Intermediates post huge writedowns

Big net losses for Pengrowth Energy, Lightstream Resources in Q3

Big writedowns related to lower future oil and gas price assumptions delivered big net losses for two Calgary- based intermediate explorers in the third quarter.

Pengrowth Energy Corp. reported Tuesday after markets closed an adjusted net loss of $ 374 million in the three- month period ended Sept. 30 thanks to a non- cash impairment charge of $ 375 million related to the value of its property and equipment in view of falling commodity prices.

Late Monday, Lightstream Resources Ltd. noted a third- quarter net loss of $ 426 million, mainly due to a non- cash asset impairment charge of $ 535 million.

Pengrowth reported production of 74,000 barrels of oil equivalent per day, up from 72,000 boe/ d in the same period of 2014, as cash flow fell to $ 120 million from $ 129 million.

The seven per cent reduction in cash flow in spite of a 44 per cent cut in average realized prices was credited to Pengrowth’s hedging program, which locks in prices through forward sales.

Lightstream production averaged 30,000 boe/ d, off 22 per cent from 39,000 boe/ d a year earlier. Cash flow fell 66 per cent to $ 45 million from $ 131 million.

Both companies are also selling assets to pay down debt.

Pengrowth said it expects to reach its goal of $ 600 million in sales this year.

“Living within cash flow in 2015 while reducing our debt remains our primary goal and with the planned sale of $ 600 million of non- core assets, we expect to materially accelerate our debt reduction efforts,” said Pengrowth chief executive Derek Evans in a news release.

Lightstream CEO John Wright said 19 parties had accessed its data room to look at the Saskatchewan Bakken assets it has proposed selling but he doubts any will put forward a credible bid until the pricing market changes.

“The A& D ( acquisition and divestiture) market is essentially dead in this town at this time,” he said on a conference call.

“We do have an active data room for the Bakken but we are not pushing for any bids in this low price environment.”

Lightstream shares gained 21 per cent or 7.5 cents to close at 43 cents on Tuesday.

Its 52- week high was $ 3.93 last November.