Tenth Avenue Petroleum Corp. ("TPC" or the "Company") is pleased to announce its financial and operating results for the three months ended September 30, 2022. The associated management's discussion and analysis ("MD&A") and unaudited interim statements as at the end of the three months ended September 30, 2022 can be found at www.sedar.com and www.tenthavenuepetroleum.com
The Company's key achievements in the third quarter of 2022 included the following:
- October production was 158 boe/d based on field estimates.
- Achieved production average of 120 boe/d (93% Oil and NGLs) in Q3/22 (1).
- Closed an acquisition on September 30, 2022, of 38 boe/d (69% Oil and NGLs) for a total consideration of $777,260 on favorable metrics of $20,500/flowing boe.
- Cash flow from operating activities was $270,889 in Q3/22 and $332,496 for the nine months ended September 30, 2022.
- Adjusted funds flow was $712,490 for the nine-month period ended September 30, 2022.
- Exited the third quarter with no debt and a working capital surplus of $1,162,237.
- Executed the Company's annual maintenance program
The acquisition of Danzig assets was accounted for under IFRS 3 Business Combinations. The Company did not recognize any of the production, income or expenses during the period, however the assets and liabilities have been accounted for during the third quarter.
Selected Quarterly Information
The Company's average production was 120 boe/d in Q3/22, down slightly from Q2/22 due to production downtime associated with annual well maintenance. Cash provided from operating activities increased by 81% to $270,889 in Q3/22, compared to Q2/22. Total capital expenditures during Q3/22 decreased by 71% to $72,302 from $250,365 in Q2/22. The Company used the warm seasonal conditions to perform its annual maintenance program on three Murray Lake wells, including replacing injection packers, increasing pump handling capacity for future EOR volumes. The Company also completed the replacement of its downhole pump on a Hays well.
The Company maintained a strong balance sheet, exiting Q3/22 with a net surplus of $1,162,237, including $846,649 in cash.
On September 30, 2022, the Company closed the acquisition of 38 boe/d (69% Oil and NGLs), including 26 bbls/d of light oil in the Vulcan area of Alberta, from Danzig Resources Ltd. The consideration was cash of $417,260 plus 1,500,000 common shares valued at $0.24/share (the market price of TPC shares on the date of closing), for total consideration of $777,260 after working capital adjustments. The Company's October field production estimate, including the acquired assets, is approximately 158 boe/d.
The Company has commenced pipeline construction and the tie-in of its 85% working interest gas well at 02/6-11-15-26W4 which was included in the Danzig acquisition. The tie-in will be funded from existing cash on hand and is expected to be on production by the end of November.
The Company continues to execute on its strategy of delivering disciplined and accretive per share growth. TPC will continue to balance organic growth with future acquisitions opportunities as cash flows fluctuate due to commodity price volatility.
