Petrus Resources Ltd.

Good day and thank you for standing by. Welcome to Petrus Resources' first quarter 2026 results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Today's conference is being recorded. I will now hand the conference over to your speaker host, Matt Kendrick. Chief Operating Officer, please go ahead, sir.

Good morning and welcome to the Petrus Resources Q1 2026 conference call. I am Matt Skendrup. I am the COO here at Petrus. Ken Gray, our CEO, is not available this morning for our call. I am joined by our CFO, Matthew Wong, and our VP Corporate and Commercial Development, Lindsay Hatcher. We just released Q1 2026 quarter results, and this quarter has been an interesting start to the new year, to say the least. We have seen and continue to see dramatic volatility in the oil market, and inflationary pressures due to rising energy prices have suddenly started to make an impact on people's lives, no matter where you live. The effect that the current conflict in the Middle East is having on the supply of oil is frankly the most disruptive we have seen in recent history. We are at a point where the demand for oil is simply more than the supply that can be produced, transported, and used across the globe. To date, strategic reserves and cautionary measures taken by governing bodies across the world have helped to lessen the shock of the drastically reduced supply and time will only tell how quickly this balance comes back into place. Despite everything that's happening across the globe, here at Petrus, we've been working hard to continue to execute projects efficiently and cost-effectively as always. At home here in Canada, we are fortunate to have the opportunity and ability to continue to execute our operations and work to continue to add value to the company for all of our shareholders. During the quarter, we closed the Harmattan acquisition effective February 1st, adding a complimentary liquids-weighted asset with strong development upside. The assets will provide additional inventory to support our ongoing development plans and add long-term flexibility and optionality. Reported Q1 production reflects only a partial contribution given the timing of when volumes were recognized from an accounting perspective. but the assets are now fully contributing as expected. The Harmattan assets have been seamlessly integrated into Petrus's existing operations. We are also happy to report that we have received final approvals regarding the acquisition from the Alberta Energy Regulator. The team here continues to work hard to ensure the new property is running as efficiently as possible, and we are looking forward to drilling our first wells in the area when we return to drilling after spring breakup. The smooth transition is a compliment to everyone here at Petrus who is involved in making this happen. We started the 2026 capital program off strong in Q1, drilling eight new operated tardium wells in Farrier. Of those, four are completed and were brought onto production near the end of March with strong initial results, but they had minimal impact on this quarter's production due to the late on-stream timing. Completion operations on the remaining four wells are scheduled to start early next week, with production expected later in May or in early June. With a wet and snowy April, we chose to hold off on completions of these wells to minimize the costs associated with spring breakup conditions. Overall, the quarter was focused on capital spending to drive as much production and cash flow as possible throughout the remainder of the year. As we look forward to the rest of 2026, we will continue to execute our development plan in line with our previously released 2026 capital budget and guidance. We are constantly evaluating changing market conditions to ensure that we develop our assets efficiently and continue to add value to the company for the long term. On behalf of the team here at Petrus, I would like to thank you for your time and continued support. We would be happy to take any questions you might have now or always feel free to reach out to one of the team members here. All of our contact information is available on our website.

Ladies and gentlemen, if you'd like to ask a question at this time, please press star 1-1 on your touch phone telephone. We'll give a moment to compile the KNA roster. And I see we have a question coming from the line of Nathan Ritchie. We've got energy report.

Hello. Hi, guys, and congratulations on your results. And it looks like everybody at Patrick's team believes in it. The insider buying keeps increasing as well, which is good news. I'm wondering if you could touch on the barrier wells, the recent ones. What percentage liquids are you achieving there? And then secondly, Are you able to move your drilling program forward a little bit? I know it's spring breakup, but I'm not sure in your particular field how conditions are and what road plans are like.

Yeah, thanks, Nathan, for calling in. Matt, probably best to address the off question, so I'll let him handle that.

Yeah, on the first four wells, the liquid weighting is a little bit heavier for sure. The well that we drilled first were in the southern part of the field. Our liquid weighting right now is probably around 60% on these ones to start with. The next four wells that we're drilling are actually up in North Farrier in some of our definitely more gassy parts of the field. These wells, though, just given gas pricing and stuff, our intention on these is actually to choke back the rates. And what the rates will do, what choking will do, will actually keep the liquid weighting higher in the wells. So when you hold back pressure on these cardian wells, you definitely don't see as much. restriction on the oil rates, and we definitely will hold back some gas volume. So we expect these ones to be, you know, probably starting at, I would say, probably 40% to 50% of liquids waiting, and then liquids waiting will continue to drop. But these ones will be stronger from a DOE perspective. But the philosophy with gas prices being low is just throttle them as much as possible and get as much liquids out of the wells as we can. To your second question, as far as accelerating the drilling, we definitely have some paths that are getting close to be ready to go to be able to do that. I would say that by the end of the month, we'll have a decision on whether we accelerate some of these or not. Some of them are in areas where the counties just have road bans where you just can't move the rigs. And then some of them are on crown land and forestry roads. Those roads are still a little wet. We don't want to rack up a bunch of roads. But I would say that by the end of the month, if we're going to accelerate things and oil prices are stronger, then that's the time that we would make that decision. The volatility is, you know, it continues, as I mentioned, and we're just continuing to watch it. But we definitely have a lot of paths that are kind of scheduled and ready to go should pricing be favorable in that direction, for sure.

Sounds good. Thank you.

Thanks for calling, Nathan. If you have any other questions, feel free to reach out.

Okay. Thank you. And there are no further questions, Nikki, at this time. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.