THIRD QUARTER 2022 HIGHLIGHTS
(1) |
Non-GAAP measure, capital measure, Non-GAAP ratio or supplementary financial 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 “Non-GAAP and Other Financial Measures” contained within this news release. |
(2) |
Type curve assumptions are based on the Total Proved plus Probable Undeveloped reserves contained in the McDaniel Reserve Report as disclosed in the Company’s Annual Information Form which is available under the Company’s profile on SEDAR at www.sedar.com. “McDaniel” means McDaniel & Associates Consultants Ltd. independent qualified reserves evaluators. “McDaniel Reserve Report” means the independent engineering evaluation of the crude oil, natural gas and NGL reserves, prepared by McDaniel with an effective date of December 31 2021 and a preparation date of March 10 2022. |
2022 OUTLOOK
Perpetual continues to forecast exploration and development capital expenditures(1) of $31 – $33 million for full year 2022, relative to previous guidance released on August 3, 2022 of $29 – 32 million, to be fully funded from the Company’s credit facility and adjusted funds flow(1). With the East Edson and Mannville 2022 drilling programs fully executed, nominal capital spending is forecast for the fourth quarter.
The table below summarizes forecasted capital expenditures(1) and drilling activities for Perpetual for the remainder of 2022:
Q1 – Q3 2022 |
# of wells |
Q4 2022 |
# of wells |
2022 |
# of wells |
|
($ millions) |
(gross/net) |
($ millions) |
(gross/net) |
($ millions) |
(gross/net) |
|
West Central(1) |
$17.7 |
7 / 3.5 |
$0.5-$1.0 |
0 / 0.0 |
$18 |
7 / 3.5 |
Eastern Alberta |
$14.1 |
5 / 5.0 |
($0.2) |
0 / 0.0 |
$14 |
5 / 5.0 |
Total(2) |
$31.8 |
12 / 8.5 |
$0.3-$0.8 |
0 /0.0 |
$32 |
12 / 8.5 |
(1) Oil-based mud load fluid recovered is credited to capital upon recovery and sales. |
(2) Excludes abandonment and reclamation spending and acquisitions or land expenditures, if any. |
Total Company average production for the third quarter of 2022 was 5,882 boe/d (24% oil and NGL) and average production volumes are forecast to exceed 7,000 boe/d during the fourth quarter of 2022 as the seven (3.5 net) new wells come on production at East Edson and the three (3.0 net) wells at Mannville contribute to heavy oil production volumes. Full year average production is on track to grow approximately 25% from 2021 levels in accordance with guidance on August 3, 2022, of 6,500 to 6,750 boe/d. Cash costs(1) are expected to average between $20.00 and $22.00 per boe for the calendar year, unchanged from previous guidance of $20.00 to $22.00 per boe.
2022 Guidance assumptions are as follows:
2022 Guidance |
|
Exploration and development capital expenditures(1) ($ millions) |
$31 – $32 |
Cash costs(1) ($/boe) |
$20.00 – $22.00 |
Average daily production (boe/d) |
6,500 – 6,750 |
Production mix (%) |
20% oil and NGL |
(1) |
Non-GAAP measure, capital management measure, Non-GAAP ratio or supplementary financial 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 “Non-GAAP and Other Financial Measures” contained within this news release. |
Perpetual continues its Environmental, Social, and Corporate Governance (“ESG”) focus, with total abandonment and reclamation expenditures through to the end of the third quarter of $1.1 million and up to an additional $0.9 million of spending on Asset Retirement Obligations (“ARO”) is planned in the fourth quarter of 2022. Of the total $2.0 million of spending to manage ARO in 2022, an estimated $0.4 million is expected to be funded through Alberta’s Site Rehabilitation Program (“SRP”). The remaining $1.6 million will exceed the Company’s annual area-based closure spending requirements of $0.9 million.
Perpetual’s Board of Directors approved a capital budget of $29 – 32 million for 2023, including $5 to 7 million to be spent in the first quarter for pipeline infrastructure and to drill two (1.0 net) wells at East Edson. The remainder of the 2023 capital program is expected to be spent in the third quarter of 2023 and focus primarily at East Edson to drill to fill the infrastructure capacity and at Mannville to pursue additional multi-lateral drilling opportunities.
Financial and Operating Highlights |
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||
($Cdn thousands except volume and per share amounts) |
2022 |
2021 |
Change |
2022 |
2021 |
Change |
Financial |
||||||
Oil and natural gas revenue |
22,856 |
14,603 |
57 % |
81,108 |
39,366 |
106 % |
Net income (loss) |
8,234 |
51,141 |
(84) % |
19,866 |
75,452 |
(74) % |
Per share – basic(2) |
0.13 |
0.80 |
(84) % |
0.31 |
1.20 |
(74) % |
Per share – diluted(2) |
0.11 |
0.72 |
(85) % |
0.27 |
1.08 |
(75) % |
Cash flow from operating activities |
8,749 |
6,655 |
31 % |
26,592 |
11,192 |
138 % |
Adjusted funds flow(1) |
9,642 |
2,174 |
344 % |
34,264 |
7,020 |
388 % |
Per share(3) |
0.15 |
0.03 |
388 % |
0.52 |
0.11 |
373 % |
Total assets |
203,431 |
217,665 |
(7) % |
203,431 |
217,665 |
(7) % |
Revolving bank debt |
6,974 |
13,183 |
(47) % |
6,974 |
13,183 |
(47) % |
Term loan, principal amount |
2,671 |
2,671 |
— % |
2,671 |
2,671 |
— % |
Other liability (undiscounted) |
3,342 |
— |
100 % |
3,342 |
— |
100 % |
Senior Notes, principal amount |
35,647 |
36,583 |
(3) % |
35,647 |
36,583 |
(3) % |
Adjusted working capital (surplus) deficiency(1) |
17,509 |
3,914 |
347 % |
17,509 |
3,914 |
347 % |
Net debt(1) |
66,143 |
56,351 |
17 % |
66,143 |
56,351 |
17 % |
Capital expenditures |
||||||
Exploration and development(1) |
22,596 |
9,947 |
127 % |
31,794 |
11,504 |
176 % |
Net payments on acquisitions and dispositions |
— |
— |
100 % |
— |
423 |
(100) % |
Net capital expenditures |
22,596 |
9,947 |
127 % |
31,794 |
11,927 |
167 % |
Common shares outstanding (thousands)(4) |
||||||
End of period |
65,923 |
63,892 |
3 % |
65,923 |
63,892 |
3 % |
Weighted average – basic |
65,016 |
63,801 |
2 % |
63,964 |
62,668 |
2 % |
Weighted average – diluted |
74,607 |
71,227 |
5 % |
74,741 |
69,955 |
7 % |
Operating |
||||||
Daily average production |
||||||
Conventional natural gas (MMcf/d) |
26.9 |
21.6 |
25 % |
30.4 |
22.2 |
37 % |
Heavy crude oil (bbl/d) |
1,002 |
972 |
3 % |
821 |
1,047 |
(22) % |
NGL (bbl/d) |
390 |
300 |
30 % |
385 |
309 |
25 % |
Total (boe/d)(5) |
5,882 |
4,876 |
21 % |
6,267 |
5,061 |
24 % |
Average realized prices |
||||||
Realized natural gas price ($/Mcf)(1) |
4.74 |
3.50 |
35 % |
5.94 |
3.15 |
89 % |
Realized oil price ($/bbl)(1) |
87.24 |
65.22 |
34 % |
98.95 |
53.56 |
85 % |
Realized NGL price ($/bbl)(1) |
85.48 |
65.40 |
31 % |
92.37 |
58.77 |
57 % |
Wells drilled – gross (net) |
||||||
Conventional natural gas |
6 (3.0) |
3 (1.5) |
7 (3.5) |
5 (2.5) |
||
Heavy crude oil |
3 (3.0) |
– (-) |
5 (5.0) |
– (-) |
||
Total |
9 (6.0) |
3 (1.5) |
200 % |
12 (8.5) |
5 (2.5) |
140 % |
(1) |
Non-GAAP measure, capital management measure, Non-GAAP ratio or supplementary financial 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 “Non-GAAP and Other Financial Measures” contained within this news release. |
(2) |
Based on weighted average basic common shares outstanding for the period. |
(3) |
Adjusted funds flows divided by the Company’s shares outstanding. |
(4) |
Shares outstanding are net of shares held in trust (Q3 2022 – 1.1 million; Q3 2021 – 0.2 million). |
(5) |
Please refer to “Advisories – Volume conversions” below. |
About Perpetual
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in Calgary, Alberta. Perpetual owns a diversified asset portfolio, including liquids-rich conventional natural gas assets in the deep basin of West Central Alberta, heavy crude oil and shallow conventional natural gas in Eastern Alberta and undeveloped bitumen leases in Northern Alberta. Additional information on Perpetual can be accessed at www.sedar.com or from the Company’s website at www.perpetualenergyinc.com.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.