Petrus Resources Ltd.

Hello, and thank you for standing by. Welcome to Petra's Resources third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Ken Gray, Petra's CEO. You may begin.

Good morning, and thanks for joining the Petra's Resources Q3 earnings call. I'm Ken Gray, CEO of Petra's, and I'm joined by our executive team of Matthew Wong, CFO, Matt Scandrup, COO, and Lindsay Hatcher, VP, Commercial and Corporate Development. The results of the drilling we did in the first half of the year are reflected in our Q3 results, with production up 7% and cash flow up 17% from last year. These are exceptional results, especially when you consider the quarter saw some of the worst commodity pricing we have ever seen. So how did we do this? By managing our business to handle the volatility we see in oil and gas prices, and by continuing to improve our operating and capital efficiencies so that we can generate strong results even when prices are low. We manage the volatility in oil and gas prices through hedging and optimizing our product mix to generate the most revenue. Headline prices for oil and natural gas were down this quarter, with the WTI oil price at only $65 US per barrel for the quarter, down 14% from a year ago, and the ACO spot natural gas price dropping to an all-time low of 25 cents per MCF in September, and down 8% overall for the quarter. But our realized oil price was only down 10%. and our realized gas price was actually up 15% from a year ago. More importantly, our total price per BOE after hedging was down only 2% from a year ago, both because our realized prices were better than the headline prices and because our product mix included more higher-value liquids. The higher liquids weighting was intentional as we reallocated capital to our developing Belly River oil play in Farrier. My point here is not to be too fixated on the headline prices reported in the media. Actual realized pricing can be quite different, and if you're really managing your business well, as we are, you can actually grow cash flow despite depressed prices. The other key factor in generating exceptional returns, especially now, is being efficient at what you do. We strive for and have seen continued improvement in both our operating and capital efficiency. On the operating side, we are constantly working to lower all our costs. royalties, transportation, operating expenses, G&A expense, finance expense, decommissioning expense. Because of these efforts, over the last year, our margins have improved by 10%, and our costs per BOE have improved by 15%. And that's with inflation, tariffs, taxes, etc., all driving costs up. On the capital side, we focus on capital efficiency, defined as the capital cost to drill, complete, equip, and tie in a well, divided by a measure of the productivity of that well. So far in 2025, we have seen a 40% improvement over where we were at in the 2022-2023 period. That is some serious improvement and is a testament to the talent of the team we have here at Petrus. It is these efficiencies that have, and will continue to drive our results. I'll stop here. We're happy to answer any questions at this time, and if there are no questions, thanks for listening in and for your continued interest in Petrus.

Thank you. Ladies and gentlemen, as a reminder to ask a question, please press Start 1 on your new telephone, then wait for your name to be announced. To withdraw your question, please press Start 1 again. Please stand by while we compile the Q&A roster. I'm showing no further questions in the queue. That does conclude today's conference call. Thank you for your participation. You may now disconnect.