Welcome!

News Feed Item

Painted Pony Petroleum Announces Record Second Quarter 2014 Financial and Operating Results

CALGARY, ALBERTA -- (Marketwired) -- 08/12/14 -- Painted Pony Petroleum Ltd. ("Painted Pony" or the "Company") (TSX: PPY) is pleased to announce its record second quarter 2014 financial and operating results from its organic Montney natural gas growth initiatives. Highlights for the second quarter of 2014 as compared to the second quarter of 2013 include:


--  90% increase in average production volumes to 15,029 barrels of oil
    equivalent ("boe") per day ("boe/d");

--  236% increase in natural gas liquids volumes to average 1,293 barrels
    per day ("bbls/d");

--  167% increase in funds flow from operations to $33.7 million ($0.38 per
    share);

--  69% increase in field operating netbacks from British Columbia
    operations to $25.04/boe;

--  39% reduction in general and administrative costs per boe to $1.57/boe;
    and

--  22% reduction in operating costs per boe to $7.37/boe.

SECOND QUARTER 2014 FINANCIAL & OPERATING RESULTS

Average production volumes for the second quarter of 2014 reached a record 15,029 boe/d, weighted 85% to natural gas, representing an increase of 90% over second quarter 2013 average production of 7,928 boe/d (82% natural gas). Natural gas liquids volumes for the second quarter of 2014 averaged 1,293 bbls/d, representing an increase of 236% over the second quarter of 2013 average natural gas liquids production of 385 bbls/d. For the first time in the Company's history, natural gas liquids volumes for the second quarter of 2014 exceeded crude oil volumes which averaged 907 bbls/d.

During the second quarter of 2014, Painted Pony generated a Company record funds flow from operations of $33.7 million, which represents a 167% increase over the second quarter of 2013. On a per share basis, Painted Pony generated funds flow from operations of $0.38/share, an increase of 171% over the second quarter 2013 funds flow per share. Similarly, record funds flow from operations for the six months ended June 30, 2014 of $53.2 million ($0.60/share) was approximately double the funds flow from operations for the six months ended June 30, 2013 of $26.7 million ($0.30/share). Painted Pony continued to realize excellent field operating netbacks in 2014. Ongoing cost reductions and efficiencies in operations coupled with increased natural gas pricing has allowed Painted Pony to realize field operating netbacks from its operations in British Columbia of $25.04/boe or $4.17 per thousand cubic feet equivalent ("Mcfe") for the three months ended June 30, 2014, a 69% improvement over realized field operating netbacks for the comparable period in 2013. Realized natural gas prices for the three months ended June 30, 2014 increased to $4.97 per thousand cubic feet ("Mcf"), an increase of 31% over the realized natural gas prices for the three months ended June 30, 2013 of $3.79 per Mcf.

During the second quarter of 2014, Painted Pony improved its general and administrative costs and operating costs per boe. General and administrative costs per boe were reduced to $1.57/boe for the three months ended June 30, 2014, a 39% improvement over general and administrative costs for the three months ended June 30, 2013 of $2.58/boe. Operating costs were $7.37/boe for the three months ended June 30, 2014, a 22% improvement over operating costs for the comparable period in 2013 of $9.49/boe.

For the six months ended June 30, 2014, capital expenditures totaled $77.6 million including $57.0 million on drilling and completions. In the first half of 2014, the Company drilled 7 (7.0 net) Montney wells, and completed 6 (6.0 net) Montney wells, including 2 (2.0 net) previously drilled Montney wells at Townsend, all of which utilized the open-hole ball drop completion system. An additional $15.7 million was spent on facilities and equipment which included the construction of the Company's 100% working interest, 25 million cubic feet ("MMcf") per day ("MMcf/d") natural gas processing and condensate stabilization facility at Townsend.

On July 30, 2014, the Company completed the sale of its southeast Saskatchewan assets for gross proceeds of $100 million and recorded an impairment as a result of the sale which contributed to a net loss in the quarter of $18.9 million. A cash position as at July 30, 2014 of $53 million combined with an undrawn $150 million credit facility positions the Company to be well-capitalized on the execution of its Montney development plan.

OPERATIONS UPDATE

During the second quarter of 2014, Painted Pony commenced operations at its 100% owned and operated natural gas processing facility at the Townsend 33-J pad with a design capacity of 25 MMcf/d. Condensate yields at this facility during the second quarter of 2014 averaged 40 bbls/MMcf, and received a price of $106.14/bbl that approximates the Edmonton Par reference price for light oil.

In addition, the Company has completed an engineering study with a third party midstream company to build a natural gas processing facility, including refrigeration and associated liquids handling, at the Townsend 33-J pad with an expected capacity of approximately 190 MMcf/d. This new plant is anticipated to commence operations in late 2015 pending execution of final agreements, and is expected to reduce transportation, processing, and operating costs, and increase liquids production.

Painted Pony has drilled 10 (10.0 net) Montney wells to date in 2014 including 6 (6.0 net) wells which have been drilled on a parallel-pair spacing pattern. This approach combines the Company's operational experience using open-hole ball drop fracture stimulations with a new sequencing and refined placement of Montney horizontal well trajectories. To date, Painted Pony has completed 4 (4.0 net) paired parallel wells with production results that have exceeded the Company's expectations. Painted Pony is currently drilling 2 (1.5 net) Montney wells at Townsend and Daiber and completing 2 (2.0 net) wells at Blair.

INCREASED 2014 CAPITAL PROGRAM

The Company's financial and operating results to date, combined with proceeds from the sale of its southeast Saskatchewan assets, have led Painted Pony to expand its 2014 capital budget to $206 million from its previous level of $169 million. As part of this budget expansion, the Company has accelerated its Montney development program in British Columbia to include a total of 22 (20.5 net) wells in 2014 and the construction of additional roads, pipeline and operational infrastructure for future production growth.

As previously announced, the 2014 capital budget includes accelerating the construction of a planned 25 MMcf/d natural gas compression and dehydration facility at Blair in the fourth quarter of 2014 with operations beginning early in the first quarter of 2015. In addition, Painted Pony has initiated an expansion of the processing capacity at its 50% working interest Daiber dry gas facility from its current capacity of 25 MMcf/d to 50 MMcf/d. The Company expects construction to be completed in the fourth quarter of 2014.

PRODUCTION EXPECTATIONS FOR 2014

After giving effect to the sale of its southeast Saskatchewan assets, the performance of recent Montney wells completions and 2014 capital spending plans, Painted Pony expects production volumes for 2014 to average approximately 13,500 boe/d (89% natural gas). This represents a 55% increase over 2013 average production of 8,693 boe/d.

Painted Pony is a Canadian oil and gas exploration company that trades on the Toronto Stock Exchange under the symbol "PPY".

FINANCIAL AND OPERATING HIGHLIGHTS


----------------------------------------------------------------------------
                             Three months ended        Six months ended
                                  June 30,                 June 30,
----------------------------------------------------------------------------
                             2014     2013  Change     2014    2013 Change
----------------------------------------------------------------------------
Financial ($ millions, except per share and shares outstanding)
Petroleum and natural gas
 revenue(1)                  54.4     24.6     121%    91.6    50.2     82%
Funds flow from
 operations(2)               33.7     12.6     167%    53.2    26.7     99%
  Per share - basic(3)       0.38     0.14     171%    0.60    0.30    100%
  Per share - diluted(4)     0.37     0.14     164%    0.59    0.30     97%
Net income (loss)           (18.9)     0.7     N/A    (20.4)   (1.1)   N/A
  Per share - basic(3) and
   diluted(4)               (0.21)    0.01     N/A    (0.23)  (0.01)   N/A
Capital expenditures(5)      30.1     15.2      98%    77.6    67.7     15%
Working capital(6)           80.4      7.3     N/A     80.4     7.3    N/A
Bank debt                    49.3        -     N/A     49.3       -    N/A
Total assets                649.6    595.4       9%   649.6   595.4      9%
Shares outstanding (000s)  89,321   88,489       1%  89,321  88,489      1%
Basic weighted-average
 shares (000s)             89,231   88,424       1%  88,889  88,383      1%
Fully diluted weighted-
 average shares (000s)     90,645   88,653       2%  89,770  88,700      1%

Operational
Daily production volumes
  Natural gas (mcf per
   day)                    76,977   39,220      96%  63,864  39,974     60%
  Crude oil (bbls per day)    907    1,006     (10%)    867   1,205    (28%)
  Natural gas liquids
   (bbls per day)           1,293      385     236%     885     393    125%
  Total (boe per day)      15,029    7,928      90%  12,396   8,260     50%
Realized prices
  Natural gas ($ per mcf)    4.97     3.79      31%    5.26    3.56     48%
  Crude oil ($ per bbl)    105.39    93.30      13%  102.56   90.05     14%
  Natural gas liquids ($
   per bbl)                 89.70    66.67      35%   87.20   56.09     55%
Field operating
 netbacks(7)($ per boe)
  British Columbia          25.04    14.78      69%   25.40   14.75     72%
  Saskatchewan              55.55    51.58       8%   50.47   48.67      4%
  Company combined          27.04    20.06      35%   27.32   20.35     34%
----------------------------------------------------------------------------
1. Before royalties.
2. This table contains the term "funds flow from operations", which should
not be considered an alternative to, or more meaningful than "cash flows
from operating activities" as determined in accordance with International
Financial Reporting Standards ("IFRS") as an indicator of the Company's
performance. Funds flow from operations and funds flow from operations per
share (basic and diluted) do not have any standardized meanings prescribed
by IFRS and may not be comparable with the calculation of similar measures
for other entities. Management uses funds flow from operations to analyze
operating performance and leverage and considers funds flow from operations
to be a key measure as it demonstrates the Company's ability to generate the
cash necessary to fund future capital investment. The reconciliation between
funds flow from operations and cash flows from operating activities can be
found in "Management's Discussion and Analysis". Funds flow from operations
per share is calculated using the basic and diluted weighted average number
of shares for the period, consistent with the calculations of earnings per
share.
3. Basic per share information is calculated on the basis of the weighted
average number of shares outstanding in the period.
4. Diluted per share information reflects the potential dilutive effect of
options.
5. Including acquisitions, decommissioning obligations, capitalized share-
based payments and transaction costs.
6. This table contains the term "working capital". Working capital does not
have any standardized meaning prescribed by IFRS and may not be comparable
with the calculation of similar measures for other entities. Management
calculates working capital as current assets less current liabilities and
uses this ratio to analyze operating performance and leverage.
7. This table contains the term "field operating netbacks". Field operating
netback does not have any standardized meaning prescribed by IFRS and may
not be comparable with the calculation of similar measures for other
entities. Management calculates field operating netback on a per unit basis
as crude oil, natural gas and natural gas liquids revenues and other income
less royalties, operating and transportation costs.

Advisory

Special Note Regarding Forward-Looking Information

This news release contains certain forward-looking statements, which are based on numerous assumptions including but not limited to (i) drilling success; (ii) production; (iii) future capital expenditures;(iv) accuracy of reserves and resources estimates; and (v) cash flows from operating activities. In addition, and without limiting the generality of the foregoing, the key assumptions underlying the forward-looking statements contained herein include the following: (i) commodity prices will be volatile, and natural gas prices will remain low, throughout 2014; (ii) capital, undeveloped lands and skilled personnel will continue to be available at the level Painted Pony has enjoyed to date; (iii) the effect of hedges on risk management programs; (iv) Painted Pony will be able to obtain equipment in a timely manner to carry out exploration, development and exploitation activities; (v) production rates in 2014 are expected to show growth from the first quarter of 2014; (vi) Painted Pony will have sufficient financial resources with which to conduct the capital program; and (vii) the current tax and regulatory regime will remain substantially unchanged. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect.

This news release contains information, including in respect of Painted Pony's capital program, which may constitute future oriented financial information or a financial outlook. Such information was approved by management of Painted Pony on August 12, 2014, and such information is included herein to provide readers with an understanding of the Company's anticipated capital expenditures. Readers are cautioned that the information may not be appropriate for other purposes.

Certain information regarding Painted Pony set forth in this news release, including estimates of the Company's reserves and resources, estimates of future net revenue from the Company's reserves and resources, pricing, inflation and exchange rates may constitute forward-looking statements under applicable securities laws and necessarily involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Painted Pony's control, including without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, environmental risks, inability to obtain drilling rigs or other services, capital expenditure costs, including drilling, completion and facility costs, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, and stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof. Readers are cautioned that the foregoing list of factors is not exhaustive. Painted Pony's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

The forward-looking statements contained in this document are made as at the date of this news release and Painted Pony does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Non-GAAP Financial Measures

This news release contains the terms "funds flow from operations", "working capital" and "field operating netback", which do not have any standardized meanings prescribed by IFRS and may not be comparable with the calculation of similar measures for other entities. Management uses funds flow from operations to analyze operating performance and leverage and considers funds flow from operations to be a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investment. Funds flow from operations per share is calculated using the basic and diluted weighted average number of shares for the period, consistent with the calculations of earnings per share. Management calculates working capital as current assets less current liabilities and uses this ratio to analyze operating performance and leverage. Management calculates field operating netback on a per unit basis as crude oil, natural gas and natural gas liquids revenues and other income less royalties and operating and transportation costs.

Oil and Natural Gas Measures

Estimates of production for individual wells may not reflect the same confidence or production levels as estimates of production for all wells on specific properties due to the effects of aggregation.

The well test results and short term production disclosed in this news release represent short-term results, which may not necessarily be indicative of long-term well performance or ultimate hydrocarbon recovery therefrom.

Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio of 6 Mcf: 1 bbl may be misleading as an indication of value.

Mcfe may be misleading, particularly if used in isolation. An Mcfe conversion ratio of 1 bbl: 6 Mcfe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 1 bbl: 6 Mcf, utilizing a conversion ratio of 1 bbl: 6 Mcf may be misleading as an indication of value.

Additional information on these and other factors that could affect Painted Pony's operations and financial results are included in the Company's Management's Discussion and Analysis for the year ended December 31, 2013, second quarter ended June 30, 2014, and the Company's Annual Information Form for the year ended December 31, 2013 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or Painted Pony's website (www.paintedpony.ca).

Contacts:
Painted Pony Petroleum Ltd.
Patrick R. Ward
President & CEO
(403) 475-0440
(403) 238-1487 (FAX)

Painted Pony Petroleum Ltd.
John H. Van de Pol
Vice President, Finance & CFO
(403) 475-0440
(403) 238-1487 (FAX)
www.paintedpony.ca

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
In recent years, containers have taken the world by storm. Companies of all sizes and industries have realized the massive benefits of containers, such as unprecedented mobility, higher hardware utilization, and increased flexibility and agility; however, many containers today are non-persistent. Containers without persistence miss out on many benefits, and in many cases simply pass the responsibility of persistence onto other infrastructure, adding additional complexity.
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
Did you know that you can develop for mainframes in Java? Or that the testing and deployment can be automated across mobile to mainframe? In his session at @DevOpsSummit at 20th Cloud Expo, Vaughn Marshall, Sr. Principal Product Owner at CA Technologies, will discuss and demo how increasingly teams are developing with agile methodologies using modern development environments and automating testing and deployments, mobile to mainframe.
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across supply chain networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost and time for product recall as well as advance trade. Are you curious about Blockchain and how it can provide you with new opportunities for innovation and growth? In her session at 20th Cloud Exp...