Calgary-Based Blackbird Energy Inc. (stock ticker: BBI) announced record financial and operational results for the quarter ended October 31, 2018.

 

Highlights from the Q1 2019 Results:

Petroleum and Natural Gas Sales

  • $7.4 million ($46.31/boe) of petroleum and natural gas sales during the three months ended October 31, 2018.
    • Represents a 186% increase from the comparative three months ended October 31, 2017.
    • Realized condensate and oil prices of $76.57/bbl for the quarter.
    • Approximately 72% of total revenues were attributable to high-quality liquids production during the quarter.

 

Production

  • During the three months ended October 31, 2018, the Company achieved a record average total production rate of 1,736 boe/d comprised of 47% liquids.
  • During the quarter:
    • Produced 5.5 mmcf/d of natural gas
    • 723 bbls/d of condensate and oil
    • 98 bbls/d of NGLs
    • 2 boe/d of non-core production.
    • Produced for approximately 84 days during the first quarter of 2019 compared to 92 total calendar days in the quarter (91% run-time) with limited third-party gas processing plant downtime experienced.

 

Netbacks

  • Operating and corporate netbacks (Non-IFRS Measures) were $23.12/boe and $13.92/boe, respectively, for the first quarter of 2019.
  • Generated $2.2 million of adjusted funds flow (Non-IFRS Measure) during the three months ended October 31, 2018.

 

Ratios

  • Condensate & oil gas ratio (“CGR”) averaged 132 bbls/mmcf during the three months ended October 31, 2018 on its sales.
  • Total liquids gas ratio (“LGR”) averaged 150 bbls/mmcf during the three months ended October 31, 2018.

 

Investments and Projects

  • Invested $11.4 million during the three months ended October 31, 2018, drilling 3 gross (3 net) Montney wells, furthering development north of Wapiti River.
    • All three wells were drilled from 9-14-71-7W6 northern pad-site and implemented an extended reach lateral program.
    • Drilled 102/2-27-71-7W6 Upper Montney, 103/14-22-71-7W6 Upper Montney and 100/2-27-71-7W6 Middle Montney wells in an average of 24.5 days and with an average horizontal length of 3,031 meters.
    • Subsequent to October 31, 2018, moved drilling rig east to the 12-36-70-6W6 pad to drill the 100/11-12-71-6W6 Middle Montney well, allowing validation of up to 20 sections of land.
  • Ordering long lead time equipment required for Pipestone/Elmworth northern development.
    • Construction expected to commence in January 2019.

 

Capital

  • Completed non-brokered private placement consisting of 6,249,181 common shares issued on a “Canadian Development Expenses flow-through” basis at a price of $0.37 per CDE flow-through share during the quarter.
    • 16,000,000 common shares issued on a “Canadian Exploration Expenses flow-through” basis at a price of $0.40 per CEE flow-through share for total combined gross proceeds of $8.7 million.

 

  • At October 31, 2018, working capital of $3.8 million.
    • Included $11.7 million of cash and no bank debt.
    • Working capital surplus combined with the undrawn loan facility provides approximately $23.0 million of future available funding (Non-IFRS Measure) at October 31, 2018.

 

Shareholders approve combination with Pipestone

Last week, Blackbird shareholders approved the strategic combination of Blackbird and Pipestone Oil Corp. by a majority of over 99% of votes cast.

In keeping with the transaction, Blackbird’s shareholders have also approved a continuance from British Columbia into Alberta. The transaction will result in the combination of two adjacent and contiguous Pipestone Montney land bases under a single company that will operate under the name Pipestone Energy Corp.

In connection with the transaction, Blackbird and Pipestone Oil also entered into agreements with certain of its existing shareholders who have committed to common equity financings totaling approximately $111.0 million. Pipestone Oil arranged approximately $198.5 million of debt financing.

The transaction and financings are expected to close on or about January 4, 2019.


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