I'll just kind of go through a couple of the highlights we add in the
press release that was released yesterday. You mentioned the PDP reserves the increased five
hundred and eight percent. So last year, twenty twenty two's reserves were four
point four PDP value of twenty seven million, this year at a discover right
of ten percent, and so that's a direct reflection of the twenty twenty three
development program that the team execute them your SAP, and what that really means
is that it identifies our opens up a variety of different conventional financing options for
prosper and non delude of financing options, asset based debt and so on.
And what it allows us to do is get away from some of the higher
red financing so we've done historically, take those that will consolidate our balance sheet
and ultimately fund the upcoming twenty twenty four development program. The Financial Survival Network
now more than ever, the Financial Survival Network. Welcome. This is Financial
Survival Network. I'm your host, Carrie Lutz, and we were about to
get a much requested update from CEO Samuel David and CFO Cress Lutkey of Prospera
Energy yesterday, Sam, you released your latest reserve report for twenty twenty three,
and I kind of thought there was a typo I was looking at it.
It said five hundred and eight percent increase in reserve value PDP, and
I mean, I've never seen numbers going up that high before. That's right,
Kerrie Prospero team is very proud and pleased to convey that appreciation of the
asset value. And really I feel we are just scratching the surface on the
asset the real asset value of the entire reservoir we have and the oil in
place, and we're just being to tap into the reserves. We're just accessing
the reserves with the horizontals that we just drilled. There's a large upside to
this asset value. For example, we haven't really started exploiting one of our
largest oil in place property and we're just commencing that. The reason that hasn't
commenced so far is because we've been doing a lot of due diligence, studying
all the technical technical parameters, historical performance. It is pressure depleted and we're
finding the most effective ways to apply that and we'll be quilting that this year.
So you can see even the largest oil and place property is not reflected
in this current appreciation of eight percent appreciation in approve and developed value. Chris,
this reserve report really kind of a game changer in terms of how the
company moves ahead, how it raises funds. You just tell us explain what
the difference is now, Yeah, certainly, Carrie. I'll just kind of
go through a couple of the highlights we adding the press release that was released
yesterday, you mentioned the PDP reserves increased five hundred and eight percent. So
last year, twenty twenty two's reserves were four point four PDP value of twenty
seven million. This year at a discover right of ten percent, and so
that's a direct reflection of the twenty twenty three development program that the team executed
them out and what that really means that it identifies or opens up a variety
of different conventional financing options for prosper and non delude of financing options, asset
based debt and so on. And what it allows us to do is get
away from some of the higher refinancings that we've done historically, take those out,
consolidate our balance sheet, and ultimately fund the upcoming twenty twenty four development
program from an np the standpoint, now, what do you reckon the NPV
of the reserves? It is all of them, P two P and PDP.
Well, the two P reserves value that was published yesterday as well as
a total three million. That's the corporate number, and that's a proved plus
probable number. It increased sixty one million year over year, and that's really
a reflection of an increase in the undeveloped reserves value along with the twenty twenty
three development program. So pretty much what you're telling me then, is that
the market cap of the company, which currently look at my latest number is
clus thirty six million. It's almost triple. Your MPV is almost triple the
market cap, that's right. But we calculate the the two PE reserve value
over the total amount of shares the air outstanding currently we get approximately thirty one
cents, which is considerably higher than where we're at currently. Total proven number
is about twenty one cents, but both were higher. Sam Basically, looking
at this kind of I saw a current recovery rate of nine percent, but
the release seems to imply that it could go much higher. Oh yeah,
definitely there's ample amount of room to be recovered, ample amount of reserves to
be recovered. That nine percent is an overall average between three properties. As
I mentioned, the largest oil in place property and the largest oil in place
has approximately two hundred and ninety million barrels in place. That property has only
recovery. We have only recovered about six percent of the oil of place.
There's plenty of remaining reserves to be recovered. This year, we got a
drill program. It's going to take place, and you've gotten a much earlier
start to the process, aven't you. Definitely? Definitely Yeah. Last year,
you know, everything got delayed to actually, you know, for us
to work through. That's the first time we were executing the large development program
for Prospera, and it stretched it into the winter till end of December,
and a lot of that production and corresponding revenue we stop reflected in the balance
sheet. It will be reflected in this year's balance sheet. But this year,
yes, we have paused everything and preparing for an early start right after
the breakup to commenced, really so we could see that those new wells hit
the income statement before the end of the year. Then yes, you know,
since we were doing a much earlier drilling in the summer. The results
from the drilling will be reflected in the year end statement. Right, So
cash flow standpoint Chris, company's position to finance this program adequately in addition to
perhaps taking on new financing. Yeah, that's right. Carry The additional financing
that the reserves will provide, combined with the company's cash flow, will support
the twenty twenty four top of the requirements allow us to achieve the year end
targets have been published earlier this year. Sam, the reserve life is now
thirty years, but we know in the market that once you go past seven
ten years, you don't really get any respect for that to you. Well,
you know, there's longevity in these as it were, and we could
have a steady stream of supply of oil and a cash flow for this company.
Right. So obviously to get to realize this additional production, you're going
to have to do a substantial number of infrastructure improvements. We already discussed technical
advancements that are going to be kicking in as the process goes along. It's
a big project, isn't it. These properties have adequate infrastructure in place.
It's a little bit outdated, and we've been attending to that on an ongoing
basis, and actually we have a turnaround plant for this summer. The previous
year. Wintery conditions affected as quite a bit last year, but this year
we were able to bounce back and resume production and appreciating production from the cold
weather. So already there's improvements in the infrastructure, and there'll be additional improvements
to infrastructure this summer. And also because there's existing infrastructure, all the drilling
that we do, all the optimization could be brought online fairly quickly on a
quick turnaround and easier permitting because it's just additional production and the same project,
the same field, right same, Yeah, these are all multi well padlese
and we just say yes, it's not the same existing infrastructure curio, I
don't go out that that that helps reduce the capital will lay considerably as well.
We're adding these new wells so we get the production right away, but
we're not adding to spend any money on pipeline infrastructure or anything along those lines.
So we're drilling new wells. We're adding them at roughly about six dollars
a barrel of capital expenditure and it's not plagued by additial infrastructure costs that would
ultimately bring that number up. Now that's in Saskatchewan and the heavy oil property,
the medium oil development, it does require some infrastructure, concentrated infrastructure to
production. So Chris, So the decline in production that happens in the winter,
it is not an isolated event. I mean, I see the chat
rooms go a little that could overreact to the winter decline. But this isn't
just a prospera phenomena. This is industry in this part of the world,
right Cort. Across the board, we see our peers impacted in a similar
way, big and small companies across the board. I mean, operating a
negative sixty degree weather is tough. But we you know, we as say
I'm talked about, there's a lot of infrastructure upgrades and things like that,
and preparedness that happens. There's always events that are on plopped. You're expanding
your team right now, I understand, adding more people and this can also
make an impact. And obviously it helped keep the oil flowing during the winter.
Two well, at minus c two celsius, not too many things move.
However, However, we can that's right, yeah, give other people.
Well, we have added experienced staff to both the operation and production engineering.
We also, I think you've mentioned before, we have a VP of
experienced VPF operation as well, so we have added significant experienced individuals to accommodate
the development that we have planned. So the money is there to do all
this, Chris, and the team is there to do it all, Sam,
what do you think end of the year. I mean I saw in
the release it said you got a target of five thousand boe per day.
Now that's right. It's a fairly ambitious target, but we feel it's it's
attainable and prosper has come a long way since the restructured in restructuring that happened
in twenty twenty one onward. But Prospero is a different company now and there's
a cohesive team management team, an operation team, and we have executed and
demonstrated the reaccessing undrained reserves, and we have retired very good wells all along
the way, and we're reducing our operating expansion and liability as at retiremental liability
as well, and we also have proved up our medium oilplay. So here
on word, it's mostly execution and development to appreciate production. Also we have
we'll be adding a key strategic acquisition to diversify your product from our heavy old
dependency, and these are all when we add up all of this, we
feel and that ambitious target is attainable. All right, well, I think
really happy to get this update. As you know, I'm a shareholder as
well as a prespera being a sponsor of the show, and it's great to
see it moving ahead. Hopefully the market will will give you some respect in
the near term once this information gets out there. It seems like it's a
good prospect. We will keep on doing what we're doing and we'll let rest
take care of it. Stuff. Thank you, Kerry. All right,
thank you, Chris Sam. It's always great to talk with you. Go
over to the company's website prespar Energy dot com, SiGe up for notifications the
ticker symbols in the US g x r FF and of course in Canada Pei
and he will be going for follow ups in the coming months and hopefully everything's
going to work out awesome. Thank you. Thanks Garry. The Financial Survival Network