Petrus Resources Ltd. press release
Petrus Resources Announces Third Quarter 2024 Financial & Operating Results
TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada
CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Petrus Resources Ltd. (“Petrus” or the “Company”) (TSX: PRQ) is pleased to report financial and operating results as at and for the three and nine months ended September 30, 2024.
Q3 2024 HIGHLIGHTS:
Dividends – Petrus continued its monthly dividend payment of $0.01 per share throughout the third quarter, totaling $3.7 million. Including the dividend declared on November 4, 2024, by the end of November shareholders will have cumulatively received $0.14 per share, or $17.4 million in dividends since the Company began paying dividends in Q4 2023. Based on the average closing share price for Q3 2024 of $1.34 per share, the current dividend yield is approximately 9% annually.
Production – Production for the third quarter of 2024 averaged 9,215 boe/d (1) , as compared to 9,471 boe/d in the second quarter of 2024. The 3% decrease was primarily due to scheduled downtime associated with third party maintenance, and strategic shut-ins due to low natural gas prices.
Increased oil production – Average oil (1) production for the third quarter of 2024 increased to 1,522 bbl/d, up 15% from 1,322 bbl/d in the second quarter of 2024. New wells brought on production in July contributed to the increased oil production in the third quarter, reflecting Petrus' increased focus on oil-weighted development.
Commodity prices – Total realized price was $24.07/boe in the third quarter of 2024, down by 10% from $26.81/boe in the second quarter. Realized natural gas and oil prices fell by 43% and 12%, respectively.
Funds flow (2) – Generated funds flow of $10.7 million ($0.09 per share ( 2 ) ) in the third quarter of 2024, up slightly from $10.6 million ($0.09 per share) reported in the second quarter of 2024. The decreases in gas and NGL production and commodity prices were offset by higher oil production and realized gains on hedge contract settlements.
Net debt (2) – Petrus reduced net debt by $1.4 million to $60.4 million during the third quarter of 2024.
OUTLOOK ( 3 )
In September, the Company resumed its capital program with a plan to drill 3 (1.3 net) extended reach wells in the second half of the year. The remainder of the 2024 capital program is expected to be funded through funds flow, with debt expected to remain relatively flat for the balance of 2024.
For the next 12 months, the Company has hedged approximately 52% of forecasted production at an average of $2.98/GJ for natural gas and CAD$94.00/bbl for oil.
The Company is well-positioned to continue its monthly dividend payments. As always, Petrus will closely monitor market conditions and is prepared to adjust its capital program as needed, guided by its commitment to delivering sustainable returns to shareholders.
THIRD QUARTER 2024 CONFERENCE CALL
Date: November 7, 2024 Time: 9:00 am (mountain time) Please refer to the events page on Petrus' website for conference call details and links: www.petrusresources.com/events
MONTHLY ACTIVITY UPDATE
The most recent version of the Company's monthly activity update can be found on the Company's website at www.petrusresources.com/monthlyupdates
An updated corporate presentation can be found on the Company's website at www.petrusresources.com.
(1) Disclosure of production on a per boe basis consists of the constituent product types and their respective quantities. Refer to "BOE Presentation" and "Production & Product Type Information" for further details. (2) Non-GAAP financial measure. Refer to "Non-GAAP and Other Financial Measures" (3) Refer to "Advisories - Forward-Looking Statements".
SELECTED FINANCIAL INFORMATION
| OPERATIONS | Three months ended
Sept. 30, 2024 | | Three months ended
Sept. 30, 2023 | | Three months ended
Jun. 30, 2024 | | Three months ended
Mar. 31, 2024 | | Three months ended
Dec. 31, 2023 | | | Average Production | | | | | | | | | | | | Natural gas (mcf/d) | 37,368 | | 42,045 | | 38,908 | | 40,174 | | 39,891 | | | Oil and condensate (bbl/d) | 1,522 | | 1,316 | | 1,322 | | 1,529 | | 1,218 | | | NGLs (bbl/d) | 1,465 | | 1,556 | | 1,664 | | 1,557 | | 1,607 | | | Total (boe/d) | 9,215 | | 9,880 | | 9,471 | | 9,783 | | 9,474 | | | Total (boe) (1) | 847,760 | | 908,985 | | 861,838 | | 890,267 | | 871,567 | | | Liquids weighting | 32 | % | 29 | % | 32 | % | 32 | % | 30 | % | | Realized Prices | | | | | | | | | | | | Natural gas ($/mcf) | 0.80 | | 2.81 | | 1.41 | | 2.54 | | 2.76 | | | Oil and condensate ($/bbl) | 90.80 | | 99.33 | | 103.77 | | 90.38 | | 98.63 | | | NGLs ($/bbl) | 36.81 | | 37.09 | | 37.25 | | 43.09 | | 37.26 | | | Total realized price ($/boe) | 24.07 | | 31.05 | | 26.81 | | 31.42 | | 30.60 | | | Royalty income | 0.05 | | 0.06 | | 0.05 | | 0.07 | | 0.09 | | | Royalty expense | (3.06 | ) | (3.37 | ) | (3.83 | ) | (3.89 | ) | (4.78 | ) | | Net oil and natural gas revenue ($/boe) | 21.06 | | 27.74 | | 23.03 | | 27.60 | | 25.91 | | | Operating expense | (6.10 | ) | (6.70 | ) | (4.96 | ) | (6.76 | ) | (5.07 | ) | | Transportation expense | (1.46 | ) | (1.54 | ) | (1.46 | ) | (1.81 | ) | (1.46 | ) | | Operating netback (2) ($/boe) | 13.50 | | 19.50 | | 16.61 | | 19.03 | | 19.38 | | | Realized gain (loss) on financial derivatives | 2.49 | | 1.21 | | (0.36 | ) | 2.90 | | 1.99 | | | Other cash income (expense) | 0.09 | | 0.04 | | 0.05 | | 0.05 | | (0.18 | ) | | General & administrative expense | (1.43 | ) | (1.27 | ) | (1.34 | ) | (1.32 | ) | (0.37 | ) | | Cash finance expense | (1.95 | ) | (1.26 | ) | (1.91 | ) | (1.78 | ) | (1.43 | ) | | Decommissioning expenditures | (0.12 | ) | (0.34 | ) | (0.72 | ) | (0.61 | ) | (0.43 | ) | | Funds flow & corporate netback (2) ($/boe) | 12.58 | | 17.88 | | 12.33 | | 18.27 | | 18.96 | | | | | | | | | | | | | | | FINANCIAL (000s except $ per share) | Three months ended
Sept. 30, 2024 | | Three months ended
Sept. 30, 2023 | | Three months ended
Jun. 30, 2024 | | Three months ended
Mar. 31, 2024 | | Three months ended
Dec. 31, 2023 | | | Oil and natural gas sales | 20,446 | | 28,273 | | 23,150 | | 28,039 | | 26,747 | | | Net income (loss) | 5,302 | | (11,293 | ) | 2,789 | | (5,333 | ) | 39,708 | | | Net income (loss) per share | | | | | | | | | | | | Basic | 0.04 | | (0.09 | ) | 0.02 | | (0.04 | ) | 0.32 | | | Fully diluted | 0.04 | | (0.09 | ) | 0.02 | | (0.04 | ) | 0.32 | | | Funds flow (2) | 10,665 | | 16,243 | | 10,628 | | 16,272 | | 16,525 | | | Funds flow per share (2) | | | | | | | | | | | | Basic | 0.09 | | 0.13 | | 0.09 | | 0.13 | | 0.13 | | | Fully diluted | 0.08 | | 0.13 | | 0.08 | | 0.13 | | 0.13 | | | Capital expenditures | 4,859 | | 21,617 | | 6,907 | | 12,343 | | 32,029 | | | Weighted average shares outstanding | | | | | | | | | | | | Basic | 124,372 | | 123,743 | | 124,290 | | 124,299 | | 123,812 | | | Fully diluted | 126,686 | | 123,743 | | 126,559 | | 124,299 | | 124,840 | | | As at period end | | | | | | | | | | | | Common shares outstanding | | | | | | | | | | | | Basic | 124,372 | | 123,867 | | 124,372 | | 124,259 | | 124,266 | | | Fully diluted | 134,952 | | 134,436 | | 134,919 | | 134,484 | | 134,542 | | | Total assets | 421,196 | | 380,100 | | 419,584 | | 427,574 | | 437,842 | | | Non-current liabilities | 62,869 | | 59,687 | | 59,511 | | 59,995 | | 60,926 | | | Net debt (2) | 60,423 | | 42,251 | | 61,848 | | 63,114 | | 62,596 | |
(1) Disclosure of production on a per boe basis consists of the constituent product types and their respective quantities. Refer to "BOE Presentation" and "Production and Product Type Information" for further details.
(2) Non-GAAP financial measure or non-GAAP ratio. Refer to "Non-GAAP and Other Financial Measures".
OPERATIONS UPDATE
Third quarter average production by area was as follows:
| For the three months ended September 30, 2024 | Ferrier | | Foothills | | Central Alberta | | Total | | | Natural gas (mcf/d) | 32,273 | | 599 | | 4,496 | | 37,368 | | | Oil and condensate (bbl/d) | 1,222 | | 54 | | 246 | | 1,522 | | | NGLs (bbl/d) | 1,347 | | 1 | | 117 | | 1,465 | | | Total (boe/d) | 7,948 | | 155 | | 1,112 | | 9,215 | |
Third quarter average production was 9,215 boe/d in 2024 compared to 9,880 boe/d in Q3 2023. The 9.7% decrease in production from the prior year comparative period was mainly due to a decrease in drilling and completion activity, natural declines and uneconomic wells shut-in due to low gas prices.
Completion activities for the wells drilled earlier in 2024 began in late June and the wells commenced production in late July.
CAPITAL EXPENDITURES
Capital expenditures (excluding acquisitions and dispositions) totaled $4.9 million in the third quarter of 2024, compared to $21.6 million in the prior year comparative period. The majority of the capital spent in the third quarter of 2024 is related to the drilling of 1 (0.6 net) well and also includes some costs related to the completion of wells drilled earlier in 2024.
The following table shows capital expenditures (excluding acquisitions and dispositions) for the reporting periods indicated. All capital is presented before decommissioning obligations.
| Capital Expenditures ($000s) | Three months ended
September 30, 2024 | | Three months ended
September 30, 2023 | | Nine months ended
September 30, 2024 | | Nine months ended
September 30, 2023 | | | Drill and complete | 3,290 | | 17,058 | | 18,818 | | 41,768 | | | Oil and gas equipment | 1,199 | | 4,200 | | 4,429 | | 11,277 | | | Geological | — | | — | | — | | 545 | | | Land and lease | 114 | | — | | 121 | | 217 | | | Office | — | | 7 | | 6 | | 109 | | | Capitalized general and administrative expense | 256 | | 352 | | 735 | | 898 | | | Total capital expenditures | 4,859 | | 21,617 | | 24,109 | | 54,814 | | | Gross (net) wells drilled | 1 (0.6) | | 6 (3.4) | | 11 (5.8) | | 13 (10.4) | |
For further information, please contact:
Ken Gray, P.Eng. President and Chief Executive Officer T: (403) 930-0889 E: kgray@petrusresources.com
NON-GAAP AND OTHER FINANCIAL MEASURES
This press release makes reference to the terms "operating netback" (on an absolute and $/boe basis), "corporate netback" (on an absolute and $/boe basis), "funds flow" (on an absolute, per share (basic and fully diluted) and $/boe basis), and "net debt". These non-GAAP and other financial measures are not recognized measures under GAAP (IFRS) and do not have a standardized meaning prescribed by GAAP (IFRS). Accordingly, the Company's use of these terms may not be comparable to similarly defined measures presented by other companies. These non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS as indicators of our performance. Management uses these non-GAAP and other financial measures for the reasons set forth below.
Operating Netback Operating netback is a common non-GAAP financial measure used in the oil and natural gas industry which is a useful supplemental measure to evaluate the specific operating performance by product type at the oil and natural gas lease level. The most directly comparable GAAP measure to operating netback is oil and natural gas sales. Operating netback is calculated as oil and natural gas sales less royalty expenses, gain (loss) on risk management activities, operating expenses and transportation expenses. See below for a reconciliation of operating netback to oil and natural gas sales.
Operating netback ($/boe) is a non-GAAP ratio used in the oil and natural gas industry which is a useful supplemental measure to evaluate the specific operating performance by product type at the oil and natural gas lease level . It is calculated as operating netbacks divided by weighted average daily production on a per boe basis. See below.
Corporate Netback and Funds Flow Corporate netback or funds flow is a common non-GAAP financial measure used in the oil and natural gas industry which evaluates the Company’s profitability at the corporate level. Corporate netback and funds flow are used interchangeably. Petrus analyzes these measures on an absolute value and on a per unit (boe) and per share (basic and fully diluted) basis as non-GAAP ratios. Management believes that funds flow and corporate netback provide information to assist a reader in understanding the Company's profitability relative to current commodity prices. They are calculated as the operating netback less general and administrative expense, cash finance expense and decommissioning expenditures, plus or minus other income (expense) and the realized gain (loss) on financial derivatives. See below for a reconciliation of funds flow and corporate netback to oil and natural gas sales.
Corporate netback ($/boe) or funds flow ($/boe) is a non-GAAP ratio used in the oil and natural gas industry which evaluates the Company’s profitability at the corporate level. Management believes that funds flow ($/boe) or corporate netback ($/boe) provide information to assist a reader in understanding the Company's profitability relative to current commodity prices. It is calculated as corporate netbacks or funds flow divided by weighted average daily production on a per boe basis. See below.
Funds flow per share (basic and fully diluted) is comprised of funds flow divided by basic or fully diluted weighted average common shares outstanding.
| | Three months ended
Sept. 30, 2024 | Three months ended
Sept. 30, 2023 | Nine months ended
September 30, 2024 | Nine months ended
September 30, 2023 | | | | | | | | | | | | | | | $000s | $/boe | $000s | $/boe | $000s | $/boe | $000s | $/boe | | | | | | | | | | Oil and natural gas sales | 20,446 | | 24.12 | | 28,273 | | 31.11 | | 71,635 | | 27.55 | | 98,858 | | 34.23 | | | Royalty expense | (2,593 | ) | (3.06 | ) | (3,061 | ) | (3.37 | ) | (9,359 | ) | (3.60 | ) | (13,088 | ) | (4.53 | ) | | Gain (loss) on risk management activities | — | | — | | — | | — | | — | | — | | 1,522 | | 0.53 | | | Net oil and natural gas revenue | 17,853 | | 21.06 | | 25,212 | | 27.74 | | 62,276 | | 23.95 | | 87,292 | | 30.23 | | | Transportation expense | (1,239 | ) | (1.46 | ) | (1,401 | ) | (1.54 | ) | (4,113 | ) | (1.58 | ) | (4,844 | ) | (1.68 | ) | | Operating expense | (5,172 | ) | (6.10 | ) | (6,086 | ) | (6.70 | ) | (15,461 | ) | (5.95 | ) | (19,086 | ) | (6.61 | ) | | Operating netback | 11,442 | | 13.50 | | 17,725 | | 19.50 | | 42,702 | | 16.42 | | 63,362 | | 21.94 | | | Realized gain (loss) on financial derivatives | 2,115 | | 2.49 | | 1,102 | | 1.21 | | 4,391 | | 1.69 | | 6,314 | | 2.19 | | | Other income (1) | 77 | | 0.09 | | 34 | | 0.04 | | 166 | | 0.06 | | 240 | | 0.08 | | | General & administrative expense | (1,209 | ) | (1.43 | ) | (1,158 | ) | (1.27 | ) | (3,539 | ) | (1.36 | ) | (3,864 | ) | (1.34 | ) | | Cash finance expense | (1,657 | ) | (1.95 | ) | (1,148 | ) | (1.26 | ) | (4,888 | ) | (1.88 | ) | (3,557 | ) | (1.23 | ) | | Decommissioning expenditures | (103 | ) | (0.12 | ) | (312 | ) | (0.34 | ) | (1,265 | ) | (0.49 | ) | (998 | ) | (0.35 | ) | | Funds flow and corporate netback | 10,665 | | 12.58 | | 16,243 | | 17.88 | | 37,567 | | 14.44 | | 61,497 | | 21.29 | |
(1) Excludes non-cash government grant related to decommissioning expenditures.
_ _
| | Three months ended
Jun. 30, 2024 | Three months ended
March 31, 2024 | Three months ended
Dec. 31, 2023 | | | | | | | | | | | | $000s | $/boe | $000s | $/boe | $000s | $/boe | | | | | | | | Oil and natural gas sales | 23,150 | | 26.86 | | 28,039 | | 31.50 | | 26,747 | | 30.70 | | | Royalty expense | (3,305 | ) | (3.83 | ) | (3,461 | ) | (3.89 | ) | (4,167 | ) | (4.78 | ) | | Net oil and natural gas revenue | 19,845 | | 23.03 | | 24,578 | | 27.61 | | 22,580 | | 25.92 | | | Transportation expense | (1,259 | ) | (1.46 | ) | (1,615 | ) | (1.81 | ) | (1,271 | ) | (1.46 | ) | | Operating expense | (4,271 | ) | (4.96 | ) | (6,018 | ) | (6.76 | ) | (4,419 | ) | (5.07 | ) | | Operating netback | 14,315 | | 16.61 | | 16,945 | | 19.04 | | 16,890 | | 19.39 | | | Realized gain (loss) on financial derivatives | (307 | ) | (0.36 | ) | 2,583 | | 2.90 | | 1,737 | | 1.99 | | | Other income (expense) (1) | 40 | | 0.05 | | 48 | | 0.05 | | (161 | ) | (0.18 | ) | | General & administrative expense | (1,152 | ) | (1.34 | ) | (1,178 | ) | (1.32 | ) | (319 | ) | (0.37 | ) | | Cash finance expense | (1,650 | ) | (1.91 | ) | (1,581 | ) | (1.78 | ) | (1,246 | ) | (1.43 | ) | | Decommissioning expenditures | (618 | ) | (0.72 | ) | (545 | ) | (0.61 | ) | (376 | ) | (0.43 | ) | | Funds flow and corporate netback | 10,628 | | 12.33 | | 16,272 | | 18.28 | | 16,525 | | 18.97 | |
(1) Excludes non-cash government grant related to decommissioning expenditures.
Net Debt Net debt is a non-GAAP financial measure and is calculated as the sum of long term debt and working capital (current assets and current liabilities), excluding the current financial derivative contracts and current portion of the lease obligation and decommissioning obligation. Petrus uses net debt as a key indicator of its leverage and strength of its balance sheet. Net debt is reconciled, in the table below, to long-term debt which is the most directly comparable GAAP measure.
| ($000s) | As at Sep. 30, 2024 | As at Sept. 30, 2023 | As at Jun. 30, 2024 | As at March 31, 2024 | As at Dec. 31, 2023 | | | | | | | Long-term debt | 25,000 | | 25,000 | | 25,000 | | 25,000 | | 25,000 | | | Current assets | (20,258 | ) | (19,375 | ) | (16,333 | ) | (21,081 | ) | (30,805 | ) | | Current liabilities | 48,458 | | 40,636 | | 52,379 | | 61,099 | | 61,755 | | | Current financial derivatives | 7,690 | | (3,397 | ) | 1,276 | | (716 | ) | 8,374 | | | Current portion of lease obligation | (230 | ) | (254 | ) | (237 | ) | (263 | ) | (258 | ) | | Current portion of decommissioning obligation | (237 | ) | (359 | ) | (237 | ) | (925 | ) | (1,470 | ) | | Net debt | 60,423 | | 42,251 | | 61,848 | | 63,114 | | 62,596 | |
ADVISORIES Basis of Presentation Financial data presented above has largely been derived from the Company’s financial statements, prepared in accordance with GAAP which require publicly accountable enterprises to prepare their financial statements using IFRS. Accounting policies adopted by the Company are set out in the notes to the audited consolidated financial statements as at and for the twelve months ended December 31, 2023. The reporting and the measurement currency is the Canadian dollar. All financial information is expressed in Canadian dollars, unless otherwise stated.
Forward-Looking Statements Certain information regarding Petrus set forth in this press release contains forward-looking statements within the meaning of applicable securities law, that involve substantial known and unknown risks and uncertainties. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe” and similar expressions are intended to identify forward-looking statements. Such statements represent Petrus’ internal projections, estimates, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Petrus believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Petrus’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Petrus. In particular, forward-looking statements included in this press release include, but are not limited to statements with respect to: our increased focus on oil-weighted development; the details of our capital program in the second half of the year, including the number and type of wells that we intend to drill; that the remainder of our 2024 capital program is expected to be funded through funds flow, with debt expected to remain relatively flat for the balance of 2024; our belief that, for the next 12 months, we have hedged approximately 52% of forecasted production and the details of such hedges; our belief that we are well-positioned to continue our monthly dividend payments; and our intention to closely monitor market conditions and that we are prepared to adjust our capital program as needed, guided by our commitment to delivering sustainable returns to shareholders. In addition, statements relating to “reserves” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.