Petrus Resources Ltd. ("
Petrus" or the
"
Company") (TSX: PRQ) is pleased to announce its
2025 capital guidance.
2025 BUDGET GUIDANCE
In 2025, Petrus will build on its strategy of
disciplined capital investment by targeting projects designed to
maintain production, increase liquids weighting, enhance capital
efficiency and generate free funds flow. The Board of Directors has
approved a $40 million to $50 million capital program, with
approximately 70% allocated toward high-impact development drilling
in its core Ferrier and North Ferrier areas. The remaining capital
will be invested in strategic infrastructure, including a
12-kilometer expansion of the North Ferrier pipeline, and land
acquisitions. The budget is based on price assumptions of
USD$68.50/bbl WTI for oil, CAD$2.04/GJ AECO for natural gas and a
USD/CAD exchange rate of $0.70. Through the execution of this
capital program, Petrus expects to:
- Achieve 2025 annual average daily
production of 9,000 to 10,000 boe1 per day - 65% gas and 35% total
liquids
- Generate $45 million to $55 million
in annual funds flow2 for 2025
- Pay a monthly dividend of
$0.01/share - annually this represents approximately 9% of the
current share price
- Maintain net debt flat2 at $60
million
Given the inherent volatility of commodity
prices, the Company recognizes it is prudent to remain disciplined
and flexible from an operational and financial perspective. For
2025, the Company has hedged approximately 54% of its forecasted
production at an average price of $2.78/GJ for natural gas and CAD
$94.37/bbl for oil. Petrus will continue to monitor Canadian oil
and natural gas prices and will evaluate the capital program on an
ongoing basis.
The Company remains well-positioned to navigate
changing market dynamics while delivering consistent value to
shareholders. By leveraging operational efficiencies and
maintaining financial discipline, Petrus continues to strengthen
its financial position and reinforce long-term sustainability. As
market conditions evolve, the Company is prepared to adapt and
respond quickly to capture opportunities and maximize returns.
ABOUT PETRUSPetrus is a public
Canadian oil and gas company focused on property exploitation,
strategic acquisitions and risk-managed exploration in Alberta.
For further information, please contact:
Ken GrayPresident and Chief Executive OfficerT: 403-930-0889E:
kgray@petrusresources.com
_____________________________
1 Disclosure of production on a per boe basis consists of the
constituent product types and their respective quantities. Refer to
"BOE Presentation" and "Production and Product Type Information"
for further details.
2 Non-GAAP financial measure. During the year ended December 31,
2023, funds flow was $78.0 million. As at September 30, 2024, net
debt was $60.4 million. Refer to "Non-GAAP and Other Financial
Measures".
READER ADVISORIES
Non-GAAP and Other Financial Measures
This press release refers to the terms "funds
flow" and "net debt". These non-GAAP and other financial measures
are not recognized measures under GAAP (IFRS) and do not have a
standardized meaning prescribed by GAAP (IFRS). Accordingly, the
Company's use of these terms may not be comparable to similarly
defined measures presented by other companies. These non-GAAP and
other financial measures should not be considered to be more
meaningful than GAAP measures which are determined in accordance
with IFRS as indicators of our performance. Management uses these
non-GAAP and other financial measures for the reasons set forth
below.
Funds Flow
Funds flow is a common non-GAAP financial
measure used in the oil and natural gas industry that evaluates the
Company’s profitability at the corporate level. Management believes
that funds flow provides information to assist a reader in
understanding the Company's profitability relative to current
commodity prices. The most directly comparable financial measure
that is disclosed in the Company's primary financial statements is
oil and natural gas revenue, which was $125.6 million for the year
ended December 31, 2023. For additional information regarding funds
flow (including a reconciliation of funds flow to oil and natural
gas revenue), see the disclosure under "Non-GAAP and Other
Financial Measures – Corporate Netback and Funds Flow" in the
Company's Management's Discussion & Analysis for the year ended
December 31, 2023 which is available on SEDAR+ at www.sedarplus.ca,
which disclosure is incorporated by reference herein.
Net DebtNet debt is a non-GAAP financial measure
and is calculated as the sum of long-term debt and working capital
(current assets and current liabilities), excluding the current
financial derivative contracts, the current portion of the lease
obligation and the current portion of the decommissioning
obligation. Petrus uses net debt as a key indicator of its leverage
and strength of its balance sheet. As at September 30, 2024,
long-term debt was $25 million. For additional information
regarding net debt (including a reconciliation of net debt to
long-term debt), see the disclosure under "Non-GAAP and Other
Financial Measures – Net Debt" in the Company's Management's
Discussion & Analysis for the three- and nine-month periods
ended September 30, 2024 which is available on SEDAR+ at
www.sedarplus.ca, which disclosure is incorporated by reference
herein.
Forward-Looking Statements and FOFI
Certain information regarding Petrus set forth
in this press release contains forward-looking statements within
the meaning of applicable securities law, that involve substantial
known and unknown risks and uncertainties. Such statements
represent Petrus’ internal projections, estimates, beliefs, plans,
objectives, assumptions, intentions or statements about future
events or performance. These statements are only predictions and
actual events or results may differ materially. Although Petrus
believes that the expectations reflected in the forward-looking
statements are reasonable, it cannot guarantee future results,
levels of activity, performance or achievement since such
expectations are inherently subject to significant business,
economic, competitive, political and social uncertainties and
contingencies. Many factors could cause Petrus’ actual results to
differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, Petrus. In
particular, forward-looking statements included in this press
release include, but are not limited to, statements with respect
to: our intention in 2025 to build on our strategy of disciplined
capital investment by targeting projects designed to maintain
production, increase liquids weighting, enhance capital efficiency
and generate free funds flow; the range of our capital program in
2025, with approximately 70% allocated toward high-impact
development drilling in our core Ferrier and North Ferrier areas,
and that the remaining capital will be invested in strategic
infrastructure, including a 12-kilometer expansion of the North
Ferrier pipeline, and land acquisitions; our belief that through
the execution of our 2025 capital program we will achieve 2025
annual average daily production of 9,000 to 10,000 boe per day (65%
gas and 35% total liquids), generate $45 million to $55 million in
annual funds flow, pay a monthly dividend of $0.01/share, and
maintain net debt flat at $60 million; our intention to remain
disciplined and flexible from an operational and financial
perspective; that for 2025 we have hedged approximately 54% of ours
forecasted production, and the details thereof; our intention to
continue to monitor Canadian oil and natural gas prices and
evaluate our capital program on an ongoing basis; our belief that
we are well-positioned to navigate changing market dynamics while
delivering consistent value to shareholders; our belief that by
leveraging operational efficiencies and maintaining financial
discipline, we continues to strengthen our financial position and
reinforce long-term sustainability; and that we are prepared to
adapt and respond quickly to capture opportunities and maximize
returns. These forward-looking statements are subject to numerous
risks and uncertainties, most of which are beyond the Company’s
control, including: the risk that (i) negotiations between the U.S.
and Canadian governments are not successful and one or both of such
governments implements announced tariffs, increases the rate or
scope of announced tariffs, or imposes new tariffs on the import of
goods from one country to the other, including on oil and natural
gas, (ii) the U.S. and/or Canada imposes any other form of tax,
restriction or prohibition on the import or export of products from
one country to the other, including on oil and natural gas, and
(iii) the tariffs imposed by the U.S. on other countries and
responses thereto could have a material adverse effect on the
Canadian, U.S. and global economies, and by extension the Canadian
oil and natural gas industry and the Company; the risk that we do
not generate sufficient funds flow and free funds flow to maintain
our dividend at current levels and/or to maintain net debt flat;
the impact of general economic conditions; volatility in market
prices for crude oil, NGL and natural gas; industry conditions;
currency fluctuation; changes in interest rates and inflation
rates; imprecision of reserve estimates; liabilities inherent in
crude oil and natural gas operations; environmental risks;
incorrect assessments of the value of acquisitions and exploration
and development programs; competition; the lack of availability of
qualified personnel or management; changes in income tax laws or
changes in tax laws and incentive programs relating to the oil and
gas industry; hazards such as fire, explosion, blowouts, cratering,
and spills, or extreme weather events, such as wild fires, floods,
drought and extreme cold or warm temperatures, each of which could
result in substantial damage to wells, production facilities, other
property and the environment or in personal injury and/or increase
our costs, decrease our production, or otherwise impede our ability
to operate our business; stock market volatility; ability to access
sufficient capital from internal and external sources; that the
amount of dividends that we pay may be reduced or suspended
entirely; that we reduce or suspend the repurchase of shares under
our NCIB; and the other risks and uncertainties described in our
Annual Information Form. With respect to forward-looking statements
contained in this press release, Petrus has made assumptions
regarding: that the tariffs that have been publicly announced by
the U.S. and Canadian governments (but which are not yet in effect)
do not come into effect, but that if such tariffs do come into
effect, the potential impact of such tariffs, and that other than
the tariffs that have been announced, neither the U.S. nor Canada
(i) increases the rate or scope of such tariffs, or imposes new
tariffs, on the import of goods from one country to the other,
including on oil and natural gas, and/or (ii) imposes any other
form of tax, restriction or prohibition on the import or export of
products from one country to the other, including on oil and
natural gas; the amount of dividends that we will pay; the number
of shares that we will repurchase under our NCIB; future commodity
prices (including as disclosed herein) and royalty regimes;
availability of skilled labour; timing and amount of capital
expenditures; future exchange rates (including as disclosed
herein); the impact of increasing competition; conditions in
general economic and financial markets; availability of drilling
and related equipment and services; effects of regulation by
governmental agencies; the effects of inflation on our
profitability; future interest rates; and future operating costs.
Management has included the above summary of assumptions and risks
related to forward-looking information provided in this press
release in order to provide investors with a more complete
perspective on Petrus’ future operations and such information may
not be appropriate for other purposes. Petrus’ actual results,
performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that the Company will
derive therefrom. Readers are cautioned that the foregoing lists of
factors are not exhaustive. This press release contains
future-oriented financial information and financial outlook
information (collectively, "FOFI") about Petrus' prospective
results of operations including, without limitation, our forecasts
for our 2025 capital spending program, 2025 annual average daily
production rate, 2025 annual funds flow, 2025 monthly dividend, and
2025 net debt, which are subject to the same assumptions, risk
factors, limitations, and qualifications as set forth above.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on FOFI. Petrus' actual results, performance
or achievement could differ materially from those expressed in, or
implied by, these FOFI, or if any of them do so, what benefits
Petrus will derive therefrom. Petrus has included the FOFI in order
to provide readers with a more complete perspective on Petrus'
future operations and such information may not be appropriate for
other purposes.
These forward-looking statements and FOFI are
made as of the date of this press release and the Company disclaims
any intent or obligation to update any forward-looking statements
and FOFI, whether as a result of new information, future events or
results or otherwise, other than as required by applicable
securities laws.
BOE Presentation
The oil and natural gas industry commonly
expresses production volumes and reserves on a barrel of oil
equivalent (“boe”) basis whereby natural gas volumes are converted
at the ratio of six thousand cubic feet to one barrel of oil. The
intention is to sum oil and natural gas measurement units into one
basis for simplified measurement of results and comparisons with
other industry participants. Petrus uses the 6:1 boe measure which
is the approximate energy equivalence of the two commodities at the
burner tip. Boe’s do not represent an economic value equivalence at
the wellhead and therefore may be a misleading measure if used in
isolation.
Production and Product Type Information
The Company's forecast 2025 annual average daily
production rate disclosed in this press release (9,000 to 10,000
boe per day) consists of the following product types, as defined in
National Instrument 51-101 and using the conversion ratio described
above, where applicable: 15% light oil and condensate, 20% natural
gas liquids and 65% conventional natural gas.
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