Niko Reports Results for the Quarter Ended June 30, 2013

Niko Reports Results for the Quarter Ended June 30, 2013 
CALGARY, ALBERTA -- (Marketwired) -- 08/13/13 -- Niko Resources Ltd.
("Niko" or the "Company") (TSX:NKO) is pleased to report its
operating and financial results for the quarter ended June 30, 2013.
The operating results are effective August 13, 2013. All amounts are
in U.S. dollars unless otherwise indicated and all amounts are
reported using International Financial Reporting Standards unless
otherwise indicated. 
PRESIDENT'S MESSAGE TO THE SHAREHOLDERS 
The first quarter of fiscal 2014 included several significant events
for the Company: 


 
--  Testing of the MJ-1 well, a significant gas and condensate discovery in
    the D6 Block in India (in which Niko owns a 10 percent interest).
    Initial evaluations indicate 155 meters of gross pay (125 meters of net
    pay) and a field size estimate of approximately 60 square kilometers.
    The appraisal program for the MJ field is expected to be initiated in
    this quarter. 
    
--  Approval by the Government of India of a new pricing formula for
    domestic gas sales in India, which is expected to effectively double
    Niko's gas price realizations effective April 1, 2014. 
    
--  Progress on improving the Company's liquidity, with the closing of a
    $63.5 million unsecured notes financing transaction, receipt of $19
    million from the Company's program of non-core asset sales, farm-outs
    and other arrangements (with an additional $24 million received in
    July), and work on a secured loan agreement that resulted in the Company
    entering into a $60 million secured loan agreement in July.

 
In light of the MJ discovery in India, the Company is re-evaluating
its go-forward exploration capital spending priorities and expects to
make decisions in the near future on various options that it is
pursuing. Guidance on spending for the remainder of fiscal 2014 will
be provided when this review has been completed.  
Edward S. Sampson - President and Chief Executive Officer, Niko
Resources Ltd. 
REVIEW OF OPERATIONS AND GUIDANCE 
Sales Volumes 


 
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                                              Quarter ended    Quarter ended
(MMcfe/d)                           
          June 30, 2013   March 31, 2013
----------------------------------------------------------------------------
D6 Block, India                                          53               71
Block 9, Bangladesh                                      50               51
Other(1)                                                  3                4
----------------------------------------------------------------------------
  Total(2)                                              107              126
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(1) Other includes Hazira in India, and Canada.                             
(2) Figures may not add up due to rounding.                                 

 
Total sales volumes for the first quarter of fiscal 2014 averaged 107
MMcfe/d compared to 126 MMcfe/d for the fourth quarter of fiscal
2013, primarily due to anticipated natural declines and reservoir
management activities in the D6 Block in India along with the
approximately 600 b/d (3.6 MMcfe/d) of the Company's share of crude
oil and condensate production volumes for the D6 Block held in
inventory at the end of the quarter that are expected to be sold in
the second quarter of fiscal 2014. At the Bangora field in Block 9 in
Bangladesh, the workover of a well that was suspended in the third
quarter of fiscal 2013 was completed at the end of the first quarter
of fiscal 2014 and the workover of a producing well has been
completed in the second quarter of the fiscal year.  
For fiscal 2014, the workovers in Bangladesh, and an additional well
in the MA field and workovers for the Dhirubhai 1 and 3 and MA fields
in the D6 Block in India, are expected to provide additional volumes
starting in the second quarter and third quarter of the fiscal year,
respectively, contributing to an annual average sales volumes
forecast between 112 and 116 MMcfe/d for the year. For fiscal 2015,
the Company is targeting 133 MMcfe/d, benefiting from the development
activities in fiscal 2014 and fiscal 2015.  
Funds from Operations 


 
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                                              Quarter ended    Quarter ended
(millions of U.S. dollars)                    June 30, 2013   March 31, 2013
----------------------------------------------------------------------------
Funds from operations                                    15               30
----------------------------------------------------------------------------

 
Funds from operations for the first quarter of fiscal 2014 were $15
million compared to $30 million for the fourth quarter of fiscal
2013. The impact of the 600 b/d of crude oil and condensate volumes
held in inventory that are expected to be sold in the second quarter
of fiscal 2014 is approximately $5 million. The fourth quarter of
fiscal 2013 benefitted from a minimum alternate tax recovery of $6
million for the D6 Block in India.  
For fiscal 2014, funds from operations are forecast to be
approximately $65 to $70 million. For fiscal 2015, funds from
operations are forecast to increase by $100 million or more,
reflecting higher sales volume and the Company's estimate of the
projected benefit of improved pricing for natural gas sales in India. 
Capital Expenditures, net of Proceeds of Farm-outs and Other
Arrangements 


 
----------------------------------------------------------------------------
                                                               Quarter ended
(millions of U.S. dollars)                                     June 30, 2013
----------------------------------------------------------------------------
Total                                                                     37
----------------------------------------------------------------------------

 
Capital expenditures, net of proceeds of farm-outs and other
arrangements, totaled $37 million for the first quarter of fiscal
2014. Spending in the quarter related primarily to exploration
activities in Indonesia, Trinidad and Tobago, and India. The Company
also received $19 million of proceeds of farm-outs and other
arrangements in the quarter and recorded $24 million as an offset to
the costs of a commitment well spudded in the quarter (related to
funds received in the second quarter of this year from a former
partner in exchange for assuming the partner's obligation for the
commitment well). 
The Company is currently reviewing its go-forward capital spending
plans and guidance on the level of capital spending forecast for
fiscal 2014 will be provided when this review has been completed.  
Indonesian Exploration Update 
The Elang-1 exploration well, located in the Cendrawasih PSC offshore
Papua province in eastern Indonesia, has been drilled in a water
depth of 5,033 feet to a total depth of 15,865 feet in 27 days. The
well did not encounter commercial reservoir pay zones and has been
plugged and abandoned. Drilled by the Diamond Offshore drilling rig,
the Ocean Monarch, the well was drilled safely, under budget and
ahead of schedule. 
The Ocean Monarch has mobilized to the Niko-operated Kofiau PSC where
it has spud the Elit-1 well as a follow up to the Ajek-1 well drilled
by Niko in January 2013
.  
Credit Facility 
The Company is in discussions with its credit facility syndicate
banks regarding the re-determination of the borrowing base under its
credit facility. The re-determination scheduled to occur on or before
July 31, 2013 has been deferred to August 31, 2013. Any required
adjustment to outstanding borrowings to reflect the new borrowing
base amount is now scheduled to occur on or before September 30,
2013.  
Q1 Interim Report  
Copies of the Company's Q1 Interim Report for the quarter ended June
30, 2013 (including Management's Discussion and Analysis and the
consolidated Financial Statements for the quarter ended June 30,
2013) are available on the Company's website and have been filed with
securities regulatory authorities and will be available by referring
to the Company's profile on SEDAR at www.sedar.com. 
Conference Call 
Niko will be hosting its Q1 Results conference call on Wednesday,
August 14th, 2013 at 9:00am MDT/ 11:00am EDT.  
The conference call will be webcast and the link to the webcast is
http://www.gowebcasting.com/4795. 
A transcript of the conference call will be available on the
Company's website until August 28, 2013. 
For further information, please contact: 
Niko Resources Ltd. (403) 262-1020, Edward Sampson, Chairman of the
Board, President & CEO, or Glen Valk, VP Finance & CFO, or visit the
Company's website at www.nikoresources.com.  
Forward-Looking Information  
Certain statements in this press release constitute forward-looking
information. Specifically, this press release contains
forward-looking information relating to funds from operations, sales
volumes, capital spending forecast, proceeds from anticipated sales
from inventory and the re-determination of the Company's borrowing
base under the credit facility. These forward-looking statements are
based on certain key expectations and assumptions, including
anticipated drilling and market conditions. The reader is cautioned
that the assumptions used in the preparation of such information,
although considered reasonable at the time of preparation, may prove
to be incorrect and that there can be no assurance that the expected
sales from inventory will occur or occur on terms acceptable to the
Company. Actual results may vary from the information provided herein
as a result of numerous known and unknown risks and uncertainties and
other factors and such variations may be material. Such factors
include, but are not limited to: risks associated with oil and gas
operations including equipment failures or accidents; the ability of
suppliers and third party contractors to meet commitments; pressure
or irregularities in geological formations; and adverse weather
conditions. Niko makes no representation that the actual results
achieved during the forecast period will be the same in whole or in
part as those forecast. 
Non-IFRS Measures 
The selected financial information presented throughout this press
release is prepared in accordance with IFRS, except for "funds from
operations". Funds from operations, which have been derived from the
financial statements and applied on a consistent basis, is used by
management to assess past performance and to help determine its
ability to fund future capital projects and investments. Funds from
operations is calculated as cash flows from operating activities
prior to the change in operating non-cash working capital, the change
in long-term accounts receivable and exploration and evaluation costs
expensed to the statement of comprehensive income. Funds from
operations should not be viewed as a substitute for measures of
financial performance presented in accordance with IFRS or as a
measure of a company's profitability or liquidity. This non-IFRS
measure do not have any standardized meaning prescribed by IFRS and
is therefore unlikely to be comparable to similar measures presented
by other companies.
Contacts:
Niko Resources Ltd.
Edward Sampson
Chairman of the Board,
President & CEO
(403) 262-1020 
Glen Valk
VP Finance & CFO
(403) 262-1020
www.nikoresources.com
 
 
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