Birchcliff Energy sees red ink in Q1 on hedging losses
Canadian Montney producer Birchcliff Energy said May 10 it had a Q1 2023 net loss of C$42.5mn (US$31.6mn) which it attributed to an unrealised mark-to-market loss on its Nymex/AECO basis swap contracts. Q1 2022 net income was C$125.8mn.
Adjusted funds flow fell to C$88.7mn from C$183.7mn, while free funds flow was a negative C$26.3mn compared to C$95.4mn a year ago. During the quarter, Birchcliff returned C$53.4mn to shareholders in the form of dividends, up from C$2.7mn in Q1 2022.
Average production in the quarter fell to 74,592 barrels of oil equivalent (boe)/day from 76,024 boe/day a year ago. But natural gas production climbed to 383.1mn ft3/day from 365.3mn ft3/day. Birchcliff’s average realised natural gas price, excluding the effects of financial instruments, fell to C$3.68/’000 ft3from C$5.40/’000 ft3 in Q1 2022.
Alongside its financial results, Birchcliff also updated its expanding Elmworth land position south of its Montney assets in northwest Alberta.
Birchcliff now holds 153 sections (about 98,000 acres) of contiguous 100% working interest lands about 25 km south of its producing properties at Pouce Coupe and Gordondale.
“This significant land base positions Birchcliff to continue to drive long-term shareholder value, providing us with a large potential future development area that can supply clean natural gas for many years to come,” CEO Jeff Tonken said.
The largely undeveloped land provides Birchcliff with a large potential future development area, which it said is well-suited to supply clean natural gas to future LNG export facilities in Canada. Birchcliff is one of six producers in the Rockies LNG Partnership, which is working with the Nisga’a Nation in BC and Houston’s Western LNG to advance a 12mn metric tons/year floating LNG project on BC’s north coast.