FOURTH-QUARTER FISCAL 2023 HIGHLIGHTS
The following is an overview of the financial and operational results during the three-and twelve-months ending
Sales revenue - Reflecting lower oil prices, crude oil sales revenue was
Funds from (used in) operations1 - Bengal used
Net income - Bengal reported a net loss of
Non-IFRS and Other Financial Measures are defined in the Non-IFRS and Other Financial Measures section of this press release.
Net income during the current quarter was materially impacted by the royalty adjustment described above. Net income for the year was also positively impacted by
Operational Summary: Production volumes - The Company's share of total production in the current quarter was 16,395 bbls of light crude oil, which is a 4.8% increase from the 15,647 bbls produced in the fourth quarter of fiscal 2022. The current quarter production averaged 182 bbls/day compared to 174 bbls/day produced in the fourth quarter of fiscal 2022. Full year fiscal 2023 saw total production of 65,680 bbls compared to 66,797 bbls for full year fiscal 2022. The full year fiscal 2023 production per day averaged 180 bbls compared to 183 bbls/day for the full year fiscal 2022.
Capital expenditures - During the year, the Company continued capital programs on two of its 100% owned and operated projects at Wareena (Petroleum Lease ('PL') 1110 & Producing Pipeline ('PPL') 138) and Caracal (Authority to Prospect ('ATP') 732). Bengal incurred
BUSINESS OVERVIEW
Bengal's producing and non-producing assets are situated primarily in
Under the State of Queensland Regulatory process, ATPs 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. 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 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 producing pipeline license ('PPL') 138 adjacent to the 100% owned ATP 934.
PL303 and PL 1028 Cuisinier (controlling permit ATP 752) (30.357% WI)
A pilot water injection-driven reservoir pressure maintenance scheme was initiated and after resolving mechanical issues, water injection activities commenced during calendar Q4 2021. This project is located in the southeast quadrant of the Cuisinier pool, with injection of water taking place at the Cuisinier 24 well. The broad nature of the Cuisinier structure combined with variable flank aquifer pressure support has resulted in pressure depletion within the central portion of the Cuisinier pool. The injection of produced formation water is anticipated to both increase production in up to four offsetting wells and reduce water handling charges. On establishing success of the pilot, the Joint Venture will begin a multi-staged water injection scheme, targeted fracture stimulation and more commercially efficient development drilling. The Joint Venture has observed compelling evidence that the overall field decline has been temporarily arrested with a modest upward trend in oil production rate in affected wells during the current quarter.
Bengal's joint venture partner and operator of the Cuisinier pool has indicated its intent to drill four wells in the Cuisinier field during calendar 2023. Bengal will not participate in this program given that the operator has not prepared a suitable field development plan considering the water injection pilot and projected capital and operating costs make such investment less attractive than alternatives available in Bengal's inventory.
PL 114 Wareena, PL 157 Ghina, PL 188 Ramses, PL 411 Karnak, PPL 138 pipeline (100% WI)
The Company has a 100% working interest in four PLs and a natural gas pipeline connected to transportation infrastructure into the Eastern Australia Gas Market. These non-productive PLs are highly compatible with theclose proximity to ATP 934. Bengal continues to integrate subsurface data from the PLs to enhance the Company's understanding of ATP 934 and to finalize the selection of exploration and appraisal drilling locations.
Included in this program is the reinstatement of two gas wells and an existing gas pipeline to produce raw gas into existing infrastructure at PL 114 Wareena. The Company completed workover activities at Wareena 1 and Wareena 5 in
The 100% ownership of these assets presents an appraisal and development opportunity that will be operated by the Company and is seen as a key steppingstone for Bengal's natural gas platform upon which future development and appraisal work at the existing PLs and exploration growth through ATP 934 can be undertaken.
ATP 732 Tookoonooka (100% WI)
The Company has conducted preliminary workover and stimulation program at the Caracal-1 well, a 53 API oil discovery in the Wyandra zone. The well produced oil to surface, although at lower-than-expected rates and is currently being assessed to determine capacity for commercial production versus drilling a more optimally placed appraisal well to assess the extent of the structure.
In
ATP 732 reached the end of its term in March of 2023 and the Company lodged an application over the northern portion of the ATP for continuation in the form of PCA 332 for a further 15 years. Based on the positive results from Caracal-1, the application was approved on
ATP 934 Barrolka East (100% WI)
ATP 934 is the Company's 100% owned natural gas exploration block. Bengal received approval of a special amendment for ATP 934 in
ATP 934 Durham Downs East Farmout Block (40% WI)
Bengal entered into an agreement with Santos in July of 2020 to farm-in on a portion of the ATP 934 block. Santos carried the drilling costs of one well to earn a 60% operated interest in the ATP 934 southern farm- out block, which represents 57.8% of the total block acreage post
While the Legbar-1 Well did not indicate commercial quantities of hydrocarbons, thick, high quality reservoir sands were encountered in the primary Permian Toolachee formation and in the Jurassic Birkhead zone, with evidence of residual hydrocarbon saturation in both zones. In addition, fluorescence shows and elevated gas readings through the Jurassic Birkhead Fm/Top Hutton Sandstone indicate oil has passed through the reservoir, supporting the search for a valid closure to test this play. The findings from the Legbar-1 well will help Bengal refine its exploration targets going forward, both with Santos in the
Business Development
The Company is in discussions with potential industry and financial partners to fund some of these oil and gas related activities.
Non-IFRS and Other Financial Measures
Non-IFRS Financial Measures
Within this Press Release, references are made to terms commonly used in the oil and gas industry. Operating netback, operating netback per barrel, funds from operations, funds from operations per share, adjusted net income, and adjusted net income per share do not have any standardized meaning under IFRS and are referred to as non-IFRS measures. Management believes the presentation of the non-IFRS measures above provides useful information to investors and shareholders as the measures provide increased transparency and the ability to better analyze performance against prior periods on a comparable basis.
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
Forward-looking statements contained herein include, but are not limited to, statements regarding: Bengal's multi-phase water injection scheme, targeted fracture stimulation and the results thereof at ATP 752;
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
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