The following is a summary of the PrairieSky Royalty Ltd. (PREKF) Q2 2024 Earnings Call Transcript:
Financial Performance:
PrairieSky Royalty reported a record oil royalty volume of 13,312 barrels per day in Q2 2024, up 6% from Q2 2023.
Total production volumes averaged 25,320 BOE per day.
Royalty revenue reached $125.5 million, with oil generating 89% of total royalty revenue.
Realized oil price was $91.75 per barrel, resulting in a significant revenue increase due to a tighter WCS heavy oil differential post-Trans Mountain Pipeline.
Funds from operations were $106.1 million, 16% ahead of Q2 2023.
Declared a dividend of $59.7 million, with a payout ratio of 56%.
Business Progress:
Multilateral wells accounted for 43% of drilling on PrairieSky lands, a significant increase over previous years.
Record leasing activity with 55 new arrangements involving 46 distinct oil companies.
Development of new play concepts by the technical team suggests promising future projects.
Anticipate strong oil royalty production from the Clearwater and Mannville stack plays.
Opportunities:
The operational efficiencies and enhanced recoveries from multilateral drilling and water and polymer floods are expected to drive future performance.
Risks:
Well spuds were down in Q2 2024 due to seasonal impacts, potentially affecting short-term production rates.
More details: PrairieSky Royalty Ltd IR
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