CALGARY, AB, March 18, 2024 /CNW/ – Logan Energy Corp. (“Logan” or the “Company”) announces its financial and operating results for the period ended December 31, 2023, and the results of the 2023 year end reserves evaluation and provides an operations update and details of the Company’s upsized revolving credit facility.
Selected financial and operational information set out below highlights results from the fourth quarter and second half of 2023 (“H2 2023”), the first full period of operations following the spin-out of the early stage Montney assets of Spartan Delta Corp. (“Spartan”) to Logan on June 20, 2023 (the “Spin-Out”). This information should be read in conjunction with the Company’s audited annual financial statements and related management’s discussion and analysis (“MD&A”) as at and for the years ended December 31, 2023 and 2022. In addition, readers are also directed to the Company’s Annual Information Form (“AIF”) for the year ended December 31, 2023, dated March 18, 2024. These documents are filed on SEDAR+ at www.sedarplus.ca and are available on the Company’s website at www.loganenergycorp.com. The highlights reported in this press release include certain non-GAAP measures and ratios which have been identified using capital letters and are defined herein. The reader is cautioned that these measures may not be directly comparable to other issuers; refer to additional information under the heading “Reader Advisories – Non-GAAP Measures and Ratios”.
H2 2023 Financial and Operating Highlights
Since commencing active operations on June 20, 2023:
Logan raised net equity proceeds of $102.2 million through completion of a private placement and the exercise of common share purchase warrants in the third quarter.
Successfully executed on its exploration and development capital expenditure program spending $74.1 million during the second half of 2023, in line with budgeted Capital Expenditures before A&D of $75.0 million for the period. The Company also incurred $5.3 million of acquisition costs to expand its undeveloped acreage position at Simonette and to acquire certain equipment inventory.
At Simonette, the Company began delineating its land base targeting both crude oil and liquids-rich natural gas prospects in the north and south sections of the play. Logan drilled, completed and brought 2.0 net wells on production in September. During the fourth quarter, Logan drilled two additional wells and a third well was spud in late 2023.
At Pouce Coupe, Logan drilled, completed and brought 3.0 net oil wells on production in November driving the significant increase in oil production during the fourth quarter.
Logan added 62.25 net sections of land around our core area of Simonette, consisting of 32.75 net sections of Montney acreage and 29.5 net sections of land in non-Montney plays on and surrounding our existing asset base. Within the Montney acreage added, Logan has acquired a 14 net section contiguous block of land in the Lator area west of Simonette.
Achieved production growth to 7,515 BOE per day (35% liquids) on average for the fourth quarter, up 39% from 5,394 BOE per day (24% liquids) during the previous quarter.
Production for the second half of 2023 exceeded guidance by 8% averaging 6,455 BOE per day (31% liquids) compared to the Company’s forecast of 6,000 BOE per day (28% liquids).
Logan’s Operating Netback continues to improve as a result of operating leverage and improved scale in the business. The Company’s Operating Netback averaged $23.63 per BOE during the fourth quarter, up 116% from $10.94 per BOE reported in the previous quarter, resulting in an average Operating Netback of $18.32 per BOE for the second half of 2023.
Generated $15.4 million and $20.6 million of Adjusted Funds Flow during the respective three and six month periods ended December 31, 2023. Adjusted Funds Flow for the fourth quarter increased by 198% from $5.2 million during the third quarter of 2023, driven by Logan’s liquids-weighted production and revenue growth, together with lower average royalties and a decrease in per unit operating and transportation expenses quarter over quarter.
Logan exited 2023 with a working capital surplus of $41.6 million, including $54.0 million of cash on hand and no bank debt. Subsequent to the reporting period in March 2024, the Company’s lender increased the authorized borrowing amount available on its revolving demand credit facility from $15.0 million to $50.0 million (refer to “Subsequent Events” below). Logan is well positioned to execute on its 2024 capital expenditure program.
The table below summarizes selected highlights from the Company’s financial and operating results for the three and six month periods ended December 31, 2023, representing the reporting periods subsequent to the Spin-Out:
(CA$ thousands, except as otherwise noted)
Q4 2023
H2 2023
FINANCIAL HIGHLIGHTS
Oil and gas sales
28,653
46,141
Net income and comprehensive income
11,391
683
$ per common share, basic and diluted
0.02
0.00
Cash provided by operating activities
11,176
16,334
Adjusted Funds Flow (1)
15,392
20,551
$ per common share, basic (1)
0.03
0.05
$ per common share, diluted (1)
0.03
0.04
Capital Expenditures before A&D (1)
40,568
74,104
Acquisitions
151
5,295
Total assets
234,638
234,638
Working capital surplus
41,633
41,633
Shareholders’ equity
174,116
174,116
Common shares outstanding (000s), end of period (2)
465,537
465,537
OPERATING HIGHLIGHTS AND NETBACKS (5)
Average daily production
Crude oil (bbls/d)
1,844
1,313
Condensate (bbls/d) (3)
456
350
Natural gas liquids (bbls/d) (3)
362
318
Natural gas (mcf/d)
29,116
26,844
BOE/d
7,515
6,455
% Liquids (4)
35 %
31 %
Average realized prices
Crude oil ($/bbl)
90.40
95.82
Condensate ($/bbl) (3)
102.39
103.37
Natural gas liquids ($/bbl) (3)
51.61
51.20
Natural gas ($/mcf)
2.72
2.70
Combined average ($/BOE)
41.44
38.85
($/BOE)
Q4 2023
H2 2023
Netbacks ($/BOE) (5)
Oil and gas sales
41.44
38.85
Processing and other revenue
1.25
1.46
Royalties
(3.37)
(4.41)
Operating expenses
(11.82)
(13.48)
Transportation expenses
(3.87)
(4.10)
Operating Netback ($/BOE) (5)
23.63
18.32
General and administrative expenses
(2.58)
(2.56)
Financing income (6)
1.35
1.61
Settlement of decommissioning obligations
(0.13)
(0.08)
Adjusted Funds Flow Netback ($/BOE) (5)
22.27
17.29
(1)
“Adjusted Funds Flow” and “Capital Expenditures before A&D” do not have standardized meanings under IFRS Accounting Standards, refer to “Non-GAAP Measures and Ratios” section of this press release.
(2)
Refer to “Share Capital” section of this press release.
(3)
Condensate is a natural gas liquid (“NGL”) as defined by NI 51-101. See “Other Measurements”.
(4)
“Liquids” includes crude oil, condensate and NGLs.
(5)
“Netbacks” are non-GAAP financial ratios calculated per unit of production. “Operating Netback”, and “Adjusted Funds Flow Netback” do not have standardized meanings under IFRS, refer to “Non-GAAP Measures and Ratios” section of this press release.
(6)
Excludes non-cash accretion of decommissioning obligations.
(7)
The unaudited highlights reported for Q4 2023 and H2 2023 should be read in conjunction with the Company’s audited annual financial statements and related MD&A as at and for the years ended December 31, 2023 and 2022. Since the shareholders of Logan and Spartan were the same both before and after the conveyance of the transferred assets (at the time, Logan was a wholly-owned subsidiary of Spartan), the Spin-Out was deemed to be a “common control transaction”. The results reported in the annual financial statements and MD&A present the historic financial position, results of operations and cash flows of the transferred assets for all prior periods up to and including June 20, 2023 on a “carve-out” basis from the historical financial records of Spartan, as if the transferred assets had operated as a stand-alone entity subject to Spartan’s control. The financial position, results of operations and cash flows from March 10, 2023 (the date of incorporation of Logan) to June 20, 2023 include both the transferred assets and Logan on a combined basis, and from June 20, 2023 forward include the actual historical results of Logan after assuming the transferred assets upon close of the Spin-Out. The historical information presented in the carve-out financial statements do not necessarily reflect what the financial position, results of operations and cash flows would have been had these net assets been in a separate entity, or the future results of Logan, as it exists after the completion of the Spin-Out.
In …