This article first appeared on GuruFocus .
Release Date: August 07, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Operating netback improved 92% year-over-year to $24.9 million, driven by increased production, higher liquids weighting, and improved liquids pricing.
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Production averaged 11,070 BOE per day in Q2 2026, up 21% from a year ago, with June corporate production exceeding 12,000 BOE per day, the highest monthly average in company history.
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Realized price increased 46% year-over-year to $37.66 per BOE, despite an 18% drop in natural gas prices, thanks to a higher liquids weighting of 39% and strong oil and NGL prices.
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Funds flow for the quarter increased 32% year-over-year, demonstrating solid financial performance despite hedging losses.
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The company is executing efficiently on operations, with new wells brought on production in August and additional wells scheduled for later in the year, positioning for continued growth.
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Management maintains a disciplined capital investment approach and consistent risk management, allowing the company to remain fundamentally strong and continue paying a high-yield dividend.
Negative Points
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Hedging losses partially masked the dramatic improvement in operating results, reducing the overall financial impact of the strong quarter.
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Natural gas prices remain weak, with an 18% drop year-over-year, which could pressure future revenue if the trend continues.
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Oil prices are described as very volatile with no end in sight, creating uncertainty for future cash flows and planning.
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The Harmatin acquisition did not contribute fully in Q2 due to scheduled facility maintenance in April and May, which temporarily curtailed production.
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Production growth is expected to plateau at around 12,000 BOE per day for the rest of the year, with management indicating it is unlikely to reach 13,000 BOE per day exit rate.
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Infrastructure constraints in North Ferrier limit the ability to fully capitalize on strong well results, requiring a more spread-out development schedule.
Q & A Highlights
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Q: What is the thought process behind the potential extra $10 million in capital spending (from the $50-60 million range), and if you spend at the higher end, should we expect an exit rate north of 13,000 boe/d for 2026? A: Ken Gray (CEO): We expect to come in at the higher end of the range, but under $60 million. The extra $10 million is just for variability and to give ourselves room for unforeseen events. We are right on schedule. For production, we hit 12,000 boe/d in June and expect to maintain that or slightly higher through the rest of the year. I'd love to hit 13,000, but I'm not sure we'll quite get there. We do have wells that we can accelerate from our 2027 program into 2026 if things work out, which could change both exit rates and capital values.
Q: Are you finding any serendipitous drilling outcomes where results have been much better than expected, and are there certain areas with more drilling inventory that you might focus on or accelerate from 2027 into 2026? A: Ken Gray (CEO): Results have been pretty much according to forecast. The biggest thing we're waiting on is the two Harmatten oil wells brought on production August 1st, which are currently cleaning up. We're optimistic about them, and if they come in well above forecast, we would look to accelerate something there. The wells in North Ferrier look great, but we're a bit constrained on infrastructure there due to pipeline rates, which dictates spreading things out. We always adjust our forecast and program based on current knowledge, so the biggest thing right now is seeing where the Harmatten wells end up.
Q: Can you provide an overview of the key financial and operational highlights for Q2 2026? A: Ken Gray (CEO): Q2 was a strong quarter. Operating net back improved 92% from a year ago to $24.9 million, driven by increased production, higher liquids weighting, and improved liquids pricing. Funds flow was up 32% from a year ago despite hedging losses. Production averaged 11,070 boe/d, up 21% year-over-year. We brought on 7 (6.1 net) new Ferrier wells, but didn't see full contribution from the Harmatten acquisition until June due to scheduled facility maintenance. In June, corporate production exceeded 12,000 boe/d, the highest average monthly production in Petrus's history.
Q: How did commodity prices impact the quarter's results? A: Ken Gray (CEO): Global events supported liquids pricing, with oil prices up 59% and NGL prices up 39% from a year ago. This, combined with an increased liquids weighting of 39%, led to a realized price of $37.66 per boe, up 46% year-over-year, despite an 18% drop in natural gas prices. Oil prices remain very volatile, and natural gas prices remain weak but with a positive long-term outlook.
Q: What are the upcoming operational activities and drilling plans? A: Ken Gray (CEO): We've drilled and completed a couple of oil wells in Harmatten, brought on production August 1stthe first wells drilled there since the Q1 acquisition. We have one more Ferrier well to complete and bring on production later this month, and we are currently drilling joint venture Glock wells scheduled to come on in October. We continue to execute efficiently on the operational side.
Q: How is the company positioned given the current price volatility? A: Ken Gray (CEO): Price volatility is a constant in this business, so it's business as usual for us. Petrus, with its strong operational efficiency, disciplined capital investment, and consistent risk management, is in a fundamentally strong position to take advantage of future opportunities while continuing to pay a high yield dividend to shareholders.
Q: What was the impact of the Harmatten acquisition on production during the quarter? A: Ken Gray (CEO): We didn't see full contribution from the Harmatten acquisition in April and May due to scheduled facility maintenance that temporarily curtailed production. However, in June, we finally saw full contribution from Harmatten and the new wells, which pushed corporate production over 12,000 boe/d, the highest average monthly production in Petrus's history.
Q: Are there any constraints on production growth in the Ferrier area? A: Ken Gray (CEO): The wells drilled in North Ferrier look great, but we are a bit constrained on infrastructure there given the rates we're trying to put through the pipeline. This dictates that we spread things out a little bit in that area, which limits how quickly we can ramp up production from those wells.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
