KFG Resources Ltd. (KFG)

[JonnyRBuck12]

KFG Q2 earnings estimate

In regards to the news release today it states KFG is producing at slightly under 100bopd, so I would guess around 98bopd. Now I am not too sure as to why the number is so much lower than what was posted on the website on November 1st. Is it possible that a couple wells were shut down between Sunday-Tuesday? maybe. But either way, since we know production increased in Q2, lets redo the estimated quarterly results. I have a confirmed LLS number for August and we have the last price for September before the drop, lets use those as well.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F003075773&f=M =====> $98.31 was the average price in August for LLS

http://www.petroleumnewsbakken.com/pntruncate/501597498.shtml ======> LLS was trading at $96.29 October 2nd, so September average should be at least $96

October prices dropped, but LLS is always around Brent, lets use $84 for this month

$98.31 + $96 + $84 = $92.77 or lets say $93, which is what I calculated as an average for Q2 in my previous post.

$93(per barrel average) X98BOPD X 90(Days in Q2) = $820,260 in oil revenues for the second quarter(estimate)

Then we add $120,000 for management fee's which puts us at $940,260 total revenue. Again lets use the $500,000 in expenses since it's higher than Q1 and might be due to extra costs from Craig 3 and Barnum 2.

$940,260 - $500,000 = $440,260 net income (estimate)

I'm pretty sure KFG will earn around $400,000 to $500,000 for the first 3 quarters, then in Q4 all the payouts and new wells will add significant revenue. $0.04-0.05c EPS for 2015 isstill an achievable target.

- 3 wells confirmed to do soon
- 2 wells to pay out and given their current numbers, it's an extra 20-25bopd from Craig 3 and Barnum 2
- The Franklin wells are in a new area, so results could be anywhere and could very well add new zones to
drill from.