Striker Exploration (SKX-V) Aug 27, '15 is pleased to announce our operating and financial results for the three and six month periods ended June 30, 2015. Our Interim Condensed Financial Statements and Notes, as well as Management's Discussion and Analysis ("MD&A") for the three and six month periods ended June 30, 2015, are available on Striker's website ( www.strikerexp.com) and will be filed on SEDAR.
SECOND QUARTER 2015 HIGHLIGHTS
The second quarter of 2015 saw continued efforts to work on expanding itself as a focused light oil growth exploration and production entity. Attention was given to expanding the Company's light oil prospects and enhancing its positions in its operated core areas. The following highlights were achieved during the three months ended June 30, 2015 (Q2):
Achieved average sales of 2,384 boe/d (61% liquids), 4% above guidance of 2,300 boe/d;
Realized funds flow from operations of $3.6 million, or $0.13 per share;
Maintained balance sheet strength with debt, net of working capital of $8.3 million, representing 0.57x debt to annualized first half funds flow;
Expended $4.0 million, net of dispositions, on capital projects, acquisitions and dispositions. Of the total, $4.2 million was spent on a Belly River focused strategic acquisition in the Wilson Creek area adding 145 boe/d (70% liquids) and 38 gross (25 net) sections of land as detailed in the June 22, 2015 press release. Offsetting the total capital expenses was disposals of non-core lands and properties with proceeds of $0.5 million.
FINANCIAL AND OPERATING HIGHLIGHTS
| | | for the 3
months Ended
June 30, 2015 | | for the 6
months Ended
June 30, 2015 | | | (in thousands of dollars except where noted) | | | | | | Oil and Gas Sales | | | | | | | Oil and NGLs | $8,285 | | $16,607 | | | | Natural gas | $1,434 | | $3,123 | | | | Total | $9,719 | | $19,730 | | | | | | | | | | | Funds Flow | $3,567 | | $7,232 | | | | Per share - basic (in dollars) | $0.13 | | $0.27 | | | | Per share - fully diluted (in dollars) | $0.09 | | $0.19 | | | | | | | | | | Capital Expenditures | | | | | | | Property acquisitions/dispositions | $3,967 | | $6,812 | | | | | | | | | | Production (6:1 boe conversion) | | | | | | | Oil and NGLs (bbls/d) | 1,465 | | 1,733 | | | | Natural gas (mcf/d) | 5,511 | | 5,939 | | | | Total (boe/d) | 2,384 | | 2,723 | | | | | | | | | | Netbacks (in dollars/boe) | | | | | | | Production and royalty sales | $44.81 | | $40.03 | | | | Royalties | ($6.77 | ) | ($6.58 | ) | | | Operating costs | ($13.70 | ) | ($12.38 | ) | | | Transportation costs | ($0.63 | ) | ($0.67 | ) | | | Operating netback | $23.71 | | $20.40 | | | | General and administrative costs | ($5.48 | ) | ($4.60 | ) | | | Finance expense (cash component) | ($0.60 | ) | ($0.62 | ) | | | Corporate netback | $17.63 | | $15.18 | |
| (1) | See "Non-IFRS Measures" | | (2) | BOE conversion for natural gas of 1Boe:6Mcf has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current price of natural gas and crude oil is significantly different from the energy equivalency of 6:1 utilizing a conversion on a 6:1 basis may be misleading as an indication of value | | (3) | Excludes unrealized risk management contracts |
OUTLOOK
Second quarter production averaged 2,384 boe/d as compared to guidance of 2,300 boe/d. As in the second quarter, third quarter production continues to be affected by restrictions and facility maintenance on the Nova gas transmission system. The Company was able to secure firm service from a third party for the month of August allowing the previously curtailed production at Brazeau to come online. Concurrently, Striker is in the process of temporarily shutting in a number of wells on its minor properties representing approximately 120 boe/d, primarily natural gas. The result is an estimated third quarter average production to August 21, based on field receipts, of approximately 2,800 boe/d.
The third quarter Belly River horizontal light oil drilling program commenced in late July. At Thorsby, the Company drilled and cased its first 3.0 gross (3.0 net) horizontal exploratory wells. Completion operations are underway with production testing to follow. Both drilling and completion costs to date have been materially lower than anticipated. The remaining 3 gross (1.7 net) wells of the third quarter will be drilled at Wilson Creek and are expected to commence in early September. Striker anticipates releasing results from the third quarter drilling program during mid fourth quarter.
In spite of recent third-party pipeline outages, Striker is maintaining its full year average production guidance of 2,650 boe/d and will complete its third quarter planned drilling program.
ABOUT STRIKER
Striker is a growth-oriented, light oil focused company operating predominantly in Alberta. Striker's full-cycle business plan provides an excellent opportunity to position itself as a high-growth junior E&P company. With an experienced management team and a strong committed Board, growth is expected to occur through timely strategic acquisitions and drilling. Striker currently trades on the TSX Venture Exchange under ticker "SKX".
Boe Disclosure. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Non-IFRS Measures. This press release contains the term "net debt", which does not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and therefore may not be comparable with the calculation of similar measures by other companies. Management believes "net debt" is a useful supplemental measure of the total amount of current and long-term debt of the Company. Additional information relating to non-IFRS measures can be found in the Company's most recent management's discussion and analysis MD&A, which may be accessed through the SEDAR website ( www.sedar.com).
Production Rates. Any references in this press release to initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue to produce and decline thereafter and are not necessarily indicative of long-term performance or ultimate recovery. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Such rates are based on field estimates and may be based on limited data available at this time.
Striker Exploration Corp.
Doug Bailey
President and Chief Executive Officer
(403) 262-0242
Striker Exploration Corp.
Neil Burrows
Vice President, Finance and Chief Financial Officer
(403) 262-0242
www.strikerexp.com |
