Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces 4th Quarter and Annual 2014 Results
TSX - Toronto Stock Exchange · United States
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CAMARILLO, CA, March 12, 2015/CNW/ - All amounts are in U.S. Dollars unless otherwise indicated:
2014 HIGHLIGHTS
Revenue, net of royalties, was $22.5 millionfor year ended 2014, an increase of 98% compared to 2013 due to increased production Cash flow from operations was $12.8 millionin 2014 compared to negative cash flow from operations of $6.7 millionin 2013 Netbacks for the year 2014 were $51.71, an increase of 68% over 2013 due to the production mix from the oil rich Caneywells drilled at the end of 2013 and in 2014 Average production for the year was 1,053 BOEPD, an increase of 36% compared to the prior year due to increased production from the Caneywells drilled at the end of 2013 and in 2014 partially offset by the loss of production from the Woodfordsale in April 2013 Capital expenditures were $75.8 millionfor the year which consisted primarily of the 2014 drilling program in Oklahomaand the Gapowo B-1 well in Poland G&A expenses decreased by $2.5 millionprimarily due to staff reductions and lower costs in Europe Completed an equity financing for total net proceeds of approximately $30.8 million Closed a $100 millioncredit facility with Morgan Stanley and borrowed an initial commitment amount of $15.9 millionin 2014. Subsequent to year-end, the Company borrowed an additional $8.5 million The Company entered into financial derivative transactions with Morgan Stanley as part of the hedging requirements of the $100 millioncredit facility. 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 A net loss of $57.5 millionwas incurred in the year ended 2014 due to $60.3 millionin impairment charges from the Company's Polish project. These impairment charges are made up of a $57.3 millionimpairment of exploration and evaluation assets and an equity impairment of $3.0 million. Excluding the impact of these charges, the Company would have reported net income of $2.8 millionfor 2014
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"During 2014, the Company increased production 36% to 1,053 boepd and increased netbacks by 68% to $51.71despite a slowdown in the industry due to a significant global oil price decline. We made excellent progress in our U.S. Tishomingofield in 2014 which was confirmed by our 2014 year end reserves report for the Caneyformation, where our proved ("1P") gross reserves almost tripled and our probable ("2P") gross reserves increased by 141 percent to 37.4 million boe, compared to the 2013 reserves report. The proved, probable and possible ("3P") gross reserves also increased by 72% from the 2013 report to approximately 70.3 million boe. The net present value of Future Net Revenue before tax, discounted at 10%, was $504.5 millionfor the 2P reserves, an increase of 76% from 2013, and $875 millionfor the 3P reserves, an increase of 3% from 2013.
"We also increased our cash flow from operations to a positive $12.8 millioncompared to negative cash flow from operations of $6.7 millionin 2013. In addition, gross revenue increased by 98% to $27.7 millioncompared to 2013.
"The Company accomplished the above by drilling 5 strategically placed wells and fracture stimulating five wells, with one only having 30% of the lateral completed. We expect to complete the remaining portion of the partially completed lateral along with one well that has not been completed beginning in the second quarter of 2015. The Company's existing production is also declining at a slower rate than originally forecast. The Company's fourth quarter average production was 1,280 boepd, an increase of 46% compared to the fourth quarter of 2013 and our exit production rate at December 31, 2014was approximately 1,400 boepd.
"In 2014, our G&A decreased by 18% ($2.5 million) and subsequent to year end the Company undertook additional cost reduction measures and further streamlined operations which will result in a further reduction to ongoing G&A costs.
"During the year, we were successful in completing both a debt and equity financing. Our equity financing, which was completed in the first half of the year, generated net proceeds of $30.8 million. After closing our $100 millioncredit facility with Morgan Stanley in July 2014, we borrowed $15.9 millionto fund our 2014 U.S. drilling program. In February 2015, we received an additional $8.5 millionunder the facility.
"In Poland, the Company completed a reservoir analysis of the Gapowo B-1A horizontal well on the Bytow concession. A numerical model was prepared which showed encouraging results of simulated flow rates and recoveries that would be achieved if another well is drilled in the Ordovician shale with a full-length successful fracture stimulation. Due to the difficult oil and gas price environment we are currently in, the Company has determined that it will give up its interest in the Trzebielino and Bytow concessions and will concentrate its effort on the Slupsk concession owned by Saponis, where the Ordovician shale is not as deep as the Bytow and Trzebielino concessions. The Company is continuing its search for a potential joint interest partner for this concession so that a well can be drilled and tested. The Company is in the final stages of acquiring the remaining 42.96% of Saponis from the Company's remaining partner in Saponis for no consideration and we expect to complete this acquisition by the end of March."
| | Fourth Quarter | | Year Ended | | | | | | 2014 | 2013 | % | 2014 | 2013 | % | | | | | | | | | | Net Loss: | | | | | | | | $ Thousands | $(57,628) | $(11,016) | - | $(57,478) | $(19,710) | - | | $ per common share | $(0.36) | $(0.08) | - | $(0.36) | $(0.14) | - | | assuming dilution | | | | | | | | | | | | | | | | Capital Expenditures | $18,027 | $36,502 | (51%) | $75,773 | $81,772 | (7%) | | | | | | | | | | Average Production (Boepd) | 1,280 | 877 | 46% | 1,053 | 776 | 36% | | Gross Revenue | 6,811 | 5,678 | 20% | 27,694 | 13,995 | 98% | | Average Product Price per Barrel | $57.82 | $70.39 | (18%) | $72.05 | $49.39 | 46% | | Average Netback per Barrel | $41.60 | $50.65 | (18%) | $51.71 | $30.81 | 68% | | | | | | | | | | | | | | | | | | | | | 12/31/2014 | 12/31/2013 | | | | | | | | | | | | Cash, Cash Equivalents and Marketable Securities | | | $12,035 | $42,215 | | | | Adjusted Working Capital (excludes debt) | | | $663 | $18,854 | | | | | | | | | | |
Year Ended 2014 to Year Ended 2013
For 2014, oil and natural gas revenues net of royalties increased $11,132,000or 98% to $22,501,000. Oil revenues before royalties increased by 166% to $24,398,000due to a 183% increase in production due to the production mix from the Caneywells partially offset by a 6% decrease in prices between years. Natural gas revenues before royalties declined $305,000or 17% due to a 35% decline in average production due to the Woodford Sale and production mix from the Caneywells, partially offset by a 28% increase in natural gas prices per mcf. NGL revenue before royalties declined $1,243,000or 41% to $1,811,000due to a 43% decline in average production per day due to the Woodford Sale and the production mix from the Caneywells.
Other income decreased due to lower management fees in 2014 due to the increase in the Company's ownership interest in the Saponis equity investment.
Exploration and evaluation expenses increased $55,480,000due to the impairment recorded on the Bytow and Trzebielino concessions in Poland.
Depletion and depreciation expense increased $2,750,000primarily due to the increased production and depletion base.
General and administrative expenses decreased $2,457,000primarily due to lower payroll and related costs, lower professional fees incurred in Europerelating to legal, accounting and management fees and lower travel costs. The Company has implemented cost cutting measures in 2015 which are intended to further reduce general and administrative expenses.
Loss from investments in joint ventures was $3,933,000in 2014 due to an impairment recorded by Saponis for the Slupsk concession. In 2013, the loss from investments in joint ventures was $7,533,000due to an exploration and evaluation impairment and the write-off of the Slawno and Starogard concessions.
Finance Income increased $4,106,000due to realized and unrealized gains on risk management contracts in 2014. Finance expense decreased $9,493,000primarily due to a $7,527,000charge related to interest on loans and borrowings which included $3,500,000for the amortization of deferred financings costs and $2,500,000of pre-payment penalties related to the loan paydown along with a realized loss on financial commodity contracts of $2,463,000as these contracts were all settled in April 2013.
Capital expenditures of $75,773,000were incurred in 2014 primarily due to the 2014 drilling program in Oklahomaand the Gapowo B-1 well in Poland.
FOURTH QUARTER HIGHLIGHTS:
Revenue, net of royalties, was $5.5 millionfor fourth quarter 2014, an increase of 20% compared to the fourth quarter 2013 due to increased production partially offset by price decreases Cash flow from operations was $4.6 millionin the fourth quarter of 2014 compared to $2.3 millionin prior year fourth quarter Netbacks for the fourth quarter of 2014 were $41.60, a decrease of 18% over fourth quarter 2013 due to price decreases Average production for the quarter was 1,280 BOEPD, an increase of 46% compared to the prior year fourth quarter due to increased production from the Caneywells drilled in 2014 G&A decreased by $1.5 milliondue to cost cutting efforts including reductions in staff and lower costs in Europe Capital expenditures decreased $18.5 millionor 51% to $18.0 millionprimarily due to the increased activity in the prior year Oklahomadrilling program compared to 2014 A net loss of $57.7 millionwas incurred in the fourth quarter 2014 due to a $57.3 millionimpairment of exploration and evaluation assets and an equity impairment of $3.0 million. Excluding the impact of these charges, the Company would have reported net income of $2.6 millionfor the fourth quarter of 2014
Fourth Quarter 2014 to Fourth Quarter 2013
Oil and gas revenues net of royalties totaled $5,534,000in the quarter versus $4,613,000in the fourth quarter of 2013. Oil revenues were $6,035,000in the quarter versus $4,716,000in the fourth quarter of 2013, an increase of 28% as production increased 71% to an average of 910 barrels per day due to the production mix from the Caneywells while average oil prices decreased 25% or $24.02a barrel. Natural gas revenues increased $111,000or 41% as natural gas production increased to 384 mcfd due to the Caneywells drilled in 2014 while average natural gas prices per mcf increased 4%. NGL revenue declined $300,000or 43% to $390,000as average production decreased 12% to 173 boepd as a result of production mix from the new Caneywells while average NGL prices decreased 35% to $24.55a barrel.
Exploration and evaluation expenses increased $55,389,000between quarters due to the impairment recorded on the Bytow and Trzebielino concessions in Poland.
Production and operating expenses increased $106,000between quarters due to the additional wells added in 2014.
Depletion and depreciation expense increased $229,000between quarters due to increased production and depletion base.
General and administrative expenses decreased $1,484,000between quarters primarily due to lower payroll and related costs, lower professional fees incurred in Europerelating to legal, accounting and management fees and lower travel costs.
Finance income increased $2,994,000due to realized and unrealized gains on risk management contracts in 2014. Finance expense increased $356,000primarily due to interest on loans and borrowings in 2014.
Capital expenditures of $18,027,000were incurred in the fourth quarter of 2014, almost all of which was spent in Oklahoma.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | | | December 31, | | December 31, | | | | | | 2014 | | 2013 | | | Current assets | | | | | | | | | Cash and cash equivalents | | $ | 12,035 | $ | 17,159 | | | Investments in marketable securities | | | - | | 25,056 | | | Trade and other receivables | | | 3,938 | | 7,268 | | | Deposits and prepaid expenses | | | 1,304 | | 1,243 | | | Fair value of commodity contracts | | | 2,037 | | - | | | | | 19,314 | | 50,726 | | | | | | | | | | | Non-current assets | | | | | | | | | Long-term receivables | | | - | | 433 | | | Investments in joint ventures | | | - | | 2,787 | | | Fair value of commodity contracts | | | 1,248 | | | | | Property, plant and equipment | | | 134,942 | | 94,663 | | | Exploration and evaluation assets | | | 7,925 | | 36,194 | | | | | 144,115 | | 134,077 | | | | | | | | | | | Total assets | | $ | 163,429 | $ | 184,803 | | | | | | | | | | | Current liabilities | | | | | | | | | Trade and other payables | | $ | 18,651 | $ | 31,872 | | | Loans and borrowings | | | 15,401 | | - | | | | | 34,052 | | 31,872 | | | | | | | | | | | Non-current liabilities | | | | | | | | | Loans and borrowings | | | - | | 100 | | | Asset retirement obligations | | | 1,355 | | 1,192 | | | | | 1,355 | | 1,292 | | | | | | | | | | | Equity | | | | | | | | | Share capital | | | 279,859 | | 247,782 | | | Contributed surplus | | | 20,505 | | 18,721 | | | Deficit | | | (172,342) | | (114,864) | | Total equity | | | 128,022 | | 151,639 | | | | | | | | | | | Total equity and liabilities | | $ | 163,429 | $ | 184,803 | |
| 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 | | | | | | | | | 2014 | | 2013 | | 2014 | | 2013 | | | Revenue: | | | | | | | | | | | Oil and natural gas revenue, net | $ | 5,534 | $ | 4,613 | $ | 22,501 | $ | 11,371 | | | Gathering income | | - | | - | | - | | 331 | | | Gain on sale of assets | | - | | (119) | | - | | 9,499 | | | Management fees and other income | | 444 | | 163 | | 763 | | 1,124 | | | | | 5,978 | | 4,657 | | 23,264 | | 22,325 | | | Expenses: | | | | | | | | | | | Exploration and evaluation | | 57,326 | | 1,937 | | 57,474 | | 1,994 | | | Production and operating | | 634 | | 528 | | 2,626 | | 2,641 | | | Depletion and depreciation | | 1,958 | | 1,729 | | 7,536 | | 4,786 | | | General and administrative | | 1,930 | | 3,414 | | 10,887 | | 13,344 | | | Share based compensation | | 480 | | 716 | | 1,610 | | 1,305 | | | Loss from investments in joint ventures | | 4,006 | | 7,439 | | 3,933 | | 7,533 | | | Restructuring expenses | | - | | - | | 438 | | 595 | | | | | 66,334 | | 15,763 | | 84,504 | | 32,198 | | | | | | | | | | | | | | | | | | | | | | | | | Finance income | | 3,901 | | 97 | | 4,272 | | 166 | | | Finance expense | | (363) | | (7) | | (510) | | (10,003) | | | | | | | | | | | | | | Net loss and comprehensive loss | $ | (57,628) | $ | (11,016) | $ | (57,478) | $ | (19,710) | | | | | | | | | | | | | | Net loss per share | | | | | | | | | | | | Basic and Diluted | $ | (0.36) | $ | (0.08) | $ | (0.36) | $ | (0.14) |
| BNK PETROLEUM, INC.
FOURTH QUARTER AND YEAR ENDED 2014
(Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2014 | 2013 | | 2014 | 2013 | | Oil revenue before royalties | $ | 6,035 | 4,716 | | 24,398 | 9,149 | | Gas revenue before royalties | | 384 | 273 | | 1,482 | 1,787 | | NGL revenue before royalties | | 390 | 690 | | 1,811 | 3,054 | | Oil and Gas revenue | | 6,809 | 5,679 | | 27,691 | 13,990 | | | | | | | | | | Cash flow used by operating activities | | 4,565 | 2,286 | | 12,750 | (6,656) | | Additions to property, plant & equipment | | (16,715) | (34,504) | | (46,839) | (78,386) | | Additions to Exploration and Evaluation | | | | | | | | Assets | | (1,312) | (1,998) | | (28,934) | (3,386) | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2014 | 2013 | | 2014 | 2013 | | Average Oil production (Bopd) | | 910 | 533 | | 739 | 261 | | Average natural gas production (mcf/d) | | 1,182 | 879 | | 975 | 1,504 | | Average NGL production (Boepd) | | 173 | 197 | | 151 | 264 | | Average production (Boepd) | | 1,280 | 877 | | 1,053 | 776 | | Average oil price ($/bbl) | | $72.11 | $96.13 | | $90.42 | $95.93 | | Average natural gas price ($/mcf) | | $3.53 | $3.38 | | $4.16 | $3.26 | | Average NGL price ($/bbl) | | $24.55 | $38.03 | | $32.78 | $31.69 | | | | | | | | | | Average price per barrel | | $57.82 | $70.39 | | $72.05 | $49.39 | | Royalties per barrel | | 10.84 | 13.20 | | 13.51 | 9.26 | | Operating expenses per barrel | | 5.38 | 6.54 | | 6.83 | 9.32 | | | | | | | | | | Netback per barrel | | $41.60 | $50.65 | | $51.71 | $30.81 |
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, 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.
Netback per barrel and its components are calculated by dividing revenue less royalties and operating expenses by the Company's sales volume during the period. Netback per barrel is a non-IFRS measure but it is commonly used by oil and gas companies to illustrate the unit contribution of each barrel produced. This is a useful measure for investors to compare the performance of one entity with another. However, non-IFRS measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures used by other companies.
Net operating income is similarly a non-GAAP measure that represents revenue net of royalties and operating expenses. The Company believes that net operating income is a useful supplemental measure to analyze operating performance and provides an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses.
Funds from operations is a non-GAAP measure that represents cash provided by (used in) operating activities, as per the consolidated statements of cash flows, before changes in non-cash working capital. The Company considers this a key measure as it demonstrates its ability to generate the funds necessary for future growth after taking into account the short-term fluctuations in the collection of accounts receivable and the payment for accounts payable.
Cautionary Statements
| (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 Boe 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) | This news release and the Company's other disclosure may contain short-term production rates. Readers are cautioned that such production rates are not necessarily indicative of long-term performance or of ultimate recovery. |