Calgary, Alberta - Bengal Energy Ltd. (TSX: BNG) ('Bengal' or the 'Company') announces its financial and operating results for the second quarter of fiscal 2023 ended September 30, 2022.
SECOND QUARTER FISCAL 2023 HIGHLIGHTS:
The following is an overview of the financial and operational results during the three and six-months ending September 30, 2022. All amounts are in Canadian funds unless otherwise noted:
Financial Summary:
Sales Revenue - Crude oil sales revenue was $2.1 million in the second quarter of fiscal 2023, which is 13% higher than the $1.9 million recorded in Q2 fiscal 2022. The higher sales revenue is due to increased realized crude oil prices which more than offset production declines during the quarter.
Funds from (used in) Operations1 - Bengal generated funds from operations of $1.8 million during Q2 fiscal 2023 compared to $0.4 million in Q2 fiscal 2022. Bengal generated $1.1 million of cash from operations during Q2 fiscal 2023 compared to $0.6 million of cash from operations in Q2 fiscal 2022. During the quarter, the Company resolved a historic crude oil stock discrepancy with the Cuisinier Joint Venture ('JV') operator, which resulted in a net gain of $1.1 million after accruing associated royalties and is reflected as other income, which contributed to the current quarter's Funds from Operations and Cash from operations. When excluding the impact of the one-time gain, the Company's adjusted funds from operations would have been $0.7 million and $1.1 million for the three and six-month period ended September 30, 2022 respectively.
Net Income - Bengal reported a net income of $1.5 million for the current quarter compared to net income of $0.1 million in Q2 fiscal 2022.
Operational Summary:
Production Volumes - The Company's share of total Cuisinier production in the current quarter was 15,996 bbls, which is a 13% decrease from the 18,303 bbls produced in the first quarter of fiscal 2023. The current quarter production averaged 174 bbls/d compared to 184 bbls/d produced in the first quarter of fiscal 2022. Suspended production at the Cuisinier 29 and Barta North 1 wells due to workover activities resulted in a loss of approximately 25 bbls/d during fiscal Q2 2023. Unseasonal rain in the Cooper Basin during the quarter hampered the Joint Venture's ability to perform the necessary workover procedures to reinstate production at these wells, which were online for the majority of the comparative period fiscal Q2 2022. The Cuisinier Joint Venture negotiated revised Crude Oil Sale and Purchase Agreements with corresponding transportation agreements effective July 1, 2022, through to December 31, 2023. These new agreements cover the Processing (Crude Oil Processing Services Agreement - COPSA), the Transportation of Crude Oil (Crude Oil Transportation Agreement - COTA), and the Liquids Allocation Agreement ('LAA').
The Cuisinier waterflood pilot, which commenced activity in calendar Q4 2021 has started to demonstrate encouraging results. The JV has observed compelling evidence to suggest that the overall field decline has been arrested with even a general upward trend in oil rate since December 2021.
Capital Expenditures - Bengal continued work on its development projects at Wareena 1 and Wareena 5 and completed activities at Caracal-1. In addition to these development activities, the Company has commenced an operational readiness program in anticipation of commencing 100% Bengal controlled operations during the year.
BUSINESS OVERVIEW
Bengal's producing and non-producing assets are situated in Australia's Cooper Basin, a region featuring large accumulations of very light and high-quality crude oil and natural gas. The Company's core Australian assets, Petroleum Lease ('PL') 303 Cuisinier, ATP 934 Barrolka, ATP 732 Tookoonooka, and four recently acquired petroleum licenses are situated within an area of the Cooper Basin that is well served with production infrastructure and take-away capacity for produced crude oil and natural gas. Still in early stages in terms of appraisal and development, Bengal believes these assets offer attractive upside potential for both oil and gas. Australia presents a stable political, fiscal, and economic environment in which to operate, and a favourable royalty regime for oil and gas production.
Under the State of Queensland Regulatory process, ATPs (Authority to Prospect) are granted by the State generally for a period of twelve years with one third of the original grant area expiring every four years. At the end of the final term of the ATP, an application can be made to continue a portion of the permit in the form of a PCA (Potential Commercial Area). PCAs have a life span of five to fifteen years. PCA applications include a commercial viability report that indicates that the area is likely to be commercially viable within the applied term. This allows for extra time to commercialize the resource. These PCA's remain a part of the ATP until expiry. If a discovery of oil or gas is made, an application for a PL (petroleum lease) is made to allow for production. PLs are granted for up to a thirty-year term.
Bengal has two PLs on the former ATP 752 Barta block, PL 303, and PL 1028, in addition to three PCAs, PCA 206, PCA 207 Barta West and PCA 155 Wompi block-Nubba/Yilgarn. Bengal also holds four PLs including a pipeline license PPL 138 adjacent to the 100% owned ATP 934.
Forward-Looking Statements
This news release contains certain forward-looking statements or information ('forward-looking statements') as defined by applicable securities laws that involve substantial known and unknown risks and uncertainties, many of which are beyond Bengal's control. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. The use of any of the words 'plan', 'expect', 'future', 'prospective', 'project', 'intend', 'believe', 'should', 'would,' 'anticipate', 'estimate', or other similar words or statements that certain events 'may' or 'will' occur are intended to identify forward-looking statements. The projections, estimates and beliefs contained in such forward-looking statements are based on management's estimates, opinions, and assumptions at the time the statements were made, including assumptions relating to: the impact of economic conditions in North America and Australia and globally; industry conditions; changes in laws and regulations including, without limitation, the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; increased competition; the availability of qualified operating or management personnel; fluctuations in commodity prices, foreign exchange or interest rates; stock market volatility and fluctuations in market valuations of companies with respect to announced transactions and the final valuations thereof; results of exploration and testing activities; and the ability to obtain required approvals and extensions from regulatory authorities. We believe the expectations reflected in those forward-looking statements are reasonable but, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bengal will derive from them. As such, undue reliance should not be placed on forward-looking statements.
Forward-looking statements contained herein include, but are not limited to, statements regarding: Bengal's multi-phase water injection scheme; Bengal's development plans for its four PLs at ATP 934.
The forward-looking statements contained herein are subject to numerous known and unknown risks and uncertainties that may cause Bengal's actual financial results, performance or achievement in future periods to differ materially from those expressed in, or implied by, these forward-looking statements, including but not limited to, risks associated with: the failure to obtain required regulatory approvals or extensions; the failure to satisfy the conditions under farm-in and joint venture agreements; the failure to secure required equipment and personnel; changes in general global economic conditions including, without limitations, the economic conditions in North America and Australia; increased competition; the availability of qualified operating or management personnel; fluctuations in commodity prices, foreign exchange or interest rates; changes in laws and regulations including, without limitation, the adoption of new environmental and tax laws and regulations and changes in how they are interpreted and enforced; the results of exploration and development drilling and related activities; the ability to access sufficient capital from internal and external sources; and stock market volatility. Readers are encouraged to review the material risks discussed in Bengal's annual information form for the year ended March 31, 2022, under the heading 'Risk Factors' and in Bengal's management's discussion and analysis for the Q2 of the fiscal year ending March 31, 2023, under the heading 'Risk Factors'. The Company cautions that the foregoing list of assumptions, risks, and uncertainties is not exhaustive. The forward-looking statements contained in this news release speak only as of the date hereof and Bengal does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.
Contact:
Bengal Energy Ltd.
Chayan Chakrabarty
President & Chief Executive Officer
Jerrad Blanchard
Chief Financial Officer
T: (403) 205-2526
Email: investor.relations@bengalenergy.ca
Website: www.bengalenergy.ca
BENGAL ENERGY LTD. 
