Bengal Energy Announces Fourth Quarter and Record Fiscal 2014 Year End Results
16 June 2014 - 9:00PM
Marketwired
Bengal Energy Announces Fourth Quarter and Record Fiscal 2014 Year
End Results
CALGARY, ALBERTA--(Marketwired - Jun 16, 2014) - Bengal Energy
Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
its financial and operating results for the fourth quarter and full
year fiscal 2014 results (periods ended March 31, 2014).
FISCAL YEAR END & FOURTH QUARTER 2013 HIGHLIGHTS:
2014 was a successful period for Bengal, evidenced by the
continued growth in our production, reserves and revenue, as well
as the achievement of several important milestones which further
advance our progress and set the stage for future expanded
development. The following are financial, operational and corporate
achievements through the three and twelve months ended March 31,
2014:
Financial Highlights:
- Increased Production Resulted in Record Revenue - Bengal's
revenue of approximately $5.3 million in the fourth quarter was 4%
lower than the $5.5 million generated in the preceding quarter due
to lower realized commodity prices, but was 75% higher than the
$3.0 million generated during fourth quarter of 2013. For the full
year 2014, Bengal generated revenue of approximately $19.8 million
which is a 237% increase over fiscal 2013. The gain was driven by a
55% increase in production compared to the previous year, and
strong pricing for the high quality crude oil produced.
- Funds Flow from Operations(1) Significantly Grow Year over Year
- Bengal generated funds flow from operations of $2.2 million in
the quarter ended March 31, 2014 a 23% decrease from the $2.9
million generated in the preceding quarter, due to lower netbacks
and the impact of foreign exchange as the Australian dollar
appreciated against the US dollar; however this reflects a 93%
increase over the $1.2 million recorded in the fourth quarter of
2013. Full year 2014 funds flow from operations was $8.2 million or
645% higher than the $1.1 million generated during the twelve
months ended March 31, 2013.
- Reserves Growth Continue - Independent third party year-end
reserves evaluation to March 31, 2014 show a 122% year-over-year
corporate 2P reserves increase, driven by significant increase of
2P reserves at Cuisinier. Based on 1P and 2P reserves additions,
Bengal has replaced approximately 6.4 times and 13.2 times its
annual production, respectively.
|
(1) |
Funds
flow from operations is an additional generally accepted account
principle ("GAAP measure"). The comparable International
Financial Reporting Standards ("IFRS") measure is cash from
operations. A reconciliation of the two measures can be found in
the table on page 6 of Bengal's Q4MD&A. |
- Net Income Demonstrates Continuing Profitability - Bengal
reported net income of $150 thousand compared to a loss of $1.8
million in the prior year. Before factoring in impairments of
approximately $3.1 million, Bengal would have generated net income
of approximately $3.2 million (EPS $0.05/share).
Operational
Highlights:
- Production Volumes - Production in the fourth quarter averaged
504 barrels of oil equivalent per day ("boepd"), an increase of 8%
over the 468 boepd in the previous quarter and a 55% increase over
the 325 boepd produced in Q4 2013. For the full year, Bengal's
production averaged 468 boepd, a significant increase of 175% over
the 170 boepd produced in 2013.
- Cuisinier Drilling 2013 - On March 20, 2013, the Company
commenced its fiscal 2014 Cuisinier drilling program, comprised of
six Murta focused oil wells. The program successfully aimed to
optimize the overall pool productivity and better define the
ultimate pool size. All six wells were drilled and extended
Bengal's 100% success rate in its Cuisinier drilling history.
- Expanded ownership interest of Cuisinier Oil Field and the ATP
752P - Bengal exercised its pre-emptive right to purchase an
additional interest in the ATP 752P permit, bringing the Company's
total ownership to 30.357% of the Cuisiner field and 38% in the
Wompi field.
- Receipt of Petroleum License - Final approval of Petroleum
Lease 303 ("PL303") for the Cuisinier oil pool was granted in April
2013, allowing Bengal's past and future Cuisinier wells to produce
for up to 21 years.
- 2014 Phase 1 Cuisinier Drilling Campaign - Commencing in March
2014, four development wells were drilled through May 2014 at
Cuisiner with a 100% success rate. The wells have been cased and
are awaiting completion which is anticipated to run from mid-July
through early August 2014. The Company expects tie-ins to be
completed by the end of September 2014, with cash flow from the new
production volumes being reflected in the first quarter of calendar
2015.
- Onshore India Drilling Plan - The Company continues to work
with the operator of Bengal's onshore block in India's Cauvery
Basin to finalize the necessary regulatory approvals for the
drilling of three exploration wells.
Recent Developments:
- April 2014 Production Volumes - Production rates in Cuisinier
have been impacted by natural declines as well as operational
issues encountered in the field's largest producing well. The
Cuisinier 6 well has experienced a sudden and unusual increase in
water-cut as well as an increase in measured well head pressure
since April 2014. Bengal, along with the operator are currently
investigating the source of the water to determine a remediation
strategy aimed oil production to offset this decline.
- Extending Financial Flexibility - Subsequent to year-end,
Bengal signed an indicative term sheet for a US $20.0 million
secured credit facility with a leading Australian commercial bank.
Once finalized, the facility is expected to fully fund Bengal's
Australian development through March 2015, allowing the Company to
fund future planned exploration activities in India and Australia
with internally generated cash flows.
OPERATING
HIGHLIGHTS
| $000s except per share, volumes and netback
amounts |
Three Months Ended March 31 |
Twelve Months Ended March 31 |
| 2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
$ |
5,174 |
|
$ |
2,946 |
|
75 |
|
$ |
19,480 |
$ |
5,669 |
|
244 |
|
|
Natural gas |
|
87 |
|
|
67 |
|
29 |
|
|
274 |
|
172 |
|
59 |
|
|
Natural gas liquids |
|
11 |
|
|
- |
|
N/A |
|
|
68 |
|
44 |
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
5,272 |
|
$ |
3,013 |
|
75 |
|
$ |
19,822 |
$ |
5,885 |
|
237 |
|
| Royalties |
|
407 |
|
|
271 |
|
50 |
|
|
1,334 |
|
526 |
|
154 |
|
|
% of revenue |
|
7.7 |
|
|
9.0 |
|
(14 |
) |
|
6.7 |
|
8.9 |
|
(25 |
) |
| Operating & transportation |
|
1,496 |
|
|
694 |
|
116 |
|
|
5,290 |
|
1,726 |
|
207 |
|
| Operating netback(1) |
|
3,369 |
|
$ |
2,048 |
|
65 |
|
|
13,198 |
$ |
3,633 |
|
263 |
|
| Cash from (used in) operations: |
|
2,106 |
|
|
119 |
|
1170 |
|
|
7,591 |
|
(703 |
) |
N/A |
|
|
Per share ($) (basic & diluted) |
|
0.03 |
|
|
(0.00 |
) |
|
|
|
0.12 |
|
(0.01 |
) |
|
|
| Funds from (used in) operations:(2) |
|
2,218 |
|
|
1,151 |
|
93 |
|
|
8,183 |
|
1,099 |
|
569 |
|
|
Per share ($) (basic & diluted) |
|
|
|
|
0.02 |
|
|
|
|
0.13 |
|
0.02 |
|
|
|
| Net (loss): |
|
(1,804 |
) |
|
(592 |
) |
(205 |
) |
|
150 |
|
(1,799 |
) |
N/A |
|
|
Per share ($) (basic & diluted) |
|
(0.03 |
) |
|
(0.01 |
) |
|
|
|
.00 |
|
(0.03 |
) |
|
|
| Capital expenditures |
|
2,048 |
|
$ |
1,280 |
|
60 |
|
$ |
16,647 |
$ |
28,381 |
|
(41 |
) |
| Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (bpd) |
|
472 |
|
|
287 |
|
65 |
|
|
433 |
|
138 |
|
214 |
|
|
Natural gas (mcfd) |
|
180 |
|
|
229 |
|
(21 |
) |
|
201 |
|
180 |
|
12 |
|
|
Natural gas liquids (boepd) |
|
2 |
|
|
- |
|
N/A |
|
|
2 |
|
2 |
|
- |
|
|
Total (boepd @ 6:1) |
|
504 |
|
|
325 |
|
55 |
|
|
468 |
|
170 |
|
175 |
|
| Netback(1) ($/boe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
116.24 |
|
$ |
102.88 |
|
13 |
|
$ |
115.94 |
$ |
94.95 |
|
22 |
|
|
Royalties |
|
8.97 |
|
|
9.25 |
|
(3 |
) |
|
7.80 |
|
8.49 |
|
(8 |
) |
|
Operating & transportation |
|
32.99 |
|
|
23.70 |
|
39 |
|
|
30.94 |
|
27.85 |
|
11 |
|
|
Total |
|
74.28 |
|
$ |
69.93 |
|
6 |
|
$ |
77.20 |
$ |
58.61 |
|
32 |
|
|
(1) |
|
Netback is a non-IFRS measure. Netback per boe is calculated by
dividing the revenue and costs in total for the Company by the
total production of the Company measured in boe. |
|
(2) |
|
Funds
from operations is a non-IFRS measure. The comparable IFRS measure
is cash from operations. A reconciliation of the two measures can
be found in the table on page 6 of Bengal's Q4 2014 MD&A. |
Bengal has filed its consolidated financial statements and
management's discussion and analysis for the fourth fiscal quarter
of 2014 and year ended March 31, 2014 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's common shares trade 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 timing of processing and interpreting seismic data
and timing for the selection and drilling of a second well; receipt
of regulatory approvals for the drilling of exploration wells in
Cauvery Basin, India; and the timing for drilling of the first well
in the Cauvery Basin, 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 for the year
ended March 31, 2013 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 |
|
bopd -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 IFRS and previous 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 6of Bengal's Q4
MD&A.
Bengal Energy Ltd.Chayan ChakrabartyPresident & Chief
Executive Officer(403) 205-2526Bengal Energy Ltd.Jerrad
BlanchardChief Financial Officer(403)
205-2526investor.relations@bengalenergy.cawww.bengalenergy.ca
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