- Cardinal Energy (CJ) records second quarter 2022 operating and financial results
- Free cash flow also increased to $103.3 million, which enabled the company to lower its debt
- In addition, net debt decreased by $85.2 million to $62.0 million, a 58 per cent decrease over the balance listed on March 31
- Since implementing an NCIB in June, Cardinal bought back 3,000,000 shares for cancellation at an average cost of $7.09 per share
- Cardinal continued to focus on strong corporate emissions performance with ongoing CO2 sequestration in Saskatchewan
- Cardinal Energy Ltd. (CJ) is in the green by 4.79 per cent, trading at C$9.18 at 12:04 pm EST
Cardinal Energy (CJ) announced its record operating and financial results for Q2, which ended on June 30.
The second quarter in 2022 consists of solid drilling results coupled with lower than forecasted base decline rates.
Free cash flow also increased to $103.3 million, which enabled the company to lower its debt. In addition, net debt decreased by $85.2 million to $62.0 million, a 58 per cent decrease over the balance listed on March 31.
As for the net operating expenses, it decreased quarter over quarter despite inflationary pressures impacting the industry.
The higher commodity prices combined with increased production elevated the company’s adjusted funds flow by 48 per cent over Cardinal’s previous record in the first quarter of 2022 to a new corporate form of $128.3 million or $0.82 per diluted share.
Since implementing an NCIB in June, Cardinal bought back 3,000,000 shares for cancellation at an average cost of $7.09 per share.
During the second quarter, it also purchased through its independent trust 1.7 million shares to be used for the potential settlement of restricted and performance awards.
The company’s low decline crude oil focus has increased our second quarter 2022 netback per boe to $66.51/boe, up 135 per cent over the same period in 2021, while the adjusted funds flow per boe has increased to a record $63.31/boe.
In Q2, the company spent $25.0 million on development capital expenditures, which included drilling seven (6.3 net) wells and completing five (4.7 net) wells. Two (1.6 net) wells were completed in July.
In addition, Cardinal spent $8.1 million to construct new facilities and upgrade existing infrastructure across our asset base and continued with the enhanced oil recovery program.
Cardinal continued to focus on strong corporate emissions performance with ongoing CO2 sequestration in Saskatchewan and implementation of various emissions reduction projects across Alberta.
To date, the Midale CCS EOR project has sequestered over five million tonnes of CO2 and has reduced oil production decline rates from this project to approximately 3 per cent to 5 per cent.
Cardinal’s safety record continues to be in the industry’s top tier.
Since 2020, Cardinal has continued actively participating in various government programs focused on site closure, including abandonments, decommissioning and reclamation.
The company went on to spend around 90 per cent of the nearly $30 million in allocated funding. In addition, Cardinal’s 2022 asset retirement obligation budget has been increased to $19 million, four times the required regulatory spend requirements.
According to the company, these numbers demonstrate Cardinal’s commitment to maintaining a low environmental footprint.
The Board of Directors has approved a massive $30 million increase to Cardinal’s 2022 capital budget.
As of July 28, Cardinal has purchased for cancellation 3,000,000 common shares at an average cost of $7.09 per common share, 2 per cent of its outstanding shares.
The company is looking to continue to reduce its external risk factors with a strategy of being debt free by the end of 2022.
Cardinal also anticipates that its net debt will decrease to under $50 million in the third quarter when it revisits its overall shareholder return strategy with an increase in the dividend rate.
With the implementation of the NCIB, it is looking forward to a balanced dividend increase with opportunities to utilize the NCIB.
Cardinal continually works to improve its Environmental, Social and Governance profile and operates its assets responsibly and environmentally sensitively.
Cardinal Energy Ltd. (CJ) is in the green by 4.79 per cent, trading at C$9.18 at 12:04 pm EST.