March 23, 2017 – Calgary Alberta – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company”) announces its financial and operating results for the three months and year ended December 31, 2016. InPlay’s full audited financial statements and notes, as well as management’s discussion and analysis (“MD&A”) for the three and twelve month periods ended December 31, 2016 will be available shortly on the System for Electronic Document Analysis and Retrieval (“SEDAR”).
| Financial and Operating Highlights
For the Three and Twelve Months Ended
Three months ended
Twelve months ended
|Financial (CDN $)|
|Petroleum and natural gas revenue||10,578||7,655||27,850||32,556|
|Funds flow from Operations (1)||(29)||4,700||6,407||15,993|
|Per share – basic and diluted (1) (2)||0.00||0.39||0.33||1.33|
|Comprehensive Income (Loss)||36,077||(9,862)||20,019||(30,101)|
|Per share – basic and diluted (2)||0.86||(0.82)||1.02||(2.50)|
|Exploration and Development Capital expenditures||7,340||3,196||11,083||22,513|
|(Net Debt)/Working Capital (1)||(34,556)||(59,159)||(34,556)||(59,159)|
|Shares outstanding (2)||62,396,169||12,063,110||62,396,169||12,063,110|
|Basic & fully diluted weighted-average shares (2)||42,153,526||12,063,110||19,626,821||12,052,898|
|Daily production volumes|
|Crude oil (bbls/d)||1,522||1,593||1,318||1,598|
|Natural gas liquids (bbls/d)||258||50||143||49|
|Natural gas (Mcf/d)||5,592||1,701||2,871||1,305|
|Crude Oil & NGLs ($/bbls)||58.64||48.31||49.71||52.18|
|Natural gas ($/Mcf)||3.33||2.27||2.53||2.50|
|Operating netbacks ($ per boe) (1)|
|Oil and Gas sales||42.40||43.20||39.22||47.84|
|Operating Netback (prior to realized derivative contracts)||20.25||22.84||17.55||26.41|
|Realized gain on derivative contracts||(1.04)||12.18||3.74||5.73|
|Operating Netback (including realized derivative contracts)||19.21||35.02||21.29||32.14|
1) “Funds flow from operations”, “Funds flow from operations per share”, “Funds flow from operations per boe”, “Net Debt”, “Working Capital”, “Operating netback per boe” and “Operating income” do not have a standardized meaning under international financial Reporting standards (IFRS) and GAAP. Please refer to Non-GAAP Financial Measures and BOE equivalent at the end of this news release.
(2) All weighted average share amounts are converted retrospectively at the exchange rate of 0.1303 in accordance with the terms of the Arrangement Agreement as outlined in note 5 & 13 in the audited annual December 31, 2016 financial statements. This is done in accordance with IAS 33.64.
We are pleased to present InPlay’s financial and operating results for the three months and year ended December 31, 2016. This was a transformational year which saw InPlay transition into a publicly traded entity following the November 7, 2016 private placement financing, asset acquisition in Pembina (the “Asset Acquisition”) and the closing of the reverse take-over transaction (the “Arrangement”) with Anderson Energy Inc. (“Anderson”). These transactions have positioned InPlay as a well-financed light oil producer (65% oil & liquids) with 74% of our current field estimated production of 4,100 boed in the Cardium and providing ample opportunities for growth and development in our expanded core areas.
The Company’s 2016 drilling program included a total of six (5.7 net) wells. Two (1.7 net) Belly River horizontal wells were drilled in the first quarter of 2016 and four (3.9 net) Pembina Cardium horizontals were drilled in the fourth quarter. Two (1.9 net) of the Cardium horizontals came on production in late December 2016 while the others began production in mid-February 2017. The drilling and completion program carried over into 2017 with an additional six (4.1 net) wells being drilled and five (3.1 net) wells are expected to be completed and brought on production through March and April of 2017.
Fourth quarter 2016 production averaged 2,712 boe/day, reflecting limited production from the newly acquired assets as of November 7, 2016. Capital expenditures in 2016 amounted to $86.0 million comprised of $7.3 million related to the quarterly E&D capital program and $78.7 million as consideration for the Arrangement with Anderson as well as the Pembina Asset Acquisition. Funds flow from operations for the fourth quarter was ($29) thousand net of $2.4 million of transaction related expenses. We exited the year with $34.6 million in net debt with a draw of $29.8 million on our $60.0 million syndicated credit facility. At year end, following these transactions, proved plus probable reserves increased 180% to 24.5 mmboe from the previous year’s 8.7 mmboe resulting in an asset base with a long reserve life of 19.3 years. Complete details of the results of our independent reserves evaluation prepared by Sproule Associates Limited effective as of December 31, 2016 were contained in our press release issued March 14, 2017.
In 2017 we have a focused plan in place that will allow InPlay to achieve its targeted production growth per share of greater than 20% (December 2017 over December 2016) through an efficient development program in our core areas. In 2017 we anticipate drilling a total of 12.0 net wells in our two core Cardium areas of Pembina and Willesden Green. We recently started drilling our first (1.0 net) Willesden Green Cardium horizontal well that is expected to be completed and placed on production in the second quarter which will leave approximately seven net wells to be drilled for the second half of the year. Capital expenditures are forecast to be $28.0 million for this program which is expected to be less than forecasted funds flow from operations, assuming a $55 WTI yearly average oil price. This program is forecast to generate net debt to funds flow from operations for the fourth quarter annualized of approximately 0.8 times. At a stress tested $45 WTI price for the remainder of 2017 this program is forecast to generate fourth quarter 2017 net debt to adjusted funds flow from operations of approximately 1.1 times ensuring that the 2017 capital program can be maintained in a lower commodity price environment. This production growth is expected to yield top quartile production per share growth within our oil weighted peers.
InPlay is in a very strong position with low debt levels, high operating netback assets and a solid set of commodity hedges that will allow us to continue to develop our asset base in the current volatile commodity price environment, while always focusing on meaningful and sustainable per share growth for our shareholders.
We thank our employees and directors for their commitment and dedication through the past year, and we thank all of our shareholders for their continued interest in InPlay.
|For further information please contact: Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632|