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Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

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Message: Connacher Announces Q1 2015 Results
Connacher Announces Q1 2015 Results

CALGARY, May 13, 2015 /CNW/ - Connacher Oil and Gas Limited (CLL - TSX; "Connacher" or the "Company") announces its financial and operating results for the quarter-ended March 31, 2015 ("Q1 2015") (all amounts are in Canadian dollars unless otherwise noted).

As previously announced, the Company closed its recapitalization on May 8, 2015.

At the opening of trading on Thursday, May 14, 2015, the common shares of Connacher will commence trading on a 1-for-800 consolidated basis under the new stock symbol "CLC".

Q1 2015 Highlights

  • Revenue, net of royalties decreased 49% to $53.8 million (Q1 2014 - $105.0 million), primarily due to the decline in crude oil prices, partially offset by higher sales volumes
  • Production and operating costs decreased 30% to $22.3 million (Q1 2014 - $31.6 million), primarily as a result of lower natural gas costs and reduced fluid handling and disposal costs
  • Adjusted EBITDA decreased to a deficit of $18.8 million in Q1 2015 (Q1 2014 - $10.9 million), primarily due to lower revenue, net of royalties, partially offset by lower blending and operating costs
  • Net loss increased to $139.9 million (Q1 2014 - net loss of $62.6 million), primarily due to lower revenue, net of royalties; higher foreign exchange losses primarily on the translation of long-term US dollar denominated debt; offset by lower blending and operating costs and risk management contract gains
  • Q1 2015 funds flow used was $42.1 million (Q1 2014 - funds flow used of $10.2 million). The decrease in funds flow in Q1 2015 was primarily due to lower revenue, net of royalties and the translation of a strengthened US dollar on interest payments associated with US dollar denominated long-term debt
  • Capital expenditures totaled $6.1 million (Q1 2014 - $18.1 million). The reduction in growth capital was due to the continued delay of the completion of the SAGD+® process commercial project implementation at Algar and of the mini-steam expansion project at Pod One and to the deferral of discretionary maintenance capital expenditures
  • Connacher closed Q1 2015 with a cash balance of $49.3 million (Q4 2014 - $87.7 million)
  • Production increased 12% to 15,078 bbl/d (Q1 2014 - 13,433 bbl/d). Production increases were attributable to the Company's five infill wells at Pod One that were brought on production in Q3 2014
  • Subsequent to Q1 2015, the Company closed out its remaining hedging contracts

Q1 2015 Financial and Operating Highlights

FINANCIAL (1)

Q1 2015

Q1 2014

% Change

Revenue, net of royalties

$53,774

$104,952

(49)

Adjusted EBITDA (2)

(18,764)

10,948

(271)

Net loss

(139,883)

(62,613)

123

Basic and diluted per share (3)

(0.31)

(0.14)

121

Funds flow (used) (4)

(42,144)

(10,185)

314

Capital expenditures

6,101

18,085

(66)

Cash on hand

49,307

19,631

151

Working capital surplus (deficiency)

8,093

(13,726)

(159)

Long-term debt

1,160,842

913,764

27

Shareholders' equity

(128,865)

159,529

(181)

(1)

($ 000) except per share amounts

(2)

Adjusted EBITDA is a non-GAAP measure and is defined in the "Advisory Section" of the Q1 2015 MD&A and is reconciled to net loss under "Reconciliations of Net Loss to EBITDA, Facility EBITDA, Adjusted EBITDA, and Bitumen Netback"

(3)

Basic and diluted amounts are the same due to the net loss position

(4)

Funds flow (used) is a non-GAAP measure and is defined in the "Advisory Section" of the Q1 2015 MD&A and is reconciled to cash flow from operating activities under "Reconciliation of Cash Flow from Operating Activities to Funds Flow (Used)"

OPERATIONAL

Q1 2015

Q1 2014

% Change

Average benchmark prices




WTI (US$/bbl)

48.63

98.68

(51)

WTI (CA$/bbl)

61.45

109.36

(44)

Heavy oil differential (CA$/bbl)

(18.61)

(25.64)

(27)

WCS (CA$/bbl)

42.84

83.73

(49)

Production and sales volumes (1)




Daily bitumen production (bbl/d)

15,078

13,433

12

Daily bitumen sales (bbl/d)

14,865

12,364

20

Bitumen netback (CA$/bbl) (2)(3)




Dilbit sales

$31.94

$79.63

(60)

Diluent costs

(8.23)

(9.67)

(15)

Realized bitumen sales price

23.71

69.96

(66)

Transportation and handling costs

(15.91)

(15.68)

1

Net realized bitumen sales price

7.80

54.28

(86)

Royalties

0.12

(4.11)

(103)

Net bitumen revenue price

7.92

50.17

(84)

Production and operating expenses

(16.67)

(28.44)

(41)

Bitumen netback

$(8.75)

$21.73

(140)

(1)

The Company's bitumen sales and production volumes differ due to changes in inventory and product losses

(2)

A non-GAAP measure which is defined in the "Advisory Section" of the Q1 2015 MD&A. Bitumen netback is reconciled to net loss under "Reconciliations of Net Loss to EBITDA, Facility EBITDA, Adjusted EBITDA, and Bitumen Netback". Bitumen netbacks per barrel amounts are calculated by dividing the total amounts presented in the "Bitumen Netback" table on page 10 of the MD&A by bitumen sold volumes as presented in the "Production and Sales Volumes" table on page 8 of the MD&A, with the exception of dilbit sales (presented as dilbit sales divided by dilbit sales volume) and diluent costs (presented as the cost of diluent in excess of the dilbit selling price)

(3)

Before risk management contract gains or losses

About Connacher

Connacher is a Calgary-based in situ oil sands developer, producer, and marketer of bitumen. The Company holds a 100 per cent interest in approximately 440 million barrels of proved and probable bitumen reserves and operates two steam-assisted gravity drainage facilities located on the Company's Great Divide oil sands leases near Fort McMurray, Alberta.

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