The following is a summary of the Saturn Oil & Gas Inc. (OILSF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Saturn Oil & Gas reported Q1 average production of 26,000 BOE per day, resulting in Net Operating Income of $96 million.
The company realized an operating netback of $40 per BOE compared to $47 per BOE in Q4 2023, driven by widening WTI MSW differential and cold weather impacts on production.
Saturn reported a cash flow of $68 million or $0.46 per share and invested $40 million in capital expenditures.
The company saw free cash flow of $34 million, which it used for debt repayment, reducing its net debt to $386 million by the end of Q1.
Through the sale of its Swan Hills package and a significant acquisition in Saskatchewan, the company projects net debt to be $792 million post-transaction.
Business Progress:
Saturn started the year with strong initial production rates from nine wells drilled in Southeast Saskatchewan and Central Alberta, despite temporary impacts from adverse weather conditions.
Despite a temporary shutdown, causing a decrease of 300 barrels per day in quarterly average production, the company reported no permanent damage.
The company's acquisition of assets in Saskatchewan, expected to close in June, positions it for a 60% increase in crude oil production to 86% liquids weighting.
With the new oil production currently unhedged, Saturn expects to see an increase in their average sale price and netback per BOE.
Saturn targets a production rate of 40,000 BOE per day for the next year, with a projected run-rate revenue exceeding $1 billion.
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