DXI Energy Inc. (TSE:DXI) (OTCMKTS:DXIEF) has posted its third-quarter numbers to end September, the same month it announced a new strategic direction for the junior oiler, which will see it transition to a regional producer of methanol.
The company, the owner of the Woodrush field in north-eastern British Columbia, said the combined barrel of oil equivalent per day (boe/d) for the three months to September 30 was 161 barrels, versus 203 barrels in the same period of 2018.
READ: DXI Energy unveils plans to become regional producer of methanol at Peace River Arch region of BC
The firm also noted it had reduced its general and administrative (G&A) expenses by 27% to C$211,000 from C$290,000 in the third quarter of 2018 and reduced financing expenses by 40% to C$153,000 (2018: C$254,000).
The net loss was C$846,000 compared to a loss of C$625,000 in the same period a year ago, on revenue of C$308,000 down from C$570,000 a year ago.
On September 6, DXI unveiled its plan to convert the processing facility at Woodrush to allow scalable production, initially targeting a potential of 16,000 gallons of methanol per day beginning in August, 2020.
Internal estimates show a potential 900% increase in net income from operations for DXI as market demand for methanol, used in the oil and gas sector, in the region is high.
New chairman, president and CEO, Simon Raven, who initiated the detailed review of DXI's assets, had said: "....producing and selling raw natural gas into an oversupplied market, with low gas prices today and for the foreseeable future, is not sustainable as a business model and is not in the best interest of our shareholders."
A 'value-added' product
But he noted that methanol was a "value-added" product which sells for many times the value of raw natural gas and is in high demand throughout the region, as well as internationally.
"Our existing facilities and producing gas assets at Woodrush provide an excellent opportunity to cost-effectively transition to methanol production and sales in a short time frame."
The plan is subject to:
a) Securing project financing of approximately C$20 million; and
b) Receipt of industry regulatory approvals in the Province of British Columbia.
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