Canada’s Advantage Energy reports Q3 records
Canadian producer Advantage Energy, active on the Alberta side of the Montney basin, on October 28 reported record production and free cash flow in Q3 2021 and accelerated its debt reduction efforts, potentially to begin returning capital to shareholders.
Total production increased 13% from Q3 2020, to 50,025 barrels of oil equivalent (boe)/day from 44,448 boe/day, with natural gas production jumping to 271.8mn ft3/day from 238.3mn ft3/day. Liquids production was virtually unchanged, slipping to 4,724 b/d from 4,729 b/d.
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“Operational performance of our summer development program exceeded expectations, with many of our new wells ranking amongst the best producers in our history,” the company said. “With elevated commodity prices presiding through much of the quarter and excess plant capacity available for new volumes, the average payout of new wells fell to less than seven months from the on-stream date.”
Third quarter net income rebounded to C$43.1mn (US$34.9mn) from a loss of C$21.6mn in Q3 2020, while cash provided by operating activities rose to C$47mn from C$25.3mn. Adjusted funds flow (AFF) reached a record C$63.4mn while free cash flow rose to a record C$32mn and net debt fell to C$167.9mn, or 0.9x of AFF, it said.
Going forward, Advantage said it would continue to grow its gas-weighted assets by 10% utilising existing capacity at its Glacier natural gas plant, grow liquids production to balance its exposure to gas pricing and pursue new revenue-generating cleantech investments through its Entropy subsidiary, which is rolling out modular carbon capture and storage (CCS) technology at several locations.
Modules for the first phase of its Glacier CCS project are under construction at fabrication yards in Alberta, and the facilities are expected to be on-stream in April 2022.