2021 3rd Quarter Results & Sustainability Linked Credit Fac. CALGARY, Alberta, Oct. 25, 2021 (GLOBE NEWSWIRE) -- PrairieSky Royalty Ltd. ("PrairieSky" or the "Company") (TSX: PSK) is pleased to announce its third quarter operating and financial results for the period ended September 30, 2021 ("Q3 2021"). PrairieSky is also pleased to announce an extension and expansion of the Company’s credit facility which has been reconstituted as a sustainability-linked loan, reinforcing PrairieSky’s environmental, social and governance leadership and performance.
Third Quarter 2021 Highlights:
- Total revenues increased to $78.1 million, a 12% increase over Q2 2021 and 80% over Q3 2020, comprised of royalty production revenues of $76.0 million and other revenues of $2.1 million.
- Funds from Operations grew to $66.2 million ($0.30 per common share basic and diluted), a 17% increase over Q2 2021 and a 75% increase over Q3 2020.
- Royalty production averaged 19,871 BOE per day with liquids royalty production reaching 10,138 barrels per day, representing 51% of royalty production as compared to 49% in Q2 2021 and 48% in Q3 2020.
- Natural gas royalty volumes of 58.4 MMcf per day, down 3% from Q2 2021, were impacted by seasonal turnarounds and third-party downtime in the Montney and Alberta Foothills.
- Completed acquisitions totaling $190.1 million, including a previously announced $155.0 million investment in a 5.0% gross overriding royalty in the Clearwater and $34.8 million, before adjustments, in complementary Fee Lands and GORR Interests in Central Alberta.
- Declared a third quarter dividend of $20.0 million ($0.09 per common share), representing a payout ratio of 30%, with remaining cash flow allocated to acquisitions.
- Common share repurchases of $8.0 million under the normal course issuer bid ("NCIB") at an average price per share of $13.71.
Sustainability-Linked Loan: - Credit facility expanded to $425 million, with a permitted increase to $500 million, and extended maturity to February 28, 2025.
- Sustainability-linked pricing mechanism provides the Company the opportunity to achieve positive pricing adjustments on drawn and undrawn balances based on sustainability performance.
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PrairieSky’s royalty production revenue increased to $76.0 million in Q3 2021, our second highest quarter since inception in 2014. The growth in revenue was due primarily to strong commodity prices for all products, resulting in a 17% increase in funds from operations over Q2 2021 and a 75% increase over Q3 2020. During the quarter, PrairieSky completed acquisitions totalling $190.1 million, including the previously announced 5.0% gross overriding royalty agreement in the core of the Clearwater oil play in the Marten Hills area of Alberta. On August 25, 2021, PrairieSky also completed the acquisition of 138,000 acres of Fee Land and 125,000 acres of GORR Interests in Central Alberta adding approximately 200 BOE per day of royalty production (74% liquids) for total cash consideration of $34.8 million, before adjustments. Both acquisitions were financed using PrairieSky’s credit facility which was subsequently increased to $425 million and now incorporates sustainability-linked performance criteria. Net debt at September 30, 2021 totaled $187.7 million, which assuming current strip pricing, could be repaid within a year.
During Q3 2021, third-party operators were active across Western Canada and on PrairieSky’s royalty lands with 193 wells spud (98% oil). Wells spud during the quarter included 101 wells on our GORR acreage, 71 wells on our Fee Lands and 21 unit wells. There were 190 oil wells spud in Q3 2021, including 84 Viking wells, 51 Clearwater wells, 23 Mannville heavy and light oil wells, 5 Duvernay light oil wells and additional spuds in the Bakken, Cardium, Charlie Lake and Nisku formations. There were 3 natural gas wells spud in Q3 2021, all in the Spirit River. PrairieSky’s average royalty rate for wells spud in Q3 2021 was 6.7%.
https://www.globenewswire.com/news-release/2021/10/25/2320145/0/en/PrairieSky-Announces-2021-Third-Quarter-Results-and-Sustainability-Linked-Credit-Facility.html