PrairieSky Royalty reports lower second-quarter crude oil production

PrairieSky Royalty reports lower second-quarter crude oil production

CALGARY — Oil production is beginning to recover after it was curtailed by an average of 30 per cent in the second quarter due to low crude prices, PrairieSky Royalty Ltd. said Tuesday.

The Calgary-based company, which earns revenue by sharing in production from lands for which it holds the petroleum mineral rights, said it produced 18,670 barrels of oil equivalent per day in the three months ended June 30, down 16 per cent from the first quarter.

No new wells were started on its properties in the three months ended June 30 but there are signs that activity will pick up later this year as oil prices strengthen, said CEO Andrew Phillips on a conference call.

“We do expect greater activity than we would have two months ago… I don’t know that will show an effect for us in the back half of this year, but it certainly will improve in 2021,” he said.

PrairieSky’s production shortfalls are expected to be a common theme as larger oilpatch players including Suncor Energy Inc. and Cenovus Energy Corp. roll out second quarter results later this week.

Producers in Western Canada are estimated to have shut down wells producing more than 800,000 barrels per day of oil at times in the second quarter due to plunging prices amid the economic downturn associated with the COVID-19 lockdowns.

Crude oil production at PrairieSky fell by 30 per cent to 6,035 barrels per day over the quarter from 8,740 bpd in the year-earlier period as its average realized price fell to C$24.31 per barrel from C$65.48.

PrairieSky says as much as 40 per cent of its oil output was curtailed in May.

Natural gas output was down 7.5 per cent from the second quarter of 2019 despite the average price rising from 74 cents per thousand cubic feet to $1.39.

The company’s second quarter production revenue was $25.1 million, off by 39 per cent compared with the first quarter of 2020 and 60 per cent from the second quarter of 2019.

PrairieSky reported a net loss of $400,000 or zero cents per share in the quarter, compared with a net profit of $44 million or 19 cents in the year-earlier period, largely matching analyst expectations.

Its stock rose by as much as seven per cent to $8.90 on the Toronto Stock Exchange on Tuesday.

The company reported completing $6 million in royalty interest acquisitions in northeastern B.C. during the quarter and added it is continuing to look for expansion opportunities.

This report by The Canadian Press was first published July 21, 2020.

Companies in this story: (TSX:PSK, TSX:SU, TSX:CVE)

The Canadian Press

crude oil

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

‘Is this a town garden?’ Sylvan Lake resident has been gardening for 7 decades

Most summer days, Joel McCutcheon is in his garden pulling weeds, tending flowers and mowing

Witnesses to doctor attack will likely suffer trauma: RCMP

Supt. Gerald Grobmeier held a news conference last night but wouldn’t confirm details.

Red Deer doctor killed at clinic

Red Deer RCMP are investigating the death of a doctor at the Village Mall Walk-In Clinic.

Alberta reports 257 new cases of COVID-19

Central zone has 157 active cases

Charges likely in fatal attack at central Alberta medical clinic: RCMP

A vigil was held Monday night to mourn the victim

Vigil held in Maskwacis for 10-year-old boy

Samson Cree Nation comes together for comfort, console each other

Cuts to environmental monitoring budget In Alberta’s oilsands are viewed as reckless

The 2019-2020 budget saw $58 million dollars being dedicated to environmental monitoring

Over half of Americans oppose Trump tariff on Canadian aluminum: survey

The survey was conducted Aug. 7 to 9 among 1,513 Canadians and 1,003 Americans

Police investigating after insults, expletives yelled at federal minister’s staff

A 90-second video circulating on social media appears to have been shot by the person who was yelling

Rent-relief program becomes new front in fight between Liberals, opposition

Opposition trying to draw parallels between decision to have Canada Mortgage and Housing Corp. run program and the WE controversy

Ottawa sets minimum unemployment rate at 13.1% for EI calculation

Statistics Canada says the unemployment rate was 10.9 per cent in July

Oilers 50/50 raffle delayed as team resolves errors, offers refunds

Alberta fans who want to void any ticket purchases will have until noon Thursday

Who can dismiss the Governor General? A look at protocols and possibilities

The Governor General is appointed by the Queen, on the advice of the prime minister

Most Read