CDN NEWS | 
US NEWS 
Second Quarter Highlights
- Average production of 9,875 boe/d (44% liquids) during the quarter, a 24% decrease from the same period in 2019
- Oil and gas sales were $16.2 million, a decrease of 56% from the same period in 2019
- Funds flow from operations of $7.7 million ($0.09 per share – basic), a decrease of 68% from the same period in 2019
- Adjusted EBITDA (which excludes changes in derivative financial instruments) was $8.1 million ($0.09 per share – basic)
- Net loss of $2.8 million ($0.03 per share – basic, $2.9 million before tax), a decrease of 115% from the same period in 2019
- Operating costs were $6.33/boe (including $0.96/boe of transportation costs)
- Field operating netbacks were $11.45/boe
- Operating netbacks, which include the impact of commodity contracts, were $11.37/boe
- Operating margins were 63% and funds flow from operations margins were 47%
- G&A costs of $0.66/boe
- Royalties were 2% of oil and gas revenue
- All in cash costs were $9.52/boe
- Capital expenditures were $1.1 million
- Net Debt of $192 million, a $6 million decrease from the first quarter
- Completed its annual borrowing base review and the syndicated senior credit facility was been confirmed at $210 million
- Net Debt to second quarter annualized funds flow from operations was 6.2 : 1
- Retained earnings of $104 million
- Corporate LMR is 10.1 with decommissioning liabilities of $16.5 million (discounted)
Financial Summary
|
2020 |
2019 |
Six Months Ended |
|||||||||
|
Q2 |
Q1 |
Q2 |
2020 |
2019 |
|||||||
|
Statements of Comprehensive Income |
|||||||||||
|
Petroleum & natural gas sales |
$ |
16,290 |
$ |
27,435 |
$ |
36,473 |
$ |
43,725 |
$ |
76,380 |
|
|
Net (loss) income (before tax) |
$ |
(2,933) |
$ |
3,877 |
$ |
13,433 |
$ |
944 |
$ |
29,819 |
|
|
Net (loss) income |
$ |
(2,801) |
$ |
2,835 |
$ |
18,219 |
$ |
34 |
$ |
29,733 |
|
|
Net (loss) income per share – basic |
$ |
(0.03) |
$ |
0.03 |
$ |
0.21 |
$ |
0.00 |
$ |
0.35 |
|
|
Net (loss) income per share – diluted |
$ |
(0.03) |
$ |
0.03 |
$ |
0.21 |
$ |
0.00 |
$ |
0.34 |
|
|
Statements of Cash Flow |
|||||||||||
|
Funds flow from operations |
$ |
7,733 |
$ |
15,293 |
$ |
24,445 |
$ |
23,026 |
$ |
52,176 |
|
|
Funds flow from operations per share – basic |
$ |
0.09 |
$ |
0.18 |
$ |
0.29 |
$ |
0.27 |
$ |
0.61 |
|
|
Funds flow from operations per share – diluted |
$ |
0.09 |
$ |
0.18 |
$ |
0.28 |
$ |
0.27 |
$ |
0.60 |
|
|
Cash from operating activities |
$ |
1,544 |
$ |
15,725 |
$ |
22,005 |
$ |
17,269 |
$ |
44,968 |
|
|
Statements of Financial Position |
|||||||||||
|
Property and equipment |
$ |
554,470 |
$ |
558,956 |
$ |
515,730 |
$ |
554,470 |
$ |
515,730 |
|
|
Total assets |
$ |
604,096 |
$ |
608,468 |
$ |
561,986 |
$ |
604,096 |
$ |
561,986 |
|
|
Working capital deficit (surplus) |
$ |
(2,181) |
$ |
9,278 |
$ |
6,672 |
$ |
(2,181) |
$ |
6,672 |
|
|
Adjusted Net Debt |
$ |
192,067 |
$ |
198,253 |
$ |
177,821 |
$ |
192,067 |
$ |
177,821 |
|
|
Shareholders equity |
$ |
306,629 |
$ |
307,265 |
$ |
288,027 |
$ |
306,629 |
$ |
288,027 |
|
|
Weighted average number of shares – basic |
85,380 |
85,380 |
85,363 |
85,380 |
85,361 |
||||||
|
Weighted average number of shares – diluted |
85,380 |
85,524 |
86,680 |
85,640 |
86,728 |
||||||
Company Netbacks ($/boe)
|
2020 |
2019 |
Six Months Ended |
|||||||||
|
Q2 |
Q1 |
Q2 |
2020 |
2019 |
|||||||
|
Sales price |
$ |
18.13 |
$ |
24.87 |
$ |
30.76 |
$ |
21.83 |
$ |
33.77 |
|
|
Royalty expense |
(0.35) |
(1.49) |
(2.35) |
(0.98) |
(2.56) |
||||||
|
Production costs |
(5.37) |
(5.67) |
(5.50) |
(5.53) |
(5.68) |
||||||
|
Transportation costs |
(0.96) |
(1.00) |
(0.79) |
(0.98) |
(0.87) |
||||||
|
Field operating netback |
11.45 |
16.71 |
22.12 |
14.34 |
24.66 |
||||||
|
Realized gain (loss) on commodity contract settlement |
(0.08) |
0.05 |
0.22 |
0.00 |
0.19 |
||||||
|
Operating netback |
11.37 |
16.76 |
22.34 |
14.33 |
24.85 |
||||||
|
G&A |
(0.66) |
(0.72) |
(0.50) |
(0.69) |
(0.41) |
||||||
|
Cash Finance expenses |
(2.11) |
(2.17) |
(1.49) |
(3.96) |
(1.72) |
||||||
|
Depletion and depreciation |
(8.46) |
(8.36) |
(8.53) |
(8.41) |
(8.51) |
||||||
|
Non Cash – Finance expenses |
(1.71) |
(2.11) |
(0.05) |
(0.05) |
(0.05) |
||||||
|
Stock-based compensation |
(1.68) |
(0.51) |
(0.75) |
(1.04) |
(0.96) |
||||||
|
Unrealized gain (loss) on financial instruments |
(0.07) |
0.57 |
0.32 |
0.28 |
(0.02) |
||||||
|
Deferred income tax |
0.15 |
(0.94) |
4.04 |
(0.45) |
(0.04) |
||||||
|
Net Income netback |
$ |
(3.18) |
$ |
2.51 |
$ |
15.38 |
$ |
0.01 |
$ |
13.14 |
|
Business Environment
|
2020 |
2019 |
Six Months Ended |
|||||||||
|
Q2 |
Q1 |
Q2 |
2020 |
2019 |
|||||||
|
Realized Pricing (Including realized commodity contracts) |
|||||||||||
|
Oil ($/bbl) |
$ |
31.31 |
$ |
52.19 |
$ |
73.77 |
$ |
44.36 |
$ |
69.81 |
|
|
NGL ($/bbl) |
$ |
13.82 |
$ |
16.64 |
$ |
24.20 |
$ |
15.33 |
$ |
30.80 |
|
|
Gas ($/mcf) |
$ |
2.24 |
$ |
2.11 |
$ |
1.24 |
$ |
2.10 |
$ |
1.84 |
|
|
Realized Pricing (Excluding commodity contracts) |
|||||||||||
|
Oil ($/bbl) |
$ |
31.31 |
$ |
52.05 |
$ |
73.77 |
$ |
44.28 |
$ |
69.81 |
|
|
NGL ($/bbl) |
$ |
13.98 |
$ |
16.59 |
$ |
22.80 |
$ |
15.38 |
$ |
29.57 |
|
|
Gas ($/mcf) |
$ |
2.25 |
$ |
2.11 |
$ |
1.24 |
$ |
2.11 |
$ |
1.84 |
|
|
Oil Price Benchmarks |
|||||||||||
|
West Texas Intermediate (“WTI”) (US$/bbl) |
$ |
28.00 |
$ |
46.17 |
$ |
59.56 |
$ |
36.82 |
$ |
57.05 |
|
|
Edmonton Par (C$/bbl) |
$ |
28.67 |
$ |
51.44 |
$ |
73.73 |
$ |
40.06 |
$ |
70.13 |
|
|
Edmonton Par to WTI differential (US$/bbl) |
$ |
(7.31) |
$ |
(7.85) |
$ |
(4.44) |
$ |
(7.47) |
$ |
(4.42) |
|
|
Natural Gas Price Benchmarks |
|||||||||||
|
AECO gas (Cdn$/mcf) |
$ |
1.89 |
$ |
2.03 |
$ |
1.04 |
$ |
1.91 |
$ |
1.83 |
|
|
Foreign Exchange |
|||||||||||
|
U.S./Canadian Dollar Exchange |
0.72 |
0.75 |
0.75 |
0.73 |
0.75 |
||||||
Operations Summary
Net petroleum and natural gas production, pricing and revenue are summarized below:
|
2020 |
2019 |
Six Months Ended |
|||||||||
|
Q2 |
Q1 |
Q2 |
2020 |
2019 |
|||||||
|
Daily production volumes |
|||||||||||
|
Natural gas (mcf/d) |
33,214 |
38,712 |
41,304 |
35,962 |
38,024 |
||||||
|
Oil (bbl/d) |
2,513 |
3,550 |
4,116 |
3,029 |
4,223 |
||||||
|
NGL’s (bbl/d) |
1,827 |
2,120 |
2,032 |
1,976 |
1,937 |
||||||
|
Combined (boe/d 6:1) |
9,875 |
12,122 |
13,032 |
10,999 |
12,497 |
||||||
|
Revenue |
|||||||||||
|
Petroleum & natural gas sales – Gross |
$ |
16,290 |
$ |
27,435 |
$ |
36,473 |
$ |
43,725 |
$ |
76,380 |
|
|
Realized gain (loss) on commodity contract settlement |
(69) |
53 |
260 |
(16) |
430 |
||||||
|
Total sales |
16,221 |
27,488 |
36,733 |
43,709 |
76,810 |
||||||
|
Royalty expense |
(314) |
(1,640) |
(2,785) |
(1,954) |
(5,788) |
||||||
|
Total Revenue – Net of royalties |
$ |
15,907 |
$ |
25,848 |
$ |
33,948 |
$ |
41,755 |
$ |
71,022 |
|
Working Capital Summary
The following table summarizes the change in working capital during the six months ended June 30, 2020 and December 31, 2019:
|
Six months ended |
Year ended |
|||
|
June 30, 2020 |
December 31, 2019 |
|||
|
Adjusted Net Debt – beginning of period |
$ |
(187,711) |
$ |
(155,882) |
|
Funds flow from operations |
23,026 |
92,236 |
||
|
Additions to property and equipment |
(26,092) |
(115,276) |
||
|
Decommissioning costs incurred |
– |
(966) |
||
|
Additions to E&E Assets |
(426) |
(5,723) |
||
|
Issuance of shares |
– |
41 |
||
|
Other |
(864) |
(2,141) |
||
|
Adjusted Net Debt – end of period |
$ |
(192,067) |
$ |
(187,711) |
|
Credit facility limit |
$ |
210,000 |
$ |
225,000 |
Capital Spending
Capital spending is summarized as follows:
|
2020 |
2019 |
Six Months Ended |
|||||||||
|
Cash additions |
Q2 |
Q1 |
Q2 |
2020 |
2019 |
||||||
|
Land, acquisitions and lease rentals |
$ |
36 |
$ |
104 |
$ |
98 |
$ |
140 |
$ |
136 |
|
|
Drilling and completion |
372 |
22,563 |
8,960 |
22,935 |
47,870 |
||||||
|
Geological and geophysical |
145 |
171 |
209 |
316 |
446 |
||||||
|
Equipment |
273 |
1,968 |
3,346 |
2,241 |
21,667 |
||||||
|
Other asset additions |
258 |
201 |
182 |
459 |
682 |
||||||
|
$ |
1,084 |
$ |
25,008 |
$ |
12,794 |
$ |
26,092 |
$ |
70,800 |
||
|
Exploration & evaluation assets |
$ |
– |
$ |
426 |
$ |
1,019 |
$ |
426 |
$ |
2,063 |
|
Quarter End Disclosure
The Company’s financial statements, notes to the financial statements and management’s discussion and analysis will be filed on SEDAR (www.sedar.com) and are available on the Company’s website (www.yangarra.ca).
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