Calgary, Alberta–(Newsfile Corp. – May 29, 2020) –  Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months ended March 31, 2020. Financial and operational information is set out below and should be read in conjunction with Briko’s March 31, 2020 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Decreased net operating expenses per boe by 6% to $11.94/boe for the three months ended March 31, 2020 as compared to $12.71/boe for the three months ended March 31, 2019.
  • Average daily production of 568 boe per day for the three months ended March 31, 2020 compared to 668 boe per day for the three months ended March 31, 2019.
  • Operating netback of $6.74 per boe for the three months ended March 31, 2020 compared to $9.42 per boe for the three months ended March 31, 2019.
  • Adjusted funds flow for the three months ended March 31, 2020 of $0.2 million ($0.02/share) compared to $0.4 million (0.03/share) for the three months ended March 31, 2019.
  • Net loss for the three months ended March 31, 2020 of $2.6 million, including a $2.7 million impairment expense.
  • Maintained a strong Liability Management Rating (“LMR”) in excess of 8.0 at March 31, 2020.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended
March 31, 2020 March 31, 2019
OPERATIONS
Average daily production
Light oil (bbl/d) 138 181
Natural gas (mcf/d) 2,266 2,584
NGLs (bbl/d) 52 57
Total equivalent (boe/d) 568 668
Average prices
Light oil ($/bbl) $ 57.42 $ 63.11
Natural gas ($/mcf) 1.61 2.46
NGLs ($/bbl) 45.72 48.72
Operating netback
Revenue ($/boe) $ 24.58 $ 30.74
Realized gain on risk management contracts ($/boe) 0.44
Royalties ($/boe) (4.17) (6.29)
Net operating expenses(1) ($/boe) (11.94) (12.71)
Transportation expenses ($/boe) (2.17) (2.32)
Operating netback (1) ($/boe) $ 6.74 $ 9.42
FINANCIAL
Oil and natural gas revenues (2) $ 1,270 $ 1,849
Operating income(1) $ 348 $ 567
Cash provided by operating activities $ 309 $ 558
Per share – basic and diluted $ 0.03 $ 0.05
Adjusted funds flow (1) $ 187 $ 351
Per share – basic and diluted $ 0.02 $ 0.03
Net income (loss) $ (2,611) $ 5
Per share – basic and diluted $ (0.23) $ 0.00
Capital expenditures $ 25 $ 25
Net working capital (1) $ 188 $ 129
Shares outstanding (‘000s) 11,207 11,206
Weighted average shares outstanding
basic and diluted (‘000s) 11,207 11,206


(
1)Operating netback, operating income, net operating expenses, adjusted funds flow and net working capital are non-IFRS measures. See “Non- IFRS Measures”.
(2)
 Before royalties.

GUIDANCE

Given the current weak crude oil commodity price environment, Briko has proactively responded to this very volatile period. The Corporation currently has approximately 70 bbl/d of crude oil production shut in until prices recover. Due to these shut in decisions, Briko’s estimated production for the second quarter of 2020 is in the range of 525 – 575 boe/d and 2020 estimated production is in the range of 500 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives that is anticipated to be funded by adjusted funds flow for 2020.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the second quarter of 2020, estimated production for 2020 and the anticipated funding of the capital expenditure program by adjusted funds flow in 2020. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Non-IFRS Measures

This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Funds flow from operations, operating netback and net operating expenses are not recognized measures under IFRS. Management believes that in addition to net income (loss), funds flow from operations and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss), determined in accordance with IFRS, as an indication of Briko’s performance. Funds flow from operations is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of petroleum, natural gas and equipment, share-based payments, unrealized gain (loss) on risk management contracts and accretion. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest.

Oil and Gas Advisory

Calgary, Alberta–(Newsfile Corp. – April 28, 2020) –  Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months and year ended December 31, 2019 along with an activity update. Financial and operational information is set out below and should be read in conjunction with Briko’s December 31, 2019 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation today announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2019. The AIF contains the Corporation’s reserves and other oil and natural gas information, as required under National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The AIF, financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Decreased net operating expenses per boe by 8% to $11.99/boe for the year ended December 31, 2019 as compared to $13.05/boe for the year ended December 31, 2018.
  • Average daily production of 663 boe per day for the year ended December 31, 2019 compared to the 749 boe per day for the year ended December 31, 2018.
  • Generated an operating netback of $8.64 per boe for the year ended December 31, 2019, an increase of 23% compared to the $7.05 per boe for the year ended December 31, 2018.
  • Generated adjusted funds flow for the year ended December 31, 2019 of $1.1 million ($0.10/share).
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months ended
December 31,
Year Ended
December 31,
2019 2018 2019 2018
OPERATIONS
Average daily production
Light oil (bbls/d) 155 197 166 206
Natural gas (mcf/d) 2,381 3,040 2,601 2,851
NGL’s (bbl/d) 66 73 63 67
Total equivalent (boe/d) 617 777 663 749
Average prices
Light oil ($/bbl) $ 70.25 $ 37.25 $ 67.80 $ 66.18
Natural gas ($/mcf) 1.96 1.93 1.61 1.63
NGL ($/bbl) 54.11 45.20 48.93 55.80
Operating netback
Revenue ($/boe) $ 30.91 $ 21.25 $ 28.01 $ 29.43
Realized gain (loss) on risk management contracts ($/boe) (0.69) 0.18 (0.28) (1.13)
Royalties ($/boe) (5.05) (2.99) (4.71) (6.19)
Net operating expenses ($/boe) (1) (13.61) (14.51) (11.99) (13.05)
Transportation expenses ($/boe) (2.59) (1.83) (2.39) (2.01)
Operating netback (1) ($/boe) $ 8.97 $ 2.10 $ 8.64 $ 7.05
FINANCIAL
Oil and natural gas revenues (2) $ 1,755 $ 1,519 $ 6,777 $ 8,040
Operating income(1) 509 150 2,090 1,928
Cash provided by (used in) operating activities $ (17) $ 692 $ 929 $ 1,777
Per share – basic and diluted $ (0.00) $ 0.06 $ 0.08 $ 0.16
Adjusted funds flow (1) $ 256 $ 63 $ 1,141 $ 1,676
Per share – basic and diluted $ 0.02 $ 0.01 $ 0.10 $ 0.15
Net loss and comprehensive loss $ (2,458) $ (8,469) $ (2,829) $ (9,141)
Per share – basic and diluted $ (0.22) $ (0.76) $ (0.25) $ (0.82)
Capital expenditures $ 140 $ 4 $ 699 $ 317
Net working capital (deficiency)(1) $ 46 $ (177) $ 46 $ (177)
Shares outstanding (‘000s) 11,207 11,206 11,206 11,206
Weighted average shares outstanding
basic and diluted (‘000s) 11,207 11,206 11,206 11,206

 

(1)Operating netback, operating income, net operating expenses, adjusted funds flow and net working capital are non-IFRS measures. See “Non- IFRS Measures”.
(2)
 Before royalties.

ACTIVITY UPDATE

Given the current weak crude oil commodity price environment, Briko has proactively responded to this very volatile period. The Corporation currently has approximately 70 bbl/d of crude oil production shut in until prices recover. In conjunction with ongoing net operating expense reductions, Briko has also initiated salary cuts effective April 1, 2020 with additional reductions in other general and administrative costs anticipated for the remainder of 2020.

Briko remains focused on protecting its balance sheet strength through this unprecedented period of uncertainty. As announced on April 1, 2020, the Corporation terminated the previously announced purchase and sale agreement to acquire complementary Foothills assets. In conjunction with this termination, the Corporation fully repaid the $1.5 million credit facility associated with this acquisition. Currently, Briko has no debt outstanding, positive working capital and a solid hedging position.

In response to the COVID -19 outbreak, Briko continues to ensure safe and efficient field and head office operations. In order to increase social distancing, Briko has temporarily closed its head office with all work, other than critical work, being performed remotely.

GUIDANCE

With the unscheduled shut in of non-operated natural gas production of approximately 100 boe/d from November 1, 2019 until late March 2020, Briko’s estimated production for the first quarter of 2020 is in the range of 500-550 boe/d. With the recent decision to shut in crude oil production, Briko’s estimated production for the second quarter of 2020 is in the range of 525 – 575 boe/d. With the impact of shut-in production, estimated average production for 2020 is in the range of 500 – 600 boe/d. Briko continues to establish a prudent capital expenditure program focussed on maintenance and optimization initiatives.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Calgary, Alberta–(April 1, 2020) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce its 2019 year-end reserves and Complementary Acquisition update.

2019 Reserve Highlights

  • Proved (“1P”) reserves increased 6% to 2.4 million barrels of oil equivalent (“BOE”) at December 31, 2019 compared to 2.3 million BOE at December 31, 2018;
  • Proved Developed Producing (“PDP) reserves of 1.6 million BOE at December 31, 2019 with a net present value of $14.4 million ($1.29 per share) at a 10% discount rate;
  • Proved plus probable (“2P) reserves were unchanged at 3.8 million BOE at December 31, 2019 and December 31, 2018;
  • Maintained conservative 1P reserve position that represents 65% of 2P reserves;
  • Future development costs (“FDC”) requirement of only $0.1 million on a 1P basis and $17.1 million on a 2P basis; and
  • Low annual production decline rates provided a strong reserves life index of 11 years based on 1P reserves and 15 years based on 2P reserves.

2019 Summary of Reserves

The detailed reserves data set forth below are based on an independent reserves assessment and evaluation prepared by Deloitte LLP (“Deloitte”) with an effective date of December 31, 2019, which is contained in the report dated March 06, 2020 (the “Deloitte Report”).

2019 YE(1) 2018 YE(2) 2019YE & 2018YE
Comparison
Reserves Category (MBOE) NPV10%
($M)
(MBOE) NPV10%
($M)
Reserves (%)
Proved Developed Producing 1,582 $14,448 2,008 $14,096 (21%)
Proved Non-producing 865 $1,760 305 $769 184%
Total Proved 2,448 $16,208 2,313 $14,864 6%
Total Proved plus Probable 3,755 $18,304 3,777 $19,247 (1%)

 

Note:
(1) Deloitte Report effective as of December 31, 2019.
(2) Deloitte Report effective as of December 31, 2018.

Corporate Reserves

The detailed reserves data set forth below are based on the Deloitte Report. The following presentation summarizes the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Corporation’s reserves using forecast prices and costs as set out in the Deloitte Report. The Deloitte Report has been prepared in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves evaluation was based on the consensus forecast escalated pricing and foreign exchange rates at December 31, 2019 (“Consensus Price”) as outlined in the table herein entitled “Price Forecast”. This Consensus Price forecast is the average of the escalated price forecasts of four independent reserve evaluators, namely Deloitte, GLJ Petroleum Consultants Ltd. (“GLJ”), McDaniel & Associates Consultants Ltd (“McDaniel”) and Sproule Associates Limited (“Sproule”).

All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of Briko’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater or less than the estimates provided herein. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise. In addition to the detailed information disclosed in this press release, more detailed information will be included in the Corporation’s Annual Information Form (“AIF”) which will be filed on the Corporation’s profile at www.sedar.com on or before April 30, 2020.

See “Forward Looking Information and Statements” for a statement of principal assumptions and risks that may apply.

The preparation and audit of Briko’s 2019 annual financial statements is not yet complete, and accordingly, all financial amounts referred to in this press release are unaudited and represent management’s estimates. Readers are advised that these financial estimates may be subject to change. Year-end financial statements for 2019 will be released no later than April 30, 2020.

Reserves Category(1) Light and Medium Crude Oil Natural Gas Liquids Non- Associated Natural Gas(2) Barrels of Oil Equivalent(3)
(Mbbl) (Mbbl) (Mmcf) (Mboe)
Proved
Proved Developed Producing (“PDP”) 474 151 5,744 1,582
Proved Non-producing (“PNP”) 26 73 4,601 865
Proved Developed (“PD”) 500 224 10,344 2,448
Proved Undeveloped (“PUD”)
Total Proved (“1P”) 500 224 10,344 2,448
Probable 758 58 2,952 1,308
Total Proved plus Probable (“2P”) 1,258 282 13,296 3,755

Notes:
(1) Reserves have been presented on a “gross” basis which is defined as Briko’s working interest (operating and non-operating) share before deduction of royalties and without including any royalty interest of the Corporation.
(2) Includes solution gas.
(3) Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil.
(4) Columns may not add due to rounding.

Reserve Values

The estimated before tax net present value (“NPV”) of future net revenue associated with Briko’s reserves effective December 31, 2019 and based on the Deloitte Report and the Consensus Price forecast are summarized in the following table:

Reserves Category 0% 5% 10% 15% 20%
(M$) (M$) (M$) (M$) (M$)
Proved
   Developed Producing
25,682 18,605 14,448 11,800 9,996
   Developed Non-Producing
3,111 2,330 1,760 1,366 1,091
   Undeveloped
Total Proved 28,793 20,935 16,208 13,167 11,088
Probable 13,948 5,804 2,096 301 (590)
Total Proved plus Probable 42,740 26,739 18,304 13,468 10,497

Notes:
(1) Based on Deloitte’s December 31, 2019 Consensus Price forecast.
(2) The estimated future net revenues are stated prior to provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures.
(3) See the Corporation’s AIF, once filed, for the after-tax present values of future net revenue attributed to Briko’s reserves.
(4) Columns may not add due to rounding.

Price Forecast

Year Canadian
Light Sweet
Crude(2)
40° API
($C/Bbl)
Western Canada Select(3)
20.5° API
($C/Bbl)
Alberta
AECO-C
($C/Mcf) (5)
Edmonton
Pentanes
Plus
($C/Bbl) (4,6)
Edmonton
Butane
($C/Bbl) (4,6)
Edmonton
Propane
($C/Bbl) (4,6)
$US/$C
Exchange Rate
2020 71.58 56.66 2.05 74.21 37.56 24.04 0.76
2021 75.33 61.20 2.32 78.15 44.41 28.75 0.77
2022 77.51 63.08 2.60 80.48 50.19 33.14 0.78
2023 79.77 64.92 2.74 82.77 51.67 34.16 0.79
2024 81.60 66.54 2.82 84.66 52.88 35.00 0.79
2025 83.46 68.16 2.91 86.56 54.09 35.85 0.79
2026 85.34 69.80 2.97 88.49 55.33 36.71 0.79
2027 87.19 71.41 3.03 90.40 56.53 37.55 0.79
2028 88.97 72.94 3.10 92.22 57.69 38.37 0.79
2029 90.79 74.50 3.16 94.09 58.87 39.19 0.79
Escalation Rate of 2.0% Thereafter

Notes:
(1) This Consensus Price forecast is an average of four independent reserve evaluators’ forecasts at December 31, 2019 including Deloitte, GLJ, McDaniel and Sproule.
(2) Edmonton city gate prices based on historical light oil par prices posted by the government of Alberta and Net Energy differential futures (40 Deg. API < 0.5% Sulphur).
(3) Western Canada Select prices are forecasted at Hardisty WCS
(4) Natural Gas Liquid prices are forecasted at Edmonton therefore an additional transportation cost must be included to plant gate sales point.
(5) 1 Mcf is equivalent to 1 MMbtu.
(6) NGL prices have been switched from a mix reference to a spec reference.

Reserves Reconciliation

The table below reconciles reserves volumes from opening balances at December 31, 2018 to closing balances at December 31, 2019. Technical revisions included positive revisions to the Associated and Non-Associated Gas category as the result of reduced operating costs and increased processing income.

TOTAL PROVED Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2018 613 203 8,984 2,313
Production (59) (23) (953) (241)
Technical Revisions (48) 49 2,804 469
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions
Economic factors (7) (5) (491) (94)
Infill Drilling
December 31, 2019 500 224 10,344 2,448

 

TOTAL PROVED PLUS PROBABLE Light and Medium Crude Oil (Mbbl) Natural Gas Liquids
(Mbbl)
Associated and Non-Associated Gas
(Mmcf)
Oil Equivalent (Mboe)
December 31, 2018 1,428 282 12,403 3,777
Production (59) (23) (953) (241)
Technical Revisions (91) 27 2,419 339
Extensions & Improved Recovery
Exploration Discoveries
Acquisition
Dispositions
Economic factors (20) (4) (573) (120)
Infill Drilling
December 31, 2019 1,258 282 13,296 3,755

Note:
(1) Columns may not add due to rounding.

Production and Capital Expenditures

Due to the unscheduled shut in of non-operated natural gas production of approximately 100 boe/d on November 1, 2019, Briko’s production for the first quarter of 2020 is estimated to be in the range of 500-550 boe/d. As a result, and in conjunction with low production decline rates, average production for 2020 is expected to be in the range of 525 – 625 boe/d. The shut in natural gas production was back online in late March 2020. Briko has established a prudent capital expenditure program for 2020 and 2021 that is expected to focus on maintenance and optimization initiatives. This capital expenditure program is expected to be funded by internally generated cash flow. Future financing sources will be considered as the Corporation’s inventory of Cardium light oil drilling opportunities is pursued.

Complementary Acquisition Update

As previously announced on December 9, 2019, Briko executed a purchase and sale agreement (the “PSA”) to acquire complementary Cardium oil and natural gas assets in the Alberta foothills (the “Complementary Assets”) for a cash consideration of $1.8 million. The Corporation has determined that it will not proceed with the PSA and has terminated the agreement.

Accordingly, the previously announced $1.5 million senior secured credit facility for the Complementary Asset acquisition is no longer required and amounts held in trust have been repaid in full.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Definitions

The reserves evaluation, effective December 31, 2019, was conducted by Deloitte, the Corporation’s independent reserves evaluators and is in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves are provided on a Gross basis in units of barrels of oil equivalent using a forecast price deck, adjusted for quality, in Canadian dollars. The estimated values may or may not represent the fair market value of the reserve estimates.

“Gross” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Corporation;

“Net” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share after deduction of royalty obligations, plus its royalty interest in production or reserves;

“Proved reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves;

“Probable reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves;

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release includes, but is not limited to, the Consensus Price used in the Deloitte Report, the amount of the FDC requirements, Briko’s reserves and the net present value information relating thereto, Briko’s average production for 2020, the source of funding of Briko’s 2020 and 2021 capital expenditure program, Briko’s consideration of future financing sources and the expected timing of the release of Briko’s December 31, 2019 financial and operating results and the expected timing of the shut in production to be back on production. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

Calgary, Alberta–(Newsfile Corp. – March 3, 2020) –  Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce the appointment of David C. Anderson as a new member of the Board of Directors. Since 1993, Mr. Anderson has been the Chief Executive Officer of Winsome Capital Inc., a private venture capital firm. Mr. Anderson co-founded Dixie Energy Trust, Bison Resources and Outrider Resources and is currently the Executive Chairman of Ember Partners, a natural gas to power developer headquartered in Houston, Texas. Mr. Anderson’s oil and gas industry and capital markets experience will supplement and strengthen Briko’s existing Board of Directors as the Corporation considers future development plans on its extensive Alberta Foothills asset base.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release include, but are not limited to, Mr. Anderson’s oil and gas industry and capital markets experience supplementing and strengthening Briko’s existing Board of Directors as the Corporation considers future development plans on its extensive Alberta Foothills asset base. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. Consequently, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to several factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Calgary, Alberta–(December 9, 2019) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce that it has executed a purchase and sale agreement (“PSA”) to acquire complementary Cardium oil and natural gas assets in the Alberta foothills (the “Complementary Assets”) with an effective date of November 1, 2019. In addition to executing the PSA, Briko is also pleased to announce that it has entered into a $1.5 million credit agreement with Tallinn Capital Energy Corp. (“Tallinn”).

The Complementary Assets include established reserves, production, infrastructure and land holdings jointly with and adjacent to Briko’s existing foothills assets. In addition to an increased asset and production base, the acquisition of the Complementary Assets expands Briko’s development drilling inventory in its Cardium light oil focused Stolberg area providing for future reserve and production growth.

Closing of the acquisition of the Complementary Assets is expected to occur in the first quarter of 2020 and is subject to satisfaction of customary closing conditions, including receipt of applicable regulatory approvals.

Key Acquisition Highlights

  • Cash consideration of $1.8 million, subject to customary adjustments;
  • Current average daily production on the Complementary Assets of approximately 425 BOE/d based on field estimates;
  • Increases Briko’s Foothills acreage by 35,000 net acres to approximately 250,000 net acres;
  • Increases Briko’s anticipated 2020 annual average daily production to be in the range of 850 – 950 BOE/d; and
  • Pro-forma adjusted funds flow for 2020 is expected to be in excess of $1.2 million ($0.11 per share) based on production estimates and current 2020 strip commodity prices.

Credit Facility Financing

In conjunction with the acquisition of the Complementary Assets, Tallinn is providing a senior secured credit facility (the “Credit Facility”) of $1.5 million that matures on September 30, 2021. Principal reductions on the Credit Facility of $60,000 per month will commence on February 28, 2020 with the remainder of the principal due on the maturity date. The Credit Facility is also subject to customary financial covenants and security requirements.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release include, but are not limited to, the closing of the purchase of the Complementary Assets, Briko’s anticipated annual average daily production for 2020 and its pro-forma adjusted funds flow for 2020. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. Consequently, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to several factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Non-IFRS Measures

This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Adjusted funds flow, operating netback, operating income, net operating expenses and net working capital (deficiency) are not recognized measures under IFRS. Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss), determined in accordance with IFRS, as an indication of Briko’s performance. Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback but is presented on a total basis rather than on a boe basis. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

Calgary, Alberta- November 29, 2019 – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three and nine months ended September 30, 2019. Financial and operational information is set out below and should be read in conjunction with Briko’s September 30, 2019 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Achieved average daily production of 678 boe per day for the nine months ended September 30, 2019, compared to 739 boe per day for the nine months ended September 30, 2018.
  • Generated an operating netback of $8.53 per boe for the nine months ended September 30, 2019, compared to the $8.82 per boe for the nine months ended September 30, 2018.
  • Generated adjusted funds flow for the nine months ended September 30, 2019 of $885,000 ($0.08/share) and cash provided by operating activities of $946,000 ($0.08/share).
  • No debt outstanding at September 30, 2019.
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended September 30 Nine Months Ended September 30
2019 2018 2019 2018
OPERATIONS
Average daily production
Light oil (bbl/d) 155 193 170 209
Natural gas (mcf/d) 2,639 3,242 2,675 2,788
NGLs (bbl/d) 57 88 62 65
Total equivalent (boe/d) 652 821 678 739
Average prices
Light oil ($/bbl) $ 66.94 $ 80.42 $ 67.06 $ 75.38
Natural gas ($/mcf) 0.93 1.50 1.51 1.52
NGLs ($/bbl) 39.32 59.41 47.08 59.79
Operating netback
Revenue ($/boe) $ 23.11 $ 31.18 $ 27.11 $ 32.33
Realized loss on risk management
contracts ($/boe) (0.27 ) (2.52 ) (0.15 ) (1.59 )
Royalties ($/boe) (3.86 ) (6.53 ) (4.60 ) (7.32 )
Net operating expenses(1) ($/boe) (11.03 ) (10.69 ) (11.50 ) (12.53 )
Transportation expenses ($/boe) (2.61 ) (2.42 ) (2.33 ) (2.07 )
Operating netback (1) ($/boe) $ 5.34 $ 9.02 $ 8.53 $ 8.82
FINANCIAL
Oil and natural gas revenues (2) $ 1,386 $ 2,355 $ 5,021 $ 6,523
Operating income(1) 321 679 1,580 1,780
Cash provided by operating activities 181 309 946 1,085
    Per share – basic and diluted 0.02 N/A 0.08 N/A
Adjusted funds flow (1) 110 619 885 1,613
    Per share – basic and diluted 0.01 N/A 0.08 N/A
Net income (loss) and comprehensive
income (loss) (407 ) 21 (371 ) (672 )
    Per share – basic and diluted (0.04 ) N/A (0.03 ) N/A
Capital expenditures 406 39 559 313
Net working capital(1) 19 274 19 274
Shares outstanding (‘000s) 11,207 N/A 11,207 N/A
Weighted average shares outstanding
basic and diluted (‘000s) 11,207 N/A 11,206 N/A

(1)Operating netback, operating income, net operating expenses, adjusted funds flow and net working capital are non-IFRS measures. See “Non- IFRS Measures”.
(2) Before royalties.
(3) N/A is defined as Not Applicable.

GUIDANCE

Briko’s average production for 2019 is expected to be in the range of 625 – 675 boe/d. Based on these production estimates, combined with the Corporation’s hedge position and its current cost structure, adjusted funds flow for 2019 is expected to be in excess of $1.0 million, representing approximately $0.09 per share in 2019.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO

Kim Benders
Vice President & CFO

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for 2019 and its anticipated funds flow for 2019. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Non-IFRS Measures

This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS. Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss), determined in accordance with IFRS, as an indication of Briko’s performance. Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

Briko Energy Corp. Announces Second Quarter 2019 Financial and Operating Results

Calgary, Alberta – August 22, 2019 – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three and six months ended June 30, 2019.  Financial and operational information is set out below and should be read in conjunction with Briko’s June 30, 2019 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”).  Briko’s condensed unaudited interim financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Achieved average daily production of 692 boe per day for the six months ended June 30, 2019, compared to 697 boe per day for the six months ended June 30, 2018.
  • Generated an operating netback of $10.06 per boe for the six months ended June 30, 2019, a 15% increase over the $8.71 per boe for the corresponding period in 2018.
  • Generated adjusted funds flow for the six months ended June 30, 2019 of $775,000 ($0.07/share), cash provided by operating activities of $765,000 ($0.07/share) and net income of $36,000 ($0.00/share).
  • Net working capital of $408,000 and no debt outstanding at June 30, 2019.

 

(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended June 30 Six Months Ended June 30

2019

2018 2019

2018

OPERATIONS
Average daily production        
Light oil (bbl/d)   176 237 178 217
Natural gas (mcf/d)   2,801 2,757 2,693 2,557
NGLs (bbl/d)   72 69 65 54
Total equivalent (boe/d)   715 765 692 697
Average prices       
Light oil ($/bbl) $ 71.16 $ 76.13 $ 67.11 $ 73.10
Natural gas ($/mcf)   1.20 1.36 1.80 1.53
NGLs ($/bbl)   52.00 63.80 50.56 60.10
Operating netback      
Revenue ($/boe) $ 27.45 $ 34.21 $ 29.03 $ 33.02
Realized loss on risk management        
contracts ($/boe)   (0.18) (1.88)   (0.09) (1.03)
Royalties ($/boe)   (3.72) (7.74) (4.96) (7.79)
Net operating expenses(1)  ($/boe)   (10.82) (10.39) (11.73) (13.63)
Transportation expenses ($/boe)   (2.08) (2.01) (2.19) (1.86)
Operating netback (1) ($/boe) $ 10.65 $ 12.19 $ 10.06 $ 8.71
FINANCIAL      
Oil and natural gas revenues (2) $ 1,786 $ 2,383 $ 3,635 $ 4,168
Operating income(1)   692 851   1,259 1,101
Cash provided by operating activities   207 385   765 776
Per share – basic and diluted   0.02 N/A   0.07 N/A
Adjusted funds flow (1)   424 790   775 994
Per share – basic and diluted   0.04 N/A   0.07 N/A
Net income (loss) and comprehensive        
income (loss)   31 (238)   36 (693)
Per share – basic and diluted   0.00 N/A   0.00 N/A
Capital expenditures   128 50   153 274
Net working capital (deficiency)(1)   408 (36)   408 (36)
Shares outstanding (‘000s)   11,207 N/A   11,207 N/A
Weighted average shares outstanding      
basic and diluted (‘000s)   11,207 N/A   11,206 N/A

(1)Operating netback, operating income, net operating expenses, adjusted funds flow and net working capital (deficiency) are non-IFRS measures. See “Non- IFRS Measures”.

(2) Before royalties.

(3) N/A is defined as Not Applicable.

 

GUIDANCE

Briko’s average production for 2019 is expected to be in the range of 600 – 650 boe/d. Based on these production estimates, combined with the Corporation’s hedge position and its current cost structure, adjusted funds flow for 2019 is expected to be in excess of $1.0 million, representing approximately $0.09 per share in 2019.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

 

For additional information, please contact:

 

Briko Energy Corp.

1710 736 6th Ave. SW

Calgary, Alberta

T2P 3T7

(587) 392-6317

info@brikoenergy.com

 

John H. Van de Pol

President & CEO

 

Kim Benders

Vice President & CFO

 

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward‑looking statements and forward‑looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com.  The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward‑looking statements or information.  Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for 2019 and its anticipated funds flow for 2019. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources.  As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements.  Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward‑looking statements and information are based are reasonable, undue reliance should not be placed on the forward‑looking statements and information because Briko cannot give any assurance that they will prove to be correct.  Since forward‑looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.  These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital.  We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance.  The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward‑looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Non-IFRS Measures

This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS.  These non-IFRS financial measures may not be comparable to similar measures presented by other issuers.  Adjusted funds flow, operating netback, operating income,net operating expenses and net working capital (deficiency) are not recognized measures under IFRS.  Management believes that in addition to net income (loss), adjusted funds flow, operating income and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss), determined in accordance with IFRS, as an indication of Briko’s performance.  Adjusted funds flow is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of property, plant and equipment, share-based payments, unrealized gain (loss) on risk management contracts, accretion and expenditures on decommissioning obligations.  Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses as calculated on a boe basis. Operating income is calculated in the same method as the operating netback, but is presented on a total basis rather than on a boe basis.   Net operating expense is a non-IFRS measure calculated as operating expenses less other income.  Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest. Net working capital (deficiency) includes total current assets and current liabilities excluding current lease obligations and short-term derivative assets and liabilities related to the Corporation’s risk management activities.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl).  BOE may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

 

Calgary, Alberta–(Newsfile Corp. – May 27, 2019) – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months ended March 31, 2019. Financial and operational information is set out below and should be read in conjunction with Briko’s March 31, 2019 condensed unaudited interim financial statements and the related management’s discussion and analysis (“MD&A”). Briko’s condensed unaudited interim financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

FINANCIAL AND OPERATING RESULTS

  • Achieved a 6% increase in the average daily production for the first quarter of 2019 of 668 boe per day, compared to 629 boe per day for the first quarter of 2018.
  • Generated an operating netback of $9.42 per boe for the first quarter of 2019, a 114% increase over the corresponding period in 2018.
  • Generated adjusted funds flow for the first quarter of 2019 of $351,000 ($0.03/share) and net income of $5,000 ($0.00/share).
(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months Ended
March 31, 2019 March 31, 2018
OPERATIONS
Average daily production
Light oil (bbl/d) 181 197
Natural gas (mcf/d) 2,584 2,355
NGLs (bbl/d) 57 39
Total equivalent (boe/d) 668 629
Average prices
Light oil ($/bbl) $ 63.11 $ 69.43
Natural gas ($/mcf) 2.46 1.72
NGLs ($/bbl) 48.72 53.48
Operating netback
Revenue ($/boe) $ 30.74 $ 31.56
Realized gain on risk management contracts ($/boe) 0.01
Royalties ($/boe) (6.29) (7.85)
Net operating expenses(1) ($/boe) (12.71) (17.62)
Transportation expenses ($/boe) (2.32) (1.69)
Operating netback (1) ($/boe) $ 9.42 $ 4.41
FINANCIAL
Oil and natural gas revenues (2) $ 1,849 $ 1,785
Cash provided by operating activities $ 558 $ 391
Per share – basic and diluted(3) $ 0.05 $ N/A
Adjusted funds flow (1) $ 351 $ 204
Per share – basic and diluted(3) $ 0.03 $ N/A
Net income (loss) $ 5 $ (455)
Per share – basic and diluted(3) $ 0.00 $ N/A
Capital expenditures $ 25 $ 224
Shares outstanding (‘000s) (3) 11,206 N/A
Weighted average shares outstanding
basic and diluted (‘000s) (3) 11,206 N/A

(1)Operating netback, net operating expenses and adjusted funds flow are non-IFRS measures. See “Non- IFRS Measures”.
(2)
 Before royalties.
(3
) N/A is defined as Not Applicable.

GUIDANCE

Briko’s production for the second quarter of 2019 is estimated to be in the range of 600 – 650 boe/d. Briko’s average production for 2019 continues to be expected in the range of 550 – 650 boe/d. Based on these production estimates, combined with the Corporation’s hedge position and its current cost structure, the Corporation anticipates its adjusted funds flow to be approximately $1.0 million, representing approximately $0.09 per share in 2019.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO
587-392-6317

Kim Benders
Vice President & CFO
392-6317

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release includes, but is not limited to, Briko’s estimated production for the second quarter of 2019 and its anticipated funds flow for 2019. In addition, management’s assessment of future plans and operations, drilling plans, and the timing thereof, capital expenditures, timing of capital expenditures, and methods of financing capital expenditures and the ability to fund financial liabilities, production estimates, expected commodity mix and prices, future operating costs, future transportation costs, expected royalty rates, general and administrative expenses, interest rates, debt levels, funds flow from (used in) operations and the timing of and impact of implementing accounting policies, estimates regarding undeveloped land position and estimated future drilling, completion, recompletion or reactivation locations may constitute forward-looking statements and information under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefit of acquisitions, the inability to fully realize the benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and inability to access sufficient capital from internal and external sources. As a consequence, the Corporation’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward-looking statements or information is based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Non-IFRS Measures

This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Funds flow from operations, operating netback and net operating expenses are not recognized measures under IFRS. Management believes that in addition to net income (loss), funds flow from operations and operating netback are useful supplemental measures that demonstrate the Corporation’s ability to generate the cash necessary to fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss), determined in accordance with IFRS, as an indication of Briko’s performance. Funds flow from operations is calculated by adjusting net income (loss) for depletion and depreciation, exploration and evaluation expense, impairment, gain (loss) on sale of petroleum, natural gas and equipment, share-based payments, unrealized gain (loss) on risk management contracts and accretion. Operating netback equals the total of oil and natural gas sales, realized gains or losses on risk management contracts, less royalties, transportation and net operating expenses. Net operating expense is a non-IFRS measure calculated as operating expenses less other income. Other income includes gas processing income earned from fees charged to third parties at facilities where Briko has an ownership interest.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl). BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.

Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to report its financial and operating results for the three months and year ended December 31, 2018. Financial and operational information is set out below and should be read in conjunction with Briko’s December 31, 2018 audited annual financial statements and the related management’s discussion and analysis (“MD&A”). In addition, the Corporation today announces the filing of its Annual Information Form (“AIF”) for the year ended December 31, 2018. The AIF contains the Corporation’s reserves and other oil and natural gas information, as required under National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities. The AIF, financial statements and MD&A are available for review at www.sedar.com and on the Corporation’s website at www.brikoenergy.com.

OVERVIEW OF PLAN OF ARRANGEMENT

On December 20, 2018, Ikkuma Resources Corp. (“Ikkuma”), Pieridae Energy Limited (“Pieridae”) and Briko, at that time a wholly-owned subsidiary of Ikkuma, and the shareholders of Ikkuma, completed a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”), whereby Pieridae acquired all of the issued and outstanding shares of Ikkuma. Pursuant to the Arrangement, in addition to receiving 0.1926 of a Pieridae share for each common share of Ikkuma, Ikkuma shareholders also received 0.1 of a common share of Briko (“Briko Share”) and 0.1 of a common share purchase warrant of Briko (“Briko Warrant”). Each whole Briko Warrant entitles the holder to the right to acquire one Briko Share at a price of $1.10 per share until June 28, 2019 (see extension of expiry date to June 26, 2020 below).

Pursuant to an asset conveyance agreement (the “Conveyance Agreement”) between Briko and Ikkuma made as of September 21, 2018, Ikkuma assigned and transferred to Briko certain petroleum and natural gas rights and related interests in its Cardium light-oil focused Alberta Foothills properties (collectively, the “Cardium Oil Properties”). Briko, independent of Ikkuma, commenced operations of the Cardium Oil Properties upon the completion of the Arrangement on December 20, 2018.

FINANCIAL AND OPERATING RESULTS

The financial and operating results below present the historical financial position, results of operations and cash flows of the Cardium Oil Properties for the years ended December 31, 2018 and 2017, notwithstanding the date of the Conveyance Agreement and notwithstanding the date of completion of the Arrangement.

FINANCIAL AND OPERATING HIGHLIGHTS

(Expressed in thousands of Canadian dollars except per boe and share amounts) Three Months ended
December 31,
Year Ended
December 31,
2018 2017 2018 2017
OPERATIONS
Average daily production
Light oil (bbls/d) 197 59 206 54
Natural gas (mcf/d) 3,040 237 2,851 86
NGL’s (bbl/d) 73 6 67 3
Total equivalent (boe/d) 777 104 749 72
Average prices
Light oil ($/bbl) $ 37.25 $ 58.29 $ 66.18 $ 57.50
Natural gas ($/mcf) 1.93 2.02 1.63 2.30
NGL ($/bbl) 45.20 54.03 55.80 47.10
Operating netback
Revenue ($/boe) $ 21.25 $ 41.54 $ 29.43 $ 48.27
Realized gain (loss) on risk management contracts ($/boe) 0.18 0.90 (1.13) 0.43
Royalties ($/boe) (2.99) (1.79) (6.19) (2.63)
Net operating expenses ($/boe) (1) (14.51) (25.46) (13.05) (34.74)
Transportation expenses ($/boe) (1.83) (3.08) (2.01) (5.55)
Operating netback (1) ($/boe) $ 2.10 $ 12.11 $ 7.05 $ 5.78
FINANCIAL
Oil and natural gas revenues (2) $ 1,519 $ 387 $ 8,040 $ 1,262
Cash provided by (used in) operating activities $ 692 $ 89 $ 1,777 $ (336)
        Per share – basic and diluted(4) $ 0.06 $ N/A $ 0.16 $ N/A
Adjusted funds flow (1) $ 63 $ 550 $ 1,676 $ 94
        Per share – basic and diluted(4) $ 0.01 $ N/A $ 0.15 $ N/A
Net loss and comprehensive loss $ (8,469) $ (17,867) $ (9,141) $ (18,877)
        Per share – basic and diluted(4) $ (0.76) $ N/A $ (0.82) $ N/A
Capital expenditures $ 4 $ 1,596 $ 317 $ 17,404
Property acquisitions $ $ 6,988 $ $ 6,988
Shares outstanding (‘000s) (4) 11,206 N/A 11,206 N/A
Weighted average shares outstanding
Basic and diluted (‘000s) (3) (4) 11,206 N/A 11,206 N/A

(1)Operating netback, net operating expenses and adjusted funds flow are non-IFRS measures. See “Non- IFRS Measures”.
(2) Before royalties.
(3) Deemed to be the number of shares issued by the Corporation upon completion of the Arrangement for the three months ended December 31, 2018 and the total issued shares of the Corporation as at December 31, 2018.
(4) N/A is defined as Not Applicable.

EXTENSION OF EXPIRY DATE FOR BRIKO WARRANTS

Briko’s Board of Directors has approved an extension to the expiry date of the Briko Warrants from June 28, 2019 to June 26, 2020. A formal notification relating to the extension of the expiry date will be mailed to the holders of Briko Warrants in the near future. As of April 29, 2019, a total of 11,205,035 Briko Warrants are outstanding.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW
Calgary, Alberta
T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO
587-392-6317

Kim Benders
Vice President & CFO
587-392-6317

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements or information. Although Briko believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Briko cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

Calgary, Alberta – April 11, 2019 – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce the appointment of Officers of the Corporation, its 2018 year-end reserves and other news.

 Officer Appointments

Briko’s Board of Directors is pleased to announce the appointments, effective April 11, 2019, of Mr. John Van de Pol to the position of President and Chief Executive Officer, Ms. Kim Benders to the position of Vice President and Chief Financial Officer and Ms. Venessa Veres to the position of Vice President, Operations. Mr. Michael Kohut will resign as President and Chief Executive Officer and will become Chairman of the Board effective April 11, 2019.

Mr. Van de Pol has 40 years of experience in the oil and gas industry including more than 30 years as an executive officer with several growth-oriented public energy companies. Most recently Mr. Van de Pol held the position of Senior Vice President and Chief Financial Officer of Ikkuma Resources Corp. (“Ikkuma”), an intermediate oil and gas company, which was acquired by Pieridae Energy Limited (“Pieridae”) on December 20, 2018. Mr. Van de Pol holds a Bachelor of Commerce degree from the University of Calgary and is a Chartered Accountant.

Ms. Benders brings over 17 years of oil and gas industry experience to Briko.  Most recently Ms. Benders was the Corporate Controller and an executive officer for Ikkuma. Ms. Benders was a key contributor to the growth initiatives of Ikkuma as its production base grew from approximately 100 boe/d in 2014 to over 19,000 boe/d by 2018. Ms. Benders will oversee all aspects of the Corporation’s finance and administrative functions. Ms. Benders earned her Bachelor of Commerce degree from the University of Saskatchewan and her CMA, CPA from the Certified Management Accountants of Alberta.

Ms. Veres has more than 12 years of oil and gas industry experience in the Foothills area of Alberta, which is the focal point of both Briko’s current production base and its future development plans. Ms. Veres was the Production and Operations Engineer for an intermediate Foothills oil and gas company for the past eight years. She will be responsible for Briko’s production operations and for Briko’s health and safety programs, as the Corporation initiates its optimization and development initiatives. Ms. Veres has a Bachelor of Applied Science from the University of British Columbia and her Professional Engineer Designation from the Association of Petroleum Engineers, Geologists and Geophysicists of Alberta.

2018 Reserve Highlights

  • Proved Developed Producing (“PDP”) reserves of 2.0 million barrels of oil equivalent (“BOE”) at December 31, 2018;
  • PDP net present value of $14.1 million ($1.26 per share) at a 10% discount rate using a consensus price deck from four independent qualified reserves evaluators;
  • Established conservative PDP reserve position that represents 87% of total proved (“1P”) reserves of 2.3 million BOE and 53% of total proved plus probable (“2P”) reserves of 3.8 million BOE;
  • Future development costs (“FDC”) requirement of only $0.1 million on a 1P basis and $16.4 million on a 2P basis; and
  • Low annual production decline rates on PDP reserves with an average reserve life index of 15 years.

Reserves Information

 Briko was formed as a junior oil and gas exploration company resulting from the plan of arrangement involving Ikkuma Resources Corp. (“Ikkuma”), Pieridae Energy Limited, Briko and the shareholders of Ikkuma (the “Arrangement”).  Pursuant to the Arrangement, Briko acquired all of Ikkuma’s Cardium light oil focused Alberta Foothills properties.  Briko is an Alberta company focused on the development of Cardium light oil in the foothills area of Alberta.  Briko commenced operations on December 20, 2018 immediately upon completion of the Arrangement.

 2018 Summary of Reserves

The detailed reserves data set forth below are based on an independent reserves assessment and evaluation prepared by Deloitte LLP (“Deloitte”) with an effective date of December 31, 2018, which is contained in a report dated March 22, 2019 (the “Deloitte Report”).

  2018 YE(1)
Reserves Category (MBOE) NPV10%  ($M)
Proved Developed Producing 2,008 $14,096
Total Proved 2,313 $14,864
Total Proved plus Probable 3,777 $19,247

 Note:

  • Deloitte Report effective as of December 31, 2018.

 Corporate Reserves

The detailed reserves data set forth below are based on the Deloitte Report. The following presentation summarizes the Corporation’s crude oil, natural gas liquids and natural gas reserves and the net present values before income tax of future net revenue for the Corporation’s reserves using forecast prices and costs as set out in the Deloitte Report.  The Deloitte Report has been prepared in accordance with definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The reserves evaluation was based on the consensus forecast escalated pricing and foreign exchange rates at December 31, 2018 (“Consensus Price”) as outlined in the table herein entitled “Price Forecast”. This Consensus Price forecast is the average of the escalated price forecasts of four independent reserve evaluators, namely Deloitte, GLJ Petroleum Consultants Ltd. (“GLJ”), McDaniel & Associates Consultants Ltd (“McDaniel”) and Sproule Associates Limited (“Sproule”).

All evaluations and summaries of future net revenue are stated prior to provision for interest, debt service charges or general administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of Briko’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater or less than the estimates provided herein. Reserves included herein are stated on a company gross basis (working interest before deduction of royalties without including any royalty interests) unless noted otherwise.  In addition to the detailed information disclosed in this press release, more detailed information will be included in the Corporation’s Annual Information Form (“AIF”) which will be filed on the Corporation’s profile at www.sedar.com on or before April 30, 2019.

See “Forward Looking Information and Statements” for a statement of principal assumptions and risks that may apply.

The preparation and audit of Briko’s 2018 annual financial statements is not yet complete, and accordingly, all financial amounts referred to in this press release are unaudited and represent management’s estimates.  Readers are advised that these financial estimates may be subject to change.  Year–end financial statements for 2018 will be released no later than April 30, 2018.

 

 

 

Reserves Category(1)

 

 

 Light and Medium Crude Oil

 

 

Natural Gas Liquids

 

 

Non- Associated Natural Gas(2)

 

 

 

Barrels of Oil Equivalent(3)

(Mbbl) (Mbbl) (Mmcf) (Mboe)
Proved
Proved Developed Producing (“PDP”)                581 197         7,384             2,008
 

Proved Developed Non-producing (“PDNP”)

                 32          6         1,600             305
Proved Developed (“PD”)                613       203         8,984             2,313
Proved Undeveloped (“PUD”)                –
Total Proved (“1P”)             613      203         8,984             2,313
Probable                815          79         3,419             1,464
Total Proved plus Probable (“2P”)             1,428       282         12,403           3,777

Notes:

  • Reserves have been presented on a “gross” basis which is defined as Briko’s working interest (operating and non-operating) share before deduction of royalties and without including any royalty interest of the Corporation.
  • Includes solution gas.
  • Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil.
  • Columns may not add due to rounding.

 Reserve Values

The estimated before tax net present value (“NPV”) of future net revenue associated with Briko’s reserves effective December 31, 2018 and based on the Deloitte Report and the Consensus Price forecast are summarized in the following table:

Reserves Category 0% 5% 10% 15% 20%
(M$) (M$) (M$) (M$) (M$)
 

Proved

 

Developed Producing

29,797 19,291 14,096 11,063 9,101
Developed Non-Producing
1,336 1,013 769 595 471
Undeveloped
Total Proved 31,132 20,304 14,864 11,658 9,572
Probable 22,121 9,658 4,383 1,658 84
Total Proved plus Probable 53,254 29,962 19,247 13,316 9,656

Notes:

  • Based on Deloitte’s December 31, 2018 Consensus Price forecast.
  • The estimated future net revenues are stated prior to provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures.
  • See the Corporation’s AIF, once filed, for the after-tax present values of future net revenue attributed to Briko’s reserves.
  • Columns may not add due to rounding.

Price Forecast

Year Canadian

Light Sweet

Crude(2)

40° API

($C/Bbl)

Western Canada Select(3)

20.5° API

($C/Bbl)

Alberta

AECO-C

($C/Mcf) (5)

Edmonton

Pentanes

Plus

($C/Bbl) (4,6)

Edmonton

Butane

($C/Bbl) (4,6)

Edmonton

Propane

($C/Bbl) (4,6)

$US/$C

Exchange Rate

2019 $66.93 $51.16 $1.80 62.65 $39.40 $27.00 0.76
2020 $74.99 $59.13 $2.23 70.96 $50.75 $33.43 0.78
2021 $79.71 $64.62 $2.63 75.67 $58.51 $38.67 0.78
2022 $82.91 $67.57 $2.94 78.42 $64.26 $41.25 0.80
2023 $86.33 $70.82 $3.16 81.14 $68.00 $43.56 0.79
2024 $88.28 $72.55 $3.31 82.98 $69.50 $44.63 0.81
2025 $90.35 $74.38 $3.45 84.95 $71.13 $45.67 0.81
2026 $92.60 $76.36 $3.54 87.09 $72.84 $46.86 0.81
2027 $94.48 $77.98 $3.62 88.86 $74.33 $47.85 0.81
2028 $96.41 $79.65 $3.71 90.68 $75.84 $48.88 0.81
2029 $98.32 $81.23 $3.77 92.48 $77.35 $49.90 0.81
Escalation Rate of 2.0% Thereafter

Notes:

  • This Consensus Price forecast is an average of four independent reserve evaluators’ forecasts at December 31, 2018 including Deloitte, GLJ, McDaniel and Sproule.
  • Edmonton city gate prices based on historical light oil par prices posted by the government of Alberta and Net Energy differential futures (40 Deg. API < 0.5% Sulphur).
  • Western Canada Select prices are forecasted at Hardisty WCS
  • Natural Gas Liquid prices are forecasted at Edmonton therefore an additional transportation cost must be included to plant gate sales point.
  • 1 Mcf is equivalent to 1 MMbtu.
  • NGL prices have been switched from a mix reference to a spec reference. 

Production and Capital Expenditures 

Briko’s production for the first quarter of 2019 is estimated to be in the range of 600 – 650 boe/d.  With low decline rates on existing production, average production for 2019 is expected to be in the range of 550 – 650 boe/d.  Briko has established a prudent capital expenditure program for 2019 and 2020 that is expected to focus on maintenance and optimization initiatives.  This capital expenditure program is expected to be funded by internally generated cash flow.  Future financing sources will be considered as the Corporation’s inventory of Cardium light oil drilling opportunities is pursued.

Compliance Reporting

Briko is a “reporting issuer” under applicable securities law but is not listed on any stock exchange at this time. The Corporation expects to provide its 2018 financial and operating results on SEDAR at www.sedar.com by no later than April 30, 2019.

About Briko Energy Corp.

Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.

For additional information, please contact:

Briko Energy Corp.
1710 736 6th Ave. SW Calgary, Alberta T2P 3T7
(587) 392-6317
info@brikoenergy.com

John H. Van de Pol
President & CEO
587-392-6317

Kim Benders
Vice President & CFO
392-6317

Definitions

The reserves evaluation, effective December 31, 2018, was conducted by Deloitte, the Corporation’s independent reserves evaluators and is in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.  The reserves are provided on a Gross basis in units of barrels of oil equivalent using a forecast price deck, adjusted for quality, in Canadian dollars.  The estimated values may or may not represent the fair market value of the reserve estimates.

“Gross” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Corporation;

“Net” in relation to the Corporation’s interest in production or reserves is its working interest (operating or non-operating) share after deduction of royalty obligations, plus its royalty interest in production or reserves;

“Proved reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable.  It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves;

“Probable reserves” are those additional reserves that are less certain to be recovered than proved reserves.  It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves;

Forward-Looking Statements and Information and Cautionary Statements

This press release contains forward‑looking statements and forward‑looking information within the meaning of applicable securities laws including, without limitation, those listed under “Risk Factors” and “Forward-looking Statements and Information” in its filings available on SEDAR at www.sedar.com.  The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward‑looking statements or information.  Forward-looking statements and information in this press release includes, but is not limited to, the Consensus Price used in the Deloitte Report, the amount of the FDC requirements, Briko’s reserves and the net present value information relating thereto, Briko’s average production for 2019, the source of funding of Briko’s 2019 and 2020 capital expenditure program, Briko’s consideration of future financing sources and the expected timing of the release of Briko’s December 31, 2018 financial  and operating results. Although Briko believes that the expectations and assumptions on which the forward‑looking statements and information are based are reasonable, undue reliance should not be placed on the forward‑looking statements and information because Briko cannot give any assurance that they will prove to be correct.  Since forward‑looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.  These include but are not limited to the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; failure to obtain necessary regulatory approvals for planned operations; health, safety and environmental risks; uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures; volatility of commodity prices, currency exchange rate fluctuations; imprecision of reserve estimates; and competition from other explorers) as well as general economic conditions, stock market volatility, and the ability to access sufficient capital.  We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance.  The forward-looking statements and information contained in this press release are made as of the date hereof and Briko undertakes no obligation to update publicly or revise any forward‑looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Oil and Gas Advisory

In this press release, the abbreviation BOE means a barrel of oil equivalent derived by converting gas to oil in the ratio of 6 Mcf of gas to 1 bbl of oil (6 Mcf:1 bbl).  BOE may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf:1 bbl, utilizing a conversion ratio on a 6 Mcf of gas to 1 bbl of oil basis may be misleading as an indication of value.