Net sales volumes from Evi decreased 13% in the fourth quarter of 2012 to 2,730 boe/d (2,995 boe/d working interest) compared to 3,140 boe/d (3,413 boe/d working interest) in the third quarter of 2012 due to the slowdown of drilling activity in the period. In the fourth quarter of 2012, Lone Pine drilled 4 gross (2.8 net) wells, completed 5 gross (4.3 net) wells and brought onstream 5 gross (4.3 net) wells at Evi. For the full year 2012, Lone Pine drilled 32 gross (27.7 net) wells, completed 34 gross (30.5 net) wells and brought onstream 41 gross (37.5 net) wells at Evi.
In the first quarter of 2013, Lone Pine has completed drilling 8 gross (6.75 net) wells, five of which are expected to be brought onstream within the next two weeks.
Net sales volumes from the Deep Basin averaged 42.5 MMcfe/d in the fourth quarter of 2012 compared to 49.4 MMcfe/d in the third quarter of 2012 as sales volumes declined due to the disposition of certain natural gas weighted non-core assets in the period.
Interim 2013 Capital Budget & Guidance
The following guidance is subject to all the cautionary statements and limitations described below under the caption "Forward Looking Statements."
Lone Pine's Board of Directors has approved an interim capital budget for the first half of 2013 of approximately $35 million. The interim capital budget will focus on light oil opportunities at Evi and will include the drilling of 8 gross (6.75 net) wells. Lone Pine's interim capital budget is designed to closely approximate cash flow from operations together with proceeds from non-core asset dispositions in the period such that total long-term debt over the period is approximately flat.
Lone Pine expects total average net sales volumes of approximately 45 - 47 MMcfe/d in the first half of 2013, which are expected to be comprised of 35% liquids and 65% natural gas.
The following table summarizes other selected guidance for the first half of 2013:
52 - 54 MMcfe/d (35%Average Working Interest Sales Volumes: liquids)Net Production Expense: $ 3.10 per Mcfe
A conference call to discuss the fourth quarter and full year 2012 results is scheduled for Friday, March 15, 2013, at 10:00 AM MT. To participate, please dial 800-215-2410 (toll-free from North America) or 617-597-5410 and request the Lone Pine teleconference (ID#13608391) or listen to the webcast on Lone Pine's website at www.lonepineresources.com. A replay will be available through April 15, 2013 by dialing 888-286-8010 or 617-801-6888 and entering passcode #25137513
Adjusted Net Earnings (Loss)
In addition to reporting net earnings (loss) as defined under GAAP, Lone Pine also presents adjusted net earnings (loss), which is a non-GAAP measure. Adjusted net earnings (loss) consists of net earnings (loss) after adjustment for those items described in the table below. Adjusted net earnings (loss) does not represent, and should not be considered an alternative to, GAAP measurements, such as net earnings (loss) (its most comparable GAAP measure), and Lone Pine's calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, Lone Pine believes the measure is useful to investors because similar measures are frequently used by securities analysts, ratings agencies, investors, and other interested parties in their evaluation of companies in similar industries. Lone Pine's management does not view adjusted net earnings in isolation and also uses other measurements, such as net earnings and revenues, to measure operating performance.