Prospera Energy Inc. ("
Prospera" or the
"
Corporation") (PEI: TSX-V; OF6A: FRA)
In Q3 2023, Prospera was steadily recovering
production rates that had been impacted by adverse weather in
earlier quarters. During Q3 PEI attained gross peak rates of 770+
boe/d, with another 350 boe/d behind the pipe to be optimized.
Meanwhile, phase 2 development drilling commenced in Q3, and this
horizontal drilling program required the temporary shut-in of the
adjacent production of approximately 120 boe/d for smoother
drilling operations. This second phase of restructuring development
includes the transformation from vertical wells to horizontal wells
to access the significant remaining reserves in Prospera’s
Saskatchewan heavy oil fields.
Prospera attained higher working interest (net)
sales of 519 boe/d (658 boe/d gross) in Q3 2023 with higher
corresponding revenue of $4.0M compared to Q3 2022. Prospera’s
Joint Venture partners are in receivables and therefore in default
payables until remedied. Consequently, Prospera assumes 100% of
production and revenue. In 2023 Quarter three highlights are as
follows:
- Realized positive Operating Income
of $1,101,827 in Q3 2023 compared to $783,084 in Q3 2022.
- Reported Net Income of $71,011 in Q3 2023 compared to a Net
Loss of ($779,438) in Q2 2023.
- PEI realized average sales prices of $82.15/boe in Q3 2023,
compared to $85.09/boe in Q3 2022. PEI expects pricing to remain at
similar levels through the remainder of 2023.
- Operating Expenses in Q3 2023 were $41.45/boe compared to
$36.24/boe in Q3 2022. Increases were driven by higher vegetation
control, facility de-sanding, injection volumes optimization,
winterization, and preparation for additional volume
throughput.
- Restructuring efforts continue to
improve Prospera’s balance sheet:
- Increased Property and Equipment balance to $36.0 million from
$29.0 million on December 31, 2022.
- Positive Shareholders Equity balance of $2.3 million compared
to -$6.2 million on December 31, 2022.
- Year-to-date, PEI has received
$7,435,568 through warrant exercises and $4,329,000 through private
placements, whilst extending matured convertible debt of $1,500,000
to 2025, allowing for PEI capital development without affecting
working capital.
- Prospera’s capital development
program originally consisted of 10 heavy oil horizontal wells and 8
medium oil vertical wells and was expected to contribute an
additional 1,000 bpd. Prospera has since drilled, completed and
tied-in 5 horizontal wells and due to positive drilling results,
has extended the heavy oil horizontal development program.
Operating Netback ($) |
|
Q3 2023 |
|
|
Q3 2022 |
|
Total petroleum and natural gas sales revenue |
$ |
3,920,428 |
|
$ |
3,750,664 |
|
Transportation costs |
|
(276,460) |
|
|
(168,705) |
|
Royalties |
|
(424,448) |
|
|
(451,488) |
|
Operating costs |
|
(1,978,034) |
|
|
(1,597,486) |
|
Operating netback |
|
1,241,485 |
|
|
1,532,985 |
|
Operating Netback ($/boe) |
|
Q3 2023 |
|
|
Q3 2022 |
|
Sales revenue |
$ |
82.15 |
|
$ |
85.09 |
|
Transportation costs |
|
(5.79) |
|
|
(3.83) |
|
Royalties |
|
(8.89) |
|
|
(10.24) |
|
Operating costs |
|
(41.45) |
|
|
(36.24) |
|
Operating netback |
$ |
11.30 |
|
$ |
34.78 |
|
|
|
|
|
|
Balance Sheet: Assets |
|
September 30,2023 |
|
|
December 31, 2022 |
|
Current assets |
|
|
|
|
Cash |
$ |
194,941 |
|
$ |
1,050,960 |
|
Trade and other receivables |
|
3,902,395 |
|
|
838,500 |
|
Prepaid expenses and deposits |
|
547,997 |
|
|
59,788 |
|
Inventory |
|
426,661 |
|
|
449,849 |
|
Total current assets |
|
5,071,994 |
|
|
2,399,097 |
|
Non-current assets |
|
|
|
|
Trade and other receivables |
|
1,655,328 |
|
|
2,844,129 |
|
Deposits |
|
1,002,658 |
|
|
918,902 |
|
Property and equipment |
|
36,013,239 |
|
|
28,984,586 |
|
Right-of-use |
|
543,340 |
|
|
661,941 |
|
Total assets |
$ |
44,286,560 |
|
$ |
35,808,655 |
|
|
|
|
|
|
|
|
Prospera Quarter Three Financial
Performance:
Selected financial and operational information
outlined above should be read in conjunction with the Company’s
financial statements and related management’s discussion and
analysis (MD&A) for the quarter ended September 30, 2023.
PEI has submitted its quarter-end financial
information for 2023, within the Company's issuer profile on SEDAR
at www.sedar.com.
First Closing of Debt
Financing
Additionally, Prospera Energy announces the
first closing of CDN $580,000 private placement financing of debt
with an equity bonus. Prospera intends to use the net proceeds for
development capital (covering default partner portion) – drilling,
completion & tie-in, well abandonment & reclamation costs,
and ongoing ESG initiatives. The financing is subject to approval
by the TSX Venture Exchange.
Debt Term Sheet
Issuer: |
Prospera Energy Inc. (“Prospera” or the
“Company”). |
Issue: |
Low-dilutive offering (the "Offering") of debt
financing with equity bonus. |
Target Close Date: |
November 15, 2023. |
Offering Amount: |
$3,000,000 CAD. |
Equity Bonus: |
Principal amount loaned will be granted an equity bonus. 1 share
for every $1 of debt provided for a total of 3,000,000 shares. |
Interest: |
14% interest, calculated and paid quarterly in cash starting after
the 3rd quarter (interest in the first quarter is compounded). |
Term: |
2 years. |
Repayment: |
Principle repaid at the end of the term. |
Underlying Equity Bonus: |
Common shares of the Company listed on the TSX Venture Exchange
under the symbol PEI (the “Common Shares”). |
Use of Proceeds: |
Prospera intends to use the net proceeds of the Offering for
development capital (covering default partner portion) – drilling,
completion & tie-in, well abandonment & reclamation costs,
and ongoing ESG initiatives. |
Finders Fees: |
The Corporation may pay qualified finders a fee of 7% cash and 7%
warrants. |
Offering Basis: |
Private placement debt offering with equity bonus. |
An aggregate amount of up to $3,000,000 CAD may
be raised through this non-brokered private placement and Prospera
is actively in discussion to fill the remaining amount. The company
remains focused on minimal dilution financing options moving
forward and if fully subscribed, this debt financing would
represent less than 1% equity dilution.
The securities will be offered to qualified
purchasers in reliance upon exemptions from prospectus and
registration requirements of applicable securities legislation. A
finder's fee in cash and/or warrants may be paid to eligible
finders in relation to this financing. These private placements are
offered in jurisdictions where the Corporation is legally allowed
to do so.
Furthermore, PEI issues a clarification in
respect to the settlement of finder's fees totaling $47,304 (the
"Shares for Debt Transaction") pursuant to the finder's fee
agreement dated January 15, 2023. This debt was incurred in respect
to a private placement announced on January 25, 2023, and
referenced in press releases on March 29, 2023, and again on June
14, 2023, both times using a price per share and warrant exercise
price that was deemed unacceptable to the TSXV.
Under this revised agreement, the Corporation
will convert the debt into common share units of the Corporation
(the "Common Share Units"). The shares for debt transaction
involves the issuance of 525,600 Common Share Units at a deemed
price of $0.09 per common share unit, subject to certain
conditions, including the final approval of the TSX Venture
Exchange ("TSXV"). Each common share unit consists of one common
share and 0.875 common share purchase warrants. Holders of whole
purchase warrants are entitled to purchase one common share at
$0.105 per share until February 14, 2025. The Corporation reserves
the right to accelerate the expiry of the warrants should the
shares trade at $0.30 for ten consecutive business trading days
following the expiry of the four-month hold period. The common
shares issued as part of the shares for debt transaction will be
subject to a four-month hold period.
Prospera and Development
objectives
Prospera Energy Inc. (TSX.V: PEI, OTC: GXRFF,
FRA: OF6B) is a publicly traded energy company based in Western
Canada, specializing in the exploration, development, and
production of crude oil and natural gas. Prospera Energy Inc. has
announced a mid-August spud of PEI’s phase 2 restructured
development program intended to increase production. This phase
includes the transformation from vertical wells to horizontal wells
to access the significant remaining reserves (400 million bbls) in
Prospera’s Saskatchewan heavy oil fields. This transformation will
also reduce PEI environmental and surface footprint by eliminating
the numerous vertical well leases along the lateral path.
The first 5 horizontal wells drilled have
performed higher than the estimated type curve and the IP60 has
exceeded PEI expectations. Prospera’s current production is 1,100
boepd, with another 450 boepd behind pipe to accommodate
development. The extended horizontal drilling is to resume and in
the next few days. The development of light oil slanted wells has
received permits and lease construction, which is set to commence
in the next few days as well. Prospera will continue the Phase 2
development program to increase production, aiming to achieve
year-end targets and enhance Prospera’s share value.
Phase 3 of Prospera’s restructured development
program involves full-scale reservoir management with IOR/EOR
applications to provide support to optimize recovery and lower the
decline to sustain steady volume delivery. Prospera plans to
further its acquisition strategy, expanding within its core area
and diversifying its product mix. The goal for PEI is to attain 50%
light oil, 40% heavy oil and 10% gas.
PEI remains committed to ESG initiatives aimed
at minimizing its environmental footprint, reducing and ultimately
eliminating emissions, and exploring innovative methods to enhance
API quality. This approach not only improves margins but also
eliminates the need for diluents.
For further information:
Shawn Mehler, PREmail:
smehler@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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