LOGAN ENERGY CORP. ANNOUNCES FIRST QUARTER 2025 RESULTS, UPSIZED CREDIT FACILITIES AND OPERATIONS UPDATE
Selected financial and operational information set out below should be read in conjunction with the Company's unaudited interim financial statements and related management's discussion and analysis ("MD&A") as at and for the three months ended
FIRST QUARTER 2025 HIGHLIGHTS
- The first quarter was very active operationally as the Company progressed its organic growth program and major infrastructure build. Capital Expenditures before A&D were
$96.3 million for the three months endedMarch 31, 2025 , of which Logan spent$52.2 million on drilling and completions,$42.4 million on facilities, pipelines and well equipment,$0.7 million on land and lease retention, and$1.0 million on production optimization and other assets.- At Simonette, Logan drilled 3 (2.0 net) wells, completed 6 (5.0 net) wells and brought 4 (4.0 net) wells on production, including three Montney wells and the Company's first Duvernay oil well. The remaining 2 (1.0) net wells completed on the recently acquired
Lower Montney acreage were subsequently brought onstream in April. - At Pouce Coupe, Logan drilled a 5 (5.0 net) well pad which is expected to be completed and brought on production in the second quarter.
- During the quarter, the Company significantly advanced construction of its 40 mmcf/d gas plant, battery and compression facilities at
Pouce Coupe (the "Pouce 4-19 Facility"), as well as associated gathering and sales pipelines. Capital spending for the quarter also includes investment in pipeline infrastructure at South Simonette.
- At Simonette, Logan drilled 3 (2.0 net) wells, completed 6 (5.0 net) wells and brought 4 (4.0 net) wells on production, including three Montney wells and the Company's first Duvernay oil well. The remaining 2 (1.0) net wells completed on the recently acquired
- Logan received
$16.6 million of net proceeds from the previously announced sale of a 2.5% gross overriding royalty on its Pouce Coupe property which closed onJanuary 31, 2025 . The Company also completed small tuck-in acquisitions of land and strategic infrastructure at an aggregate cost of$0.9 million during the quarter. - Production averaged 9,974 BOE per day (34% liquids) during the first quarter of 2025, an increase of 42% compared to 7,017 BOE per day (33% liquids) in the same quarter of 2024.
- The Company's Operating Netback after hedging averaged
$21.03 per BOE during the quarter endedMarch 31, 2025 , an increase of 20% from$17.54 per BOE in the comparative quarter endedMarch 31, 2024 . - Logan generated Adjusted Funds Flow of
$16.0 million ($0.03 per share, diluted) in the first quarter of 2025, up 62% from$9.8 million ($0.02 per share, diluted) in the first quarter of 2024. - As of
March 31, 2025 , Logan had Net Debt of$92.5 million or 1.4 times its annualized Adjusted Funds Flow for the first quarter. The Company's Net Debt to Adjusted Funds Flow ratio is expected to moderate in the second half of 2025 as approximately 80% of Logan's capital expenditures are planned for the first half of the year. AssumingUS$60 /bbl WTI for the remainder of 2025 and that capital spending in the second half goes forward as originally planned, Logan expects its full year Net Debt to Adjusted Funds Flow ratio to average under 1.0 times. - Subsequent to the quarter, the Company's lender approved an increase to aggregate borrowing capacity available under its credit facilities from
$125.0 million to$150.0 million . Refer to additional information under the heading "Subsequent Events".
The following table summarizes selected highlights for the three months ended
|
|
Three months ended |
||||
(CA$ thousands, except as otherwise noted) |
|
|
|
2025 |
2024 |
% |
FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
Oil and gas sales |
|
|
|
34,685 |
24,430 |
42 |
Net loss and comprehensive loss |
|
|
|
(394) |
(1,991) |
(80) |
$ per common share, basic and diluted |
|
|
|
(0.00) |
(0.00) |
- |
Cash provided by operating activities |
|
|
|
15,695 |
16,800 |
(7) |
Adjusted Funds Flow (1) |
|
|
|
15,983 |
9,845 |
62 |
$ per common share, basic and diluted (1) |
|
|
|
0.03 |
0.02 |
50 |
Capital Expenditures before A&D (1) |
|
|
|
96,285 |
35,182 |
174 |
Acquisitions, net of dispositions |
|
|
|
(15,724) |
300 |
nm |
Total assets |
|
|
|
461,755 |
244,787 |
89 |
Net Debt (Surplus) (1) |
|
|
|
92,513 |
(17,799) |
nm |
Shareholders' equity |
|
|
|
275,744 |
173,408 |
59 |
Common shares outstanding (000s), end of period (2) |
|
|
|
595,675 |
465,537 |
28 |
OPERATING HIGHLIGHTS AND NETBACKS (5) |
|
|
|
|
|
|
Average daily production |
|
|
|
|
|
|
Crude oil (bbls/d) |
|
|
|
2,779 |
1,782 |
56 |
Condensate (bbls/d) (3) |
|
|
|
299 |
265 |
13 |
Natural gas liquids (bbls/d) (3) |
|
|
|
306 |
290 |
6 |
Natural gas (mcf/d) |
|
|
|
39,540 |
28,079 |
41 |
BOE/d |
|
|
|
9,974 |
7,017 |
42 |
% Liquids (4) |
|
|
|
34 % |
33 % |
3 |
Average realized prices, before financial instruments |
|
|
|
|
|
|
Crude oil ($/bbl) |
|
|
|
89.96 |
89.94 |
0 |
Condensate ($/bbl) (3) |
|
|
|
86.19 |
88.83 |
(3) |
Natural gas liquids ($/bbl) (3) |
|
|
|
51.94 |
51.97 |
(0) |
Natural gas ($/mcf) |
|
|
|
2.37 |
2.48 |
(4) |
Combined average ($/BOE) |
|
|
|
38.64 |
38.26 |
1 |
Netbacks ($/BOE) (5) |
|
|
|
|
|
|
Oil and gas sales |
|
|
|
38.64 |
38.26 |
1 |
Processing and other revenue |
|
|
|
0.68 |
1.34 |
(49) |
Royalties |
|
|
|
(3.77) |
(3.16) |
19 |
Operating expenses |
|
|
|
(12.63) |
(14.64) |
(14) |
Transportation expenses |
|
|
|
(2.07) |
(3.93) |
(47) |
Operating Netback, before hedging (5) |
|
|
|
20.85 |
17.87 |
17 |
Realized gain (loss) on derivative financial instruments |
|
|
|
0.18 |
(0.33) |
nm |
Operating Netback, after hedging (5) |
|
|
|
21.03 |
17.54 |
20 |
General and administrative expenses |
|
|
|
(1.69) |
(2.37) |
(29) |
Financing income (expenses) (6) |
|
|
|
(0.69) |
0.86 |
nm |
Realized foreign exchange gain (loss) |
|
|
|
0.01 |
(0.00) |
(0) |
Settlement of decommissioning obligations |
|
|
|
(0.85) |
(0.60) |
42 |
Adjusted Funds Flow Netback (5) |
|
|
|
17.81 |
15.43 |
15 |
(1) |
"Adjusted Funds Flow", "Capital Expenditures before A&D", and "Net Debt" do not have standardized meanings under IFRS Accounting Standards, refer to "Non-GAAP Measures and Ratios" section of this press release. |
(2) |
Refer to "Share Capital" section of this press release. |
(3) |
Condensate is a natural gas liquid ("NGL") as defined by NI 51-101. See "Other Measurements". |
(4) |
"Liquids" includes crude oil, condensate and NGLs. |
(5) |
"Netbacks" are non-GAAP financial ratios calculated per unit of production. "Operating Netback", and "Adjusted Funds Flow Netback" do not have standardized meanings under IFRS, refer to "Non-GAAP Measures and Ratios" section of this press release. |
(6) |
Excludes non-cash accretion of decommissioning obligations. |
OPERATIONS UPDATE
At Simonette, onstream dates for our winter 2024/25 drilling program were negatively impacted by a variety of factors, including challenging surface conditions and the decision to let our
- The two well "16-13" pad (50% WI) at South Simonette targeting the Lower Montney oil window averaged for the first 30 days on production 660 bbls/d of oil, 12 bbls/d of NGLs and 0.7 mmcf/d of natural gas (796 BOE/d, 84% liquids) per well. Current rates are in excess of the quoted 30 day rates, reflective of the fact that the wells are continuing to clean up.
- The two well "06-06" pad (100% WI) in North Simonette has a Duvernay oil well ("13-12") and a Montney oil well ("09-11").
- The 13-12 Duvernay well significantly exceeded our type curve expectations, averaging 1,306 bbls/d of oil, 6 bbls/d of NGLs and 1.2 mmcf/d of natural gas (1,503 BOE/d, 87% liquids) for the first 30 days on production. This highly encouraging result in the Duvernay adds validation to our investment thesis in Simonette and opens up an additional resource opportunity for our shareholders.
- The strong initial production of the Duvernay well resulted in pad level constraints that deferred the onstream of the 09-11 well. The 09-11 Montney well has now been cleaning up and on production for approximately 20 days. Early performance is stronger than the previous offsetting 05-11 well drilled by Logan in 2023 and the well continues to clean up with oil rates increasing and water cuts decreasing.
- The two well "11-22" pad (100% WI) at South Simonette targeting the Middle Montney gas condensate window averaged for the first 60 days on production 258 bbls/d of oil, 31 bbls/d of NGLs and 4.0 mmcf/d of natural gas (961 BOE/d, 30% liquids) per well.
At
In light of significant uncertainty in the current macro environment and the recent precipitous decline and volatility in crude oil prices, Logan is currently reevaluating planned activity levels for our second half and winter 2025/26 drilling program if such conditions persist. While no decisions have been made, any future adjustment to planned activity levels would not be expected to significantly impact 2025 full year guidance.
Logan has hedged 34% of its forecasted crude oil and condensate production (net of royalties) for the remainder of 2025, of which the Company has locked in fixed price swaps on 500 bbls/d of WTI crude oil at CA$102.05 per barrel plus an average of 1,166 bbls/d at
SUBSEQUENT EVENTS
Amendments to Credit Facilities
The Company's lender completed its annual borrowing base review and increased total available credit capacity from
- the borrowing base available under the revolving credit facility was expanded from
$75.0 million to$150.0 million , replacing the$50.0 million term facility dueApril 3, 2027 which has been cancelled; - the revolving credit facility, as amended, is comprised of a
$25.0 million operating facility and a$125.0 million loan facility; - the current revolving period was extended to
April 3, 2026 , with a term-out toApril 3, 2027 if not renewed; - the "Net Debt to EBITDA" financial covenant was eliminated and there are no financial covenants under the amended credit facilities; and
- subject to certain utilization thresholds, the lender may require a minimum level of hedging if certain criteria are met.
ABOUT
Logan is a growth-oriented exploration, development and production company formed through the spin-out of the early stage Montney assets of Spartan
Logan's corporate presentation has been updated as of
READER ADVISORIES
Non-GAAP Measures and Ratios
This press release contains certain financial measures and ratios which do not have standardized meanings prescribed by International Financial Reporting Standards as issued by the
The non-GAAP measures and ratios used in this press release, represented by the capitalized and defined terms outlined below, are used by Logan as key measures of financial performance and are not intended to represent operating profits nor should they be viewed as an alternative to cash provided by operating activities, net income or other measures of financial performance calculated in accordance with IFRS.
The definitions below should be read in conjunction with the "Non-GAAP and Other Financial Measures" section of the Company's MD&A dated
Operating Income and Operating Netback
Operating Income, a non-GAAP financial measure, is a useful supplemental measure that provides an indication of the Company's ability to generate cash from field operations, prior to administrative overhead, financing and other business expenses. "Operating Income, before hedging" is calculated by Logan as oil and gas sales, net of royalties, plus processing and other revenue, less operating and transportation expenses. "Operating Income, after hedging" is calculated by adjusting Operating Income, before hedging for realized gains or losses on derivative financial instruments.
The Company refers to Operating Income expressed per unit of production as an "Operating Netback" and reports the Operating Netback before and after hedging, both of which are non-GAAP financial ratios. Logan considers Operating Netback an important measure to evaluate its operational performance as it demonstrates its field level profitability relative to current commodity prices.
Adjusted Funds Flow
Cash provided by operating activities is the most directly comparable measure to Adjusted Funds Flow. "Adjusted Funds Flow" is reconciled to cash provided by operating activities by excluding changes in non-cash working capital, adding back transaction costs on acquisitions (if applicable). Logan utilizes Adjusted Funds Flow as a key performance measure in the Company's annual financial forecasts and public guidance.
The Company refers to Adjusted Funds Flow expressed per unit of production as an "Adjusted Funds Flow Netback".
Adjusted Funds Flow per share ("AFF per share")
AFF per share is a non-GAAP financial ratio used by the Logan as a key performance indicator. The basic and/or diluted weighted average common shares outstanding used in the calculation of AFF per share is calculated using the same methodology as net income per share.
Capital Expenditures before A&D
"Capital Expenditures before A&D" is used by Logan to measure its capital investment level compared to the Company's annual budgeted capital expenditures for its organic drilling program. It includes capital expenditures on exploration and evaluation assets and property, plant and equipment, before acquisitions and dispositions. The directly comparable GAAP measure to capital expenditures is cash used in investing activities.
Net Debt (Surplus)
Throughout this press release, references to "Net Debt" or "
Net Debt to Adjusted Funds Flow Ratio
The Company monitors its capital structure and short-term financing requirements using a "Net Debt to Adjusted Funds Flow Ratio", which is a non-GAAP financial ratio calculated as the Company's Net Debt relative to its Adjusted Funds Flow, monitored on both a twelve month trailing basis for fiscal year, and annualized basis for the most recently completed quarter multiplied by a factor of 4. Management believes that this ratio provides investors with information to understand the Company's liquidity risk and its ability to repay bank debt and fund future capital expenditures.
Supplementary Financial Measures
The supplementary financial measures used in this press release (primarily average sales price per product type and certain per BOE and per share figures) are either a per unit disclosure of a corresponding GAAP measure, or a component of a corresponding GAAP measure, presented in the financial statements. Supplementary financial measures that are disclosed on a per unit basis are calculated by dividing the aggregate GAAP measure (or component thereof) by the applicable unit for the period. Supplementary financial measures that are disclosed on a component basis of a corresponding GAAP measure are a granular representation of a financial statement line item and are determined in accordance with GAAP.
Other Measurements
All dollar figures included herein are presented in Canadian dollars, unless otherwise noted. This press release contains various references to the abbreviation "BOE" which means barrels of oil equivalent. Where amounts are expressed on a BOE basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet (mcf) per barrel (bbl). The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead and is significantly different than the value ratio based on the current price of crude oil and natural gas. This conversion factor is an industry accepted norm and is not based on either energy content or current prices. Such abbreviation may be misleading, particularly if used in isolation.
References to "oil" or "crude oil" in this press release include light crude oil, medium crude oil, heavy oil and tight oil combined. NI 51-101 includes condensate within the product type of "natural gas liquids". References to "natural gas liquids" or "NGLs" include pentane, butane, propane and ethane. References to "gas" or "natural gas" relates to conventional natural gas. References to "liquids" includes crude oil, condensate and NGLs. The Company has disclosed "condensate" separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this presentation provides a more accurate description of its operations and results.
References in this press release to peak rates, first 30 and 60 days of production, producing day rates and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production of Logan.
Share Capital
Common shares of Logan trade on the
As of
Forward-Looking and Cautionary Statements
Certain statements contained within this press release constitute forward-looking statements within the meaning of applicable Canadian securities legislation. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "outlook", "anticipate", "budget", "plan", "endeavor", "continue", "estimate", "evaluate", "expect", "forecast", "monitor", "may", "will", "can", "able", "potential", "target", "intend", "consider", "focus", "identify", "use", "utilize", "manage", "maintain", "remain", "result", "cultivate", "could", "should", "believe" and similar expressions (or grammatical variations or negatives thereof). Logan believes that the expectations reflected in such forward-looking statements are reasonable as of the date hereof, but no assurance can be given that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Without limitation, this press release contains forward-looking statements pertaining to: the Company's opportunity rich assets; management's track record of generating excess returns in various business cycles; the success of the Company's 2025 drilling program based on initial results; the amount and timing of budgeted capital expenditures and the expectation that the Company's Net Debt to Adjusted Funds Flow ratio will moderate and average under 1.0 times based on
The forward-looking statements and information are based on certain key expectations and assumptions made by Logan, including, but not limited to, expectations and assumptions concerning the business plan of Logan, the timing and success of future drilling, development and completion activities and infrastructure projects, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of Logan's properties, the successful integration of the recently acquired assets into Logan's operations, the successful application of drilling, completion and seismic technology, the Company's ability to secure sufficient amounts of water, prevailing weather conditions, prevailing legislation affecting the oil and gas industry, prevailing commodity prices, price volatility, future commodity prices, price differentials and the actual prices received for the Company's products, anticipated fluctuations in foreign exchange and interest rates, impact of inflation on costs, royalty regimes and exchange rates, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners, general economic conditions, and the ability to source and complete acquisitions.
Although Logan believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Logan can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, fluctuations in commodity prices (including pursuant to determinations by the
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Logan's prospective results of operations and production and growth, Logan's 2025 guidance, Logan's anticipated full year 2025 average Net Debt to Adjusted Funds Flow ratio, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Logan's proposed business activities in 2025. Logan and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Logan disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Changes in forecast commodity prices, exchange rates, differences in the timing of capital expenditures, and variances in average production estimates can have a significant impact on the Company's key performance measures. The Company's actual results may differ materially from these estimates.
Neither
Abbreviations
A&D |
acquisitions and dispositions |
AECO |
|
AIF |
refers to the Company's Annual Information Form dated |
bbl |
barrel |
bbls/d |
barrels per day |
bcf |
one billion cubic feet |
BOE |
barrels of oil equivalent |
BOE/d |
barrels of oil equivalent per day |
CA$ or CAD |
Canadian dollar |
COGHE |
the most recent publication of the Canadian Oil and Gas Evaluations Handbook |
GJ |
gigajoule |
Mbbl |
one thousand barrels |
MBOE |
one thousand barrels of oil equivalent |
mcf |
one thousand cubic feet |
mcf/d |
one thousand cubic feet per day |
MMbtu |
one million British thermal units |
MMcf |
one million cubic feet |
MD&A |
refers to Management's Discussion and Analysis of the Company dated |
MM |
millions |
$MM |
millions of dollars |
MPa |
megapascal unit of pressure |
NGL(s) |
natural gas liquids |
NI 51-101 |
National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities |
nm |
"not meaningful", generally with reference to a percentage change |
NYMEX |
|
TSXV |
|
US$ or USD |
|
WI |
Working interest |
WTI |
West Texas Intermediate, the reference price paid in |
SOURCE