Mr. Chayan Chakrabarty reports
BENGAL ENERGY ANNOUNCES FISCAL Q3 2013 RESULTS
Bengal Energy Ltd. has provided its financial and operating results for the three and nine months ended Dec. 31, 2012. The Company's drilling success in Australia and aggressive exploration and development program are expected to drive continued growth.
FISCAL Q3 2013 HIGHLIGHTS:
Cuisinier - Combined oil production exceeds initial estimates: Combined oil exit December 2012 producing day production rate was 1,315 barrels of oil per day (net 328) from 5 of the 8 wells in the field. Production from all wells is expected to commence early in April of 2013 when pipeline connection and production infrastructure is complete and a long term field production license is received. Benefits of the pipeline are expected to include: reduced production downtime, higher sustained production levels, improved operational flexibility and an overall reduction in operating and transportation costs of approximately $5 to $7 per barrel.
Cuisinier Drilling and Seismic: Five firm and one contingent appraisal wells are now planned to commence drilling in March of 2013.A new 224 square kilometer 3D seismic survey has been completed with processing and interpretation expected mid-year. Further appraisal and exploration drilling will occur in 2014.
A Cuisinier reserves update (net to Bengal) completed in September by GLJ Petroleum Consultants Ltd. recognized 0.7 million proved barrels (an increase of 904%), 1.6 million proved plus probable barrels (an increase of 269%) and 7.5 million proved plus probable plus possible barrels (an increase of 614%) net to Bengal (at its 25% working interest). The net present values discounted at 10% amount to $16 million for proved, $37 million for proved plus probable and $164 million for proved plus probable plus possible (see Note 1 and 2).
100% Working Interest New Oil Discovery at the Caracal #1 well on the Tookoonooka Property: Drilling and testing operations indicate a new oil discovery of 52Adegree API gravity oil from the Wyandra Formation. A fracture stimulation and appraisal drilling program on the Caracal structure is being planned and geophysical review is continuing.
Onshore Cauvery Seismic: Acquisition and processing of 575 square kilometers of 3D seismic data are now complete. Interpretation of the data is currently in progress with a 3 well drilling program scheduled to commence in calendar Q3 2013. Bengal has a 30% working interest in this block.
Cashflow to increase significantly in 2013: Funds flow from operations (this is a non-IFRS measure - see footnote 2 from the table on page 3) for the three months ended December 31, 2012 improved to $481,000 compared to negative $402,000 in the prior year three month period. The Company expects cash generation to increase over the year as production from Cuisinier ramps up with the completion of the tie in to the Cook facility. By year end 2013 the Company should be producing sufficient cash flow to fund ongoing exploration. However, some external financing will be required to meet partner drilling commitments in 2013. Management's view is that the current stock price does not adequately reflect the value of the Company's assets and future prospects and Management is therefore reluctant to issue common shares at a price that would see dilution of the existing shareholders' interest. Management is pursuing a number of alternatives simultaneously that could provide necessary capital while, at the same time, maintaining or enhancing the underlying per share value. These initiatives include structured finance instruments; farm out discussions, joint venture partnerships and potential divestiture of some non-core assets.
Bengal Reports Financial Results for the three and nine months ended December 31, 2012: The Company reported that revenues in the three and the nine months ended December 31, 2012 amounted to $1,937,000 and $2,872,000, respectively compared to $1,328,000 and $3,664,000 respectively in 2011. The net loss for the three and nine months ended December 31, 2012 amounted to $151,000 or $0.00 per share and $1,207,000 or $0.02 per share respectively, compared to the net loss for the three and nine months ended December 31, 2011 of $477,000 or $0.01 per share and $5,785,000 or $0.11 per share, respectively. The Company spent $9,475,000 in the three months ended December 31, 2012 and $27,100,000 in the nine months ended December 31, 2012 related to the drilling of four Cuisinier wells, the acquisition of the drilling rig, seismic acquisition in Australia and India and drilling the Caracal-1 well.
Notes:
(1) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
(2) It should not be assumed that the future net revenues presented in this press release represent the fair market value of the reserves
For more information on the Company's operational activities and permits, refer to Bengal's website at www.bengalenergy.ca.
FINANCIAL AND OPERATING SUMMARY (thousands of dollars) Three months ended Nine months ended Dec. 31, Dec. 31, 2012 2011 2012 2011RevenueOil $1,901 $1,213 $2,721 $3,361Natural gas 35 92 105 250Natural gas liquids 1 23 46 53Total 1,937 1,328 2,872 3,664Royalties 172 121 255 337% of revenue 8.9 9.1 8.9 9.2Operating and transportation 623 486 1,032 1,324Netback(1) 1,142 721 1,585 2,003Cash from (used in) operations (378) (417) (822) (1,628)Per share ($) (basic and diluted) (0.01) (0.01) (0.02) (0.03)Funds from (used in) operations (2) 481 (402) (52) (824)Per share ($) (basic and diluted) 0.01 (0.01) 0.00 (0.02)Net (loss) (151) (477) (1,207) (5,785)Per share ($) (basic and diluted) (0.01) (0.01) (0.03) (0.11)Capital expenditures 9,475 4,265 27,100 8,605VolumesNatural gas (mcf/d) 110 271 165 238Natural gas liquids (boe/d) 1 4 3 3Oil (bbl/d) 184 108 89 103Total (boe/d @ 6:1) 203 157 119 146Netback(1) ($/boe)Revenue $103.33 92.03 87.84 91.50Royalties 9.18 8.43 7.80 8.42Operating and transportation 33.23 33.71 31.56 33.07Total $60.92 49.89 48.48 50.01(1) Netback is a non-IFRS measure. Netback per boe is calculated by dividing the revenue and costs in total for the Company by the total production of the Company measured in boe. (2) Funds from operations is a non-IFRS measure. The comparable IFRS measure is cash from operations. A reconciliation of the two measures can be found in Bengal's management's discussion and analysis for the quarter ended December 31, 2012.
Bengal's portfolio of drilling prospects in Australia and India consists of both lower-risk development wells and higher-impact exploration opportunities. Material production from Bengal's 100% drilling success at Cuisinier is expected to drive the Company's near-term growth. Bengal will continue to evaluate acquisition and exploration opportunities as it seeks to maximize its value for the benefit of shareholders.
Bengal has filed its consolidated financial statements and management's discussion and analysis for the quarter ended December 31, 2012 with Canadian securities regulators. The documents are available on SEDAR at www.sedar.com or by visiting Bengal's website at www.bengalenergy.ca.
We seek Safe Harbor.