CALGARY, AB – Journey Energy Inc. (TSX: JOY) (OTCQX: JRNGF) (“Journey” or the “Company“) reports that it has updated its Corporate Presentation and has posted the presentation on its website at www.journeyenergy.ca. Alex Verge, Journey’s President and CEO, will be presenting at the Peters and Company Energy Conference at 3:40 PM Eastern Standard Time on Tuesday September 13, 2022. The presentation will be webcast and a link to the recording of this presentation will be posted to Journey’s website as soon as it is available.
On July 28, 2022 Journey announced its intention to enter into a significant transformative acquisition (the “Acquisition”). In preparing this presentation Journey has taken the opportunity to refine its corporate guidance, post preliminary pro-forma reserves, present a 2023 first look, and update changes to current hedges.
Although the 2022 year-end debt projections and exit rates are essentially unchanged, 2022 average production and Adjusted Funds Flow have been updated. The primary influences pertaining to the guidance adjustments are:
- revising the forecasted closing date for the Acquisition from October 1 to November 1;
- phasing of capital expenditures to later in 2022 in order to ensure sufficient cash reserves are available at closing in an uncertain commodity price environment;
- deferring approximately $4 million of capital projects into 2023 from 2022; and
- minor third quarter production curtailments associated with NGTL’s maintenance related mainline restrictions.
Journey has also presented a preliminary review of its pro-forma reserves using an effective date of November 1, 2022. This preliminary review was performed by Journey’s independent evaluator, GLJ Petroleum Consultants Ltd., and is subject to the disclosures highlighted in the presentation. The review utilizes the three consultant’s average price deck as of July 1, 2022. On November 1, 2022, and post-closing of the Acquisition, Journey forecasts having approximately $108 million of net debt and 58.2 million common shares outstanding. Based on these assumptions Journey’s per share net asset value will have increased by approximately 100% since December 31, 2021. Journey’s proved, developed, producing NPV@10% will have increased to $7.05 per basic common share under these assumptions.
Journey also provided a first look for 2023 based upon its projected year-end 2022 forecast net debt and exit sales volumes. Journey’s 2023 forecast incorporates a capital budget of approximately $75 million, $15 million of which is allocated to the completion of a 15.5 megawatt power project in Gilby. Assuming an $85 US/bbl average WTI price, Journey is currently forecasting growth in both production and Adjusted Funds Flow per common share of approximately 30% in 2023 over 2022. Journey’s forecasted exit net debt of $88-92 million in 2022 is projected to decline to $3-9 million by the end of 2023. Journey has also provided updated sensitivities in its 2023 first look.
The business plan for 2023 is preliminary in nature and will be updated prior to the end of 2022. Journey continuously seeks out opportunities to expand our base business plan in order to enhance value for shareholders. Management looks forward to updating you regularly on its progress.