Northern Blizzard's unaudited financial statements and management's discussion and analysis ("MD&A") for the three and six months ended
FINANCIAL AND OPERATING HIGHLIGHTS
Three months ended
Six months ended
Financial ($000s,except per share information)
Oil and natural gas sales
Funds from operations(1)
Per share – diluted
Net income (loss)
Per share – basic
Per share – diluted
Average daily production
Heavy oil (bbl/d)
Light oil & NGL (bbl/d)
Natural gas (mcf/d)
Average realized price
Heavy oil ($/bbl)(2)
Light oil & NGL ($/bbl)
Oil & NGL ($/bbl)
Natural gas ($/mcf)
Average realized price
Production and operating expenses
Realized gains (losses) on financial derivative contracts
General and administrative expenses
Cash finance costs
Funds from operations(1)
Funds from operations and operating netback do not have any standardized meaning prescribed by International Financial Reporting Standards. See "Non-IFRS Financial Measures" and "Additional IFRS Measures" in the MD&A for the three and six months ended
Average heavy oil prices received are net of blending expenses and include the impact of physical delivery contracts.
FIRST HALF 2014 HIGHLIGHTS
The first half of 2014 was highlighted by the following:
•Production increased 12% during the first half of 2014 to 19,890 boe/d (94% oil) from the first half of 2013. Production increases were due primarily to the drilling of new oil wells, which included the Viking light oil development at Smiley. Increases were partially offset by natural declines and seasonal maintenance at a number of areas during the second quarter of 2014.
•Operating netback for the first half of 2014 was
•Funds from operations were
•The net loss during the first half of 2014 was
•Capital expenditures for the first half of 2014 totalled
•Polymer injections continued into the Bakken at
•Northern Blizzard drilled its first light oil wells during the first half of 2014, with 8 (8.0 net) wells drilled in the Viking play at Smiley. In total, 27 Viking wells are planned for the year.
In connection with the IPO and in accordance with the terms of the indenture governing the senior notes, the Company elected to redeem 35% of the aggregate principal amount of the senior notes (
Net debt at
The Board of Directors has declared a dividend of
The dividends have been designated as eligible dividends under the Income Tax Act (
Conference Call Today
Northern Blizzard will host a conference call today,
A recording of the conference call will be available until
In this news release, barrel of equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil or natural gas liquids (6 mcf : 1 bbl), which represents an energy equivalency conversion method applicable at the burner tip and does not represent a value equivalency at the wellhead. While it is useful for comparative measures, it may not accurately reflect individual product values and may be misleading if used in isolation.
This news release may contain certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements contain words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes.
In particular, this news release may contain forward-looking statements pertaining to the following:
•Business plans and strategies; •Capital expenditure and drilling programs; •Methods and ability to finance operations and capital expenditure programs; •Anticipated oil and natural gas production levels; •Timing and success of development and exploitation activities; •Future oil and natural gas prices; •Future costs including operating and administrative costs and royalty rates; •Future cash flows and net earnings; •Estimated tax pools and the Company's tax horizon; •Expectations regarding the Company's ability to add reserves through exploration and development; •Redemption of a portion of the Company's outstanding senior unsecured notes; and •The payment of dividends by Northern Blizzard.
In particular, the payment of dividends is dependent on the satisfaction of the applicable liquidity and solvency tests imposed by the Business Corporations Act (
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will be realized. Actual results will differ, and the difference may be material and adverse to the Company and its shareholders.
With respect to forward-looking statements contained in this news release, management has made assumptions regarding future production levels; future oil and natural gas prices; future operating costs; timing and amount of capital expenditures; the ability to obtain financing on acceptable terms; availability of skilled labour and drilling and related equipment; general economic and financial market conditions; continuation of existing tax and regulatory regimes; and the ability to market oil and natural gas successfully to current and new customers. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that the goals or figures contained in forward-looking statements will not be achieved. These factors include, but are not limited to, risks associated with fluctuations in market prices for crude oil, natural gas and diluent, general economic, market and business conditions, substantial capital requirements, uncertainties inherent in estimating quantities of reserves and resources, extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations from time to time, the need to obtain regulatory approvals on projects before development commences, environmental risks and hazards and the cost of compliance with environmental regulations, aboriginal claims, inherent risks and hazards with operations such as fire, explosion, blowouts, mechanical or pipe failure, cratering, oil spills, vandalism and other dangerous conditions, potential cost overruns, variations in foreign exchange rates, diluent supply shortages, competition for capital, equipment, new leases, pipeline capacity and skilled personnel, credit risks associated with counterparties, the failure of the Company or the holder of licenses, leases and permits to meet requirements of such licenses, leases and permits, reliance on third parties for pipelines and other infrastructure, changes in royalty regimes, failure to accurately estimate decommissioning costs, inaccurate estimates and assumptions by management, effectiveness of internal controls, the potential lack of available drilling equipment and other restrictions, failure to obtain or keep key personnel, title deficiencies with the Company's assets, geo-political risks, risks that the Company does not have adequate insurance coverage, risk of litigation and risks arising from future acquisition activities. The foregoing risks and other risks are described in more detail in the Company's final prospectus dated