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Petrus Resources Announces Third Quarter 2017 Financial and Operating Results

Nachrichtenquelle: Marketwired
11.11.2017, 01:50  |  522   |   |   

CALGARY, ALBERTA--(Marketwired - Nov. 10, 2017) - Petrus Resources Ltd. ("Petrus" or the "Company") (TSX:PRQ) is pleased to report financial and operating results for the third quarter of 2017. Petrus is focused on organic growth and infrastructure control in its core area, Ferrier, Alberta. The Company is targeting liquids rich natural gas in the Cardium formation as well as investing in infrastructure in Ferrier to control operations in order to maximize the Company's return on investment. The Company's Management's Discussion and Analysis ("MD&A") and interim consolidated financial statements dated as at and for the period ended September 30, 2017 are available on SEDAR (the System for Electronic Document Analysis and Retrieval) at www.sedar.com.

  • Petrus generated funds flow of $7.7 million in the third quarter of 2017, a 30% increase relative to the $5.9 million generated in the third quarter of 2016. The 30% increase in funds flow is attributed to 49% higher production and 11% lower operating expenses (on a per boe basis) from the prior year. This production growth and lower cost structure reflects the Company's strategic shift to focus on developmental drilling and facility ownership and control in the Ferrier area.
  • Third quarter average production was 10,567 boe/d in 2017 compared to 7,100 boe/d for the same period in 2016. The 49% increase is attributable to the Company's drilling program at Ferrier, where production has grown 110% since the third quarter of 2016.
  • Total operating expenses have decreased 11% from $6.04 per boe in the third quarter of 2016 to $5.42 per boe in the third quarter of 2017. Due to facility constraints, a portion of the Company's Ferrier production was processed through third party facilities during the third quarter of 2017. Ferrier operating expenses are expected to decrease further in the fourth quarter as the Ferrier gas plant expansion is now complete(1).
  • Petrus utilizes financial derivative contracts to mitigate commodity price risk. The Company's realized gain on financial derivatives in the third quarter of 2017 increased the Company's corporate netback(2) by $1.88 per boe. The realized hedging gain increased significantly from the $0.23 per boe realized in the second quarter of 2017 to $1.88 per boe in the third quarter of 2017. The increase is attributed to the recent volatility in commodity prices, natural gas in particular. As a percentage of third quarter 2017 production, Petrus has derivative contracts in place for 60% and 70% of its natural gas and oil and natural gas liquids production, respectively, up to the end of the next fiscal year.
  • During the third quarter Petrus entered into a farm-in agreement (the "Farm-in Agreement") to drill two extended reach horizontal ("ERH") Cardium wells in Ferrier. Upon completion of these wells, Petrus will also earn a working interest in three additional sections of land in Ferrier. Subsequent to the end of the third quarter, the ERH wells were each drilled with a lateral length of approximately 2 sections. The Company estimates the Farm-in Agreement will contribute 16 gross (5.2 net) Cardium locations to its drilling inventory(1).
  • In order to accommodate for the Farm-in Agreement, Petrus' Board of Directors approved a $10 million increase to the Company's capital budget for 2017 to a range of $60 to $70 million, from the $50 to $60 million previously approved. The budget increase is expected to be funded through availability under the Company's existing credit facilities(1).
  • During the third quarter of 2017, Petrus participated in or spud 6 gross (4.7 net) Cardium wells in the Ferrier area. The Ferrier gas plant expansion, increasing the plant's capacity from 30 mmcf/d to 60 mmcf/d, was completed in early October. With the new processing capacity available at the plant, the fracture stimulation operations for the new wells were scheduled for the fourth quarter. The wells are expected to be brought onstream later in the fourth quarter(1).
  • Subsequent to the end of the third quarter of 2017 Petrus completed the semi-annual review of its revolving credit facility ("RCF"). The RCF syndicate of lenders increased the borrowing base from $120 million to $130 million. In addition, the Company's total debt borrowing limit was increased from $141 million to $155 million. Petrus' second lien term loan ("Term Loan") has $35 million outstanding therefore lender consent, from both the RCF syndicate and Petrus' Term Loan lender, is required for total borrowings against the RCF that exceed $120 million.

(1) Refer to "Advisories - Forward-Looking Statements" attached hereto.

(2) Refer to "Non-GAAP Financial Measures" in the September 30, 2017 Management's Discussion & Analysis.

SELECTED FINANCIAL INFORMATION
OPERATIONS Three months ended
Sept. 30, 2017
Three months ended
Sept. 30, 2016
Three months ended
Jun. 30, 2017
Three months ended
Mar. 31, 2017
Three months ended
Dec. 31, 2016
Average Production
Natural gas (mcf/d) 45,550 30,009 42,392 40,332 37,327
Oil (bbl/d) 1,877 1,419 2,015 1,542 1,452
NGLs (bbl/d) 1,098 680 1,160 1,067 922
Total (boe/d) 10,567 7,100 10,240 9,331 8,595
Total (boe) 972,140 653,215 931,821 839,746 790,806
Natural gas sales weighting 72 % 70 % 69 % 72 % 72 %
Realized Prices
Natural gas ($/mcf) 1.66 2.53 3.29 2.85 3.29
Oil ($/bbl) 51.23 44.50 59.02 62.62 59.42
NGLs ($/bbl) 24.79 15.56 30.32 33.18 24.56
Total realized price ($/boe) 18.82 21.06 28.69 26.48 26.97
Royalty income 0.01 0.07 0.03 0.05 0.10
Royalty expense (2.73 ) (2.99 ) (4.62 ) (3.94 ) (3.52 )
Net oil and natural gas revenue ($/boe) 16.10 18.14 24.10 22.59 23.55
Operating expense (5.42 ) (6.04 ) (5.53 ) (4.50 ) (3.63 )
Transportation expense (1.29 ) (1.49 ) (1.32 ) (1.38 ) (1.50 )
Operating netback (1)(2) ($/boe) 9.39 10.61 17.25 16.71 18.42
Realized gain on derivatives ($/boe) (2) 1.88 4.06 0.23 0.57 0.99
General & administrative expense (1.09 ) (1.69 ) (1.12 ) (1.05 ) (3.78 )
Cash finance expense (1.99 ) (3.85 ) (1.94 ) (2.07 ) (2.58 )
Decommissioning expenditures (3) (0.23 ) (0.04 ) (1.03 ) (0.19 ) (0.64 )
Corporate netback (1)(2) ($/boe) 7.96 9.09 13.39 13.97 12.41
FINANCIAL (000s except per share) Three months ended
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