Paramount Resources (POU) Q4 2023 earnings summary

Executive summary

• Record 2023 sales volumes averaged 96,393 Boe/d, with liquids at 46%; Q4 volumes reached 101,348 Boe/d.

• February 2024 non-core Kaybob asset sale generated ~$47 million in cash proceeds; 2024 production and free cash flow guidance were revised lower.

Financial highlights

• 2023 net income was $470.2 million, down from $680.6 million in 2022; basic EPS was $3.29 versus $4.83.

• 2023 cash from operating activities was $938.2 million ($6.56/basic share); adjusted funds flow was $965.3 million ($6.75/basic share).

• 2023 free cash flow was $168.4 million ($1.18/basic share); Q4 free cash flow was $59.7 million ($0.41/basic share).

• Capital expenditures were $732.1 million in 2023, versus $655.0 million in 2022; asset retirement obligation settlements were $54.6 million, versus $36.1 million.

Outlook and guidance

• 2024 sales volume guidance was revised to 100,000–106,000 Boe/d, midpoint 103,000 Boe/d, from prior guidance of 108,000–116,000 Boe/d.

• Revised 2024 free cash flow forecast is $235 million, down from $350 million; it excludes the $47 million Kaybob disposition proceeds.

• 2024 capital expenditure guidance remains $830–890 million, including $415–445 million each for sustaining and maintenance and growth; abandonment and reclamation spending is $40 million.

• 2024 volume guidance is 96,000–100,000 Boe/d in H1 and 104,000–112,000 Boe/d in H2; midpoint program, abandonment spending and regular dividend are fully funded under forecast assumptions.

• Revised free cash flow is $235 million at WTI US$80/Bbl, NYMEX US$3.50/MMBtu and AECO $2.84/GJ; alternatives yield $135 million and $25 million at lower prices.