Financial Highlights

 

Fourth Quarter Key Points

  • Non-core asset dispositions totalling approximately $486 million with associated production of 10,800 boe per day were closed in the fourth quarter of 2013. Asset dispositions in 2013 resulted in an approximate $90 million reduction to our decommissioning liability.

  • As a result of our focus on cost reductions, our recycle ratio(1), on a proved plus probable basis and including the change in future development costs (“FDC”), improved to 3.1 in 2013 compared to 1.0 in 2012.

  • Development capital was $208 million for the fourth quarter of 2013 and $816 million for 2013. For 2013, our development capital came in below our budget of $900 million primarily due to the cost reductions we realized across our plays.

  • Further operational improvements were experienced during the fourth quarter with continued reduction in drilling and completion costs and cycle times, notably in the Lodgepole and Crimson Lake areas of the Cardium and the Dodsland area of the Viking.

    (1) Recycle ratio is a non-GAAP measure. Please refer to our “Non-GAAP Measures Advisory” section in the press release or quarter report for more information.

Reserve Highlights

  • Proved plus probable finding and development cost (“F&D”) including the change in FDC for 2013 was $9.47 per boe (2012 – $25.50 per boe). The improvement includes the effects of reductions in FDC due to significant declines in our drilling and completion costs and removal of certain capital costs associated with properties no longer carrying reserves, and technical revisions to our current reserve base.

  • Excluding the impact of dispositions, our reserve replacement ratio (2) was 97 percent in 2013.

  • Total working interest (gross) proved plus probable reserves were 625 mmboe at December 31, 2013 (2012 – 676 mmboe), weighted approximately 70 percent to liquids (2012 – 71 percent), and including the effect of 50 mmboe of oil weighted asset dispositions completed in 2013.

  • Proved plus probable net present value discounted at 10 percent (before income taxes) remained relatively consistent year-over-year with December 31, 2013 at $8.9 billion (2012 – $9.1 billion) which included a reduction of approximately $450 million related to asset dispositions completed in 2013.

  • Reserve additions for 2013 were weighted 76 percent to oil, excluding technical revisions.

  • During 2013, we completed or updated contingent resource studies covering our interests in the Cardium, Viking, Slave Point and Swan Hills areas substantiating our appraisal activities and confirming significant recoverable oil resources in these areas.

    (2) Reserve replacement ratio is calculated by dividing reserve additions by production on a proved plus probable basis.

Financial Highlights

  • Funds flow for the fourth quarter of 2013 was $216 million ($0.44 per share – basic), a decrease from $293 million ($0.60 per share – basic) in the third quarter of 2013, mainly due to lower crude oil prices and lower production volumes as a result of asset dispositions in the fourth quarter of 2013.
  • For the fourth quarter of 2013, we recorded a net loss of $728 million ($1.49 per share – basic). The net loss was primarily due to non-cash PP&E impairment charges and unrealized foreign exchange losses on the translation of our US denominated senior, unsecured notes.
  • Disposition proceeds received during 2013 were applied to our credit facilities with a net reduction in long-term debt of $356 million during the year, prior to foreign currency translations.

Asset Impairments

  • During the fourth quarter of 2013, we recorded non-cash impairment charges of $742 million related to PP&E. These impairment charges were the result of limited planned development capital in certain non-core natural gas assets and lower estimated reserve recoveries at our Manitoba properties. Our five-year plan is focused on the integrated development of our large light-oil areas in the Cardium, Slave Point and Viking.

 

  Three months ended
December 31

 
                                           
     2013
                             
2012
         % change
Financial (millions, except per share amounts)
Gross revenues (1)(2)   $613 $799   (23)
Funds flow (2)   $216 $295   (27)
Basic per share (2)   $0.44 $0.62   (29)
Diluted per share (2)   $0.44 $0.62   (29)
Net income (loss)   ($728) ($78)   (100)
Basic per share   ($1.49) ($0.16)   (100)
Diluted per share   ($1.49) ($0.16)   (100)
Development capital expenditures (3)   $208 $348   (40)
Long term debt at period-end                    $2,458 $2,690   (9)
Dividends (millions)
Dividends paid (4)         $68 $129   (47)
DRIP   ($14) ($31)   (55)
Dividends paid in cash   $54 $98   (45)
Operations
Daily production (average)
Light oil and NGL (bbls/d)         64,056 82,224   (22)
Heavy oil (bbls/d)   14,601 16,847   (13)
Natural gas (mmcf/d)   272 329   (17)
Total production (boe/d) (5)   123,995 153,931   (19)
Average sales price
Light oil and NGL (per bbl)           $77.43 $75.91   2
Heavy oil (per bbl)   $58.66 $59.85   (2)
Natural gas (per mcf)   $3.53 $3.28   8
Netback per boe
Sales price   $54.65 $54.10   1
Risk management gain (loss)       $0.62 $0.51   22
Net sales price   $55.27 $54.61   1
Royalties   ($10.13) ($10.10)    
Operating expenses   ($17.86) ($17.16)   4
Transportation   ($0.62) ($0.51)   22
Netback (2)   $26.66 $26.84   (1)

 

(1) Gross revenues include realized gains and losses on commodity contracts.

(2) The terms "gross revenues", “funds flow”, “funds flow per share-basic”, “funds flow per share-diluted” and “netback” are non-GAAP measures. Please refer to the "Calculation of FundsFlow" and "Non-GAAP Measures Advisory" in the press release or quarter report for information.

(3) Includes the effect of capital carried by partners.

(4) Includes dividends paid prior to amounts reinvested in shares under the dividend reinvestment plan.

(5) Please refer to the “Oil and Gas Information Advisory” in the press release or quarter report for information regarding the term “boe”.