Laique Ahmad Amir Arif's questions to Saturn Oil & Gas (OILSF) leadership • Q4 2024
Question
Laique Ahmad Amir Arif of Canaccord Genuity asked about the sustainability of Saturn's improved cost structure, the reasons for technical revisions to reserves, the company's go-forward hedging strategy, and the potential inventory for Spearfish open-hole multilateral wells.
Answer
CEO John Jeffrey stated that while Q1 costs will be seasonally higher, he is confident the full-year operating costs will remain below the $20/barrel target, similar to 2024 levels. He explained that technical revisions were primarily due to high-grading the drilling inventory after an acquisition, which involved dropping about 30 locations. On hedging, Jeffrey confirmed the strategy is to maintain a ~55% hedge on a 12-month forward basis to provide flexibility. CDO Justin Kaufmann added that they see about 30 potential Spearfish wells, representing nearly $100 million in NPV at a $70 price deck, with the first well showing over a 100% rate of return.