Bengal Energy Announces Results for Q3 2010 - Undeveloped Land Position Now
Exceeds 2.3 Million Net Acres
CALGARY, Feb. 16 /CNW/ - Bengal Energy Ltd. (TSX: BNG) ("Bengal" or the "Company") today announced that its financial and operating results for the three and nine months ended December 31, 2009 have been filed on SEDAR. A highlights table is provided below.
Bengal has now assembled an extensive inventory of oil and natural gas drilling opportunities in India and Australia on more than 2.3 million net acres of undeveloped land. These producing and prospective properties range from the Cuisinier oil discovery in Australia's Cooper Basin, where production is expected to come on stream shortly, to high-impact drilling prospects on large offshore blocks.
In October 2009, Bengal was provisionally awarded a 100% working interest in 340,000 offshore acres at CY-OSN 2009/1 in India's Cauvery Basin. Companies operating within 50 kilometers of the acquired block have committed more than $200 million of exploration expenditures over the next four years. Bengal has already identified a 7,500 acre prospect on the block having similarities with a large established light-oil producing pool in the Cauvery offshore. Exploration is anticipated to begin following formal signing of a Production Sharing Contract ("PSC") with the Government of India in the first quarter of 2010.
Bengal's exploration work on its onshore India CY-ONN-2005/1 block is expected to commence upon granting of a Petroleum Exploration License ("PEL") from the provincial government early in 2010. Bengal has a 30% working interest in this 236,000 acre block. A 3D seismic shoot is planned for the second half of 2010 with drilling to follow in 2011. There is a producing oilfield within five kilometers of the block. Bengal is partnered with two of India's National Oil Companies on the block.
In the Timor Sea offshore Australia, the Company has a 100% working interest in 861,000 acres on the AC/P 47 Permit. Bengal has begun 2D seismic reprocessing on this block. The Company has identified a robust series of prospects from seismic data, the first of which has been given a Prospective Resource Assessment of 736 MM bbls (unrisked mean recoverable oil) by an independent technical engineering evaluator (see www.bengalenergy.ca for details). Bengal plans to acquire 750 sq km of 3D seismic in year two of the permit beginning in April 2010. Bengal is currently in discussions to farmout the drilling of a well in order to leverage the expertise of an experienced offshore driller, minimize risk capital, and accelerate the testing of one of the structures.
Most recently, Bengal signed an agreement to acquire a 100% working interest in exploration block Authority to Prospect ("ATP") 732P. ATP 732P has a 12 year term and consists of 654,000 gross acres near producing oil and gas fields in Australia's Cooper Basin. The Company has identified two large Permian subcrop gas plays offsetting a producing gas field. The block holds light oil potential demonstrated by Hutton, Murta and Birkhead zones in offsetting producing fields.
Initial production is expected shortly at the Cuisinier oil discovery in Australia's Barta block at ATP 752P. Production facilities have been installed and a production license has been granted. Production is expected before month end after the execution of marketing and transportation contracts. Processing of the 103 sq km Cuisinier 3D seismic survey is complete and initial interpretations have identified additional exploration and exploitation opportunities for dual objective Hutton/Birkhead and Murta targets. A development plan will be formulated by the joint venture partners in April 2010.
Bengal holds a 10% interest in the offshore Timor Sea Permit AC/P 24, which the Company earned through the drilling of the Katandra-1 oil discovery well in December 2004. Following a merged rework of existing seismic data a new well test is anticipated in the fall of 2010.
Bengal has diligently and prudently expanded its land and prospect base in the past 18 months whereby it has nearly quadrupled the Company's net undeveloped acreage position to more than 2.3 million net acres. Bengal has significantly expanded its project inventory to a number of high impact, world class opportunities through extensive geosciences and engineering evaluations. The Company's highly dedicated team of professionals has been successful in four separate international bid rounds in three established producing basins. The company has a 60% average working interest and operates 69% of its highly prospective land base. Plans are underway to continue to expand this growth.
HIGHLIGHTS
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$000s except per
share, volumes Three Months Ended Nine Months Ended
and netback -----------------------------------------------------
amounts 12/31/09 12/31/08 09/30/09 12/31/09 12/31/08
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Revenue
Natural gas $ 186 $ 516 $ 218 $ 623 $ 1,753
Natural gas liquids 19 67 67 142 411
Oil 208 242 220 727 2,095
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Total 413 825 505 1,492 4,259
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Royalties 53 125 74 192 739
% of revenue 12.7 15.2 14.8 12.8 17.4
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Operating &
transportation 164 211 230 640 862
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Netback(1) 196 489 201 660 2,658
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Cash flow from (used
in) operations: (264) 303 (263) (1,157) 1,858
Per share ($) (basic
& diluted) (0.01) 0.02 (0.01) (0.06) 0.10
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Funds from (used in)
operations:(2) (347) (29) (295) (940) 1,197
Per share ($) (basic
& diluted) (0.02) (0.00) (0.02) (0.05) 0.07
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Net (loss): (885) (6,196) (1,848) (3,598) (7,359)
Per share ($) (basic
& diluted) (0.05) (0.34) (0.10) (0.20) (0.40)
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Capital expenditures $ 1,120 $ 1,096 $ (426) $ 848 $ 6,470
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Property disposition
proceeds $ - $ - $ 2,111 $ 2,111 $ -
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Volumes
Natural gas (mcf/d) 422 842 787 631 729
Natural gas liquids
(boe/d) 6 19 17 13 19
Oil (bbl/d) 24 46 36 34 63
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Total (boe/d @
6:1) 100 205 184 152 203
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Netback(1) ($/boe)
Revenue $ 44.89 $ 43.69 $ 29.70 $ 35.60 $ 76.22
Royalties 5.69 6.63 4.39 4.57 13.23
Operating &
transportation 17.81 11.16 13.54 15.27 15.43
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Total $ 21.39 $ 25.90 $ 11.77 $ 15.76 $ 47.56
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(1) Netback is a non-GAAP measure. Netback per barrel of oil equivalent
is calculated by dividing the revenue and costs in total for the
Company by the total production of the Company measured in boe.
(2) Funds from operations is a non-GAAP measure. The comparable GAAP
measure is cash flow from operations. A reconciliation of the two
measures can be found in the table on page 1 of Bengal's Management's
Discussion and Analysis for the third quarter of fiscal 2010.
Copies of the consolidated interim Financial Statements and Management's Discussion & Analysis in respect thereof for the three and nine months ended December 31, 2009 have been filed with Canadian securities regulators and are available on SEDAR at www.sedar.com or by visiting Bengal's website at www.bengalenergy.ca.
About Bengal
Bengal Energy Ltd. is an international junior oil and gas exploration and production company based in Calgary, Alberta. The Company is committed to growing shareholder value through international exploration, production and acquisitions. Bengal trades on the TSX under the symbol BNG. Additional information is available at www.bengalenergy.ca.
Disclaimers
This news release contains certain statements which constitute forward-looking statements or information, including the execution of production sharing contracts, granting of petroleum exploration licenses, execution of marketing and transportation contracts, required work commitments, work program capital expenditure requirements and the approximate size and nature of seismically defined features. Although the Company believes the expectations reflected in its forward-looking statements are reasonable, the forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The Company has provided these forward-looking statements or information in reliance on certain assumptions that it believes are reasonable at this time, including: the provisional award of 340,000 acres at CY-OSN-2009/1 in the Cauvery Basin of India will be formalized, the Tamil Nadu Government in India will grant a Petroleum Exploration License for CY-ONN-2005/1, that the Queensland Government will grant an ATP on the 654,000 acres in Australia, Cuisinier well production commences and the ability to meet work commitments and work program capital expenditure requirements. Risks include, but are not limited to: uncertainties and other factors that are beyond the control of the Company, risks associated with the oil and gas industry, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, and specific risks associated with the ability to complete the execution of the production sharing contract such as delays in obtaining or failure to obtain final Government of India approval, ability to meet the work commitments, Bengal's ability to meet the capital expenditures, estimated size of any seismic features and whether additional geosciences work will progress to defining drillable locations. The Company assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements except as required by securities laws. Additional information identifying risks and uncertainties is contained in filings of the Company with Canadian securities regulators, which are available under the Company's profile at www.sedar.com.
Barrels of oil equivalent - When converting natural gas to barrels of oil equivalent (boe), Bengal uses the widely recognized standard of 6 thousand cubic feet (Mcf) of natural gas to one barrel of oil (bbl). Bengal cautions that boes 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.
%SEDAR: 00003559E
For further information: Bengal Energy Ltd., Bradley Johnson, Chief Executive Officer, Chayan Chakrabarty, President, (403) 205-2526, Email: [email protected], Website: www.bengalenergy.ca
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