August 29, 2024 8:04 AM EDT | Source: Criterium Energy Ltd.
Calgary, Alberta–(Newsfile Corp. – August 29, 2024) – Criterium Energy Ltd. (TSXV: CEQ) (“Criterium” or the “Company”), a leading independent upstream energy development and production company focusing on driving growth in Southeast Asia and enhancing shareholder value, is pleased to announce the release of its Q2 2024 financial and operational results for the three- and six-month periods ending on June 30, 2024 (“Q2 2024 Results“), along with an Operational Update. The unaudited interim consolidated financial statements and Management’s Discussion and Analysis (“MD&A“) are available on the Company’s official website (https://criteriumenergy.com/reports-filings/) and on SEDAR+ (www.sedarplus.ca.)
Quarterly Highlights
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Achieved average field production of 821 barrels per day (“bbl/d“) in Q2 2024 from the Tungkal Production Sharing Contracts (“Tungkal PSC“), compared to 822 bbl/d in Q1 2024 and zero in Q2 2023, reflecting the Mont D’Or Petroleum Limited (“MOPL“) acquisition in early 2024 and the success of ongoing workover activities.
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Completed four workovers on existing wells in the quarter at a cost of approximately US$285,000 allocated to operating expenses. These workovers exceeded expectations, with production levels surpassing the projected well type curve by 50%. All workovers completed during the first half of 2024 reached pre-tax payout by the end of Q2 2024.
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Reduced total expenses quarter-over-quarter, with operating expenses (inclusive of G&A) (“Opex“) decreasing by 7% to US$40/bbl in Q2 2024 from US$43/bbl in Q1 2024, attributed to reduced fuel costs, effective cost management, and operational efficiencies resulting from the MOPL transaction. Opex is expected to drop below US$30/bbl by the end of the year.
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Enhanced operating netbacks per barrel, averaging US$19/bbl in Q2, approximately 40% higher than the average in Q1 2024. Despite lower projected Brent prices in the second half of the year, operating netbacks are anticipated to reach nearly US$30/bbl by year-end, highlighting the increased resilience of Criterium’s portfolio.
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Reduced total debt by C$1.4 million as of June 30, 2024 compared to March 31, 2024, benefiting from favorable interest rates of over 8%, significantly better than what the Company could have obtained from new credit facilities.
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Ended the period with cash and cash equivalents totaling C$6 million, with a path to positive free cash flow generation, positioning the Company with financial strength to execute its planned capital program under various macro-economic scenarios or corporate events.
Operations Update
During Q2 2024, the Company continued its low-cost, high-return workover program in the oil-producing Mengoepeh (“MGH“) field, successfully completing four workovers, including one that produced from the newly discovered GH sand zone. These workovers have consistently outperformed expectations, allowing Criterium to efficiently deploy capital with cash paybacks averaging less than 30 days. In Q3 2024, the Company is currently focused on its latest five-well workover program, three of which were carried out in August and are producing from the GH Sand Zone. Further details on the outcomes of these workovers can be found in the Company’s Q2 Results and Operational Update Presentation.
This program’s positive impact is evident in production increases supporting Criterium’s ongoing growth in production, revenue, and financial flexibility. In July, production averaged 850 bbl/d, while August has seen an average of 860 bbl/d despite approximately 100 bbl/d currently offline due to pump repairs in the PLT field within the Tungkal PSC. The volumes from the repaired pumps are expected to be back online by early September 2024.
Outlook
Infill Drilling Program
For the remainder of 2024, Criterium will focus on finalizing its well optimization activities and commence its inaugural two-well infill drilling program in September. This drilling program targets a previously unexplored section of the MGH Field and is expected to add approximately 300 – 350 bbl/d of combined production, with volumes from the initial well expected to come online in October and the second well in November. The Company will provide updates on drilling results and other key operational developments as they become available.
Progress at Tungkal PSC
In addition to the oil-weighted projects at the MGH Field, Criterium is progressing with technical feasibility studies for the development plan for the SE Mengoepeh gas field in the Tungkal PSC. The Company aims to submit a proposal to include the gas field in the existing Mengoepeh Plan of Development to the government before the end of 2024. To support this strategy, Criterium executed a Memorandum of Understanding related to gas offtake during Q2 2024 with PT Energasindo Heksa Karya (“EHK“), a company owned by Rukun Raharja and Tokyo Gas, whereby EHK will purchase gas discovered from SE Mengoepeh and the Tungkal PSC.
Bulu Transaction Progress
Following the announcement on June 25, 2024, Criterium continues to advance the sale of its 42.5% non-operated working interest in the Bulu Production Sharing Contract (“Bulu PSC“) and expects to provide an update shortly.
Financial Strategy
Criterium remains committed to cost reduction, enhancing netbacks, and deleveraging while adopting a prudent approach to capital allocation. As a growth-oriented entity, the Company plans to direct appropriate investments to value-creating development programs within its asset portfolio to uphold financial flexibility and support positive cash flow generation. This strategy is anticipated to be further reinforced by the reduced lender payment negotiated in July 2024, with an expected net positive cash impact of US$1,500,000 in the second half of 2024.
Stay Connected to Criterium
Shareholders and other stakeholders interested in learning more about the opportunities offered by Criterium are encouraged to visit the Company’s website to review a recent corporate presentation. Follow the Company on X (formerly Twitter) at https://x.com/CriteriumEnergy and on LinkedIn at https://www.linkedin.com/company/criterium-energy/ for the latest corporate updates and relevant information on the international oil and gas industry.
About Criterium Energy Ltd.
Criterium Energy Ltd. (TSXV: CEQ) is a Canadian upstream energy company focused on consolidating and sustainably developing assets in Southeast Asia to drive scalable growth and cash flow generation. This region is expected to witness considerable population growth, approaching 800 million people in the next 25 years, leading to substantial economic expansion and energy demand. With expertise in international operations and local presence, Criterium aims to provide responsible, safe, and secure energy sources to meet this growing demand. The Company’s strategic pillars include fostering a successful and sustainable reputation, leveraging innovation and technology arbitrage, and achieving operational excellence with a commitment to safety. For more information, visit the official website (www.criteriumenergy.com) or contact:
Investors are advised that, except as disclosed in the management information circular or filing statement in connection with the Acquisition, any information regarding the Acquisition may not be complete or accurate and should not be relied upon. Trading in Criterium securities should be considered highly speculative.
Neither the TSXV nor its Regulation Services Provider (as defined in the TSXV policies) assumes responsibility for the adequacy or accuracy of this release.
Notes
1Management estimate based on the ‘Mont D’Or Venture Limited YE Evaluation’ reserve and resource report as of December 31, 2022. The report was conducted by an independent qualified reserves evaluator or auditor in compliance with the COGE Handbook.
2 Management estimate based on historical operating costs and projected reductions. Unit costs assume production profile as per production target, which is based on Management Estimates of future workover and infill programs.
3 Non-IFRS financial measure or ratio without a standardized meaning as per International Financial Reporting Standards, making it incomparable to similar measures from other entities. Refer to “Advisories – Non-IFRS and Other Financial Measures” in this press release and the Company’s latest MD&A filed on SEDAR+ at sedarplus.ca.
4 Estimate based on field production reports
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking information and statements based on expectations, estimates, projections, and interpretations as of the date of the release. Words such as “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends”, “seek”, “aims” and similar terms aim to identify forward-looking information or statements.
Factors that may cause actual results to differ from forward-looking statements or impact Criterium’s operations, performance, development, and results include operational risks and assumptions, risks inherent in future operations, increased maintenance, operating, or financing costs, availability and pricing of labor, equipment, and materials, competitive factors, including competition from third parties, pricing pressures, and supply and demand dynamics in the oil and gas industry, currency and interest rate fluctuations, inflation, risks of war, pandemics, political and economic instability, severe weather conditions, and climate change risks, among others. The impact of each assumption, risk, or uncertainty on a forward-looking statement cannot be precisely determined, as these factors are interconnected, and future action depends on the information available at that time. Forward-looking statements involve known and unknown risks, uncertainties, and factors that could significantly differ Criterium’s actual results, performance, or achievements from future results, performance, or achievements implied or stated by such forward-looking statements.
Regarding forward-looking statements in this release, Criterium has assumed factors such as future exchange and interest rates, commodity demand and supply, inflation, capital availability, labor and material costs, competition, general economic and financial market conditions, regulatory approvals, tax regimes, and effects of government regulations.
The forward-looking statements in this release are as of the release date, and the parties do not commit to updating or revising any forward-looking statements or information unless obliged by applicable securities laws.
Non-IFRS and Other Financial Measures
In this release and other Company disclosures, Criterium utilizes specific measures to analyze financial performance, position, and cash flow. These non-IFRS and special financial measures are not standardized under IFRS and may not be comparable to similar measures from other entities. They should not be considered as alternatives to, or more meaningful than, financial measures decided under IFRS to gauge Criterium’s performance. These non-IFRS and special financial measures provide useful information to shareholders and investors to comprehend and assess ongoing operational performance, offering increased transparency and improved analysis of Criterium’s business performance against prior periods.
Operating Netback per bbl
Operating netback per bbl is computed by subtracting royalties and net opex from petroleum sales, calculated on a per bbl basis. Management views operating netback per bbl as a vital measure to evaluate its operational performance, highlighting its field-level profitability relative to prevailing commodity prices.
To access the original version of this press release, please visit https://www.newsfilecorp.com/release/221489
