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Canada : NuVista Energy Ltd. Announces First Quarter 2018 Financial and Operating Results

May 14, 2018 (Euclid Infotech Ltd via COMTEX) --

NuVista Energy Ltd., is pleased to announce results for the three months ended March 31, 2018 and provide an update on our future business plans.

This has been another successful quarter for NuVista, with key operational advancements, the favorable placement of senior unsecured notes and the renewal of our credit facility. It was also a quarter where despite industry headwinds, we have seen improvement in oil and condensate pricing, and relative steadiness in NYMEX natural gas pricing. Due to our favorable price diversification and natural gas export position, NuVista has not been materially exposed to the downward pressure affecting AECO natural gas pricing. As a result, NuVista adjusted funds flow netbacks have continued to strengthen and our balance sheet remains robust as we progress on our 60,000 Boe/d growth plan.

Key Financial and Operational Highlights

During the quarter ended March 31, 2018 NuVista:

Achieved production of 36,100 Boe/d, at the top of the guidance range of 34,500 36,000 Boe/d and 35% greater than the comparative quarter in 2017. Condensate volume weighting remained similar to the prior year at 31% but decreased from the short term high of 35% for the fourth quarter of 2017, as expected;

Attained adjusted funds flow of $58.7 million for the quarter ($0.34/share, basic), compared to $43.3 million ($0.25/share, basic) for the first quarter of 2017. Q1 2018 includes approximately $9 million in costs for the early redemption of our prior $70 million term note;

Achieved adjusted funds flow netbacks of $18.09/Boe as compared to $17.98/Boe for the first quarter of 2017;

Realized operating costs of $10.02/Boe as compared to $10.72 for the comparable quarter in 2017;

Continued our downward trend in net G&A expenses, reaching $1.41/Boe, as compared to $1.71 in the first quarter of 2017;

Executed a successful $115 million capital expenditure program for the first quarter running three to four rigs and drilling 8 gross (8 net) successful wells in our Wapiti asset; and

Successfully drilled, completed and brought on stream the longest horizontal lateral well ever drilled in Canada at almost 3,000 Boe/d, including over 1,000 BBls/d of condensate.

Credit Facility, Senior Notes, and Hedging

Exited the first quarter of 2018 with nil drawn on the Companys $310 million credit facility. Net debt, including senior unsecured notes and working capital deficiency, was $259 million;

Achieved net debt to annualized current quarter adjusted funds flow of 1.1 times;

During the quarter, NuVista issued $220 million of 6.5% five year senior unsecured notes due March 2, 2023. The net proceeds were used in part to redeem the Companys pre-existing 9.875% senior unsecured notes in the amount of $70 million and the excess proceeds were used for a non-permanent repayment of indebtedness under NuVistas existing credit facility;

Subsequent to the first quarter of 2018, NuVista successfully concluded the annual review of our borrowing base with our lenders with no change to the $310 million credit capacity, and;

Continued to prudently and selectively add to our hedge positions for 2018 and beyond. We currently possess hedges which in aggregate cover approximately 70% of 2018 projected liquids production with a price floor of C$70.41/Bbl, and approximately 70% of 2018 projected gas production at a price of C$2.62/Mcf. Both of these percentage figures relate to production net of royalty volumes. Early in the second quarter, NuVista added approximately 40 MMcf/d of physical natural gas delivery to the US Pacific NW/Northern California markets with the completion of the NGTL Sundre Crossover Pipeline Project. This was also our first full quarter utilizing the long term fixed priced (LTFP) contract volumes of 45 MMcf/d on the TCPL pipeline to the Dawn hub. NuVista has also continued to add long term NYMEX basis hedges for terms out as far as 2024. Combined with our natural gas pipeline export contracts and NYMEX natural gas basis hedges, NuVista has essentially no exposure to AECO natural gas pricing through the full year of 2018 and a maximum AECO natural gas volume exposure range of approximately 15-25% throughout our 60,000 Boe/d growth plan.

Bilbo, Elmworth, and Gold Creek Update

Drilling at Bilbo during the quarter continued as planned with one to two rigs operating and wells being brought on stream to maintain production at or near 18,000 Boe/d. Pad sizes for new wells currently range from two to five wells per pad. Four new wells were brought onstream during the quarter, with average IP30s of 1,972 Boe/d including 46% condensate, or 124 Bbls condensate per MMcf of raw gas. NuVistas first Lower Montney well which started up at the end of 2017 continues to perform favorably. This quarter the well reached an IP90 condensate rate of 540 Bbls/d, an excellent outcome as compared to the average of all prior NuVista Middle Montney Bilbo wells at 550 Bbls/day condensate. The Bilbo compressor station is performing well, with indications of peak-day production capability as high as 20,000 Boe/d as compared to original nameplate capacity of 18,000 Boe/d.

One rig was deployed at Elmworth during the quarter, currently drilling a four-well pad. Production averaged 14,200 Boe/d for the quarter and is now being restricted to make room for the new Gold Creek wells which have come on stream.

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