VANCOUVER, BRITISH COLUMBIA–(Marketwired – March 22, 2017) – DXI Energy Inc. (TSX:DXI)(OTCQB:DXIEF) (“DXI” or the “Company”), an upstream oil and gas exploration and production company operating in Colorado’s Piceance Basin and the Peace River Arch region in British Columbia, today announced its financial results for the three and twelve month periods ended December 31, 2016.
2016 Key Financial and Operating Highlights are:
| 1. Retired the Company’s bank loan and related credit facility with a Canadian bank; |
| 2. Completed a $995,800 private placement; |
| 3. Decreased G&A expenses for the year ended December 31, 2016 by $675,000 (30%) to $1.6 million in response to a 24% decrease in average realized prices per BOE from 2015 to 2016; and |
| 4. Decreased the loss for the year ended December 31, 2016 to $5.5 million from $7.1 million for the comparative period ended December 31, 2015. |
CORPORATE SUMMARY – THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2016
| OPERATIONS | Three months ended December 31, | Twelve months ended December 31, | |||||
| 2016 | 2015 | Change | 2016 | 2015 | Change | ||
| Production | |||||||
| Oil and natural gas liquids (bbls/d) | 106 | 515 | -80% | 209 | 369 | -43% | |
| Natural gas (mcf/d) | 1,327 | 2,773 | -52% | 1,666 | 1,764 | -6% | |
| Combined (BOE/d) | 327 | 977 | -67% | 487 | 663 | -27% | |
| Realized sales prices | |||||||
| Oil and natural gas liquids ($/bbl) | 57.53 | 46.72 | 23% | 43.25 | 52.68 | -18% | |
| Natural gas ($/mcf) | 3.28 | 2.26 | 45% | 2.47 | 2.33 | 6% | |
| Operating expenses | |||||||
| Oil operations ($/bbl) | 21.63 | 10.62 | 104% | 18.31 | 13.39 | 37% | |
| Natural gas operations ($/mcf) | 3.21 | 3.27 | -2% | 2.59 | 3.19 | -19% | |
| Operating netback | |||||||
| Oil operations ($/bbl) (1) | 27.44 | 26.79 | 2% | 17.45 | 29.04 | -40% | |
| Natural gas operations ($/BOE) (2) | -1.77 | -7.91 | -78% | -2.32 | -6.09 | -62% | |
| General and administrative expenses ($/BOE) | 10.01 | 6.85 | 46% | 8.82 | 9.28 | -5% | |
| Notes: |
| (1) Decline for the year ended December 31, 2016 due to the reduction in oil production at Woodrush combined with 18% reduction in oil prices. |
| (2) Decline for the three and twelve months ended December 31, 2016 due to the reduction in natural gas production combined with the reduction in gas prices. |
| FINANCIAL (CA$ thousands, except per share) | Three months ended December 31, | Twelve months ended December 31, | ||||
| 2016 | 2015 | Change | 2016 | 2015 | Change | |
| Revenue | 558 | 2,206 | -75% | 3,306 | 7,093 | -53% |
| Royalties | 396 | 562 | -30% | 1,502 | 1,486 | 1% |
| Cash flow(1) | -207 | 164 | -226% | -1,017 | 860 | -218% |
| Cash flow per share (basic) | -0.00 | 0.00 | 0% | -0.02 | 0.02 | -203% |
| Cash flow per share (diluted) | -0.00 | 0.00 | 0% | -0.02 | 0.02 | -203% |
| Net loss | 2,366 | 3,827 | -38% | 5,486 | 7,108 | -23% |
| Basic loss ($/common share) | 0.05 | 0.10 | -50% | 0.13 | 0.19 | -33% |
| Diluted loss ($/common share) | 0.05 | 0.10 | -50% | 0.13 | 0.19 | -33% |
| Capital expenditures, net of dispositions | 53 | 1,236 | -96% | 530 | 5,738 | -91% |
| Weighted average common shares outstanding (thousands) | ||||||
| Basic | 44,808 | 36,505 | 23% | 42,095 | 36,492 | 15% |
| Diluted | 44,808 | 36,505 | 23% | 42,095 | 36,492 | 15% |
| Debt, net of working capital | 11,075 | 10,697 | 4% | |||
| Note 1: “Cash flow” is a non-IFRS measure calculated by adding back settlement of decommissioning liabilities and change in operating working capital to cash flows from (used in) operating activities. See “Non-IFRS Measure” below for details. |
SUPPLEMENTAL FINANCIAL INFORMATION – NON-IFRS MEASURE
| Three months ended December 31, | Twelve months ended December 31, | |||
| (CA$ thousands) | 2016 | 2015 | 2016 | 2015 |
| Cash flows from (used in) operating activities | (1,005) | 371 | (350) | 1,064 |
| Change in operating working capital | 798 | (207) | (667) | (204) |
| Cash flow | (207) | 164 | (1,017) | 860 |
RESERVES
Independent Reserves Evaluation
DXI’s reserves were evaluated by independent evaluators as at December 31, 2016 in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). GLJ Petroleum Consultants (“GLJ”) were retained by the Company to evaluate it Canadian properties and Gustavson Associates (“Gustavson”) were retained by the Company to evaluate its US properties. The reserves evaluation was based on forecast pricing as outlined in the notes to the table below entitled “Forecast Prices in 2016 Reserves Report”. Additional reserves disclosures are included in the Company’s AIF for the year ended December 31, 2016.
Summary of Reserves as at December 31, 2016(1)
| Oil | Natural Gas | NGL | Oil Equivalent |
% of Proved Plus Probable |
|
| (MBBL) | (MMCF) | (MBOE) | (MBOE) | Reserves | |
| Proved | |||||
| Developed Producing | 96 | 1,984 | 71 | 498 | 4% |
| Developed Non-Producing | – | 462 | 12 | 89 | 1% |
| Undeveloped | – | 35,094 | 1,923 | 7,771 | 60% |
| Total Proved | 96 | 37,540 | 2,006 | 8,358 | 65% |
| Total Probable | 35 | 21,088 | 1,131 | 4,680 | 35% |
| Total Proved and Probable | 131 | 58,628 | 3,137 | 13,038 | 100% |
| Note 1: Reserves means DXI’s working interest reserves before deduction of royalties and without including any royalty interests. |
Summary of Net Present Values, Before Tax
| Discounted at | ||||||
| (CA$ thousands) | 0% | 5% | 10% | 15% | 20% | |
| Proved | ||||||
| Developed Producing | 4,351 | 3,806 | 3,441 | 3,169 | 2,953 | |
| Developed Non-Producing | 643 | 540 | 473 | 427 | 391 | |
| Undeveloped | 45,639 | 23,322 | 11,271 | 4,028 | (661) | |
| Total Proved | 50,633 | 27,668 | 15,185 | 7,624 | 2,683 | |
| Total Probable | 30,398 | 15,427 | 7,988 | 3,917 | 1,547 | |
| Total Proved and Probable | 81,031 | 43,095 | 23,173 | 11,541 | 4,230 | |
Future Development Costs
| (CA$ thousands) | Proved Reserves | Proved plus Probable Reserves |
| 2017 | 21,146 | 21,146 |
| 2018 | 20,946 | 20,946 |
| 2019 | 10,876 | 20,141 |
| 2020 | – | 20,543 |
| 2021 | – | 1,209 |
| Remainder | 705 | 1,093 |
| Total Undiscounted | 53,673 | 85,078 |
Forecast Prices in 2016 Reserves Report
The following table summarizes the first five years of the forecast prices used by GLJ and Gustavson in preparing DXI Energy’s estimated reserve volumes and net present values of future net revenues in the 2016 reserves report.
| GLJ | Gustavson | ||||||
|
Year |
Natural gas (AECO) Cdn$ / mmbtu |
NGL (Edmonton Pentanes Plus) Cdn$ / bbl |
Crude oil (Edmonton Par) Cdn$ / bbl |
Natural gas (NYMEX Henry Hub) US$ / mmbtu |
NGL (Williams Fork Wellhead) US$ / bbl |
Condensate (NYMEX) US$ / bbl |
|
| 2017 | 3.46 | 72.11 | 69.33 | 3.42 | 38.39 | 42.05 | |
| 2018 | 3.10 | 74.79 | 72.26 | 2.96 | 33.20 | 42.49 | |
| 2019 | 3.27 | 78.75 | 75.00 | 3.21 | 36.02 | 42.09 | |
| 2020 | 3.49 | 79.80 | 76.36 | 3.33 | 37.37 | 42.01 | |
| 2021 | 3.67 | 82.37 | 78.82 | 3.44 | 38.62 | 42.15 | |
| 2022+ | See AIF for additional details | ||||||
About DXI ENERGY INC.
DXI Energy Inc. is an upstream oil and natural gas exploration and production company operating projects in Colorado’s Piceance Basin (25,684 net acres) and the Peace River Arch region in British Columbia (14,444 net acres). DXI Energy Inc. maintains offices in Calgary and Vancouver, Canada. The company is publicly traded on the Toronto Stock Exchange (DXI.TO) and the OTCQB (DXIEF).
Statements Regarding Forward-Looking Information: This news release contains statements about oil and gas production and operating activities that may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation as they involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by DXI Energy and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the exploration and development of oil and gas properties. Additional information on these and other factors, which could affect DXI Energy Inc.’s operations or financial results, are included in DXI Energy Inc.’s reports on file with Canadian and United States securities regulatory authorities. We assume no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change unless otherwise required under securities law.
The TSX does not accept responsibility for the adequacy or accuracy of this news release.
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Robert L. Hodgkinson
Chairman & CEO
604-638-5055
[email protected]
Craig Allison
Investor Relations- New York
914-882-0960
[email protected]
