Journey Energy Inc. (TSX: JOY) (OTCQX: JRNGF) ("Journey" or the "Company") is pleased to provide preliminary guidance for 2025 with a focus on advancing development activities within the Duvernay Joint Venture.
2025 CAPITAL PROGRAM
On January 6, 2025, Journey announced initial drilling results on the first 2.0 (0.71 net) wells in its Duvernay joint venture in Central Alberta. In the most recent corporate presentation Journey provided an updated type curve highlighting the economic opportunity this world class resource affords the Company over the long term. When the joint venture was announced on May 7, 2024, Journey announced a 2025 cap on joint venture drill, complete, equip and tie-in expenditures at $100 million gross dollars.
In addition to considerations pertaining to the cap on expenditures, the timing of spring runoff, and the logistical benefit of multi-well pad drilling and completions, creates a logical argument for winter drilling and spring completions. This results in 2025 capital being concentrated in the first half of 2025. Journey currently forecasts participating in all wells and spending approximately $30 million net dollars for drilling, completing, equipping and tieing-in 7 (2.1 net) wells. Current expectations are that all wells will be producing by mid-year 2025. The majority of these locations will be drilled from two-three well pads in order to maximize operational efficiencies and to minimize costs.
Total capital expenditures for Journey in 2025 are forecast to be $50 million. Capital for 2025 includes $30 million for the Duvernay program; $10 million of capital toward the completion of the ongoing power projects; with the remainder allocated to end-of-life, polymer, land, seismic acquisition, and miscellaneous other expenditures.
TERM-DEBT REPAYMENT UPDATE
Journey and its long-term capital provider and largest shareholder, Alberta Investment Management Corporation ("AIMCo"), have reached an agreement today to amend the repayment terms of the remaining outstanding balance as at February 28, 2025 of approximately $12.4 million. Under the existing agreement, monthly payments were scheduled to be made from March, 2025 until the final payment on August 31, 2025. Under the new repayment terms, payments of principal and interest from March 31, 2025 to August 31, 2025 will be paused. On September 30, 2025 equal principal payments of approximately $2.1 million, plus accrued interest, will resume and continue until a final payment on February 27, 2026. The deferral of the balance of approximately $12.4 million of near-term payments, coupled with the cash flows from the new Duvernay wells as well as Journey's existing operations, is intended to assist the Company with funding the Duvernay development program.
Journey continues to look at funding alternatives to simplify its capital structure and to accelerate Duvernay expenditures in 2026. The attractive cash flow profile provided by the early phase Duvernay wells presents an excellent opportunity to recuperate capital expenditures quickly while generating attractive rates of return.
OUTLOOK & PRELIMINARY GUIDANCE
The below guidance incorporates many material underlying assumptions including but not limited to:
- Forecasted commodity prices;
- No material changes to the current regulatory framework;
- Forecasted growth capital investment;
- Forecast operating costs, including forecasted prices for power;
- Forecast results and phasing in of production additions from the capital program.
In addition to the above, Journey has incorporated a number of specific assumptions which are unique to the company including but not limited to:
- No net asset sales or acquisitions for 2025 are included in the forecast;
- No power revenue is included in the forecast outside of the Countess power facility;
- Stolberg area production, shut in August 2024 due to a third party. The projected re-start date is August of 2025.
Journey intends to update its guidance at regular intervals throughout the year as assumptions are further refined.
Annual average daily sales volumes
2025 Initial Guidance: 10,800-11,200 boe/d (58% crude oil & NGL's)
Adjusted Funds Flow
2025 Initial Guidance: $68 - $70 million
Adjusted Funds Flow per weighted average share
2025 Initial Guidance: $1.01 - $1.05
Capital spending
2025 Initial Guidance: $50 million
Year-end Net Debt:
2025 Initial Guidance: $41 - $43 million
Net Debt to Adjusted Funds Flow ratio
2025 Initial Guidance: 0.6x
Reference commodity prices:
WTI (USD $/bbl): $4.00
MSW oil differentials (USD $/bbl): $13.00
WCS oil differentials (USD $/bbl): $2.05
AECO natural gas (CAD $/mcf): $0.70
CAD/USD foreign exchange $72.00
Future Update and Further Information
Journey management views 2025 as a pivotal year for the company as the groundwork laid in previous years begins to materialize. Journey's management remains focussed on long-term value creation for all stakeholders and are available to address shareholder inquiries upon request.