CALGARY, ALBERTA -- (Marketwire) -- 03/05/13 -- Trilogy Energy Corp. (TSX:TET) ("Trilogy") is pleased to announce its financial and operating results for the quarter and year-ended December 31, 2012.
FINANCIAL AND OPERATING HIGHLIGHTS
-- Trilogy added 19.2 MMBoe of proved reserves (56 percent oil and NGLs)
and 20.6 MMBoe of proved plus probable reserves (59 percent oil and
natural gas liquids), including positive technical revisions.
-- Trilogy replaced 157 percent of 2012 produced reserves when compared to
proved reserve additions, and 168 percent when compared to proved plus
probable reserves.
-- 2012 reported sales volumes averaged 33,510 Boe/d as compared to 28,012
Boe/d in 2011, representing a 20 percent increase in production.
Reported sales volumes for the fourth quarter of 2012 averaged 35,014
Boe/d as compared to 33,412 for the previous quarter, representing a 5
percent increase in production.
-- 2012 oil sales volumes increased 143 percent to 9,153 Bbl/d from 3,759
Bbl/d in 2011. Oil sales volumes increased 35 percent in the fourth
quarter over the third quarter of 2012. Combined oil and natural gas
liquids sales volumes represented 40 percent of total sales volumes for
the year (29 percent in 2011).
-- Trilogy's Kaybob Montney oil pool production averaged 14,300 Boe/d,
consisting of 10,300 Bbl/d of oil and 24 MMcf/d of natural gas, for the
last two weeks of February 2013.
-- 2012 net capital expenditures totaled $351.3 million as compared to
$349.9 million in 2011. $77 million was spent in the fourth quarter of
2012 as compared to $60.9 million in the prior quarter.
-- Finding and development costs (1)were $17.60/Boe for total proved
reserves and $16.63/Boe for proved plus probable reserves on net capital
expenditures of $351.3 million.
-- 75 (47.9 net) wells were drilled in 2012, as compared to 68 (45.7 net)
wells in 2011. 17 (10.5 net) wells were drilled in the fourth quarter,
as compared to 14 (8.2 net) wells in the prior quarter.
-- 2012 funds flow from operations (1) totaled $241.9 million as compared
to $218.5 million in 2011, representing an 11 percent increase year-
over-year. Funds flow from operations(1)increased to $80.5 million for
the fourth quarter as compared to $47.1 million in the previous quarter.
-- Dividends declared to Shareholders in 2012 totaled $49.0 million or 21
percent of cash flow from operations (2011 - $48.6 million or 23
percent). Dividends for the fourth quarter of 2012 were $12.3 million or
16 percent of cash flow from operations (prior quarter - $12.2 million
or 26 percent).
-- In December 2012, Trilogy issued unsecured senior notes in the amount of
$300 million. Proceeds from the issuance were used to repay existing
indebtedness under Trilogy's revolving credit facility. Borrowing
capacity under Trilogy's revolving credit facility was $253 million as
at December 31, 2012.
(1) Refer to Non-GAAP measures in this release and MD&A
FINANCIAL AND OPERATING HIGHLIGHTS TABLE
(In thousand Canadian dollars except per share amounts and where stated
otherwise)
Three Months Ended Year Ended December 31
December September
31, 30,
2012 2012 Change% 2012 2011 Change%
----------------------------------------------------------------------------
FINANCIAL
Petroleum and
natural gas sales 135,221 103,535 31 455,697 380,998 20
Funds flow
From operations(1) 80,529 47,176 71 241,941 218,502 11
Per share -
diluted 0.67 0.40 67 2.03 1.84 10
Earnings
Earnings (loss)
before tax 3,474 (13,413) (126) (12,093) 25,042 (148)
Per share -
diluted 0.03 (0.12) (125) (0.10) 0.21 (149)
Earnings (loss)
after tax 1,682 (11,094) (115) (12,133) 17,415 (170)
Per share -
diluted 0.01 (0.10) (115) (0.10) 0.15 (171)
Dividends declared 12,255 12,242 - 48,956 48,656 1
Per share 0.105 0.105 - 0.420 0.420 -
Capital
expenditures
Exploration,
development,
land, and
facility 76,544 61,824 24 349,294 351,744 (1)
Acquisitions
(dispositions)
and other - net 495 (919) (154) 2,022 (1,865) (208)
Net capital
expenditures 77,039 60,905 26 351,316 349,879 -
Total assets 1,395,111 1,364,815 2 1,395,111 1,260,364 11
Net debt(1) 636,785 628,692 1 636,785 490,945 30
Shareholders'
equity 486,399 491,768 (1) 486,399 530,445 (8)
Total shares
outstanding
(thousands)
- As at end of
period (2) 116,674 116,494 - 116,674 116,118 -
----------------------------------------------------------------------------
OPERATING
Production
Natural gas
(MMcf/d) 118 125 (6) 120 120 -
Oil (Bbl/d) 10,780 8,014 35 9,153 3,759 143
Natural gas
liquids (Boe/d) 4,555 4,517 1 4,315 4,287 1
Total production
(Boe/d @ 6:1) 35,014 33,412 5 33,510 28,012 20
----------------------------------------------------------------------------
Average prices
before financial
instruments
Natural gas
($/Mcf) 3.39 2.42 40 2.57 3.88 (34)
Crude Oil ($/Bbl) 78.96 78.03 1 79.76 89.21 (11)
Natural gas
liquids ($/Boe) 47.85 43.56 10 47.85 56.99 (16)
----------------------------------------------------------------------------
Average realized
price 41.98 33.68 25 37.16 37.26 0
Drilling activity
(gross)
Gas 5 1 400 28 34 (18)
Oil 12 13 (8) 47 33 42
D&A - - - - 1 (100)
Total wells 17 14 21 75 68 10
(1) Funds flow from operations and net debt are non-GAAP terms. Please refer
to the advisory on Non-GAAP measures below.
(2) Excluding shares held in trust for the benefit of Trilogy's officers and
employees under the Company's Share Incentive Plan. Includes Common
Shares and Non-voting Shares. Refer to the notes to the annual
consolidated financial statements for additional information.
OUTLOOK
Trilogy is forecasting that it will spend approximately $350 million to grow the existing asset base to an annual production of 40,000 - 42,000 Boe/d, representing approximately 20 - 25 percent year over year production growth. This includes spending approximately $175 million to drill, complete and tie-in approximately 40 Montney oil wells, $20 million towards Dunvegan oil wells and $155 million allocated toward Montney, Duvernay and Nikanassin oil and liquids-rich gas plays in the Kaybob and Grande Prairie areas. Trilogy is currently producing approximately 37,000 Boe/d, which is in line with budget expectations. First quarter 2013 production is forecast to be approximately 38,000 Boe/d which is also in line with expectations required to meet annual production guidance. Trilogy anticipates that most of the wells drilled and completed in the first quarter will be on production in March through early April, adding significant production volumes in the second quarter.
Trilogy's 2013 annual guidance is as follows:
Average production 40,000 - 42,000 Boe/d (45% oil and NGLs)
Average operating cost $8.00/Boe
Capital expenditures $350 million
ADDITIONAL INFORMATION
A copy of Trilogy's 2012 annual report to Shareholders, including Management's Discussion and Analysis and the audited annual consolidated financial statements and related notes can be obtained at http://media3.marketwire.com/docs/305tet.pdf. This report will also be made available at a later date through Trilogy's website at www.trilogyenergy.com and SEDAR at www.sedar.com.
ADVANCE NOTICE REQUIREMENT FOR NOMINATING DIRECTORS
Trilogy's board of directors today approved the adoption of amendments to the by-laws of the Corporation (the "By-laws") which, among other things, include an advance notice requirement (the "Advance Notice Requirement") for shareholders who wish to nominate a person for election as a director of the Corporation (other than pursuant to a requisition of a meeting or a shareholder proposal made pursuant to the provisions of the Business Corporations Act (Alberta)).
The purpose of the Advance Notice Requirement is to provide shareholders, directors and management of the Corporation with a clear framework for nominating directors. Among other things, the Advance Notice Requirement fixes a deadline by which shareholders must submit a notice of director nominations to the Corporation prior to any annual or special meeting of shareholders where directors are to be elected, and sets out the information that must be included in the notice for it to be valid. In the case of an annual meeting of shareholders, notice must be given to the Corporation not less than 30 days nor more than 65 days prior to the date of the annual meeting; provided, that if the first public announcement of the meeting is given less than 50 days prior to the meeting date notice must be given not later than the close of business on the 10th day following such public announcement.
In the case of a special meeting of shareholders (which is not also an annual meeting), notice must be given to the Corporation not later than the close of business on the 15th day following the first public announcement of the date of the special meeting.
Advance notice requirements have been adopted by a number of Canadian issuers. The deadlines in the Advance Notice Requirement are supported by Institutional Shareholder Services Inc.
The amendments to the By-laws (including the Advance Notice Requirement) are effective immediately. At the annual meeting of shareholders to be held on May 9, 2013, shareholders will be asked to confirm and ratify the amendments. A copy of the amended By-laws has been filed and is available under the Company's profile at www.sedar.com.
ABOUT TRILOGY
Trilogy is a growing petroleum and natural gas-focused Canadian energy corporation that actively develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy's geographically concentrated assets are primarily low-risk, high working interest properties that provide abundant infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy's common shares are listed on the Toronto Stock Exchange under the symbol "TET".
NON-GAAP MEASURES
Certain measures used in this document, including "funds flow from operations", "operating income", "net debt", "finding and development costs", "operating netback " and "recycle ratio" collectively the "Non-GAAP measures" do not have any standardized meaning as prescribed by IFRS and previous GAAP and, therefore, are considered Non-GAAP measures. Non-GAAP measures are commonly used in the oil and gas industry and by Trilogy to provide shareholders and potential investors with additional information regarding the Company's liquidity and its ability to generate funds to finance its operations. However, given their lack of standardized meaning, such measurements are unlikely to be comparable to similar measures presented by other issuers.
"Funds flow from operations" refers to the cash flow from operating activities before net changes in operating working capital. The most directly comparable measure to "funds flow from operations" calculated in accordance with IFRS is the cash flow from operating activities. "Funds flow from operations" can be reconciled to cash flow from operating activities by adding (deducting) the net change in operating working capital as shown in the consolidated statements of cash flows.
"Operating income" is equal to petroleum and natural gas sales before financial instruments and bad debt expenses minus royalties, operating costs, and transportation costs. "Operating netback" refers to Operating income plus realized financial instrument gains and losses and other income minus actual decommissioning and restoration costs incurred. "Net debt" is calculated as current liabilities minus current assets plus long-term debt. The components described for "operating income", "operating netback" and "net debt" can be derived directly from Trilogy's consolidated financial statements.
"Finding and development costs" refers to all current year net capital expenditures, excluding property acquisitions and dispositions with associated reserves, and including changes in future development capital on a proved and proved plus probable basis. "Finding and development costs per Barrel of oil equivalent" ("F&D $/Boe") is calculated by dividing finding and development costs by the current year's reserve extensions, discoveries and revisions on a proved or proved plus probable reserve basis.
"Recycle ratio" is equal to "Operating netback" on a production barrel of oil equivalent for the year divided by "F&D $/Boe" (computed on a proved or proved plus probable reserve basis as applicable).
Investors are cautioned that the Non-GAAP measures should not be considered in isolation or construed as alternatives to their most directly comparable measure calculated in accordance with IFRS, as set forth above, or other measures of financial performance calculated in accordance with IFRS.
FORWARD-LOOKING INFORMATION
Certain information included in this news release constitutes forward-looking statements under applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "budget" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release pertain to, without limitation: expected average production volumes and the relative content of crude oil, natural gas, and natural gas liquids therein; average operating costs; capital expenditures and the relative allocation and timing thereof; planned drilling programs, well completions, well tie-ins and the anticipated costs and timing thereof; statements regarding sources of and plans for funding Trilogy's exploration, development, facilities and other expenditures; business strategies and objectives for 2013 and beyond; among others. Such forward- looking statements or information are based on a number of assumptions which may prove to be incorrect. Statements regarding "reserves" or "resources" are forward-looking statements, as they involve implied assessments, based on estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future.
Such assumptions include: current commodity price forecasts for petroleum, natural gas and natural gas liquids; current reserves estimates; current production forecasts and the relative mix of crude oil, NGLs and natural gas therein; geology applicable to Trilogy's land holdings; the extent and development potential of Trilogy's assets including, without limitation, Trilogy's Kaybob area Montney oil and gas assets, the Duvernay Shale Gas development program and the Dunvegan oil program; continuity of the mutually beneficial NGL recovery agreement with Aux Sable Canada LP and pricing thereunder; assumptions regarding royalties and expenses and the continuity of government incentive programs and their applicability to Trilogy; operating and other costs; expected timelines and budgets being met; budget allocations and capital spending flexibility; access to capital markets and other sources of funding for Trilogy's planned operations and expenditures; estimates of deferred tax amounts, tax assets and tax pools; the ability of Trilogy and its partners to achieve drilling, completion construction and other operational results consistent with our expectations; general business, economic, and market conditions; the ability of Trilogy to obtain equipment, services and supplies in a timely manner to carry out its activities; the ability of Trilogy to market oil and natural gas successfully to current and new customers; the timing and costs of pipeline, storage and facility construction and expansion facility run-times; the ability to secure adequate product processing, transmission and transportation and the timely receipt of required regulatory approvals: among others.
Although Trilogy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trilogy can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Trilogy and described in the forward-looking statements or information.
These risks and uncertainties include, but are not limited to: fluctuations of oil, natural gas and natural gas liquids prices, foreign currency, exchange rates and interest rates, volatile economic and business conditions, the ability of management to execute its business plan; the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil, natural gas and associated by- products and market demand; risks and uncertainties involving geology of oil and gas deposits; risks inherent in Trilogy's marketing operations, including credit risk; the uncertainty of reserves estimates and reserves life; the uncertainty of estimates and projections relating to future production, NGL yields, costs and expenses; uncertainty in amounts and timing of royalty payments and applicability of and change to royalty regimes and government incentive programs including, without limitation, the Natural Gas Deep Drilling Programs and the Drilling Royalty Credit Program; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the availability of financing; the ability to generate sufficient cash flow from operations and other sources of financing at an acceptable cost to fund Trilogy's exploration, development and construction plans and repay debt; Trilogy's ability to secure adequate product transmission and transportation on a timely basis or at all; Trilogy's ability to enter into or renew leases; health, safety and environmental risks; the ability of Trilogy to add production and reserves through development and exploration activities; weather conditions; the possibility that government policies, regulations or laws, including without limitation those relating to the environment and taxation, may change; imprecision in estimates of product sales, tax pools, tax shelters, tax deductions available to Trilogy, changes to and the interpretation of tax legislation and regulations applicable to Trilogy, and timing and amounts of reversals of temporary differences between assets and liabilities recognized for accounting and tax purpose; the possibility that regulatory approvals may be delayed or withheld; risks associated with existing and potential future lawsuits and regulatory actions against Trilogy; uncertainty regarding aboriginal land claims and co-existing local populations; hiring/maintaining staff; the impact of market competition; and other risks and uncertainties described elsewhere in this document or in Trilogy's other filings with Canadian securities authorities.
The forward-looking statements and information contained in this news release are made as of the date hereof and Trilogy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Refer to Trilogy's Management's Discussion and Analysis for additional information on forward-looking information.
OIL AND GAS ADVISORY
This news release contains disclosure expressed as "Boe", "Boe/d", "Mcf/d", "MMcf/d", "Bbl" and "Bbl/d ". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. For fiscal 2012, the ratio between Trilogy's average realized oil price and the average realized natural gas price was approximately 31:1 ("Value Ratio"). The Value Ratio is obtained using the 2012 average realized oil price of $79.76 (CAD$/Bbl) and the 2012 average realized natural gas price of $2.57 (CAD$/mcf). This Value Ratio is significantly different from the energy equivalency ratio of 6:1 and using a 6:1 ratio would be misleading as an indication of value.
“Cloud has everything to do with what has happened with Big Data,” explained Jason Deck, Director of Strategic Alliances at Logicworks, in this exclusive Q&A with Cloud Expo Conference Chair Jeremy Geelan. “Big Data doesn’t exist in its easily accessible way without cloud. From reduced startup costs, to cheap storage, to fast processing, to adequate security, to the easy incorporation of third-party analytics tools, cloud made Big Data accessible to customers of all sizes, with all different bud...
“Social, mobile, analytics and cloud can’t be looked at as distinct technology trends; they are facets of the same movement and an everyday reality for consumers and businesses alike,” said Craig Sowell, IBM VP of SmartCloud Marketing, in this exclusive Q&A with Cloud Expo Conference Chair Jeremy Geelan. “This means that businesses need to start looking at trends as one: cloud is the delivery, analytics is the unique insight, social is a shareable service, and mobile is the ubiquitous access.”
...
With Cloud Expo New York | 12th Cloud Expo [June 10-13, 2013] hurtling towards us, let's take a look at the distinguished individuals in our incredible Speaker Faculty for the technical and strategy sessions at the conference coming up June 10-13 at the Jacob Javits Center in New York City.
We have technical and strategy sessions for you all four days dealing with every nook and cranny of Cloud Computing and Big Data, but what of those who are presenting? Who are they, where do they work, wha...
The new open source cloud orchestration platform called OpenStack is the promise of flexible network virtualization, and network overlays are looking closer than ever. The vision of this platform is to enable the on-demand creation of many distinct networks on top of one underlying physical infrastructure in the cloud environment. The platform will support automated provisioning and management of large groups of virtual machines or compute resources, including extensive monitoring in the cloud.
In his session at the 12th International Cloud Expo, Dave Eichorn, Global Data Center Practice Head at Zensar, will share a case study describing how a utility services company handled the migration of its Microsoft platform to the cloud. Challenged with the time-consuming task of opening operations out of temporary offices, this company struggled with the need to simultaneously access data that was accumulated from a vast amount of data-intensive jobs. Zensar migrated the company’s application ...
At pennies per virtual machine-hour, the economics of cloud computing are both compelling and daunting to replicate. Whether you are building your own cloud infrastructure, building a public cloud or choosing a cloud service, there are key strategy and technology decisions that make the difference between success and failure.
In his General Session at the 12th International Cloud Expo, Jason Waxman, VP in the Intel Architecture Group and general manager of the Cloud Platforms Group within Inte...
You're getting pitched every day from your legacy enterprise software and hardware vendors about "cloud." They're doing an amazing job of convincing your CIO and CTO about what cloud is and how you should use it. The reality is they're defending their shrinking market share and keeping you on the legacy treadmill for as long as they can by selling you solutions that aren't "cloud."
In her session at the 12th International Cloud Expo, Niki Acosta, Cloud Evangelista for Rackspace, will talk thro...
The rise of cloud computing has exposed hard drive-based storage as the new data center bottleneck. Combating this, data center managers have deployed SSDs to gain the performance needed to provide real-time access to data. However, due to budget constraints, many have turned to consumer-grade SSDs without understanding that they wear out quickly when processing enterprise workloads. In this session, Esther Spanjer will discuss recent endurance advancements in SSD technology that enable usage of...
SYS-CON Events announced today that Wowrack will exhibit at SYS-CON's 12th International Cloud Expo, which will take place on June 10–13, 2013, at the Javits Center in New York City, New York.
Wowrack’s core expertise lies in high-availability Private and Public Cloud IaaS Hosting Solutions. Wowrack provides a true Hybrid service – where business release all IT management and hardware provisioning – taking the data center and server system administrative headaches off our customer’s shoulders. ...
Organizations across the world are increasingly starting to see the benefits of moving more and more services to the cloud. The focus on the cost-saving potential of cloud is rapidly shifting to completely transforming the business with cloud. As organizations are investing enormous sums on technology they are starting to realize that in order to maximize the return on investment and accelerate the business transformation process the first area of focus should be people. By ensuring the organiza...
Imagine if you could take a time machine five years into the future, so that you would know which of today’s new technologies panned out and which did not.
Most companies have only started using cloud in the past two years. But there are some companies that have been using cloud for five years or...
Although often misunderstood, cloud computing ultimately relies on the same technological underpinnings as traditional server and storage options. While software, platforms and even infrastructure are farmed out to third-party providers, their ability to operate efficiently is constrained by the sam...
Hyper-V Replica is our included asynchronous site-to-site VM replication capability for Windows Server 2012 and our free Hyper-V Server 2012 bare-metal enterprise-grade hypervisor. Using Hyper-V Replica, you can quickly implement a cost-effective disaster recovery plan for your business critical VM...
While movement to the cloud keeps accelerating, fears about security hang on. Let’s take a look at the most common myths about cloud security that might be holding businesses back from taking advantage of the flexibility and scalability of the cloud model.
This is the piece of “common sense” that h...
“The last time I checked, people do not change their social security numbers very often...”
While in constant debate over data encryption and ease of access, I encountered a train of thought that made my jaw drop. A tradeshow attendee suggested encrypting everything, but just use a weak algorithm; ...
Don and I have four children, all of whom have had the fortune to take piano lessons (I'm not sure if the youngest would agree he's fortunate at this point in his life but at five, he's not really able to answer the question with any degree of wisdom, anyway. Come to think of it, not sure the other ...
Our prior post, A Roadmap to High-Value Cloud Infrastructure: Disaster Recovery and Data Protection, discussed both the benefits and limitations of a cloud-based disaster recovery (DR) strategy. As we highlighted last week, traditional disaster recovery options leave open a huge hole: At one extreme...
Online collaboration has evolved during the last decade, delivering even greater value -- thanks to a new generation of business technology applications. Forbes Insights released "Collaborating in the Cloud," a Cisco-sponsored study examining the ways business leaders increasingly look at cloud coll...
New technologies allow schools, colleges and universities to analyze absolutely everything that happens. From student behavior, testing results, career development of students as well as educational needs based on changing societies. A lot of this data has already been stored and is used for statist...
A recent Gartner study states that the function of the modern CIO is in flux and that his or her future focus must incorporate digital assets (aka cloud-based data and applications) to remain relevant. Towards the goal of riding the sea change a compiler of stacks to a broker of business needs, secu...
Subscribe to Big Data Journal Email News Alerts
Subscribe via RSS
