Coelacanth Stock Price, News & Analysis

Coelacanth Energy Inc. (TSXV: CEI, OTC: CEIEF) is an oil and natural gas company active in the crude petroleum and natural gas extraction industry. According to its public disclosures, the company focuses on developing a Montney resource base at its Two Rivers project, which includes Two Rivers East and Two Rivers West.

Coelacanth states that its business plan centers on delineating and developing a large Montney resource base at Two Rivers. The company reports that this land position encompasses approximately 150 contiguous sections of Montney land with multiple identified Montney zones. Public updates describe work on Upper Montney, Lower Montney, Basal Montney and a Middle Montney zone, with horizontal wells drilled and tested in several of these horizons.

Operations and resource focus

In its news releases, Coelacanth explains that it has drilled and tested pads at Two Rivers East and Two Rivers West in multiple Montney zones. The company reports drilling and testing of Lower Montney, Upper Montney and Basal Montney wells on its 5-19 pad at Two Rivers East, with wells flowing a mix of light oil, natural gas and natural gas liquids. It also discloses that it has obtained core, pressure and other data to help define commerciality across its mapped Montney horizons.

Coelacanth describes its Two Rivers Montney project as having both discovered and undiscovered resource potential. A GLJ Ltd. report, as summarized by the company, provides estimates of Discovered Petroleum Initially-In-Place and Undiscovered Petroleum Initially-In-Place for its Montney zones. The company notes that reserves have been booked on a portion of its land base, predominantly in the Lower Montney, with room to expand reserves both aerially across more sections and vertically into additional zones.

Infrastructure and development approach

The company reports that it has invested in infrastructure to support its Montney development. Public disclosures describe the completion of a battery facility at Two Rivers East, construction of pipelines connecting the 5-19 pad to this facility and to a midstream gathering system, and a facility design that can be expanded in stages. Coelacanth states that its Two Rivers East facility was initially designed with capacity for several thousand barrels of oil equivalent per day and that additional compression is expected to increase this capacity.

Coelacanth indicates that it has secured takeaway and processing arrangements for gas volumes associated with its Montney development. It also reports the construction of pipelines and related infrastructure to handle tested but previously shut-in volumes from the 5-19 pad and to accommodate future pads. The company describes this infrastructure build-out as a key step in moving its Montney land position from a large resource base toward a producing asset with an inventory of drilling locations.

Development strategy and reserves

In its operations updates and reserves disclosures, Coelacanth outlines a development strategy that includes pad drilling, horizontal multi-fracture completions and systematic delineation of its Montney lands. The company states that it is using pad development to increase production and cash flow, while vertical and horizontal wells are used to understand commerciality across multiple benches. It also notes that it is licensing additional pads, delineation wells and infrastructure locations to support future growth beyond existing facility capacity.

Coelacanth’s public reserves information, as summarized from GLJ reports, indicates proved and proved plus probable reserves in tight oil, shale natural gas and natural gas liquids associated with its Montney assets. The company highlights that reserves have been assigned on a limited portion of its land base and that prior updates have shown increases in both reserve volumes and estimated future net revenues.

Financial and operating measures

The company’s news releases include detailed financial and operating data, such as oil and natural gas sales, daily production by product type, operating expenses, royalties and transportation costs. Coelacanth also uses several non-GAAP and capital management measures, including adjusted funds flow (used), net transportation expenses, operating netback and adjusted working capital (deficiency). It explains that these measures are intended to help analyze operating performance, capital investment and financial position alongside figures prepared in accordance with IFRS.

Operationally, Coelacanth reports production volumes in terms of tight oil, condensate, other natural gas liquids and shale natural gas, and it presents oil equivalent volumes using a six thousand cubic feet of natural gas to one barrel of oil equivalent conversion ratio. The company cautions that this energy equivalency conversion is based on burner-tip equivalence and does not represent a value equivalency at the wellhead.

Capital structure and credit facilities

Coelacanth has disclosed the use of revolving bank credit facilities with a Canadian chartered bank. The company reports securing and later increasing a bank credit facility, with proceeds used in part to fund drilling programs and infrastructure projects, including pipelines and facilities at Two Rivers East. It also provides information on adjusted working capital, net bank debt relative to its credit facility and capital expenditures on property, plant and equipment and exploration and evaluation assets.

Trading and corporate information

Coelacanth Energy Inc. is listed on the TSX Venture Exchange under the symbol CEI. The company has also disclosed that it engaged a CIRO dealer-member firm to provide automated market making services under an agreement that specifies a monthly cash fee and no equity compensation. Public contact information in news releases identifies Coelacanth as based in Calgary, Alberta.

Key concepts and terminology

Coelacanth’s disclosures include definitions of frequently used oil and gas terms such as barrels (bbls), barrels per day (bbls/d), natural gas liquids (NGLs), thousands of cubic feet (Mcf), millions of cubic feet per day (MMcf/d), barrels of oil equivalent (boe) and barrels of oil equivalent per day (boe/d). The company also provides definitions for resource classification terms such as Discovered Petroleum Initially-In-Place, Undiscovered Petroleum Initially-In-Place, reserves, contingent resources and prospective resources, consistent with Canadian oil and gas disclosure standards.

Risk and disclosure framework

In its public communications, Coelacanth emphasizes that non-GAAP financial measures and non-GAAP financial ratios do not have standardized meanings under IFRS and may not be comparable to similar measures presented by other entities. It also notes that reserve and resource estimates, as well as future net revenue estimates, are subject to numerous uncertainties and may differ from actual results. The company refers readers to its financial statements, Management’s Discussion and Analysis and Annual Information Form filed on SEDAR+ for full disclosure prepared in accordance with applicable Canadian securities regulations.