Kelt Ex­plo­ration earns $3.63-mil­lion in Q3

Stockwatch Daily - - FRONT PAGE - Mr. David Wil­son re­ports

KELT EX­PLO­RATION Ltd. has re­leased its fi­nan­cial and op­er­at­ing re­sults for the three and nine months ended Sept. 30, 2018.

(See KEL Ta­ble 1 on page 15)

Av­er­age pro­duc­tion for the three months ended Sept. 30, 2018, was 26,204 boe per day, up 16 per cent com­pared with av­er­age pro­duc­tion of 22,510 boe per day dur­ing the third quar­ter of 2017. Quar­ter over quar­ter, daily av­er­age pro­duc­tion in the third quar­ter of 2018 was flat com­pared with av­er­age pro­duc­tion of 26,120 boe per day in the sec­ond quar­ter of 2018.

Kelt’s re­al­ized av­er­age oil price dur­ing the third quar­ter of 2018 was $80.62 per bar­rel, up 51 per cent from $53.22 per bar­rel in the third quar­ter of 2017. The re­al­ized av­er­age NGLs price dur­ing the third quar­ter of 2018 was $41.20 per bar­rel, up 69 per cent from $24.34 per bar­rel in the same quar­ter of 2017. Kelt’s re­al­ized av­er­age gas price for the third quar­ter of 2018 was $2.81 per thou­sand cu­bic feet, up 21 per cent from $2.33 per Mcf in the cor­re­spond­ing quar­ter of the pre­vi­ous year.

For the three months ended Sept. 30, 2018, rev­enue was $100.2-mil­lion and ad­justed funds from op­er­a­tions was $46.9-mil­lion (25 cents per share, di­luted), com­pared with $56.4-mil­lion and $23.0-mil­lion (13 cents per share, di­luted) re­spec­tively, in the third quar­ter of 2017.

2018 out­look

As a re­sult of lower pro­duc­tion than orig­i­nally fore­casted dur­ing the third quar­ter, pri­mar­ily due to the re­al­lo­ca­tion of cap­i­tal ex­pen­di­tures, Kelt has re­duced its an­nual 2018 av­er­age pro­duc­tion es­ti­mate to be within a range of 27,000 to 28,000 boe per day (pre­vi­ously 28,000 to 29,000 boe per day). The ex­pected range for pro­duc­tion in 2018 would rep­re­sent an in­crease be­tween 22 per cent and 27 per cent from av­er­age pro­duc­tion in 2017 of 22,130 boe per day. Es­ti­mated pro­duc­tion for 2018 is ex­pected to be weighted ap­prox­i­mately 42 per cent oil and NGLs and 58 per cent gas.

2019 guid­ance

The com­pany’s board of di­rec­tors has ap­proved an ini­tial cap­i­tal ex­pen­di­ture bud­get of $270.0-mil­lion for 2019. Kelt ex­pects to drill 34 gross (33.0 net) wells in 2019 and ex­pects to com­plete 36 gross (35.0 net) wells in 2019. The 2019 cap­i­tal ex­pen­di­tures are ex­pected to be al­lo­cated as fol­lows: $201.0-mil­lion for drilling and com­plet­ing wells, $60.0-mil­lion for fa­cil­i­ties, pipe­line and equip­ment, and $9.0-mil­lion for land and seis­mic.

Kelt has pre­pared its 2019 fi­nan­cial guid­ance based on a cap­i­tal ex­pen­di­ture bud­get of $270.0-mil­lion and the fore­casted com­mod­ity prices that re­sult in the fol­low­ing:

• Es­ti­mated av­er­age pro­duc­tion of 33,500 to 34,500 boe per day, an in­crease of ap­prox­i­mately 24 per cent from es­ti­mated 2018 pro­duc­tion lev­els;

• Pro­duc­tion mix is ex­pected to be weighted 47 per cent to oil and NGLs and 53 per cent to gas;

• Op­er­at­ing in­come is ex­pected to be de­rived 85 per cent from oil and NGLs and 15 per cent from gas;

• Es­ti­mated funds from op­er­a­tions of $240.0-mil­lion ($1.23 per share, di­luted);

• Es­ti­mated bank debt, net of work­ing cap­i­tal as at Dec. 31, 2019, of $225.0-mil­lion (0.9 times fore­casted 2019 funds from op­er­a­tions).

We seek Safe Har­bor.

Erika Flo­res con­densed this news re­lease (erikaf@stockwatch.com).

Robert John Dales, Geral­dine L Greenall, Wil­liam Charles Guinan, Michael R Shea, Neil Gra­ham Sin­clair, David John Wil­son

(KEL) Shares: 183,980,702

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