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CALGARY, ALBERTA--(Marketwire - March 1, 2012) - Bonavista Energy Corporation BNP is pleased to report to shareholders its results for the fourth quarter ended December 31, 2011.
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Highlights
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Three months
ended Years ended
December 31, % December 31, %
2011 2010 Change 2011 2010 Change
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Financial
($ thousands, except
per share)
Production revenues 285,167 234,706 21% 1,044,414 938,726 11%
Funds from
operations(1) 150,843 127,258 19% 553,303 526,987 5%
Per share(1) (2) 0.91 0.81 12% 3.44 3.44 -
Dividends declared 51,850 64,242 (19%) 200,032 252,298 (21%)
Per share 0.36 0.48 (25%) 1.44 1.92 (25%)
Percentage of funds
from operations(1) 34% 50% (16%) 36% 48% (12%)
Net income (loss) (3,321) (66,784) 95% 137,184 82,288 67%
Per share(3) (0.02) (0.50) 96% 0.85 0.63 35%
Adjusted net income(4) 16,994 (51,028) 133% 139,383 79,599 75%
Per share(3) 0.10 (0.38) 126% 0.87 0.61 43%
Total assets 3,924,160 3,444,555 14%
Long-term debt, net of
working capital(5) 1,131,715 1,021,836 11%
Long-term debt, net of
adjusted working
capital(4)(5) 1,123,001 1,020,318 10%
Shareholders' equity 2,001,802 1,841,422 9%
Capital expenditures:
Exploration and
development 81,035 94,031 (14%) 453,550 348,062 30%
Acquisitions, net 67,120 (39,801) 269% 163,521 220,514 (26%)
Weighted average
outstanding
equivalent shares:
(thousands)(3)
Basic 165,355 133,783 24% 160,712 131,075 23%
Diluted 165,355 133,783 24% 161,787 131,493 23%
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Operating
(boe conversion - 6:1
basis)
Production:
Natural gas
(mmcf/day) 268 250 7% 255 240 6%
Natural gas liquids
(bbls/day) 14,628 12,387 18% 12,890 11,562 11%
Oil (bbls/day)(9) 14,110 14,304 (1%) 13,868 14,620 (5%)
Total oil
equivalent
(boe/day) 73,373 68,307 7% 69,332 66,259 5%
Product prices:(6)
Natural gas ($/mcf) 3.69 4.08 (10%) 4.06 4.50 (10%)
Natural gas liquids
($/bbl) 58.78 45.15 30% 55.09 45.01 22%
Oil ($/bbl)(9) 89.36 71.85 24% 81.91 69.28 18%
Operating expenses
($/boe) 9.26 7.88 18% 9.05 8.05 12%
General and
administrative
expenses ($/boe) 0.95 0.87 9% 0.95 0.86 10%
Cash costs ($/boe)(7) 13.16 12.30 7% 13.27 11.76 13%
Operating netback
($/boe)(8) 24.75 22.98 8% 24.53 23.85 3%
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Highlights (cont'd) December 31, %
2011 2010 Change
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Drilling (gross wells): 143 140 2%
Natural gas 67 77 (13%)
Oil 76 61 25%
Average success rate 100% 99% 1%
Land:
Undeveloped (net acres) 1,474,080 1,522,867 (3%)
Total (net acres) 3,078,418 3,003,411 2%
Reserves: (10)
Proved:
Natural gas (bcf) 851.0 840.4 1%
Oil and natural gas liquids
(mbbls) 92,235 83,695 10%
Total oil equivalent
(mboe) 234,075 223,756 5%
Proved and probable:
Natural gas (bcf) 1,264.0 1,177.4 7%
Oil and natural gas liquids
(mbbls) 133,992 115,578 16%
Total oil equivalent
(mboe) 344,660 311,811 11%
% Proved producing 42% 45% (3%)
% Proved 68% 72% (4%)
% Probable 32% 28% 4%
Net present value of future
cash flow before income
taxes ($ millions):
0% discount rate 9,766 9,947 (2%)
5% discount rate 6,184 6,283 (2%)
10% discount rate 4,472 4,537 (1%)
Reserve life index (years):
Proved 8.8 9.1 (3%)
Proved and probable 12.2 12.0 2%
Finding, development and
acquisition costs - proved and
probable ($/boe):
Including changes in future
development expenditures 13.39 13.35 1%
Excluding changes in future
development expenditures 10.61 8.99 18%
Recycle ratio - proved and
probable: (11)
Including changes in future
development expenditures 1.8 1.8 -
Excluding changes in future
development expenditures 2.3 2.7 (15%)
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Share Trading Statistics
Three months ended
December September June 30, March 31,
31, 2011 30, 2011 2011 2011
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($ per share, except volume)
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High 27.48 29.98 30.36 32.00
Low 19.88 20.08 27.13 25.12
Close 26.07 23.56 28.57 30.00
Average Daily Volume - Shares 392,532 370,453 345,427 561,706
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NOTES:
1. Management uses funds from operations to analyze operating performance,
dividend coverage and leverage. Funds from operations as presented do
not have any standardized meaning prescribed by IFRS and therefore it
may not be comparable with the calculations of similar measures for
other entities. Funds from operations as presented is not intended to
represent operating cash flow or operating profits for the period nor
should it be viewed as an alternative to cash flow from operating
activities, net income or other measures of financial performance
calculated in accordance with IFRS. All references to funds from
operations throughout this report are based on cash flow from operating
activities before changes in non-cash working capital, decommissioning
expenditures and interest expense. Funds from operations per share is
calculated based on the weighted average number of shares outstanding
consistent with the calculation of net income per share.
2. Basic funds from operations per share calculations include exchangeable
shares which are convertible to common shares on certain terms and
conditions. For the comparative periods, exchangeable shares are
included in the basic funds from operations per share calculation.
3. Basic net income per share calculations include exchangeable shares
which are convertible to common shares on certain terms and conditions.
For the comparative periods under the trust structure, exchangeable
shares are excluded from the basic per share calculations in accordance
with International Financial Reporting Standards.
4. Amounts have been adjusted to exclude unrealized gains or losses on
financial instrument commodity contracts.
5. Amounts exclude convertible debentures, exchangeable shares and share-
based compensation.
6. Product prices include realized gains or losses on financial instrument
commodity contracts.
7. Cash costs equal the total of transportation, operating, general and
administrative, and financing expenses.
8. Operating netback equals production revenues including realized gains or
losses on financial instrument commodity contracts, less royalties,
transportation and operating expenses, calculated on a boe basis.
9. Oil includes both conventional and heavy oil.
10. Company interest reserves are gross reserves prior to deduction of
royalties and includes any royalty interests of Bonavista.
11. Recycle ratio is calculated using operating netback per boe divided by
finding, development and acquisition costs per boe.
MESSAGE TO SHAREHOLDERS
Bonavista experienced another successful year as a result of the consistent application of our proven and disciplined business strategies. Our audited consolidated financial statements, Annual Report and other disclosure documents for 2011 will be available on or before March 30, 2012 through our filings on SEDAR at www.sedar.com or can be obtained from Bonavista's website at www.bonavistaenergy.com.
The year 2011 marked the first year Bonavista operated as a dividend paying corporation after converting from the energy trust structure on December 31, 2010. With our proven underlying operating strategies unchanged, we entered this corporate structure with confidence knowing that Bonavista was well positioned to pursue a business model offering our shareholders an appealing growth profile along with a meaningful dividend.
Although we witnessed encouraging improvements in the North American economy throughout 2011, numerous events caused continued volatility in both commodity and equity prices. Crude oil prices, while impacted by significant volatility in 2011, posted a 19% improvement over 2010. Conversely, North American natural gas prices were eroded by a significant supply imbalance and declined approximately 10% in 2011. As we enter 2012, we are witnessing natural gas prices at levels not seen for the past decade forcing us to take a more conservative approach to spending this year.
While this prolonged downturn in natural gas prices has negatively impacted our company and the industry directly, it helped to create an opportunity for Bonavista to negotiate two strategic private company acquisitions totaling $173.9 million at attractive transaction metrics. These acquisitions overlapped nicely with our existing assets and base of operations within our West Central Alberta core region and will provide incremental growth opportunities for us in the years ahead. As a testament to our conservative financial management, we completed an equity financing of $192 million to support the incremental acquisition expenditures thereby maintaining our balance sheet strength and financial flexibility. Bonavista strives to maintain a high degree of flexibility and responsiveness to changing industry conditions as we allocate capital to the highest rate of return projects.
Specific accomplishments for Bonavista in 2011 include:
-- Increased production volumes to a record level of 69,332 boe per day
representing a 5% increase over 2010;
-- Increased proved and probable reserves by 11% to 344.7 mmboe. which
resulted in the following key reserve metrics:
-- Added 58.2 mmboe of proved and probable reserves, of which 48% were
in the oil and liquids category;
-- Replaced 2011 annual production by 230%;
-- Improved our proved and probable reserve life index to 12.2 years
from 12.0 years in 2010;
-- Achieved attractive finding, development and acquisition costs,
including changes in future development expenditures, of $18.21 per
boe on a proved basis ($17.32 per boe excluding changes in future
development expenditures) and $13.39 per boe on a proved and
probable basis ($10.61 per boe excluding changes in future
development expenditures);
-- Attained a 2011 proved and probable operating netback recycle ratio
of 1.8:1 as a result of this level of finding, development and
acquisition costs, including future development capital (2.3:1
recycle ratio excluding future development costs); and
-- Increased proved and probable future development capital by 15% to
$1.1 billion representing the significant development and growth
potential on our asset base while remaining at a manageable level
within two times trailing cash flow.
-- Completed an active capital program in 2011 investing $453.6 million in
exploration and development activities drilling 143 wells with an
overall 100% success rate. Complementing our exploration and development
activity, we invested an additional $193.9 million on 23 synergistic
property transactions within our core regions which includes the two
private company acquisitions for $173.9 million. Divestitures of $30.4
million in non-core assets resulted in net acquisition and divestiture
expenditures of $163.5 million;
-- Acquired approximately 117,200 net acres of undeveloped land for a total
of $42.3 million, further enhancing our organic growth opportunities;
-- Generated funds from operations of $553.3 million ($3.44 per share) for
the year ended December 31, 2011. Bonavista distributed 36% of these
funds to shareholders with the remainder reinvested to continue growing
our production and reserves base;
-- Completed an equity financing of 7.0 million common shares for net
proceeds of approximately $192.0 million;
-- Completed a private placement of US$150.0 million of unsecured senior
notes with an interest rate of 4.25% for a ten year term and an
extension of our existing $1.0 billion bank facility to September 10,
2015 to further enhance our financial flexibility; and
-- Since inception as a trust in 2003 and continuing in our current
corporate structure, Bonavista has delivered cumulative dividends of
over $2.1 billion or $24.87 per common share.
Accomplishments for Bonavista subsequent to 2011 include:
-- Initiated a dividend reinvestment program in January 2012 with strong
shareholder acceptance as indicated by the current 35% participation
rate; and
-- Divested approximately 580 boe per day of non-core properties for net
proceeds of approximately $56.0 million.
2011 Operational Review
Hoadley Glauconite Liquids Rich Natural Gas
Bonavista drilled 43 operated horizontal wells and participated in seven additional non-operated horizontal wells on the highly prospective Glauconite trend. Our 2011 drilling program was largely focused on the south western region of the Glauconite trend in an attempt to advance our understanding of the play's geological scope and economic potential.
In addition to our exploration and development initiatives, Bonavista continued to increase its prospective acreage in this industry leading liquids rich natural gas play. Through both asset and crown land acquisitions, Bonavista added 29 sections of prospective Glauconite rights resulting in the addition of 57 drilling locations. Our drilling inventory has grown 27% over the past year to 380 horizontal locations despite our robust drilling activity in 2011.
Bonavista invested approximately $45 million in facility and infrastructure assets in 2011 across the trend adding 70 mmcf per day of gathering and compression capacity to accommodate the anticipated growth from the area and enhance the full cycle economics of the play. These investments have improved the efficiency of our operations resulting in current operating costs of approximately $3.00 per boe and has led to a 17% increase in the average natural gas liquids yield to 70 bbls per mmcf, thereby improving the single well economics associated with our future development program. Resulting from the increase in average natural gas liquids yield and continued predictability in production results, our estimated ultimate recovery per Glauconite location has increased from 440 mboe at year end 2010 to 480 mboe at year end 2011 resulting in an approximate 25% increase to the net present value at current strip prices.
Even with today's low natural gas prices, single well economics remain competitive within our asset portfolio owing to the predictable results, attractive natural gas liquids yield, low operating costs and strong capital efficiencies associated with this play. Generating a 43% rate of return at current strip natural gas pricing of $2.50 per GJ, Bonavista's Glauconite development program remains a key growth platform in 2012 with a drilling program of 35 to 40 horizontal wells.
Cardium Light Oil
Bonavista participated in the drilling of 27 horizontal wells targeting the unconventional Cardium light oil trend in central Alberta. Our operated development program in 2011 was focused in the Ferrier/Willesden Green area with three horizontal wells drilled delivering an average three month production rate of 415 boe per day per well including 300 bbls per day of oil and liquids.
Bonavista further enhanced capital efficiencies in our Cardium development program in 2011 through a commitment to water-based completion techniques resulting in capital cost savings of approximately $400,000 per well.
Bonavista has now drilled 54 horizontal Cardium wells since commencing our unconventional Cardium development program in the fourth quarter of 2009. Initial production rates and our estimate of recoverable reserves per well have increased meaningfully over this time frame by focusing our efforts in areas of greater reservoir quality and refining our drilling and completion techniques.
We have identified 100 horizontal locations across our land base of approximately 300 net sections of Cardium rights in central Alberta.
With the improvement in production results and strengthening oil prices, Bonavista has recently increased its 2012 Cardium capital program by 38% to $90 million with a budget to drill between 27 and 30 horizontal wells. We plan to focus the majority of our 2012 activity targeting 21 prospects in the Ferrier/Willesden Green area identified for top quartile production and reserve volumes while also prudently testing other emerging opportunities on our land base in the Harmattan and Lochend areas.
Pine Creek/Rosevear Liquids Rich Natural Gas
Bonavista's activities in the deep basin include the pursuit of liquids rich natural gas prospects in the Bluesky formation at Pine Creek and the Rock Creek formation at Rosevear. The results of these development programs in 2011 delivered initial production rates that met or exceeded internal type curve estimates. Our first three horizontal Bluesky wells drilled at Pine Creek are on track to average 375 boe per day per well in their first year of production, generating 40 bbls per mmcf of natural gas liquids of which 40% is high value condensate. We have initiated our budgeted 2012 five well drilling program with production growth in our Pine Creek field to coincide with 10 mmcf per day of take-away capacity expansions scheduled for completion by the end of the first quarter in 2012.
Liquid recovery enhancements undertaken at our Rosevear processing facility in 2011, coupled with a higher quality production stream has increased the natural gas liquids recovery rates in our Rock Creek program to 50 bbls per mmcf of which 55% is condensate. The associated revenue enhancement coupled with the low cost operating structure of this production stream offers attractive single well economics with rates of return of 46% at current strip pricing. We will continue to monitor the production performance of our 2011 program as we delineate our Rock Creek land base with two to four additional horizontal wells in 2012.
Bonavista's initial activities in this multi-zone area of the deep basin, characterized by our attractive land and infrastructure footprint in the Bluesky and Rock Creek plays, has offered an opportunity to gain operational experience and begin the evaluation of additional emerging plays. Over the past 18 months, Bonavista has assembled a 26 net section land position at Fir which is prospective for liquids rich natural gas in the Montney formation. We anticipate drilling one horizontal well in 2012 to begin the delineation of this land position where offsetting competitor activity has demonstrated robust productivity.
Blueberry Montney Liquids Rich Natural Gas
Throughout 2011, Bonavista gained significant confidence with the technical and economic merits of this emerging resource play. To the end of 2011, Bonavista has drilled four horizontal Montney wells at Blueberry, three of which are currently on production from the Upper Montney horizon with an average three month production rate of 420 boe per day including an average natural gas liquids yield of 100 bbls per mmcf, of which 50% is free condensate.
Early in 2012, Bonavista drilled two additional Montney horizontal wells delineating our southern Blueberry acreage in both the Upper and Lower Montney horizons. Drilling operations were completed as planned and we anticipate completion activities to commence in the next few weeks.
Bonavista holds 55 contiguous net sections of Montney rights in the Blueberry area of which 100% are prospective for unconventional resource development in the Upper Montney horizon. Additionally, based on our technical work conducted to date and encouraging offsetting industry results, we consider the Lower Montney horizon to be prospective across approximately 65% of our land base.
We are encouraged by the quality and profitability of this liquids rich Montney resource and anticipate drilling between two and four horizontal wells in 2012 to further delineate and evaluate this large resource play in its progression towards full scale development.
Additional Emerging Opportunities
Bonavista drilled its first vertical Duvernay test in the fourth quarter of 2011. Thirty three meters of the formation were cored and are currently being analyzed for geological and petrophysical parameters, organic richness and geomechanical properties. These results in conjunction with industry activities in the area will advance our understanding of this resource towards commercial development. Our exposure to the play in the greater Willesden Green area is over 400 net sections of which 75 are interpreted to be in the liquids rich natural gas fairway.
In addition to the Duvernay formation, our technical teams continue to identify and evaluate additional emerging resource opportunities with a focus on tight sand and source rock prospects on, or in close proximity to our extensive land base. We will be advancing these opportunities in 2012 with an initial focus on light oil or liquids rich natural gas in the Mannville, Viking, Second White Specks and Banff formations.
Strengths of Bonavista Energy Corporation
Beginning in 1997 with an initial restructuring to create a high growth junior exploration company, throughout the energy trust phase between July 2003 and 2010, and now operating as a dividend paying corporation, Bonavista remains committed to the same strategies that have resulted in our tremendous success over the last 14 years. We have maintained a high level of investment activity on our asset base, increasing production by approximately 100% since converting to an energy trust in July 2003 and a further 5% since converting back to a corporation at the end of 2010. More importantly, profitability metrics remained strong over this period despite the weaker than expected natural gas prices. These results stem from the operational, technical and financial focus of our people, their attention to detail, and their entrepreneurial approach to generating low risk, highly profitable projects within the Western Canadian Sedimentary Basin. Our experienced technical teams have a solid understanding of our assets and they continue to exercise the discipline and commitment required to deliver long-term value to our shareholders. We actively participate in undeveloped land acquisitions, property purchases and farm-in opportunities, which have all enhanced the quality and quantity of our extensive drilling inventory. These activities have led to low cost reserve additions, lengthening of our reserve life index, and a predictable production base that continues to grow at a healthy pace. Our production base is currently weighted 60% towards natural gas and is geographically focused within select, multi-zone regions primarily in Alberta and British Columbia. The low cost structure of our asset base maintains attractive operating netbacks in most operating environments. In addition, our asset base is predominantly operated by Bonavista, providing control over the pace of operations and ensuring that operating and capital cost efficiencies are consistently optimized.
Our team brings a successful track record of executing low to medium risk development programs, including both asset and corporate acquisitions, along with sound financial management. Our Board of Directors and management team possess extensive experience in the oil and natural gas business. They have successfully guided our organization through many different economic cycles utilizing a proven strategy consisting of disciplined cost controls and prudent financial management. Directors, management and employees also own approximately 14% of the equity of Bonavista, resulting in the alignment of interests with all shareholders.
Outlook
Since our inception in 1997, we have witnessed many fluctuations in our business environment including significant commodity price volatility, a global credit crisis and economic recession and changes to our taxation and royalty regimes. Throughout this instability, Bonavista has continuously and purposefully adjusted to the environment while continuing to apply the same core strategies that have proven to add shareholder value over the long term. The pillar of these strategies is to continually exercise cost discipline and a high level of capital spending efficiency in pursuit of low to medium risk drilling prospects. Additionally we strive to negotiate timely and strategic acquisition opportunities to complement our internally generated drilling programs.
In light of the continued erosion in natural gas prices, we will be making minor adjustments to our 2012 capital budget resulting in net expenditures of between $340 and $360 million, down from our original range of between $400 and $425 million. In addition, we have reallocated the drilling program in consideration of the significant disparity between crude oil and natural gas prices. The revised program will incorporate an increase in crude oil directed capital spending to approximately 45% of total drilling expenditures which is an increase from our previous budget of 33%. We anticipate drilling between 125 and 135 wells, 100% of which will target oil and our highest return liquids rich natural gas prospects. Further, it is expected that any 2012 acquisition activity will be largely offset by a continuation of our disposition program of non-core assets. This capital program is expected to result in 2012 production volumes of between 73,000 and 75,000 boe per day and an increase in our year end 2012 oil and liquids weighting to 42% compared to 39% at the end of 2011. Overall, our long term business strategy will remain intact in 2012 with a commitment to deliver a balance of growth and income through our regular monthly dividend.
Bonavista expects to finance its 2012 capital program largely within projected cash flow after taking into account the proceeds from our recently announced dividend reinvestment program and non-core asset dispositions. In addition to the $56 million of properties sold to date in 2012, we are focused on rationalizing an additional $100 to $150 million of non-core assets during the year to high grade our asset base and augment the strength of our balance sheet. As in years past, we will be attentive to changes in commodity prices and the business environment and will maintain flexibility with our capital expenditure plans in order to maximize shareholder value. Additionally, our focus will be on complementary acquisition opportunities that offer accretive growth potential.
Driven by the efforts of our employees, Bonavista's inventory of future drilling prospects has more than doubled over the past three years to the current level of approximately 1,400 locations representing more than 10 years of inventory at the current pace of drilling. This inventory offers attractive economics in today's commodity price environment with approximately 90% targeting high impact, unconventional resource prospects with a focus on light oil and liquids rich natural gas.
We would like to thank our employees for their continued success in the execution of an efficient capital expenditure program in 2011. Our core philosophy and key operating strategies have proven to work well throughout all phases of the business cycle and we look forward to continually creating long-term value for our shareholders. Our team is very committed to this vision.
BONAVISTA ENERGY CORPORATION
Supplemental Financial Information
Consolidated Statements of Financial Position
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(thousands) December 31, December 31, January 1,
Notes 2011 2010 2010
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(unaudited)
Assets:
Current assets:
Accounts receivable $ 133,324 $ 114,430 $ 104,912
Prepaid expenses 9,660 14,510 16,912
Marketable securities - - 6,322
Financial instrument
commodity contracts 5,203 11,413 5,626
Other assets 8,655 10,068 6,539
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156,842 150,421 140,311
Financial instrument contracts 3,604 - -
Property, plant and equipment 3,518,847 3,043,223 2,726,326
Exploration and evaluation
assets 233,642 219,590 179,747
Goodwill 11,225 31,321 41,321
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$ 3,924,160 $ 3,444,555 $ 3,087,705
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Liabilities and Shareholders'
Equity:
Current liabilities:
Accounts payable and
accrued liabilities $ 176,743 $ 186,447 $ 157,019
Dividends payable 17,292 21,436 19,937
Financial instrument
commodity contracts 13,917 12,931 15,169
Convertible debentures - - 38,856
Exchangeable shares - - 479,136
Share-based compensation
(3) - - 8,468
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207,952 220,814 718,585
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Long-term debt (10) 1,080,605 951,443 832,138
Decommissioning liabilities 444,132 319,096 294,635
Deferred income taxes 189,669 107,519 117,784
Financial instrument
commodity contracts - 4,261 -
Share-based compensation - - 4,577
Shareholders' equity:
Shareholders' capital 1,446,804 1,162,680 1,533,919
Exchangeable shares 585,754 650,668 -
Contributed surplus 32,092 28,074 123
Deficit (62,848) - (414,056)
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2,001,802 1,841,422 1,119,986
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$ 3,924,160 $ 3,444,555 $ 3,087,705
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See accompanying notes to the condensed consolidated interim financial
statements.
BONAVISTA ENERGY CORPORATION
Supplemental Financial Information
Consolidated Statements of Income and Comprehensive Income
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Three months Years
ended December 31, ended December 31,
(thousands, except per share
amounts) 2011 2010 2011 2010
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(unaudited)
Revenues:
Production $ 285,167 $ 234,706 $ 1,044,414 $ 938,726
Royalties (44,902) (35,071) (161,742) (143,507)
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240,265 199,635 882,672 795,219
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Realized gains on financial
instrument commodity contracts 812 4,927 7,766 16,080
Unrealized gains (losses) on
financial instrument commodity
contracts (27,109) (21,024) (2,935) 3,764
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(26,297) (16,097) 4,831 19,844
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213,968 183,538 887,503 815,063
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Expenses:
Operating 62,486 49,494 229,072 194,755
Transportation 11,488 10,677 40,581 39,652
General and administrative 6,392 5,441 24,146 20,897
Restructuring costs - 736 - 736
Goodwill impairment 20,096 10,000 20,096 10,000
Share-based compensation 6,402 10,841 17,282 20,862
Gains on dispositions of
property, plant and equipment (4,880) (8,296) (11,901) (27,109)
Depletion, depreciation,
amortization and impairment 100,967 70,559 313,475 271,346
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202,951 149,452 632,751 531,139
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Income from operating activities 11,017 34,086 254,752 283,924
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Finance costs 17,307 137,730 86,171 228,008
Finance income (8,415) (12,113) (25,752) (15,119)
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Net finance costs 8,892 125,617 60,419 212,889
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Income (loss) before taxes 2,125 (91,531) 194,333 71,035
Deferred income taxes (recovery) 5,446 (24,747) 57,149 (11,253)
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Net income (loss) and
comprehensive income (loss) $ (3,321)$ (66,784) $ 137,184 $ 82,288
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Net income (loss) per share -
basic $ (0.02) $ (0.50) $ 0.85 $ 0.63
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Net income (loss) per share -
diluted $ (0.02) $ (0.50) $ 0.85 $ 0.63
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See accompanying notes to the condensed consolidated interim financial
statements.
BONAVISTA ENERGY CORPORATION
Supplemental Financial Information
Consolidated Statements of Changes in Equity
For the years ended December 31
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(thousands) Shareholders' Exchangeable Contributed
capital shares surplus
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(unaudited)
Balance as at January 1, 2010 $ 1,533,919 $ - $ 123
Net income - -
Issuance of equity, net of
issue costs 166,661 - -
Issued on property acquisition 675 - -
Issued for cash on exercise of
common share incentive rights 20,395 - -
Exercise of common share
incentive rights 6,049 - -
Conversion of restricted share
awards 2,397 - -
Exchangeable shares exchanged
for common shares 16,650 - -
Dividends declared - - -
Reclassification of deficit (584,066) - -
Reclassification of share-based
compensation - - 27,951
Exchangeable shares issued
pursuant to the Arrangement - 650,668 -
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Balance as at December 31, 2010 $ 1,162,680 $ 650,668 $ 28,074
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(thousands) Total
shareholders'
Deficit equity
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(unaudited)
Balance as at January 1, 2010 $ (414,056) $ 1,119,986
Net income 82,288 82,288
Issuance of equity, net of
issue costs - 166,661
Issued on property acquisition - 675
Issued for cash on exercise of
common share incentive rights - 20,395
Exercise of common share
incentive rights - 6,049
Conversion of restricted share
awards - 2,397
Exchangeable shares exchanged
for common shares - 16,650
Dividends declared (252,298) (252,298)
Reclassification of deficit 584,066 -
Reclassification of share-based
compensation - 27,951
Exchangeable shares issued
pursuant to the Arrangement - 650,668
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Balance as at December 31, 2010 $ - $ 1,841,422
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(thousands) Shareholders' Exchangeable Contributed
capital shares surplus
----------------------------------------------------------------------------
(unaudited)
Balance as at December 31, 2010 $ 1,162,680 $ 650,668 $ 28,074
Net income - - -
Issuance of equity, net of
issue costs 193,597 - -
Issued on business acquisition 939 - -
Issued for cash on exercise of
common share incentive rights 12,521 - -
Exercise of common share
incentive rights 7,794 - (7,794)
Conversion of restricted share
awards 4,359 - (4,359)
Share-based compensation
expense - - 13,411
Share-based compensation
capitalized - - 2,760
Exchangeable shares exchanged
for common shares 64,914 (64,914) -
Dividends declared - - -
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Balance as at December 31, 2011 $ 1,446,804 $ 585,754 $ 32,092
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(thousands) Total
shareholders'
Deficit equity
----------------------------------------------------------------------------
(unaudited)
Balance as at December 31, 2010 $ - $ 1,841,422
Net income 137,184 137,184
Issuance of equity, net of
issue costs - 193,597
Issued on business acquisition - 939
Issued for cash on exercise of
common share incentive rights - 12,521
Exercise of common share
incentive rights - -
Conversion of restricted share
awards - -
Share-based compensation
expense - 13,411
Share-based compensation
capitalized - 2,760
Exchangeable shares exchanged
for common shares - -
Dividends declared (200,032) (200,032)
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Balance as at December 31, 2011 $ (62,848) $ 2,001,802
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See accompanying notes to the condensed consolidated interim financial
statements.
BONAVISTA ENERGY CORPORATION
Supplemental Financial Information
Consolidated Statements of Cash Flows
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----------------------------------------------------------------------------
Three months Years
ended December 31, ended December 31,
(thousands) 2011 2010 2011 2010
----------------------------------------------------------------------------
(unaudited)
Cash provided by (used in):
Operating Activities:
Net income (loss) $ (3,321) $ (66,784) $ 137,184 $ 82,288
Adjustments for:
Depletion, depreciation,
amortization and impairment 100,967 70,559 313,475 271,346
Share-based compensation 4,988 10,841 15,868 20,862
Unrealized (gains) losses on
financial instrument commodity
contracts 27,109 21,024 2,935 (3,764)
Gains on dispositions of
property, plant and equipment (4,880) (8,296) (11,901) (27,109)
Goodwill impairment 20,096 10,000 20,096 10,000
Net finance costs 8,892 125,617 60,419 212,889
Deferred income taxes (recovery) 5,446 (24,747) 57,149 (11,253)
Decommissioning expenditures (5,973) (7,012) (21,136) (15,831)
Changes in non-cash working
capital items (8,174) (4,505) (6,923) 3,008
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145,150 126,697 567,166 542,436
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Financing Activities:
Issuance of equity, net of issue
costs - - 191,506 167,648
Issuance of senior notes 152,214 356,676 152,214 409,301
Repayment of convertible
debentures - - - (38,567)
Proceeds on exercise of common
share incentive rights 2,454 6,385 12,521 20,395
Dividends paid (51,824) (64,185) (204,176) (250,799)
Interest paid (14,414) (9,763) (41,182) (27,193)
Proceeds from long-term debt - - 88,579 132,511
Repayment of long-term debt (69,492) (367,243) (116,605) (394,371)
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18,938 (78,130) 82,857 3,995
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Investing Activities:
Business acquisitions (69,309) - (172,944) (229,721)
Exploration and development (81,035) (94,031) (453,550) (348,062)
Property acquisitions (1,433) (381) (19,806) (55,688)
Property dispositions 12,884 40,182 30,357 65,570
Office equipment and leasehold
improvements (211) (363) (10,361) (1,419)
Proceeds on sale of marketable
securities - - - 8,193
Changes in non-cash working
capital items (24,984) 6,026 (23,719) 14,696
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(164,088) (48,567) (650,023) (546,431)
----------------------------------------------------------------------------
Change in cash - - - -
Cash, beginning of period - - - -
----------------------------------------------------------------------------
Cash, end of period $ - $ - $ - $ -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
See accompanying notes to the condensed consolidated interim financial
statements.
FORWARD LOOKING INFORMATION
Forward-Looking Statements - Certain information set forth in this document, including management's assessment of Bonavista's future plans and operations, contains forward-looking statements including; (i) forecasted capital expenditures and plans; (ii) exploration, drilling and development plans, (iii) prospects and drilling inventory and locations; (iv) anticipated production rates; (v) expected royalty rate; (vi) anticipated operating and service costs; (vii) our financial strength; (viii) incremental development opportunities; (ix) reserve life index; (x) total shareholder return; (xi) growth prospects; (xii) asset disposition plans; (xiii) sources of funding, which are provided to allow investors to better understand our business. By their nature, forward-looking statements are subject to numerous risks and uncertainties; some of which are beyond Bonavista's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, changes in environmental tax and royalty legislation, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Bonavista's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements or if any of them do so, what benefits that Bonavista will derive there from. Bonavista disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-IFRS Measurements - Within this press release, references are made to terms commonly used in the oil and natural gas industry. Management uses "funds from operations" and the "ratio of debt to funds from operations" to analyze operating performance and leverage. Funds from operations as presented does not have any standardized meaning prescribed by IFRS and therefore it may not be comparable with the calculation of similar measures for other entities. Funds from operations as presented is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net income or other measures of financial performance calculated in accordance with IFRS. All references to funds from operations throughout this report are based on cash flow from operating activities before changes in non-cash working capital, decommissioning expenditures and interest expense. Basic funds from operations per share is calculated based on the weighted average number of common shares outstanding in accordance with International Financial Reporting Standards. For the comparative periods under the trust structure, exchangeable shares have been included in the basic funds from operations per share calculation. Operating netbacks equal production revenue and realized gains or losses on financial instrument commodity contracts, less royalties, transportation and operating expenses calculated on a boe basis. Total boe is calculated by multiplying the daily production by the number of days in the period. Management uses these terms to analyze operating performance and leverage.
Bonavista is a mid-sized energy corporation committed to maintaining its emphasis on operating high quality oil and natural gas properties, providing moderate growth and delivering consistent dividends to its shareholders and ensuring financial strength and sustainability.
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