REGINA, SK / ACCESSWIRE / May 31, 2022 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK) has filed its interim Financial Results and Management Discussion & Analysis for the three months ended March 31, 2022.
Financial Statements
Highlights include:
- In Q1 2022, the Company realized production volume of 84,647 boe, resulting in crude and natural gas sales of $8,121,878 and operating income of $4,988,689 after royalties and operating expenses. This equates to an operating netback per boe of $58.93 and an operating income profit margin of 61.4%.
- In March 2022, the Company successfully closed the acquisition (the "FCL Acquisition") of certain oil & gas assets in Saskatchewan and Alberta from Federated Co-operatives Limited and its wholly-owned subsidiary, 2214896 Alberta Ltd. ("FCL"). Total consideration paid for the FCL Acquisition was approximately $71.7 million, prior to a preliminary purchase price adjustment of $9.6 million in favor of the Company. The FCL Acquisition was funded through a combination of proceeds from the Prospectus Offering and the Senior Loan Facility (see below).
- In March 2022, the Company completed a bought deal public offering (the "Prospectus Offering) for a total gross proceeds of $17.3 million, whereby 95,834,100 units of the Company were issued at a price of $0.18 per unit. Each unit consisted of one Class B Share in the capital of the Company and one purchase warrant. Each purchase warrant is exercisable for one Class B Share at an exercise price of $0.25 per purchase warrant for a period of three years.
- In March 2022, the Company entered into a senior secured loan facility with Anvil Channel Energy Solutions ("ACES") for an aggregate principal amount of $65 million (the "Senior Loan Facility"), denominated as $51.35 million US dollars. The Senior Loan Facility bears interest at a rate of US prime interest rate + 8.00% and will amortize over a four-year period, with monthly combined payments of principal and interest. Under the terms of the Senior Loan Facility, the Company also granted an overriding royalty to ACES on the future oil and natural gas production from the existing oil and gas assets of the Company. The overriding royalty will be 2.5% of oil and natural gas production until the maturity date of the loan facility, and 1.5% thereafter.
$ (Canadian dollars) | March 31, 2022 | March 31, 2021 | ||||||
Cash & cash equivalents | 8,625,754 | 1,289,367 | ||||||
Property, plant and equipment | 152,859,322 | 1,399,253 | ||||||
Exploration and evaluation assets | 1,324,193 | 1,225,927 | ||||||
Total assets | 177,308,775 | 4,435,218 | ||||||
Cash flow used in operations (three months) | 2,305,838 | 143,217 | ||||||
Operating income (three months) | 4,988,689 | 140,270 | ||||||
Gain on acquisition (three months) | 57,913,364 | |||||||
Net income (loss) (three months) | 67,300,594 | (371,687 | ) | |||||
Net income (loss) per share (three months) Basic Diluted | 0.65 0.61 | (0.01 (0.01 | ) ) | |||||
Complete reports and statements are available on SEDAR at www.sedar.com and on the Company website www.rokresources.ca.
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".
For further information, please contact:
Cameron Taylor, Chairman and CEO
Jared Lukomski, Senior Vice President, Land & Business Development
Phone: (306) 522-0011
Email: [email protected]
Non-IFRS Measures
The non-IFRS measures referred to above do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and, therefore, may not be comparable to similar measures used by other companies. Management uses this non-IFRS measurement to provide its shareholders and investors with a measurement of the Company's financial performance and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used. "Operating Income" is calculated by deducting operating expense from total revenue. Total revenue is comprised of oil and gas sales, net of royalties. The Company refers to Operating Income expressed per unit of production as an "Operating Netback". "Operating Income Profit Margin" is calculated by the Company as Operating Income as a percentage of oil and natural gas sales.
Conversion Measures
Production volumes and reserves are commonly expressed on a barrel of oil equivalent ("boe") basis whereby natural gas volumes are converted at the ratio of 6 thousand cubic feet ("Mcf") to 1 barrel of oil ("bbl"). Although the intention is to sum oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants, boe's may be misleading, particularly if used in isolation. A 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. In recent years, the value ratio based on the price of crude oil as compared to natural gas has been significantly higher than the energy equivalency of 6:1 and utilizing a conversion of natural gas volumes on a 6:1 basis may be misleading as an indication of value.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company's objectives, goals, or future plans with respect to pursuing the objectives and the expectations regarding the expected results thereof. Forward-looking statements are necessarily based on several estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to general business, economic and social uncertainties; litigation, legislative, environmental, and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in ROK's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether because of new information, future events, or otherwise.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility of the adequacy or accuracy of this release.
SOURCE: ROK Resources Inc.