|By Marketwired .||
|December 7, 2012 08:00 AM EST||
CALGARY, ALBERTA -- (Marketwire) -- 12/07/12 -- Eagle Energy Trust (the "Trust") (TSX:EGL.UN) is pleased to provide an operational update of its subsidiary Eagle Energy Acquisitions LP ("Eagle"), including Eagle's 2013 capital program, production guidance and operating cost budget, as well as benchmark calculations and commentary regarding the sustainability of its distributions.
This press release contains statements that are forward looking. Investors should read the "Note Regarding Forward-Looking Statements" at the end of this press release. Figures within this press release are presented in Canadian dollars unless otherwise indicated.
2012 Exit Rate Guidance Achieved
Eagle's current working interest production is 3,300 barrels of oil equivalent per day ("boe/d"). With 2012 exit production guidance having been met, Eagle is well positioned to achieve 2013 production targets.
Eagle also maintains its full year 2012 guidance previously provided to the market, that being average production of approximately 2,700 boe/d, funds flow from operations of approximately $37.0 million (assuming $US 88.00 WTI, natural gas $US 2.90 NYMEX and 2012 average working interest production of 2,700 boe/d), a basic payout ratio of approximately 70%, average operating costs of approximately $15.00 per boe, capital expenditures of approximately $43.0 million and a 2012 exit debt to trailing cash flow ratio of approximately 1.0x.
2013 Summary Capital, Production and Operating Cost Guidance
Eagle is pleased to announce that the Board of Directors has approved a 2013 capital budget of $US 24.0 million (down 44% year over year).
Eagle's 2013 budget demonstrates a planned move from a growth phase on its Luling and Midland assets, toward a sustainability phase, where the level of capital necessary to maintain production, plus distributions paid to unitholders, will be more closely aligned with funds flow from operations.
Management anticipates that, based on 2013 estimated levels of drilling and operating costs, an annual budget of $US 24.0 million should be sufficient to grow 2013 average working interest production by approximately 11% over 2012 average working interest production.
With this 2013 capital budget, Eagle intends to execute an 11 (gross) well drilling program at Midland and Luling and a 3 (gross) well re-fracturing program at Midland. In addition, a portion of the capital investment will be deployed to add new zones in Midland, test Salt Flat analogs and pilot enhanced recovery initiatives that would serve to flatten the corporate decline, increase recovery rates, and cost effectively add reserves.
Eagle anticipates average 2013 working interest production in the range of 2,900 to 3,100 boe/d (up 11% year over year) comprised of 88% oil, 8% NGLs and 4% gas.
Operating costs (inclusive of transportation) per boe are expected to average in the range of $12.00 to $14.00 per boe (down 13% year over year).
Funds flow from operations of approximately $41.0 million using the following assumptions:
-- average working interest production of 3,000 boe/d; -- pricing at $US 90.00 per barrel WTI oil, $US 2.90 per mcf NYMEX gas and $US 39.60 per barrel NGLs (NGLs price is calculated as 44% of the WTI price); -- negative differential (excluding transportation) to WTI oil of $US 2.56 per barrel in Midland and $US 1.89 per barrel in Luling; -- average operating costs (inclusive of transportation) of $13.00 per boe; and -- foreign exchange at $1.00 CDN/US.
A table showing the sensitivity of Eagle's funds flow to production and pricing is set out below under the heading "Sensitivities".
2013 Capital Budget
The Board of Directors has approved a 2013 capital budget of $US 24.0 million, consisting of:
-- in the Luling Area: -- 6 (4.8 net) horizontal oil wells -- 2 (1.6 net) salt water disposal well workovers -- Addition to an existing battery -- Land, seismic, workovers -- in the Midland Area: -- 5 (4.6 net) vertical oil wells -- 1 (0.9 net) water source well -- 3 refracs
The capital budget excludes corporate and property acquisitions, which are evaluated separately on their own merits.
Calculations and Commentary Regarding the Sustainability of Eagle's Distributions Payout Ratios (as a percentage of cash flow) 2012 Guidance 2013 Guidance Notes ------------------------------------- -------------- -------------- ----- Basic Payout Ratio (i.e.: Distribution) 70% 77% (1) Plus: Capital Expenditures 116% 59% (2) Equals: Corporate Payout Ratio 186% 136% (3) Adjusted Payout Ratio (i.e.: Distribution - DRIP proceeds - Capital Expenditures) 139% 85% (4) Financial Strength ------------------------------------- Debt to trailing cashflow 1.03 0.78 (5) % Drawn on existing credit facility 79% 66% Notes: 1. Eagle calculates the Basic Payout Ratio as follows: Unitholder Distributions = Basic ---------------------------------------- Funds flow from Operations Payout Ratio A table showing the sensitivity of Eagle's Basic Payout Ratio to production and pricing is set out below under the heading "Sensitivities". 2. A portion of the 2013 capital investment, approximately $1.2 million, will be deployed to add new zones in Midland, test Salt Flat analogs and pilot enhanced recovery initiatives that would serve to flatten the corporate decline, increase recovery rates, and cost effectively add reserves. 3. Eagle calculates the Corporate Payout Ratio as follows: Capital Expenditures + Unitholder Distributions = Corporate ----------------------------------------- Funds flow from Operations Payout Ratio A table showing the sensitivity of Eagle's Corporate Payout Ratio to production and pricing is set out below under the heading "Sensitivities". 4. Approximately 65% of Eagle's unitholders presently elect to receive their monthly distributions in its distribution reinvestment and Premium Drip(TM) programs. The benefit of these distribution reinvestment programs is that it reduces the cash payout, but this can come at a cost of dilution. Eagle will continue to weigh the benefits of a reduced cash payout against the implied costs of this method of financing, (including unitholder dilution and becoming over-reliant on dilutive financing) and make adjustments as deemed prudent. 5. Debt to cash flow is a bigger driver than the percentage drawn on current bank facilities. Increased leverage means increased distribution sustainability risk. Eagle's view is that the maximum target would be 1.5x for larger entities, and 1.0x for smaller entities. Underlying Asset Quality Benchmarks Oil and Gas Fundamentals 2012 Guidance 2013 Guidance Notes ------------------------------ -------------- ------------------ ----- Oil Weighting 92% 88% Gas Weighting (@ 6:1) 3% 4% NGL Weighting 5% 8% Operating Expense $ 15.00 $ 12.00 to $14.00 (1) Field Netbacks $ 48.57 $ 51.17 (2) % Hedged 56% 43% (3) Notes: 1. Including transportation. 2. Directly relates to producer's ability to generate free cash flow. Assuming average operating costs (inclusive of transportation) of $13.00 per boe. 3. Hedging supports sustainability in a volatile commodity price environment (target 50%). 2013 hedges currently in place lock in an average of 1,300 barrels per day at WTI prices ranging from $US 87.00 to $US 108.25 per barrel. Sustaining vs Growth Capital 2013 Guidance ----------------- Base Production (boe/d) - 2012 average working interest production 2,700 Corporate Decline Rate % 36% Required Make-up (boe/d) 972 Capital Efficiency stats ($ / boe / day) $26,611(1) Notes: 1. This is the cost for which a producer can replace a barrel of production (i.e., how much does it cost to replace declines). Sensitivities Sensitivity of Funds flow ($ millions) to Commodity Price and Production ---------------------------------------------------------------------------- 2013 Average WTI $US 80.00 $US 90.00 $US 100.00 --------------------------------------------- 2013 Average WI 2,800 35.3 37.6 41.1 Production 3,000 38.3 41.0 45.1 (boe/d) 3,200 41.3 44.7 49.1 Sensitivity of Corporate Payout Ratio to Commodity Price and Production ---------------------------------------------------------------------------- 2013 Average WTI $US 80.00 $US 90.00 $US 100.00 2013 Average WI 2,800 157% 147% 135% Production 3,000 145% 136% 123% (boe/d) 3,200 134% 124% 113% Sensitivity of Basic Payout Ratio to Commodity Price and Production ---------------------------------------------------------------------------- 2013 Average WTI $US 80.00 $US 90.00 $US 100.00 2013 Average WI 2,800 90% 84% 77% Production 3,000 83% 77% 71% (boe/d) 3,200 77% 71% 65% Assumptions: 1. Annual distributions are held at current levels of $1.05 per unit per year. 2. No new equity issued, other than distribution reinvestment program. 3. Field operating costs, including transportation of $13.00 per barrel.
Non-IFRS Financial Measures
Statements throughout this press release make reference to the terms "funds flow from operations", "distributions", "basic payout ratio" and "corporate payout ratio" which are non-IFRS financial measures that do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Investors should be cautioned that these measures should not be construed as an alternative to net income calculated in accordance with IFRS. Management believes that "funds flow from operations", "basic payout ratio" and "corporate payout ratio" provide useful information to investors and management since these terms reflect the quality of production, the level of profitability, the ability to drive growth through the funding of future capital expenditures and the sustainability of distributions to unitholders. Funds flow from operations is calculated before changes in non-cash working capital. References to "distributions" are to cash distributions to Unitholders in accordance with the distribution policies of the Trust. Distributable cash is a measure generally used by Canadian open-ended trusts as an indicator of financial performance and management believes that prospective investors may consider the cash distributed by the Trust relative to the price of the Units when assessing an investment in Units.
Note Regarding Forward-Looking Statements
Certain of the statements made and information contained in this press release are forward-looking statements and forward looking information (collectively referred to as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historic fact are forward-looking statements.
Forward-looking statements include those pertaining to Eagle's working interest production exit rate for 2012, average working interest production for 2012 and 2013, drilling and on production program for 2013, 2013 capital budget amount and specific uses, 2013 operating costs, commodity prices, US/Canadian dollar exchange rates, funds flow from operations, cash available from the distribution reinvestment and Premium Drip(TM) programs, corporate and basic payout ratios, sensitivities to production rates and commodity prices, sustainability of production, amount of and sustainability of distributions on the Trust's units and existing credit facilities. In determining its drilling program, timing for bringing wells onto production, the production rates from the wells and operating costs, management has made assumptions relating to, among other things, anticipated future production from wells in the Luling area and Midland area, regulatory approvals, future commodity prices and US/Canadian dollar exchange rates, the regulatory framework governing taxes and environmental matters in the U.S. and Texas, the ability to market future production from the Luling area and Midland area, future capital expenditures and the geological and engineering reserves estimates in respect of Eagle's properties in the Luling area and Midland area. These assumptions necessarily involve known and unknown risks and uncertainties inherent in the oil and gas industry such as geological, environmental, technical, drilling and processing problems, the volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, obtaining regulatory approvals, competition for services and supplies as well as other business risks that are set out in the Trust's Annual Information Form dated March 22, 2012 under the heading "Risk Factors".
The success of Eagle's drilling program is a key assumption in the production estimates for the 2012 and 2013 financial years. The primary risk factors which could lead to Eagle not meeting its production targets are: (i) production rates from drilling activity are less than expected; (ii) a lack of access to drilling rigs and related equipment on a timely basis and at reasonable prices due to high industry demand or poor weather; (iii) not obtaining regulatory approvals; and (iv) unexpected operational delays and challenges. Increases in capital costs from forecast amounts can result from the foregoing reasons as well as general cost inflation in the industry. Additionally, Eagle may choose to decrease capital expenditures from those anticipated in its budget projections, therefore affecting production estimates for the 2012 and 2013 financial years. There are many factors that could result in production levels being less than anticipated, including greater than anticipated declines in existing production due to poor reservoir performance, the unanticipated encroachment of water or other fluids into the producing formation, mechanical failures or human error or inability to access production facilities, among other factors.
As a result of these risks, actual performance and financial results in 2012 and 2013 may differ materially from any projections of future performance or results expressed or implied by these forward-looking statements. Eagle's production rates, operating costs and 2013 capital budget, and the Trust's distributions, are subject to change in light of ongoing results, prevailing economic circumstances, obtaining regulatory approvals, commodity prices and industry conditions and regulations. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those set out in this press release. New factors emerge from time to time, and it is not possible for management to predict all of these factors or to assess in advance the impact of each such factor on the operations of Eagle, or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
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. Although management believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date the forward-looking statements were made, 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 the Trust and its unitholders.
Oil and Natural Gas Measures
This press release contains disclosure expressed as "boe" or "boe/d". All oil and natural gas equivalency volumes have been derived using the conversion ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of oil. Equivalency measures may be misleading, particularly if used in isolation. A 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 well head. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf:1 bbl would be misleading as an indication of value.
About the Trust
Eagle Energy Trust is an energy trust created to provide investors with a publicly traded, oil and natural gas focused, distribution producing investment with favourable tax treatment relative to taxable Canadian corporations.
Richard W. Clark, President and Chief Executive Officer
The Trust's units are traded on the Toronto Stock Exchange under the symbol EGL.UN.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Jun. 30, 2016 01:00 PM EDT Reads: 1,486
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2016' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited t...
Jun. 30, 2016 12:30 PM EDT Reads: 397
"We work in the area of Big Data analytics and Big Data analytics is a very crowded space - you have Hadoop, ETL, warehousing, visualization and there's a lot of effort trying to get these tools to talk to each other," explained Mukund Deshpande, head of the Analytics practice at Accelerite, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jun. 30, 2016 12:00 PM EDT Reads: 513
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Jun. 30, 2016 12:00 PM EDT Reads: 1,255
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jun. 30, 2016 11:45 AM EDT Reads: 574
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
Jun. 30, 2016 11:30 AM EDT Reads: 618
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jun. 30, 2016 11:15 AM EDT Reads: 716
The idea of comparing data in motion (at the sensor level) to data at rest (in a Big Data server warehouse) with predictive analytics in the cloud is very appealing to the industrial IoT sector. The problem Big Data vendors have, however, is access to that data in motion at the sensor location. In his session at @ThingsExpo, Scott Allen, CMO of FreeWave, discussed how as IoT is increasingly adopted by industrial markets, there is going to be an increased demand for sensor data from the outermos...
Jun. 30, 2016 11:00 AM EDT Reads: 437
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
Jun. 30, 2016 11:00 AM EDT Reads: 471
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jun. 30, 2016 11:00 AM EDT Reads: 1,090
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
Jun. 30, 2016 10:45 AM EDT Reads: 663
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Jun. 30, 2016 10:30 AM EDT Reads: 566
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Jun. 30, 2016 10:15 AM EDT Reads: 983
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
Jun. 30, 2016 10:00 AM EDT Reads: 536
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profession...
Jun. 30, 2016 09:33 AM EDT Reads: 249
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Jun. 30, 2016 09:02 AM EDT Reads: 246
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
Jun. 30, 2016 09:00 AM EDT Reads: 436
Apixio Inc. has raised $19.3 million in Series D venture capital funding led by SSM Partners with participation from First Analysis, Bain Capital Ventures and Apixio’s largest angel investor. Apixio will dedicate the proceeds toward advancing and scaling products powered by its cognitive computing platform, further enabling insights for optimal patient care. The Series D funding comes as Apixio experiences strong momentum and increasing demand for its HCC Profiler solution, which mines unstruc...
Jun. 30, 2016 08:45 AM EDT Reads: 583
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Jun. 30, 2016 08:00 AM EDT Reads: 559
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jun. 30, 2016 07:00 AM EDT Reads: 448