Kolibri Global Energy Inc. press release
BNK Petroleum Inc. announces 2nd quarter 2014 results
TSX - Toronto Stock Exchange · United States
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TSX ticker symbol: BKX
All amounts are in U.S. Dollars unless otherwise indicated:
| | | Second Quarter | | First Six Months | | | | | | | 2014 | 2013 | % | 2014 | 2013 | % | | | | | | | | | | | Net Income (Loss): | | | | | | | | | $ Thousands | $199 | $(929) | - | $449 | $(6,249) | - | | | $ per common share | $0.00 | $(0.01) | - | $0.00 | $(0.04) | - | | | assuming dilution | | | | | | | | | | | | | | | | | | Capital Expenditures | $22,710 | $7,870 | 189% | $35,664 | $10,362 | 244% | | | | | | | | | | | | Average Production (Boepd) | 999 | 266 | 276% | 980 | 966 | 1% | | | Average Product Price per Barrel | $81.74 | $43.83 | 86% | $80.05 | $35.96 | 123% | | | Average Netback per Barrel | $58.85 | $16.52 | 256% | $58.16 | $18.57 | 213% | | | | | | | | | | | | | | June 2014 | | March 2014 | | December 2013 | | | | | | | | | | | | Cash and Cash Equivalents | $32,266 | | $47,351 | | $17,159 | | | | Working Capital | $18,721 | | $37,417 | | $18,854 | | |
CAMARILLO, CA, Aug. 13, 2014/CNW/ - BNK's President and Chief Executive Officer, Wolf Regenercommented:
"During the second quarter, the Company began its 2014 drilling program in the U.S. with the Wiggins 11-2H well. The drilling was completed in July with a 5,050 foot treatable lateral section and the Company has just begun fracture stimulating the well with results expected in early September. The lateral section of the Wiggins 11-2H well was placed in what we believe is the most productive stratigraphic portion of the Caney, based on the analysis of previous well results and the pilot hole. The second well in the 2014 drilling program is the Hartgraves 1-5H well which was spud on August 6th, and is currently drilling the lateral portion of the wellbore with fracture stimulation expected to begin in early September.
"The Wiggins 12-8H and the Barnes 7-2H wells both continue to perform above our expectations with combined average production of over 550 boepd for the six months of 2014. These wells have been on production for 6 and 8 months respectively. The Company's first three wells in the 2014 US drilling program are being drilled in sections directly adjacent to the Wiggins 12-8H and Barnes 7-2H wells.
"With the recently announced $100 millionreserve-based credit facility and the equity financing in the first quarter, we intend to continue our 2014 US Caney formation drilling program beyond the three previously announced wells. The Company plans to continue drilling Caneywells for the rest of the year. By year end, we are projecting to have finished drilling 6 wells in 2014 and have 4 of them on production. Our year-end production exit rate is projected to be between 2,300 to 2,600 BOEPD.
"The credit facility, which was completed at the end of July, has an initial commitment amount of $15.9 millionand additional commitment amounts will become available subject to new higher reserve evaluations as we bring the new wells on production.
"Due to our successful 2013 drilling program in the Caneyformation, the Company was able to generate positive net income for the first two quarters of 2014. Our netbacks for the first six months increased by more than 200% compared to the same period in 2013, which allowed the Company to generate positive net income with the same level of production on a BOE basis due to the higher oil content in the Caneyformation. In addition, we generated positive cash flow from operations of almost $5.3 millionand revenue of $14.2 millionfor the first six months of the year.
"The flow-back test of the Gapowo B-1 horizontal well in Polandhas concluded and the well is currently shut-in for a 3-4 week pressure buildup test. Production rates remained in the range of 200,000 to 400,000 cubic feet per day throughout the flowback test. The Company expects this pressure data to provide the remaining information required to complete our reservoir model analysis. The Company anticipates completing the reservoir analysis in October.
"The Company believes that this reservoir analysis will validate the Company's preliminary analysis, through further design improvements, that future wells can be effectively stimulated across an entire lateral and that the production rates achieved at Gapowo can be proportionally increased to not only account for the entire lateral but also increase gas rates per stage when placement of designed proppant concentrations are achieved. The Company expects the resulting projected production to be at rates that would justify further development of the reservoir.
"This is similar to the path of exploration to development in many shale gas projects in the United Stateswhere numerous exploratory wells are necessary to advance shale projects to economic production, including the Company's own experience in the Caneyformation. As previously announced, given the capital requirements of such exploration activities and the Company's focus on its Caneygrowth, the Company intends to renew its efforts to joint venture with a suitable partner after completing the reservoir analysis mentioned above.
"In the second quarter of 2014, the Company generated net income of $199,000compared to a net loss of $929,000in the second quarter of 2013. Oil and gas revenue, net of royalties was $6.0 millionin the second quarter of 2014, an increase of $5.2 million, or almost 600%, compared to the prior year quarter when the Woodfordassets were sold in April 2013.
"Average netbacks for the second quarter 2014 were $58.85, an increase of 256% compared to the prior year quarter due to the significantly higher levels of oil in the production mix of the Caneyformation. Oil accounted for 72% of 2014 production in the Caneyversus 33% of 2013 production from the Woodfordformation which was sold in April 2013.
"Production increased 276% in the second quarter 2014 compared to second quarter 2013 due to the Caneywells drilled in the second half of 2013 and the Woodfordsale in April 2013.Average pricing per barrel increased 86% primarily due to the higher oil of the Caneyformation in the production mix.
"Capital expenditures increased to $22.7 millionin the second quarter 2014 due to the startup of the 2014 drilling program in the US and the drilling and completion of the Gapowo B-1 well in Poland. Capital expenditures in the second quarter of 2013 were $7.8 million."
"Through the first half of 2014 the Company generated net income of $449,000compared to a loss of $6.2 millionin the first half of 2013. Oil and gas revenues increased by 125% to $11.5 milliondue to an increase of 123% in average prices due to the higher oil from the Caneyformation in the production mix. Cash flow generated from operating activities for the first six months of 2014 was $5.3 millioncompared to negative cash flow from operating activities of $8.7 millionin the first six months of 2013."
SECOND QUARTER HIGHLIGHTS:
Revenue, net of royalties was $6.0 millionfor second quarter of 2014 and netbacks were $58.85per BOE, an increase of 256% compared to the second quarter of 2013 due to more oil in the production mix and higher prices Production was 999 BOEPD for the second quarter, an increase of 276% due to the Caneyproduction in the second half of 2013 and the Woodfordsale in April 2013 Net income was $199,000for the second quarter of 2014 compared to a loss of $929,000in second quarter of 2013 In July, the Company closed a $100 millioncredit facility with Morgan Stanley with an initial commitment amount of $15.9 million Cash flow from operating activities was $2.3 millionfor the second quarter of 2014 compared to negative cash flow from operating activities of $9.0 millionin the second quarter of 2013 Cash and working capital totaled $32.3 millionand $18.7 millionrespectively at June 30, 2014not including the subsequently closed credit facility. Capital expenditures increased 189% to $22.7 millionprimarily due to the startup of the 2014 US drilling program and the drilling and fracture stimulation of the Gapowo B-1 well in Poland In June 2014, the Company entered into financial derivative transactions with Morgan Stanley as part of the hedging requirements of the credit facility that was completed in July 2014. These transactions also meet the Company's risk management strategy to manage commodity price fluctuations and stabilize cash flows for future exploration and development programs.
Second Quarter 2014 versus Second Quarter 2013
Gross oil and gas revenues totaled $7,432,000in the second quarter 2014 versus $1,063,000in the second quarter of 2013. Oil revenues were $6,697,000in the quarter versus $717,000in the second quarter of 2013, an increase of 834% as production increased 720% due to the higher oil content from the Caneywells. Average oil prices increased 14% or $12.78a barrel for the quarter. Natural gas revenues increased $135,000or 68%, as natural gas production increased 51% due to the Woodfordasset sale in April 2013and average natural gas prices per mcf increased 11% compared to the second quarter of 2013. Natural Gas Liquid (NGL) revenue increased $255,000or 177% to $399,000as average production increased 61% to 140 boepd due to the Woodfordsale in 2013 and average NGL prices increased 72% to $31.28a barrel.
Production and operating expenses increased $224,000between quarters due to the Woodfordasset sale in April 2013.
Depletion and depreciation expense increased $1,403,000between quarters due to increased production and a higher depletion base due to the Caneywells.
General and administrative expenses decreased $239,000between quarters primarily due to lower professional fees relating to legal, accounting, and management fees partially offset by an increase in director fees.
Finance income decreased $2,242,000due to higher unrealized gains on financial commodity contracts in 2013. Finance expense decreased $9,087,000primarily due to 2013 interest expense of $6,534,000which included $3.5 millionfor the amortization of deferred financings costs and $2.5 millionof pre-payment penalties and a realized loss on financial commodity contracts of $2.7 millionas these contracts were all settled in April 2013.
Capital expenditures of $22,710,000were incurred in the second quarter of 2014 primarily related to the startup of the 2014 drilling program in the US and the Gapowo B-1 well in Poland.
FIRST SIX MONTHS 2014 HIGHLIGHTS
Revenue, net of royalties was $11.5 millionfor first six months of 2014 and netbacks were $58.16per BOE, an increase of 213% compared to the first six months of 2013 due to more oil in the production mix and higher prices Average production was 980 BOEPD for the first six months, an increase of 1% as increased production from the Caneywells drilled in the second half of 2013 was offset by the loss of production from the Woodfordsale in April 2013 Net income was $449,000for the first six months of 2014 compared to a loss of $6,249,000in first six months of 2013 In July, the Company closed a $100 millioncredit facility with Morgan Stanley with an initial commitment amount of $15.9 million Completed an equity financing for total net proceeds of approximately $30.8 million Cash flow from operating activities was $5.3 millionfor the first six months of 2014 compared to negative cash flow from operating activities of $8.7 millionin the first six months of 2013 Capital expenditures increased 244% to $35.7 millionprimarily due to the completion of the 2013 U.S. drilling program, the startup of the 2014 U.S. drilling program and the Gapowo B-1 well in Poland In June 2014, the Company entered into financial derivative transactions with Morgan Stanley as part of the hedging requirements of the credit facility that was completed in July 2014. These transactions also meet the Company's risk management strategy to manage commodity price fluctuations and stabilize cash flows for future exploration and development programs
First Six Months of 2014 versus First Six Months of 2013
Gross oil and gas revenues totaled $14,202,000in the first six months of 2014 versus $6,291,000in the first six months of 2013. Oil revenues were $12,385,000in the first six months versus $2,728,000in the same period of 2013, an increase of 354% as production increased 313% due to the higher oil content from the Caneywells and average oil prices increased 10% or $8.98a barrel. Natural gas revenues decreased $665,000or 47%, due to a decrease in natural gas production of 65% due to the Woodfordasset sale in April 2013which was partially offset by an average natural gas price increase of 51% in the first six months of 2014. NGL revenue decreased $1,080,000, or 50%, due to a decrease in NGL production of 61% due to the Woodfordsale in April 2013which was partially offset by an average NGL price increase of 29% in the first six months of 2014.
Management fees and other income decreased due to lower management fees compared to the prior year.
Production and operating expenses decreased 34% for the first six months of 2014 due to a reduced well count due to the Woodfordsale in 2013 and reduced gathering costs.
Depletion and depreciation expense increased $1,357,000due to the Woodfordsale in April 2013and a higher depletion base due to the Caneywells.
General and administrative expenses decreased $775,000primarily due to lower professional fees relating to legal and accounting expenses and lower payroll and related costs, partially offset by an increase in director fees.
Finance expense decreased $9,823,000primarily due to 2013 interest expense of $7,528,000which included $3.5 millionfor the amortization of deferred financings costs and $2.5 millionof pre-payment penalties and a realized loss on financial commodity contracts of $2.5 millionas these contracts were all settled in April 2013.
| BNK PETROLEUM INC. | | | | | | | | | CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | | | | | | | | | (Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | | | | | June 30, | | December 31, | | | | | | | 2014 | | 2013 | | | | Current assets | | | | | | | | | | Cash and cash equivalents | | $ | 32,266 | $ | 17,159 | | | | Trade and other receivables | | | 6,656 | | 7,268 | | | | Deposits and prepaid expenses | | | 1,509 | | 1,243 | | | | Fair value of commodity contracts | | | - | | 25,056 | | | | | | 40,431 | | 50,726 | | | | | | | | | | | | | Non-current assets | | | | | | | | | | Long-term receivables | | | - | | 433 | | | | Investments in joint ventures | | | 3,659 | | 2,787 | | | | Fair value of commodity contracts | | | 26 | | - | | | | Property, plant and equipment | | | 103,878 | | 94,663 | | | | Exploration and evaluation assets | | | 59,421 | | 36,194 | | | | | | 166,984 | | 134,077 | | | | | | | | | | | | | Total assets | | $ | 207,415 | $ | 184,803 | | | | | | | | | | | | | Current liabilities | | | | | | | | | | Trade and other payables | | $ | 21,627 | $ | 31,872 | | | | Fair value of commodity contracts | | | 84 | | - | | | | | | 21,711 | | 31,872 | | | | | | | | | | | | | Non-current liabilities | | | | | | | | | | Loans and borrowings | | | 100 | | 100 | | | | Fair value of commodity contracts | | | 82 | | - | | | | Asset retirement obligations | | | 1,312 | | 1,192 | | | | | | 1,494 | | 1,292 | | | | | | | | | | | | | Equity | | | | | | | | | | Share capital | | | 279,071 | | 247,782 | | | | Contributed surplus | | | 19,554 | | 18,721 | | | | Deficit | | | (114,415) | | (114,864) | | | Total equity | | | 184,210 | | 151,639 | | | | | | | | | | | | | Total equity and liabilities | | $ | 207,415 | $ | 184,803 | | | | | | | | | | | |
| | | | | | | | | | | | BNK PETROLEUM INC. | | | | | | | | | | | CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | | | | | | | | | | | _(Unaudited, expressed in Thousands of United States dollars, except per share amounts)_ | | | | | | | | | | | | | | | | | | | | | | | | Second Quarter | | First Six Months | | | | | | | | | 2014 | | 2013 | | 2014 | | 2013 | | | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 6,083 | | 863 | | 11,539 | | 5,111 | | | Gathering income | | - | | 1 | | - | | 331 | | | Other income | | 3 | | 296 | | 205 | | 519 | | | Gain on sale of assets | | - | | 9,747 | | - | | 9,747 | | | | | 6,041 | | 10,907 | | 11,744 | | 15,708 | | | | | | | | | | | | | | Exploration and evaluation expenditures | | 36 | | 3 | | 136 | | 57 | | | Production and operating expenses | | 687 | | 463 | | 1,220 | | 1,862 | | | Depletion and depreciation | | 1,886 | | 483 | | 3,694 | | 2,337 | | | General and administrative expenses | | 3,002 | | 3,241 | | 5,932 | | 6,707 | | | Stock based compensation | | 356 | | 341 | | 691 | | 449 | | | Loss from investments in joint ventures | | 52 | | 42 | | (239) | | 65 | | | Legal restructuring expenses | | - | | 595 | | - | | 595 | | | | | 6,019 | | 5,168 | | 11,434 | | 12,072 | | | | | | | | | | | | | | Finance income | | 331 | | 2,573 | | 316 | | 115 | | | Finance expense | | (154) | | (9,241) | | (177) | | (10,000) | | | | | | | | | | | | | | Net income (loss) and comprehensive income (loss) | $ | 199 | | (929) | | 449 | | (6,249) | | | | | | | | | | | | | | Net income (loss) per share | | | | | | | | | | | | Basic and Diluted | $ | 0.00 | | (0.01) | | 0.00 | | (0.04) | | | | | | | | | | | |
| | | | | | | | | | | | | BNK PETROLEUM INC. | | | | | | | | | | | | SECOND QUARTER 2014 | | | | | | | | | | | | ($000 except as noted) | | | | | | | | | | | | | Second Quarter | | First Six Months | | | | | | | | | | | | 2014 | 2013 | | 2014 | 2013 | | | | | Oil revenue before royalties | | $ | 6,697 | 717 | | 12,385 | 2,728 | | | | | Gas revenue before royalties | | | 335 | 200 | | 748 | 1,413 | | | | | NGL revenue before royalties | | | 399 | 144 | | 1,067 | 2,147 | | | | | Oil and Gas revenue | | | 7,431 | 1,061 | | 14,200 | 6,288 | | | | | | | | | | | | | | | | | Cash Flow from (used) by operating activities | 2,340 | (8,952) | | 5,296 | (8,684) | | | | | | | Additions to property, plant & equipment | (7,308) | (7,483) | | (12,487) | (9,093) | | | | | | | Additions to exploration and evaluation assets | (15,402) | (387) | | (23,177) | (1,269) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | | | | | | | 2nd Quarter | | First Six Months | | | | | | | | | | 2014 | 2013 | | 2014 | 2013 | | | | Average natural gas production (mcf/d) | | 822 | 546 | | 846 | 2,418 | | | | | | Average NGL production (Boepd) | | 140 | 87 | | 153 | 397 | | | | | | Average Oil production (Bopd) | | 722 | 88 | | 686 | 166 | | | | | | Average production (Boepd) | | | 999 | 266 | | 980 | 966 | | | | | Average natural gas price ($/mcf) | | $4.48 | $4.03 | | $4.89 | $3.23 | | | | | | Average NGL price ($/bbl) | | | $31.28 | $18.18 | | $38.54 | $29.90 | | | | | Average oil price ($/bbl) | | | $101.93 | $89.15 | | $99.68 | $90.70 | | | | | | | | | | | | | | | | | Average price per barrel | | | $81.74 | $43.83 | | $80.05 | $35.96 | | | | | Royalties per barrel | | | 15.33 | 8.22 | | 15.01 | 6.74 | | | | | Operating expenses per barrel | | | 7.56 | 19.09 | | 6.88 | 10.65 | | | | | | | | | | | | | | | | | Netback per barrel | | | $58.85 | $16.52 | | $58.16 | $18.57 | | | |
The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three months ended June 30, 2014and 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.