CALGARY,
AB, Nov. 7, 2024 /CNW/ - Paramount Resources
Ltd. ("Paramount" or the "Company") (TSX: POU) is pleased to
announce its third quarter 2024 financial and operating
results.
HIGHLIGHTS
- Third quarter sales volumes averaged 94,892 Boe/d (48%
liquids). (1)
- Grande Prairie Region sales volumes averaged 67,635 Boe/d
(50% liquids). The planned turnaround at the Wapiti natural
gas processing plant (the "Wapiti Plant") and related full Wapiti
production outage commenced in mid-September, five days earlier
than expected. Prior to the turnaround, Wapiti sales volumes
reached over 35,000 Boe/d as two new Montney pads were brought on production.
- Kaybob Region sales volumes averaged 20,894 Boe/d (41%
liquids).
- Central Alberta and Other
Region sales volumes averaged 6,363 Boe/d (53% liquids).
- 5,600 Boe/d of dry natural gas production was shut-in for
the quarter due to low natural gas prices.
- Cash from operating activities was $206
million ($1.40 per basic
share) in the third quarter. Adjusted funds flow was
$201 million ($1.37 per basic share). Free cash flow was
($26) million (($0.18) per basic share). (2)
- Third quarter capital expenditures totaled $217 million. Significant activities included:
- Grande Prairie Region (Montney) – eight (8.0 net) wells drilled,
nineteen (19.0 net) wells brought on production and the successful
completion of the new compressor node at Wapiti that was brought
onstream in the third quarter, which will support development of
the western portion of the field;
- Kaybob Region (Duvernay) –
three (3.0 net) wells drilled; and
_________________________________________
|
(1)
|
In this press release,
"natural gas" refers to shale gas and conventional natural gas
combined, "condensate and oil" refers to condensate, light and
medium crude oil, tight oil and heavy crude oil combined, "Other
NGLs" refers to ethane, propane and butane and "liquids" refers to
condensate and oil and Other NGLs combined. See the "Product
Type Information" section for a complete breakdown of sales volumes
for applicable periods by the specific product types of shale gas,
conventional natural gas, NGLs, light and medium crude oil, tight
oil and heavy crude oil. See also "Oil and Gas Measures and
Definitions" in the Advisories section.
|
(2)
|
Adjusted funds flow and
free cash flow are capital management measures used by
Paramount. Cash from operating activities per basic share,
adjusted funds flow per basic share and free cash flow per basic
share are supplementary financial measures. Refer to the
"Specified Financial Measures" section for more information on
these measures.
|
-
- Central Alberta and Other
Region (Duvernay) – three (3.0
net) wells brought on production and the ongoing construction of
the Company's second operated natural gas processing plant at
Willesden Green (the "Alhambra Plant").
- Paramount has recently spud the first of two horizontal
appraisal wells at its Sinclair property, where the Company
has approximately 107,000 net acres prospective for high-rate gas
production from the Montney
formation.
- Asset retirement obligations settled in the third quarter
totaled $7 million.
- The carrying value of the Company's investments in securities
at September 30, 2024 was
$482 million. (1)
- At September 30, 2024, net debt
was $129
million. (2)
UPDATED 2024 GUIDANCE
Third quarter sales volumes averaged 94,892 Boe/d (48% liquids),
below prior guidance of between 96,000 Boe/d to 104,000 Boe/d (49%
liquids). In addition to the impact from the early start of
the Wapiti Plant turnaround, the Company's third quarter sales
volumes were affected by numerous curtailments due to high ambient
temperatures throughout the summer, unplanned outages at several
minor infrastructure sites and the continuing shut-in of dry
natural gas production.
Paramount is updating its fourth quarter 2024 sales volumes
guidance to a range of 102,000 Boe/d to 109,000 Boe/d (49%
liquids). The Company has deferred bringing approximately 4,200
Boe/d of dry natural gas production onstream in the fourth quarter.
In addition, fourth quarter sales volumes were impacted by
approximately 5,000 Boe/d due to the Wapiti Plant turnaround
extending for the equivalent of 6 full days longer than expected in
October as well as other disruptions in the month. Annual sales
volumes would average 100,000 Boe/d at the upper end of the
forecast range of fourth quarter 2024 sales volumes.
With the Wapiti Plant turnaround complete and subsequent
disruptions resolved, Grande Prairie Region sales volumes have
averaged over 80,000 Boe/d and total Company sales volumes have
averaged over 110,000 Boe/d since late-October.
The Company is reaffirming its 2024 guidance for capital
expenditures and abandonment and reclamation expenditures.
Paramount is updating its forecast of 2024 free cash flow from
$100 million to $10 million to reflect results from the first
three quarters, revised fourth quarter forecast production and a
lower forecast WTI price of US$70/Bbl (previously US$80/Bbl).
|
Prior 2024
Guidance
|
Revised 2024
Guidance
|
Fourth quarter average
sales volumes (Boe/d)
|
109,000 to 121,000 (48%
liquids)
|
102,000 to 109,000 (49%
liquids)
|
Capital
expenditures
|
$830 to $890
million
|
No change
|
Sustaining
and maintenance
|
$415 to $445
million
|
Growth
|
$415 to $445
million
|
Abandonment and
reclamation expenditures
|
$40 million
|
No change
|
Free cash flow
(3)
|
$100 million
|
$10 million
|
_________________________________________
|
(1)
|
Investments in publicly
traded securities are carried at their September 30, 2024 closing
trading price.
|
(2)
|
Net (cash) debt is a
capital management measure used by Paramount. This capital
management measure has been expressed as net debt in this instance
for simplicity as the amount referenced is a positive number.
Refer to the "Specified Financial Measures" section for more
information on this measure.
|
(3)
|
Free cash flow is a
capital management measure used by Paramount. Refer to the
"Specified Financial Measures" section for more information on this
measure. The stated free cash flow forecast is based on the
following assumptions for 2024: (i) the midpoint of stated capital
expenditures, (ii) the midpoint of fourth quarter sales volumes,
(iii) $40 million in abandonment and reclamation costs, (iv) $10
million in geological and geophysical expenses, (v) realized
pricing of $48.50/Boe, (vi) a $US/$CAD exchange rate of $0.735,
(vii) royalties of $6.25/Boe, (viii) operating costs of $13.30/Boe
and (ix) transportation and NGLs processing costs of $3.50/Boe. The
stated amounts have been adjusted to incorporate actual results for
the first three quarters of 2024.
|
NOVEMBER DIVIDEND
Paramount's Board of Directors has declared a cash dividend of
$0.15 per class A common share that
will be payable on November 29,
2024 to shareholders of record on November 15, 2024. The dividend will be
designated as an "eligible dividend" for Canadian income tax
purposes.
REVIEW OF OPERATIONS
GRANDE PRAIRIE
REGION
Sales volumes and netbacks in the Grande Prairie Region are
summarized below:
|
Q3
2024
|
Q2 2024
|
% Change
|
Sales
Volumes
|
|
|
|
Natural gas (MMcf/d)
|
203.2
|
187.3
|
8
|
Condensate and oil (Bbl/d)
|
29,047
|
28,083
|
3
|
Other NGLs (Bbl/d)
|
4,723
|
4,179
|
13
|
Total
(Boe/d)
|
67,635
|
63,480
|
7
|
%
liquids
|
50 %
|
51 %
|
|
Netback
(1)
|
($ millions)
|
($/Boe)
|
($ millions)
|
($/Boe)
|
Change in $
millions (%)
|
Natural gas revenue (2)
|
25.9
|
1.38
|
28.5
|
1.67
|
(9)
|
Condensate and oil revenue
|
257.4
|
96.33
|
264.9
|
103.63
|
(3)
|
Other NGLs revenue
|
16.1
|
37.09
|
12.8
|
33.77
|
26
|
Petroleum and
natural gas sales
|
299.4
|
48.12
|
306.2
|
53.01
|
(2)
|
Royalties
|
(39.9)
|
(6.40)
|
(56.9)
|
(9.86)
|
(30)
|
Operating
expense
|
(83.4)
|
(13.41)
|
(82.6)
|
(14.29)
|
1
|
Transportation
and NGLs processing
|
(24.8)
|
(3.99)
|
(21.9)
|
(3.80)
|
13
|
|
151.3
|
24.32
|
144.8
|
25.06
|
4
|
(1)
|
"Netback" is a Non-GAAP
financial measure. When presented on a $/Boe or $/Mcf basis,
each of the components of Netback is a supplementary financial
measure and Netback is a non-GAAP ratio. Refer to the
"Specified Financial Measures" section for more information on
these measures.
|
(2)
|
Per unit natural gas
revenue presented as $/Mcf.
|
Third quarter 2024 sales volumes in the Grande Prairie Region
averaged 67,635 Boe/d (50% liquids) compared to 63,480 Boe/d
(51% liquids) in the second quarter. Sales volumes were
higher quarter-over-quarter as a result of new well production from
19 (19.0 net) new Montney wells
that were brought onstream. The scheduled turnaround of the
Wapiti Plant, which began five days earlier than expected, resulted
in the shutdown of production from the Wapiti field for the
equivalent of 15 full days in the third quarter, impacting average
third quarter sales volumes by approximately 5,400 Boe/d.
Unplanned maintenance at another third-party processing
facility and high ambient temperatures also reduced sales volumes
in the quarter. Paramount's aggressive well optimization program
initiated in March 2024 is now
substantially complete.
The Wapiti Plant turnaround continued into October. In
total, the Wapiti Plant turnaround resulted in the shutdown of
production from the Wapiti field for the equivalent of 32 full
days, 11 more than originally expected.
Initial production from a new 4 (4.0 net) well Montney pad that was brought onstream at Karr
in the quarter is in line with expectations, averaging gross 30-day
peak production per well of 1,347 Boe/d (2.4 MMcf/d of shale gas
and 953 Bbl/d of NGLs) with an average CGR of 403 Bbl/MMcf.
(1)
Initial production results from a new 7 (7.0 net) well
Montney pad that was brought
onstream in the western portion of the Wapiti field in the quarter
are encouraging despite the wells being heavily choked to manage
temporary facilities constraints. The wells averaged gross
30-day peak production per well of 1,120 Boe/d (4.8 MMcf/d of shale
gas and 314 Bbl/d of NGLs) with an average CGR of 65 Bbl/MMcf.
(2)
Third quarter development activities in the Grande Prairie
Region included the drilling of 8 (8.0 net) Montney wells, the completion of 16 (16.0 net)
Montney wells and the bringing
onstream of 19 (19.0 net) Montney
wells. The Company also brought a new compressor node
onstream to service the western portion of the Wapiti field.
Paramount plans to drill a total of seven (7.0 net) Montney wells and bring on production a total
of eight (8.0 net) Montney wells
in the Grande Prairie Region in the fourth quarter of 2024.
The Company has spud the first of two appraisal wells to be
drilled in 2024 at Sinclair. Paramount will use the flow test
and other data obtained from these wells to continue to advance its
development plans for the property, which have included the
securing of downstream transportation capacity that would enable
the first phase of Sinclair
production to commence as early as the fourth quarter of
2027. The Sinclair property
is prospective for high-rate gas production from the Montney formation.
KAYBOB REGION
Kaybob Region sales volumes averaged 20,894 Boe/d (41% liquids)
in the third quarter of 2024 compared to 23,946 Boe/d (41% liquids)
in the second quarter. Sales volumes were lower
quarter-over-quarter as a result of natural declines and the
previously disclosed shut-in of dry gas production that occurred in
mid-June. New well production from 5 (5.0 net) new
Duvernay wells that came onstream
in May partially offset the decreases.
Development activities in the third quarter included the
drilling of three (3.0 net) Duvernay wells at Kaybob North.
Paramount plans to drill an additional two (2.0 net) Duvernay wells and bring on production six
(6.0 net) Duvernay wells at Kaybob
North in the fourth quarter of 2024.
_________________________________________
|
(1)
|
30-day peak production
is the highest daily average production rate for each well,
measured at the wellhead, over a rolling 30-day period, excluding
days when the well did not produce. The production rates and
volumes stated are over a short period of time and, therefore, are
not necessarily indicative of average daily production, long-term
performance or of ultimate recovery from the wells. CGR means
condensate to gas ratio and is calculated by dividing raw wellhead
liquids volumes by raw wellhead natural gas volumes. See "Oil
and Gas Measures and Definitions" in the Advisories section.
Natural gas sales volumes were lower by approximately 11% and
liquids sales volumes were lower by approximately 8% due to
shrinkage. In addition, certain liquids entrained in the
natural gas stream are only recovered once processed and therefore
final sales volumes cannot be imputed from wellhead volumes and
shrinkage estimates alone.
|
(2)
|
30-day peak production
is the highest daily average production rate for each well,
measured at the wellhead, over a rolling 30-day period, excluding
days when the well did not produce. The production rates and
volumes stated are over a short period of time and, therefore, are
not necessarily indicative of average daily production, long-term
performance or of ultimate recovery from the wells. CGR means
condensate to gas ratio and is calculated by dividing raw wellhead
liquids volumes by raw wellhead natural gas volumes. See "Oil
and Gas Measures and Definitions" in the Advisories section.
Natural gas sales volumes were lower by approximately 10% and
liquids sales volumes were lower by approximately 2% due to
shrinkage. In addition, certain liquids entrained in the
natural gas stream are only recovered once processed and therefore
final sales volumes cannot be imputed from wellhead volumes and
shrinkage estimates alone.
|
CENTRAL ALBERTA AND OTHER
REGION
Central Alberta and Other
Region sales volumes averaged 6,363 Boe/d (53% liquids) in the
third quarter of 2024 compared to 8,183 Boe/d (49% liquids) in the
second quarter. Third quarter sales volumes were lower
quarter-over-quarter as a result of natural declines, a planned
outage at the Company's Leafland facility and the shut-in of
certain wells to allow for completion activities on offsetting
wells.
Initial production from the three new Duvernay wells that were brought onstream in
the quarter is in line with expectations, averaging gross 30-day
peak production per well of 1,254 Boe/d (2.3 MMcf/d of shale gas
and 865 Bbl/d of NGLs) with an average CGR of 371 Bbl/MMcf.
(1)
In addition to the completion and tie-in of the three new
Duvernay wells, development
activities in the third quarter of 2024 included the ongoing
construction of the Alhambra Plant at Willesden Green. The
Alhambra Plant will add approximately 18,000 Boe/d of raw handling
capacity (comprised of 50 MMcf/d or raw gas handling and 10,000
Bbl/d of raw liquids handling).
The Company has initiated its drilling program that will provide
production to the first phase of the Alhambra Plant.
Paramount plans to drill five (5.0 net) wells in the fourth quarter
of 2024 and complete and tie-in those wells in advance of the
planned fourth quarter 2025 start-up of the Alhambra Plant.
HEDGING
The Company's current commodity and foreign exchange contracts
are summarized below:
|
|
Q4
2024
|
2025
|
|
Average Price
(1)
|
|
Oil
|
|
|
|
|
|
|
NYMEX WTI Swaps (Sale)
(Bbl/d)
|
|
5,000
|
5,000
|
|
C$105.00/Bbl
|
|
|
|
|
|
|
|
|
Natural
gas
|
|
|
|
|
|
|
AECO – Basis (Physical
Sale) (MMBtu/d)
|
|
13,478
|
–
|
|
NYMEX less
US$0.93/MMBtu (2)
|
|
Malin / Citygate Basis
Swap (Sale) (MMBtu/d)
|
|
10,000
|
10,000
|
|
Citygate less
US$1.03/MMBtu (3)
|
|
|
|
|
|
|
|
|
Foreign Currency
Exchange
|
|
|
|
|
|
|
Swaps (Sale) (US$
million / month)
|
|
$30
|
–
|
|
1.3462 C$ /
US$
|
|
(1)
|
Average price is
calculated using a weighted average of notional volumes and
prices.
|
(2)
|
"NYMEX" means NYMEX
pricing at Henry Hub. The contract has a notional volume of
40,000 MMBtu/d for the final period of the term, October
2024.
|
(3)
|
"Malin" refers to
Pacific Gas & Electric at Malin and "Citygate" refers to
Pacific Gas & Electric Citygate. The remaining term of
this contract is October 2024 to October 2027.
|
________________________________________
|
(1)
|
30-day peak production
is the highest daily average production rate for each well,
measured at the wellhead, over a rolling 30-day period, excluding
days when the well did not produce. The production rates and
volumes stated are over a short period of time and, therefore, are
not necessarily indicative of average daily production, long-term
performance or of ultimate recovery from the wells. CGR means
condensate to gas ratio and is calculated by dividing raw wellhead
liquids volumes by raw wellhead natural gas volumes. See "Oil
and Gas Measures and Definitions" in the Advisories section.
Natural gas sales volumes were lower by approximately 13% and
liquids sales volumes were lower by approximately 7% due to
shrinkage. In addition, certain liquids entrained in the
natural gas stream are only recovered once processed and therefore
final sales volumes cannot be imputed from wellhead volumes and
shrinkage estimates alone.
|
ABOUT PARAMOUNT
Paramount is an independent, publicly traded, liquids-rich
natural gas focused Canadian energy company that explores for and
develops both conventional and unconventional petroleum and natural
gas, including longer-term strategic exploration and
pre-development plays, and holds a portfolio of investments in
other entities. The Company's principal properties are
located in Alberta and British
Columbia. Paramount's Common Shares are listed on the Toronto
Stock Exchange under the symbol "POU".
Paramount's third quarter 2024 results, including Management's
Discussion and Analysis and the Company's Interim Consolidated
Financial Statements, can be obtained on SEDAR+ at
www.sedarplus.ca or on Paramount's website at
www.paramountres.com/investors/financial-shareholder-reports.
A summary of historical financial and operating results is also
available on Paramount's website at
www.paramountres.com/investors/financial-shareholder-reports.
FINANCIAL AND OPERATING
RESULTS (1)
($ millions, except
as noted)
|
Q3
2024
|
Q2 2024
|
Q3
2023
|
Net
income
|
95.8
|
84.5
|
87.2
|
per share – basic
($/share)
|
0.65
|
0.58
|
0.61
|
per share – diluted
($/share)
|
0.64
|
0.57
|
0.59
|
Cash from operating
activities
|
205.7
|
220.5
|
207.6
|
per share – basic
($/share)
|
1.40
|
1.51
|
1.45
|
per share – diluted
($/share)
|
1.38
|
1.47
|
1.40
|
Adjusted funds
flow
|
200.7
|
266.2
|
234.2
|
per share – basic
($/share)
|
1.37
|
1.82
|
1.64
|
per share – diluted
($/share)
|
1.34
|
1.78
|
1.58
|
Free cash
flow
|
(26.3)
|
20.3
|
18.5
|
per share – basic
($/share)
|
(0.18)
|
0.14
|
0.13
|
per share – diluted
($/share)
|
(0.18)
|
0.14
|
0.12
|
Total
assets
|
4,544.1
|
4,589.2
|
4,305.1
|
Investments in
securities
|
482.2
|
579.5
|
577.5
|
Long-term
debt
|
44.0
|
–
|
–
|
Net (cash)
debt
|
128.8
|
29.3
|
44.4
|
Common shares
outstanding (millions) (2)
|
146.5
|
146.7
|
143.4
|
Sales volumes
(3)
|
|
|
|
Natural gas
(MMcf/d)
|
294.5
|
296.8
|
323.1
|
Condensate and oil
(Bbl/d)
|
38,770
|
39,206
|
38,161
|
Other NGLs
(Bbl/d)
|
7,045
|
6,928
|
6,627
|
Total
(Boe/d)
|
94,892
|
95,609
|
98,644
|
%
liquids
|
48 %
|
48 %
|
45 %
|
Grande Prairie Region
(Boe/d)
|
67,635
|
63,480
|
74,381
|
Kaybob Region
(Boe/d)
|
20,894
|
23,946
|
17,027
|
Central Alberta &
Other Region (Boe/d)
|
6,363
|
8,183
|
7,236
|
Total
(Boe/d)
|
94,892
|
95,609
|
98,644
|
Netback
|
|
($/Boe) (4)
|
|
($/Boe) (4)
|
|
($/Boe) (4)
|
Natural gas revenue
|
37.2
|
1.37
|
45.6
|
1.69
|
79.3
|
2.67
|
Condensate and oil revenue
|
342.9
|
96.15
|
367.7
|
103.07
|
362.9
|
103.36
|
Other NGLs revenue
|
23.5
|
36.25
|
20.8
|
33.07
|
20.5
|
33.64
|
Royalty income and other revenue (5)
|
1.2
|
–
|
9.5
|
–
|
1.1
|
–
|
Petroleum and
natural gas sales
|
404.8
|
46.37
|
443.6
|
50.99
|
463.8
|
51.11
|
Royalties
|
(46.4)
|
(5.31)
|
(66.1)
|
(7.60)
|
(75.2)
|
(8.28)
|
Operating
expense
|
(116.3)
|
(13.33)
|
(115.7)
|
(13.29)
|
(113.9)
|
(12.55)
|
Transportation
and NGLs processing
|
(34.2)
|
(3.92)
|
(31.3)
|
(3.60)
|
(31.2)
|
(3.44)
|
Sales of
commodities purchased (6)
|
79.6
|
9.11
|
84.4
|
9.70
|
42.1
|
4.64
|
Commodities
purchased (6)
|
(78.5)
|
(9.00)
|
(82.4)
|
(9.47)
|
(39.2)
|
(4.32)
|
Netback
|
209.0
|
23.92
|
232.5
|
26.73
|
246.4
|
27.16
|
Risk management
contract settlements
|
2.0
|
0.23
|
36.4
|
4.18
|
0.2
|
0.02
|
Netback including
risk management contract settlements
|
211.0
|
24.15
|
268.9
|
30.91
|
246.6
|
27.18
|
Capital
expenditures
|
|
|
|
|
|
|
Grande Prairie
Region
|
84.6
|
154.8
|
117.6
|
Kaybob
Region
|
56.5
|
40.9
|
41.4
|
Central Alberta &
Other Region
|
73.0
|
45.9
|
35.5
|
Fox Drilling and
Cavalier Energy
|
2.7
|
0.7
|
4.9
|
Corporate
(7)
|
(0.1)
|
(1.5)
|
(0.5)
|
Total
|
216.7
|
240.8
|
198.9
|
Asset retirement
obligations settled
|
7.4
|
2.3
|
14.0
|
(1)
|
Adjusted funds flow,
free cash flow and net (cash) debt are capital management measures
used by Paramount. Netback and netback including risk
management contract settlements are non-GAAP financial measures.
Netback and Netback including risk management contract settlements
presented on a $/Boe or $/Mcf basis are non-GAAP ratios. Each
measure, other than net income, that is presented on a per share,
$/Mcf or $/Boe basis is a supplementary financial measure.
Refer to "Specified Financial Measures".
|
(2)
|
Common shares are
presented net of shares held in trust under the Company's
restricted share unit plan: Q3 2024: 0.4 million, Q2 2024: 0.2
million, Q3 2023: 0.4 million.
|
(3)
|
Refer to the Product
Type Information section of this document for a complete breakdown
of sales volumes for applicable periods by specific product
type.
|
(4)
|
Natural gas revenue
presented as $/Mcf.
|
(5)
|
Royalty income and
other revenue for the nine months ended September 30, 2024 includes
$10.0 million related to an initial payment from insurers for 2023
Alberta wildfire losses. This amount was not allocated to
individual Regions or properties. The Company continues to
advance its insurance claims process.
|
(6)
|
Sales of commodities
purchased and commodities purchased are treated as corporate items
and not allocated to individual regions or properties.
|
(7)
|
Includes transfers
between regions.
|
PRODUCT TYPE INFORMATION
This press release includes references to sales volumes of
"natural gas", "condensate and oil", "NGLs", "Other NGLs" and
"liquids". "Natural gas" refers to shale gas and conventional
natural gas combined. "Condensate and oil" refers to
condensate, light and medium crude oil, tight oil and heavy crude
oil combined. "NGLs" refers to condensate and Other NGLs
combined. "Other NGLs" refers to ethane, propane and
butane. "Liquids" refers to condensate and oil and Other NGLs
combined. Below is a complete breakdown of sales volumes for
applicable periods by the specific product types of shale gas,
conventional natural gas, NGLs, light and medium crude oil, tight
oil and heavy crude oil. Numbers may not add due to
rounding.
|
Total Company by
Product
Type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
2024
|
|
Q2 2024
|
|
Q3
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shale gas
(MMcf/d)
|
249.0
|
|
243.1
|
|
276.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional natural
gas (MMcf/d)
|
45.5
|
|
53.7
|
|
46.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
(MMcf/d)
|
294.5
|
|
296.8
|
|
323.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensate
(Bbl/d)
|
36,830
|
|
36,825
|
|
35,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other NGLs
(Bbl/d)
|
7,045
|
|
6,928
|
|
6,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs
(Bbl/d)
|
43,875
|
|
43,753
|
|
42,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light and medium crude
oil (Bbl/d)
|
1,235
|
|
1,566
|
|
1,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tight oil
(Bbl/d)
|
368
|
|
466
|
|
627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude oil
(Bbl/d)
|
337
|
|
349
|
|
396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil
(Bbl/d)
|
1,940
|
|
2,381
|
|
2,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
(Boe/d)
|
94,892
|
|
95,609
|
|
98,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grande Prairie
Region
|
Kaybob
Region
|
Central Alberta and
Other
Region
|
|
Q3
2024
|
|
Q2 2024
|
|
Q3
2023
|
|
Q3
2024
|
|
Q2 2024
|
|
Q3
2023
|
|
Q3
2024
|
|
Q2 2024
|
|
Q3
2023
|
|
Shale gas
(MMcf/d)
|
203.0
|
|
187.0
|
|
222.8
|
|
31.8
|
|
35.8
|
|
28.0
|
|
14.2
|
|
20.3
|
|
25.9
|
|
Conventional natural
gas (MMcf/d)
|
0.2
|
|
0.3
|
|
0.4
|
|
41.6
|
|
48.8
|
|
41.7
|
|
3.7
|
|
4.6
|
|
4.3
|
|
Natural gas
(MMcf/d)
|
203.2
|
|
187.3
|
|
223.2
|
|
73.4
|
|
84.6
|
|
69.7
|
|
17.9
|
|
24.9
|
|
30.2
|
|
Condensate
(Bbl/d)
|
28,924
|
|
27,936
|
|
32,145
|
|
5,943
|
|
6,617
|
|
2,981
|
|
1,963
|
|
2,272
|
|
858
|
|
Other NGLs
(Bbl/d)
|
4,723
|
|
4,179
|
|
4,815
|
|
1,403
|
|
1,599
|
|
1,188
|
|
919
|
|
1,150
|
|
624
|
|
NGLs
(Bbl/d)
|
33,647
|
|
32,115
|
|
36,960
|
|
7,346
|
|
8,216
|
|
4,169
|
|
2,882
|
|
3,422
|
|
1,482
|
|
Light and medium crude
oil (Bbl/d)
|
–
|
|
–
|
|
–
|
|
1,224
|
|
1,544
|
|
1,131
|
|
11
|
|
22
|
|
23
|
|
Tight oil
(Bbl/d)
|
123
|
|
147
|
|
220
|
|
85
|
|
80
|
|
104
|
|
160
|
|
239
|
|
303
|
|
Heavy crude oil
(Bbl/d)
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
337
|
|
349
|
|
396
|
|
Crude oil
(Bbl/d)
|
123
|
|
147
|
|
220
|
|
1,309
|
|
1,624
|
|
1,235
|
|
508
|
|
610
|
|
722
|
|
Total
(Boe/d)
|
67,635
|
|
63,480
|
|
74,381
|
|
20,894
|
|
23,946
|
|
17,027
|
|
6,363
|
|
8,183
|
|
7,236
|
|
Paramount is updating its fourth quarter 2024 sales volumes
guidance to a range of 102,000 Boe/d to 109,000 Boe/d (51% shale
gas and conventional natural gas combined, 42% condensate, light
and medium crude oil, tight oil and heavy crude oil combined and 7%
Other NGLs).
SPECIFIED FINANCIAL MEASURES
Non-GAAP Financial Measures
Netback and netback including risk management contract
settlements are non-GAAP financial measures. These measures
are not standardized measures under IFRS and might not be
comparable to similar financial measures presented by other
issuers. These measures should not be considered in isolation
or construed as alternatives to their most directly comparable
measure disclosed in the Company's primary financial statements or
other measures of financial performance calculated in accordance
with IFRS.
Netback equals petroleum and natural gas sales (the most
directly comparable measure disclosed in the Company's primary
financial statements) plus sales of commodities purchased less
royalties, operating expense, transportation and NGLs processing
expense and commodities purchased. Sales of commodities
purchased and commodities purchased are treated as corporate items
and are not allocated to individual regions or properties.
Netback is used by investors and management to compare the
performance of the Company's producing assets between periods.
Netback including risk management contract settlements equals
netback after including (or deducting) risk management contract
settlements received (paid). Netback including risk management
contract settlements is used by investors and management to assess
the performance of the producing assets after incorporating
management's risk management strategies.
Refer to the table under the heading "Financial and Operating
Results" in this press release for the calculation of netback and
netback including risk management contract settlements for the
three months ended September 30,
2024, June 30, 2024 and
September 30, 2023.
Non-GAAP Ratios
Netback and netback including risk management contract
settlements presented on a $/Boe basis are non-GAAP ratios as they
each have a non-GAAP financial measure as a component. These
measures are not standardized measures under IFRS and might not be
comparable to similar financial measures presented by other
issuers. These measures should not be considered in isolation
or construed as alternatives to their most directly comparable
measure disclosed in the Company's primary financial statements or
other measures of financial performance calculated in accordance
with IFRS.
Netback on a $/Boe basis is calculated by dividing netback (a
non-GAAP financial measure) for the applicable period by the total
sales volumes during the period in Boe. Netback including
risk management contract settlements on a $/Boe basis is calculated
by dividing netback including risk management contract settlements
(a non-GAAP financial measure) for the applicable period by the
total sales volumes during the period in Boe. These measures
are used by investors and management to assess netback and netback
including risk management contract settlements on a unit of sales
volumes basis.
Capital Management Measures
Adjusted funds flow, free cash flow and net (cash) debt are
capital management measures that Paramount utilizes in managing its
capital structure. These measures are not standardized measures and
therefore may not be comparable with the calculation of similar
measures by other entities. Refer to Note 15 in the Interim
Consolidated Financial Statements of Paramount as at and for the
three and nine months ended September 30,
2024 for: (i) a description of the composition and use of
these measures, (ii) reconciliations of adjusted funds flow and
free cash flow to cash from operating activities, the most directly
comparable measure disclosed in the Company's primary financial
statements, for the three and nine months ended September 30, 2024 and 2023 and (iii) a
calculation of net (cash) debt as at September 30, 2024 and December 31,
2023.
Supplementary Financial Measures
This press release contains supplementary financial measures
expressed as: (i) cash from operating activities, adjusted funds
flow and free cash flow on a per share – basic and per share –
diluted basis and (ii) petroleum and natural gas sales, revenue,
royalties, operating expenses, transportation and NGLs processing
expenses, sales of commodities purchased and commodities purchased
on a $/Boe or $/Mcf basis.
Cash from operating activities, adjusted funds flow and free
cash flow on a per share – basic basis are calculated by dividing
cash from operating activities, adjusted funds flow or free cash
flow, as applicable, over the referenced period by the weighted
average basic shares outstanding during the period determined under
IFRS. Cash from operating activities, adjusted funds flow and
free cash flow on a per share – diluted basis are calculated by
dividing cash from operating activities, adjusted funds flow or
free cash flow, as applicable, over the referenced period by the
weighted average diluted shares outstanding during the period
determined under IFRS.
Petroleum and natural gas sales, revenue, royalties, operating
expenses, transportation and NGLs processing expenses, sales of
commodities purchased and commodities purchased on a $/Boe or $/Mcf
basis are calculated by dividing petroleum and natural gas sales,
revenue, royalties, operating expenses, transportation and NGLs
processing expenses, sales of commodities purchased and commodities
purchased, as applicable, over the referenced period by the
aggregate units (Boe or Mcf) of sales volumes during such
period.
ADVISORIES
Forward-looking Information
Certain statements in this press release constitute
forward-looking information under applicable securities
legislation. Forward-looking information typically contains
statements with words such as "anticipate", "believe", "estimate",
"will", "expect", "plan", "schedule", "intend", "propose", or
similar words suggesting future outcomes or an outlook.
Forward-looking information in this press release includes, but is
not limited to:
- forecast sales volumes for the fourth quarter of 2024;
- planned capital expenditures in 2024 and the allocation thereof
between sustaining and maintenance capital and growth capital;
- planned abandonment and reclamation expenditures in 2024;
- forecast free cash flow in 2024;
- planned exploration, development and production activities,
including: (i) the expected timing of drilling, completing and
bringing new wells on production; (ii) the expected timing of
completion of the Alhambra Plant at Willesden Green and (iii) the
expected capacity of the Alhambra Plant upon completion; and
- the potential payment of future dividends.
Such forward-looking information is based on a number of
assumptions which may prove to be incorrect. Assumptions have been
made with respect to the following matters, in addition to any
other assumptions identified in this press release:
- future commodity prices;
- the impact of international conflicts, including in
Ukraine and the Middle East;
- royalty rates, taxes and capital, operating, general &
administrative and other costs;
- foreign currency exchange rates, interest rates and the rate
and impacts of inflation;
- general business, economic and market conditions;
- the performance of wells and facilities;
- the availability to Paramount of the funds required for
exploration, development and other operations and the meeting of
commitments and financial obligations;
- the ability of Paramount to obtain equipment, materials,
services and personnel in a timely manner and at expected and
acceptable costs to carry out its activities;
- the ability of Paramount to secure adequate processing,
transportation, fractionation, disposal and storage capacity on
acceptable terms and the capacity and reliability of
facilities;
- the ability of Paramount to obtain the volumes of water
required for completion activities;
- the ability of Paramount to market its production
successfully;
- the ability of Paramount and its industry partners to obtain
drilling success (including in respect of anticipated sales
volumes, reserves additions, product yields and product recoveries)
and operational improvements, efficiencies and results consistent
with expectations;
- the timely receipt of required governmental and regulatory
approvals;
- the application of regulatory requirements respecting
abandonment and reclamation; and
- anticipated timelines and budgets being met in respect of: (i)
drilling programs and other operations, including well completions
and tie-ins, (ii) the construction, commissioning and start-up of
new and expanded third-party and Company facilities, including the
Alhambra Plant at Willesden Green, and (iii) facility turnarounds
and maintenance.
Although Paramount believes that the expectations reflected in
such forward-looking information are reasonable based on the
information available at the time of this press release, undue
reliance should not be placed on the forward-looking information as
Paramount can give no assurance that such expectations will prove
to be correct. Forward-looking information is based on
expectations, estimates and projections that involve a number of
risks and uncertainties which could cause actual results to differ
materially from those anticipated by Paramount and described in the
forward-looking information. The material risks and
uncertainties include, but are not limited to:
- fluctuations in commodity prices;
- changes in capital spending plans and planned exploration and
development activities;
- changes in foreign currency exchange rates, interest rates and
the rate of inflation;
- the uncertainty of estimates and projections relating to future
production, product yields (including condensate to natural gas
ratios), revenue, free cash flow, reserves additions, product
recoveries, royalty rates, taxes and costs and expenses;
- the ability to secure adequate processing, transportation,
fractionation, disposal and storage capacity on acceptable
terms;
- operational risks in exploring for, developing, producing and
transporting natural gas and liquids, including the risk of spills,
leaks or blowouts;
- risks associated with wildfires, including the risk of physical
loss or damage to wells, facilities, pipelines and other
infrastructure, prolonged disruptions in production, restrictions
on the ability to access properties, interruption of electrical and
other services and significant delays or changes to planned
development activities and facilities maintenance;
- the ability to obtain equipment, materials, services and
personnel in a timely manner and at expected and acceptable costs,
including the potential effects of inflation and supply chain
disruptions;
- potential disruptions, delays or unexpected technical or other
difficulties in designing, developing, expanding or operating new,
expanded or existing facilities, including third-party facilities
and the Alhambra Plant at Willesden Green;
- processing, transportation, fractionation, disposal and storage
outages, disruptions and constraints;
- potential limitations on access to the volumes of water
required for completion activities due to drought, conditions of
low river flow, government restrictions or other factors;
- risks and uncertainties involving the geology of oil and gas
deposits;
- the uncertainty of reserves estimates;
- general business, economic and market conditions;
- the ability to generate sufficient cash from operating
activities to fund, or to otherwise finance, planned exploration,
development and operational activities and meet current and future
commitments and obligations (including asset retirement
obligations, processing, transportation, fractionation and similar
commitments and obligations);
- changes in, or in the interpretation of, laws, regulations or
policies (including environmental laws);
- the ability to obtain required governmental or regulatory
approvals in a timely manner, and to obtain and maintain leases and
licenses, including those required for the Alhambra Plant at
Willesden Green;
- the effects of weather and other factors including wildlife and
environmental restrictions which affect field operations and
access;
- uncertainties as to the timing and cost of future abandonment
and reclamation obligations and potential liabilities for
environmental damage and contamination;
- uncertainties regarding Indigenous claims and in maintaining
relationships with local populations and other stakeholders;
- the outcome of existing and potential lawsuits, regulatory
actions, audits and assessments; and
- other risks and uncertainties described elsewhere in this
document and in Paramount's other filings with Canadian securities
authorities.
There are risks that may result in the Company changing,
suspending or discontinuing its monthly dividend program, including
changes to its free cash flow, operating results, capital
requirements, financial position, market conditions or corporate
strategy and the need to comply with requirements under debt
agreements and applicable laws respecting the declaration and
payment of dividends. There are no assurances as to the
continuing declaration and payment of future dividends or the
amount or timing of any such dividends.
The foregoing list of risks is not exhaustive. For more
information relating to risks, see the section titled "Risk
Factors" in Paramount's annual information form for the year
ended December 31, 2023, which is
available on SEDAR+ at www.sedarplus.ca or on the Company's
website at www.paramountres.com. The forward-looking
information contained in this press release is made as of the date
hereof and, except as required by applicable securities law,
Paramount undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise.
Certain forward-looking information in this press release,
including forecast free cash flow in 2024, may also constitute a
"financial outlook" within the meaning of applicable securities
laws. A financial outlook involves statements about Paramount's
prospective financial performance or position and is based on and
subject to the assumptions and risk factors described above in
respect of forward-looking information generally as well as any
other specific assumptions and risk factors in relation to such
financial outlook noted in this press release. Such assumptions are
based on management's assessment of the relevant information
currently available and any financial outlook included in this
press release is provided for the purpose of helping readers
understand Paramount's current expectations and plans for the
future. Readers are cautioned that reliance on any financial
outlook may not be appropriate for other purposes or in other
circumstances and that the risk factors described above or other
factors may cause actual results to differ materially from any
financial outlook.
Oil and Gas Measures and Definitions
Liquids
|
|
Natural
Gas
|
Bbl
|
Barrels
|
|
GJ
|
Gigajoules
|
Bbl/d
|
Barrels per
day
|
|
GJ/d
|
Gigajoules per
day
|
MBbl
|
Thousands of
barrels
|
|
MMBtu
|
Millions of British
Thermal Units
|
NGLs
|
Natural gas
liquids
|
|
MMBtu/d
|
Millions of British
Thermal Units per day
|
Condensate
|
Pentane and heavier
hydrocarbons
|
Mcf
|
Thousands of cubic
feet
|
WTI
|
West Texas
Intermediate
|
|
MMcf
|
Millions of cubic
feet
|
|
|
|
MMcf/d
|
Millions of cubic feet
per day
|
Oil Equivalent
|
|
|
NYMEX
|
New York Mercantile
Exchange
|
Boe
|
Barrels of oil
equivalent
|
|
AECO
|
AECO-C reference
price
|
MBoe
|
Thousands of barrels of
oil equivalent
|
|
|
|
MMBoe
|
Millions of barrels of
oil equivalent
|
|
|
|
Boe/d
|
Barrels of oil
equivalent per day
|
|
|
|
This press release contains disclosures expressed as "Boe",
"$/Boe" and "Boe/d". Natural gas equivalency volumes have
been derived using the ratio of six thousand cubic feet of natural
gas to one barrel of oil when converting natural gas to Boe.
Equivalency measures may be misleading, particularly if used in
isolation. A conversion ratio of six thousand cubic feet of natural
gas to one barrel of oil is based on an energy equivalency
conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the well head. For the
nine months ended September 30, 2024,
the value ratio between crude oil and natural gas was approximately
73:1. This value ratio is significantly different from the energy
equivalency ratio of 6:1. Using a 6:1 ratio would be misleading as
an indication of value.
This press release refers to "CGR", a metric commonly used in
the oil and natural gas industry. "CGR" means condensate to gas
ratio and is calculated by dividing wellhead raw liquids volumes by
wellhead raw natural gas volumes. This metric does not
have a standardized meaning and may not be comparable to similar
measures presented by other companies. As such, it should not be
used to make comparisons. Management uses oil and gas metrics for
its own performance measurements and to provide shareholders with
measures to compare the Company's performance over time; however,
such measures are not reliable indicators of the Company's future
performance and future performance may not compare to the
performance in previous periods and therefore should not be unduly
relied upon.
Additional information respecting the Company's oil and gas
properties and operations is provided in the Company's annual
information form for the year ended December
31, 2023 which is available on SEDAR+ at
www.sedarplus.ca or on Paramount's website at
www.paramountres.com.
SOURCE Paramount Resources Ltd.