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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Edge Res | LSE:EDG | London | Ordinary Share | CA27986R1010 | COM SHS NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.175 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMEDG
RNS Number : 5008H
Edge Resources Inc.
01 December 2015
TSX Venture Exchange Symbol: EDE
AIM Exchange Symbol:EDG 1 December 2015
EDGE RESOURCES INC. Calgary, Alberta
Edge Resources Inc. Announces Half Year Results
Edge Resources Inc. ("Edge" or the "Company") is pleased to report its operating and financial results, for the second quarter and half year ended September 30, 2015 ("Q2 2016" and "H1 2016").
Like all oil and gas companies, Edge is not immune to the effects of a low-priced environment and our much lower revenues reflect this. In fact, we started positioning ourselves early for this protracted downturn and have continually reduced our field and office costs for more than a year - the success of our cost reductions are reflected below. We have also advertised our desire to become a consolidator of assets at a time like this when high quality assets are available on a broad basis. Although we have been disappointed by the lack of quality assets available over the past 6-12 months, we are now starting to see (i) asset quality improve and (ii) the quantity of assets available increase.
The board and management team are enthusiastic about building a strong asset base and positioning the Company for a strong future, with a focus on growth centred around strong returns on capital employed ("ROCE"). That will be the focus for the Company going forward.
Highlights for the period:
-- Average quarterly (Q2 2016) production of 436 boe/day compared to 446 boe/day in the previous quarter and 474 boe/day one year earlier. Production held up well, despite Q2 2016 total capital spending of $142,000, the lowest quarterly capital expenditure in the history of the company
-- Sales/Revenue:
o Average quarterly (Q2 2016) oil sales price of $33.51/bbl versus $80.42/bbl one year earlier (58% decline)
o Average quarterly (Q2 2016) natural gas sales price of $2.81/mcf versus $4.03 one year earlier (30% decline)
o Oil and natural gas sales for Q2 2016 of $1,269,782 versus $2,356,740 for the same quarter, one year earlier (46% decline)
-- Costs:
o Year-on-year oil operating costs decreased by 46% for the second quarter, to $12.67/bbl from $23.50/bbl
o Year-on-year royalties for oil production decreased by 60% for the second quarter, to $5.75/bbl from $14.50/bbl
o Company quarterly General and Administrative ("G&A") costs decreased by 13%, continuing the trend of previous quarters' decreases. All-in G&A costs are now approximately $120,000 per month
-- Cash used in operating activities was $318,000 for Q2 2016 versus a gain of $99,000 for the same quarter one year earlier
Brad Nichol, President and CEO of Edge, commented, "It was a difficult quarter for all oil and gas companies world-wide, and Edge was not immune. However, we kept production almost flat year-on-year, with almost no budget and in the heavy oil arena that is no small feat. I must congratulate our entire field and office-based operational team for their innovative approach to problem solving. They have rolled up their sleeves during these difficult days. The entire company has continued our quarterly trend of reducing costs, as well, which we believe has served all of our shareholders." Nichol added, "Recent developments on the potential acquisitions front have given us a degree of enthusiasm about the future. We have been working intently with our new capital partner and are very optimistic that we will be in a position to acquire positive-cash-flowing assets at very reasonable prices in the near future."
Detailed operating and financial results are presented in Edge's unaudited financial statements and related Management Discussion & Analysis ("MD&A"), which can be accessed on the Company's website (www.edgeres.com) and on SEDAR (www.sedar.com). The unaudited results for the three and six month periods ended September 30, 2015 are summarised below.
For more information, visit the company website: www.edgeres.com or contact:
Brad Nichol, President and CEO Phone: +1 403 767 9905
Sanlam Securities UK Limited (Joint Broker and NOMAD) Phone: +44 20 7628 2200
Simon Clements / James Thomas / Max Bascombe
SP Angel Corporate Finance LLP (Joint Broker) Phone: +44 20 3463 2260
John MacKay / Richard Hail
About Edge Resources Inc.
Edge Resources is focused on developing a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. Management has consistently focused on:
1. Shallow, vertical, conventional programs with reduced capital, operational and geological risks
2. Very high or 100% working interests and fully operated assets 3. Pools and horizons with exceptionally high reserves in place
The management team's very high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.
Edge Resources Inc.
Condensed Interim Balance Sheets
(amounts in Canadian dollars)
(unaudited)
Hot Features
Premium
September
30, March 31,
Note 2015 2015
Assets
Current assets
Accounts receivable 510,260 836,329
Deposits and prepaid expenses 254,472 78,259
Total current assets 764,732 914,588
------------------------------------ ----- ------------- ------------
Non-current assets
Exploration and evaluation
assets 74,061 74,061
Property, plant and equipment 3 29,554,793 30,502,797
------------------------------------ ----- ------------- ------------
Total non-current assets 29,628,854 30,576,858
------------------------------------ ----- ------------- ------------
Total assets $ 30,393,586 $ 31,491,446
------------------------------------ ----- ------------- ------------
Liabilities
Current liabilities
Bank overdraft $ 34,994 $ 26,367
Accounts payable and accrued
liabilities 1,074,982 2,191,432
Bank debt 4 7,680,000 6,420,000
Fair value of derivative
instruments 365,380 -
Total current liabilities 9,155,356 8,637,799
Loans payable 5 11,044,712 10,643,616
Decommissioning provisions 8,206,932 8,951,000
------------------------------------ ----- ------------- ------------
Total liabilities 28,625,890 28,232,415
------------------------------------ ----- ------------- ------------
Shareholders' Equity
Share capital 36,561,341 36,111,048
Contributed surplus 2,773,152 2,701,935
Deficit (37,566,797) (35,553,952)
------------------------------------ ----- ------------- ------------
Total shareholders' equity 1,767,696 3,259,031
------------------------------------ ----- ------------- ------------
Total liabilities and shareholders'
equity $ 30,393,586 $ 31,491,446
------------------------------------ ----- ------------- ------------
Going concern 1
See accompanying notes to the condensed interim financial statements.
APPROVED BY THE BOARD,
(signed) "Scott Reeves" (signed) "Chris Cooper" Director Director
Edge Resources Inc.
Condensed Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(amounts in Canadian dollars)
(unaudited)
Three months ended Six months ended
September September September September
30, 30, 2014 30, 30, 2014
Note 2015 2015
Revenue
Oil and natural gas
sales $ 1,269,782 $ 2,356,740 $ 2,815,677 $ 5,831,131
Royalties (210,279) (389,349) (449,493) (1,059,315)
--------------------------------- ----- ------------- ------------ ------------- -----------
Revenue, net of royalties 1,059,503 1,967,391 2,366,184 4,771,816
--------------------------------- ----- ------------- ------------ ------------- -----------
Other income (losses)
Realized gain (loss)
on financial derivatives (100,796) (112,294) (183,387) (310,387)
Unrealized gain (loss)
on financial derivatives (365,059) 301,225 (584,270) 463,206
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:01 ET (07:01 GMT)
Gain on settlement of
decommissioning provision 16,258 - 16,258 -
Other income - 10,883 - 22,192
--------------------------------- ----- ------------- ------------ ------------- -----------
Total income, before
expenses 609,906 2,167,205 1,614,785 4,946,827
--------------------------------- ----- ------------- ------------ ------------- -----------
Expenses
Operating 652,184 917,721 1,280,227 1,835,696
Transportation 94,557 83,097 165,751 194,213
General and administrative 360,695 444,887 743,568 903,221
Depletion and depreciation 3 359,000 386,500 709,100 900,200
Finance 310,635 364,805 623,888 700,431
Stock-based compensation 29,702 65,221 71,217 179,907
Capital taxes 16,378 22,916 33,879 62,670
Total expenses 1,823,151 2,285,147 3,627,630 4,776,338
--------------------------------- ----- ------------- ------------ ------------- -----------
Income (loss) and comprehensive
income (loss) for the
period $ (1,213,245) $ (117,942) $ (2,012,845) $ 170,489
--------------------------------- ----- ------------- ------------ ------------- -----------
Income (loss) and comprehensive
income (loss) per share
Basic and diluted $ (0.01) $ (0.00) $ (0.01) $ 0.00
--------------------------------- ----- ------------- ------------ ------------- -----------
See accompanying notes to the condensed interim financial statements.
Edge Resources Inc.
Condensed Interim Statements of Changes in Shareholders' Equity
(amounts in Canadian dollars)
(unaudited)
Total
Share Contributed Shareholders'
Capital surplus Deficit Equity
Balance at March 31, 2015 $ 36,111,048 $ 2,701,935 $ (35,553,952) $ 3,259,031
Issue of common shares for
cash 500,000 - - 500,000
Share issue costs, cash
paid (49,707) - - (49,707)
Stock-based compensation - 71,217 - 71,217
Loss for the period - - (2,012,845) (2,012,845)
Balance at September 30,
2015 $ 36,561,341 $ 2,773,152 $ (37,566,797) $ 1,767,696
--------------------------- ------------- ------------ --------------- ---------------
Balance at March 31, 2014 $ 36,094,048 $ 2,425,249 $ (24,096,038) $ 14,423,259
Issue of common shares on
exercise of stock options 17,000 (6,000) - 11,000
Stock-based compensation - 179,907 - 179,907
Income for the period - - 170,489 170,489
--------------------------- ------------- ------------ --------------- ---------------
Balance at September 30,
2014 $ 36,111,048 $ 2,599,156 $ (23,925,549) $ 14,784,655
--------------------------- ------------- ------------ --------------- ---------------
See accompanying notes to the condensed interim financial statements.
Edge Resources Inc.
Condensed Interim Statements of Cash Flows
(amounts in Canadian dollars)
(unaudited)
Three months ended Six months ended
September
30,
2015 September September September
Note 30, 2014 30, 2015 30, 2014
Cash flows provided by
(used for):
Cash flows generated from
(used in) operating activities
Income (loss) $ (1,213,248) $ (117,942) $ (2,012,845) $ 170,489
Items not affecting cash:
Unrealized loss (gain)
on financial derivatives 365,059 (301,225) 584,270 (463,206)
Gain on settlement of decommissioning
provision (16,258) - (16,258) -
Foreign exchange loss (gain) - (553) - 11
Depletion and depreciation 359,000 386,500 709,100 900,200
Accretion of decommissioning
provisions 46,000 41,000 91,000 85,000
Stock-based compensation 29,702 65,221 71,217 179,907
Decommissioning expenditures (87,810) - (93,328) -
Changes in non-cash items 199,417 26,250 282,674 368,998
Net cash generated from
(used in) operating activities (318,135) 99,251 (384,170) 1,241,399
-------------------------------------------------------- ------------- ------------ ------------- -----------
Cash flows used in investing
activities
Property, plant and equipment
expenditures (142,418) (190,507) (468,578) (553,678)
Changes in non-cash items (183,931) (170,752) (848,172) (248,498)
-------------------------------------------------------- ------------- ------------ ------------- -----------
Net cash used in investing
activities (326,349) (361,259) (1,334,750) (802,176)
-------------------------------------------------------- ------------- ------------ ------------- -----------
Cash flows from (used in)
financing activities
Proceeds from bank debt,
net 390,000 40,000 1,260,000 140,000
Proceeds from issuance
of common shares 500,000 - 500,000 11,000
Share issuance costs (49,707) - (49,707) -
Net cash from financing
activities 840,293 40,000 1,710,293 151,000
-------------------------------------------------------- ------------- ------------ ------------- -----------
Effect of exchange rates
on cash and cash equivalents
held in foreign currency - 553 - (11)
-------------------------------------------------------- ------------- ------------ ------------- -----------
Net change in cash and
cash equivalents (bank
overdraft) 195,809 (221,455) (8,627) 590,212
Bank overdraft, beginning
of period (230,803) (7,643) (26,367) (819,310)
-------------------------------------------------------- ------------- ------------ ------------- -----------
Bank overdraft, end of
period $ (34,994) $ (229,098) $ (34,994) $ (229,098)
-------------------------------------------------------- ------------- ------------ ------------- -----------
See accompanying notes to the condensed interim financial statements.
Notes to the Condensed Interim Financial Statements
Three and six months ended September 30, 2015
(amounts in Canadian dollars)
(unaudited)
1. Going Concern
These condensed interim financial statements have been prepared on a going concern basis which presumes that the Company will be able to discharge its obligations and realize its assets in the normal course of business. The Company had a loss and comprehensive loss of $2.0 million for the six month period ended September 30, 2015. As at September 30, 2015, the Company had a working capital deficiency of $8.0 million (March 31, 2015 - $7.7 million) that includes $7.7 million (March 31, 2015 - $6.4 million) in bank debt (excluding derivative assets/liabilities if any).
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:01 ET (07:01 GMT)
As per note 5, the Company has a revolving credit facility with a $17.0 million limit, and as of September 30, 2015, there was $9.3 million available for use. However, given the amount available for use under the facility is also limited by the "senior debt to cash flow" ratio, the actual limit will vary on a period by period basis. The calculations of the applicable ratios as of September 30, 2015 are presented in note 16 and the senior debt to cash flow ratio was not met at September 30, 2015. The breach has been communicated to the bank however, because the Company is currently in the process of finalizing the terms of its lending facilities, no waiver will be sought for this breach. As a result of significantly weaker future commodity price forecasts, Management expects the lending limit on the revolving facility to be reduced although the amount of the reduction cannot be predicted at this time. As part of finalizing the terms of its lending facilities, Management is also in discussion with the bank as to appropriate future financial covenants including the senior debt to cash flow covenant. Management actively forecasts applicable cash flows and will conduct an appropriate capital program based on estimated future credit facility availability. Management believes, despite the current significant decrease in world oil prices and its effect on Company cash flows, that with its current expected credit facility, and its near-term future equity-raising plans, that the Company will generate sufficient cash flows to meet its foreseeable obligations in the normal course of operations. Management has significantly delayed the Company's capital programs until the pricing environment further improves and has and continues to work on strategies to reduce general and administrative and operating costs subsequent to September 30, 2015.
Management has been and continues to be active in seeking alternative sources of funding to help accelerate its planned capital expenditure program, and to ultimately reduce its total debt. The Company cannot provide any assurance that sufficient cash flows will be generated from operating activities to reduce its working capital deficiency and to carry out its planned capital expenditure program.
The above-noted factors describe matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to attain profitable operations, generate sufficient funds to continue its exploration and development activities, to repay its debts as they come due, and continue to obtain sufficient capital from investors or other sources of financing to meet its current and future obligations.
Management considers the Company to be a going concern and has prepared the financial statements on a going concern basis.
2. Basis of preparation (a) Statement of compliance
These condensed interim financial statements are unaudited and have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting" using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Certain information and disclosures normally included in the annual financial statements prepared in accordance with IFRS have been condensed or omitted.
The condensed interim financial statements should be read in conjunction with the Company's audited annual financial statements as at and for the year ended March 31, 2015 and the notes thereto. All accounting policies and methods of computation followed in the preparation of these condensed interim financial statements are consistent with those of the previous financial year.
(b) Management's judgements and estimates
The timely preparation of condensed interim financial statements requires management to make judgments, estimates and assumptions based on currently available information that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities as at the balance sheet date and the reported amounts of revenues and expenses during the period. Accordingly, actual results may differ from these estimates. Estimates, underlying assumptions and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates will, by definition, seldom equal the actual results. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future years affected.
In preparation of these condensed interim financial statements, the significant judgments made by Management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements as at and for the year ended March 31, 2015.
(c) Comparative financial statements
Certain prior periods' comparative figures have been restated to conform to the current year's presentation.
3. Property, plant and equipment
Oil and
natural Corporate
gas interests and other Total
Cost
Balance at March 31, 2014 $ 46,279,996 $ 70,805 $ 46,350,801
Capital expenditures 2,791,506 6,154 2,797,660
Change in decommissioning
provisions 2,997,000 - 2,997,000
Balance at March 31, 2015 52,068,502 76,959 52,145,461
Capital expenditures 486,578 - 486,578
Change in decommissioning
provisions (note 7) (725,482) - (725,482)
Balance at September 30, 2015 $ 51,829,598 $ 76,959 $ 51,906,557
--------------------------------- --------------- ----------- -------------
Accumulated depletion and
depreciation and impairment
losses
Balance at March 31, 2014 $ 8,545,000 $ 37,764 $ 8,582,764
Depletion, depreciation and
impairment 13,050,000 9,900 13,059,900
Balance at March 31, 2015 21,595,000 47,664 21,642,664
Depletion and depreciation 705,000 4,100 709,100
Balance at September 30, 2015 $ 22,300,000 $ 51,764 $ 22,351,764
--------------------------------- --------------- ----------- -------------
Oil and
natural Corporate
gas Interests and other Total
Net carrying value:
At March 31, 2015 $ 30,473,502 $ 29,295 $ 30,502,797
At September 30, 2015 $ 29,529,598 $ 25,195 $ 29,554,793
--------------------------------- --------------- ----------- -------------
4. Bank debt
As at September 30, 2015, the Company had lending facilities with a Canadian chartered bank consisting of a $17 million revolving demand operating credit facility, of which $7.7 million was drawn ($0.7 million on the prime-based facility and $7.0 million drawn under guaranteed notes). The revolving facility is a borrowing base facility that is determined based on, among other things, the Company's current reserve report, the results of operations, current and forecasted commodity prices and the current economic environment. The revolving credit facility contains standard commercial covenants for facilities of this nature. The Company also has available a risk management facility which allows the Company to conduct certain financial risk management options. The interest rate on the facility is bank prime plus 1.75% per annum. Guaranteed notes are subject to a 2.75% acceptance fee plus an applicable market interest rate. The facilities are secured by a general security agreement covering all assets of the Company including a subordination agreement with the lender in note 6, and repayments are interest only, subject to the bank's right of demand. The revolving credit facility provides that advances may be made by way of direct advances, guaranteed notes, or standby letters of credit/guarantee.
The revolving facility has the following financial covenant requirements (calculations are presented in note 16):
-- The working capital ratio must be maintained above 1.0 to 1. The working capital ratio is defined as current assets (excluding derivative assets if any) plus the undrawn availability of the revolving facility to current liabilities (excluding the current portion of bank debt and derivative liabilities if any).
-- The senior debt to cash flow ratio must not exceed 3.0 to 1. The senior debt to cash flow ratio is defined as the amount drawn under the bank facility to net income for the trailing one year period from the balance sheet date adjusted for non-cash items, and less dividends declared and repayments of shareholder loans.
As per note 16, the senior debt to cash flow ratio was not met at September 30, 2015. The breach has been communicated to the bank however, because the Company is currently in the process of finalizing the terms of its lending facilities, no waiver will be sought for this breach. As a result of significantly weaker future commodity price forecasts, Management expects the lending limit on the revolving facility to be reduced although the amount of the reduction cannot be predicted at this time. As part of finalizing the lending facilities, Management is also in discussion with the bank as to appropriate future financial covenants including the senior debt to cash flow covenant.
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 02:01 ET (07:01 GMT)
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