Kolibri Global Energy Inc. press release
BNK Petroleum Inc. Announces Third Quarter 2019 Results with Positive Net Income
TSX - Toronto Stock Exchange · United States
Canada NewsWire
CAMARILLO, CA, Nov. 7, 2019
All amounts are in U.S. Dollars unless otherwise indicated:
TSX ticker symbol; BKX OTCQX ticker symbol; BNKPF
CAMARILLO, CA, Nov. 7, 2019/CNW/ -
THIRD QUARTER HIGHLIGHTS
Average production for the third quarter of 2019 was 1,341 BOEPD, compared to third quarter 2018 average production of 1,534 BOEPD, which was a decrease of 13%. Average production for the third quarter of 2019 was only 1% lower than the second quarter 2019 production. The decrease compared to the prior year quarter was primarily due to normal production decline for existing wells Net income for the third quarter of 2019 was $1.4 millioncompared to net income of $1.2 millionin 2018. The Company had an unrealized gain on financial commodity contracts of $1.3 millionin the third quarter of 2019, compared to an unrealized loss of $0.2 millionin the third quarter of 2018 General & administrative expenses decreased by 8% for the third quarter of 2019 compared to the third quarter of 2018. The decrease relates to management's continued efforts to reduce costs throughout the Company and the adoption of IFRS 16 which lowered rent expense Adjusted funds flow was $2.2 millionin the third quarter 2019 compared to $3.9 millionin the third quarter of 2018, which was a decrease of 42%. The decrease was mainly due to lower revenue caused by lower production and lower average prices Revenue, net of royalties was $4.1 millionin the third quarter of 2019 compared to $6.8 millionfor third quarter of 2018, which was a decrease of 40%, as production decreased by 13% and average prices decreased 26% between the quarters Average netback from operations was $25.69per barrel for the third quarter of 2019, which was a decrease of 33% from the prior year third quarter due to lower prices in 2019 During the third quarter of 2019, the Company paid down $2.5 millionof the outstanding amount on its BOK Financial credit facility to reduce the outstanding balance to $27.5 million At September 30, 2019, cash totaled $2.1 million
BNK's President and Chief Executive Officer, Wolf Regenercommented:
"We are pleased with the performance of our field in the third quarter of 2019 as production has only declined by 13% from the prior year third quarter and only 1% from the second quarter of 2019 as the WLC 14-1H well that was shut-in came back on production in August and we were able to recover about 70% of the lost production. The Company generated net income of $1.4 millionand adjusted funds flow of over $2.2 millionduring the quarter even though our capital expenditures for the first nine months of 2019 totaled only $1.3 million. Also, the Company continued to reduce its G&A overhead by over 8% in the third quarter. The Company is expected to continue to generate positive cash flow for the remainder of the year and into 2020.
In the third quarter of 2019, the Company generated net income of $1.4 millioncompared to net income of $1.2 millionin the third quarter of 2018. This included an unrealized gain on financial commodity contracts of $1.3 millionin the third quarter of 2019, compared to unrealized loss of $0.2 millionin the third quarter of 2018.
The Company's G&A expenses decreased by 8% due to continued cost cutting at the Company and the implementation of the new lease accounting standard which lowered the Company's rental expense in 2019.
Average production for the third quarter of 2019 decreased by 13% to 1,341 BOEPD, compared to third quarter 2018 average production of 1,534 BOEPD. Average production for the third quarter of 2019 was only 1% lower than the second quarter 2019 production as the WLC 14-1H well came back on production in August and the Company was able to recover approximately 70% of the lost production. The decrease compared to the prior year quarter was primarily due to normal production decline for existing wells.
Net revenue decreased by 40% in the third quarter of 2019 and adjusted funds flow decreased by 42% to $2.2 millionin the third quarter 2019 compared to $3.9 millionin the third quarter of 2018 due to production and price decreases.
Average netbacks from operations for the third quarter of 2019 were $25.69per boe, a decrease of 33% compared to the prior year due to lower prices and decreased production."
| | | Third Quarter | | First Nine Months | | | | | | | 2019 | 2018 | % | 2019 | 2018 | % | | | | | | | | | | | Net Income (Loss): | | | | | | | | | $ Thousands | $1,420 | $1,184 | 20% | $1,474 | $(111) | - | | | $ per common share | $0.01 | $0.01 | - | $0.01 | $(0.00) | - | | | assuming dilution | | | | | | | | | | | | | | | | | | Capital Expenditures | $195 | $2,188 | (91%) | $1,310 | $13,771 | (90%) | | | | | | | | | | | | Average Production (Boepd) | 1,341 | 1,534 | (13%) | 1,397 | 1,700 | (18%) | | | Average Price per Barrel | $41.87 | $56.91 | (26%) | $43.89 | $53.78 | (18%) | | | Average Netback from operations per Barrel | $25.69 | $38.33 | (33%) | $27.47 | $35.39 | (22%) | | | Average Netback after adjustments per Barrel | $24.63 | $33.73 | (27%) | $25.87 | $28.16 | (8%) | | | | | | | | | | | | | | September
2019 | | June
2019 | | December 2018 | | | | | | | | | | | | Cash and Cash Equivalents | $2,064 | | $2,855 | | $1,456 | | | | Working Capital | $(376) | | $(598) | | $(2,393) | | |
Third Quarter 2019 versus Third Quarter 2018
Oil and gas gross revenues totaled $5,166,000in the third quarter of 2019 versus $8,378,000in the third quarter of 2018. Oil revenues decreased $2,740,000or 36% as oil production decreased by 19% to 955 boepd and average oil prices decreased by $14.77per barrel or 21% to $54.41. Natural gas revenues increased $27,000or 18% to $178,000as natural gas production increased 25% to 990 mcfpd, which was offset by an average natural gas price decrease of $0.12/mcf or 6% to $1.96/mcf. Natural gas production for the third quarter of 2018 included prior period adjustments which decreased production by 565 mcfpd. Natural gas liquids (NGLs) revenues decreased $499,000or 71% as NGL production was the same in both periods while average NGL prices decreased 71% to $10.18. NGL production for the third quarter of 2018 included prior period adjustments which increased production by 17 boepd.
Average third quarter 2019 production per day decreased 13% from the third quarter of 2018. Production in the third quarter of 2018 included prior period adjustments which decreased production by 77 boepd. The decrease was primarily due to the normal production decline of existing wells.
Production and operating expenses decreased to $934,000mainly due to lower production. Production and operating costs on a boe basis decreased by 5% to $7.57/boe due to operating cost reductions.
Depletion and depreciation expense decreased $348,000or 19% due to a decrease in production in the third quarter of 2019 and an increase in reserves from the prior year.
General and administrative expenses decreased $74,000or 8% in the quarter due to continued cost cutting efforts and lower rent expense from the adoption of IFRS 16.
Stock based compensation decreased by $30,000or 53% due to the timing of stock awards granted to employees.
Finance income increased $1.3 millionin the third quarter of 2019 compared to the third quarter of 2018 due to unrealized gains on commodity contracts in the third quarter of 2019.
Finance expense decreased by $0.9 millionin the third quarter of 2019 compared to the prior year quarter primarily due to higher realized losses on commodity contracts in the third quarter of 2018.
During the third quarter of 2019, the Company paid down $2.5 millionof the commitment amount on its BOK Financial credit facility to reduce the outstanding balance to $27.5 million. BOK Financial is in the process of modifying the credit facility to amortize the amount outstanding down to $26.0 millionby April of 2020.
FIRST NINE MONTHS 2019 HIGHLIGHTS
Average production for the first nine months of 2019 was 1,397 BOEPD, a decrease of 18% compared to prior year first nine months average production of 1,700 BOEPD. Production for first nine months of 2018 included prior period adjustments which increased production by 122 boepd. The decrease was primarily due to the normal production decline of existing wells. Net income for the first nine months of 2019 was $1.5 millioncompared to net loss of $0.1 millionfor the first nine months of 2018. The 2019 amount included an unrealized gain on financial commodity contracts of $0.6 millionand the 2018 amount included an unrealized losses on commodity contracts of $2.5 million General & administrative expenses decreased by 10% for the first nine months of 2019 compared to the first nine months of 2018. The decrease relates to management's continued efforts to reduce costs throughout the Company, the adoption of IFRS 16 which lowered rent expense and adviser fees incurred in 2018 Adjusted funds flow was $7.3 millionin the first nine months of 2019 compared to $10.3 millionin the first nine months of 2018, a decrease of 28%. The decrease was mainly due to a 18% decrease in production combined with a 18% decrease in average prices Revenue, net of royalties was $13.3 millionfor the first nine months of 2019 compared to $18.6 millionfor the first nine months of 2018, a decrease of 29%, due to lower prices and decreased production Average netback from operations for the first nine months of 2019 was $27.47per boe, a decrease of 22% from the prior year period due to lower production and prices in 2019 Cash totaled $2.1 millionat September 30, 2019
First Nine Months of 2019 versus First Nine Months of 2018
Gross oil and gas revenues totaled $16,739,000in the first nine months of 2019 versus $23,724,000in the first nine months of 2018, a decrease of 29%. Oil revenues were $15,293,000in the first nine months of 2019 versus $20,743,000in the same period of 2018, a decrease of 26% as average oil prices decreased 17% or $10.91a barrel and oil production decreased by 12%. Natural gas revenues decreased $473,000or 39%, due to an average natural gas production decrease of 46% in the first nine months of 2019 partially offset by an increase in natural gas prices of 13%. Natural gas production for the first nine months of 2018 included an increase of 654 mcfpd related to prior period adjustments. NGL revenue decreased $1,062,000, or 60%, due to a decrease in NGL production of 10% and an average NGL price decrease of 56% in the first nine months of 2019. NGL production for the first nine months of 2018 included an increase of 16 boepd related to prior period adjustments.
Average production per day for the first nine months of 2019 decreased 18% from the prior year comparable period due to two additional wells added to production in 2018. The production for the first nine months of 2018 also included an increase of 122 boepd related to prior period adjustments. The decrease was primarily due to the normal production decline of existing wells.
Production and operating expenses decreased 22% for the first nine months of 2019 mainly due to a decrease in production. Operating expenses averaged $7.36per BOE for the first nine months of 2019 compared to $6.79per BOE for the same period in 2018. The operating expense per BOE amounts for the first nine months of 2019 include the impact of a production tax increase in July 2018which increased the first nine months of 2019 amount by $0.41per boe compared to the prior year period.
Depletion and depreciation expense decreased $1,443,000due to decreased production and an increase in reserves compared to the prior year.
General and administrative expenses decreased $274,000, or 10%, due to cost cutting efforts, lower rent expense from the adoption of IFRS 16 and advisor fees incurred in the first nine months of 2018.
Finance income increased $0.6 milliondue to unrealized gains on financial commodity contracts in 2019.
Finance expense decreased $3.7 milliondue to realized losses of $0.6 millionin 2019 compared to realized and unrealized losses of $4.4 millionon commodity contracts in 2018.
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited, Expressed in Thousands of United States Dollars) | | | | | ($000 except as noted) | | | | | | | | | | | September 30 | | December 31 | | | 2019 | | 2018 | | | | | | | Current Assets
Cash | $2,064 | | $1,456 | | Trade and other receivables | 1,903 | | 2,965 | | Other current assets | 679 | | 609 | | Fair value of commodity contracts | 636 | | 407 | | | 5,282 | | 5,437 | | | | | | | Non-current assets
Property, plant and equipment | 155,828 | | 159,122 | | Fair value of commodity contracts | 351 | | - | | Right of use assets | 137 | | - | | | 156,316 | | 159,122 | | | | | | | Total Assets | $161,598 | | $164,559 | | | | | | | Current Liabilities
Trade and other payables | $5,515 | | $7,830 | | Lease payable | 143 | | - | | | 5,658 | | 7,830 | | | | | | | Non-current liabilities | | | | | Loans and borrowings | 27,134 | | 29,551 | | Asset retirement obligations | 1,152 | | 1,127 | | Fair value of commodity contracts | - | | 9 | | | 28,286 | | 30,687 | | | | | | | Equity | | | | | Share capital | 289,622 | | 289,622 | | Contributed surplus | 22,893 | | 22,755 | | Deficit | (184,861) | | (186,335) | | Total Equity | 127,654 | | 126,042 | | | | | | | Total Equity and Liabilities | $161,598 | | $164,559 |
| BNK PETROLEUM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except per share amounts) | | | | | | | | | | | ($000 except as noted) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | First Nine Months | | | | | | | | | 2019 | | 2018 | | 2019 | | 2018 | | | | | | | | | | | | | | Oil and natural gas revenue, net | $ | 4,104 | | 6,834 | | 13,282 | | 18,632 | | | Other income | | - | | - | | 2 | | 19 | | | | | 4,104 | | 6,834 | | 13,284 | | 18,651 | | | | | | | | | | | | | | Production and operating expenses | | 934 | | 1,268 | | 2,808 | | 3,611 | | | Depletion and depreciation expense | | 1,531 | | 1,879 | | 4,731 | | 6,174 | | | General and administrative expenses | | 811 | | 885 | | 2,548 | | 2,822 | | | Stock based compensation | | 27 | | 57 | | 121 | | 279 | | | | | 3,303 | | 4,089 | | 10,208 | | 12,886 | | | | | | | | | | | | | | Finance income | | 1,263 | | - | | 597 | | - | | | Finance expense | | (644) | | (1,561) | | (2,199) | | (5,876) | | | | | | | | | | | | | | Net income (loss) | | 1,420 | | 1,184 | | 1,474 | | (111) | | | Net income (loss) per share | $ | 0.01 | | 0.01 | | 0.01 | | (0.00) | | | | | | | | | | | | |
| BNK PETROLEUM INC. | | | | | | | | | | THIRD QUARTER 2019 | | | | | | | | | | (Unaudited, expressed in Thousands of United States dollars, except as noted) | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | First Nine Months | | | | | | | | 2019 | | 2018 | | 2019 | | 2018 | | Oil revenue before royalties | $ | 4,781 | | 7,521 | | 15,293 | | 20,743 | | Gas revenue before royalties | | 178 | | 151 | | 739 | | 1,212 | | NGL revenue before royalties | | 207 | | 706 | | 707 | | 1,769 | | Oil and Gas revenue | | 5,166 | | 8,378 | | 16,739 | | 23,724 | | | | | | | | | | | | Adjusted funds flow | | 2,233 | | 3,875 | | 7,332 | | 10,253 | | Additions to property, plant & equipment | | 195 | | 2,188 | | 1,310 | | 13,771 | | | | | | | | | | | | | | | | | | | | | | Statistics: | | 3rd Quarter | | First Nine Months | | | | | | | | 2019 | | 2018 | | 2019 | | 2018 | | Average oil production (Bopd) | | 955 | | 1,182 | | 1,019 | | 1,154 | | Average natural gas production (mcf/d) | | 990 | | 789 | | 1,024 | | 1,901 | | Average NGL production (Boepd) | | 221 | | 220 | | 207 | | 229 | | Average production (Boepd) | | 1,341 | | 1,534 | | 1,397 | | 1,700 | | Average oil price ($/bbl) | | $54.41 | | $69.18 | | $54.96 | | $65.87 | | Average natural gas price ($/mcf) | | $1.96 | | $2.08 | | $2.64 | | $2.33 | | Average NGL price ($/bbl) | | $10.18 | | $34.89 | | $12.50 | | $28.35 | | | | | | | | | | | | Average price (Boe) | | $41.87 | | $56.91 | | $43.89 | | $53.78 | | Royalties (Boe) | | 8.61 | | 10.62 | | 9.06 | | 11.60 | | Operating expenses (Boe) | | 7.57 | | 7.96 | | 7.36 | | 6.79 | | Netback from operations (Boe) | | $25.69 | | $38.33 | | $27.47 | | $35.39 | | Price adjustment from commodity contracts (Boe) | | (1.06) | | (5.71) | | (1.60) | | (4.22) | | Netback including commodity contracts (Boe) | | 24.63 | | 32.62 | | 25.87 | | 31.17 | | Prior period adjustments (Boe) | | - | | 1.11 | | - | | (3.01) | | Netback after adjustments (Boe) | | $24.63 | | $33.73 | | $25.87 | | $28.16 |
The information outlined above is extracted from and should be read in conjunction with the Company's unaudited financial statements for the three and nine months ended September 30, 2019and 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 from operations, netback including commodity contracts, netback after adjustments, net operating income and adjusted funds flow (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. |
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 Company's Tishomingofield, Oklahomaacreage, expectations regarding cash flow, the Company's reserves based loan facility, expected hedging levels 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.