Forza Petroleum Q2 2022 Financial and Operational Results
28 July 2022
Calgary, Alberta, July 28, 2022
Revenue increases another 20% in the second quarter versus the first quarter of 2022; profit up more than 600% versus the second quarter of 2021
Forza Petroleum Limited (“Forza Petroleum” or the “Corporation”) today announces its financial and operational results for the three and six months ended June 30, 2022. All dollar amounts set forth in this news release are in United States dollars.
Financial Highlights:
- Revenue of $98.8 million for Q2 2022, consisting of an average realized sales price of $94.28/barrel of oil (“bbl”) on working interest oil sales of 877,500 bbl and $16.0 million in recovery of carried costs
- The Corporation has received full payment in accordance with production sharing contract entitlements for all oil sales into the Kurdistan Oil Export Pipeline through April 2022
- Field operating costs, representing the Corporation’s working interest share of operating expenses, of $6.0 million ($6.85/bbl) for Q2 2022 versus $4.8 million ($6.56/bbl) for Q2 2021
- Field operating costs per bbl are up 4% versus the comparable period because of increases in security, diesel and consumable costs, partially offset by a 20% increase in sales volumes
- Profit of $31.5 million ($0.05 per common share) in Q2 2022 versus $4.4 million ($0.01 per common share) in Q2 2021 primarily the result of an increase in net revenue
- Net cash generated from operating activities was $45.6 million in Q2 2022 versus $14.6 million in Q2 2021
- Net cash used in investing activities during Q2 2022 was $18.7 million, including payments related to drilling and facilities work in the Hawler license area, versus $6.5 million in Q2 2021
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$43.5 million of cash and cash equivalents as of June 30, 2022
Operations Update:
- Average gross (100%) oil production of 14,800 bbl/d (working interest 9,600 bbl/d) in Q2 2022.
- During the second quarter of 2022, the Demir Dagh-14 well was completed in the Cretaceous reservoir and turned over to production. The well has since been connected by flowline to Demir Dagh production facilities.
- A sidetrack of the previously drilled Demir Dagh-9H well targeting the Cretaceous reservoir reached total depth on July 2, 2022. Clean-up and evaluation of the well is underway.
- Workover operations on the Demir Dagh-13 well were undertaken mid-July to replace a leased jet pump with a progressive cavity pump owned by the Corporation.
- Mobilization of a drilling rig is underway to convert the previously drilled Zey Gawra-2 well to a water disposal well.
- For the balance of 2022, the Corporation will continue to advance its forecasted 2022 work program including the completion of the Ain al Safra-2 well, drilling one new well in each of the Tertiary and Cretaceous reservoirs of the Zey Gawra field, and redrilling the horizontal drain of the temporarily abandoned Zey Gawra-6 well in the Cretaceous reservoir.
- Planned facilities’ work for the balance of 2022 includes installation of a pipeline connecting the Banan field to the Hawler production facilities at the Demir Dagh field.
Liquidity Outlook:
- The Corporation expects cash on hand as of June 30, 2022 and cash receipts from net revenues from sales, exclusively made to the Kurdistan Regional Government at the tie-in to the Kurdistan Oil Export Pipeline, will fund its forecasted capital expenditures and operating and administrative costs through the end of September 2023 and the $76.2 million in deferred purchase consideration, falling due at end of March 2023, owing in connection with the original acquisition of the Hawler license area.
CEO’s Comment
Commenting today, Forza Petroleum’s Chief Executive Officer, Vance Querio, stated:
“Higher oil prices and stable production further strengthened Forza Petroleum’s financial position during the second quarter of 2022, as demonstrated by a cash and cash equivalents balance of $43.5 million at period end. The Corporation’s liquidity permits continued execution of our work program for 2022.
Although not immune to supply chain challenges and higher costs for certain operating items, we continue to maintain a high level of activity in the Hawler area while we pursue efforts to identify operating efficiencies and reduce unit operating cost. 2022 is on track to be Forza Petroleum’s most successful year yet.”
Complete press release:
PR-Q22022_Results.pdf