Market Overview

Crew Energy Inc. Announces First Quarter 2019 Financial and Operating Results

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CALGARY, May 2, 2019 /CNW/ - Crew Energy Inc. (TSX:CR) ("Crew" or the "Company") is pleased to announce our operating and financial results for the three month period ended March 31, 2019.  Crew's Financial Statements and Notes, as well as Management's Discussion and Analysis ("MD&A") for the three month period ended March 31, 2019 are available on Crew's website and filed on SEDAR at www.sedar.com

Q1 2019 HIGHLIGHTS

  • Production of 23,222 boe per day: Volumes were 4% higher than the previous quarter supported by stronger Greater Septimus production of 19,535 boe per day that was 6% higher than the previous quarter due to robust production from newly completed Ultra Condensate Rich ("UCR") wells.

  • Stable Adjusted Funds Flow ("AFF"): Q1 AFF totaled $25.8 million or $0.17 per fully diluted share, compared to Q4 2018 AFF of $23.7 million or $0.16 per fully diluted share, reflecting increased liquids production, including condensate growth and stronger overall liquids pricing.

  • Continued Focus on Montney Condensate Growth: Q1 condensate volumes averaged 2,617 bbls per day, an increase of 7% over Q4 2018. Total liquids represented 28% of average quarterly volumes and contributed 44% to Crew's petroleum and natural gas sales for the quarter.

  • Strong UCR Well Results from 15-20 Pad: Early results from four "B" zone wells and one "C" zone well on our 15-20 pad at Greater Septimus continue to support further development and capital allocation in the UCR area. After 45 days of production, the four "B" zone wells produced an average of 1,211 boe per day comprised of 3,336 mcf per day of sales gas, 538 bbls per day of condensate and 117 bbls per day of propane and butane.

  • Positive Early Results from 4-21 Pad in UCR Transition Zone: After 20 days of flow back, the six (6.0 net) "B" zone wells were producing at restricted rates averaging 1,374 boe per day comprised of 4,830 mcf per day of sales gas, 400 bbls per day of condensate and 169 bbls per day of propane and butane at an average flowing casing pressure of approximately 8,900 kPa.

  • Strong Operational Execution with Capital Spending Below Guidance: Exploration and development capital expenditures in the quarter totaled $55.2 million, lower than our forecast guidance of between $60 and $70 million. Crew drilled seven (7.0 net) and completed eight (8.0 net) wells in our UCR area at West Septimus and recompleted six (6.0 net) heavy oil wells at Lloydminster. After incorporating $17.5 million in proceeds from a disposition and minor acquisition during the period, net capital expenditures were $39.3 million.

  • Longest Laterals Drilled in Company History: Four extended reach horizontal ("ERH") UCR wells were drilled in Q1 with lateral lengths over 3,000 metres and per lateral metre drilling costs that were 35% lower than costs realized in 2017.

  • Realized Natural Gas Prices Again Outperformed Benchmark: Q1 average realized natural gas prices of $3.45 per mcf were 21% higher than Q1 2018 and outperformed the AECO 5A benchmark of $2.62 per mcf by 32%, driven by Crew's high heat content natural gas and exposure to diversified sales hubs and markets.

  • Financial Flexibility Maintained: Quarter end net debt of $361.5 million includes $300 million of term debt due in 2024 with no financial maintenance covenants and 17% drawn on the Company's $235 million credit facility (excluding working capital deficiency).

Financial & Operating Highlights:






FINANCIAL

($ thousands, except per share amounts)



Three months
ended

Mar. 31, 2019

Three months
ended

Mar. 31, 2018

Petroleum and natural gas sales



55,451

59,427

Adjusted Funds Flow(1)



25,771

26,373

Per share  - basic



0.17

0.18

- diluted



0.17

0.17

Net income



6,186

4,148

Per share  - basic



0.04

0.03

- diluted



0.04

0.03






Exploration and Development expenditures



55,241

33,921

Property acquisitions (net of dispositions)



(15,924)

(10,007)

Net capital expenditures



39,317

23,914

Capital Structure

($ thousands)



As at

Mar. 31, 2019

As at

Dec. 31, 2018

Working capital deficiency (surplus)(2)



26,283

(11,984)

Bank loan



40,065

59,904




66,348

47,920

Senior Unsecured Notes



295,130

294,885

Total Net Debt



361,478

342,805

Current Debt Capacity(3)



535,000

535,000

Common Shares Outstanding (thousands)



150,554

151,730






Notes:


(1)

AFF is calculated as cash provided by operating activities, adding the change in non-cash working capital, decommissioning obligation expenditures and accretion of deferred financing costs on the senior unsecured notes.  AFF does not have a standardized measure prescribed by International Financial Reporting Standards, ("IFRS") and therefore may not be comparable with the calculations of similar measures for other companies.  See "Non-IFRS Measures" contained within Crew's MD&A for details including reasons for use and a reconciliation of AFF to its most closely related IFRS measure.

(2)

Working capital deficiency / (surplus) includes cash and cash equivalents plus accounts receivable less accounts payable and accrued liabilities.  See "Non-IFRS Measures" contained within Crew's MD&A.

(3)

Current Debt Capacity reflects the bank facility of $235 million plus $300 million in senior unsecured notes outstanding. 

 



Operations



Three months
ended

Mar. 31, 2019

Three months

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