Weak gas prices hit Advantage Energy in Q3
Canadian Montney producer Advantage Energy said October 24 it had a Q3 2024 net loss of C$6.49mn (US$4.7mn) against net income of C$28.3mn in the same period a year ago, attributing the loss to weaker natural gas prices, particularly in western Canada.
Excluding derivatives, Advantage’s realised natural gas price averaged just C$1.20/’000 ft3 in the third quarter, down from C$2.76/’000 ft3 in the same period a year ago. The daily price at the AECO hub in western Canada, where Advantage marketed nearly a quarter of its production, averaged just C$0.69/’000 ft3 in the third quarter, compared to C$2.60/’000 ft3 in Q3 2023.
An aggressive hedging programme yielded Q3 realised gains on natural gas derivatives of C$16.3mn and unrealised gains of C$5.5mn and pushed Advantage’s average realised natural gas price, including derivatives, to C$1.65/’000 ft3.
Weaker prices in the quarter were partially offset by a 9% increase in natural gas production, to 369.3mn ft3/day from 339.7mn ft3/day in Q3 2023. At the same time, crude oil production climbed 168%, largely reflecting the impact of assets acquired in June 2024.
Late in the quarter, in response to prices at AECO that fell at times to near zero, Advantage announced it would curtail up to about 130mn ft3/day of dry gas production until prices recover. The curtailments reduced Q3 natural gas production by about 31mn ft3/day, Advantage said.
Cash provided by operating activities in Q3 2024 fell to C$46.7mn from C$90.4mn in Q3 2023, while adjusted funds flow declined to C$52.3mn from C$81.9mn.