KFG Q1 2017 Results (Ending July 31st 2017)
All Information Below Can Be Found At www.Sedar.com
Balance Sheet End Of Quarter (All Funds in US Dollars)
ASSETS – In US Dollars
Cash: $615,926
Accounts Receivable: $216,881
Prepaid Expenses: $10,700
Exploration & Evaluation Assets: $129,941
Property & Equipment: $499,002
Total Assets: $1,472,450
LIABILITIES – In US Dollars
Accounts Payable: $473,577
Decommissioning Liability: $195,125
Total Liabilities: $668,702
Revenue For Q1
Oil & Gas: $241,204
Management Fees: $82,096
Total Revenue: $323,300
Total Expenses: $305,499
Net Income: $17,801
Average Daily Production For Q1: 65.47bopd
Number Of Producing Wells: 19
Average Oil Price: $46.86
**Notes**
- Cost reductions did not commence until June ( As per May 10th News)
- Production purchase reduced cash by $40,000 for Q1 and $20,000 for Q2
MD&A Highlights
Overall Performance
For the three months ended July 31, 2017, the Company had cash flow from oil and gas production of $159,687, compared to $101,647 for the three months ended July 31, 2016. Oil production increased from 60.88 BOPD to 65.47 BOPD, and gas production increased 1.28 MCF per day. The average price of gas increased $0.27 per MCF and the average price of crude oil increased $4.27 per bbl when comparing the three months ended July 31, 2017 and July 31, 2016.
As of July 31, 2017, two instalments of the production purchase in Jefferson County, MS have been paid with the remaining instalment to be paid by the end of September. As of now, the Company is optimistic that one of its new projects will be drilled in October 2017 weather permitting.
As of July 31, 2017, the Company generated $93,291 of cash provided by operations versus a loss of $113,517 in cash in the comparable quarter of 2016, and was able to show an actual increase in cash after all expenditures. The Company’s current rate of assets to liabilities is 1.78 and its quick ratio is 1.3.
Outlook
The Company production has been stable in the past year showing minimal decline. Oil prices appear to be slowly increasing into the low $50/bbl range. In June and July 2016, the Company took initial steps to reduce its overhead. Management salaries were cut and a field hand was let go resulting in a savings of about $9,000 per month going forward. Reduced insurance amounted to a savings of $1,100/month. Office reductions, rent and parking were reduced affecting a savings going forward of $10,800/month in salaries and overhead. Additional reductions were made in June 2017, amounting to another $8,500 per month. The Company is now generating free cash flow amounting to $93,291 in the quarter ending July 31, 2017 and is starting to move forwarding raising money for its drilling program.
Share Capital
The total number of shares outstanding as at July 31, 2017 and September 28, 2017, is 50,584,144. As of July 31, 2017 and September 28, 2017, there were no stock options or warrants outstanding.
Additional information pertaining to the Company is available on the SEDAR website at www.sedar.com
