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Cequence Energy Announces 35% Growth in Reserves and 2012 Financial and Operating Results

Cequence Energy Ltd. (CQE.TO) announced its 2012 year end reserves and its operating and financial results for the three months and the year ended December 31, 2012.

Reserve Highlights: Cequence's 2012 year end reserves reflect a continued focus on the successful delineation of its Simonette property in the Deep Basin of Alberta. The growth in reserves further substantiates management's views that the company's assets contain significant resource potential. The following highlights are based on the reserve report dated March 5, 2013 and effective December 31, 2012

- Increased proved reserves by 32% from the prior year to 46 MMBOE;

- Increased proved plus probable reserves by 35% from the prior year to 91 MMBOE;

- Increased total proved plus probable reserves at Simonette by 55% from the prior year to 77 MMBOE;

- Achieved finding, development and acquisition costs (including changes to future development capital) of $10.57 per boe on a proved plus probable basis and $12.93 per boe on a proved basis;

- Increased the net present value of the company's proved plus probable reserves by 12% from the prior year to $797 million or $3.97 per share (using a discount rate of 10%); and

- Replaced 820% of production with proven plus probable reserves.

Financial and Operating Highlights: Cequence has focused its efforts on expanding its asset value and resource base through the continued delineation of the extensive Montney formation and the exploration for additional reservoir targets at Simonette. Significant financial and operating highlights are as follows:

- Reduced annual operating costs by 18% from the prior year to $7.43 per boe and decreased fourth quarter operating costs by 24% from the fourth quarter of 2011 to $6.55 per boe;

- Reduced fourth quarter cash costs by 18% from prior year to $10.65 per boe;

- Maintained a strong balance sheet with year end debt of $45.9 million resulting in a debt to annualized fourth quarter cash flow ratio of 1:1;

- Increased fourth quarter funds flow from operations by 16% to $11.6 million or $0.06 per share, from the fourth quarter of 2011;

- Increased fourth quarter operating netback by 13% from prior year to $16.45, despite an 8 percent decrease in commodity prices;

- Drilled key land retention/delineation wells for the Montney formation at Simonette while lowering drilling costs and increasing horizontal target length;

- Discovered new resource potential at Simonette with exploration success in the Falher and Dunvegan formations;

- Completed the Aux Sable tie-in and meter station in June 2012 resulting in improved liquids extraction;

- Drilled and completed a total of 7.0 gross (5.8 net) horizontal wells at Simonette in 2012; and

- Annual production averaged 8,990 boepd and fourth quarter production averaged 8,951 boepd.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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