Bonterra Energy Corp. (“Bonterra” or the “Company”) is pleased to announce its financial and operating results for the fourth quarter and year ended December 31, 2024. The related financial statements and notes, as well as management’s discussion and analysis along with the annual information form, all for the period ended December 31, 2024, are available on SEDAR+ at www.sedarplus.ca and on Bonterra’s website at www.bonterraenergy.com.
2024 FINANCIAL AND OPERATIONAL HIGHLIGHTS
Production achieved record annual levels in 2024 averaging 14,846 BOE per day, compared to 14,000 BOE per day (midpoint) from original guidance, resulting in approximately five percent growth year over year. Fourth quarter 2024 volumes averaged 15,619 BOE per day, a quarterly production record for the Company.
Funds Flow[1] and Adjusted Free Funds Flow1 in 2024 totaled $118.7 million ($3.18 per fully diluted share) and $10.5 million ($0.28 per fully diluted share), respectively.
Field and Cash Netbacks1 in 2024 averaged $28.34 per BOE and $21.84 per BOE, respectively, driven by Bonterra’s light oil and NGL weighted production base.
Production costs averaged $16.54 per BOE reflecting an approximate 3% increase in year over year per unit production costs, primarily due to start up activities and early stage third party infrastructure arrangements in the Charlie Lake and Montney plays and a more active year over year well reactivation program.
Capital expenditures in line with original (pre–Charlie Lake Acquisition) guidance totaling $101.1 million which included the capital program associated with the Company’s second Montney well (initially unbudgeted) in addition to the integration and execution of the Charlie Lake acquisition and subsequent four gross well capital program:
- $69.1 million of 2024 capital was directed to drilling 20 gross (18.9 net) operated wells, bringing 24 gross (22.7 net) wells onto production following their completion, equip and tie-in; and
- $32.0 million was directed to related infrastructure, recompletions and non-operated capital, including the first disposal well in the Montney play.
Net Debt1 totaled $167.2 million at year end, representing a 1.2x net debt to EBITDA1 multiple. Net Debt increased year over year by $26.8 million, primarily due to the funding of the Charlie Lake acquisition.
Reserves Growth across Proved Developed Producing (“PDP”), Total Proved (“TP”) and Total Proved plus Probable (“TPP”) of five percent, six percent and five percent, respectively, representing production replacement of 130 percent on a PDP basis, 189 percent on a TP basis and 198 percent on a 2P basis. The 2024 Reserves Report underpins a TPP Reserve Life Index2 of 19.5 years based on 2024 annual average production.
Debt Refinancing completed subsequent to year end. On January 28, 2025, Bonterra closed a private placement offering of $135 million of Senior Secured Second Lien Notes which accomplishes a significant business priority allowing the Company to advance its business plan with a long term, simplified and more flexible debt capital structure in place which includes the Company’s revolving first lien credit facility, syndicated by its supportive banking partners, and the new Notes.
OPERATIONS UPDATE
Charlie Lake
Bonterra’s Charlie Lake asset is located northwest of Grand Prairie, Alberta (Bonanza), on a contiguous 118 sections of land with two extensive land blocks of 91 and 100 percent working interest.
The Company drilled, completed, tied in and brought on production four gross Charlie Lake wells in 2024 which have exceeded expectations to date. Initial production from the two most recent wells exceeded gathering infrastructure capacity resulting in area wide production restrictions in Q4 2024, however the Company has since been able to resume unrestricted operations as of January 2025. The two most recent wells achieved 30 day peak rates at a combined 1,558 BOE per day, including approximately 390 barrels per day of light crude oil. Current total production from the Charlie Lake asset is approximately 2,100 BOE per day, including approximately 685 barrels per day of light crude oil.
Montney
Bonterra’s Montney asset is located directly north of Grand Prairie, Alberta (Valhalla), on a contiguous 52 sections of land with 100 percent working interest.
Bonterra’s first Montney well (the “4-3 well”) has been flowing unrestricted since November 2024 and is currently producing approximately 575 BOE per day, including approximately 125 barrels per day of light crude oil, 2.2 mmcf per day of conventional natural gas and 85 barrels per day of natural gas liquids. To date, the 4-3 well has cumulatively produced approximately 58,350 barrels of light crude oil, 575 mmcf of conventional natural gas and 19,200 barrels of natural gas liquids over a 13 month period, of which the majority of the producing time in the first ten months was restricted.
The Company is very encouraged with the early results of its second Montney well (the “102/4-28 well”), flowing unrestricted at current rates of approximately 915 BOE per day, including approximately 300 barrels per day of light crude oil, 3.0 mmcf per day of conventional natural gas and 105 barrels per day of natural gas liquids. The 102/4-28 well was completed with a different fracture stimulation design than the 4-3 well and was able to avoid lengthy early time production restrictions that the 4-3 well experienced. To date, over the course of approximately four months, the 102/4-28 well has cumulatively produced 35,800 barrels of light crude oil, 200 mmcf of conventional natural gas and 7,000 barrels of natural gas liquids.
The Company’s plan to continue to monitor the progress of production results from the two wells and assess long term egress solutions over the coming quarters before allocating further capital to the Montney play remains unchanged.
2025 OUTLOOK
Bonterra has two drilling rigs operating in Q1 2025, one in the Charlie Lake and one in the Cardium. The Charlie Lake program for Q1 consists of a three well pad north of the Peace River where drilling has been completed. Completion and tie in activities are expected to be finished by the end of the first quarter of 2025 with production expected to come online early in the second quarter of 2025. A further three gross Charlie Lake wells are planned to be drilled, completed, equipped and tied-in later in 2025. The Cardium Q1 program has been completed with two new gross wells now flowing inline. The Cardium capital program consists of an additional five gross operated wells to be drilled, completed, equipped and tied-in later in 2025.
Further the Company reaffirms its production and capital guidance for 2025 outlined below:
- Annual average production of 14,600 and 14,800 BOE per day3, weighted approximately 52 to 54 percent to oil and liquids; and
- Capital expenditure range of $65 million to $75 million.
The 2025 guidance does not include any potential impact of tariffs or trade-related regulations that have been announced by the U.S. and Canada, including the tariffs imposed by the U.S. on Canada effective March 4, 2025. See “Forward-looking information”.
Bonterra takes a proactive approach to mitigating risk and adding stability during periods of market volatility. The Company has secured physical delivery sales and risk management contracts for approximately 35% and 40% (net of royalties payable) of its expected crude oil production and natural gas production, respectively, through the next nine months of 2025. The Company has locked in WTI prices between $60.00 USD and $86.35 USD per barrel for 1,995 barrels per day, and natural gas prices between $1.75 and $3.30 per GJ for 17,456 GJ per day.
The Company is uniquely positioned within the junior E&P sector via the recent additions of two, high performing, light oil plays added to its portfolio at attractive acquisition costs. With over 450 identified drilling locations across the Cardium, Charlie Lake and Montney plays, Bonterra is able to generate stronger capital efficiencies that are driving an improving free funds flow profile which will be focused in the near term on debt reduction to ultimately facilitate a return of capital strategy. The Company’s enhanced capital structure enables the pursuit of strategic acquisitions in its core operating areas, further enhancing scale, drilling inventory, and cost efficiencies.
