NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES
REGINA, SK / ACCESSWIRE / August 29, 2022 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK) has filed its interim Financial Results and Management Discussion & Analysis for the three and six months ended June 30, 2022.
Financial and Operating Highlights
In Q2 2022, the Company realized production volume of 277,877 total boe (3,054 boe/d), resulting in crude and natural gas sales of $28.7 million and operating income of $18.3 million after royalties and operating expenses. This equates to an operating netback per boe of $65.99 and an operating income profit margin of 63.9%. This is the first full quarter since the closing of the FCL Acquisition, as defined from the previous release dated March 7th, 2022.
Financial | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | ||||||||||||
Net income (loss) | (1,460,541 | ) | (386,529 | ) | 70,299,205 | (758,216 | ) | |||||||||
Basic ($/share) | (0.01 | ) | (0.01 | ) | 0.48 | (0.01 | ) | |||||||||
Diluted ($/share) | (0.01 | ) | (0.01 | ) | 0.47 | (0.01 | ) | |||||||||
Funds flow | 17,200,967 | (117,689 | ) | 19,580,003 | (315,036 | ) | ||||||||||
Basic ($/share) | 0.09 | (0.00 | ) | 0.13 | (0.01 | ) | ||||||||||
Diluted ($/share) | 0.09 | (0.00 | ) | 0.13 | (0.01 | ) | ||||||||||
Expenditures on property, plant and equipment | 4,449,920 | 83,933 | 4,496,823 | 115,232 | ||||||||||||
Operating | ||||||||||||||||
Operating Income | ||||||||||||||||
Oil and Natural Gas Sales | 28,710,012 | 709,209 | 36,831,890 | 1,149,236 | ||||||||||||
Royalties | (4,593,258 | ) | (136,277 | ) | (5,882,316 | ) | (220,469 | ) | ||||||||
Operating Expenses | (5,781,028 | ) | (265,088 | ) | (7,625,159 | ) | (480,653 | ) | ||||||||
Total ($) | 18,335,726 | 307,844 | 23,324,415 | 448,114 | ||||||||||||
Average daily production | ||||||||||||||||
Crude oil (bbl/d) | 2,085 | 98 | 1,376 | 81 | ||||||||||||
NGLs (boe/d) | 179 | 35 | 124 | 38 | ||||||||||||
Natural gas (mcf/d) | 4,740 | 201 | 3,023 | 233 | ||||||||||||
Total (boe/d) | 3,054 | 166 | 2,003 | 158 | ||||||||||||
Operating Netback per boe | ||||||||||||||||
Oil and Natural Gas Sales | 103.32 | 46.96 | 101.60 | 40.20 | ||||||||||||
Royalties | (16.53 | ) | (9.02 | ) | (16.23 | ) | (7.71 | ) | ||||||||
Operating Expenses | (20.80 | ) | (17.55 | ) | (21.03 | ) | (16.81 | ) | ||||||||
Operating Netbacks ($/boe) | 65.99 | 20.39 | 64.34 | 15.68 | ||||||||||||
Operating Income Profit Margin | 63.9 | % | 43.4 | % | 63.3 | % | 39.0 | % | ||||||||
Share information | ||||||||||||||||
Common shares outstanding, end of period | 195,160,585 | 74,471,576 | 195,160,585 | 74,471,576 | ||||||||||||
Weighted average basic shares outstanding | 189,352,095 | 64,688,609 | 146,999,083 | 61,909,283 | ||||||||||||
Weighted average diluted shares outstanding | 197,548,079 | 64,688,609 | 150,094,930 | 61,909,283 | ||||||||||||
Net Debt
Reductions of Net Debt from $45.8 million as at March 31, 2022, to $38.4 million as at June 30, 2022, 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.
| June 30, 2022 | March 31, 2022 | December 31, 2021 | ||||||||||
Senior Loan Facility (12.75%) | 58,298,629 | 62,549,849 | - | |||||||||
Debt Notes (14%) | - | - | 4,000,000 | |||||||||
Less: adjusted working capital | 19,912,783 | 16,750,311 | 478,610 | |||||||||
Net debt | 38,385,846 | 45,799,538 | 3,521,390 | |||||||||
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 royalties and operating expense from total sales 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. "Net Debt" includes all indebtedness of the Company, such as the Debt Notes and the Senior Loan Facility (as defined within the Company's interim condensed financial statements for the six months ended June 30, 2022), net of Adjusted Working Capital. "Adjusted Working Capital" is calculated as current assets less current liabilities, excluding current portion of debt as presented on the Company's statement of financial position within the Company's interim condensed financial statements for the six months ended June 30, 2022.
"Funds Flow" includes all cash for (used in) operating activities and is calculated before the change in non-cash working capital. "Funds flow", "funds flow basic ($/share)" and "funds flow diluted ($/share)" are capital management measures and are key measures of operating performance as they demonstrate the Company's ability to generate the cash necessary to repay debt and fund capital investments. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, funds flow, funds flow basic ($/share) and funds flow diluted ($/share) provide useful measures of ROK's ability to generate cash that are not subject to short-term movements in non-cash operating working capital. Funds flow on a per share basis (basic and diluted) is calculated by dividing funds flow by the weighted average number of basic shares and weighted average number of diluted shares outstanding for the relevant period.
The following table reconciles cash flow from operating activities to funds flow:
| Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | |||||||||||||
Cash provided by (used in) operating activities | 18,661,683 | (308,562 | ) | 16,355,845 | (451,779 | ) | ||||||||||
Change in non-cash working capital | (1,460,716 | ) | 190,873 | 3,224,158 | 136,743 | |||||||||||
Funds flow | 17,200,967 | (117,689 | ) | 19,580,003 | (315,036 | ) | ||||||||||
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.