Prospera Energy Inc. Announces 2021 Year End Financial Results


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CALGARY, Alta., July 12. 2022 (GLOBE NEWSWIRE) — Prospera Energy Inc. (“will prosper“or the”society“) (PEI: TSX-V; OF6B: FRA) is pleased to report its financial and operating results for the fourth quarter and year-end 2021. Financial and operating information Selected items presented below should be read in conjunction with the Company’s financial statements and related MD&A discussion and analysis for the year ended December 31, 2021.

Message to shareholders

2021 has been a transformational year for Prospera as the company has been restructured to be compliant and profitable for all stakeholders. The restructuring of Prospera began in the second quarter of 2021 with an initial focus on accounts payable arrears, regulatory and environmental non-compliances, security of infrastructure operations and production optimization. It is important to note that P.E.I. increased its focus on ensuring that its accounting practices comply with IFRS and is committed to improving the legacy culture associated with Prospera’s accounting policies.

Prospera’s accounting engagement began with the hire of new auditor Crowe MacKay LLP (“Crowe”), announced on December 3, 2021. Crowe has completed a thorough audit of the current and prior periods. In addition, we performed more sample testing, which resulted in many prior period adjustments. Also, identify important internal controls to implement. Overall, the audit took longer than expected, but the restructured PEI has established much higher confidence in its financial accounting and compliance practices

The 2021 audited financial statements reflected the significant reorganization and business efforts made that resulted in the current financial position and liquidity. Prince Edward Island is positioned for accelerated growth in 2022 and beyond (on a strong pillar of fundamental business support).

2021 Highlights

A. Realized positive net income of $4.3 million in 2021 ($0.05 per share – basic) compared to a net loss of $11.7 million in 2020 (-$0.18 per share – from base)

Net operating income 2021 2020
Total oil and natural gas sales 4,410,761 3,275,508
Royalty fee (447,340) (191,042)
Operating and restructuring costs (5,066,843) (4,283,082)
Net operating income (1,103,422) (1,198,616)
Depreciation (charge)/reversal 6,849,087 (9,019,769)
Net revenue $4,349,802 ($11,728,262)
Earnings/(loss) per share $0.05 ($0.18)
  • The reversal of impairment of $6,849,087 results from the increase in the volume of reserves from 464 Mbbl to 2,644 Mbbl; Increase [email protected]% increase from -$3.4 million to +$56.2 million. The oil in place was technically justified by the restructured team backed up by a third party assessment. The NPV increase was completed at a modest price of $70/boe CAD.
  • The cost of infrastructure restructuring and well optimization translates into a higher operating cost. However, production at the current 700 (gross) barrels of oil equivalent (boe) per day has resulted in a significant increase in monthly revenues, from a low of 80 boe per day in March 2021.
  • Average realized oil and natural gas prices of $61.42 per barrel of oil equivalent (boe) in 2021, compared to $33.76 per boe in 2020

B. PEI has significantly increased the value of its assets by 368%+ in 2021:

2021 2020
ASSETS
Current assets
Cash $ 281,519 $ 153,393
Customers and other debtors 1,405,573 2,967,449
Expenses and installments paid in advance 505 728 296 104
Inventory 237,863 226,890
Total current assets 2,430,683 3,643,836
Non-current assets
Property and Equipment 23,073,890 1,933,355
Right of use 627,965
Total assets $ 26,132,538 $ 5,577,191
  • The justification of the oil in place and the corresponding increase in the value of the NPV were the main contributors to the increase in the value of the asset.
  • Increased the Company’s interest in the Cuthbert, Luseland and Heart Hills properties from an average of 40% to 80%+ by settling partners’ arrears.

VS Prince Edward Island significantly reduced legacy arrears in 2021

Current liabilities 2021 2020
Suppliers and other creditors $ 8,645,147 $ $10,906,989
Flow-through premium 17,000
Current portion of rental debts 64 121
Credit facilities 1,575,348
Total current liabilities 8,726,268 12,482,337
  • Settlement of $1,575,000 of mezzanine debt
  • Settlement of inherited debt and commercial arrears of $5.8 million
  • Reduction in year-over-year AP liabilities of $2,261,842 (based on 2020 closing balances)

D. Increased production and asset values ​​improved shareholder deficit in 2021

Failure of shareholders 2021 2020
Share the capital 12,452,481 11,649,956
Stock warrants 863 740 154,641
Contributed surplus 3,981,894 3,804,198
Equity portion of convertible debt 60 211
Accumulated other comprehensive income (14,013) (14,013)
Deficit (30,128,149) (34,477,951)
Total shareholder deficit (12,783,836) (18,883,169)
  • Net profit resulting in reduction of shareholders’ deficiency of 4,349,802
  • Issuance of convertible debt securities through several private placements, raising a net total of $6,469,410; raised equity proceeds of $902,000.

PEI’s 2021 year-end financial information. can be found under the company’s issuer profile on SEDAR at www.sedar.com.

Outlook 2022

Prince Edward Island’s restructuring efforts have resulted in manageable liabilities, safe operating infrastructure and optimized critical production rates of 700 BOE per day from vertical wells. PEI positioned itself to execute the second phase of the PEI development plan. which consists of increasing production through horizontal wells and capturing the large remaining reserves. All while ditching vertical wells and reducing environmental footprint and ARO obligations. PEI launched the horizontal trials to assess the technical and economic merits.

About Prospera

Prospera is a public oil and gas exploration, development and exploration company focused on conventional oil and gas reservoirs in Western Canada. Prospera will use its experience to develop, acquire and drill assets with primary and secondary recovery potential.

For more information:

Shawn Mehler, PR Email: [email protected]Website: www.prosperaenergie.com

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements relating to the Company’s future operations and other statements that are not historical facts. Forward-looking statements are often identified by words such as “will”, “may”, “should”, “anticipate”, “expect” and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Company’s future plans and objectives, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Although Prospera believes that the expectations and assumptions on which forward-looking statements are based are reasonable, undue reliance should not be placed on forward-looking statements because Prospera cannot guarantee that they will prove to be accurate. Because forward-looking statements address future events and conditions, they, by their very nature, involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (for example, operational risks associated with development, exploration and production; delays or changes in plans for exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of production, cost and expense estimates and projections, and risks to the health, safety and environment), fluctuations in commodity prices and exchange rates and uncertainties resulting from potential delays or changes in plans for exploration or development projects or capital expenditures.

Readers are cautioned that the assumptions used in preparing any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those anticipated due to numerous known and unknown risks, uncertainties and other factors, many of which are beyond Prospera’s control. Accordingly, Prospera cannot guarantee that any forward-looking statement will materialize, and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time it was prepared, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Prospera undertakes no obligation to publicly update or revise any of the forward-looking statements included, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities laws.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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Source: Prospera Energy Inc.

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