Advantage Announces Fourth Quarter and Year End 2019 Results

February 27, 2020 CNW

CALGARY, Feb. 27, 2020 /CNW/ – Advantage Oil & Gas Ltd. (“Advantage” or the “Corporation”) is pleased to announce its 2019 results, including considerable progress on liquids growth, continued operational excellence of our low-cost natural gas foundation, and solid performance on our 2019 objectives. With modern, low emissions-intensity assets and our Glacier Carbon Sequestration project, the Corporation continues to proudly deliver clean and sustainable energy, contributing to a reduction in global emissions by displacing high-carbon fuels.

We are proud of our Team’s 2019 achievements and thank Advantage’s Board of Directors and our shareholders for their support. We look forward to reporting on our progress as the Team continues to execute on our liquids-focused development plan.

Accomplishments during 2019 included:

Record annual production of 44,334 boe/d, an increase of 6% (250 mmcf/d natural gas and 2,700 bbls/d liquids).
Record quarterly natural gas production of 266 mmcf/d in the fourth quarter of 2019 during a period of elevated AECO prices.
Increased liquids production by 81% to average 2,700 bbls/d in the fourth quarter of 2019. Liquids comprised 18% of total revenue.
Discovery of a light oil pool at Progress, elevating the asset to a top tier investment priority. Production began in the first quarter of 2020 above management expectations.
Commissioned a 40 mmcf/d and 2,000 bbls/d liquids hub at our Valhalla asset, which alleviated a facility restriction.
Initial production from our first well at Pipestone/Wembley in the fourth quarter of 2019.
Achieved hedging and market diversification gains of $32 million.
Increased CO₂e sequestration credits by 59% to 90,500 tonnes.
Achieved operating costs of $1.98/boe.
Delivered on 2019 plan with capital spending reduced from $225 million to $185 million.

2019 Operating and Financial Results Summary

Annual 2019 cash provided by operating activities of $156 million and adjusted funds flow^(a)of $155 million or $0.83/share.

Year-end net debt^(a) was $304 million on a $400 million bank credit facility, resulting in a net debt to adjusted funds flow^(a) ratio of 2.0.

Financial Highlights		Three months ended December 31				Year ended December 31
($000, except as otherwise indicated)		2019		2018		2019		2018
Financial Statement Highlights
Sales including realized derivatives ⁽³⁾	$	76,921	$	73,979	$	275,237	$	250,604
Net income (loss) and comprehensive income (loss)	$	(1,844)	$	25,162	$	(24,654)	$	11,119
per basic share ⁽²⁾	$	(0.01)	$	0.14	$	(0.13)	$	0.06
Cash provided by operating activities ⁽⁴⁾	$	39,965	$	41,627	$	156,063	$	149,240
Cash provided by financing activities ⁽⁴⁾	$	20,037	$	11,739	$	24,317	$	63,937
Cash used in investing activities	$	50,365	$	50,723	$	173,640	$	213,734
Basic weighted average shares (000)		186,911		185,942		186,659		186,040
Other Financial Highlights
Adjusted funds flow ⁽¹⁾	$	44,452	$	46,301	$	155,180	$	150,378
per boe ⁽¹⁾	$	10.20	$	11.02	$	9.59	$	9.89
per basic share ⁽¹⁾⁽²⁾	$	0.23	$	0.25	$	0.83	$	0.81
Net capital expenditures ⁽¹⁾	$	59,609	$	51,187	$	184,922	$	201,086
Working capital deficit ⁽¹⁾	$	7,996	$	1,912	$	7,996	$	1,912
Bank indebtedness	$	295,624	$	270,918	$	295,624	$	270,918
Net debt ⁽¹⁾	$	303,620	$	272,830	$	303,620	$	272,830


⁽¹⁾	Non-GAAP measure which may not be comparable to similar non-GAAP measures used by other entities. Please see “Non-GAAP Measures”.
⁽²⁾	Based on basic weighted average shares outstanding.
⁽³⁾	Excludes net sales of natural gas purchased from third parties.
⁽⁴⁾	Cash provided by operating activities and cash provided by financing activities for the three months and year ended December 31, 2018 has been adjusted to conform to the presentation adopted for the periods ended December 31, 2019.

Operating Highlights		Three months ended December 31				Year ended December 31
		2019		2018		2019		2018
Operating
Daily Production
Natural gas (mcf/d)		266,035		262,269		249,802		240,959
Liquids (bbls/d)		3,031		1,974		2,700		1,491
Total production (mcfe/d)		284,221		274,113		266,002		249,905
Total production (boe/d)		47,370		45,686		44,334		41,651
Average realized prices (including realized derivatives)
Natural gas ($/mcf)⁽²⁾	$	2.58	$	2.69	$	2.49	$	2.47
Liquids ($/bbl)	$	49.09	$	49.23	$	49.14	$	62.12
Operating Netback ($/boe)
Sales of natural gas and liquids from production	$	17.69	$	16.86	$	15.53	$	14.62
Net sales of natural gas purchased from third parties⁽¹⁾		0.00		0.00		(0.09)		0.07
Realized gains (losses) on derivatives		(0.04)		0.74		1.48		1.86
Royalty expense		(0.51)		(0.39)		(0.29)		(0.17)
Operating expense		(1.89)		(1.73)		(1.98)		(1.82)
Transportation expense		(3.46)		(3.18)		(3.50)		(3.33)
Operating netback⁽¹⁾	$	11.79	$	12.30	$	11.15	$	11.23

⁽¹⁾	Non-GAAP measure which may not be comparable to similar non-GAAP measures used by other entities. Please see “Non-GAAP Measures”.
⁽²⁾	Excludes net sales of natural gas purchased from third parties.

The Corporation’s audited consolidated financial statements for the fiscal year ended December 31, 2019 together with the notes thereto, and Management’s Discussion and Analysis for the year ended December 31, 2019 have been filed on SEDAR and are available on the Corporation’s website at http://www.advantageog.com/investors/financial-reports/financial-reports-2019. The Corporation’s audited consolidated financial statements for the fiscal year ended December 31, 2018 are also available on the Corporation’s website via the same webpage. Upon request, Advantage will provide a hard copy of any financial reports free of charge.