IKM Ikkuma Resources Corp (delisted)

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.

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.