Relentless Announces Year-End 2016 Results and Filing of Reserves Disclosure
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E-mailCALGARY, ALBERTA -- (Marketwired) -- 04/27/17 -- Relentless Resources Ltd. ("Relentless" or the "Company") (TSX VENTURE: RRL) announces the filing of its audited financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2016. The Company also announces the filing of its reserves data and other oil and natural gas information ("51-101 Information"), as required under National Instrument 51-101. The financial statements, MD&A and 51-101 Information are available for review at www.sedar.com. Additional information about Relentless is available on SEDAR at www.sedar.com or on the Company's website at www.relentless-resources.com.
Recent Highlights
- In Q4 of 2016, the Company expended approximately $1.5 million to drill
and complete two new wells in Heathdale, Alberta:
- 102/5-7-27-9W4 horizontal oil well:
- drilled in eight days to a total measured depth of 2,375 metres;
- perforated over 23 intervals and fracture stimulated using a coil
tubing straddle packer assembly; placed on stream in mid-January with
a spud to on-stream timeline of 35 days inclusive of the holidays;
- total on-stream cost of $1.17 million as a one-off single well
operation;
- continual production with minimal downtime and a high fluid level;
- averaged 100 boe/d (80% oil) for the first 60 days; and
- continues to produce at 80 boe/d (75% oil).
- 100/6-12-27-10W4 vertical well:
- drilled approximately 1.2 kilometres west of the known Heathdale
glauconitic oil pool;
- encountered approximately five meters of glauconitic oil reservoir at
virgin pressure;
- total on-stream cost of $425,000 equipped as a single well battery;
and
- fifth section of land in which Relentless has confirmed the presence
of this glauconite oil deposit.
- The Company's net debt was reduced from approximately $4.05 million, as at
December 31, 2016, to approximately $3.05 million as a result of the
completion of two private placements in January 2017.
- The Heathdale glauconite oil pool have been successfully delineated with
five vertical wells and developed with four horizontal multistage
fractured wells.
- Current corporate production is estimated at 275 boe/d (60% oil and
liquids). Fifty boe/d is currently shut in as a result of a third party
compressor outage and is anticipated to return to production in Q2 2017.
Cash Flow, Comprehensive Loss and Netbacks
---------------------------------------------------------------------------- Three months ended December % 2016 2015 % 31, 2016 2015 Change ($ / boe) ($ / boe) Change ---------------------------------------------------------------------------- Oil and natural gas sales 606,421 613,309 (1) 34.26 29.68 15 Royalties (53,717) (35,565) 51 (3.03) (1.72) 76 ---------------------------------------------------------------------------- Revenue after royalties 552,704 577,744 (4) 31.23 27.96 12 Production, operating and transportation expenses (309,960) (303,177) 2 (17.51) (14.67) 19 ---------------------------------------------------------------------------- Operating cash flow (1) 242,744 274,567 (12) 13.72 13.29 3 General & administrative expenses (102,106) (109,994) (7) (5.77) (5.32) 8 Interest and other financing charges (34,489) (36,305) (5) (1.95) (1.76) 11 Bad debt expense - (181,018) (100) 0.00 (8.76) (100) Flow through share indemnification expense - (15,732) (100) 0.00 (0.76) (100) ---------------------------------------------------------------------------- Cash flow from operations (1) 106,149 (68,482) (255) 6.00 (3.31) (281) Other income 393,750 26,192 1,403 22.25 1.27 1652 Gain on disposition 99,504 5.62 0.00 100 Share based compensation - - - 0.00 0.00 - Accretion (10,799) 21,758 (150) (0.61) 1.05 (158) Impairment 59,050 (234,506) (125) 3.34 (11.35) (129) Depletion and depreciation (135,807) (138,500) (2) (7.67) (6.70) 14 ---------------------------------------------------------------------------- Comprehensive income (loss) 511,847 (393,538) (230) 28.93 (19.04) (252) ---------------------------------------------------------------------------- $ Per Share - Basic 0.01 (0.01) $ Per Share - Diluted 0.01 (0.01) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Year ended % 2016 2015 % December 31, 2016 2015 Change ($ / boe) ($ / boe) Change ---------------------------------------------------------------------------- Oil and natural gas sales 2,030,043 3,331,944 (39) 29.54 32.91 (10) Royalties (171,064) (413,605) (59) (2.49) (4.08) (39) ---------------------------------------------------------------------------- Revenue after royalties 1,858,979 2,918,339 (36) 27.05 28.83 (6) Production, operating and transportation expenses (1,011,344) (1,506,848) (33) (14.71) (14.88) (1) ---------------------------------------------------------------------------- Operating cash flow (1) 847,635 1,411,491 (40) 12.33 13.95 (12) General & administrative expenses (475,096) (551,445) (14) (6.91) (5.45) 27 Interest and other financing charges (139,562) (72,628) 92 (2.03) (0.72) 183 Bad debt expense - (181,018) (100) 0.00 (1.79) (100) Flow through share indemnification expense - (15,732) (100) 0.00 (0.16) (100) ---------------------------------------------------------------------------- Cash flow from operations (1) 232,977 590,668 (61) 3.39 5.83 (42) Other income 393,750 305,223 29 5.73 3.01 90 Gain on disposition 99,504 - 1.45 0.00 100 Share based compensation - (132,027) (100) 0.00 (1.30) (100) Accretion (54,681) (64,901) (16) (0.80) (0.64) 24 Impairment (96,725) (1,903,931) (95) (1.41) (18.80) (93) Depletion and depreciation (819,719) (1,390,068) (41) (11.93) (13.73) (13) ---------------------------------------------------------------------------- Comprehensive loss (244,894) (2,595,036) (91) (3.56) (25.63) (86) ---------------------------------------------------------------------------- $ Per Share - Basic (0.00) (0.04) $ Per Share - Diluted (0.00) (0.04) ----------------------------------------------------------------------------
(1) Non-IFRS measure
Daily Production and Commodity Prices
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Three months ended December 31
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2016 2015 % Change
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Daily production
Oil and NGLs (bbl/d) 96 125 (23)
Natural gas (mcf/d) 581 600 (3)
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Oil equivalent (boe/d @ 6:1) 192 225 (15)
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Realized commodity prices ($CDN)
Oil and NGLs (bbl) $ 50.17 $ 40.62 24
Natural gas (mcf) $ 3.10 $ 2.67 16
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Oil equivalent (boe @ 6:1) $ 34.26 $ 29.68 15
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Years ended December 31
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2016 2015 % Change
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Daily production
Oil and NGLs (bbl/d) 103 150 (31)
Natural gas (mcf/d) 511 766 (33)
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Oil equivalent (boe/d @ 6:1) 188 278 (32)
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Realized commodity prices ($CDN)
Oil and NGLs (bbl) $ 42.18 $ 47.95 (12)
Natural gas (mcf) $ 2.37 $ 2.55 (7)
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Oil equivalent (boe @ 6:1) $ 29.54 $ 32.91 (10)
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Reserves Data
The reserves data set forth below (the "Reserves Data") is based upon a report prepared by Trimble Engineering Associates Ltd. independent petroleum consultants of Calgary, Alberta, evaluating the crude oil, natural gas and natural gas liquids ("NGL") reserves of Relentless, as at December 31, 2016, with a preparation date of April 11, 2017 (the "Trimble Report"). The Reserves Data summarizes the crude oil, NGL and natural gas reserves of the Company and the net present values of future net revenue for these reserves using forecast prices and costs. The Trimble Report is available for review on the Company's profile on www.sedar.com.
OIL AND GAS RESERVES SUMMARY
Light & Medium Crude
Reserve Category Oil Solution Gas
Gross Net Gross Net
Mstb Mstb MMcf MMcf
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Proved
Developed Producing 249.4 222.8 1,028.2 906.0
Developed Non-producing 60.0 49.9 113.5 89.3
Undeveloped 270.0 228.8 446.3 370.6
Total Proved 579.4 501.5 1,588.0 1,366.0
Total Probable 502.9 432.3 1,034.5 883.4
Total Proved Plus Probable 1,082.3 933.7 2,622.5 2,249.4
Conventional
Reserve Category Natural Gas NGL BOE
Gross Net Gross Net Gross Net
MMcf MMcf Mstb Mstb Mboe Mboe
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Proved
Developed Producing 506.2 441.0 26.8 18.0 531.9 465.4
Developed Non-producing - - 1.0 0.7 79.9 65.5
Undeveloped - - 4.0 3.3 348.4 293.9
Total Proved 506.2 441.0 31.8 22.1 960.2 824.7
Total Probable 170.2 150.9 14.3 11.3 718.0 615.9
Total Proved Plus Probable 676.3 591.9 46.1 33.4 1,678.2 1,440.6
NET PRESENT VALUES OF FUTURE NET REVENUE BEFORE INCOME TAXES DISCOUNTED AT (%/YEAR)
(FORECAST COSTS AND PRICES)
Reserve Category 0% (BTax) 5% (BTax) 10% (BTax) 15% (BTax) 20% (BTax) 10%
M$ M$ M$ M$ M$ $/boe
----------------------------------------------------------------------------
Proved
Developed
Producing 11,391.6 8,788.1 7,118.4 5,993.5 5,197.4 15.30
Developed Non-
producing 2,862.5 2,267.6 1,883.9 1,622.4 1,435.6 28.76
Undeveloped 9,546.3 6,868.6 5,163.5 4,015.1 3,204.1 17.57
Total Proved 23,800.4 17,924.3 14,165.8 11,631.1 9,837.0 17.18
Total Probable 26,907.6 15,692.0 10,407.8 7,557.9 5,832.5 16.90
Total Proved
Plus Probable 50,708.0 33,616.3 24,573.5 19,188.9 15,669.5 17.06
About Relentless Resources Ltd.
Relentless is a Calgary based emerging oil and natural gas company, engaged in the exploration, development, acquisition and production of natural gas and light gravity crude oil reserves in Alberta, Canada. Relentless's common shares trade on the TSX Venture Exchange under the symbol RRL.
Relentless's primary corporate objective is to achieve non-dilutive growth and enhance shareholder value through internal prospect development, strategic production acquisitions and prudent financial management.
Forward-Looking Statements: All statements, other than statements of historical fact, set forth in this news release, including without limitation, assumptions and statements regarding the volumes and estimated value of the Company's proved and probable reserve s, future production rates, exploration and development results, financial results, and future plans, operations and objectives of the Company are forward-looking statements that involve substantial known and unknown risks and uncertainties. Some of these risks and uncertainties are beyond management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks, industry competition, availability of qualified personnel and management, availability of materials, equipment and third party services, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
These assumptions and statements necessarily involve known and unknown risks and uncertainties inherent in the oil and gas industry such as geological, technical, drilling and processing problems and other risks and uncertainties, as well as the business risks discussed in the MD&A under the heading "Business Risks". The Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel of oil) 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. Boe/d means boe per day.
Any references in this press release to initial, early and/or test production/performance rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production. The initial production rate may be estimated based on other third party estimates or limited data available at this time. Initial production or test rates are not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non -IFRS financial measures may not be comparable to similar measures presented by other issuers. Cash flow from operations and net surplus (debt) are not recognized measures under IFRS. Management believes that in addition to net income (loss), cash flow from operations and net surplus (debt) are useful supplemental measures that demonstrate the Company's ability to generate the cash necessary to repay debt or fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company's performance. The Company's method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. Cash flow from operations is calculated by adjusting net income (loss) for other income, unrealized gains or losses on financial derivative instruments, transaction costs, accretion, share based compensation, impairment and depletion and depreciation. Net surplus (debt) is the total of cash plus accounts receivable, prepaids and deposits, less accounts payable plus bank debt.
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.
Contacts: Relentless Resources Ltd. Dan Wilson CEO (403) 532-4466 ext. 227 or Mobile: (403) 874-9862 (587) 955-9668 (FAX) Relentless Resources Ltd. Ron Peshke President (403) 532-4466 ext. 223 or Mobile: (403) 852-3403 (587) 955-9668 (FAX) [email protected] www.relentless-resources.com
Source: Relentless Resources Ltd.
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