Pieridae Energy Limited, a leading Canadian energy company, has announced the successful execution of another stage of its corporate strategy. The company has closed the sale of its Goldboro asset, fully repaid a high-interest bridge loan, and completed an equity private placement, all of which are significant achievements that solidify its financial position and pave the way for future growth.

Unlocking Value, Reducing Debt, and Securing Funding

Goldboro Asset Sale and Bridge Loan Repayment

Pieridae's management team has demonstrated its ability to navigate challenging market conditions and make strategic decisions that benefit the company and its shareholders. The successful conclusion of the Goldboro asset sale for $12 million and the repayment of the $24 million bridge loan are important milestones that strengthen Pieridae's financial footing. By shedding the Goldboro asset and eliminating the high-interest debt, the company has freed up resources to focus on its core operations and pursue more profitable opportunities.

Equity Private Placement

Pieridae's recent equity private placement, which raised $29 million with a $25 million commitment from AIMCo, an existing shareholder, further bolsters the company's financial position. This infusion of capital will enable Pieridae to invest in strategic initiatives, such as a high-impact well and facility optimization program, that are expected to increase production, improve operational efficiency, and lower costs. The successful completion of this equity offering demonstrates the confidence that Pieridae's shareholders have in the company's long-term prospects.

Operational Highlights and Prudent Decision-Making

Pieridae's operational performance during the third quarter of 2024 was also noteworthy. The company produced 23,116 boe/d and generated Net Operating Income of $19.8 million, a testament to the effectiveness of its commodity price hedge program and the prudent decision to shut in uneconomic production flowing to third-party facilities. This move not only improved short-term NOI but also preserved the company's reserves for the long-term benefit of shareholders.

Maintenance Turnaround and Facility Optimization

Pieridae's planning, operations, and maintenance personnel also deserve recognition for their successful completion of the Waterton gas plant turnaround shortly after the end of the third quarter, which was executed on budget. This achievement highlights the company's commitment to maintaining its critical infrastructure and ensuring the reliability of its processing facilities. Additionally, Pieridae's plans to invest a portion of the rights offering proceeds in a well and facility optimization program are expected to further enhance production, efficiency, and cost savings.

Navigating Challenging Market Conditions

Pieridae's management team has demonstrated its ability to navigate the challenging natural gas pricing environment, as evidenced by the company's decision to temporarily shut in selected low-margin properties. This proactive approach has allowed Pieridae to optimize its NOI during periods of sustained low commodity prices, while preserving the value of its reserves for future reactivation when market conditions improve.

Hedging Strategy and Risk Management

Pieridae's comprehensive hedging strategy, which includes physical and financial contracts for natural gas, condensate, and power, has been instrumental in protecting the company's cash flow and enabling it to fund its operations, capital requirements, and debt service obligations. The discounted unrealized gain on the company's hedge positions at the end of the third quarter was approximately $85 million, further strengthening Pieridae's financial resilience.

Outlook and Strategic Priorities

Looking ahead, Pieridae's priorities for 2024 remain focused on maximizing the reliability of its operated processing facilities, reducing operating expenses, optimizing fuel gas consumption, and continuing to deleverage its balance sheet. The company's 2024 capital budget is targeted at low-cost well and facility optimization projects, as well as the completion of the Waterton gas plant turnaround.Pieridae's management team has demonstrated its ability to navigate challenging market conditions, make strategic decisions, and execute on its corporate objectives. The successful completion of the Goldboro asset sale, bridge loan repayment, and equity private placement, coupled with the company's operational performance and prudent risk management, position Pieridae for continued success in the years to come.