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Pine Cliff Energy Ltd. Announces First Quarter 2020 Results and Annual General Meeting Update


Calgary, Alberta – Pine Cliff Energy Ltd. (TSX: PNE) (“Pine Cliff” or the “Company“) is pleased to announce the filing of its first quarter financial and operating results. Included in the filings were Pine Cliff’s unaudited interim condensed consolidated financial statements and related management’s discussion and analysis for the three months ended March 31, 2020 (the “Q1-Report“). Selected highlights are shown below and should be read in conjunction with the Q1-Report.

First Quarter 2020 Highlights

The first quarter of 2020 had a promising start with the production performance of all three of Pine Cliff’s Pekisko oil wells continuing to outperform internal expectations. This good news however was dampened by the fact this past winter was an unusually warm winter and as a result, natural gas prices were not as strong as they were in Q1 2019. The first quarter of 2020 however was dominated by the unprecedented collapse of crude oil and liquids prices due to global over-supply combined with demand destruction from the novel coronavirus (“COVID-19“). Despite the fact that 91% of Pine Cliff’s Q1 production volume was natural gas, those price drops impacted commodity sales. These negative impacts were mitigated to some degree by improving natural gas prices, which resulted in Pine Cliff still generating adjusted funds flow.

Highlights from Pine Cliff’s first quarter ended March 31, 2020 include:

  • generated $1.2 million of adjusted funds flow for the three months ended March 31, 2020, despite the AECO 5A benchmark averaging only $2.02 per Mcf for the quarter;
  • produced an average of 19,169 Boe/d (91% natural gas) in the three months ended March 31, 2020, a 2% increase compared to the same period in 2019; and
  • tied-in production from the second of two Pekisko oil wells and one Edson oil well drilled in the fourth quarter of 2019.

Outlook

2020 has had the most volatile start to a year that Pine Cliff has ever experienced. Although Q2 and Q3 may still experience unpredictable moves in natural gas pricing, the Company has entered into fixed price physical sales contracts for approximately 40% of our natural gas production during those two periods. The increase in AECO forward pricing to levels not witnessed for several years has raised optimism for increased adjusted funds flow for later in 2020 and into 2021. At this time the Company does not have any material fixed price contracts beyond Q3 2020.

Financial and Operating Results1

Three months ended
March 31,
2020 2019
($000s, unless otherwise indicated)
Commodity sales (before royalty expense) 25,441 32,063
Cash flow from operating activities 1,637 7,925
Adjusted funds flow2 1,153 6,823
Per share – Basic and Diluted ($/share)2 0.02
Loss (20,011 ) (6,525 )
Per share – Basic and Diluted ($/share) (0.06 ) (0.02 )
Capital expenditures 1,822 995
Net Debt2 65,532 51,820
Production (Boe/d) 19,169 18,741
Percentage natural gas (%) 91% 93%
Weighted-average common shares outstanding (000s)
   Basic and diluted 327,784 307,076
Combined sales price ($/Boe) 14.58 19.01
Operating netback ($/Boe)2 2.25 5.68
Corporate netback ($/Boe)2 0.65 4.04
Operating netback ($ per Mcfe)2 0.38 0.95
Corporate netback ($ per Mcfe)2 0.11 0.67

Includes results for acquisitions and excludes results for disposition from the closing date.
2 This is a non-GAAP measure, see “NON-GAAP Measures” for additional information.

Annual General Meeting Update

Pine Cliff Energy Ltd. will hold its 2020 Annual General Meeting (the “Meeting“) at its Head Office, 8th Floor, 1015 4th Street S.W., Calgary, Alberta, on Thursday, May 21, 2020, at 11:00 a.m. (Calgary time). Shareholders can listen to the Meeting via teleconference by dialing locally in Toronto at 416-764-8659, Calgary at 587-880-2171 or Toll Free at 1-888-664-6392 with the confirmation #55147778. An archived recording of the teleconference will be available on the Corporation’s website at www.pinecliffenergy.com following the Meeting for those unable to listen live. Pine Cliff does not plan to provide a presentation at the conclusion of the meeting. Please monitor the Corporation’s website at www.pinecliffenergy.com for Meeting updates if necessary.

Due to restrictions on mass gatherings implemented by the Government of Alberta in response to the COVID-19 outbreak and out of concern for the well-being of all participants, SHAREHOLDERS AND GUESTS WILL NOT BE PERMITTED TO PHYSICALLY ATTEND THE MEETING. Shareholders are encouraged to exercise their voting rights by mail, telephone or internet in advance of the Meeting.

Registered Shareholders are urged to transmit their voting instructions online at www.odysseytrust.com/login or to date and sign the form of proxy and return it to Odyssey Trust Company, Stock Exchange Tower, 1230-300 5th Avenue SW, Calgary, Alberta, T2P 3C4. In order to be valid and acted upon at the Meeting, voting instructions must be transmitted online or forms of proxy must be returned to the aforesaid address not less than 48 hours, excluding Saturdays, Sundays and statutory holidays, preceding the date of the Meeting, or any adjournment thereof. Shareholders who do not hold their common shares in their own name are strongly encouraged to complete the voting instruction forms received from their broker as soon as possible and to follow the instructions set out under “Notice to Beneficial Holders of Shares” in the Company’s 2020 Information Circular.



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