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Pine Cliff Energy Ltd. Announces 2023 Annual Results, Filing of Disclosure Documents, Year-End Reserves, Provides 2024 Guidance, Dividend Declaration and Executive Update

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Calgary, Alberta--(Newsfile Corp. - March 4, 2024) - Pine Cliff Energy Ltd. (TSX: PNE) ("Pine Cliff" or the "Company") announces its 2023 annual results, filing of disclosure documents, year-end reserves, provides 2024 guidance, dividend declaration and executive update.

Q4 2023 and 2023 annual results are as follows:

  • Generated $9.7 million ($0.03 per basic and fully diluted per share) and $58.7 million ($0.17 per basic and $0.16 per fully diluted share) of adjusted funds flow for the three months and year ended December 31, 2023, compared to $40.2 million ($0.11 per basic and fully diluted share) and $163.2 million ($0.47 per basic and $0.45 per fully diluted share) for comparable periods in 2022;

  • Generated net income of $0.8 million ($0.00 per basic and fully diluted share) and $9.1 million ($0.03 per basic and fully diluted share) for the three months and year ended December 31, 2023, compared to $24.7 million ($0.07 per basic and fully diluted share) and $108.9 million ($0.31 per basic and $0.30 per fully diluted share) for the comparable periods in 2022;

  • Completed the acquisition of Certus Oil & Gas for total consideration of $108.9 million (the "Acquisition") on December 13, 2023, expanding Pine Cliff's operations in Central Alberta and providing a new core area;

  • Production averaged 21,454 Boe/d2 and 20,660 Boe/d3 during the three months and year-ended December 31, 2023, representing a 2% increase and 2% decrease from the comparable periods in 2022;

  • Paid dividends of $11.6 million ($0.03 per basic and fully diluted share) and $46.0 million ($0.13 per basic and fully diluted share) for the three months and year ended December 31, 2023, compared to $10.8 million ($0.03 per basic and fully diluted share) and $23.6 million ($0.07 per basic and fully diluted share) for the comparable periods in 2022;

  • Entered into a three-year secured term debt facility in the amount of $56.3 million to fund a portion of the Acquisition;

  • Capital expenditures totaled $30.5 million in 2023, including development capital of $11.8 million to drill one gross (0.3 net) Caroline oil well, drill, complete and tie-in three gross (2.1 net) Pekisko oil wells and drill, complete and tie-in one gross (0.2 net) non-operated natural gas well in Edson. Capital expenditures also included facilities optimization and maintenance capital of $9.2 million and abandonment and reclamation expenditures of $9.5 million.

Included in the filings were Pine Cliff's annual information form ("AIF"), which includes disclosure and reports related to reserves data and other oil and gas information pursuant to National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities and its consolidated financial statements and related management's discussion and analysis for the year ended December 31, 2023.

Pine Cliff will host a webcast at 10:00 AM MDT (12:00 PM EDT) on Tuesday, March 5, 2024. Participants can access the live webcast via this Link or through the links provided on the Company's website. A recorded archive of the webcast will be available on the Company's website following the live webcast.

Reserve Report Highlights

Pine Cliff's independent reserve report (the "Report") was prepared by McDaniel & Associates Limited ("McDaniel") in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") with the effective date of December 31, 2023.

Highlights of the Report include:

  • Net present value for proved plus probable ("P+P") reserves of $476.8 million, discounted at 10%, an increase of $65.3 million, or 16%, from December 31, 2022, primarily as a result of the Acquisition, offsetting the impact of lower natural gas benchmark pricing;

  • Pine Cliff increased its 2023 P+P reserves by 29.0 MMBoe4 prior to adjusting for 2023 production, a reserve replacement ratio of 325% of 2024 estimated production5 as a result of the 31.5 MMBoe6 added from the Acquisition;

  • Remaining P+P reserves of 89.2 MMboe (71% conventional natural gas and coal bed methane) at December 31, 2023 increased 31% from 67.6 MMboe at December 31, 2022 largely as a result of the Acquisition; and

  • Approximately 70% of total reserve volumes are classified as total proved reserves, 30% are classified as probable reserves.

Pine Cliff's Reserves

McDaniel has used a three-consultant average price (McDaniel, GLJ & Sproule) forecast, resulting in a price forecast of $2.20 and $3.37 per MMBtu for AECO natural gas and US$73.67 and US$74.98 per Bbl for WTI oil in 2024 and 2025 respectively.

Summary of Remaining Working Interest Reserves, as of December 31, 2023

Reserve Category
Oil1,2

Natural Gas Liquids

Conventional Natural Gas

Coal Bed Methane

Oil Equivalent 


MBbl

MBbl

MMcf

MMcf

MBoe 


 

 

 

 

  
Proved
 

 

 

 

 
Developed Producing
3,210.0

6,283.0

204,978.90

22,133.9

47,345.1
Developed Non-Producing
218.8

90.2

1,956.60

-

635.1
Undeveloped
944.0

2,804.2

20,059.40

-

7,091.4 
Total Proved
4,372.9

9,177.4

226,994.90

22,133.9

55,071.8
Probable
2,400.6

5,451.7

87,299.80

6,668.1

23,513.6 
Total Proved plus Probable
6,773.5

14,629.1

314,294.70

28,802.0

78,585.4 
1 Amounts may not add due to rounding.
2 Oil includes Light and Medium and Heavy Oil. Light and Medium oil represents 100 per cent of Total Proved and Proved plus Probable reserves.

 

Summary of Net Present Values of Future Net Revenue, Before Income Taxes, as of December 31, 2023

Discounted at (% per year) 
($ millions)
0%

5%

10%

15%

20% 
Reserve Category1
 

 

 

 

  
Proved
 

 

 

 

 
Developed Producing
51.1

199.9

213.7

198.1

178.1
Developed Non-Producing
21.1

12.8

8.7

6.3

4.9
Undeveloped
142.2

87.7

57.3

39.0

27.3 
Total Proved
214.4

300.4

279.7

243.5

210.3 
Probable
484.6

292.9

197.2

142.4

107.9 
Total Proved plus Probable
699.0

593.2

476.8

385.9

318.2 
1 Amounts may not add due to rounding.

 

Reconciliation of Gross Reserves by Principal Product Type, as of December 31, 2023

Reserve Reconciliation Company Gross1
Oil2

Natural Gas Liquids

Natural Gas3

Oil Equivalent 


MBbl

MBbl

MMcf

MBoe 
Total Proved
 

 

 

 
December 31, 2022
3,099.3

3,663.1

270,514.8

51,848.3
Extension
91.6

23.2

751.1

240.0
Technical Revisions
(23.9)
193.1

(5,933.4)
(819.8)
Acquisitions
2,439.6

7,987.3

53,881.2

19,407.1
Economic Factors
3.3

(195.6)
(5,680.5)
(1,139.1)
Production
(458.0)
(544.8)
(39,229.4)
(7,541.0)
December 31, 2023
5,152.0

11,126.2

274,303.8

61,995.5 
Total Proved plus Probable
 

 

 

 
December 31, 2022
4,882.9

4,834.2

347,587.80

67,648.4
Extension
374.6

91.3

3,035.40

971.8
Technical Revisions
(61.9)
211.4

(8,783.80)
(1,314.4)
Acquisitions
3,387.8

13,461.3

87,872.50

31,494.5
Economic Factors
9.3

(251.1)
(11,164.10)
(2,102.5)
Production
(458.0)
(544.8)
(39,229.40)
(7,541.0)
December 31, 2023
8,134.7

17,802.3

379,318.3

89,156.7 
1 Amounts may not add due to rounding.
2 Oil includes Light and Medium and Heavy Oil. Light and Medium oil represents 100 per cent of Total Proved and Proved plus Probable reserves.
3 Natural gas includes Conventional Natural Gas and Coal Bed Methane. Conventional Natural Gas represents 90 per cent Total Proved and Proved plus Probable reserves.

 

2024 Guidance and Dividend

Pine Cliff's Board of Directors has approved a 2024 capital expenditure budget of $17.5 million, including $7.0 million of abandonment and reclamation spending. Pine Cliff expects 2024 annual production volumes to range between 24,000 Boe/d and 25,000 Boe/d10, representing 14% growth at the midpoint due to the Acquisition.

Pine Cliff has declared a regular monthly dividend of $0.005 per common share ($0.06 per common share annualized) to be paid March 28, 2024 to shareholders of record on March 15, 2024. The reduced capital budget and monthly dividend represent a disciplined response to preserve financial flexibility while natural gas prices are weak. The dividend is designated as an eligible dividend for Canadian income tax purposes.

In response to weak natural gas prices, Pine Cliff has increased its AECO hedge position to approximately 22% of gross natural gas production11 at an average price of $3.20/Mcf for 2024. Approximately 33% of gross crude oil production11 has been hedged at an average price of $99.58/Bbl for 2024.

Executive Update

Mr. Alan MacDonald will be retiring from his role as Chief Financial Officer effective April 30, 2024. We are pleased to announce the promotion of Mr. Kristopher Zack to the role of Chief Financial Officer and Corporate Secretary effective May 1, 2024. Mr. MacDonald will continue to work with the executive team to assist with the transition.

Financial and Operating Results



Three months ended December 31,

Year ended December 31,


2023

2022

2023

2022 
($000s, unless otherwise indicated)










 
Commodity sales (before royalty expense)
45,465

76,928

188,852

306,208
Cash provided by operating activities
16,559

33,791

66,627

150,452
Adjusted funds flow1
9,700

40,200

58,687

163,206
Per share - Basic ($/share)1
0.03

0.11

0.17

0.47
Per share - Diluted ($/share)1
0.03

0.11

0.16

0.45
Net income
841

24,685

9,121

108,939
Per share - Basic ($/share)
0.00

0.07

0.03

0.31
Per share - Diluted ($/share)
0.00

0.07

0.03

0.30
Capital expenditures
3,616

6,637

20,966

29,077
Acquisitions
109,014

528
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