Kolibri Global Energy Inc. press release
BNK Petroleum Inc. announces 2nd quarter 2015 results
TSX - Toronto Stock Exchange · United States
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CAMARILLO, CA, Aug. 13, 2015/CNW/ -
All amounts are in U.S. Dollars unless otherwise indicated:
SECOND QUARTER HIGHLIGHTS:
Average production for the second quarter of 2015 was 1,490 BOEPD, an increase of 49% compared to second quarter 2014 production of 999 BOEPD due to the completion of the Nickel Hill 36-3H well and the remaining portion of the Emery 17-1H well during the second quarter General & administrative expenses decreased by 41% and operating expenses on a per barrel basis decreased by 34% for the second quarter of 2015 compared to the second quarter of 2014 due to the Company's global cost cutting efforts initiated at the beginning of the year Revenue, net of royalties was $4.0 millionfor second quarter of 2015 compared to $6.0 millionin the second quarter of 2015 due to lower prices in 2015 Average netbacks were $24.88per BOE for the quarter, a decrease of 58% compared to the second quarter of 2014 due to lower prices in 2015 partially offset by lower operating costs per barrel. If the realized gains from the commodity contracts are included, the average netbacks for the quarter increase by almost $5/barrel to $29.84per BOE Cash flow from operating activities was $1.6 millionfor the second quarter of 2015 compared to $2.3 millionin the second quarter of 2014 Cash and working capital totaled $3.7 millionand $2.3 millionrespectively at June 30, 2015 Capital expenditures decreased by 81% to $4.2 millionprimarily due to the prior year drilling and completion of the Gapowo well in Poland
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"Our second quarter production increased to 1,490 BOEPD, an increase of 49% compared to the prior year second quarter, due to the fracture stimulation of the previously drilled Nickel Hill 36-3H well and the remaining stages in the Emery 17-1H well during the quarter. The cost of the completion work on these 2 wells was 40% less than our average 2014 completion costs, even with larger fracture stimulations, due to efficient execution and lower service costs. The Company's existing production continues to perform well and our June 2015average production was over 1,700 BOEPD.
"Our global cost cutting efforts that were initiated at the beginning of the year led to decreases in general and administrative expense of 41% during the second quarter of 2015 compared to the prior year second quarter. In addition, the Company's per barrel operating costs for the 2015 second quarter were $4.96, a 34% decrease from the 2014 second quarter.
"These costs reductions helped the Company to maintain positive cash flow from operations of $1.6 millionfor the second quarter of 2015 despite a decrease in average prices of 52% compared to the prior year second quarter. Cash flow from operations in the second quarter of last year were $2.3 million.
"Average netbacks for the second quarter 2015 were $24.88, a decrease of 58% compared to the prior year second quarter due to the 52% average price decrease. If we include the impact of the realized gains from the commodity contracts, our average netbacks for the second quarter would be $29.84, which is a decrease of 49% compared to the 2014 second quarter.
"In the second quarter of 2015, the Company generated a net loss of $3.7 millioncompared to net income of $199kin the second quarter of 2014. The 2015 net loss included unrealized losses on commodity contracts of $3.1 millionas the Company had to mark its commodity contracts to market as oil prices increased throughout the second quarter before falling down to their current levels subsequent to quarter-end.
"Capital expenditures decreased to $4.2 millionin the second quarter 2015 due to the prior year drilling and completion of the Gapowo B-1 well in Poland. Capital expenditures in the second quarter of 2014 were $22.7 million."
| | | Second Quarter | | First Six Months | | | | | | | | 2015 | 2014 | % | 2015 | 2014 | % | | | | | | | | | | | | | Net Income (Loss): | | | | | | | | | | $ Thousands | $(3,658) | $199 | - | $(4,418) | $449 | - | | | | $ per common share | $(0.02) | $0.00 | - | $(0.03) | $0.00 | - | | | | assuming dilution | | | | | | | | | | | | | | | | | | | | Capital Expenditures | $4,248 | $22,710 | (81%) | $8,566 | $35,664 | (76%) | | | | | | | | | | | | | | Average Production (Boepd) | 1,490 | 999 | 49% | 1,369 | 980 | 40% | | | | Average Price per Barrel | $39.35 | $81.74 | (52%) | $38.15 | $80.05 | (52%) | | | | Average Netback per Barrel | $24.88 | $58.85 | (58%) | $24.21 | $58.16 | (58%) | | | | Average Price per Barrel including Commodity Contracts | $44.31 | $81.74 | (46%) | $44.38 | $80.05 | (45%) | | | | Average Netback per Barrel including Commodity Contracts | $29.84 | $58.85 | (49%) | $30.44 | $58.16 | (48%) | | | | | | | | | | | | | | | | June
2015 | | March
2015 | | December 2014 | | | | | | | | | | | | | | Cash and Cash Equivalents | $3,748 | | $6,757 | | $12,035 | | | | | Working Capital | $2,310 | | $6,827 | | $663 | | | | | | | | | | | | | |
Second Quarter 2015 versus Second Quarter 2014
Oil and gas gross revenues totaled $5,335,000in the second quarter 2015 versus $7,431,000in the second quarter of 2014. Oil revenues were $4,519,000in the quarter versus $6,697,000in the second quarter of 2014, a decrease of 33% as average oil prices decreased 47% or $47.58a barrel for the quarter, partially offset by an increase in production of 27%. Natural gas revenues increased $20,000or 6%, as natural gas production increased 99% which was partially offset by a 47% decrease in average natural gas prices compared to the second quarter of 2014. Natural Gas Liquid (NGL) revenue increased $62,000or 16% to $461,000as average production increased 116% which was partially offset by an average NGL price decrease of 47%.
Production and operating expenses decreased $15,000between quarters. These costs declined from the prior year quarter even though total production increased by 49% and the Company incurred over $30,000of repair and maintenance costs for heavy flooding in Oklahomaduring the second quarter of 2015.
Depletion and depreciation expense increased $312,000between quarters due to increased production and a higher depletion base due to the Caneywells that were drilled and completed in the last half of 2014 and 2015.
General and administrative expenses decreased $1,241,000between quarters due to the Company's global cost cutting efforts which reduced employee salary and benefit costs, director fees, legal and professional fees and travel costs.
Finance income increased $362,000due to realized gains on financial commodity contracts in 2015. Finance expense increased $3,424,000primarily due to 2015 unrealized loss on financial commodity contracts of $3,084,000and interest expense of $490,000.
Capital expenditures of $4,248,000were incurred in the second quarter of 2015 primarily related to completions operations in the U.S. during the quarter.
FIRST SIX MONTHS 2015 HIGHLIGHTS
Average production was 1,369 BOEPD for the first six months, an increase of 40% compared to the prior year six months production of 980 BOEPD due to the completion of the Nickel Hill 36-3H well and the remaining portion of the Emery 17-1H well during the second quarter of 2015 General & administrative expenses decreased by 27% and operating expenses on a per barrel basis decreased by 27% for the first six months of 2015 compared to the first six months of 2014 due to the Company's global cost cutting efforts initiated in the first quarter Revenue, net of royalties was $7.2 millionfor first six months of 2015 compared to $11.5 millionfor the first six months of 2014, a decrease of 37%, due to lower prices in 2015 Average netbacks were $24.21per BOE for the first six months of 2015, a decrease of 58% compared to the first six months of 2014 due to lower prices in 2015 partially offset by lower operating costs per barrel. If the realized gains from the commodity contracts are included, the average netbacks for the first six months of 2015 increase by more than $6/barrel to $30.44per BOE Cash flow from operating activities was $2.9 millionfor the first six months of 2015 compared to $5.3 millionin the first six months of 2014 due mainly to lower prices Capital expenditures decreased by 76% to $8.6 millionprimarily due to the prior year drilling and completion of the Gapowo well in Poland In February 2015, the Company obtained an additional $8.5 millionunder the Company's $100 millioncredit facility to fund the drilling of Caneywells in Oklahoma. Total borrowing under the facility is now at $24.4 million
First Six Months of 2015 versus First Six Months of 2014
Gross oil and gas revenues totaled $9,452,000in the first six months of 2015 versus $14,200,000in the first six months of 2014. Oil revenues were $8,119,000in the first six months versus $12,385,000in the same period of 2014, a decrease of 34% as average oil prices decreased 49% or $49.31a barrel which was partially offset by an oil production increase of 30%. Natural gas revenues decreased $19,000or 3%, due to an average natural gas price decrease of 46% in the first six months of 2015 which was partially offset by an increase in natural gas production of 79%. NGL revenue decreased $463,000, or 43%, due to an average NGL price decrease of 62% in the first six months of 2015, partially offset by an increase in NGL production of 48% in the first six months of 2015.
Other income decreased due to lower management fees compared to the prior year.
Production and operating expenses increased 2% for the first six months of 2015 due to $30,000of repair and maintenance costs for heavy flooding in Oklahomaduring the second quarter of 2015 and an increase in the number of wells which contributed to an increase in production of 40%.
Depletion and depreciation expense increased $338,000due to increased production and a higher depletion base due to the Caneywells that were drilled and completed in the last half of 2014 and 2015.
General and administrative expenses decreased $1,626,000primarily due to the Company's global cost cutting efforts which reduced employee salary and benefit costs, director fees, legal and professional fees and travel costs.
Finance income increased $1,242,000due to realized gains on financial commodity contracts in 2015. Finance expense increased $2,855,000primarily due to 2015 unrealized loss on financial commodity contracts of $1,912,000and interest expense of $949,000.
| BNK PETROLEUM INC. | | | | | | | | | | CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | | | | | | | | | | (Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | | | | | | | June 30, | | December 31, | | | | | | | | 2015 | | 2014 | | | | | Current assets | | | | | | | | | | | Cash and cash equivalents | | $ | 3,748 | $ | 12,035 | | | | | Trade and other receivables | | | 3,088 | | 3,938 | | | | | Deposits and prepaid expenses | | | 1,640 | | 1,304 | | | | | Fair value of commodity contracts | | | 1,215 | | 2,037 | | | | | | | 9,691 | | 19,314 | | | | | | | | | | | | | | | Non-current assets | | | | | | | | | | | Fair value of commodity contracts | | | 158 | | 1,248 | | | | | Property, plant and equipment | | | 139,475 | | 134,942 | | | | | Exploration and evaluation assets | | | 8,132 | | 7,925 | | | | | | | 147,765 | | 144,115 | | | | | | | | | | | | | | | Total assets | | $ | 157,456 | $ | 163,429 | | | | | | | | | | | | | | | Current liabilities | | | | | | | | | | | Trade and other payables | | $ | 7,381 | $ | 18,651 | | | | | Loans and borrowings | | | - | | 15,401 | | | | | | | 7,381 | | 34,052 | | | | | | | | | | | | | | | Non-current liabilities | | | | | | | | | | | Loans and borrowings | | | 23,893 | | - | | | | | Asset retirement obligations | | | 2,024 | | 1,355 | | | | | | | 25,917 | | 1,355 | | | | | | | | | | | | | | | Equity | | | | | | | | | | | Share capital | | | 279,859 | | 279,859 | | | | | Contributed surplus | | | 21,059 | | 20,505 | | | | | Deficit | | | (176,760) | | (172,342) | | | | Total equity | | | 124,158 | | 128,022 | | | | | | | | | | | | | | | Total equity and liabilities | | $ | 157,456 | $ | 163,429 | | | |
| 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 | | | | | | | | | 2015 | | 2014 | | 2015 | | 2014 | | | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 4,044 | $ | 6,083 | $ | 7,235 | $ | 11,539 | | | Other income | | 4 | | 3 | | 45 | | 205 | | | | | 4,048 | | 6,041 | | 7,280 | | 11,744 | | | | | | | | | | | | | | Exploration and evaluation expenditures | | 12 | | 36 | | 44 | | 136 | | | Production and operating expenses | | 672 | | 687 | | 1,244 | | 1,220 | | | Depletion and depreciation | | 2,198 | | 1,886 | | 4,032 | | 3,694 | | | General and administrative expenses | | 1,761 | | 3,002 | | 4,306 | | 5,932 | | | Stock based compensation | | 178 | | 356 | | 358 | | 691 | | | Loss from investments in joint ventures | | - | | 52 | | - | | (239) | | | Restructuring expenses | | - | | - | | 240 | | - | | | | | 4,821 | | 6,019 | | 10,224 | | 11,434 | | | | | | | | | | | | | | Finance income | | 693 | | 331 | | 1,558 | | 316 | | | Finance expense | | (3,578) | | (154) | | (3,032) | | (177) | | | | | | | | | | | | | | Net income (loss) and comprehensive income (loss) | $ | (3,658) | $ | 199 | $ | (4,418) | $ | 449 | | | | | | | | | | | | | | Net income (loss) per share | | | | | | | | | | | | Basic and Diluted | $ | (0.02) | $ | 0.00 | $ | (0.03) | $ | 0.00 | | | | | | | | | | | |
| BNK PETROLEUM INC. | | | | | | | | | | | SECOND QUARTER 2015 | | | | | | | | | | | ($000 except as noted) | | | | | | | | | | | | | | | | | | | | | | | Second Quarter | | First Six Months | | | | | | | | | | | | | 2015 | 2014 | | 2015 | 2014 | | Oil revenue before royalties | | $ | 4,519 | 6,697 | | 8,119 | 12,385 | | | | Gas revenue before royalties | | | 355 | 335 | | 729 | 748 | | | | NGL revenue before royalties | | | 461 | 399 | | 604 | 1,067 | | | | Oil and Gas revenue | | | 5,335 | 7,431 | | 9,452 | 14,200 | | | | | | | | | | | | | | | Cash Flow from operating activities | 1,580 | 2,340 | | 2,862 | 5,296 | | | | | | Additions to property, plant & equipment | (4,083) | (7,308) | | (8,396) | (12,487) | | | | | | Additions to exploration and evaluation assets | (165) | (15,402) | | (170) | (23,177) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | | | | | | | 2nd Quarter | | First Six Months | | | | | | | | 2015 | 2014 | | 2015 | 2014 | | | Average Oil production (Bopd) | | 914 | 722 | | 890 | 686 | | | | | Average natural gas production (mcf/d) | | 1,637 | 822 | | 1,518 | 846 | | | | | Average NGL production (Boepd) | | 303 | 140 | | 226 | 153 | | | | | Average production (Boepd) | | | 1,490 | 999 | | 1,369 | 980 | | | | Average oil price ($/bbl) | | $54.35 | $101.93 | | $50.37 | $99.68 | | | | | Average natural gas price ($/mcf) | | $2.38 | $4.48 | | $2.65 | $4.89 | | | | | Average NGL price ($/bbl) | | | $16.72 | $31.28 | | $14.75 | $38.54 | | | | | | | | | | | | | | | Average price per barrel | | | $39.35 | $81.74 | | $38.15 | $80.05 | | | | Royalties per barrel | | | 9.51 | 15.33 | | 8.94 | 15.01 | | | | Operating expenses per barrel | | | 4.96 | 7.56 | | 5.00 | 6.88 | | | | Netback per barrel | | | | $24.88 | $58.85 | | $24.21 | $58.16 | | | | | | | | | | | | |
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, 2015and 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, netback per barrel including commodity contracts, 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. Netbacks including Commodity Contracts and its components are calculated by dividing revenue and realized gains from commodity contracts, 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. 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 and should not be used to make comparisons.
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.
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 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 may disclose 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. |
Caution Regarding Forward-Looking Information
This release contains forward-looking information including information regarding the proposed timing and expected results of exploratory and development work including production from the Lower Caney and upper Sycamore formations on the Company's Oklahomaacreage, the effect of design and performance improvements on future productivity, the anticipated timing of commencement and completion of drilling and fracture-stimulations in connection with the Company's Caneydrilling program, the advancement of the Company's European projects, future well stimulations, and expected productivity from future wells, planned capital expenditure programs and cost estimates, 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.