Prospera Energy Inc. Announces Year-End 2021 Financial Results
July 12 2022 - 01:10AM
Prospera Energy Inc. ("
Prospera" or the
"
Corporation") (PEI: TSX-V; OF6B: FRA) is pleased
to release its fourth quarter and year-end 2021 financial and
operating results. Selected financial and operational information
outlined below should be read in conjunction with the Company’s
financial statements and related management’s discussion and
analysis for the year ended December 31, 2021.
Message to Shareholders
2021 was a transformational year for Prospera as
the Corporation was restructured to be compliant, and profitable
for all stakeholders. Restructuring of Prospera commenced in Q2
2021 with the initial focus on AP arrears, regulatory &
environmental non-compliances, safe infrastructure operations, and
production optimization. Importantly, PEI has placed additional
focus on ensuring its accounting practices are compliant with IFRS
standards and is committed to improving the legacy culture
associated with Prospera’s accounting policies.
Prospera’s commitment to accounting commenced
with hiring new auditor Crowe MacKay LLP (“Crowe”), announced on
December 3, 2021. Crowe completed an extensive audit into current
and prior periods. Also, conducted a higher count of sample
testing, resulting in numerous prior period adjustments. Further,
identifying significant internal controls to be implemented.
Overall, the audit took longer than expected, however restructured
PEI has established much higher confidence in its financial
accounting practices and compliance
The 2021 audited financials captured the
significant reorganization and business efforts achieved resulting
in the current financial position and liquidity. PEI is positioned
for accelerated growth in 2022 and years onward (upon a strong
Foundational business support pillar).
2021 Highlights
A. Realized positive net earnings of $4.3 million in
2021 ($0.05 per share – basic) compared to a net loss of $11.7
million in 2020 (-$0.18 per share – basic)
Operating netback |
2021 |
2020 |
Total petroleum and natural gas sales |
4,410,761 |
3,275,508 |
Royalties |
(447,340) |
(191,042) |
Operating & restructuring costs |
(5,066,843) |
(4,283,082) |
Operating netback |
(1,103,422) |
(1,198,616) |
Impairment (expense)/reversal |
6,849,087 |
(9,019,769) |
Net Income |
$4,349,802 |
($11,728,262) |
Earnings/(loss) per share |
$0.05 |
($0.18) |
- Impairment reversal of
$6,849,087 is a result of reserves volume increase from 464Mbbl to
2,644Mbbl; Increased NPV@10% increase from -$3.4 million to +$56.2
million. The oil in place was technically justified by the
restructured team substantiated by third party evaluation. The NPV
increase was completed at modest $70/BOE CAD price deck.
-
The restructuring cost of infrastructure and well optimization
resulting in a higher operating cost. However, production to the
current 700 barrels (gross) of oil equivalent (BOE) per day
resulting in significantly increased monthly revenue, from a low of
80 BOE per day in March 2021
-
Realized average oil and natural gas prices of $61.42 per barrel of
oil equivalent (boe) in 2021 compared to $33.76 per boe in
2020
B. PEI increased its asset value considerably by 368%+
in the 2021:
|
|
2021 |
|
2020 |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash |
$ |
281,519 |
$ |
153,393 |
Trade and other receivables |
|
1,405,573 |
|
2,967,449 |
Prepaid expenses and deposits |
|
505,728 |
|
296,104 |
Inventory |
|
237,863 |
|
226,890 |
Total current assets |
|
2,430,683 |
|
3,643,836 |
Non-current assets |
|
|
|
|
Property and equipment |
|
23,073,890 |
|
1,933,355 |
Right-of-use |
|
627,965 |
|
- |
Total assets |
$ |
26,132,538 |
$ |
5,577,191 |
- The substantiation
of oil in place and corresponding increase in NPV value were key
contributors to the increase in asset value.
- Increased the
Corporation’s ownership in the Cuthbert, Luseland, and Heart Hills
properties from an average of 40% to 80%+ by settling partner
arrears.
C. PEI reduced legacy arrears
significantly in Year 2021
Current liabilities |
|
2021 |
|
2020 |
Trade and other payables |
$ |
8,645,147 |
$ |
$10,906,989 |
Flow-through share premium |
|
17,000 |
|
- |
Current portion of lease liabilities |
|
64,121 |
|
- |
Credit facilities |
|
- |
|
1,575,348 |
Total current liabilities |
|
8,726,268 |
|
12,482,337 |
- Settled
$1,575,000 of mezzanine debt
- Settled legacy
debt and trade arrears of $5.8 million
- Reduced AP
liabilities year over year by $2,261,842 (based on 2020 closing
balances)
D. Increase in production and asset
value improved the Shareholder deficiency in Year 2021
Shareholders’ deficiency |
2021 |
2020 |
Share capital |
12,452,481 |
11,649,956 |
Share purchase warrants |
863,740 |
154,641 |
Contributed surplus |
3,981,894 |
3,804,198 |
Equity portion of convertible debt |
60,211 |
- |
Accumulated other comprehensive income |
(14,013) |
(14,013) |
Deficit |
(30,128,149) |
(34,477,951) |
Total shareholders’ deficiency |
(12,783,836) |
(18,883,169) |
- Net income driving reduction in
shareholder deficiency of 4,349,802
- Issued convertible debt through
multiple private placements, raising a net total of $6,469,410;
raised equity proceeds of $902,000.
PEI’s 2021 year-end financial information is
under the Company’s issuer profile on SEDAR
at www.sedar.com.
2022 Outlook
PEI restructured efforts have resulted in
manageable liabilities, safe operating infrastructure and optimized
critical production rates of 700BOE per day from vertical wells.
PEI has positioned itself to execute the second phase of the PEI
development plan that is to increase production through horizontal
wells and to capture the significant remaining reserves. While
abandoning vertical wells and reducing the environmental footprint
and ARO obligations. PEI has initiated the test horizontals to
evaluate technical and economical merits.
About Prospera
Prospera is a public oil and gas exploration,
exploitation and development company focusing on conventional oil
and gas reservoirs in Western Canada. Prospera will use its
experience to develop, acquire, and drill assets with potential for
primary and secondary recovery.
For further information:
Shawn Mehler, PR Email:
shawn@prosperaenergy.comWebsite: www.prosperaenergy.com
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking
statements relating to the future operations of the Corporation and
other statements that are not historical facts. Forward-looking
statements are often identified by terms such as “will,” “may,”
“should,” “anticipate,” “expects” and similar expressions. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
future plans and objectives of the Corporation, are forward looking
statements that involve risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements.
Although Prospera believes that the expectations
and assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the
forward-looking statements because Prospera can give no assurance
that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, risks associated with the oil and gas industry in
general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures.
The reader is cautioned that assumptions used in
the preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of Prospera. As a result, Prospera
cannot guarantee that any forward-looking statement will
materialize, and the reader is cautioned not to place undue
reliance on any forward- looking information. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may
differ materially from those anticipated. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement. The forward-looking statements
contained in this news release are made as of the date of this news
release, and Prospera does not undertake any obligation to update
publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by Canadian securities
law.
Neither the TSXV nor its Regulation
Services Provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
release.
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