Record Second Quarter 2021 Results and Provides an Update CALGARY, Alberta, Aug. 11, 2021 (GLOBE NEWSWIRE) -- (PIPE – TSX) -- Pipestone Energy Corp. (“Pipestone” or the “Company”) is pleased to report its Q2 2021 financial and operational results, as well as provide an update on its operations.
During Q2 2021, Pipestone delivered record quarterly production and cash flow, underpinned by the continued efficient execution of its organic development program. The Company remains on track to generate free cash flow beginning in Q4 2021, with forecast annual free cash flow of $95 million in 2022 and $190 million in 2023 (US$65 WTI | C$2.50 AECO).
SECOND QUARTER 2021 CORPORATE HIGHLIGHTS:
- Record average quarterly production of 23,336 boe/d (31% condensate, 46% total liquids), an 8% quarterly increase over Q1 2021 and a 39% increase over Q2 2020. The record production was achieved despite processing curtailments due to high ambient temperatures experienced in Alberta during late June;
- Improvement in operating netback to a corporate record of $19.60/boe, an increase of 12% over Q1 2021 and an 88% increase over Q2 2020;
- The Company generated record revenue of $82.3 million and record adjusted funds flow from operations of $35.5 million ($0.19 per share basic and $0.13 per share fully diluted);
- The Company continued the effective execution of its 2021 capital program with 8 wells drilled and rig-released and 6 wells completed during the second quarter of 2021. Total capital expenditures, including capitalized G&A, were $47.6 million during the three months ended June 30, 2021; and
- The Company generated strong returns on invested capital, with Q2 2021 annualized ROCE and CROIC of 14.1% and 18.9%, respectively, as compared to a Q2 2020 annualized ROCE and CROIC of (0.5%) and 8.6%, respectively.
As a result of continued efficiencies with its drilling program, the Company plans to accelerate $10 million of completion and tie-in capital from early 2022 to Q4 2021. Pipestone’s revised 2021 capital guidance is now $170 - $175 million (up from $155 - $165 million), with its 2022 forecast capital spending reduced to $185 million (down from $195 million). The incremental 2021 capital will be spent completing and equipping 3 additional wells on the 6-13 pad.
With material free cash flow generation forecast to begin in Q4 2021, Pipestone will initially prioritize the repayment of debt, with a target of less than 0.5x debt to cash flow prior to the end of 2022. The Company also believes its common shares are trading at a significant discount to their intrinsic value. As such, the Company plans to implement a normal course issuer bid in Q4 2021, concurrent with the transition to free cash flow generation. In addition, the Pipestone board is assessing all options to maximize shareholder returns through potential uses for future free cash flow, which could include additional share buyback programs, a future dividend, as well as investment in further growth or potential acquisitions.
https://www.globenewswire.com/news-release/2021/08/11/2278689/0/en/Pipestone-Energy-Corp-Reports-Record-Second-Quarter-2021-Results-and-Provides-an-Operations-Update.html