Key Financial Highlights for Q2 2024:
- Net Income: Prospera reported a net income of $137,933 in Q2 2024, a major turnaround from a net loss of $779,438 in Q2 2023.
- Production and Sales:
- Net Sales: The company realized average net sales of 696 boe/d (gross 813 boe/d) in Q2 2024, marking a 34% increase from Q2 2023 net sales of 478 boe/d (gross 609 boe/d). This growth was driven by the successful implementation of the 2023 development program.
- Sales Revenue: Sales revenue rose by 69%, reaching $5,164,586 in Q2 2024 compared to $3,041,561 in Q2 2023, attributed to both higher production volumes and increased price levels.
- Operating Expenses:
- Operating expenses per barrel were reduced by 11%, dropping to $32.87/boe in Q2 2024 from $36.89/boe in Q2 2023. This reduction is due to the increased production volumes, which helped spread costs more efficiently.
- Operating Netback:
- The company saw a significant increase in its operating netback, which rose by $1,534,079 quarter over quarter, reaching $2,628,444 in Q2 2024 ($42.87/boe) compared to $1,094,365 in Q2 2023 ($25.10/boe).
- Balance Sheet Enhancements:
- As of June 30, 2024, Prospera reduced its accounts payable arrears by $2,659,680 from December 31, 2023.
- Prospera also settled JV receivables and a non-core Red Earth property in exchange for an additional 7% working interest in its core Saskatchewan properties (Cuthbert, Luseland, and Hearts Hill). This transaction increased Prospera's weighted average corporate working interest to 84%.
- Financing for Development:
- In Q2 2024, Prospera entered into a loan agreement for CAD $11 million, which was closed in July 2024. Additionally, the company closed a CAD $3.4 million Gross Overriding Royalty (GORR) financing during the same quarter. Both financings are earmarked for the company's 2024 development program.
- Sales: $82.67/boe (Q2 2024) vs. $69.87/boe (Q2 2023)
- Transportation Costs: $5.41/boe (Q2 2024) vs. $3.73/boe (Q2 2023)
- Royalties: $6.92/boe (Q2 2024) vs. $7.87/boe (Q2 2023)
- Operating Costs: $27.46/boe (Q2 2024) vs. $33.16/boe (Q2 2023)
- Operating Netback: $42.87/boe (Q2 2024) vs. $25.10/boe (Q2 2023)
Year 1 (2024):
- Interest: 5% of $11 million = $550,000
- Principal repayment: $2 million - $550,000 = $1,450,000
- Debt remaining: $11 million - $1.45 million = $9.55 million
Year 2 (2025):
- Interest: 5% of $9.55 million = $477,500
- Principal repayment: $2 million - $477,500 = $1,522,500
- Debt remaining: $9.55 million - $1.5225 million = $8.0275 million
Year 3 (2026):
- Interest: 5% of $8.0275 million = $401,375
- Principal repayment: $2 million - $401,375 = $1,598,625
- Debt remaining: $8.0275 million - $1.598625 million = $6.428875 million
Year 4 (2027):
- Interest: 5% of $6.428875 million = $321,443.75
- Principal repayment: $2 million - $321,443.75 = $1,678,556.25
- Debt remaining: $6.428875 million - $1.67855625 million = $4.75031875 million
Year 5 (2028):
- Interest: 5% of $4.75031875 million = $237,515.94
- Principal repayment: $2 million - $237,515.94 = $1,762,484.06
- Debt remaining: $4.75031875 million - $1.76248406 million = $2.98783469 million
After five years, Prospera could reduce its debt from $11 million to approximately $2.99 million, assuming the above scenario.
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