Prospera Energy Inc. 2023 was a transformational year for Prospera transforming to horizontal well technology in the Saskatchewan heavy-oil fields. Also, to initiate medium/light-oil development to diversify from predominately a heavy oil producer. The company successfully drilled, completed, and tied in 9 horizontal wells in its Saskatchewan heavy-oil fields and 1 slanted well in its Alberta medium/light-oil field. PEI attained a gross peak rate of 1,800+ boe/d, with total estimated capability at 2,200 boe/d. However, low commodity prices and 2023 Q1 cold weather conditions offset PEI’s production increases.
2023 financial highlights are as follows:
PEI realized average net sales of 723 boe/d (847 boe/d gross) in Q4 2023, an increase of 86% from Q4 2022 levels, and average net sales of 505 boe/d (621 boe/d gross) in 2023, an increase of 18% from 2022 levels.
PEI realized average sales prices of $71.48/boe in 2023, compared to $89.13/boe in 2022.
Realized a positive operating netback of $3,356,774 in 2023.
PEI’s 2023 third party reserves report highlights include the following:
Before Tax PDP reserves increase of 508% from $4.4m to $27.1m in 2023 using a discount rate of 10%
Before tax 2P reserves increased by $60.8m from $72.5m to $133.3m in 2023 using a discount rate of 10%.
Total proved and probable reserves value increased by 25% from 4,306 to 5,403 Mboe.
In 2023 PEI raised $16.0m in financing whilst extending matured convertible debt of $1.5m to 2025, allowing for PEI capital development without affecting working capital:
$9.1m through warrant exercises, at an average price of $0.068/share.
$3.6m through the issuance of two-year promissory notes.
$3.0m through the issuance of a GORR.
$1.3m through the issuance of units consisting of common shares and warrants.
Prospera’s capital development program consisted of 9 heavy oil horizontal wells and 1 medium oil vertical well and contributed an additional 1,000 bpd of additional production capability.
Restructuring efforts continue to improve Prospera’s balance sheet:
Increased Property and Equipment balance to $38.8 from $29.0m on December 31, 2022.
Positive Shareholders Equity balance of $1.2m compared to a deficit of $6.2m on December 31, 2022.
Restructured Prospera continues to increase its asset value by executing the development programs to capture the significant remaining reserves. In 2023, PEI experienced a $12.4million increase in total assets.
2024 Outlook
2023 transformational development yielded initial production rates much higher than expected production rates. As result, the asset value of Prospera increased to 133MM$ (2023 NPV10-2P reserves value). This robust increase stems from initial exploitation of medium-oil property and only one of the three core oil properties. The upside for exploitation at hand for Prospera is significant. In 2024, Prospera will continue to extend its transformational development accessing untapped reserves while reducing the environmental footprint. Further, expand these developments to the remaining core properties that have much larger reserves in place.
