ROK Resources Inc. has filed its interim Financial Results and Management Discussion & Analysis for the six months ended June 30, 2021.
Financial Statements
Highlights include:
- In year-to-date Q2 2021, the Company realized production volume of 28,587 boe, resulting in crude and natural gas sales of $1,149,236 and net operating income of $448,114 after royalties and operating expenses. This equates to an operating netback per boe of $15.68 and an operating income profit margin of 39.0%.
- In May 2021, the Company completed the first closing of a private placement financing for a total of $2,200,000, whereby 11,000,000 units of the Company were issued at a price of $0.20 per unit. Each unit consists of one Class B Share in the capital of the Company and one half of one purchase warrant. Each purchase warrant is exercisable for one Class B Share at an exercise price of $0.35 per purchase warrant for a period of 2 years. Commissions were paid to various brokers and finders in an amount of approximately $56,000 plus the issuance of a total of 280,000 broker warrants, with each such broker warrant exercisable for one Class B Share at an exercise price of $0.35 per broker warrant for a period of two years.
- In June 2021, the Company completed the first tranche of $3,500,000 of senior secured notes of the Company (“Notes”), with each Note consisting of a principal amount of $1,000 and with interest payable thereon at a rate of 14% per annum over a term of three years from the date of issuance thereof (the “Note Financing”). In July 2021, a second tranche of $500,000 of Notes was closed by the Company under the same terms. The Notes are secured by the assets of the Company and are senior to all other indebtedness of the Company. In addition, 500 purchase warrants were issued to participants in the Note Financing for each $1,000 principal amount of Notes purchased, with each purchase warrant being exercisable for one Class B Share at an exercise price of $0.35 per warrant for a period of two years.
- In April 2021, the Company closed the acquisition of non-operated working interest in certain producing petroleum and natural gas properties located within the Florence area of Southeastern Saskatchewan. Total consideration for the acquisition is $1,500,000 in cash and 2,000,000 Class B Shares of the Company. The acquisition property is located within the Company’s core operating area in Southeast Saskatchewan, targeting the Midale and Frobisher formations. The acquired assets also include associated facilities and land, as well as associated liabilities relating to future abandonment obligations on well and facility sites.
- In May 2021, the Company closed the acquisition of operated working interest in certain producing petroleum and natural gas properties located within the Florence area of Southeastern Saskatchewan. Total consideration for the acquisition is $2,500,000 in cash and 2,250,000 Class B Shares of ROK. The acquired assets also include associated facilities and land, as well as associated liabilities relating to future abandonment obligations on well and facility sites.
