KFG - KFG Resources Ltd. (Oil Production in Southern US)

[Jack_Aster]

The following information was taken from the company's year end results which came out August 29th 2014.

KFG Year End Results, Ending April 30th 2014

This will be the last year KFG produces at less than 100bopd. Given the new rates which started early June and new reservoir discovery over July, the company is easily producing at double the average for 2013. Q1 results will be out in exactly a month which will show a significant increase from last year's Q1 and Q4, then Q2 will be even higher given the payout times. Every quarter KFG should be increase in production from now on.

Price: $0.10
Shares Outstanding: 50,584,144
Insider Holdings: 10%
Options and warrants: 0

Financials

Assets
Cash: $1,205,750
Accounts Receivable: $577,215
Marketable Securities: $476
Prepaid Expenses: $14,486
Reclamation Bond: $20,000
Property and Equipment: $1,199,375
Total Assets: $3,017302

Liabilities
Accounts Payable: $700,604
Deposits from Co-owners: $178,978
Total Liabilities: $879,582

-Assets grew by $500,000 year over year. Then if you include the reserve growth and new potential, it's been a real transition of a year.

- The reason for the drop in oil revenues is very easy to explain. When KFG's main property paid out last year, the interest went from 100% to 75%. This loss was made up over 2013 but it took some time. Now of course we have exceeded it by quite a bit.

Revenue
(2013)Oil and gas: $2,240,754 (2012)$2,925,253
(2013)Management Fees: $419,014 (2012)$120,626
(2013)Expenses: $2,586,411 (2012)$2,961,875
(2013)Net Income: $67,467 (2012)$76,164
(2013)EPS: $0.0013c (2012)$0.0015c

Overall not bad given the circumstances over the year. Oil revenue was down quite a bit, but we picked up on the management side, going from 15 wells to 22 and now 24 in production with many more to do.



MD&A Highlights

Overall the Company has recovered from giving up 25% of its interested in the Fayette Field wells at payout. Currently, with the MacNeil wells and Craig wells at payout, revenues are on a growth pattern again. The Company was able to grow just utilizing cash flow. Several new projects are in the pipeline and the Craig #3 well will payout in the next few months increasing that revenue stream. KFG will have no problems financing growth through its internal cash flow throughout the remainder of its fiscal year ending April 30, 2015.

For the year ended April 30, 2014, the Company had cash flow from oil and gas production of $1,482,016, compared to $1,823,195 for the year ended April 30, 2013. Oil production decreased from 92.02 BOPD to 71.79 BOPD, and gas production
decreased 3 MCF per day. The average price increased $1.06 per MCF and the average price of crude oil decreased $3 per bbl when comparing the year ended April 30, 2014 to April 30, 2013.

Revenue from the sale of oil and gas was $2,240,754 for the year ended April 30, 2014, compared to $2,925,253 for the year ended April 30, 2013. The decrease in revenue is a result of lower prices and production primarily because oil revenues at Fayette were reduced by approximately 25% when the property paid out and triggered a revision of KFG