Saturn Oil & Gas (SOIL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 production of 39,049 BOE/day, up 30% from Q2 and 49% year-over-year, driven by successful integration of Saskatchewan acquisitions and new wells.

• Adjusted EBITDA reached CAD 136 million, up 28% sequentially and 35% year-over-year, surpassing consensus estimates despite lower realized oil prices.

• Adjusted Funds Flow (AFF) set a new high at CAD 94.1 million, 6% higher than Q2 and 23% above Q3 2023, with normalized AFF at CAD 114 million after one-off hedge costs.

• Strategic tuck-in acquisitions, including a CAD 20 million Brazeau/Central Alberta deal, expanded drilling inventory and production, supporting long-term value creation.

• Launched share buyback program (NCIB), returning over CAD 4.7 million to shareholders through repurchase and cancellation of 2.2 million shares.

Financial highlights

• Petroleum and natural gas sales were CAD 262.4 million, up from CAD 208.9 million in Q2 and CAD 201.1 million in Q3 2023.

• Q3 Adjusted EBITDA reached a record CAD 136 million, above consensus.

• Adjusted Funds Flow was CAD 94 million; normalized for hedge costs, AFF was over CAD 114 million (CAD 0.56/share).

• Free Funds Flow (excluding one-time hedge monetization) was CAD 9.7 million, reflecting active capital spending and non-recurring hedge costs.

• Net debt as of September 30 was CAD 779 million, or 1.4x net debt to annualized pro forma adjusted EBITDA.

• Liquidity at quarter-end exceeded CAD 260 million, including CAD 113 million cash and CAD 150 million undrawn credit.

Outlook and guidance

• Q4 2024 production expected to average 39,000–40,000 BOE/day, at the upper end of guidance.

• Planned Q4 capital expenditures of CAD 90–95 million, targeting 20 new wells and production optimization.

• Full 2025 budget and guidance to be released before year-end, with preliminary plans for a stable budget and robust Free Funds Flow.

• Early guidance for 2025 likely to use a $75 WTI oil price assumption, aligning with peers and market conditions.