The Company’s unaudited interim financial statements and corresponding Management’s Discussion and Analysis (“MD&A”) for the three and nine month periods ended September 30, 2019, are available on SEDAR at www.sedar.com and on Saturn’s website at www.saturnoil.com. Copies of the materials can also be obtained upon request without charge by contacting the Company directly. Please note, currency figures presented herein are reflected in Canadian dollars, unless otherwise noted.
Q3 and Year-to-Date 2019 Highlights
- Achieved strong production volumes of 686 barrels of oil per day (bbls/d) during the third quarter, an increase of 209% compared to the same period in 2018, and average volumes of 761 bbls/d over the first nine months of 2019, a level 307% higher than in the first nine months of 2018.
- Generated revenue of $3.8 million in Q3 2019, $2.9 million or 318% higher than the same period in 2018, while year-to-date 2019 revenue of $13.8 million was $10.8 million, or 352%, higher than first nine months of 2018, directly related to Saturn’s successful drilling program, production growth and effective cost control initiatives.
- Realized record operating netbacks1 (before realized loss on derivative instruments) in Q3 2019 and the first nine months of 2019 of $51.44 per bbl and $52.09 per bbl, respectively, due to lower royalties and operating costs relative to the same periods last year as Saturn continues to drive down costs.
- Recorded net income of $2.3 million ($0.01 per share basic and diluted) for the first nine months of 2019, compared to a net loss of $108,000 for the same period in 2018.
- Strengthened the balance sheet by delivering robust adjusted EBITDAX1 (before pro-forma adjustments) of $2.6 million in Q3 2019, an increase of $2.3 million over Q3 2018, and $9.6 million for the first nine months of 2019, more than $8.4 million higher than the same period last year, with the increases in both periods attributable to Saturn’s successful drilling program and higher operating netbacks.
- Through the first nine months of 2019, drilled, completed and tied-in 13 100% working interest extended reach horizontal (“ERH”) wells at an average cost per well of approximately $1.04 million, which included the following:
- Two wells in Kerrobert posted an average initial production rate after 30 days (“IP30”) of 144 bbls/d2, with the top producing well in the area posting an IP30 of 153 bbls/d2;
- Two wells in Milton posted an average IP30 of 62 bbls/d2, with the top producing well in the area posting an IP30 of 74 bbls/d2 ; and
- Nine wells in Prairiedale posted an average IP30 of 101 bbls/d2, with the top producing well in the area posting an IP30 of 133 bbls/d2 .
- Expanded the asset portfolio through the first nine months of 2019 with the acquisition of 23.2 net sections of land within the highly economic light oil Viking play in Saskatchewan at an average cost of approximately $190 per hectare, bringing Saturn’s total acreage to 57.3 net sections as at September 30, 2019.
- At September 30, 2019, Saturn had US$18.56 million of borrowings (CAD$24.58 million using September 30, 2019 exchange rate) drawn against the Company’s US$20.0 million Revolving Note (CAD$26.49 million using the period-end exchange rate).
“I am very pleased with Saturn’s continued operating success through the third quarter as we maintained strong production volumes, reduced operating costs and generated record operating netbacks despite ongoing pricing and broad energy market challenges,” said John Jeffrey, CEO of Saturn. “With our high-quality, oil-weighted asset base, Saturn is well positioned to continue generating robust adjusted EBITDAX that can be directed to fund our conservative budget for the balance of 2019, improve our balance sheet strength as well as enhance our financial flexibility.”
Results of Oil and Gas Activities
|Three months ended
|Nine months ended
|($, except per unit amounts)||2019||2018||2019||2018|
|Net income (loss)||(552,890||)||(442,632||)||2,272,847||(107,680||)|
|Per share – basic & diluted||(0.00||)||(0.00||)||0.01||(0.00||)|
|Crude oil (bbls/d)||686||158||761||187|
|Natural gas (Mcf/d)||–||–||–||–|
|Natural gas liquids (bbls/d)||–||–||–||–|
|Average Realized Prices|
|Crude Oil ($/bbl)||64.55||62.84||65.98||65.54|
|Natural gas ($/Mcf)||–||–||–||–|
|Natural gas liquids ($/bbl)||–||–||–||–|
|Operating Netback ($/bbl)|
|Realized loss on derivative instruments||(0.01||)||–||(1.10||)||–|
|Operating netback, after realized loss on derivative instruments1||51.43||42.68||50.99||44.95|
(1) Non-IFRS Measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the section entitled “Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures”.
As previously announced, Saturn’s fourth quarter 2019 drilling program commenced in November and will include the drilling of 4.0 net new ERH wells. Two of the wells will be drilled in the Company’s core Prairiedale area and two wells in the Company’s new development area, Loverna. All of these wells are expected to be on-line and producing by the end of the year, setting the stage for further drilling in Q1 2020. Saturn confirms its full-year 2019 capital program at approximately $22.7 million, which will result in a total of 17 wells being drilled, completed, equipped and tied-in within its Viking light oil areas. With increases in reserves, production and cash flow, the Company anticipates improved financial flexibility and access to capital to underpin future growth strategies and deliver meaningful shareholder returns. Further, in keeping with strong corporate governance practices, Saturn is pleased to confirm that its Board of Directors recently approved a new Insider Trading and Blackout Periods Policy which will be implemented immediately and made available on the Company’s website.
About Saturn Oil & Gas Inc.
Saturn Oil & Gas Inc. (TSX.V: SOIL) (FSE: SMK) is a public energy Company focused on the acquisition and development of undervalued, low-risk assets. Saturn is driven to build a strong portfolio of cash flowing assets with strategic land positions. De-risked assets and calculated execution will allow Saturn to achieve growth in reserves and production through retained earnings. Saturn’s portfolio will become its key to growth and provide long-term stability to shareholders.
Investor & Media Contact:
Saturn Oil & Gas
John Jeffrey, MBA – Chief Executive Officer & Chairman
Tel: +1 (587) 392-7902
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.