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![Saturn Oil & Gas Inc. (TSX: SOIL) (FSE: SMKA) (OTCQX: OILSF)](https://investingnews.com/media-library/saturn-oil-gas-inc-tsx-soil-fse-smka-otcqx-oilsf.png?id=51742594&width=1200&height=800)
Saturn Oil & Gas Inc. Reports 2023 Year-End Results Highlighted by Record Annual Production and Free Funds Flow
Saturn Oil & Gas Inc. (TSX: SOIL) (FSE: SMKA) (OTCQX: OILSF) ("Saturn" or the "Company") is pleased to report its financial and operating results for the three and twelve months ended December 31, 2023.
"2023 was a tremendous year of progress for Saturn in creating a substantial and sustainable free cash generating enterprise. In addition to doubling our production base over last year, we have assembled a deep inventory of high-quality development drilling locations to sustain current production levels for decades," commented John Jeffrey, Chief Executive Officer. "Saturn has maintained its strategic focus on developing light oil focused assets and optimizing our cost structure to deliver some of the highest cash flow margins in Canada, and to further our ultimate goal of shareholder value creation."
2023 Fourth Quarter and Annual Highlights:
- Delivered record crude oil and natural gas production with fourth quarter 2023 averaging 26,891 boe/d (82% oil and NGLs), compared to 12,514 boe/d (96% oil and NGLs) in the fourth quarter of 2022, an increase of 115%;
- Generated quarterly adjusted EBITDA(1) of $100.1 million compared to $62.2 million in the fourth quarter of 2022, an increase of 61%;
- Achieved record quarterly adjusted funds flow(1) of $80.2 million compared to $50.7 million in the fourth quarter of 2022, an increase of 58%;
- Invested $57.2 million of capital expenditures(1) in the fourth quarter, drilling 19 (16.9 net) horizontal wells;
- Generated free funds flow(1) of $23.1 million in the fourth quarter 2023, compared to $15.1 million in the fourth quarter of 2022, an increase of 53%; and
- Exited 2023 with net debt(1) of $460.5 million, realizing a net debt to fourth quarter annualized adjusted funds flow(1) of 1.4x.
Three months ended December 31, | Year ended December 31, | ||||||||||||
(CAD $000s, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||
Petroleum and natural gas sales | 185,384 | 111,558 | 693,891 | 367,957 | |||||||||
Cash flow from operating activities | 75,380 | 58,100 | 283,988 | 102,314 | |||||||||
Operating netback, net of derivatives(1) | 104,328 | 64,661 | 382,890 | 153,450 | |||||||||
Adjusted EBITDA(1) | 100,092 | 62,191 | 363,143 | 146,740 | |||||||||
Adjusted funds flow(1) | 80,247 | 50,729 | 278,138 | 118,658 | |||||||||
per share | - Basic | 0.58 | 0.85 | 2.20 | 2.67 | ||||||||
- Diluted | 0.56 | 0.84 | 2.15 | 2.64 | |||||||||
Free funds flow(1) | 23,072 | 15,053 | 147,565 | 29,553 | |||||||||
per share | - Basic | 0.17 | 0.25 | 1.17 | 0.67 | ||||||||
- Diluted | 0.16 | 0.25 | 1.14 | 0.66 | |||||||||
Net income (loss) | 131,456 | (16,728 | ) | 290,623 | 74,815 | ||||||||
per share | - Basic | 0.94 | (0.28 | ) | 2.30 | 1.68 | |||||||
- Diluted | 0.92 | (0.28 | ) | 2.25 | 1.66 | ||||||||
Net Debt(1), end of period | 460,483 | 219,803 | 460,483 | 219,803 |
Three months ended December 31, | Year ended December 31, | |||||||||||
(CAD $000s, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||
OPERATING HIGHLIGHTS | ||||||||||||
Average production volumes | ||||||||||||
Crude oil (bbls/d) | 19,407 | 11,590 | 18,177 | 8,841 | ||||||||
NGLs (bbls/d) | 2,533 | 428 | 1,992 | 353 | ||||||||
Natural gas (mcf/d) | 29,704 | 2,971 | 24,559 | 2,392 | ||||||||
Total boe/d | 26,891 | 12,514 | 24,262 | 9,593 | ||||||||
% Oil and NGLs | 82% | 96% | 83% | 96% | ||||||||
Average realized prices | ||||||||||||
Crude oil ($/bbl) | 95.09 | 103.03 | 96.75 | 111.84 | ||||||||
NGLs ($/bbl) | 44.21 | 51.47 | 43.75 | 58.41 | ||||||||
Natural gas ($/mcf) | 2.49 | 5.36 | 2.77 | 5.57 | ||||||||
Processing expenses ($/boe) | (0.61 | ) | (1.56 | ) | (0.53 | ) | (1.52 | ) | ||||
Petroleum and natural gas sales ($/boe) | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
Operating netback ($/boe) | ||||||||||||
Petroleum and natural gas sales | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
Royalties | (9.75 | ) | (9.57 | ) | (9.10 | ) | (13.61 | ) | ||||
Net operating expenses(1) | (18.17 | ) | (22.42 | ) | (20.33 | ) | (24.67 | ) | ||||
Transportation expenses | (1.25 | ) | (0.45 | ) | (1.28 | ) | (0.61 | ) | ||||
Operating netback(1) | 45.76 | 64.46 | 47.64 | 66.20 | ||||||||
Realized loss on derivatives | (3.59 | ) | (8.29 | ) | (4.41 | ) | (22.38 | ) | ||||
Operating netback, net of derivatives(1) | 42.17 | 56.17 | 43.23 | 43.82 | ||||||||
Common shares outstanding, end of period | 139,313 | 59,892 | 139,313 | 59,892 | ||||||||
Weighted average, basic | 139,313 | 59,869 | 126,230 | 44,402 | ||||||||
Weighted average, diluted | 142,292 | 60,363 | 129,225 | 44,955 |
Message to Shareholders
In 2023, Saturn achieved its third consecutive year of growth in production and cash flow from operations:
- Average production increased 153% to 24,262 boe/d, compared to 9,593 boe/d average production in 2022;
- Adjusted EBITDA(1) increased 147% to $363.1 million, compared to $146.7 million in 2022; and
- Adjusted funds flow(1) increased 134% to $278.1 million, compared to $118.7 million in 2022.
During 2023, Saturn successfully drilled and rig released a total of 59 gross (48.8 net) horizontal wells across its four core operating areas, comprised of:
- 28 gross (25.2 net) wells in Southeast Saskatchewan;
- 19 gross (14.3 net) wells in West Central Saskatchewan;
- 8 gross (5.3 net) wells in Central Alberta; and
- 4 gross (4.0 net) wells in North Alberta.
The February acquisition of privately held oil and gas producer, Ridgeback Resources Inc. ("Ridgeback"), was a key contributor to Saturn's growth in 2023, adding 670 net sections of land featuring development opportunities to sustain the Company's production going forward. The acquisition of Ridgeback was highly synergistic to the Company's existing Southeast Saskatchewan assets expanding its high cash flow, light oil production base by approximately 65%; more than doubling the light oil reserve volumes in the area; and added a large undeveloped land position featuring Bakken light oil resource that Saturn can continue to develop. In addition to growing the Company's Saskatchewan footprint, the acquisition also expanded Saturn's operations into Alberta's prolific Cardium, Kaybob and Swan Hills areas.
The Company has continued to focus on streamlining its cost structure by reducing overall royalties, decreasing operating costs and improving average hedging pricing:
- Average royalties decreased to 11.5% in 2023, compared 12.8% in 2022;
- Average net operating expenses(1) decreased 18% to $20.33 per boe in 2023, compared to $24.67 per boe in 2022; and
- Average realized loss on derivatives decreased 80% to $4.41 per boe in 2023, compared to $22.38 in 2022.
In light of the above cost reduction impacts, the Company's 2023 operating netback(1), net of derivatives of $43.23 per boe, was comparable to the $43.82 per boe in 2022, despite an approximately 17% drop in the average benchmark WTI oil price to US $77.60 in 2023, compared to an average WTI oil price of US $94.25 in 2022.
Saturn drilled as operator in 2023, 47 gross (45.2 net) wells, with the results of the 46 gross operated wells that were placed on production summarized in the table below:
Gross Wells Drilled by Formation (number): | Avg. IP30 per Location (boe/d) | 2023 Guidance Type Curve (boe/d) | Performance vs. Type Curve (%) | Total Gross Capital Invested ($MM) | Capital Efficiency ($ per boe/d) |
SE Sask - Frob. & Midale (10) | 80.4 | 69.0 | +17 | 13.2 | 16,420 |
SE Sask - Spearfish (6) | 89.2 | 77.0 | +16 | 7.1 | 13,270 |
SE Sask - Stimulated Bakken (7) | 109.7 | 101.0 | +9 | 12.3 | 16,020 |
SE Sask - OHML Bakken (2) | 168.5 | 147.0 | +15 | 4.6 | 13,650 |
WC Sask - Viking (12) | 97.9 | 68.0 | +44 | 19.4 | 16,510 |
Central AB - Lochend Cardium (3) | 279.0 | 260.0 | +7 | 17.7 | 21,150 |
Central AB - Pembina (2) | 239.5 | 248.0 | -3 | 9.4 | 19,620 |
North AB - Montney (4) | 314.4 | 330.0 | -5 | 14.3 | 11,390 |
Weighted Average | 134.6 | 121.0 | +11 | 98.0 | 15,830 |
Commitment to Debt Repayment
On February 28, 2023, the Company expanded its Senior Term Loan by $375.0 million in relation to the acquisition of Ridgeback. Saturn continues to prioritize the rapid repayment of its Senior Term Loan, and in 2023, the Company made principal payments totaling approximately $164.5 million, with additional aggregate payments of approximately $50.7 million made to date in 2024, for a total of $215.2 million of principal payments since December 31, 2022. The Company intends to continue directing free cash flow to ongoing debt repayment and balance sheet strengthening.
Southeast Saskatchewan
In Q4 of 2023, Saturn rig released six gross (4.6 net) Bakken wells, of which two gross wells (2.0 net) were drilled as open hole multi-lateral ("OHML") wells. These OHML wells feature seven to eight horizontal legs per well and represent the first on which Saturn has deployed this innovative drilling technique. The Company's Bakken light oil development has been a strong addition to its capital program in Southeast Saskatchewan, where Saturn has already successfully drilled a total of 11 gross (9.1 net) Bakken wells in 2023. Saturn has 197 net booked Bakken drilling locations (including 16.9 net OHML locations) and has identified over 100 net unbooked Bakken wells for future development.
Saturn successfully drilled three gross (2.3 net) Frobisher wells in Q4 of 2023 for an annual total of 11 gross (10.1 net) Mississippian wells, including two gross (1.9 net) Midale wells, which collectively outperformed IP30 type curve expectations by 17%. The six gross (6.0 net) Spearfish wells drilled in 2023 were a highlight of the year's development program, outperforming IP30 type curve expectations by 16%, while experiencing lower than expected declines. Further budgeted development of Frobisher and Spearfish light oil is expected to be a prominent component of Saturn's 2024 capital investment plan.
For the three months ended December 31, 2023, the Company's Southeast Saskatchewan assets collectively averaged 12,550 boe/d of production, an increase of 67% from 7,522 boe/d in the comparative 2022 period.
West Central Saskatchewan
The Company added a third rig to the fourth quarter development plan in order to extend the drilling success of its Viking light oil targets in West Central Saskatchewan, adding four additional wells with 100% working interest. In 2023 Saturn successfully drilled 19 gross (14.3 net) Viking wells and continued to follow up on its best performing areas of Hershel and Plato with 12 operated wells. These 12 wells were drilled with 100% working interest, had an average IP30 of 97.9 bbls/d of light oil, which outperformed the type curve expectations by 44%. Saturn has 165 net locations booked for future Viking development.
The Company's West Central Saskatchewan assets averaged 3,504 boe/d of production for the three months ended December 31, 2023, compared to 4,992 boe/d in the prior year.
Central Alberta
Saturn successfully drilled three Cardium horizontal wells in the fourth quarter of 2023, with 100% working interest, for a total of eight gross (5.3 net) Cardium wells being rig released in 2023. The 2023 Cardium wells drilled by Saturn were Extended Reach Horizontal ("ERH") wells having an average lateral length of 2.2 miles. Five of the Saturn operated Cardium wells were put on production in Q4 of 2023, with IP30 rates consistent with type cure expectations, and delivering approximately 1,316 boe/d in aggregate during the first 30 days on production. The 6th Cardium well drilled in late 2023 has now been completed along with an additional three gross (3.0 net) ERH Cardium wells drilled to date in 2024. The four new wells are expected to be brought online before the end of Q1 2024. In total during 2024, Saturn expects to drill eight net Cardium ERH wells.
For the three months ended December 31, 2023, the Company's Central Alberta assets produced an average of 8,066 boe/d.
North Alberta
In December 2023, the Company brought on production a four well pad in Kaybob, with 100% working interest to Saturn. The four wells were within expectations of the Montney type curve for this area and delivered an IP30 rate of approximately 1,254 boe/d in aggregate. Saturn plans to drill an additional four well pad in Kaybob during 2024.
For the three months ended December 31, 2023, the Company's North Alberta assets produced an average of 2,771 boe/d.
ESG Initiatives
Saturn continued its dedication to responsible environmental stewardship by directing approximately $10.7 million in 2023 to decommissioning expenditures, including the abandonment of 114 wells that no longer had economic production potential, amounting to approximately 2x the number of gross new wells the Company drilled in 2023.
Outlook
Saturn's Board of Directors has approved the Company's largest ever development plan in 2024, with a budget of approximately $145.6 million targeting the drilling of up to 61 net wells. With Saturn's extensive pipeline network and facilities infrastructure within each of its core operating areas, the Company has ample capacity to handle incremental new production coming on-stream. Over 85% of the Company's 2024 development capital expenditures will be directed to drilling, completions, equipping and tie-in of new production.
Through the first quarter of 2024, the Company employed a full-time rig in Southeast Saskatchewan, resulting in the drilling of five gross (5.0 net) conventional wells (two Frobisher, two Spearfish, one Tilston) all of which have been put onto production. The Company is now drilling the first of two Bakken OHML wells that will continue through the first half of 2024 with 100% working interest to Saturn.
Additional details on Saturn's 2024 Capital Investment Program is available within the Company's Guidance Presentation now available on the website at https://saturnoil.com/investors/#presentations-and-events.
Investor Webcast
Saturn will host a webcast at 10:00 AM MDT (12:00 PM Noon EDT) on Wednesday, March 13, 2024, to review the year end and fourth quarter 2023 financial results and provide additional colour on the Company's operational highlights. Participants can access the live webcast via https://saturnoil.com/invest/q4-2023-results-webcast. A recorded archive of the webcast will be available afterwards on the Company's website.
About Saturn Oil & Gas Inc.
Saturn Oil & Gas Inc. is a growing Canadian energy company focused on generating positive shareholder returns through the continued responsible development of high-quality, light oil weighted assets, supported by an acquisition strategy that targets highly accretive, complementary opportunities. Saturn has assembled an attractive portfolio of free-cash flowing, low-decline operated assets in Saskatchewan and Alberta that provide a deep inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an ESG-focused culture, Saturn's goal is to increase reserves, production and cash flows at an attractive return on invested capital. Saturn's shares are listed for trading on the TSX under ticker 'SOIL' on the Frankfurt Stock Exchange under symbol 'SMKA' and on the OTCQX under the ticker 'OILSF'.
The Company's consolidated financial statements and corresponding Management's Discussion and Analysis for the three months and year ended December 31, 2023 are available on SEDAR+ at www.sedarplus.com and on Saturn's website at www.saturnoil.com. Copies of the materials can also be obtained upon request without charge by contacting the Company directly. Please note, currency figures presented herein are reflected in Canadian dollars, unless otherwise noted.
Further information and a corporate presentation is available on Saturn's website at www.saturnoil.com.
Saturn Oil & Gas Investor & Media Contacts:
John Jeffrey, MBA - Chief Executive Officer
Tel: +1 (587) 392-7900
www.saturnoil.com
Kevin Smith, MBA - VP Corporate Development
Tel: +1 (587) 392-7900
info@saturnoil.com
Note:
(1) See Reader Advisory "Non-GAAP and Other Financial Measures"
Reader Advisory
Non-GAAP and Other Financial Measures
Throughout this news release and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures provided by other issuers. Non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS. The disclosure under the section "Non-GAAP and Other Financial Measures" including non-GAAP financial measures and ratios, capital management measures and supplementary financial measures in the Company's Condensed consolidated interim financial statements and MD&A are incorporated by reference into this news release.
This press release uses the terms "adjusted EBITDA", "adjusted funds flow", "free funds flow" and "net debt" which are capital management measures. See the disclosure under "Capital Management" in our audited consolidated financial statements for the three months and the year ended December 31, 2023, for an explanation and composition of these measures and how these measures provide useful information to an investor, and the additional purposes, if any, for which management uses these measures.
Free funds flow
The Company considers free funds flow to be a key capital management measure as it is used to determine the efficiency and liquidity of Saturn's business, measuring its funds available after capital investment available for debt repayment, pursue acquisitions and gauge optionality to pay dividends and/or return capital to shareholders through share repurchases. Saturn calculates Free funds flow as Adjusted funds flow in the period less expenditures on property, plant and equipment and exploration and evaluation assets, together "capital expenditures". By removing the impact of current period capital expenditures from adjusted funds flow, management monitors its free funds flow to inform its capital allocation decisions.
Three months ended December 31, | Year ended December 31, | |||||||||||
($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
Adjusted funds flow | 80,247 | 50,729 | 278,138 | 118,658 | ||||||||
Capital expenditures | (57,175 | ) | (35,676 | ) | (130,573 | ) | (89,105 | ) | ||||
Free funds flow | 23,072 | 15,053 | 147,565 | 29,553 |
Capital Expenditures
Saturn uses capital expenditures to monitor its capital investments relative to those budgeted by the Company on an annual basis. Saturn's capital budget excludes acquisition and disposition activities as well as the accounting impact of any accrual changes or payments under certain lease arrangements. The most directly comparable GAAP measure for capital expenditures is cash flow used in investing activities. The following table reconciles capital expenditures and capital expenditures, net acquisitions and dispositions ("A&D") to the nearest GAAP measure, cash flow used in investing activities.
Three months ended December 31, | Year ended December 31, | |||||||||||
($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
Cash flow used in investing activities | 38,725 | 41,747 | 576,405 | 318,238 | ||||||||
Change in non-cash working capital | 18,450 | (5,266 | ) | 20,830 | 19,234 | |||||||
Capital expenditures, net A&D | 57,175 | 36,481 | 597,235 | 337,472 | ||||||||
Acquisitions, net of cash acquired | - | (805 | ) | (466,662 | ) | (248,367 | ) | |||||
Capital expenditures | 57,175 | 35,676 | 130,573 | 89,105 |
Net operating expenses
Net operating expense is calculated by deducting processing income primarily generated by processing third party production at processing facilities where the Company has an ownership interest, from operating expenses presented on the Statement of income (loss). Where the Company has excess capacity at one of its facilities, it will process third-party volumes to reduce the cost of ownership in the facility. The Company's primary business activities are not that of a midstream entity whose activities are focused on earning processing and other infrastructure-based revenues, and as such third-party processing revenue is netted against operating expenses in the MD&A. This metric is used by management to evaluate the Company's net operating expenses on a unit of production basis. Net operating expense per boe is a non-GAAP financial ratio and is calculated as net operating expense divided by total barrels of oil equivalent produced over a specific period of time. The calculation of the Company's net operating expenses is shown within the net operating expenses section of our MD&A for the three months and year ended December 31, 2023.
Operating netback and Operating netback, net of derivatives
The Company's operating netback is determined by deducting royalties, net operating expenses and transportation expenses from petroleum and natural gas sales. The Company's operating netback, net of derivatives is calculated by adding or deducting realized financial derivative commodity contract gains or losses from the operating netback. The Company's operating netback and operating netback, net of derivatives are used in operational and capital allocation decisions. Presenting operating netback and operating netback, net of derivatives on a per boe basis is a non-GAAP financial ratio and allows management to better analyze performance against prior periods on a per unit of production basis. The calculation of the Company's operating netbacks and operating netback, net of derivatives are summarized as follows.
Three months ended December 31, | Year ended December 31, | |||||||||||
($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
Petroleum and natural gas sales | 185,384 | 111,558 | 693,891 | 367,957 | ||||||||
Royalties | (24,124 | ) | (11,022 | ) | (80,565 | ) | (47,640 | ) | ||||
Net operating expenses | (44,945 | ) | (25,817 | ) | (180,074 | ) | (86,379 | ) | ||||
Transportation expenses | (3,094 | ) | (518 | ) | (11,314 | ) | (2,139 | ) | ||||
Operating netback | 113,221 | 74,201 | 421,938 | 231,799 | ||||||||
Realized loss on financial derivatives | (8,893 | ) | (9,540 | ) | (39,048 | ) | (78,349 | ) | ||||
Operating netback, net of derivatives | 104,328 | 64,661 | 382,890 | 153,450 | ||||||||
($ per boe amounts) | ||||||||||||
Petroleum and natural gas sales | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
Royalties | (9.75 | ) | (9.57 | ) | (9.10 | ) | (13.61 | ) | ||||
Net operating expenses | (18.17 | ) | (22.42 | ) | (20.33 | ) | (24.67 | ) | ||||
Transportation expenses | (1.25 | ) | (0.45 | ) | (1.28 | ) | (0.61 | ) | ||||
Operating netback | 45.76 | 64.46 | 47.64 | 66.20 | ||||||||
Realized loss on financial derivatives | (3.59 | ) | (8.29 | ) | (4.41 | ) | (22.38 | ) | ||||
Operating netback, net of derivatives | 42.17 | 56.17 | 43.23 | 43.82 |
Adjusted EBITDA
The Company considers adjusted EBITDA to be a key capital management measure as it is both used within certain financial covenants prescribed under the Company's Senior Term Loan (note 11) and demonstrates Saturn's standalone profitability, operating and financial performance in terms of cash flow generation, adjusting for interest related to its capital structure. Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation, amortization and other noncash or extraordinary items.
Adjusted funds flow
The Company considers adjusted funds flow to be a key capital management measure as it demonstrates Saturn's ability to generate the necessary funds to manage production levels and fund future growth through capital investment. Management believes that this measure provides an insightful assessment of Saturn's operations on a continuing basis by eliminating certain non-cash charges, actual settlements of decommissioning obligations, of which the nature and timing of expenditures may vary based on the stage of the Company's assets and operating areas, and transaction costs which vary based on the Company's acquisition and disposition activity.
Free funds flow
The Company considers free funds flow to be a key capital management measure as it is used to determine the efficiency and liquidity of Saturn's business, measuring its funds available after capital investment available for debt repayment, pursue acquisitions and gauge optionality to pay dividends and/or return capital to shareholders through share repurchases. Saturn calculates free funds flow as adjusted funds flow in the period less expenditures on property, plant and equipment and exploration and evaluation assets, together "capital expenditures". By removing the impact of current period capital expenditures from adjusted funds flow, management monitors its free funds flow to inform its capital allocation decisions.
The following table reconciles adjusted EBITDA, adjusted funds flow and free funds flow to cash flow from operating activities:
Year ended December 31, | ||||||
($000s) | 2023 | 2022 | ||||
Cash flow from operating activities | 283,988 | 102,314 | ||||
Change in non-cash working capital | (20,993 | ) | 14,536 | |||
Decommissioning expenditures | 10,486 | 582 | ||||
Transaction costs | 4,657 | 1,226 | ||||
Current tax recovery | (1,915 | ) | - | |||
Net interest(1) | 86,920 | 28,082 | ||||
Adjusted EBITDA | 363,143 | 146,740 | ||||
Current Tax Recovery | 1,915 | - | ||||
Net Interest(1) | (86,920 | ) | 28,082 | |||
Adjusted Funds Flow | 278.138 | 118,658 | ||||
Capital Expenditures(2) | (130,573 | ) | (89,105 | ) | ||
Free Funds Flow | 147,565 | 29,553 | ||||
(1) Calculated as interest expense, net of interest revenue. (2) Calculated as expenditures on exploration and development assets on the consolidated statements of cash flows. |
Market capitalization and net debt
Management considers net debt a key capital management measure in assessing the Company's liquidity. Total market capitalization and net debt to annualized quarterly adjusted funds flow are used by management and the Company's investors in analyzing the Company's balance sheet strength and liquidity. The summary of total market capitalization, net debt, annualized quarterly adjusted funds flow and net debt to annualized quarterly adjusted funds flow is as follows:
Year ended December 31, | ||||||
($000s) | 2023 | 2022 | ||||
Total common shares outstanding (000s) | 139,313 | 59,892 | ||||
Share price(1) | 2.20 | 2.35 | ||||
Total market capitalization | 306,489 | 140,746 | ||||
Adjusted working capital(2) | 8,240 | (3,128 | ) | |||
Senior Term Loan | 451,153 | 240,843 | ||||
Convertible notes | 1,090 | 2,361 | ||||
Long-term deposit | - | (21,101 | ) | |||
Promissory notes | - | 828 | ||||
Net debt | 460,483 | 219,803 | ||||
Current quarter adjusted funds flow | 80,247 | 50,729 | ||||
Annualized factor | 4 | 4 | ||||
Annualized quarterly adjusted funds flow | 320,988 | 202,916 | ||||
Net debt to annualized quarterly adjusted funds flow | 1.4x | 1.1x | ||||
(1) Represents the closing share price on the TSX on the last day of trading of the period. (2) Adjusted working capital is calculated as cash, accounts receivable, deposits and prepaids net of accounts payable. |
Supplemental Information Regarding Product Types
References herein to boe/d include gas or natural gas and NGLs which refer to conventional natural gas and natural gas liquids product types, respectively, as defined in National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), except where specifically noted otherwise.
The following table is intended to provide the product type composition for each of the production figures provided herein, where not already disclosed within tables above for average production for the three months and the year ended December 31, 2023 and 2022:
Three months ended December 31, 2023 | Three months ended December 31, 2022 | |||||||
Crude oil (bbls/d) | NGLs (bbls/d) | Natural gas (mcf/d) | Total (boe/d) | Crude oil (bbls/d) | NGLs (bbls/d) | Natural gas (mcf/d) | Total (boe/d) | |
Southeast Saskatchewan | 10,832 | 939 | 4,673 | 12,550 | 6,714 | 398 | 2,457 | 7,522 |
West Central Saskatchewan | 3,389 | 29 | 514 | 3,504 | 4,876 | 30 | 514 | 4,992 |
Central Alberta | 3,543 | 1,172 | 20,105 | 8,066 | - | - | - | - |
North Alberta | 1,643 | 393 | 4,412 | 2,771 | - | - | - | - |
Total boe/d | 19,407 | 2,533 | 29,704 | 26,891 | 11,590 | 428 | 2,971 | 12,514 |
Year ended December 31, 2023 | Year ended December 31, 2022 | |||||||
Crude oil (bbls/d) | NGLs (bbls/d) | Natural gas (mcf/d) | Total (boe/d) | Crude oil (bbls/d) | NGLs (bbls/d) | Natural gas (mcf/d) | Total (boe/d) | |
Southeast Saskatchewan | 9,596 | 770 | 3,968 | 11,027 | 6,401 | 340 | 2,118 | 7,094 |
West Central Saskatchewan | 4,262 | 20 | 468 | 4,360 | 2,440 | 13 | 274 | 2,499 |
Central Alberta | 3,005 | 915 | 16,602 | 6,687 | - | - | - | - |
North Alberta | 1,314 | 287 | 3,521 | 2,188 | - | - | - | - |
Total boe/d | 18,177 | 1,992 | 24,559 | 24,262 | 8,841 | 353 | 2,392 | 9,593 |
Initial Production Rates
Any reference in this news release to initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Any reference in this news release to initial production rates consist of the above noted product types, using a conversion rate of 1 bbl : 6 MCF (where applicable). Readers are cautioned not to place undue reliance on such rates in calculating aggregate production for Saturn.
Per boe or ($/boe)
Any reference in this news release to disclosures for petroleum and natural gas sales, royalties, operating expenses, transportation expenses and marketing expenses on a per boe basis are supplementary financial measures that are calculated by dividing each of these respective GAAP measures by Saturn's total production volumes for the period.
Per Share Amounts
Per share amounts noted in this news release are based on Saturn's weighted average issued and outstanding common shares as of December 31, 2023, unless noted otherwise.
Boe Presentation
Boe means barrel of oil equivalent. All boe conversions in this news release are derived by converting gas to oil at the ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("Bbl") of oil. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Bbl : 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl: 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.
Forward-Looking Information and Statements.
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "scheduled", "will" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, the Company's drilling and development plans, timing of bringing wells on-stream, 2024 production, expectations regarding netbacks, the business plan, cost model and strategy of the Company.
The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Saturn, including expectations and assumptions concerning: the timing of and success of future drilling, development and completion activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the ability to allocate capital to pay down debt and grow or maintain production, the geological characteristics of Saturn's properties, the application of regulatory and licensing requirements and the availability of capital, labour and services.
Although Saturn 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 Saturn 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; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraints in the availability of services, commodity price and exchange rate fluctuations, actions of OPEC and OPEC+ members, changes in legislation impacting the oil and gas industry, adverse weather or break-up conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These and other risks are set out in more detail in Saturn's Annual Information Form for the year ended December 31, 2023.
Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Saturn believes that the expectations reflected in its forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because Saturn can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, our capital expenditure and drilling programs, drilling inventory and booked locations, production and revenue guidance, ESG initiatives, debt repayment plans and future growth plans. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
The forward-looking information contained in this press release is made as of the date hereof and Saturn undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.
All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.
Placement to Support Next Phases of Grandis Project
Elixir Energy Limited (Elixir or the Company) is pleased to announce that it has received binding commitments for a placement of new shares in the Company (Placement), on the following terms:
1. Placement to raise $6.25 million (before costs) through the issue of 62.5 million new shares to institutional and sophisticated investors at a price of 10 cents per share (a 13% discount to the last close and a 12.7% discount to the 5 day VWAP).
2. Placement participants will receive one (1) one of Elixir’s currently listed options (EXROBs) for every four (4) Placement Shares issued. These already listed EXROB Options have an exercise price of 12 cents and a term expiring on 17 October 2026.
HIGHLIGHTS
- Over-subsribed share placement of $6.25 million to institutional and sophisticated investors
- Funds to be used to support the next phases of the Grandis Project
The capital raising was strongly supported, with demand in excess of the placement size, and introduced a number of new institutional investors to the Company’s register.
The new capital raised will be deployed in the next phases of the Grandis Project - to deal with potential contingencies that might arise from the imminent multiple stage stimulation and flow testing program at the Company’s Daydream-2 well; and, position the Company for the next phases of Project Grandis – including ordering long lead items for the next well and improving the negotiating position for potential farm-out negotiations post the flow testing phase.
The 62.5 million Placement Shares will be issued under listing rule 7.1 A and the 18,750,000 Listed Options will be issued under listing rule 7.1.
The new shares are anticipated to be issued on Wednesday, 31 July 2024.
Taylor Collison Limited and Originate Capital Pty Ltd acted as Joint Lead Managers to the Placement.
Elixir’s Managing Director, Mr. Neil Young, said: “We are pleased to receive this financial support from existing and new investors to fund the final phases of the Daydream-2 program and take forward Project Grandis into its next phases. Equipment is mobilizing to the well lease and the commencement of work is now imminent.”
Click here for the full ASX Release
This article includes content from Elixir Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Charbone Hydrogen Secures Key Transport Infrastructure for Green Hydrogen Delivery from Flagship Quebec Production Facility
Brossard, Quebec, JULY 24, 2024 TheNewswire Charbone Hydrogen Corporation (TSXV: CH;
OTCQB: CHHYF; FSE: K47) (the "Company" or "CHARBONE"), North America's only publicly traded pure-play green hydrogen company, today announced the arrival of its first tube trailer to be used in the transport and bulk delivery of compressed green hydrogen produced from the Company's City of Sorel-Tracy, Quebec flagship project to local and domestic customers.
Manufactured in the US and engineered to meet the most stringent American Department of Transportation (DOT) and Transport Canada (TC) regulations for the transportation of industrial gases, this first tube trailer is ready to be loaded with 316 kilograms of CHARBONE pure and green hydrogen. CHARBONE's higher facility compression standards will increase and optimize the volume capacity of each of its bulk loads, while reducing transportation and delivery costs per onboard kilogram.
"With much of our hydrogen production components now ordered or secured with down payments already made, the delivery of our first green hydrogen tube trailer for our flagship Canadian project is another new and significant milestone reached," said Dave Gagnon, CEO of CHARBONE. "Our vision is to build a North American fleet of transport and delivery trailers as we continue to advance our green hydrogen production infrastructure. Each and every day, we are gaining momentum and valuable on-site experience that helps guide our North American portfolio planning and project deployments."
The Sorel-Tracy Green Hydrogen Project will serve as the Company's flagship facility, giving CHARBONE a first-mover advantage with production starting in 2 nd semester 2024. Following a phased approach, Phase 1 of the project will produce up to 400 kg per day of green hydrogen. Once reaching the full capacity, the facility will produce up to 10 tons per day.
With plans to introduce a second Detroit, Michigan area facility before year-end, CHARBONE intends to target additional low-supply / high-potential markets including New York, Ontario, Pennsylvania, Illinois, Wisconsin and California. CHARBONE has also been invited to respond and propose projects in two different large-scale RFIs (Requests for Information). All CHARBONE projects are targeting industrial actual users and replacing gray hydrogen produced from fossil fuels with a clean, and reliable alternative, providing a decarbonize product.
Shares for debts
With capital management efforts, as previously announced by press release on November 17, 2023, the Company confirms remuneration debts incurred since September 30, 2022 settlements of an aggregate of $195,000 with certain members of management, including its Chief Executive Officer, following reception of acceptance by the Exchange with the approval received from the disinterested shareholders on December 19, 2023. The 1,950,000 Common Shares issued pursuant to the debt settlement are subject to a statutory four month hold period.
About Charbone Hydrogen Corporation
CHARBONE is an integrated green hydrogen group focused on delivering a network of modular green hydrogen production facilities across North America. Using renewable energy sources to produce green (H2) dihydrogen molecules and eco-friendly energy solutions for industrial, institutional, commercial and future mobility users, CHARBONE plans to scale and deliver green hydrogen production facilities in both the US and Canada by 2024, with an additional 14 facilities planned by 2030. CHARBONE is the only publicly traded pure-play green hydrogen company with common shares trading on the TSX Venture Exchange (TSXV: CH); the OTC Markets (OTCQB: CHHYF); and the Frankfurt Stock Exchange (FSE: K47). For more information, please visit www.charbone.com
Forward-Looking Statements
This news release contains statements that are "forward-looking information" as defined under Canadian securities laws ("forward-looking statements"). These forward-looking statements are often identified by words such as "intends", "anticipates", "expects", "believes", "plans", "likely", or similar words. The forward-looking statements reflect management's expectations, estimates, or projections concerning future results or events, based on the opinions, assumptions and estimates considered reasonable by management at the date the statements are made. Although Charbone believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on forward-looking statements, as unknown or unpredictable factors could cause actual results to be materially different from those reflected in the forward-looking statements. The forward-looking statements may be affected by risks and uncertainties in the business of Charbone. These risks, uncertainties and assumptions include, but are not limited to, those described under "Risk Factors" in the Corporation's Filing Statement dated March 31, 2022, which is available on SEDAR at www.sedar.com; they could cause actual events or results to differ materially from those projected in any forward-looking statements.
Except as required under applicable securities legislation, Charbone undertakes no obligation to publicly update or revise forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release .
Contacts Charbone Hydrogen Corporation | ||||
Dave B. Gagnon | ||||
Chief Executive Officer and Chairperson of the Board | ||||
Telephone: | +1 450 678-7171 | |||
Email: | ||||
Daniel Charette | ||||
Chief Operating Officer | ||||
Telephone: | +1 450 678-7171 | |||
Email: | ||||
Benoit Veilleux | ||||
Chief Financial Officer and Corporate Secretary | ||||
Telephone: | +1 450 678-7171 | |||
Email: | ||||
Copyright (c) 2024 TheNewswire - All rights reserved.
News Provided by TheNewsWire via QuoteMedia
Charbone Hydrogene securise une infrastructure de transport cle pour la livraison d'hydrogene vert a partir d'une usine de production phare au Quebec
(TheNewswire)
Brossard (Québec), le 24 juillet 2024 TheNewswire CORPORATION CHARBONE HYDROGÈNE (TSXV: CH OTCQB: CHHYF, FSE: K47 ) (« Charbone » ou la « Société »), la seule société d'Amérique du Nord cotée en bourse spécialisée dans l'hydrogène vert, a annoncé aujourd'hui l'arrivée de sa première remorque tubulaire qui sera utilisée pour le transport et la livraison en vrac de l'hydrogène vert comprimé, produit à partir du projet phare de la société de la ville de Sorel-Tracy, au Québec, aux client locaux et nationaux.
Fabriquée aux États-Unis et conçue pour répondre aux réglementations les plus strictes du Département américain des transports (DOT) et de Transport Canada (TC) pour les gaz industriels, cette première remorque tubulaire est prête à être chargée de 316 kilogrammes d'hydrogène vert pure de Charbone. Les normes de compression plus élevées des usines de Charbone augmenteront et optimiseront la capacité volumique de chacun de ses chargements en vrac, tout en réduisant les coûts de transport et de livraison par kilogramme embarqué.
" Alors qu'une grande partie de nos composantes de production d'hydrogène sont désormais commandés ou sécurisés avec des acomptes déjà versés, la livraison de notre première remorque tubulaire d'hydrogène vert pour notre projet phare canadien est une autre nouvelle étape importante franchie , a déclaré Dave Gagnon, Chef de la direction chez Charbone. " Notre vision est de construire une flotte nord-américaine de remorques de transport et de livraison tout en continuant à faire progresser notre infrastructure de production d'hydrogène vert. Chaque jour, nous gagnons en élan et en expérience précieuse sur le terrain qui nous aide à guider la planification de notre portefeuille nord-américain et les déploiements de projets . "
Le projet d'hydrogène vert de Sorel-Tracy servira d'usine phare de la Société, donnant à Charbone un avantage de premier arrivant avec une production commençant au 2 e semestre 2024. Suivant une approche progressive, la phase 1 du projet produira jusqu'à 400 kg par jour d'hydrogène vert. Une fois sa pleine capacité atteinte, l'installation produira jusqu'à 10 tonnes par jour.
Avec l'intention d'ouvrir une deuxième usine dans la région de Détroit, dans le Michigan, avant la fin de l'année, Charbone a l'intention de cibler d'autres marchés à faible offre et à fort potentiel, notamment New York, l'Ontario, la Pennsylvanie, l'Illinois, le Wisconsin et la Californie. Charbone a également été invité à répondre et à proposer des projets dans deux RFI (Demande d'informations) différentes à grande échelle. Tous les projets de Charbone ciblent les utilisateurs industriels réels et remplacent l'hydrogène gris produit à partir de combustibles fossiles par une alternative propre et fiable, fournissant un produit décarboné.
Actions pour règlements de dettes
Grâce aux efforts de gestion du capital, comme annoncé précédemment par le communiqué de presse du 17 novembre 2023, la Société confirme les règlements de dettes de rémunération contractées depuis le 30 septembre 2022 d'un montant total de 195 000 $ avec certains membres de la direction, dont son Chef de la direction, à la suite de la réception de l'acceptation de la Bourse et de l'approbation reçue des actionnaires désintéressés le 19 décembre 2023. Les 1 950 000 actions ordinaires émises dans le cadre du règlement des dettes sont assujetties à une période de détention légale de quatre mois.
À propos de Charbone Hydrogène Corporation
Charbone est un groupe intégré de production d'hydrogène vert axé sur le déploiement d'un réseau nord-américain d'usines de production. En utilisant des énergies renouvelables pour produire des molécules de dihydrogène (H2) et des solutions écoénergétiques et respectueuses de l'environnement aux utilisateurs industriels, institutionnels, commerciaux et de la mobilité future, Charbone prévoit déployer et livrer des usines de production d'hydrogène vert aux États-Unis et au Canada d'ici 2024, et 14 usines supplémentaires sont prévues d'ici 2030. Charbone est la seule société d'Amérique du Nord cotée en bourse spécialisée dans l'hydrogène vert avec ses actions ordinaires se négociant sur la Bourse de croissance TSX (TSXV: CH); les marchés OTC (OTCQB: CHHYF); et la Bourse de Francfort (FSE: K47). Pour plus d'information, merci de visiter www.charbone.com .
Énoncés prospectifs
Le présent communiqué de presse contient des énoncés qui constituent de « l'information prospective » au sens des lois canadiennes sur les valeurs mobilières (« déclarations prospectives »). Ces déclarations prospectives sont souvent identifiées par des mots tels que « a l'intention », « anticipe », « s'attend à », « croit », « planifie », « probable », ou des mots similaires. Les déclarations prospectives reflètent les attentes, estimations ou projections respectives de la direction de Charbone concernant les résultats ou événements futurs, sur la base des opinions, hypothèses et estimations considérées comme raisonnables par la direction à la date à laquelle les déclarations sont faites. Bien que Charbone estime que les attentes exprimées dans les déclarations prospectives sont raisonnables, les déclarations prospectives comportent des risques et des incertitudes, et il ne faut pas se fier indûment aux déclarations prospectives, car des facteurs inconnus ou imprévisibles pourraient faire en sorte que les résultats réels soient sensiblement différents de ceux exprimés dans les déclarations prospectives. Des risques et des incertitudes liés aux activités de Charbone peuvent avoir une incidence sur les déclarations prospectives. Ces risques, incertitudes et hypothèses comprennent, sans s'y limiter, ceux décrits à la rubrique « Facteurs de risque » dans la déclaration de changement à l'inscription de la Société datée du 31 mars 2022, qui peut être consultée sur SEDAR à l'adresse www.sedar.com; ils pourraient faire en sorte que les événements ou les résultats réels diffèrent sensiblement de ceux prévus dans les déclarations prospectives.
Sauf si les lois sur les valeurs mobilières applicables l'exigent, Charbone ne s'engage pas à mettre à jour ni à réviser les déclarations prospectives.
Ni la Bourse de croissance TSX ni son fournisseur de services de réglementation (tel que ce terme est défini dans les politiques de la Bourse de croissance TSX) n'acceptent de responsabilité quant à la pertinence ou à l'exactitude du présent communiqué.
Contacts
Pour de plus amples informations, veuillez contacter :
Dave B. G agnon | ||
Chef de la direction et président du conseil d'administration | ||
Corporation Charbone Hydrogène | ||
Téléphone bureau: +1 450 678-7171 | ||
Courriel: dg@charbone.com | ||
Daniel Charette | ||
Chef de l'exploitation | ||
Corporation Charbone Hydrogène | ||
Téléphone bureau : +1 450 678-7171 | ||
Courriel: dc@charbone.com | ||
Benoit Veilleux | ||
Chef de la direction financière et secrétaire corporatif | ||
Corporation Charbone Hydrogène | ||
Téléphone bureau: +1 450 678-7171 | ||
Courriel: bv@charbone.com |
Copyright (c) 2024 TheNewswire - All rights reserved.
News Provided by TheNewsWire via QuoteMedia
Elixir Energy Limited (ASX: EXR) – Trading Halt
Description
The securities of Elixir Energy Limited (‘EXR’) will be placed in trading halt at the request of EXR, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Thursday, 25 July 2024 or when the announcement is released to the market.
ASX Compliance
Click here for the full ASX Release
This article includes content from Elixir Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
5 Top Weekly TSXV Stocks: Pulsar Helium Flies with 52 Percent Gain
Welcome to the Investing News Network's weekly look at the best-performing junior mining stocks on the TSX Venture Exchange, starting with a round-up of Canadian and US market data impacting the resource sector.
The S&P/TSX Venture Composite Index (INDEXTSI:JX) lost 15.98 points last week to close at 580.09. Meanwhile, the S&P/TSX Composite Index (INDEXTSI:OSPTX) closed at a new all-time high mid-week, but ended the period flat.
Statistics Canada released its June consumer price index (CPI) figures this past Tuesday (July 16). The data shows that inflation continued to cool, with 2.7 percent growth on an annualized basis, down from 2.9 percent in May.
The agency attributes the deceleration largely to gasoline prices, which saw a year-on-year gain of 0.4 percent in June versus 5.8 percent the previous month. The cost of food purchased from stores increased by 2.1 percent year-on-year.
On a monthly basis, CPI fell 0.1 percent, down from a month-on-month gain of 0.6 percent in May. Statistics Canada reported that the biggest factors were an 11.1 percent decrease in travel tours and a 3.1 percent fall in gas prices.
Statistics Canada also published its monthly mineral production data this past Friday (July 19). The numbers indicate a broad increase in metals production in May. Gold output rose by 2,339 ounces over April to reach a total of 18,418 ounces, while silver production increased by 2,024 ounces to reach 23,446 ounces.
Copper mining jumped by 2,551.23 metric tons over April to come in at 44,261.57 metric tons.
These figures came alongside Statistics Canada's industrial product price index, which tracks the prices of products made in Canada. The data shows that non-ferrous metals prices declined 0.4 percent month-on-month in June. Leading the way were prices for unwrought nickel and nickel alloys, which dropped 10.3 percent, the largest decline since March 2023.
Multiple US indexes hit new all-time highs this past week, including the S&P 500 (INDEXSP:.INX), which peaked at 5,667.2 at Tuesday's close, although it ultimately lost 2.36 percent on the week to finish at 5,505.
The Dow Jones Industrial Average (INDEXDJX:.DJI) also reached a new all-time high last week when it closed at 41,196 on Wednesday (July 17). It finished the week at 40,287.53, a slight weekly gain of 0.37 percent. After hitting a new high the prior week, the Nasdaq-100 (INDEXNASDAQ:NDX) lost 4.29 percent last week to close at 19,517.76.
As for commodities prices, gold hit a new all-time high on Wednesday before pulling back to US$2,401 on Friday. Silver saw steep declines in the second half of the week, losing 5.16 percent to fall to US$29.23 per ounce on Friday. The S&P GSCI (INDEXSP:SPGSCI) lost 1.45 percent over the week, trading at US$563.81 on Friday.
How did junior resource stocks listed on the TSX Venture Exchange perform this past week? The five mining and energy companies below were the best performers by share price gains.
1. Pulsar Helium (TSXV:PLSR)
Weekly gain: 51.85 percent; market cap: C$20.04 million; share price: C$0.82
Pulsar Helium is a development company working to advance its Topaz helium project located 100 kilometers north of Duluth, Minnesota. The site consists of 1,040 acres of private mineral rights; Pulsar holds an exclusive lease with the option to lease an additional 2,092 acres from the same mineral rights holder.
Pulsar began exploration at the site in early 2024, with drilling of an appraisal well commencing on February 5 to a depth of 671 meters. Lab tests from the appraisal well indicated helium concentrations of 13.8 percent, with small amounts of atmospheric air contamination decreasing the measured helium values.
The company commenced downhole well works at Jetstream 1 on May 16, with a focus on collecting further data in preparation for a final phase consisting of flow testing and pressure buildup. Results from testing were released on June 6, with the company reporting maximum flow rates of 821,000 cubic feet per day and concentrations of 8.7 to 14.5 percent helium. It also said carbon dioxide concentrations of 70 percent were present.
Pulsar’s most recent update came on July 9, when the company announced the results from a seismic survey at Topaz. In the announcement, the company said a helium-bearing zone at the appraisal well was identifiable, and that further gas-bearing zones are likely at depth.
2. Solis Minerals (TSXV:SLMN)
Weekly gain: 26.92 percent; market cap: C$14.49 million; share price: C$0.165
Solis Minerals is a copper and lithium explorer advancing properties in South America. Its main focus in 2024 has been its Cinto copper project in Peru. The site is composed of seven tenements covering 3,200 hectares in the country's copper belt. The asset has seen limited exploration, primarily consisting of grab samples and satellite imaging.
Shares of Solis surged this past week following an exploration update on July 9. It reported the completion of an initial geochemical program, which identified copper mineralization over a 200 meter by 100 meter area at Cinto, including high-grade surface grab samples grading up to 7.14 percent copper.
In addition to that, the company signed an access agreement with the Carumbraya community to fast track the next phase of its exploration program. Solis said it has already deployed drones to collect magnetometer readings, and will be using geological mapping to guide drill permitting at the site.
Solis' momentum continued last week from the prior week, when it topped this list.
3. Hannan Metals (TSXV:HAN)
Weekly gain: 25.53 percent; market cap: C$64.75 million; share price: C$0.59
Explorer Hannan Metals is focused on advancing gold, silver and copper deposits in Latin America.
The San Martin project is a joint venture with the Japan Organization for Metals and Energy Security (JOGMEC), a Japanese government agency established in 2004 to secure stable resources and fuel supplies. Under the terms of the agreement, JOGMEC can earn up to a 75 percent stake in the project if all its funding goals are met.
The Peru-based site hosts a copper and silver system with 120 kilometers of combined strike. Exploration has shown grades at the Tabalosos target of 4.9 percent copper and 62 grams per metric ton (g/t) silver over 2 meters.
Hannan also wholly owns the Valiente project, which hosts a previously unknown porphyry and epithermal mineralized belt within a 140 kilometer by 50 kilometer area containing copper, gold, molybdenum and silver.
Its most recent project update came on July 2, when Hannan announced that it had doubled the footprint of the Previsto Central prospect at Valiente. The company said mineralization had been discovered over a 10 kilometer by 5 kilometer area within a previously unmapped zone with only 20 percent of the target area covered. It will continue to execute fieldwork during the dry season with a focus on mapping and soil sampling.
4. Usha Resources (TSXV:USHA)
Weekly gain: 25 percent; market cap: C$10.5 million; share price: C$0.125
Usha Resources is a mineral acquisition and exploration company with interests in North American lithium, copper and gold projects. The company has an earn-in agreement for the White Willow lithium-tantalum project in Thunder Bay, Ontario.
On May 17, Usha entered into a letter of intent with Stardust Power (NASDAQ:SDST) giving Stardust the right to earn up to a 90 percent interest in Usha’s Jackpot Lake lithium brine project in Nevada, US. The deal is subject to a 2 percent net smelter royalty, along with US$26.03 million in payments over the next five years.
Usha's latest news came on July 17, when it executed an option agreement with Abitibi Metals (CSE:AMQ,OTCQB:AMQFF) for the right to purchase a 100 percent stake in the Southern Arm project. The agreement will require Usha to complete C$2 million in work in the next two years and issue 5 million shares to Abitibi Metals, along with a 2 percent net smelter royalty. Usha executed the deal following receipt of an initial US$75,000 payment from Stardust.
The property is located near Joutel, Québec, and is composed of 76 claims covering 42 square kilometers; it is home to a 7.3 kilometer copper and gold trend that hosts numerous mineralization targets. The most prolific target is Hollywood, where anomalies have been identified over 1.8 kilometers of strike.
5. Lode Gold Resources (TSXV:LOD)
Weekly gain: 25 percent; market cap: C$10.98 million; share price: C$0.025
Lode Gold Resources is an exploration company with projects located in Canada and the US, including its Fremont gold project in California, US, which hosts a past-producing high-grade gold mine.
The company announced this past Monday (July 15) that it has filed a NI 43-101 technical report for its Golden Culvert and Win properties along the Tombstone gold trend in Yukon. It was a necessary step in its plan to spin out the properties, as well as the McIntyre Brook property in New Brunswick, into a new entity named Gold Orogen.
The spinout is part of a broader restructuring plan; Lode expects to complete the spinout by the end of 2024.
Golden Culvert and Win are early stage projects consisting of a combined 509 claims over 99.47 square kilometers. Fieldwork at the site has produced highlighted results of 8.53 g/t gold and 155 g/t silver. Exploration at McIntyre Brook has seen trench samples grading 41.6 g/t gold.
FAQs for TSXV stocks
What is the difference between the TSX and TSXV?
The TSX, or Toronto Stock Exchange, is used by senior companies with larger market caps, while the TSXV, or TSX Venture Exchange, is used by smaller-cap companies. Companies listed on the TSXV can graduate to the senior exchange.
How many companies are listed on the TSXV?
As of September 2023, there were 1,713 companies listed on the TSXV, 953 of which were mining companies. Comparatively, the TSX was home to 1,789 companies, with 190 of those being mining companies.
Together the TSX and TSXV host around 40 percent of the world’s public mining companies.
How much does it cost to list on the TSXV?
There are a variety of different fees that companies must pay to list on the TSXV, and according to the exchange, they can vary based on the transaction’s nature and complexity. The listing fee alone will most likely cost between C$10,000 to C$70,000. Accounting and auditing fees could rack up between C$25,000 and C$100,000, while legal fees are expected to be over C$75,000 and an underwriters’ commission may hit up to 12 percent.
The exchange lists a handful of other fees and expenses companies can expect, including but not limited to security commission and transfer agency fees, investor relations costs and director and officer liability insurance.
These are all just for the initial listing, of course. There are ongoing expenses once companies are trading, such as sustaining fees and additional listing fees, plus the costs associated with filing regular reports.
How do you trade on the TSXV?
Investors can trade on the TSXV the way they would trade stocks on any exchange. This means they can use a stock broker or an individual investment account to buy and sell shares of TSXV-listed companies during the exchange's trading hours.
Data for this 5 Top Weekly TSXV Performers article was retrieved at 11:00 am PST on July 19, 2024, using TradingView's stock screener. Only companies with market capitalizations greater than C$10 million prior to the week's gains are included. Companies within the non-energy minerals and energy minerals were considered.
Article by Dean Belder; FAQs by Lauren Kelly.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Source Rock Royalties
Overview
Source Rock Royalties (TSXV:SRR) is a Calgary, Canada based company exclusively focused on oil & gas royalties in the provinces of Alberta and Saskatchewan. Source Rock's portfolio primarily consists of royalty interests focused on oil, with concentrations in southeast Saskatchewan, central Alberta and west-central Saskatchewan. The portfolio comprises:
- Various gross overriding royalty interests in southeast Saskatchewan.
- A gross overriding royalty in largely contiguous Clearwater interests in Central Alberta.
- A production volume royalty in Viking mineral rights in east-central Alberta.
- Various gross overriding royalties in central Alberta.
- Various gross overriding royalties in the west-central Saskatchewan Viking light oil play.
Source Rock Royalties offers investors low-risk and low-capital-cost exposure to the oil & gas sector in western Canada. The royalty business model offers the benefit of sharing in production revenue without exposure to the capital costs associated with drilling, development, maintenance, abandonment, environmental and other obligations.
Since its inception, Source Rock Royalties has consistently pursued royalty acquisitions, even amidst significant energy market fluctuations. The company has primarily concentrated on non-marketed royalty acquisitions rather than opportunities marketed through formal third-party processes. Leveraging strong relationships within the oil and gas sector in the Western Canadian Sedimentary Basin, Source Rock identifies and accesses niche royalty acquisitions.
Source Rock acquired new royalties worth nearly C$13 million in 2023 and a total of C$16.5 million since its IPO in March 2022. These acquisitions effectively doubled Source Rock’s royalty acreage, significantly enhancing both its current royalty production and its exposure to potential undeveloped drill locations. Source Rock generated C$6.6 million in royalty revenue in 2023, the highest in its 11-year history.
Source Rock endeavors to keep costs low, thereby maximizing cash flows. Aside from the CEO and CFO, additional technical oil and gas professionals are engaged by Source Rock as consultants on an as-needed basis. Currently, Source Rock Royalties employs only one full-time staff member. The low-cost base ensures consistent cash flows as evidenced by its more than 11-year track record of delivering positive funds from operations.
Strong cash flow allows the company to consistently pay and increase dividends. Source Rock has paid ~$17 million in dividends to shareholders since 2014. Source Rock increased its dividend twice in 2023, for a total increase of 20 percent.
The current monthly dividend is $0.006 and is sustainable given that it can comfortably be funded by current operations even at a lower oil price scenario of C$60/bbl (or US$50/bbl WTI).
The management and board of directors have a proven track record of creating value in the oil & gas industry. The insiders own 9.5 percent of Source Rock’s common shares, aligning their interest to that of the shareholders by directly participating in the same financings as outside shareholders since inception. The company has a strong institutional shareholder base with CN Rail Pension Fund owning approximately 21 percent of Source Rock’s common shares. Source Rock Royalties has a clean capital structure with only ~45 million common shares issued and outstanding.
Source Rock focuses on a balanced growth and yield model, limiting volatility in returns for shareholders. Source Rock offers investors a unique opportunity to gain exposure to the oil & gas sector.
Company Highlights
- Source Rock Royalties is a Calgary, Canada based pure-play oil and gas royalty company, with a focus on Alberta and Saskatchewan; the only junior oil and gas royalty company listed on the TSXV.
- Source Rock concentrates on acquiring royalties in areas with proved reserves, foreseeable future high rate-of-return drilling upside, and partnering with operators that are financially and operationally prudent.
- Owning and managing royalties is a capital-light business model offering the benefit of sharing in production revenue without exposure to the capital costs associated with drilling, development, maintenance, abandonment, environmental and other obligations.
- Source Rock Royalties has a diversified oil-focused portfolio of royalty interests concentrated in southeast Saskatchewan, central Alberta, and west-central Saskatchewan with well-positioned royalty payors. Oil exposure allows for a strong netback (profit) per barrel even during periods of lower commodity prices.
- Source Rock Royalties has a proven track record of executing on its balanced growth and yield business model. The company has achieved 11 years of positive cash flow and provided ~$17 million in dividends back to shareholders since 2014.
- Source Rock Royalties anticipates its current monthly dividend of $0.006 to be comfortably funded with cash flow by current operations down to oil prices of C$60/bbl (or US$50/bbl WTI).
- The management and board of directors have a proven track record of creating value in the oil & gas industry. The insiders own 9.5 percent of Source Rock’s common shares, aligning their interests to that of the shareholders.
- The company has a strong institutional shareholder base with CN Rail Pension Fund owning approximately 21 percent of Source Rock’s common shares.
- Insiders and key shareholders have an average cost on their shares of ~$0.90 (there were never any cheap Founders or seed shares issued).
- Source Rock Royalties does not use debt in its business and always maintains a cash balance (currently ~$2.2 million).
Royalty Assets
Source Rock's current portfolio comprises royalties primarily focused on oil (95 percent), spread across southeast Saskatchewan, central Alberta and west-central Saskatchewan. The company holds varying gross overriding royalties in more than 150,000 gross acres of land. Additionally, Source Rock owns a production volume royalty in Viking mineral interests situated in lands in east-central Alberta.
The majority of Source Rock's royalties are derived from top-line revenue, resulting in minimal exposure to deductions linked to production costs from wellbores and the sale of various commodities. Also, the majority of its current royalty payors are financially stable and possess robust capabilities to efficiently operate and enhance the value of the lands in which Source Rock holds royalties. Some of the key royalty payors include Whitecap Resources (TSX:WCP), Rubellite Energy (TSX:RBY), Surge Energy (TSX:SGY), Crescent Point Energy (TSX:CPG) and Anova Resources (Private), among many others.
1. SE Saskatchewan Light Oil Gross Overriding Royalties
The company holds gross overriding royalties in approximately 35,000 gross acres of land in southeast Saskatchewan. The key operators include Whitecap Resources, Vermilion Energy (TSX:VET), Anova Resources (Private), Crescent Point Energy, Tundra Oil & Gas (Private), ROK Resources (TSXV:ROK), Woodland Development (Private) and Saturn Oil & Gas (TSX:SOIL). Future development activities on gross overriding royalty lands will be focused on the Frobisher Formation. The Frobisher Formation, characterized by shallow depths and conventional light oil, does not necessitate hydraulic fracturing, making it one of Canada's most economically viable light oil plays.
2. Clearwater Heavy Oil Gross Overriding Royalty
The company holds a gross overriding royalty in approximately 61,440 net acres of land in the Figure Lake area of central Alberta. Rubellite Energy is the operator of gross overriding royalty lands and the production is entirely from the Clearwater Formation. The gross overriding royalty initially carries a royalty rate of 1.5 percent until the cumulative royalty revenue received by Source Rock matches the purchase price. At that point, the royalty rate decreases to 1 percent. The operator has committed to drill 59 horizontal wells on the lands by June 2026.
3. Hamilton Lake Unit Viking Light Oil Royalty
Source Rock earns a production volume royalty supported by production from Hamilton Lake Unit and Viking lands of Axiom Oil & Gas. Pursuant to the production volume royalty agreement, Source Rock's remaining entitlement to royalty volumes from the Hamilton Lake Unit is as follows:
- 2024 – 75 bbl/d; 2025 – 70 bbl/d; 2026 – 39 bbl/d
- 2027 to 2034 – 20 percent lower on a per-day basis than the prior calendar year; and
- January 1, 2035 – conversion to a 0.50 percent gross overriding royalty in the Hamilton Lake Unit or a $500,000 pay-out, at the discretion of the royalty payor.
4. Central Alberta and Saskatchewan Gross Overriding Royalties
Source Rock owns varying gross overriding royalties in approximately 60,000 gross acres of land located in west-central Saskatchewan and central Alberta. The west-central Saskatchewan gross overriding royalty lands produce predominantly light oil from the Viking and Mannville formations. The Central Alberta gross overriding royalties produce from various formations and include exposure to several low-decline properties that are under waterflood.
Management Team
Brad Docherty – President, Chairman and Chief Executive Officer
Brad Docherty is the Founder of Source Rock Royalties, and has held the positions of president, chief executive officer and chairman of the company since its incorporation. Previously, he was a corporate finance & securities lawyer at Gowlings and served as the president, CEO and director of Exito Energy and Exitio Energy II, both capital pool companies on the TSXV.
Cheryne Lowe – Chief Financial Officer
Cheryne Lowe is a seasoned financial professional with extensive experience in companies listed on the Toronto Stock Exchange and the TSX Venture Exchange. She also brings a background in the upstream oil and gas industry and the Canadian capital markets. Her most recent role was interim CFO at AgJunction (TSX:AJX), an agriculture technology company, which was acquired in late 2021. Previously, she served as CFO and corporate secretary at Pine Cliff Energy (TSX:PNE), and as vice-president finance and CFO at Orlen Upstream Canada and its predecessor, TriOil Resources. Lowe began her career with KPMG and later worked as an Institutional Research Associate with Tristone Capital.
John Bell – Director
John Bell is the president and chief financial officer at WCSB Blockchain Infrastructure. Prior to this, he served as the director of finance at Tidewater Midstream and Infrastructure (TSX:TWM).
Dean Potter – Director
Dean Potter serves as the executive chairman and CEO of Burgess Creek Exploration. Additionally, he is the president at DPX, a private company engaged in petroleum exploration and development. He is a member of the Saskatchewan oil and gas Hall of Fame and has more than 40 years of geological expertise that has been focused on making discoveries in SE Saskatchewan.
Gary McMurren – Director
Gary McMurren is the vice-president of engineering at Southern Energy (TSXV:SOU). He was previously the vice-president of engineering at Gulf Pine Energy Partners. Formerly, he held various engineering roles with Athabasca Oil (TSX:ATH).
Shaun Thiessen – Director
Shaun Thiessen is vice-president of land and business development at Astara Oil. Prior to this, he held the same title at Astra Oil from inception until its sale. Formerly, he was the director of land at PrairieSky Royalty (TSX:PSK).
Scott Rideout – Director
Scott Rideout is vice-president of land at Headwater Exploration (TSX:HWX). He was previously vice-president of land at both Baytex Energy (TSX:BTE) and Raging River Exploration (Private).
June-Marie Innes – Director
June-Marie Innes is currently CFO at Thread Innovations. She previously held progressively more senior roles at Tamarack Valley Energy (TSX:TVE).
Jordan Kevol – Director
Jordan Kevol is currently involved with Westgate Energy, a private oil and gas producer undertaking a listing on the TSXV. Previously, he was the president & CEO of Blackspur Oil.
This profile was written in collaboration with Couloir Capital.
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