Manitok Energy Reports 2014 Year-end Financial Results, Reserves Evaluation

Manitok Energy Inc. (TSXV:MEI) announced its financial and operating results for 2014, which show an 11 percent increase in funds from operations to $46 million or $0.65 per diluted share. The company also provided results from its 2014 independent reserves evaluation.

Year-end result:

• Production averaged 4,502 boe/d (57 percent light oil and liquids), a 9 percent increase over 2013 production of 4,113 boe/d (52 percent light oil and liquids). The increase was offset by the Foothills Asset Divestiture in February 2014 which contributed 955 boe/d during 2013. Manitok’s fourth quarter production averaged 4,072 boe/d (56 percent light oil and liquids), an 18 percent decrease from fourth quarter 2013 production of 4,989 boe/d (57 percent light oil and liquids), which was due mainly to the Foothills Asset Divestiture, which contributed 879 boe/d in the fourth quarter of 2013.
• Recorded average production per diluted share growth of 13 percent and funds from operations per diluted share growth of 14 percent in 2014 when compared to 2013
• Recorded an 11 percent increase in funds from operations to $46.0 million ($0.65 per diluted share) in 2014 from $41.6 million ($0.57 per diluted share) in 2013.
• Recorded a 7 percent increase in operating netback to $35.22/boe in 2014 (excluding the realized gain or loss on financial instruments) from $33.07/boe in 2013.
• Recorded an unrealized gain on financial instruments of $27.6 million in the fourth quarter of 2014, which highlights the importance of the crude oil and natural gas hedging program for 2015 funds from operations.
• Capital expenditures were approximately $97.4 million, before of $35.1 million in divestitures and $7.4 million in acquisitions. This included drilling 29 gross (20.8 net) wells for about $75.4 million and about $17.9 million on equipment and facilities in both the Entice and Stolberg areas.
• In October 2014, the Corporation completed an acquisition of approximately 290 boe/d (15 percent oil and liquids) in the Stolberg area, with an effective date of October 1, 2014, for total cash consideration of approximately $7.4 million.
• In December 2014, Manitok divested its interest in certain oil and gas infrastructure for $12.3 million after postclosing adjustments. The Corporation has entered into an agreement for the exclusive use of the oil and gas infrastructure, which include facility fees of approximately $1.8 million per annum.
• At December 31, 2014, net debt was approximately $78.5 million.

2014 year-end reserves results:

• The pre-tax net present value discounted at 10 percent (“NPV10%”) of proved plus probable (“P+P”) and total proved (“TP”) reserves amounted to approximately $183.2 million(1) and $109.4 million(1) respectively in 2014. Each of these NPV10% amounts does not include any additional value for Manitok’s undeveloped land base and seismic.
• The net asset value on a P+P NPV10% valuation (“NAV”) is about $2.14 per share, assuming an undeveloped land value of $35.0 million (approximately $120 per acre) and net debt of $78.5 million at December 31, 2014.
• As at December 31, 2014 proved developed producing (“PDP”) reserves are 3,730.6 Mboe; TP reserves are 5,688.9 Mboe; and P+P reserves are 11,438.3 Mboe. This includes the Foothills Asset Divestiture in February 2014 and the negative reserve revisions in Stolberg, offset by reserve additions in the Entice area.
• Based on the 2014 Sproule Report, Manitok’s P+P reserves are comprised of 46% light oil on a boe basis, but represent 87% of the value on a NPV10% valuation basis.
• 2014 capital expenditures in the Entice area were approximately $44.2 million which resulted in reserves of 347.8 Mboe PDP, 1,185.8 Mboe TP and 2,828.1 Mboe P+P.

Click here to read the full Manitok Energy Inc. (TSXV:MEI) press release.