Bengal Energy Announces First Quarter Fiscal 2014 Results

Bengal Energy Announces First Quarter Fiscal 2014 Results 
CALGARY, ALBERTA -- (Marketwired) -- 08/14/13 -- Bengal Energy Ltd.
(TSX:BNG) ("Bengal" or the "Company") is pleased to announce its
financial and operating results for the first fiscal 2014 quarter
ended June 30, 2013. 
FISCAL Q1 2014 HIGHLIGHTS:  
During the first quarter of the Company's fiscal 2014 year, Bengal
continued its current strategy, resulting in further growth in
production and cash flow through the period. With the drilling
success realized to date in the Company's Cuisinier asset in the
Cooper Basin, Australia, understanding of the magnitude and lower
risk profile of this play has evolved, demonstrating that Cuisinier
represents a significant short and long term potential resource play
for Bengal.   
Following are highlights of specific operational, financial and
corporate achievements that Bengal reached during the three months
ended June 30, 2013:  
Financial Highlights: 


 
--  Profitable Quarter + Higher Funds Flow from Operations -Bengal recorded
    a profit in the quarter, with positive net income of $0.8 million,
    compared to a loss of $0.2 million in Q1 of the prior year and a loss of
    $0.6 million in the preceding quarter this year. Funds flow from
    operations grew to $1.7 million, compared to a deficiency of $0.1
    million in Q1 of the prior year and $1.1 million in the preceding
    quarter this year. 
    
--  Higher Revenue + Strong Netbacks - Bengal's realized revenue of $3.7
    million was substantially higher than the $0.5 million realized in Q1 of
    the prior year and 23% higher than the $3.0 million realized in the
    preceding quarter this year, driven by higher production volumes and
    very attractive realized pricing. Bengal's operating (field) netback in
    Australia averaged $89.05 per barrel (bbl) (corporate average of
    $79.82/bbl), reflecting the high quality of crude oil produced, which
    was priced at a premium of almost $6.00 / bbl over the Brent benchmark. 
    
--  Financing Activity Strengthens Balance Sheet - In April, Bengal raised
    C$5.7 million through a brokered equity private placement, directing
    proceeds to fund ongoing capital investments.  
    
--  Increase in Cuisinier Working Interest- On June 26, Bengal announ
ced
    that it was exercising its pre-emptive right to purchase an additional
    5.357% interest in the Cuisinier oil field and Authority to Prospect
    ("ATP") 752P in the Cooper Basin, which will bring the Company's total
    ownership to 30.357%. Subsequent to quarter end, Bengal successfully
    raised C$8 million through a private placement of non-convertible
    unsecured notes to fund the acquisition of this additional interest,
    which is expected to close in September 2013 and have an effective date
    of March 15, 2013. 

 
Operating Highlights: 


 
--  Rising Production - Bengal's production averaged 356 boe/d for the
    period, an increase of 300% over Q1 of the prior year and 10% over the
    preceding quarter this year. This production level does not reflect the
    incremental working interest to be acquired in Cuisinier, which would
    have increased the quarterly oil production volumes by 21% or 67 b/d. 
    
--  Continued 100% Drilling Success In Cuisinier - During the period ended
    June 30, 2013, Bengal continued its 100% success rate in the Cuisinier
    field, with five out of five wells drilled currently being completed as
    oil producers and tied-in. This brings Bengal's total wells drilled in
    Cuisinier to 13, with one additional well to be drilled in August.
    Assuming this sixth well is a successful oil producer; production from
    these wells is expected to be fully tied-in by early September, which
    should positively impact volumes and cash flows for the balance of
    calendar 2013 and into 2014. With the success to date in the Cuisinier
    area it is now clear that the Company is participating in a significant,
    seismically supported potential resource play. 
    
--  Farmout and Joint Venture (JV) Agreement - On May 23, 2013, Bengal
    entered into a binding letter of intent with Australia-based Beach
    Energy Ltd for the exploration and development of Bengal's 100% owned
    Tookoonooka Permit. Under the agreement terms, Beach will fund the
    drilling of two new wells and acquire an additional 300 km2 of 3D
    seismic, up to a maximum of AUD $11.5 million. One of the wells is
    anticipated to be in the Caracal area near Bengal's existing oil
    discovery, with the second well to be situated within the area covered
    by the new 3D seismic. Subsequent to the end of the quarter, the JV
    Agreement was finalized and the transaction closed.  
    
--  Receipt of Petroleum License and Pipeline Commissioning - On April 8,
    2013 the final approval of Petroleum Lease 303 ("PL303") for the
    Cuisinier oil pool was granted, which allows all current and future
    Cuisinier wells to produce for up to 21 years. Subsequently, on June 7,
    the Cuisinier to Cook pipeline was commissioned allowing production from
    all eight of Bengal's pre-2013 and subsequent wells to flow through the
    pipeline, and eliminating capacity constraints from trucking for
    transportation of the oil. 
    
--  Onshore India Drilling Plan - In Bengal's onshore block in the Cauvery
    Basin India, the Company intends to commence the drilling of its
    exploration wells in the first quarter of calendar 2014. Continued
    activity in onshore India for the balance of calendar 2014 and beyond
    will depend on the results of the three wells drilled under the existing
    work program.

 
"First quarter of fiscal 2014 was a successful period both
financially and operationally for Bengal," said Chayan Chakrabarty,
Bengal's President and CEO. "We continued to grow production and
generated very attractive netbacks, both of which contributed to a
profitable quarter. We reported 100% drilling success in Cuisinier
and announced an acquisition to increase our interest in that field,
meaning Bengal will realize a higher proportion of production,
reserves and cash flow from this important, potential resource play
going forward. Our JV agreement with Beach, which closed after the
quarter end, accelerates development at Tookoonooka, and in concert
with the financing activity undertaken during the quarter, enables
Bengal to preserve balance sheet strength. I am very pleased with
Bengal's progress and continuing transition from exploration to
development, and look forward to updating our shareholders about
ongoing developments." 
For a discussion of the activities on each of the Company's permits,
refer to Bengal's management's discussion and analysis for the first
fiscal quarter 2014 ended June 30, 2013 filed on SEDAR at
www.sedar.com. 


 
FINANCIAL & OPERATING HIGHLIGHTS                                            
                                                                            
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$000s except per share, volumes and                                         
 netback amounts                                         Three Months Ended 
                                                                            
                                            June 30,   June 30,   March 31, 
                                                2013       2012        2013 
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Revenue                                                                     
 Oil                                         $ 3,626      $ 433     $ 2,946 
 Natural gas                                      65         39          67 
 Natural gas liquids                              31         26           - 
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Total                                        $ 3,722      $ 498     $ 3,013 
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Royalties                                        204         45         271 
 % of revenue                                    5.5        9.0         9.0 
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Operating & transportation                       930        247         694 
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Netback                                      $ 2,588      $ 206     $ 2,048 
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Cash from (used in) operations:                1,249       (759)        119 
 Per share ($) (basic & diluted)                0.02      (0.01)      (0.00)
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Funds flow from (used in) operations           1,732        (62)      1,151 
 Per share ($) (basic & diluted)                0.03      (0.00)       0.02 
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Net income (loss):                               836       (211)       (592)
 Per share ($) (basic & diluted)                0.01      (0.00)      (0.01)
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Capital expenditures                         $ 5,435    $ 7,326     $ 1,280 
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Volumes                                                                     
 Oil (bbl/d)                                     313         47         287 
 Natural gas (mcf/d)                             240        225         229 
 Natural gas liquids (boe/d)                       3          4           - 
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Total (boe/d @ 6:1)                              356         89         325 
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Netback ($/boe)                                                             
 Revenue                                    $ 114.83    $ 61.95    $ 102.88 
 Royalties                                      6.32       5.60        9.25 
 Operating & transportation                    28.69      30.73       23.70 
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Total                                        $ 79.82    $ 25.62     $ 69.93 
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Bengal has filed its consolidated financial statements and
management's discussion and analysis for the first fiscal 2014
quarter ended June 30, 2013 with Canadian securities regulators. The
documents 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 with assets in Australia and India. 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 
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",
"prospective", "project", "intend", "believe", "should",
"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, Australia, India 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: the
Tookoonooka joint venture; including without limitation, the terms
thereof and the location of the two wells; the acquisition of the
increased interest in ATP 752P and the closing thereof; use of funds
from the July 2013 private placement; the timing and location of
future wells; tie-in operations, including, without limitation, the
timing and benefit thereof; and the commencement of drilling
operations in India. 
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; failure to satisfy the conditions
under farm-in and joint venture agreements; failure to secure
r
equired equipment and personnel; changes in general global economic
conditions including, without limitations, the economic conditions in
North America, Australia, India; 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 under the heading "Risk Factors" and in Bengal's annual MD&A
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 require pursuant to
applicable securities laws. 
Barrels of Oil Equivalent 
When converting natural gas to equivalent barrels of oil, Bengal uses
the widely recognized standard of 6 thousand cubic feet (mcf) to one
barrel of oil (boe). However, a boe 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. 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 on a 6:1 basis
may be misleading as an indication of value. 


 
Certain Defined Terms                                                       
boe - barrels of oil equivalent                                             
boe/d - barrels of oil equivalent per day                                   
bbl - barrel                                                                
bbl/d - barrels per day                                                     
mcf - thousand cubic feet                                                   
mcf/d - thousand cubic feet per day                                         

 
Non-IFRS Measurements 
Within this release references are made to terms commonly used in the
oil and gas industry. Funds from operations, funds from operations
per share and netbacks do not have any standardized meaning under
International Financial Reporting Standards (IFRS) and previous
generally accepted accounting principles (GAAP) and are referred to
as non-IFRS measures. Funds from operations per share is calculated
based on the weighted average number of common shares outstanding
consistent with the calculation of net income (loss) per share.
Netbacks equal total revenue less royalties and operating and
transportation expenses calculated on a boe basis. Management
utilizes these measures to analyze operating performance. The
Company's calculation of the non-IFRS measures included herein may
differ from the calculation of similar measures by other issuers.
Therefore, the Company's non-IFRS measures may not be comparable to
other similar measures used by other issuers. Funds from operations
is not intended to represent operating profit for the period nor
should it be viewed as an alternative to operating profit, net
income, cash flow from operations or other measures of financial
performance calculated in accordance with IFRS. Non-IFRS measures
should only be used in conjunction with the Company's annual audited
and interim financial statements. A reconciliation of these measures
can be found in the table on page 5 of Bengal's Q1 fiscal 2014 MD&A. 
Contacts:
Bengal Energy Ltd.
Chayan Chakrabarty
President & Chief Executive Officer
(403) 205-2526 
Bengal Energy Ltd.
Bryan Goudie
Chief Financial Officer
(403) 205-2526
investor.relations@bengalenergy.ca
www.bengalenergy.ca
 
 
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