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
One of the biggest challenges with adopting a DevOps mentality is: new applications are easily adapted to cloud-native, microservice-based, or containerized architectures - they can be built for them - but old applications need complex refactoring. On the other hand, these new technologies can require relearning or adapting new, oftentimes more complex, methodologies and tools to be ready for production. In his general session at @DevOpsSummit at 20th Cloud Expo, Chris Brown, Solutions Marketi...
At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
HyperConvergence came to market with the objective of being simple, flexible and to help drive down operating expenses. It reduced the footprint by bundling the compute/storage/network into one box. This brought a new set of challenges as the HyperConverged vendors are very focused on their own proprietary building blocks. If you want to scale in a certain way, let's say you identified a need for more storage and want to add a device that is not sold by the HyperConverged vendor, forget about it...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
From 2013, NTT Communications has been providing cPaaS service, SkyWay. Its customer’s expectations for leveraging WebRTC technology are not only typical real-time communication use cases such as Web conference, remote education, but also IoT use cases such as remote camera monitoring, smart-glass, and robotic. Because of this, NTT Communications has numerous IoT business use-cases that its customers are developing on top of PaaS. WebRTC will lead IoT businesses to be more innovative and address...
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
In this presentation, you will learn first hand what works and what doesn't while architecting and deploying OpenStack. Some of the topics will include:- best practices for creating repeatable deployments of OpenStack- multi-site considerations- how to customize OpenStack to integrate with your existing systems and security best practices.
DXWorldEXPO LLC announced today that Kevin Jackson joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Kevin L. Jackson is a globally recognized cloud computing expert and Founder/Author of the award winning "Cloud Musings" blog. Mr. Jackson has also been recognized as a "Top 100 Cybersecurity Influencer and Brand" by Onalytica (2015), a Huffington Post "Top 100 Cloud Computing Experts on Twitter" (2013) and a "Top 50 C...
"Venafi has a platform that allows you to manage, centralize and automate the complete life cycle of keys and certificates within the organization," explained Gina Osmond, Sr. Field Marketing Manager at Venafi, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
In a world where the internet rules all, where 94% of business buyers conduct online research, and where e-commerce sales are poised to fall between $427 billion and $443 billion by the end of this year, we think it's safe to say that your website is a vital part of your business strategy. Whether you're a B2B company, a local business, or an e-commerce site, digital presence is key to maintain in your drive towards success. Digital Performance will take priority in 2018 for the following reason...
Rodrigo Coutinho is part of OutSystems' founders' team and currently the Head of Product Design. He provides a cross-functional role where he supports Product Management in defining the positioning and direction of the Agile Platform, while at the same time promoting model-based development and new techniques to deliver applications in the cloud.
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...