REGINA, SK / ACCESSWIRE / May 26, 2023 / ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK)(TSXV:ROK.WT)(OTCQB:ROKRF), has filed its interim Financial Results and Management Discussion and Analysis for the three months ended March 31, 2023.
Financial and Operating Highlights
In Q1 2023, the Company realized production volume of 372,570 total boe (4,140 boe/d), resulting in crude and natural gas sales of $24.1 million and funds from operations of $13.3 million. This equates to an operating netback, after hedging, per boe of $33.71 and an operating income profit margin, after hedging, of 52.0%. For Q1 2022, a gain on acquisition of $66.8 million significantly contributed to the resulting net income of $76.2 million for the quarter.
| Financial | Q1 2023 | Q1 2022 | ||||||
| Net income | 330,025 | 76,209,556 | ||||||
| Basic ($/share) | 0.00 | 0.73 | ||||||
| Diluted ($/share) | 0.00 | 0.69 | ||||||
| Funds flow | 11,514,733 | 2,379,036 | ||||||
| Basic ($/share) | 0.05 | 0.02 | ||||||
| Diluted ($/share) | 0.04 | 0.02 | ||||||
| Expenditures on property, plant and equipment | 5,445,650 | 46,903 | ||||||
| Operating | ||||||||
| Operating Income | ||||||||
| Oil and Natural Gas Sales | 24,137,513 | 8,121,878 | ||||||
| Royalties | (4,771,385) | (1,289,058) | ||||||
| Operating Expenses | (9,471,536) | (1,844,131) | ||||||
| Operating Income | 9,894,592 | 4,988,689 | ||||||
| Realized gain on commodity contracts | 2,666,447 | – | ||||||
| Processing and other income | 734,731 | 62,475 | ||||||
| Funds from operations | 13,295,770 | 5,051,164 | ||||||
| Average daily production | ||||||||
| Crude oil (bbl/d) | 2,466 | 659 | ||||||
| NGLs (boe/d) | 401 | 68 | ||||||
| Natural gas (mcf/d) | 7,635 | 1,280 | ||||||
| Total (boe/d) | 4,140 | 941 | ||||||
| Operating Netback per boe | ||||||||
| Oil and Natural Gas Sales | 64.79 | 95.95 | ||||||
| Royalties | (12.81) | (15.23) | ||||||
| Operating Expenses | (25.42) | (21.79) | ||||||
| Operating Netbacks ($/boe) | 26.56 | 58.93 | ||||||
| Operating Netbacks, after hedging ($/boe) | 33.71 | 58.93 | ||||||
| Operating Income Profit Margin | 41.0 | % | 61.4 | % | ||||
| Operating Income Profit Margin, after hedging | 52.0 | % | 61.4 | % | ||||
| Share information | ||||||||
| Common shares outstanding, end of period | 212,613,817 | 185,861,266 | ||||||
| Weighted average basic shares outstanding | 211,916,317 | 104,175,483 | ||||||
| Weighted average diluted shares outstanding | 265,105,802 | 110,030,345 | ||||||
Net Debt
The continued reduction of Net Debt quarter over quarter is a result of organically generated funds flows utilized to reduce Company indebtedness. ROK uses “Net Debt” as a measure of the Company’s financial position and liquidity, however it is not intended to be viewed as an alternative to other measures calculated in accordance with IFRS.
| March 31, 2023 |
December 31, 2022 |
|||||||
| Credit Facility (8.2%) (1) | 15,000,000 | – | ||||||
| Term Loan (10.9%) (1) | 7,143,533 | – | ||||||
| Lease obligations (1) | 30,077 | – | ||||||
| Senior Loan Facility (15%) (1) | – | 43,347,566 | ||||||
| Less: adjusted working capital (2) | 13,870,283 | 8,006,020 | ||||||
| Net debt | 8,303,327 | 35,341,546 | ||||||
- Represents undiscounted face value of debt balances and lease obligations outstanding as of each respective date presented.
- Calculation of working capital excludes current portion of debt as presented on the statement of financial position.
Complete reports and statements are available on SEDAR at www.sedar.com
First Quarter Highlights
- Record production of 4,140 boe/d (70% liquids);
- Net Debt of $8.3 million as of March 31, 2023. A decrease of $27 million from Q4 2022, after Q1 2023 capital expenditures of $5.4 million;
- Successfully drilled 2 gross (1.6 net) wells: 1 vertical test well in Southeast, Saskatchewan and 1 horizontal Cardium well in Kaybob, Alberta;
- Realized a quarterly hedge gain on commodity contracts of $2.7 million;
Early Repayment of Term Loan and Hedge Strategy
Through a combination of monthly cash flow and strategic non-operated asset dispositions the Company was able to pay down the term loan from the initial balance of $52.5 million to $7.1 million in Q1 2023, with the full repayment of the remaining balance in May 2023. As a result of the early term loan repayment, the Company made the strategic decision to unwind certain commodity swap hedges placed in 2023, 2024 and 2025, as more particularly described in its May 2, 2023 press release.
Impact of Alberta Wildfires
The Alberta wildfires have affected ROK’s Kaybob, Alberta operations, resulting in production shut-ins of ~300 Boepd (80% natural gas). It is expected that some production will remain shut-in through Q2 2023 and potentially into Q3 2023, however ROK will provide additional guidance, as further details emerge. The Company’s corporate 2023 year-end production target of 4,500 Boepd remains unchanged with the 2H 2023 drilling program scheduled to begin in July 2023.
About ROK
ROK is primarily engaged in exploring for petroleum and natural gas development activities in Alberta and Saskatchewan. Its head office is located in Regina, Saskatchewan, Canada and ROK’s common shares are traded on the Exchange under the trading symbol “ROK”.
SOURCE: ROK Resources Inc.
View source version on accesswire.com:
https://www.accesswire.com/757559/ROK-Resources-Files-Financial-Results-and-Management-Discussion-Analysis-for-the-First-Quarter-of-2023
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