U.S. Markets closed

Petrus Resources Ltd. (PRQ.TO)

Toronto - Toronto Real Time Price. Currency in CAD
Add to watchlist
0.41000.0000 (0.00%)
At close: 10:15AM EDT
Full screen
Gain actionable insight from technical analysis on financial instruments, to help optimize your trading strategies
Chart Events
Neutralpattern detected
Previous Close0.4100
Open0.4100
Bid0.4000 x 0
Ask0.4200 x 0
Day's Range0.4100 - 0.4100
52 Week Range0.0850 - 0.4900
Volume16,500
Avg. Volume59,680
Market Cap20.282M
Beta (5Y Monthly)3.51
PE Ratio (TTM)N/A
EPS (TTM)-1.9720
Earnings DateFeb 25, 2021
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est0.46
  • Petrus Resources Announces Changes to Board of Directors
    GlobeNewswire

    Petrus Resources Announces Changes to Board of Directors

    CALGARY, Alberta, March 11, 2021 (GLOBE NEWSWIRE) -- Petrus Resources Ltd. ("Petrus" or the "Company") (TSX: PRQ) announces that Mr. Stephen White has resigned from his position as a director of Petrus. The Board of Directors is also pleased to announce that Mr. Ken Gray has joined the Petrus Board. Mr. Ken Gray is a Petroleum Engineer with a degree from Texas A&M University and has over thirty-five years of experience in the oil and gas sector. The staff, management, and Board of Directors of Petrus would like to thank Mr. White for his commitment and service to Petrus. We all wish him the best in his future endeavours. ABOUT PETRUSPetrus is a public Canadian oil and gas company focused on property exploitation and strategic acquisitions in Alberta. For further information, please contact:Neil Korchinski, P.Eng.President and Chief Executive OfficerT: 403-930-0889E: nkorchinski@petrusresources.com

  • Statement on the Acquisition of Shares of Petrus Resources Ltd.
    GlobeNewswire

    Statement on the Acquisition of Shares of Petrus Resources Ltd.

    CALGARY, Alberta, March 10, 2021 (GLOBE NEWSWIRE) -- Each of Mr. Don Gray, Glen Gray and Stuart Gray (collectively, the "Purchasers") announce that they have each individually agreed (on a several basis) to acquire the number of common shares ("Common Shares") of Petrus Resources Ltd. ("Petrus") set forth below from an arm's length vendor, at a purchase price of $0.30 per share, pursuant to the terms of a share purchase agreement among the Purchasers and the vendor (the "Purchase Agreement). Closing of the transaction is expected to occur on or about March 16, 2021, subject to satisfaction of closing conditions customary for a transaction of this nature. On closing of the acquisition, each Purchaser will acquire ownership of, and control over, the number of Common Shares set forth below. The ownership of Common Shares before and after giving effect to the Purchase Agreement, of each of Don Gray, Glen Gray and Stuart Gray is as set forth below: Name Ownership of Common Shares Before Giving Effect to the Purchase Agreement Ownership of Common Shares After Giving Effect to the Purchase AgreementDon Gray(1) 7,314,402 Common Shares(approximately 14.79% on a non-diluted basis) 13,354,742 Common Shares(approximately 27% on a non-diluted basis)Glen Gray 3,875,000 Common Shares(approximately 7.83% on a non-diluted basis) 6,875,000 Common Shares(approximately 13.9% on a non-diluted basis)Stuart Gray 2,120,000 Common Shares(approximately 4.3% on a non-diluted basis) 5,120,000 Common Shares(approximately 10.3% on a non-diluted basis) Note: (1)Assuming the settlement, in full, of all deferred share units held by Mr. Don Gray, and the closing of the transactions contemplated by the Purchase Agreement, Mr. Don Gray would own and control 13,894,310 Common Shares (approximately 27.8% of the then issued and outstanding Common Shares, on a non-diluted basis). Each of the Purchasers may be considered to be "joint actors" solely for the purpose of completing the transactions under the Purchase Agreement. Such persons will cease to be joint actors with respect to the transactions under the Purchase Agreement upon the first to occur of the completion of transactions under the Purchase Agreement or upon termination of the Purchase Agreement. Except as it relates to the transactions under the Purchase Agreement, none of the Purchasers are otherwise "joint actors". The acquisition by Mr. Don Gray will be exempt from the formal take-over bid requirements in applicable Canadian securities laws pursuant to the "private agreement exemption" set forth in Section 4.2 of National Instrument 62-104. The exemption is available on the basis that (i) the Common Shares are being acquired from not more than five persons or companies in the aggregate; (ii) the bid was not made generally to holders of Common Shares; and (iii) the value of the consideration to be paid for the Common Shares, including brokerage fees and commissions, is not greater than 115% of the market price of the Common Shares at the date of the bid as determined in accordance with applicable Canadian securities laws. Each Purchaser agreed to acquire the subject Common Shares for investment purposes. A Purchaser may, depending on market and other conditions, increase or decrease his ownership of Common Shares or other securities of the Company, whether in the open market, by privately negotiated agreement or otherwise. For additional information or to obtain a copy of the applicable early warning report to be filed by each Purchaser in connection with the foregoing, please contact: c/o 2400, 240 - 4th Avenue SWCalgary, AB T2P 4H4 (403) 930-0889

  • GlobeNewswire

    Petrus Resources Announces Year End 2020 Financial, Operating & Reserves Results; Significant Net Debt Reduction

    CALGARY, Alberta, Feb. 25, 2021 (GLOBE NEWSWIRE) -- Petrus Resources Ltd. (“Petrus” or the “Company”) (TSX: PRQ) is pleased to report financial and operating results as at and for the three and twelve months ended December 31, 2020 and to provide 2020 year end reserves information as evaluated by Sproule Associates Limited ("Sproule"). The Company's Management's Discussion and Analysis ("MD&A") and audited consolidated financial statements are available on SEDAR (the System for Electronic Document Analysis and Retrieval) at www.sedar.com. Given the significant turmoil in global energy markets in 2020, Petrus is pleased to report annual results that achieved the objectives management laid out for the year. This includes the generation of free cash flow in excess of capital expenditures used to repay debt and continue to strengthen the Company's balance sheet. Petrus generated $26.4 million of funds flow in 2020. This was used to fund a capital program of $14.3 million, the lowest in the Company's history, with the remainder used to reduce the balance drawn on the company’s Revolving Credit Facility (“RCF”). In light of the volatile commodity prices during the outbreak of the COVID-19 pandemic, the Company pursued a very disciplined capital program. To conserve cash, Petrus drilled 4 gross wells (3.2 net) during the year. The Company continues to focus the majority of capital spending in its Ferrier core area where ownership of key infrastructure generates low operating costs, high netbacks and quick capital payouts. Debt repayment – Reduction of debt was the top priority for the Company in 2020 and Petrus was successful in reducing net debt by $9.4 million during the year. Since December 31, 2015 Petrus has repaid $112.4 million (50%) of net debt. As part of the extension agreement reached in mid-2020 in respect of Petrus' second lien term loan ("Term Loan"), interest is now paid-in-kind and is added to the balance of the loan outstanding. Petrus focused on paying down the balance of the RCF, which was reduced by $14.8 million during the year, and is ahead of its required scheduled repayments. Stronger natural gas pricing – Natural gas prices showed marked improvement from the prior year and continue to strengthen. Petrus’ average realized price was $2.57/mcf in 2020, compared to $1.89/mcf in 2019, a 36% improvement. Company production was weighted 70% towards natural gas in 2020. Free funds flow – In 2020 Petrus generated funds flow of $26.4 million ($0.53/share), and invested $14.3 million in capital projects including the drilling of three 100% working interest wells. During the fourth quarter of 2020, Petrus generated funds flow of $6.4 million. Increased PDP reserves – In 2020, Petrus’ development program generated PDP reserve volume additions of 2.9 mmboe, or 1.2x production in the year. Despite decreased capital spending, the Company produced 2.4 mmboe during 2020 and ended the year with 12.2 mmboe of PDP reserves. Petrus realized Finding Development and Acquisition (“FD&A”) costs of $4.83/boe for PDP reserves, which are the best in the Company's history. Low operating costs – Total annual operating costs were $4.64/boe in 2020. The Company continues to focus on optimizing its cost structure, particularly in the Ferrier area, through facility ownership and control. Reduced general and administrative costs – Petrus reduced gross general and administrative expenses ("G&A") by $1.0 million in 2020, in comparison to 2019, to a total of $5.2 million. This marks the fourth consecutive year of G&A cost reductions and a 40% reduction since 2017. 2021 OUTLOOK Petrus’ Board of Directors has approved a first quarter 2021 capital budget of $9.0 million to drill 3 gross (2.1 net) Cardium wells in its Ferrier area. With current commodity prices and the low operating cost structure utilizing company owned infrastructure, new wells operated by Petrus in the Ferrier area are expected to reach payout in under one year. Petrus is committed to maintaining its financial flexibility and the Company will determine subsequent quarter capital spending as the year progresses. With stronger forward oil and gas prices than were experienced through most of 2020, Petrus management is forecasting stronger cash flow in 2021 than 2020 that will be used to fund a larger capital program and grow production from 2020 levels. Management anticipates that the 2020 capital plan will be funded by funds flow, with free funds flow used to continue significant debt reduction targets. With improved commodity pricing so far in 2021, Petrus has been active in adding price protection for the remainder of the year through additional forward sale contracts. The average volume of oil hedged for 2021 (825 bbl/d) represents 41% of fourth quarter 2020 average oil production. The 15,250 GJ/day average natural gas hedged for 2021 represents 61% of fourth quarter 2020 average natural gas production. Petrus' management continues to layer in additional hedged volumes into 2022. Refer to "Non-GAAP Financial Measures". Refer to "Advisories - Forward-Looking Statements". Refer to "Advisories - Presentation". SELECTED FINANCIAL INFORMATIONOPERATIONSTwelve months ended Dec. 31, 2020Twelve months ended Dec. 31, 2019Three months ended Dec. 31, 2020Three months ended Sept. 30, 2020Three months ended Jun. 30, 2020Three months ended Mar. 31, 2020Average Production Natural gas (mcf/d)27,640 32,032 26,177 26,181 27,630 30,604 Oil (bbl/d)1,021 1,616 980 1,103 867 1,134 NGLs (bbl/d)980 1,351 1,014 997 819 1,088 Total (boe/d)6,608 8,306 6,357 6,463 6,291 7,323 Total (boe)2,418,259 3,031,659 584,860 594,599 572,440 666,361 Light oil weighting15%19%15%17%14%15%Realized Prices Natural gas ($/mcf)2.57 1.89 3.07 2.51 2.35 2.40 Oil ($/bbl)44.14 64.11 49.64 46.46 27.18 50.02 NGLs ($/bbl)20.84 22.13 23.52 22.05 12.87 23.19 Total realized price ($/boe)20.67 23.35 24.05 21.48 15.73 21.23 Royalty income0.16 0.20 0.13 0.12 0.06 0.30 Royalty expense(2.15)(2.35)(2.02)(2.09)(1.51)(2.85)Net oil and natural gas revenue ($/boe)18.68 21.20 22.16 19.51 14.28 18.68 Operating expense(4.64)(4.25)(5.53)(4.05)(4.44)(4.55)Transportation expense(1.43)(1.26)(1.68)(1.63)(1.40)(1.05)Operating netback(1) ($/boe)12.61 15.69 14.95 13.83 8.44 13.08 Realized gain (loss) on derivatives ($/boe)2.70 (0.44)0.65 2.20 6.39 1.76 Other income0.15 0.03 0.31 0.04 0.17 0.07 General & administrative expense(1.41)(1.20)(1.81)(1.07)(1.43)(1.35)Cash finance expense(2.75)(2.72)(2.49)(2.16)(3.20)(3.13)Decommissioning expenditures(0.37)(0.28)(0.63)(0.13)(0.15)(0.56)Funds flow & corporate netback(1)(2) ($/boe)10.93 11.08 10.98 12.71 10.22 9.87 FINANCIAL (000s except $ per share)Twelve months ended Dec. 31, 2020Twelve months ended Dec. 31, 2019Three months ended Dec. 31, 2020Three months ended Sept. 30, 2020Three months ended Jun. 30, 2020Three months ended Mar. 31, 2020Oil and natural gas revenue50,368 71,398 14,143 12,840 9,041 14,344 Net loss(97,554)(42,176)(151)(3,678)(6,281)(87,444)Net loss per share Basic(1.97)(0.85)— (0.07)(0.13)(1.77)Fully diluted(1.97)(0.85)— (0.07)(0.13)(1.77)Funds flow26,397 33,625 6,423 7,551 5,855 6,566 Funds flow per share Basic0.53 0.68 0.13 0.15 0.12 0.13 Fully diluted0.53 0.68 0.13 0.15 0.12 0.13 Capital expenditures14,298 18,073 2,797 2,543 305 8,655 Net dispositions— 651 — — — — Weighted average shares outstanding Basic 49,469 49,472 49,469 49,469 49,469 49,469 Fully diluted49,469 49,472 49,469 49,469 49,469 49,469 As at year end Common shares outstanding Basic49,469 49,469 49,469 49,469 49,469 49,469 Fully Diluted49,469 49,469 49,469 49,469 49,469 49,469 Fully diluted Total assets177,914 289,225 177,914 179,895 184,532 193,679 Non-current liabilities45,321 42,346 45,321 44,471 43,017 38,533 Net debt(1)114,361 123,744 114,361 116,717 120,570 125,974 (1)Refer to "Non-GAAP Financial Measures". (2)Corporate netback is equal to funds flow which is a comparable additional GAAP measure. Petrus analyzes these measures on an absolute value and per unit basis. OPERATIONS UPDATE Fourth quarter average production by area was as follows: For the three months ended December 31, 2020FerrierFoothillsCentral AlbertaTotalNatural gas (mcf/d)19,6371,4255,11826,180Oil (bbl/d)569113298980NGLs (bbl/d)86071471,014Total (boe/d)4,7023571,2986,357 Fourth quarter production averaged 6,357 boe/d in 2020 versus 6,463 boe/d in the third quarter. Production was lower due to natural declines as no new wells were brought on production during the quarter. One well completed during the fourth quarter is awaiting tie-in and is expected to be brought on production in the first quarter of 2021. Petrus’ Board of Directors has approved a first quarter 2021 capital budget of $9.0 million to drill 3 gross (2.1 net) Cardium wells in the Ferrier area. With current commodity prices and the low operating cost structure utilizing company owned infrastructure, new wells operated by Petrus in the Ferrier area are expected to reach payout in under one year. With stronger forward oil and natural gas prices than were experienced through most of 2020, Petrus management is forecasting stronger cash flow in 2021 than 2020 that will be used to fund a larger capital program and grow production from 2020 levels. Management anticipates that the 2020 capital plan will be funded by funds flow, with free funds flow used to continue significant debt reduction targets. With improved commodity pricing so far in 2021, Petrus has been active in adding price protection for the remainder of the year through additional forward sale contracts. The average volume of oil hedged for 2021 (825 bbl/d) represents 41% of fourth quarter 2020 average oil production. The 15,250 GJ/day average natural gas hedged for 2021 represents 61% of fourth quarter 2020 average natural gas production. RESERVES Petrus’ 2020 year end reserves were evaluated by independent reserves evaluator, Sproule Associates Limited, in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) as of December 31, 2020 ("2020 Sproule Report"). Additional reserve information as required under NI 51-101 will be included in our Annual Information Form for the year ended December 31, 2020, which will be available under the Company's profile on SEDAR (the System for Electronic Document Analysis and Retrieval) at www.sedar.com. Petrus has a reserves committee, comprised of independent board members, that reviews the qualifications and appointment of the independent reserves evaluator. The committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon annual evaluations by the independent qualified reserve evaluator conducted in accordance with the COGE Handbook and NI 51-101. The evaluations are conducted using all available geological and engineering data. The reserves committee has reviewed the reserves information and approved the 2020 Sproule Report. The following table provides a summary of the Company’s before tax reserves as evaluated by Sproule: As at December 31, 2020Total Company Interest (1)(3)Reserve CategoryConventional Natural Gas (mmcf)Light and Medium Crude Oil (mbbl)NGL (mbbl)Total (mboe)NPV 0%(2) ($000s)NPV 5%(2) ($000s)NPV 10%(2) ($000s)Proved Producing53,1721,1582,15012,170120,922130,024119,122Proved Non-Producing30981474726639571Proved Undeveloped52,4489433,49213,177113,18568,34439,745Total Proved105,9292,1095,65725,421234,833199,007159,438Proved + Probable Producing66,0711,4352,65015,097167,144154,424133,562Total Probable65,1862,2312,89415,989224,418142,94997,553Total Proved Plus Probable171,1154,3408,55141,410459,251341,956256,991 (1)Tables may not add due to rounding.(2)NPV 0%, NPV 5% and NPV 10% refer to the risked net present value of the future net revenue of the Company's reserves, discounted by 0%, 5% and 10%, respectively and is presented before tax and based on Sproule's pricing assumptions.(3)Total company interest reserve volumes presented above and in the remainder of this Annual Report are presented as the Company's total working interest before the deduction of royalties (but after including any royalty interests of Petrus). In 2020, Petrus’ development program generated Proved Developed Producing ("PDP") reserve volume additions of 1.3 mmboe. The Company produced 2.4 mmboe during 2019 and ended the year with 12.2 mmboe of PDP reserve volume (34% oil and liquids). Petrus ended 2020 with $119.7 million, $159.4 million and $257.0 million of Proved Developed ("PD"), Total Proved ("TP"), and Proved plus Probable (“P+P”), respectively, reserve value before-tax, discounted at 10%, based on the 2020 Sproule Report. In 2020, the Company realized Finding and Development (“FD&A”)(1)(2) costs of $4.83/boe for PDP reserves. Based on the 2020 Sproule Report, the Company’s PDP reserve value before-tax, discounted at 10% is $2.41 per share. On the same basis, the P+P reserve value is $5.20 per share. (1)Refer to "Oil and Gas Disclosures". (2)Certain changes in FD&A and F&D produce non-meaningful figures as discussed in "Oil and Gas Disclosures". While FD&A and F&D costs, reserve life index, reserve replacement ratio and finding and development costs are commonly used in the oil and nature gas industry and have been prepared by management, these terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies and, therefore, should not be used to make such comparisons. FUTURE DEVELOPMENT COST Future Development Cost ("FDC") reflects Sproule's best estimate of what it will cost to bring the P+P undeveloped reserves on production. The following table provides a summary of the Company's FDC as set forth in the 2020 Sproule Report: Future Development Cost ($000s) Total ProvedTotal Proved + Probable202128,58236,242202245,75870,913202357,78365,73120246,16420,582202512,94428,89520265,58311,1292027—18,844Thereafter——Total FDC, Undiscounted156,815252,335Total FDC, Discounted at 10%129,059198,745 PERFORMANCE RATIOS The following table highlights annual performance ratios for the Company from 2016 to 2020: December 31, 2020December 31, 2019December 31, 2018December 31, 2017 December 31, 2016Proved Producing FD&A ($/boe) (1)(2)4.83 13.31 37.76 13.05 (0.43)F&D ($/boe) (1)(2)4.83 12.81 42.27 11.57 9.89 Reserve Life Index (yr) (1)5.2 3.8 4.6 4.1 4.4 Reserve Replacement Ratio (1)1.2 0.4 0.2 1.6 0.4 FD&A Recycle Ratio (1)2.6 1.2 0.4 1.1 (24.8)Proved Developed FD&A ($/boe) (1)(2)4.71 12.49 11.34 16.74 (0.23)F&D ($/boe) (1)(2)4.71 12.03 11.55 14.62 7.69 Reserve Life Index (yr) (1)5.2 4.8 5.6 4.5 5.3 Reserve Replacement Ratio (1)1.2 0.5 0.6 1.2 0.7 FD&A Recycle Ratio (1)2.7 1.3 1.4 0.9 (46.3)Total Proved FD&A ($/boe) (1)(2)1.29 1.09 8.73 14.33 (15.78)F&D ($/boe) (1)(2)1.29 (6.83)8.16 12.03 2.46 Reserve Life Index (yr) (1)10.9 9.9 11.1 8.0 9.8 Reserve Replacement Ratio (1)(1.0)0.3 1.3 1.1 0.5 FD&A Recycle Ratio (1)9.8 14.4 1.8 1.0 (0.7)Future Development Cost ($000s)156,815 174,027 194,757 182,086 201,556 Total Proved + Probable FD&A ($/boe) (1)(2)0.37 (7.32)6.49 14.87 350.09 F&D ($/boe) (1)(2)0.37 190.21 5.15 17.28 (8.06)Reserve Life Index (yr) (1)17.7 15.4 17.1 12.3 14.6 Reserve Replacement Ratio (1)(1.3)— 1.5 1.7 (0.1)FD&A Recycle Ratio (1)33.7 (2.1)2.4 1.0 — Future Development Cost ($000s)252,335 267,652 290,876 283,030 269,144 (1)Refer to "Oil and Gas Disclosures". (2)Certain changes in FD&A and F&D produce non-meaningful figures as discussed in "Oil and Gas Disclosures". While FD&A and F&D costs, reserve life index, reserve replacement ratio and finding and development costs are commonly used in the oil and nature gas industry and have been prepared by management, these terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies and, therefore, should not be used to make such comparisons. NET ASSET VALUE The following table shows the Company's Net Asset Value ("NAV"), calculated using Sproule's December 31, 2020 price forecast: As at December 31, 2020 ($000s except per share) Proved Developed ProducingTotal ProvedProved + ProbablePresent Value Reserves, before tax (discounted at 10%) (1)119,122 159,438 256,991 Undeveloped Land Value (2)17,568 17,568 17,568 Net Debt (3)(114,361)(114,361)(114,361)Net Asset Value22,329 62,645 160,198 Estimated Net Asset Value per Share$0.45 $1.27 $3.24 (1)Based on the 2020 Sproule Report, using the forecast future prices and costs. (2)Based on the exploration and evaluation assets as per the Company's December 31, 2020 audited consolidated financial statements. (3)See "Non-GAAP Financial Measures". ANNUAL GENERAL MEETING The Corporation currently intends to hold its Annual General Meeting ("Meeting") on Thursday, May 13, 2021 at 2:00 p.m. (Calgary time). Due to the COVID-19 pandemic and restrictions on indoor gatherings implemented by the Government of Alberta in response thereto, and out of concern for the wellbeing of all participants, access to the Meeting may be limited. The Company does not plan to have a formal presentation at the conclusion of the Meeting. We encourage all shareholders and proxyholders not to attend the meeting in person, particularly if they are experiencing any of the described COVID-19 symptoms. Shareholders and guests can listen to the Meeting via teleconference at 1-888-433-2192 (participant code 6841494) however shareholders and proxyholders will not be able to vote their shares via teleconference. We encourage all shareholders to submit their proxies in advance of the Meeting. An updated corporate presentation can be found on the Company's website at www.petrusresources.com. For further information, please contact: Neil Korchinski, P.Eng. President and Chief Executive Officer T: (403) 930-0889 E: nkorchinski@petrusresources.com NON-GAAP FINANCIAL MEASURES This press release makes reference to the terms "operating netback", "corporate netback" and "net debt". These indicators are not recognized measures under GAAP (IFRS) and do not have a standardized meaning prescribed by GAAP (IFRS). Accordingly, the Company's use of these terms may not be comparable to similarly defined measures presented by other companies. Management uses these terms for the reasons set forth below. Operating Netback Operating netback is a common non-GAAP financial measure used in the oil and natural gas industry which is a useful supplemental measure to evaluate the specific operating performance by product at the oil and natural gas lease level. The most directly comparable GAAP measure to operating netback is funds flow. Operating netback is calculated as oil and natural gas revenue less royalties, operating and transportation expenses. It is presented on an absolute value and per unit basis. Funds Flow and Corporate Netback Corporate netback is a common non-GAAP financial measure used in the oil and natural gas industry which evaluates the Company’s profitability at the corporate level. Corporate netback is equal to funds flow which is a directly comparable GAAP measure. Petrus analyzes these measures on an absolute value and per unit basis. Management believes that funds flow and corporate netback provide information to assist a reader in understanding the Company's profitability relative to current commodity prices. It is calculated, in the following table, as the operating netback less general and administrative expense, finance expense, decommissioning expenditures, plus other income and the net realized gain (loss) on financial derivatives. Net DebtNet debt is a non-GAAP financial measure and is calculated as current assets (excluding unrealized financial derivative assets) less current liabilities (excluding unrealized financial derivative liabilities, right-of-use lease obligations, and deferred share unit liabilities) and long term debt. Petrus uses net debt as a key indicator of its leverage and strength of its balance sheet. There is no GAAP measure that is reasonably comparable to net debt. OIL AND GAS DISCLOSURES Our oil and gas reserves statement for the year ended December 31, 2020, which includes disclosure of our oil and natural gas reserves and other oil and natural gas information in accordance with NI 51-101, is contained in the AIF. The recovery and reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. F&D and FD&A Costs FD&A cost is defined as capital costs for the time period including change in FDC divided by change in reserves including revisions and production for that same time period. F&D cost is defined as capital costs for the time period including change in FDC divided by change in reserves including revisions and production for that same time period, excluding acquisitions and dispositions. Both F&D and FD&A costs take into account reserves revisions during the year on a per boe basis. The methodology used to calculate F&D costs includes disclosure required to bring the proved undeveloped and probable reserves to production. Annually, changes in forecast FDC occur as a result of Petrus' development, acquisition and disposition activities, undeveloped reserve revision and capital cost estimates. These values reflect the independent evaluator's best estimate of the cost to bring the proved and probable undeveloped reserves to production. In 2019, the P+P FD&A and F&D costs including changes in FDC can generate non meaningful information because acquisitions and dispositions can have a significant impact on our ongoing reserves replacement costs. Reserve Life Index Reserve life index is defined as total reserves by category divided by the annualized fourth quarter production. Reserve Replacement Ratio The reserve replacement ratio is calculated by dividing the yearly change in reserves net of production by the actual annual production for the year. Management uses oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Petrus' operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this MD&A, should not be relied upon for investment or other purposes. FD&A Recycle Ratio The FD&A recycle ratio is calculated by dividing field netback by FD&A. Management uses oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Petrus' operations overtime. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this MD&A, should not be relied upon for investment. ADVISORIES Basis of PresentationFinancial data presented above has largely been derived from the Company’s financial statements, prepared in accordance with GAAP which require publicly accountable enterprises to prepare their financial statements using IFRS. Accounting policies adopted by the Company are set out in the notes to the consolidated financial statements as at and for the twelve months ended December 31, 2020. The reporting and the measurement currency is the Canadian dollar. All financial information is expressed in Canadian dollars, unless otherwise stated. Forward-Looking StatementsIn particular, forward-looking statements included in this MD&A include, but are not limited to, statements with respect to: Petrus focus on paying down the balance of the RCF; the Company's focus on optimizing its cost structure, particularly in the Ferrier area, through facility ownership and control; Petrus' commitment to maintaining its financial flexibility and expectation that it will determine subsequent quarter capital spending as the year progresses; forecast cash flow in 2021 and the use thereof; managements expectation that the 2020 capital plan will be funded by funds flow, with free funds flow used to continue significant debt reduction targets; management expectation that it will continue to layer in hedges; expectations regarding the payout of new wells in the Ferrier area; the drilling 3 gross (2.1 net) Cardium wells under Petrus' first quarter 2021 capital budget; the Company's strategy to prioritize debt repayment and moderate capital spending; Petrus' ability to modify its operations according to NGL market pricing; the intent of the Company's hedging strategy; expectations regarding the adequacy of Petrus' liquidity and the funding of its financial liabilities; the impact of the current economic environment on Petrus; the performance characteristics of the Company's crude oil, NGL and natural gas properties; future prospects; the focus of and timing of capital expenditures; access to debt and equity markets; Petrus' future operating and financial results; capital investment programs; supply and demand for crude oil, NGL and natural gas; future royalty rates; drilling, development and completion plans and the results therefrom; and treatment under governmental regulatory regimes and tax laws. In addition, statements relating to “reserves” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. This MD&A contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Petrus' prospective results of operations including, without limitation, forecast cash flow in 2021, managements expectation that the 2020 capital plan will be funded by funds flow, expectations regarding the payout of new wells in the Ferrier area, Petrus' liquidity to execute the Company's business plan over the coming year and ability to repay debt, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI. Petrus' actual results, performance or achievement could differ materially from those expressed in, or implied by, these FOFI, or if any of them do so, what benefits Petrus will derive therefrom. Petrus has included the FOFI in order to provide readers with a more complete perspective on Petrus' future operations and such information may not be appropriate for other purposes. These forward-looking statements and FOFI are made as of the date of this MD&A and the Company disclaims any intent or obligation to update any forward-looking statements and FOFI, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. BOE PresentationThe oil and natural gas industry commonly expresses production volumes and reserves on a barrel of oil equivalent (“boe”) basis whereby natural gas volumes are converted at the ratio of six thousand cubic feet to one barrel of oil. The intention is to sum oil and natural gas measurement units into one basis for improved measurement of results and comparisons with other industry participants. Petrus uses the 6:1 boe measure which is the approximate energy equivalence of the two commodities at the burner tip. Boe’s do not represent an economic value equivalence at the wellhead and therefore may be a misleading measure if used in isolation. Abbreviations $000’s $/bbl $/boe $/GJ$/mcf bbl bbl/d boe mboe mmboe boe/d GJ GJ/d mcf mcf/d mmcf/d NGLs WTIthousand dollars dollars per barrel dollars per barrel of oil equivalent dollars per gigajoule dollars per thousand cubic feet barrel barrels per day barrel of oil equivalent barrel of oil equivalent thousand barrel of oil equivalent million barrel of oil equivalent per day gigajoule gigajoules per day thousand cubic feet thousand cubic feet per day million cubic feet per day natural gas liquids West Texas Intermediate