Petrus Resources (PRQ) Q2 2024 earnings summary

Executive summary

• Q2 2024 production averaged 9,471 BOE per day, down 9.7% year-over-year due to lower drilling activity and uneconomic well shut-ins, but steady over the past 12 months despite reduced capital investment and maintenance downtime.

• Oil weighting increased to 15% in H1 2024, with oil production up 17% sequentially from Q4 2023.

• Production included new volumes from 2.3 net wells drilled in Q1 and brought online at the end of that quarter; some production was shut in for economic reasons and maintenance.

• Current production is slightly above 10,000 BOE per day following the addition of new wells in late July.

• Operating expenses fell 27% sequentially to CAD 4.96/BOE, driven by lower power costs and higher third-party processing and transportation fees.

Financial highlights

• Q2 2024 oil and natural gas sales were CAD 23.2 million, down from CAD 29.3 million in Q2 2023 and CAD 28.0 million in Q1 2024.

• Q2 cash flow was CAD 10.6 million, with funds flow per share at CAD 0.09 and net income of CAD 2.8 million.

• Dividends distributed totaled CAD 3.7 million; capital expenditures were CAD 6.9 million, mainly for well completions.

• Net debt at June 30, 2024 was CAD 61.8 million, up from CAD 36.2 million at June 30, 2023.

• Operating expenses dropped to CAD 4.96 per BOE, 20% lower than Q1.

Outlook and guidance

• Annual production guidance remains at 9,000–10,000 BOE per day, reflecting operational flexibility amid price volatility.

• Capital spending for 2024 is expected to be at or below the low end of the CAD 40–50 million range.

• Drilling to resume in September with a limited program; no major capital commitments for the remainder of the year.

• Approximately 48% of forecast 2024 production hedged at ~$3.00/GJ for gas and CAD 98.00/bbl for oil, supporting ongoing monthly dividends.

• Any excess cash flow after dividends and CapEx will be used to reduce debt unless market conditions improve.