Press

BNK Petroleum Inc. Announces Annual 2017 Financial Results


TSX ticker symbol; BKX
QTCQX ticker symbol; BNKPF

CAMARILLO, California, March 20, 2018 /PRNewswire/ -- 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 million based on the Company's December 31, 2017 independent reserves evaluation.
  • Funds from continuing operations was $6.5 million for 2017 compared to $4.9 million for 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 $25.49 per 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 $29.39 per BOE compared to $27.70 in 2016
  • Revenue, net of royalties was $12.6 million for 2017 compared to $8.6 million in 2016 due to higher prices and production compared to 2016
  • In June 2017, the Company's US subsidiary obtained a new $75 million credit 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 million of the commitment amount and had an available borrowing capacity of $5.0 million.
  • Net loss was $1.6 million for 2017 compared to a net loss of $11.1 million in 2016.  The Company had an unrealized loss on financial commodity contracts of $1.2 million in 2017, compared to an unrealized loss of $8.0 million in 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 Regener commented:

"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 million compared to 2016.

"These results allowed us to obtain a $5 million increase in the borrowing capacity of our credit facility from $25 million to $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 million budget.  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 million in 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 million for 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 million compared to $8.6 million in 2016.

"Average netbacks for the fourth quarter of 2017 were $29.81 per BOE, an increase of 42% compared to the prior year fourth quarter due to higher prices and production.  For the year, average netbacks were $25.49 per 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 $29.39 per BOE, compared to $27.70 per BOE in 2016. 

"The Company recorded a net loss of $1.3 million in the fourth quarter of 2017, due to a $2.1 million unrealized loss on commodity contracts, compared to a net loss of $3.7 million in 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 million in 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 $4,013,000 or 47% to $12,591,000.  Oil revenues before royalties increased by 52% to $13,714,000 due to a 25% increase in prices between years and a 22% increase in production.  Natural gas revenues before royalties increased $17,000 or 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 $343,000 or 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 $835,000 on exploration and evaluation leases.

Operating expenses increased by $263,000 due 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 $247,000 due to increased production.

General and administrative expenses decreased $24,000 due to the Company's continued cost cutting efforts partially offset by advisor fees in 2017.

Finance income decreased $2,497,000 due to higher realized gains on risk management contracts in 2016 of $4,184,000, compared to $1,556,000 in 2017.  Finance expense decreased $7,072,000 due to a decrease in unrealized losses on risk management contracts of $6,843,000.

Capital expenditures of $19,271,000 were incurred in 2017 for drilling and completion costs in Oklahoma during the year.

FOURTH QUARTER HIGHLIGHTS:

  • Funds from continuing operations was $2.8 million in the fourth quarter of 2017 compared to $0.5 million in 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 million for 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 $30.46 per BOE compared to $31.40 per 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 million to $30.0 million.  As of December 31, 2017, the US subsidiary had borrowed $25.0 million of 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 million was 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 $5,043,000 in the quarter versus $1,750,000 in the fourth quarter of 2016, an increase of 188%.  Oil revenues were $5,572,000 in the quarter versus $1,910,000 in 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 $578,000 as average NGL production increased by 82% and by an average price increase of 49%.

Exploration and evaluation expenses decreased $832,000 in 2017 compared to 2016.  The 2016 amount includes an impairment of $835,000 on exploration and evaluation leases.

Operating expenses increased by $346,000 in the fourth quarter of 2017 compared to 2016 due to additional production and an increase in production taxes. 

Depletion and depreciation expense increased $1,025,000 due to increased production.

General and administrative expenses increased $153,000 between 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, 2017 and 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.



New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Visit source site

https://bnkpetroleum.com/shareholders/news-release...

Financial ResultsBNK PetroleumOilProven Reserves

More items from oilvoice


Africa E&P Summit

The organisers of the Africa E&P Summit are bringing together Africa's leading exploration companies and governments, just one of the many reasons why you should be attending frontier's event that they are organising and hosting in London at the IET: Savoy Place, 22-23 May. Over 200 key senior exec ...

OilVoice Press - OilVoice


Posted 2 months agoPress > Africasummitoil summit +2

Equinor Deepens in Offshore Wind in Poland

Equinor has exercised an option to acquire a 50 % interest in the offshore wind development project Bałtyk I in Poland from Polenergia. This transaction is a follow-up of the agreement between the two companies which came into force in May 2018 , by which Equinor acquired a 50 % inter ...

OilVoice Press - OilVoice


Posted 7 months agoPress > EquinorEquinor EnergyPoland +2

Nigeria has highest capex on crude and natural gas projects in sub-Saharan Africa Over Next Seven Years, says GlobalData

Nigeria accounts for more than 34% of the proposed capital expenditure (capex) on planned and announced crude and natural gas projects in the sub-Saharan Africa over the period 2018–2025, according to GlobalData , a leading data and analytics company. The company's report: ‘H2 2018 Production ...

OilVoice Press - OilVoice


Posted 7 months agoOpinion > GlobalDataNigeriaCrude +5

CNOOC Signs Strategic Cooperation Agreements with 9 International Oil Companies

HONG KONG, Dec. 18, 2018 /PRNewswire/ -- CNOOC Limited (the "Company", SEHK: 00883, NYSE: CEO, TSX: CNU) announced today that its parent company, China National Offshore Oil Corporation (CNOOC), has signed Strategic Cooperation Agreements with 9 international oil companies including: Chevron, Conoco ...

OilVoice Press - OilVoice


Posted 7 months agoPress > CNOOCChina National Offshore Oil CorporationChevron +11

Total Announces the Distribution of its Second 2018 Interim Dividend

The Board of Directors met on December 12, 2018 and declared  the distribution of a second interim dividend for the 2018 fiscal year of €0.64 per share, in accordance with the Board's decision of July 25, 2018, an amount equal to the first 2018 interim dividend and an increase of 3.2% compared to t ...

OilVoice Press - OilVoice


Posted 7 months agoPress > TotalDividend
All posts from oilvoice