Petrus Resources (PRQ) Q3 2024 earnings summary

Executive summary

• Cash flow increased slightly over Q2 2024, supported by effective hedging and higher oil production despite record-low gas prices.

• Q3 2024 production averaged 9,215 boe/d, down 3% sequentially and 9.7% year-over-year, mainly due to scheduled downtime, maintenance, and strategic shut-ins from low gas prices.

• Oil production increased 15% sequentially to 1,522 bbl/d, reflecting a shift to oil-weighted development.

• Regular monthly dividend payments continued throughout the quarter, totaling $3.7 million in Q3 and $0.14/share ($17.4 million) since inception, with a 9% annualized yield.

• Drilling activities resumed in September, with two joint interest wells drilled and completions scheduled for November.

Financial highlights

• Q3 2024 oil and natural gas sales were $20.4 million, down from $23.2 million in Q2 2024 and $28.3 million in Q3 2023.

• Net income was $5.3 million in Q3 2024, compared to $2.8 million in Q2 2024 and a loss of $11.3 million in Q3 2023.

• Funds flow was $10.7 million ($0.09/share), nearly flat sequentially and down from $16.2 million in Q3 2023.

• Realized price per boe fell 10% sequentially to $24.07, with natural gas and oil prices down 43% and 12%, respectively.

• Net debt reduced by $1.4 million to $60.4 million during Q3 2024.

Outlook and guidance

• Completions for two newly drilled joint interest wells are planned for November, with a capital program resuming in September and plans to drill 3 (1.3 net) extended reach wells in H2 2024.

• 52% of forecasted production hedged for the next 12 months at $2.98/GJ for gas and CAD $94.00/bbl for oil.

• Debt expected to remain relatively flat for the rest of 2024.

• Company remains committed to monthly dividends and will adjust capital program as needed based on market conditions.