NuVista Energy Ltd. (“
NuVista” or the
“
Company”) (TSX:
NVA) is pleased
to announce strong financial and operating results for the three
months ending March 31, 2023, and to provide an update on a number
of key strategic initiatives. Commodity prices were volatile in the
first quarter, but the quality and capacity of our asset base
allowed us to continue to deliver outsized returns. We continued to
invest in a disciplined manner in new high-return wells to fill and
optimize existing facilities. We made meaningful progress on
returning capital to shareholders under our existing Normal Course
Issuer Bid (“NCIB”) while continuing with the reduction of debt. We
have also achieved another new corporate milestone, improving our
financial flexibility further by moving to a covenant-based credit
facility.
First Quarter 2023 Operational and Financial
Highlights
During the first quarter of 2023, NuVista:
- Produced 71,209
Boe/d in the quarter as expected, despite the impact of unplanned
outages at three separate third party midstream facilities which
impacted quarterly production by approximately 1,500 Boe/d. This
represented a 7% increase in production from the first quarter of
2022. First quarter production consisted of 32% condensate, 9% NGLs
and 59% natural gas;
- Generated adjusted
funds flow(1) of $207.5 million ($0.95/share, basic(3)) in the
quarter, a 9% increase from the first quarter of 2022;
- Achieved net
earnings of $80.7 million ($0.37/share, basic) in the quarter,
compared to $70.3 million ($0.31/share, basic) in the first quarter
of 2022;
- Delivered positive
free adjusted funds flow(2) of $27.9 million despite a high
activity and capital spending quarter, with net capital
expenditures(2) of $169.9 million and ARO spending of $9.7
million;
- Executed a
successful capital expenditure(2) program, investing $195.9 million
in well and facility activities including the drilling of 12 gross
(11.7 net) wells and the completion of 17 gross (16.2 net) wells in
our condensate rich Wapiti Montney play;
- Received cash
proceeds of $26.0 million for the disposal of a non-operated
working interest in an underutilized gas processing facility.
Approximately half of the proceeds are being reinvested this year
to replace the sold processing capacity with higher efficiency
operated capacity as part of our larger Elmworth compressor station
expansion;
- Managed our
exposure to commodity price fluctuations through our natural gas
diversification strategy, in this quarter benefiting primarily from
our Malin, California exposure. We realized an average natural gas
price of $7.02/Mcf, an improvement of 62% compared to the average
AECO monthly 7A index price of $4.34/Mcf for the first
quarter;
- Exited the quarter
with $65.6 million held in cash deposits and zero drawn on our $440
million credit facility. Net debt(1) at the end of the quarter was
$169.0 million, a 59% reduction from the first quarter of 2022 and
2% lower than year end 2022. We maintained a favorable net debt to
annualized first quarter adjusted funds flow(1) of 0.2x;
- Improved our
financial flexibility through the successful transition from a
reserve-based credit facility to a $450 million three-year
covenant-based credit facility with our existing banking syndicate
effective May 9, 2023. The credit facility has an accordion feature
of an additional $300 million; and
- Repurchased and
subsequently cancelled 1.1 million common shares for an aggregate
cost of $12.2 million or $11.54/share under the terms of our NCIB.
As of today, we have repurchased and subsequently cancelled 16.5
million common shares, completing 91% of the NCIB.
Notes: |
(1) |
|
Each of "adjusted funds flow", "net debt" and “net debt to
annualized first quarter adjusted funds flow” are capital
management measures. Reference should be made to the section
entitled “Non-GAAP and Other Financial Measures” in this press
release. |
(2) |
|
Each of "free adjusted funds flow", "capital expenditures" and “net
capital expenditures” are non-GAAP financial measures that do not
have any standardized meanings under IFRS and therefore may not be
comparable to similar measures presented by other companies where
similar terminology is used. Reference should be made to the
section entitled “Non-GAAP and Other Financial Measures” in this
press release. |
(3) |
|
“Adjusted funds flow per share” is a supplementary financial
measure. Reference should be made to the section entitled “Non-GAAP
and Other Financial Measures” in this press release. |
Excellence in Operations
Operations in the field proceeded as planned
again in the first quarter. Production in the Wapiti area averaged
over 28,000 Boe/d (32% condensate, 7% NGLs and 61% natural gas),
down 2,000 Boe/d versus the previous quarter due primarily to the
unplanned third party outages reported earlier. At Gold Creek we
brought online our second multi-bench pad including a Lower Montney
target. Initial results are very encouraging with the Lower Montney
well achieving an IP30 average of 1,730 Boe/d, including 45%
condensate. Drilling operations are proceeding with one rig in the
Wapiti area which is currently finishing a five-well pad on the
Bilbo block. This pad is expected to be completed and on-stream
early in the third quarter. The remainder of 2023 drilling activity
in the Wapiti area includes two additional six-well pads, which
will increase area volumes to approximately 40,000 Boe/d toward the
end of the year.
Production in the Pipestone area averaged over
42,000 Boe/d in the first quarter (32% condensate, 10% NGLs and 58%
natural gas), similar to the previous quarter. Spot rates with the
addition of our latest six-well pad have filled the area to its
approximate capacity of 45,000 Boe/d. This pad has reached its IP30
milestone with per-well rates averaging 1,880 Boe/d, including 50%
condensate. These rates fully meet expectations. The balance of
2023 activity will include turning inline the recently completed
six-well pad at Pipestone South late in the second quarter, and the
drilling of two additional pads (18 wells total) to hold volumes
around 45,000 Boe/d for the second half of the year and into
2024.
Inflation continues with some persistence in
2023. Our most effective partial hedge against inflation is
continued improvement in execution. New fraccing records continue
to be set, completing an average of 17 stages per day on a six-well
pad in Pipestone while achieving over 60% fuel gas substitution as
we gradually continue our transition into a full Tier IV fleet. On
the drilling side the latest 8-well Pad at Pipestone North averaged
11 days per well, from spud to rig-release for all wells, resulting
in an average cost of approximately $900 per horizontal meter which
is 22% lower than the pre-inflation 2019 average for the area.
Balance Sheet Strength, Return of
Capital to Shareholders, and Transition to Covenant Based Credit
Facility
We increased our return of capital to
shareholders for 2023 to approximately 75% of free adjusted funds
flow, with the remainder to be allocated primarily to further
reducing net debt. Since the inception of the NCIB, repurchases
represent a 7.2% reduction in common shares outstanding with 91% of
the approved NCIB complete. As the current NCIB will expire on June
13, 2023, our Board of Directors has approved the filing of a
renewal application of the NCIB. The application for the renewal of
the NCIB (including the number of shares available for purchase
thereunder) is subject to review and approval of the TSX. If
approved, this will allow us to once again buy back up to 10% of
the public float (as defined by the TSX) from June onwards over a
one-year period.
We continue to believe that the best method for
return of capital to shareholders is initially to repurchase
shares, however we will re-evaluate over the next year as our
growth plan proceeds. This evaluation will consider commodity
prices, the economic and tax environment, and will include all
options including continued disciplined growth to facility capacity
of 105,000 Boe/d, share repurchases, and dividend payments.
As our net debt has already progressed below our
long term target, the remaining 25% of free adjusted funds flow
will be used opportunistically for a combination of continued debt
reduction, facility repurchases, or tuck-in acquisitions.
Subsequent to the first quarter, we achieved a
key corporate milestone through the successful transition from a
sustainability-linked (SLL) reserve-based credit facility to a SLL
covenant-based credit facility. Supported by our existing banking
syndicate, we now have in place a $450 million three-year SLL
covenant-based credit facility, with an accordion feature of an
additional $300 million.
Board of Director Changes
With sincere appreciation, we bid Mr. Sheldon
Steeves a fond farewell as he retires from our Board after ten
years of dedicated service and leadership. Sheldon has always
provided calm and deft advice through the many industry challenges
of the past decade, and we thank him deeply as we wish him and his
family all the very best in the future. With Sheldon’s retirement,
we welcome Ms. Mary Ellen Lutey who will be joining our Board. Ms.
Lutey has deep experience in the leadership, production and
development of resource plays, and we look forward to working with
her as she brings her insights to growing shareholder value over
the years to come.
2023 Guidance Update
We are in an extremely fortunate position of
having top tier assets and economics. With disciplined execution we
are able to grow production and adjusted funds flow while
generating significant positive free adjusted funds flow, despite
the significant moderation of natural gas pricing during the first
quarter of 2023. We have hedged approximately 35% of projected
natural gas production for this summer with floor and ceiling
prices of C$4.17/Mcf and $7.31/Mcf (hedged and exported volumes
converted to an AECO equivalent price). We have less than 2%
exposure to AECO prices this summer due our hedges and our
diversified sales portfolio.
Due to our high condensate weighting, our
execution economics remain very strong. As such, we will continue
with our capital execution plans unchanged at present, however we
will remain nimble to adjust our activity levels downward should
condensate and gas prices reach sustained lower levels.
We anticipate that the cost inflation we have
encountered over the past year will ease through the coming summer.
It has remained limited but persistent through the first quarter of
2023, partially offset by improving execution and capital
efficiency. The softening of natural gas prices is expected to
affect gas-directed activity levels, reducing the competition for
services. In addition, inventories of steel products and raw
materials are building, and fuel costs have already moderated. We
also retain the pricing certainty provided in our long-term
pressure pumping and sand contract. At this time, we are
maintaining our outlook for full year spending by optimizing
phasing toward the end of the year. We plan to reassess our budget
in August in the context of commodity and service prices at that
time.
Our full year production and net capital
expenditure guidance range is unchanged at 79,000 – 83,000 Boe/d
and $425 to $450 million, respectively. Our guidance on capital
expenditures is based on “net capital expenditures” which includes
proceeds received on property dispositions which will be reinvested
into our development plan to replace the sold production capacity.
As a result of the wildfire situation in Grande Prairie region and
the related production impacts, we are choosing not to provide
guidance for the second quarter production at this time. Once the
situation has stabilized and facilities are restarted, we intend to
provide quarterly guidance.
We intend to continue our track record of
carefully directing free adjusted funds flow towards a prudent
balance of return to shareholders and debt reduction, while
investing in production growth until our existing facilities are
filled and debottlenecked to maximum efficiency. NuVista has an
exceptional business plan that maximizes free adjusted funds flow
and the return of capital to shareholders when our existing
facilities are debottlenecked and filled to maximum efficiency at
production levels of approximately 100,000 Boe/d through 2025.
NuVista has top quality assets and a management
team focused on relentless improvement. We have the necessary
foundation and liquidity to continue adding significant value for
our shareholders. We will continue to adjust to the environment in
order to maximize the value of our asset base and ensure the
long-term sustainability of our business. We would like to thank
our staff, contractors, and suppliers for their continued
dedication and delivery, and we thank our Board of Directors and
our shareholders for their continued guidance and support.
Please note that our corporate presentation will
be available at www.nuvistaenergy.com on May 9, 2023. NuVista’s
management’s discussion and analysis, condensed consolidated
interim financial statements for the three months ended March 31,
2023 and notes thereto, will be filed on SEDAR (www.sedar.com)
under NuVista Energy Ltd. on May 9, 2023 and can also be accessed
on NuVista’s website.
FINANCIAL AND
OPERATING HIGHLIGHTS |
|
|
Three months ended March 31 |
|
($ thousands, except otherwise stated) |
2023 |
|
2022 |
|
% Change |
|
FINANCIAL |
|
|
|
Petroleum and natural gas
revenues |
390,163 |
|
381,827 |
|
2 |
|
Cash provided by operating
activities |
215,221 |
|
162,442 |
|
32 |
|
Adjusted funds flow (3) |
207,464 |
|
189,869 |
|
9 |
|
Per share, basic (6) |
0.95 |
|
0.83 |
|
14 |
|
Per share, diluted (6) |
0.91 |
|
0.80 |
|
14 |
|
Net earnings |
80,709 |
|
70,255 |
|
15 |
|
Per share, basic |
0.37 |
|
0.31 |
|
19 |
|
Per share, diluted |
0.36 |
|
0.30 |
|
20 |
|
Net capital expenditures
(1) |
169,870 |
|
119,964 |
|
42 |
|
Net debt (3) |
168,985 |
|
412,932 |
|
(59 |
) |
OPERATING |
|
|
|
Daily Production |
|
|
|
Natural gas (MMcf/d) |
253.3 |
|
229.0 |
|
11 |
|
Condensate (Bbls/d) |
22,885 |
|
21,680 |
|
6 |
|
NGLs (Bbls/d) |
6,113 |
|
6,756 |
|
(10 |
) |
Total (Boe/d) |
71,209 |
|
66,599 |
|
7 |
|
Condensate & NGLs
weighting |
41 |
% |
43 |
% |
|
Condensate weighting |
32 |
% |
33 |
% |
|
Average realized selling
prices (5) |
|
|
|
Natural gas ($/Mcf) |
7.02 |
|
5.79 |
|
21 |
|
Condensate ($/Bbl) |
101.31 |
|
119.21 |
|
(15 |
) |
NGLs ($/Bbl) (4) |
39.30 |
|
49.30 |
|
(20 |
) |
Netbacks ($/Boe) |
|
|
|
Petroleum and natural gas
revenues |
60.88 |
|
63.71 |
|
(4 |
) |
Realized loss on financial
derivatives |
(1.42 |
) |
(7.54 |
) |
(81 |
) |
Royalties |
(8.04 |
) |
(5.56 |
) |
45 |
|
Transportation expense |
(4.13 |
) |
(4.58 |
) |
(10 |
) |
Operating expense |
(11.71 |
) |
(10.89 |
) |
8 |
|
Operating netback (2) |
35.58 |
|
35.14 |
|
1 |
|
Corporate netback (2) |
32.36 |
|
31.69 |
|
2 |
|
SHARE TRADING STATISTICS |
|
|
|
High ($/share) |
12.67 |
|
11.92 |
|
6 |
|
Low ($/share) |
10.42 |
|
6.94 |
|
50 |
|
Close ($/share) |
10.93 |
|
10.57 |
|
3 |
|
Average daily volume
(thousands of shares) |
677 |
|
1,576 |
|
(57 |
) |
Common
shares outstanding (thousands of shares) |
218,764 |
|
228,472 |
|
(4 |
) |
(1) |
|
Non-GAAP financial measure that does not have any standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other companies where similar terminology is
used. Reference should be made to the section entitled “Specified
Financial Measures”. |
(2) |
|
Non-GAAP ratio that does not have any standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other companies where similar terminology is used.
Reference should be made to the section entitled “Specified
Financial Measures”. |
(3) |
|
Capital management measure. Reference should be made to the section
entitled “Specified Financial Measures”. |
(4) |
|
Natural gas liquids (“NGLs”) include butane, propane and ethane
revenue and sales volumes, and sulphur revenue. |
(5) |
|
Product prices exclude realized gains/losses on financial
derivatives. |
(6) |
|
Supplementary financial measure. Reference should be made to the
section entitled “Specified Financial Measures”. |
Advisories Regarding Oil and Gas
Information
BOEs may be misleading, particularly if
used in isolation. A BOE conversion ratio of 6 Mcf: 1 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. As the value ratio between natural gas and crude oil
based on the current prices of natural gas and crude oil is
significantly different from the energy equivalency of 6:1,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
Any references in this press release to initial
production rates 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. While encouraging, readers are cautioned not to place
reliance on such rates in calculating the aggregate production for
NuVista.
Basis of presentation
Unless otherwise noted, the financial data
presented in this press release has been prepared in accordance
with Canadian generally accepted accounting principles (“GAAP”)
also known as International Financial Reporting Standards (“IFRS”).
The reporting and measurement currency is the Canadian dollar.
National Instrument 51-101 - "Standards of Disclosure for Oil and
Gas Activities" includes condensate within the product type of
natural gas liquids. NuVista has disclosed condensate values
separate from natural gas liquids herein as NuVista believes it
provides a more accurate description of NuVista's operations and
results therefrom.
Production split for Boe/d amounts referenced in
the press release are as follows:
Reference |
Total Boe/d |
Natural Gas% |
Condensate% |
NGLs% |
|
|
|
|
|
Q1 2023 production guidance |
71,000 - 74,000 |
61 |
% |
30 |
% |
9 |
% |
Q1 2023 actual production |
71,209 |
59 |
% |
32 |
% |
9 |
% |
2023 annual production guidance |
79,000 - 83,000 |
62 |
% |
29 |
% |
9 |
% |
Advisory regarding forward-looking
information and statements
This press release contains forward-looking
statements and forward-looking information (collectively,
“forward-looking statements”) within the meaning of applicable
securities laws. The use of any of the words “will”, “expects”,
“believe”, “plans”, “potential” and similar expressions are
intended to identify forward-looking statements. More particularly
and without limitation, this press release contains forward looking
statements, including management's assessment of: NuVista’s future
focus, strategy, plans, opportunities and operations; our plans to
continue to balance debt repayment, increasing adjusted funds flow
through disciplined production and growth; NuVista’s financial
strength entering into 2023; our ability to continue to deliver on
our value-adding growth strategy, reduce net debt and return
capital to shareholders; our ESG plans and commitment targets and
expected results from our ESG initiatives; the quality of NuVista’s
assets; the expected depth and quality in undeveloped reserves; our
ability to create both short and long term value for our
shareholders; our expectations regarding free adjusted funds flow
in 2023; guidance with respect to 2023 capital expenditures
amounts, spending timing and allocation; our expectations that the
cost inflation we have encountered over the past year will ease
through the coming summer; revised guidance with respect to 2023
production and production mix; the anticipated timing of release of
our second quarter production guidance; expectations with respect
to future net debt to adjusted funds flow ratio; the expected
benefits of our financial commodity hedges and diversified natural
gas sales portfolio; plans to direct additional available adjusted
funds flow towards a disciplined balance of return of capital to
shareholders and debt reduction; future commodity prices;
anticipated increases in well costs; anticipated timing of bringing
the new pad in the Pipestone area inline and the anticipated
benefits thereof; expectations regarding 2023 free adjusted funds
flow; plans to maximize free adjusted funds flow and the return of
capital to shareholders; the ability to re-evaluate the uses of
free adjusted funds flow and anticipating outcomes thereof; the
future capacity of our facilities and positive impact to corporate
netbacks; that we will generate free adjusted funds flow while
reducing net debt; NuVista’s future realized gas prices; the timing
of release of our corporate presentation; the effect of our
financial, commodity, and natural gas risk management strategy and
market diversification; the satisfaction of the NCIB and the
anticipated effects of common share repurchases thereunder; the
anticipated timing of completion of the NCIB; approval of the NCIB
renewal and subsequent repurchases thereunder; 2023 drilling and
completion plans, timing and expected results; our ability to
manage the capital program in an inflationary price environment and
the ability to continue adding significant value and improvement.
Statements relating to "reserves" are also deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the reserves
described exist in the quantities predicted or estimated and that
the reserves can be profitably produced in the future.
By their nature, forward-looking statements are
based upon certain assumptions and are subject to numerous risks
and uncertainties, some of which are beyond NuVista’s control,
including the impact of general economic conditions, industry
conditions, current and future commodity prices and inflation
rates, the impact of ongoing global events including European
tensions, with respect to commodity prices, currency and interest
rates, anticipated production rates, borrowing, operating and other
costs and adjusted funds flow, allocation and amount of capital
expenditures and the results therefrom, anticipated reserves and
the imprecision of reserve estimates, the performance of existing
wells, the success obtained in drilling new wells, the sufficiency
of budgeted capital expenditures in carrying out planned
activities, access to infrastructure and markets, competition from
other industry participants, availability of qualified personnel or
services and drilling and related equipment, stock market
volatility, effects of regulation by governmental agencies
including changes in environmental regulations, tax laws and
royalties, the ability to access sufficient capital from internal
sources and bank and equity markets, that we will be able to
execute our 2023 drilling plans as expected, our ability to
carry-out our 2023 production and capital guidance as expected and
including, without limitation, those risks considered under “Risk
Factors” in our Annual Information Form. Readers are cautioned that
the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. NuVista’s actual results,
performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements, or
if any of them do so, what benefits NuVista will derive therefrom.
NuVista has included the forward-looking statements in this press
release in order to provide readers with a more complete
perspective on NuVista’s future operations and such information may
not be appropriate for other purposes. NuVista disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
This press release also contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about NuVista's prospective results of
operations including, without limitation, its ability to repay
debt, expectations with respect to future net debt to adjusted
funds flow ratios, projected adjusted funds flows at current strip
prices, capital expenditures and corporate netbacks, which are
subject to the same assumptions, risk factors, limitations, and
qualifications as set forth above. Readers are cautioned that the
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise and, as such, undue reliance should not be placed on
FOFI. NuVista's actual results, performance or achievement could
differ materially from those expressed in, or implied by, these
FOFI, or if any of them do so, what benefits NuVista will derive
therefrom. NuVista has included the FOFI in order to provide
readers with a more complete perspective on NuVista's future
operations and such information may not be appropriate for other
purposes.
These forward-looking statements and FOFI are
made as of the date of this press release and NuVista disclaims any
intent or obligation to update any forward-looking statements and
FOFI, whether as a result of new information, future events or
results or otherwise, other than as required by applicable
securities law.
Non-GAAP and other financial
measures
This press release uses various specified
financial measures (as such terms are defined in National
Instrument 52-112 – Non-GAAP Disclosure and Other Financial
Measures Disclosure ("NI 51-112")) including
"non-GAAP financial measures", "non-GAAP ratios”, “capital
management measures" and “supplementary financial measures” (as
such terms are defined in NI 51-112), which are described in
further detail below. Management believes that the presentation of
these non-GAAP measures provide useful information to investors and
shareholders as the measures provide increased transparency and the
ability to better analyze performance against prior periods on a
comparable basis.
Non-GAAP financial measures
NI 52-112 defines a non-GAAP financial measure
as a financial measure that: (i) depicts the historical or expected
future financial performance, financial position or cash flow of an
entity; (ii) with respect to its composition, excludes an amount
that is included in, or includes an amount that is excluded from,
the composition of the most directly comparable financial measure
disclosed in the primary financial statements of the entity; (iii)
is not disclosed in the financial statements of the entity; and
(iv) is not a ratio, fraction, percentage or similar
representation.
These non-GAAP financial measures are not
standardized financial measures under IFRS and might not be
comparable to similar measures presented by other companies where
similar terminology is used. Investors are cautioned that these
measures should not be construed as alternatives to or more
meaningful than the most directly comparable IFRS measures as
indicators of NuVista's performance. Set forth below are
descriptions of the non-GAAP financial measures used in this press
release.
NuVista has added the Non-GAAP financial measure
of “net capital expenditures” which includes proceeds received on
property dispositions which will be reinvested into the Company’s
development plans. The use of “net capital expenditures” more
closely aligns with the most directly comparable GAAP measure of
cash used in investing activities and incorporates funds reinvested
from property dispositions which more accurately reflects the
Company’s strategic plan. The definition of “free adjusted funds
flow” has been revised to include “net capital expenditures” rather
than “capital expenditures” which did not include the reinvestment
of disposition proceeds.
Capital expenditures
Capital expenditures are equal to cash used in
investing activities, excluding changes in non-cash working
capital, other asset expenditures and proceeds on property
dispositions. NuVista considers capital expenditures to be a useful
measure of cash flow used for capital reinvestment.
The following table provides a reconciliation
between the non-GAAP measure of capital expenditures to the most
directly comparable GAAP measure of cash used in investing
activities for the period:
|
Three months ended March 31 |
|
($ thousands) |
2023 |
|
2022 |
|
Cash used in investing activities |
(143,773 |
) |
(126,522 |
) |
Changes in non-cash working
capital |
(35,597 |
) |
6,558 |
|
Other asset expenditures |
9,500 |
|
— |
|
Proceeds on property disposition |
(26,000 |
) |
— |
|
Capital expenditures |
(195,870 |
) |
(119,964 |
) |
Net capital expenditures
Net capital expenditures are equal to cash used
in investing activities, excluding changes in non-cash working
capital, and other asset expenditures. The Company includes funds
used for property acquisition or proceeds from property
dispositions within net capital expenditures as these transactions
are part of its development plans. NuVista considers net capital
expenditures to be a useful measure of cash flow used for capital
reinvestment.
The following table provides a reconciliation
between the non-GAAP measure of net capital expenditures to the
most directly comparable GAAP measure of cash used in investing
activities for the period:
|
Three months ended March 31 |
|
($ thousands) |
2023 |
|
2022 |
|
Cash used in investing activities |
(143,773 |
) |
(126,522 |
) |
Changes in non-cash working
capital |
(35,597 |
) |
6,558 |
|
Other
asset expenditures |
9,500 |
|
— |
|
Net capital expenditures |
(169,870 |
) |
(119,964 |
) |
Free adjusted funds flow
Free adjusted funds flow is adjusted funds flow
less net capital expenditures and asset retirement expenditures.
Each of the components of free adjusted funds flow are non-GAAP
financial measures. Please refer to disclosures under the headings
"Capital management measures" and "Capital expenditures" for a
description of each component of free adjusted funds flow.
Management uses free adjusted funds flow as a measure of the
efficiency and liquidity of its business, measuring its funds
available for additional capital allocation to manage debt levels,
pay dividends, and return capital to shareholders. By removing the
impact of current period net capital and asset retirement
expenditures, management believes this measure provides an
indication of the funds the Company has available for future
capital allocation decisions.
The following table sets out our free adjusted
funds flow compared to the most directly comparable GAAP measure of
cash provided by operating activities less cash used in investing
activities for the period:
|
Three months ended March 31 |
|
($ thousands) |
2023 |
|
2022 |
|
Cash provided by operating activities |
215,221 |
|
162,442 |
|
Cash
used in investing activities |
(143,773 |
) |
(126,522 |
) |
Excess cash provided by operating activities over cash used in
investing activities |
71,448 |
|
35,920 |
|
Adjusted funds flow |
207,464 |
|
189,869 |
|
Net capital expenditures |
(169,870 |
) |
(119,964 |
) |
Asset
retirement expenditures |
(9,693 |
) |
(5,568 |
) |
Free adjusted funds flow |
27,901 |
|
64,337 |
|
Non-GAAP ratios
NI 52-112 defines a non-GAAP ratio as a
financial measure that: (i) is in the form of a ratio, fraction,
percentage or similar representation; (ii) has a non-GAAP financial
measure as one or more of its components; and (iii) is not
disclosed in the financial statements of the entity. Set forth
below is a description of the non-GAAP ratios used in this press
release.
These non-GAAP ratios are not standardized
financial measures under IFRS and might not be comparable to
similar measures presented by other companies where similar
terminology is used. Investors are cautioned that these ratios
should not be construed as alternatives to or more meaningful than
the most directly comparable IFRS measures as indicators of
NuVista's performance.
Non-GAAP ratios presented on a "per Boe" basis
may also be considered to be supplementary financial measures (as
such term is defined in NI 51-112).
Operating netback and corporate netback
("netbacks"), per Boe
NuVista calculated netbacks per Boe by dividing
the netbacks by total production volumes sold in the period. Each
of operating netback and corporate netback are non-GAAP financial
measures. Operating netback is calculated as petroleum and natural
gas revenues including realized financial derivative gains/losses,
less royalties, transportation expense and operating expense.
Corporate netback is operating netback less general and
administrative expense, cash share-based compensation expense,
financing costs excluding accretion expense, and current tax
expense.
Management believes both operating and corporate
netbacks are key industry benchmarks and measures of operating
performance for NuVista that assists management and investors in
assessing NuVista's profitability, and are commonly used by other
petroleum and natural gas producers. The measurement on a Boe basis
assists management and investors with evaluating NuVista's
operating performance on a comparable basis.
Capital management measures
NI 52-112 defines a capital management measure
as a financial measure that: (i) is intended to enable an
individual to evaluate an entity’s objectives, policies and
processes for managing the entity’s capital; (ii) is not a
component of a line item disclosed in the primary financial
statements of the entity; (iii) is disclosed in the notes to the
financial statements of the entity; and (iv) is not disclosed in
the primary financial statements of the entity.
Please refer to Note 15 "Capital Management" in
NuVista's condensed consolidated interim financial statements for
additional disclosure net debt and adjusted funds flow, and net
debt to annualized first quarter adjusted funds flow ratio, each of
which are capital management measures used by the Company in this
press release.
NuVista calculated net debt to annualized first
quarter adjusted funds flow ratio by dividing net debt by the
annualized adjusted funds flow for the first quarter.
Supplementary financial
measure
This press release may contain certain
supplementary financial measures. NI 52-112 defines a supplementary
financial measure as a financial measure that: (i) is intended to
be disclosed on a periodic basis to depict the historical or
expected future financial performance, financial position or cash
flow of an entity; (ii) is not disclosed in the financial
statements of the entity; (iii) is not a non-GAAP financial
measure; and (iv) is not a non-GAAP ratio.
NuVista calculates “adjusted funds flow per
share” by dividing adjusted funds flow for a period by the number
of weighted average common shares of NuVista for the specified
period.
FOR FURTHER INFORMATION CONTACT:
Jonathan A. Wright |
Ivan
J. Condic |
Mike
J. Lawford |
President and CEO |
VP, Finance and CFO |
Chief Operating Officer |
(403) 538-8501 |
(403) 538-1945 |
(403) 538-1936 |
NuVista Energy (TSX:NVA)
過去 株価チャート
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NuVista Energy (TSX:NVA)
過去 株価チャート
から 5 2023 まで 5 2024