CALGARY, Nov. 4, 2014 /CNW/ – Ikkuma Resources Corp. (“Ikkuma” or the “Corporation”) is pleased to announce that it has now closed the previously announced acquisition of certain petroleum and natural gas assets located in several areas of the Western Canadian foothills, including the Brown Creek, Stolberg, Deanne, Burnt Timber, Moose, Jumping Pound, and Ricinus areas in Alberta (collectively, the “Assets“). The purchase price was $23.2 MM, which is subject to adjustments. Current production from these Assets is approximately 1,150 BOE/d, with approximately 11% liquids.
Corporate capital expenditures for land, seismic, drilling program and recompletion program remain unchanged at $65 million, as previously announced on October 6, 2014. The Acquisition contributes to an upward revision in the Corporation’s 2015 exit rate to 9,100 BOE/d, as summarized in the table below. The Acquisition has greatly expanded Ikkuma’s footprint within the large Foothills play area. It has reduced the Corporate production decline to about 17%, raised Ikkuma’s liquids weighting to approximately 3%, and increased the drilling inventory by a minimum of 18 gross unrisked and unbooked locations. The Corporation now has a drilling inventory in excess of three years, based on a single rig program.
Ikkuma is also pleased to announce that is has commenced its work-over / recompletion operations and is moving drilling equipment in anticipation of its continuous drilling program. The first well in the program is expected to spud prior to December 1, 2014.
The Corporation’s previously disclosed (October 6th, 2014) and present guidance for 2014-2015 (15 months):
|Production||October 6th Guidance||Present Guidance|
|2014 exit production rate||5,900 BOE/d (100% natural gas)||7,000 BOE/d (100% natural gas) (1)|
|2015 exit production rate||8,000 BOE/d (95% natural gas)||9,100 BOE/d (95% natural gas)|
|2015 average production rate||6,500-7,500 BOE/d (96% natural gas)||7,500-8,500 BOE/d (96% natural gas)|
|Operating Cash flow||$36 million ($11.67 / BOE)||$45 million ($11.89 / BOE) (2)|
|G&A & Interest||$6 million ($2.00 / BOE)||$7.5 million ($1.97 / BOE) (3)|
|2014 year end net debt||nil||$11 million ($44 million unused credit line) (4)|
|Drilling, completion & equipping||$45 million||$45 million|
|Land & seismic||$13 million||$13 million|
|Recompletion and optimization||$ 7 million||$ 7 million|
|Total||$65 million||$65 million|
(1) Assuming no unscheduled facilities and pipeline restrictions.
(2) Pricing assumptions: $80CDN/bbl Edmonton light; AECO price: $3.96/Mcf
(3) Increase due to interest on use of credit facilities; no increase in G&A
(4) Based on current $55 million credit facility before any increase for the Acquisition.
About Ikkuma Resources Corp.
Ikkuma Resources Corp. is a diversified junior public oil and gas company listed on the TSX-V under the symbol “IKM”, with holdings in both conventional and unconventional projects in Western Canada. The technical team has worked together for over a decade in the Foothills Region of Western Canada, through two successful, publicly traded companies. The unique skills and repeat success at exploiting a complex, potentially prolific play type are fundamental ingredients for a successful growth-oriented company in Western Canada. Corporate information can be found at: www.ikkumarescorp.com.
This press release contains forward‑looking statements and forward‑looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward‑looking statements or information. In particular, this press release contains forward-looking statements and information relating to the drilling inventory of the Corporation, the expected spud date of the first well under its drilling program prior to December 1, 2014 and the expected 2015 exit rate of production. Although Ikkuma believes that the expectations and assumptions on which the forward‑looking statements and information are based are reasonable, undue reliance should not be placed on the forward‑looking statements and information because Ikkuma cannot give any assurance that they will prove to be correct. Since forward‑looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risk. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.
In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Ikkuma undertakes no obligation to update publicly or revise any forward‑looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Certain information set out herein may be considered as “financial outlook” within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding Ikkuma’s reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.
Oil and Gas Advisory
In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOEs 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 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Ikkuma Resources Corp.
For further information: Tim de Freitas, President and CEO, 403-478-0141, or; Carrie McLauchlin, VP Finance & CFO, 403-510-8889; Ikkuma Resources Corp., 400, 540-5th Avenue S.W.Calgary, AB, T2P 0M2, Phone : 403-261-5900, Fax : 403-261-5902