PTRUF/PRQ.TO US$1.77
Petrus Energy is a Canadian energy company. I like this one because of the financial results so far, projections for next year AND the mgmt.
Petrus changed mgmt in 2021. Ken Gray took over as CEO. They wanted to increase production but their bank was not helpful so they refinanced their debt. Ken and his brothers put in a tremendous amount of equity resulting in 74% insider ownership. In addition one of the brothers loaned the company $25million for three years in a second lien position to the bank that provides Petrus with a revolving line of credit. In addition to the tremendous equity contribution, Don Gray is the largest shareholder and Chairman, holding 34% of the common shares. Don Gray is also founder and CEO of Peyto,. a natural gas producer that started out as a penny stock and is now a 2.2 billion dollar major in Canadian natural gas production.
Petrus has 122 million shares outstanding.
In the latest Q3 report, Petrus averaged 6,639boepd at 71% gas and 29% liquids. Petrus is projecting exiting 2022 at 10,500boepd.
Guiding for $130-135million capex in 2023 allowing the company to average 13,000 to 13,500boepd. That should result in a 75% increase in production in 2023 as well as a 65% increase in cashflow to C$140-150million depending on commodity prices.
Petrus's main production comes from the Ferrier fields in Alberta. In addition to substantial acreage, Petrus owns the processing facilities for their production.
Petrus has low debt of C$48million. In addition to Ferrier they have substantial acreage positions in Thorsby and Foothills with steady, low decline production. They also have drilling sites in Kakwa which are oil heavy and represent future growth. Petrus focuses on high payback wells that payoff drilling costs within 6 months. They are a leader in this drilling metric.
Petrus is already a success story, starting with an C$.81 share price a year ago vs C$2.44 now. 52week hi was c$3.42. I missed this stock in 2021 but with a double in production coming in 2023, this should still take off.
The change in lending and decrease in debt allowed Petrus to rapidly expand production.
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