Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Second Quarter 2019 Results with Net Income of $1.5 Million
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, Aug. 8, 2019
All amounts are in U.S. Dollars unless otherwise indicated:
TSX ticker symbol; BKX OTCQX ticker symbol; BNKPF
CAMARILLO, CA, Aug. 8, 2019/CNW/ -
SECOND QUARTER HIGHLIGHTS
Net income for the second quarter of 2019 was $1.5 millioncompared to a net loss of $0.8 millionfor the second quarter of 2018 due to unrealized gains of $1.1 millionfrom hedged commodity contracts in the second quarter of 2019 compared to an unrealized loss of $1.4 millionin second quarter 2018 General & administrative expenses decreased by 7% for the second quarter of 2019 compared to the second quarter of 2018. The decrease relates to management's continued efforts to reduce costs throughout the Company and the adoption of IFRS 16 which lowered rent expense Average netback from operations for the second quarter of 2019 was $29.67per barrel, a decrease of 17% from the prior year second quarter due to lower prices in 2019. Netbacks after adjustments was $27.20which was an increase of 9% from the second quarter of 2018 Average production for the second quarter of 2019 was 1,355 BOEPD, a decrease of 35% compared to the second quarter of 2018 average production of 2,100 BOEPD. Excluding the impact of prior period adjustments that were included in only the 2018 production numbers, average production decreased by 21% for the second quarter of 2019. This decrease was due to 2 wells that were temporarily shut-in during a portion of the quarter due to pipeline repairs as well as the high IP Glenn 16-2H well that came on production at the beginning of the 2018 second quarter Adjusted funds flow was $2.5 millionin the second quarter 2019 compared to $3.9 millionin the second quarter of 2018. The decrease was mainly due to a 35% decrease in production combined with a 13% decrease in oil prices Revenue, net of royalties was $4.6 millionin the second quarter of 2019 compared to $6.9 millionfor second quarter of 2018, a decrease of 33%, as production decreased by 35% and prices decreased by 13% At June 30, 2019, cash totaled $2.9 million
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"We are pleased that the Company generated net income of $1.5 millionand adjusted funds flow of over $2.5 millionduring the quarter. The Company also continues to reduce its overhead with a 7% reduction in G&A expenses for the quarter. The Company is expected to continue to generate positive cash flow for the remainder of the year and forecasts that it will have generated enough cash to be able to begin drilling the next well in the field in the fourth quarter. The special committee of the board of directors of the Company continues to examine and evaluate all strategic options as it has received interest in various options from third parties.
The Company generated net income of $1.5 millioncompared to a net loss of $0.8 millionin the second quarter 2018. This is partially due to an unrealized gain on financial commodity contracts of $1.1 millionin the second quarter of 2019, compared to an unrealized loss of $1.4 millionin the second quarter of 2018.
The Company's G&A expenses decreased by 7% due to continued cost cutting and the implementation of the new lease accounting standard which lowered the Company's rental expense in 2019.
Average production for the second quarter of 2019 was 1,355 BOEPD, a decrease of 35% compared to the second quarter of 2018 average production of 2,100 BOEPD. This decrease was primarily due to prior period adjustments related to natural gas and NGL volumes in 2018 which added 375 boepd to the average production for the second quarter of 2018. There were no prior period adjustments in the second quarter of 2019. Excluding the impact of the prior period adjustments, average production decreased by 21% for the second quarter of 2019. In addition, both the Anderson 1-15H10X3 well and the WLC 14-2H well were temporarily shut-in in May 2019due to pipeline repairs which contributed to the production decline. The Anderson 1-15H10X3 resumed production in June 2019but the WLC 14-1H well is not expected to resume production until mid-August 2019. Also, the Glenn 16-2H well had its first three months of production in the second quarter of 2018.
Average netback from operations for the second quarter of 2019 was $29.67per boe, a decrease of 17% from the prior year second quarter due to lower prices in 2019. Netbacks after adjustments, which include the impact of price adjustments from commodity contracts and the 2018 prior period adjustments on natural gas and NGL volumes sold as well as processing costs, was $27.20per boe, which was an increase of 9% from the second quarter of 2018.
Our net revenue was $4.6 millionin the second quarter of 2019 compared to $6.9 millionfor second quarter of 2018, a decrease of 33%. Adjusted funds flow was $2.5 millionin the second quarter 2019 compared to $3.9 millionin the second quarter of 2018. These decreases were mainly due to a 35% decrease in production combined with a 13% decrease in average prices."
| | Second Quarter | | First Six Months | | | | | | 2019 | 2018 | % | 2019 | 2018 | % | | | | | | | | | | Net Income (Loss): | | | | | | | | $ Thousands | $1,531 | $(801) | - | $ 54 | $(1,295) | - | | $ per common share assuming dilution | $0.01 | $(0.00) | - | $0.00 | $(0.01) | - | | | | | | | | | | | | | | | | | | Capital Expenditures | $363 | $3,652 | (90%) | $1,115 | $11,582 | (90%) | | | | | | | | | | Average Production (Boepd) | 1,355 | 2,100 | (35%) | 1,426 | 1,783 | (20%) | | Average Price per Barrel | $47.06 | $54.31 | (13%) | $44.84 | $52.15 | (14%) | | Average Netback from operations per Barrel | $29.67 | $35.60 | (17%) | $28.31 | $33.86 | (16%) | | Average Netback after adjustments per Barrel | $27.20 | $24.97 | 9% | $26.45 | $25.72 | 3% | | | | | | | | | | | June
2019 | | March
2019 | | December 2018 | | | | | | | | | | | Cash and Cash Equivalents | $ 2,855 | | $1,708 | | $1,456 | | | Working Capital | $ (598) | | $(2,969) | | $(2,393) | |
Second Quarter 2019 versus Second Quarter 2018
Oil and gas gross revenues totaled $5,802,000in the quarter versus $9,028,000in the second quarter of 2018. Oil revenues decreased $2,470,000or 32% as oil production decreased by 22% to 1,001 boepd and average oil prices decreased by $8.10per barrel or 12% to $58.07. Natural gas revenues decreased $433,000or 63% to $252,000as natural gas production decreased 68% to 1,053 mcfpd which was partially offset by an average natural gas price increase of $0.37/mcf or 16% to $2.63/mcf. Natural gas production for the second quarter of 2018 included 2,104 mcfpd related to prior period adjustments. Excluding the impact of the prior period adjustments, average natural gas production decreased by 14% for the second quarter of 2019 compared to the second quarter of 2018. Natural gas liquids (NGLs) revenues decreased $323,000or 55% as NGL production decreased 31% to 178 boepd and average NGL prices decreased 35% to $16.19. NGL production for the second quarter of 2018 included 24 boepd related to prior period adjustments. Excluding the impact of the prior period adjustments, average NGL production decreased by 24% for the second quarter of 2019 compared to the second quarter of 2018.
Average production for the second quarter of 2019 was 1,355 BOEPD, a decrease of 35% compared to the second quarter of 2018 average production of 2,100 BOEPD. This decrease was primarily due to prior period adjustments related to natural gas and NGL volumes in 2018 which added 375 boepd to the average production for the second quarter of 2018. There were no prior period adjustments in the second quarter of 2019. Excluding the impact of the prior period adjustments, average production decreased by 21% for the second quarter of 2019. In addition, both the Anderson 1-15H10X3 well and the WLC 14-2H well were temporarily shut-in in May 2019due to pipeline repairs which contributed to the production decline. The Anderson 1-15H10X3 resumed production in June 2019but the WLC 14-1H well is not expected to resume production until mid-August 2019. Also, the Glenn 16-2H well had its first three months of production in the 2ndquarter of 2018.
Production and operating expenses decreased to $945,000due to lower production. Production and operating costs on a boe basis increased by 37% to $7.66/boe due to the impact of a production tax increase in July 2018which increased the second quarter 2019 amount by $0.43per boe. In addition, the per BOE operating expense increase for the second quarter of 2019 is due to the decrease in production which raises the fixed operating cost per barrel, as well as equipment repairs due to lightning strikes in the second quarter of 2019.
Depletion and depreciation expense decreased $1,010,000or 40% due to a decrease in production in the second quarter of 2019 and increased reserves in 2019.
General and administrative expenses decreased $61,000or 7% due to continued cost cutting efforts in the second quarter of 2019 and the adoption of IFRS 16 which lowered rent expense.
Stock based compensation decreased by $165,000or 85% due to the timing of stock awards granted to employees.
Finance income increased $1.1 millionin the second quarter of 2019 compared to the prior year quarter due to unrealized gains on commodity contracts in the second quarter of 2019.
Finance expense decreased $1.8 millionin the second quarter of 2019 compared to the prior year quarter primarily due to an unrealized loss on commodity contracts of $1.4 millionin the second quarter of 2018.
Capital expenditures of $363,000were incurred in the second quarter of 2019 relating to the Tishomingofield.
At June 30, 2019, the Company's US subsidiary had borrowed all of the committed amount of $30.0 millionon the credit facility with BOK Financial. The Company paid down $0.5 millionof the commitment amount in August 2019.
FIRST SIX MONTHS 2019 HIGHLIGHTS
Net income for the first six months of 2019 was $54 thousandcompared to a net loss of $1.3 millionfor the first six months 2018 due to unrealized losses of $0.7 millionfrom commodity contracts in the first six months of 2019 compared to an unrealized loss of $2.2 millionin the first six months of 2018 General & administrative expenses decreased by 10% for the first six months of 2019 compared to the first six months of 2018. The decrease relates to management's continued efforts to reduce costs throughout the Company, advisor fees incurred in the prior year and the adoption of IFRS 16 which lowered rent expense Average netback from operations for the first six months of 2019 was $28.31per barrel, a decrease of 16% from the prior year period due to lower prices in 2019. Netbacks after adjustments was $26.45which was an increase of 3% from the first six months of 2018 Average production for the first six months of 2019 was 1,426 BOEPD, a decrease of 20% compared to prior year first six months average production of 1,783 BOEPD. Excluding the impact of prior period adjustments that were included in only the 2018 production numbers, average production decreased by 9% for the first six months of 2019. This decrease was due to 2 wells that were temporarily shut-in during a portion of the quarter due to pipeline repairs Adjusted funds flow was $5.1 millionin the first six months of 2019 compared to $6.4 millionin the first six months of 2018. The decrease was mainly due to a 20% decrease in production combined with a 14% decrease in oil prices Revenue, net of royalties was $9.2 millionfor first six months of 2019 compared to $11.8 millionfor the first six months of 2018, a decrease of 22%, due to lower prices in 2019 and decreased production Cash totaled $2.9 millionat June 30, 2019
First Six Months of 2019 versus First Six Months of 2018
Gross oil and gas revenues totaled $11,573,000in the first six months of 2019 versus $15,348,000in the first six months of 2018. Oil revenues were $10,512,000in the first six months versus $13,224,000in the same period of 2018, a decrease of 21% as average oil prices decreased 14% or $8.91a barrel coupled by a decrease in oil production of 8%. Natural gas revenues decreased $500,000or 47%, due to an average natural gas production decrease of 58% in the first six months of 2019 offset by an increase in natural gas prices of 25%. Natural gas production for the first six months of 2018 included 1,244 mcfpd related to prior period adjustments. Excluding the impact of the prior period adjustments, average natural gas production decreased by 15% for the second quarter of 2019 compared to the second quarter of 2018. NGL revenue decreased $563,000, or 53%, due to a decrease in NGL production of 14% and an average NGL price decrease of 45% in the first six months of 2019. NGL production for the first six months of 2018 included 15 boepd related to prior period adjustments. Excluding the impact of the prior period adjustments, average NGL production decreased by 8% for the second quarter of 2019.
Average production for the first six months of 2019 was 1,426 BOEPD, a decrease of 20% from the average production of 1,783 BOEPD in the same period of 2018. These decreases were primarily due to prior period adjustments related to natural gas and NGL volumes in 2018 which added 222 boepd for the first six months of 2018. There were no prior period adjustments in 2019. Excluding the impact of the prior period adjustments, average production decreased by 9% for the first six months of 2019 compared to the comparable prior year periods. In addition, both the Anderson 1-15H10X3 well and the WLC 14-2H well were temporarily shut-in in May 2019due to pipeline repairs which contributed to the production decline. The Anderson 1-15H10X3 resumed production in June 2019but the WLC 14-1H well is not expected to resume production until mid-August 2019.
Production and operating expenses decreased 20% for the first six months of 2019 due to a decrease in production. Operating expenses averaged $7.26per BOE for the first six months of 2019 compared to $6.18per BOE for the same period in 2018. The increase was due to the impact of a production tax increase in July 2018which increased the first six months of 2019 amount by $0.42per boe. In addition, the per BOE operating expense increase for the first six months of 2019 is due to the decrease in production which raises the fixed operating cost per barrel, as well as equipment repairs due to lightning strikes in the second quarter of 2019.
Depletion and depreciation expense decreased $1,095,000due to a decrease in production in the first six months of 2019 and increased reserves in 2019.
General and administrative expenses decreased $200,000, or 10%, primarily due to management's continued efforts to reduce costs throughout the Company, advisor fees that were incurred in 2018 and the adoption of IFRS 16 which lowered rent expense.
Stock based compensation decreased by $128,000due to the timing of stock awards granted to employees.Finance expense decreased $2.1 milliondue to lower unrealized and realized losses on commodity contracts in 2019 offset by higher interest expense on the credit facility in 2019.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | ($000 except as noted) | | | | | | | | | | | June 30 | | December 31 | | | 2019 | | 2018 | | | | | | | Current Assets | | | | | Cash | $2,855 | | $1,456 | | Trade and other receivables | 2,296 | | 2,965 | | Other current assets | 457 | | 609 | | Fair value of commodity contracts | - | | 407 | | | 5,608 | | 5,437 | | | | | | | Non-current assets
Property, plant and equipment | 157,123 | | 159,122 | | Fair value of commodity contracts | 280 | | - | | Right of use assets | 174 | | - | | | 157,577 | | 159,122 | | | | | | | Total Assets | $163,185 | | $164,559 | | | | | | | Current Liabilities
Trade and other payables | $5,499 | | $7,830 | | Fair value of commodity contracts | 555 | | - | | Lease payable | 152 | | - | | | 6,206 | | 7,830 | | | | | | | Non-current liabilities | | | | | Loans and borrowings | 29,606 | | 29,551 | | Asset retirement obligations | 1,144 | | 1,127 | | Fair value of commodity contracts | - | | 9 | | Lease payable | 27 | | - | | | 30,777 | | 30,687 | | | | | | | Equity | | | | | Share capital | 289,622 | | 289,622 | | Contributed surplus | 22,861 | | 22,755 | | Deficit | (186,281) | | (186,335) | | Total Equity | 126,202 | | 126,042 | | | | | | | Total Equity and Liabilities | $163,185 | | $164,559 |
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except per share amounts) | | | | | | | | | | | | | | | | | | | | ($000 except as noted) | | | | | | | | | | | | | | | | | | | | | Second Quarter | | First Six Months | | | | | | | | | 2019 | | 2018 | | 2019 | | 2018 | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 4,601 | | 6,866 | | 9,178 | | 11,798 | | Other income | | 1 | | 1 | | 2 | | 19 | | | | 4,602 | | 6,867 | | 9,180 | | 11,817 | | | | | | | | | | | | Production and operating expenses | | 945 | | 1,356 | | 1,874 | | 2,343 | | Depletion and depreciation expense | | 1,531 | | 2,541 | | 3,200 | | 4,295 | | General and administrative expenses | | 830 | | 891 | | 1,737 | | 1,937 | | Stock based compensation | | 28 | | 193 | | 94 | | 222 | | | | 3,334 | | 4,981 | | 6,905 | | 8,797 | | | | | | | | | | | | Finance income | | 1,109 | | - | | 8 | | - | | Finance expense | | (846) | | (2,687) | | (2,229) | | (4,315) | | | | | | | | | | | | Net income (loss) | | 1,531 | | (801) | | 54 | | (1,295) | | Net income (loss) per share | $ | 0.01 | | (0.00) | | 0.00 | | (0.01) |
| BNK PETROLEUM INC. | | | | | | | | SECOND QUARTER 2019 | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | Second Quarter | | First Six Months | | | | | | | 2019 | 2018 | | 2019 | 2018 | | Oil revenue before royalties | $ | 5,288 | 7,758 | | 10,512 | 13,224 | | Gas revenue before royalties | | 252 | 685 | | 561 | 1,061 | | NGL revenue before royalties | | 262 | 585 | | 500 | 1,063 | | Oil and Gas revenue | | 5,802 | 9,028 | | 11,573 | 15,348 | | | | | | | | | | Adjusted funds flow | | 2,525 | 3,884 | | 5,099 | 6,378 | | Additions to property, plant & equipment | | 363 | 3,653 | | 1,115 | 11,583 | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | 2nd Quarter | | First Six Months | | | | | | | 2019 | 2018 | | 2019 | 2018 | | Average Oil production (Bopd) | | 1,001 | 1,288 | | 1,052 | 1,139 | | Average natural gas production (mcf/d) | | 1,053 | 3,328 | | 1,041 | 2,467 | | Average NGL production (Boepd) | | 178 | 257 | | 200 | 233 | | Average production (Boepd) | | 1,355 | 2,100 | | 1,426 | 1,783 | | Average oil price ($/bbl) | | $58.07 | $66.17 | | $55.22 | $64.13 | | Average natural gas price ($/mcf) | | $2.63 | $2.26 | | $2.98 | $2.38 | | Average NGL price ($/bbl) | | $16.19 | $25.01 | | $13.80 | $25.21 | | | | | | | | | | Average price (Boe) | | $47.06 | $54.31 | | $44.84 | $52.15 | | Royalties (Boe) | | 9.73 | 13.12 | | 9.27 | 12.11 | | Operating expenses (Boe) | | 7.66 | 5.59 | | 7.26 | 6.18 | | Netback from operations (Boe) | | $29.67 | $35.60 | | $28.31 | $33.86 | | Price adjustment from commodity contracts (Boe) | | (2.47) | (3.85) | | (1.86) | (3.58) | | Netback including commodity contracts (Boe) | | 27.20 | 31.75 | | 26.45 | 30.28 | | Prior period adjustments (Boe) | | - | (6.78) | | - | (4.56) | | Netback after adjustments (Boe) | | $27.20 | $24.97 | | $26.45 | $25.72 |
The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three and six months ended June 30, 2019and 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 adjusted fund flow (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.