Rubellite Energy (RBY.TO and RUBLF) Q1 Results

[dan_s]

FIRST QUARTER 2025 HIGHLIGHTS

Rubellite delivered record first quarter conventional heavy oil sales production of 8,339 bbl/d that exceeded the high end of guidance (3% above the mid-point of the guidance range) and was up 8% relative to the fourth quarter of 2024 (Q4 2024 - 7,754 bbl/d) and 85% relative to the first quarter of 2024 (Q1 2024 - 4,514 bbl/d). < Beat my Q1 oil production forecast of 8,047 bpd.

First quarter total sales production of 12,383 boe/d (70% heavy oil and NGL) was up 19% from the fourth quarter of 2024 (174% relative to Q1 2024) while also exceeding the high end of guidance (2% above the mid-point of the guidance range). < Beat my Q1 forecast of 12,100 Boepd.
Production growth quarter over quarter was driven by the successful drilling program at Figure Lake and Frog Lake and a full quarter impact of the Recombination Transaction which added an average of 3,708 boe/d to sales volumes (20.0 MMcf/d of conventional natural gas and 371 bbl/d of NGL). Ten (8.0 net) new wells were brought on production from the heavy oil drilling program and at Figure Lake the newly constructed gas plant commenced operations on January 23, 2025 and added an average of 2.0 MMcf/d of solution gas sales in the first quarter of 2025.

Exploration and development capital expenditures(1) totaled $22.3 million for the first quarter of 2025, in line with guidance of $22 to $24 million. First quarter spending included costs to drill, complete, equip and tie-in four (4.0 net) multi-lateral horizontal development wells at Figure Lake, six (4.5 net) multi-lateral horizontal development wells at Frog Lake, one (0.3 net) waterflood injection well at Marten Hills and one (1.0 net) exploratory well. Included in first quarter development capital spending was $1.1 million for the Figure Lake gas conservation project.

Land and other spending totaled $2.5 million in the first quarter of 2025 to acquire 13.0 net sections of land and included $0.4 million of spending on seismic purchases. An additional $0.8 million (Q1 2024 - $0.1 million) was spent on decommissioning, abandonment and reclamation activities.

Adjusted funds flow(1) was up 94% to $35.9 million, and up 30% on a per share basis to $0.39 per share, relative to the first quarter of 2024 (Q1 2024 - $18.5 million; $0.30 per share). Quarter-over-quarter, adjusted funds flow, after transaction costs was up 14% and 8% on a per share basis (Q4 2024 - $31.6 million; $0.36 per share), which marks another consecutive quarter of growth in adjusted funds flow per share since the inception of Rubellite. < My Q1 Adjusted Operating Cash Flow forecast was $34.9 million.

Cash costs(1) were $20.9 million or $18.76/boe in the first quarter of 2025 (Q1 2024 - $9.0 million or $21.86/boe; Q4 2024 - $18.6 million or 19.45/boe).

Net income was $1.2 million ($0.01 per share) in the first quarter of 2025 (Q1 2024 - $4.2 million net loss; Q4 2024 - $26.7 million net income).

Free funds flow(1) of $11.0 million was driven by adjusted funds flow of $35.9 million exceeding capital expenditures including land and other spending of $24.9 million, and was used to reduce net debt and other balance sheet obligations.

As at March 31, 2025, net debt(1) was $147.7 million, a reduction in net debt of $6.3 million from $154.0 million as at December 31, 2024.

Rubellite had available liquidity(1) at March 31, 2025 of $33.1 million, comprised of the $140.0 million borrowing limit of Rubellite's first lien credit facility, less current bank borrowings of $103.3 million and outstanding letters of credit of $3.6 million. Subsequent to the end of the quarter, outstanding letters of credit were reduced by $2.2 million to $1.4 million, further enhancing available liquidity.
-------------------------
I will update my forecast/valuation model for Rubellite this afternoon.