Permex Petroleum Corp (OILCF)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 was severely impacted by a full production shutdown: revenue fell to $2.7K (royalty only), oil and gas sales were $0, net loss widened to $1.35M, and diluted EPS was ($2.45). Management attributed the deterioration to financial constraints that halted field operations across all assets .
• Sequentially, revenue dropped from $30.9K in Q2 to $2.7K in Q3 and EPS deteriorated from ($0.75) to ($2.45); year-over-year, revenue fell from $157.0K and EPS from ($2.96) in Q3 2023 .
• Liquidity actions included raising $1.365M via secured convertible debentures; the company recognized $678,531 of debt expense tied to warrant allocation, ending Q3 with cash of $428K and a working capital deficiency of $4.83M .
• Strategic and regulatory developments: board reconstitution, new CEO, partial revocation of a cease trade order (FFCTO) and continued efforts to fully revoke and reinstate trading—key catalysts alongside any funding that enables production restarts and drilling plan resumption in H2 2024 (subject to financing) .

What Went Well and What Went Wrong

What Went Well

• Operating costs were reduced alongside the production shutdown: lease operating expense (LOE) in Q3 declined to $10,421 from $235,511 YoY; G&A also fell YoY on reduced corporate activity .
• Cash increased to $428,385 by quarter-end (from $82,736 at FY23 year-end), supported by debenture financing; management disclosed detailed use of proceeds prioritizing filings, claim payments, M&A, and working capital .
• Governance and leadership reset: appointment of a new CEO (April 29), subsequent board refresh and expansion (June and August), positioning for strategic financing and operations re-start .

Management quote: “The Company will need substantial additional funding to pay the outstanding payables and bring the operated assets back to production.”

What Went Wrong

• Production shutdown across all fields drove oil and gas sales to $0 in Q3 and nil Boe production, collapsing revenue and amplifying losses .
• Working capital deficiency widened to $4.83M; vendor claims totaled $455K (with $446.8K accrued), highlighting ongoing balance-sheet stress .
• Interest and debt expense surged (including $678,531 debt expense from warrant allocation), materially worsening net results despite lower operating costs .

Financial Results

Income Statement Summary vs prior periods and consensus

Note: Margins are derived from reported revenue and net loss; extreme negative margins reflect negligible revenue during Q3 2024 .

Actual vs Wall Street Consensus (S&P Global)

Estimates unavailable from S&P Global due to API limit or limited coverage. Values would normally be retrieved from S&P Global.

Operating Expense Detail (selected)

Segment/Geography Revenue

Note: Total Q3 2024 revenue of $2,671 reflects royalty income, not contract revenue by geography .

KPIs and Production

Guidance Changes

No formal revenue, margin, tax rate, or dividend guidance was provided in the quarter .

Earnings Call Themes & Trends

No Q3 2024 earnings call transcript was available; themes below reflect MD&A narratives across quarters.

Management Commentary

• “Production of oil and gas was shut down across all fields, resulting from financial constraints that impacted field operations.”
• “The Company will need substantial additional funding to pay the outstanding payables and bring the operated assets back to production.”
• “Management has budgeted approximately $1.5 million in minimum operating expenses and $0.5 million in capital expenditures for the next 12 months, which the Company plans to finance principally from one or more equity or debt financings.”
• “Management expects to restart its drilling and development program in the second half of 2024, subject to receipt of additional funding.”

Q&A Highlights

• No Q3 2024 earnings call transcript was available; therefore, no Q&A themes or clarifications could be sourced for this quarter [Search: no earnings-call-transcript found].

Estimates Context

• Wall Street consensus estimates (S&P Global) for Q3 2024 revenue and EPS were unavailable via our API due to request limits or limited coverage. As a result, we cannot quantify beats/misses versus consensus for this quarter. The company’s actuals were revenue $2,671 and diluted EPS ($2.45) .

Key Takeaways for Investors

• The investment case is highly contingent on near-term financing: production is fully shut, and working capital deficiency is large ($4.83M), implying equity/debt issuance risk and potential dilution or higher leverage .
• Liquidity actions (debentures) stabilized cash ($428K) but raised interest/debt expense and introduced significant warrant overhang (676,663 warrants; 401,471 debenture-convertible shares), affecting future equity dynamics .
• Operational recovery requires funding; management plans to restart drilling H2 2024, with Breedlove and West Henshaw recompletion/waterflood opportunities as potential production catalysts if capital is secured .
• Governance changes and regulatory progress (partial FFCTO revocation; board refresh) are positives for reinstating trading and executing capital plans, but execution risk remains high .
• Near-term trading implications: headline sensitivity to any financing, FFCTO full revocation, and concrete field restart timelines; absent these, fundamentals remain constrained by zero production and negative margins .
• Medium-term thesis hinges on converting undeveloped reserves and re-entering 60+ shut-in wells; management estimates multi-year capex requirements far exceeding current liquidity, implying ongoing reliance on external capital and/or partnerships .
• Monitor vendor claim settlements and expense control to limit further working capital deterioration as operations remain paused .