Mr. Dan Wilson reports
RELENTLESS ANNOUNCES FINANCIAL AND OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014
Relentless Resources Ltd. has issued its Sept. 30, 2014, condensed interim financial statements, and related management discussion and analysis. Additional information about Relentless is available on SEDAR at or on the company's website.
Relentless has increased corporate production from 65 barrels of oil equivalent per day in first quarter 2014 to approximately 320 barrels of oil equivalent per day at the date of this report, an increase of 492 per cent. The increase in daily production is mainly the result of:
- The acquisition of 127 barrels of oil equivalent per day of Peace River Arch conventional producing
petroleum and natural gas properties in May, 2014, for $3-million;
- The addition of new production from the company's Heathdale horizontal
well brought on stream in October, 2014.
The third quarter operating and financial results reflect the first full quarter of production added from the May, 2014, acquisition of the Peace River Arch assets.
For the three months ended Sept. 30, 2014, as compared with the same period in 2013:
-
Revenues increased 174 per cent to $1,077,975;
- Cash flow increased 219 per cent to $537,754;
- Daily production volumes increased 144 per cent to 217 barrels of oil equivalent per day.
In third quarter 2014, Relentless began development of the Heathdale assets acquired in June, 2014. The $700,000 acquisition included a 100-per-cent working interest in four wells (one producing, three non-producing) as well as associated lands. In July and August, 2014, Relentless recompleted the three non-producing wellbores, resulting in two producing oil wells and one suspended gas well.
In September, 2014, Relentless drilled its first horizontal well at Heathdale. The 100-per-cent working interest (before payout) Relentless Heathdale 8-7-27-9 W4 horizontal Glauconite oil well was drilled over eight days to a total measured depth of 2,334 metres and completed with a multistage, water-based fracture completion. The well was then equipped to pump and tied in with all solution gas being conserved.
The well was placed on production on Oct. 17, 2014, 28 days after the initial drilling spud date. After approximately 10 days, the well was shut in for seven days for the required initial pressure buildup. Since that time, it has produced for 18 days up until the time of this update.
Over the first 28 days of production, the 8-7 well has averaged 157 barrels of oil equivalent per day (85 per cent oil) and is currently producing at 135 barrels of oil equivalent per day (85 per cent oil). Relentless has tested the Glauconite over three sections in this pool and has used 3-D seismic to confirm its potential over a total of eight sections.
The company is now positioned on a high-working-interest, shallow, conventional Glauconite oil pool at Heathdale, and intends to drill four more horizontal wells within the next six months. Given the low capital cost per well and the significant oil development upside, Relentless intends to further derisk the Heathdale Glauconite oil pool and further assemble lands on similar play types.
Relentless's current production volume is approximately 320 barrels of oil equivalent per day, comprising 192 barrels per day of oil and natural gas liquids and 768,000 cubic feet per day of natural gas.
FINANCIAL SUMMARY
Three months ended Sept. 30,
2014 2013
Oil and gas revenue $ 1,077,975 $ 393,465
Cash flow from operations (1) 537,754 168,526
Per share -- basic and diluted (1) 0.01 0.01
Comprehensive income (loss) 388,978 (109,042)
Per share -- basic and diluted 0.01 (0.00)
Total assets 9,036,918 2,940,618
Net surplus (debt)(1) (509,823) 194,655
Capital expenditures, net $ 1,737,930 $ 46,353
Nine months ended Sept. 30,
2014 2013
Oil and gas revenue $ 1,899,139 $ 1,060,708
Cash flow from operations (1) 677,926 597,562
Per share -- basic and diluted 0.02 0.02
Comprehensive income (loss) 108,395 (536,723)
Per share -- basic and diluted 0.00 (0.02)
Total assets 9,036,918 2,940,618
Net surplus (debt)(1) (509,823) 194,655
Capital expenditures, net $ 5,523,567 $ 548,086
DAILY PRODUCTION AND COMMODITY PRICES
Three months ended Sept. 30,
2014 2013
Daily production
Oil and NGLs (bbl/d) 93 38
Natural gas (mcf/d) 744 306
Oil equivalent (boe/d at 6:1) 217 89
Realized commodity prices ($CDN)
Oil and NGLs (bbl) $ 90.72 $ 90.14
Natural gas (mcf) 4.39 2.78
Oil equivalent (boe at 6:1) $ 53.95 $ 48.05
Nine months ended Sept. 30,
2014 2013
Daily production
Oil and NGLs (bbl/d) 52 35
Natural gas (mcf/d) 436 259
Oil equivalent (boe/d at 6:1) 124 78
Realized commodity prices ($CDN)
Oil and NGLs (bbl/d) $ 92.46 $ 86.46
Natural gas (mcf/d) 4.96 3.40
Oil equivalent (boe/d at 6:1) $ 55.88 $ 49.83
NETBACKS
Three months ended Sept. 30,
2014 2013
($/boe) ($ /boe)
Operating netback
Revenue 53.95 48.05
Royalties (6.73) (5.17)
Production, operating and transportation
expenses (13.07) (13.59)
Operating netback 34.15 29.30
General and administrative expenses (7.24) (8.65)
Interest expense 0.01 (0.07)
Cash flow from operations 26.92 20.58
Nine months ended Sept. 30,
2014 2013
($/boe) ($ /boe)
Operating netback
Revenue 55.88 49.83
Royalties (6.55) (3.37)
Production, operating and transportation
expenses (17.11) (18.39)
Operating netback 32.22 28.07
General and administrative expenses (11.92) (10.90)
Interest expense (0.36) (0.16)
Cash flow from operations 19.95 17.02
We seek Safe Harbor.
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