CALGARY, April 14, 2016 /CNW/ – Ikkuma Resources Corp. (“Ikkuma” or the “Corporation”) (TSXV: IKM) is pleased to report its financial and operating results for the three months and year ended December 31, 2015. Selected financial and operational information is set out below and should be read in conjunction with Ikkuma’s December 31, 2015 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation today announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2015 which contains the Corporation’s reserves and other oil and natural gas information, as required under National Instrument 51-101. The AIF, financial statements and MD&A are available for review at www.sedar.com or on the Corporation’s website at www.ikkumarescorp.com.
2015 HIGHLIGHTS
- Achieved production capability in 2015 of approximately 9,000 – 10,000 boe/d following the tie-in of two recompleted gas wells. Ikkuma produced an average of 7,270 boe/d in the fourth quarter which is lower than the Corporation’s capability, due to third party gas volume restrictions and curtailments.
- Increased Ikkuma’s hedged natural gas position for 2016 to 30.6 mmcf (5,100 boe/d) at approximately $3.06/mcf.
- Decreased G&A per boe to $1.58/boe in Q4 2015, a 34% decrease from the $2.39 reported in Q4 2014. Year over year Ikkuma reduced G&A per boe 50% to $1.71/boe from $3.39/boe.
- Generated funds flow from operations in the fourth quarter of $1.8 million ($0.02/share) and $9.9 million ($0.12/share) year to date despite a 30% reduction in natural gas pricing over the last twelve months.
- Achieved relatively flat PDP reserves at 14.4 MMBoe, increased 1P reserves by 4% to 20.0 MMboe and increased 2P reserves 7% to 27.5 MMboe, despite reducing 2015 capital spending by 25%.
- Ikkuma’s recompletion program accounted for $16.7 million of total exploration and development expenditures and resulted in adding 1,555 Mboe of PDP reserves and 2,274 Mboe of 2P reserves. Capex included a 12 km pipeline build, which will be used for up to six offset gas wells. A single offset PUD booked on one of the recompletions has been assigned 1,546 Mboe of 2P reserves. One of the gas recompletion results continues to be one of the top performing new wells in Alberta.
- Total proved plus probable reserve value was relatively unchanged at $202 million (discounted at 10% before tax) as compared to the $208 million reported last year, despite a 30% reduction in the forecasted price deck.
(Expressed in thousands of Canadian dollars except per boe and Share amounts) |
Three months ended December 31, |
Year Ended December 31, |
|||||||
2015 |
2014 |
2015 |
2014 |
||||||
OPERATIONS |
|||||||||
Average daily production |
|||||||||
Natural gas (mcf/d) |
42,790 |
41,238 |
40,552 |
16,179 |
|||||
Light oil (bbls/d) |
7 |
43 |
31 |
41 |
|||||
NGL’s (bbl/d) |
131 |
92 |
135 |
28 |
|||||
Total equivalent (boe/d) |
7,270 |
7,008 |
6,925 |
2,766 |
|||||
Average prices and operating netback |
|||||||||
Natural gas ($/mcf) |
$ |
2.51 |
$ |
3.64 |
$ |
2.71 |
$ |
3.76 |
|
Light oil ($/bbl) |
42.79 |
58.55 |
41.97 |
77.70 |
|||||
NGL ($/bbl) |
25.29 |
42.28 |
22.07 |
47.34 |
|||||
Revenue ($/boe)
|
15.79 |
22.85 |
17.08 |
23.98 |
|||||
Realized gain on commodity contracts ($/boe) |
1.71 |
– |
1.27 |
– |
|||||
Royalties ($/boe) |
(1.46) |
(1.42) |
(1.58) |
(3.06) |
|||||
Operating ($/boe) |
(9.40) |
(9.17) |
(9.01) |
(8.98) |
|||||
Transportation costs ($/boe) |
(1.78) |
(1.74) |
(1.64) |
(1.84) |
|||||
Operating netback (1) ($/boe) |
$ |
4.86 |
$ |
10.52 |
$ |
6.12 |
$ |
10.10 |
|
FINANCIAL |
|||||||||
Oil and natural gas sales |
$ |
10,562 |
$ |
14,731 |
$ |
43,157 |
$ |
24,194 |
|
Funds flow from operations (1) |
$ |
1,804 |
$ |
4,810 |
$ |
9,873 |
$ |
4,445 |
|
Per share –basic and diluted |
$ |
0.02 |
$ |
0.06 |
$ |
0.12 |
$ |
0.11 |
|
Net loss |
$ |
(16,585) |
$ |
(3,711) |
$ |
(28,770) |
$ |
(8,936) |
|
Per share – basic and diluted |
$ |
(0.21) |
$ |
(0.05) |
$ |
(0.36) |
$ |
(0.22) |
|
Capital expenditures |
$ |
2,489 |
$ |
16,857 |
$ |
35,516 |
$ |
22,675 |
|
Property acquisitions (dispositions) |
$ |
(399) |
$ |
21,732 |
$ |
(3,342) |
$ |
132,406 |
|
Net debt (1) |
$ |
33,036 |
$ |
9,924 |
$ |
33,036 |
$ |
9,924 |
|
Bank loan |
$ |
27,859 |
$ |
– |
$ |
27,859 |
$ |
– |
|
Shares outstanding (000)(2) |
80,159 |
80,159 |
80,159 |
80,159 |
|||||
Weighted average shares outstanding |
|||||||||
Basic and diluted (000) (2) |
80,159 |
80,159 |
80,159 |
40,416 |
(1) |
Funds flow from operations, operating netback and net debt are non-IFRS measures. See “Non- IFRS Measures”. |
(2) |
On September 17, 2014, the shareholders’ of the Corporation approved a 10 for 1 share consolidation. The number of shares, warrants and options outstanding have been adjusted on a retroactive basis. |
OUTLOOK
Ikkuma is committed to managing the 2016 capital budget within funds from operations and accordingly the 2016 capital budget will be $6 million to $10 million depending on commodity prices. The Corporation has no drilling commitments and therefore has the flexibility to adjust capital spending as required. The Corporation does expect to maintain or grow production during 2016 even with a modest capital budget as its Foothills producing reserves have a low (10-15%) decline rate.
ABOUT IKKUMA
Ikkuma Resources Corp. is a diversified junior public oil and gas company listed on the TSXV 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.