TSX Venture Exchange: IKM
CALGARY, Oct. 6, 2014 /CNW/ - Ikkuma Resources Corp.
("Ikkuma" or the "Corporation") is pleased to
announce that the Corporation's Q4 2014 & 2015 capital
expenditure budget, in the amount of $65
million, has been approved by the Corporation's Board of
Directors. Ikkuma has built a drilling schedule consisting of
approximately 25 (19 net) drill locations, based on by-pass pay,
which represents more than 2 years of drilling inventory.
Most of Ikkuma's operations are expected to be
executed during 2015. The capital expenditure budget has been
designed to exploit conventional by-pass pay opportunities in the
Canadian Foothills. Based on the nature of these conventional
pools, Ikkuma is anticipating 2015 as a high-growth year and
expects exit rate production to increase by approximately 34% to
approximately 8,000 BOE/d (95% natural gas).
2014-2015 Guidance Highlights
- Anticipated 2015YE exit production of approximately 8,000 BOE/d
with liquids weighting increasing to approximately 5% from an
anticipated 2014YE exit production rate of 5,900 BOE/d (100%
natural gas). (These production volumes do not include any
production additions from the Corporation's proposed asset
acquisition previously announced on August
20, 2014, since that acquisition has not yet closed).
- Corporate decline maintained at 20% for 2014YE.
- The Q4 2014/2015 capital budget has been approved for
$65 million and is planned to be
funded through a combination of cash flow, available credit
facilities, and the Corporation's current cash on hand.
- The Ikkuma technical team has built and scheduled a 2 year
drilling program, based on a single, continuously operating rig;
Ikkuma anticipates that the drilling program will commence during
late Q4 2014 or early Q1 2015.
- Approximately 40% of the net wells will target oil prone
formations.
- As previously disclosed in our press release dated August 21, 2014, the optimization and
recompletion program is expected to commence in October 2014. This program is planned to include
the recompletion and, potentially, the fracture stimulation of
known by-pass zones, reservoir pressure measurement and production
optimization on some facilities and/or well bores. Some of
this data is expected to be used to further de-risk the 2015
capital program.
The Company's guidance for 2014-2015 (15 months)
is as follows:
Production |
2014 exit production rate(1) |
5,900 BOE/d (100% natural gas) |
2015 exit production rate |
8,000 BOE/d (95% natural gas) |
2015 average production rate
|
6,500-7,500 BOE/d (96% natural gas) |
|
Financial |
Operating Cash flow(2) |
$36 million ($11.67 / BOE) |
G&A & Interest |
$6 million ($2.00 / BOE) |
2015 year end net debt |
$9 million |
Available Credit Facility(3)
|
$46 million |
|
Capital Expenditures |
Drilling, completion & equipping |
$45 million |
Land & seismic |
$13 million |
Recompletion and optimization |
$ 7 million |
Total |
$65 million |
|
Notes: |
(1) Assuming no
unscheduled facilities and pipeline restrictions. |
(2) Pricing
assumptions: 98$CDN/bbl Edmonton light; AECO price: $3.96/Mcf. |
(3) Estimated as of
December 31, 2015. |
Discussion
Production volumes and associated cash flow
which may result from Ikkuma's proposed asset acquisition announced
on August 20, 2014 have not been
included in this guidance. Subject to the closing of that
acquisition, including compliance with all rights of first refusals
relating thereto, the Corporation will revise its guidance in order
to reflect additional volumes, higher cash flow, and lower declines
resulting therefrom.
About Ikkuma Resources Corp.
Ikkuma Resources Corp is a diversified junior
public oil and gas company listed on the TSX-V 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. Corporation information
can be found at: www.panterraresource.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
and information relating to the drilling inventory of the
Corporation, 2015 being a high-growth year, the completion of the
previously announced proposed asset acquisition, the timing of the
commencement of drilling operations in late Q4 2014 or early Q1
2015, the commencement of an optimization and recompletion program
in October 2014 and the operations to
be carried out in connection therewith and the use of the data
acquired therefrom and the Corporation's future financial position
and operating results. 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 risk. 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 epxenditures; 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.
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.