https://www.accesswire.com/834005/rok-resources-announces-record-production-2023-year-end-reserves-and-provides-first-half-2024-guidance
DAN, HOW DOES IT LOOK, SOUNDS GOOD
ROK RESOURCES- UPDATE
Re: ROK RESOURCES- UPDATE
2023 Operational Highlights: The Company reported outstanding Q4 operating results; production exceeded guidance, operating expenses per BOE declined, the balance sheet is in good shape and they have plenty of high-quality "Running Room". I am updating my forecast/valuation model this morning and I will post it to the EPG website by 10AM CT.
Record Average Production of 4,650 boepd in December: Daily average production in December of 4,650 boepd (60% liquids), which exceeded the Company's 2023 exit production target range of 4,300 - 4,500 boepd and represents a 35% increase in production compared to December 2022 daily average; < Beat my Q4 forecast of 4,000 Boepd.
Organically Increased Production by Over 50% in 6-Months: Following two asset transactions, previously announced on January 24, 2023 and March 23, 2023, the Company grew from 2,950 boepd to 4,650 boepd in 6-months;
Core Area Drilling Inventory Growth: Added 10 proved drilling locations in core operating areas in Southeast Saskatchewan after successful Frobisher results across multiple fields;
Drilled the #1 Daily Average Oil Well in Saskatchewan in December: The Company's 6-25 Glen Ewen Frobisher well averaged 392 bopd in the month of December;
Operating Cost Reduction: With a focus on operational efficiencies in Q4 2023, the Company reduced total operating cost per boe by approximately 20% compared to Q3 2023, resulting in operating costs below $30/boe in Q4 2023;
Exceeded Q4 2024 Funds from Operations forecast: Estimated10 Funds from Operations of $10 million in Q4 2023, exceeding the Company's forecast by 16% despite weaker commodity pricing;
Net Debt: The Company will exit 2023 with an estimated Net Debt of $14.5 million (or Adjusted Net Debt of $18.5 million). This represents a 59%, or $20.8 million, reduction in Net Debt year over year; and
Commitment to ESG: The Company increased its original asset retirement obligation budget and invested approximately $2.3 million to reduce environmental liabilities which represents 10% of its estimated inactive asset retirement obligation.
2023 Corporate Reserves
The Company is pleased to announce the results of its independent reserves evaluation. The evaluation for the Company as at December 31, 2023 was conducted by McDaniel & Associates ("McDaniel") of Calgary and was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluators Handbook ("COGEH") and National Instrument 51-101 - Standards for Disclosure of Oil and Gas Activities ("NI 51-101").
Reserves Evaluation Highlights
Proved oil and gas reserves ("1P") of 13,399 Mboe and Net Present Value of 1P reserves discounted at 10% ("NPV10") of $129.8 million;
Proved plus probable oil and gas reserves ("2P") of 21,054 Mboe and Net Present Value of 2P reserves discounted at 10% of $237.5 million;
Total 1P Basic NAV8 of $0.53/share and 2P Basic NAV8 of $1.02/share, a YoY increase of 12% and 17%, respectively, and excludes any value attributed to the Company's current hedges, undeveloped land, and lithium prospect;
Total 1P Diluted NAV9 of $0.33/share and 2P Diluted NAV9 of $0.63/share, a YoY increase of 15% and 22%, respectively, and excludes any value attributed to the Company's current hedges, undeveloped land, and lithium prospect;
Finding, Development and Acquisition ("FD&A") costs, including changes in Future Development Capital ("FDC"), of:
1P: $13.69/boe
2P: $11.20/boe
Finding and Development ("F&D") costs, including changes in Future Development Capital ("FDC"), of:
PDP: $22.24/boe
1P: $25.82/boe
2P: $42.98/boe
With an estimated10 2023 average Operating Netback of $24.37/boe, inclusive of hedge gain, finding, development and acquisition recycle ratios of:
1P: 1.78
2P: 2.18
Record Average Production of 4,650 boepd in December: Daily average production in December of 4,650 boepd (60% liquids), which exceeded the Company's 2023 exit production target range of 4,300 - 4,500 boepd and represents a 35% increase in production compared to December 2022 daily average; < Beat my Q4 forecast of 4,000 Boepd.
Organically Increased Production by Over 50% in 6-Months: Following two asset transactions, previously announced on January 24, 2023 and March 23, 2023, the Company grew from 2,950 boepd to 4,650 boepd in 6-months;
Core Area Drilling Inventory Growth: Added 10 proved drilling locations in core operating areas in Southeast Saskatchewan after successful Frobisher results across multiple fields;
Drilled the #1 Daily Average Oil Well in Saskatchewan in December: The Company's 6-25 Glen Ewen Frobisher well averaged 392 bopd in the month of December;
Operating Cost Reduction: With a focus on operational efficiencies in Q4 2023, the Company reduced total operating cost per boe by approximately 20% compared to Q3 2023, resulting in operating costs below $30/boe in Q4 2023;
Exceeded Q4 2024 Funds from Operations forecast: Estimated10 Funds from Operations of $10 million in Q4 2023, exceeding the Company's forecast by 16% despite weaker commodity pricing;
Net Debt: The Company will exit 2023 with an estimated Net Debt of $14.5 million (or Adjusted Net Debt of $18.5 million). This represents a 59%, or $20.8 million, reduction in Net Debt year over year; and
Commitment to ESG: The Company increased its original asset retirement obligation budget and invested approximately $2.3 million to reduce environmental liabilities which represents 10% of its estimated inactive asset retirement obligation.
2023 Corporate Reserves
The Company is pleased to announce the results of its independent reserves evaluation. The evaluation for the Company as at December 31, 2023 was conducted by McDaniel & Associates ("McDaniel") of Calgary and was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluators Handbook ("COGEH") and National Instrument 51-101 - Standards for Disclosure of Oil and Gas Activities ("NI 51-101").
Reserves Evaluation Highlights
Proved oil and gas reserves ("1P") of 13,399 Mboe and Net Present Value of 1P reserves discounted at 10% ("NPV10") of $129.8 million;
Proved plus probable oil and gas reserves ("2P") of 21,054 Mboe and Net Present Value of 2P reserves discounted at 10% of $237.5 million;
Total 1P Basic NAV8 of $0.53/share and 2P Basic NAV8 of $1.02/share, a YoY increase of 12% and 17%, respectively, and excludes any value attributed to the Company's current hedges, undeveloped land, and lithium prospect;
Total 1P Diluted NAV9 of $0.33/share and 2P Diluted NAV9 of $0.63/share, a YoY increase of 15% and 22%, respectively, and excludes any value attributed to the Company's current hedges, undeveloped land, and lithium prospect;
Finding, Development and Acquisition ("FD&A") costs, including changes in Future Development Capital ("FDC"), of:
1P: $13.69/boe
2P: $11.20/boe
Finding and Development ("F&D") costs, including changes in Future Development Capital ("FDC"), of:
PDP: $22.24/boe
1P: $25.82/boe
2P: $42.98/boe
With an estimated10 2023 average Operating Netback of $24.37/boe, inclusive of hedge gain, finding, development and acquisition recycle ratios of:
1P: 1.78
2P: 2.18
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group