Criterium Energy, an independent upstream energy development and production company focused on energizing growth in Southeast Asia announces its Q2 2024 financial and operating results for the three- and six-month periods ended June 30, 2024.

Quarterly Highlights 

• Realized average field production of 821 barrels per day (“bbl/d”) in Q2 2024 from the Tungkal Production Sharing Contracts (“Tungkal PSC”), compared to 822 bbl/d in Q1 2024 and nil in Q2 2023, reflecting the Mont D’Or Petroleum Limited (“MOPL”) acquisition in early 2024 and the impact of a successful, ongoing workover program. 
• Completed four workovers on existing wells during the quarter at a cost of approximately US$285,000 allocated to operating expenses. Workovers have exceeded expectations, producing at levels 50% above the projected well type curve(1). All workovers completed during the first half of 2024 collectively reached pre-tax payout by the end of Q2 2024. 
• Decreased total expenses quarter-over-quarter, with operating expenses (inclusive of G&A) (“Opex”) declining 7% to US$40/bbl in Q2 2024 from US$43/bbl in Q1 2024, owing to reduced fuel expenses, cost management, and operational efficiencies realized from the MOPL transaction. Opex is anticipated to fall below US$30/bbl by year end(2). 
• Strengthened operating netbacks(3) per barrel which averaged US$19/bbl in Q2, approximately 40% higher than the average in Q1 2024. Operating netbacks at year-end are expected to reach nearly US$30/bbl(2) despite lower forecast Brent prices in the second half, underscoring the increasing resiliency of Criterium’s portfolio. 
• Reduced total debt by C$1.4 million at June 30, 2024 compared to March 31, 2024, with Criterium benefitting from favourable interest rates of just over 8%, a level far better than the Company could expect to secure had it been required to find new sources of credit facilities. 
• Exited the period with cash and cash equivalents totalling C$6 million, and line of sight to positive free cash flow generation, positioning the Company with financial strength to execute its planned capital program across a variety of potential macro-economic environments or corporate events.

Operations Update 

Through the second quarter of 2024, the Company continued its program of low cost, high-return workovers in the oil-producing Mengoepeh (“MGH”) field with four workovers successfully completed, including one which produced from the newly discovered GH sand zone. The Q2 2024 workovers have continued to perform above expectations, enabling Criterium to rapidly recycle capital given cash paybacks average less than 30 days. Into the third quarter of 2024, the Company is currently working on its latest five well workover program, three of which were executed in August and are producing from the GH Sand Zone.

The positive impact of this program is demonstrated by production increases that are supporting Criterium’s continued growth in production, revenue and financial flexibility. During July, production averaged 850 bbl/d(4), while August has averaged 860 bbl/d4 despite having approximately 100 bbl/d currently offline as the Company performs repairs on three different pumps in the PLT field in the Tungkal PSC. Volumes from those repaired pumps are expected to be back on-line by early September 2024.

Outlook 

Infill Drilling Program 
Through the balance of 2024, Criterium will focus on finalizing its well optimization work, along with commencing the inaugural two-well infill drilling program in September. This drilling program is targeting a previously undrilled section of the MGH Field and is forecast to add approximately 300 - 350 bbl/d1 of combined production, with volumes from the initial well expected on-stream in October and volumes from the second well being brought online in November. The Company will provide updates on drilling results and other key operational developments as information becomes available. 

Progress at Tungkal PSC 
In addition to oil-weighted developments at the MGH Field, Criterium is continuing to undertake technical feasibility for the development plan for the SE Mengoepeh gas field in the Tungkal PSC, and expects to make a submission to government for the gas field to be included in the existing Mengoepeh Plan of Development before year end 2024. In support of this strategy, Criterium successfully executed a Memorandum of Understanding related to gas offtake during Q2 2024 with PT Energasindo Heksa Karya ("EHK"), a company owned by Rukun Raharja and Tokyo Gas, whereby EHK will purchase discovered gas from SE Mengoepeh and the Tungkal PSC.

Bulu Transaction 
Progress As previously announced on June 25, 2024, Criterium continues to progress the sale of its 42.5% non-operated working interest in the Bulu Production Sharing Contract ("Bulu PSC") and expects to provide an update shortly.

Financial 

Criterium intends to maintain its focus on cost reductions, netback enhancements and deleveraging while simultaneously taking a prudent approach to capital allocation decisions. As a growth-focused entity, the Company plans to ensure appropriate investment is directed to value-creating development programs within its asset portfolio in order to maintain financial flexibility and support the generation of positive cash flow. This strategy is expected to be further supported by the reduced lender payment negotiated in July of 2024, which is forecast to have a net positive cash impact of US$1,500,000 through the second half of 2024.

(1) Management estimate based on previously disclosed ‘Mont D’Or Venture Limited YE Evaluation’ reserve and resource report, effective December 31, 2022.
(2) Management estimate based on past operating costs and forecasted reductions. Unit costs assume production profile as per production target which is based on Management Estimates of future workover and infill programs. 
(3) Non-IFRS financial measure or ratio that does not have any standardized meaning as prescribed by International Financial Reporting Standards, and therefore, may not be comparable with calculations of similar measures or ratios for other entities.
(4) Estimate based on field production reports

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