Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Annual 2019 Results, 75% of 2020 Oil Production Hedged at $56.62
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, March 12, 2020
All amounts are in U.S. Dollars unless otherwise indicated:
TSX ticker symbol; BKX QTCQX ticker symbol; BNKPF
CAMARILLO, CA, March 12, 2020/CNW/ -
2019 HIGHLIGHTS
The Company has commodity contracts in place for 75% of its existing 2020 oil production at an average price of $56.62/barrel. Average production for 2019 was 1,395 BOEPD, compared to 2018 production of 1,662 BOEPD. The average production for 2018 included a positive prior period adjustment for natural gas and NGL volumes of 99 BOEPD. Excluding the impact of the prior period adjustment, production only decreased by 11% in 2019 compared to 2018 due to the normal production decline of existing wells. Adjusted funds flow was $9.0 millionfor 2019 compared to $13.2 millionfor 2018 due to lower average prices and lower production. Capital expenditures for 2019 were $2.3 million Netback from operations was $26.79per BOE in 2019 compared to $33.99per BOE in 2018 due to lower production and prices in 2019 The Company's Total Proved Reserves totaled 33.4 million barrels of oil equivalent (BOE) which essentially stayed flat from 2018 as there was only a 1% decrease according to BNK's December 31, 2019independent reserves evaluation. The NPV10 value of the Total Proved Reserves decreased by 26% to $299.2 milliondue primary to lower estimated future pricing G&A expense for 2019 was $3.9 millioncompared to $3.8 millionin 2018. The 2019 G&A amount includes $0.6 millionof expenses related to cost cutting measures including severance payouts for terminated employees as well as advisor fees and special committee expenses. Excluding the impact of these items, G&A decreased by $0.5 million, or 12%, due to management's continued efforts to reduce G&A costs throughout the Company and lower rent expense from the adoption of IFRS 16 Revenue, net of royalties was $17.4 millionfor 2019 compared to $23.9 millionin 2018, due to lower prices and production Net loss was $0.2 millionfor 2019 compared to net income of $5.3 millionin 2018 due to an unrealized loss on financial commodity contracts of $0.7 millionin 2019, compared to an unrealized gain of $2.3 millionin 2018. In addition, the decrease was due to the $0.6 millionof G&A expenses related to cost cutting measures discussed above as well as lower production and average prices compared to the prior year
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"The Company has extensive commodity contracts in place for 2020 which significantly protects the operating cash flow from our existing wells from market price fluctuations during the year. We have commodity contracts in place for over 75% of our existing 2020 oil production at an average price of $56.62/barrel.
"The Company is very pleased with the performance of our field during the year as our production only declined by 11% during the year (excluding the impact of the 2018 prior period adjustments) and the fourth quarter 2019 production declined by less than 1% from the third quarter of 2019. The 2019 independent reserves evaluation report showed that we have total proved reserves of over 33.4 million BOE, which is only 1% lower than the prior year. In addition, we were able to generate adjusted funds flow of over $9.0 millionduring 2019 while total capital expenditures were only $2.3 millionfor the year. The Company was able to paydown $2.5 millionof its existing credit facility during 2019 which will reduce our interest expense going forward.
"In our continued effort to reduce overhead costs, the Company reduced its headcount in December 2019by 25%. Our G&A expense for 2019 includes a charge of $0.6 millionfor severance payouts for terminated employees as well as advisor fees and special committee expenses. If you exclude this charge, our G&A decreased by $0.5 million, or 12%, due to the Company's effort to reduce G&A costs thoughout the year as well as the impact of lower rent expense from the adoption of IFRS 16. G&A for 2020 should see an additional 25% decrease over 2019 due to the cost cutting measures.
"Revenue, net of royalties was $17.4 millionfor 2019, a decrease of 27% compared to the prior year due to the decrease in production as well as prices.
"Average production for 2019 was 1,395 BOEPD, compared to 2018 production of 1,662 BOEPD. The average production for 2018 included a positive prior period adjustment for natural gas and NGL volumes of 99 BOEPD. Excluding the impact of the prior period adjustment, production decreased by 11% in 2019 compared to 2018 due to the normal production decline of existing wells.
"The Company had a net loss of $0.2 millionfor 2019 compared to net income of $5.3 millionin 2018 due to an unrealized loss on financial commodity contracts of $0.7 millionin 2019, compared to an unrealized gain of $2.3 millionin 2018. The decrease was also due to lower production and average prices compared to the prior year and the 2019 G&A expenses related to cost cutting measures.
"Average netback from operations for 2019 was $26.79per BOE compared to $33.99per BOE in 2018, a decrease of 21%, due to lower average production and average prices in 2019. 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 $25.30per BOE for 2019 compared to $27.71per BOE in the prior year, a decrease of 9%."
| | Fourth Quarter | Year Ended | | | | | | | 2019 | 2018 | % | 2019 | 2018 | % | | | | | | | | | | Net Income (Loss): | | | | | | | | $ Thousands | $(1,650) | $5,431 | -% | $(177) | $5,320 | -% | | $ per common share | $(0.01) | $0.02 | -% | $(0.00) | $0.02 | -% | | assuming dilution | | | | | | | | | | | | | | | | Adjusted Funds Flow | $1,680 | $2,957 | (43%) | $9,006 | $13,223 | (32%) | | Capital Expenditures | $979 | $5,850 | (83%) | $2,289 | $19,621 | (88%) | | | | | | | | | | Average Production (Boepd) | 1,346 | 1,555 | (13%) | 1,395 | 1,662 | (16%) | | Gross Revenue | 5,252 | 6,640 | (21%) | 22,179 | 30,364 | (27%) | | Average Price per Barrel | $42.41 | $47.11 | (10%) | $43.56 | $52.15 | (16%) | | Average Netback from operations per Barrel | $25.57 | $29.67 | (14%) | $26.79 | $33.99 | (21%) | | Average Netback after adjustments per Barrel | $24.36 | $27.12 | (10%) | $25.30 | $27.71 | (9%) | | | | | | | | | | | | December 2019 | | December 2018 | | | | Cash and Cash Equivalents | | $3,089 | | $1,456 | | | | Working Capital | | ($2,482) | | ($2,393) | | |
Year Ended 2019 to Year Ended 2018
For 2019, oil and gas gross revenues decreased $8,185,000or 27% to $22,179,000. Oil revenues before royalties decreased by 23% to $20,157,000due to a 14% decrease in prices between years and an 11% decrease in production. Natural gas revenues before royalties decreased $543,000or 36% due to a 41% decrease in natural gas production partially offset by a 9% increase in average gas prices. NGL revenue before royalties decreased $1,518,000or 59% due to a 54% decrease in average prices and a 10% decrease in production.
Average production per day for 2019 decreased 16% from the prior year. The 2018 average production included an increase of 99 boepd related to prior period adjustments. Excluding the impact of the prior period adjustment, production decreased by 11% in 2019 compared to 2018 due to the normal production decline of existing wells.
Operating expenses decreased by $915,000due to a decrease in production partially offset by an increase in production taxes. Operating expenses averaged $7.39per BOE in 2019 compared to $6.90per BOE for 2018 (excluding the prior period adjustments). The 2019 amount includes the impact of a production tax increase in July 2018which increased the 2019 amount by $0.38per BOE compared to the prior year period. The increase in operating expense per BOE was also due to a decrease in production which increases the fixed operating cost per barrel.
Depletion and depreciation expense decreased $1,668,000due to decreased production.
General & administrative (G&A) expenses increased $129,000in 2019. The 2019 G&A amount includes $579,000of expenses related to cost cutting measures including severance payouts for terminated employees as well as advisor fees and special committee expenses. Excluding the impact of these items, G&A decreased by $450,000, or 12%, due to management's continued efforts to reduce G&A costs throughout the company and lower rent expense from the adoption of IFRS 16.
Finance income decreased $2,349,000in 2019 compared to the prior year due to unrealized gains on commodity contracts in the prior year.
Finance expense decreased $666,000due to lower realized losses on commodity contracts in 2019 compared to the prior year.
Capital expenditures of $2,289,000were incurred in 2019 for the Oklahomafield.
FOURTH QUARTER HIGHLIGHTS:
Average production for the quarter was 1,346 BOEPD, a decrease of 13% compared to the prior year fourth quarter due to the normal decline of existing wells Adjusted funds flow was $1.7 millionin the fourth quarter of 2019 compared to $3.0 millionin the prior year fourth quarter, a decrease of 43%, due to lower production and lower prices as well as higher G&A expenses due to severance costs for terminated employees and advisor fees. Netback from operations for the fourth quarter of 2019 was $25.57compared to $29.67for the fourth quarter of 2018. If the impact of commodity contracts and prior period adjustments are included, the netback after adjustments for the fourth quarter of 2019 was $24.36per BOE compared to $27.12per BOE in the fourth quarter of 2018 G&A expense increased by $403,000, or 43%, in the fourth quarter of 2019 compared the prior year fourth quarter. The fourth quarter 2019 G&A amount includes $494,000of expenses related to cost cutting measures including severance payouts for terminated employees as well as advisor fees and special committee expenses. Excluding the impact of these items, G&A decreased by $91,000, or 10%, due to management's continued efforts to reduce G&A costs throughout the company and lower rent expense from the adoption of IFRS 16 Net loss was $1.7 millionin the fourth quarter of 2019 compared to net income of $5.4 millionin the fourth quarter 2018, due to an unrealized loss on financial commodity contracts of $1.3 millionin the fourth quarter of 2019, compared to an unrealized gain of $4.8 millionin the fourth quarter of 2018. In addition, the decrease was due to the $494,000of G&A expenses primarily related to cost cutting measures discussed above as well as lower production and average prices compared to the prior year quarter. Revenue, net of royalties, was $4.1 millionfor the fourth quarter of 2019, a decrease of 21% compared to the fourth quarter 2018 due to lower prices and lower production
Fourth Quarter 2019 to Fourth Quarter 2018
Gross oil and gas revenues totaled $5,252,000in the fourth quarter of 2019 versus $6,640,000in the fourth quarter of 2018, a decrease of 21%. Oil revenues were $4,680,000in the quarter versus $5,538,000in the fourth quarter of 2018, a decrease of 15%, due to decreased production and prices. Natural gas revenues decreased 23% due to a decrease in production and natural gas prices. NGL revenue decreased 57% to $353,000due to lower average NGL production and average prices.
Operating expenses decreased by $112,000in the fourth quarter of 2019 compared to 2018 due to lower production.
Depletion and depreciation expense decreased $225,000due to the lower production in the fourth quarter of 2019.
G&A expenses increased by $403,000between quarters. The fourth quarter 2019 G&A amount includes $494,000of expenses related to cost cutting measures including severance payouts for terminated employees as well as advisor fees and special committee expenses. Excluding the impact of these items, G&A decreased by $91,000, or 10%, due to management's continued efforts to reduce G&A costs throughout the company and lower rent expense from the adoption of IFRS 16.
Finance income decreased $4,803,000in the fourth quarter of 2019 compared to the prior year fourth quarter due to unrealized gains on commodity contracts in the prior year.
Finance expense increased $1,154,000due to an unrealized loss on commodity contracts of $1,337,000in the fourth quarter of 2019.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | December 31, | | December 31, | | | | | 2019 | | 2018 | | Current assets | | | | | | | Cash and cash equivalents | | $ | 3,089 | $ | 1,456 | | Trade and other receivables | | | 2,198 | | 2,965 | | Deposits and prepaid expenses | | | 513 | | 609 | | Fair value of commodity contracts | | | - | | 407 | | | | | 5,800 | | 5,437 | | | | | | | | | Non-current assets | | | | | | | Property, plant and equipment | | | 155,309 | | 159,122 | | Right of use assets | | | 99 | | - | | | | | | | | | Total assets | | $ | 161,208 | $ | 164,559 | | | | | | | | | Current liabilities | | | | | | | Trade and other payables | | $ | 6,424 | $ | 7,830 | | Current portion of loans and borrowings | | | 1,500 | | - | | Current lease payable | | | 105 | | - | | Fair value of commodity contracts | | | 253 | | - | | | | | 8,282 | | 7,830 | | | | | | | | | Non-current liabilities | | | | | | | Fair value of commodity contracts | | | 97 | | 9 | | Loans and borrowings | | | 25,664 | | 29,551 | | Asset retirement obligations | | | 1,130 | | 1,127 | | | | | 26,891 | | 30,687 | | | | | | | | | Equity | | | | | | | Share capital | | | 289,622 | | 289,622 | | Contributed surplus | | | 22,925 | | 22,755 | | Deficit | | | (186,512) | | (186,335) | | Total equity | | | 126,035 | | 126,042 | | | | | | | | | Total equity and liabilities | | $ | 161,208 | $ | 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) | | | | | | | | | | | | | | | | | | | | | | Three months ended
December 31 | | Year ended
December 31 | | | | | | | | 2019 | | 2018 | | 2019 | | 2018 | | Revenue: | | | | | | | | | | Oil and natural gas revenue, net | $ | 4,121 | $ | 5,202 | $ | 17,402 | $ | 23,834 | | Other income | | 7 | | 1 | | 9 | | 20 | | | | 4,128 | | 5,203 | | 17,411 | | 23,854 | | Expenses: | | | | | | | | | | Production and operating | | 955 | | 1,067 | | 3,763 | | 4,678 | | Depletion and depreciation | | 1,509 | | 1,734 | | 6,240 | | 7,908 | | General and administrative | | 1,331 | | 928 | | 3,879 | | 3,750 | | Share based compensation | | 28 | | 45 | | 149 | | 324 | | | | 3,823 | | 3,774 | | 14,031 | | 16,660 | | | | | | | | | | | | | | | | | | | | | | Finance income | | - | | 4,803 | | - | | 2,349 | | Finance expense | | (1,955) | | (801) | | (3,557) | | (4,223) | | | | | | | | | | | | Net loss and comprehensive loss | $ | (1,650) | $ | 5,431 | $ | (177) | $ | 5,320 | | | | | | | | | | | | Net income/loss per share | | | | | | | | | | Basic and Diluted | $ | (0.01) | $ | 0.02 | $ | (0.00) | $ | 0.02 |
| BNK PETROLEUM INC. | | | | | | | | FOURTH QUARTER AND YEAR ENDED 2019 | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2019 | 2018 | | 2019 | 2018 | | Oil revenue before royalties | $ | 4,680 | 5,538 | | 20,157 | 26,281 | | Gas revenue before royalties | | 219 | 285 | | 954 | 1,497 | | NGL revenue before royalties | | 353 | 817 | | 1,068 | 2,586 | | | | 5,252 | 6,640 | | 22,179 | 30,364 | | | | | | | | | | Adjusted funds flow | | 2,537 | 2,537 | | 9,006 | 13,223 | | Additions to property, plant & equipment | | 979 | 5,850 | | 2,289 | 19,621 | | | | | | | | | | Statistics: | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2019 | 2018 | | 2019 | 2018 | | Average oil production (Bopd) | | 1,043 | 1,137 | | 1,004 | 1,126 | | Average natural gas production (mcf/d) | | 1,389 | 1,119 | | 1,037 | 1,772 | | Average NGL production (Boepd) | | 280 | 215 | | 218 | 241 | | Average production (Boepd) | | 1,539 | 1,539 | | 1,395 | 1,662 | | Average oil price ($/bbl) | | $57.69 | $53.26 | | $54.99 | $63.96 | | Average natural gas price ($/mcf) | | $2.23 | $2.52 | | $2.52 | $2.31 | | Average NGL price ($/bbl) | | $29.17 | $29.17 | | $13.42 | $29.34 | | | | | | | | | | Average price per barrel | | $42.41 | $47.11 | | $43.56 | $52.15 | | Royalties per barrel | | 9.13 | 10.20 | | 9.38 | 11.26 | | Operating expenses per barrel | | 7.71 | 7.24 | | 7.39 | 6.90 | | Netback from operations | | $25.57 | $29.67 | | $26.79 | $33.99 | | Price adjustment from commodity contracts (Boe) | | (1.21) | (1.78) | | (1.49) | (3.87) | | Netback including commodity contracts (Boe) | | 24.36 | 27.89 | | 25.30 | 30.12 | | Prior period adjustments (Boe) | | - | (0.77) | | - | (2.41) | | Netback after adjustments (Boe) | | $24.36 | $27.12 | | $25.30 | $27.71 |
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, 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 funds 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.
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, 2019independent 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, 2019, which the Company filed on SEDAR on March 9, 2020.
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.