IFR Mexico nears completion of TEC 10

Highlights

IFR achieved several strategic objectives in 2017. With an increased focus on Mexico’s Energy Reform, IFR successfully executed on its strategy to be a first-mover. Through its joint venture company Tonalli Energia (“Tonalli”), which was formed in partnership with Mexican petrochemical leader Grupo IDESA, IFR built a solid foundation from which to emerge as an energy leader in Mexico.

IFR’s achievements in 2017 include:

  • In March, IFR closed a private placement that raised aggregate gross proceeds of$5,059,085. The brokered portion of the private placement was led by PI Financial Corp.
  • In June, Tonalli received approval of its evaluation plan for the onshore Tecolutla block. The evaluation plan outlined in detail the scheduled work program to develop the asset.

Subsequent to year-end 2017 IFR announced:

  • In January, Tonalli secured the drilling authorization permit from Mexico’s National Hydrocarbons Commission for its TEC-10 directional development well at Tecolutla. TEC-10 is the first Tecolutla well to target new locations within the reservoir with the advantage of 3D seismic that has been reprocessed by Tonalli.
  • In April, IFR announced that Tonalli had spudded its first directional evaluation well, TEC-10. The TEC-10 well is now being drilled to target the El Abra formation at a depth of 2,490 meters (8,169 feet). The expected timeline from spud date to reach total depth is under three weeks.

Financial Highlights – Fourth Quarter 2017 and Year ended December 31, 2017

  • The Company reported a consolidated net loss of$2,514,925 ($0.02 loss per share) for the three months ended December 31, 2017 compared to a net loss of$1,690,950 ($0.02 per share) for the same period in 2016.
  • In Q4 2017, the Company had negative cash flow from continuing operations of ($165,350) which excluded a$1,489,415 non-cash impairment charge.
  • The impairment charge at December 31, 2017 of$1,489,415 includes an impairment of$844,550 with respect to lease rentals paid to date on properties in the Northwest Territories as the Company plans to relinquish its remaining freehold leases and an impairment of$644,865 with respect to the remaining net book value of its properties in Montana.
  • The loss from operations in the period included$412,245 in general and administrative costs and$63,000 incurred during the period in respect to the Company’s Mexico project.
  • General and administrative costs for the quarter were higher than previous quarters mainly because of the costs related to increased activities and development focused on Mexico and certain non-recurring corporate costs that were incurred in the period.
  • The Company recorded a consolidated net loss for the year ended December 31, 2017 of$3,382,755 ($0.03 per share) compared to a net loss of$3,252,130 ($0.03 per share) at December 31, 2016.
  • In 2017, the Company had a net loss from operations of$1,808,905 including the impairment charge of$1,489,415 and a loss attributed to the Company’s investment in its Mexican joint venture, Tonalli, of$669,300.
  • During the year, the Company spent$1,597,450 for its 50% share to fund the Company’s joint venture in Mexico.
  • Working capital at December 31, 2017 was$5,683,860, including$5,640,735 of cash and cash equivalents.
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