Paramount Resources Ltd. Announces First Quarter 2024 Results and 20% Dividend Increase
HIGHLIGHTS
- First quarter sales volumes averaged 100,977 Boe/d (47% liquids). (1)
Grande Prairie Region sales volumes averaged 67,163 Boe/d (50% liquids). As previously disclosed, first quarter production was impacted by cold weather, intermittent run time at key facilities and other operational challenges. Production has since been largely restored and the Company has begun to realize benefits from the aggressive well optimization program it initiated inMarch 2024 .Kaybob Region sales volumes increased to 22,353 Boe/d (42% liquids), driven by a new six wellDuvernay pad brought onstream at Kaybob North in the first quarter that more than offset the impact of the previously disclosed non-core asset disposition (the "2024 Kaybob Disposition").Central Alberta andOther Region sales volumes increased to 11,461 Boe/d (44% liquids) as a result of production from fourDuvernay wells brought onstream in late-2023 andJanuary 2024 .- Combined, the Company's
Duvernay sales volumes in theKaybob Region and at Willesden Green increased to over 12,000 Boe/d in the first quarter, more than double fourth quarter 2023 Duvernay sales volumes. This production is approximately 70% liquids and is processed through Company owned facilities, resulting in the highest per Boe netback corporately.
- Cash from operating activities was
$201 million ($1.39 per basic share) in the first quarter. Adjusted funds flow was$226 million ($1.56 per basic share). Free cash flow was($10) million (($0.07 ) per basic share). (2)
__________________________ |
|
(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 |
- First quarter capital expenditures totaled
$214 million . Significant activities included:Grande Prairie Region (Montney ) – nine (9.0 net) wells drilled, four (4.0 net) wells brought on production and ongoing construction of a new compressor node;Kaybob Region (Duvernay ) – four (4.0 net) wells drilled and six (6.0 net) wells brought on production; andCentral Alberta andOther Region (Duvernay ) – two (2.0 net) wells drilled, two (2.0 net) wells brought on production and commenced construction of the Company's second natural gas processing plant at Willesden Green.
- Asset retirement obligations settled in the first quarter totaled
$17 million , on track with budget. Activities in the quarter included the abandonment of 26 wells and the reclamation of 17 sites. -
Paramount closed the 2024 Kaybob Disposition inFebruary 2024 for cash proceeds of$46 million while retaining a 2% no-deduction gross overriding royalty on the undevelopedMontney acreage forming part of the assets. - At
March 31, 2024 , net debt was$68 million andParamount's $1.0 billion revolving credit facility was undrawn. (1) - The carrying value of the Company's investments in securities at
March 31, 2024 was$569 million . InApril 2024 ,Paramount sold 6 million common shares of NuVista Energy Ltd. for cash proceeds of$75 million . - In
April 2024 ,Paramount hedged 14,250 Bbl/d of liquids sales volumes for the remainder of 2024 at an average WTI price ofCAD$111.67 /Bbl, re-establishing a hedging position similar to that monetized for approximately$45 million in the fourth quarter of 2023.
INCREASED DIVIDEND
- The first increased dividend of
$0.15 per Common Share will be payable onMay 31, 2024 to shareholders of record onMay 15, 2024 . The dividend will be designated as an "eligible dividend" for Canadian income tax purposes.
_______________________________ |
|
(1) |
Net (cash) debt is a capital management measure used by |
GUIDANCE
|
2024 Guidance |
Annual average sales volumes (Boe/d) |
100,000 to 106,000 (47% liquids) |
First half 2024 (Boe/d) |
96,000 to 100,000 (47% liquids) |
Second half 2024 (Boe/d) |
104,000 to 112,000 (47% liquids) |
Capital expenditures |
|
Sustaining and Maintenance |
|
Growth |
|
Abandonment and reclamation expenditures |
|
Free cash flow (1) |
|
The Company's midpoint 2024 capital program, abandonment and reclamation expenditures and increased regular monthly dividend is more than fully funded under the above forecast, when combined with cash proceeds from dispositions realized year-to-date. The Company's midpoint 2024 sustaining and maintenance capital program, abandonment and reclamation expenditures and increased regular monthly dividend would remain fully funded down to an average WTI price for the remaining three quarters of 2024 of about
____________________________ |
|
(1) |
Free cash flow is a capital management measure used by |
REVIEW OF OPERATIONS
Sales volumes and netbacks in the
|
Q1 2024 |
Q4 2023 |
% Change |
||
Sales Volumes |
|
|
|
||
Natural gas (MMcf/d) |
201.8 |
214.4 |
(6) |
||
Condensate and oil (Bbl/d) |
29,202 |
32,382 |
(10) |
||
Other NGLs (Bbl/d) |
4,334 |
4,742 |
(9) |
||
Total (Boe/d) |
67,163 |
72,860 |
(8) |
||
% liquids |
50 % |
51 % |
|
||
Netback (1) |
($ millions) |
($/Boe) |
($ millions) |
($/Boe) |
Change in $ millions (%) |
Natural gas revenue (2) |
53.0 |
2.89 |
56.2 |
2.85 |
(6) |
Condensate and oil revenue |
248.0 |
93.32 |
295.0 |
99.00 |
(16) |
Other NGLs revenue |
15.7 |
39.70 |
16.1 |
36.95 |
(2) |
Royalty income and other revenue |
– |
– |
0.1 |
– |
NM |
Petroleum and natural gas sales |
316.7 |
51.81 |
367.4 |
54.81 |
(14) |
Royalties |
(50.8) |
(8.32) |
(56.8) |
(8.47) |
(11) |
Operating expense |
(80.1) |
(13.11) |
(84.1) |
(12.54) |
(5) |
Transportation and NGLs processing |
(22.6) |
(3.69) |
(26.0) |
(3.88) |
(13) |
|
163.2 |
26.69 |
200.5 |
29.92 |
(19) |
(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. |
|||||
NM means not meaningful |
Sales volumes in the
Average gross 30-day peak production per well from the eight (8.0 net) well
____________________________ |
|
(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 9% and liquids sales volumes were lower by approximately 2% due to shrinkage. |
First quarter development activities in the
Initial production from the four (4.0 net)
The Company continues to expect that its second quarter 2024 sales volumes will be impacted by a 9-day 50% curtailment at the third-party Wapiti natural gas processing plant and its third quarter 2024 sales volumes will be impacted by a 21-day full outage at that plant.
Over the remaining three quarters of 2024,
KAYBOB REGION
In the first quarter,
Initial production from the six (6.0 net) well pad brought on in the first quarter has exceeded expectations, averaging gross 30-day peak production per well of 1,271 Boe/d (1.8 MMcf/d of shale gas and 980 Bbl/d of NGLs) with an average CGR of 563 Bbl/MMcf. (1)(3)
Over the remaining three quarters 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. |
(2) |
Natural gas sales volumes were lower by approximately 10% and liquids sales volumes were lower by approximately 8% due to shrinkage. |
(3) |
Natural gas sales volumes were lower by approximately 16% and liquids sales volumes were lower by approximately 14% due to shrinkage. |
Development activities in the first quarter included the drilling of two (2.0 net) Duvernay wells at a six (6.0 net) well pad at Willesden Green. Drilling operations on the remaining wells are anticipated to be concluded in the second quarter. First production from three of the wells on this pad is expected in the third quarter.
Construction of the Company's second natural gas processing plant at Willesden Green commenced in the first quarter with earthworks, the ordering of equipment and offsite construction of equipment modules underway. The project is progressing as planned and
Over the remaining three quarters of 2024, the Company plans to drill eight (8.0 net)
HEDGING
The Company's current commodity and foreign exchange contracts are summarized below:
|
Q2 2024 |
Q3 2024 |
Q4 2024 |
|
Average Price (1) |
- |
Oil |
|
|
|
|
|
|
NYMEX WTI Swaps (Sale) (Bbl/d) (2) |
14,250 |
14,250 |
14,250 |
|
|
|
MSW WTI Differential Swap (Sale) (Bbl/d) (3) |
3,352 |
5,000 |
5,000 |
|
WTI less |
|
|
|
|
|
|
|
|
Natural gas |
|
|
|
|
|
|
AECO – Basis (Physical Sale) (MMBtu/d) |
40,000 |
40,000 |
13,478 |
|
NYMEX less |
|
|
|
|
|
|
|
|
Foreign Currency Exchange |
|
|
|
|
|
|
Swaps (Sale) (US$MM/Month) |
|
– |
– |
|
|
|
Swaps (Sale) (US$MM/Month) |
– |
|
|
|
|
|
(1) |
Average price is calculated using a weighted average of notional volumes and prices. |
(2) |
"NYMEX" means |
(3) |
"MSW" means |
(4) |
"NYMEX" means NYMEX pricing at Henry Hub. |
ANNUAL GENERAL MEETING
ABOUT
A summary of historical financial and operating results is also available on
FINANCIAL AND OPERATING RESULTS (1)
($ millions, except as noted) |
Q1 2024 |
Q4 2023 |
Q1 2023 |
|||
Net income |
68.1 |
111.9 |
197.0 |
|||
per share – basic ($/share) |
0.47 |
0.78 |
1.39 |
|||
per share – diluted ($/share) |
0.46 |
0.75 |
1.33 |
|||
Cash from operating activities |
201.3 |
287.0 |
271.4 |
|||
per share – basic ($/share) |
1.39 |
1.99 |
1.91 |
|||
per share – diluted ($/share) |
1.35 |
1.93 |
1.84 |
|||
Adjusted funds flow |
225.6 |
284.1 |
268.2 |
|||
per share – basic ($/share) |
1.56 |
1.97 |
1.89 |
|||
per share – diluted ($/share) |
1.52 |
1.91 |
1.81 |
|||
Free cash flow |
(9.5) |
59.7 |
59.8 |
|||
per share – basic ($/share) |
(0.07) |
0.41 |
0.42 |
|||
per share – diluted ($/share) |
(0.07) |
0.40 |
0.40 |
|||
Total assets |
4,458.9 |
4,388.7 |
4,114.6 |
|||
Investments in securities |
568.6 |
540.9 |
498.3 |
|||
Long-term debt |
– |
– |
– |
|||
Net (cash) debt |
68.4 |
59.6 |
(43.6) |
|||
Common shares outstanding (millions) (2) |
145.2 |
144.2 |
142.4 |
|||
Sales volumes (3) |
|
|
|
|||
Natural gas (MMcf/d) |
318.7 |
326.2 |
320.6 |
|||
Condensate and oil (Bbl/d) |
40,908 |
40,290 |
37,916 |
|||
Other NGLs (Bbl/d) |
6,954 |
6,698 |
5,916 |
|||
Total (Boe/d) |
100,977 |
101,348 |
97,269 |
|||
% liquids |
47 % |
46 % |
45 % |
|||
|
67,163 |
72,860 |
69,507 |
|||
|
22,353 |
20,324 |
19,201 |
|||
|
11,461 |
8,164 |
8,561 |
|||
Total (Boe/d) |
100,977 |
101,348 |
97,269 |
|||
Netback |
|
($/Boe) (4) |
|
($/Boe) (4) |
|
($/Boe) (4) |
Natural gas revenue |
82.4 |
2.84 |
83.7 |
2.79 |
122.0 |
4.23 |
Condensate and oil revenue |
344.8 |
92.64 |
363.7 |
98.12 |
343.5 |
100.66 |
Other NGLs revenue |
23.9 |
37.81 |
22.2 |
36.00 |
23.4 |
43.93 |
Royalty income and other revenue |
1.2 |
– |
0.9 |
– |
0.8 |
– |
Petroleum and natural gas sales |
452.3 |
49.24 |
470.5 |
50.46 |
489.7 |
55.94 |
Royalties |
(61.8) |
(6.73) |
(68.9) |
(7.39) |
(69.1) |
(7.90) |
Operating expense |
(118.9) |
(12.94) |
(126.4) |
(13.56) |
(108.8) |
(12.43) |
Transportation and NGLs processing |
(31.9) |
(3.47) |
(33.2) |
(3.56) |
(36.3) |
(4.15) |
Sales of commodities purchased (5) |
54.7 |
5.95 |
50.2 |
5.38 |
115.1 |
13.15 |
Commodities purchased (5) |
(53.4) |
(5.81) |
(47.4) |
(5.08) |
(114.3) |
(13.05) |
Netback |
241.0 |
26.24 |
244.8 |
26.25 |
276.3 |
31.56 |
Risk management contract settlements |
(0.5) |
(0.05) |
43.0 |
4.61 |
6.1 |
0.70 |
Netback including risk management contract settlements |
240.5 |
26.19 |
287.8 |
30.86 |
282.4 |
32.26 |
Capital expenditures |
|
|
|
|
|
|
|
120.2 |
75.8 |
121.1 |
|||
|
56.3 |
64.5 |
39.0 |
|||
|
39.8 |
61.7 |
5.6 |
|||
|
4.1 |
3.9 |
12.7 |
|||
Corporate (6) |
(6.5) |
3.0 |
5.7 |
|||
Total |
213.9 |
208.9 |
184.1 |
|||
Asset retirement obligations settled |
16.5 |
12.8 |
21.8 |
(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: Q1 2024: 0.4 million, Q4 2023: 0.4 million, Q1 2023: 0.8 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) |
Sales of commodities purchased and commodities purchased are treated as corporate items and not allocated to individual regions or properties. |
(6) |
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shale gas (MMcf/d) |
268.5 |
|
271.8 |
|
265.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional natural gas (MMcf/d) |
50.2 |
|
54.4 |
|
55.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (MMcf/d) |
318.7 |
|
326.2 |
|
320.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensate (Bbl/d) |
38,332 |
|
37,522 |
|
34,706 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other NGLs (Bbl/d) |
6,954 |
|
6,698 |
|
5,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NGLs (Bbl/d) |
45,286 |
|
44,220 |
|
40,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Light and medium crude oil (Bbl/d) |
1,595 |
|
1,636 |
|
2,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tight oil (Bbl/d) |
592 |
|
699 |
|
599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude oil (Bbl/d) |
389 |
|
433 |
|
460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (Bbl/d) |
2,576 |
|
2,768 |
|
3,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (Boe/d) |
100,977 |
|
101,348 |
|
97,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
Q1 2024 |
|
Q4 2023 |
|
Q1 2023 |
|
Shale gas (MMcf/d) |
201.6 |
|
214.1 |
|
204.0 |
|
30.6 |
|
30.2 |
|
31.8 |
|
36.3 |
|
27.5 |
|
29.4 |
|
Conventional natural gas (MMcf/d) |
0.2 |
|
0.3 |
|
0.4 |
|
47.7 |
|
49.6 |
|
49.6 |
|
2.3 |
|
4.5 |
|
5.4 |
|
Natural gas (MMcf/d) |
201.8 |
|
214.4 |
|
204.4 |
|
78.3 |
|
79.8 |
|
81.4 |
|
38.6 |
|
32.0 |
|
34.8 |
|
Condensate (Bbl/d) |
29,061 |
|
32,155 |
|
31,367 |
|
6,038 |
|
4,003 |
|
2,315 |
|
3,233 |
|
1,364 |
|
1,024 |
|
Other NGLs (Bbl/d) |
4,334 |
|
4,742 |
|
4,074 |
|
1,480 |
|
1,209 |
|
988 |
|
1,140 |
|
747 |
|
854 |
|
NGLs (Bbl/d) |
33,395 |
|
36,897 |
|
35,441 |
|
7,518 |
|
5,212 |
|
3,303 |
|
4,373 |
|
2,111 |
|
1,878 |
|
Light and medium crude oil (Bbl/d) |
– |
|
– |
|
– |
|
1,573 |
|
1,602 |
|
2,121 |
|
22 |
|
34 |
|
30 |
|
Tight oil (Bbl/d) |
141 |
|
227 |
|
– |
|
212 |
|
205 |
|
206 |
|
239 |
|
267 |
|
393 |
|
Heavy crude oil (Bbl/d) |
– |
|
– |
|
– |
|
– |
|
– |
|
– |
|
389 |
|
433 |
|
460 |
|
Crude oil (Bbl/d) |
141 |
|
227 |
|
– |
|
1,785 |
|
1,807 |
|
2,327 |
|
650 |
|
734 |
|
883 |
|
Total (Boe/d) |
67,163 |
|
72,860 |
|
69,507 |
|
22,353 |
|
20,324 |
|
19,201 |
|
11,461 |
|
8,164 |
|
8,561 |
|
The Company forecasts that 2024 annual sales volumes will average between 100,000 Boe/d and 106,000 Boe/d (53% shale gas and conventional natural gas combined, 41% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 6% Other NGLs). First half 2024 sales volumes are expected to average between 96,000 Boe/d and 100,000 Boe/d (53% shale gas and conventional natural gas combined, 41% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 6% Other NGLs). Second half 2024 sales volumes are expected to average between 104,000 Boe/d and 112,000 Boe/d (53% shale gas and conventional natural gas combined, 41% condensate, light and medium crude oil, tight oil and heavy crude oil combined and 6% 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
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
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 2024 and certain periods therein;
- 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) planned workovers; and (iii) the expected timing of completion of planned facilities, including a new natural gas processing facility at Willesden Green;
- the expected impact on sales volumes of outages and curtailments at the third-party Wapiti natural gas processing plant; 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 theMiddle 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 new natural gas processing facility at Willesden Green, and (iii) facility turnarounds and maintenance.
Although
- 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;
- 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 new natural gas processing facility 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 new natural gas processing facility 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
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
Oil and Gas Measures and Definitions
Liquids |
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Natural Gas |
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Bbl |
Barrels |
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GJ |
Gigajoules |
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Bbl/d |
Barrels per day |
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GJ/d |
Gigajoules per day |
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MBbl |
Thousands of barrels |
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MMBtu |
Millions of British Thermal Units |
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NGLs |
Natural gas liquids |
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MMBtu/d |
Millions of British Thermal Units per day |
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Condensate |
Pentane and heavier hydrocarbons |
Mcf |
Thousands of cubic feet |
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WTI |
West Texas Intermediate |
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MMcf |
Millions of cubic feet |
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MMcf/d |
Millions of cubic feet per day |
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Oil Equivalent |
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NYMEX |
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Boe |
Barrels of oil equivalent |
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AECO |
AECO-C reference price |
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MBoe |
Thousands of barrels of oil equivalent |
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MMBoe |
Millions of barrels of oil equivalent |
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Boe/d |
Barrels of oil equivalent per day |
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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 three months ended
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
Pricing Sensitivity
The below table reflects forecast 2024 free cash flow under the Company's 2024 guidance and, for illustrative comparison, two alternative pricing scenarios for the final three quarters of 2024:
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2024 Guidance |
Alternative Scenario 1 |
Alternative Scenario 2 |
WTI |
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NYMEX |
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AECO |
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2024 Free Cash Flow |
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Forecast 2024 free cash flow is forward-looking information. See "Forward-looking Information" in these Advisories.
SOURCE