Canada’s Birchcliff posts record funds flow in Q1
Canadian Montney producer Birchcliff Energy reported record Q1 2022 free funds flow on May 12, and like many of its peers committed to returning most of the bounty to shareholders in the form of higher dividends, with the balance used to reduce debt.
“We continue to be committed to maximising free funds flow generation and significantly reducing indebtedness,” CEO Jeff Tonken said. “I am pleased to report that Birchcliff delivered on both fronts in Q1 2022.”
Free funds flow reached a record C$95.4mn (US$73.1mn) in the first quarter, up from negative flow of C$8.02mn a year ago, while total debt at March 31 stood at C$409mn, down from C$777.4mn on the same date last year.
Based on the strength of forward commodity price markets, Tonken said Birchcliff has increased its target for full year funds flow to C$920-C$940mn from C$330-C$350mn and expects to be debt-free by the end of this year, with a surplus of C$260-C$280mn at year-end.
“As a result, we have accelerated our plans for increasing shareholder returns,” he said. “Our board of directors has declared a doubled quarterly common share dividend of C$0.02/common share for the quarter ending June 30, 2022. In addition, we are currently targeting increasing our annual common share dividend in 2023 to at least $0.80/share (C$212mn annually), subject to commodity prices and the approval of our board of directors.”
Net income in Q1 2022 jumped to C$125.8mn from C$22.2mn, while cash flow from operating activities nearly doubled, to C$154.2mn from C$82.6mn.
Total production for the quarter averaged 76,024 barrels of oil equivalent (boe)/day, a modest 1.3% increase over Q1 2021, but natural gas production was nearly 6% higher, at 365.3mn ft3/day against 345mn ft3/day. Its average realised natural gas price increased to C$5.40/’000 ft3 from C$3.52/’000 ft3.