Welcome!

News Feed Item

Artek Exploration Ltd. Announces First Quarter 2014 Financial Results

CALGARY, ALBERTA -- (Marketwired) -- 05/14/14 -- Artek Exploration Ltd. (TSX:RTK) of Calgary, Alberta ("Artek" or the "Company") is pleased to provide this summary of its financial and operating results for the quarter ended March 31, 2014. A complete copy of the Company's comparative financial statements for the quarter ended March 31, 2014, along with management's discussion and analysis in respect thereof will be filed on SEDAR and on the Company's website at www.artekexploration.com.

HIGHLIGHTS


----------------------------------------------------------------------------
Three Months Ended March 31,                     2014       2013     Change 
----------------------------------------------------------------------------
(000s, except per share amounts)                  ($)        ($)        (%) 
Financial                                                                   
Petroleum and natural gas revenues             20,396     14,449         41 
Funds flow from operations (1)                  9,872      6,919         43 
  Per share - basic                              0.15       0.13         15 
    - diluted                                    0.14       0.13          8 
Cash from operating activities                  7,703      7,488          3 
Net earnings                                    1,267      1,460        (13)
  Per share - basic                              0.02       0.03        (33)
    - diluted                                    0.02       0.03        (33)
Capital expenditures                           29,462     20,687         42 
Net debt (2)                                  (87,882)   (25,845)       240 
Shareholders' equity                          170,671    152,603         12 
----------------------------------------------------------------------------
(000s)                                            (#)        (#)        (%) 
Share Data                                                                  
At period-end                                                               
  Basic                                        67,025     62,471          7 
  Options                                       4,800      4,001         20 
Weighted average                                                            
  Basic                                        67,001     51,983         29 
  Diluted                                      68,943     53,648         29 
----------------------------------------------------------------------------
                                                                        (%) 
Operating                                                                   
Production                                                                  
  Natural gas (mcf/d)                          15,789     12,675         25 
  Crude oil (bbls/d)                            1,025      1,134        (10)
  NGLs (bbls/d)                                   491        357         38 
  Total (boe/d)(3)                              4,147      3,603         15 
Average wellhead prices (4)                                                 
  Natural gas ($/mcf)                            6.04       3.58         69 
  Crude oil ($/bbl)                             90.57      84.25          8 
  NGLs ($/bbl)                                  67.76      52.96         28 
  Total ($/boe)(5)                              53.48      44.55         20 
Royalties ($/boe)                               (8.58)     (8.13)         6 
Operating cost ($/boe)                         (12.44)     (9.53)        31 
Transportation cost ($/boe)                     (2.61)     (1.88)        39 
Operating netback ($/boe)(6)                    29.85      25.00         19 
General and administrative expense ($/boe)      (2.02)     (2.48)       (19)
Interest expense ($/boe)                        (1.39)     (1.19)        17 
Funds flow netback ($/boe)(7)                   26.45      21.33         24 
Drilling activity - gross (net)                                             
  Development (#)                              7 (4.5)    6 (3.0)           
  Exploration (#)                                   -     1 (0.6)           
  Total (#)                                    7 (4.5)    7 (3.6)           
----------------------------------------------------------------------------
Average working interest (%)                       64         51            
----------------------------------------------------------------------------
(1)   Funds flow from operations is calculated using cash from operating    
      activities, as presented in the statement of cash flows, before       
      changes in non-cash working capital and settlement of decommissioning 
      costs. Funds flow from operations is used to analyze the Company's    
      operating performance and leverage. Funds flow from operations does   
      not have a standardized measure prescribed by International Financial 
      Reporting Standards ("IFRS"), and therefore, may not be comparable    
      with the calculations of similar measures for other companies.        
(2)   Current assets less current liabilities, excluding fair value of      
      derivative instruments.                                               
(3)   For a description of the boe conversion ratio, refer to the advisories
      contained herein.                                                     
(4)   Product prices include realized gains/losses from financial derivative
      instruments.                                                          
(5)   Oil equivalent price includes minor sulphur sales revenue.            
(6)   Operating netback equals petroleum and natural gas revenues plus      
      realized gains or losses on financial derivatives less royalties,     
      transportation and operating costs calculated on a per boe basis.     
      Operating netback does not have a standardized measure prescribed by  
      IFRS, and therefore, may not be comparable with the calculations of   
      similar measures for other companies.                                 
(7)   Funds flow netback equals petroleum and natural gas revenues plus     
      realized gains or losses on financial derivatives less royalties,     
      transportation, operating costs, general and administrative expenses  
      and interest calculated on a per boe basis. Funds flow netback does   
      not have a standardized measure prescribed by IFRS, and therefore, may
      not be comparable with the calculations of similar measures for other 
      companies.                                                            

First Quarter Financial and Operating Highlights


--  Increased average production to 4,147 boe/d (37% liquids), up 15% and 3%
    from the first and fourth quarters of 2013, respectively despite
    production curtailments and facility restrictions. 
    
--  Increased funds flow from operations to $9.9 million, up 43% and 53%
    from the first and fourth quarters of 2013, respectively. On a per share
    basis, funds flow rose to $0.15 per basic share, an increase of 15% and
    50% compared to the first and fourth quarters last year, respectively. 
    
--  Improved operating netback to $29.85/boe, up 19% and 46% from the first
    and fourth quarters of 2013, respectively. 
    
--  Increased funds flow netback to $26.45/boe, representing a 24% and 53%
    improvement from the 2013 first and fourth quarters, respectively. 
    
--  Drilled 7 (4.5 net) wells, including 3 (1.7 net) wells at Inga/Fireweed,
    British Columbia, 2 (2.0 net) wells at Mulligan, Alberta and 2 (0.8 net)
    wells at Leduc Woodbend, Alberta. 
    
--  Invested $29.5 million in capital expenditures, including $1.7 million
    on undeveloped land acquisitions in our core operating areas and $2.9
    million on facilities. 

Financial Summary

The Company invested $29.5 million in capital expenditures during the first quarter of 2014, including the drilling of 3 (1.7 net) wells at Inga/Fireweed, 2 (2.0 net) wells at Mulligan and 2 (0.8 net) wells at Leduc Woodbend. First quarter capital investment included $1.7 million on undeveloped land acquisitions in our core operating areas and $2.9 million on facilities.

Artek's average production for the three-month period ended March 31, 2014 was 4,147 boe/d (37% liquids), up 15% from the previous year and up 3% from the 2013 fourth quarter. First quarter funds flow increased 43% to $9.9 million and 15% to $0.15 per basic share from the same period of 2013. During the first three months of 2014, the Company's operating netback was $29.85/boe, up 19% from the 2013 first quarter, while funds flow per boe increased 24% to $26.45/boe from the previous year. Artek's natural gas price for the quarter rose 69% to $6.04/mcf compared to the same period in 2013. General and administrative costs on a boe basis fell 19% to $2.02/boe compared to the first quarter last year.

Artek has secured several commodity contracts to protect its cash flow and support its 2014 capital budget. The Company has entered into natural gas production swaps on 10,000 mmbtu/d from April to October 2014 at an average fixed price of $3.64/GJ. In addition, 400 bbls/d of crude oil production has been fixed at an average price of CDN$100.75/bbl WTI for 2014. Lastly, the AECO basis on 2,000 mmbtu/d of natural gas has been fixed at 12.85% of Henry Hub for 2014.

Outlook

Following spring breakup, the Company will be back drilling with plans to start in the liquids-rich Inga South area. Artek is currently planning to drill up to an additional seven horizontal wells in the greater Inga/Fireweed area targeting natural gas and condensate in the Doig and Montney formations, and an additional horizontal well targeting the Charlie Lake formation in the Mulligan area.

Subsequent to quarter-end, on May 13, 2014, the Company announced that it entered into an agreement with a syndicate of underwriters pursuant to which the underwriters have agreed to purchase, on a bought deal basis, and Artek has agreed to issue 8,050,000 common shares at a price of $4.10 per share and 1,987,000 flow-through common shares at a price of $5.04 per share for aggregate gross proceeds of approximately $43,019,000. The offering is expected to close on or about June 3, 2014 and remains subject to satisfaction of customary conditions and approvals. Proceeds of the offering will initially be used to reduce bank indebtedness, thereby freeing up additional borrowing capacity to fund a portion of the Company's ongoing capital program with the flow-through share proceeds used to incur eligible Canadian exploration expenses that will be renounced to subscribers effective on or before December 31, 2014. The Company and its Board reviews its capital expenditure program on an ongoing basis.

Forward Looking Statements: This press release contains forward-looking statements. Management's assessment of future plans and operations and the timing thereof, including the number and locations of wells to be drilled, financial capacity to carry out its planned 2014 capital program, completion of the offering and timing thereof, may constitute forward-looking statements 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, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward looking statements. Forward looking statements or information are 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 Artek believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct.

In addition to other factors and assumptions which may be identified in this document and other documents filed by the Company, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Artek operates; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; Artek's ability to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and Artek's ability to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Company's website (www.artekexploration.com). Furthermore, the forward looking statements contained in this document are made as at the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

BOE Conversions: Barrel of oil equivalent ("BOE") amounts may be misleading, particularly if used in isolation. A BOE conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel. This conversion ratio of six thousand cubic feet of natural gas to one barrel is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value.

Artek is a crude oil and natural gas exploration, development and production company headquartered in Calgary, Alberta, Canada. Artek's shares trade on the TSX under the symbol "RTK".

Contacts:
Artek Exploration Ltd.
Darryl Metcalfe
President and Chief Executive Officer
(403) 296-4799

Artek Exploration Ltd.
Darcy Anderson
Vice President Finance and Chief Financial Officer
(403) 296-4775
www.artekexploration.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that Carbonite will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Carbonite protects your entire IT footprint with the right level of protection for each workload, ensuring lower costs and dependable solutions with DoubleTake and Evault.
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo Silicon Valley Call for Papers is now open.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
SYS-CON Events announced today that Twistlock, the leading provider of cloud container security solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Twistlock is the industry's first enterprise security suite for container security. Twistlock's technology addresses risks on the host and within the application of the container, enabling enterprises to consistently enforce security policies, monitor...
The hot topics in the industry today seem to center around Digital Transformation and Mobile Apps. While a digital transformation strategy is crucial to keep up with the chaos in your industry, customer demands, and other disruptions, the need to create mobile apps to remain relevant in your market and to your customers is equally a no-brainer. Regardless of the approach, the next question always seems to pop up: What architecture should I chose? Native? Hybrid? Managed? Hosted?
We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
SYS-CON Events announced today that EARP Integration will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. EARP Integration is a passionate software house. Since its inception in 2009 the company successfully delivers smart solutions for cities and factories that start their digital transformation. EARP provides bespoke solutions like, for example, advanced enterprise portals, business intelligence systems an...
The 21st International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?