Rubellite Energy Inc. Reports Second Quarter Financial and Operating Results

Calgary, Alberta – August 8, 2024 (TSX:RBY) – Rubellite Energy Inc. (“Rubellite”, or the “Company”), is pleased to report its second quarter 2024 financial and operating results.

Select financial and operational information is outlined below and should be read in conjunction with Rubellite’s unaudited condensed interim consolidated financial statements and related Management’s Discussion and Analysis (MD&A”) for the three and six months ended June 30, 2024, which are available through the Company’s website at www.rubelliteenergy.com and Sedar+ at www.sedarplus.ca.

This news release contains certain specified financial measures that are not recognized by GAAP and used by management to evaluate the performance of the Company and its business. Since certain specified financial measures may not have a standardized meaning, securities regulations require that specified financial measures are clearly defined, qualified and, where required, reconciled with their nearest GAAP measure. See “Non GAAP and Other Financial Measures” in this news release and in the MD&A for further information on the definition, calculation and reconciliation of these measures. This news release also contains forward-looking information. See “Forward-Looking Information”. Readers are also referred to the other information under the “Advisories” section in this news release for additional information.

On August 2, 2024, Rubellite closed the previously announced acquisition of Buffalo Mission Energy Corp. (“Buffalo Mission”) for total consideration of $97.5 million (the “Acquisition”), inclusive of $23.5 million of assumed net debt, which consisted of $62.7 million in cash and the issuance of 5.0 million common shares of Rubellite to certain shareholders of Buffalo Mission having a deemed value of $11.3 million.

Rubellite funded the cash portion of the Acquisition through (a) expanded bank credit facilities (the “Expanded Facility”) and (b) a new senior secured second-lien term loan placed, directly or indirectly, with certain directors and officers of Rubellite and the Company’s significant shareholder for $20.0 million (the “Second-Lien Term Loan”). The Company’s borrowing base was increased to $100.0 million from $60.0 million at June 30, 2024, until the next scheduled semi-annual borrowing base redetermination on or before November 30, 2024. In addition, the Company’s lenders provided a $20.0 million bank syndicate term loan that matures on or before December 15, 2024. The Second-Lien Term Loan bears interest at 11.5% with interest to be paid quarterly, and matures in five years from the date of issue, and can be repaid by the Company without penalty at any time.

In conjunction with the Expanded Facility, the credit facility lending syndicate will be expanded to include The Bank of Nova Scotia joining the Bank of Montreal as agent, ATB Financial as co-lead and Canadian Western Bank.

SECOND QUARTER 2024 HIGHLIGHTS

• Second quarter conventional heavy oil sales production of 4,503 bbl/d was relatively unchanged from the first quarter of 2024 (Q1 2024 – 4,514 bbl/d) and up 58% from the second quarter of 2023 (Q2 2023 – 2,844 bbl/d).
• Exploration and development capital expenditures(1) totaled $21.1 million for the second quarter to drill, complete, equip and tie-in eight (8.0 net) multi-lateral horizontal development wells at Figure Lake. Spending on facilities of $1.9 million in the quarter for the 2024 Figure Lake gas conservation project, bringing total expenditures for 2024 to $2.4 million.
• Adjusted funds flow(1) in the second quarter was $20.7 million ($0.33 per share), a 12% increase from the first quarter of 2024 (Q1 2024 – $18.5 million; $0.30/share) driven by higher realized oil prices. Adjusted funds flow increased 72% from the second quarter of 2023 (Q2 2023 – $12.0 million and $0.19 per share), driven by the growth in sales production and higher realized oil prices, partially offset by higher cash costs.
• Cash costs(1) were $9.3 million or $22.58/boe in the second quarter of 2024 (Q2 2023 – $5.9 million or $22.73/boe). On a per boe basis, the reduction in costs were driven by efficiencies over a higher production base and lower trucking rates, partially offset by higher royalties and G&A costs.
• Net income was $12.4 million in the second quarter of 2024 (Q2 2023 – $3.4 million net income) driven by higher adjusted funds flow and a $3.6 million unrealized gain on risk management contracts.
• As at June 30, 2024, net debt(1) was $49.1 million, a decrease from $51.0 million as at December 31, 2023, driven by $2.4 million of free funds flow(1).
• Rubellite had available liquidity(2) at June 30, 2024 of $26.8 million, comprised of the $60.0 million borrowing limit of Rubellite’s first lien credit facility, less current borrowings of $30.8 million and outstanding letters of credit of $2.4 million.
• Non-GAAP financial measure, non-GAAP ratio or supplementary financial measure. See “Non-GAAP and Other Financial Measures” in this news release.

OPERATIONS UPDATE

Rubellite drilled and rig released a total of eight (8.0 net) horizontal wells in the second quarter of 2024, all in the Greater Figure Lake area, bringing the total number of new horizontal drills rig released in 2024 to fourteen (14.0 net) as at June 30, 2024. Production results from the 2024 drilling program have averaged IP(30) 130 bbl/d (11 wells) and IP(60) 120 bbl/d (10 wells), as compared to the McDaniel Type Curve(1) rates of 120 and 112,bbl/d, respectively. Repeatable results from the 2024 capital program continue to meet expectations, confirming the geologic model and increasing the confidence in the identified drilling inventory in excess of 220.0 net locations (165.0 net unbooked(1)) at Figure Lake and Edwand.

Read More

NT4