TENAZ ENERGY CORP. ANNOUNCES Q1 2022 RESULTS AND CORPORATE UPDATE – QNT Press Release


CALGARY, AB, May 30, 2022 /CNW/ – Tenaz Energy Corp. (“Tenaz”, “We”, “Our”, “Us” or the “Company”) (TSX:TNZ) is pleased to announce its financial and operating results for the three months ended March 31, 2022 and corporate update. The unaudited interim condensed consolidated financial statements and related management’s discussion and analysis (“MD&A”) are available at www.sedar.com and www.tenazenergy.com. Selected financial and operating information for the three months ended March 31, 2022 appear below and should be read in conjunction with the related financial statements and MD&A.

HIGHLIGHTS

  • On May 25, 2022we announced an agreement to acquire SDX Energy Plc (“SDX”) in an all-share transaction. SDX is an AIM-listed oil and gas producer with assets in Egypt and Morocco. Completion of the transaction is subject to a number of conditions and approvals including the approval of the Toronto Stock Exchange (“TSX”), and shareholders of both Tenaz and SDX. The combined company will retain the name Tenaz Energy Inc. and will be headquartered in Calgary, Alberta.
  • On May 12, 2022Tenaz completed the process of graduation to the TSX and concurrently delisted from the TSX Venture exchange.
  • During Q1 2022, we equipped, tied-in and brought on production two (1.75 net) wells targeting the Rex formation in Leduc-Woodbend. Following clean-up, production rates are on our predicted type curve.
  • Production volumes averaged 1,007 boe/d1 in the quarter, little changed from Q4 2021. While two new wells were placed on production during the first quarter, they contributed little to quarterly production due to frac clean-up.
  • Net income for the quarter was $3.5 million ($0.12 per share), which increased from a net loss of $0.3 million ($0.01 per share) in Q4 2021, primarily driven by an impairment reversal arising from an improved commodity price outlook.
  • Funds flow from operations2 for the quarter was $1.0 millionup 360% from Q4 2021. Higher first quarter funds flow from operations resulted from higher commodity prices and the absence of recapitalization transaction costs incurred in Q4 2021, partially offset by realized hedging losses and increased well servicing.
  • Hedges put in place prior to the recapitalization, which were required by credit facility covenants, expire in May 2022. Hedging requirements by lenders have been waived for Tenaz following recapitalization and repayment of the outstanding balance on the facility. We have elected at this time to not hedge any additional production.
  • We ended the quarter with positive adjusted working capital2 of approximately $21 millionproviding flexibility in deploying capital in our acquisition strategy and organic investment program.
  • Our Board of Directors has approved the establishment of a plan to repurchase shares through a normal course issuer bid (the “NCIB”). The NCIB will allow the repurchase and retirement of up to 10% of the issued and outstanding common shares of Tenaz. The NCIB will be subject to the approval of the TSX and is intended to be effective upon closing of the SDX acquisition.

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1 The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. Per boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel (1 bbl ) of crude oil. Refer to “Barrels of Oil Equivalent” section included in the “Advisories” section of this press release.

2 This is a non-GAAP and other financial measure. Refer to “Non-GAAP and Other Financial Measures” included in the “Advisories” section of this press release.

FINANCIAL AND OPERATIONAL SUMMARY

Three months ended

($000 CADexcept per share and per boe amounts)

Mar 31

2022

Dec 31

2021

Mar 31

2021

Financial

Petroleum and natural gas sales

6,201

5,453

3,440

Cash flow from operating activities

1,158

373

827

Funds flow from operations(1)

992

216

809

Per share – basic(1)(4)

0.03

0.01

0.07

Per share – diluted(1)(3)(4)

0.03

0.01

0.07

Net income (loss)(2)

3,497

(258)

(976)

Per share – basic(2)(4)

0.12

(0.01)

(0.09)

Per share – diluted(2)(3)(4)

0.12

(0.01)

(0.09)

Capital expenditures(1)

719

5,840

1,510

Property dispositions

(438)

Adjusted working capital (net debt)(1)

20,995

20,688

(4,207)

Common Shares outstanding (000)

End of period – basic(4)

28,458

28,438

10,892

Weighted average for the period – basic(4)

28,457

26,069

10,892

Weighted average for the period – diluted(3)(4)

29,361

27,450

10,892

Operating

Average daily production

Heavy crude oil (bbls/d)

515

502

496

NGLs (bbls/d)

62

78

53

Full story available on Benzinga.com



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