/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES OF AMERICA./
CALGARY, Aug. 30, 2017 /CNW/ - Manitok Energy Inc. (the
"Corporation" or "Manitok") (TSX-V: MEI)
announces its financial and operating results for the second
quarter of 2017.
The full text of Manitok's second quarter results are contained
in its unaudited and unreviewed condensed interim consolidated
financial statements as at and for the three and six months ended
June 30, 2017 and the related
management's discussion and analysis, copies of which are available
electronically on Manitok's profile on the System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedar.com
and also on Manitok's website at www.manitokenergy.com.
Second Quarter 2017 Results:
- Average production increased by 55%, year over year, to 5,556
boe/d (38% light oil and liquids) as compared to 3,587 boe/d (49%
light oil and liquids) in the second quarter of 2016.
- Recorded negative funds from operations of $0.1 million in the second quarter of 2017 as
compared to negative funds from operations of $0.2 million in the second quarter of 2016. The
second quarter of 2017 included an $0.8
million one-time cash payment related to the amended Lease
Issuance and Drilling Commitment Agreement ("LIDCA"), which
contributed to the $32.0 million
reduction in Manitok's capital commitment over 2017 and 2018 as
discussed below.
- Operating netback excluding the realized gain (loss) on
financial instruments was $8.76/boe
as compared to $2.45/boe in the
second quarter of 2016.
- Per unit operating expenses decreased by 4% to $14.87/boe as compared to $15.44/boe in the second quarter of 2016.
- Per unit G&A expenses decreased by 45% to $2.79/boe as compared to $5.03/boe in the second quarter of 2016.
- As at June 30, 2017, net bank
debt was $40.3 million and net debt
was $73.4 million, which includes
senior secured notes and long-term financial obligations.
- On May 24, 2017, Manitok
announced amended terms to its LIDCA Agreement with an Alberta based royalty company, including a
$32.0 million reduction of its
capital commitment over 2017 and 2018. Full details are available
in the press release which can be found either on Manitok's website
(www.manitokenergy.com) or under Manitok's SEDAR profile at
www.sedar.com.
- On June 6, 2017, Manitok closed
the previously announced arrangement agreement to acquire Craft Oil
Ltd. ("Craft Arrangement"), which includes
approximately $4.5 million of cash,
$0.9 million of working capital
surplus and approximately 250 boe/d (22% oil and liquids) of
production, subsequent to an asset divestiture by Craft, which
closed prior to the Craft Arrangement. Craft shareholders received
56.9 million common shares of Manitok.
OPERATIONAL AND FINANCIAL SUMMARY
|
|
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2017
|
2016
|
2017
|
2016
|
Operating
|
|
|
|
|
Average daily
production
|
|
|
|
|
|
Light oil
(bbls/d)
|
1,505
|
1,519
|
1,566
|
1,665
|
|
Natural gas
(mcf/d)
|
20,605
|
11,004
|
22,144
|
12,654
|
|
NGLs
(bbls/d)
|
617
|
235
|
669
|
223
|
|
Total
(boe/d)
|
5,556
|
3,587
|
5,926
|
3,997
|
Average realized
sales price
|
|
|
|
|
|
Light oil
($/bbl)
|
57.00
|
49.42
|
57.82
|
42.38
|
|
Natural gas
($/mcf)
|
3.02
|
1.49
|
2.94
|
1.79
|
|
NGLs
($/bbl)
|
32.81
|
24.86
|
33.71
|
23.31
|
|
Total
($/boe)
|
30.29
|
27.11
|
30.08
|
24.64
|
Netback and
Cost ($ per boe)
|
|
|
|
|
|
Petroleum and natural
gas sales
|
30.29
|
27.11
|
30.08
|
24.64
|
|
Processing
revenue
|
1.01
|
0.74
|
0.97
|
0.65
|
|
Realized gain (loss)
on financial instruments
|
(0.67)
|
5.74
|
(0.75)
|
24.47
|
|
Royalty
income
|
0.07
|
-
|
0.05
|
-
|
|
Royalty
expenses
|
(6.35)
|
(8.57)
|
(6.78)
|
(7.28)
|
|
Operating
expenses
|
(14.87)
|
(15.44)
|
(13.34)
|
(15.03)
|
|
Transportation and
marketing expenses
|
(1.39)
|
(1.39)
|
(1.44)
|
(1.47)
|
Operating netback
(1)
|
8.09
|
8.19
|
8.79
|
25.98
|
|
General and
administrative expenses
|
(2.79)
|
(5.03)
|
(2.82)
|
(4.38)
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|
Interest and
financing expenses
|
(3.48)
|
(3.90)
|
(3.19)
|
(4.02)
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Funds from operations
netback (1)
|
1.82
|
(0.74)
|
2.78
|
17.58
|
Financial
|
|
|
|
|
Petroleum and natural
gas revenue ($000)
|
15,352
|
8,849
|
32,314
|
17,923
|
Funds from operations
($000) (1)
|
(92)
|
(244)
|
1,850
|
12,791
|
|
Per share – basic and
diluted ($) (1)
|
-
|
-
|
0.01
|
0.08
|
Net loss
($000)
|
(8,549)
|
(7,354)
|
(12,375)
|
(3,752)
|
|
Per share – basic and
diluted ($) (2)
|
(0.03)
|
(0.04)
|
(0.05)
|
(0.02)
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Common shares
outstanding
|
|
|
|
|
|
End of period –
basic
|
319,716,343
|
177,510,671
|
319,716,343
|
177,510,671
|
|
End of period –
diluted
|
386,267,338
|
193,888,631
|
386,267,338
|
193,888,631
|
|
Weighted average for
the period – basic
|
277,825,505
|
168,663,250
|
270,364,121
|
162,364,715
|
|
Weighted average for
the period – diluted
|
277,825,505
|
169,036,922
|
270,437,499
|
162,678,786
|
Capital expenditures,
net of divestitures ($000)
|
2,212
|
3,260
|
4,419
|
9,426
|
Adjusted working
capital deficit (surplus) ($000) (1)
|
3,044
|
1,853
|
3,044
|
1,853
|
Drawn on credit
facilities ($000)
|
37,209
|
43,693
|
37,209
|
43,693
|
Net bank debt ($000)
(1)
|
40,253
|
45,546
|
40,253
|
45,546
|
Senior Secured
Notes
|
18,363
|
-
|
18,363
|
-
|
Long-term financial
obligations ($000)
|
14,803
|
14,902
|
14,803
|
14,902
|
Net debt ($000)
(1)
|
73,419
|
60,448
|
73,419
|
60,448
|
(1)
|
Funds from
operations, funds from operations per share, funds from operations
netback, operating netback, adjusted working capital deficit, net
bank debt and net debt do not have standardized meanings prescribed
by generally accepted accounting principles and therefore should
not be considered in isolation. These reported amounts and
their underlying calculations are not necessarily comparable or
calculated in an identical manner to a similarly titled measure of
other companies where similar terminology is used. Where
these measures are used they should be given careful consideration
by the reader. Refer to the Non-GAAP Financial Measures paragraph
in the Advisories section of this press release.
|
(2)
|
The basic and diluted
weighted average shares outstanding are the same for periods in
which the Corporation records a net loss and when all the
outstanding stock options and warrants are
anti-dilutive.
|
About Manitok
Manitok is a public oil and gas exploration and development
company focusing on Lithic Glauconitic light oil in southeast
Alberta and Cardium light oil in
west central Alberta. The
Corporation utilizes its expertise, combined with the latest
recovery techniques, to develop the remaining oil and liquids-rich
natural gas pools in its core areas of the Western Canadian
Sedimentary Basin.
Non-GAAP Financial Measures
This press release contains references to measures used in
the oil and natural gas industry such as "funds from operations",
"funds from operations netback", "funds from operations per share",
"operating netback", "adjusted working capital deficit", "net bank
debt" and "net debt". These measures do not have standardized
meanings prescribed by generally accepted accounting principles
("GAAP"), including International Financial Reporting
Standards ("IFRS") and therefore should not be considered in
isolation. These reported amounts and their underlying
calculations are not necessarily comparable or calculated in an
identical manner to a similarly titled measure of other companies
where similar terminology is used. Where these measures are
used they should be given careful consideration by the
reader. These measures have been described and presented in
this press release in order to provide shareholders and potential
investors with additional information regarding the Corporation's
liquidity and its ability to generate funds to finance its
operations.
Funds from operations should not be considered an alternative
to, or more meaningful than, cash provided by operating, investing
and financing activities or net income as determined in accordance
with GAAP, as an indicator of Manitok's performance or
liquidity. Funds from operations is used by Manitok to
evaluate operating results and Manitok's ability to generate cash
flow to fund capital expenditures and repay indebtedness.
Funds from operations denotes cash flow from operating activities
as it appears on the Corporation's Statement of Cash Flows before
decommissioning expenditures, acquisition-related expenses and
changes in non-cash operating working capital. Funds from
operations is also derived from net income (loss) plus non-cash
items including deferred income tax expense (recovery), depletion
and depreciation expense, impairment expense, stock-based
compensation expense, accretion expense, unrealized gains or losses
on financial instruments, gains or losses on asset divestitures and
the change in fair value of marketable securities. Funds from
operations netback is calculated on a per boe basis and funds from
operations per share is calculated as funds from operations divided
by the weighted average number of basic and diluted common shares
outstanding. Operating netback denotes petroleum and natural gas
revenue, processing revenue, royalty income and realized gains or
losses on financial instruments less royalty expenses, operating
expenses and transportation and marketing expenses calculated on a
per boe basis. Adjusted working capital deficit includes current
assets less current liabilities excluding the current
portion of the amount drawn on the credit facilities, the current
portion of the fair value of financial instruments and provisions.
Manitok uses net bank debt and net debt as a measure to assess its
financial position. Net bank debt includes outstanding bank
indebtedness plus adjusted working capital deficit (surplus) and
net debt includes net bank debt plus the senior secured notes and
the long-term financial obligations.
Barrels of Oil Equivalent
The term barrels of oil equivalent ("boe") may be
misleading, particularly if used in isolation. Per boe amounts have
been calculated using a conversion ratio of six thousand cubic feet
(6 mcf) of natural gas to one barrel (1 bbl) of crude oil.
The boe conversion ratio of 6 mcf to 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.
Neither the 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 Manitok Energy Inc.