Petrus Resources Ltd. (“Petrus” or the “Company”) (TSX: PRQ) is
pleased to report financial and operating results as at and for the
three and six months ended June 30, 2022.
Q2 2022 HIGHLIGHTS:
- Production up 15%
– Production was up 15% from 6,309 boe/d in the second
quarter of 2021 to 7,280 boe/d in the second quarter of 2022 due to
the new wells drilled in late 2021 and the strategic acquisition of
Cardium assets located in Petrus' Ferrier area that closed in March
2022.
- Funds
flow(1) increased 188% –
Generated funds flow of $23.2 million ($0.21 per share(2)) for the
second quarter of 2022, 188% higher than funds flow of $8.1 million
($0.16 per share) for the second quarter of 2021.
- Operating
netback(2) up 118% –
Operating netback increased by 118% from $20.55/boe in the second
quarter of 2021 to $44.86/boe in the second quarter of 2022.
- Commodity price
improvement – Realized price per boe
increased by 87% in the second quarter of 2022 compared to the
second quarter of 2021; from $33.87/boe to $63.33/boe. The realized
oil, natural gas and NGL prices increased by 75%, 136% and 88%,
respectively.
- Backstopped rights offering
– Petrus closed a $20 million rights offering that was
backstopped by the Company's major shareholders. The rights
offering was oversubscribed by 84%.
- Net
debt(1) reduction – Net
debt was $13.9 million at June 30, 2022, an 87% decrease from the
second quarter of 2021 and a 78% decrease from December 31, 2021.
The Company continues to manage its balance sheet with the goal of
maintaining a net debt to funds flow ratio(2) of under 1x.
- Debt restructuring complete
– The Company entered into agreements with new lenders
providing two new credit facilities ("New Facilities") totaling $55
million; at June 30, 2022, $18 million was drawn on the New
Facilities. The refinancing completes the Company’s debt
restructuring, moving forward with supportive lenders that provide
stability and liquidity.
2022 CAPITAL PROGRAM
The Company's 2022 capital program resumed in
the second quarter with 2 (1.6 net) operated wells spud and an
additional 3 (0.15 net) non-operated wells spud in late June. Given
the inherent volatility of commodity prices, the Company recognizes
it is prudent to remain disciplined and flexible from an
operational and financial perspective. Petrus will continue to
monitor the price of Canadian light oil and natural gas and will
evaluate capital investments on an ongoing basis.
(1)Non-GAAP measure. Refer to "Non-GAAP and
Other Financial Measures".(2)Non-GAAP ratio. Refer to "Non-GAAP and
Other Financial Measures".
SELECTED FINANCIAL INFORMATION
|
OPERATIONS |
Three months
ended Jun. 30,
2022 |
Three months ended Jun. 30,
2021 |
Three months
ended Mar. 31,
2022 |
Three months
ended Dec. 31,
2021 |
Three months ended Sept. 30,
2021 |
|
Average Production |
|
|
|
|
|
|
Natural gas (mcf/d) |
30,913 |
|
24,291 |
|
29,530 |
|
23,494 |
|
23,942 |
|
|
Oil (bbl/d) |
1,073 |
|
1,214 |
|
1,250 |
|
1,002 |
|
937 |
|
|
NGLs (bbl/d) |
1,055 |
|
1,046 |
|
1,207 |
|
962 |
|
1,010 |
|
|
Total (boe/d) |
7,280 |
|
6,309 |
|
7,379 |
|
5,880 |
|
5,937 |
|
|
Total (boe) |
662,456 |
|
574,084 |
|
664,010 |
|
540,924 |
|
546,227 |
|
|
Light oil weighting |
15 |
% |
19 |
% |
17 |
% |
20 |
% |
21 |
% |
|
Realized Prices |
|
|
|
|
|
|
Natural gas ($/mcf) |
7.74 |
|
3.28 |
|
5.20 |
|
5.45 |
|
4.04 |
|
|
Oil ($/bbl) |
133.36 |
|
75.99 |
|
110.12 |
|
89.71 |
|
82.56 |
|
|
NGLs ($/bbl) |
74.63 |
|
39.76 |
|
60.12 |
|
56.35 |
|
45.10 |
|
|
Total realized price ($/boe) |
63.33 |
|
33.87 |
|
49.31 |
|
46.29 |
|
37.00 |
|
|
Royalty income |
0.25 |
|
0.19 |
|
0.29 |
|
0.06 |
|
0.18 |
|
|
Royalty expense |
(8.64 |
) |
(4.87 |
) |
(6.89 |
) |
(6.34 |
) |
(3.94 |
) |
|
Net oil and natural gas revenue ($/boe) |
54.94 |
|
29.19 |
|
42.71 |
|
40.01 |
|
33.24 |
|
|
Operating expense |
(7.92 |
) |
(6.80 |
) |
(6.76 |
) |
(5.02 |
) |
(5.57 |
) |
|
Transportation expense |
(2.16 |
) |
(1.84 |
) |
(2.17 |
) |
(1.87 |
) |
(1.81 |
) |
|
Operating netback(1)
($/boe) |
44.86 |
|
20.55 |
|
33.78 |
|
33.12 |
|
25.86 |
|
|
Realized loss on financial derivatives ($/boe) |
— |
|
(3.21 |
) |
(6.98 |
) |
(9.52 |
) |
(6.41 |
) |
|
Loss on risk management activities ($/boe) |
(6.76 |
) |
— |
|
— |
|
— |
|
— |
|
|
Other income |
0.04 |
|
1.77 |
|
0.07 |
|
0.04 |
|
0.02 |
|
|
General & administrative expense |
(1.70 |
) |
(2.41 |
) |
(0.82 |
) |
(2.24 |
) |
(1.47 |
) |
|
Cash finance expense |
(1.46 |
) |
(2.52 |
) |
(1.04 |
) |
(1.58 |
) |
(3.30 |
) |
|
Decommissioning expenditures |
0.06 |
|
(0.14 |
) |
(0.02 |
) |
(0.56 |
) |
(0.27 |
) |
|
Funds flow & corporate
netback(1) ($/boe) |
35.04 |
|
14.04 |
|
24.99 |
|
19.26 |
|
14.43 |
|
|
|
|
|
|
|
|
|
FINANCIAL (000s except $ per share) |
Three months ended Jun. 30,
2022 |
Three months ended Jun. 30,
2021 |
Three months ended Mar. 31,
2022 |
Three months
ended Dec. 31,
2021 |
Three months
ended Sept. 30,
2021 |
|
Oil and natural gas revenue |
42,119 |
|
19,553 |
|
32,940 |
|
25,070 |
|
20,306 |
|
|
Net income (loss) |
18,046 |
|
(4,265 |
) |
10,903 |
|
114,633 |
|
7,343 |
|
|
Net income (loss) per share |
|
|
|
|
|
|
Basic |
0.16 |
|
(0.09 |
) |
0.11 |
|
1.19 |
|
0.04 |
|
|
Fully diluted |
0.15 |
|
(0.09 |
) |
0.11 |
|
1.11 |
|
0.03 |
|
|
Funds flow(2) |
23,208 |
|
8,070 |
|
16,601 |
|
10,418 |
|
7,874 |
|
|
Funds flow per share(1) |
|
|
|
|
|
|
Basic |
0.21 |
|
0.16 |
|
0.17 |
|
0.11 |
|
0.15 |
|
|
Fully diluted |
0.20 |
|
0.16 |
|
0.16 |
|
0.10 |
|
0.14 |
|
|
Capital expenditures |
4,932 |
|
763 |
|
5,064 |
|
12,235 |
|
6,101 |
|
|
Acquisitions (dispositions) |
364 |
|
(100 |
) |
15,200 |
|
— |
|
— |
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
Basic |
111,795 |
|
49,513 |
|
99,189 |
|
96,660 |
|
54,167 |
|
|
Fully diluted |
117,203 |
|
49,513 |
|
103,250 |
|
102,868 |
|
57,638 |
|
|
As at period end |
|
|
|
|
|
|
Common shares outstanding |
|
|
|
|
|
|
Basic |
122,017 |
|
49,559 |
|
106,907 |
|
96,708 |
|
96,603 |
|
|
Fully diluted |
131,302 |
|
49,559 |
|
113,883 |
|
103,889 |
|
100,074 |
|
|
Total assets |
302,472 |
|
176,629 |
|
308,744 |
|
290,492 |
|
173,101 |
|
|
Non-current liabilities |
50,924 |
|
40,838 |
|
46,702 |
|
42,172 |
|
40,200 |
|
|
Net debt(2) |
13,895 |
|
110,346 |
|
50,044 |
|
61,779 |
|
60,071 |
|
(1)Non-GAAP ratio. Refer to "Non-GAAP and Other Financial
Measures". (2)Non-GAAP measure. Refer to "Non-GAAP and Other
Financial Measures".
OPERATIONS UPDATE
Second quarter average production by area was as
follows:
|
For the three months ended June 30, 2022 |
Ferrier |
North Ferrier |
Foothills |
Central Alberta |
Kakwa |
Total |
|
Natural gas (mcf/d) |
19,020 |
4,093 |
2,696 |
4,915 |
192 |
30,916 |
|
Oil (bbl/d) |
570 |
145 |
91 |
248 |
31 |
1,085 |
|
NGLs (bbl/d) |
778 |
114 |
6 |
130 |
16 |
1,044 |
|
Total (boe/d) |
4,518 |
940 |
546 |
1,198 |
78 |
7,280 |
Second quarter average production was 7,280
boe/d in 2022 compared to 6,309 boe/d in 2021. The increase in
production is due to the capital activity in the second half of
2021, the strategic acquisition of Cardium assets located in
Petrus' Ferrier area that closed in March 2022, and certain wells
in the Foothills area being brought back on-stream due to improved
pricing.
An updated corporate presentation can be found
on the Company's website at www.petrusresources.com.
For further information, please
contact:
Ken Gray, P.Eng.President and Chief Executive
OfficerT: (403) 930-0889E: 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 and $/boe basis), "net debt" and "net debt to
funds flow ratio". These non-GAAP and other financial measures are
not recognized measures under GAAP (IFRS) and do not have a
standardized meaning prescribed by GAAP (IFRS). Accordingly, the
Company's use of these terms may not be comparable to similarly
defined measures presented by other companies. These non-GAAP and
other financial measures should not be considered to be more
meaningful than GAAP measures which are determined in accordance
with IFRS as indicators of our performance. Management uses these
non-GAAP and other financial measures for the reasons set forth
below.
Operating NetbackOperating netback is a common
non-GAAP financial measure used in the oil and natural gas industry
which is a useful supplemental measure to evaluate the specific
operating performance by product type at the oil and natural gas
lease level. The most directly comparable GAAP measure to operating
netback is oil and natural gas revenue. Operating netback is
calculated as oil and natural gas revenue less royalty expenses,
operating expenses and transportation expenses. See below for a
reconciliation of operating netback to oil and natural gas
revenue.
Operating netback ($/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 FlowCorporate
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) basis as a non-GAAP ratio.
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, finance expense, decommissioning expenditures, plus other
income and the net realized gain (loss) on financial derivatives
and risk management activities. See below for a reconciliation of
funds flow and corporate netback to oil and natural gas
revenue.
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 Jun. 30,
2022 |
Three months ended Jun. 30,
2021 |
Six months ended June 30,
2022 |
Six months ended June 30,
2021 |
|
|
$000s |
$/boe |
$000s |
$/boe |
$000s |
$/boe |
$000s |
$/boe |
|
Oil and natural gas revenue |
42,119 |
|
63.58 |
|
19,553 |
|
34.06 |
|
75,059 |
|
56.58 |
|
35,892 |
|
32.44 |
|
| Royalty
expense |
(5,721 |
) |
(8.64 |
) |
(2,794 |
) |
(4.87 |
) |
(10,297 |
) |
(7.76 |
) |
(4,783 |
) |
(4.32 |
) |
|
Net oil and natural gas revenue |
36,398 |
|
54.94 |
|
16,759 |
|
29.19 |
|
64,762 |
|
48.82 |
|
31,109 |
|
28.12 |
|
|
Transportation expense |
(1,434 |
) |
(2.16 |
) |
(1,057 |
) |
(1.84 |
) |
(2,874 |
) |
(2.17 |
) |
(1,920 |
) |
(1.74 |
) |
|
Operating expense |
(5,249 |
) |
(7.92 |
) |
(3,903 |
) |
(6.80 |
) |
(9,741 |
) |
(7.34 |
) |
(7,157 |
) |
(6.47 |
) |
|
Operating netback |
29,715 |
|
44.86 |
|
11,799 |
|
20.55 |
|
52,147 |
|
39.31 |
|
22,032 |
|
19.91 |
|
|
Realized loss on financial derivatives |
— |
|
— |
|
(1,843 |
) |
(3.21 |
) |
(4,632 |
) |
(3.49 |
) |
(3,058 |
) |
(2.77 |
) |
| Loss on risk management
activities |
(4,476 |
) |
(6.76 |
) |
— |
|
— |
|
(4,476 |
) |
(3.37 |
) |
— |
|
— |
|
| Other income |
28 |
|
0.04 |
|
1,018 |
|
1.77 |
|
75 |
|
0.06 |
|
1,041 |
|
0.94 |
|
| General & administrative
expense |
(1,127 |
) |
(1.70 |
) |
(1,381 |
) |
(2.41 |
) |
(1,670 |
) |
(1.26 |
) |
(2,257 |
) |
(2.04 |
) |
| Cash finance expense(1) |
(969 |
) |
(1.46 |
) |
(1,444 |
) |
(2.52 |
) |
(1,655 |
) |
(0.34 |
) |
(2,474 |
) |
(2.24 |
) |
|
Decommissioning expenditures |
37 |
|
0.06 |
|
(79 |
) |
(0.14 |
) |
21 |
|
0.02 |
|
(222 |
) |
(0.20 |
) |
|
Funds flow and corporate netback |
23,208 |
|
35.04 |
|
8,070 |
|
14.04 |
|
39,810 |
|
30.93 |
|
15,062 |
|
13.60 |
|
(1)Excludes non-cash Term Loan interest payment-in-kind
Net DebtNet 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. 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 June 30, 2022 |
As at March 31, 2022 |
As at December 31, 2021 |
|
Long-term debt |
12,000 |
|
— |
|
— |
|
| Current assets |
(18,783 |
) |
(17,356 |
) |
(15,611 |
) |
| Current liabilities |
18,785 |
|
67,625 |
|
80,095 |
|
| Current financial
derivatives |
2,124 |
|
— |
|
(2,488 |
) |
| Current
portion of lease obligation |
(231 |
) |
(225 |
) |
(217 |
) |
|
Net debt |
13,895 |
|
50,044 |
|
61,779 |
|
Net debt to funds flow ratio is a non-GAAP ratio used as a key
indicator of our leverage and strength of our balance sheet. It is
calculated as net debt divided by funds flow for the relevant
period.
ADVISORIES
Basis of PresentationFinancial
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,
2021. The reporting and the measurement currency is the Canadian
dollar. All financial information is expressed in Canadian dollars,
unless otherwise stated.
Forward-Looking
StatementsCertain 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: that the Company will continue to
manage its balance sheet with the goal of maintaining a net debt to
funds flow ratio of under 1x; that the Company will remain
disciplined and flexible from an operational and financial
perspective; and that Petrus will continue to monitor the price of
Canadian light oil and natural gas and will evaluate capital
investments on an ongoing basis. 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.
These forward-looking statements are subject to
numerous risks and uncertainties, most of which are beyond the
Company’s control, including: the impact of general economic
conditions; volatility in market prices for crude oil, NGL and
natural gas; industry conditions; currency fluctuation; imprecision
of reserve estimates; liabilities inherent in crude oil and natural
gas operations; environmental risks; incorrect assessments of the
value of acquisitions and exploration and development programs;
competition; the lack of availability of qualified personnel or
management; changes in income tax laws or changes in tax laws and
incentive programs relating to the oil and gas industry; hazards
such as fire, explosion, blowouts, cratering, and spills, each of
which could result in substantial damage to wells, production
facilities, other property and the environment or in personal
injury; stock market volatility; ability to access sufficient
capital from internal and external sources; and the other risks and
uncertainties described in the AIF. With respect to forward-looking
statements contained in this press release, Petrus has made
assumptions regarding: future commodity prices (including as
disclosed herein) and royalty regimes; availability of skilled
labour; timing and amount of capital expenditures; future exchange
rates; the impact of increasing competition; conditions in general
economic and financial markets; availability of drilling and
related equipment and services; effects of regulation by
governmental agencies; the effects of inflation on our
profitability; and future operating costs. Management has included
the above summary of assumptions and risks related to
forward-looking information provided in this press release in order
to provide investors with a more complete perspective on Petrus’
future operations and such information may not be appropriate for
other purposes. Petrus’ actual results, performance or achievement
could differ materially from those expressed in, or implied by,
these forward-looking statements and, accordingly, no assurance can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
benefits that the Company will derive therefrom. Readers are
cautioned that the foregoing lists of factors are not
exhaustive.
This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about Petrus' prospective results of
operations including, without limitation, its forecast for net debt
to funds flow ratio, which are subject to the same assumptions,
risk factors, limitations, and qualifications as set forth above.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on FOFI. Petrus' actual results, performance
or achievement could differ materially from those expressed in, or
implied by, these FOFI, or if any of them do so, what benefits
Petrus will derive therefrom. Petrus has included the FOFI in order
to provide readers with a more complete perspective on Petrus'
future operations and such information may not be appropriate for
other purposes.
These forward-looking statements and FOFI are
made as of the date of this press release and the Company disclaims
any intent or obligation to update any forward-looking statements
and FOFI, whether as a result of new information, future events or
results or otherwise, other than as required by applicable
securities laws.
BOE PresentationThe oil and
natural gas industry commonly expresses production volumes and
reserves on a barrel of oil equivalent (“boe”) basis whereby
natural gas volumes are converted at the ratio of six thousand
cubic feet to one barrel of oil. The intention is to sum oil and
natural gas measurement units into one basis for improved
measurement of results and comparisons with other industry
participants. Petrus uses the 6:1 boe measure which is the
approximate energy equivalence of the two commodities at the burner
tip. Boe’s do not represent an economic value equivalence at the
wellhead and therefore may be a misleading measure if used in
isolation.
Abbreviations
|
$000’s |
|
thousand
dollars |
|
|
$/bbl |
|
dollars per
barrel |
|
|
$/boe |
|
dollars per
barrel of oil equivalent |
|
$/GJ |
|
dollars per
gigajoule |
|
|
$/mcf |
|
dollars per
thousand cubic feet |
|
bbl |
|
barrel |
|
|
bbl/d |
|
barrels per
day |
|
|
boe |
|
barrel of oil
equivalent |
|
|
mboe |
|
thousand barrel
of oil equivalent |
|
mmboe |
|
million barrel
of oil equivalent |
|
boe/d |
|
barrel of oil
equivalent per day |
|
GJ |
|
gigajoule |
|
|
GJ/d |
|
gigajoules per
day |
|
|
mcf |
|
thousand cubic
feet |
|
|
mcf/d |
|
thousand cubic
feet per day |
|
mmcf/d |
|
million cubic
feet per day |
|
|
NGLs |
|
natural gas
liquids |
|
|
WTI |
|
West Texas
Intermediate |
|
Petrus Resources (TSX:PRQ)
Historical Stock Chart
Von Nov 2023 bis Dez 2023
Petrus Resources (TSX:PRQ)
Historical Stock Chart
Von Dez 2022 bis Dez 2023
