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Pieridae Releases Q1 2022 Results

Press Release

Higher Commodity Prices, Cost Discipline Drive a 127% Increase in Net Operating Income
Growing Interest in Proposed LNG Project

Key Highlights:

  • During Q1 2022:
    • Generated Net Operating Income1 (“NOI”) of $47.3 million ($0.30 per basic and fully diluted share), up 127% from the comparable period in 2021;
    • Generated Adjusted Funds Flow from Operations1 (“AFFO”) of $45.1 million ($0.29 per basic and fully diluted share), up 203%; generated net income of $10.5 million ($0.07 per basic and fully diluted share), up 154% from the comparable period in 2021;
    • Generated petroleum and natural gas revenue of $129.8 million, up 48% from the comparable period in 2021;
    • Netback per boe increased 146% to $12.98/boe from $5.27/boe in the comparable period in 2021;
    • Total production of 40,491 boe/day weighted 77% to natural gas production of 188 MMcf/day
  • Subsequent to the quarter end, repaid $6.7 million of senior term debt maturing October 16, 2023;
  • Proposed East Coast LNG Project continues to generate broad stakeholder interest

(1) Refer to the “non-GAAP measures” section on pages 13-14 of the Company’s Q1 2022 MD&A

CALGARY, ALBERTA – May 12, 2022 ‐ Pieridae Energy Limited (“Pieridae” or the “Company”) (PEA.TO) released its Q1 2022 financial and operating results today, highlighted by the positive impact higher commodity prices have had on our business, resulting in material increases in NOI, AFFO, net income, petroleum and natural gas revenue, and netback per boe.

“We achieved solid financial results, managed our costs and, subsequent to the end of the quarter, began to reduce our debt principal. Higher commodity prices have allowed us to make meaningful progress on our plan and we forecast strong cash flows for the remainder of 2022. We committed to shareholders that we would right the ship and we are doing so,” said Pieridae’s Chief Executive Officer Alfred Sorensen. “Our leadership team will continue to focus on refinancing and repayment of our debt, as well as demonstrating that the conventional Foothills play is a competitive supplier of natural gas in the Western Canada Sedimentary Basin and throughout North America.”

“The invasion of Ukraine and the global issues it created has moved countries to aggressively look for alternate, secure supplies of natural gas away from Russia. Pieridae’s proposed net‐zero LNG export project off the East Coast continues to make sense and conversations with a broad list of stakeholders are ongoing as many want to see Canada offer leadership in a meaningful way to support a long‐term solution by providing Canadian natural gas overseas in an environmentally and socially responsible manner.”

Production in the first quarter of 2022 averaged 40,491 boe/day in Q1 2022, a decrease 8% from 43,997 boe/day in Q1 2021 and was significantly impacted by the January 2022 temporary shut‐in of production in Central Alberta due to a commercial dispute, which was amicably resolved later in the same month. Pieridae also experienced unplanned maintenance downtime at the Waterton and Jumping Pound facilities. First quarter 2022 production compared to the fourth quarter of 2021 was consistent.

Q1 2022 Financial Highlights

View Table

(1) Refer to the “non-GAAP measures” section on pages 13-14 of the Company’s Q1 2022 MD&A


View Table

Commodity Pricing and Hedge Position
Energy markets have seen a drastic change in fundamentals between 2021 and 2022. The AECO monthly natural gas price index increased 51% in the first quarter of 2022 compared to 2021. Average North American crude oil prices increased 64% in the first quarter of 2022 compared to the first quarter of 2021 based upon WTI futures pricing Canadian condensate differentials to WTI also improved due to typical seasonal factors, including strong oil sands production and competition for imported supply. The start‐up of Enbridge’s recently expanded Line 3 pipeline has provided significant additional capacity to accommodate growing Canadian crude oil production.

As a result of these market factors, Pieridae’s average realized natural gas price was $4.08/Mcf, which includes the impact of fixed price natural gas forward sales contracts settled during the quarter. 68,596 GJ/d of fixed price natural gas contracts are in place at a weighted‐average price of $2.64/GJ over a term of 12 months as of March 31, 2022.

Pieridae’s realized condensate price was $106.13/bbl. Physical fixed‐price forward condensate sales contracts (C$WTI basis) are in place averaging 553 bbl/d for the balance of the year 2022 at an average price of C$108.02/bbl. Subsequent to quarter end, Pieridae added an additional condensate forward sales contract (C$WTI basis) for 500 bbl/d at C$123.59 for July to December 2022.

2022 Guidance
Pieridae’s near‐term priority is to continue to improve flexibility by strengthening the balance sheet, sustaining production, implementing cost control initiatives, optimizing infrastructure logistics and executing non‐core asset dispositions. Subject to final approval, planning for a modest drilling program in the second half of 2022 is currently underway. This drilling program would continue into Q1 2023, with additional 2023 drilling contingent on success of the initial 2022 drilling program, commodity pricing, and cash flow. If successful, production from the initial drilling program would commence in Q1 2023.

Pieridae’s Board of Directors approved the 2022 budget in November 2021. The chart below highlights the Company’s updated guidance reflecting higher commodity process for the balance of 2022:

View Table

(1) Refer to the “non‐GAAP measures” section on pages 13‐14 of the Company’s Q1 2022 MD&A.
(2) 2022 outlook assumes average 2022 AECO price of $4.96/Mcf and average 2022 WTI price of USD$88.09/bbl and accounts for fixed price forward commodity sales contracts as of March 31, 2022
(3) Comprised of facility maintenance and turnaround capital expenditures
(4) Comprised of seismic, development and land capital expenditures

About Pieridae
Pieridae is a majority Canadian‐owned corporation based in Calgary that was founded in 2011. The Company is focused on the exploration, extraction and processing of natural gas as well as analyzing options for a reconfigured LNG Project that fits with the current environment and would supply Europe and other markets. Pieridae provides the energy to fuel people’s daily lives while supporting the environment and the transition to a lower‐carbon economy. After completion of all the transactions disclosed in this news release, Pieridae has 157,641,871 common shares issued and outstanding which trade on the TSX (PEA.TO).

For further information please contact:

Alfred Sorensen, Chief Executive Officer
Telephone: (403) 261‐5900
[email protected]

Adam Gray, Chief Financial Officer
Telephone: (403) 261‐5900


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