NXT Energy Solutions Announces Second Quarter 2019 Results
8/7/19, 6:23 PM
CALGARY, Alberta, Aug. 07, 2019 (GLOBE NEWSWIRE) -- NXT Energy Solutions Inc. (“NXT” or the "Company") (TSX:SFD; OTC QB:NSFDF) today announced the Company’s financial and operating results for the quarter ended June 30, 2019. All dollar amounts herein are in Canadian Dollars.
Q2 Financial and Operating Highlights
Key financial and operational highlights for the second quarter and year to date include:
On May 1, 2019 the Company completed the acquisition phase of its Nigerian SFD® survey valued at approximately US$8.9 Million with PE Energy Limited (“PE”), a Nigerian oil and gas service company. PE has a contract with the Nigerian National Petroleum Company (“NNPC”), to provide 5,000-line kilometers of SFD® surveys in Nigeria. NXT’s recommendations are being delivered during the third quarter of 2019. The Company will also discuss the potential utilization of SFD® technology in NNPC’s future exploration programs based upon the successful completion of the Department of Petroleum Resources (“DPR”) near-shore flight and the initial onshore SFD® data review conducted in April 2019 by the Frontier Exploration Services (“FES”) of NNPC.
The Company has received US$5.7 million from PE for the SFD® Surveys in Nigeria, including US$4.4 million in July 2019. The final milestone payments of US$3.2 million for delivery of the final report are expected to be made by the end of the third quarter.
In February 2019, NXT entered into a Co-operative Agreement with Alberta Green Ventures (“AGV”), to propose up to three SFD® surveys within two years. The Co-operative Agreement is based on a cost plus formula and a gross overriding royalty interest in oil and gas production arising on lands subject to the surveys. NXT and AGV are evaluating potential SFD® surveys. The Company has received a US$100,000 non-refundable deposit for this Co-operative Agreement in Q2-19.
As the result of the Co-operation Agreement between AGV and NXT, the Company has received approval from its shareholders and the Toronto Stock Exchange (“TSX”) to extend the 3,421,648 common share purchase warrants at an exercise price of $1.20 held by AGV for an additional 12 months until February 16, 2020 contingent upon AGV’s performance under the Co-operation Agreement.
NXT has entered into a three year exclusive sales representative agreement with AGV, in nine jurisdictions in the Middle East and Latin America. This includes an at-market subscription right to purchase treasury shares of NXT in a dollar amount equal to 25% of the contracts introduced by AGV to NXT in the first year of the agreement, subject to approval from the TSX.
Survey revenues of $10.95 million were recorded in Q2-19.
A net income of $8.09 million was recorded for Q2-19, including amortization expense of $0.44 million.
A net income of $6.32 million was recorded for 2019 YTD, including amortization expense of $0.89 million.
Operating activities used $0.38 million of cash during Q2-19 and net cash used for financing activities was $0.01 million.
Operating activities used $1.26 million of cash during 2019 YTD and net cash used for financing activities was $0.02 million.
Net income per common share for Q2-19 was $0.12 basic and $0.11 diluted.
Net income per common share for 2019 YTD was $0.09 basic and $0.09 diluted.
General and administrative costs for the Q2-19 as compared to 2018 have been reduced by $0.343 million or 31% mostly due to a reduction in business development travel, legal costs and some expenditures becoming direct survey costs.
General and administrative costs for 2019 YTD as compared to 2018 YTD have been reduced by $0.40 million or 19% mostly due a reduction in business development costs, the suspension of the Advisory Board, lower headcount costs and some expenditures becoming direct survey costs.
Cash and short-term investments at the end of the Q2-19 were $2.96 million.
Message to Shareholders
George Liszicasz, President, and CEO of NXT, commented, “During the second quarter we completed the acquisition of 5,000 line-kilometers of SFD® data, interpreted most of it, and presented milestone results to the clients in late July 2019. In addition, we were paid almost two thirds of the total $US 8.9 million contract fee based upon milestones completed. The Company also discussed the potential utilization of SFD® technology in the NNPC’s future exploration programs based upon the successful correlations of SFD® with NNPC’s proprietary seismic data. During the last week of July a detailed comparison of SFD® data with Department of Petroleum Resources’ (“DPR”) proprietary seismic data was carried out over the near-shore SFD® Pilot Project area designed by DPR. The results are very encouraging which may lead to new SFD® survey opportunities in Nigeria. Again, I want to thank NXT’s hard working employees and PE Energy Limited for executing on a successful SFD® project.
Our team has just completed a three week trip which started with data integration and presenting results in Nigeria and ended in Beijing where we built upon our strengths in the West African region through conversations in Beijing with BGP and affiliates. BGP is the largest seismic company in the world with a significant presence in Africa.”
Summary highlights of NXT's 2019 second quarter and year to date financial statements (with comparative figures to 2018) are noted below. All selected and referenced financial information noted below should be read in conjunction with the Company's three month and six month periods ended June 30, 2019 unaudited condensed consolidated interim financial statements and the related management's discussion and analysis ("MD&A").
(All in Canadian $)
Q2-19
Q2-18
2019 YTD
2018 YTD
Operating results:
Survey revenues $ 10,954,617 $ - $ 10,954,617 $ -
Survey expenses 1,412,380 267,672 1,790,113 517,434
General & administrative expenses 767,401 1,110,634 1,689,150 2,092,038
Stock based compensation expense 3,775 153,791 7,550 449,075
Amortization and other expenses, net 443,154 447,192 886,851 894,383
Operating expenses 2,626,710 1,979,289 4,373,664 3,952,930
Comprehensive income (loss) for the period 8,085,888 (1,961,114 ) 6,322,568 (3,915,764 )
Earnings (loss) per common share – basic $ 0.12 $ (0.03 ) $ 0.09 (0.06 )
Earnings (loss) per common share – diluted $ 0.11 $ (0.03 ) $ 0.09 (0.06 )
Number of common shares outstanding as at end of the period 68,573,558 67,378,297 68,573,558 67,378,297
Weighted average number of common shares outstanding for the period:
Basic 68,573,558 64,319,452 68,573,558 62,366,678
Diluted 73,267,206 64,319,452 73,274,112 62,366,678
Cash provided by (used in):
Operating activities (384,271 ) (1,942,964 ) (1,262,250 ) (3,281,872 )
Financing activities (10,554 ) 4,093,205 (20,931 ) 8,377,941
Investing activities 900,000 (4,960,007 ) 2,100,000
