CALGARY – Petrus Resources Ltd. (“Petrus” or the “Company”) (TSX: PRQ) is pleased to provide its first quarter capital budget and outlook for 2020. With the risk of volatility in the price of Canadian light oil and natural gas, the Company believes that it is prudent to maintain a disciplined capital budget that is flexible from an operational and financial perspective. Petrus’ Board of Directors has approved a first quarter 2020 capital budget of $9.0 million. Petrus will continue to monitor the Canadian commodity price environment and will evaluate subsequent quarter capital spending as the year progresses. The first quarter capital budget is focused on the highest rates of return, lowest risk, condensate rich drilling opportunities in the Company’s inventory at Ferrier, Alberta. Petrus is focused on designing its 2020 capital plan to invest capital systematically each quarter within funds flow, permitting excess funds each quarter to reduce debt.
Petrus’ Board of Directors has approved a first quarter 2020 capital budget of $9.0 million to drill two (2.0 net) Cardium wells in the Ferrier area. First quarter funds flow combined with proceeds from the previously announced non-core asset disposition are expected to total $9.5 million which will permit excess funds to be directed toward debt repayment. We estimate that the wells will each have payouts of less than one year. The commodity price assumptions used for the first quarter 2020 capital budget were an average price of $2.18 C$/GJ for natural gas (AECO) and $62.81 US$/bbl for oil (WTI). Our estimated first quarter average differential for Western Canadian light oil is estimated at $6.72 US$/bbl.
Petrus is committed to maintaining its financial flexibility and the Company will determine subsequent quarter capital spending as the year progresses. For the coming year we have significant optionality in the number, the commodity composition and the location of drilling opportunities. Given our growing infrastructure system, Petrus expects that it will drill the majority of its anticipated 2020 capital plan from existing surface leases which will not only decrease cost and environmental disturbance, but can increase flexibility through reduction of lead time required to begin drilling. Management anticipates that the 2020 capital plan will be funded by funds flow, and will continue to systematically reduce debt each quarter by approximately $1 to $2 million. The objectives of the 2020 capital plan are to reduce debt, maintain or grow production, grow funds flow per share and increase the Company’s liquids weighting.
Petrus is a public Canadian oil and gas company focused on property exploitation, strategic acquisitions and risk-managed exploration in Alberta.