CDN NEWS | 
US NEWS 
|
Financial and Operating Highlights |
|
Three months ended March 31, |
Percent |
|||
|
2020 |
2019 |
|||
|
Financial (thousands of dollars except share data) |
||||
|
Sales |
2,308 |
6,009 |
(62) |
|
|
Cash flow provided by operating activities |
1,182 |
7,720 |
(85) |
|
|
Per share – basic |
0.01 |
0.09 |
(89) |
|
|
– diluted |
0.01 |
0.09 |
(89) |
|
|
Adjusted funds flow from operations (1) |
5,413 |
7,554 |
(28) |
|
|
Per share – basic |
0.05 |
0.08 |
(38) |
|
|
– diluted |
0.05 |
0.08 |
(38) |
|
|
Net income (loss) |
(6,810) |
2,960 |
(330) |
|
|
Per share – basic |
(0.06) |
0.03 |
(300) |
|
|
– diluted |
(0.06) |
0.03 |
(300) |
|
|
Capital expenditures |
70 |
178 |
(61) |
|
|
Working capital |
114,200 |
64,034 |
78 |
|
|
Shareholders’ equity |
157,235 |
114,768 |
37 |
|
|
Weighted average shares (thousands) |
||||
|
Basic |
105,436 |
88,919 |
19 |
|
|
Diluted |
105,436 |
89,213 |
18 |
|
|
Shares outstanding, end of period (thousands) |
||||
|
Basic |
144,327 |
88,924 |
62 |
|
|
Diluted |
145,552 |
90,430 |
61 |
|
|
Operating (6:1 boe conversion) |
||||
|
Average daily production |
||||
|
Natural gas (mmcf/d) |
8.9 |
9.0 |
(1) |
|
|
Natural gas liquids (bbl/d) |
7 |
10 |
(30) |
|
|
Barrels of oil equivalent (3) (boe/d) |
1,487 |
1,510 |
(2) |
|
|
Netbacks ($/boe) |
||||
|
Operating |
||||
|
Sales |
17.06 |
44.23 |
(61) |
|
|
Royalties |
(0.42) |
(1.17) |
(64) |
|
|
Production expenses |
(4.78) |
(5.50) |
(13) |
|
|
Field netback (1) |
11.86 |
37.56 |
(68) |
|
|
Realized gains on financial derivatives |
29.09 |
20.95 |
39 |
|
|
Operating netback (1) |
40.95 |
58.51 |
(30) |
|
|
General and administrative expense |
(5.05) |
(4.43) |
14 |
|
|
Interest income and other (3) |
4.10 |
1.49 |
175 |
|
|
Decommissioning liabilities settled |
– |
0.03 |
(100) |
|
|
Adjusted funds flow netback(1) |
40.00 |
55.60 |
(28) |
|
|
(1) See “Non-IFRS” measures |
|
(2) See ‘”Barrels of Oil Equivalent.” |
|
(3) Excludes accretion on decommissioning liabilities. |
FIRST QUARTER 2020 HIGHLIGHTS
- On March 4, 2020, the Company completed its previously announced recapitalization transaction (the “Recapitalization Transaction”) pursuant to which the Company raised aggregate gross proceeds of $50 million pursuant to two equity private placements, a new management team was appointed and the board of directors of the Company was reconstituted. In connection with the transaction, the Company incurred $4.4 million of transaction costs and $1.9 million in share issue costs.
- As at March 31, 2020, Headwater has cash and cash equivalents of $111.6 million, net working capital of $114.2 million and no outstanding debt.
- Q1 2020 production averaged 1,487 boe/d, representing a 154 percent increase from Q4 2019, due to an additional month of production in Q1 2020 compared to Q4 2019.
- Effectively optimized our risk management strategy recognizing realized financial derivative gains of $3.9 million, assisting to offset a significant decline in natural gas pricing, to achieve an operating netback of $40.95/boe.
- Achieved adjusted funds flow from operations of $5.4 million and an adjusted funds flow netback of $40.00/boe.
RESPONSE TO COVID‐19
Headwater’s top priority is the health and safety of the Company’s employees, contractors, partners, service providers and the communities in which we operate. During the first quarter of 2020, the Company introduced measures to protect the well‐being of all stakeholders and follow the guidance of public health officials, while maintaining safe operations and business continuity.
2020 GUIDANCE
Headwater has continued the strategy of revenue optimization of the McCully gas field by shutting in all gas production as of May 1, 2020. The field is expected to be shut-in until November 1, 2020 to optimize production levels, revenue, cash flow and returns, by taking advantage of premium gas pricing during the peak demand months.
Headwater is pleased to re-confirm its previously released guidance.
2020 OUTLOOK
To date the COVID-19 pandemic has had minimal impact on Headwater’s base operations or cashflow expectations; however, the pandemic is anticipated to have lasting effects which will reshape the exploration and production business. The Headwater team continues to diligently evaluate the multiple unique opportunities that continue to evolve in the Canadian oil and gas sector. With our significant capital resources, experience and tenacity, it is expected that one or more of these opportunities will result in acquisitions that are transformative to our business in 2020.
Additional corporate information can be found in our corporate presentation on our website at www.headwaterexp.com
Share This:
Canada’s Advantage as the World’s Demand for Plastic Continues to Grow