CALGARY, April 20, 2017 /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, 2016.
Selected financial and operational information is set out below and
should be read in conjunction with Ikkuma's December 31, 2016 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, 2016 which contains the
Corporation's reserves and other oil and natural gas information,
as required under National Instrument 51-101 Standards of
Disclosure of Oil and Gas Activities. The AIF, financial
statements and MD&A are available for review at www.sedar.com
and on the Corporation's website at www.ikkumarescorp.com.
HIGHLIGHTS
- Generated funds flow from operations in the fourth quarter of
$3.2 million ($0.03/share) and $10.4
million ($0.12/share) year to
date despite weak natural gas prices.
- Reduced per unit operating expenses in the fourth quarter of
2016 and for the year by 12% and 6%, respectively, from the same
periods in 2015.
- Drilled and completed the first two oil wells in Ikkuma's new
Cardium oil play accounting for substantially all of the
$14.9 million of exploration and
development capital spending in 2016.
- The Corporation expanded its land position in its emerging
Cardium oil play by 30% (8,160 net acres). At present, Ikkuma has
an 89% working interest in 31,800 gross acres prospective for
Cardium oil.
- Completed a strategic acquisition of certain Foothills natural
gas assets for $2.7 million, net of
adjustments, which increases the Corporation's working interest in
existing producing gas wells and facilities, allows Ikkuma to
farm-in on lands strategic to Ikkuma's development of its Cardium
oil play and provides clear access to certain gas
recompletions.
- Ikkuma's land position grew by 15% to 233,000 net acres (avg WI
72%). Over 70% of the Corporation's net acres are undeveloped.
- Raised $10 million of equity in
May 2016 through the issuance of 14.1
million flow-through common shares at $0.71/share.
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|
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(Expressed in
thousands of Canadian dollars except
per boe and Share
amounts)
|
Three months
ended
December
31,
|
Year
Ended
December
31,
|
|
2016
|
2015
|
2016
|
2015
|
OPERATIONS
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|
|
|
|
|
|
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Average daily
production
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|
|
|
|
|
|
|
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Natural gas
(mcf/d)
|
|
34,734
|
|
42,790
|
|
37,186
|
|
40,552
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Light oil
(bbls/d)
|
|
72
|
|
7
|
|
18
|
|
31
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NGL's
(bbl/d)
|
|
106
|
|
131
|
|
95
|
|
135
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Total equivalent
(boe/d)
|
|
5,967
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|
7,270
|
|
6,310
|
|
6,925
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|
|
|
|
|
|
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Average prices and
operating netback
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|
|
|
|
|
|
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Natural gas
($/mcf)
|
$
|
3.12
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$
|
2.51
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$
|
2.15
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$
|
2.71
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Light oil
($/bbl)
|
|
56.30
|
|
42.79
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|
56.30
|
|
41.97
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NGL
($/bbl)
|
|
34.96
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|
25.29
|
|
26.37
|
|
22.07
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Revenue
($/boe)
|
|
19.43
|
|
15.79
|
|
13.34
|
|
17.08
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Realized gain on
commodity contracts ($/boe)
|
|
(0.01)
|
|
1.71
|
|
4.03
|
|
1.27
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Royalties
($/boe)
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(1.11)
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(1.46)
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(0.29)
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(1.58)
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Operating
($/boe)
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(7.65)
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(8.72)
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(8.27)
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(8.83)
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Transportation costs
($/boe)
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(2.06)
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(1.78)
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(1.85)
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(1.64)
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Operating netback
(1) ($/boe)
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$
|
8.60
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$
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5.54
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$
|
6.96
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$
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6.30
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FINANCIAL
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Oil and natural gas
sales
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$
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10,669
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$
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10,562
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$
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30,811
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$
|
43,157
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Funds flow from
operations (1)
|
$
|
3,216
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$
|
2,260
|
$
|
10,370
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$
|
10,329
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Per share – basic and
diluted
|
$
|
0.03
|
$
|
0.03
|
$
|
0.12
|
$
|
0.13
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Net loss
|
$
|
(8,971)
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$
|
(16,585)
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$
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(17,937)
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$
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(28,770)
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Per share – basic and
diluted
|
$
|
(0.10)
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$
|
(0.21)
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$
|
(0.20)
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$
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(0.36)
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Capital
expenditures
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$
|
6,949
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$
|
4,121
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$
|
14,869
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$
|
37,148
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Property acquisitions
(dispositions)
|
$
|
-
|
$
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(399)
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$
|
2,761
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$
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(3,342)
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Net debt
(1)
|
$
|
32,465
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$
|
34,212
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$
|
32,465
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$
|
34,212
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Bank loan
|
$
|
25,132
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$
|
27,859
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$
|
25,132
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$
|
27,859
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Shares outstanding
(000)
|
|
94,244
|
|
80,159
|
|
94,244
|
|
80,159
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Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
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Basic and diluted
(000)
|
|
94,244
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|
80,159
|
|
89,150
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|
80,159
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(1) Funds flow from operations,
operating netback and net debt are non-IFRS measures. See "Non-
IFRS Measures".
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 and Information" 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, farm-n opportunities on land strategic to the
development of Ikkuma's Cardium oil play and Ikkuma's clear access
to certain gas recompletions. 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.