BNK Petroleum Inc. Announces 1st Quarter 2013 Results
Alberta (ots/PRNewswire)
- TSX ticker symbol; BKX
All amounts are in U.S. Dollars unless otherwise indicated:
2013 2012 %
Earnings (Loss):
$ Thousands $(5,320) $(3,520) L
$ per common share assuming dilution $(0.04) $(0.02) L
Capital Expenditures $2,492 $10,759 (77)
Average production per day (Boepd) 1,674 1,654 1
Average Product Price per Barrel $34.69 $38.55 (10)
Average Netback per Barrel $18.89 $18.08 4
3/31/2013 12/31/2012 3/31/2012
Cash and Cash Equivalents $3,100 $2,836 $30,582
Working Capital $1,773 $471 $26,976
BNK's President and CEO Wolf Regener commented:
"With the close of the sale of our Tishomingo field assets, which excluded the Caney and Upper Sycamore formations, on April 19th, the first quarter results reflect our last quarter of production from the Woodford shale formation. With the $147.1 million proceeds from the sale, the Company is well positioned to maximize what we believe will be outstanding opportunities in the oil-rich Caney and upper Sycamore formations and to pursue our exciting European projects with or without partners. The knowledge gained from our successful first Caney test wells is being utilized in the Caney wells we are now drilling and completing. We have finished drilling our second horizontal Caney well, the Barnes 6-3H, which was has over a 5,000 foot lateral, drilled entirely in the "T zone". Fracture stimulation operations for this well are scheduled for the last week of May. We anticipate being able to have flowback results in June. The drilling rig will now be moving over to drill our next Caney well, the Dunn 2-2H.
In the first quarter of 2013 the Company generated positive cash flow from operating activities of $300 thousand in the first quarter of 2013 compared to negative cash flow from operations of $4.8 million in the first quarter 2012. The Company incurred a net loss of $5.3 million versus a loss of $3.5 million in the first quarter of 2012. Included in the first quarter 2013 loss were non-cash expenses of $1.9 million relating to depletion and $2.5 million of unrealized losses on financial commodity contracts.
Capital expenditures were down 77% from the first quarter 2012 due to the drilling of two wells in Poland in 2012. Going forward we expect our capital expenditures to increase from our first quarter 2013 level as we shift our focus to drilling wells in the Caney formation. In addition, we are also making progress on obtaining drilling permits in Europe and anticipate having the approvals to be able to drill a lateral out of our Gapowo B-1 well in Poland later this year.
Average netbacks increased 4% between quarters to $18.89 a barrel primarily due to reduced operating expenses of 30% from reduced workovers and well maintenance costs in 2013 which offset the 10% decline in average product prices from the prior year quarter."
FIRST QUARTER HIGHLIGHTS
- Capital expenditures decreased 77% to $2.5 million primarily due to 2012 expenditures in Poland related to the drilling of the Miszewo T-1 and the Gapowo B-1 wells - Production per day increased slightly from the first quarter of 2012 - Average net-backs per barrel increased 4% to $18.89 primarily due to lower workover and maintenance costs which offset falling NGL and oil prices - Loss of $5.3 million versus a loss of $3.5 million from the first quarter of 2012 due to higher unrealized losses on financial derivative contracts and higher interest expense - A new $76 million credit facility was obtained in January 2013 and $41 million was drawn on the facility to repay the existing loan amount and for general working capital - Cash and working capital totaled $3.1 million and $1.8 million respectively at March 31, 2013 - Subsequent to quarter end, in April 2013, the Company closed the sale of the Tishomingo field, excluding the Caney and Upper Sycamore formations, for $147.1 million - Subsequent to quarter end, in April 2013, all the financial derivative contracts were settled for a loss of $2.6 million and the outstanding loan balance was paid down from $41 million to $100 thousand
First Quarter 2013 versus First Quarter 2012
Oil and gas revenues totaled $5,228,000 in the quarter versus $5,802,000 in the first quarter of 2012. Oil revenues decreased $494,000 or 20% as oil production per day decreased 11% to 245 boepd while average oil prices decreased $8.63 per barrel or 9% to $91.27. Natural gas liquids (NGL's) revenues decreased $291,000 or 13% as NGL production increased 5% to 710 boepd while average NGL prices fell 16% or $5.76 a barrel to $31.35. Natural gas revenues increased $210,000 or 21% to $1,213,000 as natural gas production increased by 118 cubic feet per day (mcf/d) or 3% to 4,311 while average natural gas prices increased $0.50 an mcf or 19% to $3.13.
Average production per day increased 1% from the first quarter of 2012 due to new wells completed during the third and fourth quarter of 2012 that slightly increased production.
Gathering revenue decreased $72,000 due to the mix of production from wells that generate gathering revenue. Production and operating expenses decreased $594,000 to $1,399,000 due mostly to workovers in the first quarter of 2012 that did not occur in the same period for 2013 and decreased well maintenance costs.
Depletion and depreciation expense increased $38,000 or 2% due to an increase in the capital base.
General and administrative expenses decreased $248,000 or 7% due to lower salary and benefit related expenses due to decreased headcount, as well as lower consulting, management and professional fees and lower travel expenses.
Share based compensation declined $162,000 or 6% due to a greater percentage of options becoming fully vested.
Restructuring expenses dropped from $600,000 in the first quarter 2012 to zero in the current quarter. The expenses were from the Company's effort to properly position the Company's concessions to facilitate farm-outs, joint ventures and potential future sales of concessions. Finance income declined $163,000 or 35% to $302,000 primarily due to lower foreign exchange gains and a 2012 gain on warrant revaluation.
Finance expense increased $2,680,000 or 319% to $3,519,000 primarily due to $2.5 million of unrealized losses on financial commodity contracts and higher interest expense.
Capital expenditures of $2,492,000 were incurred in the first quarter with $1,600,000 spent in Oklahoma and the remaining amount spent in Europe.
BNK Petroleum Inc.
($000 except as noted)
($000's) March 31 December 31
2013 2012
Cash $3,100 $2,836
Trade and other receivables 8,286 11,363
Other current assets 1,502 3,113
Assets held for sale 135,982 -
Total Current Assets 148,870 17,312
Property, plant and equipment 20,405 157,132
Exploration and evaluation assets 34,543 33,007
Investment in joint ventures 10,091 10,114
Other non-current assets 1,087 1,297
Total Non-current assets 66,126 201,550
Total Assets $214,996 $218,862
Trade and other payables $10,574 $16,840
Current Portion of long-term debt 37,499 31,797
Other current liabilities 541 -
Liabilities associated with assets held for sale 1,299 -
Total Current Liabilities 49,913 48,637
Other non-current liabilities 1,297 1,390
Equity
Share capital 247,326 247,326
Contributed surplus 16,934 16,663
Deficit (100,474) (95,154)
Total Equity 163,786 168,835
Total Equity and Liabilities $214,996 $218,862
BNK Petroleum Inc.
($000 except as noted)
Three months ended March 31
($000's) 2013 2012
Oil and gas revenue net of royalties $4,248 $4,714
Other income 553 622
4,801 5,336
Exploration and evaluation expenditures 54 52
Production and operating expenses 1,399 1,993
Depletion and depreciation 1,854 1,816
General and administrative expenses 3,466 3,714
Share based compensation 108 270
Loss (gain) on equity investments 23 37
Legal restructuring expenses - 600
$6,904 $8,482
Finance Income 302 465
Finance Expense (3,519) (839)
Net loss and comprehensive loss for the
period $(5,320) $(3,520)
Loss per share $(0.04) $(0.02)
BNK Petroleum Inc.
($000 except as noted)
1st QUARTER
2013 2012
Oil revenue before royalties $2,011 $2,505
Gas revenue before royalties 1,213 1,003
NGL revenue before royalties 2,004 2,294
Oil and Gas revenue 5,228 5,802
Cash flow provided (used) by operating activities 268 (4,799)
Additions to property, plant & equipment (2,492) (10,759)
Statistics:
Average natural gas production (mcf/d) 4,311 4,193
Average NGL production (Boepd) 710 679
Average Oil production (Bopd) 245 276
Average production (Boepd) 1,674 1,654
Average natural gas price ($/mcf) $3.13 $2.63
Average NGL price ($/bbl) 31.35 37.11
Average oil price ($/bbl) 91.27 99.90
Average price per barrel $34.69 $38.55
Royalties per barrel 6.51 7.23
Operating expenses per barrel 9.29 13.24
Netback per barrel $18.89 $18.08
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 March 31, 2013 and the related management's discussion and analysis thereof, copies of which are available under the Company's profile at http://www.sedar.com.
Non-IFRS Information
Netback per barrel and its components are calculated by dividing revenue, 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. This is a useful measure for investors to compare the performance of one entity with another. The non-IFRS measures referred to above do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures used by other companies.
The Company also uses the "barrels" (bbls) or "barrels of oil equivalent" (boe) reference in this report to reflect natural gas liquids and oil production and sales. All boe conversions are derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil, representing the approximate energy equivalency.
Caution Regarding Forward-Looking Information
Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including information regarding the proposed timing and expected results of exploratory work, anticipated timing of commencement of drilling of the wells referred to, the timing and prospect for obtaining a favorable environmental decision required to deepen the Miszewo well, plans to conserve cash and management's expectation that these will allow the Company to exit 2012 is a solid financial position. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management, including that all required permits and approvals will be obtained when required and on the terms required to proceed with its programs as planned, funding from co-venturers and farmouts and the necessary labor and equipment will be obtained, provided or available, as applicable, when required and on terms that are acceptable to the Company. Forward looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates, timing and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that permits, approvals, equipment and/or funding or farmouts are delayed or available only on terms that are not acceptable to the Company, political and currency risks and other risks associated with exploration and development of oil and gas projects, including those set forth in the Company's management's discussion and analysis and annual information form filed under the Company's profile on http://www.sedar.com.
About BNK Petroleum Inc.
BNK Petroleum Inc. is a U.S. based international oil and gas exploration and production company focused on finding and exploiting large, predominately unconventional oil and gas resource plays. Through various affiliates and subsidiaries, the Company owns and operates shale gas properties and concessions in the United States, Poland, Germany and Spain. Additionally the Company is utilizing its technical and operational expertise to identify and acquire additional unconventional projects outside of North America. The Company's shares are traded on the Toronto Stock Exchange under the stock symbol BKX.
For further information: Wolf E. Regener, President and Chief Executive Officer +1-805-484-3613 Email: investorrelations@bnkpetroleum.com Website: http://www.bnkpetroleum.com
(BKX.)