CALGARY, ALBERTA–(Marketwired – Jan. 24, 2017) – Petrus Resources Ltd. (“Petrus” or the “Company”) (TSX:PRQ) is pleased to announce a term loan refinancing and provide a corporate update including a 2017 outlook.
SECOND LIEN TERM LOAN
Petrus has entered into an agreement with Macquarie Bank Limited to extend the Company’s $42 million second lien term loan by two years; now due October 2019. Concurrent with the extension, the Company reduced the amount outstanding by $7 million through working capital and available credit facilities. The interest rate on the $35 million balance will remain unchanged at the Canadian Dealer Offered Rate (CDOR) plus 700 basis points (which is currently a total interest rate of 7.9%).
PRODUCTION AND OPERATIONS UPDATE
Petrus’ 2016 drilling program was concentrated in the Ferrier area targeting Cardium liquids rich natural gas. Three gross (1.2 net) of the final four gross (1.6 net) wells in the program are now on production. With the addition of these new wells, Petrus’ January monthly production is expected to be approximately 9,000 boe/d. The final well in the program is currently being completed and is expected to be on production by early February. Based on the Company’s year-end production and estimated 2016 capital expenditures (excluding acquisitions and divestitures) Petrus added production at a cost of approximately $14,000 per flowing boe/d. Using historic data and estimated field production, the Company estimates its corporate base decline production rate to be approximately 28%. Since the acquisition of Arriva Energy Inc. on September 9 2014, Petrus has drilled 15 wells in the Ferrier area and participated as a working interest partner in 5 additional wells. In that same period, the Company has increased net production in the Ferrier area from approximately 1,000 boe/d to over 5,000 boe/d.
Petrus’ Board of Directors has approved a $50 to $60 million capital budget for 2017. Based on the economics and repeatable results characteristic of the Ferrier Cardium play, 2017 capital is expected to be directed primarily to the development of the Company’s Ferrier assets. The program is expected to include drilling 16 gross (11.7 net) Cardium wells at Ferrier. Utilization of pad drilling from locations in close proximity to existing Petrus infrastructure is expected to further improve capital efficiencies. The program also provides for investment in facilities; the processing and compression capability of the Ferrier gas plant is expected to be doubled to reach a capacity of approximately 60 mmcf/d by the fourth quarter of 2017. Capital will also be allocated to expansion of the Ferrier gathering system to tie in additional volume to Petrus’ Ferrier gas plant for processing.
The 2017 capital budget is expected to add net production at a cost of approximately $15,000 per flowing boe/d. Petrus expects the 2017 capital program will increase December 2016 field estimated production of 8,572 boe/d by approximately 12 to 18% by year-end 2017 to 9,600 to 10,200 boe/d, based on anticipated service costs, activity levels, an estimated 28% base decline rate and current capital structure. The 2017 capital program is expected to be funded through cash flow and working capital.
Petrus is also pleased to announce three executive appointments. Mr. Brett Booth has been appointed Vice President Land, Mr. Marcus Schlegel has been appointed Vice President Engineering and Mr. Ross Keilly has been appointed Vice President Exploration. The three executives previously held senior positions with Petrus and have demonstrated significant leadership and commitment to the organization. Their contributions to the Company’s strategy, culture and growth have been and will continue to be integral to the Company’s success.
MONTHLY ACTIVITY UPDATE
Petrus provides an activity update on a monthly basis which includes an estimate of production and capital investment. It is available on our website where there is also a registration link for email distribution.
The company plans to release its annual financial results on March 9, 2017.
Petrus is a public Canadian oil and gas company focused on property exploitation, strategic acquisitions and risk-managed exploration in Alberta.