NuVista Energy : Q2 2023 Financial Statements

CONDENSED CONSOLIDATED INTERIM FINANCIAL

STATEMENTS

As at, and for the three and six months ended:

June 30, 2023 and 2022

NUVISTA ENERGY LTD.

Consolidated Interim Statements of Financial Position (Unaudited)

		June 30		December 31
($Cdn thousands)	Note	2023		2022
Assets
Current assets
Cash and cash equivalents	$	- $	41,890
Accounts receivable and prepaid expenses		141,470	$	203,741
Financial derivative assets	16	22,890		37,925
		164,360		283,556
Financial derivative assets	16	34,114		40,633
Other asset		9,500		-
Exploration and evaluation assets	3	25,676		18,307
Property, plant and equipment	4	2,571,610		2,380,205
Right-of-use assets	5	105,128		98,965
Total assets	$	2,910,388	$	2,821,666
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	154,571	$	185,129
Current portion of other liabilities	15	14,923		15,375
Current portion of lease liabilities	9	6,472		5,908
Current portion of asset retirement obligations	10	15,300		9,950
		191,266		216,362
Long-term debt	7	8,019		-
Senior unsecured notes	8	161,851		215,392
Other liabilities	15	-		1,540
Lease liabilities	9	118,292		110,822
Asset retirement obligations	10	72,069		81,731
Deferred tax liability		307,930		260,326
Total liabilities		859,427		886,173
Shareholders' equity
Share capital	11	1,163,217		1,183,769
Contributed surplus		62,563		65,963
Retained earnings		825,181		685,761
Total Shareholders' equity		2,050,961		1,935,493
Total liabilities and shareholders' equity	$	2,910,388	$	2,821,666
Subsequent events	11
Commitments	19

See accompanying notes to the consolidated interim financial statements.

NuVista Energy Ltd.

Q2 2023 Consolidated Interim Financial Statements | 2

NUVISTA ENERGY LTD.

Consolidated Interim Statements of Earnings and Comprehensive Income (Unaudited)

		Three months ended June 30		Six months ended June 30
($Cdn thousands, except per share amounts)	Note		2023		2022		2023		2022
Revenues
Petroleum and natural gas sales	13	$	282,064	$	463,273	$	672,227	$	845,100
Royalties			(21,271)		(71,650)		(72,767)		(104,958)
Revenue from petroleum and natural gas sales			260,793		391,623		599,460		740,142
Realized gain (loss) on financial derivatives	16		7,416		(75,553)		(1,674)		(120,768)
Unrealized gain (loss) on financial derivatives	16		33,709		78,922		(21,554)		23,586
Other income	10		-		425		-		6,030
Total revenue, other income and gain (loss) on			301,918		395,417		576,232		648,990
risk management contracts
Expenses
Operating			76,979		68,347		152,020		133,606
Transportation			35,658		33,062		62,112		60,531
General and administrative			6,190		4,878		11,899		9,911
Share-based compensation	15		2,022		1,632		3,545		7,490
Financing costs	17		11,004		10,675		22,283		22,927
Depletion, depreciation and amortization	4,5		57,530		46,547		119,086		94,577
Gain on property disposition	6		(1,615)		(408)		(15,207)		(1,688)
			187,768		164,733		355,738		327,354
Earnings before taxes			114,150		230,684		220,494		321,636
Current income tax recovery			(6,391)		-		-		-
Deferred income tax expense			33,408		52,730		52,652		73,427
Total income tax expense		$	27,017	$	52,730	$	52,652	$	73,427
Net earnings and comprehensive income		$	87,133	$	177,954	$	167,842	$	248,209
Net earnings per share	12
Basic		$	0.40	$	0.78	$	0.77	$	1.08
Diluted		$	0.39	$	0.74	$	0.74	$	1.04

See accompanying notes to the consolidated interim financial statements.

NuVista Energy Ltd.

Q2 2023 Consolidated Interim Financial Statements | 3

NUVISTA ENERGY LTD.

Consolidated Interim Statements of Changes in Shareholders' Equity (Unaudited)

		Six months ended June 30
($Cdn thousands)	Note	2023		2022
Share capital	11
Balance, January 1	$	1,183,769	$	1,228,275
Issued for cash on exercise of stock options		1,253		13,225
Contributed surplus transferred on exercise of stock options		626		5,732
Conversion of restricted share awards		1,251		442
Conversion of performance share awards		1,713		1,209
Repurchase of shares for cancellation		(25,395)		(13,807)
Balance, end of period	$	1,163,217	$	1,235,076
Contributed surplus
Balance, January 1	$	65,963	$	68,337
Share-based compensation		6,665		3,803
Transfer to share capital on exercise of stock options		(626)		(5,732)
Conversion of restricted share awards		(1,251)		(442)
Conversion of performance share awards		(1,713)		(1,209)
Share-based compensation - tax withholdings settled in cash		(11,524)		-
Tax deduction on excess value of share awards		5,049		4,947
Balance, end of period	$	62,563	$	69,704
Retained earnings
Balance, January 1	$	685,761	$	139,205
Repurchase of shares for cancellation		(28,422)		(13,792)
Net earnings		167,842		248,209
Balance, end of period	$	825,181	$	373,622
Total shareholders' equity	$	2,050,961	$	1,678,402

See accompanying notes to the consolidated interim financial statements.

NuVista Energy Ltd.

Q2 2023 Consolidated Interim Financial Statements | 4

NUVISTA ENERGY LTD.

Consolidated Interim Statements of Cash Flows (Unaudited)

	Three months ended June 30		Six months ended June 30
($Cdn thousands)	Note	2023		2022		2023		2022
Cash provided by (used in)
Operating activities
Net earnings	$	87,133	$	177,954	$	167,842	$	248,209
Items not requiring cash from operations:
Other income	10	-		(425)		-		(6,030)
Depletion, depreciation and amortization	4,5	57,530		46,547		119,086		94,577
Gain on property disposition	6	(1,615)		(408)		(15,207)		(1,688)
Share-based compensation	15	2,007		1,517		5,536		3,233
Unrealized (gain) loss on financial derivatives		(33,709)		(78,922)		21,554		(23,586)
Deferred income tax expense		33,408		52,730		52,652		73,427
Accretion	10	728		840		1,483		1,560
Asset retirement expenditures	10	479		(1,184)		(9,214)		(6,752)
Change in non-cash working capital	18	(11,795)		29,019		5,655		7,160
Cash provided by operating activities		134,166		227,668		349,387		390,110
Financing activities
Issuance of share capital on exercise of stock options		537		9,004		1,253		13,225
Share-based compensation - tax withholdings settled		(8,839)		-		(11,524)		-
with cash
Payment on lease liabilities		(1,485)		(1,294)		(2,849)		(2,509)
Repurchase of shares		(41,569)		(27,599)		(53,817)		(27,599)
Decrease (increase) of long-term debt		8,019		(100,247)		8,019		(139,173)
Repayment of senior unsecured notes		(21,973)		-		(54,132)		-
Cash used in financing activities		(65,310)		(120,136)		(113,050)		(156,056)
Investing activities
Property, plant and equipment expenditures	4	(125,130)		(112,811)		(313,631)		(231,683)
Exploration and evaluation expenditures	3	-		(2,212)		(7,369)		(3,304)
Other asset expenditures		-		-		(9,500)		-
Proceeds on property disposition	6	-		-		26,000		-
Change in non-cash working capital	18	(9,324)		7,491		26,273		933
Cash used in investing activities		(134,454)		(107,532)		(278,227)		(234,054)
Change in cash and cash equivalents		(65,598)		-		(41,890)		-
Cash and cash equivalents, beginning of period		65,598		-		41,890		-
Cash and cash equivalents, end of period	$	-	$	- $	-	$	-
Cash interest paid	$	2,932	$	2,123	$	14,252	$	14,278

See accompanying notes to the consolidated interim financial statements.

NuVista Energy Ltd.

Q2 2023 Consolidated Interim Financial Statements | 5