CALGARY, Alberta, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Birchcliff Energy Ltd. ("Birchcliff” or the "Corporation”) (TSX: BIR) is pleased to announce its unaudited 2024 full-year and fourth quarter financial and operational results and highlights from its independent reserves evaluation effective December 31, 2024.
"Due to the success of our 2024 capital program and driven by our improved capital efficiencies, we delivered annual average production of 76,695 boe/d and adjusted funds flow(1) of $236.8 million and returned $107.8 million to shareholders through common share dividends in 2024,” commented Chris Carlsen, President and Chief Executive Officer of Birchcliff. "The 27 wells we brought on production as part of the 2024 capital program delivered strong PDP reserves additions of 34.1 MMboe, which highlights the quality of our assets. We believe that there is significant intrinsic shareholder value embedded in Birchcliff's asset base that is not reflected in our current share price, as demonstrated by our PDP reserves net asset value per common share(2) of $6.35 and $13.79 and $18.09 for our proved and proved plus probable reserves, respectively.(3) In addition, our Elmworth asset, which is largely unbooked from a reserves basis, provides us with significant inventory and a large potential future development area consisting of approximately 145 net sections of Montney lands.”
"Our strategy for 2025 builds off of the operational momentum from 2024, maintaining our focus on capital efficiency improvements and further driving down costs. Our 2025 capital program has been designed to ensure that our capital is strategically deployed throughout the year, providing us with the flexibility to adjust our capital spending if necessary in response to the commodity price volatility we expect during 2025, including as a result of the potential for U.S. and Canadian tariffs and the start-up of LNG Canada.”
2024 Financial and Operational Highlights
- Delivered annual average production of 76,695 boe/d (82% natural gas and 18% liquids) in 2024 and quarterly average production of 77,623 boe/d (82% natural gas and 18% liquids) in Q4 2024.
- Generated annual adjusted funds flow of $236.8 million in 2024 and quarterly adjusted funds flow of $71.8 million in Q4 2024. Cash flow from operating activities was $203.7 million in 2024 and $45.6 million in Q4 2024.
- Reported annual net income to common shareholders of $56.1 million in 2024 and quarterly net income to common shareholders of $35.2 million in Q4 2024.
- F&D capital expenditures were $273.1 million in 2024 and $58.3 million in Q4 2024. Birchcliff drilled 29 (29.0 net) wells and brought 27 (27.0 net) wells on production in 2024.
- Returned $107.8 million to shareholders in 2024 through common share dividends.
- Birchcliff brought 27 new wells on production as part of its 2024 F&D capital program with strong PDP reserves additions of 34.1 MMboe (1.26 MMboe per well) and delivered PDP F&D costs(5) of $8.01/boe, resulting in a PDP F&D operating netback recycle ratio(2) of 1.4x in 2024 on such additions.
- Birchcliff added an aggregate of 23.7 MMboe of PDP reserves on an F&D basis in 2024, after adding back 2024 actual production of 28.1 MMboe(6) and including all other applicable PDP reserves adjustments in 2024. Birchcliff's PDP reserves totalled 217.1 MMboe at December 31, 2024.
- Birchcliff delivered PDP F&D costs of $11.52/boe and a PDP F&D operating netback recycle ratio of 1.0x on its aggregate 23.7 MMboe of PDP reserves additions, notwithstanding $18.8 million in F&D capital expenditures spent on strategic priorities in Elmworth for which there was no production or reserves assigned at year-end 2024.
- At December 31, 2024, the net present value of future net revenue (before income taxes, discounted at 10%) was $2.3 billion for Birchcliff's PDP reserves, $4.4 billion for its proved reserves and $5.6 billion for its proved plus probable reserves.
- The net asset value per common share of Birchcliff's PDP, proved and proved plus probable reserves at December 31, 2024 was $6.35, $13.79 and $18.09, respectively, which is 9%, 136% and 210% higher than the closing price of its common shares on the TSX on February 10, 2025 of $5.84.
- Reserves life index(5) at December 31, 2024 of 7.7 years on a PDP basis, 23.6 years on a proved basis and 34.3 years on a proved plus probable basis.
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. For further information regarding the forward-looking statements and forward-looking information contained herein, see "Advisories - Forward-Looking Statements”. With respect to the disclosure of Birchcliff's reserves and related reserves metrics contained in this press release, see "2024 Year-End Reserves”, "Presentation of Oil and Gas Reserves” and "Advisories - Oil and Gas Metrics”. With respect to the disclosure of Birchcliff's production contained in this press release, unless otherwise stated herein, production volumes have been disclosed on a "gross” basis as such term is defined in National Instrument 51-101- Standards of Disclosure for Oil and Gas Activities ("NI 51-101”). For further information regarding the disclosure of Birchcliff's production contained herein, see "Advisories - Production”. In addition, this press release uses various "non-GAAP financial measures”, "non-GAAP ratios” and "capital management measures” as such terms are defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure ("NI 52-112”). Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and might not be comparable to similar financial measures disclosed by other issuers. For further information regarding the non-GAAP and other financial measures used in this press release, see "Non-GAAP and Other Financial Measures”.
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(1) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures”.
(2) Non-GAAP ratio. See "Non-GAAP and Other Financial Measures”.
(3) Net asset value per common share is at December 31, 2024 and before income taxes (discounted at 10%). See "2024 Year-End Reserves - Net Asset Value”.
(4) Deloitte LLP ("Deloitte”) prepared an independent evaluation of the Corporation's reserves effective December 31, 2024 as contained in their report dated February 12, 2025 (the "Deloitte Report”). The forecast commodity prices, inflation and exchange rates utilized in the Deloitte Report were computed using the average of forecasts from Deloitte, McDaniel & Associates Consultants Ltd. ("McDaniel”), GLJ Ltd. ("GLJ”) and Sproule Associates Limited ("Sproule”) effective January 1, 2025 (the "2024 Price Forecast”). See "2024 Year-End Reserves” and "Presentation of Oil and Gas Reserves”.
(5) See "Advisories - Oil and Gas Metrics”.
(6) Consists of 738.2 Mbbls of light oil, 1,619.6 Mbbls of condensate, 2,591.3 Mbbls of NGLs and 138,728.6 MMcf of natural gas.
2024 UNAUDITED FINANCIAL AND OPERATIONAL SUMMARY
| Three months ended
December 31, | Twelve months ended December 31, | |||||||
| 2024 | 2023 | 2024 | 2023 | |||||
| OPERATING | ||||||||
| Average production | ||||||||
| Light oil (bbls/d) | 1,993 | 1,649 | 2,017 | 1,849 | ||||
| Condensate (bbls/d) | 4,310 | 5,145 | 4,425 | 5,202 | ||||
| NGLs (bbls/d) | 7,748 | 7,653 | 7,080 | 6,306 | ||||
| Natural gas (Mcf/d) | 381,433 | 372,594 | 379,040 | 374,052 | ||||
| Total (boe/d) | 77,623 | 76,546 | 76,695 | 75,699 | ||||
| Average realized sales prices (CDN$)(1) | ||||||||
| Light oil (per bbl) | 95.18 | 100.07 | 98.90 | 99.07 | ||||
| Condensate (per bbl) | 95.79 | 103.80 | 99.66 | 103.76 | ||||
| NGLs (per bbl) | 26.20 | 26.95 | 26.37 | 26.92 | ||||
| Natural gas (per Mcf) | 2.27 | 2.92 | 2.05 | 3.03 | ||||
| Total (per boe) | 21.53 | 26.02 | 20.90 | 26.79 | ||||
| NETBACK AND COST ($/boe) | ||||||||
| Petroleum and natural gas revenue(1) | 21.53 | 26.03 | 20.91 | 26.80 | ||||
| Royalty expense | (1.26 | ) | (2.75 | ) | (1.41 | ) | (2.54 | ) |
| Operating expense | (2.91 | ) | (3.81 | ) | (3.24 | ) | (3.83 | ) |
| Transportation and other expense(2) | (5.26 | ) | (5.53 | ) | (5.24 | ) | (5.69 | ) |
| Operating netback(2) | 12.10 | 13.94 | 11.02 | 14.74 | ||||
| G&A expense, net | (2.00 | ) | (1.80 | ) | (1.45 | ) | (1.52 | ) |
| Interest expense | (1.40 | ) | (0.95 | ) | (1.31 | ) | (0.74 | ) |
| Lease interest expense | (0.33 | ) | - | (0.16 | ) | - | ||
| Realized gain (loss) on financial instruments | 1.68 | (0.38 | ) | 0.33 | (1.35 | ) | ||
| Other cash income (expense) | 0.01 | 0.01 | 0.01 | (0.03 | ) | |||
| Adjusted funds flow(2) | 10.06 | 10.82 | 8.44 | 11.10 | ||||
| Depletion and depreciation expense | (8.96 | ) | (8.44 | ) | (8.79 | ) | (8.20 | ) |
| Unrealized gain (loss) on financial instruments | 5.95 | (1.58 | ) | 3.51 | (1.38 | ) | ||
| Other expenses(3) | (0.75 | ) | (1.88 | ) | (0.52 | ) | (0.95 | ) |
| Deferred income tax (expense) recovery | (1.37 | ) | 0.29 | (0.64 | ) | (0.22 | ) | |
| Net income (loss) to common shareholders | 4.93 | (0.79 | ) | 2.00 | 0.35 | |||
| FINANCIAL | ||||||||
| Petroleum and natural gas revenue ($000s)(1) | 153,741 | 183,295 | 586,856 | 740,359 | ||||
| Cash flow from operating activities ($000s) | 45,641 | 79,006 | 203,710 | 320,529 | ||||
| Adjusted funds flow ($000s)(4) | 71,838 | 76,215 | 236,794 | 306,827 | ||||
| Per basic common share ($)(2) | 0.27 | 0.29 | 0.88 | 1.15 | ||||
| Free funds flow ($000s)(4) | 13,528 | 18,049 | (36,290 | ) | 2,190 | |||
| Per basic common share ($)(2) | 0.05 | 0.07 | (0.13 | ) | 0.01 | |||
| Net income (loss) to common shareholders ($000s) | 35,216 | (5,533 | ) | 56,100 | 9,780 | |||
| Per basic common share ($) | 0.13 | (0.02 | ) | 0.21 | 0.04 | |||
| End of period basic common shares (000s) | 271,304 | 267,156 | 271,304 | 267,156 | ||||
| Weighted average basic common shares (000s) | 270,185 | 266,667 | 269,081 | 266,465 | ||||
| Dividends on common shares ($000s) | 27,126 | 53,390 | 107,833 | 213,344 | ||||
| F&D capital expenditures ($000s)(5) | 58,310 | 58,166 | 273,084 | 304,637 | ||||
| Total capital expenditures ($000s)(4) | 66,673 | 59,541 | 282,745 | 307,916 | ||||
| Revolving term credit facilities ($000s) | 566,857 | 372,097 | 566,857 | 372,097 | ||||
| Total debt ($000s)(6) | 535,557 | 382,306 | 535,557 | 382,306 | ||||
(2) Non-GAAP ratio. See "Non-GAAP and Other Financial Measures”.
(3) Includes non-cash items such as compensation, accretion, amortization of deferred financing fees and other gains and losses.
(4) Non-GAAP financial measure. See "Non-GAAP and Other Financial Measures”.
(5) See "Advisories - F&D Capital Expenditures”.
(6) Capital management measure. See "Non-GAAP and Other Financial Measures”.
FULL-YEAR AND Q4 2024 UNAUDITED FINANCIAL AND OPERATIONAL RESULTS
Production
- Birchcliff's production averaged 76,695 boe/d in 2024, a 1% increase from 2023. Production averaged 77,623 boe/d in Q4 2024, a 1% increase from Q4 2023. Birchcliff's annual average production for 2024 was at the high-end of its guidance range of 75,000 to 77,000 boe/d.
- The increases were primarily due to the strong performance of the Corporation's capital program and the successful drilling of new Montney/Doig wells brought on production, partially offset by natural production declines. Full-year production in 2023 was negatively impacted by an unplanned system outage on Pembina's Northern Pipeline system, which reduced the Corporation's NGLs sales volumes in 2023.
- Liquids accounted for 18% of Birchcliff's total production in both 2024 and 2023, which was in line with Birchcliff's guidance of 19%. Liquids accounted for 18% of