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Bengal Energy Announces Fiscal Q2 2013 Results

November 12, 2012

Drilling Results Set Stage for Production Growth

TSX: BNG

CALGARY, Nov. 12, 2012 /CNW/ – Bengal Energy Ltd. (TSX: BNG) (“Bengal” or the “Company”) today announced its financial and operating
results for the three and six months ended September 30, 2012. The
Company focused on drilling during the quarter, spending $10 million to
pursue its successful drilling program in Australia.

FISCAL Q2 2013 HIGHLIGHTS:

        --  100% Drilling Success at Cuisinier: Since March 2012, Bengal
            has drilled four oil producers, resulting in a drilling success
            rate of eight for eight in the Cooper Basin of Australia. The
            Company is currently producing 325 barrels of oil per day
            (bopd) (net to the Company) from two of the newly drilled
            wells, under Extended Production Test, while certain regulatory
            and capacity constraints limit full production from all the
            wells.  The following presents the current status of the
            Company's Cuisinier wells.

            The Company is currently trucking its production to a nearby
            terminal.  The operator of the field is progressing plans for
            facilities upgrades and pipeline connection to a large facility
            at an adjacent field that should handle production from all
            wells in the field. The operator is also applying for a
            Petroleum Lease ("PL") that will allow all the wells in the
            field to produce at their productive capacities.  The Company
            expects regulatory approval and facilities upgrades to be
            completed in the quarter ending June 30, 2013.
     __________________________________________________________________
    |            Well    |Productive Capacity |             Status     |
    |                    |  (Net to Bengal)   |                        |
    |____________________|____________________|________________________|
    |Cuisinier 1, 2 and 3|125 bopd (aggregate)|Shut-in, awaiting       |
    |                    |                    |Petroleum Lease         |
    |____________________|____________________|________________________|
    |Cuisinier 4         |         125 bopd   |Shut-in, awaiting tie-in|
    |____________________|____________________|________________________|
    |Cuisinier 5 and 6   |325 bopd (aggregate)|Production Test         |
    |____________________|____________________|________________________|
    |Barta North and     |75 bopd (aggregate) |Shut-in awaiting tests  |
    |Cuisinier North 1   |                    |and tie-in              |
    |____________________|____________________|________________________|
    |           Total    |         650 bopd   |                        |
    |____________________|____________________|________________________|
        --  Cuisinier Reserves Increase Substantially: An independent
            reserves update of the quantity of oil reserve volumes
            contained on Company lands within the boundaries of the Barta
            sub-Block, of Authority to Prospect ("ATP") 752 onshore
            Australia in the Cooper/Eromanga Basins in the State of
            Queensland effective September 30, 2012, prepared by GLJ
            Petroleum Consultants Ltd. recognized 717,000 proved barrels
            (an increase of 904%), 1,550,000 proved plus probable barrels
            (an increase of 269%) and 7,512,000 proved plus probable plus
            possible barrels (an increase of 614%) to Bengal. The net
            present values discounted at 10% amount to $16 million for
            proved, $37 million for proved plus probable and $164 million
            for proved plus probable plus possible.

        --  Company's New Rig Drills First Well at Tookoonooka: The
            Company's recently purchased drilling rig, Bengal 1, has been
            fully commissioned and, on October 5, 2012 commenced drilling
            of the first well on the Company's 100% owned ATP 732P Permit
            ("Tookoonooka") in the Cooper Basin. The first exploration well
            in the Company's Tookoonooka drilling campaign, Caracal-1, has
            been cased as a potential oil producer awaiting testing
            results.

        --  Bengal Reports Financial Results: The Company reported that
            revenues in the three and six months ended September 30, 2012
            amounted to $437,000 and $935,000, respectively compared to
            $1,017,000 and $2,336,000 respectively in 2011. The lower
            revenues resulted from production reductions primarily related
            to expiration of Extended Production Tests for the Cuisinier 1,
            2 and 3 wells; as mentioned earlier, the regulatory approvals
            (expected in the quarter ending June 30, 2013) will allow all
            the wells in the Cuisinier Field to produce at their productive
            capacities. The net loss for the three and six month periods
            amounted to ($845,000) or ($0.02) per share and ($1,056,000) or
            ($0.02) per share, respectively compared to ($4,247,000) or
            ($0.08) per share and ($5,308,000) or ($0.10) per share,
            respectively. The 2011 losses were impacted by an impairment
            loss related to the drilling of two dry holes in 2011 and 2008.
            The Company spent $10,299,000 in the three-month period ended
            September 30, 2012 and $17,625,000 in the six month period
            ended September 30, 2012 related to the drilling of four
            Cuisinier wells, the acquisition of the Rig, seismic
            acquisition in Australia and India and preparation for drilling
            the Caracal-1 well.

For more information on the Company’s operational activities and
permits, refer to Bengal’s website at www.bengalenergy.ca.

Financial and Operating Summary


    $000s except per                                                  Three Months Ended                              Six Months Ended
    share, volumes                                                          September 30                                  September 30
    and netback
    amounts                              2012                      2011                %               2012               2011       %
                                                                                  Change                                        Change

    Revenue                                                                                                                           

      Natural gas            $             31         $              67             (54)       $         70          $     159    (56)

      Natural gas
      liquids                              19                        13               46                 45                 29      55

      Oil                                 387                       937             (59)                820              2,148    (62)

      Total                               437                     1,017             (57)                935              2,336    (60)

    Royalties                              38                        95             (60)                 83                216    (62)

      % of revenue                        8.7                       9.3              (7)                8.9                9.2     (3)

    Operating &
    transportation                        162                       316             (49)                409                838    (51)

    Netback(1)                            237                       606             (61)                443              1,282    (65)

    Cash from (used
    in) operations:                       315                       159             (98)              (444)            (1,212)    (63)

      Per share ($)
      (basic &
      diluted)                           0.01                      0.00                -             (0.01)             (0.02)    (50)

    Funds from (used
    in) operations:
    (2)                                 (471)                     (430)               10              (533)              (423)      26

      Per share ($)
      (basic &
      diluted)                         (0.01)                    (0.01)                -             (0.01)             (0.01) -

    Net (loss):                         (845)                   (4,247)             (80)            (1,056)            (5,308)    (80)

      Per share ($)
      (basic &
      diluted)                         (0.02)                    (0.08)             (75)             (0.02)             (0.10)    (80)

    Capital
    expenditures             $         10,299         $           2,407             328        $     17,625          $   4,340     306

    Volumes                                                                                                                           

      Natural gas
      (mcf/d)                             159                       196             (19)                192                221    (13)

      Natural gas
      liquids
      (boe/d)                               3                         3                -                  4                  3      33

      Oil (bbl/d)                          35                        94             (63)                 41                100    (59)

      Total (boe/d @
      6 mcf:1 bbl)                         65                       130             (50)                 77                140    (45)

    Netback(1)
    ($/boe)                                                                                                                           

      Revenue                $          73.90         $           86.21             (14)       $      67.02          $   91.20    (27)

      Royalties                          6.43                      8.01             (20)               5.95               8.42    (29)

      Operating &
      transportation                    27.40                     26.78                2              29.32              32.70    (10)

      Total                  $          40.07         $           51.42             (22)       $      31.75          $   50.08    (37)

    (1)  Netback is a non-IFRS measure. Netback per boe is calculated by
         dividing the revenue and costs in total for the Company by the
         total production of the Company measured in boe.

    (2)  Funds from operations is a non-IFRS measure. The comparable IFRS
         measure is cash from operations. A reconciliation of the two
         measures can be found in Bengal's management's discussion and
         analysis for the quarter ended September 30, 2012.

Bengal offers an attractive portfolio of both lower-risk and high-impact
drilling opportunities. Increasing production from new wells drilled at
Cuisinier is expected to drive operating income and set the stage for
future development. Potential near-term exploration drilling success on
permit ATP 732P could create further momentum. The Company also offers
long-term plays in India to potentially add value in 2013 and onward.
The Company will continue to evaluate accretive production acquisition,
exploration and corporate transaction opportunities within and around
the Company’s core areas.

Bengal has filed its consolidated financial statements and management’s
discussion and analysis for the quarter ended September 30, 2012 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; and the ability to obtain required approvals,
extensions, permits and leases from regulatory authorities. We believe
the expectations and assumptions 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: facility
upgrades and pipeline tie-ins and the impact thereof; the application
for the PL, including the timing and impact thereof; the timing of
receipt of regulatory approvals and the impact thereof; impact of
Cuisinier production on operating income; impact of drilling success on
the ATP 732P. 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, or leases; failure to secure required
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; imprecision of reserve and resource
estimates; unexpected decline rates in wells; wells not performing as
expected; 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.

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.

 

 

SOURCE Bengal Energy Ltd.


Source: PR Newswire