ROK Resources files financial results and management discussion & analysis for the first quarter of 2023


REGINA, SK / ACCESSWIRE / May 26, 2023 / ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK)(TSXV:ROK.WT)(OTCQB:ROKRF), has filed its interim Financial Results and Management Discussion and Analysis for the three months ended March 31, 2023.

Financial and Operating Highlights

In Q1 2023, the Company realized production volume of 372,570 total boe (4,140 boe/d), resulting in crude and natural gas sales of $24.1 million and funds from operations of $13.3 million. This equates to an operating netback, after hedging, per boe of $33.71 and an operating income profit margin, after hedging, of 52.0%. For Q1 2022, a gain on acquisition of $66.8 million significantly contributed to the resulting net income of $76.2 million for the quarter.

Financial Q1 2023 Q1 2022
Net income 330,025 76,209,556
Basic ($/share) 0.00 0.73
Diluted ($/share) 0.00 0.69
Funds flow 11,514,733 2,379,036
Basic ($/share) 0.05 0.02
Diluted ($/share) 0.04 0.02
Expenditures on property, plant and equipment 5,445,650 46,903
Operating Income
Oil and Natural Gas Sales 24,137,513 8,121,878
Royalties (4,771,385) (1,289,058)
Operating Expenses (9,471,536) (1,844,131)
Operating Income 9,894,592 4,988,689
Realized gain on commodity contracts 2,666,447
Processing and other income 734,731 62,475
Funds from operations 13,295,770 5,051,164
Average daily production
Crude oil (bbl/d) 2,466 659
NGLs (boe/d) 401 68
Natural gas (mcf/d) 7,635 1,280
Total (boe/d) 4,140 941
Operating Netback per boe
Oil and Natural Gas Sales 64.79 95.95
Royalties (12.81) (15.23)
Operating Expenses (25.42) (21.79)
Operating Netbacks ($/boe) 26.56 58.93
Operating Netbacks, after hedging ($/boe) 33.71 58.93
Operating Income Profit Margin 41.0 % 61.4 %
Operating Income Profit Margin, after hedging 52.0 % 61.4 %
Share information
Common shares outstanding, end of period 212,613,817 185,861,266
Weighted average basic shares outstanding 211,916,317 104,175,483
Weighted average diluted shares outstanding 265,105,802 110,030,345

Net Debt

The continued reduction of Net Debt quarter over quarter is a result of organically generated funds flows utilized to reduce Company indebtedness. ROK uses “Net Debt” as a measure of the Company’s financial position and liquidity, however it is not intended to be viewed as an alternative to other measures calculated in accordance with IFRS.

March 31,
December 31,
Credit Facility (8.2%) (1) 15,000,000
Term Loan (10.9%) (1) 7,143,533
Lease obligations (1) 30,077
Senior Loan Facility (15%) (1) 43,347,566
Less: adjusted working capital (2) 13,870,283 8,006,020
Net debt 8,303,327 35,341,546
  1. Represents undiscounted face value of debt balances and lease obligations outstanding as of each respective date presented.
  2. Calculation of working capital excludes current portion of debt as presented on the statement of financial position.

Complete reports and statements are available on SEDAR at

First Quarter Highlights

  • Record production of 4,140 boe/d (70% liquids);
  • Net Debt of $8.3 million as of March 31, 2023. A decrease of $27 million from Q4 2022, after Q1 2023 capital expenditures of $5.4 million;
  • Successfully drilled 2 gross (1.6 net) wells: 1 vertical test well in Southeast, Saskatchewan and 1 horizontal Cardium well in Kaybob, Alberta;
  • Realized a quarterly hedge gain on commodity contracts of $2.7 million;

Early Repayment of Term Loan and Hedge Strategy

Through a combination of monthly cash flow and strategic non-operated asset dispositions the Company was able to pay down the term loan from the initial balance of $52.5 million to $7.1 million in Q1 2023, with the full repayment of the remaining balance in May 2023. As a result of the early term loan repayment, the Company made the strategic decision to unwind certain commodity swap hedges placed in 2023, 2024 and 2025, as more particularly described in its May 2, 2023 press release.

Impact of Alberta Wildfires

The Alberta wildfires have affected ROK’s Kaybob, Alberta operations, resulting in production shut-ins of ~300 Boepd (80% natural gas). It is expected that some production will remain shut-in through Q2 2023 and potentially into Q3 2023, however ROK will provide additional guidance, as further details emerge. The Company’s corporate 2023 year-end production target of 4,500 Boepd remains unchanged with the 2H 2023 drilling program scheduled to begin in July 2023.

About ROK

ROK is primarily engaged in exploring for petroleum and natural gas development activities in Alberta and Saskatchewan. Its head office is located in Regina, Saskatchewan, Canada and ROK’s common shares are traded on the Exchange under the trading symbol “ROK”.

SOURCE: ROK Resources Inc.

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