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01/11 07:33
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite some challenges, the company reported a 60% increase in net revenue and a 28% increase in adjusted EBITDA, indicating strong financial performance. The share buyback program and involvement with a large oil company in a joint well project are positive indicators. However, declining net income and EPS, as well as regulatory and supply chain risks, temper the outlook slightly. Overall, the positive financial results and strategic partnerships outweigh the negatives, suggesting a positive stock price movement.
Net Revenue $58.5 million, an increase of 60% compared to the prior year due to an increase in production, partially offset by lower prices of 7%.
Adjusted EBITDA $44 million, an increase of 28% compared to $39.1 million in 2023 due to higher revenue, partially offset by higher operating and G&A expenses.
Average Production 3,478 BOE per day, an increase of 24% compared to 2,796 in the prior year due to the wells added in 2024.
Net Income $18.1 million, a decrease of 6% compared to $19.3 million in 2023.
Basic EPS $0.51 per share, compared to $0.54 per share in 2023, reflecting the decrease in net income.
Operating Expenses $7.44 per BOE, compared to $6.61 in 2023, which included $0.63 of prior year cost true-ups.
CapEx $31.3 million, a decrease of 41% compared to $53.2 million in 2023 due to cost efficiencies in field operations.
Netback from Operations $38.54 per BOE, a decrease from $42.97 in the prior year due to lower average prices of 7% and higher operating expenses.
Net Debt $28.9 million, slightly better than the lowest end of forecasted guidance.
Fourth Quarter Net Revenue $17.4 million, an increase of 29% compared to $13.4 million in the prior year quarter.
Fourth Quarter Adjusted EBITDA $13.5 million, a 28% increase from the prior year fourth quarter due to higher production, partially offset by a 17% price decrease.
Fourth Quarter Net Income $5.6 million, compared to $4.8 million in the prior year fourth quarter.
Fourth Quarter Basic EPS $0.16 per share, compared to $0.14 per share in the prior year fourth quarter.
Fourth Quarter Operating Expenses $6.59 per BOE, a decrease of 6% compared to $7.02 in the prior year quarter due to increased production.
Fourth Quarter Netback from Operations $35.94 per BOE, a decrease from $44.40 in the prior year quarter due to lower prices.
New Wells: Drilled three longer lateral wells, the 1.5 mile Alicia Renee wells, which are performing very well.
Revenue Growth: Net revenue for 2024 was $58.5 million, an increase of 60% compared to the prior year.
Production Forecast: Average production forecast for 2025 is 4,500 to 5,100 BOE per day, a 29% to 47% increase from 2024.
Operating Expenses: 2024 average operating expenses were $7.44 per BOE, including $0.63 of prior year costs.
Capital Expenditures: CapEx for 2024 was $31.3 million, a decrease of 41% from 2023.
Share Buyback Program: Purchased 280,656 shares for about $1.1 million in 2024, with plans to continue in 2025.
Production Risks: The company faces risks related to production increases, which are dependent on the successful drilling and completion of new wells. Any delays or issues in drilling could impact production forecasts.
Price Volatility: There is a risk associated with fluctuating oil and gas prices, which can significantly affect revenue and netbacks. The company reported a 7% decrease in average prices, impacting overall financial performance.
Operational Costs: Higher operating expenses were noted, which could affect profitability. The operating expenses increased to $7.44 per BOE, which is a concern if prices continue to decline.
Debt Management: The company plans to manage working capital through credit facilities, which introduces risks related to debt levels and interest rates. The forecasted net debt for 2025 is expected to be between $25 million to $30 million.
Regulatory Risks: The company operates in a heavily regulated industry, and any changes in regulations could impact operations and financial performance.
Supply Chain Challenges: Potential supply chain disruptions could affect the availability of materials and services necessary for drilling and production activities.
Economic Factors: Broader economic conditions, including inflation and market demand, could impact the company's financial performance and growth projections.
Production Growth: Production increased by 24% over 2023, with an average production of 3,478 BOE per day.
Capital Expenditures: CapEx for 2024 was $31.3 million, a decrease of 41% from 2023, reflecting cost efficiencies.
Share Buyback Program: In 2024, 280,656 shares were purchased for about $1.1 million, with plans to continue in 2025.
Operational Efficiency: Drilling times and costs have improved significantly, leading to more economic wells.
2025 Production Forecast: Average production forecast of 4,500 to 5,100 BOE per day, a 29% to 47% increase from 2024.
2025 Revenue Forecast: Revenue forecast of $75 million to $89 million, a 28% to 52% increase from 2024.
2025 Adjusted EBITDA Forecast: Adjusted EBITDA forecast of $58 million to $71 million, a 32% to 61% increase from 2024.
2025 CapEx Forecast: Forecasted CapEx of $48 million to $53 million, with plans to bring nine wells into production.
Net Debt Projection: Expected net debt of $25 million to $30 million at the end of 2025.
Share Buyback Program: During 2024, we purchased 280,656 shares for about $1.1 million. Our plan is to continue to buy back shares in 2025 while managing our cash flow needs for the new wells.
The earnings call reveals mixed signals: strong production growth and share buybacks are positives, but declining net income, netbacks, and increased OpEx are concerns. The Q&A highlights uncertainties around future drilling plans and reliance on oil prices, which could limit growth. Given these factors, the stock price is likely to remain stable, leading to a neutral sentiment.
The earnings call presents a mixed picture. Despite production increases and cost reductions, revenue and net income have declined due to lower oil prices and production disruptions. The Q&A indicates management's cautious optimism but also highlights uncertainties, particularly regarding production guidance and the potential of new wells. The positive impact of share buybacks is offset by financial risks and reliance on credit facilities. Overall, the sentiment is balanced, resulting in a neutral prediction for stock price movement.
The earnings call reveals strong financial performance with significant growth in net income, EPS, and adjusted EBITDA. Despite some uncertainties in the Q&A, the company's strategic initiatives, such as increased production and drilling efficiency, alongside shareholder returns through buybacks, paint a positive outlook. The decrease in CapEx and operational costs further supports a positive sentiment. Although commodity price fluctuations pose risks, the overall financial health and optimistic guidance suggest a positive stock price movement.
The earnings call reveals mixed results: strong revenue growth and increased production, but decreased net income and EPS. However, the continuation of a share buyback program, a potential partnership with a large oil company, and improved Q4 financial metrics suggest a positive sentiment. Despite challenges such as increased operating expenses and regulatory risks, the optimistic guidance and strategic partnerships are likely to result in a positive stock price movement over the next two weeks.
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