Bonavista Energy Corporation Announcing 2013 Fourth Quarter Results

Bonavista Energy Corporation Announcing 2013 Fourth Quarter Results 
CALGARY, ALBERTA -- (Marketwired) -- 02/27/14 -- Bonavista Energy
Corporation (TSX:BNP) is pleased to report to shareholders its
results for the fourth quarter ended December 31, 2013. Bonavista's
Audited Consolidated Financial Statements and Notes, as well as
Management's Discussion and Analysis for the years ended December 31,
2013 and 2012 are available on SEDAR at www.sedar.com or can be
obtained from Bonavista's website at www.bonavistaenergy.com. 


 
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Highlights                                                                  
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                   Three months ended                  Years ended          
                         December 31,      %          December 31,       %  
                        2013     2012 Change        2013      2012  Change  
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Financial                                                                   
($ thousands,                                                               
 except per share)                                                          
                                                                            
Production revenues  245,466  223,021     10%    964,312   832,491      16% 
                                                                            
Funds from                                                                  
 operations(1)       124,354  110,015     13%    477,578   378,667      26% 
  Per share(1) (2)      0.62     0.57      9%       2.42      2.16      12% 
                                                                            
Dividends                                                                   
 declared(3)          38,904   63,481    (39%)   152,968   224,801     (32%)
  Per share             0.21     0.36    (42%)      0.84      1.44     (42%)
                                                                            
Net income             6,667   14,442    (54%)    49,505    64,202     (23%)
  Per share(4)          0.03     0.07    (57%)      0.25      0.37     (32%)
                                                                            
Adjusted net                                                                
 income(5)            23,702   16,535     43%     75,297    58,049      30% 
  Per share(4)          0.12     0.09     33%       0.38      0.33      15% 
                                                                            
Total assets                                   4,235,626 4,062,852       4% 
                                                                            
Long-term debt, net                                                         
 of working capital                            1,155,764   963,678      20% 
                                                                            
Long-term debt, net                                                         
 of adjusted                                                                
 working capital(6)                            1,124,198   963,500      17% 
                                                                            
Shareholders'                                                               
 equity                                        2,270,015 2,285,889      (1%)
                                                                            
Capital                                                                     
 expenditures:                                                              
  Exploration and                                                           
   development       111,596   76,937     45%    443,829   402,090      10% 
  Acquisitions, net                                                         
   of dispositions     4,815  118,837    (96%)    20,530   (10,956)    287% 
                                                                            
Weighted average                                                            
 outstanding                                                                
 equivalent shares:                                                         
 (thousands)(4)                                                             
  Basic              199,254  192,638      3%    197,296   175,581      12% 
  Diluted            201,756  194,322      4%    199,340   176,747      13% 
                                                                            
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Operating                                                                   
(boe conversion -                                                           
 6:1 basis)                                                                 
                                                                            
Production:                                                                 
  Natural gas                                                               
   (mmcf/day)            287      269      7%        278       253      10% 
  Natural gas                                                               
   liquids                                                                  
   (bbls/day)         15,103   14,563      4%     15,093    14,074       7% 
  Oil (bbls/day)(7)   12,208   12,395     (2%)    12,039    12,997      (7%)
    Total oil                                                               
     equivalent                                                             
     (boe/day)        75,072   71,842      4%     73,406    69,250       6% 
                                                                            
Product prices:(8)                                                          
  Natural gas                                                               
   ($/mcf)              3.54     3.22     10%       3.35      2.60      29% 
  Natural gas                                                               
   liquids ($/bbl)     49.35    42.60     16%      47.61     45.19       5% 
  Oil ($/bbl)(7)       72.73    75.73     (4%)     79.32     77.30       3% 
                                                                            
Operating expenses                                                          
 ($/boe)                8.77     8.69      1%       8.93      9.07      (2%)
                                                                            
General and                                                                 
 administrative                                                             
 expenses ($/boe)       1.21     1.22     (1%)      1.15      1.10       5% 
                                                                            
Cash costs                                                                  
 ($/boe)(9)            12.91    12.67      2%      13.00     13.26      (2%)
                                                                            
Operating netback                                                           
 ($/boe)(10)           20.82    19.12      9%      20.54     17.70      16% 
                                                                            
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                                       Years ended December 31,          %  
Highlights (cont'd)                           2013         2012     Change  
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Drilling (gross wells):                        128          115         11% 
  Natural gas                                   58           47         23% 
  Oil                                           68           67          1% 
    Average success rate                        98%          99%        (1%)
                                                                            
Land:                                                                       
    Undeveloped (net acres)              1,281,191    1,253,141          2% 
    Total (net acres)                    2,891,947    2,832,701          2% 
                                                                            
Reserves: (11)                                                              
                                                                            
    Proved:                                                                 
      Natural gas (bcf)                      950.4        921.0          3% 
      Oil and natural gas liquids                                           
       (mbbls)                              97,822       94,914          3% 
        Total oil equivalent (mboe)        256,216      248,409          3% 
    Proved plus probable:                                                   
      Natural gas (bcf)                    1,472.0      1,372.3          7% 
      Oil and natural gas liquids                                           
       (mbbls)                             153,195      143,505          7% 
        Total oil equivalent (mboe)        398,529      372,220          7% 
                                                                            
          % Proved producing                    39%          40%        (1%)
          % Proved                              64%          67%        (3%)
          % Probable                            36%          33%         3% 
  Net present value of future cash                                          
  flow before income taxes ($                                               
  millions):                                                                
      0% discount rate                       9,726        9,005          8% 
      5% discount rate                       6,310        5,742         10% 
      10% discount rate                      4,608        4,126         12% 
      15% discount rate                      3,608        3,183         13% 
    Reserve life index (years): (12)                                        
      Total proved                             9.1          9.6         (5%)
      Total proved plus probable              13.2         13.5         (2%)
    Reserves (boe per thousand shares                                       
     - basic):                                                              
      Total proved                           1,282        1,283          -  
      Total proved plus probable             1,994        1,924          4% 
                                                                            
Finding and development expenditures -                                      
proved plus probable ($/boe):                                               
    Including changes in future                                             
     development expenditures                11.95        14.66        (18%)
    Excluding changes in future                                             
     development expenditures                11.56        11.23          3% 
                                                                            
Finding, development and acquisition                                        
expenditures - proved plus probable                                         
($/boe):                                                                    
    Including changes in future                                             
     development expenditures                11.03        11.16         (1%)
    Excluding changes in future                                             
     development expenditures                 8.75         6.98         25% 
                                                                            
Recycle ratio - proved plus probable: (13)                                  
    Including changes in future                                             
     development expenditures                  1.9          1.6         19% 
    Excluding changes in future                                             
     development expenditures                  2.3          2.5         (8%)
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NOTES: 


 
(1)   Management uses funds from operations to analyze operating            
      performance, dividend coverage and leverage. Funds from operations as 
      presented does not have any standardized meaning prescribed by IFRS   
      and therefore it may not be comparable with the calculations of       
      similar measures for other entities. Funds from operations as         
      presented is not intended to represent operating cash flow or         
      operating profits for the period nor should it be viewed as an        
      alternative to cash flow from operating activities, net income or     
      other measures of financial performance calculated in accordance with 
      IFRS. All references to funds from operations throughout this report  
      are based on cash flow from operating activities before changes in    
      non-cash working capital, decommissioning expenditures and interest   
      expense. Funds from operations per share is calculated based on the   
      weighted average number of shares outstanding consistent with the     
      calculation of net income per share.                                  
(2)   Basic funds from operations per share calculations include            
      exchangeable shares which are convertible into common shares on       
      certain terms and conditions.                                         
(3)   Dividends declared includes both cash dividends and common shares     
      issued pursuant to Bonavista's dividend reinvestment plan (DRIP) and  
      Bonavista's stock dividend program (SDP). For the three months ended  
      December 31, 2013 approximately 1.2 million common shares were issued 
      under the DRIP and SDP with an approximate value of $14.2 million. For
      the year ended December 31, 2013, approximately 4.6 million common    
      shares were issued under the DRIP and SDP with an approximate value of
      $59.2 million.                                                        
(4)   Basic net income per share calculations include exchangeable shares   
      which are convertible into common shares on certain terms and         
      conditions.                                                           
(5)   Amounts have been adjusted to exclude unrealized gains and losses on  
      financial instrument commodity contracts.                             
(6)   Amounts have been adjusted to exclude associated assets or liabilities
      from financial instrument commodity contracts and decommissioning     
      liabilities.                                                          
(7)   Oil includes light, medium and heavy oil.                             
(8)   Product prices include realized gains and losses on financial         
      instrument commodity contracts.                                       
(9)   Cash costs equal the total of operating, transportation, general and  
      administrative, and financing expenses.                               
(10)  Operating netback equals production revenues including realized gains 
      and losses on financial instrument commodity contracts, less          
      royalties, operating and transportation expenses, calculated on a boe 
      basis.                                                                
(11)  Working interest reserves are gross reserves prior to deduction of    
      royalties and without including any of Bonavista's royalty interests. 
(12)  Calculated based on the amount for the relevant reserve category      
      divided by the 2014 production forecast prepared by the independent   
      reserve evaluator (GLJ).                                              
(13)  Recycle ratio is calculated using operating netback per boe divided by
      finding, development and acquisition expenditures per boe.            
                                                                            
                                                                            
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                                          Three months ended                
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                             December 31,  September 30,  June 30, March 31,
Share Trading Statistics             2013           2013      2013      2013
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($ per share, except                                                        
 volume)                                                                    
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High                                14.04          14.37     16.77     15.18
Low                                 11.25          12.70     13.33     12.25
Close                               13.92          12.93     13.65     14.94
Average Daily Volume -                                                      
 Shares                         1,000,966        620,864   428,813   676,012
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MESSAGE TO SHAREHOLDERS 
In 2013, Bonavista successfully executed on its commitment to
maximize shareholder value demonstrated by a solid year of
performance as we validated the quality of our asset base and the
capabilities of our team. As a key component of our business plan, we
demonstrated a 26% increase in our funds from operations over 2012,
representing growth of 12% on a per share basis.  
Improved natural gas prices and our focus on enhancing our operating
and capital efficiencies were the primary sources for this increase
in funds from operations. This was evidenced by steadily lowering our
cost of adding production to approximately $21,000 per boe per day
during the fourth quarter of 2013 from $32,500 per boe per day during
the fourth quarter of 2012, on a trailing 12 month basis.
Additionally, our ability to improve our finding and development
costs by 18% to $11.95 per boe (including changes in future
development expenditures) and our finding, development and
acquisition costs to $11.03 per boe (including changes in future
development expenditures) are a testament to this focus on efficiency
gains. Lastly, we achieved a two percent improvement in operating and
cash costs and when included with a seven percent increase in
realized product prices, resulted in a year-over-year improvement in
our recycle ratio to 1.9:1 from 1.6:1 in 2012.  
These achievements were realized by focusing our attention in our
West Central and Deep Basin core areas where we have the opportunity
and expertise to drive enhancements in our performance and execution.
Our strategy has led to an increased concentration of land,
production and reserves in these multi-zone, prolific areas of the
Western Canadian Sedimentary Basin. As a result, a group of non-core
assets which cannot compete for investment within these core areas
were rationalized for approximately $110.9 million as part of our
concentration strategy. 
Our business plan to maximize shareholder value is based upon a
balanced approach of generating income and growth. In 2013, we
experienced a six percent increase in our production volumes while
our dividend program delivered an annualized yield of approximately
six percent, collectively exceeding our total return goal. Our growth
strategy is centered on achieving total returns in excess of 10% at
fixed commodity prices of $3.50 per gj for natural gas at AECO and
Cdn$95.00 per bbl WTI equivalent over the next five years. The
continued success of this business plan will lie in our ability to
remain focused on continued improvements in both operating and
capital efficiencies and our ability to manage risk and safeguard our
funds from operations through our hedging strategy. 
The successful implementation of our business plan has led to
multiple achievements during 2013, some of which are outlined below. 
Operational and Financial Accomplishments for 2013 include: 


 
--  Achieved a record average annual production rate of 73,406 boe per day,
    representing a 6% increase over last year and record quarterly
    production of 75,072 boe per day in the fourth quarter. Bonavista is
    currently producing approximately 74,000 boe per day, net of recent
    dispositions of approximately 2,500 boe per day in the first quarter of
    2014 for proceeds of $103 million; 
--  Improved our 2013 operating costs on a per boe basis by 2% to $8.93 per
    boe from $9.07 per boe as compared to 2012. Operating costs for the
    three months ended December 31, 2013 were $8.77 per boe; 
--  Executed an effective capital expenditure program, investing $443.8
    million in exploration and development activities drilling 128 wells
    with an overall success rate of 98%. In the fourth quarter, Bonavista
    spent approximately $111.6 million on exploration and development,
    drilling 27 wells with an overall success rate of 100%; 
--  Production revenues were 16% higher at $964.3 million in 2013 when
    compared to 2012. For the fourth quarter, production revenues were
    $245.5 million representing a 10% increase from the fourth quarter of
    2012; 
--  Realized funds from operations of $477.6 million in 2013 representing a
    26% increase from 2012. Funds from operations during the fourth quarter
    were $124.4 million, a 13% improvement from the same period in 2012; 
--  Managed our exposure to commodity price fluctuations for 2014 resulting
    in approximately 66% of our forecasted net natural gas revenues hedged
    at an average floor price of $3.40 per gj at AECO and 70% of our net oil
    and liquids revenues hedged at an average floor price of Cdn$89.35 per
    bbl WTI. Additionally, in 2015 we have hedged approximately 50% of net
    natural gas revenues at an average floor price of $3.60 per gj at AECO
    and 30% of our net oil and liquids revenues at an average floor price of
    Cdn$90.00 per bbl WTI; 
--  Delivered cumulative dividends of over $2.6 billion or $27.03 per common
    share since we introduced an income component to our shareholder return
    in July 2003; and 
--  Elected to reduce the commitment amount under our bank credit facility
    to $600 million from $1.0 billion. The $400 million reduction in the
    commitment results in annual savings of approximately $1.7 million in
    standby fees or $0.06 per boe on our cash costs. With the reduction, we
    still have committed bank credit availability of approximately $367.8
    million. The weighted average interest rate under the bank facility was
    3.1% for the year ended December 31, 2013. 

 
2013 Reserves Highlights 


 
--  Replaced 2013 annual production by 198%, adding 53.1 mmboe of proved
    plus probable reserves, bringing total year end 2013 reserves to 398.5
    mmboe representing a 7% increase over 2012 equivalent to a 4% per share
    increase; 
--  Generated a solid reserve life index of 9.1 years on a proved basis and
    13.2 years on a proved plus probable basis; 
--  Reduced finding and development costs (excluding acquisitions and
    divestitures) by 18% to $11.95 per boe on a proved plus probable basis
    (including changes in future development capital), which reflects the
    improvement in capital efficiencies achieved in 2013 with our
    exploration and development program; 
--  Achieved 2013 finding, development and acquisition costs, including
    changes in future development expenditures, of $14.60 per boe on a
    proved basis ($13.44 per boe excluding changes in future development
    expenditures) and $11.03 per boe on a proved plus probable basis ($8.75
    per boe excluding changes in future development expenditures); 
--  Three year average finding, development and acquisition costs, including
    changes in future development expenditures are $15.31 per boe on a
    proved basis ($10.93 per boe excluding changes in future development
    expenditures) and $12.07 per boe on a proved plus probable basis ($9.37
    per boe excluding changes in future development expenditures); 
--  Generated an attractive proved plus probable operating netback recycle
    ratio of 1.9:1 based on 2013 operating netbacks and 2.2:1 based on
    forecasted 2014 operating netbacks; and 
--  Increased proved plus probable future development capital by 9% to $1.5
    billion, representing the future growth and development potential in our
    asset portfolio. Future development capital as a ratio of forecasted
    2014 capital expenditures and cash flow are 3.1:1 and 2.5:1 times
    respectively.  

 
The reserves estimates contained in the following tables represent
Bonavista's gross reserves as at December 31, 2013 and are defined
under NI 51-101, as our interest before deduction of royalties and
without including any of our royalty interests. 
A summary of this independent reserves evaluation is presented in the
tables below: 


 
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                                Light and            Natural Gas       Total
                  Natural Gas  Medium Oil  Heavy Oil     Liquids Reserves(2)
Reserves:(1)(4)        (mmcf)     (mbbls)    (mbbls)     (mbbls)      (mboe)
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Proved:                                                                     
  Proved                                                                    
   producing          575,880      21,450      3,153      34,250     154,833
  Proved non-                                                               
   producing           19,319         720        431         984       5,356
  Proved                                                                    
   undeveloped        355,169       4,914        266      31,652      96,028
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Total proved          950,368      27,085      3,851      66,886     256,216
  Probable            521,634      11,733      2,109      41,532     142,313
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Total proved plus                                                           
 probable           1,472,002      38,818      5,959     108,418     398,529
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Proved reserve life index                                                   
 (years)(3)                                                              9.1
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Proved plus probable reserve life index                                     
 (years)(3)                                                             13.2
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(1)  Bonavista's gross reserves are based on the GLJ reserve report dated   
     February 20, 2014, GLJ reserve estimates based on forecast prices and  
     costs as of January 1, 2014.                                           
(2)  Boe may be misleading, particularly if used in isolation. A boe        
     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 wellhead.                         
(3)  Calculated based on the amount for the relevant reserve category       
     divided by the 2014 production forecast prepared by GLJ.               
(4)  Amounts may not add due to rounding.                                   

 
The following table highlights Bonavista's proved plus probable
reserves, proved plus probable finding and development ("F&D")
expenditures and proved plus probable finding, development and
acquisition ("FD&A") expenditures and the associated recycle ratios: 


 
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                                                 2013       2012       2011 
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Proved plus probable reserves (mboe):(1)                                    
  Opening balance                             372,220    341,390    310,749 
  Discoveries and extensions                   41,946     36,645     33,667 
  Acquisitions and dispositions                14,655     20,266     22,402 
  Revisions and economic factors               (3,537)      (844)      (365)
  Production                                  (26,755)   (25,236)   (25,063)
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Closing balance                               398,529    372,220    341,390 
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Operating netback ($/boe) (2)                   20.54      17.70      24.53 
Operating netback ($/boe) three-year                                        
 average(2)                                     20.92      22.03      24.05 
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Finding and development expenditures:                                       
  Total F&D expenditures (excluding changes                                 
   in future development expenditures)                                      
   ($millions)                                  443.8      402.1      453.6 
  Proved plus probable F&D costs ($/boe)(3)     11.56      11.23      13.62 
  F&D recycle ratio(4)                            1.8        1.6        1.8 
  Proved plus probable F&D three-year costs                                 
   ($/boe)(3)                                   12.09      11.30      11.35 
  F&D recycle ratio three-year average(4)         1.7        1.9        2.1 
  Total F&D expenditures (including changes                                 
   in future development expenditures)                                      
   ($millions)                                  458.8      524.7      480.5 
  Proved plus probable F&D costs ($/boe)(3)     11.95      14.66      14.43 
  F&D recycle ratio(4)                            1.7        1.2        1.7 
  Proved plus probable F&D three-year costs                                 
   ($/boe)(3)                                   13.62      13.89      13.32 
  F&D recycle ratio three-year average(4)         1.5        1.6        1.8 
                                                                            
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Finding, development and acquisition                                        
 expenditures:                                                              
  Total FD&A expenditures (excluding                                        
   changes in future development                                            
   expenditures) ($millions)                    464.4      391.1      617.1 
    Proved plus probable FD&A costs ($/boe)                                 
     (3)                                         8.75       6.98      11.08 
    FD&A recycle ratio(4)                         2.3        2.5        2.2 
    Proved plus probable FD&A three-year                                    
     costs ($/boe)(3)                            9.37       9.02       9.15 
    FD&A recycle ratio three-year                                           
     average(4)                                   2.2        2.4        2.6 
  Total FD&A expenditures (including                                        
   changes in future development                                            
   expenditures) ($millions)                    585.1      625.8      778.7 
    Proved plus probable FD&A costs                                         
     ($/boe)(3)                                 11.03      11.16      13.98 
    FD&A recycle ratio(4)                         1.9        1.6        1.8 
    Proved plus probable FD&A three-year                                    
     costs ($/boe)(3)                           12.07      12.82      12.86 
    FD&A recycle ratio three-year                                           
     average(4)                                   1.7        1.7        1.9 
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(1)  Amounts may not add due to rounding.                                   
(2)  Operating netback is calculated using production revenues including    
     realized gains and losses on financial instruments commodity contracts 
     less royalties, transportation and operating costs calculated on a per 
     barrel of oil equivalent basis.                                        
(3)  Both F&D and FD&A costs take into account reserve revisions during the 
     year on a per barrel of oil equivalent basis (6:1).                    
(4)  Recycle ratio is defined as operating netback per barrel of oil        
     equivalent divided by either F&D or FD&A costs on a per barrel of oil  
     equivalent.                                                            

 
Future development costs of $1.5 billion at year end 2013 have the
following development schedule: 


 
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                    Future Development Costs, Proved plus probable reserves,
Year                                               undiscounted ($ millions)
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2014                                                                     319
2015                                                                     521
2016                                                                     289
2017                                                                     207
2018                                                                     109
Thereafter                                                                49
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Total                                                                  1,494
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2013 Acquisition and Divestiture Highlights 


 
--  Completed 30 property transactions in 2013, resulting in net
    expenditures of $20.5 million;  
--  Completed acquisitions of $131.4 million adding production of 3,670 boe
    per day at closing and 2,430 boe per day on average for the year, and
    proved plus probable reserves of 20.5 mmboe; 
--  Divested of $110.9 million of non-core assets comprising 1,290 boe per
    day of production at closing and 745 boe per day on average for the year
    and 5.8 mmboe of proved plus probable reserves; and 
--  Closed a strategic acquisition during the fourth quarter in the Deep
    Basin area of $29 million, adding production of approximately 725 boe
    per day and over 26 Bluesky locations. Since closing, optimization and
    drilling investment of $9.7 million has resulted in production growing
    to approximately 2,100 boe per day. 

 
2013 Core Area Highlights 
West Central Alberta Core Area 
Hoadley Glauconite Liquids Rich Natural Gas: 
Bonavista drilled 12 horizontal Glauconite wells during the fourth
quarter for a total of 42 wells in 2013. Our activity during the year
was focused primarily on optimizing capital efficiencies. We achieved
this through maximizing facility and infrastructure utilization while
reducing the development cost of this substantial resource through
initiatives like our extended reach horizontal well program. Based
upon our first three extended reach horizontal wells, we experienced
an average cost reduction of 13% per well when compared to the cost
of equivalent reservoir access from two wells. As we refine this
extended reach technology, we expect the use of this development
technique to improve capital efficiencies throughout the entire
Glauconite trend. 
Our Glauconite horizontal well program in 2013 exceeded our
expectations with average first month production rates of 500 boe per
day. Production from the Hoadley Glauconite play in 2013 was 16,860
boe per day representing a 13% increase from the prior year. We have
been successful with our cost structure achieving an overall
reduction in costs of four percent when compared to 2012. Bonavista's
Hoadley development program generates an internal rate of return of
50% and a recycle ratio of 3.8:1 at an AECO price of $3.50 per gj.
These compelling economics rank it amongst the top natural gas plays
in North America. Given these attractive economics, the
predictability of well performance and our continued success in
optimizing capital efficiencies, we have increased our 2014 activity
by 57%, with plans to spend $141 million drilling approximately 66
wells. This level of development will result in a record year of
activity for Bonavista within the Hoadley Glauconite trend.  
To support this increase in activity, Bonavista has recently
partnered with an area midstream operator, in the building of two 28
kilometer pipelines which will provide an incremental 130 mmcf per
day of gathering capacity from the Hoadley Glauconite play to the
Rimbey processing facility. The two pipelines include a 12 inch line
to gather natural gas and a six inch line to gather natural gas
liquids. This project is scheduled to be commissioned in the third
quarter of 2014. Additionally, during the first quarter of 2015, we
expect the commissioning of the Rimbey deep cut facility which will
positively impact our economics as a result of increased natural gas
liquids recoveries. 
Bonavista continues to be an industry leader in the Hoadley
Glauconite play having drilled a total of 186 horizontal wells since
2008. Our land acquisition program and down spacing initiatives have
resulted in a current drilling inventory in excess of 400 horizontal
locations. With more than 75% of the original natural gas in place
remaining in the reservoir, a stable inventory contemplating four
wells per section, and the predictability and repeatability of the
reservoir, the Glauconite will remain the anchor development project
for Bonavista in 2014.  
Cardium Light Oil:  
Bonavista drilled two horizontal Cardium wells in the fourth quarter
bringing total 2013 activity to 27 wells. The 2013 program involved
the development of emerging areas of our land base such as Lochend
and Strachan to confirm our understanding of reservoir capabilities.
Despite this commitment to emerging areas in 2013, our continued
focus on improving capital efficiencies has resulted in cost
reductions on average of approximately $200,000 per well when
compared to 2012.  
The Willesden Green area has been a focus area over the past 18
months. With numerous wells on production for a full year, we are
confident in our completion approach of utilizing slick water
fracture treatments to generate a 10 to 15% improvement in well
performance. Our 2014 development plans involve drilling five wells
and initiating a water flood pilot.  
At Lochend, we drilled one well in the fourth quarter and seven wells
in total for the year. Despite being constrained by facility
limitations, initial well performance has been strong with first
month production averaging over 300 boe per day. As a result of this
well performance, we invested approximately $9 million in the
construction of a 29 kilometer, eight inch pipeline from Lochend to a
deep cut facility at Harmattan during the fourth quarter. This
pipeline addition will not only add to our extensive operated
infrastructure, it will create an unrestricted flow path for our
current producing wells and will adequately accommodate our planned
activity for 2014 at Lochend. 
Our 2014 capital expenditure plan is primarily focused on development
in Willesden Green and Lochend, totaling approximately $53 million
and drilling 20 wells. We have remained prudently active in the
Cardium over the past five years drilling a total of 113 horizontal
wells to date, while maintaining a healthy inventory of horizontal
locations, representing a profitable, multi-year development
opportunity. 
Ellerslie Liquids Rich Natural Gas: 
During the fourth quarter, Bonavista drilled one horizontal Ellerslie
oil well at Garrington, which had an initial 30-day rate of 350 boe
per day, which includes 170 bbls per day of oil production. We expect
this well to perform similar to our offset well that has demonstrated
stable production performance at an average 190 bbls per day of oil
over the first eight months. The significant presence of oil in the
Ellerslie at Garrington creates an attractive netback of $40 per boe
resulting in individual well payouts of approximately one year.  
In the second half of 2013, we drilled our first liquids rich natural
gas Ellerslie horizontal well at Westerose which has demonstrated an
initial 90-day production rate of 840 boe per day. With a well cost
of $2.7 million, the economic performance of this well has encouraged
our investment in a three dimensional seismic program to determine
the extent of the Ellerslie reservoir.  
Similarly at Caroline, we drilled an Ellerslie liquids rich natural
gas horizontal well in the second half of 2013. Despite having many
operational challenges with the well, we successfully completed four
stages (originally designed for 12) resulting in a stable rate of 525
boe per day over its first five months of production.  
We are exceedingly pleased with our development results in the
Ellerslie formation throughout 2013. Hence, our 2014 plan
contemplates a drilling program of 12 wells with an associated budget
of approximately $44 million, representing a two-fold increase in
activity over 2013. We will focus on the opportunities with lower
operational risk at Garrington and Westerose where we anticipate an
increase in execution success. As we become more intimate with the
reservoir, we anticipate well performance that continues to meet or
exceed our expectations. With a meaningful oil and natural gas
liquids yields of approximately 100 bbls per mmcf on average,
economic performance will continue to strengthen as we refine our
operational approach. As an active operator in the Ellerslie over the
past decade, our strategy had been to continue to strengthen our land
position as we delineated the resource opportunity with vertical well
development. Over the past 24 months we have acquired valuable
horizontal operational experience in the play which has enhanced and
accelerated the value of this play within our organization. Since
2010, we have grown our inventory of horizontal locations in excess
of 200 locations and have assembled an extensive land base of 135
prospective sections. With netbacks currently averaging $30 per boe
and decline rates approximating 50% in the first year of production,
our 2013 activity has certainly exceeded our economic expectations.
Consequently, we see the Ellerslie becoming a cornerstone of our
development program in the near future. 
Deep Basin Core Area 
Bonavista had an active drilling program in the fourth quarter
participating in 10 horizontal wells bringing our total 2013 drilling
activity to 21 horizontal wells in our Deep Basin core area. We have
been tremendously pleased with the overall results and look forward
to continued success. 
Current production in the Deep Basin core area is approximately
16,500 boe per day and has grown 22% from a year ago. Our capital
plan for 2014 involves spending $102 million, drilling 29 wells and
infrastructure spending of $34 million. 
Our expansion in this core area is expected to result in capital
efficiency improvements as larger drilling programs take place. Over
the past four years, we have assembled a position of approximately
238,000 net acres with over 200 future horizontal locations.
Bonavista currently operates natural gas processing capacity of
approximately 230 mmcf per day and we continue to invest in
additional infrastructure in 2014. We see the Deep Basin core area
providing both near-term and mid-term growth especially as we
transition from the building phase to commercial development with
many of our plays. We remain committed to our Deep Basin area and are
confident about its growth profile.  
Wilrich Natural Gas: 
We have experienced tremendous success with the Wilrich formation in
2013. Building on an important asset acquisition of 5,000 boe per day
of production and 79,000 net acres of land in 2012, we exited 2013
acquiring access to an additional 26,000 acres of land and have added
2,800 boe per day of production through our exploration and
development program.  
The majority of this land acquisition throughout 2013 has taken place
in the Ansell area of the Deep Basin. Early in 2013, we gained access
to 20,000 acres of Wilrich land at Ansell and have since drilled and
completed two horizontal wells on this acreage. The results of these
two wells have exceeded our expectations at restricted 90-day
production rates averaging 900 boe per day per well. The first well
has been on production for 10 months and has cumulatively produced
1.2 bcf of raw natural gas in that period of time. Currently, with
access to over 44 sections of land at Ansell and the potential of
multiple prospective zones, we have planned an $84 million capital
budget for this area for 2014. We have committed to drilling 12
wells, five of which will be drilled in the first quarter of 2014.
The first two have been drilled and completed using one drilling pad
and have resulted in a combined rate of 34 mmcf per day after a 50
hour flow test. We have also committed to an infrastructure project
in the first quarter of 2014, consisting of a 10 inch, 100 mmcf per
day pipeline and a 30 mmcf per day compressor station. The pipeline
and compressor station are expected to be commissioned by April 2014.
The economic performance of our Wilrich play in Ansell is compelling
at a natural gas price of $3.50 per gj at AECO. Single-well economics
portray a recycle ratio of 3.5:1 with a 10 month payout. The impact
of a stronger natural gas price, coupled with the success of our 2013
drilling program speaks well to the future development of this play. 
At Marlboro, Bonavista holds approximately 28,000 net acres of
Wilrich land. Our 2013 drilling program involved six gross horizontal
wells (4.8 net) drilled into the Wilrich formation with these wells
currently producing at a combined rate of 1,700 boe per day. The
Wilrich at Marlboro provides Bonavista with an additional 35
horizontal drilling locations. Although the natural gas from the
Wilrich formation at Marlboro tends to have less associated natural
gas liquids, economics remain robust due to the prolific production
performance with payouts under two years and rates of return in
excess of 35% at a natural gas price of $3.50 per gj at AECO.  
Bluesky Liquids Rich Natural Gas: 
In the fourth quarter, Bonavista participated in five horizontal
Bluesky wells consisting of two operated and three non-operated,
totaling nine wells for 2013. Our latest Pine Creek horizontal well
drilled in the fourth quarter is our highest rate Bluesky result to
date, producing at an average 30-day raw natural gas rate of 8.6 mmcf
per day and 35 bbls per mmcf of liquids, of which 50% is condensate.
We remained active during the fourth quarter by adding to our Bluesky
position in Pine Creek with the acquisition of approximately 725 boe
per day of Bluesky production and access to approximately 12,000 net
acres of Bluesky rights where we have identified an additional 25
horizontal locations. On a rate of return perspective, the individual
well economics of the Bluesky are the best of our liquids rich
natural gas plays.  
Additional Emerging Opportunities 
The Blueberry Montney play remains an important part of our long-term
development plans. Industry activity in the Montney formation remains
strong on all fronts with recent industry acquisition metrics of
approximately $4,000 per acre, solidifying our interpretation of the
value of our land base. Through focused efforts on efficiencies, we
reduced our drilling, completion and tie-in costs to $6.3 million
representing a 25% reduction from the average of the previous wells
drilled into the formation. As our industry remains focused on
exporting Canadian natural gas from the west coast, the Blueberry
Montney field will continue to play an important role as a potential
supply, as it is uniquely positioned to participate in LNG export
economics. Meanwhile, Bonavista will continue to improve its
understanding of the technology required to optimize the recovery of
the Montney liquids rich resource at our Blueberry field. As such, we
have planned to drill two wells in Blueberry during 2014. 
In addition, Bonavista drilled and completed a Falher horizontal well
in the West Central Alberta core area during the third quarter which
has resulted in an initial 90-day production rate of approximately
600 boe per day including 60 bbls per mmcf of natural gas liquids.
With the success of this well, we plan on additional reservoir
delineation by drilling five horizontal wells in 2014.  
Strengths of Bonavista Energy Corporation 
Throughout our history, from an initial restructuring in 1997 to
create a high growth junior exploration company, through the energy
trust phase between July 2003 and December 2010, and since January
2011 as a dividend paying corporation, Bonavista has remained
committed to the same operating philosophies despite the endless
volatility and uncertainly inherent in a commodity business like the
energy sector. We have consistently improved the quality of our
projects and have maintained a high level of investment activity on
our asset base. This has resulted in an increase in corporate
production by approximately 110% since converting to an energy trust
in July 2003 and a further 10% since converting back to a corporation
three years ago. These results stem from the expertise of our people
and their entrepreneurial approach to consistently generating
profitable development projects in an unpredictable commodity price
environment within the Western Canadian Sedimentary Basin. Our
experienced technical teams have a solid understanding of our assets
as they exercise the discipline and commitment required to deliver
long-term value to our shareholders. We actively participate in
undeveloped land purchases, producing property acquisitions and
farm-in opportunities, which have all enhanced the quality of our
extensive drilling inventory. These activities have led to low cost
reserve additions and a predictable production base that continues to
grow at a steady pace. Our production is currently approximately 65%
natural gas weighted and is geographically focused in multi-zone
regions primarily in Alberta. The predictable production performance
and low cost structure of our asset base ensures favourable operating
netbacks in most operating environments. Furthermore, our assets are
predominantly operated by Bonavista, providing control over the pace
of operations and direct influence over our operating and capital
cost efficiencies. 
Our team brings a successful track record of executing low to medium
risk development programs, while incorporating acquisitions and sound
financial management. Our Board of Directors and management team
possess extensive experience in the oil and natural gas business.
They have successfully guided our organization through many different
economic cycles utilizing a proven strategy consisting of disciplined
cost controls and prudent financial management. Directors, management
and employees also own approximately 13% of the equity of Bonavista,
aligning our interests with external shareholders. 
Outlook 
With the recent strengthening in natural gas prices due to cold
weather across much of North America, we remain cautiously optimistic
as we move into 2014. We do however remain aware of the robust
natural gas production capability on this continent. This capability
has been powered by prolific resource discoveries, associated natural
gas production from oil and liquids drilling and continued
improvements in the techniques used to exploit these resources. Given
this backdrop, Bonavista will maintain a disciplined approach to
commodity hedging and continue to take advantage of the recent
increases in natural gas prices to secure future funds from
operations. Operationally, we will continue to focus on being one of
the most efficient producers within our peer group and continue to
pursue low cost, repeatable opportunities throughout our concentrated
portfolio of assets. These strategies coupled with our on-going asset
concentration program will support our commitment to maximize
shareholder returns through a balance of income and growth. 
To support this strategy and in light of the successful first quarter
dispositions, Bonavista has a budgeted capital program of between
$460 and $500 million in 2014. This includes spending between $560
and $600 million on exploration and development activities, offset by
approximately $100 million of dispositions and does not contemplate
further acquisitions at this time. The exploration and development
program is expected to result in approximately 150 wells drilled and
an average daily production forecast for the year of between 76,000
and 78,000 boe per day. Using the mid-point of our production
estimate, Bonavista will deliver approximately five percent
production growth in 2014 in spite of the non-core dispositions. With
current commodity prices and hedges in place, we expect to exit 2014
with a debt to funds from operations ratio of approximately 1.8:1 and
an all in payout ratio of 106%. 
Bonavista wishes to announce that Mr. Harry Knutson is retiring from
the Board of Directors of the Company effective today. Mr. Knutson
has served on the Board of Directors since 1997 and has provided
valuable guidance, expertise and oversight since then. We would like
to thank him for his 17 years of service to Bonavista and wish him
all the best in the future. 
Bonavista previously announced the addition of Ms. Sue Lee as a
member of the Board of Directors in November 2013 and is currently
conducting a search for an additional director, which we expect to
communicate at our next annual general meeting in May. 
We thank our employees and directors for their commitment and
dedication to our strategy throughout the year and our shareholders
for their trust and support. We firmly believe that we have the right
people and assets required to execute our five year strategy with
efficiency and precision. Our employees are the foundation of our
continued success.  
On behalf of the Board of Directors 


 
Keith A. MacPhail             Jason E. Skehar                               
Executive Chairman            President and Chief Executive Officer         
                                                                            
February 27, 2014                                                           
Calgary, Alberta                                                            
                                                                            
BONAVISTA ENERGY CORPORATION                                                
                                                                            
Supplemental Financial Information                                          
Consolidated Statements of Financial Position                               
                                                                            
----------------------------------------------------------------------------
                                                December 31,   December 31, 
(thousands)                                             2013           2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
(unaudited)                                                                 
Assets:                                                                     
  Current assets:                                                           
    Accounts receivable                        $     124,431  $     102,500 
    Prepaid expenses                                   7,322         11,089 
    Marketable securities                              2,645          2,768 
    Other assets                                      13,786         12,191 
    Financial instrument commodity contracts             419          8,608 
----------------------------------------------------------------------------
                                                     148,603        137,156 
  Financial instrument commodity contracts               346          1,224 
  Financial instrument contracts                       8,023          4,293 
  Property, plant and equipment                    3,845,344      3,691,572 
  Exploration and evaluation assets                  222,085        217,382 
  Goodwill                                            11,225         11,225 
----------------------------------------------------------------------------
                                               $   4,235,626  $   4,062,852 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Liabilities and Shareholders' Equity:                                       
  Current liabilities:                                                      
    Accounts payable and accrued liabilities   $     213,118  $     181,674 
    Decommissioning liabilities                        9,313              - 
    Dividends payable                                 13,087         21,303 
    Financial instrument commodity contracts          31,985          8,786 
----------------------------------------------------------------------------
                                                     267,503        211,763 
----------------------------------------------------------------------------
  Financial instrument commodity contracts             3,710          1,550 
  Long-term debt                                   1,046,177        889,071 
  Other long-term liabilities                         13,853         13,650 
  Decommissioning liabilities                        397,174        447,753 
  Deferred income taxes                              237,194        213,176 
  Shareholders' equity:                                                     
    Shareholders' capital                          2,228,210      2,059,305 
    Exchangeable shares                              307,468        405,183 
    Contributed surplus                               61,247         44,848 
    Deficit                                         (326,910)      (223,447)
----------------------------------------------------------------------------
                                                   2,270,015      2,285,889 
----------------------------------------------------------------------------
                                               $   4,235,626  $   4,062,852 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
BONAVISTA ENERGY CORPORATION                                                
                                                                            
Supplemental Financial Information                                          
Consolidated Statements of Income and Comprehensive Income                  
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Three months ended           Years ended 
                                         December 31,          December 31, 
                                                                            
(thousands, except per share                                                
 amounts)                             2013       2012       2013       2012 
----------------------------------------------------------------------------
(unaudited)                                                                 
Revenues:                                                                   
  Production                     $ 245,466  $ 223,021  $ 964,312  $ 832,491 
  Royalties                        (30,099)   (29,650)  (124,489)  (124,300)
----------------------------------------------------------------------------
                                   215,367    193,371    839,823    708,191 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
  Realized gains (losses) on                                                
   financial instrument                                                     
   commodity contracts              (1,769)       204    (13,652)     8,581 
  Unrealized gains (losses) on                                              
   financial instrument                                                     
   commodity contracts             (22,742)    (2,793)   (34,426)     8,210 
----------------------------------------------------------------------------
                                   (24,511)    (2,589)   (48,078)    16,791 
----------------------------------------------------------------------------
                                   190,856    190,782    791,745    724,982 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Expenses:                                                                   
  Operating                         60,601     57,464    239,196    229,847 
  Transportation                     9,206      9,732     36,595     38,367 
  General and administrative         8,361      8,049     30,802     27,927 
  Share-based compensation           5,777      5,845     23,868     19,450 
  Gain on disposition of                                                    
   property, plant and equipment   (28,760)   (21,449)   (38,115)   (59,675)
  Loss (gain) on disposition of                                             
   exploration and evaluation                                               
   assets                              (19)       311    (18,143)     5,938 
  Depletion, depreciation and                                               
   amortization                     90,844     90,282    349,285    331,023 
----------------------------------------------------------------------------
                                   146,010    150,234    623,488    592,877 
----------------------------------------------------------------------------
Income from operating activities    44,846     40,548    168,257    132,105 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
  Finance costs                     20,439      9,493     98,439     53,350 
  Finance income                    16,525      8,791     (3,730)   (11,739)
----------------------------------------------------------------------------
  Net finance costs                 36,964     18,284     94,709     41,611 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income before taxes                  7,882     22,264     73,548     90,494 
  Deferred income taxes              1,215      7,822     24,043     26,292 
----------------------------------------------------------------------------
Net income and comprehensive                                                
 income                          $   6,667  $  14,442  $  49,505  $  64,202 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per share - basic     $    0.03  $    0.07  $    0.25  $    0.37 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per share - diluted   $    0.03  $    0.07  $    0.25  $    0.36 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
BONAVISTA ENERGY CORPORATION                                                
                                                                            
Supplemental Financial Information                                          
Consolidated Statements of Changes in Equity                                
For the years ended December 31                                             
                                                                            
----------------------------------------------------------------------------
                            Shareholders'     Exchangeable      Contributed 
(thousands)                       capital           shares          surplus 
----------------------------------------------------------------------------
(unaudited)                                                                 
Balance as at December                                                      
 31, 2012                 $     2,059,305  $       405,183  $        44,848 
                                                                            
Net income                              -                -                - 
Issue costs, net of                                                         
 future tax benefit                   (74)               -                - 
Issued for cash on                                                          
 exercise of common share                                                   
 incentive rights                   1,984                -                - 
Exercise of common share                                                    
 incentive rights                   2,708                -           (2,708)
Conversion of restricted                                                    
 share awards                       7,410                -           (7,410)
Share-based compensation                                                    
 expense                                -                -           23,868 
Share-based compensation                                                    
 capitalized                            -                -            2,649 
Issued pursuant to the                                                      
 dividend reinvestment                                                      
 and stock dividend plans          59,162                -                - 
Exchangeable shares                                                         
 exchanged for common                                                       
 shares                            97,715          (97,715)               - 
Dividends declared                      -                -                - 
----------------------------------------------------------------------------
                                                                            
Balance as at December                                                      
 31, 2013                 $     2,228,210  $       307,468  $        61,247 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance as at December                                                      
 31, 2011                 $     1,446,804  $       585,754  $        32,092 
                                                                            
Net income                              -                -                - 
Issuance of equity, net                                                     
 of issue costs                   334,736                -                - 
Issued for cash on                                                          
 exercise of common share                                                   
 incentive rights                   4,510                -                - 
Exercise of common share                                                    
 incentive rights                   4,609                -           (4,609)
Conversion of restricted                                                    
 share awards                       5,183                -           (5,183)
Share-based compensation                                                    
 expense                                -                -           20,070 
Share-based compensation                                                    
 capitalized                            -                -            2,478 
Issued pursuant to the                                                      
 dividend reinvestment                                                      
 and stock dividend plans          82,892                -                - 
Exchangeable shares                                                         
 exchanged for common                                                       
 shares                           180,571         (180,571)               - 
Dividends declared                      -                -                - 
----------------------------------------------------------------------------
                                                                            
Balance as at December                                                      
 31, 2012                 $     2,059,305  $       405,183  $        44,848 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 
-----------------------------------------------------------
                                                     Total 
                                             shareholders' 
(thousands)                       Deficit           equity 
-----------------------------------------------------------
(unaudited)                                                
Balance as at December                                     
 31, 2012                 $      (223,447) $     2,285,889 
                                                           
Net income                         49,505           49,505 
Issue costs, net of                                        
 future tax benefit                     -              (74)
Issued for cash on                                         
 exercise of common share                                  
 incentive rights                       -            1,984 
Exercise of common share                                   
 incentive rights                       -                - 
Conversion of restricted                                   
 share awards                           -                - 
Share-based compensation                                   
 expense                                -           23,868 
Share-based compensation                                   
 capitalized                            -            2,649 
Issued pursuant to the                                     
 dividend reinvestment                                     
 and stock dividend plans               -           59,162 
Exchangeable shares                                        
 exchanged for common                                      
 shares                                 -                - 
Dividends declared               (152,968)        (152,968)
-----------------------------------------------------------
                                                           
Balance as at December                                     
 31, 2013                 $      (326,910) $     2,270,015 
-----------------------------------------------------------
-----------------------------------------------------------
                                                           
Balance as at December                                     
 31, 2011                 $       (62,848) $     2,001,802 
                                                           
Net income                         64,202           64,202 
Issuance of equity, net                                    
 of issue costs                         -          334,736 
Issued for cash on                                         
 exercise of common share                                  
 incentive rights                       -            4,510 
Exercise of common share                                   
 incentive rights                       -                - 
Conversion of restricted                                   
 share awards                           -                - 
Share-based compensation                                   
 expense                                -           20,070 
Share-based compensation                                   
 capitalized                            -            2,478 
Issued pursuant to the                                     
 dividend reinvestment                                     
 and stock dividend plans               -           82,892 
Exchangeable shares                                        
 exchanged for common                                      
 shares                                 -                - 
Dividends declared               (224,801)        (224,801)
-----------------------------------------------------------
                                                           
Balance as at December                                     
 31, 2012                 $      (223,447) $     2,285,889 
-----------------------------------------------------------
-----------------------------------------------------------
                                                                            
BONAVISTA ENERGY CORPORATION                                                
                                                                            
Supplemental Financial Information                                          
Consolidated Statements of Cash Flows                                       
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Three months ended           Years ended 
                                         December 31,          December 31, 
(thousands)                           2013       2012       2013       2012 
----------------------------------------------------------------------------
(unaudited)                                                                 
Cash provided by (used in):                                                 
Operating Activities:                                                       
  Net income                     $   6,667  $  14,442  $  49,505  $  64,202 
  Adjustments for:                                                          
    Depletion, depreciation and                                             
     amortization                   90,844     90,282    349,285    331,023 
    Share-based compensation         5,777      7,017     23,868     18,364 
    Unrealized (gains) losses on                                            
     financial instrument                                                   
     commodity contracts            22,742      2,793     34,426     (8,210)
    Gain on disposition of                                                  
     property, plant and                                                    
     equipment                     (28,760)   (21,449)   (38,115)   (59,675)
    Loss (gain) on disposition                                              
     of exploration and                                                     
     evaluation assets                 (19)       311    (18,143)     5,938 
    Net finance costs               36,964     18,284     94,709     41,611 
    Deferred income taxes            1,215      7,822     24,043     26,292 
  Decommissioning expenditures     (10,539)   (11,410)   (30,143)   (25,530)
  Changes in non-cash working                                               
   capital items                    (9,870)    (5,206)    (2,830)    13,466 
----------------------------------------------------------------------------
                                   115,021    102,886    486,605    407,481 
----------------------------------------------------------------------------
                                                                            
Financing Activities:                                                       
  Issuance of senior notes             (49)         -    229,226          - 
  Issuance of equity, net of                                                
   issue costs                           -          -        (99)   331,188 
  Proceeds on exercise of common                                            
   share incentive rights              228        355      1,984      4,510 
  Dividends paid                   (24,480)   (38,323)  (102,022)  (137,898)
  Interest paid                    (19,369)   (14,892)   (40,793)   (40,907)
  Proceeds from long-term debt      44,057          -    119,791          - 
  Repayment of long-term debt            -    127,198   (235,970)  (182,329)
----------------------------------------------------------------------------
                                       387     74,338    (27,883)   (25,436)
----------------------------------------------------------------------------
                                                                            
Investing Activities:                                                       
  Business acquisitions            (29,795)  (155,266)  (102,284)  (155,266)
  Exploration and development     (111,596)   (76,937)  (443,829)  (402,090)
  Property and other business                                               
   acquisitions                     (2,435)    (9,491)   (16,275)   (14,626)
  Property dispositions             27,415     45,920     98,029    180,848 
  Office equipment                  (2,066)      (704)    (6,183)    (3,307)
  Changes in non-cash working                                               
   capital items                     3,069     19,254     11,820     12,396 
----------------------------------------------------------------------------
                                  (115,408)  (177,224)  (458,722)  (382,045)
----------------------------------------------------------------------------
Change in cash                           -          -          -          - 
Cash, beginning of period                -          -          -          - 
----------------------------------------------------------------------------
Cash, end of period              $       -  $       -  $       -  $       - 
----------------------------------------------------------------------------
----------------------------------------------------------------------------

 
FORWARD-LOOKING INFORMATION 
Forward-Looking Statements - Certain information set forth in this
document, including management's assessment of Bonavista's future
plans and operations, contains forward-looking statements including;
(i) forecasted capital expenditures and plans; (ii) exploration,
drilling and development plans, (iii) prospects and drilling
inventory and locations; (iv) anticipated production rates; (v)
anticipated operating and service costs; (vi) our financial strength;
(vii) incremental development opportunities; (viii) reserve life
index; (ix) total shareholder return; (x) growth prospects; (xi)
asset acquisition and disposition plans; (xii) sources of funding,
which are provided to allow investors to better understand our
business. By their nature, forward-looking statements are subject to
numerous risks and uncertainties; some of which are beyond
Bonavista's control, including the impact of general economic
conditions, industry conditions, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates,
environmental risks, changes in environmental tax and royalty
legislation, competition from other industry participants, the lack
of availability of qualified personnel or management, stock market
volatility and ability to access sufficient capital from internal and
external sources. Readers are cautioned that the assumptions used in
the preparation of such information, although considered reasonable
at the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking statements.
Bonavista's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these
forward-looking statements or if any of them do so, what benefits
that Bonavista will derive there from. Bonavista disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law.  
Non-IFRS Measurements - Within this press release, references are
made to terms commonly used in the oil and natural gas industry.
Management uses "funds from operations" and the "ratio of debt to
funds from operations" to analyze operating performance and leverage.
Funds from operations as presented does not have any standardized
meaning prescribed by IFRS and therefore it may not be comparable
with the calculation of similar measures for other entities. Funds
from operations as presented is not intended to represent operating
cash flow or operating profits for the period nor should it be viewed
as an alternative to cash flow from operating activities, net income
or other measures of financial performance calculated in accordance
with IFRS. All references to funds from operations throughout this
report are based on cash flow from operating activities before
changes in non-cash working capital, decommissioning expenditures and
interest expense. Basic funds from operations per share is calculated
based on the weighted average number of common shares outstanding in
accordance with International Financial Reporting Standards.
Operating netbacks equal production revenue and realized gains or
losses on financial instrument commodity contracts, less royalties,
transportation and operating expenses calculated on a boe basis.
Total boe is calculated by multiplying the daily production by the
number of days in the period. Management uses these terms to analyze
operating performance and leverage. 
Conversion of Natural Gas to Barrels of Equivalent (BOE) 
To provide a single unit of production for analytical purposes,
natural gas production and reserves volumes are converted
mathematically to equivalent barrels of oil (boe). We use the
industry-accepted standard conversion of six thousand cubic feet of
natural gas to one barrel of oil (6 mcf = 1 bbl). The 6:1 boe ratio
is based on an energy equivalency conversion method primarily
applicable at the burner tip. It does not represent a value
equivalency at the wellhead and is not based on either energy content
or current prices. While the boe ratio is useful for comparative
measures and observing trends, it does not accurately reflect
individual product values and might be misleading, particularly if
used in isolation. As well, given that the value ratio, based on the
current price of crude oil to natural gas, is significantly different
from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio
may be misleading as an indication of value.
Contacts:
Bonavista Energy Corporation
Keith A. MacPhail
Executive Chairman
(403) 213-4300 
Jason E. Skehar
President & CEO
(403) 213-4300 
Glenn A. Hamilton
Senior Vice President & CFO
(403) 213-4300
www.bonavistaenergy.com
 
 
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