Canada’s Advantage reports small Q1 loss
Canadian producer Advantage Oil & Gas said April 29 it had managed to nearly recover from a C$266mn (US$216mn) loss in the first quarter last year, but remained C$425,000 in the red for Q1 2021.
Other financial metrics were equally positive: cash from operations increased to C$51.6mn from C$20.8mn, adjusted funds flow jumped to nearly C$54mn from C$32.1mn, and the company slashed its net debt to C$214.5mn from C$364.9mn.
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Production in Q1 averaged a record 49,819 barrels of oil equivalent (boe)/day, up from 46,458 boe/day in Q1 2020. Heavily gas-weighted, Advantage reported record natural gas production of 271.3mn ft3/day in the quarter, up from 256.5mn ft3/day a year ago, while liquids output rose to 4,609 b/day from 3,714 b/day.
Like many Canadian producers, Advantage is diversifying its natural gas marketing programmes away from the sometimes-volatile AECO marketing hub in Alberta. It has hedged 41% of its summer gas production and 37% of its total 2021 production through a series of fixed price swaps at AECO (just 1%), Henry Hub (16%), the Dawn hub in Ontario (10%) and Chicago Citygate (8%).
Physical sales at AECO represent 21% of Advantage’s variable price marketing volumes in 2021; Dawn took 17%, Empress took 11%, Emerson about 2% and the Midwest (Chicago Citygate, Ventura and Henry Hub) about 14%.