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 acquisitions and operational execution.

• Adjusted EBITDA reached CAD 136 million ($135.8 million), up 28% sequentially and 35% year-over-year, surpassing consensus estimates.

• Adjusted Funds Flow (AFF) set a new high at CAD 94.1 million, with normalized AFF at CAD 114 million after one-off hedge costs.

• Strategic tuck-in acquisitions, including a CAD 20.5 million Brazeau deal, expanded drilling inventory and production.

• Launched share buyback program (NCIB), returning over CAD 4.7 million to shareholders and canceling 2.2 million shares to date.

Financial highlights

• Petroleum and natural gas sales were $262.4 million, up from $208.9 million in Q2.

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

• Adjusted Funds Flow was CAD 94.1 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 29.7 million; reported free funds flow was $9.7 million due to active capital spending.

• Net debt as of September 30 was CAD 779 million, or 1.4x net debt to annualized pro forma adjusted EBITDA, with $113 million in cash and a fully undrawn $150 million credit facility.

Outlook and guidance

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

• Planned Q4 capital expenditures of $90–$95 million, targeting 20 new wells and facility investments.

• 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.

• Continued focus on share buybacks and strategic tuck-in acquisitions to enhance per-share metrics.