Bengal Energy Announces Credit Facility Amendment and 2019 Drilling Program Update
20 November 2018 - 12:30AM
Bengal Energy Ltd. (TSX: BNG) (“Bengal” or the
“Company”) announces that it has entered into an amendment (the
“Amendment”) to its secured credit facility (the “Credit Facility”)
with the Australian based Westpac Institutional Bank (“Westpac”),
which includes a 14 month deferral of all principal payments on the
Credit Facility. Pursuant to the Amendment, the Credit
Facility has a new maturity date of February 15, 2020 (the “New
Maturity Date”) and provides the continuance of the borrowing base
of US$12.5 million, of which the full amount is currently drawn.
The Company will now be required to make a
single principal repayment of US$12.5MM on the New Maturity Date,
with no principal payments being required until such date. There
were no changes to the covenants and cash sharing requirements
under the Credit Facility.
The Company is now planning to undertake the
following development activities in calendar 2019, to be funded
from the Company’s cash balance and cash flows:
- A six well drilling program on the Barta Permit, ATP 752,
including one exploration well; and
- A water injection pilot project deployed within the Cuisinier
oil field on the Barta Permit.
Bengal will continue to hedge approximately 50%
of its crude oil production as required under the Credit
Facility.
“This extension demonstrates the strong support
from our lenders at Westpac and delivers additional value to our
shareholders,” said Chayan Chakrabarty, Bengal’s President and CEO.
“The financial flexibility afforded by the extension provides
additional liquidity to move forward with our aggressive
development drilling program in 2019 targeted at growing our
production, cash flow and reserves base, which in turn positions us
well for continuing further development of the Cuisinier oil
field.”
Copies of the Credit Facility, including the
Amendment, are available under the Company’s profile on
www.sedar.com.
CALENDAR 2019
DEVELOPMENT PROGRAM:
- Hydraulic Stimulation Program – In December
2018, the Company and its joint venture partners will hydraulically
stimulate the Cuisinier-19 well and are expected to connect it for
production by the end of 2018. This well encountered a 12.5 m
thick, oil-bearing section of Murta sandstone and is in a portion
of the oil field anticipated to have virgin reservoir pressure.
Additional locations potentially suitable for stimulation continue
to be identified by Bengal for upcoming programs.
- 2019 Drilling Program – Bengal and its joint
venture partners on the ATP 752 Barta Block (Bengal’s working
interest is 30.357%.) will participate in a six-well drilling
program commencing in Q2 2019. Five of the six wells in this
drilling program will be located in the Cuisinier oil field aimed
at high graded targets for productivity, reserves growth and pool
expansion. The sixth well will be an exploration well on the
Barta permit, proximal to the Cuisinier pool. Two of the five wells
will be directly offsetting the planned water injection pilot,
bringing the total number of wells expected to be impacted by
injection to five, thus complementing the goals of the water
injection pilot to enhance reservoir performance in that area of
the pool. Another two wells are located in the northwest portion of
the pool where thick Murta reservoir has been established in
existing wells (Cuisinier-1 & -4). These wells are targeting
increased production while extending this mapped trend, potentially
increasing reserves while providing a site for potential water
injection expansion in future phases. The fifth well is located
west of the Cuisinier-19 well, in an area where seismic attribute
mapping highlights the potential for significant reservoir sand
development. A successful outcome at this location could provide a
new development platform for subsequent years’ drilling. The
location of the exploration well is yet to be confirmed among the
joint venture partners. There are a number of dual target features
inside the Cuisinier PL 303 and immediately adjacent to
Cuisinier.
- Water Injection Pilot – A water injection
pilot project is expected to commence at Cuisinier in Q2 2019. This
program is designed to begin increasing pressure in the Cuisinier
pool and thereby increase the expected oil recovery and enhance
productivity and reserves. The location of the water injection
pilot was based on the well to well correlation of both reservoir
sand and reservoir pressure, suggesting a high degree of
continuity. Bengal expects the response to injection at
Cuisinier-24 to be recognized early through close monitoring of all
the wells offsetting injection.
“The 2019 development program represents $5.0
million of net capital expenditures and is expected to bring with
it an exciting step change in production and cash flow for the
company,” said Chayan Chakrabarty, Bengal’s President and CEO. “The
program is a well balanced portfolio expected to significantly
expand the Cuisinier platform supporting the Company’s growth
beyond 2019.”
About Bengal
Bengal Energy Ltd. is an international junior
oil and gas exploration and production company with assets in
Australia. The Company is committed to growing shareholder
value through international exploration, production and
acquisitions. Bengal’s common shares trade on the Toronto Stock
Exchange 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 forward-looking 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
current commodity price environment; the impact of economic
conditions in North America, Australia 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.
Bengal believes 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 expected
benefit of the Amendments to the Company; the Company's hedging
program; the Company's expected growth activities and development
forecast in calendar 2019 and the funding sources for such
activities; and the expected expansion of the Company's Cuisinier
platform as a result of the 2019 development program. 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: further amendments to, and extensions of,
the Credit Facility; the ability of the Company to complete the
2019 development program and activities as outlined in this news
release or at all; failure to obtain the expected results from the
water injection pilot; liabilities inherent in oil and natural gas
operations; 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 and
Australia; uncertainties associated with estimating oil and natural
gas reserves; increased competition for, among other things:
capital, acquisitions of reserves, undeveloped lands and skilled
personnel; the availability of qualified operating or management
personnel; incorrect assessment of the value of acquisitions;
fluctuations in commodity prices, foreign exchange or interest
rates; inability to meet commitments due to inability to raise
funds or complete farm-outs; geological, technical, drilling and
processing problems; changes in laws and regulations including,
without limitation, the adoption of new environmental, royalty and
tax laws and regulations and changes in how they are interpreted
and enforced; Bengal’s development and exploration opportunities;
the results of exploration and development drilling and related
activities; the ability to access sufficient capital from internal
and external sources; and counter-party credit risk, stock market
volatility and market valuation of Bengal’s stock. Statements
relating to "reserves" are deemed to be forward-looking statements,
as they involve the implied assessment, based on certain estimates
and assumptions, which the reserves described, can be profitably
produced in the future. 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.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Bengal Energy
Ltd.Chayan Chakrabarty, President & Chief
Executive OfficerMatthew Moorman, Chief Financial
OfficerPhone: (403)
205-2526Email:
investor.relations@bengalenergy.caWebsite:
www.bengalenergy.ca
PDF
available: http://resource.globenewswire.com/Resource/Download/86b0f5f3-e304-4fa2-810d-056b69196a51
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