Tenaz Energy (TNZ) Q2 2024 earnings summary

Executive summary

• Q2 2024 production averaged 2,517 boe/d, down 13% sequentially due to natural declines and maintenance, but up 32% year-over-year from drilling and asset acquisition.

• Net income was $1.3 million in Q2 2024, reversing losses from Q1 2024 and Q4 2023, aided by income tax recoveries.

• Closed acquisition of a gas plant and leasehold assets in Alberta for $2.8 million; announced agreement to acquire NAM Offshore B.V. (NOBV) for €165 million ($246 million), expected to close mid-2025.

• Share price increased 79% in 2024, leading TSX-listed oil and gas companies in total shareholder return.

Financial highlights

• Q2 2024 petroleum and natural gas sales were $14.0 million, down from $17.9 million in Q1 2024, but up from $10.6 million in Q2 2023.

• Funds flow from operations (FFO) was $5.8 million, down 21% sequentially, up 73% year-over-year.

• Q2 2024 capital expenditures totaled $2.5 million, mainly for Netherlands facilities.

• Adjusted working capital at quarter-end was $44.3 million, down from $48.7 million in Q1 2024.

Outlook and guidance

• 2024 capital expenditure guidance unchanged at $26–28 million; Canadian drilling planned for late Q3.

• Annual production guidance maintained at 2,700–2,900 boe/d.

• NOBV acquisition expected to add nearly 11,000 boe/d (99% TTF natural gas) and generate €90 million ($134 million) free cash flow in 2024.