Corridor Announces 2016 Year End Results and Reserves
(firmenpresse) - HALIFAX, NOVA SCOTIA -- (Marketwired) -- 03/30/17 -- Corridor Resources Inc. (TSX: CDH) ("Corridor" or the "Company") announced today its 2016 year-end financial results and reserves evaluations. Corridor''s annual financial statements, annual management''s discussion and analysis and Annual Information Form for the year ended December 31, 2016 have been filed on SEDAR at and are available on Corridor''s website at . All amounts referred to in this press release are in Canadian dollars unless otherwise stated.
Year End Financial Results
The following table provides a summary of Corridor''s financial and operating results for the three and twelve months ended December 31, 2016 with comparisons to the three and twelve months ended December 31, 2015.
Selected Financial Information
2016 Highlights
Financial Summary for 2016
Q4 2016 Netback Analysis
2016 Reserve Information
Corridor currently has natural gas reserves in the McCully Field near Sussex, New Brunswick. GLJ assessed Corridor''s reserves in its report dated March 1, 2017 and effective as at December 31, 2016 ("2016 GLJ Reserves Report") and its updated report dated June 15, 2016 and effective December 31, 2015 ("GLJ 2015 Updated Reserves Report") (collectively, the "GLJ Reports") which were both prepared in accordance with National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities ("NI 51-101"). The GLJ 2015 Updated Reserves Report updated GLJ''s initial reserves report effective December 31, 2015 to assess the impact on Corridor''s reserves of the New Brunswick Government''s announcement on May 27, 2016 of its decision to continue the moratorium on hydraulic fracturing for an indefinite period. The GLJ 2015 Updated Reserves Report demonstrated that the New Brunswick Government''s decision resulted in a material reduction in Corridor''s undeveloped reserves, future development capital and associated net present value of future revenue as Corridor''s undeveloped wells no longer qualified as reserves given that such wells require hydraulic fracture stimulations. See Corridor''s material change report dated June 16, 2016, a copy of which is filed on SEDAR at .
The following table presents a summary from the GLJ Reports of Corridor''s total gross natural gas and shale gas reserves, before the deduction of royalties, using forecast prices and costs.
The decrease in Corridor''s proved plus probable natural gas reserves from December 31, 2015 to December 31, 2016 is primarily attributable to Corridor''s production in 2016.
GLJ assessed the net present value of Corridor''s natural gas, oil and natural gas liquids reserves in the GLJ Reports, based on GLJ''s forecast prices as at January 1, 2016 and 2015, as applicable, as follows:
Net Present Value ($ in million) - undiscounted
Net Present Value ($ in million) - discounted at 10%
The increase in the net present value of Corridor''s proved plus probable natural gas reserves is primarily attributable to the increase in the estimate of future natural gas revenues due to lower future transportation costs expected as a result of an anticipated increase in the Company''s sales to the local Maritimes market as opposed to the New England market.
A summary of the 2016 GLJ Reserves Report will be available on Corridor''s website at on or about March 30, 2017 and in Corridor''s Annual Information Form for the year ended December 31, 2016, which is filed on SEDAR at .
Anticosti Joint Venture
Corridor has a 21.67% interest in Anticosti Hydrocarbons L.P., which has undeveloped lands on Anticosti Island, Quebec. The Anticosti Joint Venture is a limited partnership between Corridor, Ressources Quebec Inc., a subsidiary of Investissement Quebec (an affiliate of the Government of Quebec), Petrolia Inc. and Saint-Aubin E&P Quebec Inc. formed to appraise and potentially develop hydrocarbon resources on Anticosti Island.
Beginning in December 2015, the Premier of Quebec stated on numerous occasions that he is not in favor of the development of hydrocarbons on Anticosti Island and that he is willing to face the financial consequences of pulling out of the Anticosti Joint Venture and cancelling the agreements governing the Anticosti Joint Venture. Subsequently, in March 2016, the Premier issued a statement confirming that the Quebec Government would respect the Anticosti Joint Venture agreements as long as the project met environmental standards.
In January 2017, the Quebec Government announced its decision to support the designation of Anticosti Island as a UNESCO World Heritage site. If designated as a UNESCO World Heritage site, the Anticosti Joint Venture would not be permitted to engage in development or production of oil and gas on the Island. While the Quebec Government confirmed its intention to respect the Anticosti Joint Venture agreements, there is uncertainty that Anticosti Hydrocarbons'' drilling program will proceed in 2017. Corridor is reviewing its options to ensure the value of its investment in Anticosti Hydrocarbons is protected.
Old Harry
On January 15, 2017, the Canada - Newfoundland and Labrador Offshore Petroleum Board issued exploration license EL-1153 to Corridor in exchange for the surrender of exploration license EL-1105 covering the Newfoundland and Labrador sector of the Old Harry Prospect in the Gulf of St. Lawrence. The new exploration license expires on January 14, 2020, subject to extension by Corridor for an additional one year period (January 14, 2021) with the payment of a $1 million deposit.
Corridor intends to purchase a user license for a controlled source electro-magnetic ("CSEM") data program to investigate the resistivity of geological prospects over the Newfoundland and Labrador sector of the Old Harry prospect, similar to resistivity logging in well bores of potential hydrocarbon zones. Highly resistive layers in a geological structure measured with CSEM technology could indicate hydrocarbon bearing reservoirs and, therefore, would serve to reduce exploration risk and increase the likelihood of finding commercial quantities of hydrocarbons. The undertaking of the CSEM program, currently planned by an independent service provider for a seven day period in the fall of 2017, is subject to the receipt of the necessary regulatory approvals and vessel availability.
Guidance
Corridor has revised its guidance for the period from April 1, 2016 to March 31, 2017 from guidance previously disclosed on October 7, 2016 to reflect actual results to December 31, 2016 and expected natural gas prices from January 1, 2017 to March 31, 2017, as follows:
Revised Guidance from April 1, 2016 to March 31, 2017
Notwithstanding a significant decrease in natural gas prices at AGT from those previously forecasted for the first quarter of 2017, Corridor''s cash flow from operations for the period from April 1, 2016 to March 31, 2017 is only expected to decrease by $0.2 million to $4.4 million. This is due to the financial hedges Corridor put in place and lower general and administrative expenses.
Corridor is currently evaluating alternatives for its optimization strategy for the period from April 1, 2017 to March 31, 2018 and anticipates providing guidance for that period at its annual shareholders'' meeting, currently scheduled for May 11, 2017.
"Corridor is well positioned for 2017," said Steve Moran, President and Chief Executive Officer. "Our balance sheet is very strong, with a forecast $33.2 million of positive working capital at the end of Q1 2017. We are very pleased with the results of our optimization strategy over the past two years, taking advantage of the winter pricing premium of our natural gas market, while preserving reserves for production in future years. We expect this winter pricing premium to continue for the foreseeable future. Corridor has been evaluating new opportunities to deploy our working capital, but with the prolonged downturn in commodity prices, we have been patient in our approach. We will continue to be selective in any opportunities we may decide to pursue."
Corridor is a Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and Quebec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick. In addition, Corridor has a shale gas prospect in New Brunswick, an offshore conventional hydrocarbon prospect in the Gulf of St. Lawrence and an unconventional hydrocarbon prospect through a 21.67% interest in Anticosti Hydrocarbons L.P., a joint venture with undeveloped lands on Anticosti Island, Quebec.
Forward-Looking Statements
This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this press release contains forward-looking statements pertaining to: the characteristics of Corridor''s and the Anticosti Joint Venture''s properties; business plans and strategies (including plans to shut-in production to take advantage of expected price differentials), exploration and development plans, including timing of such plans (including the CSEM and Anticosti Hydrocarbons L.P.''s plans); expectation of the price of natural gas; expectations regarding Corridor''s financial resilience and plans to maintain a strong balance sheet and the estimates of reserves and the net present values of reserves; the financial position of the Company; government plans, including in particular the Quebec Government''s plans in respect of the Anticosti Joint Venture and Anticosti Island; and expectations regarding natural gas prices, the U.S. Canada exchange rate, natural gas production, operating netbacks, cash flow from operations, capital expenditures and working capital estimates;
Statements relating to "reserves" are 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 can profitably be produced in the future.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Corridor and its shareholders.
Forward-looking statements are based on Corridor''s current beliefs as well as assumptions made by, and information currently available to, Corridor concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas commodity prices, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through development and exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in Corridor''s Annual Information Form for the year ended December 31, 2016.
The forward-looking statements contained in this press release are made as of the date hereof and Corridor does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Oil and Gas Advisory
Boe Conversion
All calculations converting natural gas to crude oil equivalent have been made using a ratio of six mscf of natural gas to one barrel of crude oil equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six mscf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Contacts:
Steve Moran
President
Corridor Resources Inc.
(902) 429-4511
(902) 429-0209 (FAX)
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Datum: 30.03.2017 - 17:47 Uhr
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