Riley Exploration Permian, Inc. press release

LOGAN ENERGY CORP. ANNOUNCES RECORD PRODUCTION AND CASH FLOW WITH THIRD QUARTER 2024 RESULTS AND PROVIDES AN OPERATIONS UPDATE

2024-11-13

NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · United States

Canada NewsWire

CALGARY, AB , Nov. 13, 2024 /CNW/ - Logan Energy Corp. (TSXV: LGN) (" Logan " or the " Company ") is pleased to announce its operating and financial results for the three and nine months ended September 30, 2024 , and to provide details of its expanded Duvernay land position along with an operations update.

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Selected financial and operational information set out below should be read in conjunction with the Company's unaudited interim financial statements and related management's discussion and analysis (" MD&A ") as at and for the three and nine months ended September 30, 2024 and 2023. These documents are filed on SEDAR+ at www.sedarplus.ca and are available on the Company's website at www.loganenergycorp.com . The highlights reported throughout this press release include certain non-GAAP measures and ratios which have been identified using capital letters and are defined herein. The reader is cautioned that these measures may not be directly comparable to other issuers; refer to additional information under the heading "Reader Advisories – Non-GAAP Measures and Ratios" .

THIRD QUARTER 2024 HIGHLIGHTS

Logan achieved corporate record quarterly average production of 9,942 BOE per day (35% liquids), an increase of 84% compared to 5,394 BOE per day (24% liquids) in the same quarter of 2023. The increase in production is a culmination of an active drilling program in the first half of the year, pursuant to which Logan brought six wells onstream to date in 2024, including a three well pad at Pouce Coupe in mid-May and a three well pad at South Simonette in late-July.

Logan also reported strong financial results for the third quarter driven by significantly lower per unit costs, highlighting the Company's operating leverage and continued momentum of its organic development program. The Company's Operating Netback after hedging averaged $21.35 per BOE during the quarter ended September 30, 2024 , an increase of 95% from $10.94 per BOE in the comparative quarter ended September 30, 2023 . Despite AECO 5A natural gas prices reaching a 20 year quarterly average low of $0.65 per GJ during the third quarter, Logan's average realized selling price was bolstered by significant oil production growth together with continued strength of crude oil prices. Operating expenses averaged $9.58 per BOE in the third quarter, a decrease of 39% from $15.80 per BOE the comparative quarter of 2023. The Company's average royalty rate decreased to 8.0% in the current quarter reflecting the benefit of royalty incentives on new production as well as materially lower natural gas prices.

Logan generated record Adjusted Funds Flow of $17.6 million ( $0.04 per share, diluted) in the third quarter of 2024, up 242% from $5.2 million ( $0.01 per share, diluted) in the third quarter of 2023. Capital Expenditures before A&D were $31.4 million for the three months ended September 30, 2024 , of which Logan spent $5.9 million on land and lease retention, $17.1 million on completions, and $8.4 million on facilities, pipelines and well equipment. As of September 30, 2024 , Logan had Net Debt of $35.1 million or 0.5 times its annualized Adjusted Funds Flow for the third quarter. Subsequent to the quarter on October 3, 2024 , the Company further strengthened its liquidity and financial position: Closed a bought-deal private placement equity financing for gross proceeds of $50.0 million . Net proceeds were used initially to repay outstanding bank debt in full. Directors and officers of the Company participated for approximately $5.0 million or 10% of the private placement. Established new committed credit facilities with aggregate borrowing capacity of $125.0 million .

The following table summarizes selected highlights for the three and nine month periods ended September 30, 2024 and September 30, 2023 :

| | Three months ended September 30 | Nine months ended September 30 | | | | | | (CA$ thousands, except as otherwise noted) | 2024 | 2023 | % | 2024 | 2023 | % | | FINANCIAL HIGHLIGHTS | | | | | | | | Oil and gas sales | 30,549 | 17,488 | 75 | 81,523 | 50,205 | 62 | | Net income (loss) and comprehensive income (loss) | 6,280 | (10,708) | nm | 4,705 | (45,190) | nm | | $ per common share, basic and diluted | 0.01 | (0.03) | nm | 0.01 | (0.18) | nm | | Cash provided by operating activities | 18,233 | 5,158 | 253 | 38,427 | 12,778 | 201 | | Adjusted Funds Flow (1) | 17,641 | 5,159 | 242 | 36,230 | 13,955 | 160 | | $ per common share, basic (1) | 0.04 | 0.01 | 300 | 0.08 | 0.05 | 60 | | $ per common share, diluted (1) | 0.04 | 0.01 | 300 | 0.07 | 0.05 | 40 | | Capital Expenditures before A&D (1) | 31,369 | 33,536 | (6) | 112,655 | 39,838 | 183 | | Acquisitions | 50 | 5,144 | (99) | 350 | 5,244 | (93) | | Total assets | 267,304 | 218,390 | 22 | 267,304 | 218,390 | 22 | | Net Debt (Surplus) (1) | 35,148 | (67,374) | nm | 35,148 | (67,374) | nm | | Shareholders' equity | 182,734 | 162,165 | 13 | 182,734 | 162,165 | 13 | | Common shares outstanding (000s), end of period (2) | 465,537 | 465,537 | - | 465,537 | 465,537 | - | | OPERATING HIGHLIGHTS AND NETBACKS (5) | | | | | | | | Average daily production | | | | | | | | Crude oil (bbls/d) | 2,873 | 782 | 267 | 2,269 | 732 | 210 | | Condensate (bbls/d) (3) | 125 | 243 | (49) | 204 | 265 | (23) | | Natural gas liquids (bbls/d) (3) | 483 | 273 | 77 | 342 | 219 | 56 | | Natural gas (mcf/d) | 38,768 | 24,573 | 58 | 31,620 | 24,108 | 31 | | BOE/d | 9,942 | 5,394 | 84 | 8,085 | 5,234 | 54 | | % Liquids (4) | 35 % | 24 % | 46 | 35 % | 23 % | 52 | | Average realized prices, before financial instruments | | | | | | | | Crude oil ($/bbl) | 91.98 | 108.60 | (15) | 94.14 | 101.37 | (7) | | Condensate ($/bbl) (3) | 89.55 | 105.22 | (15) | 92.83 | 97.70 | (5) | | Natural gas liquids ($/bbl) (3) | 52.65 | 50.65 | 4 | 52.71 | 48.83 | 8 | | Natural gas ($/mcf) | 0.80 | 2.67 | (70) | 1.48 | 3.03 | (51) | | Combined average ($/BOE) | 33.40 | 35.24 | (5) | 36.80 | 35.14 | 5 | | Netbacks ($/BOE) (5) | | | | | | | | Oil and gas sales | 33.40 | 35.24 | (5) | 36.80 | 35.14 | 5 | | Processing and other revenue | 0.98 | 1.76 | (44) | 1.10 | 1.77 | (38) | | Royalties | (2.66) | (5.85) | (55) | (3.31) | (5.04) | (34) | | Operating expenses | (9.58) | (15.80) | (39) | (13.39) | (16.03) | (16) | | Transportation expenses | (2.32) | (4.41) | (47) | (3.16) | (3.77) | (16) | | Operating Netback, before hedging (5) | 19.82 | 10.94 | 81 | 18.04 | 12.07 | 49 | | Realized gain on derivative financial instruments | 1.53 | - | - | 0.42 | - | - | | Operating Netback, after hedging (5) | 21.35 | 10.94 | 95 | 18.46 | 12.07 | 53 | | General and administrative expenses | (1.51) | (2.52) | (40) | (2.01) | (2.81) | (28) | | Financing income (expenses) (6) | (0.43) | 1.98 | nm | 0.18 | 0.68 | (74) | | Settlement of decommissioning obligations | (0.12) | (0.01) | nm | (0.28) | (0.18) | 56 | | Adjusted Funds Flow Netback (5) | 19.29 | 10.39 | 86 | 16.35 | 9.76 | 68 |

| (1) | "Adjusted Funds Flow", "Capital Expenditures before A&D", and "Net Debt" do not have standardized meanings under IFRS Accounting Standards, refer to "Non-GAAP Measures and Ratios" section of this press release. | | (2) | Refer to "Share Capital" section of this press release. An additional 68.5 million common shares were subsequently issued pursuant to the private placement which closed on October 3, 2024. | | (3) | Condensate is a natural gas liquid (" NGL ") as defined by NI 51-101. See "Other Measurements". | | (4) | "Liquids" includes crude oil, condensate and NGLs. | | (5) | "Netbacks" are non-GAAP financial ratios calculated per unit of production. "Operating Netback", and "Adjusted Funds Flow Netback" do not have standardized meanings under IFRS, refer to "Non-GAAP Measures and Ratios" section of this press release. | | (6) | Excludes non-cash accretion of decommissioning obligations. | | (7) | Logan was spun-out from Spartan Delta Corp. (" Spartan ") on June 20, 2023. Comparative information for the nine months ended September 30, 2023 is prepared on a "carve-out" basis from the historical records of Spartan. The information should be read in conjunction with the Company's unaudited condensed interim financial statements and MD&A as at September 30, 2024 and 2023 and the audited annual financial statements and related MD&A as at and for the years ended December 31, 2023 and 2022. |

EXPANDED DUVERNAY POSITION

During the third quarter, Logan acquired 35.5 net sections of Duvernay acreage at Two Creeks, Alberta , within the greater Kaybob area. The Two Creeks asset is situated on the east side of Kaybob in the oil window and adds 34 net locations to Logan's drilling inventory. The lands are proximal to existing Duvernay producers which largely de-risk the land base. The asset is located near existing infrastructure, high grade roads and water sources making it well situated for development. Logan expects to allocate capital to the Two Creeks asset within the next two years.

In total, Logan's Duvernay position at North Simonette, Ante Creek, and Two Creeks is now comprised of an aggregate of 187.5 net sections and 174 net drilling locations. An updated land map can be found in Logan's corporate presentation at www.loganenergycorp.com .

OPERATIONS UPDATE

The Simonette "4-10" three well pad has now been onstream for approximately 100 days. For the first 90 days on production, the pad averaged 292 bbls/d of oil, 28 bbls/d of NGLs and 3.7 mmcf/d of natural gas (931 BOE/d, 34% liquids) per well. While the 4-10 results are within Logan's range of expectations, the Company plans to revert back to NCS single point entry well design for the next phase of drilling.

The Lator "13-34" single exploratory well was tied into permanent facilities in October. The well flows through a third-party pipeline which has had intermittent run time and as a result the well has only been on production for 25 days. The current water cut remains elevated, however the well continues to clean up.

The Company has commenced its winter drilling program with the first well on the "11-22" pad at South Simonette spud in mid-October. The rig will drill the planned Simonette wells this winter prior to moving to Pouce Coupe in the spring.

Since publishing our preliminary budget for 2025, strip pricing for AECO natural gas has decreased by approximately 25% to a forecast of approximately $1.90 per GJ on average for calendar 2025, relative to our budget pricing of $2.50 per GJ. The Company continues to monitor the current commodity price environment and may consider reallocating capital within its 2025 budget to more liquids-rich opportunities.

To date in 2024, the Company has shut-in uneconomic natural gas production at its non-core northeastern British Columbia property and has also deferred certain production optimization projects until gas prices recover resulting in approximately 670 BOE per day of production behind pipe. While these uneconomic shut-ins, project deferrals and initial performance at Lator will put pressure on Logan's ability to achieve its stated annual production guidance of approximately 8,700 BOE per day for calendar 2024, our annual Adjusted Funds Flow guidance for 2024 remains intact.

SUBSEQUENT EVENTS

On October 3, 2024 , Logan closed the previously announced $50.0 million bought deal private placement of approximately 68.5 million common shares at an issue price of $0.73 per common share. Concurrently, the Company established new committed credit facilities in the aggregate principal amount of $125.0 million , comprised of a $75.0 million revolving credit facility and $50.0 million term facility, which together replaced the Company's $75.0 million demand credit facility.

Commodity Hedging Update

The following table summarizes new commodity price risk management contracts entered subsequent to the quarter:

| Commodity /

Contract Type | Notional

Volume | Reference

Price | Fixed

Contract Price | Remaining

The table above should be read in conjunction with the existing contracts in place as of September 30, 2024 , as disclosed in the MD&A.

As of the date hereof, Logan has an average of 1,375 bbls/d of oil hedged at an average WTI price of $99.26 per barrel (approximate Canadian dollar equivalent) for calendar 2025, representing approximately 35% of forecasted crude oil and condensate production (net of royalties). Additionally, the Company has AECO swaps in place for an average of 10,863 GJ/d of natural gas at $2.34 per GJ on average for calendar 2025, representing approximately 20% of forecasted natural gas production (net of royalties).

ABOUT LOGAN ENERGY CORP.

Logan is a growth-oriented exploration, development and production company formed through the spin-out of the early stage Montney assets of Spartan Delta Corp. Logan was founded with a strong initial capitalization and three high quality and opportunity rich Montney assets located in the Simonette and Pouce Coupe areas of northwest Alberta and the Flatrock area of northeastern British Columbia and has recently established a position within the greater Kaybob Duvernay oil play with assets in the North Simonette, Ante Creek and Two Creeks areas. The management team brings proven leadership and a track record of generating excess returns in various business cycles.

Logan's corporate presentation has been updated as of November 2024 and can be accessed on the Company's website at www.loganenergycorp.com .

READER ADVISORIES

Non-GAAP Measures and Ratios

This press release contains certain financial measures and ratios which do not have standardized meanings prescribed by International Financial Reporting Standards as issued by the International Accounting Standards Board (" IFRS Accounting Standards "), also known as Canadian Generally Accepted Accounting Principles (" GAAP "). As these non-GAAP financial measures and ratios are commonly used in the oil and gas industry, Logan believes that their inclusion is useful to investors. The reader is cautioned that these amounts may not be directly comparable to measures for other companies where similar terminology is used.

The non-GAAP measures and ratios used in this press release, represented by the capitalized and defined terms outlined below, are used by Logan as key measures of financial performance and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS.

The definitions below should be read in conjunction with the "Non-GAAP and Other Financial Measures" section of the Company's MD&A dated November 13, 2024 , which includes discussion of the purpose and composition of the specified financial measures and detailed reconciliations to the most directly comparable GAAP financial measures.

Operating Income and Operating Netback

Operating Income, a non-GAAP financial measure, is a useful supplemental measure that provides an indication of the Company's ability to generate cash from field operations, prior to administrative overhead, financing and other business expenses. " Operating Income, before hedging " is calculated by Logan as oil and gas sales, net of royalties, plus processing and other revenue, less operating and transportation expenses. " Operating Income, after hedging " is calculated by adjusting Operating Income, before hedging for realized gains or losses on derivative financial instruments.

The Company refers to Operating Income expressed per unit of production as an " Operating Netback " and reports the Operating Netback before and after hedging, both of which are non-GAAP financial ratios. Logan considers Operating Netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.

Adjusted Funds Flow

Cash provided by operating activities is the most directly comparable measure to Adjusted Funds Flow. " Adjusted Funds Flow " is reconciled to cash provided by operating activities by excluding changes in non-cash working capital, adding back transaction costs on acquisitions (if applicable). Logan utilizes Adjusted Funds Flow as a key performance measure in the Company's annual financial forecasts and public guidance.

The Company refers to Adjusted Funds Flow expressed per unit of production as an " Adjusted Funds Flow Netback ".

Adjusted Funds Flow per share (" AFF per share ")

AFF per share is a non-GAAP financial ratio used by the Logan as a key performance indicator. The basic and/or diluted weighted average common shares outstanding used in the calculation of AFF per share is calculated using the same methodology as net income per share.

Capital Expenditures before A&D

" Capital Expenditures before A&D " is used by Logan to measure its capital investment level compared to the Company's annual budgeted capital expenditures for its organic drilling program. It includes capital expenditures on exploration and evaluation assets and property, plant and equipment, before acquisitions and dispositions. The directly comparable GAAP measure to capital expenditures is cash used in investing activities.

Net Debt (Surplus)

Throughout this press release, references to " Net Debt " or " Net Surplus " includes bank debt, net of Adjusted Working Capital. Net Debt (Surplus) and Adjusted Working Capital are both non-GAAP financial measures. "Adjusted Working Capital" is calculated as current liabilities less current assets, excluding derivative financial instrument assets and liabilities and the current portion of bank debt (if any).

Supplementary Financial Measures

The supplementary financial measures used in this press release (primarily average sales price per product type and certain per BOE and per share figures) are either a per unit disclosure of a corresponding GAAP measure, or a component of a corresponding GAAP measure, presented in the financial statements. Supplementary financial measures that are disclosed on a per unit basis are calculated by dividing the aggregate GAAP measure (or component thereof) by the applicable unit for the period. Supplementary financial measures that are disclosed on a component basis of a corresponding GAAP measure are a granular representation of a financial statement line item and are determined in accordance with GAAP.

Drilling Locations

All of the 174 net horizontal Duvernay oil drilling locations disclosed in this press release are unbooked locations. Unbooked locations are internal estimates prepared effective as of November 13, 2024 by a member of management who is a qualified reserves evaluator in accordance with NI 51-101 and COGEH based on the Company's assumptions as to the number of wells that can be drilled per section based on industry practice and internal review, being 600 meters inter well spacing and an average horizontal well length of ~3,500 meters. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of Logan's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the Company actually drills wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.