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CALGARY, ALBERTA -- (Marketwire) -- 03/08/13 -- Paramount Resources Ltd. (TSX: POU) -
OVERVIEW
Reserves and Principal Properties
-- Total proved and probable reserves increased 239 percent to 179.9 MMBoe, with conventional reserves increasing 64 percent to 86.8 MMBoe (replacement ratio of six times) and probable oil sands bitumen reserves increasing 93.1 MMBoe.-- Conventional proved reserves increased 43 percent year-over-year to 50.9 MMBoe, after production of 7.3 MMBoe and dispositions of 3.4 MMBoe (replacement ratio of three times).-- Conventional proved and probable finding and development costs, excluding facilities and gathering system construction costs, decreased 50 percent to $12.18 per Boe and for the Kaybob COU decreased 24 percent to $10.31 per Boe.-- Natural gas and NGLs sales volumes increased approximately 20 percent despite downstream processing and transportation constraints which impacted the Company's operations in the second half of the year.-- The Company's new 45 MMcf/d refrigeration facility at Musreau (the "Musreau Refrig Facility") has been operating near capacity since being re-commissioned in March.-- Operating expenses decreased 14 percent to $9.58 per Boe in 2012 compared to $11.20 per Boe in 2011 due to the sale of higher cost US properties and processing cost savings from the Company's Musreau Refrig Facility.-- Construction of the Company's wholly-owned 200 MMcf/d deep cut facility at Musreau (the "Musreau Deep Cut Facility") commenced in the third quarter of 2012 following the receipt of regulatory approval. The project continues to be on-schedule, with commissioning expected to commence by the end of the third quarter of 2013.-- Advance drilling for the deep cut facility expansions at Musreau and Smoky continued. The Company currently has an inventory of 43 (35 net) Kaybob Deep Basin wells with estimated first month deliverability exceeding 225 MMcf/d (185 MMcf/d net) of raw gas.-- In February 2013, the Company closed the sale of substantially all of its remaining US properties for cash proceeds of US$22.5 million, subject to closing adjustments. Since 2011, the Company has realized aggregate cash proceeds of approximately US$130 million on the sale of its US properties, significantly in excess of their carrying value.
Strategic Investments
-- Paramount drilled and completed its first horizontal shale gas exploration well at Patry in Northeast British Columbia in March 2013. In order to further evaluate well performance, the Company plans to bring the well on production by the end of 2013.-- Paramount's wholly-owned subsidiary, Cavalier Energy Inc. ("Cavalier Energy"), recorded 93.1 million barrels of probable bitumen reserves with an NPV10 of $379 million following its regulatory applications for the initial 10,000 Bbl/d phase of the Hoole Grand Rapids development.-- Fox Drilling completed the construction of two new walking drilling rigs, which will drill on multi-well pad sites in the Kaybob COU.Corporate
-- To fund the Company's growth initiatives, Paramount raised over $700 million in aggregate cash proceeds in 2012, including over $400 million from equity offerings, the sale of investments and non-core oil and gas properties and $300 million from the notes offering.-- At February 28, 2013, Paramount had cash balances of $109.2 million and its $300 million credit facility was undrawn.Financial and Operating Highlights(1)(2)---------------------------------------------------------------------------($ millions, except as noted) Three months ended December 31 Year ended December 31---------------------------------------------------------------------------- 2012 2011 % Change 2012 2011 % Change----------------------------------------------------------------------------FINANCIALPetroleum and natural gas sales 54.6 63.3 (14) 197.1 241.7 (18)Funds flow from operations 17.7 26.1 (32) 58.1 96.2 (40) Per share - diluted ($/share) 0.20 0.33 (39) 0.67 1.23 (46)Net income (loss) (151.8) (209.9) 28 (61.9) (232.0) 73 Per share - basic and diluted ($/share) (1.69) (2.54) 33 (0.71) (2.96) 76Exploration and development expenditures 166.8 144.1 16 523.1 465.7 12Investments in other entities - market value(3) 704.8 1,077.3 (35)Total assets 2,037.0 1,725.7 18Net debt(4) 701.4 513.4 37Common shares outstanding (thousands) 89,932 85,500 5----------------------------------------------------------------------------OPERATINGSales volumes Natural gas (MMcf/d) 104.1 91.5 14 98.5 81.6 21 NGLs (Bbl/d) 2,110 1,620 30 1,873 1,542 21 Oil (Bbl/d) 1,213 2,356 (49) 1,620 2,291 (29) Total (Boe/d) 20,674 19,223 8 19,917 17,426 14Average realized price Natural gas ($/Mcf) 3.45 3.62 (5) 2.72 4.04 (33) NGLs ($/Bbl) 61.23 78.08 (22) 67.10 79.56 (16) Oil ($/Bbl) 79.72 93.25 (15) 83.16 87.00 (4) Total ($/Boe) 28.70 35.80 (20) 27.04 38.00 (29)Net wells drilled (excluding oil sands evaluation) 8 13 (38) 34 48 (29)Net oil sands evaluation wells drilled - - - 1 27 (96)----------------------------------------------------------------------------RESERVES(5)Proved and probable Natural gas (Bcf) 323.7 244.1 33 Light and medium crude oil (MBbl) 2,128 6,573 (68) NGLs (MBbl) 30,761 5,760 434 ------------------ Total Conventional (MBoe) 86,842 53,015 64 Oil sands bitumen (MBbl) 93,091 - 100 ------------------ Total Company (MBoe) 179,933 53,015 239 ------------------ ------------------Conventional F&D cost before facilities expenditures (proved and probable) ($/Boe) 12.18 24.19 (50)Conventional reserves replacement (proved and probable) 599% 193%NPV10 future net revenue before tax Proved 455.9 611.4 (25) Proved and probable 1,259.3 832.2 51--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Readers are referred to the advisories concerning non-GAAP measures and oil and gas definitions in the Advisories section of this document.(2) Amounts include the results of discontinued operations. Refer to page seven of Paramount's Management's Discussion and Analysis for the year ended December 31, 2012.(3) Based on the period-end closing prices of publicly traded enterprises and the book value of the remaining investments.(4) Net debt is a non-GAAP measure, it is calculated and defined in the Liquidity and Capital Resources section of Paramount's Management's Discussion and Analysis for the year ended December 31, 2012.(5) Working interest reserves before royalty deductions. Net present values were determined using forecast prices and costs and do not represent fair market value.REVIEW OF OPERATIONS(1) 2012 2011 % Change-----------------------------------------------------------------------Sales Volumes Natural gas (MMcf/d) 98.5 81.6 21 NGLs (Bbl/d) 1,873 1,542 21 Oil (Bbl/d) 1,620 2,291 (29) ------------------------------------ Total (Boe/d) 19,917 17,426 14 ------------------------------------ % ChangeNetbacks ($ millions)(2) ($/Boe)(3) ($/Boe)(3)in $/Boe Natural gas revenue 98.2 2.72 120.2 4.04 (33) NGLs revenue 46.0 67.10 44.8 79.56 (16) Oil revenue 49.3 83.16 72.7 87.00 (4) Royalty and sulphur revenue 3.6 - 4.0 ---------------------------------------------------------------- Petroleum and natural gas sales 197.1 27.04 241.7 38.00 (29) Royalties (16.5) (2.27) (22.1) (3.47) (35) Operating expense and production tax (69.9) (9.58) (71.3) (11.20) (14) Transportation (21.8) (2.98) (20.5) (3.23) (8)---------------------------------------------------------------Netback 88.9 12.21 127.8 20.10 (39) Financial commodity contract settlements (0.1) (0.02) 0.2 0.03 (167) Insurance settlement 6.2 0.85 - - 100---------------------------------------------------------------Netback including commodity & insurance settlements 95.0 13.04 128.0 20.13 (35)----------------------------------------------------------------------------------------------------------------------------------------------(1) Amounts include the results of discontinued operations. Refer to page seven of Paramount's Management's Discussion and Analysis for the year ended December 31, 2012.(2) Readers are referred to the advisories concerning non-GAAP measures and oil and gas definitions in the Advisories section of this document.(3) Natural gas revenue shown per Mcf.
