Financial Highlights

  • Production in the first quarter averaged 77,010 boe per day, well ahead of our expectations primarily due to exceptional well performance in the Cardium and Viking areas. We have continued to experience production results in the second half 2015 development program significantly higher than type curve estimates. Additionally, a lower amount of production volumes were shut-in than previously anticipated which also contributed to the strong results. As we are ahead of budget, we are maintaining our 2016 average production target of 60,000 - 64,000 boe per day, after the effect of the Slave Point area disposition that was closed in April 2016.

  • Operating costs per boe were $13.02 during the first quarter as we successfully progressed on a number of strategies to reduce operating costs, with a specific focus on reducing repair & maintenance and workover activities. Despite several required maintenance and turnaround activities, specifically in the second half of 2016, we are reducing our operating cost per boe target for full year 2016 to $17.00 - $18.00 per boe.

  • We were not in default at March 31, 2016 on any financial covenants under the agreements with our lenders. We exited the first quarter with a Senior Debt to EBITDA ratio of 4.4x relative to 4.6x at December 31, 2015. We are engaged in discussions with our lenders to amend our financial covenants. Our ability to continue as a going concern depends on the ability to enter into amending agreements with our lenders. Refer to “Senior Secured Debt” below for further details.

  • During the first quarter of 2016, we closed minor non-core dispositions totaling $53 million, including the monetization of a transportation commitment, and we entered into agreements to sell our interests within the Slave Point area for total proceeds of approximately $148 million, subject to closing conditions. The Slave Point transaction closed on April 15, 2016. Additionally, subsequent to March 31, 2016, we entered into agreements to sell non-core assets for total proceeds of $30 million, which have since closed.

  • Capital expenditures were $18 million during the first quarter of 2016.  Operations were focused on completion and tie-in activities within the Viking and drilling activities in the Peace River Oil Partnership where a significant portion of our expenditures are carried by our joint venture partner. We are maintaining our 2016 total expenditures guidance of $70 million ($50 million of  exploration and development capital expenditures and $20 million of decommissioning expenditures).

  • G&A per boe was $1.97 in the first quarter as we continued to focus on our operations and aligned staff count to current activity levels. We are maintaining our 2016 G&A per boe target of $2.50 - $2.90 as we anticipate lower production volumes later in the year.