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  
-0- Nov/08/2013 02:21 GMT
 
 
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