Saturn Oil & Gas Inc. (TSX: SOIL) (FSE: SMKA) (OTCQX: OILSF) (“Saturn” or the “Firm”) is happy to report its monetary and working outcomes for the three and twelve months ended December 31, 2023.
“2023 was an incredible 12 months of progress for Saturn in creating a considerable and sustainable free money producing enterprise. Along with doubling our manufacturing base over final 12 months, we’ve assembled a deep stock of high-quality improvement drilling places to maintain present manufacturing ranges for many years,” commented John Jeffrey, Chief Govt Officer. “Saturn has maintained its strategic deal with creating mild oil centered belongings and optimizing our price construction to ship among the highest money stream margins in Canada, and to additional our final objective of shareholder worth creation.”
2023 Fourth Quarter and Annual Highlights:
- Delivered file crude oil and pure fuel manufacturing with fourth quarter 2023 averaging 26,891 boe/d (82% oil and NGLs), in comparison with 12,514 boe/d (96% oil and NGLs) within the fourth quarter of 2022, a rise of 115%;
- Generated quarterly adjusted EBITDA(1) of $100.1 million in comparison with $62.2 million within the fourth quarter of 2022, a rise of 61%;
- Achieved file quarterly adjusted funds stream(1) of $80.2 million in comparison with $50.7 million within the fourth quarter of 2022, a rise of 58%;
- Invested $57.2 million of capital expenditures(1) within the fourth quarter, drilling 19 (16.9 web) horizontal wells;
- Generated free funds stream(1) of $23.1 million within the fourth quarter 2023, in comparison with $15.1 million within the fourth quarter of 2022, a rise of 53%; and
- Exited 2023 with web debt(1) of $460.5 million, realizing a web debt to fourth quarter annualized adjusted funds stream(1) of 1.4x.
| Three months ended December 31, | 12 months ended December 31, | ||||||||||||
| (CAD $000s, besides per share quantities) | 2023 | 2022 | 2023 | 2022 | |||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||
| Petroleum and pure fuel gross sales | 185,384 | 111,558 | 693,891 | 367,957 | |||||||||
| Money stream from working actions | 75,380 | 58,100 | 283,988 | 102,314 | |||||||||
| Working netback, web of derivatives(1) | 104,328 | 64,661 | 382,890 | 153,450 | |||||||||
| Adjusted EBITDA(1) | 100,092 | 62,191 | 363,143 | 146,740 | |||||||||
| Adjusted funds stream(1) | 80,247 | 50,729 | 278,138 | 118,658 | |||||||||
| per share | – Primary | 0.58 | 0.85 | 2.20 | 2.67 | ||||||||
| – Diluted | 0.56 | 0.84 | 2.15 | 2.64 | |||||||||
| Free funds stream(1) | 23,072 | 15,053 | 147,565 | 29,553 | |||||||||
| per share | – Primary | 0.17 | 0.25 | 1.17 | 0.67 | ||||||||
| – Diluted | 0.16 | 0.25 | 1.14 | 0.66 | |||||||||
| Internet revenue (loss) | 131,456 | (16,728 | ) | 290,623 | 74,815 | ||||||||
| per share | – Primary | 0.94 | (0.28 | ) | 2.30 | 1.68 | |||||||
| – Diluted | 0.92 | (0.28 | ) | 2.25 | 1.66 | ||||||||
| Internet Debt(1), finish of interval | 460,483 | 219,803 | 460,483 | 219,803 |
| Three months ended December 31, | 12 months ended December 31, | |||||||||||
| (CAD $000s, besides per share quantities) | 2023 | 2022 | 2023 | 2022 | ||||||||
| OPERATING HIGHLIGHTS | ||||||||||||
| Common manufacturing volumes | ||||||||||||
| Crude oil (bbls/d) | 19,407 | 11,590 | 18,177 | 8,841 | ||||||||
| NGLs (bbls/d) | 2,533 | 428 | 1,992 | 353 | ||||||||
| Pure fuel (mcf/d) | 29,704 | 2,971 | 24,559 | 2,392 | ||||||||
| Whole boe/d | 26,891 | 12,514 | 24,262 | 9,593 | ||||||||
| % Oil and NGLs | 82% | 96% | 83% | 96% | ||||||||
| Common realized costs | ||||||||||||
| Crude oil ($/bbl) | 95.09 | 103.03 | 96.75 | 111.84 | ||||||||
| NGLs ($/bbl) | 44.21 | 51.47 | 43.75 | 58.41 | ||||||||
| Pure fuel ($/mcf) | 2.49 | 5.36 | 2.77 | 5.57 | ||||||||
| Processing bills ($/boe) | (0.61 | ) | (1.56 | ) | (0.53 | ) | (1.52 | ) | ||||
| Petroleum and pure fuel gross sales ($/boe) | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
| Working netback ($/boe) | ||||||||||||
| Petroleum and pure fuel gross sales | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
| Royalties | (9.75 | ) | (9.57 | ) | (9.10 | ) | (13.61 | ) | ||||
| Internet working bills(1) | (18.17 | ) | (22.42 | ) | (20.33 | ) | (24.67 | ) | ||||
| Transportation bills | (1.25 | ) | (0.45 | ) | (1.28 | ) | (0.61 | ) | ||||
| Working netback(1) | 45.76 | 64.46 | 47.64 | 66.20 | ||||||||
| Realized loss on derivatives | (3.59 | ) | (8.29 | ) | (4.41 | ) | (22.38 | ) | ||||
| Working netback, web of derivatives(1) | 42.17 | 56.17 | 43.23 | 43.82 | ||||||||
| Widespread shares excellent, finish of interval | 139,313 | 59,892 | 139,313 | 59,892 | ||||||||
| Weighted common, primary | 139,313 | 59,869 | 126,230 | 44,402 | ||||||||
| Weighted common, diluted | 142,292 | 60,363 | 129,225 | 44,955 |
Message to Shareholders
In 2023, Saturn achieved its third consecutive 12 months of progress in manufacturing and money stream from operations:
- Common manufacturing elevated 153% to 24,262 boe/d, in comparison with 9,593 boe/d common manufacturing in 2022;
- Adjusted EBITDA(1) elevated 147% to $363.1 million, in comparison with $146.7 million in 2022; and
- Adjusted funds stream(1) elevated 134% to $278.1 million, in comparison with $118.7 million in 2022.
Throughout 2023, Saturn efficiently drilled and rig launched a complete of 59 gross (48.8 web) horizontal wells throughout its 4 core working areas, comprised of:
- 28 gross (25.2 web) wells in Southeast Saskatchewan;
- 19 gross (14.3 web) wells in West Central Saskatchewan;
- 8 gross (5.3 web) wells in Central Alberta; and
- 4 gross (4.0 web) wells in North Alberta.
The February acquisition of privately held oil and fuel producer, Ridgeback Sources Inc. (“Ridgeback”), was a key contributor to Saturn’s progress in 2023, including 670 web sections of land that includes improvement alternatives to maintain the Firm’s manufacturing going ahead. The acquisition of Ridgeback was extremely synergistic to the Firm’s present Southeast Saskatchewan belongings increasing its excessive money stream, mild oil manufacturing base by roughly 65%; greater than doubling the sunshine oil reserve volumes within the space; and added a big undeveloped land place that includes Bakken mild oil useful resource that Saturn can proceed to develop. Along with rising the Firm’s Saskatchewan footprint, the acquisition additionally expanded Saturn’s operations into Alberta’s prolific Cardium, Kaybob and Swan Hills areas.
The Firm has continued to deal with streamlining its price construction by lowering general royalties, reducing working prices and enhancing common hedging pricing:
- Common royalties decreased to 11.5% in 2023, in contrast 12.8% in 2022;
- Common web working bills(1) decreased 18% to $20.33 per boe in 2023, in comparison with $24.67 per boe in 2022; and
- Common realized loss on derivatives decreased 80% to $4.41 per boe in 2023, in comparison with $22.38 in 2022.
In mild of the above price discount impacts, the Firm’s 2023 working netback(1), web of derivatives of $43.23 per boe, was akin to the $43.82 per boe in 2022, regardless of an roughly 17% drop within the common benchmark WTI oil worth to US $77.60 in 2023, in comparison with a median WTI oil worth of US $94.25 in 2022.
Saturn drilled as operator in 2023, 47 gross (45.2 web) wells, with the outcomes of the 46 gross operated wells that have been positioned on manufacturing summarized within the desk beneath:
| Gross Wells Drilled by Formation (quantity): | Avg. IP30 per Location (boe/d) |
2023 Steering Kind Curve (boe/d) |
Efficiency vs. Kind Curve (%) |
Whole Gross Capital Invested ($MM) |
Capital Effectivity ($ 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 Common | 134.6 | 121.0 | +11 | 98.0 | 15,830 |
Dedication to Debt Compensation
On February 28, 2023, the Firm expanded its Senior Time period Mortgage by $375.0 million in relation to the acquisition of Ridgeback. Saturn continues to prioritize the speedy compensation of its Senior Time period Mortgage, and in 2023, the Firm made principal funds totaling roughly $164.5 million, with extra mixture funds of roughly $50.7 million made up to now in 2024, for a complete of $215.2 million of principal funds since December 31, 2022. The Firm intends to proceed directing free money stream to ongoing debt compensation and steadiness sheet strengthening.
Southeast Saskatchewan
In This fall of 2023, Saturn rig launched six gross (4.6 web) Bakken wells, of which two gross wells (2.0 web) have been drilled as open gap multi-lateral (“OHML”) wells. These OHML wells function seven to eight horizontal legs per effectively and symbolize the primary on which Saturn has deployed this progressive drilling approach. The Firm’s Bakken mild oil improvement has been a powerful addition to its capital program in Southeast Saskatchewan, the place Saturn has already efficiently drilled a complete of 11 gross (9.1 web) Bakken wells in 2023. Saturn has 197 web booked Bakken drilling places (together with 16.9 web OHML places) and has recognized over 100 web unbooked Bakken wells for future improvement.
Saturn efficiently drilled three gross (2.3 web) Frobisher wells in This fall of 2023 for an annual whole of 11 gross (10.1 web) Mississippian wells, together with two gross (1.9 web) Midale wells, which collectively outperformed IP30 kind curve expectations by 17%. The six gross (6.0 web) Spearfish wells drilled in 2023 have been a spotlight of the 12 months’s improvement program, outperforming IP30 kind curve expectations by 16%, whereas experiencing decrease than anticipated declines. Additional budgeted improvement of Frobisher and Spearfish mild oil is predicted to be a distinguished part of Saturn’s 2024 capital funding plan.
For the three months ended December 31, 2023, the Firm’s Southeast Saskatchewan belongings collectively averaged 12,550 boe/d of manufacturing, a rise of 67% from 7,522 boe/d within the comparative 2022 interval.
West Central Saskatchewan
The Firm added a 3rd rig to the fourth quarter improvement plan so as to lengthen the drilling success of its Viking mild oil targets in West Central Saskatchewan, including 4 extra wells with 100% working curiosity. In 2023 Saturn efficiently drilled 19 gross (14.3 web) Viking wells and continued to comply with up on its greatest performing areas of Hershel and Plato with 12 operated wells. These 12 wells have been drilled with 100% working curiosity, had a median IP30 of 97.9 bbls/d of sunshine oil, which outperformed the sort curve expectations by 44%. Saturn has 165 web places booked for future Viking improvement.
The Firm’s West Central Saskatchewan belongings averaged 3,504 boe/d of manufacturing for the three months ended December 31, 2023, in comparison with 4,992 boe/d within the prior 12 months.
Central Alberta
Saturn efficiently drilled three Cardium horizontal wells within the fourth quarter of 2023, with 100% working curiosity, for a complete of eight gross (5.3 web) Cardium wells being rig launched in 2023. The 2023 Cardium wells drilled by Saturn have been Prolonged Attain Horizontal (“ERH”) wells having a median lateral size of two.2 miles. 5 of the Saturn operated Cardium wells have been placed on manufacturing in This fall of 2023, with IP30 charges in keeping with kind remedy expectations, and delivering roughly 1,316 boe/d in mixture in the course of the first 30 days on manufacturing. The sixth Cardium effectively drilled in late 2023 has now been accomplished together with a further three gross (3.0 web) ERH Cardium wells drilled up to now in 2024. The 4 new wells are anticipated to be introduced on-line earlier than the tip of Q1 2024. In whole throughout 2024, Saturn expects to drill eight web Cardium ERH wells.
For the three months ended December 31, 2023, the Firm’s Central Alberta belongings produced a median of 8,066 boe/d.
North Alberta
In December 2023, the Firm introduced on manufacturing a 4 effectively pad in Kaybob, with 100% working curiosity to Saturn. The 4 wells have been inside expectations of the Montney kind curve for this space and delivered an IP30 fee of roughly 1,254 boe/d in mixture. Saturn plans to drill a further 4 effectively pad in Kaybob throughout 2024.
For the three months ended December 31, 2023, the Firm’s North Alberta belongings produced a median of two,771 boe/d.
ESG Initiatives
Saturn continued its dedication to accountable environmental stewardship by directing roughly $10.7 million in 2023 to decommissioning expenditures, together with the abandonment of 114 wells that now not had financial manufacturing potential, amounting to roughly 2x the variety of gross new wells the Firm drilled in 2023.
Outlook
Saturn’s Board of Administrators has accepted the Firm’s largest ever improvement plan in 2024, with a funds of roughly $145.6 million concentrating on the drilling of as much as 61 web wells. With Saturn’s in depth pipeline community and services infrastructure inside every of its core working areas, the Firm has ample capability to deal with incremental new manufacturing coming on-stream. Over 85% of the Firm’s 2024 improvement capital expenditures shall be directed to drilling, completions, equipping and tie-in of latest manufacturing.
Via the primary quarter of 2024, the Firm employed a full-time rig in Southeast Saskatchewan, ensuing within the drilling of 5 gross (5.0 web) standard wells (two Frobisher, two Spearfish, one Tilston) all of which have been put onto manufacturing. The Firm is now drilling the primary of two Bakken OHML wells that may proceed by means of the primary half of 2024 with 100% working curiosity to Saturn.
Extra particulars on Saturn’s 2024 Capital Funding Program is offered throughout the Firm’s Steering Presentation now obtainable on the web site at https://saturnoil.com/investors/#presentations-and-events.
Investor Webcast
Saturn will host a webcast at 10:00 AM MDT (12:00 PM Midday EDT) on Wednesday, March 13, 2024, to evaluate the 12 months finish and fourth quarter 2023 monetary outcomes and supply extra color on the Firm’s operational highlights. Contributors can entry the reside webcast by way of https://saturnoil.com/invest/q4-2023-results-webcast. A recorded archive of the webcast shall be obtainable afterwards on the Firm’s web site.
About Saturn Oil & Fuel Inc.
Saturn Oil & Fuel Inc. is a rising Canadian vitality firm centered on producing optimistic shareholder returns by means of the continued accountable improvement of high-quality, mild oil weighted belongings, supported by an acquisition technique that targets extremely accretive, complementary alternatives. Saturn has assembled a lovely portfolio of free-cash flowing, low-decline operated belongings in Saskatchewan and Alberta that present a deep stock of long-term financial drilling alternatives throughout a number of zones. With an unwavering dedication to constructing an ESG-focused tradition, Saturn’s objective is to extend reserves, manufacturing and money flows at a lovely return on invested capital. Saturn’s shares are listed for buying and selling on the TSX beneath ticker ‘SOIL’ on the Frankfurt Inventory Alternate beneath image ‘SMKA’ and on the OTCQX beneath the ticker ‘OILSF’.
The Firm’s consolidated monetary statements and corresponding Administration’s Dialogue and Evaluation for the three months and 12 months ended December 31, 2023 can be found on SEDAR+ at www.sedarplus.com and on Saturn’s web site at www.saturnoil.com. Copies of the supplies may also be obtained upon request with out cost by contacting the Firm immediately. Please observe, foreign money figures offered herein are mirrored in Canadian {dollars}, except in any other case famous.
Additional data and a company presentation is offered on Saturn’s web site at www.saturnoil.com.
Saturn Oil & Fuel Investor & Media Contacts:
John Jeffrey, MBA – Chief Govt Officer
Tel: +1 (587) 392-7900
www.saturnoil.com
Kevin Smith, MBA – VP Company Growth
Tel: +1 (587) 392-7900
data@saturnoil.com
Word:
(1) See Reader Advisory “Non-GAAP and Different Monetary Measures”
Reader Advisory
Non-GAAP and Different Monetary Measures
All through this information launch and in different supplies disclosed by the Firm, we make use of sure measures to research monetary efficiency, monetary place and money stream. These non-GAAP and different monetary measures wouldn’t have any standardized that means prescribed by IFRS and due to this fact will not be akin to related measures supplied by different issuers. Non-GAAP and different monetary measures shouldn’t be thought of to be extra significant than GAAP measures that are decided in accordance with IFRS. The disclosure beneath the part “Non-GAAP and Different Monetary Measures” together with non-GAAP monetary measures and ratios, capital administration measures and supplementary monetary measures within the Firm’s Condensed consolidated interim monetary statements and MD&A are included by reference into this information launch.
This press launch makes use of the phrases “adjusted EBITDA”, “adjusted funds stream”, “free funds stream” and “web debt” that are capital administration measures. See the disclosure beneath “Capital Administration” in our audited consolidated monetary statements for the three months and the 12 months ended December 31, 2023, for an evidence and composition of those measures and the way these measures present helpful data to an investor, and the extra functions, if any, for which administration makes use of these measures.
Free funds stream
The Firm considers free funds stream to be a key capital administration measure as it’s used to find out the effectivity and liquidity of Saturn’s enterprise, measuring its funds obtainable after capital funding obtainable for debt compensation, pursue acquisitions and gauge optionality to pay dividends and/or return capital to shareholders by means of share repurchases. Saturn calculates Free funds stream as Adjusted funds stream within the interval much less expenditures on property, plant and tools and exploration and analysis belongings, collectively “capital expenditures”. By eradicating the affect of present interval capital expenditures from adjusted funds stream, administration screens its free funds stream to tell its capital allocation choices.
| Three months ended December 31, | 12 months ended December 31, | |||||||||||
| ($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Adjusted funds stream | 80,247 | 50,729 | 278,138 | 118,658 | ||||||||
| Capital expenditures | (57,175 | ) | (35,676 | ) | (130,573 | ) | (89,105 | ) | ||||
| Free funds stream | 23,072 | 15,053 | 147,565 | 29,553 |
Capital Expenditures
Saturn makes use of capital expenditures to observe its capital investments relative to these budgeted by the Firm on an annual foundation. Saturn’s capital funds excludes acquisition and disposition actions in addition to the accounting affect of any accrual adjustments or funds beneath sure lease preparations. Essentially the most immediately comparable GAAP measure for capital expenditures is money stream utilized in investing actions. The next desk reconciles capital expenditures and capital expenditures, web acquisitions and inclinations (“A&D”) to the closest GAAP measure, money stream utilized in investing actions.
| Three months ended December 31, | 12 months ended December 31, | |||||||||||
| ($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Money stream utilized in investing actions | 38,725 | 41,747 | 576,405 | 318,238 | ||||||||
| Change in non-cash working capital | 18,450 | (5,266 | ) | 20,830 | 19,234 | |||||||
| Capital expenditures, web A&D | 57,175 | 36,481 | 597,235 | 337,472 | ||||||||
| Acquisitions, web of money acquired | – | (805 | ) | (466,662 | ) | (248,367 | ) | |||||
| Capital expenditures | 57,175 | 35,676 | 130,573 | 89,105 |
Internet working bills
Internet working expense is calculated by deducting processing revenue primarily generated by processing third celebration manufacturing at processing services the place the Firm has an possession curiosity, from working bills offered on the Assertion of revenue (loss). The place the Firm has extra capability at one in every of its services, it is going to course of third-party volumes to scale back the price of possession within the facility. The Firm’s major enterprise actions should not that of a midstream entity whose actions are centered on incomes processing and different infrastructure-based revenues, and as such third-party processing income is netted towards working bills within the MD&A. This metric is utilized by administration to judge the Firm’s web working bills on a unit of manufacturing foundation. Internet working expense per boe is a non-GAAP monetary ratio and is calculated as web working expense divided by whole barrels of oil equal produced over a selected time frame. The calculation of the Firm’s web working bills is proven throughout the web working bills part of our MD&A for the three months and 12 months ended December 31, 2023.
Working netback and Working netback, web of derivatives
The Firm’s working netback is set by deducting royalties, web working bills and transportation bills from petroleum and pure fuel gross sales. The Firm’s working netback, web of derivatives is calculated by including or deducting realized monetary by-product commodity contract positive factors or losses from the working netback. The Firm’s working netback and working netback, web of derivatives are utilized in operational and capital allocation choices. Presenting working netback and working netback, web of derivatives on a per boe foundation is a non-GAAP monetary ratio and permits administration to raised analyze efficiency towards prior durations on a per unit of manufacturing foundation. The calculation of the Firm’s working netbacks and working netback, web of derivatives are summarized as follows.
| Three months ended December 31, | 12 months ended December 31, | |||||||||||
| ($000s) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Petroleum and pure fuel gross sales | 185,384 | 111,558 | 693,891 | 367,957 | ||||||||
| Royalties | (24,124 | ) | (11,022 | ) | (80,565 | ) | (47,640 | ) | ||||
| Internet working bills | (44,945 | ) | (25,817 | ) | (180,074 | ) | (86,379 | ) | ||||
| Transportation bills | (3,094 | ) | (518 | ) | (11,314 | ) | (2,139 | ) | ||||
| Working netback | 113,221 | 74,201 | 421,938 | 231,799 | ||||||||
| Realized loss on monetary derivatives | (8,893 | ) | (9,540 | ) | (39,048 | ) | (78,349 | ) | ||||
| Working netback, web of derivatives | 104,328 | 64,661 | 382,890 | 153,450 | ||||||||
| ($ per boe quantities) | ||||||||||||
| Petroleum and pure fuel gross sales | 74.93 | 96.90 | 78.35 | 105.09 | ||||||||
| Royalties | (9.75 | ) | (9.57 | ) | (9.10 | ) | (13.61 | ) | ||||
| Internet working bills | (18.17 | ) | (22.42 | ) | (20.33 | ) | (24.67 | ) | ||||
| Transportation bills | (1.25 | ) | (0.45 | ) | (1.28 | ) | (0.61 | ) | ||||
| Working netback | 45.76 | 64.46 | 47.64 | 66.20 | ||||||||
| Realized loss on monetary derivatives | (3.59 | ) | (8.29 | ) | (4.41 | ) | (22.38 | ) | ||||
| Working netback, web of derivatives | 42.17 | 56.17 | 43.23 | 43.82 |
Adjusted EBITDA
The Firm considers adjusted EBITDA to be a key capital administration measure as it’s each used inside sure monetary covenants prescribed beneath the Firm’s Senior Time period Mortgage (observe 11) and demonstrates Saturn’s standalone profitability, working and monetary efficiency when it comes to money stream era, adjusting for curiosity associated to its capital construction. Adjusted EBITDA is outlined by the Firm as earnings earlier than curiosity, taxes, depreciation, amortization and different noncash or extraordinary objects.
Adjusted funds stream
The Firm considers adjusted funds stream to be a key capital administration measure because it demonstrates Saturn’s means to generate the required funds to handle manufacturing ranges and fund future progress by means of capital funding. Administration believes that this measure gives an insightful evaluation of Saturn’s operations on a seamless foundation by eliminating sure non-cash costs, precise settlements of decommissioning obligations, of which the character and timing of expenditures might differ primarily based on the stage of the Firm’s belongings and working areas, and transaction prices which differ primarily based on the Firm’s acquisition and disposition exercise.
Free funds stream
The Firm considers free funds stream to be a key capital administration measure as it’s used to find out the effectivity and liquidity of Saturn’s enterprise, measuring its funds obtainable after capital funding obtainable for debt compensation, pursue acquisitions and gauge optionality to pay dividends and/or return capital to shareholders by means of share repurchases. Saturn calculates free funds stream as adjusted funds stream within the interval much less expenditures on property, plant and tools and exploration and analysis belongings, collectively “capital expenditures”. By eradicating the affect of present interval capital expenditures from adjusted funds stream, administration screens its free funds stream to tell its capital allocation choices.
The next desk reconciles adjusted EBITDA, adjusted funds stream and free funds stream to money stream from working actions:
| 12 months ended December 31, | ||||||
| ($000s) | 2023 | 2022 | ||||
| Money stream from working actions | 283,988 | 102,314 | ||||
| Change in non-cash working capital | (20,993 | ) | 14,536 | |||
| Decommissioning expenditures | 10,486 | 582 | ||||
| Transaction prices | 4,657 | 1,226 | ||||
| Present tax restoration | (1,915 | ) | – | |||
| Internet curiosity(1) | 86,920 | 28,082 | ||||
| Adjusted EBITDA | 363,143 | 146,740 | ||||
| Present Tax Restoration | 1,915 | – | ||||
| Internet Curiosity(1) | (86,920 | ) | 28,082 | |||
| Adjusted Funds Movement | 278.138 | 118,658 | ||||
| Capital Expenditures(2) | (130,573 | ) | (89,105 | ) | ||
| Free Funds Movement | 147,565 | 29,553 | ||||
| (1) Calculated as curiosity expense, web of curiosity income. (2) Calculated as expenditures on exploration and improvement belongings on the consolidated statements of money flows. |
Market capitalization and web debt
Administration considers web debt a key capital administration measure in assessing the Firm’s liquidity. Whole market capitalization and web debt to annualized quarterly adjusted funds stream are utilized by administration and the Firm’s buyers in analyzing the Firm’s steadiness sheet power and liquidity. The abstract of whole market capitalization, web debt, annualized quarterly adjusted funds stream and web debt to annualized quarterly adjusted funds stream is as follows:
| 12 months ended December 31, | ||||||
| ($000s) | 2023 | 2022 | ||||
| Whole widespread shares excellent (000s) | 139,313 | 59,892 | ||||
| Share worth(1) | 2.20 | 2.35 | ||||
| Whole market capitalization | 306,489 | 140,746 | ||||
| Adjusted working capital(2) | 8,240 | (3,128 | ) | |||
| Senior Time period Mortgage | 451,153 | 240,843 | ||||
| Convertible notes | 1,090 | 2,361 | ||||
| Lengthy-term deposit | – | (21,101 | ) | |||
| Promissory notes | – | 828 | ||||
| Internet debt | 460,483 | 219,803 | ||||
| Present quarter adjusted funds stream | 80,247 | 50,729 | ||||
| Annualized issue | 4 | 4 | ||||
| Annualized quarterly adjusted funds stream | 320,988 | 202,916 | ||||
| Internet debt to annualized quarterly adjusted funds stream | 1.4x | 1.1x | ||||
| (1) Represents the closing share worth on the TSX on the final day of buying and selling of the interval. (2) Adjusted working capital is calculated as money, accounts receivable, deposits and prepaids web of accounts payable. |
Supplemental Info Concerning Product Varieties
References herein to boe/d embrace fuel or pure fuel and NGLs which refer to traditional pure fuel and pure fuel liquids product varieties, respectively, as outlined in Nationwide Instrument 51-101, Requirements of Disclosure for Oil and Fuel Actions (“NI 51-101”), besides the place particularly famous in any other case.
The next desk is meant to supply the product kind composition for every of the manufacturing figures supplied herein, the place not already disclosed inside tables above for common manufacturing for the three months and the 12 months 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) | Pure fuel (mcf/d) | Whole (boe/d) |
Crude oil (bbls/d) | NGLs (bbls/d) | Pure fuel (mcf/d) | Whole (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 | – | – | – | – |
| Whole boe/d | 19,407 | 2,533 | 29,704 | 26,891 | 11,590 | 428 | 2,971 | 12,514 |
| 12 months ended December 31, 2023 | 12 months ended December 31, 2022 | |||||||
| Crude oil (bbls/d) | NGLs (bbls/d) | Pure fuel (mcf/d) | Whole (boe/d) |
Crude oil (bbls/d) | NGLs (bbls/d) | Pure fuel (mcf/d) | Whole (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 | – | – | – | – |
| Whole boe/d | 18,177 | 1,992 | 24,559 | 24,262 | 8,841 | 353 | 2,392 | 9,593 |
Preliminary Manufacturing Charges
Any reference on this information launch to preliminary manufacturing charges are helpful in confirming the presence of hydrocarbons, nevertheless, such charges should not determinative of the charges at which such wells will proceed manufacturing and decline thereafter. Any reference on this information launch to preliminary manufacturing charges include the above famous product varieties, utilizing a conversion fee of 1 bbl : 6 MCF (the place relevant). Readers are cautioned to not place undue reliance on such charges in calculating mixture manufacturing for Saturn.
Per boe or ($/boe)
Any reference on this information launch to disclosures for petroleum and pure fuel gross sales, royalties, working bills, transportation bills and advertising bills on a per boe foundation are supplementary monetary measures which might be calculated by dividing every of those respective GAAP measures by Saturn’s whole manufacturing volumes for the interval.
Per Share Quantities
Per share quantities famous on this information launch are primarily based on Saturn’s weighted common issued and excellent widespread shares as of December 31, 2023, except famous in any other case.
Boe Presentation
Boe means barrel of oil equal. All boe conversions on this information launch are derived by changing fuel to grease on the ratio of six thousand cubic ft (“Mcf”) of pure fuel to 1 barrel (“Bbl”) of oil. Boe could also be deceptive, notably if utilized in isolation. A Boe conversion fee of 1 Bbl : 6 Mcf is predicated on an vitality equivalency conversion methodology primarily relevant on the burner tip and doesn’t symbolize a worth equivalency on the wellhead. Provided that the worth ratio of oil in comparison with pure fuel primarily based on at present prevailing costs is considerably completely different than the vitality equivalency ratio of 1 Bbl: 6 Mcf, using a conversion ratio of 1 Bbl : 6 Mcf could also be deceptive as a sign of worth.
Ahead-Trying Info and Statements.
Sure data included on this press launch constitutes forward-looking data beneath relevant securities laws. Ahead-looking data sometimes accommodates statements with phrases similar to “anticipate”, “consider”, “anticipate”, “plan”, “intend”, “estimate”, “suggest”, “venture”, “scheduled”, “will” or related phrases suggesting future outcomes or statements concerning an outlook. Ahead-looking data on this press launch might embrace, however shouldn’t be restricted to, the Firm’s drilling and improvement plans, timing of bringing wells on-stream, 2024 manufacturing, expectations concerning netbacks, the marketing strategy, price mannequin and technique of the Firm.
The forward-looking statements contained on this press launch are primarily based on sure key expectations and assumptions made by Saturn, together with expectations and assumptions regarding: the timing of and success of future drilling, improvement and completion actions, the efficiency of present wells, the efficiency of latest wells, the provision and efficiency of services and pipelines, the flexibility to allocate capital to pay down debt and develop or keep manufacturing, the geological traits of Saturn’s properties, the applying of regulatory and licensing necessities and the provision of capital, labour and companies.
Though Saturn believes that the expectations and assumptions on which the forward-looking statements are primarily based are affordable, undue reliance shouldn’t be positioned on the forward-looking statements as a result of Saturn may give no assurance that they are going to show to be right. Since forward-looking statements deal with future occasions and situations, by their very nature they contain inherent dangers and uncertainties. Precise outcomes might differ materially from these at present anticipated because of quite a few elements and dangers. These embrace, however should not restricted to, dangers related to the oil and fuel trade normally (e.g., operational dangers in improvement, exploration and manufacturing; the uncertainty of reserve estimates; the uncertainty of estimates and projections referring to manufacturing, prices and bills, and well being, security and environmental dangers), constraints within the availability of companies, commodity worth and trade fee fluctuations, actions of OPEC and OPEC+ members, adjustments in laws impacting the oil and fuel trade, hostile climate or break-up situations and uncertainties ensuing from potential delays or adjustments in plans with respect to exploration or improvement initiatives or capital expenditures. These and different dangers are set out in additional element in Saturn’s Annual Info Kind for the 12 months ended December 31, 2023.
Ahead-looking data is predicated on quite a few elements and assumptions which have been used to develop such data however which can show to be incorrect. Though Saturn believes that the expectations mirrored in its forward-looking data are affordable, undue reliance shouldn’t be positioned on forward-looking data as a result of Saturn may give no assurance that such expectations will show to be right. Along with different elements and assumptions which can be recognized on this press launch, assumptions have been made concerning and are implicit in, amongst different issues, our capital expenditure and drilling packages, drilling stock and booked places, manufacturing and income steerage, ESG initiatives, debt compensation plans and future progress plans. Readers are cautioned that the foregoing listing shouldn’t be exhaustive of all elements and assumptions which have been used.
The forward-looking data contained on this press launch is made as of the date hereof and Saturn undertakes no obligation to replace publicly or revise any forward-looking data, whether or not on account of new data, future occasions or in any other case, except required by relevant securities legal guidelines. The forward-looking data contained on this press launch is expressly certified by this cautionary assertion.
All greenback figures included herein are offered in Canadian {dollars}, except in any other case famous.