Bonavista Energy Corporation Announces 2019 First Quarter Results

(TSX:BNP)

CALGARY, May 2, 2019 /CNW/ – Bonavista Energy Corporation (“Bonavista”) is pleased to report to shareholders its financial and operating results for the three months ended March 31, 2019. The financial statements and notes, as well as management’s discussion and analysis, are available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at http://www.sedar.com and on Bonavista’s website at www.bonavistaenergy.com.

MESSAGE TO SHAREHOLDERS

Through the first three-months of 2019, we directed a moderate 75% of our adjusted funds flow to our capital program as we pragmatically navigate the current and future commodity price discounts created by regulatory uncertainty and inadequate pipeline capacity in the Canadian energy sector.

Capital expenditures, net of acquisition and divestiture activity in the quarter were $43.8 million. 70% of our exploration and development (“E&D”) spending was allocated to drilling ten gross (9.6 net) wells, primarily in our West Central core area. The remaining 30% was allocated to support capital, the majority of which was directed to land and infrastructure spending.

Additional Duvernay mineral rights were acquired in the quarter, firmly establishing our presence in this emerging liquids-rich resource play with access now to approximately 190 prospective sections. Currently, we plan to drill our first Duvernay horizontal well in the second half of this year.

Infrastructure projects initiated in the first quarter will lead to total spend of approximately $15 million on such projects in the first half of 2019, most of which are concentrated in our West Central core area. This will allow us to redirect current and future production in the Willesden Green area to a lower cost, efficient processing solution.

Production for the quarter was recorded modestly ahead of budget despite severe cold temperatures in the later-half of the first quarter leading to unanticipated production downtime. Natural gas liquids (“NGL”) and oil production account for 30% of the total, marking a four percent increase in our oil and liquids weighting over the prior year period.

Natural gas prices were buoyed in the first quarter by the extended period of extreme cold in the province, providing us an opportunity to hedge an incremental 28 mmcf per day for the summer period of 2019 at an average price of $1.31 per mcf. When combined with other diversification initiatives, we have less than 20% of our forecasted natural gas production exposed to spot AECO pricing over the summer period of 2019.

2019 FIRST QUARTER FINANCIAL AND OPERATING HIGHLIGHTS

• Sustained production at 66,937 boe per day within two percent of prior quarter production rates while spending only 75% of adjusted funds flow;
• Executed an E&D capital program of $49.0 million, drilling ten gross (9.6 net) wells while completing eight gross (7.6 net) wells. Our focus remains on drilling liquids rich prospects, with seven of our ten wells drilled in our West Central area;
• Divested of a sour natural gas non-core asset producing 442 boe per day at closing for net proceeds of $5.4 million;
• Generated $58.2 million ($0.22 per share) in adjusted funds flow, six percent ahead of forecast;
• Recorded cash costs of $9.55 per boe, slightly below forecast but in excess of prior quarter resulting from a modest increase in operating expenses due to the cold weather experienced in February and March;
• Strengthened our position in the emerging Duvernay play by acquiring land in the Pembina area bringing our total prospective lands to over 121,000 acres within our core areas; and
• Protected 2019 adjusted funds flow through the summer period, when NGTL maintenance activities escalate, with 75% of our forecasted 2019 natural gas production hedged at an average price of $2.11 per mcf.