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, 2023.
Q2 2023 HIGHLIGHTS:
- Production up 44%
– Production was up 44% from 7,280 boe/d(1) in the second
quarter of 2022 to 10,492 boe/d in the second quarter of 2023 as a
result of new wells brought on production in late 2022 and during
the first quarter of 2023.
- Operating expense down 26%
– Operating expense was $5.83/boe in the second quarter of
2023, a decrease of 26% from $7.92/boe in the second quarter of
2022. The decrease per boe is mainly due to higher production while
holding total operating expenses relatively flat.
- Commodity prices decline
– Realized price per boe decreased by 52% in the second
quarter of 2023 ($30.59/boe) compared to the second quarter of 2022
($63.33/boe). The realized oil, natural gas and NGL prices
decreased by 31%, 66% and 53%, respectively. Realized price per boe
was also down 24% quarter-over-quarter ("QoQ"), continuing the
downward trend in 2023.
- Funds
flow(2) – Despite the
decrease in commodity prices, Petrus generated funds flow of $19.0
million ($0.15 per share(2)) for the second quarter of 2023, 18%
lower than funds flow of $23.2 million ($0.21 per share)
during the second quarter of 2022. The decrease is due to lower
commodity prices and is partially offset by higher realized hedging
gains and lower costs.
- Net
debt(2) down 31% QoQ –
Net debt was $36.9 million at June 30, 2023, 31% lower than the
prior quarter end ($53.1 million at March 31, 2023). The net debt
to annualized funds flow ratio(3) was 0.5x, well below the target
of under 1x.
- Credit facility increase
– Petrus' lender completed the semi-annual borrowing base
redetermination and increased the borrowing limit from $30 million
to $45 million. As of the date of this report, $6.3 million was
drawn on this facility.
2023 REVISED BUDGET
GUIDANCE(4)
Consistent with Petrus' commitment to maximize
long term value for shareholders, the Company has pivoted its
capital program for the remainder of 2023 to ensure spending
remains within cash flow while also prioritizing its most strategic
investments. This shift also positions Petrus to generate
significant free cash flow(2)(5) allowing the Company to introduce
a return of capital to shareholders through dividends and share
buy-backs in the fourth quarter while continuing to reduce
debt.
Petrus is revising its 2023 capital budget
guidance to $60 million to $75 million, $33.1 million of which has
already been spent, largely on drilling. Remaining capital will be
allocated as follows: 35% to adding infrastructure, including a
pipeline to North Ferrier which will provide greater flexibility
and lower operating costs in the development of our assets in this
area; and 65% to new wells, including the completion of the four
Ferrier wells drilled in Q1 2023, and new drilling in North
Ferrier.
The revised capital budget is expected to result
in 2023 annual production of 10,000 to 10,500 boe/d (up 35%
year-over-year) and annual funds flow of $70 million to $80 million
(down 14% year-over-year). Net debt at the end of the year is
expected to be $40 million to $50 million, well below our target
maximum net debt to annualized funds flow ratio of 1x. Free cash
flow is expected to be in the range of $5 million to $15
million.
In summary, the Board of Directors has approved a
revised 2023 capital budget and guidance is as follows(6):
- Capital budget of $60 million to
$75 million.
- Average annual production rate of
10,000 to 10,500 boe/d.
- Generate annual funds flow of $70
million to $80 million for 2023 (assuming an average 2023 price
forecast of US$72.50/bbl WTI for oil, AECO gas price of $2.58/GJ,
and 2023 foreign exchange rate of US$0.75).
- Free cash flow of $5 million to $15
million, which will be used to introduce a return of capital to
shareholders through dividends and share buy-backs in the fourth
quarter and continue to reduce debt.
The revised capital program is reflective of
Petrus' flexible and disciplined investment strategy and strongly
positions the Company for sustainable long term growth and value
creation.
(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 Type
Information" for further details.(2)Non-GAAP measure. Refer to
"Non-GAAP and Other Financial Measures".(3)Non-GAAP ratio. Refer to
"Non-GAAP and Other Financial Measures".(4)Refer to "Advisories -
Forward-Looking Statements". (5)Free cash flow (deficit) for the
year ended December 31, 2022 was $(9.0 million).(6)Our previous
2023 capital budget released in November 2022 included: a capital
budget of $130 million to $135 million; average annual production
rate of 13,000 to 13,500 boe/d; annual funds flow of $140 million
to $150 million; and net debt at the end of 2023 of $35 million to
$40 million.
SELECTED FINANCIAL INFORMATION
OPERATIONS |
Three months endedJun. 30,
2023 |
Three months endedJun. 30,
2022 |
Three months endedMar. 31,
2023 |
Three months endedDec. 31,
2022 |
Three months endedSept. 30,
2022 |
Average Production |
|
|
|
|
|
Natural gas (mcf/d) |
44,010 |
|
30,913 |
|
45,237 |
|
33,201 |
|
28,107 |
|
Oil (bbl/d) |
1,670 |
|
1,073 |
|
2,192 |
|
2,458 |
|
957 |
|
NGLs (bbl/d) |
1,486 |
|
1,055 |
|
1,654 |
|
1,121 |
|
997 |
|
Total (boe/d) |
10,492 |
|
7,280 |
|
11,385 |
|
9,113 |
|
6,639 |
|
Total (boe)(1) |
954,738 |
|
662,456 |
|
1,024,645 |
|
838,375 |
|
610,722 |
|
Light oil weighting |
16 |
% |
15 |
% |
19 |
% |
27 |
% |
14 |
% |
Realized Prices |
|
|
|
|
|
Natural gas ($/mcf) |
2.64 |
|
7.74 |
|
3.78 |
|
6.04 |
|
5.02 |
|
Oil ($/bbl) |
91.69 |
|
133.36 |
|
94.63 |
|
106.85 |
|
111.04 |
|
NGLs ($/bbl) |
34.82 |
|
74.63 |
|
47.55 |
|
56.90 |
|
62.25 |
|
Total realized price ($/boe) |
30.59 |
|
63.33 |
|
40.16 |
|
57.81 |
|
46.62 |
|
Royalty income |
0.06 |
|
0.25 |
|
0.16 |
|
0.15 |
|
0.37 |
|
Royalty expense |
(3.66 |
) |
(8.64 |
) |
(6.38 |
) |
(7.92 |
) |
(11.84 |
) |
Gain (loss) on risk management activities |
0.03 |
|
(6.76 |
) |
1.45 |
|
(1.26 |
) |
(0.81 |
) |
Net oil and natural gas revenue ($/boe) |
27.02 |
|
48.18 |
|
35.39 |
|
48.78 |
|
34.34 |
|
Operating expense |
(5.83 |
) |
(7.92 |
) |
(7.26 |
) |
(6.86 |
) |
(8.47 |
) |
Transportation expense |
(1.40 |
) |
(2.16 |
) |
(2.05 |
) |
(2.08 |
) |
(1.89 |
) |
Operating
netback(2)($/boe) |
19.79 |
|
38.10 |
|
26.08 |
|
39.84 |
|
23.98 |
|
Realized gain on financial derivatives |
3.56 |
|
— |
|
1.77 |
|
2.89 |
|
1.00 |
|
Other cash income |
0.04 |
|
0.04 |
|
0.16 |
|
0.22 |
|
0.05 |
|
General & administrative expense |
(1.55 |
) |
(1.70 |
) |
(1.20 |
) |
(1.10 |
) |
(1.30 |
) |
Cash finance expense |
(1.33 |
) |
(1.46 |
) |
(1.11 |
) |
(1.18 |
) |
(0.87 |
) |
Decommissioning expenditures |
(0.58 |
) |
0.06 |
|
(0.13 |
) |
0.03 |
|
(0.29 |
) |
Funds flow & corporate
netback(2)($/boe) |
19.93 |
|
35.04 |
|
25.57 |
|
40.70 |
|
22.57 |
|
|
|
|
|
|
|
FINANCIAL (000s except $ per share) |
Three months endedJun. 30,
2023 |
Three months endedJun. 30,
2022 |
Three months endedMar. 31,
2023 |
Three months endedDec. 31,
2022 |
Three months endedSept. 30,
2022 |
Oil and natural gas revenue |
29,266 |
|
42,119 |
|
41,319 |
|
48,590 |
|
28,701 |
|
Net income |
5,043 |
|
18,046 |
|
17,273 |
|
22,097 |
|
9,822 |
|
Net income per share |
|
|
|
|
|
Basic |
0.04 |
|
0.16 |
|
0.14 |
|
0.18 |
|
0.08 |
|
Fully diluted |
0.04 |
|
0.15 |
|
0.14 |
|
0.17 |
|
0.08 |
|
Funds flow(2) |
19,040 |
|
23,208 |
|
26,216 |
|
34,117 |
|
13,789 |
|
Funds flow per share(1) |
|
|
|
|
|
Basic |
0.15 |
|
0.21 |
|
0.21 |
|
0.28 |
|
0.11 |
|
Fully diluted |
0.15 |
|
0.20 |
|
0.21 |
|
0.27 |
|
0.11 |
|
Capital expenditures |
3,380 |
|
4,932 |
|
29,820 |
|
37,792 |
|
49,513 |
|
Acquisitions (dispositions) |
(100 |
) |
364 |
|
— |
|
— |
|
16 |
|
Weighted average shares outstanding |
|
|
|
|
|
Basic |
123,752 |
|
111,795 |
|
123,416 |
|
122,545 |
|
122,058 |
|
Fully diluted |
127,040 |
|
117,203 |
|
127,358 |
|
127,600 |
|
126,822 |
|
As at period end |
|
|
|
|
|
Common shares outstanding |
|
|
|
|
|
Basic |
123,849 |
|
122,017 |
|
123,239 |
|
123,239 |
|
122,197 |
|
Fully diluted |
134,423 |
|
131,302 |
|
133,377 |
|
133,377 |
|
131,482 |
|
Total assets |
383,231 |
|
302,472 |
|
403,276 |
|
381,057 |
|
356,050 |
|
Non-current liabilities |
62,630 |
|
50,924 |
|
68,056 |
|
63,021 |
|
61,778 |
|
Net debt(2) |
36,857 |
|
13,895 |
|
53,111 |
|
50,808 |
|
48,465 |
|
(1)Disclosure of production on a per boe basis
consists of the constituent product types and their respective
quantities. Refer to "BOE Presentation" for further details.
(2)Non-GAAP measure or non-GAAP ratio. 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, 2023 |
Ferrier |
North Ferrier |
Foothills |
Central Alberta |
Kakwa |
Total |
Natural gas (mcf/d) |
32,606 |
4,101 |
2,106 |
5,052 |
145 |
44,010 |
Oil (bbl/d) |
1,174 |
132 |
83 |
265 |
16 |
1,670 |
NGLs (bbl/d) |
1,237 |
81 |
10 |
148 |
10 |
1,486 |
Total (boe/d) |
7,845 |
896 |
443 |
1,258 |
50 |
10,492 |
Second quarter average production was 10,492
boe/d in 2023 compared to 7,280 boe/d in 2022. The 44% increase in
production was mainly a result of Petrus' capital program during
2022 and 3 (3.0 net) new 2023 drilled wells brought on stream in
late February and early March.
Second quarter production was down from first
quarter production of 11,385 boe/d due to a combination of natural
decline and production interruptions from the Alberta
wildfires.
CAPITAL EXPENDITURES
Capital expenditures (excluding acquisitions and
dispositions) totaled $3.4 million in the second quarter of 2023,
compared to $4.9 million in the prior year comparative period. The
majority of the capital spent in the second quarter of 2023 is
related to the equip and tie-in of the wells drilled in the first
quarter as well as preliminary construction costs on the North
Ferrier Pipeline. Completion activities for the remaining wells
drilled in the first quarter of 2023 began subsequent to quarter
end.
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 endedJune 30,
2023 |
Three months endedJune 30,
2022 |
Six months endedJune 30,
2023 |
Six months endedJune 30,
2022 |
Drill and complete |
448 |
1,613 |
24,629 |
5,892 |
Oil and gas equipment |
2,472 |
3,082 |
7,077 |
3,895 |
Geological |
30 |
— |
545 |
— |
Land and lease |
57 |
10 |
217 |
49 |
Office |
86 |
— |
102 |
— |
Capitalized general and administrative expense |
287 |
227 |
546 |
434 |
Total capital expenditures |
3,380 |
4,932 |
33,116 |
10,270 |
Gross (net) wells spud |
— |
5 (1.8) |
7 (7.0) |
7 (2.9) |
During the first quarter of 2022, Petrus closed
an acquisition in its core Ferrier area; included in this
acquisition was approximately 425 boe/day of production and 5,120
net acres of undeveloped land. The acquisition was made for total
share consideration of 10 million shares ($15.2 million).
An updated corporate presentation can be found
on the Company's website at www.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 $/boe basis),
"free cash flow", "net debt" and "net debt to annualized funds flow
ratio". These non-GAAP and other financial measures are not
recognized measures under GAAP (IFRS) and do not have a
standardized meaning prescribed by GAAP (IFRS). Accordingly, the
Company's use of these terms may not be comparable to similarly
defined measures presented by other companies. These non-GAAP and
other financial measures should not be considered to be more
meaningful than GAAP measures which are determined in accordance
with IFRS as indicators of our performance. Management uses these
non-GAAP and other financial measures for the reasons set forth
below.
Operating Netback Operating
netback is a common non-GAAP financial measure used in the oil and
natural gas industry which is a useful supplemental measure to
evaluate the specific operating performance by product type at the
oil and natural gas lease level. The most directly comparable GAAP
measure to operating netback is oil and natural gas revenue.
Operating netback is calculated as oil and natural gas revenue less
royalty expenses, gain (loss) on risk management activities,
operating expenses and transportation expenses. See below and under
"Summary of Quarterly Results" for a reconciliation of operating
netback to oil and natural gas revenue.
Operating netback ($/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) 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 other income and the realized gain (loss) on
financial derivatives. See below and under "Summary of Quarterly
Results" 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 endedJun. 30,
2023 |
Three months endedJun. 30,
2022 |
Six months endedJune 30,
2023 |
Six months endedJune 30,
2022 |
|
$000s |
$/boe |
$000s |
$/boe |
$000s |
$/boe |
$000s |
$/boe |
Oil and natural gas revenue |
29,266 |
|
30.65 |
|
42,119 |
|
63.58 |
|
70,585 |
|
35.66 |
|
75,059 |
|
56.58 |
|
Royalty expense |
(3,492 |
) |
(3.66 |
) |
(5,721 |
) |
(8.64 |
) |
(10,026 |
) |
(5.07 |
) |
(10,297 |
) |
(7.76 |
) |
Gain (loss) on risk management activities |
32 |
|
0.03 |
|
(4,476 |
) |
(6.76 |
) |
1,522 |
|
0.77 |
|
(4,476 |
) |
(3.37 |
) |
Net oil and natural gas revenue |
25,806 |
|
27.02 |
|
31,922 |
|
48.18 |
|
62,081 |
|
31.36 |
|
60,286 |
|
45.45 |
|
Transportation expense |
(1,341 |
) |
(1.40 |
) |
(1,434 |
) |
(2.16 |
) |
(3,443 |
) |
(1.74 |
) |
(2,874 |
) |
(2.17 |
) |
Operating expense |
(5,566 |
) |
(5.83 |
) |
(5,249 |
) |
(7.92 |
) |
(13,000 |
) |
(6.57 |
) |
(9,741 |
) |
(7.34 |
) |
Operating netback |
18,899 |
|
19.79 |
|
25,239 |
|
38.10 |
|
45,638 |
|
23.05 |
|
47,671 |
|
35.94 |
|
Realized gain (loss) on financial derivatives |
3,398 |
|
3.56 |
|
— |
|
— |
|
5,212 |
|
2.63 |
|
(4,632 |
) |
(3.49 |
) |
Other income(1) |
37 |
|
0.04 |
|
28 |
|
0.04 |
|
206 |
|
0.10 |
|
75 |
|
0.06 |
|
General & administrative expense |
(1,476 |
) |
(1.55 |
) |
(1,127 |
) |
(1.70 |
) |
(2,706 |
) |
(1.37 |
) |
(1,670 |
) |
(1.26 |
) |
Cash finance expense |
(1,269 |
) |
(1.33 |
) |
(969 |
) |
(1.46 |
) |
(2,409 |
) |
(0.33 |
) |
(1,655 |
) |
(0.34 |
) |
Decommissioning expenditures |
(549 |
) |
(0.58 |
) |
37 |
|
0.06 |
|
(686 |
) |
(0.35 |
) |
21 |
|
0.02 |
|
Funds flow and corporate netback |
19,040 |
|
19.93 |
|
23,208 |
|
35.04 |
|
45,255 |
|
23.73 |
|
39,810 |
|
30.93 |
|
(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. 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 atJun. 30, 2023 |
As atJun. 30, 2022 |
As atMar. 31, 2023 |
As atDec. 31, 2022 |
As atSept. 30, 2022 |
Long-term debt |
25,000 |
|
12,000 |
|
25,000 |
|
25,000 |
|
22,000 |
|
Current assets |
(28,150 |
) |
(18,783 |
) |
(31,309 |
) |
(29,849 |
) |
(29,905 |
) |
Current liabilities |
30,032 |
|
18,785 |
|
50,336 |
|
51,395 |
|
51,102 |
|
Current financial derivatives |
10,224 |
|
2,124 |
|
9,328 |
|
4,502 |
|
5,503 |
|
Current portion of lease obligation |
(249 |
) |
(231 |
) |
(244 |
) |
(240 |
) |
(235 |
) |
Net debt |
36,857 |
|
13,895 |
|
53,111 |
|
50,808 |
|
48,465 |
|
Net debt to annualized 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.
Free Cash Flow Free cash flow
is a common non-GAAP financial measure defined as cash flow from
operating activities less cash flow used in investing activities
less change in non-cash investing working capital, excluding
acquisitions and dispositions. Petrus uses the term "free cash
flow" for its own performance measure and to provide shareholders
and potential investors with a measurement of the Company's
efficiency and its ability to generate the cash necessary to fund
its future growth expenditures, to repay debt and provide
shareholder returns. The most directly comparable GAAP measure for
free cash flow is cash flow from operating activities. The table
below sets forth a reconciliation of free cash flow to cash flow
from operating activities for the periods presented.
($000s) |
Twelve months ended Dec. 31, 2022 |
Twelve months ended Dec. 31, 2021 |
Cash flow from operating activities |
100,607 |
|
32,988 |
|
Change in operating non-cash working capital |
(12,891 |
) |
366 |
|
Funds Flow |
87,716 |
|
33,354 |
|
Cash flow used in investing activities |
(97,798 |
) |
(17,934 |
) |
Change in investing non-cash working capital |
1,300 |
|
(9,089 |
) |
Dispositions (acquisitions) |
(243 |
) |
148 |
|
Free cash flow |
(9,025 |
) |
6,479 |
|
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,
2022. 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: our target of a net debt to annualized funds flow ratio of
under 1x; the details of our revised 2023 capital budget, including
the amount of capital expenditures we intend to make, the details
of such expenditures, and the benefits we expect to derive
therefrom; our revised forecasts for our 2023 average annual
production rate, annual funds flow and net debt at the end of 2023;
our forecast for 2023 free cash flow and that it will be used to
return capital to shareholders through a combination of dividends
and share buybacks with the remainder allocated to further debt
reduction; that Petrus remains committed to a flexible capital plan
that generates superior returns for shareholders; our belief that
the revised capital program strongly positions Petrus to accelerate
development when prices dictate; that the Company does not
anticipate entering any new physical commodity contracts going
forward; our hedging strategy and the benefits that we expect to
derive therefrom. 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 risk that our 2023 free cash flow
is lower than anticipated and that as a result we have little or no
cash to return to shareholders or use to reduce debt; the impact of
general economic conditions; volatility in market prices for crude
oil, NGL and natural gas; industry conditions; currency
fluctuation; changes in interest rates and inflation rates;
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; future interest rates; 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 its 2023
capital budget, 2023 average annual production, 2023 annual funds
flow, 2023 year-end net debt level, 2023 free cash flow, and target
net debt to annualized 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.
Production and Product Type
InformationThe Company's forecast average daily 2023
production rate disclosed in this press release consists of the
following product types, as defined in National Instrument 51-101
and using the conversion ratio described above, where applicable:
10,000 to 10,500 boe/d average daily 2023 production rate – 15.5%
light oil and condensate, 15.5% natural gas liquids and 69 %
conventional natural gas.
Abbreviations
$000’s
$/bbl
$/boe
$/GJ
$/mcf bbl
bbl/d
boe
mboe
mmboe boe/d
GJ
GJ/d mcf
mcf/d
mmcf/d
NGLs
WTI |
thousand
dollarsdollars per barreldollars per barrel of oil
equivalentdollars per gigajouledollars per thousand cubic
feetbarrelbarrels per daybarrel of oil equivalentthousand barrel of
oil equivalentmillion barrel of oil equivalentbarrel of oil
equivalent per daygigajoulegigajoules per daythousand cubic
feetthousand cubic feet per daymillion cubic feet per daynatural
gas liquidsWest Texas Intermediate |
For further information, please contact:
Ken Gray, P.Eng.
President and Chief Executive Officer
T: (403) 930-0889
E: kgray@petrusresources.com
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