CALGARY, Alberta – Saturn Oil & Gas Inc. (“Saturn” or the “Company”) (TSX.V: SOIL) (FSE: SMK) today provides a corporate update in response to recent market volatility caused by the COVID-19 pandemic and the continued oil price weakness.
Saturn is pleased to confirm that in the interests of managing risk through an uncertain environment, the Company has secured a fixed price hedge on production of 400 barrels (“bbl”) of oil per day at CAD $65.40 per bbl through February, 2021. With this hedge, Saturn has increased its financial flexibility by securing a fixed price on approximately 50% of its current production volumes.
Consistent with many industry peers, the Company also confirms its intention to shift Saturn’s 2020 capital allocation strategy from organic drilling opportunities to potential accretive acquisition targets. After evaluating numerous land, asset and corporate opportunities, Saturn believes that pursuing acquisition targets offers superior rates of return in the current commodity price environment versus drilling. The potential acquisitions being assessed would enable the Company to leverage its existing infrastructure, capacity and expertise, and would be designed to position Saturn for continued responsible growth in a more favourable commodity price environment.
“In this uncertain time when people and families are facing numerous challenges due to the continued spread of COVID-19, Saturn is doing what we can to support the health and well-being of our employees, partners and shareholders to safely manage through these unchartered waters,” said John Jeffrey, CEO of Saturn. “One of Saturn’s strengths is our flexibility to respond rapidly to changes in the broader market and to pursue those strategies offering the best potential rates of return for our shareholders. As a result, we have locked in attractive pricing on approximately one half of our current production for the next twelve months, and have turned our focus to portfolio-building for the future rather than risk eroding value by drilling into such a weak pricing environment.”
The safety and security of Saturn’s employees and service providers remains a top priority for the Company and all required and recommended practices both in the field and the office are being followed to help curb the spread of the Coronavirus. The Company remains on track to publish and file its audited annual 2019 financial statements and related MD&A by April 29, 2020.
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.