Click here to close now.

SYS-CON MEDIA Authors: Bart Copeland, Andreas Grabner, Liz McMillan, Dana Gardner, Elizabeth White

News Feed Item

Renegade Petroleum Ltd. Announces a $58 Million Capital Budget Targeting $77 Million in Funds from Operations

CALGARY, ALBERTA -- (Marketwired) -- 02/04/14 -- Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX VENTURE: RPL) announced today that its Board of Directors has approved a $57.7 million capital budget for 2014 directed at exploitation of its high quality light-oil assets in southeast and west central Saskatchewan. This capital program is consistent with the Company's long-term objectives of drilling low-risk, high impact wells while maintaining a strong focus on cost reduction in all areas and safe-guarding the dividend.

2014 CAPITAL BUDGET STRATEGIC OBJECTIVES


Profitability        - 97% light-oil with top tier operating netbacks
Sustainability       - 25% corporate declines
                     - Strong capital efficiencies in core areas
Cost Reduction       - Renewed focus on reduction of G&A and operating costs
Sustainable Dividend - 27% dividend payout ratio
                     - 102% all-in payout ratio
Long-Term Growth     - 260+ net light-oil development drilling locations

2014 GUIDANCE

The 2014 capital program is designed to position Renegade for long-term sustainable production, reserve replacement and funds flow from operations with a focus on sustainable dividend payments.

The $57.7 million capital program and the expected dividend payment of $20.6 million are forecasted to be substantially funded through the Company's funds flow from operations with an all-in annual payout ratio estimated at 102%.

Management is pleased to provide the following estimated 2014 guidance:(1)(2)


----------------------------------------------------------------------------
Average Production (boe/d)                                     5,700 - 5,900
Percentage Light-Oil and NGL Weighting (%)                                97
----------------------------------------------------------------------------
Funds Flow From Operations ($000)                                       76.6
Funds Flow From Operations Per Diluted Share ($)(3)                     0.36
Exit Net Debt ($000)                                                   150.8
Bank Line ($000)(2)                                                    250.0
----------------------------------------------------------------------------
Total Capital Expenditures ($000)                                       57.7
----------------------------------------------------------------------------
Annual Cash Dividends ($000)                                            20.6
Annual Cash Dividends Per Basic Share ($)                               0.10
Total All-In Payout Ratio (%)                                            102
----------------------------------------------------------------------------
 (1) Based on a WTI USD$95/bbl, CAD/USD exchange rate of 0.94, Edmonton Par
     price of C$92/bbl and an AECO gas price of C$2.00 with 4,000 bbl/d of
     2014 production hedged at an average price of C$92.46
(2)  Pending the successful closing of the previously announced $109 million
     asset disposition
(3)  Based on 209.9 million fully diluted shares currently outstanding

The Company maintains a disciplined hedging program in order to provide certainty over the funds flow from operations used to fund the capital program and protect the long-term viability of its dividend payments. Renegade has 4,000 bbl/d of 2014 production hedged at WTI C$92.46 per barrel.

2014 Capital Forecast

In southeast Saskatchewan, Renegade plans to drill 18 gross (16.0 net) wells across the Company's recently high-graded land position which represents approximately 54% of the Company's 2014 development budget. In the west central Saskatchewan Viking play, Renegade plans to drill 21 gross (20.0 net) wells which represent approximately 46% of the Company's 2014 development budget.

The breakdown of the 2014 capital expenditures program is set forth below:


                                                   2014
                                             ----------
Development Capital ($000)                       43,106
Maintenance Capital ($000)                       10,133
Land and Seismic ($000)                           3,000
Corporate ($000)                                  1,444
-------------------------------------------------------
Total Capital Expenditures ($000)                57,680

OPERATIONS UPDATE

Based on field estimates, Renegade's annualized 2013 production average was 7,450 boe/d which is within the Company's previously disclosed guidance of 7,400 to 7,700 boe/d. During the fourth quarter of 2013, the key operational focus was managing the capital program in areas that provided strong capital efficiencies, defined additional low risk drilling inventory and completed the company's flow through commitment.

Renegade drilled a total of 5 gross (3.5 net) development wells in the fourth quarter of 2013, bringing the 2014 development total to 53 gross (46.8 net) wells of which 17 gross (11.3 net) were in drilled in southeast Saskatchewan and 36 gross (35.5 net) were drilled in west central Saskatchewan.

Strategically, as part of the companies flow through obligations, Renegade completed the acquisition of over 190 sq kms of 3D seismic and an additional 4 gross (4.0 net) vertical test wells were drilled on the asset base during the fourth quarter of 2013. The vertical delineation wells and the acquisition of seismic data will be used to further de-risk the existing land base and provide support for future drilling inventory with a focus on the Frobisher and Alida trends in southeast Saskatchewan.

To date in 2014, the Company has been actively drilling in both fields with 2 gross (1.6 net) wells drilled in southeast Saskatchewan and 9 gross (9.0 net) in the Viking, all of which are in various stages of completion and being brought on production. For the remainder of the quarter, Renegade will be active with one drilling rig in southeast Saskatchewan.

CORPORATE INFORMATION

Renegade is a light oil focused development and production company with assets located in Saskatchewan, Alberta, Manitoba and North Dakota. Renegade's common shares trade on the TSX Venture Exchange under the symbol RPL.

Renegade is also pleased to announce that it has updated its corporate presentation which is available at www.renegadepetroleum.com.

READER ADVISORIES

Forward-Looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning, but not limited to, Renegade's long-term objectives, Renegade's plans to continue to create value for shareholders by investing in low-risk, high rate of return projects, Renegade's capital expenditure program, Renegade's capital budget strategic objectives (including projected commodity mix, corporate declines, capital efficiencies, focus on reduction of G&A and operating costs, dividend payout ratio, all-in payout ratio and number of development drilling locations), Renegade's drilling plans, the expected ability of Renegade to execute on its exploration and development program, anticipated dividend payments, expected sources of funding for capital program and dividend payments, potential drilling locations and drilling plans, expected well economics, commodity pricing and Renegade's anticipated production (both in terms of quantity and raw attributes), funds flow from operations, operating net backs, pay-out ratio net debt, dividends and capital expenditures for 2014, anticipated use of vertical delineation wells and the acquisition of seismic date on Renegade's land base and drilling inventory and other similar matters.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Renegade's proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Renegade's ability to execute on its exploration and development program, the performance of Renegade's personnel, the availability of capital and prevailing commodity prices; (iv) with respect to anticipated production, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and risks typically associated with oil and gas exploration and production and that the Company's production volumes and assumptions related thereto are accurate in all material respects; (v) oil prices; (vi) currency exchange rates; (vii) royalty rates; (viii) operating costs; and (ix) transportation costs.

Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures), changes in general economic, market and business conditions; actions by governmental or regulatory authorities including increasing taxes and changes in investment or other regulations; Renegade's success at acquisition, exploitation and development of reserves; unexpected drilling results; individual well productivity; the lack of availability of qualified personnel or management; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; and ability to access sufficient capital from internal and external sources.

Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide shareholders with a more complete perspective on Renegade's future operations and such information may not be appropriate for other purposes. Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this document are made as of the date hereof and Renegade is not under any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Please refer to Renegade's Annual Information Form dated April 29, 2013 for additional risk factors relating to Renegade, which is available for viewing on www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the plan of arrangement and financing described herein have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.

Dividends

The payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and will depend on the board of director's assessment of Renegade's outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant at such future time. The amount of future cash dividends, if any, may also vary depending on a variety of factors, including fluctuations in commodity prices and differentials, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates.

Conversion

The term "boe" may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. 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 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Non-IFRS Measures

The Company discloses several financial measures that do not have any standardized meaning prescribed under International Financial Reporting Standards ("IFRS"). These financial measures include funds from operations and funds flow from operations per diluted share. Management believes that these financial measures are useful supplemental information to analyze operating performance and provide an indication of the results generated by the Company's principal business activities. Investors should be cautioned that these measures should not be construed as an alternative to net income, cash provided by operating activities or other measures of financial performance as determined in accordance with IFRS. The Company's method of calculating these measures may differ from other companies, and accordingly, they may not be comparable to similar measures used by other companies. Please see the Company's most recent Management's Discussion and Analysis, which is available at www.sedar.com for additional information about these financial measures.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Renegade Petroleum Ltd.
Andrew Greenslade
Interim Chief Financial Officer
(403) 930-1102

Renegade Petroleum Ltd.
Mark Lobello
Interim Chief Financial Officer
(403) 355-8921
www.renegadepetroleum.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Since 2008 and for the first time in history, more than half of humans live in urban areas, urging cities to become “smart.” Today, cities can leverage the wide availability of smartphones combined with new technologies such as Beacons or NFC to connect their urban furniture and environment to create citizen-first services that improve transportation, way-finding and information delivery. In her session at @ThingsExpo, Laetitia Gazel-Anthoine, CEO of Connecthings, will focus on successful use c...
Sensor-enabled things are becoming more commonplace, precursors to a larger and more complex framework that most consider the ultimate promise of the IoT: things connecting, interacting, sharing, storing, and over time perhaps learning and predicting based on habits, behaviors, location, preferences, purchases and more. In his session at @ThingsExpo, Tom Wesselman, Director of Communications Ecosystem Architecture at Plantronics, will examine the still nascent IoT as it is coalescing, includin...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impac...
Wearable devices have come of age. The primary applications of wearables so far have been "the Quantified Self" or the tracking of one's fitness and health status. We propose the evolution of wearables into social and emotional communication devices. Our BE(tm) sensor uses light to visualize the skin conductance response. Our sensors are very inexpensive and can be massively distributed to audiences or groups of any size, in order to gauge reactions to performances, video, or any kind of present...
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applicatio...
VictorOps is making on-call suck less with the only collaborative alert management platform on the market. With easy on-call scheduling management, a real-time incident timeline that gives you contextual relevance around your alerts and powerful reporting features that make post-mortems more effective, VictorOps helps your IT/DevOps team solve problems faster.
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, will discuss why containers should be paired with new architectural practices such as microservices ra...
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been ...
Companies today struggle to manage the types and volume of data their customers and employees generate and use every day. With billions of requests daily, operational consistency can be elusive. In his session at Big Data Expo, Dave McCrory, CTO at Basho Technologies, will explore how a distributed systems solution, such as NoSQL, can give organizations the consistency and availability necessary to succeed with on-demand data, offering high availability at massive scale.
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, de...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...
Security can create serious friction for DevOps processes. We've come up with an approach to alleviate the friction and provide security value to DevOps teams. In her session at DevOps Summit, Shannon Lietz, Senior Manager of DevSecOps at Intuit, will discuss how DevSecOps got started and how it has evolved. Shannon Lietz has over two decades of experience pursuing next generation security solutions. She is currently the DevSecOps Leader for Intuit where she is responsible for setting and driv...
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing...
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes ...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, it is now feasible to create a rich desktop and tuned mobile experience with a single codebase, without compromising performance or usability.