Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Third Quarter 2018 Results With Positive Net Income
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, Nov. 8, 2018
All amounts are in U.S. Dollars unless otherwise indicated:
TSX ticker symbol; BKX OTCQX ticker symbol; BNKPF
CAMARILLO, CA, Nov. 8, 2018/CNW/ -
THIRD QUARTER HIGHLIGHTS
Average production for the third quarter of 2018 increased by 40% to 1,534 BOEPD, compared to third quarter 2017 average production of 1,097 BOEPD. The increase was primarily due to the Glenn 16-2H and WLC 14-1H wells that were part of the Company's 2018 drilling program as well as two wells that came into production in the last few months of 2017 partially offset by 77 BOEPD of prior period adjustments Funds from operations increased by 107% to $3.4 millionin the third quarter 2018 compared to $1.7 millionin the third quarter of 2017. The increase was mainly due to an 40% increase in production combined with a 60% increase in prices partially offset by realized losses from commodity contracts in 2018 Revenue, net of royalties increased by 136% to $6.8 millionin the third quarter of 2018 compared to $2.9 millionfor third quarter of 2017, as production increased by 40% and average prices increased 60% between the quarters Average netback from operations increased by 68% for the third quarter of 2018 to $38.33per barrel from the prior year third quarter due to higher prices in 2018 Positive net income for the third quarter of 2018 of $1.2 millioncompared to a net loss of $1.3 millionfor the third quarter of 2017 due to unrealized losses of $0.2 millionfrom hedged commodity contracts in the third quarter of 2018 compared to an unrealized loss of $1.3 millionin the third quarter of 2017 At September 30, 2018, cash totaled $1.5 million
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"The Company's successful 2018 drilling program has resulted in a 40% increase in quarterly production from the prior year. The production increase, combined with a 60% increase in prices, has resulted in a 107% increase in our funds from operations for the third quarter of 2018 compared to the prior year third quarter. As we start the fourth quarter, we are excited about the final phase of our 2018 drilling program as both the Brock 4-2H (BNK 77% working interest) and Anderson 1-15H10X3 (BNK 33% working interest) wells have already been successfully drilled under budget. Fracture stimulation operations of the Brock 4-2H began this week with the two mile long lateral Anderson 1-15H10X3 well to follow in mid-November.
Our net revenue increased by 136% in the third quarter of 2018 due to the production and price increases. Average netbacks from operations for the third quarter of 2018 were $38.33per boe, an increase of 68% compared to the prior year due to higher prices and increased production. Netback after adjustments, which include the impact of price adjustments from commodity contracts and prior period adjustments on natural gas and NGL volumes sold as well as processing costs, were $33.73per boe for the third quarter of 2018 compared to $26.76per boe in the prior year third quarter.
In the third quarter of 2018, the Company generated net income of $1.2 millioncompared to a net loss of $1.3 millionin the third quarter of 2017. This included an unrealized loss on financial commodity contracts of $0.2 millionin the third quarter of 2018, compared to an unrealized loss of $1.3 millionin the third quarter of 2017."
| | Third Quarter | | First Nine Months | | | | | | 2018 | 2017 | % | 2018 | 2017 | % | | Net Income (Loss): | | | | | | | | $ Thousands | $1,184 | $(1,333) | - | $(111) | $(293) | - | | $ per common share | $0.01 | $(0.01) | - | $(0.00) | $(0.00) | - | | assuming dilution | | | | | | | | | | | | | | | | Capital Expenditures | $2,188 | $7,485 | (71%) | $13,771 | $18,969 | (27%) | | | | | | | | | | Average Production (Boepd) | 1,534 | 1,097 | 40% | 1,700 | 942 | 80% | | Average Price per Barrel | $59.37 | $37.05 | 60% | $51.12 | $37.87 | 35% | | Average Netback from operations per Barrel | $38.33 | $22.88 | 68% | $35.39 | $23.09 | 53% | | Average Netback after adjustments per Barrel | $33.73 | $26.76 | 26% | $28.16 | $28.79 | (2%) | | | | | | | | | | | September 2018 | | June 2018 | | December 2017 | | | | | | | | | | | Cash and Cash Equivalents | $ 1,548 | | $ 1,389 | | $ 521 | | | Working Capital | $ (2,541) | | $(3,444) | | $ (537) | |
Third Quarter 2018 versus Third Quarter 2017
Oil and gas gross revenues totaled $8,378,000in the third quarter of 2018 versus $3,739,000in the third quarter of 2017. Oil revenues increased $4,458,000or 146% as oil production increased by 64% to 1,182 boepd and average oil prices increased by $22.90per barrel or 49% to $69.18. Natural gas revenues decreased $106,000or 41% to $151,000as natural gas production decreased 22% to 789 mcfpd, which was coupled by an average natural gas price decrease of $0.66/mcf or 24% to $2.08/mcf. Natural gas production for the third quarter of 2018 included a decrease of 565 mcfpd related to prior period adjustments. Natural gas liquids (NGLs) revenues increased $287,000or 68% as NGL production increased 6% to 220 boepd and average NGL prices increased 59% to $34.89. NGL production for the third quarter of 2018 included an increase of 17 boepd related to prior period adjustments.
Average third quarter 2018 production per day increased 40% from the third quarter of 2017 due to two additional wells added to production in 2018 and two wells added in the last few months of 2017. Third quarter 2018 production also included a decrease of 77 boepd related to prior period adjustments.
Production and operating expenses increased to $1,268,000due to higher production. Production and operating costs on a boe basis increased by 36% to $7.96/boe due to increases in production taxes from tax rate increases in 2018 which increased operating costs by $1.70/boe and additional costs related to water hauling, wireline and road repair work which increased operating costs by $0.31/boe in the quarter.
Depletion and depreciation expense increased $471,000or 33% due to an increase in production in the third quarter of 2018.
General and administrative expenses increased $45,000or 6% due to less capitalized G&A in the third quarter of 2018 compared to the prior year resulting from less drilling activity in the third quarter of 2018 compared to the prior year quarter.
Stock based compensation increased by $13,000or 30% due to the timing of stock awards granted to employees.
Finance income decreased $0.4 millionin the third quarter of 2018 compared to the third quarter of 2017 due to realized gains on commodity contracts in the third quarter of 2017.
Finance expense decreased slightly in the third quarter of 2018 compared to the prior year quarter primarily due to lower unrealized losses on commodity contracts in the 2018 third quarter partially offset by a realized loss on commodity contracts in the third quarter of 2018 and higher interest expense on the credit facility in 2018 due to increased borrowings.
Capital expenditures of $2,188,000were incurred in the third quarter of 2018 relating to the 2018 drilling program.
FIRST NINE MONTHS 2018 HIGHLIGHTS
Average production for the first nine months of 2018 was 1,700 BOEPD, an increase of 80% compared to prior year first nine months average production of 942 BOEPD. The increase was primarily due to the Glenn 16-2H and WLC 14-1H wells that were part of the Company's 2018 drilling program as well as two wells that came into production in the last few months of 2017 and some prior period adjustments Funds from operations were $9.0 millionin the first nine months of 2018 compared to $3.7 millionin the first nine months of 2017, an increase of 144%. The increase was mainly due to a 80% increase in production combined with a 35% increase in average prices partially offset by realized losses from commodity contracts in the first nine months of 2018 Revenue, net of royalties was $18.6 millionfor the first nine months of 2018 compared to $7.5 millionfor the first nine months of 2017, an increase of 147%, due to higher prices and increased production Average netback from operations for the first nine months of 2018 was $35.39per barrel, an increase of 53% from the prior year period due to higher production and prices in 2018 Net loss for the first nine months of 2018 was $0.1 millioncompared to net loss of $0.3 millionfor the first nine months of 2017. The 2018 amount included an unrealized loss on financial commodity contracts of $2.5 millionand the 2017 amount included an unrealized gain on commodity contracts of $0.9 million Cash totaled $1.5 millionat September 30, 2018
First Nine Months of 2018 versus First Nine Months of 2017
Gross oil and gas revenues increased by 144% and totaled $23,724,000in the first nine months of 2018 versus $9,739,000in the first nine months of 2017. Oil revenues were $20,743,000in the first nine months of 2018 versus $8,142,000in the same period of 2017, an increase of 155% as average oil prices increased 40% or $18.89a barrel coupled by an increase in oil production of 82%. Natural gas revenues increased $626,000or 107%, due to an average natural gas production increase of 141% in the first nine months of 2018 offset by a decrease in natural gas prices of 14%. Natural gas production for the first nine months of 2018 included an increase of 634 mcfpd related to prior period adjustments. NGL revenue increased $757,000, or 75%, due to an increase in NGL production of 31% and an average NGL price increase of 34% in the first nine months of 2018. NGL production for the first nine months of 2018 included an increase of 16 boepd related to prior period adjustments.
Average production per day for the first nine months of 2018 increased 40% from the prior year comparable period due to two additional wells added to production in 2018 and two wells added in the last few months of 2017. The production for the first nine months of 2018 also included an increase of 122 boepd related to prior period adjustments.
Production and operating expenses increased 124% for the first nine months of 2018 mainly due to an increase in production. Operating expenses averaged $6.79per BOE for the first nine months of 2018 compared to $6.26per BOE for the same period in 2017. The per BOE operating expense increase for 2018 is due to an increase in production taxes due to rate increases in 2018.
Depletion and depreciation expense increased $2,571,000due to increased production.
General and administrative expenses increased $2,000due to advisor fees in 2018 which offset G&A reductions from management's continued efforts to reduce costs throughout the Company.
Finance income decreased $2.4 milliondue to unrealized and realized gains on financial commodity contracts in 2017.
Finance expense increased $4.5 milliondue to unrealized losses of $2.5 millionand realized losses of $2.0 millionon commodity contracts in 2018.
| BNK PETROLEUM INC. | | | | | CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | | | | | (Unaudited, Expressed in Thousands of United States Dollars) | | | | | ($000 except as noted) | | | | | | | | | | | September 30 | | December 31 | | | 2018 | | 2017 | | | | | | | Current Assets | | | | | Cash | $1,548 | | $521 | | Trade and other receivables | 3,513 | | 2,510 | | Other current assets | 659 | | 563 | | | 5,720 | | 3,594 | | | | | | | Non-current assets
Property, plant and equipment | 155,032 | | 147,195 | | | 155,032 | | 147,195 | | | | | | | Total Assets | $160,752 | | $150,789 | | | | | | | Current Liabilities
Trade and other payables | $5,075 | | $3,132 | | Fair value of commodity contracts | 3,186 | | 999 | | | 8,261 | | 4,131 | | | | | | | Non-current liabilities | | | | | Loans and borrowings | 29,562 | | 24,484 | | Asset retirement obligations | 1,154 | | 950 | | Fair value of commodity contracts | 1,218 | | 951 | | | 31,934 | | 26,385 | | | | | | | Equity | | | | | Share capital | 289,622 | | 289,522 | | Contributed surplus | 22,701 | | 22,406 | | Deficit | (191,766) | | (191,655) | | Total Equity | 120,557 | | 120,273 | | | | | | | Total Equity and Liabilities | $160,752 | | $150,789 |
| BNK PETROLEUM INC. | | | | | | | | | | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except per share amounts) | | | | | | | | | | ($000 except as noted) | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | First Nine Months | | | | | | | | 2018 | | 2017 | | 2018 | | 2017 | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 6,834 | | 2,898 | | 18,632 | | 7,548 | | Other income | | - | | (24) | | 19 | | 52 | | | | 6,834 | | 2,874 | | 18,651 | | 7,600 | | | | | | | | | | | | Production and operating expenses | | 1,268 | | 589 | | 3,611 | | 1,610 | | Depletion and depreciation expense | | 1,879 | | 1,408 | | 6,174 | | 3,603 | | General and administrative expenses | | 837 | | 792 | | 2,727 | | 2,725 | | Stock based compensation | | 57 | | 44 | | 279 | | 131 | | | | 4,041 | | 2,833 | | 12,791 | | 8,069 | | | | | | | | | | | | Finance income | | - | | 396 | | - | | 2,376 | | Finance expense | | (1,561) | | (1,580) | | (5,873) | | (1,418) | | | | | | | | | | | | | | | | | | | | | | Net income (loss) and comprehensive income (loss) from continuing operations | $ | 1,232 | | (1,143) | | (13) | | 489 | | Net loss and comprehensive loss from discontinued operations | | (48) | | (190) | | (98) | | (782) | | Net income (loss) | | 1,184 | | (1,333) | | (111) | | (293) | | Net income (loss) per share | $ | 0.01 | | (0.01) | | (0.00) | | (0.00) |
| BNK PETROLEUM INC. | | | | | | | | THIRD QUARTER 2018 | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | Third Quarter | | First Nine Months | | | | | | 2018 | 2017 | | 2018 | 2017 | | Oil revenue before royalties | $ | 7,521 | 3,063 | | 20,743 | 8,142 | | Gas revenue before royalties | | 151 | 257 | | 1,212 | 586 | | NGL revenue before royalties | | 706 | 419 | | 1,769 | 1,012 | | Oil and Gas revenue | | 8,378 | 3,739 | | 23,724 | 9,740 | | | | | | | | | | Funds from operations | | 3,434 | 1,662 | | 8,995 | 3,688 | | Additions to property, plant & equipment | | 2,188 | 7,485 | | 13,771 | 18,969 | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | 3rd Quarter | | First Nine Months | | | | | | 2018 | 2017 | | 2018 | 2017 | | Average oil production (Bopd) | | 1,182 | 719 | | 1,154 | 635 | | Average natural gas production (mcf/d) | | 789 | 1,018 | | 1,901 | 789 | | Average NGL production (Boepd) | | 220 | 208 | | 229 | 175 | | Average production (Boepd) | | 1,534 | 1,097 | | 1,700 | 942 | | Average oil price ($/bbl) | | $69.18 | $46.28 | | $65.87 | $46.98 | | Average natural gas price ($/mcf) | | $2.08 | $2.74 | | $2.33 | $2.72 | | Average NGL price ($/bbl) | | $34.89 | $21.92 | | $28.35 | $21.20 | | | | | | | | | | Average price (Boe) | | $56.91 | $37.05 | | $53.78 | $37.87 | | Royalties (Boe) | | 10.62 | 8.33 | | 11.60 | 8.52 | | Operating expenses (Boe) | | 7.96 | 5.84 | | 6.79 | 6.26 | | Netback from operations (Boe) | | $38.33 | $22.88 | | $35.39 | $23.09 | | Price adjustment from commodity contracts (Boe) | | (5.71) | 3.88 | | (4.22) | 5.70 | | Netback including commodity contracts (Boe) | | 32.62 | 26.76 | | 31.17 | 28.79 | | Prior period adjustments (Boe) | | 1.11 | - | | (3.01) | - | | Netback after adjustments (Boe) | | $33.73 | $26.76 | | $28.16 | $28.79 |
The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three and nine months ended September 30, 2018and the related management's discussion and analysis thereof, copies of which are available under the Company's profile at www.sedar.com.
NON-GAAP MEASURES
Netback from operations, netback including commodity contracts, netback after adjustments, net operating income and funds from operations (collectively, the "Company's Non-GAAP Measures") are not measures recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by GAAP.
The Company's Non-GAAP Measures are described and reconciled to the GAAP measures in the management's discussion and analysis, which are available under the Company's profile at www.sedar.com.
Cautionary Statements
In this news release and the Company's other public disclosure:
| (a) | The Company's natural gas production is reported in thousands of cubic feet ("Mcfs"). The Company also uses references to barrels ("Bbls") and barrels of oil equivalent ("Boes") to reflect natural gas liquids and oil production and sales. Boes may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. | | | | | (b) | Discounted and undiscounted net present value of future net revenues attributable to reserves do not represent fair market value. | | | | | (c) | Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. | | | | | (d) | The Company discloses peak and 30-day initial production rates and other short-term production rates. Readers are cautioned that such production rates are preliminary in nature and are not necessarily indicative of long-term performance or of ultimate recovery. |
Caution Regarding Forward-Looking Information
This release contains forward-looking information including information regarding the proposed timing and expected results of exploratory and development work including production from the Company's Tishomingofield, Oklahomaacreage, availability of funds from the Company's reserves based loan facility, expected hedging levels and the Company's strategy and objectives. The use of any of the words "target", "plans", "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements.
Such forward-looking information is based on management's expectations and assumptions, including that the Company's geologic and reservoir models and analysis will be validated, that indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that previous exploration results are indicative of future results and success, that expected production from future wells can be achieved as modeled, declines will match the modeling, future well production rates will be improved over existing wells, that rates of return as modeled can be achieved, that recoveries are consistent with management's expectations, that additional wells are actually drilled and completed, that design and performance improvements will reduce development time and expense and improve productivity, that discoveries will prove to be economic, that anticipated results and estimated costs will be consistent with managements' expectations, that all required permits and approvals and the necessary labor and equipment will be obtained, provided or available, as applicable, on terms that are acceptable to the Company, when required, that no unforeseen delays, unexpected geological or other effects, equipment failures, permitting delays or labor or contract disputes are encountered, that the development plans of the Company and its co-venturers will not change, that the demand for oil and gas will be sustained, that the Company will continue to be able to access sufficient capital through financings, credit facilities, farm-ins or other participation arrangements to maintain its projects, that the Company will continue in compliance with the covenants under its reserves-based loan facility and that the borrowing base will not be reduced, that funds will be available from the Company's reserves based loan facility when required to fund planned operations, that the Company will not be adversely affected by changing government policies and regulations, social instability or other political, economic or diplomatic developments in the countries in which it operates and that global economic conditions will not deteriorate in a manner that has an adverse impact on the Company's business and its ability to advance its business strategy.