Northern Blizzard Resources Inc. Announces Third Quarter 2015 Results and Preliminary 2016 Guidance

Press Release

CALGARY, ALBERTA (November 12, 2015) – Northern Blizzard Resources Inc. (“Northern Blizzard” or the “Company”) (TSX: NBZ) announces its operating and financial results for the three and nine months ended September 30, 2015. Northern Blizzard’s unaudited financial statements and management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2015 are available on our website at www.northernblizzard.com and on SEDAR at www.sedar.com.

HIGHLIGHTS

Third quarter 2015 production was 20,445 boe/d (96% oil). Production was 21,497 boe/d for the first nine months of 2015, a 7% increase compared to the same period in 2014.

Funds from operations were $38.9 million ($0.35 per common share) for the third quarter of 2015. Funds from operations were $157.4 million ($1.46 per common share) for the first nine months of 2015, a 6% decrease compared to the same period in 2014.

Operating costs for the third quarter of 2015 were $16.71 per boe. Operating costs were $16.77 per boe for the first nine months of 2015, a 20% decrease compared to the same period in 2014. The Company benefited from cost saving measures implemented across all operating areas that reduced downhole, surface maintenance and other operating costs.

Northern Blizzard has a comprehensive hedging program in place to protect prices on crude oil volumes and maintain the stability of cash flows. We have WTI hedges in place for 0.4 million barrels (4,000 bbl/d) for the fourth quarter of 2015 at an average price of C$77.54/bbl, 4.2 million barrels (11,500 bbl/d) in 2016 at an average price of C$79.50/bbl and 0.7 million barrels (2,000 bbl/d) in 2017 at an average price of C$85.49/bbl.

Northern Blizzard has an undrawn credit facility of $475 million, which underpins the Company’s strong financial position. Net debt to trailing four quarters funds from operations was 1.7x.

Cactus Lake: Average production in the third quarter of 7,197 boe/d (96% oil) was supported by positive response from the Bakken polymer flood. An additional 60 drilling locations were recently identified by new 3D seismic, bringing the total drilling inventory to over 300 drilling locations.

Winter: Production in the third quarter averaged 3,283 boe/d (100% oil). Production from this area is supported by over 400 drilling locations and excellent capital efficiencies.

Coleville: Production in the third quarter averaged 843 boe/d (94% oil). Northern Blizzard has undeveloped lands with over 300 drilling locations and expects to grow production in this area to over 2,500 boe/d within the next two or three years.

Plover Lake SAGD: Production from this area averaged 1,141 boe/d (100% oil) in the third quarter. The Company remains optimistic this project will reach expected production rates in excess of 2,000 boe/d.

FINANCIAL AND OPERATING HIGHLIGHTS

		Three months ended		Nine months ended
	September	June	September	September	September
	30, 2015	30, 2015	30, 2014	30, 2015	30, 2014
Financial ($000s,except as otherwise noted)
Oil and natural gas sales	101,853	134,567	170,471	342,459	528,941
Funds from operations(1)	38,850	58,481	60,046	157,391	167,301
Per share – diluted	0.35	0.54	0.64	1.46	1.98
Net income (loss)	(55,693)	(10,466)	(53,734)	(110,066)	(70,130)
Per share – basic	(0.51)	(0.10)	(0.59)	(1.03)	(0.85)
Per share – diluted	(0.52)	(0.10)	(0.59)	(1.03)	(0.85)
Net debt(1)	372,409	366,508	394,363	372,409	394,363
Dividends declared	17,498	25,641	14,171	68,279	14,171
Per share	0.160	0.240	0.139	0.640	0.139
Capital expenditures	14,776	14,403	81,794	51,618	208,736
Weighted average shares outstanding (000s)
Basic	108,980	106,492	91,729	106,642	82,584
Diluted	110,506	108,643	93,548	108,169	84,403
Shares outstanding at period end (000s)	110,617	107,330	102,053	110,617	102,053
Operating
Average daily production
Heavy oil (bbl/d)	18,751	19,412	18,819	19,333	18,607
Light oil & NGL (bbl/d)	797	1,204	259	1,183	228
Natural gas (mcf/d)	5,384	5,894	7,203	5,885	7,116
Total (boe/d)	20,445	21,598	20,279	21,497	20,021
Average realized price
Heavy oil ($/bbl)(2)	40.99	55.70	81.45	45.41	81.95
Light oil & NGL ($/bbl)	52.88	62.97	93.47	53.83	96.84
Oil & NGL ($/bbl)	41.45	56.13	81.61	45.89	82.13
Natural gas ($/mcf)	2.96	2.53	4.00	2.75	4.75
Combined ($/boe)	40.45	54.23	78.21	44.56	78.95
Netbacks ($/boe)
Average realized price	40.45	54.23	78.21	44.56	78.95
Royalties	(4.50)	(6.20)	(11.58)	(4.98)	(11.34)
Production and operating expenses	(16.71)	(17.41)	(21.32)	(16.77)	(21.05)
Transportation expenses	(1.56)	(1.92)	(2.03)	(1.82)	(1.91)
Operating netback(1)	17.68	28.70	43.28	20.99	44.65
Realized gains (losses) on financial	6.86			11.36
derivative contracts		9.07	(5.44)		(6.73)
General and administrative expenses	(2.29)	(3.17)	(2.76)	(2.68)	(2.98)
Cash finance costs	(4.07)	(4.03)	(4.86)	(4.10)	(5.16)
Other	1.56	(0.23)	1.91	1.04	0.74
Funds from operations(1)	19.74	30.34	32.13	26.61	30.52

Read More: http://www.northernblizzard.com/uploads/Documents/nbri-news-2015-nov-12.pdf

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