- Tenaz Energy (TNZ) has released Q4 and year-end 2022 results, as well as a 2022 reserves summary
- Net income for Q4 2022 was C$0.7 million, up from $0.2 million in Q3, as a result of increased operating netback
- Full year 2022 net income was $5.2 million, down from $8.3 million in 2021, driven by an impairment reversal recorded in 2021
- Total proved + probable reserves increased 20 per cent to 13.6 million boe, with after-tax NPV10% increasing 94 per cent to $141.1 million
- CEO Anthony Marino spoke with Brieanna McCutcheon about the news
- Tenaz acquires and sustainably develops oil and natural gas assets with the goal of returning free cash flow to shareholders
- Tenaz Energy (TNZ) is down by 0.95 per cent trading at $2.08 per share
Tenaz Energy (TNZ) has released Q4 and year-end 2022 results, as well as a 2022 reserves summary.
Q4 and 2022 highlights
Average production volume was 1,520 boe/d in Q4, up 43 per cent YoY and 24 per cent from Q3. For 2022, production averaged 1,218 boe/d, up 20 per cent YoY. Increases were primarily due to volumes from new wells drilled in the second half of 2022.
Fund flows from operations for 2022 were C$8.6 million, up 146 per cent from 2021, from increases in both commodity prices and production volumes.
Net income for Q4 2022 was $0.7 million, up from $0.2 million in Q3, as a result of increased operating netback. Full year 2022 net income was $5.2 million, down from $8.3 million in 2021, driven by an impairment reversal recorded in 2021.
Q4 saw the completion of drilling and fracture stimulation of two (1.75 net) wells, with both brought into production. Production to date exceeds expected type curves.
Recently acquired Netherlands assets made small contributions to Q4 2022 and 2022 production of 95 boe/d and 24 boe/d, and are performing as expected with an average production rate of 4.8 mmcf/d for the first two months of 2023.
The assets consist of non-operated interests in the Dutch North Sea, which add high-value European natural gas production and associated infrastructure to Tenaz’s portfolio.
Year-end 2022 reserves
Proved developed producing reserves increased 75 per cent to 3.0 million boe, reflecting a reserve replacement ratio of 392 per cent. After-tax NPV10% increased 112 per cent to $48.2 million ($1.72 per share).
Total proved reserves increased 30 per cent, reflecting a reserve replacement ratio of 548 per cent. Reserves at year-end totaled 8.8 million boe, with after-tax NPV10% increasing 100 per cent to $86.0 million ($3.06 per share).
Total proved + probable reserves increased 20 per cent, reflecting a reserve replacement ratio of 618 per cent. Reserves at year-end totaled 13.6 million boe, with after-tax NPV10% increasing 94 per cent to $141.1 million ($5.02 per share).
After-tax NPV10% for the newly-acquired Netherlands natural gas assets were $14.2 million, $15.0 million and $31.0 million at the PDP, 1P and 2P levels, respectively.
PDP Finding and Developing (F&D) costs were $17.74/boe. F&D costs were $16.01 and $14.69 at the 1P and 2P levels.
PDP Finding, Developing and Acquisition Costs (FD&A) were $10.50/boe. FD&A costs were $11.40 and $9.53 at the 1P and 2P levels.
Based on Tenaz’s Q4 2022 production rate, reserve life indices were 5.4 years, 15.8 years and 24.6 years, respectively, for PDP, 1P and 2P reserves.
2023 outlook
With a strong performance from recent wells and improved reservoir understanding at Leduc-Woodbend, Tenaz is confident in its planned four-well (3.35 net) drilling program for 2023. Under the current strip, the capital program is more than fully funded by internal cash flow generation.
The company expects its Canadian unit to produce 1,450 to 1,550 boe/d this year, an increase of 25 per cent over 2022.
Its Netherlands assets are expected to produce 4.5 mmcf/d (750 boe/d) and to contribute meaningful free cash flow for 2023.
E&D capital guidance is $20 to $24 million with annual production guidance between 2,200 and 2,300 boe/d.
Management believes that Tenaz is positioned for success through continued international M&A and domestic organic development with positive free cash flow, negative net debt and a supportive shareholder base.
CEO Anthony Marino spoke with Brieanna McCutcheon about the news.
Tenaz acquires and sustainably develops oil and natural gas assets with the goal of returning free cash flow to shareholders. The company is focused on a semi-conventional oil project in the Rex member of the Upper Mannville group at Leduc-Woodbend in central Alberta and holds non-operated natural gas production assets offshore Netherlands.
Tenaz Energy (TNZ) is down by 0.95 per cent trading at $2.08 per share as of 9:37 am EST.
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