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Leucrotta Exploration First Quarter 2020 Results

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   |    Wednesday,May 27,2020

Leucrotta Exploration Inc. has reported its Q1 2020 results.

Highlights:

  • Drilled, completed and tied-in a second Montney well at Two Rivers.
  • Completed construction of the Two Rivers facility and commenced production of the two Montney wells.
  • Subsequent to March 31, 2020, disposed of certain non-core facility assets for proceeds of $2.2 million.
FINANCIAL RESULTS                  
    Three Months Ended March 31  
($000s, except per share amounts)   2020     2019     % Change  
                   
Oil and natural gas sales   5,791     8,102     (29 )
                   
Cash flow from operating activities   1,405     3,729     (62 )
     Per share – basic and diluted   0.01     0.02     (50 )
                   
Adjusted funds flow (1)   760     4,108     (81 )
     Per share – basic and diluted   –     0.02     (100 )
                   
Net (loss) earnings    (89,444 )   2,674     (3,445 )
     Per share – basic and diluted   (0.45 )   0.01     (4,600 )
                   
Capital expenditures   12,012     4,954     142  
                   
Proceeds on sale of equipment (2)   –     3,142     (100 )
                   
Working capital (deficiency)   (5,223 )   2,675     (295 )
                   
Common shares outstanding (000s)                  
     Weighted average – basic   200,525     200,525     –  
     Weighted average – diluted   200,525     200,939     –  
                   
     End of period – basic   200,525     200,525     –  
     End of period – fully diluted   226,392     227,082     –  

(1) See “Non-GAAP Measures” section

(2) The sale of equipment for proceeds of $3.1 million in Q1 2019 is exclusive of $2.7 million deposit received in Q4 2018.

OPERATING RESULTS (1)   Three Months Ended March 31  
    2020     2019     % Change  
                   
Daily production                  
     Oil and NGLs (bbls/d)   862     824     5  
     Natural gas (mcf/d)   12,354     14,049     (12 )
     Oil equivalent (boe/d)   2,921     3,166     (8 )
                   
Oil and natural gas sales                  
     Oil and NGLs ($/bbl)   39.02     51.84     (25 )
     Natural gas ($/mcf)   2.43     3.37     (28 )
     Oil equivalent ($/boe)   21.78     28.44     (23 )
                   
Royalties                  
     Oil and NGLs ($/bbl)   0.87     –     100  
     Natural gas ($/mcf)   0.01     –     100  
     Oil equivalent ($/boe)   0.31     –     100  
                   
Net operating expenses (2)                  
     Oil and NGLs ($/bbl)   9.95     6.37     56  
     Natural gas ($/mcf)   0.87     0.75     16  
     Oil equivalent ($/boe)   6.60     5.00     32  
                   
Net transportation and marketing expenses (2)                  
     Oil and NGLs ($/bbl)   1.46     1.51     (3 )
     Natural gas ($/mcf) (3)   1.78     0.98     82  
     Oil equivalent ($/boe)   7.97     4.74     68  
                   
Operating netback (2)                  
     Oil and NGLs ($/bbl)   26.74     43.96     (39 )
     Natural gas ($/mcf)   (0.23 )   1.64     (114 )
     Oil equivalent ($/boe)   6.90     18.70     (63 )
                   
Depletion and depreciation ($/boe)   (8.40 )   (9.58 )   (12 )
Asset impairment ($/boe)   (330.59 )   –     100  
General and administrative expenses ($/boe)   (3.97 )   (4.10 )   (3 )
Share based compensation ($/boe)   (0.14 )   (0.75 )   (81 )
Gain on sale of equipment ($/boe)   –     5.46     (100 )
Finance expense ($/boe)   (0.26 )   (0.35 )   (26 )
Net (loss) earnings ($/boe)   (336.46 )   9.38     (3,687)​  

Leucrotta President Robert J. Zakresky said: "In Q1 2020, Leucrotta’s capital was spent primarily on the Two Rivers facility and drilling and completing a second Montney well. $6.0 million was reclassified as assets held for sale relating to funds received subsequent to the end of Q1 2020 as part of a prior agreement with our partner at Two Rivers.

"Production remained relatively stable at 2,921 boe/d for the quarter as wells continue to outperform expectations. Production increased in late March with the start-up of the Two Rivers facility and is estimated to average approximately 3,000 boe/d for 2020.

"Leucrotta had $5.2 million of debt at the end of Q1 2020 and will look to reduce this through 2020 by eliminating all discretionary capital and continuing to sell non-core assets and equipment. In Q2 2020, Leucrotta sold a non-core disposal well for $2.2 million as part of ongoing initiatives to maintain balance sheet strength.

"We look forward to reporting on further business developments in the near future."



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