Petrus Resources Ltd. (PRQ) Earnings Call Transcript

Good day, and thank you for standing by. Welcome to the Petrus Resources Q2 2025 Results Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ken Gray.

Hello, and thanks for joining Petrus Resources 2025 Q2 Earnings Call. My name is Ken Gray, CEO of Petrus, and I'm joined here by our executive team of Matthew Wong, CFO; Matt Skanderup, COO; and Lindsay Hatcher, VP Commercial and Corporate Development. Q2 results were quite robust as we started to see the results of our accelerated capital spending in the first half of the year. Production started to tick up as we brought on five 2 net (sic) [ 2.0 net ] wells in our North Ferrier area in May. This was made possible by the completion of the North Ferrier pipeline extension, connecting our Ferrier gas plant to the furthest north of our Cardium acreage. This is the area where we drilled the company's best Cardium well back in 2021, but have not been able to follow it up due to lack of pipeline and processing capacity in the area. The North Ferrier pipeline extension has eliminated that issue. Early results from the 5 wells drilled are very positive, and production is still being significantly choked on those wells as we balance and optimize our infrastructure. We also drilled and completed four 2.0 net wells in our core Ferrier area, which came on production in early July. These were 2-mile wells that employed a design that has evolved from our continuing efforts to lower costs while maintaining or improving well productivity. And the average cost of the wells came in 30% below what we had been achieving over the last few years. Production from the wells is on type curve, and will contribute further to production growth in Q3. We completed drilling two 1.3 net additional Belly River wells in July. Completions have commenced on those wells, and they should be on production later this month. This makes 3 Belly River oil wells that we have drilled this year, and we have several more locations identified for future drilling. As planned, we are pausing our drilling program for now after accelerating certain capital projects into the first half of the year for strategic reasons. Planned capital spending for the remainder of the year is expected to be within the guidance we provided earlier this year of $40 million to $50 million for the year. We are also confident we will meet our other areas of guidance with production averaging between 9,000 and 10,000 BOEs per day. Funds flow in the range of $45 million to $55 million, and net debt unchanged from last year. And we will continue to provide our monthly dividend to our shareholders, currently generating a generous yield of over 8%. With that, I'll open the floor to questions.

Thanks for calling in and for your continued interest and support of Petrus. This concludes the conference. Thank you for your participation. You may now disconnect.