CALGARY, ALBERTA–(Marketwired – July 24, 2017) – PrairieSky Royalty Ltd. (“PrairieSky” or the “Company“) (TSX:PSK) is pleased to announce its second quarter operating and financial results for the period ended June 30, 2017.
|2017 Second Quarter Highlights:|
|•||Funds from operations of $75.0 million or $0.32 per share, basic and diluted and net income of $40.5 million or $0.17 per share, basic and diluted|
|•||Revenues of $102.2 million including $69.0 million of royalty revenue and $29.5 million of lease bonus consideration generated by leasing land for new and existing plays|
|•||Average royalty production of 25,706 BOE per day, 48% liquids|
|•||Completed acquisitions of additional producing and non-producing royalties for cash consideration of $9.7 million|
|•||Maintained a strong balance sheet with $108.0 million of positive working capital, including $96.9 million of cash on hand and nil debt as of June 30, 2017|
It was an active quarter for leasing across our fee land base. PrairieSky entered into 37 leasing arrangements with 34 different producers on our fee lands generating record quarterly lease bonus consideration of $29.5 million, of which $14.3 million was cash. Leasing was particularly active on our over 890 sections of Duvernay rights. Non-cash lease bonus consideration related to an amended leasing arrangement and provided PrairieSky with new and existing gross overriding royalties on developed and undeveloped lands as well as ownership in complementary seismic. Leasing of our undeveloped acreage is a precursor to drilling activity and future royalty production revenues at no cost to PrairieSky.
Producers spud 104 wells on PrairieSky’s land base despite a challenging commodity price environment and spring break-up. Drilling activity focused on the Viking oil play in both Western Saskatchewan and Central Alberta, the multi-zone Deep Basin fairway of Alberta and British Columbia and light and heavy oil plays across Central Alberta. During the quarter, PrairieSky acquired gross overriding royalties on producing and undeveloped lands for cash proceeds of $9.7 million which provide exposure to existing and future development for all commodities, including multi-zonal resource play opportunities in the Deep Basin. PrairieSky continues to be selective and disciplined in our evaluation of new royalty opportunities.
PrairieSky’s large undeveloped land position, low cost structure and high margin royalty production continues to deliver strong funds flow and growth opportunities with no capital requirements. During the quarter, PrairieSky declared dividends of $44.5 million and acquired and cancelled 397,200 common shares for $11.6 million under its normal course issuer bid (“NCIB“). In addition to dividends declared and the NCIB, PrairieSky generated excess free cash flow of $18.9 million in the quarter. At June 30, 2017, PrairieSky had $108.0 million of positive working capital, including $96.9 million of cash on hand and no debt.
PrairieSky marked its third anniversary during the quarter and we would like to thank our dedicated group of employees for their efforts as well as our shareholders for their continued support. Please contact Pam Kazeil, our Chief Financial Officer, at 587-293-4089 or myself at 587-293-4005 with any questions.
Andrew Phillips, President & CEO
FINANCIAL AND OPERATIONAL INFORMATION
The following table summarizes select operational and financial information of the Company for the periods noted. All dollar amounts are stated in Canadian dollars unless otherwise noted.
|($ Millions, except per share or as otherwise noted)||Three months ended
June 30, 2017
|Three months ended
June 30, 2016
|YTD 2017||YTD 2016|
|Funds from Operations||75.0||42.8||142.3||84.2|
|Per Share – basic and diluted(1)(4)||0.32||0.19||0.60||0.37|
|Net Earnings (Loss) and Comprehensive Income (Loss)||40.5||(5.7||)||61.3||(4.0||)|
|Per Share – basic and diluted(1)||0.17||(0.02||)||0.26||(0.02||)|
|Acquisitions including non-cash consideration||24.9||24.9||279.4||27.6|
|Working Capital at end of period||108.0||171.1||108.0||171.1|
|Weighted average – basic||236.8||228.9||236.7||228.8|
|Weighted average – diluted||237.1||229.1||237.0||229.0|
|Natural Gas (MMcf/d)||80.6||75.3||81.1||73.0|
|Crude Oil (bbls/d)||9,609||8,213||9,910||8,480|
|Natural Gas ($/Mcf)||$||2.15||$||0.67||$||2.20||$||1.22|
|Crude Oil ($/bbl)||52.98||45.01||52.89||39.41|
|Operating Netback per BOE(4)||$||25.28||$||17.18||$||26.22||$||16.41|
|Funds from Operations per BOE||$||32.06||$||20.31||$||29.94||$||20.01|
|Natural Gas Price Benchmarks|
|Oil Price Benchmarks|
|West Texas Intermediate (WTI) (US$/bbl)||50.27||45.64||51.03||38.99|
|Edmonton Light Sweet ($/bbl)||64.81||55.00||64.55||48.59|
|(1)||Net Earnings (Loss) and Comprehensive Income (Loss) and Funds from Operations per common share are calculated using the weighted average number of common shares outstanding.|
|(2)||A dividend of $0.0625 per common share was declared on June 15, 2017 and paid on July 17, 2017 to shareholders of record as at June 30, 2017.|
|(3)||See “Conversions of Natural Gas to BOE”.|
|(4)||A Non-GAAP measure which is defined under the Non-GAAP Measures section in PrairieSky’s MD&A.|
A full version of PrairieSky’s Management’s Discussion and Analysis (“MD&A“) and unaudited interim condensed financial statements and notes thereto for the fiscal period ended June 30, 2017 is available on SEDAR at www.sedar.com and PrairieSky’s website at www.prairiesky.com.
CONFERENCE CALL DETAILS
A conference call to discuss the results will be held for the investment community on Tuesday, July 25, 2017 beginning at 6:30 a.m. MDT (8:30 a.m. EDT). To participate in the conference call, approximately 10 minutes prior to the conference call, please dial:
|(866) 413-7174 (toll free in North America)|
|(647) 427-2293 (International)|