Pine Cliff Energy Ltd. Announces Strategic Acquisition, Update on Fourth Quarter Drilling Program and New Demand Loan Facility

December 20, 2021

Acquisition Highlights

The Acquisition will add approximately 1,900 Boe/d (approximately 71% natural gas, 23% crude oil and 6% natural gas liquids) of low decline production and 100% ownership in strategic crude oil and natural gas infrastructure that will lower Pine Cliff's Ghost Pine area operating costs. Pine Cliff has also identified development drilling opportunities in the acquired assets which appear to be comparable to the Company's recent Pekisko crude oil and Mannville natural gas drilling locations.

The Acquisition metrics are as follows:

Production(1)$11,605 per flowing Boe
Forecast adjusted funds flow multiple(2)1.7 times
PDP Reserve value at NPV 10(3)$41.5 million
2P Reserve value at NPV 10(3)$55.5 million

(1) Based on the November 2021 production month average.

(2) Based on the estimated adjusted funds flow for the 12 months following the Closing Date, assuming a WTI crude oil price of US$70.00 per Bbl, CAD/USD FX of 1.274, MSW differential of $4.96 per Bbl and an AECO natural gas price of $3.50 per Mcf. Readers are cautioned that this information may not be appropriate for other purposes. This is a non-GAAP measure, see "Non-GAAP Measures" for further information.

(3) Based on an independent engineering reserve report dated October 1, 2021.

Strategic Rationale of the Acquisition

Pine Cliff has primarily grown by acquiring low decline and low operating cost assets in an ongoing effort to build a company that can return capital to its shareholders. The Acquisition is another one of those purchases, and has the added advantage of increasing Pine Cliff's drilling inventory that can deliver economic rates of return at current commodity prices. The results of Pine Cliff's recent development drilling program in 2021 added to the motivation to complete the Acquisition. For further details on the Acquisition, please see the Company's most recent corporate presentation on its website found at http://www.pinecliffenergy.com.

With the combination of Pine Cliff's recent drilling results discussed below and the Acquisition, the Company expects to enter 2022 with production volumes exceeding 21,000 Boe/d, weighted 89% to natural gas. Pine Cliff believes that this increased production base and additional funds flow, combined with the ongoing strength of commodity prices, will permit Pine Cliff to implement a sustainable dividend model in the second half of 2022.

Update on Fourth Quarter Development Drilling Program

During the month of November, 2021, the Company's two gross (2.0 net) Pekisko wells drilled in the Ghost Pine area during the third quarter of 2021, averaged a combined 360 Boe/d (201 Bbls/d crude oil; 30 Bbls/d natural gas liquids and 776 Mcf/d of natural gas).

In November, Pine Cliff drilled and completed one gross (0.9 net) Mannville natural gas well in the Ghost Pine area that was tested and placed on production on December 11, 2021. Pine Cliff is evaluating the area for additional Mannville natural gas locations.

Pine Cliff also drilled two additional Pekisko oil wells (1.4 net) in December in the Ghost Pine area which are expected to be placed on production in early January, 2022.

Demand Loan Facility

Pine Cliff is also pleased to announce that it has entered into a demand loan facility (the "Facility") with Canadian Western Bank (the "Lender"), whereby the Lender will provide up to $5.0 million of borrowings at an interest rate of Canadian Prime rate plus 2.0%. Amounts can be drawn, repaid, and redrawn by the Company at any time and amounts outstanding under the Facility are repayable on demand. The Facility, which is currently undrawn, is expected to assist with working capital management and is not required to fund the Acquisition.

About Pine Cliff

Pine Cliff is an oil and natural gas company with a long-term view of creating shareholder value. Further information relating to Pine Cliff may be found on www.sedar.com as well as on Pine Cliff's website at www.pinecliffenergy.com.

For further information, please contact:

Philip B. Hodge - President and CEO
Alan MacDonald - CFO and Corporate Secretary
Telephone: (403) 269-2289
Fax: (403) 265-7488
Email: info@pinecliffenergy.com

Cautionary Statements

Certain statements contained in this news release include statements which contain words such as "anticipate", "estimate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about developments, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this news release includes, but is not limited to: future capital expenditures, including the amount, nature and completion thereof; future drilling opportunities and Pine Cliff's ability to generate reserves and production from the undrilled locations; future production volumes and their effects on Pine Cliff's operating costs; oil and natural gas prices and demand; expansion and other development trends of the oil and natural gas industry; business strategy and guidance; working capital management; expansion and growth of our business and operations; maintenance of existing customer, supplier and partner relationships; Pine Cliff's dividend model; supply channels; accounting policies; risks; Pine Cliff's ability to generate funds flow; and other such matters.

All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange and interest fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; carbon emission reduction capabilities; the ability of oil and natural gas companies to raise capital; future capital expenditures; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; the effects of COVID-19 on global crude oil demand and pricing; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do, what benefits will be derived there from. Except as required by law, Pine Cliff disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

Natural gas liquids and crude oil volumes are recorded in barrels of oil ("Bbl") and are converted to a thousand cubic feet equivalent ("Mcfe") using a ratio of one (1) Bbl to six (6) thousand cubic feet. Natural gas volumes recorded in thousand cubic feet ("Mcf") are converted to barrels of oil equivalent ("Boe") using the ratio of six (6) thousand cubic feet to one (1) Bbl. This conversion ratio is based on energy equivalence primarily at the burner tip and does not represent a value equivalency at the wellhead. The terms Boe or Mcfe may be misleading, particularly if used in isolation.

Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of oil, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Abbreviations:

AECO: the natural gas storage facility in Alberta connected to TC Energy's Alberta System

MSW; Mixed sweet blend, the benchmark in Canadian dollars for conventionally produced light sweet crude oil in Western Canada, also referred to Edmonton Par differential

WTI: West Texas Intermediate, the reference price paid in U.S. dollars at Cushing

All dollars referenced in this press release are Canadian dollars unless otherwise noted.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement.

NON-GAAP Measures

This press release uses the terms "adjusted funds flow" and "adjusted funds flow multiple" which are not recognized under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other companies. These measures should not be considered as an alternative to, or more meaningful than, IFRS measures including net income (loss) or cash provided by operating activities. The Company uses these measures to evaluate its performance, leverage and liquidity. Adjusted funds flow is a non-Generally Accepted Accounting Principles ("non-GAAP") measure that represents the total of funds provided by operating activities, before adjusting for changes in non-cash working capital, and decommissioning obligations settled. Adjusted funds flow multiple is a non-GAAP measure calculated as the purchase price of the Acquisition divided by the estimated adjusted funds flow for the 12 months from the Closing Date. Please refer to the Annual Report for additional details regarding non-GAAP measures and their calculation.

The TSX does not accept responsibility for the accuracy of this release.

Corporate Logo

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/108180

Previous Post
No Previous Post
Next
No Next Post
Pine Cliff Energy Ltd. Announces Results of Shareholders’ Meeting and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Record Quarterly Results, Declaration of Monthly Dividend, Debt Repayment and Operational Update
Read More
Pine Cliff Energy Ltd. Announces 2021 Year-End Reserves and Provides Operations Update and 2022 Guidance
Read More
Pine Cliff Energy Ltd. Announces Record Annual Results and Filing of 2021 Disclosure Documents
Read More
Pine Cliff Energy Ltd. Provides Operations Update and Announces 2020 Year-End Reserves and 2021 Guidance
Read More
Pine Cliff Energy Ltd. Announces Annual 2020 Results and Filing of 2020 Disclosure Documents
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting, and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Annual 2020 Results and Filing of 2020 Disclosure Documents
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2021 Results
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting, and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2021 Results, Partial Repayment of Term Debt and Update on Drilling Program
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2021 Results and Update to 2021 Guidance
Read More
Pine Cliff Energy Ltd. Announces Strategic Acquisition, Update on Fourth Quarter Drilling Program and New Demand Loan Facility
Read More
Pine Cliff Energy Ltd. Announces 2019 Year-End Reserves and 2020 Guidance
Read More
Pine Cliff Energy Ltd. Announces Annual 2019 Results and Filing of 2019 Disclosure Documents
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2020 Results and Annual General Meeting Update
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting, Election of New Director and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2020 Results and Insider Loan Facility
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2020 Results
Read More
Pine Cliff Energy Ltd. Announces 2019 Guidance and 2018 Year-End Reserves
Read More
Pine Cliff Energy Ltd. Announces Annual 2018 Results, Filing of 2018 Disclosure Documents and Operations Update on Pekisko Oil
Read More
Pine Cliff Energy Ltd. Announces Strategic Acquisition, CDE Flow-Through and Common Share Financings and Increased 2019 Capital
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2019 Results
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2019 Results
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2019 Results
Read More
Pine Cliff Energy Ltd. Announces 2018 Guidance, Commodity Risk Management and 2017 Year-End Reserves
Read More
Pine Cliff Energy Ltd. Announces Annual 2017 Results and Filing of 2017 Disclosure Documents
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2018 Results
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders’ Meeting and Annual Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2018 Results
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2018 Results and Updates Guidance
Read More
Pine Cliff Energy Ltd. Announces 2017 Guidance, 2016 Bank Debt Reduction and Year-End Reserves
Read More
Pine Cliff Energy Ltd. Announces Record Revenue and Funds Flow, Fourth Quarter and Annual 2016 Results
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2017 Results
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting and Stock Option Grant
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2017 Results
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2017 Results and Management Appointment
Read More
Pine Cliff Energy Ltd. Announces More Than 120% Increase in 2015 Year-End Reserves
Read More
Pine Cliff Energy Ltd. Announces its Fourth Quarter and Annual 2015 Results
Read More
Pine Cliff Energy Ltd. Announces its First Quarter 2016 Results
Read More
Pine Cliff Energy Ltd. Announces Results of Shareholders' Meeting
Read More
Pine Cliff Energy Ltd. Announces the Conclusion of the Borrowing Base Redetermination, Closing of a Private Placement and Second
Read More
Pine Cliff Energy Ltd. Announces Record Revenue and Third Quarter 2016 Results
Read More
Pine Cliff Energy Ltd. Announces 2014 Year-End Reserves
Read More
Pine Cliff Energy Ltd. Announces Fourth Quarter and Annual 2014 Results
Read More
Pine Cliff Energy Ltd. Enters Into a $15.94 Million Agreement to Acquire Core Area Assets
Read More
Pine Cliff Energy Ltd. Announces Its First Quarter 2015 Results
Read More
Pine Cliff Completes Acquisition of Core Area Assets and Provides Credit Facility Update
Read More
Pine Cliff Energy Ltd. Announces Its Second Quarter 2015 Results
Read More
Pine Cliff Energy Ltd. Announces Its Third Quarter 2015 Results and Provides Management Update
Read More
Pine Cliff Energy Ltd. Announces 2013 Year-End Reserves and Executive Appointment
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2014 Results
Read More
Pine Cliff Energy Ltd. Announces First Quarter 2014 Results
Read More
Pine Cliff Completes Acquisition of Alberta and Southern Saskatchewan Natural Gas Assets
Read More
Pine Cliff Energy Ltd. Announces Third Quarter 2014 Results
Read More
Pine Cliff Energy Ltd. Announces Extension of Insider Loan Facility, Changes to Board of Directors and Provides Information
Read More
Pine Cliff Energy Ltd. Announces Closing of Private Company Acquisition
Read More
Pine Cliff Energy Ltd. Provides Operational Update
Read More
Pine Cliff Energy Ltd. Provides Operational Update
Read More
Pine Cliff Energy Ltd. Announces Completion of its Borrowing Base Review
Read More
Pine Cliff Energy Ltd. Announces Closing of Strategic Acquisition, CDE Flow-Through and Common Share Equity Financings
Read More
Pine Cliff Energy Ltd. Grants Stock Options
Read More
Pine Cliff Energy Ltd. Announces Management Update
Read More
Pine Cliff Energy Ltd. Provides Credit Facility Update
Read More
Pine Cliff Energy Ltd. Announces Borrowing Base Redetermination, Closing of a Private Placement and Increase and Extension of
Read More
Pine Cliff Energy Ltd. Announces Resignation of CFO and Appointment of New CFO
Read More
Pine Cliff Energy Ltd. Announces Extension of Borrowing Base Redetermination
Read More
Pine Cliff Energy Ltd. Announces Borrowing Base Redetermination
Read More
Pine Cliff Energy Ltd. Announces Management Update
Read More
Pine Cliff Energy Ltd. Announces Graduation to Toronto Stock Exchange
Read More
Pine Cliff Energy Ltd. Announces Extension of Borrowing Base Redetermination Date
Read More
Pine Cliff Energy Ltd. Announces $25 Million Disposition of Royalty Assets
Read More
Pine Cliff Energy Ltd. Announces Closing of $25 Million Disposition of Royalty Assets and Update on Bank Redetermination Process
Read More
Pine Cliff Energy Ltd. Announces Issuance of Insider Subordinated Debt, Sale of Non-Core Assets and Extension of Borrowing Base Redetermination
Read More
Pine Cliff Energy Ltd. Announces $31.4 Million Disposition of Non-Core Oil Assets and Management Update
Read More
Pine Cliff Energy Ltd. Announces Closing of $31.4 Million Disposition of Non-Core Oil Assets
Read More
Pine Cliff Energy Ltd. Grants Stock Options
Read More
Pine Cliff Energy Ltd. Provides Operational and Management Update and Provides 2015 Guidance
Read More
Pine Cliff Announces $70 Million Syndicated Credit Facilities
Read More
Pine Cliff Energy Ltd. Grants Stock Options
Read More
Pine Cliff Energy Ltd. Completes $69 Million Subscription Receipt Offering
Read More
Pine Cliff Energy Ltd. Completes $3 Million Private Placement
Read More
Pine Cliff Energy Ltd. Announces Closing of $185 Million Strategic Acquisition, Credit Facility Increase, TSX Listing Application and 2016 Guidance
Read More
Pine Cliff Energy Ltd. Announces Year-End and Fourth Quarter 2013 Results
Read More
Pine Cliff Energy Ltd. Securities Filings
Read More
Pine Cliff Energy Ltd. Announces Executive Appointment and Grant of Stock Options
Read More
Pine Cliff Completes Acquisition of Carrot Creek/Edson Area Oil and Natural Gas Assets
Read More
Pine Cliff Energy Ltd. Announces Second Quarter 2014 Results
Read More
Pine Cliff Signs Purchase and Sale Agreement for Natural Gas Assets in Alberta and Saskatchewan and Accelerates Expected
Read More
Pine Cliff Energy Ltd. Announces $60,065,000 Bought Deal Financing
Read More
Pine Cliff Energy Ltd. Completes $60,065,000 Common Share Offering
Read More
Pine Cliff Energy Ltd. Grants Stock Options
Read More
Pine Cliff Energy Ltd. Announces 2013 Year-End Reserves and Executive Appointment
Read More