Prospera Energy Inc. (TSX.V: PEI, OTC: GXRFF) ("Prospera", “PEI” or the "Corporation")
Loan Amendment Update
The Corporation announces that it has amended its $11,000,000 promissory note, originally dated July 7, 2024, in collaboration with its principal lender. The principal balance, which was previously increased by $500,000 to $11,500,000, has now been further increased by an additional $700,000, bringing the total principal amount to $12,200,000 as of December 16, 2024. The note retains its original terms, including a 12% interest rate and a two-year maturity, with no other changes. This amendment is subject to acceptance by the TSXV.
Monthly Operational Update
This update marks the beginning of monthly production reports, designed to provide stakeholders with consistent, timely insights into operational performance and key field developments. November field production was estimated at 686 boe per day (83% oil), while December production (Dec 1-10th) has averaged 803 boe per day (83% oil). Prospera’s sales have outpaced production as the company capitalized on selling excess inventory from the Cuthbert and Brooks fields, with plans to exit the year drawing down inventory to normalized operating levels.
The company continues with its service rig workover program, currently working on well number eight (13-13-36-26W3) out of a ten well workover program, which is a Horizontal Waseca well with a higher API oil grade, much lower oil viscosity, and significantly greater reservoir exposure than other Luseland pool wells. The average cost of the first seven workovers has been under $35K per job, with efficiencies achieved through pre-planning, streamlined decision making, and strong field operations collaboration.
The program aims to complete two additional wells prior to the holiday break, after which the company will monitor and optimize well production until the new year. The rig is expected to resume operations in the first week of January, starting with work in Luseland and continuing to Cuthbert for both production well workovers, and packer repairs on injection wells.
Winterization activities have been successfully completed, improving reliability and reducing future field operating costs across all pools. Prospera is actively building an inventory of critical operational parts and supplies to minimize downtime caused by equipment failures and severe weather conditions. Older and worn-out equipment, such as wellsite engines and fan belts, are being serviced or replaced proactively to avoid inefficiencies from running equipment to failure. This has resulted in improved runtime and smoother field operations. In addition, overdue preventative maintenance tasks have been addressed, with further work planned in preparation for a comprehensive maintenance program in 2025.
With Canadian heavy oil differentials currently at record tight levels, the company has prioritized optimizing and bringing online predictable, low-decline heavy oil barrels from its Saskatchewan pools. Average oil sales pricing is $80+/bbl CAD and an operating netback of $30/bbl CAD, coupled with rising production levels, PEI is generating sufficient field operating cash flows to cover G&A, interest, AP arrears, and ongoing rig activities to further boost production. While significant optimization upside remains in Brooks, activity has been deferred to Q1 2025 to safeguard Prospera’s cash flow and strengthen its balance sheet. Recent corporate changes have significantly enhanced operational efficiency with renewed strategic focus on improving cash flow and financial health.
