CALGARY, April 14, 2016 /CNW/ - Ikkuma Resources
Corp. ("Ikkuma" or the "Corporation") (TSXV: IKM) is pleased
to report its financial and operating results for the three months
and year ended December 31, 2015.
Selected financial and operational information is set out below and
should be read in conjunction with Ikkuma's December 31, 2015 audited annual financial
statements and the related management's discussion and analysis
("MD&A"). In addition, the Corporation today announces the
filing of its Annual Information Form ("AIF") for the year ended
December 31, 2015 which contains the
Corporation's reserves and other oil and natural gas information,
as required under National Instrument 51-101. The AIF, financial
statements and MD&A are available for review at www.sedar.com
or on the Corporation's website at www.ikkumarescorp.com.
2015 HIGHLIGHTS
- Achieved production capability in 2015 of approximately 9,000 –
10,000 boe/d following the tie-in of two recompleted gas wells.
Ikkuma produced an average of 7,270 boe/d in the fourth quarter
which is lower than the Corporation's capability, due to third
party gas volume restrictions and curtailments.
- Increased Ikkuma's hedged natural gas position for 2016 to 30.6
mmcf (5,100 boe/d) at approximately $3.06/mcf.
- Decreased G&A per boe to $1.58/boe in Q4 2015, a 34% decrease from the
$2.39 reported in Q4 2014. Year
over year Ikkuma reduced G&A per boe 50% to $1.71/boe from $3.39/boe.
- Generated funds flow from operations in the fourth quarter of
$1.8 million ($0.02/share) and $9.9
million ($0.12/share) year to
date despite a 30% reduction in natural gas pricing over the last
twelve months.
- Achieved relatively flat PDP reserves at 14.4 MMBoe, increased
1P reserves by 4% to 20.0 MMboe and increased 2P reserves 7% to
27.5 MMboe, despite reducing 2015 capital spending by 25%.
- Ikkuma's recompletion program accounted for $16.7 million of total exploration and
development expenditures and resulted in adding 1,555 Mboe of PDP
reserves and 2,274 Mboe of 2P reserves. Capex included a 12 km
pipeline build, which will be used for up to six offset gas wells.
A single offset PUD booked on one of the recompletions has been
assigned 1,546 Mboe of 2P reserves. One of the gas recompletion
results continues to be one of the top performing new wells in
Alberta.
- Total proved plus probable reserve value was relatively
unchanged at $202 million (discounted
at 10% before tax) as compared to the $208
million reported last year, despite a 30% reduction in the
forecasted price deck.
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|
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(Expressed in
thousands of Canadian dollars except per boe and Share amounts)
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Three months
ended
December
31,
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Year
Ended
December
31,
|
|
2015
|
2014
|
2015
|
2014
|
OPERATIONS
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|
|
|
|
|
|
|
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Average daily
production
|
|
|
|
|
|
|
|
|
Natural gas
(mcf/d)
|
|
42,790
|
|
41,238
|
|
40,552
|
|
16,179
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Light oil
(bbls/d)
|
|
7
|
|
43
|
|
31
|
|
41
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NGL's
(bbl/d)
|
|
131
|
|
92
|
|
135
|
|
28
|
Total equivalent
(boe/d)
|
|
7,270
|
|
7,008
|
|
6,925
|
|
2,766
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|
|
|
|
|
|
|
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Average prices and
operating netback
|
|
|
|
|
|
|
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Natural gas
($/mcf)
|
$
|
2.51
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$
|
3.64
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$
|
2.71
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$
|
3.76
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Light oil
($/bbl)
|
|
42.79
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|
58.55
|
|
41.97
|
|
77.70
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NGL
($/bbl)
|
|
25.29
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|
42.28
|
|
22.07
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|
47.34
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Revenue ($/boe)
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|
15.79
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|
22.85
|
|
17.08
|
|
23.98
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Realized gain on
commodity contracts ($/boe)
|
|
1.71
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|
-
|
|
1.27
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|
-
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Royalties
($/boe)
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(1.46)
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(1.42)
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(1.58)
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|
(3.06)
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Operating
($/boe)
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(9.40)
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(9.17)
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(9.01)
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(8.98)
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Transportation costs
($/boe)
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(1.78)
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(1.74)
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(1.64)
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|
(1.84)
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Operating netback
(1) ($/boe)
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$
|
4.86
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$
|
10.52
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$
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6.12
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$
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10.10
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|
|
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FINANCIAL
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|
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|
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Oil and natural gas
sales
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$
|
10,562
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$
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14,731
|
$
|
43,157
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$
|
24,194
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Funds flow from
operations (1)
|
$
|
1,804
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$
|
4,810
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$
|
9,873
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$
|
4,445
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Per share –basic and
diluted
|
$
|
0.02
|
$
|
0.06
|
$
|
0.12
|
$
|
0.11
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Net loss
|
$
|
(16,585)
|
$
|
(3,711)
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$
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(28,770)
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$
|
(8,936)
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Per share – basic and
diluted
|
$
|
(0.21)
|
$
|
(0.05)
|
$
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(0.36)
|
$
|
(0.22)
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Capital
expenditures
|
$
|
2,489
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$
|
16,857
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$
|
35,516
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$
|
22,675
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Property acquisitions
(dispositions)
|
$
|
(399)
|
$
|
21,732
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$
|
(3,342)
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$
|
132,406
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Net debt
(1)
|
$
|
33,036
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$
|
9,924
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$
|
33,036
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$
|
9,924
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Bank loan
|
$
|
27,859
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$
|
-
|
$
|
27,859
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$
|
-
|
Shares outstanding
(000)(2)
|
|
80,159
|
|
80,159
|
|
80,159
|
|
80,159
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Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic and diluted
(000) (2)
|
|
80,159
|
|
80,159
|
|
80,159
|
|
40,416
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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".
|
(2)
|
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.
|
OUTLOOK
Ikkuma is committed to managing the 2016 capital budget within
funds from operations and accordingly the 2016 capital budget will
be $6 million to $10 million
depending on commodity prices. The Corporation has no
drilling commitments and therefore has the flexibility to adjust
capital spending as required. The Corporation does expect to
maintain or grow production during 2016 even with a modest capital
budget as its Foothills producing reserves have a low (10-15%)
decline rate.
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 including, without limitation, those listed under
"Risk Factors" and "Forward-looking Statements" in Ikkuma's Annual
Information Form and in its other filings available on SEDAR at
www.sedar.com. 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. Forward-looking statements and
information in this press release includes, but is not limited to,
Ikkuma's 2016 capital budget ranging from $6
million to $10 million depending on commodity prices and
Ikkuma's expectation to maintain or grow its production during 2016
as a result of its low decline rate. 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 netback 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). 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 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.