News Column

Angle Energy Inc. Announces 2012 Year End Financial Results

Mar 20 2013 12:00AM



CALGARY, ALBERTA -- (Marketwire) -- 03/20/13 -- Angle Energy Inc. ("Angle" or the "Company") (TSX: NGL) today announced the financial and operating results for the year ended December 31, 2012.

The Company has filed its audited consolidated financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2012 on and Operational and financial highlights for the fourth quarter of 2012 and for the twelve month period ended December 31, 2012 are noted below and should be read in conjunction with Angle's 2012 consolidated financial statements and related MD&A.


-- Recorded average corporate production for 2012 of 14,639 boe/day, an increase of 11% over the 2011 results of 13,163 boe/day.-- Increased light oil and condensate production to average 3,059 bbls/day in 2012, a 46% improvement over 2011.-- Total liquids (light oil plus natural gas liquids) production for 2012 increased by 22% to 6,573 bbls/day from 5,409 bbls/day in the prior year. Within Angle's total liquids basket, high value light oil and condensate production grew from 39% of total production to 47% of total production in 2012.-- Increased the operating netback in the fourth quarter of 2012 to $23.56/boe versus $20.25/boe recorded for the full year.-- Generated funds from operations for 2012 of $84.5 million ($1.05 per diluted share).-- Incurred $166.4 million in capital expenditures during 2012 which included drilling 46 gross (38.4 net) wells with a 100% success rate at an average working interest of 83%.-- Exited 2012 with total net debt of $249.5 million compared to a total borrowing base, including convertible debentures, of $310 million as at December 31, 2012. Of the total net debt, bank debt and working capital was $189.5 million compared to a bank borrowing base of $250 million.-- As previously announced, closed the sale of Edson gas assets on January 9, 2013 for gross proceeds of $74 million ($72.5 million net of closing adjustments) and concurrently the bank reevaluated the borrowing base at $215 million. The borrowing limit of $215 million was reconfirmed through Angle's annual credit review which was completed earlier this month.-- A net loss of $47.5 million was recorded in 2012, primarily as a result of an impairment loss triggered by the sale of the Edson gas assets.


Since the fourth quarter of 2011, Angle has drilled and "slick water" fractured a total of 26 Cardium horizontal wells at Harmattan. Seven of these wells are in the 2013 program, completed in the first quarter. The Company provided a detailed first quarter operational update on March 11, 2013. Since that update, two additional wells have completed their 3-5 day test periods, with one well a step out to the southwest of the asset base, and the second well drilled in the northern area of the play.

The first quarter test results have proven the southern extension of the play. The following table outlines the seven wells tested in the first quarter, showing oil volumes only in bbls/day (gas rates are minimal) compared to Angle's type curve and the average rates from Angle's producing wells in the play.

Light Oil Rates in BBLS/D

Test Rate IP5 IP30 IP90 IP120Well (bbl/d) (bbl/d) (bbl/d) (bbl/d) (bbl/d)----------------------------------------------------------------------------20 283 345----------------------------------------------------------------------------21 198----------------------------------------------------------------------------22 207 218----------------------------------------------------------------------------23 346 475----------------------------------------------------------------------------24 129----------------------------------------------------------------------------25 540----------------------------------------------------------------------------26 565----------------------------------------------------------------------------Type Curve 225 160 118 106----------------------------------------------------------------------------Program 334 343 255 165 144AVERAGE to DATE (26 wells) (22 wells) (19 wells) (19 wells) (17 wells)----------------------------------------------------------------------------

The total drilling inventory in this play is approximately 175 wells, at a density of 4 wells per section.


Cardium light oil is now Angle's dominant asset and has become so in only one year. The Company is the fifth largest Cardium land holder in Canada and had only 20% of its undrilled inventory booked in the December 31, 2012 reserve report.

The higher weighting of light oil is expected to be directly reflected in increases to the cash flow per share for 2013.

The sale of the Edson gas assets reduced Angle's near term debt to less than 2.0 times debt to cash flow. Angle is committed to maintaining risk-appropriate leverage and has a corporate directive of managing its debt to cash flow ratio for the overall 2013 capital program to under 2.0 times on a fourth quarter annualized basis.

FINANCIAL AND OPERATING HIGHLIGHTSYear Ended December 31 2012 2011 % Change----------------------------------------------------------------------------FINANCIAL ($000s, except per share data)Oil and natural gas revenues 179,563 186,872 (4)Funds from operations (1) 84,494 95,686 (12) Per share - basic ($) 1.05 1.32 (20) Per share - diluted ($) 1.05 1.30 (19)Cash flow from operating activities 85,243 99,111 (14)Net loss and comprehensive loss (47,472) (10,771) 341 Per share - basic ($) (0.59) (0.15) 293 Per share - diluted ($) (0.59) (0.15) 293Capital expenditures (2) 166,356 162,228 3Total assets (end of period) 623,637 595,691 5Net debt (end of period) (3) 249,511 216,492 15Shareholders' equity (end of period) 323,868 318,711 2--------------------------------------------------------------------------------------------------------------------------------------------------------COMMON SHARE DATA (000s)Shares outstanding At end of period 81,052 72,838 11 Weighted average - basic 80,158 72,525 11 Weighted average - diluted 80,255 73,681 9--------------------------------------------------------------------------------------------------------------------------------------------------------OPERATINGSales Natural gas (mcf/d) 48,394 46,522 4 NGLs (bbls/d) 3,514 3,311 6 Light crude oil and condensate (bbls/d) 3,059 2,098 46 Total oil equivalent (boe/d) 14,639 13,163 11Average wellhead prices Natural gas ($/mcf) 2.50 3.83 (35) NGLs ($/bbl) 27.13 36.85 (26) Light crude oil and condensate ($/bbl) 87.31 96.93 (10) Combined average ($/boe) 33.01 38.26 (14)Netbacks ($/boe) Operating (4) 20.25 24.09 (16) Funds from operations (1) 15.77 19.92 (21)Reserves (December 31 evaluation) Proved (mboe) 41,288 38,143 8 Proved plus probable (mboe) 79,548 73,810 8 Total net present value - proved plus probable (10% discount) ($000s) 705,775 728,531 (3)Gross (net) wells drilled (#) Natural gas 13 (12.7) 18 (17.9) -28 (-29) Oil 33 (25.7) 12 (11.6) 175 (122) Dry and abandoned - (-) 3 (3.0) -100 (-100)----------------------------------------------------------------------------Total 46 (38.4) 33 (32.5) 39 (18) Average working interest (%) 83 98 (15)--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Funds from operations, funds from operations per share and funds from operations per boe are not recognized measures under International Financial Reporting Standards (IFRS). Refer to the Management's Discussion and Analysis for further discussion.(2) Total capital expenditures, including acquisitions.(3) Current assets less current liabilities, bank debt and the face value of the convertible debentures, excluding current derivative instruments and held-for-sale assets and liabilities.(4) Operating netback equals oil and natural gas revenues including realized gains and losses on derivative instruments less royalties, operating costs and transportation costs calculated on a per-boe basis. Operating netback is not a recognized measure under IFRS and therefore may not be comparable with the calculations of similar measures presented by other companies.(5) For a description of the boe conversion ratio, refer to "Boe Conversions" in the Management's Discussion and Analysis.CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAs at Note December 31, 2012 December 31, 2011--------------------------------------------------------------------------------------------------------------------------------------------------------($000s of Canadian dollars)ASSETS Accounts receivable 19,435 20,279 Deposits and prepaid expenses 3,845 3,564 Derivative instruments 14 1,197 - Assets held for sale 6 79,875 ----------------------------------------------------------------------------- Total current assets 104,352 23,843Exploration and evaluation 4 57,703 54,780Property and equipment 5 461,582 517,068---------------------------------------------------------------------------- 623,637 595,691--------------------------------------------------------------------------------------------------------------------------------------------------------LIABILITIES Accounts payable and accrued liabilities 46,388 35,345 Derivative instruments 14 - 400 Liabilities associated with assets held for sale 6 7,403 ----------------------------------------------------------------------------- Total current liabilities 53,791 35,745Bank debt 7 166,403 144,990Convertible debentures 8 54,823 53,188Decommissioning liabilities 9 12,210 14,695Deferred tax liabilities 11 12,542 28,362---------------------------------------------------------------------------- 299,769 276,980SHAREHOLDERS' EQUITY Share capital 10 361,331 311,436 Equity component of convertible debentures 8 4,105 4,105 Contributed surplus 15,084 12,350 Deficit (56,652) (9,180)---------------------------------------------------------------------------- Total equity 323,868 318,711Commitments 14, 17Subsequent events 7, 18---------------------------------------------------------------------------- 623,637 595,691--------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to the consolidated financial statements as filed on SEDAR.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS Year Ended Note December 31, 2012 December 31, 2011--------------------------------------------------------------------------------------------------------------------------------------------------------($000s of Canadian dollars, except per share amounts)REVENUE Oil and natural gas revenues 179,563 186,872 Royalties (36,573) (39,342)----------------------------------------------------------------------------Oil and natural gas revenues, net of royalties 142,990 147,530Realized gain on derivative instruments 14 1,801 967Unrealized gain on derivative instruments 14 1,597 1,457---------------------------------------------------------------------------- 146,388 149,954EXPENSES Operating 33,630 30,135 Transportation 2,662 2,623 General and administrative 15,637 15,716 Depletion and depreciation 4,5 74,273 64,983 Gain on disposition of undeveloped land - (1,408) Impairment loss 5 70,198 38,940---------------------------------------------------------------------------- 196,400 150,989----------------------------------------------------------------------------Operating loss (50,012) (1,035)Interest expense 10,595 9,087Accretion and financing charges 8, 9 1,970 2,007----------------------------------------------------------------------------Net loss before income tax (62,577) (12,129)Deferred income tax recovery 11 (15,105) (1,358)----------------------------------------------------------------------------Net loss and comprehensive loss (47,472) (10,771)--------------------------------------------------------------------------------------------------------------------------------------------------------Net loss per share Basic 10 (0.59) (0.15) Diluted 10 (0.59) (0.15)--------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to the consolidated financial statements as filed on SEDAR.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Convertible Debentures, Retained Share Equity Contributed Earnings Total Capital Component Surplus (Deficit) Equity--------------------------------------------------------------------------------------------------------------------------------------------------------($000s of Canadian dollars)Balance at January 1, 2012 311,436 4,105 12,350 (9,180) 318,711Issuance of common shares, net of issuance costs and deferred income taxes 48,974 - - - 48,974Share-based compensation expensed - - 2,227 - 2,227Share-based compensation capitalized - - 786 - 786Options exercised 921 - (279) - 642Net loss and comprehensive loss for the year - - - (47,472) (47,472)----------------------------------------------------------------------------Balance at December 31, 2012 361,331 4,105 15,084 (56,652) 323,868--------------------------------------------------------------------------------------------------------------------------------------------------------Balance at January 1, 2011 306,742 - 7,843 1,591 316,176Share-based compensation expensed - - 4,750 - 4,750Share-based compensation capitalized - - 1,236 - 1,236Options exercised 4,694 - (1,479) - 3,215Issuance of convertible debentures, net of issuance costs and - 4,105 - - 4,105 deferred income taxesNet loss and comprehensive loss for the year - - - (10,771) (10,771)----------------------------------------------------------------------------Balance at December 31, 2011 311,436 4,105 12,350 (9,180) 318,711--------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to the consolidated financial statements as filed on SEDAR.

CONSOLIDATED STATEMENTS OF CASH FLOWSYear Ended Note December 31,2012 December 31, 2011--------------------------------------------------------------------------------------------------------------------------------------------------------($000s of Canadian dollars)OPERATING ACTIVITIESNet loss and comprehensive loss (47,472) (10,771)Adjustments for: Depletion and depreciation 4, 5 74,273 64,983 Impairment loss 5 70,198 38,940 Change in fair value of derivative instruments 14 (1,597) (1,457) Accretion and financing charges 8, 9 1,970 2,007 Share-based compensation 10 2,227 4,750 Deferred income tax recovery 11 (15,105) (1,358)Gain on disposition of undeveloped land - (1,408)Settlement of decommissioning liabilities 9 (59) (278)Change in non-cash working capital 12 808 3,703----------------------------------------------------------------------------Net cash from operating activities 85,243 99,111FINANCING ACTIVITIESIssuance of common shares, net of issuance costs 10 48,902 3,215Increase in bank debt 21,413 6,074Issuance of convertible debentures, net of issuance costs 8 - 57,171----------------------------------------------------------------------------Net cash from financing activities 70,315 66,460INVESTING ACTIVITIESExploration and evaluation expenditures 4 (55,796) (69,485)Property and equipment expenditures (110,560) (92,743)Proceeds on disposition of undeveloped land - 2,320Change in non-cash working capital 12 10,798 (5,663)----------------------------------------------------------------------------Net cash used in investing activities (155,558) (165,571)----------------------------------------------------------------------------Change in cash and cash equivalents - -Cash and cash equivalents, beginning of year - -----------------------------------------------------------------------------Cash and cash equivalents, end of year - ---------------------------------------------------------------------------------------------------------------------------------------------------------

See notes to the consolidated financial statements as filed on SEDAR.


Angle Energy Inc. is a public, Calgary-based oil and gas exploration and development company incorporated in 2004. Angle's objective is to build shareholder value through the profitable growth of its high quality asset base through a combination of drilling and strategic acquisitions. Angle's proven and dedicated team of industry specialists are focused on identifying and developing high quality assets in the Western Canadian Sedimentary Basin, with an emphasis in west central Alberta. Common shares of Angle are listed for trading on the Toronto Stock Exchange under the symbol "NGL."

Basis of Presentation

Production information is commonly reported in units of barrel of oil equivalent ("boe"). For purposes of computing such units, natural gas is converted to equivalent barrels of crude oil using a conversion factor of six thousand cubic feet of gas to one barrel of oil. This conversion ratio of 6:1 is based on an energy equivalent conversion for the individual products, primarily applicable at the burner tip, and does not represent a value equivalency at the wellhead. Such disclosure of boe may be misleading, particularly if used in isolation.

Future Outlook and Forward-Looking Information

Information set forth in this press release contains estimates and forward-looking statements and are made as of March 20, 2013, including production test results, drilling results, drilling plans and exploring opportunities. These forward-looking statements are subject to the corporate directives mentioned herein and based on assumptions as of that date and the reader should refer to the forward looking statements section disclosed in December 31, 2012 Management Discussion and Analysis as filed on SEDAR. By their nature, estimates and forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Angle's control, including the impact of reservoir quality, decline rates, volatility of commodity prices, drilling techniques, costs of third party services, general economic conditions, industry conditions, environmental risks, competition and interest from other industry participants, the lack of availability of qualified personnel or management, ability to access sufficient capital from internal and the ability to identify and consummate business opportunities.

Readers are cautioned that the assumptions and factors discussed in this press release are not exhaustive and that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise, and as such, undue reliance should not be placed on forward-looking statements. Angle's actual results, performance or achievement could differ materially from those expressed in, or implied by, these estimates and forward-looking statements, and accordingly, no assurance can be given that any of the events anticipated by the estimates and forward-looking statements will transpire or occur, or if any of them do so, what benefits that Angle or its shareholders will derive there from. Furthermore, while the production test results are useful in confirming the presence of hydrocarbons, they are not necessarily indicative of long-term performance or of ultimate recovery from a well and should not be used to calculate the aggregate production for Angle. Unless required by law, Angle disclaims any intention or obligation to update or revise any estimates and forward-looking statements, whether as a result of new information, future events or otherwise. The estimates and forward looking statements are expressly qualified by these cautionary statements.

Angle Energy Inc.
Heather Christie-Burns
President and Chief Operating Officer
(403) 263-4534
(403) 263-4179 (FAX)

Angle Energy Inc.
Gregg Fischbuch
Chief Executive Officer
(403) 263-4534
(403) 263-4179 (FAX)

Angle Energy Inc.
Stuart Symon
Chief Financial Officer
(403) 263-4534
(403) 263-4179 (FAX)

Angle Energy Inc.
Suite 700
324 Eighth Avenue SW
Calgary, Alberta T2P 2Z2

Source: Marketwire

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