All dollar amounts in this news release are stated in Canadian dollars unless otherwise noted.
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Highlights |
Three months ended |
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(in thousands, except per share data) |
March 31 2024 |
December 31 2023 |
March 31 2023 |
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Financial |
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Funds flow1 |
$28,700 |
$33,976 |
$39,894 |
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Per share basic |
$0.04 |
$0.05 |
$0.06 |
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Per share diluted |
$0.04 |
$0.05 |
$0.06 |
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Adjusted EBITDA1 |
$27,051 |
$33,552 |
$41,481 |
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Per share basic |
$0.04 |
$0.05 |
$0.06 |
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Per share diluted |
$0.04 |
$0.05 |
$0.06 |
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Cash provided by operating activities |
$24,603 |
$32,235 |
$34,918 |
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Net income |
$9,239 |
$16,882 |
$18,469 |
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Per share basic |
$0.01 |
$0.03 |
$0.03 |
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Per share diluted |
$0.01 |
$0.03 |
$0.03 |
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Exploration and development expenditures1 |
$36,715 |
$3,731 |
$31,315 |
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Property acquisitions |
$2,031 |
– |
– |
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Property dispositions |
– |
$4,227 |
– |
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Working capital (net debt)1 |
$71,462 |
$82,591 |
($69,608) |
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Common shares |
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Shares outstanding, end of period |
646,314 |
648,671 |
662,411 |
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Weighted average shares (basic) |
647,002 |
649,984 |
662,411 |
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Weighted average shares (diluted) |
661,881 |
674,271 |
671,484 |
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Operations |
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Production |
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Tight oil (Bbls per day) |
5,160 |
5,630 |
6,904 |
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Shale gas (Mcf per day) |
13,363 |
11,980 |
12,719 |
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NGL (Bbls per day) |
2,628 |
2,382 |
2,235 |
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Barrels of oil equivalent (Boepd, 6:1) |
10,015 |
10,009 |
11,259 |
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Average realized price |
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Tight oil ($ per Bbl) |
$100.62 |
$107.26 |
$104.80 |
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Shale gas ($ per Mcf) |
$1.86 |
$1.51 |
$5.64 |
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NGL ($ per Bbl) |
$4.29 |
$6.69 |
$10.70 |
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Barrels of oil equivalent ($ per Boe, 6:1) |
$55.44 |
$63.73 |
$72.76 |
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Operating netback per Boe (6:1)1 |
$32.57 |
$38.30 |
$42.81 |
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Funds flow netback per Boe (6:1)1 |
$31.49 |
$36.90 |
$39.37 |
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1 |
Management uses these non-GAAP financial measures to analyze operating performance, leverage and investing activity. These measures do not have a standardized meaning under GAAP and therefore may not be comparable with the calculation of similar measures for other companies. See Non-GAAP Measures within this document for additional information. |
MESSAGE TO SHAREHOLDERS
Building on the success and results Lucero delivered during 2023, the Company continued to demonstrate operating momentum in the first quarter of 2024. During the period, Lucero commenced the Company’s 2024 drilling and development program designed to drive disciplined production growth through 2024, while also securing further financial flexibility to pursue future opportunities for shareholder value creation.
Supported by continued positive net earnings and a strong balance sheet, Lucero returned $1.4 million to shareholders in the first quarter of 2024 by way of the Company’s Normal Course Issuer Bid (“NCIB”), through the purchase and cancellation of 2.4 million common shares of Lucero (the “Common Shares”). Subsequent to March 31, 2024, the Company returned an additional $4.8 million to shareholders via the NCIB, purchasing and canceling another 7.1 million Common Shares and further bolstering per share metrics.
First Quarter 2024 Highlights
- 10,015 Boepd average production, compared to 10,009 Boepd in the fourth quarter of 2023, and 11,259 Boepd in the same period of 2023;
- $28.7 million of funds flow, compared to $34.0 million in the fourth quarter of 2023 and $39.9 million for the first quarter of 2023;
- $0.04 per share of funds flow, compared to $0.05 generated in the fourth quarter of 2023 and $0.06 in the first quarter of 2023;
- $0.01 per share net income in the current period, compared to $0.03 per share in the fourth quarter of 2023, and $0.03 per share during the same period the prior year;
- $36.7 million directed to exploration and development expenditures, which included drilling four (3.0 net) wells, completing two (1.7 net) wells, continuing to upgrade infrastructure and the acquisition of incremental core acreage. Capital expenditures in the period represent approximately 40% of Lucero’s 2024 budgeted capital program, setting the stage to generate meaningful free funds flow in the second half of the year; and
- $71.5 million of working capital at March 31, 2024, compared to $82.6 million of working capital at December 31, 2023, and net debt of $69.6 million at March 31, 2023.
OUTLOOK AND SUSTAINABILITY
Lucero remains in a unique position among Canadian-listed, growth-oriented exploration and production companies. The Company offers 100% exposure to U.S. light oil-weighted assets within a growth platform comprised of lower-risk, high-impact development opportunities situated in the heart of the prolific North Dakota Bakken/Three Forks play.
A prudent and measured approach to capital allocation and operational execution positions Lucero well to continue driving production growth, realizing robust operating netbacks and targeting high expected recoveries from the oil-weighted asset base. With a corporate production decline profile of approximately 30%, the Company has a proven track record of generating significant free funds flow which can be allocated to growth, a return of capital, and/or other initiatives that can directly contribute to long-term shareholder value enhancement. Looking forward, Lucero’s solid financial position affords the Company flexibility to drive continued growth while evaluating initiatives aimed at further enhancing shareholder value, such as accretive acquisitions, organic production growth and/or returning additional capital to shareholders through share buybacks.
Subsequent to the end of the quarter, Lucero posted an update to the Company’s sustainability reporting performance summary data tables, showcasing continued progress across key environmental, social and governance (“ESG”) metrics. Lucero plans to issue comprehensive Sustainability Reports on a periodic basis to align with significant changes in the underlying business and operations. In the interim, the Company will provide annual updates to the key performance data tables to ensure stakeholders have access to the latest sustainability information.
The Company is proud to highlight the following key operational and financial attributes:
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Production Guidance |
2024E Average: 10,100 Boepd1 2024E Exit: 10,300 Boepd1 |
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Total Proved plus Probable Reserves2 |
Approx. 56 MMboe (82% light oil and liquids) |
|
Development Inventory |
>30 net undrilled locations at Dec 31, 2023 |
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Corporate Production Decline |
Approx. 30% |
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2024 Exploration and Development Expenditures |
US$65 million (approx. C$88 million3) |
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Working capital |
C$71.5 million at Mar 31, 2024 |
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Common Shares outstanding (basic) |
646 million at Mar 31, 2024 |
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____________________________ |
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1 Approximately 60% light oil, 20% NGL and 20% conventional natural gas. |
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2 All reserves information in this press release are gross Company reserves, meaning Lucero’s working interest reserves before deductions of royalties and before consideration of Lucero’s royalty interests. The reserve information for Lucero in the foregoing table is derived from the independent engineering report effective December 31, 2023 prepared by Netherland, Sewell & Associates, Inc. (“NSAI”) evaluating the oil, NGL and natural gas reserves attributable to all of the Company’s properties. |
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3 Assumes a foreign exchange rate of US$1.00 = C$1.36. |
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