Aeco Price Boosts CDN Pine Cliff in Q3
Canadian gas-weighted producer Pine Cliff Energy said November 3 strengthening commodity prices in western Canada boosted it in Q3 2020, with cash flow from operating activities rebounding to C$3.95mn (US$2.98mn) from a negative $2.93mn in the same period last year.
Still, it reported a loss of $12.1mn for the quarter, down from a $17.74mn loss in Q3 2019.
The benchmark Aeco 5A price recovered in the third quarter to a level not seen in a comparable third quarter since 2016, Pine Cliff CEO Phil Hodge pointed out in his message to shareholders, increasing to C$2.23/’000 ft3 in Q3 2020 from just C$0.90/’000 ft3 in the third quarter last year. About 92% of Pine Cliff’s production is natural gas.
“The continued strengthening of forward Aeco natural gas prices has Pine Cliff optimistic for the fourth quarter of 2020 and calendar 2021,” he said, noting that spot daily Aeco 5A the morning of November 3 was priced at $3.15/’000 ft3 while the forward Aeco 5A price for calendar 2021 was $3.05/’000 ft3.
In Q3 this year, Pine Cliff realised a natural gas price of C$2.18/’000 ft3, 41% higher than in the same period last year, and produced 103.3mn ft3/d, essentially unchanged from a year ago. More than 75% of its natural gas is priced off Aeco, Hodge said, making Pine Cliff “one of the most levered public companies to increases in Aeco pricing.”