NXT Energy Solutions Inc. (NSFDF) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. My name is Lee, and I will be your conference operator today. At this time, I would like to welcome everyone to the NXT Energy Solutions 2019 Year-end Operating and Financial Results Conference Call. [Operator Instructions] I would now like to turn the meeting over to Mr. George Liszicasz, President and CEO of NXT Energy Solutions. Please go ahead, Mr. Liszicasz.

Thank you, Lee. Welcome, and thank you, everyone, for joining us for NXT Energy Solutions' Full Year and Fourth Quarter 2019 Financial and Operating Results Conference Call. I hope that you and your families enjoy good health in these trying times. This is George Liszicasz, and joining me on today's conference call is Eugene Woychyshyn, Vice President of Finance and Chief Financial Officer; Rashid Tippu, Director of Geosciences for Africa, Asia and Middle East; along with Enrique Hung, Director of Geosciences for the Americas; and Mohammad Saqib, Operations Director and Head of Interpretation. The purpose of today's call is to briefly discuss the highlights of the release of NXT 2019 financial and operating results and update the market on our business activities. Following our update, we will open the line for questions. Please note that all statements made by the company and management during this call are subject to reader's advisory regarding forward-looking information and non-GAAP measures set forth in our 2019 results press release and MD&A issued earlier. All dollar amounts discussed in today's conference call are in Canadian dollars unless otherwise stated. The complete financial and operating results and consolidated audited financial statements for 2019 were published yesterday and are available on NXT's website as well as on SEDAR's website. Now over to Eugene for the financial review.

Thank you, George, and welcome, everyone. As George mentioned, our 2019 financial statements and management discussion and analysis and annual information form were filed on SEDAR's website yesterday and will be available on EDGAR shortly. We are pleased -- we are very pleased with the 2019 results, especially with $4.1 million of operating cash flow and net income of $3.77 million or $0.06 per share. From a financial perspective, the focus remained on continuing to control and optimize noncore corporate costs in support of the business development efforts. We are also actively reviewing NXT's eligibility for the various COVID-19 government support programs. For 2019, our financial results were as follows. There was $11.98 million of revenues earned in 2019, and we have collected approximately 94% of the payments due from the Nigerian SFD survey to date. For 2019, NXT recorded net income of approximately $3.77 million, or basic and diluted, $0.06 per share, based on 68.2 million weighted average common shares outstanding. For the fourth quarter, NXT recorded a loss of $1.7 million or $0.03 per share, based on 66.9 million shares. Compared to 1998's net loss, 2019's income improved by $10.7 million or $0.17 per share. Our total shares outstanding during the fourth quarter decreased by 4.17 million shares due the targeted issuer bid. Between November 18 and December 10, 2019, NXT purchased for cancellation 4.17 million common shares in Alberta Green Ventures Limited Partnership, AGV, at a price of $0.30 per common share for gross expenditures of approximately $1.25 million. Common shares purchased and canceled represented approximately 6.08% of the total common shares outstanding at November 14, 2019. Also, the 3.4 million common share repurchase warrants held by AGV expired as of October 31, 2019. Total operating expenses, including survey costs for the year, were $7.93 million. This included noncash expenses of $1.83 million related to amortization and stock-based compensation expenses. Total operating expenses for the fourth quarter were $1.66 million, including survey costs. This included noncash expenses of $0.42 million related to amortization and stock-based compensation expenses. Operating activities provided $1.2 million of cash during the quarter and $4.08 million for the year. Cash and short-term investments were $6.64 million at December 31, 2019, and net working capital was $7.13 million. On March 25, 2020, we received an additional USD 466,000 of payments from the Nigerian -- or for the Nigerian SFD survey. General and administrative expenses increased 6% or $51,000 in the fourth quarter of 2019 compared to 2018 as a result of the following. Salaries, benefits and consulting charges actually decreased by $104,000 or 20% due primarily to the change to a lower-cost mix in corporate staff and 2 less headcount. Board and professional fees and public company costs increased $66,000 or 48% due primarily to the higher professional fees given to the increased business activity during the year and the addition of one Board member. Business development costs increased by $82,000 or 215% as the company's resources, again, we're focused on business development activities in the fourth quarter of 2019 versus the prior year quarter. Also, in Q4 2018, resources were focused on closing the Nigerian SFD survey contract. On a full year basis, G&A expenses decreased by 13% or $500,000 in 2019 compared to 2018. Salaries and benefits and consulting charges decreased by $447,000 or 22% due primarily to change in lower cost, mix and staff and to less headcount and an allocation of direct salary cost to survey costs. Board and professional fees and public company costs increased $76,000 or 10% due primarily to the higher professional fees and insurance costs given the increased business activity. Premises administrative overhead increased by $47,000 or 6% due primarily to the increased costs related to the improvement of the company's information system security. Business development costs decreased by $141,000 or 37% due primarily to increased attention in specific regions and company resources focused on delivering the Nigerian SFD survey. To summarize some of the key financial points. We ended the year with $6.64 million of cash and short-term investments on hand and a net working capital of $7.13 million which was -- of which, USD 446,000 of cash was received in the first quarter of 2020. Net income of the year, again, was $3.77 million, a $10.7 million improvement over 2018. Cash flow from operations was $4.1 million. And we also continue to focus on cost control and were able to reduce general and administrative costs by 13% or $500,000. I would now like to hand the call back over to George to further discuss our business update and forward plans.

Thank you very much, Eugene. Before I continue with the review of the business development, let me explain where the company is positioned in the oil and gas sector today; what impact the tumbling oil price is having on our business growth; and finally, examine the consequences of COVID-19 on our ability to work effectively here in Calgary and abroad. Let me start with what our position is in the oil and gas sector. I think it's a very important subject because our investors need to do a little bit more in depth what that the company is doing. NXT is a geophysical service provider to the upstream sector, but the truth is we are a technology company. Today, the best technology utilized in hydrocarbon exploration is seismic. Once seismic is shot, the oil company has about 90% of the information it needs to make the best possible decision where to build the next prospect. So why is SFD needed there? From the technical perspective, seismic is the only technology that can be used for prospect identification. For regional work, companies use aeromag, aerogravity to give them valuable information on the architecture of the sedimentary basin and where they should shoot seismic. As a result, when you give the word prospect, that means seismic was shot 95% of the time. This makes seismic the most valuable tool in exploration. There are some serious issues though. Exploration is a high-risk business that requires substantial capital and time. Drilling data of new field wildcats, or NFWs, these are areas that are not close to production, okay? So they're brand-new prospect. So the data shows that when you include all technologies: Seismic; aeromag; aerogravity; CSEM, which is controlled-source electromagnetic survey; magnetotelluric; chemical analysis; multispectral satellite imagery, the success rate onshore is 18%, which means that the failure rate is a serious 82%. Offshore, the numbers are even more dismal, and this data is coming from Wood Mackenzie. The failure rate offshore is 93%. So only 7 of the 100 new field wildcats drilled will be successful on average. Consider also the well cost, which is between $35 million to $150 million offshore. We are talking about $5 billion, and the time that is needed to reach the drilling stage internationally is anywhere from 5 to 10 years. So what's missing? What's missing is another prospect level 2. SFD is, therefore, an important complementary prospect level 2 that can be used onshore and offshore environments to identify conditions associated with valid trap systems in the subsurfaces. The biggest failure in exploration is the lack of reservoir and breach trap. The application of SFD can mitigate that, because when the system encounters the simultaneous presence of a trap, reservoir and seal, it produces a unique waveform that can help eliminate traps that have poor reservoir qualities or the trend is breached. This implies that when 2 technologies operating on different physical principles recommending the same area for drilling, that such combination of seismic and SFD will significantly increase success rate. I'm going to talk about the drilling successes today. In addition to the aforementioned being airborne, the speed of deployment and data acquisition, it's low cost, makes SFD an ideal tool to partner with seismic. So I'm asking the question, what you would: Why the supermajors are not breaking down the door to use SFD? We can discuss that if you ask the question later. Let me continue with the impact of oil price collapse that is having on NXT. Obviously, the current situation is not good to say the least, but these prices cannot be maintained over a long period. Correction will be made by reducing production to close to 80 million barrels per day, that's about 20% reduction. Right now, it's less than 10%. Of course, we have surplus as well. By the fourth quarter, we hope to see an increase in oil price that would settle around 40 -- between $40 and $50. The effects on NXT are as follows. In some countries where the company is active, the oil price needs to be maintained around $35 per barrel. That is with independent oil companies. NXT has, for the most part, have contracts with NOCs, the national oil companies. In many countries, NOCs contribute significantly to the nation's GDP, which means they cannot stop drilling and selling oil. Take, for example, Mexico. Its production is in decline for the last 15 years. So their contribution -- so is their contribution to GDP. OPEC has asked Mexico to cut production by 400,000 barrels per day, and has only agreed to 100,000. What is the most important -- what is the importance here? Like PEMEX, national oil companies have to keep drilling and selling oil regardless of the oil price. And since NXT's clients are mostly NOCs, we have the opportunity to continue to work for them. They also drill our SFD recommendations, and I will talk about that shortly. COVID-19 mainly affects our ability to move projects forward as scheduled since many countries are locked down as well. However, our clients are still working from home, from their offices, and there is a continuous discussion regarding our projects. I believe that Canada and the U.S.A. are going to open up their respective countries for business together, hopefully soon. As bad as this virus is, the world cannot stop functioning. Let's turn our attention to our business development efforts. I will start with an update on our current Nigeria SFD contract. As Eugene mentioned, NXT has received USD 466,000 recently. A final payment of approximately USD 450,000, which is in fact a performance bond, was due on March 31. We elected not to enforce it until either upon the completion of a new contract with NNPC, which is the national -- Nigerian National Petroleum Corporation, or NPDC, which is the offshore arm; or at the closure of the current contract. As of today, our Nigeria negotiations are well advanced and focused on existing data sales and new contracts, both onshore and offshore. The potential contract value is similar to the original contract. Related to the -- to the completed Nigerian SFD survey, the Department of Petroleum Resources, DPR, a department under the Federal Republic of Nigeria's Ministry of Petroleum Resources, responsible for sustainable development of Nigeria's oil and gas resources, provided written confirmation of their recommendation in favor of NXT's technology based on the recent survey results. They noted specifically: In line with federal government aspirations to increase its oil and gas reserves at a considerably reduced cost, risk and optimized exploration cycle, the SFD technology is hereby adopted and recommended to be deployed as an independent data exploration tool for hydrocarbon exploration to identify and rank prospect-level leads to focus exploration efforts in the Nigeria oil and gas industry. As it stands today, we anticipate to finalize data purchase and new contract with NNPC in Q2 as long as we can travel and start SFD surveys thereafter. Africa, in general, provides an excellent opportunity for NXT. We are in discussions with a number of independents and NOCs in the region. NXT recently signed an MOU with an independent producer and continuing contract discussions, and actually, intents to secure SFD contract similar in size to the 2019 Nigeria contract. Operationally, this survey could be executed consecutively with the new Nigeria SFD project. With respect to Latin America, we are actively seeking new SFD projects in Mexico, Colombia, Peru and Brazil. Our contract negotiations are progressing well, and we hope to secure a new contract in Q2, if we can travel, and start surveying soon thereafter. Latin America remains a very important market segment for NXT, and updates will be provided as 1 update. Asia initiatives. Our corporation and development work with the NOCs of China, including BGP, Bureau of Geophysical Prospecting, is now halted until we can travel. NXT is planning to work with BGP, the world's leading geophysical service company, in cooperation with CNPC, to undertake a number of projects worldwide. NXT has also signed a new sales representative agreement in Southeast Asia recently. Having boots on the ground is critical for our success. NXT received confirmation of patent granted from the European patent office. This brings the total number of countries granting the patent to 44. The final step is for the validation process of SFD technology patent is select -- in select European countries. In addition, the company is designing and building a new fleet of sensor systems for improved efficiency, better resolution and increased capacity. With respect to our project in the Queen Charlotte Fault region. In the first quarter of 2020, NXT finalized the first phase of its survey over the Queen Charlotte Fault located offshore British Columbia. The purpose of continuing QCF study, which is the Queen Charlotte Fault, is to identify seismically active areas and to differentiate subsurface stress states in deepwater settings. The company is in the process of evaluating the acquired SFD data. This concludes the large majority of our business development initiatives for NXT. As we have previously promised, we would like to start disclosing drilling results on SFD recommendation. We have reported on the Nigeria inland base and drilling result. NXT was asked to perform an initial survey flight over seismic line designed by FES, which is the frontier exploration arm of the NNPC, and it was performed onshore in the inland basins on April 18, 2019. During most flights, NXT's technical personnel is accompanied by Nigerian Security Officer and an NNPC geologist or geophysicist. The result of the initial flight was provided to FES within a few days. One of the anomalies recommended coincided with FES seismic prospect. The well was successfully drilled and completed in late 2019 and the drilling of a new area of the recommendation is planned. Unfortunately, due to COVID situation, we do not know when the drilling will start. We also reported in our latest news release on 2 new findings with respect to our 2017 SFD Gulf of Mexico survey over the 2.1 Bid Round offshore blocks. A lead area indicated by SFD as highly prospective has now been drilled by third parties, and the results confirm that is a commercial discovery, with early estimates of volumes greater than 200 million barrels of equivalent in place. Additionally, and perhaps more importantly, from capital expenditure allocation perspective, another seismic prospect considered nonprospective by NXT was drilled as part of the same campaign and was declared unsuccessful. These results highlight the value of adding SFD to an upstream work program and evidences the efficacy of our geophysical method in recommending prospects with potential for hydrocarbon traps. Drilling activities over SFD recommendations are ongoing, and we are aware of them, in numerous countries, and NXT Energy shall provide further update as warranted. If you have any questions regarding our initiatives, drilling results or other technical activities, please direct them to myself, and I will be glad to address them along with my technical team here. Conclusion. In conclusion, I am hopeful that the COVID pandemic will be over soon, and we can advance our initiatives, both in Africa and Latin America, to secure SFD surveys. It is imperative for us to continue delivering results and growth for our shareholders. On behalf of our Board of Directors and the entire team at NXT, I would like to thank you, all of our shareholders, for their continued commitment and support. I now ask our operator, Lee, to open the line for us to take a few of your questions.

[Operator Instructions] And your first question is from Michael Mork.

My question is, under the current conditions, how do you determine drilling success rate? And how do you get confirmation from the various companies?

It's Mo here. So under the current situation, what we are doing is basically monitoring the recommendations that we have previously submitted to the various companies and operators. And we have access to a number of sources, some public, some are not so public. And the announcements from the operators concerning drilling activities that were ongoing previously, and they have now concluded. And we are verifying whether any of these locations fall within the SFD recommendations. When we recommended them, in-place volumes, as they are announced by the operator through their press releases and so forth. That's how we have been establishing which of our recommendations are coming in successfully or otherwise.

Okay. Very good. And just kind of a follow-up for George. Did I hear you correctly that you're going to be upgrading the sensors? And what's the time frame of this?

The process is -- has started already. Dr. Gui, we are in sort of in isolation most of the time. So we are working on it, and also the team with Xiang working on the upgrade. We do not know the final result yet, of course, but we need redundancy, we need capacity, we need the ability to sort of reduce the size of the sensor elements and boxes and so on and so forth, of the electronics that is associated with it, and so on. So hopefully, within the next 3 months, we're going to have to -- we are going to be able to announce that we have completed 3 new fleet of sensors.

And your next question is from Tucker Anderson.

A couple of questions. I was going to ask this question anyway, but now it appears that I'm your puppet because I'm going to ask you about the question you suggested, and that is the continued resistance of any of the supermajors to employing the technology and if there's any chance that may change.

I think so. There are several issues that this company faces with. One is the underlying physics is still not understood outside of the company. And in that regard, we are planning to bring in some heavyweights, to say the least, and both in the -- from the geophysical environment and also from the physics perspective. So that's one thing. The second thing is that the long cycle. So in order to achieve results, it takes many, many years. Now that we are in that cycle ourselves, we have now accumulated a number of results based on the SFD recommendations that we are going to disclose and also publish, and they are very encouraging to say the least. That's number two. Number three, supermajors do not open their doors very easily. So you have to go through a period of time, usually takes 2 to 3 years, it's called red tape. And you have to fully disclose the technology and so on. Even if we offer them that we would fly a specific seismic line, let's say 1,000 line kilometers long anywhere in the world. As long as they know what's underneath, we will fly that line and we'll give them the geophysical information with -- from the SFD perspective. They don't take us on. They want to know how the tool works thoroughly, and that is still an issue. So we are relying more on our empirical evidence, the drilling results and the value that we deliver to our clients. Did I miss anything?

It seems to me, George, that what's working in your favor is what's working against them right now. And that is, given the lower price of oil than they had in their projections, that they really have to do everything in their power to minimize the dry holes. And I would think that your technology and the data that you've been accumulating would be very enticing to them to really accomplish that goal with the price of oil where it is.

Just continue along your thoughts. In Nigeria, now that DPR has adopted the technology and recommended it, we are going to be working in this next contract, hopefully, it's going to be a significant one, with supermajors. So they can't avoid us now. And we are looking forward to do so with the humbleness and with all respect. And we will demonstrate our capabilities beyond the shadow of the doubt that this technology is a added value technology, it will deliver results for them and assist them in their operations. And I think thank you very much for asking the question, actually.

As I said, it was on my list, but now everybody just thinks I'm your puppet. But I'll deal with that...

The second part was important.

Yes. The second question has to do with the thing you discussed in Mexico, where the hole was drilled where your technology indicated that it was likely to be successful, and then there was a dry hole, too. Were those drilling locations similar in other respects? That is, if one looked at the underlying seismic data and didn't have the SFD, would the evaluation of those 2 prospects been relatively similar?

I will ask Enrique to address that.

Not quite understood the question.

The question is basically is that how was it determined? Did they have seismic data for this area? But in 2017, when we started the survey, there was no allocation of any of the blocks.

Yes. Correct.

Correct. So all these 2.1 Bid Round blocks were not given to Shell or any of the operators.

No. This is very impressive. I won't mention the companies, but it easily can be found on our past review or release. They had 3D data, very advanced 3D data in these shallow blocks. And this is shallow water, so the resolution is very, very good. Actually, one of the dry holes that was not recommended by SFD was dry and had AVO signals, AVO signatures, as being prospective.

Can you explain the AVOs.

AVO is amplitude versus offset, it's considered a delayed hydrocarbon indicator on -- from seismic, and it shows that it can fail. If you don't have a nearby well with a good calibration, it can fail. And in this case, it was a failure. The second one was a success as it was smack right in the middle of an SFD interpreted recommendation. So yes, they have the data, and we're looking forward to make this public with the players in the area in Mexico and elsewhere.

Yes. As a nongeologist, that comparison seems to me, as a layman, to be very, very impressive and should get you some attention, I would think.

That is correct. Yes.

We continue to review the next drilling result. Can you please...

Just addition to what Enrique said, George mentioned earlier during his talk, like 90% to 95% of seismic, you need all the operator needed to drill the well. But the chance of success is 18% in inland and only 7% to 8% in offshore. So your chance of failure is 82%, even if you have a 3D seismic or 2D. So that's why like SFD, Enrique mentioned one of the well which was purely drilled based on seismic. And it has a direct hydrocarbon indicator technologies were used there as well, which is a byproduct of seismic data. But when an SFD flown over those areas, and we recommend nothing, so that's a driver. But well where SFD and seismic agrees, that's where the chance of success goes higher.

One other question, George, and then I'll let everybody else who's on the line -- yes.

Tucker, just one second. One second. Tucker, just one second. Mo would like to say something as well.

Yes. I just had a couple of points from the overall perspective here. Like, these 2 prospects that George mentioned, at the seismic stage, from what we know, they were actually quite similar. They have similar drill costs, they have similar sizes, they have similar chances of success. And SFD recommended one and not the other. Of course, we keep in mind that 6 out of every 7 wells are going to be dry anyway, irrespective of the technology used. So it's relatively easy to say no to something, but it's quite difficult to say yes. And that's where the difference comes from SFD, is that you can say yes more reliably than you can say no.

Yes. That was the import of my question. If I -- because that's what I understood to be the case, but I wanted to make sure I understood that correctly. And that the other characteristics of the sites were similar, so it was a good comparison. And it sounds like my understanding was correct. The other question I had, George, was, in your negotiations, are you, in any cases, attempting to negotiate a royalty interest? And what's the receptivity to that?

Absolutely. And as we progress, actually, the new contract negotiations that we are having in Africa, it gives us the opportunity to have cash, royalty, bonus and participation rights. And the rocks are fantastic. It's a brand new -- these are 2 brand-new blocks, large blocks, but the rocks are very good, good quality. That's very important because that's the only thing we cannot do. We cannot put the oil there. But if there is a potential trapped fluid body there that is hydrocarbons, we will find it. And that's all we can do. But yes, to answer your question.

Your next question is from Chris Fullerton.

George, I just got a couple of points I'd love for you to address, if you don't mind. First of all, oil pricing and the reduction in what oil is going for right now globally. I would think that, that would be a positive impact for your business, and the desire for national firms, the big global firms, wanting to interact with you and have more in-depth conversations because the cost to utilize your services is significantly less than the old guard or how they would do that. So -- or how they historically have gone about drilling for oil. So I would think that this is a positive for you where oil is, so I'd love for you to touch on that real quickly if you can. And I'll be happy to ask all my questions right now or if you want me to do them one at a time.

Since I speak a lot, maybe, Enrique, if you want to speak to that?

[ You. ]

I do. Okay. Well, as we discussed, most of our clients are NOCs, and NOCs cannot stop drilling and cannot stop selling. Otherwise, the company -- I mean, the country goes bankrupt. So from that perspective, I think we made the right choice in the past to focus on them. But I also agree with you with respect to the IOCs, which is the international independents. We are making headways. There are more and more and more companies coming to us and talking to us. And if this COVID-19 situation would not be as it is today, we would be far more advanced in our contracts and so on. It's an unfortunate situation. I know some of you are disappointed with respect to the Nigeria contract did not materialize early enough, late 2019, early 2020. And the reason was that -- they had a good reason. The good reason was that in order to hire NXT and specify exactly where to place the new seismic programs, they had to review the seismic data that they had. You would not believe, but it is true that companies have these large seismic stacks, but they are not reviewing them. There are too many, too much. And as a result of that, we were delayed. They had to get the seismic data from another seismic company that is situated or located in U.K., and it took them 2.5 months to secure it and bring it and so on and so forth. And now the COVID situation is not helping either. So -- also, NNPC and NPDC went through administrative changes. The CEO has been removed, and as a result of that, everybody else is removed. That's how it goes in the oil and gas business because oil and gas business is the most conservative business you can ever encounter. And that's why it is difficult for NXT to push forward and move forward. But I can tell you one thing. The results that we produced in -- and it's not known yet because it's going to be released. But the results that we produced in Nigeria is second to none. Nobody on the planet can do what we did in 3 months. Nobody. And once you see that -- it's always more difficult for investors to understand the intricacies of oil and gas business from the technical perspective, not from the financial, but from the technical. What it means, what we paid out -- for example, with news release, correct, these wells and the well that was drilled in Nigeria, the well that was drilled in the Gulf of Mexico and the following wells that are going to come out, we have not even published the results for this, which is being really pushed by our Board, publishing the results of the previous drilling results because we need -- in many cases, we need the client's approval, and clients are not very happy to give such approvals, unfortunately. Because if the things change, the people change, right now, we have a completely new administration in PEMEX. But the Head of PEMEX who is running PEMEX has approved the technology previously. That's why we are pleased to be back in Mexico.

So you said multiple times on the call that if you could travel, if you could travel, that you think you'd be farther along. The COVID virus has been front and center for 30 days, 40 days, whatever it may be. But every single one of the opportunities that you discussed today or have in the past are opportunities that you've been working on for years. And a lot of these countries, you've had dialogue with for so long. And I guess I'm struggling a little bit to understand how the last 30 to 40 days has really stopped your business. I mean, I'm working from home, I'm in the investment asset management business. I'm working harder than I ever have day-to-day. I got to believe that you're still having incredibly important conversations with a lot of these countries. Why is it so important to be back on the ground traveling? I mean, is that just how the business is?

It's because oil and gas business is a technical business. You have to sit down, you have to show your waveforms, you have to show how you got where you are. It's a face-to-face meeting. Everybody is scattered in Nigeria as well. Everybody is locked down.

So are you doing anything online? WebExes? Anything like that? Or any...

Yes. Almost every day. Almost every day, we have 1 or 2. Actually 3 A.M., we had the other day. So it's -- we accommodate anybody and everybody. And I'm just saying on the line here, if anybody wants to have any -- or any company on this line wants to have any discussions with NXT, wants to have the proofs or follow-ups, anything, we're open. We're open book. But I understand your question and I totally agree with you. Unfortunately, these technical meetings have to take place. They cannot be over the Zoom or GoToMeetings and so on.

And my last question, George, for you and everybody. There's no doubt you're a brilliant individual and you've put some brilliant individuals around you that are very scientific. I mean, I would say you're an inventor and you've done an incredible job of coming out with some amazing technology. But I struggle a little bit with the business side because if you look at your stock over the last 3 years, it's down about 76%. The last 5 years, it's down 86%, 87%. Your volume is almost nonexistent on a day-to-day. And I think anybody that's listening on this call or anybody that owns your stock, the reason why they did it was because they would like to make money. And the last 30 days or 45 days, I understand how that's changed things currently. But when you look at the 3 and the 5-year kind of results from your stock, it's pretty disappointing. And as an investor, I want to know what you're going to do to get your stock going in the right direction.

Okay. There are 2 parts to the answer. One part is that NXT doesn't want the stock to move unless we deliver, okay? It's true that we did not deliver as we hoped for over the last 3 years, except maybe in 2019. We had a very good year and we hope to capitalize on that and continue. We are working on, very diligently, to have individuals or companies. We have interviewed a number of them. We have somebody who is working with us, and we hope that the market conditions are going to change, and we are going to be able to perform and bring the stock at the higher levels. It needs liquidity, as you said. And we need to deliver. And I think that once you start seeing the earnings per share going up significantly and maintained, okay, then everything is going to be fine. And this stock will take off like no other stock, or very few, let's put it that way. Hopefully. Okay? So I am still optimistic that things are going to change very quickly, and we are going to be back to work at the end of May, like fully back to work.

Your next question is from Jerome Hass.

George, my question is more in line with the previous caller. When you look at your financial position at the end of the last reported period, you've got $6.6 million in cash. If you add back the accounts receivable, you're about $8 million worth of cash and liquidity. At a burn of about $3.5 million a year, that's more than 2 years' worth of cash burn. We in the past have applauded your repurchase of the shares from AGV. And we'd like the Board to consider taking $0.5 million of that $8 million of liquidity that you've got available and purchasing some of your shares. It represents less than 3% of your shares outstanding. You're at $0.5 million. If you had an NCIB up to 5%, that would be less than $900,000. We'd like to see some of this cash put to use. And if the Board has the same confidence that you project in the call, why not put that money to use?

Jerome, it's Eugene. A great suggestion. And you have mentioned this in the past also. It's something we continue to discuss and one of the options we will be considering. But we will obviously do that at the right time. And we'll keep everybody updated if that -- if and when we do that.

But to the previous caller's point, if you really want to distinguish yourself in this type of environment, announcing an NCIB when everyone else is struggling with liquidity and cash would get people's attention, and it would show the confidence of management and the Board in the company and its prospects. And I actually think that, for the first time in a couple of years, you're in a position to do so. And I strongly distinguish you -- encourage you to try and distinguish yourself from the pack at this point.

Okay. We take your comments in consideration. Thank you.

Why don't we have an off-line discussion on this? We'd like to know more what are your thoughts because you have been very helpful and very, very faithful, if I may use the word, investor of NXT. You have a significant position in this company. And I myself, I am open to it. And also, I know several Board members would be interested in it. Now of course, it will be much easier to grab a $20 million contract and do so, we will do it next day. We will buy half of the float back. But at this point of time, maybe we can coordinate something or discuss it a little bit in more detail.

Your next question is from Stan Trilling.

First of all, I want to respectfully disagree with the last caller. The company has done one hell of a statement in buying back 6.8% of the company's stock. If that isn't saying they have faith in the company, that was not a small -- that was a great opportunity, and I congratulate you on doing that. But right now, I think the -- you have more important fish to fry than buying stock back, okay? But here's one thing. I was -- you answered one question, and I was a little disappointed in the answer, having to do with how many wells have been completed based on surveys you've done? And how many wells have been drilled? And of those wells, how many were commercial wells and to what extent were they commercial? Now you said the people don't want to talk about it. We -- you don't have to give names, okay? You don't have to give names. But if you can validate that you have, in Bolivia, that you've -- there were 6 wells drilled. And of the 6, only 2 of them you recommended, but they drilled 4 others. What was the results there? And what was the commercial viability of the 2 that were hit? But a complete picture of all of the wells, you have all of -- based on surveys you have completed. How many wells have been drilled? And how many wells were drilled that were recommended by [ NSF, NFC ]? And what was the commercial value of those wells? That -- I think that tells the story as loud and as clear as can be told. And I understand the issue that some of these people who want to. Why can't you not name names? You don't have to name names. But if you have documentation of your success. And you have an idea, you have a good idea what came in. Why can't you say you have this information and show this information?

Okay. So this is Mo here. So I'm going to attempt to answer this in a slightly general terms like you suggested, Stan. The first thing is, from an overall point of view, 23 NXT recommendations have been drilled to date, and we're only counting -- have been drilled...

23 recommended. Okay.

And we're only counting the time period -- sorry, we are not including Canada and the U.S. in that because that's a completely different data set. So not including Canada and the United States, we've had 23 recommendations drilled, 17 of which have been successful.

Now can you define successful from how many barrels to -- what's been the range of the -- of this success?

Okay. Again, I'm going to attempt to phrase this from a limited data set. And we're only going to do this because, as George explained, not everybody has given permission. And in the...

No. No. You don't have to -- well hold on, hold on. We're not asking names to be named.

Okay.

There should -- we're asking, what was the success rate? Not the Bolivia, not the Mexican, not...

We can choose not to name names, but in some countries, we've only done one survey. So it's relatively trivial for somebody to figure out who we are talking about.

But they don't know if it's only -- that will be hidden in -- that's hidden in the numbers. That's -- you have -- if you say 23 wells have been drilled, and 1 -- that 1 well is going to be hidden in those numbers.

Not wells, it's prospect...

Prospect, okay.

Okay. Now that being said, Stan, like we can share some statistics with you that we have permission to share or we are able to share from the 2009/2010 time frame, which is reasonable given the length of the exploration cycle, how long it takes for something to get on stream from the moment of recommendation. From the 2009/2010 time frame, roughly 40% -- no, 30% of NXT's recommendations have been drilled. 11 of them have proven to be commercially successful out of 15. Commercial success is something that varies from country to country. It is not a uniform definition, but in the countries concerned, we are talking commercial success. The total investment that has gone into SFD surveys is just under $5 million. And NXT has delivered -- and on those prospects, about 2.8 billion barrels of reserves have been found. And this is in the 2009/2010 time frame when oil prices were not at $20. So you can calculate the return on SFD from there.

That just concerns South America. And then we have Mexico, where many more wells have been -- prospects have been drilled or recommendations. Please remember, everybody, that these are stand-alone prospects. There is no production there, 0, so -- before. So it's very important to understand that. So there are, I don't know, about 6 of them in Mexico, there are 7 with dry hole. So the 6 that we recommended are producing. It doesn't mean that we don't have failures, correct, or we will not have failures, but it's standing up. And average production is probably over 100 -- not production, but the reserve is over 100 million barrels in place. So from that, you can see that this technology can deliver. The problem for us is this long cycle. We did a survey in 2012. They just drilled the latest one in 2019. How many barrels? 247 million barrels in place, 247 million. Are we going back? Yes, we are going back. But that's the problem. It takes so long for the industry to verify these results. But we are publishing. You're going to have new ones coming out in the next news release and the next release, and we're going to start publishing them, and they are very good. Now that is one of the reasons why we want to create verticals. But we cannot do them until we reach a significant number of wells that are going to be drilled, which is about -- or prospects which are going to be drilled, it's about 32, 34.

When will you be able to talk about the commercial value of the Nigerian well that was drilled?

When they give us the permission. There are multiple zones. This is going to be the first producing well after 17 dry holes, so it's pretty good. And they are drilling another one. So that's why we are getting the new opportunities. Otherwise, we wouldn't. I mean, you can introduce this company to many companies, correct. But the reality is that we have to deliver. NXT have to deliver. And that is our strength. We have never ever failed to deliver. Every time, we deliver. That's why we get paid. Even from countries that, oh, nobody is going to pay you, every one of them paid us on time.

Has there ever been a well that was suggested only on NXT's recommendation with no seismic?

Mo.

Yes, there have been those examples, and they are located almost entirely in Canada. And that is purely because of the larger data set control that is available in Canada that you're able to do that. We keep in mind that this, we have to use seismic in areas with sparse data.

Whether seismic is there or not, it doesn't really matter because we never know where the seismic is. Or you can know at 50,000 square kilometer area, there is seismic, so what? They designed the seismic line -- I mean, their flight lines, always the client, and we just fly it and we give them the data.

One question regarding the sensor's ability. One of the things in the past is that you can tell whether the reservoir is trapped, but you can't tell whether that reservoir is petrochemical or not. Is size -- will seismic eventually be able to differentiate that, that is petrochemical or gas versus water?

Okay. We can answer that with an example that George just mentioned in his speech. The well in Mexico that came up dry and it did not have NXT recommendation on it, that well had a direct hydrocarbon study done on it by the operator. The direct hydrocarbon study was positive, that's why they drilled. It, and they hit a dry hole.

So the seismic -- the trap was there, the reservoir was there...

The hydrocarbon.

But the hydrocarbon wasn't there.

Okay. All right. But it didn't say that it was -- well, all right. The question was, is it -- because I don't know what percentage of trapped liquids are not petroleum.

93%. 93%. So if you drill 100 wells, offshore, 93 or 92 are going to be dry holes by default. So it's very difficult to say this well will produce...

But those are wildcats.

All of them, yes.

Yes, where you're just drilling into the ground not knowing where you're drilling. Anyway.

Your next question is from Richard Love.

George, the giant refinery in Lagos, Nigeria. Is work continuing forward to completion? Or has it been postponed?

I do not know because of the COVID-19. I have no idea right now. Nigeria refinery?

Yes, we don't know.

Your last question is from David Adelman.

A couple of my questions have been already answered by the previous callers about liquidity. One question I have is you've put out a few announcements about Alberta Green Ventures and $250,000 in lieu of stock. What is your chances of recovering of that and when?

David, it's Eugene. Let me answer that. Our loan agreement with AGV allows us to select being repaid with shares or cash. We were not able to reach an agreement on the price of the shares under the share settlement range with AGV and within the framework required for regulatory approvals. So therefore, this gave rise for us to instruct AGV to repay the loan with cash as of yesterday, April 13. So AGV continues to be our significant partner and one of our largest shareholders. And together, we are looking at SFD opportunities in several regions. And at this point, we just -- as of yesterday, asked for the cash.

Okay. I understand. I saw the announcement. I just wondered if you were anticipating payment from them the last few -- in the short term or long term.

Yes. We're expecting -- we've had good discussions with AGV, and we expect payment shortly. We have no reason not to believe that.

And there are no further question at this time. Presenters, you may continue.

Well, thank you very much. We would like to then close the Investors Conference Call. And on behalf of NXT, I wish you good health and stay safe. Thank you again. Until our next update.

This concludes today's conference call. Thank you, everyone, for participating. You may now disconnect.