Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Annual 2018 Results with Net Income of $5.3 Million
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, March 20, 2019
All amounts are in U.S. Dollars unless otherwise indicated:
TSX ticker symbol; BKX QTCQX ticker symbol; BNKPF
CAMARILLO, CA, March 20, 2019/CNW/ -
2018 HIGHLIGHTS
Net income was $5.3 millionfor 2018 compared to a net loss of $1.6 millionin 2017 due to higher production and prices in 2018 compared to the prior year. In addition, the Company had an unrealized gain on financial commodity contracts of $2.3 millionin 2018, compared to an unrealized loss of $1.2 millionin 2017. Funds from continuing operations was $11.5 millionfor 2018 compared to $6.5 millionfor 2017, an increase of 77% The Company's Total Proved Reserves increased by 26% to 33.8 million barrels of oil equivalent (BOE) and NPV10 value of the Total Proved Reserves increased by 31% to $376.9 millionbased on the Company's December 31, 2018independent reserves evaluation. Average production for 2018 was 1,662 BOEPD, an increase of 52% compared to 2017 production of 1,092 BOEPD. This increase was mainly due to production from 3 new wells in 2018, the Glenn 16-2H, Brock 4-2H and the WLC 14-1H Average netback from operations was $33.99per BOE in 2018, an increase of 33% compared to 2017 due to higher production and prices in 2018. Revenue, net of royalties was $23.8 millionfor 2018 compared to $12.6 millionin 2017, an increase of 89%, due to higher prices and production compared to 2017 Percentage of oil produced increased to 72% in 2018 compared to 70% of the production mix in 2017. The increase of oil in the mix is due to the most recent wells being drilled in locations with a higher concentration of oil.
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"We are very pleased with the results of our 2018 drilling program and our latest reserves report. The three wells that came on production during the year have significantly increased our production. Our average production for 2018 was 1,662 BOE per day, which was an increase of 52% from 2017. Our 2018 drilling program, as well as our existing wells outperforming previous estimates, also significantly improved our reserve report, as our proved reserves increased by 26% from 2017, to 33.8 million BOE. The NPV10 value of our proved reserves increased by 31% to $376.9 millioncompared to 2017.
"Our 2018 performance generated funds from continuing operations of $11.5 millionin 2018, which was a 77% increase from 2017. In addition, we generated net income of $5.3 millioncompared to a net loss of $1.6 millionin the prior year.
"Revenue, net of royalties was $23.8 millionfor 2018, an increase of 89% compared to the prior year due to the increase in production as well as prices.
"Average netback from operations for 2018 was $33.99per BOE, an increase of 33% compared to the prior year due to higher production and prices. 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 $27.71per BOE for 2018 compared to $29.39per BOE in the prior year.
The operator of the Anderson 1-15H10X3 well has successfully cleaned out the lateral, recovering debris that we believe was restricting production, and the well has been put back on flowback. We expect to have a better understanding of the productivity of the well once the fracture stimulation fluid has been recovered, which may take several weeks.
| | Fourth Quarter | | Year Ended | | | | | | 2018 | 2017 | % | 2018 | 2017 | % | | | | | | | | | | Net Income (Loss): | | | | | | | | $ Thousands | $5,431 | $(1,303) | -% | $5,320 | $(1,596) | -% | | $ per common share | $0.02 | $(0.01) | -% | $0.02 | $(0.01) | -% | | assuming dilution | | | | | | | | | | | | | | | | Funds from continuing operations | $2,537 | $2,834 | (10%) | $11,532 | $6,522 | 77% | | Capital Expenditures | $5,850 | $302 | 1,837% | $19,621 | $19,271 | 2% | | | | | | | | | | Average Production (Boepd) | 1,555 | 1,539 | 1% | 1,662 | 1,092 | 52% | | Gross Revenue | 6,640 | 6,410 | 4% | 30,367 | 16,150 | 88% | | Average Price per Barrel | $47.11 | $45.27 | 4% | $52.15 | $40.52 | 29% | | Average Netback from operations
per Barrel | $29.67 | $29.81 | -% | $33.99 | $25.49 | 33% | | Average Price after adjustments per Barrel | $27.12 | $30.46 | (11%) | $27.71 | $29.39 | (6%) | | | | | | | | | | | | December 2018 | | December 2017 | | | | | | | | | | | | Cash and Cash Equivalents | | $1,456 | | $521 | | | | Working Capital | | ($2,393) | | ($537) | | | | | | | | | | |
Year Ended 2018 to Year Ended 2017
For 2018, oil and gas revenues net of royalties increased $11,243,000or 89% to $23,834,000. Oil revenues before royalties increased by 92% to $26,281,000due to a 30% increase in prices between years and a 48% increase in production. Natural gas revenues before royalties increased $651,000or 77% due to a 103% increase in natural gas production partially offset by a 13% decrease in average gas prices. NGL revenue before royalties increased $996,000or 63% due to a 25% increase in average prices and by a 30% increase in production.
Average production per day for 2018 increased 52% from the prior year due to three additional wells added to production during the year. The production for 2018 also included an increase of 99 boepd related to prior period adjustments.
Operating expenses increased by $2,247,000due to an increase in production due to the new wells and an increase in production taxes. Excluding the prior period adjustments, operating expenses averaged $6.90per BOE for 2018 compared to $6.10per BOE for 2017. The per BOE operating expense increases for 2018 are due to an increase in production taxes due to rate increases in both January 2018and July 2018which increased operating expense by $1.70per BOE compared to the prior year periods.
Depletion and depreciation expense increased $2,412,000due to increased production.
General and administrative expenses decreased $155,000due to the Company's continued cost cutting efforts partially offset by advisor fees in 2018.
Finance income increased $767,000due to unrealized gains on commodity contracts in 2018 of $2,349,000. In the prior year, the Company had realized gains of $1,556,000from commodity contracts.
Finance expense increased $1,191,000due to realized losses on commodity contracts of $2,210,000in 2018. In 2017, the Company had unrealized losses of $1,184,000from commodity contracts.
Capital expenditures of $19,621,000were incurred in 2018 for drilling and completion costs in Oklahomaduring the year.
FOURTH QUARTER HIGHLIGHTS:
Net income was $5.4 millionin the fourth quarter 2018 compared to a net loss of $1.3 millionin the prior year fourth quarter due to unrealized gains on commodity contracts of $4.8 millioncompared to an unrealized loss of $2.1 millionin the fourth quarter of 2017 Average production for the quarter was 1,555 BOEPD, an increase of 1% compared to the prior year fourth quarter due to the increased production from the wells drilled during 2018 Revenue, net of royalties, was $5.2 millionfor fourth quarter 2018, an increase of 3% compared to the fourth quarter 2017 due to increased production G&A expense decreased by $157,000, or 16%, due primarily to continued cost cutting in 2018 Funds from continuing operations was $2.5 millionin the fourth quarter of 2018 compared to $2.8 millionin the prior year fourth quarter, a decrease of 11%, due to higher operating costs related to production tax increases in 2018 Average netback from operations for the fourth quarter of 2018 was $29.67compared to $29.81for the fourth quarter of 2017. The 2018 netback includes production tax increases which increased operating expense by $1.70per BOE compared to the prior year fourth quarter. If the impact of commodity contracts and prior period adjustments are included, the average netback after adjustments for the fourth quarter of 2018 was $27.12per BOE compared to $30.46per BOE in the fourth quarter of 2017
Fourth Quarter 2018 to Fourth Quarter 2017
Oil and gas revenues net of royalties totaled $5,202,000in the quarter versus $5,043,000in the fourth quarter of 2017, an increase of 3%. Oil revenues were $5,538,000in the quarter versus $5,571,000in the fourth quarter of 2017, a decrease of 1% due to decreased production of 8% offset by an increase in average oil prices of 8%. Natural gas revenues increased 10% due to an increase in production of 24% partially offset by a decrease in natural gas prices of 12%. NGL revenue increased 41% to $817,000as average NGL production increased by 30% and average prices increased by 9%.
Operating expenses increased by $246,000in the fourth quarter of 2018 compared to 2017 due to an increase in production taxes.
Depletion and depreciation expense decreased $159,000due to the increase in the reserves in the fourth quarter.
General and administrative expenses decreased $157,000between quarters due to continued cost cutting efforts.
Finance income increased $4,712,000in the fourth quarter of 2018 due to unrealized gains on commodity contracts of $4,803,000.
Finance expense decreased $1,695,000due to unrealized losses on commodity contracts of $2,067,000in the fourth quarter of 2017.
Capital expenditures of $5,850,000were incurred in the fourth quarter of 2018 for drilling and completion costs in Oklahomaduring the year.
| | | | | | | BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | December 31, | | December 31, | | | | 2018 | | 2017 | | Current assets | | | | | | Cash and cash equivalents | $ | 1,456 | $ | 521 | | Trade and other receivables | | 2,965 | | 2,510 | | Deposits and prepaid expenses | | 609 | | 563 | | Fair value of commodity contracts | | 407 | | - | | | | 5,437 | | 3,594 | | | | | | | | Non-current assets | | | | | | Property, plant and equipment | | 159,122 | | 147,195 | | | | | | | | Total assets | $ | 164,559 | $ | 150,789 | | | | | | | | Current liabilities | | | | | | Trade and other payables | $ | 7,830 | $ | 3,132 | | Fair value of commodity contracts | | - | | 999 | | | | 7,830 | | 4,131 | | | | | | | | Non-current liabilities | | | | | | Fair value of commodity contracts | | 9 | | 951 | | Loans and borrowings | | 29,551 | | 24,484 | | Asset retirement obligations | | 1,127 | | 950 | | | | 30,687 | | 26,385 | | | | | | | | Equity | | | | | | Share capital | | 289,622 | | 289,522 | | Contributed surplus | | 22,755 | | 22,406 | | Deficit | | (186,335) | | (191,655) | | Total equity | | 126,042 | | 120,273 | | | | | | | | Total equity and liabilities | $ | 164,559 | $ | 150,789 |
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except per share amounts) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended
December 31 | | Year ended
December 31 | | | | | | | | 2018 | | 2017 | | 2018 | | 2017 | | Revenue: | | | | | | | | | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 5,202 | $ | 5,043 | $ | 23,834 | $ | 12,591 | | Other income | | 1 | | (39) | | 20 | | 13 | | | | 5,203 | | 5,004 | | 23,854 | | 12,604 | | Expenses: | | | | | | | | | | | | | | | | | | | | Exploration and evaluation | | - | | 3 | | - | | 3 | | Production and operating | | 1,067 | | 821 | | 4,678 | | 2,431 | | Depletion and depreciation | | 1,734 | | 1,893 | | 7,908 | | 5,496 | | General and administrative | | 854 | | 1,011 | | 3,581 | | 3,736 | | Share based compensation | | 45 | | 49 | | 324 | | 180 | | | | 3,700 | | 3,777 | | 16,491 | | 11,846 | | | | | | | | | | | | | | | | | | | | | | Finance income | | 4,803 | | 91 | | 2,349 | | 1,582 | | Finance expense | | (800) | | (2,495) | | (4,219) | | (3,028) | | | | | | | | | | | | Net income/(loss) and comprehensive income/(loss) from continuing operations | $ | 5,506 | $ | (1,177) | $ | 5,493 | $ | (688) | | Net loss and comprehensive loss from discontinued operations | | (75) | | (126) | | (173) | | (908) | | Net loss and comprehensive loss | $ | 5,431 | $ | (1,303) | $ | 5,320 | $ | (1,596) | | | | | | | | | | | | Net income/loss per share | | | | | | | | | | Continuing operations | | 0.02 | | (0.01) | | 0.02 | | (0.00) | | Discontinued operations | | (0.00) | | (0.00) | | (0.00) | | (0.00) | | Basic and Diluted | $ | 0.02 | $ | (0.01) | $ | 0.02 | $ | (0.01) |
| BNK PETROLEUM INC. | | | | | | | | FOURTH QUARTER AND YEAR ENDED 2018 | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2018 | 2017 | | 2018 | 2017 | | Oil revenue before royalties | $ | 5,538 | 5,571 | | 26,281 | 13,712 | | Gas revenue before royalties | | 285 | 260 | | 1,497 | 846 | | NGL revenue before royalties | | 817 | 578 | | 2,586 | 1,590 | | | | 6,640 | 6,409 | | 30,364 | 16,148 | | | | | | | | | | Funds from continuing operations | | 2,537 | 2,834 | | 11,532 | 6,522 | | Additions to property, plant & equipment | | (5,850) | (302) | | (19,621) | (19,271) | | | | | | | | | | Statistics: | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2018 | 2017 | | 2018 | 2017 | | Average oil production (Bopd) | | 1,043 | 1,137 | | 1,126 | 761 | | Average natural gas production (mcf/d) | | 1,389 | 1,119 | | 1,772 | 873 | | Average NGL production (Boepd) | | 280 | 215 | | 241 | 185 | | Average production (Boepd) | | 1,555 | 1,539 | | 1,662 | 1,092 | | Average oil price ($/bbl) | | $57.69 | $53.26 | | $63.96 | $49.34 | | Average natural gas price ($/mcf) | | $2.23 | $2.52 | | $2.31 | $2.66 | | Average NGL price ($/bbl) | | $31.73 | $29.17 | | $29.34 | $23.54 | | | | | | | | | | Average price per barrel | | $47.11 | $45.27 | | $52.15 | $40.52 | | Royalties per barrel | | 10.20 | 9.66 | | 11.26 | 8.93 | | Operating expenses per barrel | | 7.24 | 5.80 | | 6.90 | 6.10 | | Netback from operations | | $29.67 | $29.81 | | $33.99 | $25.49 | | Price adjustment from commodity contracts (Boe) | | (1.78) | 0.65 | | (3.87) | 3.90 | | Netback including commodity contracts (Boe) | | 27.89 | 30.46 | | 30.12 | 29.39 | | Prior period adjustments (Boe) | | (0.77) | - | | (2.41) | - | | Netback after adjustments (Boe) | | $27.12 | $30.46 | | $27.71 | $29.39 |
The information outlined above is extracted from and should be read in conjunction with the Company's audited financial statements for the year ended December 31, 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 per barrel and netback including commodity contracts, 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. |
Readers are referred to the full description of the results of the Company's December 31, 2018independent reserves evaluation and other oil and gas information contained in its Form 51-101F1 _Statement of Reserves Data and Other Oil and Gas Information_for the year ended December 31, 2018, which the Company filed on SEDAR on March 11, 2019.
Caution Regarding Forward-Looking Information
This release contains forward-looking information including estimates of reserves, the proposed timing and expected results of exploratory and development work including production from the Company's Tishomingofield, Oklahomaacreage, the future performance of wells including following shut-in's and restart of well(s), the expected effects of cost reduction efforts, availability of funds from the Company's reserves based loan facility 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.