from ROK Resources, Inc. (isin : CA77544C1041)
ROK Resources Announces Rapid Debt Reduction, Provides Operations Update and 2024 Year-End Reserves
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES
REGINA, SK / ACCESS Newswire / February 12, 2025 / ROK Resources Inc. ("ROK" or the "Company") (TSXV:ROK)(OTCQB:ROKRF) is pleased to announce expedited debt reduction through 2024 and provide an operations update and results of its 2024 year end reserves.
In 2024, the Company delivered on disciplined capital allocation with the primary goals of further enhancing its already stable balance sheet and strengthening the Company's base production. The Company's drilling program focused on light oil prospects in Southeast Saskatchewan and was underpinned by strong production rates that exceeded internal type curves by greater than 20%. The Company outperformed its 2024 guidance, deploying approximately $17.4 million1,2 in capital expenditures, resulting in annual average production of 3,992 boepd2, $31.6 million2 in Funds from Operations and Adjusted Net Debt at December 31, 2024 of $10.6 million2.
2024 Operational Highlights
43% Reduction in Adjusted Net Debt: The Company will exit 2024 with estimatedAdjusted Net Debt of $10.6 million, representing a 43%, or $8.1 million, reduction year over year;
Funds from Operations Outperforms Forecast: Estimated Funds from Operations of $31.6 million in 2024, a 6% increase compared to internal forecast of $29.8 million; and
Production In-Line with Forecast: Daily average production in 2024 of 3,992 boepd (66% liquids), which represents production growth of 3% compared to 2023 despite only drilling 8 gross (6.8 net) horizontal oil wells.
The Company expects to provide full-year 2025 guidance on February 27, 2025.
2024 Corporate Reserves
The Company focused its 2024 drilling program on open-hole, multi-lateral light oil prospects in Saskatchewan, which resulted in Light and Medium Crude Oil reserve growth across all three reserves categories, proved developed producing ("PDP"), total proved ("TP") and total proved plus probable ("TPP"). In addition, improvement to reserve life index ("RLI"), finding and development costs, recycle ratio and net asset value ("NAV") per share were also observed.
Reserves Evaluation Highlights
Total proved basic NAV9 of $0.56/share and total proved plus probable basic NAV9 of $1.03/share, representing increases of 10% and 3%, respectively, when compared to 2023 (excludes any value attributed to the Company's current hedges, undeveloped land, and equity ownership in EMP Metals Corp.).
Improved corporate decline rate11 going from 23% to 21% when compared year over year; and
As a result of our successful light oil drilling program in 2024, the Company had a 4% increase on TP Light and Medium Oil reserves and 5% increase on TPP Light and Medium Oil reserves.
Summary of Oil & Gas Reserves as of December 31, 20243,4,5,6 The evaluation for the Company as at December 31, 2024, was conducted by McDaniel & Associates Ltd. ("McDaniel") of Calgary and was conducted in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluators Handbook ("COGEH") and National Instrument 51-101 - Standards for Disclosure of Oil and Gas Activities ("NI 51-101"). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves - Total Company Interest | Light and | Conventional Natural Gas | Natural Gas Liquids | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mbbl | MMcf | Mbbl | Mboe | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved Developed Producing | 2,744 | 12,837 | 576 | 5,459 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved | 7,535 | 25,686 | 1,448 | 13,264 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Probable | 3,963 | 18,299 | 920 | 7,933 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved plus Probable | 11,498 | 43,985 | 2,368 | 21,196 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Net Present Values as of December 31, 2024 (Before Income Tax)3,4,5,6,7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Before Tax Present Value (M$) | Undiscounted | 5% | 10% | 15% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved Developed Producing | -9,968 | 34,251 | 43,626 | 44,670 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved | 165,935 | 158,475 | 134,109 | 112,145 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Probable | 216,949 | 143,054 | 101,843 | 76,498 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Proved plus Probable | 382,883 | 301,528 | 235,951 | 188,642 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Development Costs ("FDC") FDC reflects best estimate of the capital costs to develop and produce reserves. Included in FDC are 91 gross proved booked drilling locations and 30 gross probable booked drilling locations. This year, the Company converted 46 booked locations from cemented liner/hydraulic fracture completions to open-hole, multilateral designs. This initiative reduced future development costs by 9% on TP and 6% on TPP reserves.
Performance Measures (including FDC) The following table highlights finding and development ("F&D") and finding, development and acquisition ("FD&A") costs and associated recycle ratios, including FDC, based on the evaluation of the Company's petroleum and natural gas reserves prepared by McDaniel:
Reserve Life Index The following table highlights our reserve life index based on the evaluation of the Company's petroleum and natural gas reserves prepared by McDaniel:
Price Forecast4 (Sproule, GLJ, McDaniel Average), January 1, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year | F/X | WTI | Cromer Medium | Alberta AECO | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
USD/CAD | USD/bbl | CAD/bbl | CAD/Mmbtu | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2025 | 0.71 | 71.58 | 91.15 | 2.36 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2026 | 0.73 | 74.48 | 93.35 | 3.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2027 | 0.74 | 75.81 | 93.62 | 3.48 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2028 | 0.74 | 77.66 | 95.96 | 3.69 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2029 | 0.74 | 79.22 | 97.88 | 3.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2030 | 0.74 | 80.80 | 99.83 | 3.83 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2031 | 0.74 | 82.42 | 101.83 | 3.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2032 | 0.74 | 84.06 | 103.87 | 3.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2033 | 0.74 | 85.74 | 105.95 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||