Mr. George Liszicasz reports
NXT ENERGY SOLUTIONS ANNOUNCES FIRST QUARTER 2019 RESULTS
NXT Energy Solutions Inc. has released financial and operating results for the quarter ended March 31, 2019.
Q1 Financial and Operating Highlights
Key financial and operational highlights for the first quarter include:
The Company began the mobilization phase of its Nigerian SFDtrademark survey valued at approximately $US8.9 million dollars with PE Energy Limited, a Nigerian oil and gas service company. PE Energy Limited has a contract with the Nigerian National Petroleum Company ("NNPC"), to provide 5,000-line kilometers of SFDtrademark surveys in Nigeria. Data acquisition operations for this contract were completed in early May 2019. NXT's recommendations are expected to be delivered during the third quarter of 2019. The contracts have resulted from more than six (6) months of negotiations and the exchange of substantial technical information on the performance of the SFDtrademark.
To date the Company has received $US1.3 million payments from PE Energy Limited for the SFDtrademark Surveys in Nigeria. Further payments under the $US8.9 million contract will be made upon completion of each of three (3) project milestones and as per contract payment terms as follows: data acquisition (likely now due in June 2019), interpretation and delivery of the final report.
In February 2019, NXT entered into a Co-operative Agreement with Alberta Green Ventures ("AGV"), to propose up to three SFDtrademark surveys within two years. The Co-operative Agreement is based on a cost plus formula and a gross overriding royalty interest in oil and gas production arising on lands subject to the surveys. NXT and AGV are currently evaluating potential SFDtrademark surveys subject to the logistics of scheduling the NXT's aircraft. The Company has received a $US100,000 non-refundable deposit in connection with this Co-operative Agreement.
As the result of the Co-operation Agreement between AGV and NXT, the Company has received conditional approval from the Toronto Stock Exchange ("TSX") to extend the expiry date of the common share warrants held by AGV for an additional 12 months until February 16, 2020, subject to disinterested shareholder approval at the Company's Annual General Meeting on June 25, 2019.
Effective February 26, 2019, NXT has entered into a three year exclusive sales representative agreement with AGV, in nine jurisdictions in the Middle East and Latin America. This agreement includes an at-market subscription right to purchase treasury shares of NXT in a dollar amount equal to 25% of the contracts introduced by AGV to NXT in the first year of the agreement, subject to approval from the TSX.
The memorandum of understanding entered into between Generation Resource Discoveries ("GRD"), NXT's regional representative and the Government of Aceh, Indonesia on February 22, 2018, GRD has expired.
No survey revenues were recorded in the first quarter of 2019 ended March 31, 2019.
A net loss of $1.76 million was recorded for Q1 2019, including amortization expense of $0.44 million.
Operating activities used $0.88 million of cash during Q1 2019 and net cash used for financing activities was $0.01 million.
Losses per common share were $0.03 for Q1 2019 (basic and diluted).
- General and administrative costs for Q1 2019 as compared to Q1 2018 have been reduced by $0.06 million or 6% primarily due to a reduction in headcount partially offset by the Nigerian contract negotiation and legal costs.
- Cash and short-term investments at the end of the Q1 2019 were $3.35 million.
Message to Shareholders
George Liszicasz, President, and CEO of NXT, commented, "NXT had a very busy first quarter planning and finalizing operational details for the Nigerian SFDtrademark Survey. Since this project was our first in Africa, a number of logistical issues needed to be overcome. The Company has delivered more than 10,000 pages of documents to NNPC and the Department of Petroleum Resources ("DPR") as part of the qualification process. I would like to thank our partner, PE Energy Limited in Nigeria, for their tireless efforts to make this project possible within seven months of initiating discussions. Before receiving approval for the survey, NXT had to complete a test flight onshore. Within days, we presented our preliminary results to NNPC and received approval for the project. From April 17th to early May, NXT completed 5,000 line kilometers of data acquisition and is currently processing the data for interpretation. More importantly, now that the first phase is completed and approved by NNPC, the first milestone payment is to be received in June as per contract payment terms.
The offshore test designed by DPR and the Nigerian Petroleum Development Corporation was carried out on April 28, 2019. Final results will be presented in Nigeria in the near future. Our aircraft is back in Calgary and undergoing scheduled maintenance in order to prepare for additional SFDtrademark surveys. We continue to pursue opportunities in Nigeria and are building on the momentum within Africa and the Middle East. On behalf of our board of directors and myself as CEO, I want to thank all of our employees and service providers that supported the acquisition phase of the Nigerian SFDtrademark survey. We are looking forward to the rest of 2019."
Summary highlights of NXT's 2019 first quarter financial statements (with comparative figures to 2018) are noted below. All selected and referenced financial information noted below should be read in conjunction with the Company's first quarter 2019 unaudited condensed consolidated interim financial statements and the related management's discussion and analysis ("MD&A").
(All in Canadian $) Three months ended March 31,
Survey revenues $ - $ -
Survey expenses 377,733 249,762
General & administrative expenses 921,749 981,404
Stock based compensation expense 3,775 295,284
Amortization and other expenses, net 443,697 447,191
Income (loss) before income taxes (1,763,320) (1,954,650)
Income tax expense
Current - -
Deferred - -
Comprehensive loss for the period $ (1,763,320) $ (1,954,650)
Loss per common share - basic $ (0.03) $ (0.03)
Loss per common share - diluted $ (0.03) $ (0.03)
Cash provided by (used in):
Operating activities $ (877,979) $ (1,338,908)
Financing activities (10,377) 4,284,736
Investing activities 1,200,000 650,001
Net cash inflow (outflow) 311,644 3,595,829
Cash and cash equivalents, beginning of the period 339,532 166,618
Cash and cash equivalents, end of the period 651,176 3,762,447
Cash and cash equivalents 651,176 3,762,447
Short-term investments 2,700,000 300,000
Total cash and short-term investments 3,351,176 4,062,447
Net working capital balance 1,976,283 2,572,091
NXT's 2019 first quarter financial and operating results have been filed in Canada on SEDAR at
, and will soon be available in the USA on EDGAR at
, as well as on NXT's website at
Details of the conference call to discuss the 2019 first quarter financial and operating results are as follows:
Date: Thursday, May 16, 2019
Time: 4:30 p.m. Eastern Time (2:30 p.m. Mountain Time)
North American Participants Call:1-866-454-4207
International Dial In Numbers: https://www.confsolutions.ca/ILT?oss=7P1R8009525114
Participant Pass Code 727625#
About NXT Energy Solutions Inc.
NXT Energy Solutions Inc. is a Calgary-based technology company whose proprietary SFDtrademark survey system utilizes quantum-scale sensors to detect gravity field perturbations in an airborne survey method which can be used both onshore and offshore to remotely identify areas with exploration potential for traps and reservoirs. The SFDtrademark survey system enables our clients to focus their hydrocarbon exploration decisions concerning land commitments, data acquisition expenditures and prospect prioritization on areas with the greatest potential. SFDtrademark is environmentally friendly and unaffected by ground security issues or difficult terrain and is the registered trademark of NXT Energy Solutions Inc. NXT Energy Solutions Inc. provides its clients with an effective and reliable method to reduce time, costs, and risks related to exploration.
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