Strong Growth in Oil Royalty Volumes and Drilling Activities: PrairieSky Royalty Ltd. Expands in Western Canada
2023-07-25
PrairieSky Royalty Ltd. (PREKF) held its Q2 2023 Earnings Call to discuss the company's operational and financial performance. The meeting shed light on the growth in oil royalty volumes, drilling activities, leasing activity, and potential expansion in the Western Canadian Sedimentary Basin. Participants included Andrew Phillips, Pam Kazeil, and Cam Proctor, all from PrairieSky Royalty Ltd.
During the call, the management of PrairieSky Royalty Ltd. reported a solid second quarter in 2023. They witnessed a 6% increase in oil royalty volumes compared to the first six months of 2022. Additionally, the number of wells drilled rose by 21% compared to the same period last year, with the Viking and Clearwater plays being the most active. The company also entered into 39 new leases, generating $5.7 million in bonus revenue. Looking ahead, PrairieSky Royalty Ltd. anticipates increasing capital expenditures in the Western Canadian Sedimentary Basin over the next five years, driven by the growing profitability and healthy balance sheets of Canadian oil producers.
The key drivers of PrairieSky Royalty Ltd.'s business include the acquisition of 15-year oil sands leases, the development profile and economics of the acquired asset, synergies and shared resources, and an inflection in well results in Western Alberta.
In terms of the company's outlook, PrairieSky Royalty Ltd. expressed positivity for the quarter and year ahead. They expect gas volumes to return to more normalized levels for the remainder of the year, and the high-rate Montney wells that came online in Q2 are projected to contribute to gasoline production in the latter half of the year. However, it is important to note that the company did not provide specific guidance during the call.
Overall, PrairieSky Royalty Ltd.'s Q2 2023 Earnings Call highlighted the company's strong performance in terms of oil royalty volumes, drilling activities, and leasing activity. With a positive outlook for the future, PrairieSky Royalty Ltd. aims to capitalize on the opportunities presented in the Western Canadian Sedimentary Basin and continue its growth trajectory.