PrairieSky Royalty Ltd. ("
PrairieSky" or the
"
Company") (TSX: PSK) is pleased to announce its
third quarter ("
Q3 2023") results for the
three-month period ended September 30, 2023.
Third Quarter Highlights
- Royalty production volumes averaged 25,469 BOE per day, an
increase of 8% over Q2 2023 and 2% over Q3 2022. Quarterly oil
royalty production averaged 12,084 barrels per day, a 4% decrease
from Q2 2023 and a 6% increase over Q3 2022.
- Quarterly revenues totaled $133.1 million, comprised of royalty
production revenue of $127.4 million and other revenues of $5.7
million. Total revenues were 13% higher than Q2 2023 and 14% below
Q3 2022.
- Funds from operations of $93.8 million ($0.39 per common share,
basic and diluted) were driven by strength in both royalty
production volumes and commodity pricing during Q3 2023. Funds from
operations were 3% above Q2 2023 and 24% below Q3 2022.
- Declared a third quarter dividend of $57.3 million ($0.24 per
common share), representing a payout ratio of 61%. Excess cash flow
was allocated to $15.6 million of royalty acquisitions related
primarily to exploration projects in the Mannville Stack and the
balance to retiring bank debt, bringing net debt to $253.7 million
as at September 30, 2023.
Board Renewal and Leadership Update
PrairieSky announces the following planned
changes to its Board of Directors at the next Annual General
Meeting of Shareholders scheduled for April 23, 2024 (the
"2024 AGM").
- James Estey, Chair of the Board, plans to retire as Board Chair
and a director of the Company at the 2024 AGM.
- The Board intends to appoint Margaret McKenzie as Board Chair
following the 2024 AGM.
- Grant Zawalsky will not stand for re-election as a director at
the 2024 AGM.
Anna Alderson has been appointed to the Board of
Directors effective October 23, 2023, and will serve as a member of
the audit committee of the Board of Directors.
In addition to changes to the Board of
Directors, PrairieSky announced the appointment of Dan Bertram as
Vice-President, Business Development & Chief Commercial Officer
effective October 10, 2023.
President’s Message
It was another active quarter for third-party
operators across PrairieSky’s royalty properties. There were 246
wells spud, including 238 oil wells with activity focused in the
Clearwater, Mannville Stack and Viking plays. Leasing activity
remained strong in the quarter with PrairieSky earning $3.6 million
in lease bonus consideration on entering into 46 leases with 40
different counterparties. Leasing activity is a leading indicator
of future drilling and we anticipate Q4 2023 to be another active
quarter for third-party operators on PrairieSky lands. During the
quarter we executed on $15.6 million in acquisitions primarily for
undeveloped land in the Mannville Stack which continues to attract
significant third-party capital due to the play’s strong economics.
PrairieSky expects to earn a high return on invested capital from
the newly acquired assets as they will see immediate third-party
drilling activity.
Total royalty production volumes averaged 25,469
BOE per day for Q3 2023, an increase of 8% over Q2 2023 and 2%
above Q3 2022. Oil royalty production averaged 12,084 barrels per
day in Q3 2023, 4% below Q2 2023 as anticipated following spring
break up when there is lower activity across the basin and 6% above
Q3 2022 due to active drilling across PrairieSky's land base over
the last 12 months.
PrairieSky generated $127.4 million in royalty
production revenue due to a combination of increased total royalty
production volumes and the strength in realized oil pricing which
drove PrairieSky's $93.8 million in funds from operations ($0.39
per share) in the quarter. PrairieSky declared dividends of $57.3
million or $0.24 per common share for shareholders of record on
September 29, 2023, resulting in a payout ratio of 61%. Excess
funds from operations after the dividend and royalty acquisitions
were allocated to debt repayment reducing net debt to $253.7
million at September 30, 2023.
James Estey has informed the Board that he will
retire as Board Chair and director at the 2024 AGM. The Board
intends to appoint Margaret McKenzie as Chair of the Board.
"On behalf of the Board, I want to express my gratitude to Jim for
his many contributions in guiding PrairieSky to the company it is
today. Jim has been the Chair of PrairieSky since its initial
public offering in 2014 and has played a significant role in
transformational transactions growing PrairieSky from just over
five million acres of royalty lands in Alberta to over 18 million
acres across Western Canada."
"We are pleased to welcome Anna Alderson to our
Board of Directors and Dan Bertram to PrairieSky. We believe these
additions strengthen our leadership team and we look forward to
working with them. As we look forward to our next 10 years, I am
confident in PrairieSky's future success with this management team
and Margaret's leadership. As always, we would like to thank our
staff for their hard work and shareholders for their support."
Andrew Phillips, President & CEO
Q3 2023 Financial
Highlights
- Q3 2023 funds from operations
totaled $93.8 million or $0.39 per common share (basic and
diluted), a 3% increase over Q2 2023 due to an 11% increase in WTI
benchmark pricing and a narrowed heavy oil differential. This
increase was partially offset by higher cash administrative costs
as discussed below. Funds from operations were 24% below Q3 2022
due to weaker commodity pricing for all products which more than
offset the 6% increase in oil royalty production.
- Royalty production volumes totaled
25,469 BOE per day generating royalty production revenue of $127.4
million, an 18% increase over Q2 2023 and 13% below Q3 2022. A
further breakdown is as follows:
- Oil royalty production volumes
averaged 12,084 barrels per day, a 4% decrease from Q2 2023
following spring break up when activity across the Western Canadian
Sedimentary Basin slows due to road bans and limited lease access
and a 6% increase over Q3 2022 due to strong third-party activity
across PrairieSky’s royalty properties. Third-party operators have
been targeting a number of oil plays with a focus on the
Clearwater, Mannville Stack and Viking.
- Oil royalty revenue totaled $102.8
million in Q3 2023, 15% higher than Q2 2023 due to stronger average
WTI benchmark pricing and a narrowed average heavy oil
differential, partially offset by lower royalty production volumes.
The 6% growth in oil royalty production volumes over Q3 2022 and a
narrowed average oil differential only partially offset the impact
of a 10% decrease in WTI pricing in the quarter.
- Natural gas royalty production
volumes averaged 64.1 MMcf per day, an increase of 19% over Q2 2023
due to the positive impact of new Montney wells brought on stream
and the restoration of production temporarily shut in due to the
Alberta wildfires and operational downtime in the prior quarter. Q2
2023 natural gas royalty volumes also included a negative
adjustment related to a prior period overpayment that was not
repeated in Q3 2023. Natural gas royalty production was 2% below Q3
2022 as the impact of declines and operational downtime more than
offset new wells on stream.
- Natural gas royalty revenue of
$11.6 million was up 6% from Q2 2023 due to stronger royalty
production volumes as described above and decreased 52% from Q3
2022 due to weaker average AECO natural gas index pricing with AECO
daily pricing averaging $2.39 per Mcf in the quarter, down from
$5.81 per Mcf in Q3 2022.
- Natural gas liquids (NGL) royalty
production volumes averaged 2,702 barrels per day, 39% above Q2
2023 with new Montney wells coming on stream and the restoration of
production temporarily shut in due to the Alberta wildfires and
operational downtime in the prior quarter. Q2 2023 NGL royalty
volumes also included a negative adjustment related to a prior
period overpayment that was not repeated in Q3 2023. NGL royalty
production volumes were 2% above Q3 2022 as new wells on stream,
including new Montney wells, more than offset the impacts of
declines and operational downtime over the last 12 months.
- NGL royalty revenue totaled $13.0
million in Q3 2023, 65% above Q2 2023 due to higher royalty
production volumes combined with higher benchmark pricing. NGL
royalty revenue was 8% below Q3 2022 due to weaker benchmark
pricing.
- Other revenue generated $5.7
million in Q3 2023, comprised of $1.0 million of lease rentals,
$1.1 million in other income and $3.6 million of lease bonus
consideration from 46 new leasing arrangements with 40 different
counterparties.
- Cash administrative expense totaled
$17.9 million and included a $13.3 million termination payment
related to a leadership change in the quarter. The termination
payment included $1.5 million of vested Officer Deferred Share
Units which are only paid in cash when an officer leaves the
Company and $5.5 million related to Performance Share Units
scheduled to vest in January 2024.
- PrairieSky declared a third quarter
dividend of $57.3 million ($0.24 per common share), representing a
61% payout ratio with remaining funds from operations allocated to
$15.6 million of royalty acquisitions and reducing net debt to
$253.7 million, a decrease of $22.2 million from June 30,
2023.
ACTIVITY ON PRAIRIESKY’S ROYALTY PROPERTIES
During Q3 2023, there were 246 wells spud (97%
oil) on PrairieSky lands at an average royalty rate of 7.1%,
including 116 wells spud on our Fee Lands, 112 wells spud on our
GORR acreage and 18 unit wells spud. There were 238 oil wells spud
in Q3 2023 targeting oil plays across our acreage including 92
Viking wells, 46 Clearwater wells, 35 Mannville heavy oil wells, 12
Mannville light oil wells, 11 Cardium oil wells, 10 Bakken oil
wells, 10 Mississippian oil wells, 7 Mannville thermal oil wells at
Lindbergh, and 15 additional oil spuds in the Belly River, Charlie
Lake, Dunvegan, Duvernay, Jurassic, Montney and Nisku formations.
There were 8 natural gas wells spud in Q3 2023, including 5 Montney
gas wells, 2 Mannville gas wells and 1 Belly River gas well.
RETIREMENT OF BOARD CHAIR AND BOARD
RENEWAL
The following Board of Director changes are
expected to take effect following the 2024 AGM:
- James Estey will retire as Chair of
the Board of Directors at the 2024 AGM.
- The Board intends to appoint
Margaret McKenzie as the Board Chair following the 2024 AGM. Ms.
McKenzie has served on the PrairieSky Board of Directors since 2014
and has significant royalty experience as a founder and Chief
Financial Officer of Range Royalty. "We are pleased to announce
Margaret as the incoming Chair of the Board. Her understanding of
royalties, financial expertise and business and strategic planning
experience make her the ideal candidate to takeover as Chair," said
Mr. Estey.
- After serving on the Board of
Directors since December 2014, Grant Zawalsky will not stand for
re-election as a director at the 2024 AGM. "PrairieSky has
benefitted from Grant’s strategic thinking, years of capital
markets and securities law experience and his understanding of the
Canadian energy industry," said Mr. Estey. "We thank Grant for his
many contributions as a director."
PrairieSky is also pleased to announce the
appointment of Anna Alderson to the Board of Directors effective
today. Ms. Alderson will serve as a member of the Company's audit
committee. Ms. Alderson is an experienced Corporate Director based
in Calgary with over 35 years of experience in all sectors of the
energy industry as well as financial services. Ms Alderson retired
from KPMG in 2019 after a distinguished career as an audit partner
in Calgary, Toronto and Hong Kong. Ms. Alderson is a Chartered
Professional Accountant, holds her ICD.D designation from the
Institute of Corporate Directors and earned a Bachelor of Commerce
degree (with great distinction) from the University of
Saskatchewan.
PrairieSky believes these changes demonstrate
our commitment to board renewal and position us well for the
future.
FINANCIAL AND OPERATIONAL
INFORMATION
The following table summarizes select
operational and financial information of the Company for the
periods noted. All dollar amounts are stated in Canadian dollars
unless otherwise noted.
A full version of PrairieSky’s management’s
discussion and analysis ("MD&A") and unaudited
interim condensed consolidated financial statements and notes
thereto for the fiscal period ended September 30, 2023 is available
on SEDAR+ at www.sedarplus.ca and PrairieSky’s website at
www.prairiesky.com.
|
Three months ended |
Nine months ended |
(millions, except per share or as otherwise noted) |
September 30 2023 |
June 30 2023 |
September 30 2022 |
September 30 2023 |
September 30 2022 |
FINANCIAL |
|
|
|
|
|
Revenues |
$ |
133.1 |
|
$ |
117.4 |
|
$ |
154.7 |
|
$ |
376.6 |
|
$ |
492.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from Operations |
|
93.8 |
|
|
91.3 |
|
|
123.5 |
|
|
271.4 |
|
|
388.1 |
|
Per Share - basic and diluted(1) |
|
0.39 |
|
|
0.38 |
|
|
0.52 |
|
|
1.14 |
|
|
1.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
|
55.4 |
|
|
48.0 |
|
|
76.2 |
|
|
160.2 |
|
|
250.2 |
|
Per Share - basic and diluted(1) |
|
0.23 |
|
|
0.20 |
|
|
0.32 |
|
|
0.67 |
|
|
1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared(2) |
|
57.3 |
|
|
57.3 |
|
|
28.7 |
|
|
171.9 |
|
|
86. 0 |
|
Per Share |
|
0.24 |
|
|
0.24 |
|
|
0.12 |
|
|
0.72 |
|
|
0.36 |
|
|
|
|
|
|
|
Acquisitions |
|
15.6 |
|
|
15.2 |
|
|
2.5 |
|
|
36.2 |
|
|
24.4 |
|
Net debt at period end(3) |
|
253.7 |
|
|
275.9 |
|
|
364.2 |
|
|
253.7 |
|
|
364.2 |
|
|
|
|
|
|
|
Shares Outstanding |
|
|
|
|
|
Shares outstanding at period end |
|
239.0 |
|
|
238.9 |
|
|
238.8 |
|
|
239.0 |
|
|
238.8 |
|
Weighted average - basic |
|
238.9 |
|
|
238.9 |
|
|
238.8 |
|
|
238.9 |
|
|
238.8 |
|
Weighted average - diluted |
|
238.9 |
|
|
238.9 |
|
|
239.1 |
|
|
238.9 |
|
|
239.1 |
|
|
|
|
|
|
|
OPERATIONALRoyalty Production
Volumes |
|
|
|
|
|
Crude Oil (bbls/d) |
|
12,084 |
|
|
12,607 |
|
|
11,376 |
|
|
12,300 |
|
|
11,595 |
|
NGL (bbls/d) |
|
2,702 |
|
|
1,943 |
|
|
2,660 |
|
|
2,437 |
|
|
2,685 |
|
Natural Gas (MMcf/d) |
|
64.1 |
|
|
53.8 |
|
|
65.7 |
|
|
59.2 |
|
|
64.1 |
|
Royalty Production (BOE/d)(4) |
|
25,469 |
|
|
23,517 |
|
|
24,986 |
|
|
24,604 |
|
|
24,963 |
|
|
|
|
|
|
|
Realized Pricing |
|
|
|
|
|
Crude Oil ($/bbl) |
|
92.53 |
|
|
78.05 |
|
|
102.80 |
|
|
82.25 |
|
|
108.02 |
|
NGL ($/bbl) |
|
52.01 |
|
|
44.77 |
|
|
58.02 |
|
|
48.18 |
|
|
61.47 |
|
Natural Gas ($/Mcf) |
|
1.97 |
|
|
2.23 |
|
|
4.00 |
|
|
2.74 |
|
|
4.80 |
|
Total ($/BOE)(4) |
|
54.37 |
|
|
50.65 |
|
|
63.51 |
|
|
52.49 |
|
|
69.10 |
|
|
|
|
|
|
|
Operating Netback per BOE(5) |
|
46.09 |
|
|
46.64 |
|
|
60.64 |
|
|
45.49 |
|
|
65.39 |
|
|
|
|
|
|
|
Funds from Operations per BOE |
|
40.03 |
|
|
42.66 |
|
|
53.73 |
|
|
40.41 |
|
|
56.95 |
|
|
|
|
|
|
|
Oil Price Benchmarks |
|
|
|
|
|
Western Texas Intermediate (WTI) (US$/bbl) |
|
82.32 |
|
|
73.99 |
|
|
91.68 |
|
|
77.41 |
|
|
98.13 |
|
Edmonton Light Sweet ($/bbl) |
|
107.87 |
|
|
95.32 |
|
|
116.88 |
|
|
100.68 |
|
|
123.44 |
|
Western Canadian Select (WCS) crude oil differential to WTI
(US$/bbl) |
|
(12.89 |
) |
|
(15.07 |
) |
|
(19.86 |
) |
|
(17.57 |
) |
|
(15.73 |
) |
|
|
|
|
|
|
Natural Gas Price Benchmarks |
|
|
|
|
|
AECO monthly index ($/Mcf) |
|
2.39 |
|
|
2.35 |
|
|
5.81 |
|
|
3.03 |
|
|
5.56 |
|
AECO daily index ($/Mcf) |
|
2.60 |
|
|
2.45 |
|
|
4.08 |
|
|
2.76 |
|
|
5.35 |
|
|
|
|
|
|
|
Foreign Exchange Rate (US$/CAD$) |
|
0.7466 |
|
|
0.7454 |
|
|
0.7662 |
|
|
0.7436 |
|
|
0.7775 |
|
(1) Net Earnings and Funds from Operations per
Share are calculated using the weighted average number of basic and
diluted common shares outstanding. |
(2) A dividend of $0.24 per common share was
declared on September 11, 2023. The dividend was paid on October
16, 2023 to shareholders of record as at September 29, 2023. |
(3) See Note 14 "Capital Management" in the
interim condensed consolidated financial statements for the three
and nine months ended September 30, 2023 and 2022 and the three and
six months ended June 30, 2023. |
(4) See "Conversions of Natural Gas to BOE". |
(5) Operating Netback per BOE is defined under the
Non-GAAP Measures and Ratios section of this press release. |
|
CONFERENCE CALL DETAILS
A conference call to discuss the results will be
held for the investment community on Tuesday, October 24, 2023,
beginning at 6:30 a.m. MDT (8:30 a.m. EDT). To participate in the
conference call, you are asked to register at the link provided
below. Details regarding the call will be provided to you upon
registration.
Live call participants
registration
URL:
https://register.vevent.com/register/BIedc97c0d7a654dadbc5aad56f6ab221a
FORWARD-LOOKING STATEMENTS
This press release includes certain statements
regarding PrairieSky’s future plans and operations and contains
forward-looking statements that we believe allow readers to better
understand our business and prospects. The use of any of the words
"expect", "anticipate", "continue", "estimate", "objective",
"ongoing", "may", "will", "project", "should", "believe", "plans",
"intends", "strategy" and similar expressions are intended to
identify forward-looking information or statements. Forward-looking
statements contained in this press release include estimates
regarding our expectations with respect to PrairieSky’s business
and growth strategy; future growth from PrairieSky’s existing
royalty asset portfolio, including but not limited to the
expectation that the Mannville Stack oil play will attract
significant third-party capital, and contributions from
acquisitions, including newly acquired assets seeing immediate
third-party drilling activity and the expectation that PrairieSky
will earn a high return on invested capital from these assets; the
quality of PrairieSky’s existing royalty asset portfolio; leasing
and licensing inventory being a leading indicator for third-party
drilling and exploration on our royalty asset portfolio and
expectations for the pace of third-party drilling activity to
increase in Q4 2023 due in part to leasing and licensing activity
and planned leadership changes following the 2024 AGM.
With respect to forward-looking statements
contained in this press release, we have made several assumptions
including those described in detail in our MD&A and the Annual
Information Form for the year ended December 31, 2022. Readers and
investors are cautioned that the assumptions used in the
preparation of such forward-looking information and statements,
although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. Our actual results,
performance, or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements. We
can give no assurance that any of the events anticipated will
transpire or occur, or if any of them do, what benefits we will
derive from them.
By their nature, forward-looking statements are
subject to numerous risks and uncertainties, some of which are
beyond our control, including the impact of general economic
conditions including inflation, industry conditions, volatility of
commodity prices, lack of pipeline capacity, currency fluctuations,
imprecision of reserve estimates, competitive factors impacting
royalty rates, environmental risks, the effects of inclement and
severe weather events and natural disasters, including fire,
drought and flooding, taxation, regulation, changes in tax or other
legislation, competition from other industry participants, the lack
of availability of qualified personnel or management, stock market
volatility, political and geopolitical instability and our ability
to access sufficient capital from internal and external sources. In
addition, PrairieSky is subject to numerous risks and uncertainties
in relation to acquisitions. These risks and uncertainties include
risks relating to the potential for disputes to arise with
counterparties, and limited ability to recover indemnification
under certain agreements. The foregoing and other risks are
described in more detail in PrairieSky’s MD&A, and the Annual
Information Form for the year ended December 31, 2022 under the
headings "Risk Management" and "Risk Factors", respectively, each
of which is available at www.sedarplus.ca and
PrairieSky’s website at www.prairiesky.com.
Further, any forward-looking statement
is made only as of the date of this press release, and PrairieSky
undertakes no obligation to update or revise any forward-looking
statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events, except as required by
applicable securities laws. New factors emerge from time to time,
and it is not possible for PrairieSky to predict all of these
factors or to assess in advance the impact of each such factor on
PrairieSky’s business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
The forward-looking information contained in this document is
expressly qualified by this cautionary statement.
CONVERSIONS OF NATURAL GAS TO
BOE
To provide a single unit of production for
analytical purposes, natural gas production and reserves volumes
are converted mathematically to equivalent barrels of oil (BOE).
PrairieSky uses the industry-accepted standard conversion of six
thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1
bbl). The 6:1 BOE ratio is based on an energy equivalency
conversion method primarily applicable at the burner tip. It does
not represent a value equivalency at the wellhead and is not based
on either energy content or current prices. While the BOE ratio is
useful for comparative measures and observing trends, it does not
accurately reflect individual product values and might be
misleading, particularly if used in isolation. As well, given that
the value ratio, based on the current price of crude oil to natural
gas, is significantly different from the 6:1 energy equivalency
ratio, using a 6:1 conversion ratio may be misleading as an
indication of value.
NON-GAAP MEASURES AND
RATIOS
Certain measures and ratios in this document do
not have any standardized meaning as prescribed by International
Financial Reporting Standards ("IFRS") and, therefore, are
considered non-GAAP measures and ratios. These measures and ratios
may not be comparable to similar measures and ratios presented by
other issuers. These measures and ratios are commonly used in the
crude oil and natural gas industry and by PrairieSky to provide
potential investors with additional information regarding the
Company’s liquidity and its ability to generate funds to conduct
its business. Non-GAAP measures and ratios include operating
netback per BOE, operating margin, payout ratio, cash
administrative expenses and cash administrative expenses per BOE.
Non-GAAP measures should not be considered an alternative to or
more meaningful than the most directly comparable financial measure
of each such non-GAAP measure described below. Management’s use of
these measures and ratios is discussed further below. Further
information can be found in the “Non-GAAP Measures and Ratios”
section of PrairieSky’s MD&A
"Operating Netback per BOE" represents the cash
margin for products sold on a BOE basis. Operating netback per BOE
is calculated by dividing the operating netback (royalty production
revenues less production and mineral taxes and cash administrative
expenses) by the average daily production volumes sold for the
period. Operating netback per BOE is used to assess the cash
generating and operating performance per unit of product sold and
the comparability of the underlying performance between years.
Operating netback per BOE measures are commonly used in the crude
oil and natural gas industry to assess performance
comparability.
|
Three Months Ended |
Nine Months Ended |
($
millions) |
September 30 2023 |
June 30 2023 |
September 30 2022 |
September 30 2023 |
September 30 2022 |
Cash from Operating Activities |
$ |
78.1 |
|
$ |
95.6 |
|
$ |
178.3 |
|
$ |
190.9 |
|
$ |
424.8 |
|
Other Revenue |
|
(5.7 |
) |
|
(9.0 |
) |
|
(8.7 |
) |
|
(24.0 |
) |
|
(21.8 |
) |
Non-cash Revenue |
|
0.5 |
|
|
- |
|
|
- |
|
|
0.5 |
|
|
0.2 |
|
Amortization of Debt Issuance
Costs |
|
- |
|
|
(0.1 |
) |
|
(0.2 |
) |
|
(0.3 |
) |
|
(0.5 |
) |
Finance Expense |
|
4.5 |
|
|
4.6 |
|
|
4.4 |
|
|
13.6 |
|
|
14.2 |
|
Current Tax Expense |
|
14.9 |
|
|
13.0 |
|
|
20.4 |
|
|
44.4 |
|
|
65.4 |
|
Net Change in Non-cash Working
Capital |
|
15.7 |
|
|
(4.3 |
) |
|
(54.8 |
) |
|
80.5 |
|
|
(36.7 |
) |
Operating Netback |
$ |
108.0 |
|
$ |
99.8 |
|
$ |
139.4 |
|
$ |
305.6 |
|
$ |
445.6 |
|
"Operating Margin" represents operating netback
(royalty production revenues less production and mineral taxes and
cash administrative expenses) as a percentage of royalty production
revenues. Management uses this measure to demonstrate the
comparability between the Company and production and exploration
companies in the crude oil and natural gas industry as it shows net
revenue generation from operations.
|
Three Months Ended |
Nine Months Ended |
($
millions) |
September 302023 |
June 302023 |
September 302022 |
September 302023 |
September 302022 |
Royalty Production Revenue |
$ |
127.4 |
$ |
108.4 |
$ |
146.0 |
$ |
352.6 |
$ |
470.9 |
Operating Netback |
$ |
108.0 |
$ |
99.8 |
$ |
139.4 |
$ |
305.6 |
$ |
445.6 |
Operating Margin |
|
85% |
|
92% |
|
95% |
|
87% |
|
95% |
"Payout Ratio" is calculated as dividends
declared as a percentage of funds from operations. Payout ratio is
used by dividend paying companies to assess dividend levels in
relation to the funds generated and used in operating
activities.
|
Three Months Ended |
Nine Months Ended |
($
millions) |
September 302023 |
June 302023 |
September 302022 |
September 302023 |
September 302022 |
Funds From Operations |
$ |
93.8 |
|
$ |
91.3 |
$ |
123.5 |
$ |
271.4 |
|
$ |
388.1 |
Dividends Declared |
$ |
57.3 |
|
$ |
57.3 |
$ |
28.7 |
$ |
171.9 |
|
$ |
86.0 |
Payout Ratio |
|
61% |
|
|
63% |
|
23% |
|
63% |
|
|
22% |
"Cash Administrative Expenses" represent
administrative expenses excluding the volatility and fluctuations
in share-based compensation expense for restricted share units
("RSUs"), performance share units ("PSUs"), officer deferred share
units ("ODSUs”) and deferred share units ("DSUs") and stock options
that were not settled in cash in the current period. Cash
administrative expenses are calculated as total administrative
expenses, adjusting for share-based compensation expense in the
period, plus any actual cash payments made under the RSU, PSU, ODSU
or DSU plans. Management believes cash administrative expenses are
a common benchmark used by investors when comparing companies to
evaluate operating performance.
Cash Administrative Expenses
The following table presents the computation of
cash administrative expenses:
|
Three Months Ended |
Nine Months Ended |
($
millions) |
September 30 2023 |
June 30 2023 |
September 30 2022 |
September 30 2023 |
September 30 2022 |
Total Administrative Expenses |
$ |
15.0 |
|
$ |
13.0 |
|
$ |
10.4 |
|
$ |
38.9 |
|
$ |
32.4 |
|
Share-Based Compensation
Expense |
|
(8.6 |
) |
|
(7.2 |
) |
|
(5.5 |
) |
|
(20.4 |
) |
|
(17.0 |
) |
Cash Payments Made - Share
Unit Plans |
|
11.5 |
|
|
1.4 |
|
|
- |
|
|
23.8 |
|
|
5.0 |
|
Cash Administrative Expenses |
$ |
17.9 |
|
$ |
7.2 |
|
$ |
4.9 |
|
$ |
42.3 |
|
$ |
20.4 |
|
"Cash Administrative Expenses per BOE"
represents cash administrative expenses on a BOE basis and is
calculated by dividing cash administrative expenses by the average
daily production volumes sold for the period. Cash administrative
expenses per BOE assists management and investors in evaluating
operating performance on a comparable basis.
ABOUT PRAIRIESKY ROYALTY
LTD.
PrairieSky is a royalty company, generating
royalty production revenues as petroleum and natural gas are
produced from its properties. PrairieSky has a diverse portfolio of
properties that have a long history of generating funds from
operations and that represent the largest and most consolidated
independently-owned fee simple mineral title position in Canada.
PrairieSky's common shares trade on the Toronto Stock Exchange
under the symbol PSK.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Andrew PhillipsPresident & Chief Executive OfficerPrairieSky
Royalty Ltd.(587) 293-4005Investor Relations(587)
293-4000www.prairiesky.com |
Pamela KazeilVice-President, Finance & Chief Financial
OfficerPrairieSky Royalty Ltd.(587) 293-4089 |
PDF
available: http://ml.globenewswire.com/Resource/Download/9c535f8c-0c60-469b-9bee-ff60062e80fe
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