Monday, April 22, 2024

"PrairieSky Announces First Quarter 2024 Results, Record Oil Royalty Production"

[Previously: Earnings Notes (Q4 2023), PrairieSky Announces 2023 Third Quarter Results, Canadian Oil Earnings, PrairieSky Royalty Ltd. Reports Q2 2022 Earnings, and PrairieSky Royalty Ltd. Reports Q1 2022 Earnings.]

The market capitalization of PrairieSky (at US$20 per share for the U.S. ADR) is $4.8 billion and the enterprise value (with $152 million of net debt) is $4.9 billion.

The company reported net earnings of $35 million for the first quarter of 2024 (compared with $41 million the prior year) and earnings plus DD&A were $62 million (compared with $66 million the prior year). That's a "cash generation" yield of 5% (annualized) on the current enterprise value. The company paid $44 million of dividends and reduced net debt by $10 million, for a total shareholder yield of 4.5% on the market cap.

Crude oil production was up 8% over the prior year and total BOE royalty production was up 5%. The crude oil realized price was only $56 per barrel, which was up 1.2% from the prior year.

The company generated $58 million of cash from operations and spent $6.4 million on acquisition of new properties, $10 million on debt repayment, and $42 million on dividends.

Slide 9 of the investor presentation talks about PrairieSky's reserves replacement. Since 2016, the share count has increased by only 4.8%, while the proved and probable (2P) liquids reserves have increased by 64% and the production (in MBOE) has increased by 6%. (The total 2P reserves in MBOE went from 5.6 years to 7.2 years.)

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