RMP ENERGY INC (OTCMKTS:OEXFF) 4Q Production Below Corporate Capability

RMP ENERGY INC (OTCMKTS:OEXFF) stated that 4Q production averaged at 12,342 boe/d, weighted 51% NGLs and light oil, indicating a 70% increase over 4Q2013.The production came below corporate capability affected by continued solution gas handling constraints at Ante Creek. Also, production was affected by deferred tie-in of two Kaybob Montney gas wells. The delay occurred due to unusual winter freeze. FY2014 production surged 71% YOY to 11,782 boe/d, weighted 56% NGLS and light oil. The full year production was better than the company’s forecast of 11,500 boe/d.

The financials

RMP Energy reported natural gas and petroleum revenue for 4Q came at $56.2 million. The revenue from crude oil and NGLs contributed 77% in total revenue. The commodity hedging gain amounted to $2.7 million. RMP Energy is anticipating an oil price differential of $9.00 per bbl for FY2015, based on existing forward strip indications. The revenue of Petroleum and natural gas segment for FY2014 amounted to almost $265.9 million, up 95% from FY2013. The company reported commodity hedging loss for the full year at $3.7 million.

The performance

RMP Energy seems to be well-capitalized with net debt of around $123.5 million at the end of FY2014. It is drawn almost $130 million on its existing bank credit facility. RMP stated that current debt servicing rate stands at 3% per annum. It has maximum borrowing limit of $175 million as per the existing bank credit facility. The company confirmed that base determination for lenders annual borrowing will be considered before May 31, 2015.

FY 2015 Update

In December, RMP ENERGY INC (OTCMKTS:OEXFF) announced FY2015 capital expenditure budget to be around $150 million. It now intends to spend in a range of $95 million-$100 million due to sharp decline in crude oil prices and commodity prices. They are substantially below the originally-budgeted pricing expectations. Also, it will follow a disciplined approach to capital investment due to prevailing low oil and commodity prices.

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