LUCERO ENERGY CORP. Management's Discussion and Analysis
For the three months ended
March 31, 2024 and 2023
MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis (the "MD&A") has been prepared by management and was reviewed and approved by the Board of Directors of Lucero Energy Corp. ("Lucero" or the "Company") on May 16, 2024. This MD&A should be read in conjunction with the Company's unaudited interim consolidated financial statements as at and for the three months ended March 31, 2024 and the audited consolidated financial statements as at and for the year ended December 31, 2023. The reader should be aware that the operating results discussed below may not be indicative of future performance.
The financial data presented below has been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board, unless otherwise indicated.
Frequently Used Terms
Term | Description |
Bbl(s) | Barrel(s) |
Boe | Barrel(s) of oil equivalent |
Bbls/d | Barrels per day |
Boepd | Barrels of oil equivalent per day |
HH | Henry Hub, reference price paid in US$ for natural gas deliveries |
Mcf | Thousand cubic feet |
Mmbtu | Million British Thermal Units |
Mmbtu/d | Million British Thermal Units per day |
NGLs | Natural gas liquids |
WTI | West Texas Intermediate, reference price paid in US$ for crude oil of standard grade |
Barrel of Oil Equivalent Advisory
Where amounts are expressed on a Boe basis, natural gas volumes have been converted to Boe using a ratio of 6,000 cubic feet of natural gas to one barrel of oil (6 Mcf:1 Bbl). This Boe conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The value ratio between the commodities, based on the price of crude oil compared to natural gas, could be significantly different from the energy equivalency of 6 Mcf: 1 Bbl, and therefore utilizing this conversion ratio may be misleading as an indication of value.
Presentation of Volumes
The Company's reserves have been categorized as Tight Oil, Shale Gas, and Natural Gas Liquids pursuant to National Instrument 51- 101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Production volumes and per Boe calculations are presented on a gross working interest basis, before royalty interests, unless otherwise stated.
Functional and Presentation Currency
Amounts in this MD&A are in Canadian dollars, which is the Company's presentation currency, unless otherwise stated. Transactions of the Company's US subsidiary are recorded in US dollars, as this is the primary economic environment in which this subsidiary operates. The US subsidiary has a US dollar functional currency. In translating the financial results from US dollars to Canadian dollars, the Company uses the following method: assets and liabilities are translated at the exchange rate in effect as at the date of the consolidated balance sheet; revenues and expenses are translated at the rate effective at the time of the transaction or the average rate for the month; and changes in shareholders' equity are translated at the rate effective at the time of the transaction. Unrealized gains and losses resulting from the translation to the Canadian dollar presentation currency are included in other comprehensive income.
Lucero Energy Corp. | Q1 2024 | Page 2 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Non-GAAP and Other Financial Measures
Throughout this MD&A and in other materials disclosed by the Company, Lucero uses certain measures to analyze historical financial performance, financial position and cash flow. These non-GAAP and other financial measures are not defined by IFRS and therefore may not be comparable to performance measures presented by others. These non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are defined by IFRS, such as net income or cash provided by operating activities, as indicators of the Company's performance.
Non-GAAP Financial Measures
Exploration and Development Expenditures
Lucero uses exploration and development expenditures to measure the Company's investments in capital compared to the Company's annual capital budget. The most directly comparable GAAP measure to exploration and development expenditures is additions to property, plant and equipment in the cash provided by (used in) investing activities. The reconciliation between additions to property, plant and equipment, as defined by IFRS, and exploration and development expenditures, as defined herein, is as follows:
Three months ended | ||
March 31, | ||
($ thousands) | 2024 | 2023 |
Additions to property, plant and equipment | $37,188 | $32,059 |
Capitalized general and administrative expenses | (473) | (744) |
Exploration and development expenditures | $36,715 | $31,315 |
Funds Flow and Adjusted Funds Flow
Funds flow represents cash provided by operating activities prior to changes in non-cash working capital and settlement of decommissioning obligations, including cash finance expenses. Adjusted funds flow represents cash provided by operating activities prior to changes in non-cash working capital, settlement of decommissioning obligations and transaction related costs, including cash finance expenses. Lucero considers these measures to be useful as they assist in the determination of the Company's ability to generate liquidity necessary to finance capital expenditures and service its debt. Transaction related costs are incurred during asset acquisitions or dispositions, corporate acquisitions, or corporate reorganizations and are typically not considered a cost incurred in the normal course of business. As a result, excluding transaction related costs from funds flow further assists in the determination of the Company's ability to generate liquidity in the normal course of business.
Three months ended | ||
March 31, | ||
($ thousands) | 2024 | 2023 |
Cash provided by operating activities | $24,603 | $34,918 |
Finance income (expenses) - cash | 682 | (1,587) |
Settlement of decommissioning obligations | 967 | - |
Changes in non-cash operating working capital | 2,448 | 6,563 |
Funds flow | $28,700 | $39,894 |
Transaction related costs | - | - |
Adjusted funds flow | $28,700 | $39,894 |
Lucero Energy Corp. | Q1 2024 | Page 3 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")
Lucero uses adjusted EBITDA, which represents cash provided by operating activities prior to changes in non-cash working capital, to measure the Company's ability to generate funds to service debt and other obligations and to fund the Company's operations, without the impact of changes in non-cash working capital which can vary based solely on timing of settlement of accounts receivable and accounts payable. The reconciliation between cash flow from operating activities, as defined by IFRS, and adjusted EBITDA, as defined herein, is as follows:
Three months ended | ||
March 31, | ||
($ thousands) | 2024 | 2023 |
Cash provided by operating activities | $24,603 | $34,918 |
Changes in non-cash operating working capital | 2,448 | 6,563 |
Adjusted EBITDA | $27,051 | $41,481 |
Operating Netback
Operating netback represents petroleum and natural gas revenues, less royalties, operating expenses, production taxes, and transportation expenses. Lucero believes that in addition to net income and cash provided by operating activities, operating netback is a useful supplemental measure as it assists in the determination of the Company's operating performance, leverage, and liquidity. Operating netback is commonly used by investors to assess performance of oil and gas properties and the possible impact of future commodity price changes on energy producers.
The table below discloses Lucero's operating netback, including the reconciliation to the Company's most closely comparable GAAP measure, petroleum and natural gas revenues.
Three months ended | ||
March 31, | ||
($ thousands) | 2024 | 2023 |
Petroleum and natural gas revenues | $50,530 | $73,727 |
Royalties | (8,009) | (13,131) |
Operating expenses | (7,808) | (9,611) |
Production taxes | (3,639) | (5,870) |
Transportation expenses | (1,382) | (1,742) |
Operating netback | $29,692 | $43,373 |
Working Capital (Net Debt)
Working capital (net debt) represents current assets less total liabilities (excluding decommissioning obligations, deferred tax liability, and lease liability). Lucero believes working capital (net debt) is a key measure to assess the Company's liquidity position at a point in time. Working capital (net debt) is not a standardized measure and may not be comparable with similar measures for other entities. The reconciliation between current assets, as defined by IFRS, and working capital (net debt), as defined herein, is as follows:
As at March 31, 2024 | As at December 31, 2023 | As at March 31, 2023 | |
Total current assets | $124,968 | $113,842 | $29,020 |
Total liabilities | (117,008) | (89,689) | (143,701) |
Decommissioning obligations | 4,102 | 4,623 | 6,654 |
Deferred tax liability | 58,529 | 52,865 | 37,474 |
Lease liability | 871 | 950 | 945 |
Working capital (net debt) | $71,462 | $82,591 | ($69,608) |
Lucero Energy Corp. | Q1 2024 | Page 4 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Non-GAAP Financial Ratios
Adjusted EBITDA per Share Basic and Diluted
The Company calculates adjusted EBITDA per share basic and diluted as adjusted EBITDA divided by weighted average basic and diluted shares outstanding, respectively. Adjusted EBITDA is a non-GAAP financial measure. Lucero believes that adjusted EBITDA per share basic and diluted are key industry performance measures of the Company's ability to generate liquidity and are common measures within the oil and gas industry.
Funds Flow and Adjusted Funds Flow per Share Basic and Diluted
The Company calculates funds flow per share basic and diluted as funds flow divided by weighted average basic and diluted shares outstanding, respectively. Adjusted funds flow per share basic and diluted is calculated as adjusted funds flow divided by weighted average basic and diluted shares outstanding, respectively. Funds flow and adjusted funds flow are non-GAAP financial measures. Lucero believes that funds flow per share basic and diluted and adjusted funds flow per share basic and diluted are key industry performance measures of the Company's ability to generate liquidity and are common measures within the oil and gas industry.
Operating Netback per Boe
The Company calculates operating netback per Boe as operating netback divided by production for the period. Operating netback is a non-GAAP financial measure. Lucero believes that operating netback per Boe is a key industry performance measure of operational efficiency and are common measures within the oil and gas industry.
Supplementary Financial Measures
In this MD&A, the Company uses the following supplementary financial measures, which have the following meaning.
"Average realized NGLs price" (per Bbl) is comprised of NGLs commodity sales from production, as determined in accordance with IFRS, divided by the Company's NGLs production, expressed in US$ or C$, as applicable.
"Average realized shale gas price" (per Mcf) is comprised of shale gas commodity sales from production, as determined in accordance with IFRS, divided by the Company's shale gas production, expressed in US$ or C$, as applicable.
"Average realized tight oil price" (per Bbl) is comprised of tight oil commodity sales from production, as determined in accordance with IFRS, divided by the Company's tight oil production, expressed in US$ or C$, as applicable.
"Depletion and depreciation expenses per BOE" is comprised of the Company's depletion and depreciation expenses, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
(continued)
Lucero Energy Corp. | Q1 2024 | Page 5 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
"Impairment (impairment recovery) per BOE" is comprised of the Company's impairment, or impairment recovery for the period, as the case may be, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Net G&A expenses per BOE" is comprised of the Company's gross G&A expenses, as determined in accordance with IFRS, less capitalized G&A, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Operating expenses per BOE" is comprised of the Company's operating expenses, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Petroleum and natural gas revenues, per BOE" is comprised of petroleum and natural gas revenues, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Petroleum and natural gas revenues, net, per BOE" is comprised of petroleum and natural gas revenues, net of royalties, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Production taxes per BOE" is comprised of the Company's production taxes, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Realized loss on financial derivatives, per BOE" is comprised of the Company's realized loss on financial derivatives, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Royalties per BOE" is comprised of royalties, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Royalties as a percentage of revenue" is comprised of royalties, as determined in accordance with IFRS, divided by petroleum and natural gas revenues as determined in accordance with IFRS.
"Net share-based compensation expenses per BOE" is comprised of the Company's net share-based compensation expenses, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Operating expenses per BOE" is comprised of the Company's operating expenses, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Transaction related costs per BOE" is comprised of the Company's transaction related costs, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Transportation expenses per BOE" is comprised of the Company's transportation expenses, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
"Unrealized gain (loss) on financial derivatives per BOE" is comprised of the Company's unrealized gain (loss) on financial derivatives, as determined in accordance with IFRS, divided by the Company's total production (on a BOE basis).
Lucero Energy Corp. | Q1 2024 | Page 6 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Forward-Looking Statements
This MD&A contains forward looking statements and forward-looking information (collectively, "forward looking statements") within the meaning of applicable Canadian securities laws. The use of any of the words "expect," "anticipate," "continue," "estimate," "objective," "ongoing," "may," "will," "project," "should," "believe," "plans," "intends," "strategy," and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this MD&A contains forward-looking information and statements pertaining to the following: Management's assessment of future plans and operations, the Company's plans, focus and strategy, the Company's intention to use derivative instruments, the term out and maturity dates of the senior credit facility and the timing for the next borrowing base review thereunder, methods the Company will use to monitor cash flow, and the Company's expectation to receive the full amount of the Deferred Proceeds (as defined herein).
The forward-looking information and statements included in this MD&A are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: risks associated with oil and gas development, exploitation, production, marketing and transportation of oil, natural gas (including as it relates to the Dakota Access Pipeline and other transportation methods), and natural gas liquids, loss of markets, determinations by OPEC and other countries as to production levels, events resulting from hostilities in the Ukraine, Middle East and elsewhere, the results of litigation matters, volatility of commodity prices, currency fluctuations, inability to transport or process natural gas at economic rates or at all, imprecision of reserve estimates, environmental risks, competition from other producers, impacts of inflation, inability to retain drilling rigs and other services at reasonable costs or at all, unforeseen challenges or circumstances in drilling, equipping and completing wells leading to higher capital costs than anticipated, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions or drilling operations, risks associated with Lucero's non-operated status on some of its properties, risks associated with the availability of transportation of the Company's production through pipeline and other systems; the failure to receive the full amount of the Deferred Proceeds in the time frames anticipated, or at all; risks associated with pricing and costs inflation; production delays resulting from an inability to obtain required regulatory approvals or services, unfavorable weather, or the tie- in of associated natural gas production and an inability to access sufficient capital from internal and external sources.
The Company's actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Forward looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although Lucero believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this document and other documents filed by the Company, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic, regulatory and political environment in which Lucero operates; the outcome of various legal and other administrative matters effecting the Company and/or its properties; the ability of the Company to obtain and retain qualified staff, equipment and services in a timely and cost efficient manner; the impact of inflation on the Company's costs; drilling results; the ability of the Company and the operators of its non-operated properties to operate in the field in a safe, efficient, compliant and effective manner; Lucero's ability to obtain financing on acceptable terms or at all; changes in the Company's credit facilities including changes to borrowing base and maturity dates; receipt of regulatory approvals; field production rates and decline rates; the ability of the Company, and the operators of its non-operated properties, to tie-in associated natural gas production in an economic manner, or at all; the ability to manage lease operating and transportation costs; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the ability to convert non-producing proved and undeveloped or probable oil and natural gas reserves to producing reserves; the timing and costs of pipeline, storage and facility construction and expansion; the ability of the Company to secure adequate transportation for commodity production; future petroleum and natural gas prices; differentials between benchmark commodity prices and those received by the Company for its production in the field; currency exchange and interest and inflation rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; Lucero's ability to successfully drill, complete and commence production at commercial rates from its operated wells; and Lucero's ability, or those of the operators of its non-operated properties, to successfully market its petroleum and natural gas products. Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the System for Electronic Document Analysis and Retrieval ("SEDAR+") website (www.sedarplus.ca) or at the Company's website (www.lucerocorp.com). Furthermore, the forward looking statements contained in this document are made as at the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Lucero Energy Corp. | Q1 2024 | Page 7 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Financial and Operational Highlights
Three months ended | ||
Financial ($ thousands, except share amounts) | March 31, | |
2024 | 2023 | |
Petroleum and natural gas revenues | $50,530 | $73,727 |
Cash provided by operating activities | $24,603 | $34,918 |
Net income | $9,239 | $18,469 |
Per share - basic | $0.01 | $0.03 |
Per share - diluted | $0.01 | $0.03 |
Funds flow (1) | $28,700 | $39,894 |
Per share - basic (3) | $0.04 | $0.06 |
Per share - diluted (3) | $0.04 | $0.06 |
Adjusted funds flow (1) | $28,700 | $39,894 |
Per share - basic (3) | $0.04 | $0.06 |
Per share - diluted (3) | $0.04 | $0.06 |
Adjusted EBITDA (1) | $27,051 | $41,481 |
Per share - basic (3) | $0.04 | $0.06 |
Per share - diluted (3) | $0.04 | $0.06 |
Exploration and development expenditures (1) | $36,715 | $31,315 |
Working capital (net debt) (1) | $71,462 | ($69,608) |
Number of common shares outstanding | ||
Shares outstanding, end of period | 646,313,567 | 662,410,687 |
Weighted average - basic | 647,001,809 | 662,410,687 |
Weighted average - diluted | 661,881,140 | 671,483,753 |
Operating | ||
Daily production (2) | 5,160 | 6,904 |
Tight oil (Bbls) | ||
Shale gas (Mcf) | 13,363 | 12,719 |
Natural gas liquids (Bbls) | 2,628 | 2,235 |
Barrels of oil equivalent | 10,015 | 11,259 |
Average realized price: | $100.62 | $104.80 |
Tight oil ($/Bbls) | ||
Shale gas ($/Mcf) | $1.86 | $5.64 |
Natural gas liquids ($/Bbls) | $4.29 | $10.70 |
Barrels of oil equivalent ($/Boe) | $55.44 | $72.76 |
Operating netback ($ per Boe) (3) | $55.44 | $72.76 |
Petroleum and natural gas revenues | ||
Royalties | ($8.79) | ($12.96) |
Operating expenses | ($8.57) | ($9.48) |
Production taxes | ($3.99) | ($5.79) |
Transportation expenses | ($1.52) | ($1.72) |
Operating netback (1) | $32.57 | $42.81 |
- Non-GAAPmeasure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Refer to the section "Non-GAAP and Other Financial Measures" contained within this MD&A.
- The Company's reserves have been categorized as Tight Oil, Shale Gas, and Natural Gas Liquids pursuant to National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
- Non-GAAPratio or supplementary financial measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Includes a non-GAAP financial measure component of funds flow, adjusted funds flow, adjusted EBITDA or operating netback, as applicable. Refer to the section entitled "Non-GAAP and Other Financial Measures" contained within this MD&A for an explanation of composition.
Lucero Energy Corp. | Q1 2024 | Page 8 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Description of Business
Lucero Energy Corp. ("Lucero" or the "Company") is an independent oil company focused on the acquisition, development, and production of oil-weighted assets in the Bakken and Three Forks formations in the Williston Basin area of North Dakota. The Company's common shares are listed on the TSX Venture Exchange under the "LOU" ticker symbol.
The Company has corporate offices located at Suite 1024, 222 - 3rd Avenue SW, Calgary, Alberta T2P 0B4 and at 303 E. 17th Avenue, Suite 940, Denver, CO 80203.
Property Acquisition
During the three months ended March 31, 2024, Lucero closed an acquisition of top-up working interests in the Company's core Williston Basin area for total cash consideration of $2.0 million.
Property Disposition
On June 15, 2023, Lucero closed a disposition of certain non-operated oil and gas properties within the Company's North Dakota Bakken/Three Forks play (the "Disposition") for a sale price of $140.2 million before closing adjustments. As customary, at the time of closing, the purchase and sale agreement provides that receipt of $6.6 million of the cash consideration is to be deferred subject to any bona fide indemnity claims made by the purchaser (the "Deferred Proceeds"). If no such indemnity claims exist, the Deferred Proceeds are to be fully paid to Lucero on or before June 15, 2024. The Company believes it is more likely than not that the $6.6 million of Deferred Proceeds will be received in full. As at March 31, 2024, $3.3 million of Deferred Proceeds have been received by the Company and no indemnity claim has been made by the purchaser. The effective date of the Disposition was January 1, 2023 and after closing adjustments, net cash proceeds were $130.5 million including receipt of the Deferred Proceeds. The proceeds from the property disposition exceed the net book value of the properties disposed, resulting in a gain of $3.0 million.
Purchase price | $140,173 |
Closing adjustments | (8,656) |
Foreign exchange impact | (1,064) |
Proceeds from property disposition (including Deferred Proceeds of $6.6 million) | $130,453 |
Net book value of properties disposed, net of decommissioning obligations | 127,454 |
Gain on disposition | $2,999 |
Results of Operations
Production
Tight oil (Bbl per day) Shale gas (Mcf per day) Natural gas liquids (Bbl per day)
Total (Boe per day) Liquids percentage of total
Three months ended March 31,
20242023
5,160 6,904
13,363 12,719
2,628 2,235
10,015 11,259
78%81%
Total production during the three months ended March 31, 2024 decreased 11%, compared to the three months ended March 31, 2023 (the "Corresponding Period"). The decrease is due to the Disposition, partially offset by production from new wells drilled and completed subsquent to the Disposition.
Lucero Energy Corp. | Q1 2024 | Page 9 |
MANAGEMENT'S DISCUSSION AND ANALYSIS
Pricing
Three months ended | |
March 31, | |
2024 | 2023 |
Average Benchmark Prices (US$): | $76.97 | $76.11 |
Crude oil - WTI (per Bbl) | ||
Natural gas - HH spot (per Mcf) (1) | $2.04 | $2.70 |
Average Differential (US$): | ($2.36) | $1.37 |
Crude oil - (per Bbl) | ||
Natural gas - (per Mcf) (1) | ($0.66) | $1.47 |
Average Realized Prices (US$): | $74.61 | $77.48 |
Tight oil (per Bbl) | ||
Shale gas (per Mcf) | $1.38 | $4.17 |
Natural gas liquids (per Bbl) | $3.18 | $7.91 |
Average Realized Prices (C$): | $100.62 | $104.80 |
Tight oil (per Bbl) | ||
Shale gas (per Mcf) | $1.86 | $5.64 |
Natural gas liquids (per Bbl) | $4.29 | $10.70 |
- Includes conversion from Mmbtu to Mcf.
The Company's average differential for crude oil widened to a discount during the three months ended March 31, 2024. Crude oil pricing differentials are largely a function of global and regional supply/demand fundamentals as well as crude oil quality, transportation and inventories.
Henry Hub benchmark natural gas prices in the three months ended March 31, 2024 decreased compared to the Corresponding Period, as North American and global supply/demand fundamentals subsided. NGL prices in the three months ended March 31, 2024 reflected the significant oversupply of the domestic liquids market.
Revenues and Royalties
Three months ended | ||
March 31, | ||
($ thousands, except where noted) | 2024 | 2023 |
Tight oil | $47,246 | $65,117 |
Shale gas | 2,259 | 6,458 |
Natural gas liquids | 1,025 | 2,152 |
Petroleum and natural gas revenues | $50,530 | $73,727 |
Less: royalties | (8,009) | (13,131) |
Petroleum and natural gas revenues, net | $42,521 | $60,596 |
Royalties as a percentage of revenues | 16% | 18% |
Per Boe amounts: | $55.44 | $72.76 |
Petroleum and natural gas revenues | ||
Less: royalties | (8.79) | (12.96) |
Petroleum and natural gas revenues, net | $46.65 | $59.80 |
Revenues in the three months ended March 31, 2024 decreased 31% compared to the Corresponding Period. The decrease was due to lower production volumes after the Disposition and lower realized commodity prices.
The Company's royalty rate as a percentage of revenues decreased for the three months ended March 31, 2024, compared to the Corresponding Period. The decrease was due to the Disposition, which eliminated wells that incurred higher royalty rates, and also due to increased production from wells that benefit from lower royalty rates.
Lucero Energy Corp. | Q1 2024 | Page 10 |
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Lucero Energy Corp. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 20:48:19 UTC.
