Pieridae Releases Q3 2024 Financial and Operating Results | The Manila Times

Successfully executes another stage of its corporate strategy by closing the sale of Goldboro, fully repaying the high-interest bridge loan, and completing an equity private placement

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CALGARY, Alberta, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Pieridae Energy Limited ("Pieridae” or the "Company”) (TSX: PEA) announces the release of its third quarter 2024 financial and operating results. The Company produced 23,116 boe/d and generated Net Operating Income¹ ("NOI”) of $19.8 million during the third quarter of 2024. Pieridae's management's discussion and analysis ("MD&A”) and unaudited interim consolidated financial statements and notes for the quarter ended September 30, 2024 are available at www.pieridaeenergy.com and on SEDAR+ at www.sedarplus.ca.

Darcy Reding, President and CEO stated, "We are thrilled with the successful conclusion of the legacy Goldboro asset sale for $12 million and repayment of the $24 million bridge loan in the third quarter, both important strategic milestones. I am also very proud of our planning, operations and maintenance personnel that completed the Waterton gas plant turnaround shortly after quarter-end on-budget. Our prudent decision to shut-in uneconomic production flowing to third-party facilities during the quarter improved NOI in the short-term and preserves the Company's reserves for the long-term benefit of shareholders. Generating $20 million of NOI during an extremely challenging quarter for AECO gas pricing demonstrates the effectiveness of our commodity price hedge program and validates the decision to shut-in low margin properties that incur processing fees at non-operated and non-owned facilities.”

Q3 HIGHLIGHTS

Divested legacy Goldboro assets for $12.0 million, completing the strategic pivot to focus on operating and growing the Company's upstream and midstream processing businesses.
Completed a non-brokered private placement of 12.8 million common shares for gross proceeds of $4.5 million with an existing institutional shareholder.
Settled the convertible bridge term loan for $24.0 million, including outstanding principal and accrued interest, in advance of its December 13, 2024 maturity date.
Announced a backstopped rights offering to existing shareholders priced at $0.2448 per common share, a regulated 25% discount to the PEA share price immediately prior to announcement.
Produced 23,116 boe/d (83% natural gas), reflecting voluntary shut-ins and downtime due to the planned maintenance turnaround of the Waterton deep-cut, sour gas processing facility which commenced in September and concluded in October 2024.
Shut-in an additional 7,250 boe/d uneconomic production in Central Alberta due to low AECO gas prices and high third-party processing costs. Voluntarily shut-in production now totals approximately 9,370 boe/d across the asset base - approximately 25% of corporate production capability.
Generated NOI of $19.8 million ($0.12 per basic and fully diluted share and $9.31/boe) reflecting the positive impact of voluntary shut-ins and a $26.7 million realized commodity hedge gain ($0.16 per basic and fully diluted share and $12.53/boe), offsetting the impact of historically low natural gas prices.
Incurred capital expenditures of $10.0 million primarily on the planned maintenance turnaround at the Waterton facility, and a successful debottlenecking project at the Caroline gas plant to meet growing demand for gas processing from third parties.
The Company's discounted unrealized gain on its natural gas and condensate hedge positions at September 30, 2024 was approximately $85.0 million using the September 30, 2024 forward strip.

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SUBSEQUENT TO Q3

Closed the previously announced rights offering on October 8, 2024, resulting in the issue of 118,476,306 common shares to existing shareholders for proceeds of $29.0 million, backstopped by a $25.0 million commitment by AIMCo, an existing shareholder.
Successfully completed the planned maintenance turnaround at the Waterton gas plant in October 2024 and safely restarted the facility.

SELECTED QUARTERLY OPERATIONAL & FINANCIAL RESULTS

	2024						2023 Advertisement								2022
($ 000s unless otherwise noted)	Q3		Q2		Q1		Q4		Q3		Q2		Q1		Q4
Production
Natural gas (mcf/d)	115,196		157,077		175,356		174,211		155,763		159,427		186,156		179,143
Condensate (bbl/d)	2,191		2,472		2,781		2,384		2,020		2,300		2,657		2,469
NGLs (bbl/d)	1,726		2,210		2,613		1,921		2,273		2,216		2,784		2,389
Sulphur (tonne/d)	1,444		1,376		1,491		1,284		1,124		1,362		1,457		1,348
Total production (boe/d) ⁽¹⁾	23,116		30,861		34,620		33,340		30,253		31,087		36,467		34,715
Third-party volumes processed (mcf/d) ⁽²⁾	66,518		52,410		56,897		67,350		57,363		51,973		61,948		49,304
Financial
Natural gas price ($/mcf)
Realized before Risk Management Contracts ⁽³⁾	0.77		1.14		2.53		2.32		2.65		2.39		3.24		5.08
Realized after Risk Management Contracts ⁽³⁾	3.43		2.71		3.21		3.12		3.25		3.03		5.12		5.24
Benchmark natural gas price	0.68		1.17		2.48		2.29		2.59		2.40		3.25		5.20
Condensate price ($/bbl)
Realized before Risk Management Contracts ⁽³⁾	92.13		99.96		91.18		97.15		97.47		84.81		107.22		110.24
Realized after Risk Management Contracts ⁽³⁾	84.61		87.75		84.49		86.34		80.49		105.84		106.70		117.67
Benchmark condensate price ($/bbl)	97.10		105.62		98.43		104.30		106.30		93.25		107.05		115.24
Processing and marketing revenue	5,561		4,203		5,072		11,919		6,603		5,410		6,401		9,310
Net income (loss)	7,496		(19,196	)	(6,284	)	7,414		(16,254	)	4,182		13,639		114,662
Net income (loss) $ per share, basic	0.04		(0.12	)	(0.04	)	0.05		(0.10	)	0.03		0.09		0.72
Net income (loss) $ per share, diluted	0.04		(0.12	)	(0.04	)	0.03		(0.10	)	0.03		0.08		0.70
Net Operating Income ⁽⁴⁾	19,818		7,652		23,418		25,441		11,650		43,843		49,995		67,711
Cashflow provided by (used in) operating activities	2,260		(1,555	)	7,049		31,983		7,577		27,533		37,109		40,134
Funds flow from operations ⁽⁴⁾	8,234		(4,874	)	12,044		14,269		(1,422	)	35,432		37,413		57,641
Total assets	615,040		585,940		590,531		638,541		564,921		575,849		587,641		615,477
Adjusted working capital deficit ⁽⁴⁾	(42,658	)	(37,986	)	(31,671	)	(31,830	)	(21,454	)	(6,258	)	(22,275	)	(11,249	)
Net debt ⁽⁴⁾	(206,779	)	(219,204	)	(209,964	)	(204,046	)	(205,536	)	(181,670	)	(202,180	)	(214,503	)
Capital expenditures ⁽⁵⁾	10,002		5,003		4,897		9,306		16,363		9,384		20,486		19,037
^{(1) Total production excludes sulphur.}
^{(2) Third-party volumes processed are raw natural gas volumes reported by activity month, which do not include accounting accruals.}
^{(3) Includes physical commodity and financial risk management contracts inclusive of cash flow hedges, together ("Risk Management Contracts”).}
^{(4) Refer to the Company's MD&A for reference to non-GAAP measures.}
^{(5) Excludes reclamation and abandonment activities.}

OUTLOOK

Pieridae's priorities for 2024 remain to:

Maximize operated processing facility reliability to maximize sales revenue from infrastructure where the majority of operating costs are fixed, and to maximize third party processing revenue by leveraging our available deep cut natural gas processing capacity.
Reduce operating expenses to improve corporate netback.
Optimize fuel gas consumption to reduce raw gas shrinkage, increase sales revenue, and lower carbon emission compliance costs.
Reduce long-term debt to deleverage the balance sheet.

Pieridae's 2024 capital budget is highlighted by low-cost well and facility optimization projects and the second and final phase of the maintenance turnaround at the Waterton deep-cut, sour gas processing facility, which was successfully completed during September and October 2024. Pieridae owns and operates three major sour gas processing facilities that each require periodic maintenance turnarounds, typically on a five-to-six-year cycle.

Pieridae intends to invest a portion of the proceeds raised in the rights offering that closed on October 8, 2024 to fund a high-impact well and facility optimization program which is expected to increase production and sales revenue, improve facility efficiency and lower operating costs. The program will commence in the fourth quarter of 2024 and will continue into 2025. The planned capital projects are low risk and highly economic with strong returns and short payout periods. The scope and timing of all capital projects continues to be scrutinized in the context of low natural gas prices. Pieridae does not intend to resume a development drilling program until the natural gas price outlook improves.

Pieridae continually evaluates the economic performance of its producing assets to optimize NOI during periods of sustained low commodity prices. Over the past several months, the Company has elected to temporarily shut-in selected low-margin properties within the following areas, all which remain shut-in at this time:

Area	Shut-in Production (boe/d)
Central AB	8,018
Northeast BC	870
Northern Alberta	482
Current Shut-in Production	9,370

Reactivating shut-in production can be completed within one to two weeks and subsequent well performance is not expected to be negatively impacted by these shut-ins. Pieridae will only resume producing these properties when economics justify doing so.

In August 2024, Pieridae updated guidance projections including the withdrawal of production guidance due to ongoing weak natural gas pricing and the resulting production shut-ins. The Company is not making any further revisions to guidance at this time.

Current 2024 Guidance

Previous 2024 Guidance

($ 000s unless otherwise noted)