In the news release,
PERPETUAL ENERGY INC. ANNOUNCES ASSET DISPOSITION AND UPDATED 2023 GUIDANCE
Perpetual is also pleased to announce it has completed the semi-annual borrowing base redetermination for its bank credit facility. The borrowing limit on Perpetual's credit facility has been reconfirmed at
Proceeds from the Mannville Transaction will be used to reduce bank debt and manage future maturities on the Company's Term Loan and Senior Notes and other obligations as they come due, as well as provide Perpetual with the liquidity to invest in its remaining assets at
Perpetual's Board of Directors previously approved annual exploration and development capital spending(1) of
During the second half of 2023, Perpetual planned to participate at its 50% working interest in an
The table below summarizes anticipated exploration and development capital spending and drilling activities for Perpetual for the full year of 2023.
H1 2023 | # of wells | H2 2023 | # of wells | 2023 | # of wells | |
($ millions) | (gross/net) | ($ millions) | (gross/net) | ($ millions) | (gross/net) | |
West Central | 2 / 1.0 | 4 - 6 / 2.0 - 2.8 | 6 - 8 / 3.0 - 3.8 | |||
- / - | - | 0 / 0.0 | 0 / 0.0 | |||
Total(1) | 2 / 1.0 | 4 - 6 / 2.0 - 2.8 | 6 - 8 / 3.0 - 3.8 |
(1) Excludes abandonment and reclamation spending and acquisitions or land expenditures, if any. |
Prior to giving effect to the Mannville Transaction, the Company was on track to deliver results in line with previous 2023 guidance. 2023 updated guidance assumptions, adjusted for the Mannville Transaction, are as follows:
Updated 2023 Guidance | Previous 2023 Guidance | |
Exploration and development capital spending(1) ($ millions) | ||
Cash costs(1) ($/boe) | ||
Royalties (% of revenue)(1) | 16 - 18% | 16 - 18% |
Average daily production (boe/d) | 6,200 - 6,400 | 6,400 - 6,600 |
Production mix (%) | 20% NGL | 22% oil and NGL |
(1) | Non-GAAP measure, financial measure, non-GAAP ratio or supplementary financial measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. See "Non-GAAP and Other Financial Measures" in this news release and in the MD&A. |
Perpetual will continue to address end of life asset retirement obligations, with total abandonment and reclamation expenditures of approximately
Perpetual is an oil and natural gas exploration, production and marketing company headquartered in
Barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. In accordance with NI 51-101, a conversion ratio for conventional natural gas of 6 Mcf:1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, utilizing a conversion on a 6 Mcf:1 bbl basis may be misleading as an indicator of value as the value ratio between conventional natural gas and heavy crude oil, based on the current prices of natural gas and crude oil, differ significantly from the energy equivalency of 6 Mcf:1 bbl. A conversion ratio of 1 bbl of heavy crude oil to 1 bbl of NGL has also been used throughout this news release.
The following abbreviations used in this news release have the meanings set forth below:
boe barrels of oil equivalent
boe/d barrels of oil equivalent per day
Throughout this news release and in other materials disclosed by the Company, Perpetual uses 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 under IFRS and therefore may not be comparable to similar measures presented by other entities.
Non-GAAP Financial Measures:
Exploration and development capital spending: Perpetual uses exploration and development capital spending related to exploration and development to measure its capital investments compared to the Company's annual capital budgeted expenditures. Perpetual's capital budget excludes acquisition and disposition activities.
Cash costs: Cash costs are controllable costs comprised of net operating costs, transportation, general and administrative, and cash finance expense. Cash costs per boe is calculated by dividing cash costs by total production sold in the period. Management believes that cash costs assist management and investors in assessing Perpetual's efficiency and overall cost structure.
Supplementary Financial Measures
"Royalties (% of revenue)" is comprised of royalties, as determined in accordance with IFRS, divided by total Company sales production on a boe basis.
Certain information in this news release including management's assessment of future plans and operations, and including the information contained under the heading "2023 Updated Outlook" may constitute forward-looking information or statements (together "forward-looking information") under applicable securities laws. The forward-looking information includes, without limitation, statements with respect to: the benefits to be derived from the Mannville Transaction; the anticipated timing for closing the Mannville Transaction, the anticipated use of proceeds from the Mannville Transaction including to reduce bank debt and manage future maturities on the Company's Term Loan and Senior Notes and other obligations as they come due, as well as provide Perpetual with the liquidity to invest in its remaining assets at
Forward-looking information is based on current expectations, estimates and projections that involve a number of known and unknown risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Perpetual and described in the forward-looking information contained in this news release. In particular and without limitation of the foregoing, material factors or assumptions on which the forward-looking information in this news release is based include: forecast commodity prices and other pricing assumptions; forecast production volumes based on business and market conditions; foreign exchange and interest rates; near-term pricing and continued volatility of the market including inflationary pressures; accounting estimates and judgments; future use and development of technology and associated expected future results; the ability to obtain regulatory approvals; the successful and timely implementation of capital projects; ability to generate sufficient cash flow to meet current and future obligations; the ability of Perpetual to obtain and retain qualified staff and equipment in a timely and cost-efficient manner, as applicable; the retention of key properties; forecast inflation, supply chain access and other assumptions inherent in Perpetual's current guidance and estimates; climate change; severe weather events (including wild fires); the continuance of existing tax, royalty, and regulatory regimes; the accuracy of the estimates of reserves volumes; ability to access and implement technology necessary to efficiently and effectively operate assets; and the ongoing and future impact of the pandemics (including COVID-19), the war in
Undue reliance should not be placed on forward-looking information, which is not a guarantee of performance and is subject to a number of risks or uncertainties, including without limitation those described herein and under "Risk Factors" in Perpetual's Annual Information Form and MD&A for the year ended
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