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Paramount Resources Ltd. Announces Second Quarter 2015 Results; Sales Volumes Increase 107% to 42,604 Boe/d; Liquids Sales Volumes Increase 320% to 16,877 Bbl/d
CALGARY, ALBERTA–(Aug. 6, 2015) – Paramount Resources Ltd. (TSX:POU)
OIL AND GAS OPERATIONS
- Second quarter 2015 sales volumes were 42,604 Boe/d, 107 percent higher than the second quarter of 2014, despite transportation curtailments and processing facility outages in May and June.
- Sales volumes averaged approximately 50,000 Boe/d in July 2015 as production increased following the easing of downstream disruptions.
- Second quarter 2015 liquids sales volumes totaled 16,877 Bbl/d, 320 percent higher than the same period in 2014, including 7,595 Bbl/d of condensate and oil.
- Liquids sales comprised 59 percent of total revenue and 40 percent of total sales volumes in the second quarter of 2015.
- Operating expense per Boe was $5.81 in the second quarter of 2015, a 29 percent improvement from the second quarter of 2014.
- Netbacks in the second quarter of 2015 were $54.3 million compared to $53.8 million in the same period in 2014, as the growth in sales volumes and the reduction in per-unit operating costs were offset by significantly lower natural gas and liquids prices.
- In June 2015, Paramount issued US$450 million principal amount of senior unsecured notes due 2023 and redeemed its $370 million senior unsecured notes due 2017, yielding net proceeds of $170 million.
- Also in June 2015, the Company’s bank credit facility (the “Facility”) was increased by $100 million to $1.0 billion following a scheduled mid-year review. As of July 31, 2015, the Company had $39.8 million in cash and $627.0 million of borrowings outstanding under the Facility.
- In May 2015, Moody’s Investors Services upgraded Paramount’s Corporate Family Rating to “B1”, stable outlook based on projected increases in production, particularly higher condensate and Other NGLs volumes. Standard and Poor’s Ratings Services affirmed Paramount’s corporate credit rating of “B”, positive outlook.
- In July 2015, Paramount settled its 2,000 Bbl/d NYMEX WTI swaps (calendar 2016; average fixed price – US$62.28/Bbl) for cash proceeds of $6.4 million.
- The Company continues to have liquids hedging contracts in place for 3,000 Bbl/d for the second half of 2015 at an average WTI price of C$74.06/Bbl and 6,000 Bbl/d for calendar 2016 at an average WTI price of C$75.72/Bbl.
Paramount’s ability to increase sales volumes following the start-up of the condensate stabilizer expansion in May 2015 was impacted by natural gas transportation curtailments, a downstream NGLs fractionation facility turnaround and operational maintenance at the Musreau Deep Cut Facility. With downstream capacity constraints easing in July, the Company has increased throughput at the Musreau Deep Cut Facility and begun to bring additional liquids-rich Montney wells on production.
Paramount’s Kaybob area production volumes are anticipated to be impacted by scheduled maintenance outages in the second half of 2015, including a third-party NGLs pipeline outage the Company recently became aware of. Sales volumes for the remainder of the year are expected to average approximately 56,000 Boe/d, with liquids comprising approximately 45 percent of total volumes.
The Company’s 2015 capital budget remains at $400 million, of which $319.0 million was incurred in the first half of the year. Activities for the remainder of the year will be focused on completing, equipping and producing previously drilled wells.
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