fact, a sizeable purchase of 10,000 or 15,000 BOED, provided of course the assets are solid and the transaction is accretive would fit just perfectly into Shoreline’s plan. Going beyond 2012, Shoreline will continue to expand on its light oil drilling program and target a continued 50/50 oil to natural gas mix for the foreseeable future, thereby, never being dependent on anyone commodity,
Commodity Price Cycles and the Shoreline advantage
its exploration land base of 128,000 acres positions Shoreline to be a thriving, growing E&P company that pays a sustainable dividend.
Tomorrow Shoreline Management team are company builders and determined to complete a series of well planned accretive acquisitions that grow the company. Shoreline’s goal is to double production to 5000 BOED then be a 5,000 BOED producer going to 10,000 BOED and beyond. The management team is both capable and primed to grow the Company through strategic acquisitions. In
Alberta is largely a natural gas basin and junior companies are typically very sensitive to natural gas prices. This continued natural gas price weakness has left many companies with a tight balance sheet and they cannot access bank debt or capital markets to fund oil drilling opportunities at a time when oil prices are high and gas prices are low. Natural gas prices were weak from October 2011 through to May 2012, during this time; Shoreline was producing its gas economically, but derived little cash flow from it and had no opportunity to hedge or forward sell during this time. However, crude oil made a high of $109 during this time frame and so Shoreline forward sold 54% of its oil production for 2012 at an average price of $104 per barrel and half that amount for 2013. Now, in July, oil prices have weakened, natural gas prices have increased, Shoreline is forward selling its gas production above its budget forecast pricing. n
The Shoreline Highlights and Features • Consistently paid a quarterly dividend since inception • Opportunistically acquires and consolidates producing assets in weak commodity price environments • Explores for and produces oil and natural gas from a concentrated land base of 128,000 acres in the PRA • Uses conventional horizontal drilling technology to exploit known oil pools • Traded on the Toronto Stock Exchange • Rotation to balance of oil and gas over next year • Innovative and powerful use of physical and financial hedging to increase net cash flow bOperatorship of all major growth projects, allowing for control of timing of capital spent bRecent acquisitions have increased company’s position in a high impact oil resource play where other operators are drilling wells between 200 and 400 barrels of light oil per day. First drilling to occur in Q3 2012, with success potential for 10 to 25 follow up wells bLow risk light oil development opportunities being capitalized in 2012. New wells have initial production between 150 and 300 barrels per day each bStrategy to grow to between 5000 and 15000 BOED in the next 2 to 3 years. Currently evaluating over $300MM in potential acquisitions bSenior Management team has actively explored for, developed and managed between 15,000 and 50,000 BOED in the Peace River arch for much of the past two decades * BOED is Barrels of oil equivalent per day
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Micro-Cap Review Magazine
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