CALGARY, May 21, 2015 /CNW/ - Ikkuma Resources
Corp. ("Ikkuma" or the "Corporation") (TSXV: IKM) is pleased
to report its financial and operating results for the three months
ended March 31, 2015. Selected
financial and operational information is set out below and should
be read in conjunction with Ikkuma's interim condensed financial
statements and the related management's discussion and analysis
("MD&A") for the three months ended March 31, 2015. Ikkuma's condensed interim
financial statements and MD&A are available for review at
www.sedar.com and on the Corporation's website at
www.ikkumarescorp.com.
Q1 2015 HIGHLIGHTS
- Achieved record average production of 7,121 boe/d in the first
quarter (97% gas).
- Oil and natural gas sales were 36% lower at $10.8 million from the $14.7 million reported in Q4 2014, due to the
significant decline in commodity prices.
- Mitigated the impact of the decline in gas price with realized
gains from the Corporation's hedging program of $0.80 per boe or $0.13/mcf.
- Generated funds flow from operations in the first quarter of
$1.9 million ($0.02/share) despite significantly lower
commodity prices.
- To date and as previously announced, the capital program has
tested 5,500 – 6,000 boe/d (99% gas) of production which is
expected to largely come on stream by Q4 2015.
- Earned 16 gross sections (13.75 net) of undeveloped land in the
Northern foothills by reaching earning depth in the second well
drilled.
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Three months
ended
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(Cdn$000s except
per boe and
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March
31,
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December
31,
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March 31,
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Share
amounts)
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2015
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2014
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2014
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Operations
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Average daily
production
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Natural gas
(mcf/d)
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41,629
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41,238
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222
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Light Oil
(bbls/d)
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50
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43
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34
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NGL's
(bbl/d)
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134
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92
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4
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Total equivalent
(boe/d)
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7,121
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7,008
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75
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Average product
prices
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Natural gas
($/mcf)
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$
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2.69
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$
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3.64
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$
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5.54
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Light Oil
($/bbl)
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$
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38.87
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$
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58.55
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$
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82.75
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NGL
($/bbl)
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$
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18.06
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$
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42.28
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$
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67.72
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Revenue
($/boe)
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$
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16.84
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$
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22.85
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$
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57.42
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Realized gain on
commodity contracts ($/boe)
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$
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0.80
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$
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-
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$
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-
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Royalties
($/boe)
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$
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1.88
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$
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1.42
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$
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14.24
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Operating
($/boe)
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$
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9.23
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$
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9.17
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$
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33.39
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Transportation costs
($/boe)
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$
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1.53
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$
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1.74
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$
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4.04
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Operating
netback(1)($/boe)
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$
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5.00
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$
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10.52
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$
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5.75
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Financial
($000)
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Oil and natural gas
sales
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$
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10,793
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$
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14,731
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$
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387
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Funds flow from
operations(1)
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$
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1,945
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$
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4,810
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$
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(162)
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Per share – basic and
diluted
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$
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0.02
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$
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0.06
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$
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(0.06)
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Loss
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$
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(4,853)
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$
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(3,711)
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$
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(2,228)
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Per share – basic
& diluted
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$
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(0.06)
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$
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(0.05)
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$
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(0.77)
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Capital
expenditures
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$
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18,741
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$
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16,857
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$
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101
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Property Acquisitions
(dispositions)
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$
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25
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$
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21,732
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$
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-
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Net
debt(1)
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$
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26,802
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$
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9,924
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$
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1,480
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Bank loan
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$
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14,933
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$
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-
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$
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878
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Shares outstanding
(000)(2)
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80,159
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80,159
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2,878
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Weighted average
shares outstanding
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Basic & diluted
(000)(2)
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80,159
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80,159
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2,878
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(1)
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Funds flow
from operations, operating netback and net debt are non-IFRS
measures. See "Non- IFRS Measures".
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(2)
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On September 17,
2014, the shareholders' of the Corporation approved a 10 for 1
share consolidation. The number of shares, warrants and options
outstanding have been adjusted on a retroactive
basis.
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OUTLOOK
Ikkuma's 2015 capital budget has been increased from
$23 million to $28 million. The increase is due to the
additional costs incurred for the second well drilled and higher
than expected tie-in costs for the successful recompletions. The
majority of Ikkuma's remaining 2015 capital program will be used to
tie-in tested volumes, which is expected to be largely completed by
Q4 2015. Guidance has been increased for production as follows:
2015 exit rate of 9,000 to 9,300 boe/d; and 2015 average production
of 7,500 to 8,000 boe/d.
Ikkuma will continue to monitor capital spending and forecasted
cash flows to ensure the Corporation maintains its financial
strength. Ikkuma benefits from a low production decline of
approximately 15% and given the significance of the previously
announced tested gas rates, the Corporation is well positioned to
continue to grow in a low commodity price environment.
CORPORATE UPDATE
Ikkuma is pleased to announce the promotion of James Richmond (Rich) Rowe to Vice President,
Land effective immediately. Mr. Rowe has performed the duties
of Land Manager of Ikkuma since the recapitalization in May of 2014
and has been a key member of our Foothills team in the past.
ABOUT IKKUMA
Ikkuma Resources Corp. is a diversified junior public oil and
gas company listed on the TSXV under the symbol "IKM", with
holdings in both conventional and unconventional projects in
Western Canada. The technical team has worked together for
over a decade in the Foothills Region of Western Canada, through two successful,
publicly traded companies. The unique skills and repeat
success at exploiting a complex, potentially prolific play type are
fundamental ingredients for a successful growth-oriented company in
Western Canada. Corporate information can be found at:
www.ikkumarescorp.com.
Forward-Looking Statements and Information and Cautionary
Statements
This press release contains forward‑looking statements and
forward‑looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward‑looking
statements or information. In particular, this press release
contains forward-looking statements concerning tieing-in and
bringing on stream tested gas production by Q4 2015. Although
Ikkuma believes that the expectations and assumptions on which the
forward‑looking statements and information are based are
reasonable, undue reliance should not be placed on the
forward‑looking statements and information because Ikkuma cannot
give any assurance that they will prove to be correct. Since
forward‑looking statements and information address future events
and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. These include but are not limited to the risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; failure to obtain
necessary regulatory approvals for planned operations; health,
safety and environmental risks; uncertainties resulting from
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; volatility of
commodity prices, currency exchange rate fluctuations; imprecision
of reserve estimates; and competition from other explorers) as well
as general economic conditions, stock market volatility, and the
ability to access sufficient capital. We caution that the
foregoing list of risks and uncertainties is not
exhaustive.
In addition, the reader is cautioned that historical results
are not necessarily indicative of future performance. The
forward-looking statements and information contained in this press
release are made as of the date hereof and Ikkuma undertakes no
obligation to update publicly or revise any forward‑looking
statement or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
Certain information set out herein may be considered as
"financial outlook" within the meaning of applicable securities
laws. The purpose of this financial outlook is to provide
readers with disclosure regarding Ikkuma's reasonable expectations
as to the anticipated results of its proposed business activities
for the periods indicated. Readers are cautioned that the
financial outlook may not be appropriate for other
purposes.
Non-IFRS Measures
This press release provides certain financial measures that
do not have a standardized meaning prescribed by IFRS. These
non-IFRS financial measures may not be comparable to similar
measures presented by other issuers. Funds flow from operations,
operating netback and net debt are not recognized measures under
IFRS. Management believes that in addition to net income (loss),
funds flow from operations, operating netback and net debt are
useful supplemental measures that demonstrate the Corporation's
ability to generate the cash necessary to repay debt or fund future
capital investment. Investors are cautioned, however, that these
measures should not be construed as an alternative to net income
(loss), determined in accordance with IFRS, as an indication of
Ikkuma's performance.Funds flow from operations is calculated by
adjusting net income (loss) for depletion and depreciation,
exploration and evaluation expense, impairment, gain (loss) on sale
of petroleum, natural gas and equipment, share-based payments,
unrealized gain (loss) on financial instruments and accretion.
Operating equals the total of petroleum and natural gas sales,
realized gains or losses on commodity contracts, less royalties,
transportation and operating expenses. Net debt is the total of
cash and cash equivalents plus accounts receivable, plus prepaids
and deposits, less accounts payable and accrued liabilities and
bank debt.
Oil and Gas Advisory
In this press release, the abbreviation BOE means a barrel of
oil equivalent derived by converting gas to oil in the ratio of 6
Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOEs 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 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf
of gas to 1 bbl of oil basis may be misleading as an indication of
value.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Ikkuma Resources Corp.