Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces 4th Quarter and Annual 2015 Results
TSX - Toronto Stock Exchange · United States
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Canada NewsWire
CAMARILLO, CA, March 10, 2016
CAMARILLO, CA, March 10, 2016/CNW/ -
All amounts are in U.S. Dollars unless otherwise indicated:
2015 HIGHLIGHTS
Average production was 1,415 barrels of oil equivalent per day (BOEPD) for 2015, an increase of 34% compared to 2014 production of 1,053 BOEPD due to the completion of the Nickel Hill 36-3H well and the remaining portion of the Emery 17-1H well in 2015 General & administrative expenses decreased by 30% and operating expenses on a per barrel basis decreased by 26% in 2015 compared to 2014 due to the Company's global cost cutting efforts initiated at the beginning of 2015 Realized hedging gains from commodity contracts for 2015 was $4.3 millioncompared to $0.7 millionin 2014. Revenue, net of royalties was $13.7 millionfor 2015 compared to $22.5 millionin 2014 due to lower prices in 2015 partially offset by production increases Average netbacks were $21.10per BOE for 2015, a decrease of 59% compared to 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 2015 increase by more than $8/barrel to $29.43per BOE A net loss of $6.6 millionwas incurred in 2015 due to a $7.5 millionimpairment charge for the Company's European operations. Excluding the impact of this charge, the Company would have reported net income of $1.0 millionin 2015 Cash flow from operating activities was $5,581,000for 2015 compared to cash flow from operating activities of $12,750,000in 2014 due to lower prices in 2015 Capital expenditures decreased by 87% to $9.5 millionin 2015 primarily due to the prior year drilling and completion of the Gapowo well in Polandand the prior year US drilling program in Oklahoma 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
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"During 2015, the Company increased production 34% to 1,415 boepd 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 2015.
"Our wells continue to outperform the PDP well production forecasts generated by the Company's independent reserves evaluator. In Q4 2015, actual production outperformed these forecasts by approximately 20%.
"We remain in a ready to drill state and our intent is to work with our lender and utilize our existing cash flow to begin drilling again when the pricing warrants.
"Despite the significant decline in the global oil price throughout 2015 and into 2016, the Company has been able to realize a much higher price than current market levels for a portion of its oil production due to its hedging position. The Company's commodity contract hedges generated $4.3 millionin realized gains during 2015. In the fourth quarter of 2015, about 73% of our oil production was hedged and we expect a comparable level of hedging going forward assuming no new production. The Company's hedges are in place through 2018 at an average oil price of $66.13for 2016, $63.14for 2017 and $55.19for 2018.
"Our global cost cutting efforts that were initiated at the beginning of 2015 continue to show significant cost reductions with general and administrative expenses decreasing by 30% during year compared to 2014. In addition, the Company's per barrel operating costs for 2015 were $5.05, a 26% decrease from 2014. The Company recently announced the shutdown of its Polish operations which will further contribute to the cost reduction effort in 2016 as these operations cost about US$1.7 millionin 2015. In addition, the Company is evaluating alternatives for its Spainoperations including continuing its efforts to partner with another company or reducing or ceasing its operations there.
"These costs reductions helped the Company to maintain positive cash flow from operations of $5.6 millionfor 2015, despite a decrease in average prices of 53% compared to 2014. Cash flow from operations in 2014 was $12.8 million.
"The Company would have reported net income of $1.0 millionin 2015 without the impairment charges of $7.5 millionon its European operations. Likewise, in 2014, the company incurred a net loss of $57.5 milliondue to a $57.3 millionimpairment on its Polandoperations.
"Average netbacks for 2015 were $21.10, a decrease of 59% compared to the prior year due to lower prices. If we include the impact of the realized gains from the commodity contracts, our average netbacks for 2015 would be $29.43, which is a decrease of 45% compared to 2014."
| | Fourth Quarter | | Year Ended | | | | | | 2015 | 2014 | % | 2015 | 2014 | % | | | | | | | | | | Net Loss: | | | | | | | | $ Thousands | $(6,348) | $(57,628) | - | $(6,569) | $(57,478) | - | | $ per common share | $(0.04) | $(0.36) | - | $(0.04) | $(0.36) | - | | assuming dilution | | | | | | | | | | | | | | | | Capital Expenditures | $52 | $18,027 | (100%) | $9,526 | $75,773 | (87%) | | | | | | | | | | Average Production (Boepd) | 1,367 | 1,280 | 7% | 1,415 | 1,053 | 34% | | Gross Revenue | 3,834 | 6,811 | (44%) | 17,811 | 27,694 | (36%) | | Average Product Price per Barrel | $28.86 | $57.82 | (50%) | $34.09 | $72.05 | (53%) | | Average Netback per Barrel | $17.10 | $41.60 | (59%) | $21.10 | $51.71 | (59%) | | Average Price per Barrel including Commodity Contracts | $40.24 | $62.42 | (36%) | $42.42 | $73.79 | (43%) | | Average Netback per Barrel including Commodity Contracts | $28.48 | $46.20 | (38%) | $29.43 | $53.45 | (45%) | | | | | | | | | | | | December 2015 | | December 2014 | | | | | | | | | | | | Cash and Cash Equivalents | | $1,666 | | $12,035 | | | | Adjusted Working Capital (excludes debt) | | $7,298 | | $663 | | |
Year Ended 2015 to Year Ended 2014
For 2015, oil and natural gas revenues net of royalties decreased $8,788,000or 39% to $13,713,000. Oil revenues before royalties decreased by 39% to $14,823,000due to a 49% decrease in prices between years partially offset by a 19% increase in production. Natural gas revenues before royalties declined $84,000or 6% due to a 41% decrease in natural gas prices per mcf partially offset by a 61% increase in average production. NGL revenue before royalties declined $426,000or 24% due to 58% decrease in prices partially offset by a 82% increase in average production per day.
Exploration and evaluation expenses decreased $49,883,000. The 2015 amount includes an impairment of $7,547,000for the Company's European operations while the 2014 amount includes an impairment of $57,346,000recorded for the Polandoperations.
Depletion and depreciation expense increased $541,000primarily due to the increased production and depletion base.
General and administrative expenses decreased $3,443,000due to the Company's cost cutting efforts during 2015 which resulted in lower salary and benefit costs due to decreased headcount, director fees, legal and professional fees and travel costs.
Loss from investments in joint ventures was $3,933,000in 2014 due to an impairment recorded by Saponis.
Finance income increased $4,584,000due to higher realized and unrealized gains on risk management contracts and a gain on settlement of asset retirement obligations (ARO) in 2015. Finance expense increased $1,851,000due to interest on the Company's credit facility.
Capital expenditures of $9,526,000were incurred in 2015 for drilling and completion costs in Oklahomaearlier in the year.
FOURTH QUARTER HIGHLIGHTS:
Revenue, net of royalties, was $3.0 millionfor fourth quarter 2015, a decrease of 46% compared to the fourth quarter 2014 due to lower prices partially offset by increased production Cash flow from operations was $1.0 millionin the fourth quarter of 2015 compared to $4.6 millionin prior year fourth quarter. The fourth quarter 2015 cash flow included cash payments for ARO obligations in Polandof $0.5 million Average netbacks for the fourth quarter of 2015 were $17.10, a decrease of 59% over fourth quarter 2014 due to price decreases. If the realized gains from the commodity contracts are included, the average netbacks for the fourth quarter of 2015 increase by more than $11/barrel to $28.48per BOE Average production for the quarter was 1,367 BOEPD, an increase of 7% compared to the prior year fourth quarter due to increased production from the 2 completions in 2015 G&A expense decreased by $0.4 milliondue to the Company's global cost cutting efforts initiated at the beginning of 2015 A net loss of $6.3 millionwas incurred in the fourth quarter 2015 due primarily to a $7.5 millionimpairment of exploration and evaluation assets Morgan Stanley reaffirmed the Company's current outstanding borrowing base of $24.4 millionand the credit facility was modified to enable the Company to request a quick redetermination of the borrowing base when the price of oil improves by 10% above current levels
Fourth Quarter 2015 to Fourth Quarter 2014
Oil and gas revenues net of royalties totaled $3,008,000in the quarter versus $5,534,000in the fourth quarter of 2014. Oil revenues were $3,011,000in the quarter versus $6,035,000in the fourth quarter of 2014, a decrease of 50% as average oil prices decreased by 45% and oil production decreased by 9%. Natural gas revenues decreased 35% due to the decrease in the average price per mcf of 46% partially offset by an increase in natural gas production of 21%. NGL revenue decreased 5% to $369,000as average NGL prices decreased by 45% partially offset by an average production increase of 71%.
Exploration and evaluation expenses decreased $49,779,000in 2015 compared to 2014. The 2015 amount includes an impairment of $7,547,000for the Company's European operations while the 2014 amount includes an impairment of $57,346,000recorded for the Polandoperations.
General and administrative expenses decreased $244,000between quarters due to the Company's cost cutting efforts during 2015 which resulted in lower salary and benefit costs due to decreased headcount, director fees, legal and professional fees and travel costs.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | | | | December 31, | | December 31, | | | | | | 2015 | | 2014 | | | Current assets | | | | | | | | | Cash and cash equivalents | | $ | 1,666 | $ | 12,035 | | | Trade and other receivables | | | 2,905 | | 3,938 | | | Deposits and prepaid expenses | | | 906 | | 1,304 | | | Fair value of commodity contracts | | | 4,459 | | 2,037 | | | | | 9,936 | | 19,314 | | | | | | | | | | | Non-current assets | | | | | | | | | Fair value of commodity contracts | | | 2,802 | | 1,248 | | | Property, plant and equipment | | | 136,233 | | 134,942 | | | Exploration and evaluation assets | | | 835 | | 7,925 | | | | | 139,870 | | 144,115 | | | | | | | | | | | Total assets | | $ | 149,806 | $ | 163,429 | | | | | | | | | | | Current liabilities | | | | | | | | | Trade and other payables | | $ | 2,638 | $ | 18,651 | | | Loans and borrowings | | | - | | 15,401 | | | | | 2,638 | | 34,052 | | | | | | | | | | | Non-current liabilities | | | | | | | | | Loans and borrowings | | | 23,961 | | - | | | Asset retirement obligations | | | 788 | | 1,355 | | | | | 24,749 | | 1,355 | | | | | | | | | | | Equity | | | | | | | | | Share capital | | | 279,859 | | 279,859 | | | Contributed surplus | | | 21,471 | | 20,505 | | | Deficit | | | (178,911) | | (172,342) | | Total equity | | | 122,419 | | 128,022 | | | | | | | | | | | Total equity and liabilities | | $ | 149,806 | $ | 163,429 | |
| 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 | | | | | | | | | 2015 | | 2014 | | 2015 | | 2014 | | | Revenue: | | | | | | | | | | | Oil and natural gas revenue, net | $ | 3,008 | $ | 5,534 | $ | 13,713 | $ | 22,501 | | | Other income | | (20) | | 444 | | 41 | | 763 | | | | | 2,988 | | 5,978 | | 13,754 | | 23,264 | | | Expenses: | | | | | | | | | | | Exploration and evaluation | | 7,547 | | 57,326 | | 7,591 | | 57,474 | | | Production and operating | | 653 | | 634 | | 2,614 | | 2,626 | | | Depletion and depreciation | | 1,742 | | 1,958 | | 8,077 | | 7,536 | | | General and administrative | | 1,686 | | 1,930 | | 7,882 | | 11,325 | | | Share based compensation | | 158 | | 480 | | 654 | | 1,610 | | | Loss from investments in joint ventures | | - | | 4,006 | | - | | 3,933 | | | | | 11,786 | | 66,334 | | 26,818 | | 84,504 | | | | | | | | | | | | | | | | | | | | | | | | | Finance income | | 3,034 | | 3,901 | | 8,856 | | 4,272 | | | Finance expense | | (584) | | (363) | | (2,361) | | (510) | | | | | | | | | | | | | | Net loss and comprehensive loss | $ | (6,348) | $ | (57,628) | $ | (6,569) | $ | (57,478) | | | | | | | | | | | | | | Net loss per share | | | | | | | | | | | | Basic and Diluted | $ | (0.04) | $ | (0.36) | $ | (0.04) | $ | (0.36) |
| BNK PETROLEUM INC. | | | | | | | | | | | FOURTH QUARTER AND YEAR ENDED 2015 | | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | | | | 2015 | 2014 | | 2015 | 2014 | | Oil revenue before royalties | | $ | 3,011 | 6,035 | | 14,823 | 24,398 | | | | Gas revenue before royalties | | | 249 | 384 | | 1,398 | 1,482 | | | | NGL revenue before royalties | | | 369 | 390 | | 1,385 | 1,811 | | | | Oil and Gas revenue | | | 3,629 | 6,809 | | 17,606 | 27,691 | | | | | | | | | | | | | | | Cash flow used by operating activities | 1,039 | 4,565 | | 5,581 | 12,750 | | | | | | Additions to property, plant & equipment | | (52) | (16,715) | | (9,133) | (46,839) | | | | | Additions to Exploration and Evaluation | | | | | | | | | | | Assets | 58 | (1,312) | | (393) | (28,934) | | | | | | | | | | | | | | | | | Statistics: | | | | | | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | | | | 2015 | 2014 | | 2015 | 2014 | | | Average oil production (Bopd) | | 832 | 910 | | 879 | 739 | | | | | Average natural gas production (mcf/d) | | 1,436 | 1,182 | | 1,568 | 975 | | | | | Average NGL production (Boepd) | | 296 | 173 | | 275 | 151 | | | | | Average production (Boepd) | | | 1,367 | 1,280 | | 1,415 | 1,053 | | | | Average oil price ($/bbl) | | $39.36 | $72.11 | | $46.20 | $90.42 | | | | | Average natural gas price ($/mcf) | | $1.89 | $3.53 | | $2.44 | $4.16 | | | | | Average NGL price ($/bbl) | | | $13.54 | $24.55 | | $13.79 | $32.78 | | | | | | | | | | | | | | | Average price per barrel | | | $28.86 | $57.82 | | $34.09 | $72.05 | | | | Royalties per barrel | | | 6.57 | 10.84 | | 7.94 | 13.51 | | | | Operating expenses per barrel | | | 5.19 | 5.38 | | 5.05 | 6.83 | | | | Netback per barrel | | | | $17.10 | $41.60 | | $21.10 | $51.71 | |
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, 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, 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, working capital or other financial measures determined in accordance with GAAP, as an indicator of the Company's performance.
The Company's Non-GAAP Measures are described and reconciled to to GAAP measures in the management's discussion and analysis which are available under the Company's profile at www.sedar.com.
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 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) | This news release and the Company's other disclosure may contain peak and 30-day initial production rates and other short-term production rates. Readers are cautioned that such production rates 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, 2015independent 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, 2015, which the Company filed on SEDAR on March 10, 2016.
Caution Regarding Forward-Looking Information
This release contains forward-looking information including information regarding the Company's commodity contract hedges, anticipated results from the Company's cost reduction measures, estimates of reserves and future net revenue, 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 Company's European projects, planned capital expenditure programs and cost estimates, planned use and sufficiency of cash on hand and cash flow from operations 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.
Such forward-looking information is based on management's expectations and assumptions, including that the Company will achieve a comparable level of hedging going forward in respect of its existing production, that the Company will achieve the results anticipated by management from its cost reduction measures, that the Company's geologic models will be validated, that indications of early results are reasonably accurate predictors of the prospectiveness of the shale intervals, that previous exploration results are indicative of future results and success, that expected production from future wells can be achieved as modeled, declines will match the modeling, future well production rates will be improved over existing wells, that rates of return as modeled can be achieved, that recoveries are consistent with management's expectations, that additional wells are actually drilled and completed, that design and performance improvements will reduce development time and expense and improve productivity, that discoveries will prove to be economic, that anticipated results and estimated costs will be consistent with managements' expectations, that all required permits and approvals and the necessary labor and equipment will be obtained, provided or available, as applicable, on terms that are acceptable to the Company, when required, that no unforeseen delays, unexpected geological or other effects, equipment failures, permitting delays or labor or contract disputes are encountered, that the development plans of the Company and its co-venturers will not change, that the demand for oil and gas will be sustained, that the Company will continue to be able to access sufficient capital through financings, credit facilities, farm-ins or other participation arrangements to maintain its projects, that the Company will not be adversely affected by changing government policies and regulations, social instability or other political, economic or diplomatic developments in the countries in which it operates and that global economic conditions will not deteriorate in a manner that has an adverse impact on the Company's business and its ability to advance its business strategy.