Lucero Energy (LOU) Q2 2024 earnings summary

Executive summary

• Achieved positive operational momentum in Q2 2024, investing $41.2M to drill two wells and complete four, with initial production responses exceeding expectations and costs under budget.

• Purchased and cancelled 9.2M shares in Q2 2024, returning 87% of free funds flow to shareholders since NCIB inception in June 2023.

• Over 85% of 2024 capital program invested in H1, positioning for robust free funds flow in H2 2024.

Financial highlights

• Q2 2024 funds flow: $25.5M; adjusted funds flow: $25.5M; adjusted EBITDA: $24.8M; net income: $9.3M.

• Six months ended June 30, 2024: funds flow $54.2M, adjusted funds flow $54.2M, adjusted EBITDA $51.9M, net income $18.6M.

• Q2 2024 cash from operating activities: $24.1M; exploration and development expenditures: $41.2M.

• Q2 2024 property acquisitions: $3.6M; property dispositions: $126.2M.

Outlook and guidance

• 2024 exit production guidance maintained at 10,300 Boe/d; annual average production guidance revised down 4% to 9,700 Boe/d due to Q2 operational delays.

• 2024 exploration and development expenditures expected at US$65M (~C$89M); corporate production decline rate at 33%.

• Anticipates robust free funds flow in H2 2024 for growth or further capital returns.