Logan Energy announces record production and cash flow with third quarter 2024 results

Logan Energy Corp. is pleased to announce its operating and financial results for the three and nine months ended September 30, 2024, and to provide details of its expanded Duvernay land position along with an operations update.

Selected financial and operational information set out below should be read in conjunction with the Company’s unaudited interim financial statements and related management’s discussion and analysis (“MD&A“) as at and for the three and nine months ended September 30, 2024 and 2023. These documents are filed on SEDAR+ at www.sedarplus.ca and are available on the Company’s website at www.loganenergycorp.com. The highlights reported throughout this press release include certain non-GAAP measures and ratios which have been identified using capital letters and are defined herein. The reader is cautioned that these measures may not be directly comparable to other issuers; refer to additional information under the heading “Reader Advisories – Non-GAAP Measures and Ratios”.

THIRD QUARTER 2024 HIGHLIGHTS
Logan achieved corporate record quarterly average production of 9,942 BOE per day (35% liquids), an increase of 84% compared to 5,394 BOE per day (24% liquids) in the same quarter of 2023.
The increase in production is a culmination of an active drilling program in the first half of the year, pursuant to which Logan brought six wells onstream to date in 2024, including a three well pad at Pouce Coupe in mid-May and a three well pad at South Simonette in late-July.
Logan also reported strong financial results for the third quarter driven by significantly lower per unit costs, highlighting the Company’s operating leverage and continued momentum of its organic development program.
The Company’s Operating Netback after hedging averaged $21.35 per BOE during the quarter ended September 30, 2024, an increase of 95% from $10.94 per BOE in the comparative quarter ended September 30, 2023.
Despite AECO 5A natural gas prices reaching a 20 year quarterly average low of $0.65 per GJ during the third quarter, Logan’s average realized selling price was bolstered by significant oil production growth together with continued strength of crude oil prices.
Operating expenses averaged $9.58 per BOE in the third quarter, a decrease of 39% from $15.80 per BOE the comparative quarter of 2023.
The Company’s average royalty rate decreased to 8.0% in the current quarter reflecting the benefit of royalty incentives on new production as well as materially lower natural gas prices.
Logan generated record Adjusted Funds Flow of $17.6 million ($0.04 per share, diluted) in the third quarter of 2024, up 242% from $5.2 million ($0.01 per share, diluted) in the third quarter of 2023.
Capital Expenditures before A&D were $31.4 million for the three months ended September 30, 2024, of which Logan spent $5.9 million on land and lease retention, $17.1 million on completions, and $8.4 million on facilities, pipelines and well equipment.
As of September 30, 2024, Logan had Net Debt of $35.1 million or 0.5 times its annualized Adjusted Funds Flow for the third quarter.

Subsequent to the quarter on October 3, 2024, the Company further strengthened its liquidity and financial position:
Closed a bought-deal private placement equity financing for gross proceeds of $50.0 million. Net proceeds were used initially to repay outstanding bank debt in full. Directors and officers of the Company participated for approximately $5.0 million or 10% of the private placement. Established new committed credit facilities with aggregate borrowing capacity of $125.0 million.

EXPANDED DUVERNAY POSITION
During the third quarter, Logan acquired 35.5 net sections of Duvernay acreage at Two Creeks, Alberta, within the greater Kaybob area. The Two Creeks asset is situated on the east side of Kaybob in the oil window and adds 34 net locations to Logan’s drilling inventory. The lands are proximal to existing Duvernay producers which largely de-risk the land base. The asset is located near existing infrastructure, high grade roads and water sources making it well situated for development. Logan expects to allocate capital to the Two Creeks asset within the next two years.

In total, Logan’s Duvernay position at North Simonette, Ante Creek, and Two Creeks is now comprised of an aggregate of 187.5 net sections and 174 net drilling locations. An updated land map can be found in Logan’s corporate presentation at www.loganenergycorp.com.

OPERATIONS UPDATE
The Simonette “4-10” three well pad has now been onstream for approximately 100 days. For the first 90 days on production, the pad averaged 292 bbls/d of oil, 28 bbls/d of NGLs and 3.7 mmcf/d of natural gas (931 BOE/d, 34% liquids) per well. While the 4-10 results are within Logan’s range of expectations, the Company plans to revert back to NCS single point entry well design for the next phase of drilling.

The Lator “13-34” single exploratory well was tied into permanent facilities in October. The well flows through a third-party pipeline which has had intermittent run time and as a result the well has only been on production for 25 days. The current water cut remains elevated, however the well continues to clean up.

The Company has commenced its winter drilling program with the first well on the “11-22” pad at South Simonette spud in mid-October. The rig will drill the planned Simonette wells this winter prior to moving to Pouce Coupe in the spring.

Since publishing our preliminary budget for 2025, strip pricing for AECO natural gas has decreased by approximately 25% to a forecast of approximately $1.90 per GJ on average for calendar 2025, relative to our budget pricing of $2.50 per GJ. The Company continues to monitor the current commodity price environment and may consider reallocating capital within its 2025 budget to more liquids-rich opportunities.

To date in 2024, the Company has shut-in uneconomic natural gas production at its non-core northeastern British Columbia property and has also deferred certain production optimization projects until gas prices recover resulting in approximately 670 BOE per day of production behind pipe. While these uneconomic shut-ins, project deferrals and initial performance at Lator will put pressure on Logan’s ability to achieve its stated annual production guidance of approximately 8,700 BOE per day for calendar 2024, our annual Adjusted Funds Flow guidance for 2024 remains intact.

SUBSEQUENT EVENTS
On October 3, 2024, Logan closed the previously announced $50.0 million bought deal private placement of approximately 68.5 million common shares at an issue price of $0.73 per common share. Concurrently, the Company established new committed credit facilities in the aggregate principal amount of $125.0 million, comprised of a $75.0 million revolving credit facility and $50.0 million term facility, which together replaced the Company’s $75.0 million demand credit facility.

As of the date hereof, Logan has an average of 1,375 bbls/d of oil hedged at an average WTI price of $99.26 per barrel (approximate Canadian dollar equivalent) for calendar 2025, representing approximately 35% of forecasted crude oil and condensate production (net of royalties). Additionally, the Company has AECO swaps in place for an average of 10,863 GJ/d of natural gas at $2.34 per GJ on average for calendar 2025, representing approximately 20% of forecasted natural gas production (net of royalties).