Exploration & Production | Production Rates | Capital Markets | Capital Expenditure | Drilling Program

Ikkuma's Second 2015 Well Cost Runs High

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Ikkuma Resources Corp. has reported its financial and operating results for the three months ended March 31, 2015.

Highlights:

• Achieved record average production of 7,121 boe/d in the first quarter (97% gas).
• Oil and natural gas sales were 36% lower at $10.8 million from the $14.7 million reported in Q4 2014, due to the significant decline in commodity prices.
• Mitigated the impact of the decline in gas price with realized gains from the Corporation's hedging program of $0.80 per boe or $0.13/mcf.
• Generated funds flow from operations in the first quarter of $1.9 million ($0.02/share) despite significantly lower commodity prices.
• To date and as previously announced, the capital program has tested 5,500 – 6,000 boe/d (99% gas) of production which is expected to largely come on stream by Q4 2015.
• Earned 16 gross sections (13.75 net) of undeveloped land in the Northern foothills by reaching earning depth in the second well drilled.

Outlook

• Ikkuma's 2015 capital budget has been increased from $23 million to $28 million. The increase is due to the additional costs incurred for the second well drilled and higher than expected tie-in costs for the successful recompletions. 
• The majority of Ikkuma's remaining 2015 capital program will be used to tie-in tested volumes, which is expected to be largely completed by Q4 2015. Guidance has been increased for production as follows: 2015 exit rate of 9,000 to 9,300 boe/d; and 2015 average production of 7,500 to 8,000 boe/d.
• Ikkuma will continue to monitor capital spending and forecasted cash flows to ensure the Corporation maintains its financial strength. Ikkuma benefits from a low production decline of approximately 15% and given the significance of the previously announced tested gas rates, the Corporation is well positioned to continue to grow in a low commodity price environment.

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