ROK Resources Announces Normal Course Issuer Bid, Revised 2025 Guidance, & Files Financial Results for the First Quarter of 2025
- Reduction in Adjusted Net Debt from $10.6M in Q4 2024 to $4.1M in Q1 2025
- 10% reduction in operating costs compared to Q4 2024
- Improved operating income profit margin to 40.4% from 29.9% year-over-year
- Funds Flow increased to $7.1M in Q1 2025 from $6.3M in Q1 2024
- Credit facility restructuring provides more flexibility with reduced hedging requirements
- Net loss of $1.545M in Q1 2025
- Decline in production from 4,278 boepd in Q1 2024 to 3,941 boepd in Q1 2025
- Realized loss on commodity contracts of $334K compared to gain of $926K in Q1 2024
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES
REGINA, SK / ACCESS Newswire / May 15, 2025 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK)(OTCQB:ROKRF) is pleased to announce, that in parallel with the recent unwind of its crude oil swap hedges and repayment of the drawn balance of its credit facility, the Company is in the process of restructuring the existing credit facility to provide the Company with further flexibility. As part of this restructuring, the Company aims to maximize shareholder value through the introduction of a Normal Course Issuer Bid (the "NCIB") while maintaining disciplined capital allocation during ongoing pricing volatility.
Normal Course Issuer Bid
Given the restructured credit facility outlined below, the Company intends to initiate a NCIB to purchase and cancel up to
2025 Revised Guidance Summary
The Company will continue to prioritize maintaining stable production with Funds Flow directed to increasing the Company's working capital surplus and/or be used to facilitate the purchase and cancelation of its outstanding common shares, as defined by the NCIB.
US CA | US | |||||||
Net Wells | 6.0 | 10.0 | ||||||
Capital Expenditures (million) | $ | 12.6 | $ | 19.2 | ||||
Daily Average Production (boepd)2 | 3,700 | 3,900 | ||||||
Q4 2025 Production (boepd)2 | 3,900 | 4,300 | ||||||
Funds From Operations (million) | $ | 31.6 | $ | 38.3 | ||||
Working Capital Surplus (million) | $ | 2.1 | $ | 2.2 | ||||
Notes:
0.72 CA$/US$ FX
66% liquidsPrice assumptions effective June 1, 2025 and includes unhedged volumes only
Credit Facility
Prior to the restructuring, the Company maintained a revolving credit facility with a Canadian Chartered Bank. The existing credit facility maintains certain covenants, such as a
The restructured credit facility will consist of a
25% hedge requirement for estimated production on a rolling 12-month basis if more than70% of the credit facility is utilizedPermitted distributions, including the buyback of ROK common shares under a NCIB, so long as less than
50% of the credit facility is utilized
The terms of the restructured credit facility have been negotiated with the lender, but final execution is pending formal approval.
Q1 2025 Financial and Operating Highlights
The Company remained on strategy and budget for Q1 2025 with Funds Flow of
Production in line with forecast: quarterly production averaged 3,941 boepd (
66% liquids)Operating cost reduction: realized operating costs of
$25.46 per boe which represents a10% reduction when compared to Q4 2024Adjusted net debt reduced: Adjusted Net Debt reduced to
$4.1 million at Q1 2025 from$10.6 million at Q4 2024
Financial (expressed in | Q1 2025 | Q1 2024 | ||||||
Net income (loss) | (1,545 | ) | (5,612 | ) | ||||
Basic ($/share) | (0.01 | ) | (0.03 | ) | ||||
Diluted ($/share) | (0.01 | ) | (0.03 | ) | ||||
Funds flow | 7,149 | 6,343 | ||||||
Basic ($/share) | 0.03 | 0.03 | ||||||
Diluted ($/share) | 0.03 | 0.03 | ||||||
Expenditures on property, plant and equipment | 669 | 1,819 | ||||||
Capital management | Q1 2025 | Q1 2024 | ||||||
Adjusted working capital | (841 | ) | (4,305 | ) | ||||
Net debt | 6,362 | 12,129 | ||||||
Adjusted net debt | 4,117 | 10,561 | ||||||
Operating | Q1 2025 | Q1 2024 | ||||||
Oil and Natural Gas Sales | 20,980 | 20,931 | ||||||
Royalties | (3,478 | ) | (3,955 | ) | ||||
Operating Expenses | (9,031 | ) | (10,724 | ) | ||||
Operating Income | 8,471 | 6,252 | ||||||
Realized gain on commodity contracts | (334 | ) | 926 | |||||
Processing and other income (1) | 499 | 862 | ||||||
Funds from Operations | 8,636 | 8,040 | ||||||
Average daily production | ||||||||
Crude oil (bbl/d) | 2,166 | 2,206 | ||||||
NGLs (boe/d) | 417 | 458 | ||||||
Natural gas (mcf/d) | 8,144 | 9,681 | ||||||
Total (boe/d) | 3,941 | 4,278 | ||||||
Operating Netback per boe | ||||||||
Oil and Natural Gas Sales | 59.16 | 53.77 | ||||||
Royalties | (9.81 | ) | (10.16 | ) | ||||
Operating Expenses | (25.46 | ) | (27.55 | ) | ||||
Operating Netbacks ($/boe) | 23.89 | 16.06 | ||||||
Funds from Operations ($/boe) | 24.35 | 20.65 | ||||||
Operating Income Profit Margin | 40.4 | % | 29.9 | % | ||||
Funds from Operations Profit Margin | 41.2 | % | 38.4 | % | ||||
Share information | Q1 2025 | Q1 2024 | ||||||
Common shares outstanding, end of period | 219,769,315 | 218,419,315 | ||||||
Weighted average basic shares outstanding | 219,769,315 | 218,418,348 | ||||||
Weighted average diluted shares outstanding | 219,769,315 | 218,418,348 |
(1) Non-cash revenue derived from management fees that are recognized over time from deferred revenue is excluded from processing and other income for the calculation of Funds from Operations.
Complete reports and statements are available on SEDAR+ at www.sedarplus.ca and on the Company website www.rokresources.ca.
About ROK
ROK is primarily engaged in exploring for petroleum and natural gas development activities in Alberta and Saskatchewan. It has offices located in both Regina, Saskatchewan, Canada and Calgary, Alberta, Canada. ROK's common shares are traded on the TSXV Venture Exchange under the trading symbol "ROK".
For further information, please contact:
Bryden Wright, President and Chief Executive Officer
Jared Lukomski, Senior Vice President, Land & Business Development
Phone: (306) 522-0011
Email: investor@rokresources.ca
Website: www.rokresources.ca
Non-IFRS Measures
The non-IFRS measures referred to above do not have any standardized meaning prescribed by IFRS Accounting Standards ("IFRS") and, therefore, may not be comparable to similar measures used by other companies. Management uses this non-IFRS measurement to provide its shareholders and investors with a measurement of the Company's financial performance and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used.
"Operating Income" is calculated by deducting royalties and operating expense from total sales revenue. Total sales revenue is comprised of oil and gas sales. The Company refers to Operating Income expressed per unit of production as an "Operating Netback". "Operating Income Profit Margin" is calculated by the Company as Operating Income as a percentage of oil and natural gas sales. "Funds from Operations" is calculated by adding other income and realized gains/losses on commodity contracts ("hedging") to Operating Income. "Funds from Operations Profit Margin" is calculated by the Company as Funds from Operations as a percentage of oil and natural gas sales.
The following table reconciles the aforementioned non-IFRS measures:
( | Q1 2025 | Q1 2024 | ||||||
Oil and Natural Gas Sales | 20,980 | 20,931 | ||||||
Royalties | (3,478 | ) | (3,955 | ) | ||||
Operating Expenses | (9,031 | ) | (10,724 | ) | ||||
Operating Income | 8,471 | 6,252 | ||||||
Processing and other income (1) | 499 | 862 | ||||||
Realized gain (loss) on commodity contracts | (334 | ) | 926 | |||||
Funds from Operations | 8,636 | 8,040 | ||||||
Sales volume (boe) | 354,657 | 389,261 | ||||||
($ per boe) | ||||||||
Oil and Natural Gas Sales | 59.16 | 53.77 | ||||||
Royalties | (9.81 | ) | (10.16 | ) | ||||
Operating Expenses | (25.46 | ) | (27.55 | ) | ||||
Operating Netback | 23.89 | 16.06 | ||||||
Funds from Operations | 24.35 | 20.65 | ||||||
Operating Income Profit Margin | 40.4 | % | 29.9 | % | ||||
Funds from Operations Profit Margin | 41.2 | % | 38.4 | % | ||||
(1) Non-cash revenue derived from management fees that are recognized over time from deferred revenue is excluded from processing and other income for the calculation of Funds from Operations.
"Net Debt" includes the undiscounted face value of all indebtedness of the Company, such as the Credit Facility and Lease Obligations (each as defined within the Company's interim condensed financial statements for the three months ended March 31, 2025), net of Adjusted Working Capital. "Adjusted Working Capital" is calculated as current assets less current liabilities, excluding current portion of debt and lease liability as defined on the Company's statement of financial position within the Company's interim condensed financial statements for the three months ended March 31, 2025. "Adjusted Net Debt" is calculated by removing the "mark-to-market fair value of the current portion of risk management contracts" and "lease obligations" (each as defined within the Company's interim condensed financial statements for the three months ended March 31, 2025) and non-cash deferred revenue liability derived from non-core business activities from Net Debt.
The following table reconciles the aforementioned non-IFRS measures:
( | March 31, 2025 | December 31, 2024 | ||||||
Accounts receivable | 9,784 | 11,528 | ||||||
Prepaids and deposits | 1,015 | 284 | ||||||
Risk management contracts | (1,627 | ) | (771 | ) | ||||
Accounts payable | (10,013 | ) | (15,346 | ) | ||||
Adjusted working capital | (841 | ) | (4,305 | ) | ||||
Credit Facility (1) | 5,087 | 7,349 | ||||||
Lease obligations (1) | 434 | 475 | ||||||
Less: adjusted working capital | 841 | 4,305 | ||||||
Net debt | 6,362 | 12,129 | ||||||
Remove: Current portion of risk management contracts | (1,627 | ) | (771 | ) | ||||
Remove: Lease obligations | (434 | ) | (475 | ) | ||||
Remove: Deferred revenue liability (non-cash) | (184 | ) | (322 | ) | ||||
Adjusted Net Debt | 4,117 | 10,561 | ||||||
"Funds Flow" includes all cash from (used in) operating activities and is calculated before the change in non-cash working capital. "Funds Flow Basic ($/share)" and "Funds Flow Diluted ($/share)" are calculated by dividing Funds Flow by the weighted average number of basic shares and weighted average number of diluted shares outstanding, respectively, for the relevant period, as presented within the Company's interim condensed financial statements for the three months ended March 31, 2025. These are considered key measures of operating performance and capital management as they demonstrate the Company's ability to generate the cash necessary to repay debt and fund capital investments. Management believes that by excluding the temporary impact of changes in non-cash operating working capital, each of these provide useful measures of ROK's ability to generate cash that are not subject to short-term movements in non-cash operating working capital.
The following table reconciles cash flow from operating activities to Funds Flow:
( | Q1 2025 | Q1 2024 | ||||||
Cash flows provided by operating activities | 3,037 | 4,177 | ||||||
Change in non-cash working capital | 4,112 | 2,166 | ||||||
Funds Flow | 7,149 | 6,343 |
Conversion Measures
Production volumes and reserves are commonly expressed on a barrel of oil equivalent ("boe") basis whereby natural gas volumes are converted at the ratio of 6 thousand cubic feet ("Mcf") to 1 barrel of oil ("bbl"). Although the intention is to sum oil and natural gas measurement units into one basis for improved analysis of results and comparisons with other industry participants, boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf to 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. In recent years, the value ratio based on the price of crude oil as compared to natural gas has been significantly higher than the energy equivalency of 6:1 and utilizing a conversion of natural gas volumes on a 6:1 basis may be misleading as an indication of value.
Abbreviations
bbls/d bopd | barrels per day barrels per day | |
boepd | barrels oil equivalent per day | |
IP | Initial Production | |
NGLs | Natural Gas Liquids | |
Mboe Mg/l | Thousands of barrels of oil equivalent Milligrams per Litre | |
MMboe | Millions of barrels of oil equivalent | |
PDP | Proved Developed Producing | |
TP | Total Proved Reserves | |
TPP | Total Proved and Probable Reserves | |
WTI CA$ US$ | West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade Canadian dollars U.S. dollars |
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company's objectives, goals, or future plans and the expected results thereof. Forward-looking statements are necessarily based on several estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to general business, economic and social uncertainties; litigation, legislative, environmental, and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in ROK's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. In regard to the NCIB discussed in this news release, although the Company presently intends to purchase Common Shares under the NCIB, there can be no assurance that acceptance by the TSXV of the NCIB will be achieved, or that subsequently any such purchases of Common Shares will be completed. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether because of new information, future events, or otherwise.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility of the adequacy or accuracy of this release.
SOURCE: ROK Resources Inc.
View the original press release on ACCESS Newswire
FAQ
What is ROK Resources' NCIB program and how many shares can they buy back?
What are the key financial results for ROK Resources (ROKRF) in Q1 2025?
How much debt reduction did ROKRF achieve in Q1 2025?
What are the terms of ROK Resources' restructured credit facility?
What is ROK Resources' production guidance for 2025?
