CALGARY, Aug. 13 /CNW/ - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") today announced its financial and operating results for the quarter ended June 30, 2009. Highlights are as follows:
- Produced 172 barrels of oil equivalent per day (boe/d) in Australia
and Canada and pursued world-class exploration opportunities on
resource plays in Australia and India. Bengal has 1.5 million net
acres of undeveloped land focused in three countries with stable
political and favorable fiscal environments.
- Carried out a third-party prospective resource assessment for
Bengal's 100%-owned Australian offshore exploration permit AC/P 47, a
3,485 square kilometer block with significant resource potential from
multiple high quality structures. Independent third party engineering
firm DeGolyer and MacNaughton has determined that a best estimate
(P50) of the unrisked prospective oil resource attributable to one
prospect identified in the Permit is 590.4 million barrels of
recoverable oil. AC/P 47 is approximately 150 kilometers west of the
Vulcan Graben, an established offshore producing area. See
disclaimers related to "Resource Estimates" below.
- Maintained a healthy balance sheet with working capital of
$1.8 million on June 30, 2009 and no long-term debt.
- Restricted capital expenditures to $154,000 in the quarter compared
with $1.5 million in the corresponding period of fiscal 2009. Work
commitments over the next 12 months are estimated to be $2.0 million.
- Completed the acquisition of 206 square kilometers of new 3D seismic
data on exploration license ATP 752P (the Wompi Block) within the
Cooper/Eromanga Basin of Queensland, Australia. The operator acquired
the seismic data at no cost to Bengal. Bengal is carried for the
costs of the initial three exploration wells and has the option to
fund 60% of the fourth exploration well in order to retain its 30%
working interest in the block. Drilling is expected to begin in the
first quarter of calendar year 2010.
- Finalizing production lease, equipment lease and crude oil marketing
and transportation agreements in order to begin initial production
from the recent Cuisinier oil discovery on the Barta block in
Australia's Cooper Basin. Production from the well is expected to
come on stream in September 2009 at 200 to 250 barrels of oil per day
("bopd") resulting in approximately 30 to 35 bopd net to Bengal.
- The Barta block 3D seismic program (103 square kilometers) was
acquired in April at no cost to Bengal and is undergoing standard
seismic processing with results expected in October. The new 3D
seismic and production results are anticipated to enable the joint
venture to define an appropriate appraisal and development plan in
November 2009.
- Bengal is currently evaluating select exploration blocks in India
with a view to making bid decisions. The exploration blocks are
available as part of the eighth round of New Exploration Licensing
Policy (NELP-VIII) in which 70 exploration blocks covering
163,535 square kilometers are being offered for bidding. The bid
closing date is October 12, 2009.
- The Company continues to review strategic merger or acquisition
opportunities to enhance its portfolio of assets and projects.
Financial and Operating Highlights
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$000s except per share, volumes and Three Months Ended
and netback amounts ------------------------------------
06/30/09 06/30/08 03/31/09
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Revenue
Natural gas $ 219 $ 761 $ 357
Natural gas liquids 56 205 62
Oil 299 986 248
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Total 574 1,952 667
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Royalties 65 356 143
% of revenue 11.3 18.3 21.4
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Operating & transportation 246 278 283
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Netback(1) 263 1,318 241
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Cash flow from (used in) operations: (628) 607 (85)
Per share ($) (basic & diluted) (0.03) 0.03 (0.00)
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Funds from (used in) operations:(1) (298) 860 (92)
Per share ($) (basic & diluted) (0.02) 0.05 (0.01)
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Net (loss): (865) (351) (839)
Per share ($) (basic & diluted) (0.05) (0.02) (0.05)
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Capital expenditures $ 154 $ 1,532 $ 254
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Volumes
Natural gas (mcf/d) 684 734 712
Natural gas liquids (boe/d) 15 23 19
Oil (bbl/d) 43 73 44
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Total (boe/d @ 6:1) 172 218 182
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Netback ($/boe)
Revenue $ 36.54 $ 98.23 $ 40.81
Royalties 4.11 17.93 8.72
Operating & transportation 15.64 13.97 17.23
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Total $ 16.78 $ 66.33 $ 14.86
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(1) "Netback" and "funds from (used in) operations" are non-GAAP
measures. See Non-GAAP Measures below.
Bengal's Quarterly Management's Discussion and Analysis and Consolidated Financial Statements can be viewed at www.bengalenergy.ca or on SEDAR at www.sedar.com.
About Bengal
Bengal Energy Ltd. is an international junior oil and gas exploration and production company based in Calgary, Alberta. The Company is committed to growing shareholder value through international exploration, production and acquisitions. Bengal trades on the TSX under the symbol BNG. Additional information is available at www.bengalenergy.ca.
Forward-Looking Statements
This news release contains certain forward-looking statements 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 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 general global economic conditions in Canada, Australia and in the United States, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of 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, and the ability to obtain required approvals 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, including the amount of proceeds, that Bengal will derive therefrom. Forward-looking statements include expectations related to drilling of the Wompi wells, start-up date and initial production volumes of the Cuisinier well and whether the Barta block seismic will lead to a development plan. Bengal's actual financial results, performance or achievement in future periods could differ materially from those expressed in, or implied by, these forward-looking statements, including those material risks discussed in Bengal's Annual Information Form under "Risk Factors and in Bengal's MD&A under "Risk Factors". The forward-looking statements contained in the documents incorporated by reference herein are expressly qualified by this cautionary statement: The forward-looking statements contained in this release speak only as of the date of this release and Bengal does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be require pursuant to applicable securities laws.
Barrels of Oil Equivalent
When converting natural gas to equivalent barrels of oil, Bengal uses the widely recognized standard of 6 thousand cubic feet (Mcf) to one barrel of oil (boe). However, a 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.
Non-GAAP Measures
Netback and funds from operations are non-GAAP measures. 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. Management considers netback to be an important measure as it demonstrates profitability on a unit of production basis. Funds from (used in) operations is calculated as cash flow from operations before deducting changes in non-cash working capital. Management believes funds from operations is a useful supplemental measure as it demonstrates the ability to generate cash necessary to repay debt or fund growth through capital investment before changes in non-cash working capital balances. Investors are cautioned that funds from operations should not be construed as an alternative to cash flow from operations determined in accordance with GAAP.
Resource Estimates
DeGolyer and MacNaughton's resource estimates were prepared in accordance with the requirements of Canadian National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Gross Prospective Resources are those quantities of petroleum that are estimated, as of March 31, 2009, to be potentially recoverable from undiscovered accumulations by application of future development projects. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. Terms in this news release related to resource classifications are based on the definitions and guidelines in the Canadian Oil and Gas Evaluation Handbook. The Best (Median) Estimate is considered to be the best estimate of the quantity that will actually be recovered. This term reflects a P50 confidence level where the successful discovery will have a 50% chance of being more than this resource estimate.