KFG Year End Results (Ending April 30th 2017) + Oil Reserves
All Information Below Can Be Found At www.Sedar.com
Financials + MD&A Summary + 51-101 Reserve Report
Balance Sheet Year End
ASSETS – In US Dollars
Cash: $593,972
Accounts Receivable: $229,863
Prepaid Expenses: $10,497
Exploration & Evaluation Assets: $119,325
Property & Equipment: $477,591
Total Assets: $1,431,248
LIABILITIES – In US Dollars
Accounts Payable: $450,679
Decommissioning Liability: $194,622
Total Liabilities: $645,301
Asset/Debt Ratio: 2.2:1
Revenue
Oil & Gas: $1,184,011
Management Fees: $191,979
Total Revenue: $1,375,990
Total Expenses: $1,865,689
Total Loss: $489,699 - $255,012 Depletion & $81,727 Dry hole Expenses
Loss From G&A: $152,960 – 35% of this from Q1 2016 before initial cost cuts
MD&A Summary
Average Yearly Production: 63.87bopd
Number Of Producing Wells: 22
Oil prices appear to be stabilizing in the mid $45 to $55 range. In June and July 2016, the Company took initial steps to reduce its overhead by $10,800 per month. Additional cuts were made effective June 1, 2017, letting go of two office personnel, and eliminating their health insurance. In addition, key man insurance on both the President and Vice President was terminated. Total savings account for $8,500 per month going forward. Also the small production purchase should increase oil income $1,700 to $2,000 per month at current prices. In addition, KFG has two leases where it’s working interest is between 6 and 9% (the Craig #3 lease and the Barnum lease). Both leases could possibly payout within the next twelve months unless further drilling takes place. At payout, KFG’s working interest would jump to approximately 22%. If the environment stabilizes and continues to improve, KFG will look for reasonable production purchases.
Revenue from the sale of oil and gas was $1,184,011 for the year ended April 30, 2017, compared to $1,380,325 for the year ended April 30, 2016. The decrease in revenue was a result of less production during the year.
Management fee revenue for the year ended April 30, 2017 was $191,979 as compared to $287,841 for the year ended April 30, 2016. The decrease is a result of substantially less work for the Company and others because of low oil prices in the field.
Dry hole costs and abandonments for the year ended April 30, 2017 were $81,727 as compared to $2,690 for the year ended April 30, 2016. The decrease resulted from the write off of two Mississippi projects that were unsuccessful and impairment charges against the oil and gas properties.
Lease operating expenses were $440,783 for the year ended April 30, 2017 compared to $553,808 for the year ended April 30, 2016. The decrease in lease operating expenses is a result of suspending lease operations in certain areas.
General and administrative expenses for the year ended April 30, 2017 were $1,122,564 compared to $1,347,373 for the year ended April 30, 2016. The decrease is a result of terminating two employees during the year and a decrease in insurance premiums.
Depletion and amortization costs for the year ended April 30, 2017 were $225,012 compared to $540,840 for the year ended April 30, 2016, reflecting depletion on the Company’s reserves. The decrease is a result of a decreased cost base subject to depletion and a reduced depletion rate.
The Company reported a net loss of $489,699 for the year ended April 30, 2017 compared to net loss of $777,709 for the year ended April 30, 2016, with the lower net loss arising from reduced operating expenses and reduced depletion.
The total number of shares outstanding as at April 30, 2017 and August 24, 2017, is 50,584,144. As of April 30, 2017 and August 24, 2017, there were no stock options outstanding. There were no warrants outstanding as at April 30, 2017 and August 24, 2017.
Overall Performance
Updating to April 30, 2017, KFG moved its offices to 150-A Providence Rd, Natchez, MS. Office rent is unchanged. Two employees were terminated beginning June 1, 2017 and insurance on the two principal officers was dropped with a total savings going forward of $8,500 per month. The Company has completed a small production purchase for $60,000, payable in three monthly installments of $20,000, equal to approximately 5% of the Company’s production in Jefferson Co., MS. The Company has two projects to drill but has not been able to raise sufficient capital to drill the wells without affecting the Company’s cash position dramatically if the projects are not productive.
KFG 51-101 Reserve Report Ending April 2017
51-101 2017 Net To KFG (Table 1)
Oil
Total Proved Reserves – 80.3 Mbbl
Probable Reserves – 46.6 Mbbl
Total Proved + Probable – 126.8 Mbbl
Natural Gas
Total Proved Reserves – 4.5 MMcf
Net Present Value For 2017 (Table 2) - USD
Total Proved + Probable - $3,635,000
KFG 51-101 Reserve Report Ending April 2016
51-101 2016 Net To KFG (Table 1)
Oil
Total Proved Reserves – 81.3 Mbbl
Probable Reserves – 45.8 Mbbl
Total Proved + Probable – 127 Mbbl
Natural Gas Reserves – 0
Net Present Value For 2016 (Table 2) – USD
Total Proved + Probable - $3,610,000
KFG 51-101 Reserve Report Ending April 2015
51-101 2015 Net To KFG (Table 1)
Oil
Total Proved Reserves – 72.2 Mbbl
Probable Reserves – 56.5 Mbbl
Total Proved + Probable – 128.7 Mbbl
Natural Gas Reserves – 0
Net Present Value For 2015 (Table 2) – USD
Total Proved + Probably - $5,140,000 **Higher oil prices**
