Mr. Chayan Chakrabarty reports
BENGAL ENERGY ANNOUNCES FISCAL 2018 FIRST QUARTER RESULTS
Bengal Energy Ltd. has released its financial and operating results for the first quarter of fiscal 2018 ended June 30, 2017.
First quarter fiscal 2018 highlights
The following is an overview of the financial and operational results during the three-month period ended June 30, 2017.
Sales revenue: Crude oil sales revenue was $2.3-million in the first quarter of fiscal 2018, which is 5 per cent higher than the $2.2-million recorded in fourth quarter fiscal 2017, due to increased production. Revenues in first quarter fiscal 2018 were 7 per cent lower than first quarter fiscal 2017 due to a 14-per-cent decrease in production volumes partially offset by increased commodity prices.
- Hedging in place through June, 2017: The company has approximately 135,000 barrels of production hedged with a floor price of $47 (U.S.) per barrel through to December, 2018. During the quarter ended June 30, 2017, realized gains from derivative financial instruments were $1.1-million. These gains relate to the company's $80-(U.S.)-per-barrel floor-priced hedge, which expired at June 30, 2017.
Funds flow from operations: Bengal generated funds flow from operations of $1.8-million in the current quarter, which is a 12-per-cent increase from the $1.6-million generated in the preceding quarter and a 36-per-cent increase from the $1.3-million recorded in the first quarter of fiscal 2017.
- Net income (loss): Bengal reported a net income of $500,000 for the current quarter compared with net income of $1.9-million in the preceding quarter, and net loss of $2.7-million in the first quarter of fiscal 2017. Excluding the impact of unrealized foreign exchange and unrealized hedging gains and losses adjusted net earnings (1) is $1.3-million for the first quarter of fiscal 2018 compared with adjusted net earnings of $600,000 in first quarter 2017.
(1) See non-international financial reporting standard measurements section on page 5 of management's discussion and analysis.
Credit facility update: Subsequent to the quarter-end, the company received an offer to extend its existing Westpac facility by 12 months to December, 2019, with a borrowing base of $15-million (U.S.). The borrowing base would follow a reduction schedule of $3.3-million (U.S.) in June, 2018, $3.3-million (U.S.) in December, 2018, $3.3-million (U.S.) in June, 2019, and $5-million (U.S.) in December, 2019.
Production volumes: Production in the current quarter averaged 369 barrels of oil equivalent per day, a 4-per-cent increase and a 14-per-cent decrease from the previous quarter and first quarter fiscal 2017, respectively. Four of the five wells drilled during fiscal 2017 were connected in May of 2017 with initial combined production rates of approximately 245 barrels of oil per day (gross). In Bengal's opinion, operational delays experienced between completion and tie-in during the 2017 campaign may have been a contributor to longer well cleanup timing and on initial reservoir performance. The joint venture will continue to monitor well performance.
FINANCIAL AND OPERATING HIGHLIGHTS
($000s except per-share, volumes and netback amounts)
Three months ended
Oil sales revenue $2,306 $2,489
Realized gain on financial instruments 1,123 1,276
Royalties 139 147
Per cent of revenue 6
Operating and transportation 670 1,417
Operating netback (1) 2,620 2,201
Cash from operations 1,690 956
Funds from operations 1,834 1,348
Per share ($) (basic and diluted) (2) 0.02 0.02
Net income (loss) 549 (2,736)
Per share ($) (basic and diluted) 0.01 (0.04)
Adjusted net earnings (3) 1,268 565
Per share ($) (basic and diluted) 0.01 0.01
Capital expenditures 703 383
Oil volumes (bopd) 369 431
Netback (1) ($/boe)
Revenue 68.68 63.44
Realized gain on financial instruments 33.44 32.52
Royalties 4.14 3.75
Operating and transportation 19.96 36.12
Netback/boe 78.02 56.09
(1) Operating netback is a non-international financial reporting
standard measure and includes realized gain on financial
instruments. Netback per barrel of oil equivalent is calculated
by dividing revenue (including realized gain on financial
instruments) less royalties, operating and transportation costs
by the total production of the company measured in boe.
(2) Funds from operations per share are a non-IFRS measure
calculated by dividing funds from operations by weighted-average
basic and diluted shares outstanding for the periods disclosed.
(3) Adjusted net income and adjusted net income per share are
non-IFRS measures. The comparable IFRS measure is net income
Bengal has filed its consolidated financial statements and management's discussion and analysis for the first quarter of fiscal 2018 with the Canadian securities regulators. The documents are available on SEDAR or by visiting Bengal's website.
Bengal Energy Ltd.
Bengal Energy is an international junior oil and gas exploration and production company with assets in Australia. The company is committed to increasing shareholder value through international exploration, production and acquisitions.
We seek Safe Harbor.
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