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Production Reactivation, Strong Cash Flow and Hedge Monetization Drive Lower Debt
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES
CALGARY, Alberta, May 07, 2025 (GLOBE NEWSWIRE) -- Pieridae Energy Limited ("Pieridae” or the "Company”) (TSX: PEA) announces the release of its first quarter 2025 financial and operating results. The Company produced 22,584 boe/d and generated Net Operating Income1 ("NOI”) of $32.6 million during the first quarter of 2025. Management's discussion and analysis ("MD&A”) and unaudited interim condensed consolidated financial statements and notes for the quarter ended March 31, 2025 are available at www.pieridaeenergy.com and on SEDAR+ at www.sedarplus.ca.
"Pieridae continues building momentum this quarter with strong financial results driven, in part, by proactive decision making from our management team,” said Darcy Reding, President and CEO. "During the first quarter, we restarted 1,800 boe/d of previously shut-in dry gas volumes in response to improvements in AECO natural gas prices. We also monetized a portion of our in-the-money 2026 and 2027 natural gas financial hedge position, generating proceeds of $10.2 million which we used to reduce debt, while increasing exposure of our 2026 and 2027 natural gas production to future market prices. Our team remains focused on key milestones and catalysts in 2025, highlighted by continued debt reduction, growth in our third-party gathering and processing business, and the December 31, 2025 expiration of a long-term fixed price sulphur marketing agreement.”
Q1 2025 HIGHLIGHTS
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- Generated NOI of $32.6 million ($0.11 per basic and fully diluted share).
- Generated Funds Flow from Operations1 of $21.7 million ($0.07 per basic and fully diluted share).
- Incurred operating expenses of $44.0 million, down 15% from Q1 2024, reflecting both production shut-ins and the continued reduction of field and facility operating cost structure.
- Produced 22,584 boe/d (78% natural gas), down 35% from Q1 2024 due to the voluntary shut-in of approximately 9,400 boe/d of uneconomic dry gas production from Q3 2024 through February 2025 and an unplanned outage at the Jumping Pound gas plant from late February to early April.
- Completed additional routine maintenance during the Q1 Jumping Pound gas plant outage that permitted deferral of the plant's scheduled 2026 maintenance turnaround by one year to 2027.
- Restarted approximately 1,800 boe/d shut-in Northeast BC and Northern Alberta production, benefitting from stronger gas prices during Q1.
- Increased third-party raw gas processing volumes to 81.8 MMcf/d, up 40% from Q1 2024 and highlighted by the Caroline gas plant's 58.9 MMcf/d contribution, up 122% from Q1 2024.
- Executed capital expenditure activity of $6.5 million, primarily on the Super Claus sulphur condenser repair at the Jumping Pound gas plant, along with well and facility optimization projects.
- Completed a hedge monetization transaction in March 2025 for a portion of 2026 and 2027 natural gas contracts for net proceeds of $10.2 million and repaid a portion of the senior term loan.
- Reduced Net Debt1 to $185.4 million, a $12.1 million decrease from Q4 2024.
- Proposed a name change to Cavvy Energy Ltd. in support of our corporate strategy, subject to shareholder approval at the Company's Annual and Special Meeting of Shareholders on May 8, 2025.
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1 Refer to the "non-GAAP measures” section of the Company's MD&A.
| 2025 | 2024 | 2023 | ||||||||||||||
| ($ 000s unless otherwise noted) | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | ||||||||
| Production | ||||||||||||||||
| Natural gas (Mcf/d) | 105,338 | 111,787 | 115,196 | 157,077 | 175,356 | 174,211 | 155,763 | 159,427 | ||||||||
| Condensate (bbl/d) | 2,454 | 2,149 | 2,191 | 2,472 | 2,781 | 2,384 | 2,020 | 2,300 | ||||||||
| NGLs (bbl/d) | 2,574 | 1,788 | 1,726 | 2,210 | 2,613 | 1,921 | 2,273 | 2,216 | ||||||||
| Sulphur (tonne/d) | 1,076 | 968 | 1,444 | 1,376 | 1,491 | 1,284 | 1,124 | 1,362 | ||||||||
| Total production (boe/d) (1) | 22,584 | 22,568 | 23,116 | 30,861 | 34,620 | 33,340 | 30,253 | 31,087 | ||||||||
| Third-party volumes processed (Mcf/d raw) (2) | 81,777 | 71,497 | 66,518 | 52,410 | 58,423 | 67,350 | 57,363 | 51,973 | ||||||||
| Financial | ||||||||||||||||
| Natural gas price ($/Mcf) | ||||||||||||||||
| Realized before Risk Management Contracts (3) | 2.24 | 1.55 | 0.77 | 1.14 | 2.53 | 2.32 | 2.65 | 2.39 | ||||||||
| Realized after Risk Management Contracts (3) | 3.58 | 3.36 | 3.43 | 2.71 | 3.21 | 3.12 | 3.25 | 3.03 | ||||||||
| Benchmark natural gas price | 2.14 | 1.46 | 0.68 | 1.17 | 2.48 | 2.29 | 2.59 | 2.40 | ||||||||
| Condensate price ($/bbl) | ||||||||||||||||
| Realized before Risk Management Contracts (3) | 95.15 | 94.87 | 92.13 | 99.96 | 91.18 | 97.15 | 97.47 | 84.81 | ||||||||
| Realized after Risk Management Contracts (3) | 88.29 | 90.61 | 84.61 | 87.75 | 84.49 | 86.34 | 80.49 | 105.84 | ||||||||
| Benchmark condensate price ($/bbl) | 100.24 | 98.85 | 97.10 | 105.62 | 98.43 | 104.30 | 106.30 | 93.25 | ||||||||
| Sulphur price ($/tonne) | ||||||||||||||||
| Realized sulphur price (4) | 17.00 | 12.09 | 8.86 | 18.43 | 14.49 | 22.54 | 13.34 | 22.78 | ||||||||
| Benchmark sulphur price | 246.36 | 180.54 | 128.47 | 103.19 | 94.84 | 118.29 | 107.09 | 114.92 | ||||||||
| Net income (loss) | 2,666 | (20,921 | ) | 7,496 | (19,196 | ) | (6,284 | ) | 7,414 | (16,254 | ) | 4,182 | ||||
| Net income (loss) $ per share, basic | 0.01 | (0.08 | ) | 0.04 | (0.12 | ) | (0.04 | ) | 0.05 | (0.11 | ) | 0.03 | ||||
| Net income (loss) $ per share, diluted | 0.01 | (0.08 | ) | 0.04 | (0.12 | ) | (0.04 | ) | 0.03 | (0.11 | ) | 0.03 | ||||
| Net operating income (5) | 32,550 | 13,720 | 19,818 | 7,652 | 23,418 | 25,441 | 11,650 | 43,843 | ||||||||
| Cashflow provided by (used in) operating activities | 22,612 | (592 | ) | 2,260 | (1,555 | ) | 7,049 | 31,983 | 7,577 | 27,533 | ||||||
| Funds flow from operations (5) | 21,707 | 2,824 | 8,234 | (4,874 | ) | 12,044 | 14,269 | (1,422 | ) | 35,432 | ||||||
| Total assets | 571,470 | 612,423 | 615,040 | 585,940 | 590,531 | 638,541 | 564,921 | 575,849 | ||||||||
| Adjusted working capital deficit (5) | (30,540 | ) | (29,777 | ) | (42,658 | ) | (37,986 | ) | (31,671 | ) | (31,830 | ) | (21,454 | ) | (6,258 | ) |
| Net debt (5) | (185,438 | ) | (197,564 | ) | (206,779 | ) | (219,204 | ) | (209,964 | ) | (204,046 | ) | (205,536 | ) | (181,670 | ) |
| Capital expenditures (6) | 6,538 | 5,800 | 10,002 | 5,003 | 4,897 | 9,306 | 16,363 | 9,384 | ||||||||
| (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”). The realized natural gas price after Risk Management Contracts shown above is normalized to exclude the impact of the hedge monetization. | ||||||||||||||||
| (4) Realized sulphur price is net of customary deductions such as transportation, market and storage fees. | ||||||||||||||||
| (5) Refer to the "Net Operating Income”, "Capital Resources”, "Funds Flow from Operations” and "Working Capital and Capital Strategy” sections of the Company's MD&A for reference to non-GAAP measures. | ||||||||||||||||
| (6) Excludes reclamation and abandonment activities. | ||||||||||||||||
OUTLOOK
Pieridae's priority remains strengthening our balance sheet while safely sustaining production, increasing the utilization of the Company's gas processing facilities by attracting incremental third-party volumes, implementing cost reduction initiatives, optimizing infrastructure, and executing non-core asset dispositions to maintain profitability during all periods of the commodity cycle.
The Company's 2025 guidance remains unchanged as follows:
| 2025 Guidance | ||||
| ($ 000s unless otherwise noted) | Low | High | ||
| Total production (boe/d) (1) | 23,000 | 25,000 | ||
| Net operating income (2)(4)(5) | 75,000 | 95,000 | ||
| Operating netback ($/boe) (3)(4)(5) | 9.00 | 11.00 | ||
| Capital expenditures | 25,000 | 30,000 | ||
| (1) 2025 production guidance assumes persistence of previously announced shut-ins in Central AB through 2025 | ||||
| (2) Refer to the "Net Operating Income” section of the Company's MD&A for reference to non-GAAP measures. | ||||
| (3) Refer to "Operating Netback” section of the Company's MD&A for reference to non-GAAP measures. | ||||
| (4) Assumes unhedged average 2025 AECO price of $2.45/GJ and average 2025 WTI price of US$ 63.97/bbl. | ||||
| (5) Accounts for impact of hedge contracts in place at May 7, 2025. | ||||
Specific priorities for 2025 remain:
- Sustain a safe and regulatory compliant business
- Minimize facility outages to maximize sales and processing revenue
- Further grow the third-party gathering and processing business at our operated facilities
- Meaningfully reduce operating expenses to improve corporate netback
- Deliver attractive ROI on value adding optimization projects included in the 2025 capital program
- Reduce long term debt to improve financial flexibility
During the second and third quarters of 2024, several low margin, dry gas properties in Northern AB, Northeast BC, and Central AB, all producing to non-operated facilities, were shut-in due to low AECO natural gas prices and high variable operating costs. Since these decisions were made, AECO pricing has improved. As a result, approximately 1,000 boe/d of production in Northern AB and 800 boe/d of production in Northeast BC was re-started in February and March 2025, respectively, but may be shut-in once again if sustained AECO pricing does not justify ongoing production. Currently, shut-in production in Central AB representing approximately 8,000 boe/d, or 24% of the Company's production capability, is expected to remain shut-in throughout 2025, which is reflected in the 2025 production guidance of 23,000 to 25,000 boe/d.
An ongoing strategic priority is to continue to grow third-party gathering and processing revenues at our operated facilities. Management believes there is strong upside potential for cash flow growth from the third-party gathering and processing business, particularly in the Caroline region where the Company has increased raw third-party volumes by 122% over the last four quarters as area producers continue to bring on new production.
The Company has 110,000 GJ/d of its 2025 natural gas production hedged at a weighted average fixed price of $3.32/GJ, and 1,679 bbl/d of its 2025 condensate production hedged with a weighted average floor price of CAD$84.42/bbl and a weighted average ceiling price of CAD$92.32/bbl. The Company's aggregate hedge position for 2025 totals 19,055 boe/d, or approximately 80% of the above production guidance range.
Pieridae's legacy fixed price sulphur contract, which was entered into in 2019, expires on December 31
