Storm Resources Ltd. (“Storm” or the “Company”) is Pleased to Announce Its Financial and Operating Results for the Three and Six Months Ended June 30, 2020

CALGARY, Alberta, Aug. 12, 2020 (GLOBE NEWSWIRE) — Storm Resources Ltd. (TSX:SRX)Storm has also filed its unaudited condensed interim consolidated financial statements as at June 30, 2020 and for the three and six months then ended along with Management’s Discussion and Analysis (“MD&A”) for the same period. This information appears on SEDAR at www.sedar.com and on Storm’s website at www.stormresourcesltd.com.
Selected financial and operating information for the three and six months ended June 30, 2020 appears below and should be read in conjunction with the related financial statements and MD&A.Highlights

PRESIDENT’S MESSAGE2020 SECOND QUARTER HIGHLIGHTSThe considerable efforts made by Storm’s employees mitigated the many impacts of the COVID-19 pandemic on the business. Compared to last year, production grew by 20% and there was a large realized hedging gain, however, this was offset by lower natural gas and condensate prices which reduced revenue. Production costs showed a significant improvement as a result of the start-up of the Nig Creek Gas Plant in February 2020. With capital expenditures minimized in the quarter, debt was reduced by $8.3 million from the previous quarter. Production was 23,935 Boe per day, effectively unchanged from the previous quarter and an increase of 20% year over year. This was consistent with guidance for production to average 23,000 to 25,000 Boe per day. Year to date, three wells (3.0 net) have started production, all at West Umbach.
 Liquids production (condensate plus NGL) totaled 4,806 barrels per day, an increase of 4% from the previous quarter and an increase of 31% year over year. Liquids as a proportion of total production has increased as a result of higher NGL recoveries at the Nig Creek Gas Plant which started up in February 2020.
 The benefits of the Nig Creek Gas Plant were realized with corporate production costs declining by 31%, or $1.39 per Boe, from last year while higher liquids recovery added approximately 500 barrels per day. The Nig Creek area represented 36% of corporate production while providing 60% of field operating income before hedging.
 Production from the Nig Creek wells continues to meet or exceed expectations with declines from the upper/mid Montney being shallower than expected while the first well in the lower Montney has a higher field condensate rate. The four most recent wells started production in November 2019 with rates over the first eight months averaging approximately 1,550 Boe per day sales (100 barrels per day field condensate) for the three wells in the upper/mid and approximately 875 Boe per day sales (170 barrels per day field condensate) for the lower.
 Revenue was $13.86 per Boe, a 33% decline from last year mainly due to lower condensate and natural gas prices. The condensate price declined 64% as a result of the collapse in the WTI price (partially offset by a hedging gain). The natural gas price declined 16% as a result of declines in the Chicago and Sumas prices (66% of sales) which more than offset an increase in the AECO and BC Station 2 prices (29% of sales).
 Liquids increased to 20% of sales volumes (from 18% last year); however, the proportion of production revenue from liquids decreased to 23% from 38% last year as a result of the decline in the condensate price.
 Production, general and administrative, and interest and finance costs were $5.90 per Boe, a year-over-year decrease of $1.38 per Boe as a result of lower production costs resulting from the start-up of the Nig Creek Gas Plant in February.
 Hedging provided a realized gain of $6.5 million versus a realized loss of $0.4 million in the prior year. The majority of the gain, $4.9 million, was from WTI crude oil contracts.
 Funds flow was $10.9 million, or $0.09 per share, a decrease of $1.7 million from last year as a result of lower revenue per Boe which more than offset production growth, lower production costs per Boe and the hedging gain.
 Net loss was $11.7 million with the largest contributor to the decrease from net income of $7.9 million last year being an unrealized hedging loss (non-cash) of $13.8 million which represents the change in the value of future hedging contracts. 
 Capital investment was $2.4 million (within guidance for less than $3 million) and included $1.5 million to complete the Nig Creek Gas Plant project.
 Total debt including working capital deficiency was $130 million which is 3.0 times annualized quarterly funds flow. As part of the annual review, the bank line was voluntarily reduced to $190 million (from $205 million) in order to reduce the associated fees.
 The undiscounted and inflated decommissioning liability totaled $35.4 million. The liability for currently inactive wells and facilities is approximately $10 million with approximately 75% of this expected to be incurred by 2025.OPERATIONS REVIEWUmbach, Nig Creek and Fireweed Areas, Northeast British Columbia