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Ikkuma Resources Corp. Announces Financial and Operating Results for the Third Quarter of 2014

CALGARY, Nov. 25, 2014 /CNW/ - Ikkuma Resources Corp. ("Ikkuma" or the "Corporation") (TSXV: IKM) is pleased to report its financial and operating results for the three and nine months ended September 30, 2014. Ikkuma's interim condensed financial statements and related management's discussion and analysis for three months and nine months ended September 30, 2014 have been filed and are available on the SEDAR website at www.sedar.com and may also be obtained on Ikkuma's website at www.ikkumarescorp.com.

Highlights

  • Completed the Lynx/Palliser/Minnow and Ojay/Copton/Findley Foothills acquisition on July 31, 2014 for a cost of $108.3 million, net of adjustments, adding approximately 5900 boe/d of natural gas production.
  • Upon completion of the acquisition the Corporation received the $130 million of escrowed proceeds of the June 27, 2014 subscription receipts financing.  Each subscription receipt holder received one common share on August 12, 2014 as the Corporation filed a final prospectus qualifying the common shares underlying the subscription receipts.  Net proceeds after the 5.5% underwriter fee and other issue costs was $122.1 million.
  • Completed a second acquisition of natural gas assets located in the Copton and Narraway areas of the Alberta foothills on August 6, 2014. The gross cost of this acquisition was $2.4 million ($2.4 million net of adjustments). This acquisition added approximately 120 boe/d of production on closing.
  • Completed an eight for one rights offering that was agreed to in the May 6, 2014 Reorganization and Investment Agreement.  The Corporation issued 344,315 common shares for proceeds of $0.258 million.
  • Achieved a third quarter operating netback of $3.3 million
  • Achieved third quarter funds flow from operations of $1.5 million ($0.02/share) and earnings of $1.5 million ($0.02/share) for the third quarter.
  • Added 18 sections of crown land in the Foothills during the third quarter at an average price of $110/acre.
  • On November 4, 2014 Ikkuma closed the acquisition of certain petroleum and natural gas assets located in several areas of the Canadian Foothills for $23.2 million ($21.8 million net of interim adjustments) that was announced in August 2014.  The Corporation's credit facilities were increased today by $20 million, to $75 million, due to the acquisition.









Three months ended


Nine months ended



September 30,


September 30,



2014


2013


2014


2013



(unaudited)

(unaudited)

Operations








Average daily production









Natural gas (mcf/d)(1)


22,453


75


7,734


72


Light Oil (bbls/d)


39


50


40


68


NGL's (bbl/d)


9


1


6


1


Total equivalent (boe/d)


3,790


64


1,335


81










Average product prices









Natural gas ($/mcf)

$

3.96

$

7

$

3.98

$

2.83


Light Oil ($/bbl)

$

81.76

$

90.23

$

84.61

$

80.80


NGL ($/bbl)

$

82.51

$

51.37

$

75.07

$

53.05


Total equivalent ($/boe)

$

24.55

$

74.37

$

25.98

$

71.00











Royalties ($/boe)

$

5.76

$

13.38

$

5.95

$

14.19


Operating and transportation










costs ($/boe)


$

9.35

$

30.77

$

10.46

$

32.59


Operating netback(1)($/boe)


$

9.44

$

30.22

$

9.57

$

24.22










Financial ($000)








Oil and gas sales (1)

$

8,560

$

434

$

9,463

$

1,568

Funds flow from operations(2)

$

1,520

$

(75)

$

(365)

$

(207)


Per share – basic and diluted

$

0.02

$

0.02

$

0.01

$

0.07

Income (loss)

$

1,499

$

2,068

$

(5,225)

$

215


Per share – basic & diluted

$

0.02

$

0.72

$

(0.19)

$

0.07

Capital expenditures incl. acquisitions

$

115,959

$

298

$

116,500

$

521

Net debt (working capital)(2)

$

(21,591)

$

837

$

(21,591)

$

837

Shares outstanding (000)(3)


80,159


2,878


80,159


2,878

Weighted average shares outstanding










Basic (000)(3)


62,885


2,878


27,023


2,878


Diluted (000)(3)


65,357


2,878


28,972


2,878

  

(1)

Natural gas volumes were reduced within the quarter due to third party maintenance of gas distribution and processing infrastructure.


(2)

 Certain financial measures referred to in this press release, such as "funds flow", "funds flow per boe", "funds flow per share", "operating netback" , and "Net debt" do not have standardized meanings prescribed by Canadian generally accepted accounting principles ("GAAP"). Management believes that in addition to net income, funds flow from operations and netback are useful supplemental measures as they provide an indication of the results generated by the Corporation's principal business activities before the consideration of how those activities are financed or how the results are taxed. Investors are cautioned, however, that these measures should not be construed as alternatives to net income determined in accordance with IFRS, as an indication of Ikkuma's performance. These financial measures do not have a standardized meaning prescribed by IFRS and are, therefore, unlikely to be comparable to similar measures presented by other issuers. "Funds flow" is calculated based on cash flows from operating activities before changes in non-cash working capital, transaction costs from acquisitions and decommissioning expenditures incurred. "Operating netback" is calculated by deducting royalties, production expenses and transportation expenses from oil and gas revenue. "Funds flow from operations per share" is calculated using weighted average number of shares outstanding consistent with the net income (loss) per share calculation. "Net debt" represents bank debt and accounts payable and accrued liabilities less accounts receivable and prepaid expenses and deposits.



(3)

On September 17, 2014, the shareholders of the Corporation approved a change of the Corporation's name to "Ikkuma Resources Corp." from Panterra Resource Corp. In addition, the Shareholders approved a 10 for 1 share consolidation. The number of shares, warrants and options outstanding have been adjusted on a retroactive basis.

About Ikkuma

Ikkuma is a junior public oil and gas company listed on the TSX Venture Exchange under the symbol "IKM" (as of Monday, September 22, 2014), with conventional and unconventional assets 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. Corporation information can be found at: www.ikkumarescorp.com.

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward‑looking statements and forward‑looking information within the meaning of applicable securities laws.  The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward‑looking statements or information.  Although Ikkuma believes that the expectations and assumptions on which the forward‑looking statements and information are based are reasonable, undue reliance should not be placed on the forward‑looking statements and information because Ikkuma cannot give any assurance that they will prove to be correct.  Since forward‑looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risk.  These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital.  We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance.  The forward-looking statements and information contained in this press release are made as of the date hereof and Ikkuma undertakes no obligation to update publicly or revise any forward‑looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Certain information set out herein may be considered as "financial outlook" within the meaning of applicable securities laws.  The purpose of this financial outlook is to provide readers with disclosure regarding Ikkuma's reasonable expectations as to the anticipated results of its proposed business activities for the periods indicated.  Readers are cautioned that the financial outlook may not be appropriate for other purposes.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl).  BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf: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 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

NEITHER 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 Ikkuma Resources Corp.

For further information: Tim de Freitas, President & CEO; Or, Carrie Yuill, VP Finance & CFO; Ikkuma Resources Corp., 400, 540-5th Avenue S.W., Calgary, AB, T2P 0M2, Phone : 403-261-5900, Fax : 403-261-5902