Longview Announces Third Quarter 2013 Results

 CALGARY, Nov. 7, 2013 /CNW/ - Longview Oil Corp. ("Longview" or the  "Corporation") (TSX: LNV) is pleased to announce the financial and operating  results for the quarter ended September 30, 2013.                                                                                               Three months ended         Nine months ended                              September 30,             September 30,                           2013         2012         2013         2012                                                                        Financial ($000, except as otherwise indicated) ((1))                                                         Sales excluding realized hedging       $  41,591    $  32,874    $ 113,965    $ 104,517    per share( (2))      $    0.89    $    0.70    $    2.43    $    2.23    per boe              $   77.16    $   59.43    $   69.58    $   61.42  Funds from operations  $  17,959    $  14,360    $  49,455    $  44,781    per share( (2))      $    0.38    $    0.31    $    1.05    $    0.96    per boe              $   33.32    $   25.96    $   30.20    $   26.32  Net income and comprehensive income   $   4,658    $   1,473    $  10,694    $  13,198    per share( (2))      $    0.10    $    0.03    $    0.23    $    0.28  Dividends declared     $   7,039    $   7,026    $  21,100    $  21,060    per share            $    0.15    $    0.15    $    0.45    $    0.45  Expenditures on property, plant and equipment              $  13,373    $   8,822    $  29,828    $  32,728  Payout ratio                114%         110%         103%         120%  Working capital deficit                $   9,651    $   5,784    $   9,651    $   5,784  Bank indebtedness      $ 115,414    $ 114,671    $ 115,414    $ 114,671  Shares outstanding at end of period (000)       46,928       46,837       46,928       46,837  Basic weighted average shares (000)      46,923       46,831       46,885       46,796                                                                          Operating ((1))                                                          Daily production                                                           Crude oil (bbls/d)       4,122        3,938        4,227        4,126    NGLs (bbls/d)              511          551          527          572    Natural gas (mcf/d)      7,357        9,144        7,478        9,076    Total boe/d @ 6:1        5,859        6,013        6,000        6,211  Average prices (excluding hedging)                                                        Crude oil ($/bbl)    $   98.49    $   77.20    $   86.57    $   79.73    NGLs ($/bbl)         $   53.17    $   54.94    $   52.26    $   55.56    Natural gas ($/mcf)  $    2.58    $    2.52    $    3.21    $    2.28  Operating netback ($/boe)                                                                    Petroleum and                                                natural gas sales    $   77.16    $   59.43    $   69.58    $   61.42    Royalties              (13.06)      (10.70)      (12.14)      (11.86)    Operating expense      (20.48)      (20.44)      (20.92)      (20.11)    Operating netback    $   43.62    $   28.29    $   36.52    $   29.45                                                                          (1) Boe, funds from operations, payout ratio and working capital     deficit do not have a standardized meaning under GAAP.     Refer to "Non-GAAP Measures, Definitions and Abbreviations" in     this press release.  (2) Based on basic weighted average shares outstanding.        Message to Shareholders     --  Funds from operations increased by 25% in the third quarter of         2013 to $18.0 million from $14.4 million received in the third       quarter of 2012.   o On a per share basis, funds from operations for the third quarter  of 2013 was $0.38 per share versus $0.31 per share in Q3 2012, an  increase of 25%.   o The increase in funds from operations is attributable to higher        crude oil production and strengthening pricing for Canadian oil     sales.     --  The payout ratio for the first nine months of 2013 was 103%       versus 120% in the first nine months of 2012.   o Preservation of a sustainable payout ratio is the cornerstone of        our business strategy which is based on the maintenance of a solid     balance sheet while funding our dividend payments and capital     expenditure programs primarily with funds from operations.                                                                                              Three months ended             Nine months ended                               September 30,                 September 30,           ($000)                                   %                   2012     %                    2013        2012   change     2013               change  Cash provided by operating                             77                           17 % activities      $  19,833   $  11,226       % $  50,784   $  43,239  Changes in non-cash                              (110)                         (39) % working capital     (406)       4,240       %     2,745       4,517  Interest on bank                                     12                           16 % indebtedness      (1,481)     (1,328)       %   (4,187)     (3,601)  Expenditures on decommissioning                        (94)                         (82) % liability              13         222       %       113         626  Funds from                               25                           10 % operations      $  17,959   $  14,360       % $  49,455   $  44,781  Dividends                                 -                            - % declared            7,039       7,026       %    21,100      21,060  Capital expenditures (                           52                          (9) % (1))               13,373       8,822       %    29,828      32,728  Total funds                              29                          (5) % outflow         $  20,412   $  15,848       % $  50,928   $  53,788  Payout ratio (                                                             (2))                 114%        110%              103%        120%                                                                             (1) Capital expenditures includes expenditures on property, plant and equipment and expenditures on exploration and evaluation assets.  (2) Payout ratio is calculated as cash dividends declared and capital expenditures divided by funds from operations.                                             --  Crude oil production increased by 5% in the third quarter of       2013 to 4,122 bbls/d from 3,938 bbls/d in Q3 2012.   o Extreme spring break-up conditions persisted well into the third        quarter of 2013 causing delays in our capital program. As a result,     Longview went four straight months (May through August 2013)   without being able to add any new production volumes.   o In spite of these delays in executing our 2013 drilling program,        our crude oil production volumes remained relatively stable when     compared to levels reported in Q2 and Q1 of 2013. Natural gas     liquids and natural gas production volumes also remained at stable     rates demonstrating the high quality, low decline nature of our     existing production base.     --  Crude oil revenue, which comprised 90% of total revenue in the         third quarter of 2013, increased by 34% to $37.3 million from       $28.0 million in Q3 2012.   o The WTI/Canadian oil price differential narrowed in the third  quarter of 2013 to $5.27/bbl as compared to $6.37/bbl in 2012.   o The price of WTI increased significantly in the third quarter of        2013 averaging US$105.77/bbl versus US$92.19/bbl last year.     --  Operating netbacks increased by 54% from $28.29/bbl in Q3 2012       to $43.62/bbl in the third quarter of 2013.   o Operating costs were held constant with prior year levels as  ongoing cost reduction efforts are offsetting inflationary  pressures seen throughout the Western Canadian sedimentary basin.   o Royalty expenses increased due to higher sales whereas royalties as        a percentage of sales decreased due to lower rates associated with     new production additions.     --  A total of six gross (5.6 net) wells were drilled during the         third quarter of 2013 resulting in five gross (4.8 net) oil         wells. At Northgate, Saskatchewan the Corporation drilled two         gross (two net) wells targeting the Mississippian Midale         formation. The initial well produced at a rate of 246 boe/d         during the initial 30 days of production, comprised of 204         bbls/d of 41(O) API light oil and 250 mcf/d of natural gas. The         second well has been on-stream for 14 days with production         averaging 437 boe/d comprised of 316 bbls/d of 41(O) API light         oil and 725 mcf/d of natural gas. A third well was drilled in         early October and will be on-stream by mid-November. Longview         has identified up to nine gross (nine net) additional locations         on this project.     --  On a year to date basis our capital expenditures program has         resulted in total production additions of 1,578 boe/d comprised       of 1,395 bbls/d of light oil and 1,100 mcf/d of natural gas.   o This represents a capital efficiency of $18,900 per boe/d with        light oil volumes comprising 88% of total production additions.  Commodity Hedging Program     --  Longview's hedging program for calendar 2013 and 2014 includes         crude oil hedges of 1,000 bbls/d at $90.29/bbl for January to         December 2013 and 1,000 bbls/d at $93.00/bbl for February to         December 2013 as well as 2,000 bbls/d at $94.84/bbl for January         to December 2014.     --  The Corporation will continue to hedge a portion of its         production in the future in order to provide stability to cash         flow in order to fund our dividend payments and capital         expenditure program.  Looking Forward     --  Longview's business strategy is based on providing shareholders         with attractive long term returns that combine both income and         moderate growth by exploiting our assets in a financially         disciplined manner and by acquiring additional long-life oil         and gas assets of a similar nature. Longview has a base decline         rate of approximately 19% which allows the Corporation to         maintain production with a modest level of capital         expenditures, as demonstrated during 2013 and 2012.     --  Our capital program is designed to maintain production at 2012         levels while maintaining a sustainable payout ratio. Our         planned capital program for the fourth quarter of 2013 is $7.0         million and will be focused on further development of the         Midale formation in Southeast Saskatchewan where we have an         extensive land base, high working interests and existing         infrastructure. In addition, we plan on continuing to advance         our waterflood projects in Alberta through further enhancement         of injection facilities in preparation for future   in-fill         drilling programs.     --  We are currently working on our 2014 operating and capital         budget and plan on releasing an update to our shareholders in         mid-December.  Director and Management Update     --  The Board of Directors of Longview announces that Mr. Kelly         Drader has been appointed to the board of the Corporation. The         board also announces that Mr. Andy Mah and Mr. Neil Bokenfohr         have submitted their resignations as officers of Longview and         will focus all of their energy on the ongoing management of         Advantage Oil & Gas Ltd. ("Advantage").     --  The management team of Longview will now consist of the       following individuals:   o Kelly Drader, President and Chief Executive Officer - Co-founder of        Advantage in 2001 with over 27 years experience in the oil & gas     industry. Prior thereto, Senior Vice President with the EnerPlus   Group of Companies.   o Pat Cairns, Senior Vice President - Co-founder of Advantage in 2001        with over 30 years experience in reservoir and operations     engineering. Prior thereto, Vice President, Evaluations with the   EnerPlus Group of Companies.   o Lionel Derochie, Vice President, Operations - Over 30 years        experience in reservoir engineering, production and enhanced oil     recovery operations management. Has been with Advantage for 7     years. Prior thereto, with Amoco Canada for 20 years focusing on     reservoir management and acting project manager for a variety of   enhanced oil recovery projects throughout Western Canada.   o Craig Blackwood, Chief Financial Officer - Has been with Advantage  for 9 years. Prior thereto, Controller with Calpine Canada Natural        Gas Company.  Interim Financial Statements and MD&A     --  This press release should be read in conjunction with         Longview's unaudited interim financial statements for the three         and nine months ended September 30, 2013 together with the         notes thereto, and Management's Discussion and Analysis for the         three and nine months ended September 30, 2013 which have been         prepared in accordance with International Financial Reporting         Standards ("IFRS") and posted on our website at         www.longviewoil.com         and filed under our profile on SEDAR at         www.sedar.com.  Forward-Looking Statements  Certain information regarding Longview set forth in this press release,  including management's assessment of the Corporation's future plans and  operations, contains forward-looking statements that involve substantial known  and unknown risks and uncertainties. The use of any of the words "anticipate",  "continue", "estimate", "expect", "may", "will", "project", "should",  "believe" and similar expressions are intended to identify forward looking  statements. Such statements represent Longview's internal projections,  estimates or beliefs concerning, among other things, an outlook on the  estimated amounts and timing of capital expenditures or other expectations,  beliefs, plans, objectives, assumptions, intentions or statements about future  events or performance. These statements are only predictions and actual events  or results may differ materially. Although Longview believes that the  expectations reflected in the forward-looking statements are reasonable, it  cannot guarantee future results, levels of activity, performance or  achievement since such expectations are inherently subject to significant  business, economic, competitive, political and social uncertainties and  contingencies. Many factors could cause Longview's actual results to differ  materially from those expressed or implied in any forward-looking statements  made by, or on behalf of, Longview.  In particular, forward-looking statements included in this press release  include, but are not limited to, statements with respect to Longview's  business strategy; the Corporation's hedging program and its plans to hedge a  portion of its production in the future; the Corporation's capital program for  the fourth quarter of 2013; the Corporation's anticipated drilling,  development and recompletion activities; the Corporation's plans to advance  its waterflood projects in Alberta; and anticipated timing of providing  shareholders with an update on the Corporation's 2014 operating and capital  budget. In addition, statements relating to "reserves" are deemed to be  forward looking statements, as they involve the implied assessment, based on  certain estimates and assumptions, that the reserves described can be  profitably produced in the future.  These forward-looking statements are subject to numerous risks and  uncertainties, certain of which are beyond the Corporation's control,  including the impact of general economic conditions; volatility in market  prices for crude oil and natural gas; industry conditions; volatility of  commodity prices; currency fluctuation; imprecision of reserve estimates;  liabilities inherent in crude oil and natural gas operations; environmental  risks; incorrect assessments of the value of acquisitions and exploration and  development programs; competition from other producers; the lack of  availability of qualified personnel or management; changes in tax laws,  royalty regimes and incentive programs relating to the oil and gas industry;  changes to legislation and regulations and how they are interpreted and  enforced; hazards such as fire, explosion, blowouts, cratering, and spills,  each of which could result in substantial damage to wells, production  facilities, other property and the environment or in personal injury;  unexpected drilling results; changes or fluctuations in production levels;  delays in anticipated timing of drilling and completion of wells; stock market  volatility; ability to access sufficient capital from internal and external  sources and the other risks considered under "Risk Factors" in Longview's  Annual Information Form, which is available on www.sedar.com and  www.longviewoil.com.  With respect to forward-looking statements contained in this press release,  Longview has made assumptions regarding: current commodity prices and royalty  regimes; availability of skilled labour; timing and amount of capital  expenditures; future exchange rates; the price of oil and natural gas; the  impact of increasing competition; conditions in general economic and financial  markets; availability of drilling and related equipment; effects of regulation  by governmental agencies; royalty rates; future operating costs; that the  Corporation will have sufficient cash flow, debt or equity sources or other  financial resources required to fund its capital and operating expenditures  and requirements as needed; that the Corporation's conduct and results of  operations will be consistent with its expectations; that the Corporation will  have the ability to develop the Corporation's properties in the manner  currently contemplated; current or, where applicable, proposed assumed  industry conditions, laws and regulations will continue in effect or as  anticipated; and the estimates of the Corporation's production and reserves  volumes and the assumptions related thereto (including commodity prices and  development costs) are accurate in all material respects.  Management has included the above summary of assumptions and risks related to  forward-looking information provided in this press release in order to provide  shareholders with a more complete perspective on Longview's future operations  and such information may not be appropriate for other purposes. Longview's  actual results, performance or achievement could differ materially from those  expressed in, or implied by, these forward-looking statements and,  accordingly, no assurance can be given that any of the events anticipated by  the forward-looking statements will transpire or occur, or if any of them do  so, what benefits that the Corporation will derive there from. Readers are  cautioned that the foregoing lists of factors are not exhaustive. These  forward-looking statements are made as of the date of this press release and  the Corporation disclaims any intent or obligation to update publicly any  forward-looking statements, whether as a result of new information, future  events or results or otherwise, other than as required by applicable  securities laws.  Advisory  Any references in this news release to test rates or initial production rates  ("IP"), including IP rates of 30 days or less, are useful in confirming the  presence of hydrocarbons, however, such rates are not necessarily indicative  of long-term performance or ultimate recovery and such rates are not  determinative of the rates at which such wells will continue production and  decline thereafter. Additionally, such rates may also include recovered "load  oil" fluids used in well completion stimulation. While encouraging, readers  are cautioned not to place reliance on such rates in calculating the aggregate  production for the Corporation.  Non-GAAP Measures, Definitions and Abbreviations  The Corporation discloses several financial measures in this press release  that do not have any standardized meaning prescribed by International  Financial Reporting Standards ("IFRS" or "GAAP"), such as funds from  operations and payout ratio. Management believes that these financial measures  are useful supplemental information to analyze operating performance and  provide an indication of the results generated by the Corporation's principal  business activities. Longview's method of calculating these measures may  differ from other companies, and accordingly, they may not be comparable to  similar measures used by other companies. Please see the Corporation's most  recent management's discussion and analysis, which is available on  www.sedar.com for additional information about these financial measures.  "Boe" may be misleading, particularly if used in isolation. A boe conversion  ratio of six thousand cubic feet of natural gas to one barrel of oil  equivalent (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 wellhead. Given that the value ratio based on the current  price of crude oil as compared to natural gas is significantly different from  the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be  misleading as an indication of value.  "Funds from operations" represents cash provided by operating activities,  adjusted for expenditures on decommissioning liability, changes in non-cash  working capital and interest on bank indebtedness.  "Payout ratio" is calculated as cash dividends declared and capital  expenditures divided by funds from operations.  "Working capital deficit" includes trade and other receivables, prepaid  expenses and deposits, trade and other accrued liabilities and due to parent.  The following abbreviations used in this press release have the meanings set  forth below:  bbls   barrels                       mcf   thousand cubic feet  bbls/d barrels per day               mcf/d thousand cubic feet per day  boe    barrels of oil equivalent, on                the basis of 1 bbl of oil for        6 mcf of natural gas  boe/d  barrels of oil equivalent per                day             SOURCE  Longview Oil Corp.  Investor Relations Toll free: 1-855-813-0313  LONGVIEW OIL CORP. 700, 400 -3rd Avenue SW Calgary, Alberta T2P 4H2  Phone:(403) 718-8000 Fax:(403) 718-8300 Web Site:www.longviewoil.com  E-mail:ir@longviewoil.com  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/November2013/07/c5585.html  CO: Longview Oil Corp. ST: Alberta NI: OIL ERN  
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