CALGARY, AB, March 9, 2021 /CNW/ – Journey Vitality Inc. (TSX:JOY) (OTCQX:JRNGF) (“Journey” or the “Firm“) is happy to announce its 2020 reserves, working and monetary outcomes.  The entire set of economic statements and administration dialogue and evaluation for the yr ended December 31, 2020 are posted on www.sedar.com and on the Firm’s web site www.journeyenergy.ca.

Highlights for 2020:

  • Produced 8,074 boe/d (46% oil and NGL’s) within the fourth quarter and eight,379 boe/d (46% oil and NGL’s) for the yr.
  • Realized funds circulation of $13.5 million for 2020 yielding $0.31 per fundamental share.
  • Decreased web debt by 33% to $90.4 million from $134.3 million on the finish of 2019.
  • Bought the entire syndicated financial institution debt excellent of $75 million for $38 million plus a contingent fee of $5.75 million.
  • Commissioned Journey’s 4.2 megawatt electrical energy era venture in Countess on September 29.
  • Proved developed producing reserves accounted for 40% of whole proved plus possible reserves whereas proved reserves accounted for 58%.
  • Complete Proved reserves declined by 2,932 Mboe as a result of commodity pricing. This decline was partially offset by constructive technical revisions of 1,693 Mboe as a result of improved efficiency from our asset base, although no wells had been drilled in 2020.
  • Proved plus possible reserve life index of 16.1 years.
  • Proved developed producing and proved plus possible developed producing reserve life index of 6.9 and 9.4 years respectively, are testaments to Journey’s low decline asset base.
  • Future growth capital within the reserves report is:
    • $90.2 million for Proved reserves, which is 31% decrease than 2019.
    • $188 million for Proved plus Possible reserves, or 26% decrease than 2019.

Three Months ended

 December 31,

Twelve months ended

 December 31,

Monetary ($000’s besides per share quantities)

2020

2019

%

change

2020

2019

%

change

Manufacturing income

19,651

27,134

(28)

67,912

109,190

(38)

Web earnings loss

32,343

(7,654)

(523)

(56,624)

(31,355)

81

Per fundamental share

0.75

(0.18)

(517)

(1.31)

(0.78)

68

Per diluted share

0.75

(0.18)

(517)

(1.31)

(0.78)

68

Funds circulation

6,040

6,311

(4)

13,475

28,418

(53)

Per fundamental share

0.14

0.15

(7)

0.31

0.71

(56)

Per diluted share

0.14

0.14

0.31

0.68

(54)

Money circulation from operations

2,909

11,684

(75)

11,605

27,748

(58)

Per fundamental share

0.07

0.27

(74)

0.27

0.69

(61)

Per diluted share

0.07

0.26

(73)

0.27

0.67

(60)

Web capital expenditures

817

9,331

(91)

7,066

20,531

(66)

Web debt

90,355

124,213

(27)

90,355

124,213

(27)








Share Capital (000’s)







Fundamental, weighted common

43,395

42,910

1

43,164

40,172

7

Fundamental, finish of interval

44,001

43,087

2

44,001

43,087

2

Totally diluted

52,608

48,174

9

52,608

48,174

9








Day by day Gross sales Volumes







Pure gasoline (Mcf/d)







Standard

18,295

19,712

(7)

18,764

19,367

(3)

Coal mattress methane

7,871

9,490

(17)

8,506

9,712

(12)

Complete pure gasoline volumes

26,166

29,202

(10)

27,270

29,079

(6)

Crude oil (Bbl/d)







Mild/medium

2,060

2,968

(31)

2,263

2,868

(21)

Heavy

992

971

2

906

1,066

(15)

Complete crude oil volumes

3,052

3,939

(23)

3,169

3,934

(19)

Pure gasoline liquids (Bbl/d)

661

657

1

665

592

12

Barrels of oil equal (boe/d)

8,074

9,463

(15)

8,379

9,372

(11)








Common Costs (excluding hedging)







Pure gasoline ($/mcf)

2.57

1.74

48

1.94

1.55

25

Crude Oil ($/bbl)

42.46

57.70

(26)

37.97

60.80

(38)

Pure gasoline liquids ($/bbl)

25.51

25.86

(1)

18.75

25.29

(26)

Barrels of oil equal ($/boe)

26.46

31.17

(15)

22.15

31.92

(31)








Netbacks ($/boe)







Realized costs (excl. hedging)

26.46

31.17

(15)

22.15

31.92

(31)

Royalties

(2.69)

(4.33)

(38)

(2.25)

(4.03)

(44)

Working bills

(12.06)

(14.64)

(18)

(12.48)

(14.23)

(12)

Transportation bills

(0.61)

(0.75)

(19)

(0.48)

(0.54)

(11)

Working netback

11.10

11.45

(3)

6.94

13.12

(47)








Wells drilled







Gross

4

(100)

7

(100)

Web

4.0

(100)

7.0

(100)

Success charge (%)

100

100

OPERATIONS

Journey achieved gross sales volumes of 8,379 boe/d (46% crude oil and NGL’s) in 2020, representing an 11% discount from 9,372 (48% crude oil and NGL’s) produced in 2019.  The decrease volumes in 2020 are primarily the results of pure declines as a result of an absence of capital funding but in addition embody decreased volumes as a result of shutting-in uneconomic manufacturing for a portion of the yr.  In mid-March of 2020 the COVID-19 pandemic was inflicting systematic shutdowns of world economies, and world oil costs skilled a extreme decline.  WTI oil costs declined beneath USD $20/bbl making a number of of Journey’s oil properties uneconomic to function.  Consequently, Journey took the prudent and rapid motion to shut-in roughly 1,500 boe/d (73% crude oil and NGL’s) of its manufacturing efficient the primary week of April.  Journey restarted the vast majority of shut-in manufacturing early within the third quarter.

Journey didn’t drill or full any wells in 2020.  Capital expenditures for 2020 had been restricted to upkeep capital the place deemed essential, in addition to the completion and commissioning of our energy era venture.    The ability venture commenced operations in late September.  One key function of the facility venture as designed is the benefit through which the venture might be expanded to over 6 megawatts from the present most capability of 4.0 megawatts, with the addition of 1 extra energy era unit.  Over the previous six months Journey has seen a dramatic improve in pricing for each pure gasoline and electrical energy, and stays effectively positioned to take full benefit of those will increase in 2021.

In 2020 Journey was targeted on repositioning its capital construction to offer most liquidity over the medium time period.  This focus will proceed into 2021 with Journey planning to make use of free money circulation to fulfill quick time period obligations.  Journey has been in a position to reap the benefits of the beforehand introduced Web site Rehabilitation Program whereby funds are offered to business to finish abandonment work.  Journey has been allotted roughly $3.37 million in applications 1-5.  These funds will likely be utilized to desert wells, services, and in addition to conduct Section 1 and Section 2 environmental assessments.  Roughly $550 thousand of those funds have been expended up to now.  Technical groups at Journey have reviewed and authorized for abandonment, roughly 20 effectively websites in Westerose; 30 effectively websites in Matziwin; and 50 effectively websites in Crystal.  This program will likely be ongoing all through 2021 and into 2022.

The Duvernay drilling program has superior to the purpose the place Journey has vital manufacturing historical past for the three wells drilled by its three way partnership associate, Kiwetinohk Assets Corp. (“KRC”).  These wells rank within the high tier of all wells drilled up to now within the East Shale Duvernay basin.  The success up to now on this play highlights the numerous growth potential of the Duvernay land block.  The three way partnership at the moment controls roughly 116 gross sections the place Journey has a working curiosity of 37.5% (43.5 web sections).  Since KRC didn’t totally full all attainable incomes throughout the choice part of the farm-out settlement, which led to late August 2020, Journey retained its 100% curiosity in 31 unearned sections.  This, plus an extra 6 gross sections Journey beforehand acquired, ends in the Firm controlling 80.5 web sections or roughly 53% of the full acreage inside the whole Duvernay land block.  As Journey recovers from the 2020 value shock related to the pandemic, the capital obtainable for this venture in 2021 is restricted, regardless of this useful resource having engaging returns within the present pricing surroundings.  Because of this, Journey is actively looking for alternatives to monetize this chance or discover a Joint Enterprise associate.

Journey plans on returning to the sector in late 2021 or early 2022. Journey will proceed to watch broader market forces and alter its capital plans on an ongoing foundation.  Journey has a growth drilling program prepared for Skiff, Cherhill and Crystal.  The horizontal growth program in south Skiff follows up the three wells drilled there in 2018.  Through the third quarter of 2019, the central effectively of the three effectively sample was transformed to a water injection effectively, and the offsetting producers have now begun to reply favorably to the injection.  The Firm’s low decline and predictable asset base will assist the Firm keep its enterprise and restore our long run sustainability. 

FINANCIAL

Debt Restructuring
2020 will enter its place in historical past as a yr with many challenges.  Through the first part of the COVID-19 pandemic, the oil and gasoline business skilled the most important single oil value decline in historical past.  For Journey, there was no problem extra vital than coping with its excellent financial institution debt.  The yr began with sturdy commodity costs however by March, the world fell sufferer to the turmoil of the pandemic.  The sharp decline in commodity costs put extraordinary stress on the reserve values that supported Journey’s financial institution borrowings. Accordingly, the banks decreased the borrowing base and consequently Journey grew to become drawn in extra of this new borrowing base degree.  Money flows related to these low commodity costs had been inadequate for Journey to repay this deficiency.  The corporate spent the vast majority of 2020 in forbearance, attempting to work out an answer with the banks that offered the remaining stakeholders a chance to climate this doubtlessly quick time period storm. 

These efforts culminated in a multi-party transaction on October 30, 2020, whereby Journey’s largest shareholder and debt supplier, Alberta Funding Administration Company (“AIMCo”), loaned Journey $38 million to purchase out the excellent financial institution debt of $75 million.  This restructuring was a milestone for Journey and represented the fruits of a considerable, collaborative effort from all events.  Journey efficiently emerged from the state of forbearance and now has all of its borrowings held by AIMCo.  AIMCo’s help and confidence within the Journey group offered the a lot wanted credit score stability and monetary flexibility to permit it management its personal future. Occasions occurring subsequent to this transaction, together with the rise in commodity costs, and the beginnings of the world rising from the ravages of the pandemic, recommend that these efforts will profit Journey stakeholders for years to come back.

Working Outcomes
Whereas oil costs recovered considerably within the third quarter, the COVID-19 pandemic continued to wreak havoc on world economies and worldwide oil consumption continued to be challenged.  Journey’s realized oil costs throughout the fourth quarter averaged $42.46/bbl which was 26% decrease than the $57.70/bbl realized within the fourth quarter of 2019.  Pure gasoline costs confirmed energy as Journey realized $2.57/mcf in comparison with $1.74/mcf within the fourth quarter of 2019.  Nevertheless, Journey’s common realized commodity costs had been 15% decrease throughout the fourth quarter of 2020 at $26.46/boe as in comparison with $31.17/boe in the identical quarter in 2019.  Journey’s gross sales quantity combine shifted extra in direction of pure gasoline because the uneconomic, oil manufacturing that was shut-in at the start of the second quarter was introduced again on-line in levels throughout the third and fourth quarters and due to this fact gross sales volumes for the yr and the quarter weren’t at full capability.  Pure gasoline volumes accounted for 54% (2019 – 51%) of whole volumes offered within the fourth quarter whereas crude oil manufacturing dropped to 38% in 2020 from 42% in 2019.  On the income aspect, crude oil and NGL’s comprised 69% of whole revenues for the fourth quarter whereas for a similar quarter in 2019 they had been 83%.   Journey’s hedging place yielded a realized achieve of $0.4 million throughout the fourth quarter, bringing the year-to-date positive factors to $7.9 million.  The Firm continued to pursue price management initiatives initiated earlier within the yr in response to the pandemic.  On a per boe foundation, subject working bills (royalties, working bills, and transportation bills) had been 22% decrease at $15.36/boe throughout the fourth quarter of 2020 as in comparison with $19.72/boe within the fourth quarter of 2019. 

Journey ensured that each one controllable prices had been minimized, whereas persevering with to function its wells in a really protected method.  Basic and administrative prices had been 63% decrease within the fourth quarter at $605 thousand as in comparison with $1,616 thousand within the fourth quarter of 2019.  The G&A price discount initiatives initiated within the second quarter had a direct bearing on the fourth quarter outcomes. Through the second quarter, Journey decreased compensation ranges to its employees by roughly 10% on high of the already decreased work week applied in 2019; quickly furloughed roughly one-quarter of its workforce; obtained partial lease deferral for its head workplace lease; and utilized for advantages underneath the Canadian Emergency Wage Subsidy program.  These initiatives continued into the fourth quarter whereby Journey re-structured its head workplace lease by decreasing its house and decreasing its price per sq. foot.  Journey estimates that it’s going to save roughly $1.5 million per yr in head workplace lease beginning in 2021. On a per boe foundation, Journey’s G&A was $0.81 for the fourth quarter of 2020, or 56% decrease than the $1.86 realized within the fourth quarter of 2019. 

Finance bills associated to borrowings decreased by 12% to $2.0 million within the fourth quarter of 2020 from $2.3 million in the identical quarter of 2019.  Common, interest-bearing debt decreased by 18% within the fourth quarter of 2020 in comparison with 2019 because of the debt repurchase for lower than its face worth on October 30.  The elevated finance prices for the total yr of 2020 had been the results of larger rates of interest on the brand new time period debt that changed the financial institution debt. 

Journey realized web earnings of $32.3 million within the fourth quarter of 2020, which was largely attributable to the achieve on settlement of the financial institution debt of $35.7 million.  For the yr up to now this achieve was over-shadowed by the massive asset impairment of $60.9 million taken within the first quarter. This impairment was attributable to the sharp decline in commodity costs skilled within the first quarter. For all the yr Journey suffered a lack of $56.6 million or $1.31 per fundamental and diluted shares as in comparison with a loss in 2019 of $31.4 million or $0.78 per fundamental and diluted shares.

Capital program
The Firm spent $0.8 million in its capital program throughout the fourth quarter with nearly all of this spending directed to the continued work of Journey’s energy era venture.  The ability venture was commissioned on September 29.  Capital was conserved all year long for 2 mains causes. Early on within the pandemic, there have been only a few initiatives that had been financial on condition that realized oil costs dropped to a low of $6.99/bbl in April and there was nice uncertainty as to the depth and size of the worldwide financial system shutdowns.  Secondly, all obtainable money was going towards debt discount.  Because of this, there have been restricted funds to expend on discretionary initiatives.  Journey made it a precedence to finish the facility era venture it began in 2019 and began delivering electrical energy to the Alberta energy grid on September 29.  Administration’s view is that electrical energy costs are topic to much less fluctuations to the draw back than oil and pure gasoline, and due to this stability it made good sense to diversify its income base.  The venture was initially constructed with attainable future growth in thoughts and may the asset carry out as anticipated, Journey has the optionality to extend its capability to six megawatts of producing functionality a really low capital price.

Journey exited the fourth quarter of 2020 with web debt of $90.4 million, which was 27% decrease than the $124.2 million on the finish of 2019. As well as, Journey has a really sturdy revenue tax pool place with roughly $679 million in mixture deductions obtainable.

OUTLOOK

Within the fourth quarter of 2020, Journey entered right into a sale settlement with a 3rd social gathering for its newly commissioned energy venture, together with the related producing pure gasoline belongings, that are used as the provision for the electrical energy era (the “Countess Property”).  The first objective of this transaction was to scale back the borrowings from AIMCo, which had been used to buy Journey’s syndicated financial institution debt.  After of sequence of extensions to cut-off date granted to the purchaser, on March 1, 2021 Journey terminated the settlement reasonably than present an extra extension.  Journey has retained the $902 thousand deposit superior pursuant to this buy and sale settlement.  Given the numerous appreciation in ahead pricing for each pure gasoline and energy, Journey felt that the present consideration realized from the sale didn’t appropriately seize the potential worth and the optionality the belongings present to the Firm.  Journey administration estimates that money circulation from the Countess Property will likely be $1.5-2.0 million within the first quarter of 2021 alone.  As well as, the facility facility was constructed in a way that permits for expanded capability, offering vital future optionality for the Firm.

Retaining the Countess Property was made attainable by the dramatic improve in commodity costs skilled throughout Journey’s complete asset foundation because the fall of 2020.  The rise in commodity costs, if sustained, will enable Journey to fulfill its close to time period monetary obligations from money circulation, permitting the corporate to revive monetary flexibility by late 2021.  In help of this Journey made a partial compensation of $3.75 million to AIMCo on March 2, 2021.  Though this compensation will restrict Journey’s close to time period potential to take a position capital in its engaging growth alternatives the optionality, money era functionality, and lengthy life traits of the Countess Property justify the trade-off.   

2020 GUIDANCE

Journey has determined to take a conservative method to capital spending for 2021, with a concentrate on repaying the brand new borrowings from AIMCo.  The dramatic improve in commodity costs, coupled with favorable value differentials, and a decrease price construction are combining to make 2021 one other transformational yr for the Firm.  Journey’s preliminary 2021 steerage is introduced within the desk beneath:

Annual common manufacturing

7,300 – 7,600 boe/d (46% crude oil and NGL)

Capital spending

$3.5 – $5.0 million

Funds circulation

$30 – $33 million

Yr-end web debt

$62 – $65 million

Funds circulation per fundamental weighted common share

$0.68 – $0.75

Company annual decline charge

16%

Journey’s 2021 forecasted funds circulation relies upon the next assumed annual, common costs: WTI of $59.00/bbl USD; Firm differentials of $5.50/bbl USD for oil from Edmonton gentle candy costs; realized pure gasoline value of CDN$2.90/mcf CDN; and a international trade charge of $0.79 US$/CDN$.

Over the course of 2021, we sit up for updating you on our progress as we transition to higher days. We thank all of our stakeholders who’ve stood by us via these tough and attempting instances.

RESERVES

The next desk supplies abstract info introduced within the GLJ Petroleum Consultants Restricted (“GLJ“) unbiased reserves evaluation and analysis efficient December 31, 2020, (the “GLJ Report“).  GLJ evaluated 100% of Journey’s crude oil, pure gasoline liquids and pure gasoline reserves.  The analysis of all of its oil and gasoline properties was completed in accordance with the definitions, requirements and procedures contained within the Canadian Oil and Gasoline Analysis Handbook (“COGE Handbook”) and Nationwide Instrument 51-101, Requirements of Disclosure for Oil and Gasoline Actions (“NI 51-101”). 

The 2020 GLJ reserve report contains the abandonment and reclamation legal responsibility related to all lively and inactive wells, services, pipelines and gathering techniques as really useful within the COGE Handbook.      

Detailed reserve info will likely be introduced within the Firm’s upcoming Assertion of Reserves Knowledge and Different Oil and Gasoline Data part of the Firm’s Annual Data Kind scheduled to be filed on SEDAR on or earlier than March 31, 2021.

Firm Gross Reserves
Based mostly on Forecast Worth and Prices as at December 31, 2020


Mild
Medium Oil

Tight

Oil

Heavy

Oil

Pure
Gasoline

NGLs

Complete(2)

Reserves Class

(Mbbl)

(Mbbl)

(Mbbl)

(MMcf)

(Mbbl)

(Mboe)

Proved







Producing

4,354

128

2,412

66,572

2,112

20,102

Developed non-producing

319

0

7

7,748

278

1,895

Undeveloped

2,365

119

1,775

14,620

502

7,199

Complete proved

7,038

247

4,194

88,939

2,893

29,195

Possible

6,433

110

3,027

58,198

1,540

20,809

Complete proved plus possible

13,470

357

7,221

147,138

4,433

50,004








Included in Above:







Proved plus possible producing

5,934

197

3,462

95,507

2,609

28,120








Notes:

(1) 

Firm Gross Reserves consists of Journey’s working curiosity (operated and non-operated) share of reserves earlier than deduction of royalties payable and with out together with royalties receivable by the Firm.

(2) 

Within the case of pure gasoline volumes, boe’s are derived by changing pure gasoline to grease utilizing the ratio of six thousand cubic ft of pure gasoline to at least one barrel of oil (6 Mcf:1 bbl).

(3) 

Firm Gross Reserves embody gas gasoline required for energy era at our Countess property.

(4) 

Complete values could not add as a result of rounding.

Web Current Values of Future Web Income (Based mostly on Forecast Costs and Prices)


Earlier than Tax Web Current Worth
($000’s)

Reserves class

0%

5%

10%

15%

20%

Proved






Producing

(109,768)

50,772

77,212

78,559

74,558

Developed non-producing

17,336

12,652

9,900

8,111

6,861

Undeveloped

104,422

54,885

30,040

16,042

7,526

Complete proved

11,990

118,308

117,153

102,712

88,944

Possible

329,673

195,099

127,965

89,679

65,824

Complete proved plus possible

341,663

313,407

245,118

192,391

154,769







Included in Above






Proved plus possible producing

(10,712)

109,598

117,187

107,993

97,441







Not Included in Above






Countess Energy Era

28,038

16,688

11,025

7,921

6,071


Notes:

(1)

Complete values could not add as a result of rounding.

(2)

Forecast pricing used is the common of the printed value forecasts for GLJ Petroleum Consultants Ltd., Sproule Associates Ltd. and McDaniel & Associates Consultants Ltd. as at December 31, 2020.

(3)

It shouldn’t be assumed that the web current values of future web revenues estimated by GLJ symbolize truthful market worth of the reserves. There isn’t any assurance that the forecast value and price assumptions will likely be attained and variances may very well be materials.

(4)

The Web Current Values of Future Web Income for reserves doesn’t embody the long run web income from energy era at our Countess property.  The Web Current Worth of Future Web Revenues of energy era, together with the associated fee to buy gas gasoline, is proven above as evaluated by GLJ efficient January 1, 2021.

The forecast costs and international trade charges used within the GLJ Report are as follows:


WTI Cushing

Oklahoma

($US/bbl)

Edmonton

40 API
($CDN/bbl)

WCS Crude Oil
Stream
($CDN/bbl)

Alberta

AECO-spot

($CDN/Mmbtu)

NYMEX

Henry Hub
($US/Mmbtu)

International

Alternate

($US/$CDN)

2021

47.17

55.76

44.63

2.78

2.83

0.7683

2022

50.17

59.89

48.18

2.70

2.87

0.7650

2023

53.17

63.48

52.10

2.61

2.90

0.7633

2024

54.97

65.76

54.10

2.65

2.96

0.7633

2025

56.07

67.13

55.19

2.70

3.02

0.7633

2026

57.19

68.53

56.29

2.76

3.08

0.7633

2027

58.34

69.95

57.42

2.81

3.14

0.7633

2028

59.50

71.40

58.57

2.86

3.20

0.7633

2029

60.69

72.88

59.74

2.92

3.26

0.7633

2030

61.91

74.34

60.93

2.98

3.33

0.7633

2031

63.15

75.83

62.15

3.04

3.39

0.7633

2032

64.41

77.34

63.39

3.10

3.46

0.7633

2033

65.70

78.89

64.66

3.16

3.53

0.7633

2034

67.01

80.47

65.95

3.23

3.60

0.7633

2035

68.35

82.08

67.28

3.29

3.67

0.7633

Thereafter

+2.0%/yr

+2.0%/yr

+2.0%/yr

+2.0%/yr

+2.0%/yr

0.7633

RESERVES RECONCILIATION

The next desk units out a reconciliation of the adjustments within the Company’s reserves as at December 31, 2020 in comparison with December 31, 2019 primarily based on forecast costs and price assumptions in impact on the relevant reserve analysis date:

FACTORS

Proved
(Mboe)

Proved plus
Possible (Mboe)

December 31, 2019

33,422

57,546

Extensions and Improved Restoration

68

87

Technical Revisions

1,693

(648)

Financial Components

(2,932)

(3,924)

Manufacturing

(3,056)

(3,056)

December 31, 2020

29,195

50,004


Notes:

(1)

Gross Firm Reserves proven. Complete values could not add as a result of rounding.

(2)

There have been no acquisitions or inclinations in 2020.

(3)

There have been no drilling or completions in 2020.

(4)

Financial elements have been calculated because the distinction in reserves utilizing the 2020 Reserve Report value forecast with the 2019 Reserve Report forecasts.

(5)

Proved Technical Revisions had been constructive regardless of removing of sure wells that had been unlikely to be drilled previous to land expiries.

(6)

Proved plus Possible Technical revisions had been unfavourable as constructive revisions at a number of properties weren’t sufficient to offset the influence of removing of sure wells that had been unlikely to be drilled previous to land expiries.

FUTURE DEVELOPMENT COSTS

The next desk supplies the breakdown of future growth prices deducted within the estimation of the long run web income attributable to the proved and proved plus possible reserve classes famous beneath:

Yr

Proved
($000’s)

Proved Plus
Possible
($000’s)

2021

7,478

7,478

2022

29,672

38,925

2023

25,064

59,453

2024

21,889

46,046

2025

1,550

29,460

Remaining

4,499

6,590

Complete (Undiscounted)

90,152

187,952

RESERVE LIFE INDEX

The Firm’s reserve life index (“RLI“) is calculated by taking the Firm Gross Reserves from the GLJ Report and dividing them by the projected 2021 manufacturing as estimated within the GLJ report.


Firm Gross
Reserves

2021 Firm
Gross Manufacturing

RLI

Reserves Class

(Mboe)

(Mboe)

(Years)

Proved, developed, producing

20,102

2,908

6.9

Complete proved

29,195

3,008

9.7

Proved plus possible producing

28,120

2,996

9.4

Proved plus possible

50,004

3,102

16.1

In regards to the Firm 

Journey is a Canadian exploration and manufacturing firm targeted on oil-weighted operations in western Canada.  Journey’s technique is to develop its manufacturing base by drilling on its present core lands, implementing waterflood initiatives, and by executing on accretive acquisitions.  Journey seeks to optimize its legacy oil swimming pools on present lands via the appliance of finest practices in horizontal drilling and, the place possible, with water floods.

Journey Vitality Inc.
700, 517 – 10th Avenue SW
Calgary, AB T2R 0A8
403-294-1635
www.journeyenergy.ca

FORWARD LOOKING STATEMENTS AND OTHER ADVISORIES

Data on this press launch that’s not present or historic factual info could represent forward-looking info inside the that means of securities legal guidelines, which includes substantial identified and unknown dangers and uncertainties, most of that are past the management of Journey, together with, with out limitation, these listed underneath “Threat Components” and “Ahead Wanting Statements” within the Annual Data Kind filed on www.SEDAR.com on March 30, 2020. Ahead-looking info could relate to Journey’s future outlook and anticipated occasions or outcomes and will embody statements relating to the enterprise technique and plans and aims. Notably, forward-looking info on this press launch contains, however shouldn’t be restricted to, info regarding Journey’s drilling and different operational plans, manufacturing charges, and long-term aims. Journey cautions traders in Journey’s securities about vital elements that would trigger Journey’s precise outcomes to vary materially from these projected in any forward-looking statements included on this press launch. Data on this press launch about Journey’s potential funds flows and monetary place relies on assumptions about future occasions, together with financial circumstances and programs of motion, primarily based on administration’s evaluation of the related info at the moment obtainable. Readers are cautioned that info relating to Journey’s monetary outlook shouldn’t be used for functions apart from these disclosed herein. Ahead-looking info contained on this press launch relies on present estimates, expectations and projections, which Journey believes to be affordable as of the present date. No assurance might be on condition that the expectations set out herein will show to be appropriate and accordingly, you shouldn’t place undue significance on forward-looking info and mustn’t depend upon this info as of some other date. Whereas we could elect to, we’re underneath no obligation and don’t undertake to replace this info at any explicit time besides as required by relevant securities regulation.

Readers are cautioned that the above record of dangers and elements usually are not meant to be exhaustive. Further info on these and different elements that would have an effect on working and monetary outcomes are, or will likely be, included in reviews filed with the relevant securities regulatory authorities and could also be accessed via the SEDAR web site (www.sedar.com).

Non-IFRS Measures

The Firm makes use of the next non-IFRS measures in evaluating company efficiency. These phrases would not have a standardized that means prescribed by Worldwide Monetary Reporting Requirements and due to this fact is probably not comparable with the calculation of comparable measures by different corporations.

  1. “Funds Circulate” is calculated by taking “money circulation offered by working actions” from the monetary statements and including or deducting: adjustments in non-cash working capital; transaction prices; and decommissioning prices.  Funds Circulate per share is calculated as Funds Circulate divided by the weighted-average variety of shares excellent within the interval. As a result of Funds Circulate and Funds Circulate per share usually are not impacted by fluctuations in non-cash working capital balances, we consider these measures are extra indicative of efficiency than the GAAP measured “money circulation generated from working actions”.  As well as, Journey excludes transaction prices from the definition of Funds Circulate, as these bills are typically in respect of capital acquisition transactions.  The Firm considers Funds Circulate a key efficiency measure because it demonstrates the Firm’s potential to generate funds essential to repay debt and to fund future development via capital funding.  Journey’s willpower of Funds Circulate is probably not corresponding to that reported by different corporations.  The reconciliation between money from working actions on the consolidated monetary statements, and Funds Circulate might be discovered within the desk beneath.  Journey additionally presents Funds Circulate per share the place per share quantities are calculated utilizing the weighted common shares excellent per the calculation of web revenue (loss) per share, which per share quantity is calculated underneath IFRS and is extra totally described within the notes to the audited, year-end consolidated monetary statements.  
  2. Netback(s)“.  The Firm makes use of netbacks to assist consider its efficiency, leverage, and liquidity; comparisons with friends; in addition to to evaluate potential acquisitions.  Administration considers netbacks as a key efficiency measure because it demonstrates the Firm’s profitability relative to present commodity costs.  Administration additionally makes use of them in operational and capital allocation choices.  Journey makes use of three netbacks to evaluate its personal efficiency and in addition efficiency in relation to its friends. These netbacks are working, Funds Circulate and web revenue (loss).  “Working netback” is calculated as the common gross sales value of the commodities offered (excluding monetary hedging positive factors and losses), much less royalties, transportation prices and working bills.  “Funds Circulate netback” begins with the working netback and deducts basic and administrative prices, curiosity prices after which provides or deducts any realized positive factors or losses on spinoff contracts.  To calculate the “web revenue (loss) netback“, Journey takes the Funds Circulate netback after which provides or deducts: unrealized positive factors/losses on spinoff contracts; share-based compensation expense; depletion; depreciation; accretion; loss and positive factors on inclinations; asset impairments; exploration and analysis bills; PP&E impairments and reversals; and deferred revenue taxes.  There isn’t any GAAP measure that’s moderately corresponding to netbacks.
  3. Web debt” is calculated by taking present belongings, after which subtracting accounts payable and accrued liabilities; the principal quantity of time period debt; and the opposite legal responsibility. Web debt is used to evaluate the capital effectivity, liquidity and basic monetary energy of the Firm.  As well as, it’s used as a comparability software to evaluate monetary energy in relation to Journey’s friends.

Barrel of Oil Equivalents and Volumes

The place quantities are expressed in a barrel of oil equal (“boe”), or barrel of oil equal per day (“boe/d”), pure gasoline volumes have been transformed to barrels of oil equal at six (6) thousand cubic ft (“Mcf”) to at least one (1) barrel. Use of the time period BOE could also be deceptive notably if utilized in isolation. The boe conversion ratio of 6 Mcf to 1 barrel (“Bbl”) of oil or pure gasoline liquids relies on an vitality equivalency conversion methodology primarily relevant on the burner tip, and doesn’t symbolize a price equivalency on the wellhead. This conversion conforms to the Canadian Securities Regulators’ Nationwide Instrument 51-101 – Requirements of Disclosure for Oil and Gasoline Actions.

Apart from within the spotlight desk, the place the Firm makes use of the time period “crude oil” it’s referring to the combination of sunshine, medium and heavy crude oil volumes or {dollars} as is required. The place the Firm makes use of the time period “pure gasoline” it’s referring to the combination of typical pure gasoline and coal-bed methane pure gasoline volumes or {dollars} as is required.

All volumes on this press launch confer with the gross sales volumes of crude oil, pure gasoline and related by-products measured on the level of sale to third-party purchasers. For pure gasoline, this happens after the removing of pure gasoline liquids.

Oil and Gasoline Measures and Metrics

All reserve references on this press launch are “Firm Gross Reserves”. Firm gross reserves are the Firm’s whole working curiosity share of reserves earlier than deduction of any royalties and excluding any royalty pursuits of the Firm.

All future web revenues are acknowledged previous to provision of basic and administrative bills, curiosity, however after the deduction of royalties, working prices, estimated abandonment and reclamation price for wells with reserves attributed to them; and estimated future capital expenditures to e book these reserves. Future web revenues have been introduced on a earlier than tax foundation. Estimated values of future web income disclosed herein usually are not consultant of truthful market worth.

The Firm makes use of the next metrics in assessing its efficiency and evaluating itself to different corporations within the oil and gasoline business. These phrases would not have a standardized that means and due to this fact is probably not comparable with the calculation of comparable measures.by different corporations:

  1. Recycle ratio is calculated by taking the working netback and dividing it by the discovering and growth or discovering, growth and acquisition prices (together with adjustments in future growth prices) per boe. The ratio provides a sign of how profitably the corporate is changing its reserves. The upper the ratio the extra profitably it’s changing reserves.
  2. The Firm’s reserve life index (“RLI”) is calculated utilizing the Firm Gross Reserves and dividing them by the projected, subsequent years’ manufacturing from the unbiased reserve engineers’ yr finish reserve report. The RLI is utilized by administration to evaluate the longevity of the reserves being added which in flip provides details about the company decline charges of the Firm.
  3. Company decline (“Decline”) is the speed at which manufacturing from a grouping of belongings falls from the start of a fiscal yr to the tip of that yr.

Choose Abbreviations and Definitions

AIMCo

Alberta Funding Administration Company

bbl

barrel

bbls

barrels

boe

barrels of oil equal

boe/d

barrels of oil equal per day

gj

gigajoules

IFRS

Worldwide Monetary Reporting Requirements

Mbbls

thousand barrels

MMBtu

million British thermal models

Mboe

thousand boe

Mcf

thousand cubic ft

Mmcf

million cubic ft

Mmcf/d

million cubic ft per day

MSW

Combined candy Alberta benchmark oil value

NGL’s

pure gasoline liquids

WCS

Western Canada Choose benchmark oil value

WTI

West Texas Intermediate benchmark Oil value

No securities regulatory authority has both authorized or disapproved of the contents of this press launch.

SOURCE Journey Vitality Inc.

Cision View unique content material: http://www.newswire.ca/en/releases/archive/March2021/09/c6327.html

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