Pine Cliff Energy Announces Record Annual Results, Filing of 2022 Disclosure Documents

Source: www.gulfoilandgas.com 3/7/2023, Location: North America

Pine Cliff Energy Ltd. ("Pine Cliff" or the "Company") announces its year-end financial and operating results, the filing of its 2022 disclosure documents, its 2022 year-end reserves and 2023 guidance.

2022 and Fourth Quarter 2022 Highlights
Pine Cliff's adjusted funds flow1 of $40.2 million generated during the fourth quarter of 2022 and $163.2 million for 2022 were the highest fourth quarter and annual adjusted funds flow for the Company since inception.

Highlights from the fourth quarter and 2022 include:
• generated $40.2 million of adjusted funds flow1 ($0.11 per basic and fully diluted share) for the three months ended December 31, 2022, and $163.2 million ($0.47 per basic and $0.45 per fully diluted share) for the year ended December 31, 2022, 53% and 176% higher than the respective periods in the prior year;
• generated net earnings of $24.7 million ($0.07 per basic and fully diluted share) for the three months ended December 31, 2022, and $108.9 million ($0.31 per basic and $0.30 per fully diluted share) for the year then ended;
• production averaged 21,041 Boe/d2 and 21,015 Boe/d3 during the three months and year ended December 31, 2022, 10% and 14% higher than the comparable periods in 2021;
• paid dividends of $10.8 million ($0.03 per basic and fully diluted share) for the three months ended December 31, 2022 and $23.6 million ($0.07 per basic and fully diluted share) for the year ended December 31, 2022;
• repaid in full $30.0 million of term debt and $12.0 million of promissory notes outstanding by the end of the second quarter of 2022 to be debt free;
• had positive net cash1 of $55.9 million at December 31, 2022 compared to $49.7 million of net debt at December 31, 2021, a year over year change of $105.6 million;
• drilled, four (2.8 net) Pekisko oil wells and seven (1.4 net) Ellerslie liquids rich natural gas wells in 2022; and
• 2022 capital expenditures totaled $34.7 million, including development capital of $20.5 million, facilities optimization and maintenance capital of $8.4 million and abandonment and reclamation expenditures of $5.8 million.

Included in the filings were Pine Cliff's annual information form ("AIF"), which includes disclosure and reports related to reserves data and other oil and gas information pursuant to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities and its consolidated financial statements and related management's discussion and analysis for the year ended December 31, 2022 (the "Annual Report").

Reserve Report Highlights
Pine Cliff's independent reserve report was prepared by McDaniel & Associates Limited ("McDaniel") in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") with the effective date of December 31, 2022.

Highlights of the McDaniel reserve report include:
• Net present value for proved plus probable ("P+P") reserves of $411.5 million, discounted at 10%, an increase of $133.6 million, or 48%, from December 31, 2021, primarily as a result of an increase in forecast commodity prices;
• Pine Cliff increased its 2022 P+P reserves by 12.5 MMBoe4 (20%) prior to adjusting for 2022 production, a reserve replacement ratio of 163%, largely as a result of 10.0 MMBoe5 (16%) due to economic factors, 1.7 MMBoe6 (3%) of extensions and an increase of 0.8 MMBoe7 (1%) from technical revisions;
• Remaining P+P reserves of 67.6 MMBoe8 (86% conventional natural gas and coal bed methane) at December 31, 2022 increased by 4.8 MMBoe9 (8%) from 62.8 MMBoe10 (84% conventional natural gas and coal bed methane) at December 31, 2021, mainly as a result of economic factors; and
• Approximately 77% of total reserve volumes are classified as total proved reserves and approximately 23% are classified as probable reserves.

Pine Cliff's Reserves
McDaniel has used a three consultant average price (McDaniel, GLJ & Sproule) forecast, resulting in a price forecast of $4.23 and $4.40 per Mcf for AECO natural gas and US$80.33 and US$78.50 per Bbl for WTI oil in 2023 and 2024 respectively.

2023 Guidance
Pine Cliff's Board of Directors has approved a 2023 capital budget of $27.9 million to be fully funded from adjusted funds flow. Pine Cliff intends to spend approximately $12.8 million drilling four (2.8 net) Pekisko oil wells in Central Alberta and three (0.3 net) Ellerslie natural gas well in the Edson area, $8.6 million on facility optimization and maintenance capital and $6.5 million on abandonments and reclamation.

Based on $13.0 million of development capital and assuming that Pine Cliff makes no acquisitions or does not add to its 2023 capital program, Pine Cliff expects 2023 annual production volumes to range between 20,000 Boe/d11 and 21,000 Boe/d12.

Retirement of Chairman of the Board
Mr. George Fink has advised the Board that he will not be standing for re-election at the next Annual Meeting of Shareholders, scheduled to be held on May 17, 2023, and will be retiring as Chairman of the Board ("Chairman").

Mr. Fink founded Pine Cliff in November 2004 and was the President & CEO until succeeded by Mr. Hodge on January 1, 2012. Mr. Fink has been the Chairman since inception and has been instrumental in guiding and building Pine Cliff to a debt free, dividend paying natural gas company. Mr. Fink is the third largest shareholder in Pine Cliff (7.3%) and was instrumental in developing and maintaining the retail investor base that makes Pine Cliff unique. The Board would like to thank Mr. Fink for his dedication and service to Pine Cliff and wish him continued success and enjoyment with his retirement.


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