Current PRQ:CA Stock Info

Petrus Resources (ticker: PRQ), based in Calgary, Alberta, is active in three primary areas: the Ferrier area of Alberta—which draws from the Cardium formation, Central Alberta, and the foothills regions of the Rocky Mountains.

Petrus: Building Ferrier--Dropping OPEX, Debt

Source: Petrus Resources

The company has focused on developing growth within its core assets, and has experienced a 31% increase in production since Q3, 2016. As of Q1, 2017, Petrus averaged 9,331 BOEPD across all of its fields, which hold upwards of 403 potential drilling locations.

Debt reduction

In order to build its financial flexibility, Petrus has taken steps to reduce its debt during the past several quarters. Between Q4, 2015 and Q1, 2017, Petrus has reduced its net debt by 42%, from approximately $230 million to $130.6 million. The debt/funds flow ratio has decreased by 67% in the same span of time. The company also divested its Peace River assets for $28.4 million, and dedicated the proceeds to debt reduction.

Petrus: Building Ferrier--Dropping OPEX, Debt

Source: Petrus Resources

Assets in the Ferrier

The Ferrier field, producing out of the Cardium, is home to liquids-rich natural gas with approximately 60 barrels of liquids per Mmcf of gas produced. The field averaged 5,522 BOEPD during Q1, 2017 and is host to the largest number of potential drilling locations of all Petrus’ fields with upwards of 178 locations in the Cardium and upwards of 71 locations in other Mannville formations.

Petrus’ infrastructure control plays a crucial role in cost reduction. One key piece of infrastructure is the Ferrier gas plant, which became active in December of 2015 and can handle 30 Mmcf/day. The plant is operated 100% by Petrus and the company expects to double its capacity to 60 Mmcf/day in Q4, 2017.

Because the Ferrier asset makes up approximately 75% of the company’s operating income, Petrus has focused heavily on reducing operating expense for that field—which enhances the economic profile of the company as a whole.

As of Q1, 2017, Petrus had reduced its operating expenses in the Ferrier field to approximately $0.52 per BOE, down from approximately $7.50 per BOE in Q2, 2015—largely due to its control of natural gas infrastructure. Petrus has reduced its company-wide operating expenses by 52% from $11.00 per BOE, in Q4, 2015 down to $4.50 per BOE in Q1, 2017.

In developing its Ferrier asset further, Petrus drilled and completed eight gross, six net wells during Q1, 2017. Petrus’ 2017 capital budget falls between $50 and $60 million—all of which is cash-flow funded—and the company intends to drill a total of 16 gross, 11.7 net wells in 2017.

Assets in central Alberta

Petrus’ Central Alberta field is characterized by low declines of Glauconite-sourced (Glauc) oil, with a Q1, 2017 production rate of 2,002 BOEPD—approximately 37% of which was oil and hydrocarbon liquid. Much of the Central Alberta field is currently being waterflooded, and has been subdivided into three pools, the Glauc “P” Pool, Glauc “R” Pool, and Glauc “A” Pool. The A-Pool exhibits the most robust recovery factor of the three at 17%, with potential to reach 21% recovery. The P and R-Pools exhibit a 4.7% and 8.5% recovery factor, respectively. Both pools have waterflood upside potential.

Petrus Resources is presenting at EnerCom’s The Oil & Gas Conference® 22

Petrus will be a presenting company at the upcoming EnerCom conference in Denver, Colorado—The Oil & Gas Conference® 22.

The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors.  The conference will be at the Denver Downtown Westin Hotel, August 13-17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.

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