In the third quarter, Matra continued to execute the drilling and development program which resulted in accelerated growth and further sequential operational and financial improvements:
- Q3 production was 23% higher than in Q2 and 43% higher than in Q1
- 17 wells have been drilled on the Dial and Lyall leases, 12 of which had been completed by the end of Q3 and 5 are completed in Q4
- Daily gross production passed 1,000 boepd in early October
- Q3 Revenues were 24% higher than in Q2 and 37% higher than in Q1
- EBITDA improved to 0.5 MUSD from being negative in the first half of the year
The new wells perform well and encourage further development of our leases in the Texas Panhandle. Our 24 well drilling program will extend into next year, as we are entering the winter season which is more challenging and reduces the pace of drilling. Upon completion of the current program, we plan to launch an expanded drilling program in 2019. With the addition of new well completions in Q4, our production targets remain within reach and we expect further production growth in 2019.
Financial results were driven by the increase in production, higher price realisations and improved cost efficiency. Oil and gas prices continued to increase in the third quarter. The effects of costly hedging contracts experienced in the first half of 2018 levelled off in the quarter and production costs per boe decreased.
Looking ahead, we expect further financial improvements and increasing cash flow driven by higher production levels and supportive oil and gas markets. So far in the fourth quarter, oil markets have been volatile with lower prices while gas prices have increased significantly. Increased cash flow from operations supports further investments in the coming year and improves our position to reduce financing costs by capitalising on better debt financing options.
The outlook is promising as we continue our efforts to transform Matra Petroleum through successful drilling, production growth, operational performance and reduced debt costs, with the objective to continue to add value to our oil and gas reserves and improve bottom line performance.
23 November 2018
Chief Executive Officer