/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
CALGARY, April 12, 2018 /CNW/ - Marquee Energy Ltd.
("Marquee" or the "Company") (TSXV: "MQX") is pleased to report
it's financial and operating results for the year ended
December 31, 2017 and provide an
operational update for the first quarter of 2018. Marquee's
audited annual Financial Statements as well as the corresponding
Management's Discussion and Analysis for 2017 are available on its
website www.marquee-energy.com as well as on SEDAR at
www.sedar.com.
Q4 2017 HIGHLIGHTS
- Production in Q4 averaged 2,874 boe per day, comprising 49% oil
and liquids; a 12% increase to total boe per day production over Q4
2016.
- Operating netbacks averaged $15.55 per boe in Q4, reflecting an increase of
126% over Q4 2016 due mainly to increased production and product
pricing.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
|
|
|
(thousands of
Canadian dollars,
except share, per
share and, per boe amounts)
|
Three months
ended December
31,
|
Year
ended
December
31,
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
Financial
|
|
|
|
|
Oil and natural gas
sales (1)
|
$
|
9,068
|
$
|
8,013
|
$
|
32,048
|
$
|
31,538
|
Funds flow from (used
in) operations (2)
|
$
|
972
|
$
|
404
|
$
|
5,954
|
$
|
(3,065)
|
|
Per share - basic and
diluted
|
$
|
0.00
|
$
|
0.00
|
$
|
0.01
|
$
|
0.01
|
|
Per boe
|
$
|
2.67
|
$
|
(16.51)
|
$
|
5.84
|
$
|
2.50
|
Cash flow from (used
in) operating activities
|
$
|
661
|
$
|
(1,741)
|
$
|
1,656
|
$
|
762
|
Net income
(loss)
|
$
|
(13,040)
|
$
|
(10,063)
|
$
|
(21,595)
|
$
|
(22,185)
|
|
Per share - basic and
diluted
|
$
|
(0.03)
|
$
|
(0.04)
|
$
|
(0.05)
|
$
|
(0.10)
|
Capital expenditures
(net of dispositions)
|
$
|
3,392
|
$
|
1,052
|
$
|
18,767
|
$
|
(3,386)
|
Net debt
(2)(3)
|
$
|
31,598
|
$
|
17,165
|
$
|
31,598
|
$
|
17,165
|
Total
assets
|
$
|
163,969
|
$
|
169,162
|
$
|
163,969
|
$
|
169,162
|
Weighted average
basic shares outstanding
|
435,772,196
|
266,381,644
|
435,772,196
|
220,943,307
|
Weighted average
diluted shares outstanding
|
435,772,196
|
266,381,644
|
435,772,196
|
220,943,307
|
|
|
|
|
|
Operational
|
|
|
|
|
Daily sales
volumes
|
|
|
|
|
|
Oil (bbls per
day)
|
1,265
|
1,047
|
1,128
|
1,254
|
|
Heavy Oil (bbls per
day)
|
-
|
-
|
-
|
162
|
|
NGLs (bbls per
day)
|
155
|
172
|
150
|
142
|
|
Natural Gas (Mcf per
day)
|
8,722
|
8,034
|
9,091
|
10,824
|
|
Total (boe per
day)
|
2,874
|
2,558
|
2,793
|
3,361
|
|
% Oil and
NGLs
|
49%
|
48%
|
46%
|
46%
|
Average realized
prices
|
|
|
|
|
|
Light Oil
($/bbl)
|
$
|
59.36
|
$
|
51.38
|
$
|
53.26
|
$
|
42.78
|
|
Heavy Oil
($/bbl)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
23.61
|
|
NGL's
($/bbl)
|
$
|
45.94
|
$
|
30.52
|
$
|
41.10
|
$
|
32.37
|
|
Natural Gas
($/Mcf)
|
$
|
1.88
|
$
|
3.49
|
$
|
2.37
|
$
|
2.23
|
Netback
(2)
|
|
|
|
|
|
Revenue
($/boe)
|
$
|
34.30
|
$
|
34.05
|
$
|
31.43
|
$
|
25.64
|
|
Royalties
($/boe)
|
$
|
(1.95)
|
$
|
(1.64)
|
$
|
(1.91)
|
$
|
(1.99)
|
|
Operating and
transportation costs ($/boe)
|
$
|
(16.72)
|
$
|
(24.29)
|
$
|
(16.52)
|
$
|
(17.54)
|
|
Operating netback
prior to hedging (2)
|
$
|
15.63
|
$
|
8.12
|
$
|
13.00
|
$
|
6.11
|
|
Realized hedging gain
(loss) ($/boe)
|
$
|
(0.08)
|
$
|
(1.25)
|
$
|
1.27
|
$
|
1.41
|
|
Operating netback
($/boe) (2)
|
$
|
15.55
|
$
|
6.87
|
$
|
14.27
|
$
|
7.52
|
|
|
|
|
|
(1)
|
Before
royalties.
|
(2)
|
Non-IFRS
Measure. See Non-IFRS Measures advisory in Marquee's MD&A
for the year ended December 31, 2017.
|
(3)
|
Consisting of the
term loan, less cash plus working capital deficiency. Bank credit
facility was undrawn at December 31, 2017.
|
OPERATIONAL UPDATE
Marquee completed field operations
and brought all five wells of the previously announced Q1 2018
capital program at Michichi, Alberta on production. Each of these wells was
drilled with cemented monobores and received 28 to 29 fracture
stages.
The first well from this program was brought on production in
mid-January and has an average field estimated production rate over
the first 60 days (IP60) of 195 boe per day (80% oil and liquids).
The well has been producing at pump capacity with a high fluid
level (approximately 600 m above the
pump) and production has been stable for the last 40 days. Although
preliminary in nature, Management is encouraged by the production
results from this well thus far and views the increased fracture
density as a potentially significant value add to the Company's
Michichi Banff play going forward.
The final four wells in the program were drilled from a common
surface location and commenced production in late March. The wells
continue to clean up load water from the fracture stimulation. The
Company will release production results when meaningful information
becomes available.
The per well capital cost for each of these new wells was
$2.3 million, which is 25% above the
previously announced budgeted capital. The increase to the total
number of fracture stages, as well as an adverse impact due to cold
weather and service delays, contributed to the higher than
forecasted capital requirement. The Company believes an accurate
go-forward capital estimate, incorporating both summer and winter
activity, will average approximately $2
million per well.
Management continues to prudently manage the balance sheet and
will evaluate commodity prices in the coming months to determine a
sustainable second half 2018 drilling program.
As previously announced, Marquee commenced a review of strategic
alternatives to enhance shareholder value. Given the nature of the
process, the Company does not intend to provide updates with
respect to the process until such time as the Board of Directors
approves a definitive transaction or strategic alternatives, or
otherwise determines that further disclosure is advisable. The
Company cautions that there are no guarantees that the review of
strategic alternatives will result in a transaction or if a
transaction is undertaken, as to its terms or timing.
ABOUT MARQUEE
Marquee is a Calgary-based, junior energy company focused
on light oil development and production in the Michichi area of
eastern Alberta. Marquee's shares
trade on the TSX Venture Exchange under the trading symbol
"MQX". Additional information about Marquee may be found
on its website www.marquee-energy.com and in its continuous
disclosure documents filed with Canadian securities regulators on
SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
OIL AND GAS ADVISORIES
References to
BOE
Barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six
thousand cubic feet ("Mcf") to one bbl is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.
Given that the value ratio based on the current price of oil as
compared to natural gas is significantly different from the energy
equivalency conversion ratio of six to one, utilizing a boe
conversion ratio of six Mcf to one bbl may be misleading as an
indication of value.
Initial Production Rates
Any references herein to
production rates, test rates or initial production rates (including
IP60) are useful in confirming the presence of hydrocarbons,
however, such rates are not determinative of the rates at which
such wells will continue production and decline thereafter. Readers
are cautioned not to place reliance on such rates in calculating
the aggregate production for Marquee. Initial production or test
rates may be estimated based on other third-party estimates or
limited data available at this time. Well‐flow test result data
should be considered to be preliminary until a pressure transient
analysis and/or well‐test interpretation has been carried out. In
all cases herein, initial production or test results are not
necessarily indicative of long‐term performance of the relevant
well or fields or of ultimate recovery of hydrocarbons.
FORWARD‐LOOKING STATEMENTS AND CAUTIONARY
STATEMENTS
This press release contains forward‐looking
statements. Such forward‐looking statements typically contain
statements with words such as ""anticipate", "expect", "intend",
"estimate", "propose", or similar words suggesting future outcomes
or statements regarding an outlook. The forward‐looking statements
contained in this document, including statements related to
anticipated well production, are based on certain key expectations
and assumptions made by Marquee, all or any of which may prove
incorrect, including without limitation the remaining
forward‐looking statements, expectations and assumptions concerning
the timing and success of future drilling and development
activities.
Although Marquee believes that the expectations and
assumptions on which the forward‐looking statements are based are
reasonable, undue reliance should not be placed on the
forward‐looking statements because Marquee can give no assurance
that they will prove to be correct. Since forward‐looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, the failure to complete the proposed wells in a timely
manner, the failure to obtain necessary regulatory approvals, risks
associated with the oil and gas industry in general (e.g.
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserves estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), uncertainty as to the availability of labour
and services, commodity price and exchange rate fluctuations,
unexpected adverse weather conditions and changes to existing laws
and regulations. Certain of these risks are set out in more detail
in Marquee's current Annual Information Form, which is available on
Marquee's SEDAR profile at www.sedar.com.
Forward‐looking information is based on estimates and
opinions of management of Marquee at the time the information is
presented. Marquee may, as considered necessary in the
circumstances, update or revise such forward‐looking information,
whether as a result of new information, future events or otherwise,
but Marquee undertakes no obligation to update or revise any
forward‐looking information, except as required by applicable
securities laws.
SOURCE Marquee Energy Ltd.