Bengal Energy Announces First Quarter Fiscal 2014 Results
14 Agosto 2013 - 4:42PM
Marketwired Canada
Bengal Energy Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
its financial and operating results for the first fiscal 2014 quarter ended June
30, 2013.
FISCAL Q1 2014 HIGHLIGHTS:
During the first quarter of the Company's fiscal 2014 year, Bengal continued its
current strategy, resulting in further growth in production and cash flow
through the period. With the drilling success realized to date in the Company's
Cuisinier asset in the Cooper Basin, Australia, understanding of the magnitude
and lower risk profile of this play has evolved, demonstrating that Cuisinier
represents a significant short and long term potential resource play for Bengal.
Following are highlights of specific operational, financial and corporate
achievements that Bengal reached during the three months ended June 30, 2013:
Financial Highlights:
-- Profitable Quarter + Higher Funds Flow from Operations -Bengal recorded
a profit in the quarter, with positive net income of $0.8 million,
compared to a loss of $0.2 million in Q1 of the prior year and a loss of
$0.6 million in the preceding quarter this year. Funds flow from
operations grew to $1.7 million, compared to a deficiency of $0.1
million in Q1 of the prior year and $1.1 million in the preceding
quarter this year.
-- Higher Revenue + Strong Netbacks - Bengal's realized revenue of $3.7
million was substantially higher than the $0.5 million realized in Q1 of
the prior year and 23% higher than the $3.0 million realized in the
preceding quarter this year, driven by higher production volumes and
very attractive realized pricing. Bengal's operating (field) netback in
Australia averaged $89.05 per barrel (bbl) (corporate average of
$79.82/bbl), reflecting the high quality of crude oil produced, which
was priced at a premium of almost $6.00 / bbl over the Brent benchmark.
-- Financing Activity Strengthens Balance Sheet - In April, Bengal raised
C$5.7 million through a brokered equity private placement, directing
proceeds to fund ongoing capital investments.
-- Increase in Cuisinier Working Interest- On June 26, Bengal announced
that it was exercising its pre-emptive right to purchase an additional
5.357% interest in the Cuisinier oil field and Authority to Prospect
("ATP") 752P in the Cooper Basin, which will bring the Company's total
ownership to 30.357%. Subsequent to quarter end, Bengal successfully
raised C$8 million through a private placement of non-convertible
unsecured notes to fund the acquisition of this additional interest,
which is expected to close in September 2013 and have an effective date
of March 15, 2013.
Operating Highlights:
-- Rising Production - Bengal's production averaged 356 boe/d for the
period, an increase of 300% over Q1 of the prior year and 10% over the
preceding quarter this year. This production level does not reflect the
incremental working interest to be acquired in Cuisinier, which would
have increased the quarterly oil production volumes by 21% or 67 b/d.
-- Continued 100% Drilling Success In Cuisinier - During the period ended
June 30, 2013, Bengal continued its 100% success rate in the Cuisinier
field, with five out of five wells drilled currently being completed as
oil producers and tied-in. This brings Bengal's total wells drilled in
Cuisinier to 13, with one additional well to be drilled in August.
Assuming this sixth well is a successful oil producer; production from
these wells is expected to be fully tied-in by early September, which
should positively impact volumes and cash flows for the balance of
calendar 2013 and into 2014. With the success to date in the Cuisinier
area it is now clear that the Company is participating in a significant,
seismically supported potential resource play.
-- Farmout and Joint Venture (JV) Agreement - On May 23, 2013, Bengal
entered into a binding letter of intent with Australia-based Beach
Energy Ltd for the exploration and development of Bengal's 100% owned
Tookoonooka Permit. Under the agreement terms, Beach will fund the
drilling of two new wells and acquire an additional 300 km2 of 3D
seismic, up to a maximum of AUD $11.5 million. One of the wells is
anticipated to be in the Caracal area near Bengal's existing oil
discovery, with the second well to be situated within the area covered
by the new 3D seismic. Subsequent to the end of the quarter, the JV
Agreement was finalized and the transaction closed.
-- Receipt of Petroleum License and Pipeline Commissioning - On April 8,
2013 the final approval of Petroleum Lease 303 ("PL303") for the
Cuisinier oil pool was granted, which allows all current and future
Cuisinier wells to produce for up to 21 years. Subsequently, on June 7,
the Cuisinier to Cook pipeline was commissioned allowing production from
all eight of Bengal's pre-2013 and subsequent wells to flow through the
pipeline, and eliminating capacity constraints from trucking for
transportation of the oil.
-- Onshore India Drilling Plan - In Bengal's onshore block in the Cauvery
Basin India, the Company intends to commence the drilling of its
exploration wells in the first quarter of calendar 2014. Continued
activity in onshore India for the balance of calendar 2014 and beyond
will depend on the results of the three wells drilled under the existing
work program.
"First quarter of fiscal 2014 was a successful period both financially and
operationally for Bengal," said Chayan Chakrabarty, Bengal's President and CEO.
"We continued to grow production and generated very attractive netbacks, both of
which contributed to a profitable quarter. We reported 100% drilling success in
Cuisinier and announced an acquisition to increase our interest in that field,
meaning Bengal will realize a higher proportion of production, reserves and cash
flow from this important, potential resource play going forward. Our JV
agreement with Beach, which closed after the quarter end, accelerates
development at Tookoonooka, and in concert with the financing activity
undertaken during the quarter, enables Bengal to preserve balance sheet
strength. I am very pleased with Bengal's progress and continuing transition
from exploration to development, and look forward to updating our shareholders
about ongoing developments."
For a discussion of the activities on each of the Company's permits, refer to
Bengal's management's discussion and analysis for the first fiscal quarter 2014
ended June 30, 2013 filed on SEDAR at www.sedar.com.
FINANCIAL & OPERATING HIGHLIGHTS
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$000s except per share, volumes and
netback amounts Three Months Ended
June 30, June 30, March 31,
2013 2012 2013
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Revenue
Oil $ 3,626 $ 433 $ 2,946
Natural gas 65 39 67
Natural gas liquids 31 26 -
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Total $ 3,722 $ 498 $ 3,013
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Royalties 204 45 271
% of revenue 5.5 9.0 9.0
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Operating & transportation 930 247 694
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Netback $ 2,588 $ 206 $ 2,048
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Cash from (used in) operations: 1,249 (759) 119
Per share ($) (basic & diluted) 0.02 (0.01) (0.00)
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Funds flow from (used in) operations 1,732 (62) 1,151
Per share ($) (basic & diluted) 0.03 (0.00) 0.02
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Net income (loss): 836 (211) (592)
Per share ($) (basic & diluted) 0.01 (0.00) (0.01)
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Capital expenditures $ 5,435 $ 7,326 $ 1,280
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Volumes
Oil (bbl/d) 313 47 287
Natural gas (mcf/d) 240 225 229
Natural gas liquids (boe/d) 3 4 -
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Total (boe/d @ 6:1) 356 89 325
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Netback ($/boe)
Revenue $ 114.83 $ 61.95 $ 102.88
Royalties 6.32 5.60 9.25
Operating & transportation 28.69 30.73 23.70
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Total $ 79.82 $ 25.62 $ 69.93
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Bengal has filed its consolidated financial statements and management's
discussion and analysis for the first fiscal 2014 quarter ended June 30, 2013
with Canadian securities regulators. The documents are available on SEDAR at
www.sedar.com or by visiting Bengal's website at www.bengalenergy.ca.
About Bengal
Bengal Energy Ltd. is an international junior oil and gas exploration and
production company with assets in Australia and India. The company is committed
to growing shareholder value through international exploration, production and
acquisitions. Bengal trades on the TSX under the symbol BNG.
Additional information is available at www.bengalenergy.ca
Forward-Looking Statements
This news release contains certain forward-looking statements or information
("forward-looking statements") as defined by applicable securities laws that
involve substantial known and unknown risks and uncertainties, many of which are
beyond Bengal's control. These statements relate to future events or our future
performance. All statements other than statements of historical fact may be
forward looking statements. The use of any of the words "plan", "expect",
"prospective", "project", "intend", "believe", "should", "anticipate",
"estimate", or other similar words or statements that certain events "may" or
"will" occur are intended to identify forward-looking statements. The
projections, estimates and beliefs contained in such forward looking statements
are based on management's estimates, opinions, and assumptions at the time the
statements were made, including assumptions relating to: the impact of economic
conditions in North America, Australia, India and globally; industry conditions;
changes in laws and regulations including, without limitation, the adoption of
new environmental laws and regulations and changes in how they are interpreted
and enforced; increased competition; the availability of qualified operating or
management personnel; fluctuations in commodity prices, foreign exchange or
interest rates; stock market volatility and fluctuations in market valuations of
companies with respect to announced transactions and the final valuations
thereof; results of exploration and testing activities; and the ability to
obtain required approvals and extensions from regulatory authorities. We believe
the expectations reflected in those forward-looking statements are reasonable
but, no assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them do so,
what benefits that Bengal will derive from them. As such, undue reliance should
not be placed on forward-looking statements. Forward-looking statements
contained herein include, but are not limited to, statements regarding: the
Tookoonooka joint venture; including without limitation, the terms thereof and
the location of the two wells; the acquisition of the increased interest in ATP
752P and the closing thereof; use of funds from the July 2013 private placement;
the timing and location of future wells; tie-in operations, including, without
limitation, the timing and benefit thereof; and the commencement of drilling
operations in India.
The forward looking statements contained herein are subject to numerous known
and unknown risks and uncertainties that may cause Bengal's actual financial
results, performance or achievement in future periods to differ materially from
those expressed in, or implied by, these forward-looking statements, including
but not limited to, risks associated with: the failure to obtain required
regulatory approvals or extensions; failure to satisfy the conditions under
farm-in and joint venture agreements; failure to secure required equipment and
personnel; changes in general global economic conditions including, without
limitations, the economic conditions in North America, Australia, India;
increased competition; the availability of qualified operating or management
personnel; fluctuations in commodity prices, foreign exchange or interest rates;
changes in laws and regulations including, without limitation, the adoption of
new environmental and tax laws and regulations and changes in how they are
interpreted and enforced; the results of exploration and development drilling
and related activities; the ability to access sufficient capital from internal
and external sources; and stock market volatility. Readers are encouraged to
review the material risks discussed in Bengal's Annual Information Form under
the heading "Risk Factors" and in Bengal's annual MD&A under the heading "Risk
Factors". The Company cautions that the foregoing list of assumptions, risks and
uncertainties is not exhaustive. The forward-looking statements contained in
this news release speak only as of the date hereof and Bengal does not assume
any obligation to publicly update or revise them to reflect new events or
circumstances, except as may be require pursuant to applicable securities laws.
Barrels of Oil Equivalent
When converting natural gas to equivalent barrels of oil, Bengal uses the widely
recognized standard of 6 thousand cubic feet (mcf) to one barrel of oil (boe).
However, a boe 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.
Certain Defined Terms
boe - barrels of oil equivalent
boe/d - barrels of oil equivalent per day
bbl - barrel
bbl/d - barrels per day
mcf - thousand cubic feet
mcf/d - thousand cubic feet per day
Non-IFRS Measurements
Within this release references are made to terms commonly used in the oil and
gas industry. Funds from operations, funds from operations per share and
netbacks do not have any standardized meaning under International Financial
Reporting Standards (IFRS) and previous generally accepted accounting principles
(GAAP) and are referred to as non-IFRS measures. Funds from operations per share
is calculated based on the weighted average number of common shares outstanding
consistent with the calculation of net income (loss) per share. Netbacks equal
total revenue less royalties and operating and transportation expenses
calculated on a boe basis. Management utilizes these measures to analyze
operating performance. The Company's calculation of the non-IFRS measures
included herein may differ from the calculation of similar measures by other
issuers. Therefore, the Company's non-IFRS measures may not be comparable to
other similar measures used by other issuers. Funds from operations is not
intended to represent operating profit for the period nor should it be viewed as
an alternative to operating profit, net income, cash flow from operations or
other measures of financial performance calculated in accordance with IFRS.
Non-IFRS measures should only be used in conjunction with the Company's annual
audited and interim financial statements. A reconciliation of these measures can
be found in the table on page 5 of Bengal's Q1 fiscal 2014 MD&A.
FOR FURTHER INFORMATION PLEASE CONTACT:
Bengal Energy Ltd.
Chayan Chakrabarty
President & Chief Executive Officer
(403) 205-2526
Bengal Energy Ltd.
Bryan Goudie
Chief Financial Officer
(403) 205-2526
investor.relations@bengalenergy.ca
www.bengalenergy.ca
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