CALGARY, May 30, 2017 /CNW/ - Ikkuma Resources
Corp. ("Ikkuma" or the "Corporation") (TSXV: IKM) is pleased
to report its financial and operating results for the three months
ended March 31, 2017. Selected
financial and operational information is set out below and should
be read in conjunction with Ikkuma's interim condensed financial
statements and the related management's discussion and analysis
("MD&A") for the three months ended March 31, 2017. Ikkuma's condensed interim
financial statements and MD&A are available for review at
www.sedar.com and on the Corporation's website at
www.ikkumarescorp.com.
HIGHLIGHTS
- Strengthened Ikkuma's liquidity and secured funding for the
Corporation to continue developing its Cardium oil play by:
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a)
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completing a
financing with Alberta Investment Management Corporation ("AIMCo")
on May 25, 2017 for a $45 million second lien senior secured term
loan, which bears interest at 7.25% and matures on March 31,
2022. As part of this transaction Ikkuma issued 6.75 million
warrants to AIMCo to purchase common shares exercisable over the
next three years at $0.86 per common share; and
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b)
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entering into an
Amended and Restated Credit Agreement with respect to its existing
credit facilities with its banking syndicate whereby the borrowing
base was re-determined at $25.0 million and the maturity date was
extended to May 31, 2019.
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The proceeds from the second lien
facility were used to pay down all outstanding indebtedness under
the syndicated credit facilities resulting in approximately
$10 million of cash deposits and an
undrawn $25 million of credit
facilities.
- Generated funds flow from operations in the first quarter of
$2.8 million ($0.03/share), a 27% increase over the first
quarter of 2016.
- Achieved net income for the quarter of $2.5 million ($0.03/share).
- Drilled two Cardium oil wells to be completed and brought on
production after spring breakup.
- Recompleted a vertical oil well in Northern Alberta foothills establishing
another new Cardium oil pool.
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(Expressed in
thousands of Canadian dollars except
per boe and Share
amounts)
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Three months
ended
March
31,
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2017
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2016
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OPERATIONS
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Average daily
production
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Natural gas
(mcf/d)
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38,248
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44,220
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Light oil
(bbls/d)
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80
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-
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NGL's
(bbl/d)
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117
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127
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Total equivalent
(boe/d)
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6,572
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7,497
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Average prices and
operating netback
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Natural gas
($/mcf)
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$
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2.72
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$
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1.85
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Light oil
($/bbl)
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60.15
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-
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NGL
($/bbl)
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40.37
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19.62
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Revenue
($/boe)
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17.41
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11.57
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Realized gain on
commodity contracts ($/boe)
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0.14
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4.52
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Royalties
($/boe)
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(0.57)
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(1.00)
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Operating
($/boe)
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(8.08)
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(8.00)
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Transportation costs
($/boe)
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(2.00)
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(1.83)
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Operating netback
(1) ($/boe)
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$
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6.90
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$
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5.26
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FINANCIAL
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Oil and natural gas
sales
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$
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10,295
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$
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7,896
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Funds flow from
operations (1)
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$
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2,828
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$
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2,194
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Per share – basic and
diluted
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$
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0.03
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$
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0.03
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Net income
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$
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2,464
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$
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2,427
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Per share – basic and
diluted
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$
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0.03
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$
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0.03
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Capital
expenditures
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$
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8,769
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$
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3,115
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Property
acquisitions
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$
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-
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$
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21
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Net debt
(1)
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$
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38,505
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$
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34,018
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Bank loan
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$
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29,689
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$
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29,232
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Shares outstanding
(000)
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94,244
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80,159
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Weighted average
shares outstanding
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Basic and diluted
(000)
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94,244
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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".
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OUTLOOK
Capital spending for 2017 will continue to be focused on the
Cardium light oil play. The Corporation anticipates spending
$20 million to $29 million for the
year of which $10 million has been
spent to date. The higher end of this range includes drilling two
Cardium light oil wells in the fourth quarter. Timing of spudding
of these wells is dependent on production history of the four
existing horizontal oil wells. Ikkuma expects exit production
for 2017 to range between 6,500 - 7,100 boe/d (5 - 10% oil).
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 2017 capital program focusing on the Cardium oil play;
2017 capital budget ranging from $20 million
to $28 million; and exit production for 2017 to range
between 6,500 - 7,100 boe/d (5 - 10% oil). 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.