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Calgary, Alberta–(Newsfile Corp. – April 28, 2020) –  Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months and year ended December 31, 2019 along with an activity update. Financial and operational information is set out below and should be read in conjunction with Briko’s December 31, 2019 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation today announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2019. The AIF contains the Corporation’s reserves and other oil and natural gas information, as required under National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The AIF, financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Decreased net operating expenses per boe by 8% to $11.99/boe for the year ended December 31, 2019 as compared to $13.05/boe for the year ended December 31, 2018.
  • Average daily production of 663 boe per day for the year ended December 31, 2019 compared to the 749 boe per day for the year ended December 31, 2018.
  • Generated an operating netback of $8.64 per boe for the year ended December 31, 2019, an increase of 23% compared to the $7.05 per boe for the year ended December 31, 2018.
  • Generated adjusted funds flow for the year ended December 31, 2019 of $1.1 million ($0.10/share).
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months ended
December 31,
Year Ended
December 31,
2019 2018 2019 2018
OPERATIONS
Average daily production
Light oil (bbls/d) 155 197 166 206
Natural gas (mcf/d) 2,381 3,040 2,601 2,851
NGL’s (bbl/d) 66 73 63 67
Total equivalent (boe/d) 617 777 663 749
Average prices
Light oil ($/bbl) $ 70.25 $ 37.25 $ 67.80 $ 66.18
Natural gas ($/mcf) 1.96 1.93 1.61 1.63
NGL ($/bbl) 54.11 45.20 48.93 55.80
Operating netback
Revenue ($/boe) $ 30.91 $ 21.25 $ 28.01 $ 29.43
Realized gain (loss) on risk management contracts ($/boe) (0.69) 0.18 (0.28) (1.13)
Royalties ($/boe) (5.05) (2.99) (4.71) (6.19)
Net operating expenses ($/boe) (1) (13.61) (14.51) (11.99) (13.05)
Transportation expenses ($/boe) (2.59) (1.83) (2.39) (2.01)
Operating netback (1) ($/boe) $ 8.97 $ 2.10 $ 8.64 $ 7.05
FINANCIAL
Oil and natural gas revenues (2) $ 1,755 $ 1,519 $ 6,777 $ 8,040
Operating income(1) 509 150 2,090 1,928
Cash provided by (used in) operating activities $ (17) $ 692 $ 929 $ 1,777
Per share – basic and diluted $ (0.00) $ 0.06 $ 0.08 $ 0.16
Adjusted funds flow (1) $ 256 $ 63 $ 1,141 $ 1,676
Per share – basic and diluted $ 0.02 $ 0.01 $ 0.10 $ 0.15
Net loss and comprehensive loss $ (2,458) $ (8,469) $ (2,829) $ (9,141)
Per share – basic and diluted $ (0.22) $ (0.76) $ (0.25) $ (0.82)
Capital expenditures $ 140 $ 4 $ 699 $ 317
Net working capital (deficiency)(1) $ 46 $ (177) $ 46 $ (177)
Shares outstanding (‘000s) 11,207 11,206 11,206 11,206
Weighted average shares outstanding
basic and diluted (‘000s) 11,207 11,206 11,206 11,206

 

(1)Operating netback, operating income, net operating expenses, adjusted funds flow and net working capital are non-IFRS measures. See “Non- IFRS Measures”.
(2)
 Before royalties.

ACTIVITY UPDATE

Given the current weak crude oil commodity price environment, Briko has proactively responded to this very volatile period. The Corporation currently has approximately 70 bbl/d of crude oil production shut in until prices recover. In conjunction with ongoing net operating expense reductions, Briko has also initiated salary cuts effective April 1, 2020 with additional reductions in other general and administrative costs anticipated for the remainder of 2020.

Briko remains focused on protecting its balance sheet strength through this unprecedented period of uncertainty. As announced on April 1, 2020, the Corporation terminated the previously announced purchase and sale agreement to acquire complementary Foothills assets. In conjunction with this termination, the Corporation fully repaid the $1.5 million credit facility associated with this acquisition. Currently, Briko has no debt outstanding, positive working capital and a solid hedging position.

In response to the COVID -19 outbreak, Briko continues to ensure safe and efficient field and head office operations. In order to increase social distancing, Briko has temporarily closed its head office with all work, other than critical work, being performed remotely.

GUIDANCE

With the unscheduled shut in of non-operated natural gas production of approximately 100 boe/d from November 1, 2019 until late March 2020, Briko’s estimated production for the first quarter of 2020 is in the range of 500-550 boe/d. With the recent decision to shut in crude oil production, Briko’s estimated production for the second quarter of 2020 is in the range of 525 – 575 boe/d. With the impact of shut-in production, estimated average production for 2020 is in the range of 500 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO