RE:CanaccordMore details. GLTA
This year’s guidance has been updated to reflect (1) the impact of curtailed production in H1/23 resulting from the wildfires in Alberta; (2) a delayed start to its winter drilling program; and (3) a reduced capital program this year,” he said. “Development capital is now expected to total $130-million this year, down from $161-million previously, with 60 per cent of the spend occurring between September and December. Average 2023 production is now guided to 24,100 barrels of oil equivalent per day from 27,170 boe/d previously, with December rates expected to average 27,000 boe/d (30,000 boe/d previously). Importantly, SOIL secured an agreement with its lender to defer the September and December principal payments on its term loan. With the deferral, SOIL gains $50-million of headroom this year; although, this does decelerate the pace of debt repayment in the near term. Despite this, we view this as a net positive considering the company would have otherwise needed to further truncate its 2023 capital program to facilitate the aggressive amortization of its term loan, which would have limited the outlook for 2024.”
‘We are upgrading our rating to BUY (from Spec Buy) in light of the support provided to SOIL from its lender, reducing the risk of capital being cut. Leverage remains below 2 times, and we believe the company’s hedge book provides adequate protection to its cash flows over the NTM [next 12 months].”