Birchcliff Energy (BIR) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 average production of 78,358 boe/d, up 1% year-over-year, with 83% natural gas, 8% NGLs, 6% condensate, and 3% light oil.

• Reported net income to common shareholders of $46.4 million ($0.17 per share), up 8% from Q2 2023, driven by a $70.7 million unrealized gain on financial instruments.

• Adjusted funds flow was $53.7 million ($0.20 per share), down 23% year-over-year, primarily due to a 32% drop in realized natural gas prices.

• Brought 11 new wells on production in Q2, all exceeding internal production estimates.

• Declared a Q3 2024 dividend of $0.10 per share, payable September 27, 2024.

Financial highlights

• Petroleum and natural gas revenue was $147.0 million, down 14% year-over-year.

• Cash flow from operating activities was $26.9 million, a 57% decrease from Q2 2023.

• Free funds flow was $5.3 million, compared to $4.9 million in Q2 2023.

• F&D capital expenditures totaled $48.4 million in Q2, with 1 well drilled and 11 wells brought on production.

• Total debt at June 30, 2024 was $465.2 million, up 67% year-over-year.

Outlook and guidance

• 2024 annual average production guidance tightened to 75,000–77,000 boe/d (from 74,000–77,000), reflecting strong well performance.

• Adjusted funds flow and free funds flow guidance lowered due to weaker commodity price forecasts; year-end total debt now expected at $495–$515 million.

• F&D capital expenditures guidance raised to $250–$270 million (from $240–$260 million) to account for additional Elmworth drilling.

• Operating and royalty expense guidance per boe lowered due to reduced power, fuel, and commodity price assumptions.

• Remaining 11 wells of 2024 capital program to be brought on in Q4, targeting higher natural gas prices.