By Adriano Marchese
Shares in Logan Energy were higher late morning on Thursday after the company reported strong well production and adjusted funds flow in the third quarter and upgraded its guidance for the second half.
At 1128 ET, shares were trading 6.7% higher at 96 Canadian cents (70 cents).
The Canadian energy company averaged 5,394 barrels of oil equivalent a day in the third quarter, up from 5,015 barrels in the second quarter, primarily due to a new field compression add-on.
The company generated 5.2 million Canadian dollars ($3.8 million) in adjusted funds flow in the period, an increase of 64% compared with C$3.1 million in the previous quarter, primarily driven by the increase in oil and gas sales, net of royalties.
Logan said it brought on two new wells at its Simonette project in Alberta, but that they haven’t yet contributed to volumes.
“Logan’s third-quarter update did not disappoint, with well results at Simonette tracking ahead of our expectations and validating our thesis on management’s ability to execute its development plan,” CIBC analysts Chris Thompson and Jamie Kubik say in a report.
The company now also expects production in the second half to be better than previously expected, upgrading its guidance by 1,000 barrels a day to reach production of 6,000 barrels a day.
Looking ahead to 2024, Logan has set an initial capital budget of C$120 million to deliver growth in Simonette and maintain production across the rest of its operations.
This cost guidance for operating expenses and transportation is estimated to be about 5% better than consensus, according to CIBC’s analysts, who expect cash flow estimates to move higher as a result.
Write to Adriano Marchese at [email protected]
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