Marquee Announces Record Production and Cash Flow in the Third Quarter of 2012; Shrs Dropped 3% Thursday.

Marquee Energy Ltd. (MQL.V), which dropped 3% Thursday, announced record production and cash flow in the third quarter and provided an update on recent activities.


The success of the company's drilling activities at Michichi and Lloydminster in the first half of 2012 resulted in significant growth in a number of key operational and financial areas in the third quarter of 2012. Marquee is reporting significant increases in production, oil and liquids weighting, and funds flow for the third consecutive quarter. Operating netbacks have continued to improve since Q1-2012.

Two previously reported transactions that were completed subsequent to the end of the quarter will allow the company to accelerate the development of its core Michichi area in East Central Alberta:

1. Asset acquisition in Michichi area that includes a gas plant and gathering system. This acquisition is expected to provide strategic infrastructure to reduce on-stream time and enhance the company's continued focus on developing its extensive inventory of identified Mannville and Banff oil opportunities in the area.

2. Sale of oil and gas assets in Willesden Green area for net proceeds of $20.6 million. The proceeds have been used to pay down the company's credit facility. The strengthened balance sheet will allow the Company to advance its drilling program at Michichi and pursue other strategic opportunities.

Highlights for the quarter include:

Generated funds flow from operations of $4.0 million or $0.07 per basic and diluted share, an increase of 12.6% over Q3-2011 and almost double the funds flow from operations in Q2-2012.

Achieved record quarterly production of 2,728 boe/d, an increase of 79% over the Q3-2011 average of 1,522 boe/d. The Q3-2012 average production rate includes approximately 140 boe/d of volume adjustments relating to the first half of 2012.

Increased oil and natural gas liquids weighting in the quarter to 55%, compared to 40% in Q3-2011 and 51% in Q2-2012.

Increased field operating netbacks by 24% in the third quarter over Q2-2012 primarily due to the increase in oil and natural gas liquids weighting

Capital investment of $6.9 million in Q3-2012, including $1.3 million for land additions. Year-to-date capital expenditures are $32.9 million, including $5.1 million for land.

Increased undeveloped land holdings in the core Michichi area by 10,119 net acres (15.8 net sections) through land sales. Additional land acquisitions subsequent to the end of the quarter brought total holdings to more than 110 net undeveloped sections of land in the Michichi area.

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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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