Fourth Quarter 2023 Financial Results – April 2024
ROK Resources Announces Early Repayment of Term Loan, Reduction in Hedge Program and Lithium Update
May 2, 2023
ROK Resources Inc. (“ROK” or the “Company“) (TSXV:ROK)(TSXV:ROK.WT)(OTCQB:ROKRF), is pleased to announce the full repayment of its non-revolving term loan (“Term Loan“), 20 months prior to expiry. The Term Loan was obtained in January 2023 and was fully repaid, without pre-payment penalties, through a combination of monthly operating cash flow and strategic non-operated asset dispositions. Since March 2022, the Company has retired more than $55 million of debt while increasing its base production from 3,000 boepd to 3,750 boepd (>25%). The Company has retained a $22.5 million revolving credit facility, with current net debt estimated at $10 million.
As a result of the early Term Loan repayment, the Company made the strategic decision to unwind certain commodity swap hedges placed in 2023, 2024 and 2025. At May 1, 2023, the Company’s existing derivative swap hedges are as follows(1)(2):
Crude Edmonton Light Differential
Prices reported are the average price for the period.
Swaps include trades in US$ and CAD. Canadian swaps are converted from CAD to US$ at a rate of 0.75.
Includes Henry Hub swaps, AECO differential swaps and AECO swaps.
The Company, as a twenty-five (25%) percent shareholder and manager of operations of Hub City Lithium Corp. (“Hub City Lithium” or “HCL“), is pleased to announce the results of Hub City Lithium’s National Instrument 43-101 technical report on the lithium brine potential and preliminary resource assessment (“Preliminary Assessment“).
The Preliminary Assessment confirms an inferred lithium resource of 1.15 million tonnes of lithium carbonate equivalent (“LCE“) at an average grade of 143 mg/l (details below). The Preliminary Assessment evaluated more than 300 wells within the region and evaluated 8 stacked zones of high lithium concentrations.
Lithium Next Steps
Sproule Holdings Limited (“Sproule“) has been engaged to assist with a Preliminary Economic Assessment (“PEA“) on the Viewfield project area. This PEA will provide an economic framework for an initial commercial development.
An additional test well will be drilled and tested in Q3 2023.
Selection of a direct lithium extraction (“DLE“) technology provider is underway with large volume samples currently being sent for testing by multiple prospective DLE technology providers.
The Company will continue to advance the lithium project with a goal to monetize value for ROK shareholders through consideration of strategic alternatives sometime in late 2023.
The Technical content of the lithium update has been reviewed and approved by Trevor Else, P. Geo., an independent and qualified person for the purposes of National Instrument 43-101. The technical report supporting this disclosure will be filed atwww.sedar.comwithin 45 days of this news release.
ROK is primarily engaged in exploring for petroleum and natural gas development activities in Saskatchewan and Alberta. It has offices located in both Regina, Saskatchewan, Canada and Calgary, Alberta, Canada. ROK’s common shares are traded on the TSX Venture Exchange under the trading symbol “ROK”.
For further information, please contact:
Cameron Taylor, Chairman and Chief Executive Officer
Bryden Wright, Chief Operating Officer
Jared Lukomski, Senior Vice President, Land & Business Development
Lynn Chapman, Chief Financial Officer
Phone: (306) 522-0011
The term barrels of oil equivalent (“boe“) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6 Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
Certain measures commonly used in the oil and natural gas industry referred to herein, including “Net Debt”, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures by other companies. These non-IFRS measures are further described and defined below. Such non-IFRS measures are not intended to represent operating profits, nor should they be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.
“Net Debt”isequal to the sum of the outstanding long-term debt and net working capital. The Company uses this metric to analyze the level of debt in the Company including the impact of working capital.
barrels per day
barrels of oil equivalent
barrels oil equivalent per day
Natural Gas Liquids
Thousands of barrels of oil equivalent
Millions of barrels of oil equivalent
Proved Developed Producing
Total Proved Reserves
Total Proved and Probable Reserves
International Financial Reporting Standards as issued by the International Accounting Standards Board
West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company’s objectives, goals, and estimated future operating results thereof. Forward-looking statements are necessarily based on several estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to general business, economic and social uncertainties; the accuracy of well testing results; litigation, legislative, environmental, and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in ROK’s public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether because of new information, future events, or otherwise.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.