Bonterra Reports Quarterly, Full-Year Financials

Bonterra Energy announced its financial and operational results for the three months and fiscal year ended December 31, 2009.

Financial Highlights

  • Revenue and funds flow from operations in 2009 decreased 30 percent and 6 percent, respectively when compared to the prior year primarily due to a 32 percent decrease in the Company's crude oil average realized price and a 50 percent decrease in the Company's natural gas average realized price partially offset by production increases and a gain on asset sale of $24.2 million in Q4 2009. Commodity prices showed improvement during the latter half of the year, mainly in crude oil, and the fourth quarter numbers reflected a positive impact with a 250 percent increase in funds flow from operations in the fourth quarter of 2009 compared with the third quarter of 2009;
  • In 2009, Bonterra paid cash dividends to shareholders of $1.70 per share, a substantial decrease from the 2008 level of $3.12 per share. Bonterra had reduced its dividend in early 2009 to maintain its balance sheet strength and the financial flexibility necessary to continue developing the Pembina Cardium horizontal play. As pricing improved, Bonterra was able to increase the dividend twice during the year. Subsequent to year-end, Bonterra was able to once again increase the dividend to its current level of $0.18 per share which began with the dividend paid out in January, 2010;
  • The payout ratio was 46 percent of funds flow (72 percent without the gain on asset sale of $24.2 million and within the Company's annual target of 70 to 80 percent);
  • During the year, Bonterra took several steps towards improving its financial position. The Company entered into a new syndicated banking facility effective April 29, 2009 consisting of a $100 million syndicated revolving credit facility and a $20 million non-syndicated revolving credit facility. In addition, Bonterra completed an equity offering in May, 2009. The Company issued 1,068,000 common shares at a price of $16.85 per share for net proceeds of approximately $17 million. Funds were used for the Company's capital program and for general working capital purposes.

Operational Highlights

  • In 2009, Bonterra spent approximately $35.2 million on its capital development program of which $22.9 million was spent on its drilling and completions program with the remainder spend on land and corporate acquisitions in the Pembina area.
  • Production increased to an all time high of 4,994 barrels of oil equivalent (BOE) per day as a result of its internal development
  • program and acquisitions during the year. Fourth quarter production totaled 4,881 BOE per day, an increase of eight percent over the same period last year;
  • Reserves increased to 25.3 million BOE and 35.8 million BOE on a proved and a proved plus probable basis, respectively. This represents an increase of 5.2 percent to the Company's proved reserves and a 14.7 percent increase to proved plus probable reserves;
  • Reserves per share on a P+P basis increased 8.7 percent to 1.99 BOE per share compared to 1.83 BOE per share in 2008;
  • Bonterra's finding, development and acquisition (FD&A) costs in 2009 continue to be among the lowest in the Canadian oil and gas industry at $13.25 per BOE on a total proved basis and $8.93 per BOE on a proved plus probable basis.
  • With an average cash netback of $23.42 per BOE, Bonterra's 2009 proved plus probable recycle ratio is 2.6 times.
  • Bonterra completed asset sales in 2009 and in the first quarter of 2010, obtaining $35.8 million in dispositions from non-core assets in Saskatchewan. This included the divestment of approximately 270 BOE per day of producing oil and gas properties and an associated 1.4 million BOE of proved plus probable reserves. The proceeds from these sales will assist in accelerating the development of the Cardium assets.