CALGARY, Aug. 9, 2017 /CNW/ -
OIL AND GAS OPERATIONS
- Paramount's second quarter 2017 sales volumes averaged 18,367
Boe/d (52 percent Liquids), including approximately 12,700 Boe/d
(60 percent Liquids) from Karr-Gold Creek. Liquids sales revenue
totaled $45.4 million in the second
quarter of 2017, 74 percent of the Company's total petroleum and
natural gas sales revenue.
- Company sales volumes averaged approximately 22,000 Boe/d in
June and 27,000 Boe/d (53 percent Liquids) in July as new wells
were brought on at Karr-Gold Creek through the Company's expanded
80 MMcf/d compression and dehydration facility (the "6-18
Facility"). During the last week of July, Paramount's sales volumes
averaged approximately 30,000 Boe/d (53 percent Liquids), with
record sales volumes being achieved at Karr-Gold Creek.
- All 27 wells from the 2016/17 Karr-Gold
Creek Montney development program have been drilled. A total
of 21 wells have been completed and 17 have been brought on
production to date. On average, these new wells have met or
exceeded type curve expectations for the program.
- The Company continues to advance its completion techniques and
well design at Karr-Gold Creek to further enhance well performance
and generate higher returns.
- Principal Properties capital expenditures in the second quarter
of 2017 totaled $112.0 million. The
majority of spending was directed towards the Karr-Gold Creek
development program.
- Paramount closed the sale of its oil and gas properties in the
Valhalla area of Alberta for cash consideration of
approximately $150 million at the end
of May 2017. The properties had
average sales volumes of approximately 1,400 Boe/d (8 percent
Liquids) in 2017 prior to being sold.
CORPORATE
- In July 2017, Paramount entered
into an agreement to acquire Apache Canada Ltd. ("Apache Canada")
for $459.5 million, plus working
capital and other monetary adjustments (the "Apache Canada
Acquisition").
- In July 2017, Paramount also
entered into an agreement to merge with Trilogy Energy Corp.
("Trilogy") by way of an arrangement under the Business
Corporations Act (Alberta).
Pursuant to the arrangement, Paramount will acquire all of the
common shares and non-voting shares of Trilogy not already owned by
Paramount in exchange for Class A common shares of Paramount on the
basis of one Paramount share for every 3.75 Trilogy shares (the
"Merger").
- At June 30, 2017, Paramount had
$565.6 million of cash and cash
equivalents and no indebtedness.
- Paramount's revolving bank credit facility was increased from
$100 million to $300 million following completion of the annual
review. It is anticipated that further amendments will be made to
the facility following closing of the Apache Canada Acquisition and
the Merger.
- Second quarter 2017 funds flow from operations totaled
$35.2 million.
- In April 2017, the Company hedged
10,000 MMBtu/d of natural gas (for May to October 2017) at an average NYMEX price of
US$3.37/MMBtu and 20,000 MMBtu/d of
natural gas (for May to December
2017) at an average NYMEX price of US$3.40/MMBtu.
REVIEW OF OPERATIONS
Karr-Gold Creek
Development activities at Karr-Gold Creek are currently focused
on a 27 (27.0 net) well horizontal Montney drilling and completion
program that commenced in mid-2016 (the "Karr Program"). Karr
Program wells have been designed with longer horizontal laterals of
approximately 3,000 meters, higher intensity completions, tighter
frack spacing and different completion fluids compared to prior
years. The new well design is expected to significantly increase
well productivity and recoverable reserves compared to the previous
designs.
The status of the Karr Program to date is as follows:
As
of
|
Aug
4/17
|
Dec
31/16
|
Wells
Spud
|
27
|
20
|
Wells Rig
Released
|
27
|
10
|
Wells
Completed
|
21
|
2
|
Wells Brought on
Production
|
17
|
1
|
All 27 wells from the Karr Program have now been drilled, with
average per-well costs of approximately $3.8
million (approximately 5 to 10 percent higher than original
estimates). A total of 21 Karr Program wells have been completed
and 17 have been brought on production to date. Completion costs
for Karr Program wells have averaged approximately 10 to 15 percent
higher than original estimates of $5.7
million per-well (four-well pad) as a result of changes to
completion techniques and well design modifications which are
expected to further enhance well performance and returns. Cost
inflation for materials and field services also resulted in higher
than estimated completion costs. The remaining six wells in the
Karr Program are expected to be completed later in 2017 and early
2018.
Paramount continues to target Karr Program well completions with
proppant loading intensities of approximately 2.4 tonnes per meter
and stage spacing of between 40 and 50 meters using a range of
completion technologies. Paramount recently set a new Company
record, completing 16 plug and perf stages with zipper fracturing
techniques in one day. In addition, well design continues to evolve
with the testing of perforating techniques and modifications to
proppant types. The Company will continue to evaluate these
technologies as the Karr Program progresses and additional well
performance data are obtained.
The Company is currently constructing a 300,000 m3
permanent water storage reservoir at Karr-Gold Creek, which will
provide a larger water storage solution for completion operations
and reduce the need for tank rentals. In addition, Paramount
recently re-completed a well for water disposal and tied the well
into the Company's wholly-owned 6-18 Facility. Both actions of
these projects are part of the Company's overall water management
program that are expected to reduce costs over the
long-term.
Paramount's second quarter 2017 sales volumes averaged 18,367
Boe/d (52 percent Liquids), including approximately 12,700 Boe/d
(60 percent Liquids) from Karr-Gold Creek.
In April 2017, Paramount completed
the expansion of its wholly-owned 6-18 Facility, doubling capacity
of the facility to 80 MMcf/d. Company sales volumes were reduced to
approximately 12,000 Boe/d in April
2017 as the majority of production at Karr-Gold Creek was
shut-in for a two-week period to complete commissioning of the
expanded facility. Commissioning was accelerated to coincide with
an outage at a downstream third-party processing facility (the
"Third-party Facility").
Following the 6-18 Facility expansion, Paramount brought-on
additional new wells from the Karr Program, increasing total
Company sales volumes to approximately 22,000 Boe/d in June and
27,000 Boe/d (53 percent Liquids) in July. During the last week of
July, Paramount's sales volumes averaged approximately 30,000 Boe/d
(53 percent Liquids), with record sales volumes being achieved at
Karr-Gold Creek. On average, wells brought-on production to date
from the Karr Program have met or exceeded type curve expectations
for the program.
Sales volumes in August 2017 will
be impacted by scheduled outages at the Third-party Facility and a
third-party natural gas pipeline that are expected to shut-in
Karr-Gold Creek production for most of the month.
Production at Karr-Gold Creek is transported through a
Company-owned gathering system and compressed and dehydrated at the
6-18 Facility. Volumes are then shipped via pipeline to the
Third-party Facility under a long-term firm-service arrangement to
provide sales specification natural gas, condensate and
C3+. The 6-18 Facility has been equipped to facilitate
the trucking out of Liquids so that volumes in excess of contracted
capacity at the Third-party Facility can be transported for
processing at alternate locations. Paramount expects the majority
of Liquids production to be trucked until mid-2018, when a
condensate stabilization capacity expansion at the Third-party
Facility is completed. The Company has contracted a dedicated fleet
of trucks and 24-hour logistical services over this period to
provide uninterrupted egress for Liquids production.
Smoky/Resthaven
Paramount has drilled five (4.5 net) of six planned wells in its
Cretaceous exploration and delineation program at Smoky/Resthaven
to the end of July. Three of the wells have been completed to
the end of July and completion operations for the remaining two
wells are in-progress. These wells are expected to be brought on
production later in the year. Drilling of the sixth well is planned
for the fourth quarter of 2017 at a winter access
location.
The Company has drilled one (1.0 net) new Montney well in the
northern portion of its lands at Smoky/Resthaven and completion
operations are scheduled for later in the third quarter of 2017.
The well design for this new location is expected to be similar to
the Karr Program, with a planned horizontal lateral length of
approximately 3,000 meters, slickwater completion fluids,
approximately 70 fracture stages and proppant loading of
approximately 2.4 tonnes per meter.
Birch
A total of seven (3.5 net) Montney wells have been drilled to
the end of July in the planned ten (5.0 net) well drilling program
at the non-operated Birch property. The remaining three (1.5 net)
wells are scheduled to be drilled in the third quarter.
Two of the wells have been completed and brought onto production
to the end of July. All of the wells drilled in the 2017 Birch
drilling program are expected to be completed by the end of the
year, except for one well which was drilled for land retention.
The expansion of the Birch compression and dehydration facility
to 40 MMcf/d (20 MMcf/d net) is progressing on schedule to be
completed in the third quarter of 2017.
Non-Core Property Dispositions
In May 2017, the Company sold its
oil and gas properties in the Valhalla area of Alberta for cash consideration of
approximately $150 million. The
properties encompassed approximately 94 (74 net) sections of land
and had average sales volumes of approximately 1,400 Boe/d (8
percent Liquids) in 2017 prior to being sold.
APACHE CANADA ACQUISITION
AND THE MERGER
In July 2017, Paramount entered
into an agreement with certain subsidiaries of Apache Corporation
to acquire all of the shares of Apache Canada Ltd. for $459.5 million, plus working capital and other
monetary adjustments.
In July 2017, Paramount also
entered into an agreement to merge with Trilogy by way of an
arrangement under the Business Corporations Act (Alberta). Pursuant to the arrangement,
Paramount will acquire all of the common shares and non-voting
shares of Trilogy not already owned by Paramount in exchange for
Class A common shares of Paramount on the basis of one Paramount
share for every 3.75 Trilogy shares.
These strategic transactions are the next steps in Paramount's
transformation following the sale of the Company's Musreau deep cut
gas processing plant and properties in 2016 and the repayment of
all debt then outstanding. The Company is redeploying its cash on
hand and immediately increasing its production, cash flows,
reserves and landholdings.
When the acquisition of Apache Canada and merger with Trilogy
are completed, Paramount will become a Montney, Duvernay and Deep Basin focused intermediate
exploration and production company with the financial strength to
accelerate the development of a portfolio of top-tier resource
plays and unlock the value of the underlying resources. The
integration of the three companies will generate operational
synergies, optimize cost structures, offer financial flexibility
and provide economies of scale. Paramount's diversified production
base will be capable of delivering repeatable, low risk growth and
generating free cash flow in a variety of price environments.
The Apache Canada Acquisition is not conditional on the
completion of the Merger. Closing of the Apache Canada Acquisition
is expected to occur in August 2017,
subject to customary closing conditions. The Merger is conditional
upon the completion of the Apache Canada Acquisition and the
receipt of court, shareholder and regulatory approvals and other
customary closing conditions and is targeted for completion in
September 2017. A joint information
circular for the special meetings of shareholders of Paramount and
Trilogy to consider the Merger is expected to be mailed in
August.
Additional information concerning the Apache Canada Acquisition
and the Merger can be found in Paramount's Press Release dated
July 6, 2017 and Material Change
Report dated July 14, 2017, both of
which are available on SEDAR at www.sedar.com.
OUTLOOK
Following completion of the Apache Canada Acquisition and the
Merger, Paramount's fourth quarter 2017 sales volumes are expected
to exceed 90,000 Boe/d, including approximately 35 percent Liquids.
Paramount's 2017 capital budget has been maintained at $385 million. The Company also expects to
continue with the remaining portions of the Apache Canada and
Trilogy capital programs subsequent to closing these
transactions.
OPERATING AND
FINANCIAL RESULTS (1)
($ millions,
except as noted)
|
|
Three months ended
June 30
|
Six months ended
June 30
|
|
2017
|
2016
|
%
Change
|
2017
|
2016
|
%
Change
|
Sales volumes –
Ongoing Operations (2)
|
|
|
|
|
|
|
|
Natural gas
(MMcf/d)
|
53.0
|
46.3
|
14
|
52.2
|
49.7
|
5
|
|
Condensate & oil
(Bbl/d)
|
8,118
|
2,471
|
229
|
7,238
|
2,712
|
167
|
|
Other NGLs (Bbl/d)
(3)
|
1,414
|
1,042
|
36
|
1,335
|
805
|
66
|
Ongoing Operations
(Boe/d) (2)
|
18,367
|
11,236
|
63
|
17,271
|
11,803
|
46
|
|
Musreau Assets
(Boe/d) (2)
|
─
|
29,654
|
(100)
|
─
|
33,723
|
(100)
|
|
Total
(Boe/d)
|
18,367
|
40,890
|
(55)
|
17,271
|
45,526
|
(62)
|
Netback – Ongoing
Operations (2)
|
|
|
|
|
|
|
|
Natural gas
revenue
|
15.6
|
6.6
|
136
|
32.0
|
17.2
|
86
|
|
Condensate and oil
revenue
|
42.8
|
11.6
|
269
|
78.1
|
22.2
|
252
|
|
Other NGLs revenue
(3)
|
2.6
|
0.4
|
550
|
5.3
|
0.9
|
489
|
|
Royalty and sulphur
revenue
|
0.3
|
0.4
|
(25)
|
0.6
|
0.6
|
–
|
Petroleum and
natural gas sales
|
61.3
|
19.0
|
223
|
116.0
|
40.9
|
184
|
|
Royalties
|
(0.8)
|
0.5
|
NM
|
(2.8)
|
(0.6)
|
367
|
|
Operating
expense
|
(17.2)
|
(12.3)
|
40
|
(32.1)
|
(26.5)
|
21
|
|
Transportation and
NGLs processing (4)
|
(8.2)
|
(6.2)
|
32
|
(14.3)
|
(10.0)
|
43
|
Netback –
Ongoing Operations (2)
|
35.1
|
1.0
|
NM
|
66.8
|
3.8
|
NM
|
|
($/Boe)
|
21.05
|
0.94
|
NM
|
21.39
|
1.75
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and
Capital Expenditures –
Ongoing
Operations (2)
|
|
|
|
|
|
|
|
Wells and
exploration
|
103.0
|
4.1
|
|
232.4
|
10.6
|
|
|
Facilities and
gathering
|
9.0
|
1.9
|
|
26.3
|
7.7
|
|
Principal
Properties Capital (5)
|
112.0
|
6.0
|
|
258.7
|
18.3
|
|
Strategic
Investments
|
0.7
|
4.2
|
|
1.6
|
19.8
|
|
Other
|
2.0
|
11.1
|
|
3.5
|
11.4
|
|
Total
|
114.7
|
21.3
|
|
263.8
|
49.5
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
45.3
|
(30.6)
|
|
66.1
|
(76.5)
|
|
|
per share –
diluted ($/share)
|
0.42
|
(0.29)
|
|
0.62
|
(0.72)
|
|
Funds flow from
operations
|
35.2
|
(4.9)
|
|
63.2
|
17.5
|
|
|
per share –
diluted ($/share)
|
0.33
|
(0.05)
|
|
0.59
|
0.16
|
|
Total
assets
|
|
|
|
2,051.8
|
2,158.1
|
|
Cash and cash
equivalents
|
|
|
|
565.6
|
11.6
|
|
Long-term
debt
|
|
|
|
─
|
1,244.6
|
|
Investments in
other entities – market value (6)
|
|
|
|
140.4
|
162.1
|
|
Common shares
outstanding (thousands)
|
|
|
|
106,200
|
106,241
|
|
(1)
|
Readers are referred
to the advisories concerning Non-GAAP Measures and Oil and Gas
Measures and Definitions in the Advisories section of this
document.
|
(2)
|
In 2016, the
Company sold its natural gas processing facilities and the majority
of its oil and gas properties in the Musreau/Kakwa area of west
central Alberta. Disclosures of results for the three and six
months ended June 30, 2016 for "Ongoing Operations" exclude amounts
attributable to these sold facilities and oil and gas
properties.
|
(3)
|
Other NGLs means
ethane, propane and butane.
|
(4)
|
Includes downstream
natural gas, NGLs and oil transportation costs and NGLs
fractionation costs incurred by the Company.
|
(5)
|
Principal Properties
Capital includes capital expenditures and geological and
geophysical costs related to the Company's Principal Properties and
excludes land acquisitions.
|
(6)
|
Based on the
period-end closing prices of publicly-traded investments and the
book value of the remaining investments.
|
(7)
|
NM Not
meaningful
|
Paramount is an independent, publicly traded, Canadian energy
company that explores and develops unconventional and conventional
petroleum and natural gas prospects, including long-term
unconventional exploration and pre-development projects, and holds
a portfolio of investments in other entities. The Company's
principal properties are primarily located in Alberta and British
Columbia. Paramount's Class A common shares are listed on
the Toronto Stock Exchange under the symbol "POU".
Paramount's second quarter 2017 results, including Management's
Discussion and Analysis and the Company's Consolidated Financial
Statements can be obtained at:
http://files.newswire.ca/1509/PRL_Q2_Results.pdf
This information will also be made available shortly through
Paramount's website at www.paramountres.com and SEDAR at
www.sedar.com.
Advisories
Forward-looking Information
Certain statements in this document constitute forward-looking
information under applicable securities legislation.
Forward-looking information typically contains statements with
words such as "anticipate", "believe", "estimate", "will",
"expect", "plan", "schedule", "intend", "propose", or similar words
suggesting future outcomes or an outlook. Forward-looking
information in this document includes, but is not limited to:
- the anticipated closing of the Apache Canada Acquisition and
the Merger, including satisfaction of closing conditions, receipt
of regulatory, shareholder and court approvals and the timing
thereof;
- the anticipated timing of the mailing of the information
circular in connection with the special meeting of Paramount
shareholders being held to consider the Merger;
- the impact of the Apache Canada Acquisition and the Merger on
the Company's financial position and strength, cost structures and
strategy and the synergies, economies of scale and other benefits
expected to be realized from the Apache Canada Acquisition and the
Merger;
- projected production and sales volumes;
- forecast capital expenditures and operating costs;
- exploration, development, and associated operational plans and
strategies (including planned drilling and completion programs,
well tie-ins, and facility expansions, and the anticipated timing
thereof);
- the ability to obtain water storage solutions for completion
operations and the expectation of reduced long-term costs as a
result of the Company's overall water management strategy;
- expected increases in well productivity and recoverable
reserves and higher returns resulting from the adoption of new well
designs and completion technologies for the wells in the Karr
Program;
- the anticipated amendments to Paramount's Credit Facility
following closing of the Apache Canada Acquisition and the
Merger;
- the anticipated timing, duration and impact of scheduled
outages at the Third-party Facility and at a third-party natural
gas pipeline;
- the projected date when the expansion of the condensate
stabilization capacity at the Third-party Facility will be
completed, and the Company's belief that it has secured the
services of a truck fleet of sufficient size (and all related
logistical services necessary) to ensure uninterrupted egress for
its Karr-Gold Creek area Liquids until this additional
stabilization capacity becomes available; and
- general business strategies and objectives.
Such forward-looking information is based on a number of
assumptions which may prove to be incorrect. Assumptions have been
made with respect to the following matters, in addition to any
other assumptions identified in this document:
- the timely receipt of regulatory, shareholder and court
approvals and satisfying closing conditions for the completion of
the Apache Canada Acquisition and the Merger;
- the scope and effect of the expected benefits from the Apache
Canada Acquisition and the Merger;
- future natural gas and Liquids prices;
- royalty rates, taxes and capital, operating, general &
administrative and other costs;
- foreign currency exchange rates and interest rates;
- general business, economic and market conditions;
- the ability of Paramount to obtain the required capital to
finance its exploration, development and other operations and meet
its commitments and financial obligations;
- the ability of Paramount to obtain equipment, services,
supplies and personnel in a timely manner and at an acceptable cost
to carry out its activities;
- the ability of Paramount to secure adequate product processing,
transportation, de-ethanization, fractionation, and storage
capacity on acceptable terms;
- the ability of Paramount to market its natural gas and Liquids
successfully to current and new customers;
- the ability of Paramount and its industry partners to obtain
drilling success (including in respect of anticipated production
volumes, reserves additions, Liquids yields and resource
recoveries) and operational improvements, efficiencies and results
consistent with expectations;
- the timely receipt of required governmental and regulatory
approvals; and
- anticipated timelines and budgets being met in respect of
drilling programs and other operations (including well completions
and tie-ins and the construction, commissioning and start-up of new
and expanded facilities).
Although Paramount believes that the expectations reflected in
such forward-looking information are reasonable, undue reliance
should not be placed on them as Paramount can give no assurance
that such expectations will prove to be correct. Forward-looking
information is based on expectations, estimates and projections
that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by
Paramount and described in the forward-looking information. The
material risks and uncertainties include, but are not limited
to:
- the Apache Canada Acquisition and/or the Merger may not be
completed on the terms anticipated or at all;
- the conditions to and approvals for the completion of the
Apache Canada Acquisition and/or the Merger not being satisfied and
obtained;
- the expected benefits of the Apache Canada Acquisition and/or
the Merger not being realized;
- fluctuations in natural gas and Liquids prices;
- changes in foreign currency exchange rates and interest
rates;
- the uncertainty of estimates and projections relating to future
revenue, future production, reserve additions, Liquids yields
(including condensate to natural gas ratios), resource recoveries,
royalty rates, taxes and costs and expenses;
- the ability to secure adequate product processing,
transportation, de-ethanization, fractionation, and storage
capacity on acceptable terms;
- operational risks in exploring for, developing and producing,
natural gas and Liquids;
- the ability to obtain equipment, services, supplies and
personnel in a timely manner and at an acceptable cost;
- potential disruptions, delays or unexpected technical or other
difficulties in designing, developing, expanding or operating new,
expanded or existing facilities (including third-party
facilities);
- processing, pipeline, de-ethanization, and fractionation
infrastructure outages, disruptions and constraints;
- risks and uncertainties involving the geology of oil and gas
deposits;
- general business, economic and market conditions;
- the ability to generate sufficient cash flow from operations
and obtain financing to fund planned exploration, development and
operational activities and meet current and future commitments and
obligations (including product processing, transportation,
de-ethanization, fractionation and similar commitments and
obligations);
- changes in, or in the interpretation of, laws, regulations or
policies (including environmental laws);
- the ability to obtain required governmental or regulatory
approvals in a timely manner, and to enter into and maintain leases
and licenses;
- the effects of weather;
- the timing and cost of future abandonment and reclamation
obligations and potential liabilities for environmental damage and
contamination;
- uncertainties regarding aboriginal claims and in maintaining
relationships with local populations and other stakeholders;
- the outcome of existing and potential lawsuits, regulatory
actions, audits and assessments; and
- other risks and uncertainties described elsewhere in this
document and in Paramount's other filings with Canadian securities
authorities.
The foregoing list of risks is not exhaustive. For more
information relating to risks, see the section titled "RISK
FACTORS" in Paramount's current annual information form. The
forward-looking information contained in this document is made as
of the date hereof and, except as required by applicable securities
law, Paramount 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.
Non-GAAP Measures
In this document "Funds flow from operations", "Netback",
"Exploration and Capital Expenditures – Ongoing Operations",
"Principal Properties Capital" and "Investments in other entities –
market value", collectively the "Non-GAAP measures", are used and
do not have any standardized meanings as prescribed by
International Financial Reporting Standards.
Funds flow from operations refers to cash from (used in)
operating activities before net changes in operating non-cash
working capital, geological and geophysical expenses, asset
retirement obligation settlements and corporate acquisition and
merger costs. Funds flow from operations is commonly used in the
oil and gas industry to assist management and investors in
measuring the Company's ability to fund capital programs and meet
financial obligations. Refer to the Consolidated Results section of
the Company's Management's Discussion and Analysis for the three
and six months ended June 30, 2017
for the calculation of funds flow from operations. Netback
equals petroleum and natural gas sales less royalties, operating
costs and transportation and NGLs processing costs. Netback is
commonly used by management and investors to compare the results of
the Company's oil and gas operations between periods. Refer to the
Principal Properties section of the Company's Management's
Discussion and Analysis for the three and six months ended
June 30, 2017 for the calculation of
netback. Exploration and capital expenditures consist of the
Company's spending on wells and infrastructure projects, other
property, plant and equipment, land and property acquisitions and
geological and geophysical costs incurred. The closest GAAP measure
to exploration and development expenditures is property, plant and
equipment and exploration cash flows under investing activities in
the Company's Consolidated Statement of Cash Flows, which includes
all of the items included in exploration and capital expenditures,
except for geological and geophysical costs, which are expensed as
incurred. Exploration and capital expenditures – Ongoing
Operations represents Exploration and Capital Expenditures less
the amounts attributed to the Musreau/Kakwa area facilities and oil
and gas properties sold in 2016. Principal Properties Capital
includes capital expenditures and geological and geophysical costs
related to the Company's Principal Properties business segment, and
excludes land acquisitions. The Principal Properties Capital
measure provides management and investors with information
regarding the Company's Principal Properties spending on wells and
infrastructure projects separate from land acquisition activity and
capitalized interest. Refer to the Advisories section of the
Company's Management's Discussion and Analysis for the three and
six months ended June 30, 2017 for
the calculation of Exploration and Capital Expenditures and
Principal Properties Capital. Investments in other entities –
market value reflects the Company's investments in enterprises
whose securities trade on a public stock exchange at their period
end closing price (e.g. Trilogy Energy Corp., MEG Energy Corp.,
Blackbird Energy Inc., Marquee Energy Ltd., RMP Energy Inc.,
Strategic Oil & Gas Ltd. and others) and investments in all
other entities at book value. Paramount provides this information
because the market values of equity-accounted investments, which
are significant assets of the Company, are often materially
different than their carrying values. Refer to the Strategic
Investments section of the Company's Management's Discussion and
Analysis for the three and six months ended June 30, 2017 for information on carrying and
market values.
Non-GAAP measures should not be considered in isolation or
construed as alternatives to their most directly comparable measure
calculated in accordance with GAAP, or other measures of financial
performance calculated in accordance with GAAP. The Non-GAAP
measures are unlikely to be comparable to similar measures
presented by other issuers.
Oil and Gas Measures and Definitions
The term "Liquids" means oil, condensate and Other NGLs (ethane,
propane and butane).
Abbreviations
Liquids
|
|
Natural
Gas
|
Bbl
|
Barrels
|
|
Mcf
|
Thousands of cubic
feet
|
Bbl/d
|
Barrels per
day
|
|
MMcf
|
Millions of cubic
feet
|
MBbl
|
Thousands of
barrels
|
|
MMcf/d
|
Millions of cubic
feet per day
|
NGLs
|
Natural gas
liquids
|
|
MMbtu
|
Millions of British
thermal units
|
Condensate
|
Pentane and heavier
hydrocarbons
|
|
|
|
|
|
|
|
Oil
Equivalent
|
|
|
|
Boe
|
Barrels of oil
equivalent
|
|
|
|
Boe/d
|
Barrels of oil
equivalent per day
|
|
|
|
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 the six
months ended June 30, 2017, the value
ratio between crude oil and natural gas was approximately 23:1.
This value ratio is significantly different from the energy
equivalency ratio of 6:1. Using a 6:1 ratio would be misleading as
an indication of value.
SOURCE Paramount Resources Ltd.