Pieridae Energy Limited (“Pieridae” or the “Company”) (TSX:
PEA) announces the release of its first quarter 2023
financial and operating results. Pieridae generated Net Operating
Income (“NOI”)1 of $50 million and made term debt principal
repayments totalling $28 million during the first quarter of 2023.
Pieridae’s management’s discussion and analysis (“MD&A”) and
unaudited interim consolidated financial statements and notes for
the quarter ended March 31, 2023 are available at
www.pieridaeenergy.com and on SEDAR at www.sedar.com.
Q1 2023 HIGHLIGHTS
- Generated record
quarterly NOI1 of $50.0 million ($0.31 per basic and fully diluted
share) up 6% from $47.3 million ($0.30 per basic and fully diluted
share) in Q1 2022.
- Generated Funds
Flow from Operations1 of $41.6 million ($0.26 per basic and fully
diluted share), up 19% from $34.9 million ($0.22 per basic and
fully diluted share) in Q1 2022.
- Generated Net
Income of $13.6 million ($0.09 per basic and $0.08 per fully
diluted share), compared to $10.7 million ($0.07 per basic and
fully diluted share) in Q1 2022.
- Produced 36,467
boe/d (85% natural gas), down 10% from 40,491 boe/d in Q1 2022, due
primarily to the previously discussed re-injection of ethane
volumes into the natural gas sales stream, natural declines and an
unplanned outage at the Caroline gas plant in Central Alberta which
was back on-stream in late January.
- Repaid $27.9
million of the senior secured term loan (including the net impact
of interest paid in kind “PIK”), reducing the amount due at
maturity to $189.2 million2 at March 31, 2023.
- Successfully drilled the Company’s
first Foothills well (02/6-35-44-18W5, “6-35”) targeting the
Ostracod formation in the Brown Creek area of Central Alberta,
resulting in a commercially productive new pool discovery and
proving up a new Foothills play type with significant follow-up
drilling potential.
- Commenced
drilling a second Foothills well (02/6-29-44-17W5, “6-29”)
targeting the Mountain Park formation in Brown Creek.
Subsequent to Quarter End
- Equipped, tied-in and put on
production our first foothills well (6-35) in April 2023 which is
currently producing approximately 6 MMcf/d sales gas at a flowing
wellhead pressure of 16 MPa. The well is highly restricted as
production capability exceeds the Company’s working interest
capacity at the gathering system tie-in point.
- Finished drilling 6-29 in April 2023
and released the drilling rig. The Company has elected to defer
further development activity at this time.
“Pieridae had strong financial results this
quarter, despite weaker commodity prices, thanks to gains from our
hedging program,” said Pieridae’s Chief Executive Officer, Alfred
Sorensen. “We have also successfully concluded our winter drilling
program with production from the development program expected in
the second quarter. Our focus as we move into summer is to
prudently manage expenditures and working capital during a period
of expected lower commodity prices while maintaining safe and
reliable operations, and to complete our term debt
refinancing.”
SELECTED Q1 2023 OPERATIONAL &
FINANCIAL RESULTS
|
2023 |
|
2022 |
|
2021 |
|
($ 000s
unless otherwise noted) |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Production |
|
|
|
|
|
|
|
|
Natural gas (mcf/d) |
186,156 |
|
179,143 |
|
181,030 |
|
178,918 |
|
187,719 |
|
198,596 |
|
191,439 |
|
194,232 |
|
Condensate (bbl/d) |
2,657 |
|
2,469 |
|
2,911 |
|
2,864 |
|
3,201 |
|
2,851 |
|
2,555 |
|
2,950 |
|
NGLs (bbl/d) |
2,784 |
|
2,389 |
|
2,876 |
|
3,695 |
|
6,003 |
|
5,354 |
|
4,133 |
|
3,083 |
|
Sulphur (tonne/d) |
1,487 |
|
1,348 |
|
1,312 |
|
1,555 |
|
1,625 |
|
1,185 |
|
1,518 |
|
1,710 |
|
Total production (boe/d)
(1) |
36,467 |
|
34,715 |
|
35,959 |
|
36,378 |
|
40,491 |
|
41,304 |
|
38,595 |
|
38,404 |
|
Financial |
|
|
|
|
|
|
|
|
Realized natural gas price before physical commodity contracts
($/mcf) |
3.24 |
|
5.08 |
|
4.38 |
|
7.13 |
|
4.66 |
|
4.62 |
|
3.58 |
|
3.10 |
|
Realized natural gas price after physical commodity contracts
($/mcf) |
5.08 |
|
5.24 |
|
3.62 |
|
4.67 |
|
4.08 |
|
3.67 |
|
2.70 |
|
2.59 |
|
Benchmark natural gas price ($/mcf) |
3.25 |
|
5.20 |
|
4.28 |
|
7.22 |
|
4.75 |
|
4.69 |
|
3.59 |
|
3.11 |
|
Realized condensate price before physical commodity contracts
($/bbl) |
107.22 |
|
110.24 |
|
103.71 |
|
132.60 |
|
112.09 |
|
91.69 |
|
85.25 |
|
76.72 |
|
Realized condensate price after physical commodity contracts
($/bbl) |
107.36 |
|
117.67 |
|
105.82 |
|
116.61 |
|
106.13 |
|
69.71 |
|
65.33 |
|
68.08 |
|
Benchmark condensate price ($/bbl) |
107.05 |
|
115.24 |
|
115.66 |
|
132.49 |
|
122.62 |
|
100.10 |
|
70.25 |
|
64.82 |
|
Net income (loss) |
13,639 |
|
114,662 |
|
(1,573 |
) |
22,982 |
|
10,549 |
|
4,661 |
|
(14,846 |
) |
(10,058 |
) |
Net income (loss) $ per share,
basic |
0.09 |
|
0.72 |
|
(0.01 |
) |
0.15 |
|
0.07 |
|
0.03 |
|
(0.09 |
) |
(0.06 |
) |
Net income (loss) $ per share,
diluted |
0.08 |
|
0.70 |
|
(0.01 |
) |
0.14 |
|
0.07 |
|
0.03 |
|
(0.09 |
) |
(0.06 |
) |
Net operating income (2) |
49,995 |
|
67,711 |
|
30,014 |
|
55,969 |
|
47,295 |
|
30,845 |
|
17,920 |
|
14,444 |
|
Cashflow provided by operating
activities |
41,309 |
|
40,134 |
|
9,899 |
|
34,922 |
|
3,212 |
|
21,139 |
|
6,885 |
|
12,093 |
|
Funds flow from operations
(2) |
41,613 |
|
57,641 |
|
17,721 |
|
43,462 |
|
34,855 |
|
12,408 |
|
6,780 |
|
(6,366 |
) |
Total assets |
587,641 |
|
615,477 |
|
473,642 |
|
499,580 |
|
552,781 |
|
622,540 |
|
560,782 |
|
575,690 |
|
Adjusted working capital
deficit (3) |
(22,275 |
) |
(11,249 |
) |
(46,419 |
) |
(28,892 |
) |
(34,934 |
) |
(61,588 |
) |
(71,161 |
) |
(65,977 |
) |
Net debt (1) |
(202,180 |
) |
(214,503 |
) |
(254,489 |
) |
(248,967 |
) |
(273,201 |
) |
(293,169 |
) |
(314,184 |
) |
(298,360 |
) |
Capital expenditures |
20,486 |
|
19,037 |
|
7,216 |
|
9,739 |
|
3,534 |
|
1,493 |
|
9,852 |
|
17,959 |
|
Development expenses (Goldboro LNG project) |
- |
|
(4,514 |
) |
- |
|
- |
|
- |
|
225 |
|
783 |
|
(4,862 |
) |
(1) Total
production excludes sulphur.(2) Refer to the “Net Operation
Income”, “Capital Resources” and “non-GAAP measures” sections of
this MD&A for reference to non-GAAP measures.(3) Adjusted
working capital is a non-GAAP measure and is calculated as accounts
payable and accrued liabilities, less cash and cash equivalents,
restricted cash, accounts receivable, prepaids and deposits.
Pieridae’s priority remains improving financial
flexibility by strengthening our balance sheet while sustaining
production, implementing cost control initiatives, optimizing
infrastructure logistics and executing non-core asset dispositions
in order to maintain profitability during the commodity cycle.
CONFERENCE CALL DETAILSA
conference call and webcast to discuss the results will be held on
Thursday, May 11, 2023, at 1:30 p.m. MDT / 3:30 p.m. EDT, following
the formal business conducted at the Annual General Meeting. To
participate in the webcast or conference call, you are asked to
register using one of the links provided below.
To register to participate via webcast please follow this
link:https://edge.media-server.com/mmc/p/ycbxe4rk
Alternatively, to register to participate by telephone please
follow this link:
https://register.vevent.com/register/BI7ca32ab1d6cd499db19e4a78b83d5ada
ABOUT PIERIDAEPieridae is a
Canadian energy company headquartered in Calgary, Alberta. Through
a number of corporate and asset acquisitions, we have grown into a
significant upstream and midstream producer with assets
concentrated in the Canadian Foothills, producing conventional
natural gas, NGLs, condensate and sulphur. Pieridae provides the
energy to fuel people’s daily lives while supporting the
environment and the transition to a lower-carbon economy.
Pieridae’s common shares trade on the TSX under the symbol
“PEA”.
For further information, visit
www.pieridaeenergy.com, or please contact:
Alfred
Sorensen, Chief Executive Officer |
Adam
Gray, Chief Financial Officer |
Telephone: (403) 261-5900 |
Telephone: (403) 261-5900 |
Investor
Relationsinvestors@pieridaeenergy.com
Forward-Looking
StatementsCertain statements contained herein may
constitute "forward-looking statements" or "forward-looking
information" within the meaning of applicable securities laws
(collectively "forward-looking statements"). Words such as "may",
"will", "should", "could", "anticipate", "believe", "expect",
"intend", "plan", "potential", "continue", "shall", "estimate",
"expect", "propose", "might", "project", "predict", "forecast" and
similar expressions may be used to identify these forward-looking
statements.
Forward-looking statements involve significant
risk and uncertainties. A number of factors could cause actual
results to differ materially from the results discussed in the
forward-looking statements including, but not limited to, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets,
volatility of commodity prices, currency fluctuations, imprecision
of resources estimates, environmental risks, competition from other
producers, incorrect assessment of the value of acquisitions,
failure to realize the anticipated benefits or synergies from
acquisitions, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources and the risk factors outlined under
"Risk Factors" and elsewhere herein. The recovery and resources
estimate of Pieridae's reserves provided herein are estimates only
and there is no guarantee that the estimated resources will be
recovered. As a consequence, actual results may differ materially
from those anticipated in the forward-looking statements.
Forward-looking statements are based on a number
of factors and assumptions which have been used to develop such
forward-looking statements, but which may prove to be incorrect.
Although Pieridae believes that the expectations reflected in such
forward-looking statements are reasonable, undue reliance should
not be placed on forward-looking statements because Pieridae can
give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be
identified in this document, assumptions have been made regarding,
among other things: the impact of increasing competition; the
general stability of the economic and political environment in
which Pieridae operates; the timely receipt of any required
regulatory approvals; the ability of Pieridae to obtain qualified
staff, equipment and services in a timely and cost efficient
manner; the ability of the operator of the projects which Pieridae
has an interest in, to operate the field in a safe, efficient and
effective manner; the ability of Pieridae to obtain financing on
acceptable terms; the ability to replace and expand oil and natural
gas resources through acquisition, development and exploration; the
timing and costs of pipeline, storage and facility construction and
expansion and the ability of Pieridae to secure adequate product
transportation; future commodity prices; currency, exchange and
interest rates; the regulatory framework regarding royalties, taxes
and environmental matters in the jurisdictions in which Pieridae
operates; timing and amount of capital expenditures, future sources
of funding, production levels, weather conditions, success of
exploration and development activities, access to gathering,
processing and pipeline systems, advancing technologies, and the
ability of Pieridae to successfully market its oil and natural gas
products.
Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and
other factors that could affect Pieridae's operations and financial
results are included in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR
website (www.sedar.com), and at Pieridae's website
(www.pieridaeenergy.com). Although the forward-looking statements
contained herein are based upon what management believes to be
reasonable assumptions, management cannot assure that actual
results will be consistent with these forward-looking statements.
Investors should not place undue reliance on forward-looking
statements. These forward-looking statements are made as of the
date hereof and Pieridae assumes no obligation to update or review
them to reflect new events or circumstances except as required by
Applicable Securities Laws.
Forward-looking statements contained herein
concerning the oil and gas industry and Pieridae's general
expectations concerning this industry are based on estimates
prepared by management using data from publicly available industry
sources as well as from reserve reports, market research and
industry analysis and on assumptions based on data and knowledge of
this industry which Pieridae believes to be reasonable. However,
this data is inherently imprecise, although generally indicative of
relative market positions, market shares and performance
characteristics. While Pieridae is not aware of any misstatements
regarding any industry data presented herein, the industry involves
risks and uncertainties and is subject to change based on various
factors.
Additional Reader
AdvisoriesBarrels of oil equivalent (“boe”) may be
misleading, particularly if used in isolation. A boe conversion
ratio of 6 Mcf: 1 boe is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
Abbreviations
Natural Gas |
Oil |
mcf |
thousand cubic feet |
bbl/d |
barrels per day |
mcf/d |
thousand cubic feet per day |
boe/d |
barrels of oil equivalent per
day |
mmcf/d |
million cubic feet per day |
WCS |
Western Canadian Select |
AECO |
Alberta benchmark price for natural gas |
WTI |
West Texas Intermediate |
Neither TSX nor its Regulation Services
Provider (as that term is defined in policies of the TSX) accepts
responsibility for the adequacy or accuracy of this
release.
1 Refer to the “non-GAAP measures” section of the Company’s
MD&A.2 Includes the $50 million non interest-bearing deferred
fee due at maturity, A portion of this fee, closing fees and other
amounts remain to be accreted to the term debt value.
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