Cardinal Energy (CJ) Q3 2024 earnings summary

Executive summary

• Q3 2024 production averaged 21,128 boe/d, impacted by planned and unplanned facility turnarounds and voluntary natural gas shut-ins due to low prices.

• Adjusted funds flow was $65.7 million, funding drilling and SAGD project development.

• Net debt increased to $119.2 million, with a net debt to adjusted funds flow ratio of 0.5x.

• Development capital expenditures totaled $33.2 million, with ten (9.3 net) wells drilled across Alberta and Saskatchewan.

• The Reford SAGD project remains on schedule and on budget, with 30% of forecasted costs incurred by Q3.

Financial highlights

• Petroleum and natural gas revenue was $148.0 million, down 13% year-over-year.

• Adjusted funds flow declined 19% year-over-year to $65.7 million.

• Net income was $25.1 million, down 36% from Q3 2023.

• Dividends declared were $28.7 million ($0.18/share), consistent with the prior year.

• Free cash flow for the quarter was $32.6 million.

Outlook and guidance

• Q4 2024 production is expected to exceed 22,000 boe/d as new wells come online.

• Capital for the remainder of 2024 will focus on advancing the Reford SAGD project.

• The Reford SAGD project is expected to achieve initial steam in Q3 2025 and extend reserve life.

• Management plans to bring curtailed natural gas production back when prices improve.