Lightstream's Q4 production and cash flow per share were just slightly under my forecast. The big non-cash writedown is meaningless to me. This one is all about cash flow and getting their balance sheet cleaned up with free cash flows and asset sales. They made a good first step toward that goal in Q4. Higher oil & gas prices in Q1 should result in more free cash flows. I know they are working on more asset sales. - Dan
In this press release, annual comparisons are 2013 compared to 2012 and quarterly comparisons are fourth quarter 2013 compared to fourth quarter 2012, unless otherwise noted. All references to well counts are on a net basis.
•Average daily production for 2013 increased to 46,438 barrels of oil equivalent per day ("boepd"), representing a 9% increase over our 2012 average production of 42,784 boepd.
•Average fourth quarter 2013 production was 45,521 boepd, essentially unchanged from third quarter of 2013, and was 4% lower than the fourth quarter of 2012.
•Our operating netback for 2013 was $50.00/boe, 4% higher than our operating netback in 2012, and for the fourth quarter it was $45.43/boe, down 5% from the fourth quarter of 2012.
•Funds flow was $671 million ($3.43 per basic share) for 2013, a 12% increase over 2012; fourth quarter funds flow was $146 million ($0.73 per basic share), down 13% from the prior year. < This is the most important line.
•Capital expenditures (before acquisitions and divestitures) were $716 million for 2013, 25% below 2012 levels, and $156 million for the fourth quarter of 2013, a decrease of 57% for the same period a year earlier.
•For 2013 we are reporting a net loss from operations of $1,384 million ($7.07 per basic share) primarily due to a one-time non-cash goodwill impairment charge of $1,342 million.
Lightstream Resources Q4 results
Lightstream Resources Q4 results
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Lightstream Resources Q4 results
Lightstream has enough free cash flow and liquidity to continue paying dividends at the current rate. My forecast is based on $90/bbl WTI and $4.00/mcf. It shows that Lightstream should generate close to $100Cdn million free cash flow in 2014. - Dan
LIQUIDITY AND CAPITAL RESOURCES
Lightstream’s strategy is to provide a reasonable dividend payout to shareholders combined with an
accretive long-term growth-oriented business plan. We are focused on securing appropriate levels of
capitalization to support this business strategy. As commodity prices fluctuate, we have the ability to alter
our capital program and/or dividend payments in order to maintain acceptable debt levels. We will continue
to monitor our plans and forecasts and make adjustments required to maintain acceptable levels of
capitalization.
As at December 31, 2013, Lightstream had $1.16 billion of bank debt drawn on our $1.4 billion credit facility.
Our credit facility is with a syndicate of banks and has a maturity date of June 2, 2016. Generally, the credit
facility is not subject to periodic reviews unless significant asset dispositions occur. The credit facility has
financial covenants that limit the ratio of secured debt (defined as total drawn on the credit facility) to
EBITDA on a trailing twelve month basis to 3:1 (December 31, 2013 – 1.5:1), limit the ratio of total debt
(defined as total drawn on the credit facility plus value of outstanding convertible debentures plus value of
senior unsecured notes in Canadian dollars) to EBITDA adjusted for certain non-cash items on a trailing 12
month basis to 4:1 (December 31, 2013 – 2.6:1), and limit secured debt to 50% of total debt plus total equity
(December 31, 2013 – 28.8%). The Company is in compliance with all covenants on its credit facility. The
credit facility has an accordion feature providing that at any time during the term, on participation of any
existing or additional lenders, the Company can increase the facility by $100 million to $1.5 billion.
At December 31, 2013, the Company had US$900 million of senior unsecured notes (“Notes”) outstanding.
The Notes bear interest at a rate of 8.625% per annum and mature February 1, 2020. The Notes contain
covenants that could limit the Company’s ability to issue additional debt, pay dividends, and repurchase
stock, among other restrictions. The Company is in compliance with all of these covenants.
As at December 31, 2013, Lightstream had convertible debentures outstanding of US$6.5 million with an
annual coupon of 3.125%. This is a US$293.5 million decrease from December 31, 2012 resulting from the
exercise of a one-time early put option right on February 8, 2013. Lightstream elected to repay the
debentures in cash rather than shares, which was funded from our $1.4 billion credit facility. The
convertible debentures have a financial covenant that limits the amount of security and encumbrances to
35% of our total assets. The Company is in compliance with this covenant.
The Company had $240 million of available liquidity at December 31, 2013.
In addition to the liquidity noted above, other possible sources of funds available to Lightstream include the
following:
• Funds flow from operations;
• Sale of producing or non-producing assets (including joint venture structures). Cash generated from
a sale may be reduced by any required debt repayments;
• Increases to our existing $1.4 billion credit facility;
• Adjustments to our capital program;
• Issuance of additional subordinated or convertible debt;
• Dividend reduction; and
• Issuance of common shares.
We expect to satisfy ongoing working capital requirements with funds flow from operations and available
credit.
LIQUIDITY AND CAPITAL RESOURCES
Lightstream’s strategy is to provide a reasonable dividend payout to shareholders combined with an
accretive long-term growth-oriented business plan. We are focused on securing appropriate levels of
capitalization to support this business strategy. As commodity prices fluctuate, we have the ability to alter
our capital program and/or dividend payments in order to maintain acceptable debt levels. We will continue
to monitor our plans and forecasts and make adjustments required to maintain acceptable levels of
capitalization.
As at December 31, 2013, Lightstream had $1.16 billion of bank debt drawn on our $1.4 billion credit facility.
Our credit facility is with a syndicate of banks and has a maturity date of June 2, 2016. Generally, the credit
facility is not subject to periodic reviews unless significant asset dispositions occur. The credit facility has
financial covenants that limit the ratio of secured debt (defined as total drawn on the credit facility) to
EBITDA on a trailing twelve month basis to 3:1 (December 31, 2013 – 1.5:1), limit the ratio of total debt
(defined as total drawn on the credit facility plus value of outstanding convertible debentures plus value of
senior unsecured notes in Canadian dollars) to EBITDA adjusted for certain non-cash items on a trailing 12
month basis to 4:1 (December 31, 2013 – 2.6:1), and limit secured debt to 50% of total debt plus total equity
(December 31, 2013 – 28.8%). The Company is in compliance with all covenants on its credit facility. The
credit facility has an accordion feature providing that at any time during the term, on participation of any
existing or additional lenders, the Company can increase the facility by $100 million to $1.5 billion.
At December 31, 2013, the Company had US$900 million of senior unsecured notes (“Notes”) outstanding.
The Notes bear interest at a rate of 8.625% per annum and mature February 1, 2020. The Notes contain
covenants that could limit the Company’s ability to issue additional debt, pay dividends, and repurchase
stock, among other restrictions. The Company is in compliance with all of these covenants.
As at December 31, 2013, Lightstream had convertible debentures outstanding of US$6.5 million with an
annual coupon of 3.125%. This is a US$293.5 million decrease from December 31, 2012 resulting from the
exercise of a one-time early put option right on February 8, 2013. Lightstream elected to repay the
debentures in cash rather than shares, which was funded from our $1.4 billion credit facility. The
convertible debentures have a financial covenant that limits the amount of security and encumbrances to
35% of our total assets. The Company is in compliance with this covenant.
The Company had $240 million of available liquidity at December 31, 2013.
In addition to the liquidity noted above, other possible sources of funds available to Lightstream include the
following:
• Funds flow from operations;
• Sale of producing or non-producing assets (including joint venture structures). Cash generated from
a sale may be reduced by any required debt repayments;
• Increases to our existing $1.4 billion credit facility;
• Adjustments to our capital program;
• Issuance of additional subordinated or convertible debt;
• Dividend reduction; and
• Issuance of common shares.
We expect to satisfy ongoing working capital requirements with funds flow from operations and available
credit.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Lightstream Resources Q4 results
Lightstream's foundation remains strong. We have a light-oil focused asset base, 200.2 MMboe of proved plus probable reserves that have an net present value of $4.1 billion (before taxes, discounted at 10%), and an inventory of over 2,000 drilling locations. Our assets provide a platform to generate long-term funds flow growth and returns for our shareholders. Currently, three out of our four major business units are generating positive cash flow for our Company. We expect similar results from the Swan Hills area as we move forward with our development plan. As a Company, we are optimistic for the future and see 2014 as a year of progress for all aspects of our business, including execution of our capital plan and strengthening our balance sheet.
Compares to a market cap of $1.1 Billion Cdn.
Compares to a market cap of $1.1 Billion Cdn.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Lightstream Resources Q4 results
Lightstream Resources Ltd. (LTS.TO and LSTMF): An updated Net Income & Cash Flow Forecast model has been posted under the Watch List Tab.
Lightstream should generate over $3.00Cdn cash flow from operations in 2014. Based on my forecast model there is very little risk they will be forced to cut the dividend in 2014.
If oil price hold up and production ramps up into year-end, this one will be fine.
Lightstream should generate over $3.00Cdn cash flow from operations in 2014. Based on my forecast model there is very little risk they will be forced to cut the dividend in 2014.
If oil price hold up and production ramps up into year-end, this one will be fine.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group