|By Marketwired .||
|May 14, 2014 05:32 PM EDT||
CALGARY, ALBERTA -- (Marketwired) -- 05/14/14 -- Harvest Operations Corp. (Harvest or the Company) announces its financial and operating results for the first quarter ended March 31, 2014.
This press release is an overview of the first quarter results for 2014 and should be read with the interim unaudited consolidated financial statements and Management's Discussion and Analysis (MD&A) for the first quarter ended March 31, 2014 available on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
All financial data has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board except where otherwise noted. All figures reported herein are in Canadian dollars unless otherwise stated.
Harvest will be holding a conference call to discuss our first quarter 2014 results at 9:00 a.m. Mountain Standard Time (11:00 a.m. Eastern Standard Time) on May 22, 2014. Callers may dial 1-800-769-8320 (international callers or Toronto local dial 416-340-8530) a few minutes prior to start and request the Harvest conference call. The call will be available for replay by dialing 1-800-408-3053 (international callers or Toronto local dial 905-694-9451) and entering the passcode 5102493.
FIRST QUARTER 2014 HIGHLIGHTS:
-- Cash contribution from Upstream operations was $139.8 million for the first quarter of 2014, a $16.9 million increase from the same period in 2013 as a result of higher realized prices partially offset by lower sales volumes. -- Upstream production volumes averaged 48,487 boe/d in the first quarter, a 13% decrease compared to the first quarter of 2013 due to natural declines, smaller 2012 and 2013 capital drilling programs and dispositions of certain non-core producing properties. -- Operating netbacks prior to hedging for the quarter averaged $37.27/boe, an increase of $9.72/boe for the same period in 2013 due to higher average realized prices partially offset by higher operating expense and royalties per boe. -- Upstream capital spending in the first quarter of 2014 was $134.3 million mainly related to the drilling, completion and tie-in of wells. Harvest rig released 41 gross wells (31.9 net) during the first quarter of 2014. -- Subsequent to March 31, 2014, Harvest closed two joint ventures with KERR Canada Co. Ltd. (KERR), the Canadian subsidiary of a Korean registered investment fund managed by Hanwha Asset Management Co. Ltd. In the Deep Basin Partnership (DBP), Harvest contributed certain oil and gas properties in the Deep Basin area in northwest Alberta for an 82% interest in the DBP while KERR contributed $100.4 million of cash for an 18% interest in the DBP. The cash will be used to fund the exploration, development and production of the assets contributed by Harvest to the DBP. In the HK MS Partnership (HKMSP) will construct and operate a gas processing facility used primarily to process gas from the DBP. KERR contributed $22.6 million of cash for a 35% interest in HKMSP. The remaining 65% will be contributed by Harvest as cash is required for the construction of the gas processing facility.
-- Capital spending for BlackGold in the first quarter was $42.2 million, mainly related to the construction of the Central Processing Facility (CPF). -- Phase 1 of the project is approximately 93% complete as at March 31, 2014. Phase 1 completion, commissioning of the CPF and first steam are expected in 2014. -- As at March 31, 2014, Harvest has incurred costs of $580.5 million on the EPC contract and has recorded $773.1 million of costs on the project since acquiring the BlackGold assets in 2010.
-- Cash contribution from Downstream operations was $33.7 million for the first quarter of 2014, compared to a cash deficiency of $33.0 million in the same period in 2013. This was mainly due to a US$7.07/bbl improvement of the average refining margin and an improved yield mix compared to the same quarter in 2013. -- First quarter gross refining margins averaged US$9.58/bbl compared to US$2.51/bbl in the same quarter of 2013 due to higher realized product margins as a result of improved sour crude differentials. -- Refinery throughput volume averaged 95,767 bbl/d in the first quarter, a decrease of 4,307 bbl/d compared to the same period in 2013. During the first quarter of 2014 lower volumes of vacuum gas oil were processed due to constrained market economics.
-- Harvests net income in the first quarter of 2014 was $3.0 million, an increase of $98.4 million from the first quarter of 2013 due to improvements in operating income in both the Upstream and Downstream operations as described above. -- In December of 2013, Harvest entered into a five year $200 million subordinated loan agreement with Korea National Oil Corporation (KNOC). As at March 31, 2014 Harvest has borrowed $160 million under the loan agreement. -- Harvest has appointed Mr. John Wearing as Acting Chief Operating Officer. Mr. Wearing joined Harvest in 2011 and previously held the position of Director, Corporate Partnerships. Mr. Wearing is a Professional Engineer with over 30 years of experience in the oil and gas industry.
FINANCIAL & OPERATING HIGHLIGHTS:
Three Months Ended March 31 2014 2013 ---------------------------------------------------------------------------- UPSTREAM OPERATIONS Daily sales volumes (boe/d) 48,487 55,571 Average realized price Oil and NGLs ($/bbl)(2) 82.30 69.41 Gas ($/mcf)(2) 6.16 3.46 Operating netback prior to hedging ($/boe)(1) 37.27 27.55 Operating income (loss) 21.8 (22.5) Cash contribution from operations(1) 139.8 122.9 Capital asset additions (excluding acquisitions) 134.3 123.2 Property and business acquisitions (dispositions), net (2.1) 3.2 Net wells drilled 31.9 44.9 Net undeveloped land additions (acres) 6,444 16,213 BLACKGOLD OIL SANDS Capital asset additions 42.2 61.0 DOWNSTREAM OPERATIONS Average daily throughput (bbl/d) 95,767 100,074 Average refining gross margin (US$/bbl)(1) 9.58 2.51 Operating income (loss) 31.5 (55.0) Cash contribution (deficiency) from operations(1) 33.7 (33.0) Capital asset additions 3.1 12.5 NET INCOME (LOSS)(3) 3.0 (95.4) ----------------------------------------------------------------------------
(1) This is a non-GAAP measure; please refer to "Non-GAAP Measures" the MD&A.
(2) Excludes the effect of risk management contracts designated as hedges.
(3) Net income (loss) includes the consolidated operating results of Harvest's operating segments.
The following guidance is provided as general information for stakeholders regarding management's expectations for 2014 for the Upstream, BlackGold and Downstream business segments. The guidance information provided is consistent with Harvest's most recent budget information. Readers are cautioned that the guidance information provided within this Outlook may not be appropriate for other purposes and the actual results may differ materially from those anticipated.
Production volume for the year 2014 is targeted at approximately 48,800 boe/d reflecting natural declines and assets dispositions during 2013 and our 2014 operating costs are expected to average $17.80/boe. During the first quarter of 2014 production averaged 48,487 boe/d and operating expense was $20.29/boe due to higher than expected power costs as well as repairs and maintenance charges.
The 2014 annual capital budget for the Upstream business is $350 million. During the first quarter of 2014 Harvest spent $134.3 million.
Harvest has not budgeted for asset acquisitions or dispositions. The Company has identified non-core properties for disposition representing approximately 2,400 boe/d of production. Proceeds from dispositions would be used to manage Harvest's liquidity, fund development of core assets and for the acquisition of strategic assets.
Due to extreme winter conditions the project scaled back construction activities during the first quarter of 2014. Harvest anticipates resuming full construction activities in the second quarter of 2014 and has revised the project schedule accordingly.
BlackGold currently has a capital spending budget of $131 million of which $42.2 million was spent in the first quarter of 2014.
Harvest anticipates construction completion of the 10,000 bbl/d Phase 1 CPF in the second half of 2014 with first steam expected in the fourth quarter of 2014.
The 2014 capital budget for the Downstream operations has been revised to $38 million from $139 million due to the rescheduling of a refinery turnaround that was planned for the second half of 2014. The turnaround postponement is a result of running cleaner produced vacuum gas oils in the Isomax unit resulting in an extension of the catalyst life. The remaining capital spending in 2014 is allocated to sustaining and reliability improvement projects. As at the end of the first quarter of 2014 the Downstream Operations had utilized $3.1 million of the capital budget.
For the full year 2014 throughput is anticipated to average approximately 92,500 bbl/d, with operating costs and purchased energy costs aggregating to approximately $8.00/bbl. In the first quarter of 2014 throughput averaged 95,767 bbl/d with operating and purchased energy costs of $7.37/bbl.
Harvest continues to evaluate various business opportunities pertaining to the Downstream business including, but not limited to, introduction of joint venture partners, disposition, in whole or in part, as well as multiple other economic scenarios for future operations. An outcome or recommendation arising out of this review has not been determined to date.
Harvest's revised capital expenditure budget for 2014 is $519 million, comprised of $350 million for Upstream oil & gas operations, $131 million the BlackGold oil sands project and $38 million for the Downstream refining and marketing business.
Harvest is a wholly-owned, subsidiary of KNOC. Harvest is a significant operator in Canada's energy industry offering stakeholders exposure to exploration, development and production of crude oil and natural gas (Upstream), an oil sands project under construction and development in northern Alberta (BlackGold) and refining and marketing of distillate, gasoline and fuel oil (Downstream) segments.
KNOC is a state owned oil and gas company engaged in the exploration and production of oil and gas along with storing petroleum resources. KNOC will fully establish itself as a global government-run petroleum company by applying ethical, sustainable and environment-friendly management and by taking corporate social responsibility seriously at all times. For more information on KNOC, please visit their website at www.knoc.co.kr/ENG/main.jsp.
Certain information in this press release, including management's assessment of future plans and operations, contains forward-looking information that involves risk and uncertainty. Please also refer to "Forward-Looking information" in the MD&A and "Risk Factors" in the Annual Information Form for detailed discussion on these risks.
Forward-looking statements in this press release may include, but are not limited to, the forward looking statements made throughout this press release with reference to the following items to future periods: production volumes, refinery throughput volumes, operating costs, acquisitions and dispositions, capital spending and allocation of such to various projects, commerciality of Harvest's capital projects, the ability to achieve the maximum capacity from the BlackGold central processing facilities, access and ability to raise capital, cash from operating activities, regulatory approval and development projects and regulatory changes. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expect", "target", "plan", "potential", "intend", and similar expressions.
The forward-looking information in the press release is provided with the objective to share with stakeholder's management's expectations for 2014 operating levels, key expenses in the Upstream and Downstream segments and major cash outflows in 2014. The guidance information provided is consistent with the Company's current budget information. Readers are cautioned that the forward-looking information may not be appropriate for other purposes and the actual results may differ materially from those anticipated. Although management believes that the forward-looking information is reasonable based on information available on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity and achievements. Therefore, readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Although we consider such information reasonable at the time of preparation, it may prove to be incorrect and actual results may differ materially from those anticipated. Harvest assumes no obligation to update forward-looking statements should circumstances, estimates or opinions change, except as required by law. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Further information about us can be accessed under our public filings found on SEDAR at www.sedar.com or at www.harvestenergy.ca. Information can also be found by contacting our Investor Relations department at (403) 265-1178 or at 1-866-666-1178.
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
Oct. 25, 2016 08:45 PM EDT Reads: 2,683
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Oct. 25, 2016 08:45 PM EDT Reads: 3,239
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
Oct. 25, 2016 08:30 PM EDT Reads: 1,094
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
Oct. 25, 2016 08:15 PM EDT Reads: 1,369
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
Oct. 25, 2016 07:30 PM EDT Reads: 1,536
November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Penta Security is a leading vendor for data security solutions, including its encryption solution, D’Amo. By using FPE technology, D’Amo allows for the implementation of encryption technology to sensitive data fields without modification to schema in the database environment. With businesses having their data become increasingly more complicated in their mission-critical applications (such as ERP, CRM, HRM), continued ...
Oct. 25, 2016 07:30 PM EDT Reads: 1,106
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
Oct. 25, 2016 07:15 PM EDT Reads: 284
SYS-CON Events announced today that SoftNet Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
Oct. 25, 2016 07:00 PM EDT Reads: 1,023
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Oct. 25, 2016 07:00 PM EDT Reads: 338
SYS-CON Events announced today that Cloudbric, a leading website security provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Cloudbric is an elite full service website protection solution specifically designed for IT novices, entrepreneurs, and small and medium businesses. First launched in 2015, Cloudbric is based on the enterprise level Web Application Firewall by Penta Security Sys...
Oct. 25, 2016 06:45 PM EDT Reads: 1,241
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
Oct. 25, 2016 06:45 PM EDT Reads: 1,439
In his session at 19th Cloud Expo, Nick Son, Vice President of Cyber Risk & Public Sector at Coalfire, will discuss the latest information on the FedRAMP Program. Topics will cover: FedRAMP Readiness Assessment Report (RAR). This new process is designed to streamline and accelerate the FedRAMP process from the traditional timeline by initially focusing on technical capability instead of documentation preparedness. FedRAMP for High-impact level systems. Early in 2016 FedRAMP officially publishe...
Oct. 25, 2016 06:15 PM EDT Reads: 373
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
Oct. 25, 2016 06:15 PM EDT Reads: 2,140
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Oct. 25, 2016 06:00 PM EDT Reads: 2,705
Kubernetes, Docker and containers are changing the world, and how companies are deploying their software and running their infrastructure. With the shift in how applications are built and deployed, new challenges must be solved. In his session at @DevOpsSummit at19th Cloud Expo, Sebastian Scheele, co-founder of Loodse, will discuss the implications of containerized applications/infrastructures and their impact on the enterprise. In a real world example based on Kubernetes, he will show how to ...
Oct. 25, 2016 05:45 PM EDT Reads: 2,892