Bengal Energy Ltd. (TSX:BNG) ("Bengal" or the
"Company") today announces its financial and operating results for
the fourth quarter and the fiscal year ended March 31, 2018 and the
results of its independent reserve evaluation for the year ended
March 31, 2018 as prepared by GLJ Petroleum Consultants Ltd.
("GLJ").
FISCAL YEAR END & FOURTH QUARTER
2018 HIGHLIGHTS:
The following is an overview of the financial and
operational results during the three and twelve month periods ended
March 31, 2018:
Financial Highlights:
- Summary of Reserves and ValuesReserve
valuation increased year-over-year with total proved (1P) reserves
at March 31, 2018 up by 37% to $62.9 million from March 31, 2017.
Proved plus probable (2P) reserves increased in value by 19.5% to
$141 million from 2017. Reserve values increased due to higher
assumed oil prices combined with expected lower capital costs while
reserve volumes declined due to lower expected capital
spending.
- RevenueCrude oil sales for the fourth quarter
of fiscal 2018 were $2.8 million, a 28% increase over the same
quarter in the fiscal year 2017. Annual crude oil sales for fiscal
2018 were $10.7 million, a 15% increase over annual 2017. Both
increases were due to a 31% improvement in US Brent pricing
year-over-year.
- HedgingFor the period April 2018 through
December 2018, the Company has 65,261 barrels hedged using both
puts and swaps at US$47/bbl. In addition, the Company has hedged
15,906 barrels for the period January 2019 to March 2019 using both
puts and swaps at US$55.70/bbl. This hedging program is required
under the Company's credit facility.
- Funds Flow from OperationsFunds flow from
operations generated $0.5 million in fiscal Q4 2018 compared to
$1.6 million in fiscal Q4 2017. The funds flow from operations for
the full year 2018 was $3.7 million compared to $6.2 million for
full year 2017. The primary reason for the reduced funds flow
performance in both the 2018 fiscal Q4 and annual results was the
drop in realized hedging value year-over-year. The fiscal year 2017
enjoyed $80/bbl hedges compared to $47/bbl hedges in the fiscal
year 2018.
- EarningsThe Company recorded a net loss for
the fiscal Q4 2018 of $12.5 million compared to a net income of
$1.9 million for the fiscal Q4 2017. For the full year 2018, the
Company recorded a net loss of $12.3 million compared to a full
year 2017 net loss of $2.8 million. In fiscal Q4 2018, the Company
has taken a non-cash $12.2 million impairment primarily as related
to ATP 732. After adjusting for unrealized gains and losses on
financial instruments and foreign exchange, and the non-cash
impairment of non-current assets, the adjusted earnings are $(143)
and $1,459 for the three and twelve months ended March 31, 2018,
respectively.
Operational Highlights:
- Production VolumesProduction (net to Bengal)
in fiscal Q4 2018 averaged 334 barrels per day for a total
production of 30,050 barrels, compared to 344 average barrels per
day in fiscal Q4 2017 or a total of 30,951 barrels, representing a
reduction of 3%. For the full year 2018, production averaged 360
barrels per day compared to 379 barrels per day in 2017 for a
reduction of 5%. Full year 2018 production was 131,455 barrels
compared to 138,360 barrels in 2017. Normal production declines and
reduced capital spending are the reason for the reduction in
production for both the 2018 Q4 and full year.
- Credit Facility UpdateDuring fiscal 2018, the
Company's credit facility with Westpac Banking Corporation was
amended on September 25, 2017 and March 5, 2018 resulting in the
elimination of the June 2018 principal repayment.
Reserve Highlights:
- Bengal's proved plus probable reserves (Company interest) as
evaluated by GLJ as at March 31, 2018 decreased 9% to 6,416 MBOE
from 7,056 MBOE at March 31, 2017. The Company's proved reserves
(Company interest) as at March 31, 2018 decreased 6% to 2,583 MBOE
from 2,761 MBOE as at March 31, 2017.
- The net present value of Bengal's estimated future net revenue
before income taxes from proved plus probable reserves as at March
31, 2018 is $141 million, an increase from $118 million at March
31, 2017, utilizing the forecast prices and costs assumptions of
GLJ as at March 31, 2018 and published on April 1, 2018 (the "GLJ
Price Forecast") and discounted at 10%. The net present value of
Bengal's estimated future net revenue before income taxes from
total proved reserves as at March 31, 2018 is $62.9 million, an
increase from $45.8 million at March 31, 2017, utilizing the GLJ
Price Forecast and discounted at 10%.
FINANCIAL AND OPERATING
HIGHLIGHTS
| $000s except per share, volumes and netback
amounts |
Three Months Ended |
|
Twelve Months Ended |
|
| March 31 |
|
March 31 |
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
2018 |
|
|
2017 |
|
% Change |
|
Oil sales revenue |
$ |
2,783 |
|
$ |
2,179 |
|
28 |
|
$ |
10,710 |
|
$ |
9,294 |
|
15 |
|
|
Realized (loss) gain on financial instruments |
$ |
(288 |
) |
$ |
971 |
|
(130 |
) |
$ |
568 |
|
$ |
4,712 |
|
(88 |
) |
|
Royalties |
$ |
136 |
|
$ |
(347 |
) |
(139 |
) |
$ |
642 |
|
$ |
(213 |
) |
(401 |
) |
|
% of revenue |
|
5 |
|
|
(16 |
) |
(131 |
) |
|
6 |
|
|
(2 |
) |
(400 |
) |
|
Operating & transportation |
$ |
1,077 |
|
$ |
987 |
|
9 |
|
$ |
3,718 |
|
$ |
4,864 |
|
(24 |
) |
|
Operating netback(1) |
$ |
1,282 |
|
$ |
2,510 |
|
(49 |
) |
$ |
6,918 |
|
$ |
9,355 |
|
(26 |
) |
| Cash
from operations |
$ |
858 |
|
$ |
643 |
|
33 |
|
$ |
3,627 |
|
$ |
4,515 |
|
(20 |
) |
|
Funds from operations: |
$ |
525 |
|
$ |
1,639 |
|
(68 |
) |
$ |
3,737 |
|
$ |
6,196 |
|
(40 |
) |
|
Per share ($) (basic & diluted)(2) |
|
0.01 |
|
|
0.02 |
|
(50 |
) |
|
0.04 |
|
|
0.08 |
|
(50 |
) |
| Net
income (loss) |
$ |
(12,526 |
) |
$ |
1,931 |
|
(749 |
) |
$ |
(12,271 |
) |
$ |
(2,768 |
) |
343 |
|
|
Per share ($) (basic & diluted) |
|
(0.12 |
) |
|
0.02 |
|
(700 |
) |
|
(0.12 |
) |
|
(0.04 |
) |
200 |
|
| Adjusted
net income (loss)(3) |
$ |
(143 |
) |
$ |
1,181 |
|
(112 |
) |
$ |
1,459 |
|
$ |
3,605 |
|
(60 |
) |
|
Per share ($) (basic & diluted) |
|
0.00 |
|
|
0.01 |
|
(100 |
) |
|
0.01 |
|
|
0.05 |
|
(80 |
) |
|
Capital expenditures |
|
939 |
|
$ |
681 |
|
38 |
|
$ |
3,511 |
|
$ |
5,618 |
|
(38 |
) |
|
Oil Production (BOPD) |
|
334 |
|
|
344 |
|
(3 |
) |
|
360 |
|
|
379 |
|
(5 |
) |
|
Netback(1) ($/BOE) |
|
|
|
|
|
|
|
Revenue |
$ |
92.61 |
|
$ |
70.40 |
|
32 |
|
$ |
81.47 |
|
$ |
67.17 |
|
21 |
|
| Realized
(loss) gain on |
|
|
|
|
|
|
| financial
instruments |
|
(9.58 |
) |
|
31.37 |
|
(131 |
) |
|
4.32 |
|
|
34.06 |
|
(87 |
) |
|
Royalties |
|
4.53 |
|
|
(11.21 |
) |
(140 |
) |
|
4.88 |
|
|
(1.54 |
) |
(417 |
) |
|
Operating & transportation |
|
35.84 |
|
|
31.89 |
|
12 |
|
|
28.28 |
|
|
35.16 |
|
(20 |
) |
|
Netback/BOE |
|
42.66 |
|
$ |
81.09 |
|
(47 |
) |
$ |
52.63 |
|
$ |
67.61 |
|
(22 |
) |
Notes:
- Operating netback is a non-IFRS measure and includes realized
losses on financial instruments. Netback per BOE is calculated by
dividing revenue (including realized loss on financial instruments)
less royalties, operating and transportation costs by the total
production of the Company measured in BOE.
- Funds from operations per share is a non-IFRS measure
calculated by dividing funds from operations by weighted average
basic and diluted shares outstanding for the periods
disclosed.
- Adjusted net income (loss) and adjusted net income (loss) per
share are non-IFRS measures. The comparable IFRS measure is
net income (loss). A reconciliation of the two measures can
be found in the table on page 6 of the Company's management's
discussion and analysis for the Q4 and fiscal year ended March 31,
2018.
Bengal has filed its consolidated financial
statements and management's discussion and analysis for the fourth
fiscal quarter of 2018 and year ended March 31, 2018 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.
Net Asset Value
The following table provides a calculation of
Bengal's estimated net asset value and net asset value per share as
at March 31, 2018 based on the estimated future net revenues
associated with Bengal's proved plus probable reserves discounted
at 10% and utilizing the GLJ Price Forecast, as presented in the
GLJ Report (as defined below).
Bengal's estimated net asset value per (basic)
share as at March 31, 2018 is calculated at $1.26 on a before-tax,
and $0.92 on an after-tax, basis. Net asset value, as presented,
excludes land and exploration value and is calculated using 10% NPV
(as defined below) of proved plus probable reserves value of $141
million, less net debt of $12.2 million (as at March 31, 2018).
| March 31, 2018 |
|
(Cdn $M, $/share) |
BEFORE TAX |
AFTER TAX |
| Reserves
Category: |
NetAssetValue |
NetAssetValue/basic share |
NetAssetValue |
NetAssetValue/basic share |
|
|
Total Proved |
$ |
50.7 |
$ |
0.50 |
$ |
39.2 |
$ |
0.38 |
|
|
Total Proved Plus Probable |
$ |
128.8 |
$ |
1.26 |
$ |
94.2 |
$ |
0.92 |
|
Notes:(1) At March 31, 2018, the Company
had approximately 102.3 million common shares outstanding
(basic).
Corporate Reserves
The reserves data set forth in this news release
is based upon an independent reserve assessment and evaluation
prepared by GLJ with an effective date of March 31, 2018 (the "GLJ
Report"). The following presentation summarizes the Company's crude
oil, natural gas liquids and natural gas reserves and the net
present values before and after income taxes of future net revenue
for the Company's reserves using forecast prices and costs based on
the GLJ Report. The GLJ Report has been prepared in accordance with
the standards contained in the Canadian Oil and Gas Evaluation
Handbook (the "COGE Handbook") and the reserve definitions
contained in National Instrument 51-101 – Standards of Disclosure
For Oil and Gas Activities ("NI 51-101").
Reserves
Reconciliation
RECONCILIATION OF CORPORATION GROSS
RESERVESBY PRODUCT TYPEFORECAST
PRICES AND COSTS
|
|
Light Crude Oil and Medium Crude Oil |
Total BOE |
|
FACTORS |
Gross Proved (Mbbl) |
Gross Probable (Mbbl) |
Gross Proved plus Probable (Mbbl) |
Gross Proved (Mbbl) |
Gross Probable (Mbbl) |
Gross Proved plus Probable (Mbbl) |
|
March 31, 2017 |
2,761 |
|
4,295 |
|
7,056 |
|
2,761 |
|
4,295 |
|
7,056 |
|
|
Extensions(1) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
| Improved
Recovery(1) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
| Infill
drilling(1) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
Technical Revisions(2) |
(47 |
) |
(463 |
) |
(509 |
) |
(47 |
) |
(463 |
) |
(509 |
) |
|
Discoveries |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
Acquisitions(3) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
Dispositions(3) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
| Economic
Factors(4) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
Production |
(131 |
) |
- |
|
(131 |
) |
(131 |
) |
- |
|
(131 |
) |
|
March 31, 2018 |
2,583 |
|
3,832 |
|
6,416 |
|
2,583 |
|
3,832 |
|
6,416 |
|
Notes:
(1) The above change categories correspond to
standard set out in the COGE Handbook. For reporting under NI
51-101, reserves additions under Extensions, Improved Recovery and
Infill Drilling are combined and reported as Extensions and
Improved Recovery.
(2) Includes technical revisions due to
reservoir performance, geological and engineering changes.
(3) Includes production attributable to any
acquired interests from the acquisition date to effective date of
the report and production realized from disposed interests from the
opening balance date to the effective date of disposition.
(4) Includes economic revisions due to changes
in economic limits and working interest changes resulting from the
timing of interest reversions and related to price and royalty
factor changes.
Reserves Summary
The Company's total proved plus probable
reserves decreased by 9% in fiscal 2018 to 6,416 MBOE. Proved
reserves decreased by 6% to 2,583 MBOE and comprised 40% of the
Company's total proved plus probable reserves. Proved undeveloped
reserves represent 80% of the total proved reserves. The future
capital in the GLJ Report (undiscounted) is $58.1 million for the
proved plus probable reserves and is $25.6 million for total proved
reserves. The future capital is programmed over a 10 year time
period for proved plus probable reserves and a 5 year time period
for proved reserves.
The following table provides summary reserve
information based upon the GLJ Report and using the GLJ Price
Forecast.
Reserves Data (Forecast Prices and
Costs)
SUMMARY OF OIL AND GAS RESERVES
AS OF MARCH 31, 2018 FORECAST PRICES AND
COSTS
|
Total |
LIGHT CRUDE OIL AND MEDIUM CRUDE OIL |
Heavy Crude Oil |
Conventional Natural Gas |
Natural Gas Liquids |
Total |
| Reserves
Category: |
Gross
(Mbbl) |
Net
(Mbbl) |
Gross
(Mbbl) |
Net
(Mbbl) |
Gross
(Mbbl) |
Net
(MMcf) |
Gross
(Mbbl) |
Net
(Mbbl) |
Gross
(MBOE) |
Net
(MBOE) |
|
Proved Developed |
|
|
|
|
|
|
|
|
|
|
|
Producing |
448 |
421 |
- |
- |
- |
- |
- |
- |
448 |
421 |
|
Non-Producing |
32 |
30 |
- |
- |
- |
- |
- |
- |
32 |
30 |
|
Proved undeveloped |
2,103 |
1,974 |
- |
- |
- |
- |
- |
- |
2,103 |
1,974 |
|
Total Proved |
2,583 |
2,425 |
- |
- |
- |
- |
- |
- |
2,583 |
2,425 |
|
Probable |
3,832 |
3,596 |
- |
- |
- |
- |
- |
- |
3,832 |
3,596 |
|
Total Proved Plus Probable |
6,416 |
6,021 |
- |
- |
- |
- |
- |
- |
6,416 |
6,021 |
Notes:(1) "Gross" reserves are Company's working
interest reserves (operating and non-operating) before the
deduction of royalties and without including any royalty interest
of the Company.
(2) "Net" reserves are Company's working
interest reserves (operating and non-operating) after deductions of
royalty obligations plus the Company's royalty interests.
(3) BOE amounts have been calculated using a
conversion rate of six mcf to one bbl. For additional information,
see "Cautionary Statements – Barrels of Oil Equivalent" in this
news release.
(4) The numbers in this table may not add
exactly due to rounding.
Future Net Revenue Values
The estimated net present values ("NPV") of
future net revenues associated with Bengal's reserves effective
March 31, 2018 and based on the GLJ Price Forecast are summarized
in the following tables:
Future Net Revenue Data (Forecast Prices
and Costs)
SUMMARY OF NET PRESENT
VALUESOF FUTURE NET REVENUEAS OF
MARCH 31, 2018FORECAST PRICES AND
COSTS
|
|
|
|
|
|
|
|
|
|
|
|
Unit
Value Before Income Taxes |
Unit
Value Before Income Taxes |
|
Total |
Before Income Taxes Discounted at (%/year) |
After Income Taxes Discounted at (%/year) |
Dis-counted at 10%/year |
Dis-counted at 10%/year |
|
($M) |
0 |
% |
5 |
% |
10 |
% |
15 |
% |
20 |
% |
0 |
% |
5 |
% |
10 |
% |
15 |
% |
20 |
% |
($/BOE) |
($Mcfe) |
|
Proved |
|
|
|
|
|
|
|
|
|
|
|
|
| Developed
Producing |
18,751 |
|
16,839 |
|
15,173 |
|
13,793 |
|
12,658 |
|
18,751 |
|
16,839 |
|
15,173 |
|
13,793 |
|
12,658 |
|
36.07 |
6.01 |
| Developed
Non-Producing |
1,346 |
|
1,140 |
|
978 |
|
851 |
|
750 |
|
1,346 |
|
1,140 |
|
978 |
|
851 |
|
750 |
|
32.65 |
5.44 |
|
Undeveloped |
90,622 |
|
64,178 |
|
46,729 |
|
34,967 |
|
26,815 |
|
65,901 |
|
47,643 |
|
35,261 |
|
26,775 |
|
20,817 |
|
23.67 |
3.95 |
|
Total Proved |
110,719 |
|
82,157 |
|
62,880 |
|
49,611 |
|
40,223 |
|
85,998 |
|
65,622 |
|
51,412 |
|
41,419 |
|
34,225 |
|
25.93 |
4.32 |
|
Probable |
199,840 |
|
121,435 |
|
78,083 |
|
52,873 |
|
37,452 |
|
138,701 |
|
85,052 |
|
55,017 |
|
37,495 |
|
26,771 |
|
21.21 |
3.62 |
|
Total Proved Plus Probable |
310,558 |
|
203,592 |
|
140,963 |
|
102,484 |
|
77,674 |
|
224,699 |
|
150,674 |
|
106,430 |
|
78,914 |
|
60,997 |
|
23.41 |
3.90 |
Notes:(1) NPV of future net revenue includes all
resource income: sale of oil, gas by-product reserves, processing
of third party reserves and other income.
(2) Income taxes includes all resource income,
appropriate income tax calculations and prior tax pools.
(3) The unit values are based on working
interest reserve volumes before income tax (BFIT).
(4) The numbers in this table may not add
exactly due to rounding.
(5) The estimated values disclosed do not
represent fair market value.
TOTAL FUTURE NET
REVENUE(UNDISCOUNTED)AS OF MARCH
31, 2018FORECAST PRICES AND COSTS
| ($M)
Reserves Category: |
Revenue |
Royalties |
Operating Costs |
Development Costs |
Abandonment and Reclamation Costs(3) |
Future
Net Revenue Before Income Taxes |
Income
Taxes |
Future
Net Revenue After Income Taxes |
|
Total Proved |
256,895 |
15,783 |
99,287 |
25,576 |
5,530 |
110,719 |
24,721 |
85,998 |
|
Total Proved Plus Probable |
678,044 |
41,731 |
256,525 |
58,123 |
11,107 |
310,558 |
85,859 |
224,699 |
Notes:(1) The numbers in this table may
not add exactly due to rounding.
(2) Reflects estimated abandonment and
reclamation for all wells (both existing and undrilled wells) that
have been attributed reserves.
(3) The estimated values disclosed do not
represent fair market value.
FUTURE NET REVENUE BY
PRODUCT TYPE AS OF MARCH 31, 2018 FORECAST PRICES
AND COSTS
(Before income taxes and discounted at
10% per year)
|
Reserve Category |
Production Group |
($M) |
($/BOE) |
|
($/Mcfe) |
| Proved |
Light
Crude Oil and Medium Crude Oil (Including solution gas and
associated by-products) |
62,880 |
25.93 |
|
4.32 |
| Heavy
Crude Oil (Including solution gas and associated by-products) |
- |
- |
|
- |
|
Conventional Natural Gas (Including associated by-products but
excluding solution gas and by-products from oil wells) |
- |
- |
|
- |
|
Total Proved |
|
62,880 |
25.93 |
|
4.32 |
| Proved Plus Probable |
Light
Crude Oil and Medium Crude Oil (Including solution gas and
associated by-products) |
140,963 |
23.41 |
|
3.90 |
| Heavy
Crude Oil (Including solution gas and associated by-products) |
- |
- |
|
- |
|
Conventional Natural Gas (Including associated by-products but
excluding solution gas and by-products from oil wells) |
- |
- |
|
- |
|
Total Proved Plus Probable |
|
140,963 |
23.41 |
|
3.90 |
Notes:(1) Unit values are based on the
Company's net reserves.
(2) The estimated values disclosed do not
represent fair market value.
Price Forecast
The GLJ Price Forecast is summarized as
follows:
|
|
|
BRENT ($Cdn/Bbl) |
Exchange Rate ($US/$Cdn) |
BRENT ($US/Bbl) |
|
|
Year Forecast |
|
|
|
|
|
2018
Q2-Q4 |
87.37 |
0.778 |
68.00 |
|
|
2019 |
86.08 |
0.790 |
68.00 |
|
|
2020 |
85.00 |
0.800 |
68.00 |
|
|
2021 |
85.80 |
0.810 |
69.50 |
|
|
2022 |
87.20 |
0.820 |
71.50 |
|
|
2023 |
89.16 |
0.830 |
74.00 |
|
|
2024 |
92.17 |
0.830 |
76.50 |
|
|
2025 |
95.18 |
0.830 |
79.00 |
|
|
2026 |
98.30 |
0.830 |
81.59 |
|
|
2027 |
100.20 |
0.830 |
83.17 |
|
|
2028+ |
+2.0%/yr |
0.830 |
+2.0%/yr |
Note:(1) Inflation is accounted for at 2%
per year.
Comparison of Reserves and
Values
The following table provides a comparison of
Bengal's independent reserves summaries as evaluated by GLJ in the
GLJ Report as at March 31 2018 (based on published GLJ Price
Forecast) and at March 31 2017 (based on published GLJ April 1,
2017 price forecast). The NPVs shown are associated with all of
Bengal's reserves before income taxes and discounted at
10%/year.
COMPARISON OF BENGAL'S OIL AND GAS
RESERVES AND VALUESCOMPANY INTEREST (GROSS)
BASIS
|
|
March 31, 2017(4) |
March 31, 2018 |
|
|
Reserves (MBOE) (Gross) |
NPV
($M)(5) |
Reserves (MBOE) (Gross) |
NPV
($M)(5) |
|
Reserves Category: |
|
|
|
|
|
proved developed producing |
406 |
8,840 |
448 |
15,173 |
|
total proved |
2,761 |
45,780 |
2,583 |
62,880 |
|
Total Proved Plus Probable |
7,056 |
118,007 |
6,416 |
140,963 |
Notes:(1) "Gross" reserves are Company's working
interest reserves (operating and non-operating) before the
deduction of royalties and without including any royalty interest
of the Company.
(2) BOE amounts have been calculated using a
conversion rate of six mcf to one bbl. For additional information,
see "Cautionary Statements – Barrels of Oil Equivalent" in this
news release.
(3) The numbers in this table may not add
exactly due to rounding.
(4) The information relating to the Company's
reserves and NPV as at March 31, 2017 is based upon the reserves
assessment and evaluation of GLJ with an effective date of March
31, 2017 and is disclosed in the Company's annual information form
for the year ended March 31, 2017, which is available on the
Company's profile at www.sedar.com.
(5) NPV is calculated based on forecast prices
and costs, discounted at 10% and utilizing the GLJ Price Forecast,
as presented in the GLJ Report.
About Bengal
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
CAUTIONARY STATEMENTS:
Forward-Looking Statements
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", "prospective",
"project", "intend", "believe", "should", "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. 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, 2017 under the
heading "Risk Factors" and in Bengal's management's discussion and
analysis for the Q4 and fiscal year ended March 31,2018 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 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 mcf
to one 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. Given that the value ratio based on the current price of
crude oil as compared to natural gas 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.
Oil and Gas Advisory
The reserves information contained in this news
release has been prepared in accordance with NI 51-101. Complete NI
51- 101 reserves disclosure will be included in Bengal's annual
information form for the year ended March 31, 2018 which will be
filed on or before June 29, 2018. Listed below are cautionary
statements applicable to our reserves information that are
specifically required by NI 51-101:
- Individual properties may not reflect the same confidence level
as estimates of reserves for all properties due to the effects of
aggregation.
- With respect to finding and development costs, the aggregate of
the exploration and development costs incurred in the most recent
financial year and the change during that year in estimated future
development costs generally will not reflect total finding and
development costs related to reserve additions for that year.
- This news release contains estimates of the net present value
of our future net revenue from our reserves. Such amounts do not
represent the fair market value of our reserves.
- Reserves included herein are stated on a company interest basis
(before royalty burdens and including royalty interests) unless
noted otherwise as well as on a gross and net basis as defined in
NI 51-101. "Company interest" is not a term defined by NI 51-101
and as such the estimates of Company interest reserves herein may
not be comparable to estimates of "gross" reserves prepared in
accordance with NI 51-101 or to other issuers' estimates of company
interest reserves.
All evaluations and reviews of future net cash
flows in this news release are stated prior to any provisions for
interest costs or general and administrative costs and after the
deduction of estimated future capital expenditures for wells to
which reserves have been assigned. It should not be assumed that
the estimates of future net revenues presented in this news release
represent the fair market value of the reserves. There is no
assurance that the forecast prices and cost assumptions will be
attained and variances from these assumptions could be material.
The recovery and reserve estimates of the Company's crude oil,
natural gas liquids and natural gas reserves provided in this news
release are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil, natural gas
and natural gas liquids reserves may be greater than or less than
the estimates provided herein.
"Proved Developed Producing Reserves" are those
reserves that are expected to be recovered from completion
intervals open at the time of the estimate. These reserves
may be currently producing or, if shut-in, they must have
previously been on production, and the date of resumption of
production must be known with reasonable certainty.
"Proved Developed Non-Producing Reserves" are
those reserves that either have not been on production, or have
previously been on production but are shut-in and the date of
resumption of production is unknown.
"Proved Undeveloped Reserves" are those reserves
expected to be recovered from known accumulations where a
significant expenditure (e.g. when compared to the cost of drilling
a well) is required to render them capable of production.
They must fully meet the requirements of the reserves category
(proved, probable, possible) to which they are assigned.
"Proved" reserves are those reserves that can be
estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves.
"Probable" reserves are those additional
reserves that are less certain to be recovered than proved
reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the
estimated proved plus probable reserves.
Light crude oil is crude oil with a relative
density greater than 31.1 degrees API gravity, medium crude oil is
crude oil with a relative density greater than 22.3 degrees API
gravity and less than or equal to 31.1 degrees API gravity, and
heavy crude oil is crude oil with a relative density greater than
10 degrees API gravity and less than or equal to 22.3 degrees API
gravity.
Selected Definitions
The following terms used in this news release
have the meanings set forth below:
"Bbl" means
barrel"BOE" means barrel of oil equivalent of
natural gas and crude oil on the basis of 1 BOE for six mcf (this
conversion factor is and industry accepted norm and is not based on
either energy content or current prices)"BOPD"
means barrels of oil per day"Mbbl" means thousand
barrels"MBOE" means 1,000 barrels of oil
equivalent"mcf" means one thousand cubic
feet"Mcfe" means one thousand cubic feet
equivalent"MMcf'" means one million cubic feet
Non-IFRS Measurements
Within this news release references are made to
terms commonly used in the oil and gas industry. Funds from
operations, funds from operations per share, operating netback,
netback per BOE, 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 operations per share is 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 BOE is calculated by dividing revenue (including realized loss
on financial instruments) less royalties, operating and
transportation costs by the total production of the Company
measured in BOE. 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 table on page 6 of Bengal's management's discussion
and analysis for the Q4 and fiscal year ended March 31,
2018.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Bengal Energy
Ltd.Chayan Chakrabarty, President & Chief
Executive OfficerMatthew Moorman, Chief Financial
Officer(403) 205-2526Email:
investor.relations@bengalenergy.ca Website:
www.bengalenergy.ca
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