Storm Resources Ltd. (“Storm” or the “Company”) is Pleased to Announce Its Financial and Operating Results for the Three Months and Year Ended December 31, 2019

CALGARY, Alberta, Feb. 27, 2020 (GLOBE NEWSWIRE) — Storm has also filed its audited consolidated financial statements as at December 31, 2019 and for the three months and year then ended along with Management’s Discussion and Analysis (“MD&A”) for the same periods.  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 months and year ended December 31, 2019, as well as reserves information at December 31, 2019, appears below and should be read in conjunction with the related financial statements and MD&A.
Highlights    
Excludes gains and losses on risk management contracts.Certain financial amounts shown above are non-GAAP measurements. See discussion of Non-GAAP Measurements on page 40 of the MD&A. CROCE and ROCE are presented on a 12-month trailing basis.Excludes the fair value of risk management contracts, decommissioning liability and lease liability.PRESIDENT’S MESSAGE2019 FOURTH QUARTER HIGHLIGHTSThe start-up of a four well pad at Nig in late November increased production while funds flow benefitted from the increase in production and from an improvement in natural gas prices at AECO and Station 2.  Construction continued on the Nig Gas Plant which was completed and started up February 22, 2020 (previously expected to be in January 2020).  
Production at 22,375 Boe per day was an increase of 20% from the previous quarter and was largely unchanged from the previous year.  Production was reduced by approximately 500 Boe per day due to curtailments in October as a result of the low Station 2 price ($0.36 per GJ).
 Liquids production (field condensate plus gas plant NGL) increased 2% from last year to total 4,262 barrels per day, represented 19% of total production and contributed 33% of production revenue.
 A four well pad at Nig started production in late November with initial rates from the three wells in the upper/mid Montney being the same as earlier wells; however, longer-term rates are expected to be lower given tighter interwell spacing on the newest wells (400 metres versus 465 metres for earlier wells).  The fourth well in the lower Montney has a higher condensate rate while the gas rate is lower (IP90 5.5 Mmcf per day raw gas plus 315 barrels per day field condensate). 
 Revenue was $23.64 per Boe, a decline of $12.60 per Boe or 35% from last year, mainly from lower NGL and natural gas prices.  The NGL price declined 83% as a result of lower North American propane prices and a reduction in the contracted plant gate price for propane and butane during the current marketing period from April 2019 to March 2020.  The natural gas price declined 41% as a result of lower pricing in the Chicago and Sumas markets (66% of sales).    
 Production, general and administrative, and interest and finance costs were $7.08 per Boe, a year-over-year increase of $0.62 per Boe with interest expense increasing $0.26 per Boe (higher debt level associated with funding construction of the Nig Gas Plant) and production cost increasing $0.21 per Boe (inflation escalator increasing third-party gas processing fees plus the scheduled increase in BC carbon tax in April 2019).
 Hedging loss of $1.6 million resulted from Sumas price hedges that were entered into before a failure on the Enbridge T-south pipeline in October 2018 which decreased throughput and increased the Sumas price (repairs completed late November 2019).
 Funds flow was $18.5 million or $0.15 per share with the year-over-year decrease of 40% per share largely the result of revenue being reduced by lower commodity prices.      
 Net income was $2.9 million compared to $26.8 million in the prior year with the decline primarily attributable to lower commodity prices reducing revenue and funds flow. 
 Capital investment of $24 million included $19 million for the Nig Gas Plant project plus $3 million to pipeline connect a four well pad at Nig.  Investment was less than guidance ($32 to $37 million) with $9 million for the construction of the Nig Gas Plant being shifted into the first quarter of 2020 as a result of delays in equipment deliveries (damage to a bridge south of Fort St. John in late November required loads to be rerouted).
 Total debt including working capital deficiency was $129 million or 1.7 times annualized quarterly funds flow and represents 63% utilization of the $205 million bank line.  The year-over-year increase in total debt is a result of the large investment in the Nig Gas Plant project in 2019 which totaled $61 million (63% of total investment).    
 Commodity price hedges currently protect approximately 29% of forecast production in the first half of 2020 and 7% in the second half of 2020.2019 YEAR-END HIGHLIGHTS