Clearview Resources has announced its financial and operational results for the three and six months ended June 30, 2024.

HIGHLIGHTS 

• Realized a gain of $5.5 million in the three months ended June 30, 2024 as a result of the disposition of underutilized infrastructure at its Northville property for cash consideration of $8.5 million and also received a cash settlement of a contract for $2.3 million as part of the transaction; 
• Achieved net earnings of $6.5 million ($0.55 per basic share) in the three months ended June 30, 2024 as a result of the $5.5 million gain on disposition and receipt of the contract settlement payment of $2.3 million in the second quarter; 
• Generated adjusted funds flow  of $2.8 million ($0.24 per basic share) in the three months ended June 30, 2024; 
• Repaid all bank debt in the three months ended June 30, 2024 utilizing adjusted funds flow resulting in no outstanding borrowings at the end of the quarter; 
• Acquired approximately 100 barrels of oil equivalent per day (“boe/d”) of oil weighted, low decline production for $2.3 million in the North Pembina area; 
• Acquired a significant undeveloped land position in North Pembina area for $0.9 million; and 
• Further strengthened the Company’s financial position with positive working capital of $0.7 million and cash on hand of $5.1 million as at June 30, 2024.

FINANCIAL and OPERATIONAL RESULTS 

Production for the three months ended June 30, 2024 was up 5% to average 1,513 barrels of equivalent per day (“boe/d”) versus the comparative quarter of 2023 at 1,446 boe/d. The increase is primarily due to the new well drilled in Wilson Creek which came on production late in the third quarter of 2023. Additionally, the comparative quarter of 2023 was negatively affected by production downtime due to wildfires and then subsequent flooding in several of the Company’s operating areas. Production for the six months ended June 30, 2024 decreased by 3% compared to the six months ended June 30, 2023. The decrease was a result of normal production declines and the dispositions in the first quarter of 2023, partially offset by the new well in Wilson Creek producing since late in the third quarter of 2023.

Revenues for the three months ended June 30, 2024 were equivalent to revenues from the comparative period as higher production volumes in 2024 were offset by much lower realized prices for natural gas and slightly lower realized prices for natural gas liquids. Revenues for the six months ended June 30, 2024 were lower by 13% than the comparative period of 2023 due to lower production volumes and lower prices for natural gas and natural gas liquids. Lower revenues for the six months ended June 30, 2024 were partially offset by higher realized gains on financial instruments, higher processing income and lower operating costs than in the comparative period of 2023. Adjusted funds flow for the three and six months ended June 30, 2024 was $2.8 million ($0.24 per basic share) and $4.0 million ($0.34 per basic share), respectively, an increase of 243% and 70%, respectively, as compared to the same periods in 2023. The significant increase in the second quarter of 2024 was due to the receipt of a cash payment of $2.3 million for settlement of a contract. Capital expenditures for the three months ended June 30, 2024 were $75,000 and for the six months ended June 30, 2024 were $0.9 million. The expenditures were primarily incurred in Windfall on a waterflood expansion project and an associated well reactivation in the first three months of 2024.

During the second quarter of 2024, the Company recorded a gain of $5.5 million on the disposition of underutilized infrastructure assets at its 100% owned Northville property in West Central Alberta. This gain resulted in the Company having net earnings in the three months ended June 30, 2024 of $6.5 million ($0.55 per basic share) and net earnings for the six months ended June 30, 2024 of $5.4 million ($0.46 per basic share).

Clearview had no borrowings outstanding at June 30, 2024 and was in a net debt(1) surplus position of $4.6 million which included cash on hand of $5.1 million, a working capital surplus of $0.7 million and the Company’s convertible debentures of $1.2 million.

OPERATIONS 

In the second quarter of 2024, Clearview disposed of certain underutilized infrastructure assets at its 100% owned Northville property in West Central Alberta for gross cash proceeds of $8.5 million. The disposition included the sale of a 90% working interest in 10.9 kilometres of certain gathering pipeline systems, a 75% working interest in a compression facility and a 94% working interest in a 22.1 kilometre sales pipeline (the “Infrastructure Assets”). The Company retained a level of working interest in the Infrastructure Assets to continue to gather and compress its existing production and to preserve reserve values. The disposition does not include any production or petroleum and natural gas rights of the Company. As a result of the disposition, Clearview has turned over operatorship of the Infrastructure Assets to the acquirer.

In addition, the Company received a cash payment of $2.3 million as settlement of a contract that reimburses Clearview for production that becomes backed-out as a result of the acquirer’s newer production causing increases in pipeline and facility inlet pressures in the Northville area. 

Clearview expects to install additional field compression, later in 2024 or early 2025, to maintain the Company’s production in Northville, as volumes through the Infrastructure Assets are expected to increase over time.

Clearview completed an acquisition in the second quarter, effective April 1, 2024, of approximately 100 barrels of oil equivalent per day (“boe/d”) of production with a low decline rate of 13%. Based on July field estimates, the acquired asset produced 85 barrels of oil per day (“bbl/d”), 71 thousand cubic feet per day (“mcf/d”) of natural gas and 2 bbl/d of natural gas liquids. The acquired asset consists of 5 gross (5.0 net) producing horizontal oil wells and 3 gross (3.0 net) drilled and cased vertical wells in the Pembina area of central Alberta. Included with the acquisition is 177 gross and net sections of land of varying petroleum and natural gas rights with only 6 of the sections being developed. Total consideration paid was $3.2 million. In 2023, cash operating income from the acquired asset was approximately $2.5 million. Clearview views the acquisition as a low cost, low decline, low risk, oil weighted production addition with an accretive liability profile and does not have any immediate plans for drilling on the acquired lands. The acquisition closed on June 4, 2024.

Subsequent to the end of the second quarter, the Company disposed of 24 sections of certain mineral rights for proceeds of $0.9 million and retained a 1% overriding royalty on 13 of the sections. Clearview retained the shallower uphole rights on these lands and continues to evaluate these lands for development opportunities.

Clearview drilled its first well in five years in the third quarter of 2023. The Wilson Creek 15-25-043-05W5 Cardium horizontal well (67% working interest) came on production late in the third quarter and over the first 11 months, gross production averaged approximately 113 bbl/d of oil and 131 mcf/d of natural gas for a total of 166 boe/d (including estimated natural gas liquid recoveries of 32 bbl/d). Since lowering the downhole pump in early March, the well has averaged approximately 76 bbl/d of oil and 100 mcf/d of natural gas for a total of 117 boe/d (including estimated natural gas liquid recoveries of 24 bbl/d).

The Company has commenced its abandonment and reclamation program for 2024. Clearview’s closure spending quota as mandated by the Alberta Energy Regulators Inventory Reduction Program is $0.61 million. The Company is focusing its 2024 program on two progressive area closure projects as well as ongoing environmental assessments on 40 sites in Alberta. Expenditures on decommissioning projects in 2024 are expected to be approximately $0.8 million.

OUTLOOK 

Clearview’s strategy remains to provide liquidity for its shareholders. The Company is actively evaluating strategic acquisition opportunities, both marketed and unsolicited, and views these as potential paths to liquidity. The infrastructure and undeveloped land dispositions Clearview has recently undertaken have significantly improved the Company’s financial position. In conjunction, Clearview continues to build relationships with capital providers towards achieving the Company’s strategy of executing an acquisition. Clearview has submitted numerous bids to acquire various assets and companies totaling more than $280 million over the past 12 months. Although the Company has not yet closed on an opportunity, Clearview continues to explore strategic growth opportunities, both internally and externally.

KeyFacts Energy Industry Directory: Clearview Resources