CALGARY, ALBERTA–(Marketwired – Nov. 19, 2015) – Relentless Resources Ltd. (“Relentless” or “the Company”) (TSX VENTURE:RRL) announces that it has issued its September 30, 2015 unaudited condensed interim financial statements and related MD&A. Additional information about Relentless is available on SEDAR at www.sedar.com or on the Company`s website at www.relentless-resources.com.
Relentless averaged 286 boe/d (57% oil and liquids) in Q3 2015, up 32% from the same period last year, but down 19% from the previous quarter. Royalties decreased 43% to $3.79/boe compared to the previous quarter due to the effect of lower commodity pricing on variable crown royalties. Operating costs increased by 18% to $14.55/boe compared to the previous quarter mainly due to the lower production volumes. General and administration costs were the same at $5.42/boe, but were down $32,353 on a gross basis compared to the previous quarter.
As of September 30, 2015 Relentless had net debt of $3.4 million dollars on a credit line of $4.0 million dollars which is set to be reviewed in April, 2016.
At Heathdale, Relentless is currently producing 120 boe/d (75% oil). In July, 2015, a vertical step out well drilled at 16-6-27-9 W4 was successfully cased, completed and tied in for Mannville oil. The vertical oil well serves as a control point for drilling future horizontal wells in the south half of the Heathdale property. The well was pipeline tied-in to the 9-7 multi-well battery and enables the drilling of up to 8 future horizontal oil wells without any additional tie-in capital. Relentless has constructed Heathdale so that production can be ramped up when feasible.
Relentless currently has approximately 50 boe/d shut in at Gold Creek due to negative pricing on an interruptible gas sales stream. It is expected that these volumes will come back on this winter once the sales stream or sales price changes.
Relentless’ go forward capital program depends on the price of oil and natural gas and the ability to finance, both of which are uncertain as of today. With current realized pricing, the Company will defer any drilling projects to conserve reserves and cash flow for future benefit.
Relentless has abandoned two long term inactive wells satisfying the AER Inactive Well Compliance Program for 2015. The Company currently has a 2.74 AER Liability Management Ratio.
Relentless sees the industry downturn as an opportunity to optimize the Heathdale asset and potentially align itself as part of a larger company, with similar corporate direction. The Company is currently actively pursuing opportunities to achieve that goal.
Daily production and commodity prices
|Three months ended September 30, 2015||2015||2014||% Change|
|Oil and NGLs (bbl/d)||162||93||74|
|Natural gas (mcf/d)||745||744||–|
|Oil equivalent (boe/d @ 6:1)||286||217||32|
|Realized commodity prices ($CDN)|
|Oil and NGLs (bbl)||$46.73||$90.72||(48||)|
|Natural gas (mcf)||$1.91||$4.39||(56||)|
|Oil equivalent (boe @ 6:1)||$31.40||$53.97||(42||)|
Cash flow and netbacks
|Three months ended September 30, 2015||2015||2014||% Change||2015
($ / boe)
($ / boe)
|Oil and natural gas sales||825,321||1,077,975||(23||)||31.40||53.97||(42||)|
|Revenue after royalties||725,642||943,416||(23||)||27.61||47.23||(42||)|
|Production, operating and transportation expenses||(382,359||)||(261,177||)||46||(14.55||)||(13.07||)||11|
|Operating cash flow (1)||343,283||682,239||(50||)||13.06||34.16||(62||)|
|General & administrative expenses||(142,395||)||(144,663||)||(2||)||(5.42||)||(7.24||)||(25||)|
|Interest and other financing charges||(25,197||)||178||(14,256||)||(0.96||)||0.01||(10,858||)|
|Cash flow from operations (1)||175,691||537,754||(67||)||6.68||26.93||(75||)|
|$ Per Share – Basic||0.00||0.01|
|$ Per Share – Diluted||0.00||0.01|
Forward-Looking Statements: All statements, other than statements of historical fact, set forth in this news release, including without limitation, assumptions and statements regarding the volumes and estimated value of the Company’s proved and probable reserves, future production rates, exploration and development results, financial results, and future plans, operations and objectives of the Company are forward-looking statements that involve substantial known and unknown risks and uncertainties. Some of these risks and uncertainties are beyond management’s control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks, industry competition, availability of qualified personnel and management, availability of materials, equipment and third party services, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
These assumptions and statements necessarily involve known and unknown risks and uncertainties inherent in the oil and gas industry such as geological, technical, drilling and processing problems and other risks and uncertainties, as well as the business risks discussed in Management’s Discussion and Analysis of the Company under the heading “Business Risks”. The Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel of oil) 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.
This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Cash flow from operations and net surplus (debt) are not recognized measures under IFRS. Management believes that in addition to net income (loss), cash flow from operations and net surplus (debt) are useful supplemental measures that demonstrate the Company’s ability to generate the cash necessary to repay debt or fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company’s performance. The Company’s method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. Cash flow from operations is calculated by adjusting net income (loss) for other income, unrealized gains or losses on financial derivative instruments, transaction costs, accretion, share based compensation, impairment and depletion and depreciation. Net surplus (debt) is the total of cash plus accounts receivable, prepaids and deposits, less accounts payable plus bank debt.
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.
About Relentless Resources Ltd.
Relentless is a Calgary based emerging oil and natural gas company, engaged in the exploration, development, acquisition and production of natural gas and light gravity crude oil reserves in Alberta, Canada. Relentless’s common shares trade on the TSX Venture Exchange under the symbol RRL.
Relentless’s primary corporate objective is to achieve non-dilutive growth and enhance shareholder value through internal prospect development, strategic production acquisitions and prudent financial management.
Dan Wilson, CEO
Relentless Resources Ltd.
(403) 532-4466 ext. 227
Mobile: (403) 874-9862
(587) 955-9668 (FAX)
Ron Peshke, President
Relentless Resources Ltd.
(403) 532-4466 ext. 223
Mobile: (403) 852-3403
(587) 955-9668 (FAX)