Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces 4th Quarter and Annual 2013 results
TSX - Toronto Stock Exchange · United States
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CAMARILLO, CA, March 13, 2014/CNW/ - All amounts are in U.S. Dollars unless otherwise indicated:
| | | Fourth Quarter | | Year Ended | | | | | | | | | | | | 2013 | | 2012 | | % | | 2013 | | 2012 | | % | | | | | | | | | | | | | | | | Earnings (Loss): | | | | | | | | | | | | | | $ Thousands | | $(11,016) | | $(4,538) | | - | | $(19,710) | | $(14,948) | | - | | $ per common share | | $(0.08) | | $(0.03) | | - | | $(0.14) | | $(0.10) | | - | | assuming dilution | | | | | | | | | | | | | | | | | | | | | | | | | | | | Capital Expenditures | | $36,502 | | $4,945 | | 638% | | $81,772 | | $40,537 | | 102% | | | | | | | | | | | | | | | | Average Production (Boepd) | | 877 | | 1,681 | | (48%) | | 776 | | 1,581 | | (51%) | | Gross Revenue | | 5,678 | | 5,184 | | 10% | | 13,995 | | 20,028 | | (30%) | | Average Product Price per Barrel | | $70.39 | | $33.52 | | 110% | | $49.39 | | $34.61 | | 43% | | Average Netback per Barrel | | $50.65 | | $17.83 | | 184% | | $30.81 | | $17.75 | | 74% | | | | | | | | | | | | | | | | | | | | | | 12/31/2013 | | 12/31/2012 | | | | | | | | | | | | | | | | | | | | Cash, Cash Equivalents and Marketable Securities | | | | | | $42,215 | | $2,836 | | | | | | Working Capital | | | | | | $18,854 | | $472 | | | | |
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"I feel we have made excellent progress this last year on both our U.S. and European projects. In our 2013 Tishomingo Field, Caneyformation drilling program, our efforts were focused on reducing drilling time and cost, testing the optimal lateral placement within the formation and optimizing the fracture stimulations resulting in increasing the oil rate of each consecutive well. These goals were achieved. The last two wells that we drilled and completed in 2013, the Barnes 7-2H and the Wiggins 12-8H, have been our best performing wells to date, demonstrating lower decline rates along with higher percentages of oil in the production mix. The Barnes 7-2H well, which still has 15% of the lateral left to fracture stimulate, had a 60 day initial production rate of 360 barrels of oil per day (bopd) (469 barrels of oil equivalent per day (boepd)) and the Wiggins 12-8H well, where only approximately half the length of the lateral was effectively stimulated was 273 bopd (402 boepd). These two wells were the first to be drilled in the lower Caneyinterval rather than the Transition zone which was targeted in the first three wells. The Company's fourth quarter average production was 877 boepd and our December average production was approximately 1,050 boepd.
"The 2013 year end reserves report confirmed the Company's belief in the potential for the Caneyas the Company's proved and probable ("2P") gross reserves were estimated at approximately 15.5 million boe, while the proved, probable and possible ("3P") gross reserves were estimated at approximately 40.9 million boe. The net present value of Future Net Revenue before tax, discounted at 10% was $286 millionfor the 2P reserves and $847 millionfor the 3P reserves.
"We look forward to starting our 2014 drilling program in the second quarter after we obtain the final data from the Barnes 7-2 whole core analysis. Fracture stimulation operations are expected to begin at the end of this month on the first of the two lateral Caneywellbores that were not yet fully fracture stimulated (the remaining 15% of the Barnes 7-2H well and the Leila 31-2H well). In addition, work on the locations and surface casing installation for the next two Caneywells has already commenced and is expected to be finalized in the coming weeks.
"In less than 8 months after selling substantially all of our producing assets we were able to replace all of our revenue as our fourth quarter 2013 revenues exceeded 2012 fourth quarter revenues by over $400,000. Our cash flow from operations for the fourth quarter 2013 was $2.3 million, which is $1.5 millionmore than our 2012 fourth quarter operating cash flow. In addition, our Caneynetbacks for the fourth quarter 2013 averaged $50.65per barrel, a 184% increase over the netbacks from the Woodfordproduction in the fourth quarter of last year, which averaged $17.83per barrel.
"In Poland, the Company successfully drilled, cased and cemented the Gapowo B-1 well in its Bytow concession. We are encouraged by the high gas shows encountered in the 5,900 feet of lateral and we look forward to fracture stimulating the first thirty percent of the available length. After this portion of the well has been tested we will design the stimulation for the rest of the lateral, incorporating what we learn from the first stimulation.
"The fracture stimulation design for the first portion of the Gapowo B-1 well has been finalized, subcontractors have been selected and location work is underway. We expect to commence fracture stimulation of this well as soon as the location work is complete.
"In 2013, Saponis Investments Sp. z o.o ("Saponis") decided to relinquish the Slawno and Starogard concessions, while retaining the Slupsk concession. In December 2013, the Company increased its ownership in Saponis to 57.04%, up from 26.7%. This triggered an impairment test of the Company's Saponis interest under IFRS rules and the resulting impairment plus the writedown of the two concessions contributed to the Company recording a $7.5 millionloss from equity investments. However, the Company believes its interest in Saponis is more valuable now than prior to these events due to its increased interest in the more prospective Slupsk concession.
"The Company incurred an $11.0 millionloss in the fourth quarter of 2013, which includes the nonrecurring $7.5 millionSaponis equity investment loss and a $1.7 millionwrite-off of the Darlowo lease in Poland, versus a loss of $4.5 millionin the fourth quarter of 2012.
"For the 2013 year the Company incurred a loss of $19.7 millionversus a loss of $14.9 millionin 2012. Oil and gas revenues declined $4.9 million, or 30%, due to a decrease in average production per day due to the sale by the Company in April 2013of all of its rights in the Woodfordand other formations in the Tishomingo Field (the "WoodfordSale"), which was offset by production from our subsequently drilled Caneywells and an increase in average pricing per barrel.
"The Company recorded a gain of $9.5 millionon the Woodford Sale, and used a portion of the proceeds to pay down its debt from $41 millionto $100,000. Offsetting this gain was $3.5 millionrelated to the amortization of deferred financing costs, a pre-payment penalty of $2.5 millionand a $2.5 millionpayment to settle all of our financial commodity contracts."
FOURTH QUARTER HIGHLIGHTS:
Drilled and fracture stimulated the Barnes 7-2H and Wiggins 12-8H wells in the Caneyformation in the Tishomingo Field Received required EIA and concession modification to drill Gapowo B-1 well lateral in Poland In January 2014, completed the drilling and ran casing on the Gapowo B-1 well, which is expected to be fracture stimulated in the second quarter of 2014 Oil and gas revenues were $4.6 million, which exceeded the prior year quarter for the first time since the Woodford Sale Cash flow from operating activities was $2.3 millioncompared to prior year operating cash flows of $0.8 million Netbacks were $50.65per barrel compared to $17.83in the prior year fourth quarter Production continued increasing, post Woodford Sale, and averaged 877 BOEPD in the quarter G&A decreased by $1.0 milliondue to cost cutting efforts including reductions in staff and lower costs in Europe Loss of $11.0 millionin the fourth quarter of 2013 versus loss of $4.5 millionin the third quarter of 2012 due to a loss from investments in joint ventures of $7.4 millionin 2013 At quarter end, cash and marketable securities totaled $42.2 millionand working capital was $18.9 million
Fourth Quarter 2013 to Fourth Quarter 2012
Oil and gas revenues net of royalties totaled $4,613,000in the quarter versus $4,212,000in the fourth quarter of 2012. Oil revenues were $4,716,000in the quarter versus $1,822,000in the fourth quarter of 2012, an increase of 159% as production increased 118% to an average of 533 barrels per day due to the production mix from the Caneywells while average oil prices increased 19% or $15.20a barrel. Natural gas revenues declined $1,008,000or 79% as natural gas production decreased to 690 mcfd due to the Woodford Sale and the production mix of the Caneywells while average natural gas prices per mcf increased 3%. NGL revenue declined $1,391,000or 67% to $690,000as average production decreased 73% to 197 boepd as a result of the Woodford Sale and the production mix from the Caneywells while average NGL prices increased 22% to $38.03a barrel.
Other income decreased $735,000to $163,000as fourth quarter 2012 results included gains from eliminating asset retirement obligations for wells no longer owned by the Company.
Exploration and evaluation expenses increased $859,000between quarters due to the 2013 write-off of the Darlowo well in Poland.
Production and operating expenses declined $925,000between quarters due to the Woodford Sale.
Depletion and depreciation expense decreased $189,000between quarters due to decreased production and depletion base and lower production as a result of the Woodford Sale.
General and administrative expenses decreased $954,000between quarters primarily due to lower payroll and related costs and lower professional fees incurred in Europerelating to legal, accounting, and management fees which were partially offset by higher director fees incurred in 2013.
Stock based compensation increased $524,000between quarters due to a grant of stock options in the fourth quarter of 2013.
Finance income decreased $344,000due to realized gains on financial commodity contracts in 2012. Finance expense decreased $774,000primarily due to interest on loans and borrowings of $384,000in 2012 and unrealized losses on financial commodity contracts in 2012.
Capital expenditures of $36,502,000were incurred in the fourth quarter of 2013, almost all of which was spent in Oklahoma.
YEAR ENDED 2013 HIGHLIGHTS
Drilled and fracture stimulated the first five wells in the Caneyformation in the Tishomingofield Closed the Woodford Sale in April 2013for $146.4 million Paid down the Company's credit facility from $41 millionto $100,000in connection with the Woodford Sale Settled all the financial derivative contracts in April 2013in connection with the Woodford Sale and incurred a realized loss of $2.5 million Capital expenditures increased $40.7 millionor 99% to $81.8 millionprimarily due to the 2013 drilling program in Oklahomawhich totaled $78.1 millionfor the year ended 2013. The 2012 capital expenditures amount included $28 millionof capital expenditures for exploration and evaluation assets, mainly in Poland G&A expenses decreased by $2.9 millionprimarily due to staff reductions and lower costs in Europe Average production decreased 51% between comparative years due to the Woodford Sale, which was partially offset by production from the new Caneywells A net loss of $19.7 millionwas incurred in the year ended 2013 versus a loss of $14.9 millionin in 2012 partially due to a loss from investments in joint ventures of $7.5 millionin 2013 and the $1.7 millionwrite-off of the Polish Darlowo concession
Year Ended 2013 to Year Ended 2012
Oil and natural gas revenues net of royalties declined $4,902,000or 30% to $11,371,000. Oil revenues before royalties increased $624,000to $9,149,000due to a 2% increase in production due to the production mix from the Caneywells and a 6% increase in prices between years. Natural gas revenues before royalties declined $2,086,000or 54% due to a 62% decline in average production due to the Woodford Sale and production mix from the Caneywells, partially offset by a 23% increase in natural gas prices per mcf. NGL revenue before royalties declined $4,574,000or 60% to $3,054,000due to a 60% decline in average production per day due to the Woodford Sale and the production mix from the Caneywells.
Other income decreased due to 2012 gains from eliminating asset retirement obligations for wells no longer owned by the Company.
Exploration and evaluation expenses increased $606,000due to the write-off of the Darlowo concession in Poland.
Production and operating expenses decreased 56% to $2,641,000as average production decreased 51% due to the Woodford Sale.
Depletion and depreciation expense decreased $2,288,000primarily due to decreased production and depletion base and lower production as a result of the Woodford Sale.
General and administrative expenses decreased $2,935,000primarily due to lower payroll and related costs, lower professional fees incurred in Europerelating to legal, accounting, management fees and lower travel costs partially offset by higher director fees in 2013.
Finance Income decreased $1.5 milliondue to realized gains on financial commodity contracts and unrealized gains on warrant revaluations in 2012. Finance expense increased $7.6 millionprimarily due to a $7.5 millioncharge related to interest on loans and borrowings which included $3.5 millionfor the amortization of deferred financings costs and $2.5 millionof pre-payment penalties related to the loan paydown along with a realized loss on financial commodity contracts of $2.5 millionas these contracts were all settled in April 2013.
At December 31, 2013, cash and marketable securities increased by $39,379,000from December 31, 2012, primarily due to the Woodford Sale offset by the 2013 capital expenditures.
| BNK PETROLEUM INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | | | | | December 31, | | | December 31, | | | | | | 2013 | | | 2012 | | | Current assets | | | | | | | | | | Cash and cash equivalents | | $ | 17,159 | | $ | 2,836 | | | Investments in marketable securities | | | 25,056 | | | - | | | Trade and other receivables | | | 7,268 | | | 11,363 | | | Deposits and prepaid expenses | | | 1,243 | | | 2,334 | | | Fair value of commodity contracts | | | - | | | 779 | | | | | 50,726 | | | 17,312 | | | | | | | | | | | | Non-current assets | | | | | | | | | | Long-term receivables | | | 433 | | | 1,297 | | | Investments in joint ventures | | | 2,787 | | | 10,114 | | | Property, plant and equipment | | | 94,663 | | | 156,549 | | | Exploration and evaluation assets | | | 36,194 | | | 33,590 | | | | | 134,077 | | | 201,550 | | | | | | | | | | | | Total assets | | $ | 184,803 | | $ | 218,862 | | | | | | | | | | | | Current liabilities | | | | | | | | | | Trade and other payables | | $ | 31,872 | | $ | 16,840 | | | Loans and borrowings | | | - | | | 31,797 | | | | | 31,872 | | | 48,637 | | | | | | | | | | | | Non-current liabilities | | | | | | | | | | Loans and borrowings | | | 100 | | | - | | | Fair value of commodity contracts | | | - | | | 75 | | | Asset retirement obligations | | | 1,192 | | | 1,312 | | | Warrants | | | - | | | 3 | | | | | 1,292 | | | 1,390 | | | | | | | | | | | | Equity | | | | | | | | | | Share capital | | | 247,782 | | | 247,326 | | | Contributed surplus | | | 18,721 | | | 16,663 | | | Deficit | | | (114,864) | | | (95,154) | | Total equity | | | 151,639 | | | 168,835 | | | | | | | | | | | | Total equity and liabilities | | $ | 184,803 | | $ | 218,862 | |
| | | | | | | | | | | | 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 | | Twelve months ended December 31 | | | | | | | | | 2013 | | 2012 | | 2013 | | 2012 | | | Revenue: | | | | | | | | | | | Oil and natural gas revenue, net | $ | 4,613 | $ | 4,212 | $ | 11,371 | $ | 16,273 | | | Gathering income | | - | | 356 | | 331 | | 1,420 | | | Gain on sale of assets | | (119) | | - | | 9,499 | | - | | | Management fees and other income | | 163 | | 898 | | 1,124 | | 1,633 | | | | | 4,657 | | 5,466 | | 22,325 | | 19,236 | | | Expenses: | | | | | | | | | | | Exploration and evaluation | | 1,937 | | 1,078 | | 1,994 | | 1,388 | | | Production and operating | | 528 | | 1,453 | | 2,641 | | 6,002 | | | Depletion and depreciation | | 1,729 | | 1,918 | | 4,786 | | 7,074 | | | General and administrative | | 3,414 | | 4,368 | | 13,344 | | 16,279 | | | Share based compensation | | 716 | | 192 | | 1,305 | | 877 | | | Loss from investments in joint ventures | | 7,439 | | (101) | | 7,533 | | 172 | | | Restructuring expenses | | - | | 756 | | 595 | | 1,771 | | | | | 15,763 | | 9,664 | | 32,198 | | 33,563 | | | | | | | | | | | | | | | | | | | | | | | | | Finance income | | 97 | | 441 | | 166 | | 1,686 | | | Finance expense | | (7) | | (781) | | (10,003) | | (2,397) | | | | | | | | | | | | | | Net loss and comprehensive loss | $ | (11,016) | $ | (4,538) | $ | (19,710) | $ | (14,948) | | | | | | | | | | | | | | Net loss per share | | | | | | | | | | | | Basic and Diluted | $ | (0.08) | $ | (0.03) | $ | (0.14) | $ | (0.10) |
| BNK PETROLEUM, INC. | | | | | | | | | | | FOURTH QUARTER 2013 | | | | | | | | | | | _(Unaudited, expressed in Thousands of United States dollars, except as noted)_ | | | | | | | | | | | | | | | | | | | | | | | | | 4th Quarter | | | | | | | | | | | 2013 | | 2012 | | 2013 | | 2012 | | Oil revenue before royalties | | $ | 4,716 | | 1,822 | | 9,149 | | 8,525 | | Gas revenue before royalties | | | 273 | | 1,281 | | 1,787 | | 3,873 | | NGL revenue before royalties | | | 690 | | 2,081 | | 3,054 | | 7,628 | | Oil and Gas revenue | | | 5,679 | | 5,184 | | 13,990 | | 20,026 | | | | | | | | | | | | | Cash flow used by operating activities | | | 2,286 | | 784 | | (6,656) | | (10,153) | | Additions to property, plant & equipment | | | (34,504) | | (3,982) | | (78,386) | | (12,915) | | Additions to Exploration and Evaluation Assets | | | (1,998) | | (963) | | (3,386) | | (27,622) | | | | | | | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | | | | | 4th Quarter | | | | | | | | | | | 2013 | | 2012 | | 2013 | | 2012 | | Average natural gas production (mcf/d) | | | 879 | | 4,240 | | 1,504 | | 3,981 | | Average NGL production (Boepd) | | | 197 | | 729 | | 264 | | 660 | | Average Oil production (Bopd) | | | 533 | | 245 | | 261 | | 257 | | Average production (Boepd) | | | 877 | | 1,681 | | 776 | | 1,581 | | Average natural gas price ($/mcf) | | | $ 3.38 | | $3.28 | | $3.26 | | $2.66 | | Average NGL price ($/bbl) | | | $ 38.03 | | $31.02 | | $31.69 | | $31.58 | | Average oil price ($/bbl) | | | $ 96.13 | | $80.93 | | $95.93 | | $90.59 | | | | | | | | | | | | | Average price per barrel | | | $ 70.39 | | $33.52 | | $49.39 | | $34.61 | | Royalties per barrel | | | 13.20 | | 6.29 | | 9.26 | | 6.49 | | Operating expenses per barrel | | | 6.54 | | 9.40 | | 9.32 | | 10.37 | | | | | | | | | | | | | Netback per barrel | | | $ 50.65 | | $17.83 | | $30.81 | | $17.75 |
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, 2013and 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, 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. Management of the Company believes that such measures are relevant for evaluating returns on each of the Company's projects as well as the performance of the enterprise as a whole. The Company's Non-GAAP Measures may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to similar non-GAAP measures as reported by such organizations. The Company's Non-GAAP Measures should not be construed as alternatives to net income, cash flows related to operating activities, or other financial measures determined in accordance with GAAP, as an indicator of the Company's performance.