Revenues of $11.79 Million
Adjusted non-GAAP - EBITDA of $6.75 Million
Houston, TX - (NewMediaWire) - May 20, 2020 - Viking Energy Group, Inc. (OTCQB: VKIN) (“Viking” or the “Company”), an independent exploration and production company focused on acquiring, enhancing and developing oil and natural gas properties in the onshore Gulf Coast and Mid-Continent regions, announced on May 15, 2020 financial results for the quarter ended March 31, 2020.
Key Financial Highlights for Q1 2020 (all figures are approximate):
- Revenues were $11.79 million as compared to $9.35 million in Q-1 2019.
- Adjusted EBITDA was $6.75 million, as calculated by the Company below, as compared to $5.72 million in Q-1 2019.
- Revenue in excess of lease operating costs increased to $8.03 million, as compared to $6.75 million in Q-1 2019.
- Net Income was $19.29 million, as compared to a net loss of ($11.93 million) in Q-1 2019, attributable primarily to a change in the fair value of the Company’s derivates (i.e. hedging contracts) during the quarter.
- Current Assets were $10.99 million, as compared to $8.67 million in Q-1 2019.
James Doris, Viking’s President and Chief Executive Officer, commented, “I am extremely grateful to our entire team as they continue to work daily during the COVID-19 crisis to achieve efficiencies for the benefit of all stakeholders. Despite unprecedented market conditions we remain resolute in our commitment toward advancing our objectives, including with respect to asset optimization, de-levering, exploring responsible diversification opportunities, and up-listing to a national stock exchange. Regarding the latter, we continue to devote attention to matters associated with the planned merger with Camber Energy, Inc., and strongly believe being listed on an enhanced platform will serve us well as we pursue value-added opportunities post pandemic. Our disciplined and pragmatic approach have enabled us to execute on our mandate in challenging environments, and we intend to be even more steadfast moving forward.”
Financial Results for the Quarters Ended March 31, 2018, 2019 and 2020:
|Summary Financial Results|
|For the Quarters Ended March 31,|
|Total Revenue - Oil and Gas||$ 2,161,947||$ 9,346,592||$ 11,787,952|
|Lease Operating Costs (LOE)||1,008,268||2,599,394||3,759,203|
|Revenue in excess of lease operating costs||$ 1,153,679||$ 6,747,198||$ 8,028,749|
Note: The figures referenced in the summaries above are approximate and in most cases have been rounded to the nearest $100,000. For specific amounts, please refer toViking’s Quarterly Report on Form 10-Q filed on May 15, 2020 with the Securities and Exchange Commission and available under "Investors -- SEC Filings" at www.vikingenergygroup.com.
Earnings Before Interest Taxes Depreciation, Depletion and Amortization
A Non-GAAP Financial Measure to Evaluate Operational Performance
|For the Quarters Ended March 31,|
|Net Income (Loss)||$ (1,552,883)||$ (11,931,481)||$ 20,249,159|
|Non-Cash / Non-Operating Items|
|Stock Based Compensation||173,487||39,582||253,750|
|Changes in Fair Value of Derivatives||354,953||9,745,583||(22,879,444)|
|Interest expense including amortization of debt discount||1,069,310||5,410,352||5,819,090|
|Accretion - ARO||48,431||82,546||125,620|
|Income tax benefit (expense)||(271,789)||-||-|
|Depreciation, Depletion & Amortization||489,686||2,370,688||3,177,202|
|Total Non-Cash Items||1,864,078||17,648,751||(13,503,782)|
|Adjusted EBITDA||$ 311,195||$ 5,717,270||$ 6,745,377|
Viking’s Hedging Strategy Proves Wise During COVID-19 Crisis
Certain of Viking’s subsidiaries are parties to hedging contracts which are supplementing the company’s revenues during this unprecedented time of uncertainty caused by COVID-19 and other factors affecting the supply and demand of oil. A summary of Viking’s hedging arrangements through BP Energy and Cargill Incorporated was provided in a press release issued by the company on March 9, 2020 (https://finance.yahoo.com/news/viking-hedging-strategy-proves-sound-123010517.html) and certain details are set out below:
Elysium Energy, LLC (majority-owned subsidiary of Viking):
|Period||Contract Type||Quantity Hedged||Floor||Ceiling|
|Feb., 2020 to Dec. 2020||Costless Collar||179,058 bbls||$45.00||$54.20|
|Jan., 2021 to Dec. 2021||Deferred Premium (premium is $145.939,20)||121,616 bbls||$45.00||$56.00|
|Jan. 2022 to July, 2022||Costless Collar||48,536 bbls||$45.00||$52.70|
|Mar. 2020 to Aug. 2022||Costless Collar||5,882,330 mmbtu||$2.00||$2.425|
Ichor Energy, LLC & Petrodome Energy, LLC (wholly-owned subsidiaries of Viking):
|Period||Contract Type||Quantity Hedged||Floor||Ceiling|
|Ichor – Jan., 2019 to Dec. 2022||Fixed Price||1,180,792 bbls||$50.85*||$50.85*|
|Petrodome – Mar. 2020 to Dec., 2020||Fixed Price||22,700 bbls**||$52.71||$52.71|
|Petrodome – Mar. 2020 to June, 2020||Costless Collar||5,600 bbls**||$55.00||$72.00|
|Ichor – Jan., 2019 to Dec. 2022||Fixed Price||5,589,981 mmbtu||$2.715||$2.715|
*based on Louisiana Light Sweet Crude pricing
** remaining quantities only
About Viking Energy Group, Inc.
Viking is an independent exploration and production company focused on acquiring, enhancing and developing oil and natural gas properties in North America. The company has assets in Texas, Louisiana, Mississippi and Kansas. For additional information, please visit: https://www.vikingenergygroup.com.
Adjusted EBITDA - Non-GAAP Financial Measures
This press release contains “Adjusted EBITDA”, a non-GAAP financial measure, used for managerial purposes because it allows management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to compare the results of our operations from period to period without regard to our financing methods or capital structure. The Company defines Adjusted EBITDA as net income (loss), adjusted for certain non-cash and non-operating items, such as stock-based compensation, changes in the fair value of derivative instruments, asset retirement obligation accretion expense, depreciation, depletion and amortization, interest expense and income tax (benefit) provision. We also exclude certain other non-cash items listed in the aforementioned table. Adjusted EBITDA is not a measure of financial performance under US GAAP and should be considered in addition to, not as a substitute for, net income (loss). The Company adjusts net income (loss) for these specific items to arrive at Adjusted EBITDA because they can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.
This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and any statements that are not historical facts contained in this press release are "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the fluctuation of global economic conditions or economic conditions with respect to the oil and gas industry, the performance of management, actions of government regulators, vendors, and suppliers, our cash flows and ability to obtain financing, competition, general economic conditions and other factors that are detailed in our filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ending December 31, 2019, and our Quarterly Reports on Form 10-Q for the quarter ending March 31, 2020. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.
Investors and Media:
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