The following is a summary of the Topaz Energy Corp. (TPZEF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Topaz's Q4 averaged 19,600 BOE per day in royalty production, a 10% YoY increase and 4% higher than its previous record.
Q4 royalty revenue stood at $64.3 million, representing 78% of total revenue and a 99% operating margin.
The total realized royalty price for Q4 was $35.72 per BOE, with a full-year figure of $36.4 per barrel before hedging.
The company recognized a hedging gain of $300,000 in Q4 and $9.3 million for the year.
Net debt was reduced by 16% to $342.7 million or 1.1x debt-to-EBITDA.
Cash flow of $72.4 million was generated in Q4, with 62% going to shareholders via dividends.
The company reported $105 million in excess free cash flow for the year.
Business Progress:
A 2% increase was noted in the number of gross wells spud on Topaz's acreage in 2023.
Topaz has hedged 18% of its estimated natural gas production for 2024 at a fixed price of $3.17 per Mcf.
A floor price of CAD 103.25 per barrel has been set for about 30% of estimated oil and liquid production in 2024.
The dividend per share was increased to $0.32, a growth of 60% since Q1 2020.
2024 guidance expects 18,800 to 19,600 BOE per day in royalty and $69 million to $71 million in infrastructure processing revenue.
Operations are set to begin soon on two major infrastructure projects, TMX and LNG Canada.
The company anticipates higher activity on Keystone Royalty and Reserve Royalty lands. However, future projections are conservative due to uncertainties around drilling activity timings and volumes.
More details: TOPAZ ENERGY CORP IR
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