Kelt Exploration (KEL) Q2 2024 earnings summary

Executive summary

• Achieved positive net income for the fifteenth consecutive quarter, with Q2 2024 net income of $10.9 million, down 58% year-over-year.

• Q2 2024 average production was 30,693 BOE/d, up 3% from Q2 2023, despite shut-ins due to third-party gas plant maintenance.

• Oil and NGLs comprised 35% of Q2 production, with expectations to increase to 38–39% in H2 2024.

Financial highlights

• Q2 2024 petroleum and natural gas sales were $109.1 million, down 1% year-over-year.

• Adjusted funds from operations for Q2 2024 were $42.5 million ($0.21/share diluted), down 28% year-over-year.

• Net income for Q2 2024 was $10.9 million ($0.05/share diluted), down 58% year-over-year.

• Net debt at June 30, 2024 was $63.1 million, equating to 0.2x forecasted 2024 adjusted funds from operations.

• Capital expenditures in Q2 2024 were $73.8 million, up 64% year-over-year.

Outlook and guidance

• 2024 capital expenditure program remains at $325 million, with $171 million planned for H2 2024.

• Deferral of certain gassier wells to late 2024; potential to start 2025 drilling in Q4 2024 if cost reductions persist.

• Anticipates significant production growth with 26 new wells expected on stream by year-end.

• Expects oil and NGLs weighting to rise to 38–39% in H2 2024.