Equal Energy updates Q2 2010 financial and operating results
EQU: TSX, NYSE
CALGARY, AB, Aug. 13, 2010 /CNW/ - Equal Energy Ltd. ("Equal", "We", "Our" or the "Company") announces its financial and operating results for the three and six months ended June 30, 2010.
Don Klapko, Chief Executive Officer commented, "Q2 2010 is our first quarter reporting as Equal Energy Ltd. as we have now completed our corporate conversion effective May 31, 2010. We worked hard to prepare for our corporate conversion, deploying a more growth oriented business model, re-evaluating our existing properties from a growth perspective and adding new resource plays to our asset base. During Q2, our results were solid as we continue to execute on our stated corporate priorities."
As a result of the success at our oil resource plays, including the Cardium in Alberta and Circus Viola in Oklahoma, Equal's Board of Directors have approved an increase to the Company's capital expenditures to approximately $50 million from the original $40 million. This increase will allow Equal to accelerate the pace of development at its oil resource plays and drill as many as 16 wells in the second half of 2010 which is double the number of wells drilled during the first half of the year.
Q2 and 2010 year-to-date highlights:
- Generated funds from operations of $11.4 million for Q2 2010 and
$25.9 million year-to-date as compared with $8.6 million and $26.5
million in the same periods for 2009, respectively;
- The Company's Bank Syndicate completed a borrowing base review and
increased the borrowing base to $125.0 million from $110.0 million;
- The long-term bank debt was decreased to $66.0 million, a reduction
of $4.0 million from December 31, 2009 and $1.4 million since the end
of Q1 2010;
- On July 7, 2010, Equal sold non-core assets for net proceeds of $24.3
million;
- On July 9, 2010, Equal completed an equity offering for net proceeds
of $35.9 million;
- Taking into account these two transactions subsequent to the quarter
end, the revised net debt including the convertible debentures would
be approximately $114 million which is comprised of working capital
of $72 million, bank debt of $66 million and convertible debentures
with a face value of $120 million;
- Drilled six successful wells, two of which were tied-in and producing
by the end of Q2 with the other four tied-in and producing subsequent
to the Q2 quarter-end; and
- Achieved average production of 9,570 boe per day for the quarter,
compared with 9,507 boe per day in Q1 2010 and 10,059 boe per day in
Q2 2009.
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Q2 2010
Financial and
Operations
Summary
(in thousands
except for
volumes, Three months Six months Year
percentages and ended ended ended
per share and June 30 June 30 Dec. 31
boe amounts) 2010 2009 Change 2010 2009 Change 2009
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FINANCIAL
Revenue before
mark-to-market
adjustment 35,689 31,208 14% 74,742 73,097 2% 140,506
Funds from
operations 11,357 8,561 33% 25,900 26,476 (2%) 46,645
Per share
- basic and
diluted(1)
($) 0.52 0.42 1.19 1.29 2.22
Loss (4,066) (14,383) (7,003) (22,881) (41,282)
Per share
- basic and
diluted(1)
($) (0.19) (0.69) (0.32) (1.11) (1.95)
Total assets 445,513 508,588 445,513 508,588 462,272
Net debt 54,650 36,784 54,650 36,784 35,955
Convertible
debentures 115,973 114,315 115,973 114,315 114,863
Shareholders'
equity 217,265 259,595 217,265 259,595 219,046
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SHARES
OUTSTANDING
Weighted
average shares
outstanding
- basic and
diluted(1))
(000s) 21,935 20,760 21,768 20,736 21,119
Shares
outstanding at
period end(1)
(000s) 21,974 20,842 21,974 20,842 21,701
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OPERATIONS
Average daily
production
Oil (bbls per
day) 2,345 2,786 (16%) 2,411 2,955 (18%) 2,779
NGL (bbls per
day) 2,773 2,039 36% 2,598 1,563 66% 2,156
Gas (mcf per
day) 26,711 31,407 (15%) 27,176 32,972 (18%) 29,657
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Total (boe per
day) 9,570 10,059 (5%) 9,538 10,014 (5%) 9,878
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Exit production
Oil (bbls per
day) 2,718 2,766 (2%) 2,718 2,766 (2%) 2,448
NGL (bbls per
day) 2,691 2,372 13% 2,691 2,372 13% 2,515
Gas (mcf per
day) 27,700 29,232 (5%) 27,700 29,232 (5%) 24,802
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Total (boe per
day) 10,026 10,010 0% 10,026 10,010 0% 9,097
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Average sales
price
Oil ($ per
bbl) 69.55 63.49 10% 71.59 59.02 21% 62.86
NGL ($ per
bbl) 40.34 28.63 41% 43.22 29.48 47% 32.17
Gas ($ per
mcf) 4.39 3.43 28% 4.71 5.56 (15%) 4.75
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Cash flow
netback
($ per boe)
Revenue 40.98 34.09 20% 43.29 40.33 7% 38.97
Royalties 8.17 5.92 38% 9.11 6.58 38% 7.37
Production
expenses 10.50 12.19 (14%) 10.29 12.34 (17%) 10.88
Transportation
expenses 0.76 0.78 (3%) 0.72 0.71 1% 0.70
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Operating
netback 21.55 15.20 42% 23.17 20.70 12% 20.02
General and
administrative 5.10 3.61 41% 4.71 3.80 24% 4.36
Cash interest
expense 3.52 2.24 57% 3.28 2.29 43% 2.66
Other cash
costs (0.11) - 100% 0.18 - 100% 0.06
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Cash flow
netback 13.04 9.35 39% 15.00 14.61 3% 12.94
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(1) Restated to reflect the three for one exchange of trust units for
common shares.
Equal's complete unaudited consolidated financial statements, accompanying notes and MD&A for the quarter are available on Equal's website at www.equalenergy.ca, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Equal will host a conference call and webcast on Friday, August 13, 2010 at 9:00 am MT (11:00 am ET) to discuss Equal's Q2 2010 results. To access the call, please dial 1-888-231-8191 or 647-427-7450. A live audio webcast of the conference call will be available on the home page of Equal's website at www.equalenergy.ca. A replay of the conference call will be available until 11:59 pm, August 20, 2010. The replay may be accessed on Equal's website in the Investor Relations section, or by dialing 1-800-642-1687 or 1-416-849-0833, followed by passcode 89291417 followed by the number sign.
About Equal Energy Ltd.
Equal is an exploration and production oil and gas company based in Calgary, Alberta, Canada with its United States operations office located in Oklahoma City, Oklahoma. Equal's shares and debentures are listed on the Toronto Stock Exchange under the symbols (EQU, EQU.DB, EQU.DB.A) and Equal's shares are listed on the New York Stock Exchange under the symbol (EQU). The portfolio of oil and gas properties is geographically diversified with producing properties located in Alberta, British Columbia, Saskatchewan and Oklahoma. Production is comprised of approximately 54 percent crude oil and natural gas liquids and 46 percent natural gas. Equal has compiled a multi-year drilling inventory for its properties including its new oil play opportunities in the Cardium in west central Alberta and the Circus prospect in southern Oklahoma.
Barrels of Oil Equivalent
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Forward-Looking Statements
Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "seeks" and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production; marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions or dispositions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect Equal's operations or financial results are included in Equal's reports on file with Canadian and U.S. securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Equal's website (www.equalenergy.ca) or by contacting Equal. Furthermore, the forward looking statements contained in this news release are made as of the date of this news release, and Equal does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
All dollar values are in Canadian dollars unless otherwise stated.
For further information: Don Klapko, President and CEO, (403) 263-0262, or (877) 263-0262, [email protected], www.equalenergy.ca
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