Bengal Energy Announces Third Quarter Fiscal 2014 Results
February 12 2014 - 5:01PM
Marketwired
Bengal Energy Announces Third Quarter Fiscal 2014 Results
CALGARY, ALBERTA--(Marketwired - Feb 12, 2014) - Bengal Energy
Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
its financial and operating results for the third fiscal quarter of
2014 (period ended December 31, 2013).
In the quarter, Bengal advanced several key developments which
contributed to the Company's continued growth strategy. Bengal
recorded another profitable quarter driven by stable Australian
production volumes and high netbacks from its ultra-light, large
oil in place producing Cuisinier property. All 14 wells drilled to
date at Cuisinier are now producing, and exploration in the
Tookoonooka joint venture has continued with partner, Beach Energy
Ltd. With producing oil weighted assets in Australia and prospects
in India, Bengal has a portfolio of projects at various stages of
development, from exploration through to production and cash flow
generation.
Following are operational, financial and corporate achievements
through the three months ended December 31, 2013:
Financial Highlights:
- Materially Higher Funds Flow from Operations - Bengal generated
Funds Flow from Operations(1) of $2.9 million, an increase of 38%
over the $2.1 million in the prior quarter and $0.4 million in Q3
of the prior year.
- Another Profitable Quarter - Bengal reported its third
consecutive profitable quarter, with net income of $0.6 million,
compared to a loss of $0.1 million in Q3 of the prior year and net
income of $0.5 million in the preceding quarter this year.
Profitability was maintained despite the Company prudently electing
to take a $1.0 million write-down on its offshore India assets,
which was done due to continued uncertainty regarding the future
work plan for those assets.
- Realized Commodity Prices Contributed to Higher Revenue -
Bengal's revenue of $5.5 million was 4% higher than the $5.3
million realized in the preceding quarter and substantially higher
than the $0.5 million realized in Q3 of the prior year. The strong
revenue was driven by higher production volumes during the second
and third fiscal quarters of 2014 coupled with continued strong
pricing for the high quality crude oil produced. Bengal's operating
(field) netback in Australia averaged C$88.61 per barrel (corporate
average of C$83.13/bbl). Sales prices averaged USD $115.48/bbl, a
USD $6.23/bbl premium over the Brent benchmark during the
quarter.
- Enhanced Financial Flexibility - Bengal extended the maturity
of $1.8 million of its outstanding privately placed notes which had
an initial expiry of January 24, 2014 for an additional one year
period at existing terms including a 10% coupon.
Operating Highlights:
- Stable Production Volumes - Production averaged 496 boe/d for
the period, which is 144% higher than in the same period the prior
year and reflects a slight decrease of 4% compared to the previous
quarter. These volumes reflect a 25% working interest in Cuisinier
for all but the last 13 days of the quarter, when the working
interest increased to over 30%, following closing of an
acquisition. Taking into account the higher working interest, the
Company exited Q3 2014 with a production rate of approximately 520
boepd.
- Closed Acquisition of Additional Working Interest - Bengal's
agreement to acquire an incremental 5.357% working interest in
Cuisinier closed on December 18, 2013 for a purchase price of AUS
$7.5 million / C$ 7.2 million, which remains subject to final
closing adjustments. Following the acquisition, the Company's total
working interest in Cuisinier increased to 30.357% which results in
Bengal realizing a greater proportion of production and reserves
going forward.
- Commencement of Tookoonooka Drilling and Seismic Work Plan -
Bengal and its joint interest partner, Beach Energy Ltd commenced
activity under their agreement, which will see Beach drill 2 wells
in Tookoonooka and acquire 300 km2 of new 3D seismic, fully
carrying Bengal up to a maximum of AUD$11.5MM. At the end of
December, the first well, Tangalooma-1, was drilled but it failed
to define a commercial hydrocarbon accumulation. Also through
December and January, the additional 3D seismic was acquired, which
will be followed by processing and interpretation through the first
half of calendar 2014. A second location is expected to be selected
based on the 3D seismic, and drilled in the second half of
2014.
- 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. Based on current dialogue with
the partners and the regulatory agencies, it is anticipated the
drilling of the first well will commence in the second quarter of
calendar 2014. Continued activity in onshore India for the balance
of calendar 2014 and beyond will depend on the results of this
drilling.
(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 5 of Bengal's Q3
MD&A.
OPERATING
HIGHLIGHTS
$000s except per share, volumes and netback
amounts |
Three Months Ended |
Nine Months Ended |
|
December 31 |
|
September 30 |
December 31 |
|
2013 |
2012 |
|
2013 |
2013 |
2012 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
$ |
5,451 |
$ |
1,901 |
|
$ |
5,229 |
$ |
14,306 |
$ |
2,721 |
|
|
Natural gas |
|
53 |
|
35 |
|
|
69 |
|
187 |
|
105 |
|
|
Natural gas liquids |
|
12 |
|
1 |
|
|
14 |
|
57 |
|
46 |
|
|
Total |
$ |
5,516 |
$ |
1,937 |
|
$ |
5,312 |
$ |
14,550 |
$ |
2,872 |
|
Royalties |
|
365 |
|
172 |
|
|
358 |
|
927 |
|
255 |
|
|
% of revenue |
|
6.6 |
|
8.9 |
|
|
6.7 |
|
6.4 |
|
8.9 |
|
Operating & transportation |
|
1,365 |
|
623 |
|
|
1,499 |
|
3,794 |
|
1,032 |
|
Net operating income |
$ |
3,786 |
$ |
1,142 |
|
$ |
3,455 |
$ |
9,829 |
$ |
1,585 |
|
Cash from (used in) operations: |
$ |
2,170 |
$ |
(378 |
) |
$ |
2,066 |
|
5,485 |
$ |
(822 |
) |
|
Per share ($) (basic & diluted) |
|
0.02 |
|
(0.01 |
) |
|
0.03 |
|
0.07 |
|
(0.02 |
) |
Funds flow from (used in) operations:(1) |
$ |
2,862 |
$ |
481 |
|
$ |
2,063 |
$ |
6,659 |
$ |
(52 |
) |
|
Per share ($) (basic & diluted) |
|
0.05 |
|
0.01 |
|
|
0.03 |
|
0.11 |
|
0.00 |
|
Net income (loss): |
|
573 |
$ |
(151 |
) |
$ |
545 |
|
1,954 |
$ |
(1,207 |
) |
|
Per share ($) (basic & diluted) |
|
0.01 |
|
(0.00 |
) |
|
0.01 |
|
0.03 |
|
(0.02 |
) |
Capital expenditures |
$ |
6,462 |
$ |
9,475 |
|
$ |
2,702 |
$ |
14,599 |
$ |
27,100 |
|
Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (bbl/d) |
|
463 |
|
184 |
|
|
483 |
|
420 |
|
89 |
|
|
Natural gas (mcf/d) |
|
184 |
|
110 |
|
|
200 |
|
208 |
|
165 |
|
|
NGL (bbl/d) |
|
2 |
|
1 |
|
|
2 |
|
2 |
|
3 |
|
|
Total (boe/d @ 6:1) |
|
496 |
|
203 |
|
|
518 |
|
457 |
|
119 |
|
Netback(2) ($/boe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
121.11 |
$ |
103.33 |
|
$ |
111.48 |
$ |
115.84 |
$ |
87.84 |
|
|
Royalties |
|
8.01 |
|
9.18 |
|
|
7.51 |
|
7.38 |
|
7.80 |
|
|
Operating & transportation |
|
29.97 |
|
33.23 |
|
|
31.46 |
|
30.21 |
|
31.56 |
|
|
Total |
$ |
83.13 |
$ |
60.92 |
|
$ |
72.51 |
$ |
78.25 |
$ |
48.48 |
|
(1) 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 5 of Bengal's Q3
MD&A.
(2) 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.
Bengal has filed its consolidated financial statements and
management's discussion and analysis for the third fiscal 2014
quarter ended December 31, 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'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 |
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 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 5 of Bengal's Q3
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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