Bengal Energy Announces Fiscal 2022 Fourth Quarter Results
Calgary, Alberta--(Newsfile Corp. - June 17, 2022) - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") today announces its financial and operating results for the fourth quarter of fiscal 2022 ended March 31, 2022.
FOURTH-QUARTER FISCAL 2022 HIGHLIGHTS:
The following is an overview of the financial and operational results during the three-and twelve-months ending March 31, 2022. All amounts are in Canadian funds unless otherwise noted:
Reserves - Bengal's independently evaluated Proved Plus Probable ("2P") reserves for the fiscal year ended March 31, 2022, are 5,778 thousand barrels of oil ("Mbbls") and Proved ("1P") reserves are 2,145 Mbbls compared to 5,789 Mbbls and 2,163 Mbbls for 2P and 1P reserves respectively at March 31, 2021. The net present value (NPV10, before tax) of Bengal's 2P reserves, net of future development costs, at March 31, 2022, is $149.0 million, or $0.30 per share compared to $87.6 million at March 31, 2021. The 2P after-tax net asset value is $115 million for the current year compared to $69.2 million in the prior year.
Sales revenue - Crude oil sales revenue was $2.4 million in the fourth quarter of fiscal 2022, which is 50% higher than the $1.6 million recorded in Q4 fiscal 2021. Full year fiscal 2022 sales revenue was $7.7 million compared to $5.2 million for the full year fiscal 2021.
Funds from (used in) operations1 - Bengal generated $0.5 million of funds from operations during Q4 fiscal 2022 compared to a $0.2 million funds used in operations during Q4 fiscal 2021. For the full-year fiscal 2022, the Company generated $1.4 million of funds from operations compared to $0.2 million during the prior fiscal year.
Net income - Bengal reported net income of $0.2 million for the current quarter compared to net income of $3.9 million in the fourth quarter of fiscal 2021. For the full-year fiscal 2022, the Company reported a net loss of $0.4 million compared net income of $3.9 million in the prior year. Several non-operational items contributed to net income during the prior year that were absent in the current period, including $3.7 million of foreign exchange gains and a $3.5 million gain on the settlement of the Company's Credit Facility.
Private placement - On March 7, 2022, the Company closed a private placement to issue 52.3 million shares for $4.2 million of proceeds.
Working capital1 - At March 31, 2022 the Company had $5.5 million of working capital and no debt.
Production volumes - The Company's share of total production in the current quarter was 15,647 bbls of light crude oil, which is a 14% decline from the 18,222 bbls produced in the fourth quarter of fiscal 2021. The current quarter production averaged 174 bbls/day compared to 202 bbls/day produced in the fourth quarter of fiscal 2021. Full year fiscal 2022 saw total production of 66,797 bbls compared to 80,530 bbls for full year fiscal 2021. The full year fiscal 2022 production per day averaged 183 bbls compared to 221 bbls/day for the full year fiscal 2021.
Capital expenditures - During the year, the Company commenced capital programs on two of its 100% owned and operated projects at Wareena (Petroleum Lease ("PL") 1110 & Producing Pipeline ("PPL") 138) and Caracal (Authority to Prospect ("ATP") 732). Bengal incurred $2.2 million in capital expenditures during Q4 fiscal 2022 as compared to $0.5 million in Q4 fiscal 2021 and a total of $4.3 million during the current year compared to $1.2 million during fiscal 2021. Work in these projects is currently ongoing.
|($000s except per share, %, volumes and operating netback(1) amounts||Three months ended March 31,||Twelve months ended December 31,|
|Cashflow from operations||$||437||$||70||$||835||$||301|
|Funds from (used in) operations(1)||$||515||$||(158||)||$||1,432||$||(305||)|
|Per share ($) (basic and diluted)||$||0.00||$||0.00||$||0.00||$||(0.00||)|
|Net income (loss)||$||217||$||3,040||$||(374||)||$||3,928|
|Per share ($) (basic and diluted)||$||(0.00||)||$||0.01||$||(0.00||)||$||0.03|
|Oil volumes (bbls/d)||174||202||183||221|
|Operating netback(1) ($/bbl)||$||91.06||$||36.77||$||61.52||$||34.20|
(1) Non-IFRS and Other Financial Measures: refer to the Non-IFRS and Other Financial Measures section of this Press Release
Bengal has filed its consolidated financial statements and management's discussion and analysis for the year ended March 31, 2022, with the Canadian securities regulators. The documents are available on SEDAR at www.sedar.com or by visiting Bengal's website at www.bengalenergy.ca.
Bengal's producing and non-producing assets are situated in Australia's Cooper Basin, a region featuring large accumulations of very light and high-quality crude oil and natural gas. The Company's core Australian assets, PL 303 Cuisinier, ATP 934 Barrolka, ATP 732 Tookoonooka, and four petroleum licenses acquired in calendar 2019 are situated within an area of the Cooper Basin that is well served with production infrastructure and take-away capacity for produced crude oil and natural gas. Still in early stages in terms of appraisal and development, Bengal believes these assets offer attractive upside potential for both oil and gas. Australia presents a stable political, fiscal, and economic environment in which to operate, and a favourable royalty regime for oil and gas production.
Under the State of Queensland Regulatory process, ATPs are granted by the State generally for a period of twelve years with one third of the original grant area expiring every four years. At the end of the final term of the ATP, and under certain conditions relative to exploration success, an application can be made to continue a portion of the permit in the form of a PCA (Potential Commercial Area). PCAs have a life span of five to fifteen years. PCA applications include a commercial viability report that indicates that the area is likely to be commercially viable within the applied term. This allows for extra time to commercialize the resource. These PCA's remain a part of the ATP until expiry. If a discovery of oil or gas is made, an application for a PL is made to allow for production. PLs are granted for up to a thirty-year term.
Bengal has two PLs on the former ATP 752 Barta block, PL 303 and PL 1028, in addition to three PCAs, PCA 206, PCA 207 Barta West and PCA 155 Wompi block-Nubba/Yilgarn. Bengal also holds four PLs (PL 114 Wareena, PL 157 Ghina, PL 188 Ramses, PL 411 Karnak) including a pipeline license PPL 138 adjacent to ATP 934.
AUSTRALIA - Cooper Basin, Queensland
PL303 and PL 1028 Cuisinier (controlling permit ATP 752) (30.357% WI)
A pilot reservoir pressure maintenance scheme was initiated during the prior fiscal year and after resolving mechanical issues, water injection activities resumed during calendar Q4 2021. The location of this pilot is in the southeast quadrant of the Cuisinier pool, with injection of water taking place at the Cuisinier 24 well. The broad nature of the Cuisinier structure combined with variable flank aquifer pressure support has resulted in pressure depletion within the central portion of the Cuisinier pool. The injection of produced formation water is anticipated to both increase production in up to four offsetting wells and reduce water handling charges. The Cuisinier water injection pilot has continued to face a range of surface facility-related operational issues resulting in downtimes, which have not allowed the significant subsurface success potential of this pilot to be realized as yet. Bengal Energy personnel are now working with the Operator's Onshore Operations and Development Leadership to work collaboratively towards rectifying the surface facility design challenges.
Upon establishing success of the pilot, the Joint Venture ("JV") expects to begin a multi-phase water injection scheme, targeted fracture stimulation and more commercially efficient development drilling. Since inception of the pilot, 33,500 barrels of water have been injected into the C24 well at an average rate of approximately 275 barrels of water per day over 115 operating days since December 2021. Currently, the water injection rate into C24 is approximately 300 bpd at a wellhead pressure of 9,600 kilopascals. Nearby wells are being monitored for total fluid produced and water cut to help to determine which wells are being affected by the pilot program.
In December 2021, Bengal participated in the Chef exploration drilling project. Following a review of the well logs, the ATP 752 JV parties have decided to plug and abandon the well. This exploration well is located outside of the producing Cuisinier field PL 303, in a location 4 km to the northeast with primary targets in the Jurassic Birkhead Formation and Hutton Sandstone, and secondary targets within the Triassic Nappamerri Group. The well encountered multiple oil shows in the primary and secondary targets; however, no commercial pay was identified at this location. While not a commercial success, the identified oil shows may support continued exploration targeting both the Jurassic Birkhead and newly discovered oil-bearing Triassic Nappamerri formations.
PL 114 Wareena, PL 157 Ghina, PL 188 Ramses, PL 411 Karnak, PPL 138 pipeline (100% WI)
The Company acquired a 100% working interest in four PLs and a natural gas pipeline connected to transportation infrastructure into the Eastern Australia Gas Market (collectively, the "Assets"). These non-productive PLs are highly compatible with and in close proximity to ATP 934. Bengal continues to integrate subsurface data from the PLs to enhance the Company's understanding of ATP 934 and to finalize the selection of exploration and appraisal drilling locations.
Included in this program is the reinstatement of two gas wells (Wareena-1 and Wareena-5) and an existing gas pipeline to produce raw gas into existing infrastructure. Planning and execution of the project continued through Q4 fiscal 2022 including performing a deeper zone water shut off on Wareena-5. Negotiations regarding natural gas processing and sales are ongoing with Santos as the owner of the processing infrastructure. The company is evaluating various options for commercialization of expected natural gas production, including connection through a third-party gathering system existing processing infrastructure and an innovative proof of concept for alternative monetization.
The 100% ownership of the acquired Assets presents an appraisal and development opportunity that will be operated by the Company and is seen to be not only complementary to our proven producing, non-operated Cuisinier asset, but also as a key steppingstone for Bengal's natural gas platform upon which future exploration growth through ATP 934 can be undertaken.
ATP 732 Tookoonooka (100% WI)
The Company has conducted preliminary stimulation workover and stimulation program at the Caracal-1 well, a 53 API oil discovery in the Wyandra zone. The well-produced oil to surface, although at lower than expected rates and is currently being assessed to determine capacity for commercial production. This would allow the Company to progress towards a PL or PCA on the block.
In June 2019, the Company applied for an amendment to the LWP for the third term of ATP 732 permit. On October 22, 2019, the Company received approval from the Queensland regulatory authority for an amended LWP for the third, four-year term commencing April 1, 2019, to March 31, 2023. The approved LWP was revised to minimum activities of reprocessing seismic and inversion work with an estimated cost of $0.05 million and geological and geophysical investigation at an estimated cost of $0.05 million during the four-year term.
ATP 934 Durham Downs East Farmout Block (40% WI)
Bengal entered into an agreement with Santos in July of 2020 to farm-in on a portion of the ATP 934 block. Santos carried the drilling costs of one well to earn a 60% operated interest in the ATP 934 southern farm-out block, which represents 57.8% of the total block acreage post-April 2020 relinquishment. On October 14, 2021, Santos completed the drilling of the Legbar-1 exploration well. Santos paid 100% of the costs to drill, plug, and abandon the well and has accordingly earned a 60% working interest in 103,760 km2 gross exploration land.
While the Legbar-1 Well did not indicate commercial quantities of hydrocarbons, thick, high-quality reservoir sands were encountered in the primary Permian Toolachee formation and in the Jurassic Birkhead zone, with evidence of residual hydrocarbon saturation in both zones. In addition, fluorescence shows and elevated gas readings through the Jurassic Birkhead Fm/Top Hutton Sandstone indicate oil has passed through the reservoir, supporting the search for a valid closure to test this play. The findings from the Legbar-1 well will help Bengal refine its exploration targets going forward, both with Santos in the Santos Farm-out Block, and across the balance of ATP 934 which is 100% owned by Bengal.
The Company is in discussions with potential industry and financial partners to fund some of these oil and gas-related activities.
Non-IFRS and Other Financial Measures
Non-IFRS Financial Measures
Within this MD&A, references are made to terms commonly used in the oil and gas industry. Operating netback, operating netback per barrel, funds from operations, funds from operations per share, adjusted net income, and adjusted net income per share do not have any standardized meaning under IFRS and are referred to as non-IFRS measures. Management believes the presentation of the non-IFRS measures above provides useful information to investors and shareholders as the measures provide increased transparency and the ability to better analyze performance against prior periods on a comparable basis.
Bengal utilizes operating netback as a key performance indicator and is utilized by Bengal to better analyze the operating performance of its petroleum and natural gas assets against prior periods. Operating netback is calculated oil sales deducting royalties and operating expenses. The following table reconciles petroleum and natural gas revenue to netback:
To view an enhanced version of Table 2, please visit:
Funds from operations
Management utilized funds from operations a measure to assess the Company's ability to generate cash not subject to short-term movements in non-cash operating working capital. Funds from operations is calculated by adding back all non-cash expense deductions to the net loss for the quarter and year. The following table reconciles cash from operations to funds from (used in) operations, which is used in this MD&A:
To view an enhanced version of Table 3, please visit:
Bengal uses working capital to monitor its capital structure, liquidity, and its ability to fund current operations. Working capital is calculated as current assets less current liabilities but excludes other obligations and the current portion of decommissioning obligations.
Non-IFRS Financial Ratios
Bengal uses operating netback per share to assess the Company's operating performance on a per unit of production basis. Operating netback per barrel equals operating netback divided by the applicable number of barrels.
To view an enhanced version of Table 4, please visit:
Bengal uses funds from operations per share to assess the ability of the Company to generate the funds necessary for financing, operating, and capital activities on a per-share basis. This is a non-IFRS measure calculated by dividing funds from operations by weighted average basic and diluted shares outstanding for the periods disclosed.
Bengal Energy Ltd. is an international junior oil and gas exploration and production company with assets in Australia. The Company is committed to growing shareholder value through international exploration, production, and acquisitions. Bengal's common shares trade on the TSX under the symbol "BNG". Additional information is available at www.bengalenergy.ca
This news release contains certain forward-looking statements or information ("forward-looking statements") as defined by applicable securities laws that involve substantial known and unknown risks and uncertainties, many of which are beyond Bengal's control. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words "plan", "expect", "future", "prospective", "project", "intend", "believe", "should", "would," "anticipate", "estimate", or other similar words or statements that certain events "may" or "will" occur are intended to identify forward-looking statements. The projections, estimates and beliefs contained in such forward-looking statements are based on management's estimates, opinions, and assumptions at the time the statements were made, including assumptions relating to: the impact of economic conditions in North America and Australia and globally; industry conditions; changes in laws and regulations including, without limitation, the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; increased competition; the availability of qualified operating or management personnel; fluctuations in commodity prices, foreign exchange or interest rates; stock market volatility and fluctuations in market valuations of companies with respect to announced transactions and the final valuations thereof; results of exploration and testing activities; and the ability to obtain required approvals and extensions from regulatory authorities. We believe the expectations reflected in those forward-looking statements are reasonable but, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bengal will derive from them. As such, undue reliance should not be placed on forward-looking statements.
Forward-looking statements contained herein include, but are not limited to, statements regarding:
- Bengal's multi-phase water injection scheme, targeted fracture stimulation and the results thereof at ATP 752;
- Bengal's development plans for its four PLs at ATP 934.
The forward-looking statements contained herein are subject to numerous known and unknown risks and uncertainties that may cause Bengal's actual financial results, performance or achievement in future periods to differ materially from those expressed in, or implied by, these forward-looking statements, including but not limited to, risks associated with: the failure to obtain required regulatory approvals or extensions; the failure to satisfy the conditions under farm-in and joint venture agreements; the failure to secure required equipment and personnel; changes in general global economic conditions including, without limitations, the economic conditions in North America and Australia; increased competition; the availability of qualified operating or management personnel; fluctuations in commodity prices, foreign exchange or interest rates; changes in laws and regulations including, without limitation, the adoption of new environmental and tax laws and regulations and changes in how they are interpreted and enforced; the results of exploration and development drilling and related activities; the ability to access sufficient capital from internal and external sources; and stock market volatility. Readers are encouraged to review the material risks discussed in Bengal's annual information form for the year ended March 31, 2021, under the heading "Risk Factors" and in Bengal's management's discussion and analysis for the Q3 of the fiscal year ending March 31, 2022 under the heading "Risk Factors". The Company cautions that the foregoing list of assumptions, risks, and uncertainties is not exhaustive. The forward-looking statements contained in this news release speak only as of the date hereof and Bengal does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.
The following terms used in this news release have the meanings set forth below:
bbl - barrel
bbls - barrels
bbls/d -barrels per day
$/bbl - dollars per barrel
Q1- three months ended June 30
Q2- three months ended September 30
Q4 - three months ended March 31
Within this news release, references are made to terms commonly used in the oil and gas industry. Funds from (used in) operations, funds from (used in) operations per share, operating netback, netback per bbl, adjusted net income (loss) and adjusted net income (loss) per share do not have any standardized meaning under IFRS and previous GAAP and are referred to as non-IFRS measures. Funds from (used in) operations per share are calculated based on the weighted average number of common shares outstanding consistent with the calculation of net income (loss) per share. Operating netback includes realized losses on financial instruments. Netback per bbl is calculated by dividing revenue (including realized loss on financial instruments) less royalties, and operating expenses by the total production of the Company measured in bbl. Adjusted net income (loss) and adjusted net income (loss) per share are calculated based on Net income (loss) plus unrealized loss (gain) on financial instruments less unrealized foreign exchange loss (gain) and non-cash impairment of non-current assets. The Company's calculation of the non-IFRS measures included herein may differ from the calculation of similar measures by other issuers. Therefore, the Company's non-IFRS measures may not be comparable to other similar measures used by other issuers. Funds from operations is not intended to represent operating profit for the period nor should it be viewed as an alternative to operating profit, net income, cash flow from operations or other measures of financial performance calculated in accordance with IFRS. Non-IFRS measures should only be used in conjunction with the Company's annual audited and interim financial statements. A reconciliation of these measures can be found in the tables on pages 7,14 and 15 of Bengal's management's discussion and analysis for the fiscal year ending March 31, 2022.
Disclosure of Oil and Gas Information
This document discloses test results which are not necessarily indicative of long-term performance or of ultimate recovery.
FOR FURTHER INFORMATION PLEASE CONTACT:
(1) Non-IFRS and Other Financial Measures are defined in the Non-IFRS and Other Financial Measures section of this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/128245