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Prairie Provident Resources continues to focus on executing its capital program at Wheatland

In light of the commodity price environment, the company made a conscious decision to scale back its 2017 capital program and to defer certain projects to 2018 to preserve liquidity and to protect project economics.
Prairie drilling
The Evi properties provide the company with a stable cash flow base that complements the development programs in other areas

The third quarter saw a sharp increase in production for Prairie Provident Resources Inc (TSE:PPR).

The company formed from the combination of Lone Pine Resources and Arsenal Energy said third quarter production averaged 5,506 barrels of oil equivalent per day (boepd), of which 61% was liquids.

That represented an 81% increase from the same period of 2016, primarily due to production additions from the successful Wheatland drilling program, the Arsenal acquisition, and the acquisition in March of high-quality, light oil assets in the Greater Red Earth area of Northern Alberta.

It was not all sweetness and light, however, as the energy firm also saw natural production declines, extended downtime related to wet weather conditions, a scheduled turnaround of the Evi main battery and other minor maintenance.

Oil and natural gas revenue rose to $16.61mln from $9.33mln the year before.

Adjusted funds from operations of $4.5-million, equivalent to four cents per diluted share, were up 151% year-on-year.

Operating netbacks after realized hedging gains were $13.95/boe, a decrease of $3.17/boe from the third quarter of 2016, primarily due to lower realized gains on derivative instruments.

The net loss widened slightly to $11.99mln from $11.59mln the year before, with the performance hit by a non-cash impairment losses of $3.4mln (2016: $1.7mln); an unrealized loss of $2.6mln (2016: $1.9mln) on derivative instruments, and depletion and depreciation of $8.6mln (2016: $4.2mln).

“Looking to the fourth quarter of 2017, operations will be focused on bringing a Princess well drilled during the third quarter on production and completing the tie-in of two standing wells in the same area,” the company said.

“Encouragingly, oil prices have trended up through the latter half of October and into early November; the company will continue to monitor pricing conditions for hedging opportunities and will adjust its pace of development to ensure optimal rates of return on investments. If oil prices remain favourable, the company has the flexibility to accelerate its development. The company's scalable approach centres around its core strategy -- delivering growth through adjusted funds from operations,” it added.

Shares in Prairie were off 4.5 cents in lunchtime trading at C$0.465.

 

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