CALGARY, AB, Feb. 18, 2022 /CNW/ – Clearview Resources Ltd. (“Clearview” or the “Company”) is pleased to announce the following corporate update.
Clearview’s path forward is substantially clearer at the end of 2021 than at any time since the beginning of the COVID-19 pandemic. Higher commodity prices coupled with the convertible debenture financing at the end of 2020 has allowed the Company to retire substantial bank debt, reduce our inactive well abandonment and reclamation liabilities and has supported Phases 1 and 2 of an asset optimization capital program. In summary, the Company has been stabilized financially which has driven the goal of shareholder liquidity to the forefront of Clearview’s strategy.
To provide our shareholders with liquidity, the Company is exploring a number of potential options including:
- A business combination with existing public or private oil and gas companies.
- A sale of the Company for cash, shares or a combination of both.
- Reinstating the distribution of dividends or undertaking some other return of capital to shareholders once all debt is eliminated.
While pursuing the strategic goal of liquidity for shareholders there are several tactics the Company continues to employ to enhance its ability to transact, including:
- Finding opportunistic, growth oriented and strategic acquisitions and/or business combinations;
- Increasing net asset value per share through ongoing debt repayments;
- Stabilizing production and revenue through well optimizations, reactivations and/or development drilling; and
- Reducing inactive well, pipeline and facility abandonment and reclamation liabilities.
During 2021, the sales prices received by the Company for its oil, natural gas and natural gas liquids production increased significantly and so far in 2022 these prices have continued to improve. Clearview’s stable production performance combined with higher commodity prices has resulted in improved adjusted funds flow. While spending capital on Phase 1 and 2 optimization programs in 2021, Clearview has reduced its bank debt to $8.8 million at December 31, 2021 from $12.3 million at the end of the previous year. The Company’s bank debt at December 31, 2021 consists of a federal government sponsored Export Development Canada guaranteed term loan for $6.3 million and a revolving operating facility with $2.5 million outstanding, both with ATB Financial.
Management and the Board of Directors (“Board”) view Clearview’s current level of debt as very manageable and expect further reductions in 2022 due to stable production and the current strong commodity prices in 2022.
Clearview’s focus in 2022 continues to be on enhancing shareholder value and efforts towards the realization of liquidity for its stakeholders. The Company plans to execute a disciplined capital program to maintain and grow production, by strategically allocating capital between production optimization capital projects, debt repayment and abandonment and reclamation liability reduction.
Clearview finished 2021 on a strong operational note. The Company’s Phase 1 and 2 optimization and reactivation capital programs in 2021 met the objective of significantly offsetting corporate declines on approximately $2.0 million of field capital spending. The Company’s 2021 annual production averaged approximately 2,100 barrels of oil equivalent per day, representing a small increase over 2020 despite the minimal capital spend. In January 2022, Clearview initiated its Phase 3 optimization program. This program is estimated to consist of approximately $1.6 million of well optimization and reactivation activity. At current commodity prices, these capital projects are expected to achieve payback in less than six months once brought on-stream.
In Clearview’s newly acquired, undeveloped, Clearwater lands in the Jarvie area of Alberta, recent public Crown land sale activity has provided a proxy for the market value of this very low-cost acquisition. The Company has completed its mapping and reservoir analysis in the area and is targeting potential transactions to either boost its current land position or the divestment of the lands.
The Company has continued abandonment and reclamation activities through the end of 2021. Spending for 2022 has been budgeted for approximately $0.5 million. The ultimate level of decommissioning spending will depend on the amount of non-operated spending activities conducted by Clearview’s partners while Clearview executes its own operated abandonment and reclamation program commensurate with Alberta Energy Regulator closure targets.
Clearview’s Board and Management are excited about the Company’s outlook for 2022, as strong commodity prices and low corporate declines are expected to provide for strong adjusted funds flow and the ability to further reduce debt. Previous lender mandated, lower priced, crude oil hedging contracts expired at the end of October 2021, providing greater exposure to current high commodity prices. Management continues to strategically assess, analyze and position the Company based on its strong competitive corporate advantages, including Clearview’s 7.1 year reserve life index, low conventional corporate decline rate, light oil weighted operating netbacks, stable production efficiencies, low risk development drilling inventory and the Company’s tax pools in the amount of approximately $144 million.
Clearview’s much improved operating netback, conventional light oil weighted assets and opportunity base matches very well with the Board and Management’s conservative returns-based business strategy. The Company’s conventional reservoirs provide good production efficiencies, shallow declines and significant adjusted funds flow – underpinning the Board’s strategic plan to eliminate bank debt and pursue liquidity for shareholders.
Clearview’s press releases, financial statements and management’s discussion and analysis are available on the Company’s website at www.clearviewres.com and SEDAR at www.SEDAR.com.
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