Clearview Resources Ltd. ("Clearview" or the "Company") is pleased to announce its financial and operational results for the three months ended March 31, 2024.
Production for the three months ended March 31, 2024 was down 9% to average 1,634 barrels of equivalent per day ("boe/d") versus the comparative quarter of 2023 at 1,801 boe/d. The decrease was due to lower oil production of 18% as a result of the dispositions in the first quarter of 2023, which were primarily oil producing wells, natural production declines of approximately 12% and production downtime in the quarter of approximately 105 boe/d primarily due to severe cold temperatures in January. The decrease was partially offset by production from the oil well drilled in Wilson Creek which has been producing since late in the third quarter of 2023. Natural gas liquids production, generally associated with natural gas production, increased by 7%, primarily due to the natural gas production from the new oil well being produced through third party natural gas processing facilities which extract a high percentage of natural gas liquids from the gas stream. Natural gas production for the three months ended March 31, 2024, decreased by 12%. These declines were partially offset by natural gas production volumes associated with the new oil well at Wilson Creek.
Adjusted funds flow(1) for the three months ended March 31, 2024 was $1.2 million ($0.10 per share(3)), a decrease of 37% compared to 2023, primarily due to lower realized sales prices for all of the Company's production and lower production volumes, resulting in a decrease in revenue of $1.6 million. The decrease in revenue for 2024 was offset by lower royalties due to the sliding scale nature of Crown royalties, realized gains on financial instruments, additional processing income and lower operating costs due to dispositions undertaken in 2022 and in the first quarter of 2023 as well as reduced spending on workovers and spending efficiencies on repairs and maintenance. Capital expenditures(2) for the three months ended March 31, 2024 were $0.8 million and were primarily incurred in Windfall on a waterflood expansion project and an associated well reactivation.
Clearview had net debt(1) outstanding of $3.3 million at March 31, 2024, which included bank debt of $1.1 million, a working capital deficit of $1.0 million and the Company's convertible debentures of $1.2 million.
OPERATIONS
During the fourth quarter of 2023 and the first quarter of 2024, Clearview completed an expansion of the waterflood at its Windfall oil property. The initial waterflood, started in 2012, showed positive results by arresting oil declines and reducing gas/oil production ratios. The Company is currently injecting approximately 1,600 bbl/d of water into the expanded waterflood scheme resulting in an instantaneous voidage replacement ratio of approximately 3 times.
Clearview drilled its first well in five years in the third quarter of 2023. The Wilson Creek 15-25-043-05W5 Cardium horizontal well (67% working interest) came on production late in the third quarter and over the first 8 months, gross production averaged approximately 131 barrels per day ("bbl/d") of oil and 142 thousand cubic feet per day ("mcf/d") of natural gas for a total of 190 boe/d (including estimated natural gas liquid recoveries of 35 bbl/d). Since lowering the downhole pump in early March, the well has averaged approximately 83 bbl/d of oil and 101 mcf/d of natural gas for a total of 125 boe/d (including estimated natural gas liquid recoveries of 25 bbl/d).
Clearview continues to be proactive in reducing its carbon footprint and greenhouse gas emissions. The Company has implemented two additional programs to accomplish these efforts. Through these programs, the Company has reduced the amount of methane being vented in the field. The measured reduction in methane venting generates carbon credits which can be used to partially offset Clearview's carbon tax obligations and the remainder can be sold. The emission reductions in 2023 alone were over 5,900 tons of CO2 equivalent, comparable to removing over 1,200 vehicles from the road for a year. Total credits generated in 2023 were $0.3 million, more than offsetting the Company's carbon tax obligation. Clearview estimates credits generated in the first quarter of 2024 totalled $0.1 million.
The Company has commenced its abandonment and reclamation program for 2024. Clearview's closure spending quota as mandated by the Alberta Energy Regulators Inventory Reduction Program is $0.61 million. The Company is focusing it's 2024 program on two progressive area closure projects as well as ongoing environmental assessments on 40 sites in Alberta. Expenditures on decommissioning projects in 2024 are expected to be approximately $0.8 million.
CORPORATE UPDATE
Clearview is also pleased to announce the results of its annual general meeting of shareholders (the "Meeting"), which was held on May 28, 2024. Shareholders voted in favour of all matters of business before the Meeting. Each of those matters is set out in detail in the Management Information Circular published in connection with the Meeting, which is available on the Company's profile at www.sedarplus.ca.
Clearview is very excited to welcome Patricia Saputo to its Board of Directors. Ms. Saputo is a longtime shareholder of the Company and brings an extensive and impressive business, finance and accounting background to the Board. Ms. Saputo is a Fellow of the Chartered Professional Accountants (FCPA) and has her ICD.D designation from the Institute of Corporate Directors. Ms. Saputo will be assuming the role as Chair of the Audit Committee.
Mr. Todd McAllister and Mr. Harold Pine did not stand for re-election at the Meeting. Clearview would like to extend a sincere thank you to Mr. McAllister and Mr. Pine for their service to Clearview. Mr. McAllister had been a director for the past 11 years and served as Chair of the Compensation Committee and a member of the Audit Committee during that time. During Todd's tenure as a board member, he played an instrumental role in the development of Clearview and his expertise in the oil and gas industry has been a valuable asset to the Company. Mr. Pine had been a director for the past 6 years, following the merger with Bashaw Oil Corp., and served as a member of the Compensation Committee. During Harold's tenure as a board member, his expertise in finance, capital markets and commodity markets has been a valuable asset to the Company. We wish them both all the best in the future.
OUTLOOK
Clearview's strategy remains to provide liquidity for its shareholders. The Company is actively evaluating strategic acquisition opportunities, both marketed and unsolicited, and views these as potential paths to liquidity. Clearview submitted numerous bids to acquire various assets and companies over the past 12 months totaling more than $250 million. Although the Company has not yet closed on an opportunity, Clearview continues to explore strategic growth opportunities, both internally and externally.
Clearview would like to thank its shareholders for their continued support as we evaluate our internal development plans and external opportunities to grow production volumes and adjusted funds flow towards providing liquidity for shareholders.
Clearview's March 31, 2024 interim financial statements and management's discussion and analysis are available on the Company's website at www.clearviewres.com and SEDAR+ at www.sedarplus.ca.
