Calgary, Alberta–(Newsfile Corp. – June 24, 2021) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Journey Energy Inc. (“Journey”), pursuant to which Journey will acquire all the issued and outstanding common shares of Briko by way of Plan of Arrangement under the Business Corporations Act (Alberta) (the “Acquisition”).

Consideration for Briko shareholders from the Acquisition includes $2.9 million of cash (the “Cash Maximum”) and the issuance of 3.5 million common shares of Journey (“Journey Shares”), on the basis of $0.26 in cash and 0.31 Journey Shares for each common share of Briko (“Briko Shares”) held. Holders of Briko Shares may also elect to receive their consideration all in cash or in Journey Shares, subject to the Cash Maximum being payable by Journey. Assuming the Cash Maximum, based on the 20 day volume weighted average price per Journey Share preceding June 23, 2021 of $1.06 per share, the total consideration for the Acquisition is approximately $6.6 million (or approximately $0.59 per Briko Share based on 11.2 million Briko Shares outstanding).

The Acquisition is expected to close on or about August 18, 2021. Completion of the Acquisition is subject to the approval of at least 66 2/3 percent of Briko Shareholders voting at an annual and special meeting scheduled to be held on August 12, 2021. Completion of the proposed transaction is also subject to, among other things, the receipt of court approval and other customary closing conditions.

The Board of Directors of Briko has unanimously approved the Acquisition. Based in part on a verbal opinion from Briko’s financial advisor Sayer Energy Advisors, the Briko Board of Directors determined that the Acquisition is in the best interests of Briko and is fair from a financial point of view to Briko shareholders. The Briko Board of Directors has resolved to recommend that Briko shareholders vote their common shares in favor of the Acquisition. All the directors and officers of Briko, holding approximately 8.4% of the outstanding common shares of Briko, have entered into support agreements to vote their Briko common shares in favour of the Acquisition.

The Arrangement Agreement provides for non-solicitation covenants on behalf of Briko which are subject to the fiduciary duty obligations of the Board of Directors of Briko and provides Journey with the right to match any superior proposal received by Briko. The Arrangement Agreement also provides for mutual non-completion fees of $375,000 in the event the Transaction is not completed or is terminated by either party in certain circumstances.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release include, but are not limited to, the anticipated receipt of required regulatory, court and securityholder approvals for the Arrangements, the ability of the parties to satisfy the conditions to, and to complete the closing of the Acquisition and the anticipated closing date of the Acquisition.. The Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect, including but not limited to the ability of each of the parties to receive, in a timely manner, the necessary regulatory, court and securityholder approvals, the ability of each of the parties to satisfy, in a timely manner, the other conditions to the closing of the Acquisition. Although Briko 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 Briko 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 several factors and risks. These include but are not limited to the risks associated with unforeseen delays and the ability to secure required approvals and other conditions to the closing of the Acquisition, 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. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko 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.

Briko Energy Corp. Announces First Quarter 2021 Financial and Operating Results

Calgary, Alberta–(Newsfile Corp. – May 26, 2021) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months ended March 31, 2021. Financial and operational information is set out below and should be read in conjunction with Briko’s March 31, 2021 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim 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

  • Average daily production of 467 boe per day for the three months ended March 31, 2021 compared to 568 boe per day for the three months ended March 31, 2020.
  • Operating netback of $8.11 per boe for the three months ended March 31, 2021 compared to $6.74 per boe for the three months ended March 31, 2020.
  • Adjusted funds flow for the three months ended March 31, 2021 of $190,000 ($0.02/share) compared to $187,000 (0.02/share) for the three months ended March 31, 2020.
  • Net income for the three months ended March 31, 2021 of $82,000.
  • Net working capital at March 31, 2021 of $792,000.
  • Maintained a strong Liability Management Rating (“LMR”) of 6.23 at May 1, 2021.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended
March 31, 2021 March 31, 2020
OPERATIONS
Average daily production
Light oil (bbl/d) 140 138
Natural gas (mcf/d) 1,844 2,266
NGLs (bbl/d) 19 52
Total equivalent (boe/d) 467 568
Average prices
Light oil ($/bbl) $ 57.73 $ 57.42
Natural gas ($/mcf) 2.57 1.61
NGLs ($/bbl) 58.32 45.72
Operating netback
Revenue ($/boe) $ 29.91 $ 24.58
Realized gain (loss) on risk management contracts ($/boe) (0.66) 0.44
Royalties ($/boe) (4.08) (4.17)
Net operating expenses(1) ($/boe) (14.58) (11.94)
Transportation expenses ($/boe) (2.48) (2.17)
Operating netback (1) ($/boe) $ 8.11 $ 6.74
FINANCIAL
Oil and natural gas revenues (2) $ 1,257 $ 1,270
Operating income(1) $ 340 $ 348
Cash provided by operating activities $ 89 $ 309
Per share – basic and diluted $ 0.01 $ 0.03
Adjusted funds flow (1) $ 190 $ 187
Per share – basic and diluted $ 0.02 $ 0.02
Net income (loss) $ 82 $ (2,611)
Per share – basic and diluted $ 0.01 $ (0.23)
Capital expenditures $ 78 $ 25
Net working capital (1) $ 792 $ 188
Shares outstanding (‘000s) 11,211 11,207
Weighted average shares outstanding
basic and diluted (‘000s) 11,211 11,207

(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.

GUIDANCE

Briko’s production for the second quarter of 2021 is estimated to be in the range of 600 – 650 boe/d. Average production for 2021 is expected to be in the range of 500 – 550 boe/d. Briko has established a prudent capital expenditure program for 2021 that is expected to focus on maintenance and optimization initiatives.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the second quarter of 2021, estimated production for 2021 and the anticipated funding of the capital expenditure program by adjusted funds flow in 2021. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko 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 Briko 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 risks. 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 Briko 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.

Non-IFRS Measures

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. Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS. Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to 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 Briko’s performance. Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

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). BOE 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.

Calgary, Alberta–( April 27, 2021) –  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, 2020. Financial and operational information is set out below and should be read in conjunction with Briko’s December 31, 2020 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2020. 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

  • Average daily production of 566 boe per day for the year ended December 31, 2020 compared to 663 boe per day for the year ended December 31, 2019.
  • Decreased net operating expenses per boe by 3% to $11.69/boe for the year ended December 31, 2020 as compared to $11.99/boe for the year ended December 31, 2019.
  • Decreased G&A expenses per boe by 23% to $3.01/boe for the year ended December 31, 2020 as compared to $3.92/boe for the year ended December 31, 2019.
  • Adjusted funds flow for the year ended December 31, 2020 of $767,000 ($0.07/share) compared to $1.1 million (0.10/share) for the year ended December 31, 2019.
  • Net working capital at December 31, 2020 of $768,000 compared to $46,000 at December 31, 2019.
  • Maintained a strong Liability Management Rating (“LMR”) of 6.46 at April 3, 2021.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months ended
December 31,
Year Ended
December 31,
2020 2019 2020 2019
OPERATIONS
Average daily production
Light oil (bbls/d) 145 155 122 166
Natural gas (mcf/d) 2,154 2,381 2,369 2,601
NGL’s (bbl/d) 31 66 49 63
Total equivalent (boe/d) 535 617 566 663
Average prices
Light oil ($/bbl) $ 57.72 $ 70.25 $ 56.82 $ 67.80
Natural gas ($/mcf) 2.53 1.96 1.90 1.61
NGL ($/bbl) 44.55 54.11 36.22 48.93
Operating netback
Revenue ($/boe) $ 28.43 $ 30.91 $ 23.34 $ 28.01
Realized gain (loss) on risk management contracts ($/boe) (0.13) (0.69) 0.76 (0.28)
Royalties ($/boe) (3.62) (5.05) (3.58) (4.71)
Net operating expenses ($/boe) (1) (13.70) (13.61) (11.69) (11.99)
Transportation expenses ($/boe) (2.17) (2.59) (2.11) (2.39)
Operating netback (1) ($/boe) $ 8.81 $ 8.97 $ 6.72 $ 8.64
FINANCIAL
Oil and natural gas revenues (2) $ 1,400 $ 1,755 $ 4,836 $ 6,777
Operating income(1) 435 509 1,391 2,090
Cash provided by (used in) operating activities $ (395) $ (17) $ 874 $ 929
Per share – basic and diluted $ (0.04) $ (0.00) $ 0.08 $ 0.08
Adjusted funds flow (1) $ 235 $ 256 $ 767 $ 1,141
Per share – basic and diluted $ 0.02 $ 0.02 $ 0.07 $ 0.10
Net income (loss) and comprehensive income (loss) $ 3,024 $ (2,458) $ (232 ) $ (2,829)
Per share – basic and diluted $ 0.27 $ (0.22) $ (0.02 ) $ (0.25)
Capital expenditures $ (22) $ 140 $ 47 $ 699
Net working capital(1) $ 768 $ 46 $ 768 $ 46
Shares outstanding (‘000s) 11,211 11,207 11,211 11,206
Weighted average shares outstanding
basic and diluted (‘000s) 11,211 11,207 11,209 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.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko 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 Briko 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 risks. 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 Briko 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.

Non-IFRS Measures

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. Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS. Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to 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 Briko’s performance. Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

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). BOE 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.

Calgary, Alberta–(Newsfile Corp. – March 3, 2021) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce its 2020 year-end reserves and corporate update.

2020 Reserve Highlights

  • Proved (“1P”) reserves of 2.3 million barrels of oil equivalent (“BOE”) at December 31, 2020 compared to 2.4 million BOE at December 31, 2019;
  • 1P net present value of $14.5 million ($1.29 per share) at a 10% discount rate at December 31, 2020;
  • Proved plus probable (“2P”) reserves of 3.0 million BOE at December 31, 2020 compared to 3.8 million at December 31, 2019;
  • Conservative 1P reserve position that represents 77% of 2P reserves, compared to 63% at December 31, 2019;
  • Future development costs (“FDC”) requirement of only $0.1 million on a 1P and 2P basis; and
  • Low annual production decline rates provided a strong reserves life index of 12 years based on 1P reserves and 15 years based on 2P reserves.

2020 Summary of Reserves

The detailed reserves data set forth below are based on an independent reserves assessment and evaluation prepared by Deloitte LLP (“Deloitte”) with an effective date of December 31, 2020, which is contained in the report dated February 22, 2021 (the “Deloitte Report”).

2020 YE(1) 2019 YE(2) 2020YE & 2019YE
Comparison
Reserves Category (MBOE) NPV10% ($M) (MBOE) NPV10% ($M) Reserves (%)
Proved Developed Producing 1,207 $9,564 1,582 $14,448 (24%)
Proved Non-producing(3) 1,125 $4,909 865 $1,760 30%
Total Proved 2,332 $14,473 2,448 $16,208 (5%)
Total Proved plus Probable 3,009 $17,196 3,755 $18,304 (20%)

 

Notes:

(1) Deloitte Report effective as of December 31, 2020.

(2) Deloitte Report effective as of December 31, 2019.

(3) Reserves from the Corporation’s Kiskiu area has been reclassified to proved non-producing at December 31, 2020 due to the unscheduled shut in of production during the fourth quarter of 2020. The shut in production is anticipated to be back on production in April 2021.

Corporate Reserves

The detailed reserves data set forth below are based on the Deloitte Report. The following presentation summarizes the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Corporation’s reserves using forecast prices and costs as set out in the Deloitte Report. The Deloitte Report has been prepared in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves evaluation was based on the consensus forecast escalated pricing and foreign exchange rates at December 31, 2020 (“Consensus Price”) as outlined in the table herein entitled “Price Forecast”. This Consensus Price forecast is the average of the escalated price forecasts of four independent reserve evaluators, namely Deloitte, GLJ Petroleum Consultants Ltd. (“GLJ”), McDaniel & Associates Consultants Ltd (“McDaniel”) and Sproule Associates Limited (“Sproule”).

All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of Briko’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater or less than the estimates provided herein. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise. In addition to the detailed information disclosed in this press release, more detailed information will be included in the Corporation’s Annual Information Form (“AIF”) which will be filed on the Corporation’s profile at www.sedar.com on or before April 30, 2021.

See “Forward Looking Information and Statements” for a statement of principal assumptions and risks that may apply.

The preparation and audit of Briko’s 2020 annual financial statements is not yet complete, and accordingly, all financial amounts referred to in this press release are unaudited and represent management’s estimates. Readers are advised that these financial estimates may be subject to change. Year-end financial statements for 2020 will be released no later than April 30, 2021.

Reserves Category(1) Light and Medium Crude Oil Natural Gas Liquids Non- Associated Natural Gas(2) Barrels of Oil Equivalent(3)
(Mbbl) (Mbbl) (Mmcf) (Mboe)
Proved
Proved Developed Producing (“PDP”) 444 34 4,370 1,207
Proved Non-producing (“PNP”) 22 139 5,786 1,125
Proved Developed (“PD”) 466 173 10,156 2,332
Proved Undeveloped (“PUD”)
Total Proved (“1P”) 466 173 10,156 2,332
Probable 104 50 3,135 677
Total Proved plus Probable (“2P”) 570 223 13,291 3,009

 

Notes:

(1) Reserves have been presented on a “gross” basis which is defined as Briko’s working interest (operating and non-operating) share before deduction of royalties and without including any royalty interest of the Corporation.

(2) Includes solution gas.

(3) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil.

(4) Columns may not add due to rounding.

Reserve Values

The estimated before tax net present value (“NPV”) of future net revenue associated with Briko’s reserves effective December 31, 2020 and based on the Deloitte Report and the Consensus Price forecast are summarized in the following table:

Reserves Category 0% 5% 10% 15% 20%
(M$) (M$) (M$) (M$) (M$)
Proved
Developed Producing 10,811 11,550 9,564 7,981 6,838
Developed Non-Producing 9,408 6,537 4,909 3,896 3,218
Undeveloped
Total Proved 20,219 18,087 14,473 11,877 10,056
Probable 9,624 4,713 2,723 1,774 1,261
Total Proved plus Probable 29,843 22,800 17,196 13,651 11,317

 

Notes:

(1) Based on Deloitte’s December 31, 2020 Consensus Price forecast.

(2) The estimated future net revenues are stated prior to provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures.

(3) See the Corporation’s AIF, once filed, for the after-tax present values of future net revenue attributed to Briko’s reserves.

(4) Columns may not add due to rounding.

Price Forecast

Year Canadian
Light Sweet
Crude(2)
40° API
($C/Bbl)
Western Canada Select(3)
20.5° API
($C/Bbl)
Alberta
AECO-C
($C/Mcf) (5)
Edmonton
Pentanes
Plus
($C/Bbl) (4,6)
Edmonton
Butane
($C/Bbl) (4,6)
Edmonton
Propane
($C/Bbl) (4,6)
$US/$C
Exchange Rate
2021 55.13 44.19 2.75 57.75 25.76 18.30 0.77
2022 60.62 48.55 2.70 63.10 33.27 23.49 0.77
2023 64.68 52.90 2.65 67.58 40.49 26.11 0.77
2024 66.73 54.68 2.69 69.74 41.80 26.94 0.77
2025 68.11 55.78 2.74 71.15 42.66 27.50 0.77
2026 69.52 56.89 2.81 72.58 43.55 28.07 0.77
2027 70.95 58.03 2.86 74.04 44.44 28.64 0.77
2028 72.40 59.19 2.91 75.52 45.36 29.23 0.77
2029 73.89 60.37 2.97 77.03 46.28 29.82 0.77
2030 75.37 61.58 3.02 78.58 47.21 30.42 0.77
Escalation Rate of 2.0% Thereafter

 

Notes:

(1) This Consensus Price forecast is an average of four independent reserve evaluators’ forecasts at December 31, 2020 including Deloitte, GLJ, McDaniel and Sproule.

(2) Edmonton city gate prices based on historical light oil par prices posted by the government of Alberta and Net Energy differential futures (40 Deg. API < 0.5% Sulphur).

(3) Western Canada Select prices are forecasted at Hardisty WCS

(4) Natural Gas Liquid prices are forecasted at Edmonton therefore an additional transportation cost must be included to plant gate sales point.

(5) 1 Mcf is equivalent to 1 MMbtu.

(6)  NGL prices have been switched from a mix reference to a spec reference.

Reserves Reconciliation

The table below reconciles reserves volumes from opening balances at December 31, 2019 to closing balances at December 31, 2020. Technical revisions include positive revisions to the Associated and Non-Associated Gas category as the result of reduced operating costs. Dispositions include the disposal of a non-core gas well. Infill drilling include a non-operated farm in well that was brought on production in November 2020. As part of the farm in agreement, the Corporation incurred nil capital costs to earn a 15% working interest in the well.

TOTAL PROVED Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2019 500 224 10,344 2,448
Production (45) (18) (867) (207)
Technical Revisions 33 (23) 1,135 199
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions (2) (77) (15)
Economic factors (22) (9) (595) (130)
Infill Drilling 2 215 37
December 31, 2020 466 173 10,156 2,332

 

TOTAL PROVED PLUS PROBABLE Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2019 1,258 282 13,296 3,755
Production (45) (18) (867) (207)
Technical Revisions (583) (24) 1,578 (344)
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions (3) (101) (20)
Economic factors (60) (15) (860) (218)
Infill Drilling 2 245 43
December 31, 2020 570 223 13,291 3,009

 

Note:

(1) Columns may not add due to rounding.

Production and Capital Expenditures

Due to the unscheduled shut in of natural gas and natural gas liquids production of approximately 200 boe/d in the fourth quarter of 2020, Briko’s production for the first quarter of 2021 is estimated to be in the range of 400 – 450 boe/d. The shut in production is anticipated to be back on production by April 2021. Average production for 2021 is expected to be in the range of 475 – 525 boe/d. Briko has established a prudent capital expenditure program for 2021 that is expected to focus on maintenance and optimization initiatives.

Alberta Site Rehabilitation Program

During 2020, the Corporation and its field service contractors submitted applications under the Government of Alberta’s Site Rehabilitation Program (“SRP”) to abandon and reclaim well sites. The Government of Alberta is administering the SRP in phases and providing grant funding directly to the service providers for the abandonment and remediation work. To date, Briko has been approved for $182,000 in grant funding under the SRP. In January 2021, Briko abandoned an inactive well bore and is anticipating that it will be able to utilize the grant funding in full in 2021. Briko continues to monitor the provincial and federal funding developments to accelerate the decommissioning of the Corporation’s asset retirement obligations. The Corporation’s Liability Management Rating with the Alberta Energy Regulator remains strong at 7.03 as of February 6, 2021.

Strategic Alternatives Process

On January 6, 2021, the Corporation announced the initiation of a strategic alternatives process to maximize shareholder value. Sayer Energy Advisors (“Sayer”) has now been engaged by Briko’s Board of Directors to support its evaluation of all potential alternatives. Additional information relating to the strategic alternatives process will be available on Sayer’s website at www.sayeradvisors.com in mid-March 2021.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

Definitions

The reserves evaluation, effective December 31, 2020, was conducted by Deloitte, the Corporation’s independent reserves evaluators and is in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves are provided on a Gross basis in units of barrels of oil equivalent using a forecast price deck, adjusted for quality, in Canadian dollars. The estimated values may or may not represent the fair market value of the reserve estimates.

“Gross” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Corporation;

“Net” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share after deduction of royalty obligations, plus its royalty interest in production or reserves;

“Proved reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves;

“Probable reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves;

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, but is not limited to, the Consensus Price used in the Deloitte Report, the amount of the FDC requirements, Briko’s reserves and the net present value information relating thereto, Briko’s estimated production for the first quarter of 2021, Briko’s average production for 2021, the source of funding of Briko’s 2021 capital expenditure program, the expected timing of the release of Briko’s December 31, 2020 financial and operating results and the expected timing of the shut in production to be back on production. Although Briko 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 Briko 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 risks. 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 Briko 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.

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). BOE 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.

Calgary, Alberta–(Newsfile Corp. – January 6, 2021) –  Briko Energy Corp. (“Briko” or the “Corporation”) announces management changes and initiation of a strategic alternatives process.

MANAGEMENT CHANGES

John H. Van de Pol, President & CEO, has advised Briko’s Board of Directors (the “Board”) and executive team of his intention to step down as President & CEO effective March 15, 2021 but will continue to remain as a member of the Board. Mr. Van de Pol has been a key member of the executive team and has provided strong leadership throughout the Corporation’s initial two years of operation. The executive team and the Board thank Mr. Van de Pol for his contributions and wish him all the best in the future.

The Board is also pleased to announce the appointment of Louise Lee, partner at Borden Ladner Gervais LLP, who is replacing William C. Guinan as Corporate Secretary. The Board and executive team thank Mr. Guinan for his contributions since the Corporation’s inception. Mrs. Lee has over 15 years experience as a corporate lawyer and is a welcome addition to the Briko team.

STRATEGIC ALTERNATIVES PROCESS

Briko’s Board is undertaking a formal process to evaluate strategic alternatives available to the Corporation to maximize shareholder value. The strategic alternatives process is intended to explore a comprehensive range of strategic alternatives which may include, but are not limited to, a corporate sale, merger or other business combination, a disposition of all or a portion of the Corporation’s assets, a recapitalization and other alternatives to maximize value. The Board plans to engage a strategic advisor to support the evaluation of all potential alternatives. The Corporation will provide additional information regarding the strategic alternatives process as the process progresses. There can be no guarantees as to whether the strategic alternatives process will result in a transaction or the terms or timing of any resulting transaction.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release include, but are not limited to, the intention to conduct a strategic alternative process, the engagement of a strategic advisor and the possible alternatives that may arise due to such process. The Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect, including but not limited to the actual engagement of a strategic advisor and the strategic process being undertaken. Although Briko 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 Briko 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 several factors and risks. 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. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko 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.

Calgary, Alberta–(Newsfile Corp. – November 25, 2020) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three and nine months ended September 30, 2020. Financial and operational information is set out below and should be read in conjunction with Briko’s September 30, 2020 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim 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

  • Average daily production of 576 boe per day for the nine months ended September 30, 2020 compared to 678 boe per day for the nine months ended September 30, 2019.
  • Decreased net operating expenses per boe by 4% for the nine months ended September 30, 2020 of $11.07/boe as compared to $11.50/boe for the nine months ended September 30, 2019.
  • Decreased G&A expenses per boe by 28% to $2.69/boe for the nine months ended September 30, 2020 as compared to $3.75/boe for the nine months ended September 30, 2019.
  • Adjusted funds flow for the nine months ended September 30, 2020 of $532,000 ($0.05/share) compared to $885,000 (0.08/share) for the nine months ended September 30, 2019.
  • Maintained a strong Liability Management Rating (“LMR”) of 7.6 at September 30, 2020.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended
September 30
Nine Months Ended September 30
2020 2019 2020 2019
OPERATIONS
Average daily production
Light oil (bbl/d) 119 155 114 170
Natural gas (mcf/d) 2,315 2,639 2,441 2,675
NGLs (bbl/d) 57 57 56 62
Total equivalent (boe/d) 562 652 576 678
Average prices
Light oil ($/bbl) $ 54.83 $ 66.94 $ 56.43 $ 67.06
Natural gas ($/mcf) 1.83 0.93 1.71 1.51
NGLs ($/bbl) 37.85 39.32 34.67 47.08
Operating netback
Revenue ($/boe) $ 22.98 $ 23.11 $ 21.76 $ 27.11
Realized gain (loss) on risk management
contracts ($/boe) (0.42) (0.27) 1.03 (0.15)
Royalties ($/boe) (2.81) (3.86) (3.57) (4.60)
Net operating expenses(1) ($/boe) (11.85) (11.03) (11.07) (11.50)
Transportation expenses ($/boe) (2.17) (2.61) (2.10) (2.33)
Operating netback (1) ($/boe) $ 5.73 $ 5.34 $ 6.05 $ 8.53
FINANCIAL
Oil and natural gas revenues (2) $ 1,188 $ 1,386 $ 3,436 $ 5,021
Operating income(1) 297 321 957 1,580
Cash provided by operating activities 508 181 1,269 946
Per share – basic and diluted 0.05 0.02 0.11 0.08
Adjusted funds flow (1) 160 110 532 885
Per share – basic and diluted 0.01 0.01 0.05 0.08
Net loss and comprehensive loss (187) (407) (3,256) (371)
Per share – basic and diluted (0.02) (0.04) (0.29) (0.03)
Capital expenditures 39 406 69 559
Net working capital(1) 453 19 453 19
Shares outstanding (‘000s) 11,211 11,207 11,211 11,207
Weighted average shares outstanding
basic and diluted (‘000s) 11,211 11,207 11,208 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.

GUIDANCE

Briko’s estimated production for the fourth quarter of 2020 is in the range of 525 – 575 boe/d and 2020 estimated production is in the range of 525 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives that is anticipated to be funded by adjusted funds flow for 2020.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the fourth quarter of 2020, estimated production for 2020 and the anticipated funding of the capital expenditure program by adjusted funds flow in 2020. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko 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 Briko 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 risks. 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 Briko 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.

Non-IFRS Measures

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. Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS. Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to 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 Briko’s performance. Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

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). BOE 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.

Calgary, Alberta – August 24, 2020 – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three and six months ended June 30, 2020.  Financial and operational information is set out below and should be read in conjunction with Briko’s June 30, 2020 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”).  Briko’s condensed unaudited interim 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

  • Average daily production of 600 boe per day for the three months ended June 30, 2020 compared to 715 boe per day for the three months ended June 30, 2019.
  • Approximately 50 barrels per day of oil production was shut in during the second quarter of 2020 due to the 35% decrease in the Corporation’s revenue per boe from the significant reduction in global oil prices.
  • Decreased net operating expenses per boe by 12% to $9.50/boe for the three months ended June 30, 2020 as compared to $10.82/boe for the three months ended June 30, 2019.
  • Decreased G&A expenses per boe by 44% to $2.32/boe for the three months ended June 30, 2020 as compared to $4.12/boe for the three months ended June 30, 2019.
  • Adjusted funds flow for the three months ended June 30, 2020 of $185,000 ($0.02/share) compared to $372,000 (0.04/share) for the three months ended June 30, 2019.
  • Maintained a strong Liability Management Rating (“LMR”) of 7.9 at June 30, 2020.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended June 30 Six Months Ended June 30
2020 2019 2020 2019
OPERATIONS
Average daily production        
Light oil (bbl/d)   85 176 112 178
Natural gas (mcf/d)   2,742 2,801 2,504 2,693
NGLs (bbl/d)   58 72 55 65
Total equivalent (boe/d)   600 715 584 692
Average prices       
Light oil ($/bbl) $ 57.09 $ 71.16 $ 57.29 $ 67.11
Natural gas ($/mcf)   1.70 1.20 1.66 1.80
NGLs ($/bbl)   21.54 52.00 32.99 50.56
Operating netback      
Revenue ($/boe) $ 17.92 $ 27.45 $ 21.16 $ 29.03
Realized gain (loss) on risk management        
contracts ($/boe)   2.97 (0.18)   1.74 (0.09)
Royalties ($/boe)   (3.71) (3.72) (3.93) (4.96)
Net operating expenses(1)  ($/boe)   (9.50) (10.82) (10.69) (11.73)
Transportation expenses ($/boe)   (1.95) (2.08) (2.06) (2.19)
Operating netback (1) ($/boe) $ 5.73 $ 10.65 $ 6.22 $ 10.06
FINANCIAL      
Oil and natural gas revenues (2) $ 978 $ 1,786 $ 2,248 $ 3,635
Operating income(1)   312 692   660 1,259
Cash provided by operating activities   452 207   761 765
Per share – basic and diluted   0.04 0.02   0.07 0.07
Adjusted funds flow (1)   185 424   372 775
Per share – basic and diluted   0.02 0.04   0.03 0.07
Net income (loss) and comprehensive        
income (loss)   (458) 31   (3,069) 36
Per share – basic and diluted   (0.04) 0.00   (0.27) 0.00
Capital expenditures   5 128   30 153
Net working capital(1)   337 408   337 408
Shares outstanding (‘000s)   11,211 11,207   11,211 11,207
Weighted average shares outstanding      
basic and diluted (‘000s)   11,207 11,207   11,207 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. 

GUIDANCE

Briko’s estimated production for the third quarter of 2020 is in the range of 525 – 575 boe/d and 2020 estimated production is in the range of 500 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives that is anticipated to be funded by adjusted funds flow for 2020.

ANNUAL GENERAL MEETING

Briko’s annual general meeting (the “Meeting”) is scheduled for 9:00 am (MST) on September 9, 2020. In response to the COVID-19 pandemic, the Corporation encourages Shareholders and proxyholders not to attend the meeting in person and has decided to offer shareholders an opportunity to listen to the business to be conducted at the Meeting by teleconference. Shareholders not attending in person must vote on the matters not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) before the time of the Meeting. Further instructions on how to listen to the Meeting and how to vote in advance of the Meeting are contained in Briko’s management information circular that is posted on the Corporation’s website and on SEDAR. In line with Briko’s commitment to safety, in-person attendance by directors and senior management of Briko will be limited and will be subject to the orders, limitations, advice and guidance of the federal and provincial health ministries and other governmental authorities. Accordingly, Briko expects to only have a minimum number of in-person attendees present to conduct the formal business of the Meeting and does not intend to provide a corporate presentation after the Meeting.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

 

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com.  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.  Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the third quarter of 2020, estimated production for 2020 and the anticipated funding of the capital expenditure program by adjusted funds flow in 2020. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources.  As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements.  Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko 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 Briko 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 risks.  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 Briko 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.

Non-IFRS Measures

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.  Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS.  Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to 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 Briko’s performance.  Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations.  Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis.   Net operating expense is a non-IFRS measure calculated as operating expenses less other income.  Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

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).  BOE 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.

Calgary, Alberta–(Newsfile Corp. – May 29, 2020) –  Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months ended March 31, 2020. Financial and operational information is set out below and should be read in conjunction with Briko’s March 31, 2020 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim 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 6% to $11.94/boe for the three months ended March 31, 2020 as compared to $12.71/boe for the three months ended March 31, 2019.
  • Average daily production of 568 boe per day for the three months ended March 31, 2020 compared to 668 boe per day for the three months ended March 31, 2019.
  • Operating netback of $6.74 per boe for the three months ended March 31, 2020 compared to $9.42 per boe for the three months ended March 31, 2019.
  • Adjusted funds flow for the three months ended March 31, 2020 of $0.2 million ($0.02/share) compared to $0.4 million (0.03/share) for the three months ended March 31, 2019.
  • Net loss for the three months ended March 31, 2020 of $2.6 million, including a $2.7 million impairment expense.
  • Maintained a strong Liability Management Rating (“LMR”) in excess of 8.0 at March 31, 2020.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended
March 31, 2020 March 31, 2019
OPERATIONS
Average daily production
Light oil (bbl/d) 138 181
Natural gas (mcf/d) 2,266 2,584
NGLs (bbl/d) 52 57
Total equivalent (boe/d) 568 668
Average prices
Light oil ($/bbl) $ 57.42 $ 63.11
Natural gas ($/mcf) 1.61 2.46
NGLs ($/bbl) 45.72 48.72
Operating netback
Revenue ($/boe) $ 24.58 $ 30.74
Realized gain on risk management contracts ($/boe) 0.44
Royalties ($/boe) (4.17) (6.29)
Net operating expenses(1) ($/boe) (11.94) (12.71)
Transportation expenses ($/boe) (2.17) (2.32)
Operating netback (1) ($/boe) $ 6.74 $ 9.42
FINANCIAL
Oil and natural gas revenues (2) $ 1,270 $ 1,849
Operating income(1) $ 348 $ 567
Cash provided by operating activities $ 309 $ 558
Per share – basic and diluted $ 0.03 $ 0.05
Adjusted funds flow (1) $ 187 $ 351
Per share – basic and diluted $ 0.02 $ 0.03
Net income (loss) $ (2,611) $ 5
Per share – basic and diluted $ (0.23) $ 0.00
Capital expenditures $ 25 $ 25
Net working capital (1) $ 188 $ 129
Shares outstanding (‘000s) 11,207 11,206
Weighted average shares outstanding
basic and diluted (‘000s) 11,207 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.

GUIDANCE

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. Due to these shut in decisions, Briko’s estimated production for the second quarter of 2020 is in the range of 525 – 575 boe/d and 2020 estimated production is in the range of 500 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives that is anticipated to be funded by adjusted funds flow for 2020.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium 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

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the second quarter of 2020, estimated production for 2020 and the anticipated funding of the capital expenditure program by adjusted funds flow in 2020. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko 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 Briko 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 risks. 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 Briko 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.

Non-IFRS Measures

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. Funds flow from operations, operating netback and net operating expenses are not recognized measures under IFRS. Management believes that in addition to net income (loss), funds flow from operations and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to 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 Briko’s performance. Funds flow from operations is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of petroleum, natural gas and equipment, share-based payments, unrealized gain (loss) on risk management contracts and accretion. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest.

Oil and Gas Advisory

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

Calgary, Alberta–(April 1, 2020) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce its 2019 year-end reserves and Complementary Acquisition update.

2019 Reserve Highlights

  • Proved (“1P”) reserves increased 6% to 2.4 million barrels of oil equivalent (“BOE”) at December 31, 2019 compared to 2.3 million BOE at December 31, 2018;
  • Proved Developed Producing (“PDP) reserves of 1.6 million BOE at December 31, 2019 with a net present value of $14.4 million ($1.29 per share) at a 10% discount rate;
  • Proved plus probable (“2P) reserves were unchanged at 3.8 million BOE at December 31, 2019 and December 31, 2018;
  • Maintained conservative 1P reserve position that represents 65% of 2P reserves;
  • Future development costs (“FDC”) requirement of only $0.1 million on a 1P basis and $17.1 million on a 2P basis; and
  • Low annual production decline rates provided a strong reserves life index of 11 years based on 1P reserves and 15 years based on 2P reserves.

2019 Summary of Reserves

The detailed reserves data set forth below are based on an independent reserves assessment and evaluation prepared by Deloitte LLP (“Deloitte”) with an effective date of December 31, 2019, which is contained in the report dated March 06, 2020 (the “Deloitte Report”).

2019 YE(1) 2018 YE(2) 2019YE & 2018YE
Comparison
Reserves Category (MBOE) NPV10%
($M)
(MBOE) NPV10%
($M)
Reserves (%)
Proved Developed Producing 1,582 $14,448 2,008 $14,096 (21%)
Proved Non-producing 865 $1,760 305 $769 184%
Total Proved 2,448 $16,208 2,313 $14,864 6%
Total Proved plus Probable 3,755 $18,304 3,777 $19,247 (1%)

 

Note:
(1) Deloitte Report effective as of December 31, 2019.
(2) Deloitte Report effective as of December 31, 2018.

Corporate Reserves

The detailed reserves data set forth below are based on the Deloitte Report. The following presentation summarizes the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Corporation’s reserves using forecast prices and costs as set out in the Deloitte Report. The Deloitte Report has been prepared in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves evaluation was based on the consensus forecast escalated pricing and foreign exchange rates at December 31, 2019 (“Consensus Price”) as outlined in the table herein entitled “Price Forecast”. This Consensus Price forecast is the average of the escalated price forecasts of four independent reserve evaluators, namely Deloitte, GLJ Petroleum Consultants Ltd. (“GLJ”), McDaniel & Associates Consultants Ltd (“McDaniel”) and Sproule Associates Limited (“Sproule”).

All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of Briko’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater or less than the estimates provided herein. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise. In addition to the detailed information disclosed in this press release, more detailed information will be included in the Corporation’s Annual Information Form (“AIF”) which will be filed on the Corporation’s profile at www.sedar.com on or before April 30, 2020.

See “Forward Looking Information and Statements” for a statement of principal assumptions and risks that may apply.

The preparation and audit of Briko’s 2019 annual financial statements is not yet complete, and accordingly, all financial amounts referred to in this press release are unaudited and represent management’s estimates. Readers are advised that these financial estimates may be subject to change. Year-end financial statements for 2019 will be released no later than April 30, 2020.

Reserves Category(1) Light and Medium Crude Oil Natural Gas Liquids Non- Associated Natural Gas(2) Barrels of Oil Equivalent(3)
(Mbbl) (Mbbl) (Mmcf) (Mboe)
Proved
Proved Developed Producing (“PDP”) 474 151 5,744 1,582
Proved Non-producing (“PNP”) 26 73 4,601 865
Proved Developed (“PD”) 500 224 10,344 2,448
Proved Undeveloped (“PUD”)
Total Proved (“1P”) 500 224 10,344 2,448
Probable 758 58 2,952 1,308
Total Proved plus Probable (“2P”) 1,258 282 13,296 3,755

Notes:
(1) Reserves have been presented on a “gross” basis which is defined as Briko’s working interest (operating and non-operating) share before deduction of royalties and without including any royalty interest of the Corporation.
(2) Includes solution gas.
(3) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil.
(4) Columns may not add due to rounding.

Reserve Values

The estimated before tax net present value (“NPV”) of future net revenue associated with Briko’s reserves effective December 31, 2019 and based on the Deloitte Report and the Consensus Price forecast are summarized in the following table:

Reserves Category 0% 5% 10% 15% 20%
(M$) (M$) (M$) (M$) (M$)
Proved
   Developed Producing
25,682 18,605 14,448 11,800 9,996
   Developed Non-Producing
3,111 2,330 1,760 1,366 1,091
   Undeveloped
Total Proved 28,793 20,935 16,208 13,167 11,088
Probable 13,948 5,804 2,096 301 (590)
Total Proved plus Probable 42,740 26,739 18,304 13,468 10,497

Notes:
(1) Based on Deloitte’s December 31, 2019 Consensus Price forecast.
(2) The estimated future net revenues are stated prior to provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures.
(3) See the Corporation’s AIF, once filed, for the after-tax present values of future net revenue attributed to Briko’s reserves.
(4) Columns may not add due to rounding.

Price Forecast

Year Canadian
Light Sweet
Crude(2)
40° API
($C/Bbl)
Western Canada Select(3)
20.5° API
($C/Bbl)
Alberta
AECO-C
($C/Mcf) (5)
Edmonton
Pentanes
Plus
($C/Bbl) (4,6)
Edmonton
Butane
($C/Bbl) (4,6)
Edmonton
Propane
($C/Bbl) (4,6)
$US/$C
Exchange Rate
2020 71.58 56.66 2.05 74.21 37.56 24.04 0.76
2021 75.33 61.20 2.32 78.15 44.41 28.75 0.77
2022 77.51 63.08 2.60 80.48 50.19 33.14 0.78
2023 79.77 64.92 2.74 82.77 51.67 34.16 0.79
2024 81.60 66.54 2.82 84.66 52.88 35.00 0.79
2025 83.46 68.16 2.91 86.56 54.09 35.85 0.79
2026 85.34 69.80 2.97 88.49 55.33 36.71 0.79
2027 87.19 71.41 3.03 90.40 56.53 37.55 0.79
2028 88.97 72.94 3.10 92.22 57.69 38.37 0.79
2029 90.79 74.50 3.16 94.09 58.87 39.19 0.79
Escalation Rate of 2.0% Thereafter

Notes:
(1) This Consensus Price forecast is an average of four independent reserve evaluators’ forecasts at December 31, 2019 including Deloitte, GLJ, McDaniel and Sproule.
(2) Edmonton city gate prices based on historical light oil par prices posted by the government of Alberta and Net Energy differential futures (40 Deg. API < 0.5% Sulphur).
(3) Western Canada Select prices are forecasted at Hardisty WCS
(4) Natural Gas Liquid prices are forecasted at Edmonton therefore an additional transportation cost must be included to plant gate sales point.
(5) 1 Mcf is equivalent to 1 MMbtu.
(6) NGL prices have been switched from a mix reference to a spec reference.

Reserves Reconciliation

The table below reconciles reserves volumes from opening balances at December 31, 2018 to closing balances at December 31, 2019. Technical revisions included positive revisions to the Associated and Non-Associated Gas category as the result of reduced operating costs and increased processing income.

TOTAL PROVED Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2018 613 203 8,984 2,313
Production (59) (23) (953) (241)
Technical Revisions (48) 49 2,804 469
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions
Economic factors (7) (5) (491) (94)
Infill Drilling
December 31, 2019 500 224 10,344 2,448

 

TOTAL PROVED PLUS PROBABLE Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2018 1,428 282 12,403 3,777
Production (59) (23) (953) (241)
Technical Revisions (91) 27 2,419 339
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions
Economic factors (20) (4) (573) (120)
Infill Drilling
December 31, 2019 1,258 282 13,296 3,755

Note:
(1) Columns may not add due to rounding.

Production and Capital Expenditures

Due to the unscheduled shut in of non-operated natural gas production of approximately 100 boe/d on November 1, 2019, Briko’s production for the first quarter of 2020 is estimated to be in the range of 500-550 boe/d. As a result, and in conjunction with low production decline rates, average production for 2020 is expected to be in the range of 525 – 625 boe/d. The shut in natural gas production was back online in late March 2020. Briko has established a prudent capital expenditure program for 2020 and 2021 that is expected to focus on maintenance and optimization initiatives. This capital expenditure program is expected to be funded by internally generated cash flow. Future financing sources will be considered as the Corporation’s inventory of Cardium light oil drilling opportunities is pursued.

Complementary Acquisition Update

As previously announced on December 9, 2019, Briko executed a purchase and sale agreement (the “PSA”) to acquire complementary Cardium oil and natural gas assets in the Alberta foothills (the “Complementary Assets”) for a cash consideration of $1.8 million. The Corporation has determined that it will not proceed with the PSA and has terminated the agreement.

Accordingly, the previously announced $1.5 million senior secured credit facility for the Complementary Asset acquisition is no longer required and amounts held in trust have been repaid in full.

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

Definitions

The reserves evaluation, effective December 31, 2019, was conducted by Deloitte, the Corporation’s independent reserves evaluators and is in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves are provided on a Gross basis in units of barrels of oil equivalent using a forecast price deck, adjusted for quality, in Canadian dollars. The estimated values may or may not represent the fair market value of the reserve estimates.

“Gross” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Corporation;

“Net” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share after deduction of royalty obligations, plus its royalty interest in production or reserves;

“Proved reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves;

“Probable reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves;

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 including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. 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. Forward-looking statements and information in this press release includes, but is not limited to, the Consensus Price used in the Deloitte Report, the amount of the FDC requirements, Briko’s reserves and the net present value information relating thereto, Briko’s average production for 2020, the source of funding of Briko’s 2020 and 2021 capital expenditure program, Briko’s consideration of future financing sources and the expected timing of the release of Briko’s December 31, 2019 financial and operating results and the expected timing of the shut in production to be back on production. Although Briko 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 Briko 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 risks. 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 Briko 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.

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). BOE 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.