Positive News Release Bengal Energy Ltd (C-BNG) - News Release
Bengal Energy earns $836,000 in fiscal Q1 2014
2013-08-14 17:48 ET - News Release
Shares issued 61,610,843
BNG Close 2013-08-13 C$ 0.64
Mr. Chayan Chakrabarty reports
BENGAL ENERGY ANNOUNCES FIRST QUARTER FISCAL 2014 RESULTS
Bengal Energy Ltd. has released its financial and operating results for the fiscal 2014 first quarter ended June 30, 2013.
Fiscal 2014 first quarter highlights:
During the first quarter of the company's fiscal 2014 year, Bengal continued its current strategy, resulting in further growth in production and cash flow through the period. With the drilling success realized to date in the company's Cuisinier asset in the Cooper basin, Australia, understanding of the magnitude and lower-risk profile of this play has evolved, demonstrating that Cuisinier represents a significant short- and long-term-potential resource play for Bengal.
The following are highlights of specific operational, financial and corporate achievements that Bengal reached during the three months ended June 30, 2013:
Financial highlights:
- Profitable quarter and higher funds flow from operations: Bengal recorded a profit in the quarter, with positive net income of $800,000, compared with a loss of $200,000 in the first quarter of the prior year and a loss of $600,000 in the preceding quarter this year. Funds flow from operations grew to $1.7-million, compared with a deficiency of $100,000 in the first quarter of the prior year and $1.1-million in the preceding quarter this year.
- Higher revenue and strong netbacks: Bengal's realized revenue of $3.7-million was substantially higher than the $500,000 realized in the first quarter of the prior year and 23 per cent higher than the $3-million realized in the preceding quarter this year, driven by higher production volumes and very attractive realized pricing. Bengal's operating (field) netback in Australia averaged $89.05 per barrel (corporate average of $79.82 per barrel), reflecting the high quality of crude oil produced, which was priced at a premium of almost $6 per barrel over the Brent benchmark.
- Financing activity strengthens balance sheet: In April, Bengal raised $5.7-million through a brokered equity private placement, directing proceeds to finance continuing capital investments.
- Increase in Cuisinier working interest: On June 26, Bengal announced that it was exercising its pre-emptive right to purchase an additional 5.357-per-cent interest in the Cuisinier oil field and ATP (authority to prospect) 752P in the Cooper basin, which will bring the company's total ownership to 30.357 per cent. Subsequent to quarter-end, Bengal successfully raised $8-million through a private placement of non-convertible unsecured notes to finance the acquisition of this additional interest, which is expected to close in September, 2013, and have an effective date of March 15, 2013.
Operating highlights:
- Rising production: Bengal's production averaged 356 barrels of oil equivalent per day for the period, an increase of 300 per cent over the first quarter of the prior year and 10 per cent over the preceding quarter this year. This production level does not reflect the incremental working interest to be acquired in Cuisinier, which would have increased the quarterly oil production volumes by 21 per cent or 67 barrels per day.
- Continued 100-per-cent drilling success in Cuisinier: During the period ended June 30, 2013, Bengal continued its 100-per-cent success rate in the Cuisinier field, with five out of five wells drilled currently being completed as oil producers and tied in. This brings Bengal's total wells drilled in Cuisinier to 13, with one additional well to be drilled in August. Assuming this sixth well is a successful oil producer, production from these wells is expected to be fully tied in by early September, which should positively affect volumes and cash flow for the balance of calendar 2013 and into 2014. With the success to date in the Cuisinier area, it is now clear that the company is participating in a significant, seismically supported potential resource play.
- Farm-out and joint venture agreement: On May 23, 2013, Bengal entered into a binding letter of intent with Australia-based Beach Energy Ltd. for the exploration and development of Bengal's 100-per-cent-owned Tookoonooka permit. Under the agreement terms, Beach will finance the drilling of two new wells and acquire an additional 300 square kilometres of 3-D seismic, up to a maximum of $11.5-million (Australian). One of the wells is anticipated to be in the Caracal area near Bengal's existing oil discovery, with the second well to be situated within the area covered by the new 3-D seismic. Subsequent to the end of the quarter, the joint venture agreement was finalized and the transaction closed.
- Receipt of petroleum licence and pipeline commissioning: On April 8, 2013, the final approval of petroleum lease 303 (PL303) for the Cuisinier oil pool was granted, which allows all current and future Cuisinier wells to produce for up to 21 years. Subsequently, on June 7, the Cuisinier-to-Cook pipeline was commissioned, allowing production from all eight of Bengal's pre-2013 and subsequent wells to flow through the pipeline and eliminating capacity constraints from trucking for transportation of the oil.
- Onshore india drilling plan: In Bengal's onshore block in the Cauvery basin, India, the company intends to start drilling its exploration wells in the first quarter of calendar 2014. Continued activity onshore India for the balance of calendar 2014 and beyond will depend on the results of the three wells drilled under the existing work program.
"First quarter of fiscal 2014 was a successful period both financially and operationally for Bengal," said Chayan Chakrabarty, Bengal's president and chief executive officer. "We continued to grow production and generated very attractive netbacks, both of which contributed to a profitable quarter. We reported 100-per-cent drilling success in Cuisinier and announced an acquisition to increase our interest in that field, meaning Bengal will realize a higher proportion of production, reserves and cash flow from this important potential resource play going forward. Our JV agreement with Beach, which closed after the quarter-end, accelerates development at Tookoonooka, and, in concert with the financing activity undertaken during the quarter, enables Bengal to preserve balance sheet strength. I am very pleased with Bengal's progress and continuing transition from exploration to development, and look forward to updating our shareholders about ongoing developments."
For a discussion of the activities on each of the company's permits, refer to Bengal's management's discussion and analysis for the fiscal 2014 first quarter ended June 30, 2013, filed on SEDAR.
FINANCIAL AND OPERATING HIGHLIGHTS (in thousands of dollars, except per-share, volume and netback amounts) Three months ended June 30, June 30, March 31, 2013 2012 2013 Revenue Oil $ 3,626 $ 433 $ 2,946 Natural gas 65 39 67 Natural gas liquids 31 26 - Total $ 3,722 $ 498 $ 3,013 Royalties 204 45 271 % of revenue 5.5 9.0 9.0 Operating and transportation 930 247 694 Netback $ 2,588 $ 206 $ 2,048 Cash from (used in) operations 1,249 (759) 119 Per share ($) (basic and diluted) 0.02 (0.01) (0.00) Funds flow from (used in) operations 1,732 (62) 1,151 Per share ($) (basic and diluted) 0.03 (0.00) 0.02 Net income (loss) 836 (211) (592) Per share ($) (basic and diluted) 0.01 (0.00) (0.01) Capital expenditures $ 5,435 $ 7,326 $ 1,280 Volumes Oil (bbl/d) 313 47 287 Natural gas (mcf/d) 240 225 229 Natural gas liquids (boe/d) 3 4 - Total (boe/d at 6 to 1) 356 89 325 Netback ($/boe) Revenue $114.83 $ 61.95 $102.88 Royalties 6.32 5.60 9.25 Operating and transportation 28.69 30.73 23.70 Total $ 79.82 $ 25.62 $ 69.93
Bengal has filed its consolidated financial statements and management's discussion and analysis for the fiscal 2014 first quarter ended June 30, 2013, with Canadian securities regulators. The documents are available on SEDAR and on Bengal's website.
We seek Safe Harbor.