The Company’s unaudited interim financial statements and corresponding Management’s Discussion and Analysis (“MD&A”) for the three month period ended March 31, 2020 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.
First Quarter Highlights
- Saturn’s strategy continues to be focused on the acquisition and development of high-quality Viking light oil assets.
- Production averaged 706 bbls/day, despite not bringing any new wells on-line given the current world economic conditions resulting from the impact of COVID-19.
- Adjusted EBITDAX (before pro-forma adjustments) was $2.05 million, a $0.78 million decrease from the same period in 2019 (see “Non-IFRS Measures”), primarily due to the decrease in production and realized price per barrel (see “Non-IFRS Measures”).
- Net income for the period ending March was $657,851, compared to $1.64 million in the same period of 2019. The decrease of $0.98 million was primarily a result of lower production from not bringing on any new wells in the period.
- Realized gain on derivative instruments was $288,015 for the period ending March 31, 2020, a $317,453 increase from the same period in 2019.
- Unrealized gain on derivative instruments was $3.28 million for the period ending March 31, 2020.
- Saturn’s operating netback (see “Non-IFRS Measures”) before realized loss on derivatives was $37.00/bbl, a decrease of $12.25/bbl from the same period in 2019. The year-over-year decrease was primarily due to a decline of $13.87/bbl in the realized price, offset by a reduction in operating costs of $1.06/bbl.
- At March 31, 2020, Saturn had US$19.99 million of borrowings (CAD$28.36 million converted at an exchange rate of $1.00 USD to $1.4187 CAD on March 31, 2020) drawn against its US$20.00 million Revolving Note (CAD$28.37 million using the period-end exchange rate).
|Three months ended
|($, except per unit amounts)||2020||2019|
|Per share – basic & diluted||0.00||0.01|
|Crude oil (bbls/d)||706||806|
|Natural gas (Mcf/d)||–||–|
|Natural gas liquids (bbls/d)||–||–|
|% liquids||100 %||100%|
|Three months ended
|Average Realized Prices|
|Crude Oil ($/bbl)||49.24||63.11|
|Natural gas ($/Mcf)||–||–|
|Natural gas liquids ($/bbl)||–||–|
|Operating Netback1 ($/bbl)|
|Realized gain (loss) on derivative instruments||4.48||(0.41)|
|Operating netback, after realized gain (loss) on derivative instruments||41.48||48.84|
In March 2020, the COVID-19 pandemic coupled with the price war between Saudi Arabia and Russia resulted in significant downfall in global oil prices. Saturn is cautious with its capital spending in light of uncertainties around worldwide energy consumption and supplies and the duration of this turmoil. The Company plans to suspend its capital program to preserve future development economics until oil prices recover and stabilize. Over 60% of Saturn’s 2020 forecast base oil production (net of royalties) is hedged, which is expected to help the Company endure the current economic situation. In addition, Saturn is continually reviewing its 2020 budget, including exploring all avenues to reduce debt, G&A and operating expenses, along with the implementation of a 20% reduction on all management salaries.
|(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.”|
|(2)||Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures|
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.