Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Annual 2017 Financial Results
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, March 19, 2018
TSX ticker symbol; BKX QTCQX ticker symbol; BNKPF
CAMARILLO, CA, March 19, 2018/CNW/ - All amounts are in U.S. Dollars unless otherwise indicated:
2017 HIGHLIGHTS
The Company's Total Proved Reserves increased by 40% to 25.2 million barrels of oil equivalent (BOE) and NPV10 value of the Total Proved Reserves increased by 73% to $259.5 millionbased on the Company's December 31, 2017independent reserves evaluation. Funds from continuing operations was $6.5 millionfor 2017 compared to $4.9 millionfor 2016, an increase of 32% Average production for 2017 was 1,092 BOEPD, an increase of 4% compared to 2016 production of 1,045 BOEPD. This increase was due to production from 3 new wells, the Chandler 8-6H well, the Hartgraves 1-6H well, and the Brock 9-2H well. The production from these new wells was partially offset by the impact of three wells that were shut in during the first half of the year due to offset fracture stimulation by another operator in the Woodford formation beneath the Caney and normal production decline Subsequent to year end, the Company drilled the Glenn 16-2H well and has just finished fracture stimulation operations with production expected to start in April. The Company has also drilled the WLC 14-2H well and expects fracture stimulation operations in mid-2018 Percentage of oil produced increased to 74% in the fourth quarter of 2017 from 67% in the fourth quarter of 2016. This is due to the new wells producing about 87% oil. Average netbacks were $25.49per BOE in 2017, an increase of 52% compared to 2016 due to higher prices in 2017. If the realized gains from the commodity contracts are included, the average netbacks for 2017 was $29.39per BOE compared to $27.70in 2016 Revenue, net of royalties was $12.6 millionfor 2017 compared to $8.6 millionin 2016 due to higher prices and production compared to 2016 In June 2017, the Company's US subsidiary obtained a new $75 millioncredit facility from BOK Financial, with an initial commitment amount of $25.0 million. In December 2017, the commitment amount was increased to $30.0 million. As of December 31, 2017, the US subsidiary had borrowed $25.0 millionof the commitment amount and had an available borrowing capacity of $5.0 million. Net loss was $1.6 millionfor 2017 compared to a net loss of $11.1 millionin 2016. The Company had an unrealized loss on financial commodity contracts of $1.2 millionin 2017, compared to an unrealized loss of $8.0 millionin 2016. General & administrative expenses decreased by 1% for 2017 compared to the prior year due to the Company's continued cost cutting efforts partially offset by advisor fees in 2017
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"We are very pleased with the results of our 2017 drilling program. The three wells that came on production during the year have significantly increased our production. Our average production for the fourth quarter of 2017 was 1,539 BOE per day, which was an increase of 132% from the fourth quarter of 2016. Our 2017 drilling also significantly improved our reserve report, as our proved reserves increased by 40% from 2016, to 25.2 million BOE. The NPV10 value of our proved reserves increased by 73% to $259.5 millioncompared to 2016.
"These results allowed us to obtain a $5 millionincrease in the borrowing capacity of our credit facility from $25 millionto $30 million, which, along with our positive cash flow, is being used to fund our 2018 drilling program. So far in 2018, we drilled and successfully completed the fracture stimulation of the Glenn 16-2H well which will begin flowback next week. We expect production from this well to start in the beginning of April. We have also drilled the WLC 14-2H well with fracture stimulation operations to follow in a few months. All of these operations have been performed on time and under budget. Total cost for the Glenn 16-2H well is expected to be less than the targeted $5.7 millionbudget. Both of these wells had hydrocarbon shows comparable to some of our best wells and we expect both of these wells to further increase our reserves and cash flow.
"We generated funds from continuing operations of $2.8 millionin the fourth quarter of 2017, which was a 455% increase from the fourth quarter 2016 amount of $0.5 million. For all of 2017, funds from continuing operations totaled $6.5 million, which was an increase of 32% from 2016.
"Revenue, net of royalties was $5.0 millionfor the fourth quarter of 2017, an increase of 188% compared to the prior year fourth quarter amount of $1.7 million. For 2017, revenue, net of royalties was $12.6 millioncompared to $8.6 millionin 2016.
"Average netbacks for the fourth quarter of 2017 were $29.81per BOE, an increase of 42% compared to the prior year fourth quarter due to higher prices and production. For the year, average netbacks were $25.49per BOE in 2017, an increase of 52% compared to 2016. If we include the impact of the realized gains from the commodity hedging contracts, our average netbacks for 2017 were $29.39per BOE, compared to $27.70per BOE in 2016.
"The Company recorded a net loss of $1.3 millionin the fourth quarter of 2017, due to a $2.1 millionunrealized loss on commodity contracts, compared to a net loss of $3.7 millionin the fourth quarter of 2016. For 2017, the Company had a net loss of $1.6 million, compared to a net loss of $11.1 millionin 2016."
| | Fourth Quarter | | Year Ended | | | | | | 2017 | 2016 | % | 2017 | 2016 | % | | | | | | | | | | Net Loss: | | | | | | | | $ Thousands | $(1,303) | $(3,745) | -% | $(1,596) | $(11,148) | -% | | $ per common share | $(0.01) | $(0.02) | -% | $(0.01) | $(0.06) | -% | | assuming dilution | | | | | | | | Funds from continuing operations | $2,834 | $511 | 455% | $6,522 | $4,926 | 32% | | | | | | | | | | Capital Expenditures | $302 | $1,751 | (83%) | $19,271 | $2,497 | 672% | | | | | | | | | | Average Production (Boepd) | 1,539 | 661 | 133% | 1,092 | 1,045 | 4% | | Gross Revenue | 6,410 | 2,258 | 184% | 16,150 | 11,084 | 46% | | Average Product Price per Barrel | $45.27 | $37.13 | 22% | $40.52 | $28.98 | 40% | | Average Netback per Barrel | $29.81 | $20.97 | 42% | $25.49 | $16.76 | 52% | | Average Price per Barrel including Commodity Contracts | $45.92 | $47.56 | (3%) | $44.42 | $39.92 | 11% | | Average Netback per Barrel including Commodity Contracts | $30.46 | $31.40 | (3%) | $29.39 | $27.70 | 6% | | | | | | | | | | | | December 2017 | | December 2016 | | | | | | | | | | | | Cash and Cash Equivalents | | $521 | | $11,101 | | | | Working Capital | | ($537) | | $10,640 | | |
Year Ended 2017 to Year Ended 2016
For 2017, oil and gas revenues net of royalties increased $4,013,000or 47% to $12,591,000. Oil revenues before royalties increased by 52% to $13,714,000due to a 25% increase in prices between years and a 22% increase in production. Natural gas revenues before royalties increased $17,000or 2% due to a 31% increase in natural gas prices per mcf partially offset by a 22% decrease in average production. NGL revenue before royalties increased $343,000or 28% due to a 64% increase in average prices partially offset by a 22% decrease in production.
Exploration and evaluation expenses decreased $832,000. The 2016 amount includes an impairment of $835,000on exploration and evaluation leases.
Operating expenses increased by $263,000due to an increase in production due to the new wells, an increase in production taxes and additional water hauling costs earlier in the year for the wells impacted by the offset fracture stimulation operations.
Depletion and depreciation expense increased $247,000due to increased production.
General and administrative expenses decreased $24,000due to the Company's continued cost cutting efforts partially offset by advisor fees in 2017.
Finance income decreased $2,497,000due to higher realized gains on risk management contracts in 2016 of $4,184,000, compared to $1,556,000in 2017. Finance expense decreased $7,072,000due to a decrease in unrealized losses on risk management contracts of $6,843,000.
Capital expenditures of $19,271,000were incurred in 2017 for drilling and completion costs in Oklahomaduring the year.
FOURTH QUARTER HIGHLIGHTS:
Funds from continuing operations was $2.8 millionin the fourth quarter of 2017 compared to $0.5 millionin the prior year fourth quarter, an increase of 455%, due to the increased production from the three additional wells drilled during 2017 and higher prices Revenue, net of royalties, was $5.0 millionfor fourth quarter 2017, an increase of 188% compared to the fourth quarter 2016 due to higher prices and increased production Average netbacks for the fourth quarter of 2017 were $29.81, an increase of 42% over fourth quarter 2016 due to price and production increases. If the realized gains from the commodity contracts are included, the average netbacks for the fourth quarter of 2017 are $30.46per BOE compared to $31.40per BOE for the fourth quarter of 2016 Average production for the quarter was 1,539 BOEPD, an increase of 133% compared to the prior year fourth quarter mainly due to the increased production from the three additional wells drilled during 2017 and higher prices In December 2017, the commitment amount on the BOK credit facility was increased by $5 millionto $30.0 million. As of December 31, 2017, the US subsidiary had borrowed $25.0 millionof the commitment amount and has an available borrowing capacity of $5.0 million. G&A expense increased by $153,000, or 18%, due primarily to advisor fees incurred in 2017 A net loss of $1.3 millionwas incurred in the fourth quarter 2017 due to unrealized losses on commodity contracts of $2.1 million
Fourth Quarter 2017 to Fourth Quarter 2016
Oil and gas revenues net of royalties totaled $5,043,000in the quarter versus $1,750,000in the fourth quarter of 2016, an increase of 188%. Oil revenues were $5,572,000in the quarter versus $1,910,000in the fourth quarter of 2016, an increase of 192% due to increased production of 156% and an increase in average oil prices of 14%. Natural gas revenues increased 93% due to an increase in production of 90% in addition to an increase in natural gas prices of 1%. NGL revenue increased 171% to $578,000as average NGL production increased by 82% and by an average price increase of 49%.
Exploration and evaluation expenses decreased $832,000in 2017 compared to 2016. The 2016 amount includes an impairment of $835,000on exploration and evaluation leases.
Operating expenses increased by $346,000in the fourth quarter of 2017 compared to 2016 due to additional production and an increase in production taxes.
Depletion and depreciation expense increased $1,025,000due to increased production.
General and administrative expenses increased $153,000between quarters due primarily to advisor fees in 2017.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | | | | | | | | | | | | December 31, | | December 31, | | | | | 2017 | | 2016 | | | Current assets | | | | | | | | Cash and cash equivalents | $ | 521 | $ | 11,101 | | | Trade and other receivables | | 2,510 | | 1,163 | | | Deposits and prepaid expenses | | 563 | | 614 | | | Fair value of commodity contracts | | - | | 650 | | | | 3,594 | | 13,528 | | | | | | | | | | Non-current assets | | | | | | | | Property, plant and equipment | | 147,195 | | 133,476 | | | | | | | | | Total assets | $ | 150,789 | $ | 147,004 | | | | | | | | | | Current liabilities | | | | | | | | Trade and other payables | $ | 3,132 | $ | 2,888 | | | Fair value of commodity contracts | | 999 | | - | | | | 4,131 | | 2,888 | | | | | | | | | | Non-current liabilities | | | | | | | | Fair value of commodity contracts | | 951 | | 1,417 | | | Loans and borrowings | | 24,484 | | 20,229 | | | Asset retirement obligations | | 950 | | 785 | | | | 26,385 | | 22,431 | | | | | | | | | | Equity | | | | | | | | Share capital | | 289,522 | | 289,549 | | | Contributed surplus | | 22,406 | | 22,195 | | | Deficit | | (191,655) | | (190,059) | | Total equity | | 120,273 | | 121,685 | | | | | | | | | | Total equity and liabilities | $ | 150,789 | $ | 147,004 | |
| 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 | | | | | | | | | 2017 | | 2016 | | 2017 | | 2016 | | | Revenue: | | | | | | | | | | | Oil and natural gas revenue, net | $ | 5,043 | $ | 1,750 | $ | 12,591 | $ | 8,578 | | | Other income | | (39) | | (19) | | 13 | | (17) | | | | | 5,004 | | 1,731 | | 12,604 | | 8,561 | | | Expenses: | | | | | | | | | | | Exploration and evaluation | | 3 | | 835 | | 3 | | 835 | | | Production and operating | | 821 | | 475 | | 2,431 | | 2,168 | | | Depletion and depreciation | | 1,893 | | 868 | | 5,496 | | 5,249 | | | General and administrative | | 1,011 | | 858 | | 3,736 | | 3,760 | | | Share based compensation | | 49 | | 105 | | 180 | | 611 | | | | | 3,777 | | 3,141 | | 11,846 | | 12,623 | | | | | | | | | | | | | | | | | | | | | | | | | Finance income | | 91 | | 634 | | 1,582 | | 4,184 | | | Finance expense | | (2,495) | | (2,674) | | (3,028) | | (10,100) | | | | | | | | | | | | | | Net income/loss and comprehensive income/loss from continuing operations | $ | (1,177) | $ | (3,450) | $ | (688) | $ | (9,978) | | | | Net loss and comprehensive loss from discontinued operations | | (126) | | (295) | | (908) | | (1,170) | | Net loss and comprehensive loss | $ | (1,303) | $ | (3,745) | $ | (1,596) | $ | (11,148) | | | | | | | | | | | | | | Net income/loss per share | | | | | | | | | | | | Continuing operations | | (0.01) | | (0.02) | | (0.00) | | (0.05) | | | Discontinued operations | | (0.00) | | (0.00) | | (0.00) | | (0.01) | | | Basic and Diluted | $ | (0.01) | $ | (0.02) | $ | (0.01) | $ | (0.06) |
| BNK PETROLEUM INC. | | | | | | | | FOURTH QUARTER AND YEAR ENDED 2017 | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2017 | 2016 | | 2017 | 2016 | | Oil revenue before royalties | $ | 5,572 | 1,910 | | 13,714 | 9,008 | | Gas revenue before royalties | | 260 | 135 | | 846 | 829 | | NGL revenue before royalties | | 578 | 213 | | 1,590 | 1,247 | | | | 6,410 | 2,258 | | 16,150 | 11,084 | | | | | | | | | | Funds from continuing operations | | 2,834 | 511 | | 6,522 | 4,926 | | Additions to property, plant & equipment | | (302) | (1,751) | | (19,271) | (2,497) | | | | | | | | | | | | | | | | | | Statistics: | | 4th Quarter | | Year Ended Dec. 31 | | | | | | 2017 | 2016 | | 2017 | 2016 | | Average oil production (Bopd) | | 1,137 | 445 | | 761 | 622 | | Average natural gas production (mcf/d) | | 1,119 | 588 | | 873 | 1,116 | | Average NGL production (Boepd) | | 215 | 118 | | 185 | 237 | | Average production (Boepd) | | 1,539 | 661 | | 1,092 | 1,045 | | Average oil price ($/bbl) | | $53.26 | $46.63 | | $49.34 | $39.59 | | Average natural gas price ($/mcf) | | $2.52 | $2.50 | | $2.66 | $2.03 | | Average NGL price ($/bbl) | | $29.17 | $19.61 | | $23.54 | $14.36 | | | | | | | | | | Average price per barrel | | $45.27 | $37.13 | | $40.52 | $28.98 | | Royalties per barrel | | 9.66 | 8.35 | | 8.93 | 6.55 | | Operating expenses per barrel | | 5.80 | 7.81 | | 6.10 | 5.67 | | Netback per barrel | | $29.81 | $20.97 | | $25.49 | $16.76 | | | | | | | | | | Average price per barrel including commodity contracts | | $45.92 | $47.56 | | $44.42 | $39.92 | | Royalties per barrel | | 9.66 | 8.35 | | 8.93 | 6.55 | | Operating expenses per barrel | | 5.80 | 7.81 | | 6.10 | 5.67 | | Netback per barrel including commodity contracts | | $30.46 | $31.40 | | $29.39 | $27.70 |
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, 2017and 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 and netback 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.
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, 2017independent 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, 2017, which the Company filed on SEDAR on March 14, 2018.
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.
Such forward-looking information is based on management's expectations and assumptions, including that the Company's geologic and reservoir models and analysis 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 continue in compliance with the covenants under its reserves-based loan facility and that the borrowing base will not be reduced, that funds will be available from the Company's reserves based loan facility when required to fund planned operations, 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.