Q4 and FY 2012 Results
Petroleum and natural gas sales for the three months ended December 31, 2012 increased 51% to $5.6 million, compared to $3.7 million in the same period last year despite lower commodity prices. The increase is related to production gains arising from both successful drilling and increased oil volumes. Revenue for the year increased 130% to $19.1 million compared to $8.3 million for the same period last year.
Average production volumes for the three months ended December 31, 2012 increased 26% to 1,459 boe/d compared to 1,159 boe/d, last year. The production and royalty volume mix for the current quarter improved to 65% natural gas and 35% light crude oil and NGL's in comparison to the product mix for the three months ended December 31, 2011 of 72% natural gas and 28% light crude oil and NGL's. Oil and NGL production has increased by 21% from the previous quarter as the result of a new well that came on production during the quarter in the Company's Progress area. Current production from field estimates are 1,760 boe/d. Shoreline expects to have its second Montney oil well tied in and on stream on or about April 10. Shoreline is budgeting average daily production of 400 boe/d for this well. The Company will continue to focus on horizontal light oil projects and expects that the light crude mix will continue to increase as more production comes on stream from drilling activities in the Peace River Arch and in Colorado.
The Company's netbacks were $26.25 and $16.31 for the three and twelve months ended December 31, 2012 compared to $13.13 and $14.23, respectively, in the comparable periods a year ago. The increase in the current year operating netback is primary due to increased oil volumes and decreased royalty costs per boe. The Company anticipates future operating netbacks to increase quarter over quarter as the Company brings on additional oil production in Canada and the United States and the effects of stronger natural gas prices are realized. Operating and transportation expenses for the three months ended December 31, 2012 were $1.8 million or $13.72/boe in comparison to $1.6 million or $15.42/boe for the comparative three-month period.
For the three-month period and year ended December 31, 2012, the Company incurred a net loss and comprehensive loss of $1.0 million or $0.18 per share and $3.3 million or net loss of $0.59 per share basic and diluted, respectively. For the comparative three-month period and year ended, December 31, 2011, the Company had a net loss and comprehensive loss of $12.2 million or $2.68 per share and $13.1 million or $4.68 per share. Net loss for the comparative three month period and year end included a goodwill impairment related to the Worsley CGU.
Shoreline's funds from operations increased by 303% and 255% for the three and twelve months ended December 31, 2012 to $2 million and $5.2 million, respectively. The Company declared $0.7 million and $3.2 million of cash dividend payments in the fourth quarter and full year 2012, representing $0.12 and $0.56 per share, respectively.
The Company spent $23.7 million for capital expenditures and $15.8 million for acquisitions during the full year of 2012.
Net debt and shareholders' equity were $55.8 million and $32 million, respectively, at December 31, 2012 compared to $21.3 million and $34.8 million at December 31, 2011. The Company increased its net debt significantly in 2012 to fund the Colorado acquisitions. The Company is actively looking to reduce its current debt level and has taken several steps since the end of 2012. They include:
-- In March 2013, the Company closed a private placement financing by issuing 1,400,000 common shares for gross proceeds of $4.9 million at a price of $3.50 per share;-- On March 15, 2013, the Company sold a non-core property for $2.15 million of cash consideration. The effective date of the sale was February 1, 2013.