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CALGARY, AB, November 7, 2024 /CNW/ – Tenaz Energy Corp. (“Tenaz”, “We”, “Our”, “Us” or the “Company”) TNZ is pleased to announce its financial and operating results for the three and nine months ended September 30, 2024 and senior unsecured notes issue. 

The unaudited interim condensed consolidated financial statements and related management’s discussion and analysis (“MD&A”) are available on SEDAR+ at www.sedarplus.ca and on Tenaz’s website at www.tenazenergy.com. Select financial and operating information for the three and nine months ended September 30, 2024 appear below and should be read in conjunction with the related financial statements and MD&A.

HIGHLIGHTS

Corporate Update

• We are pleased to announce a $140 million private placement offering (the “Offering”) of Senior Unsecured Notes due 2029 (the “Notes”). The Offering has been placed with institutional investors and is expected to close on November 14, 2024. The Notes are non-callable for the first two-and-one-half years, bear interest at 12% per annum, and are priced at par. The Notes will replace the previously- announced $90 million delayed-draw term loan provided by National Bank of Canada (“NBC”) to facilitate the acquisition of NAM Offshore B.V. (“NOBV”). This long-term debt financing provides significant liquidity to pursue our international M&A strategy, as well as funding the closing of the NOBV acquisition.  
• On July 18, 2024, we announced the execution of a definitive agreement to purchase NOBV. On August 5, the Netherlands Authority for Consumers and Markets (“ACM”) completed its review of the transaction and cleared it to proceed as planned. We are now conducting transition activities with a target of a mid-2025 closing and assumption of operations. Free cash flow occurring between the effective date of January 1, 2024 and the closing date will be reflected as a reduction of the purchase price. 

Third Quarter Operating and Financial Results

• Production volumes averaged 2,535 boe/d⁽¹⁾ in Q3 2024, up approximately 1% from Q2 2024. Higher Netherlands production after completing annual offshore maintenance was largely offset by lower Canadian production.  Production increased 7% over Q3 2023, driven by an increase in Canadian production from Leduc-Woodbend wells brought on late in 2023.   
• During Q3, we drilled an unstimulated multi-lateral well in the Ellerslie formation on recently-acquired land near the Watelet gas plant. During its initial 45 days of production, this well has averaged approximately 355 boe/d gross (310 boe/d net to Tenaz), with oil constituting 93% of this production. Based on these strong results, we are drilling a follow-up multi-lateral well to further develop this Ellerslie pool. 
• Our 2024 capital plan in Canada has been revised to include the two (1.75 net) horizontal multi-lateral wells targeting the Ellerslie formation. These two Ellerslie wells replace the four gross (3.5 net) Rex program in our original plan. The revised capital program is even more capital efficient than the original Rex-oriented plan.    
• Funds flow from operations (“FFO”)⁽²⁾ for the third quarter was $3.4 million, down 42% from Q2 2024 and 30% from Q3 2023. Lower FFO resulted in part from higher G&A and transaction costs for M&A activity, including the NOBV acquisition. In the quarter-over-quarter comparison, FFO was further impacted by a prior-period income tax recovery recorded in Q2 2024.
• We recorded a net loss of $2.5 million in Q3 2024, as compared to net income of $1.3 million in Q2 2024 and $20.9 million in Q3 2023. The shift to a net loss was driven in part by transaction expenses in Q3 2024, the positive impact of a prior-period income tax recovery in Q2 2024, and a gain on acquisition of non-operated Netherlands assets which was recorded in Q3 2023.
• We ended Q3 2024 with positive adjusted working capital ⁽²⁾ of $9.0 million, down from $44.3 million at Q2 2024 and $49.4 million at Q4 2023. The decrease in positive adjusted working capital reflects the payment of the deposit for the NOBV acquisition, transaction costs associated with the NOBV acquisition and continuing M&A efforts, and the payment for the acquisition of the Watelet gas plant. Tenaz paid a €23 million ($34 million) deposit for the acquisition of NOBV and has incurred $2.8 million of transaction costs for the first three quarters of 2024.

Budget and Outlook

• Annual guidance for drilling and development (“D&D”) capital expenditures (“CAPEX”) is being reduced to a new range of $16 to $18 million from the previous range of $23 to $25 million. Lower D&D CAPEX reflects a change to Canadian drilling plans from a four gross (3.5 net) well Rex program to a two gross (1.75 net) well Ellerslie program.
• Despite lower CAPEX, annual production is expected to be within our present guidance range of 2,700 to 2,900 boe/d. Because the Ellerslie wells were drilled late in 2024 on recently-acquired lands, annual production is expected to be near the lower end of the guidance range. The redirection of the Canadian drilling program was effected to further improve capital efficiencies while still achieving greater than 10% annual corporate production growth. The undrilled Rex wells remain in our project inventory with robust economics at current oil prices.

FINANCIAL AND OPERATIONAL SUMMARY

PRESIDENT’S MESSAGE

During the third quarter of 2024, we achieved a significant step in the execution of our corporate strategy with the signing of a definitive agreement to acquire NOBV from Nederlandse Aardolie Maatschappij B.V. (“NAM”). Our team is in the midst of transition activities to close this transaction and effect the cutover of operations. The transition process is on track for closing on or before mid-year 2025. We have received great support and cooperation in these efforts from our future NOBV workforce and our counterparty in the transaction. As we review the NOBV assets with the NAM staff, we are now even more encouraged by the reinvestment opportunities than we were at the time we announced the acquisition.

We are today announcing another important step in the realization of our business plan with the $140 million Offering of Senior Unsecured Notes due 2029, which has been placed with institutional investors. The Notes are non-callable for the first two-and-one-half years, bear interest at 12% per annum, and are priced at par. Closing of the Offering is expected to occur on November 14, 2024. The Offering replaces a $90 million delayed draw term loan entered into in July 2024 with NBC to support our previously announced acquisition of NOBV.

The Offering is important for several reasons. It replaces short-term bridge finance with long-term unsecured debt, is aligned with our target capital structure, and provides liquidity in excess of what we expect to use in the NOBV transaction. We believe increased liquidity provides a competitive advantage by enhancing Tenaz’s credibility as a counterparty in M&A markets. Finally, the Offering represents a desirable entry into the long-term debt markets, positioning us for future public high-yield debt offerings as Tenaz grows. Importantly, the private placement was placed in advance of closing the NOBV transaction and with terms that are typical for public issues in the Canadian high yield market. We see this as a vote of confidence in our business model and the NOBV acquisition.

Upon closing of the Offering, we will have a strong liquidity position underpinned by our existing working capital, proceeds from the Notes, our revolving credit line with NBC, and continued free cash flow generation from our existing producing assets. In aggregate, we expect to be in a strong financial position both before and after the closing of the NOBV acquisition, with increased flexibility for additional acquisitions as a result of the Offering.

The Offering is being led by National Bank Financial Markets Inc. (“NBF”), as sole bookrunner and placement agent. NBF is also acting as sole financial advisor for Tenaz in respect of the NOBV acquisition.

In Canada, we have recast our 2024 development activity to drill on lands acquired in June along with the Watelet gas plant. On these lands, we are redeveloping an Ellerslie oil pool that was originally drilled with vertical wells. Our revised CAPEX program replaces our originally-planned four gross (3.5 net) well drilling program in the Rex with two (1.75 net) multilateral wells in the Ellerslie. 

During Q3, we drilled the first of these two Ellerslie wells. This unstimulated well has three horizontal laterals at a true vertical depth of 1,477 meters, a total measured depth of 4,177 meters, and an open hole length in the Ellerslie reservoir of 2,493 meters. During its first 45 days of production, this well produced at an average rate of 355 boe/d, with oil constituting 93% of oil-equivalent production rate. Water cut is stable at about 25%. Oil gravity is 26 °API. Tenaz has an 87.5% working interest in the Ellerslie project.

The second of the two Ellerslie wells is currently being drilled, with production expected to begin during Q4. The Ellerslie wells have relatively low capital requirements because the horizontal laterals are unlined and unstimulated, use existing surface pads, and require only minor battery upgrades to put on production. The average gross cost of the wells is expected to be $2.9 million.

During Q3, we also conducted a significant turnaround at the newly acquired Watelet gas plant, as well as minor facility and battery upgrades to prepare for increased production. D&D CAPEX for the turnaround and upgrades is expected to be approximately $2.0 million net to Tenaz in 2024.

In the Netherlands, our non-operated assets continue to produce at expected levels. The operator of the L10 complex, Eni Energy Netherlands B.V., is focused on potential in discovered but as-yet undeveloped fields near existing infrastructure. One of the undeveloped fields is being appraised for development with a new well from an existing platform during 2025. In addition to development drilling, the joint venture group continues to evaluate and design the L10 CCS project, potentially leading to an FID decision in the second half of 2025.

Including both our Canadian operations and our non-operated Netherlands properties, we expect D&D CAPEX to be approximately $7 million lower than our original budget, bringing our 2024 guidance range down to $16 to $18 million. We believe the two-well Ellerslie program will generate nearly as much oil deliverability as the originally-planned four-well Rex program, albeit with substantially less gas production than the Rex wells. Because the Ellerslie drilling occurred later in 2024 than we had planned for the Rex locations, its annual production impact for calendar-year 2024 is lower than in the original Rex plan. While we maintain our original production guidance range of 2,700 to 2,900 boe/d, we expect annual production to be near the lower end of the range due to the later drilling of the Ellerslie wells. 

As we have previously communicated, we are pursuing additional M&A opportunities at the same time we are executing transition activities for the NOBV acquisition. We believe our Notes Offering is an important financing step as it provides long-term debt to fund the NOBV closing and provides liquidity to assist future potential transactions. We remain optimistic about our transaction pipeline, and believe that our business model has the potential to continue to produce value-adding acquisitions for our shareholders. 

We are honoured that Tenaz shares have returned 189% year-to-date during 2024. This year-to-date total shareholder return places Tenaz at the top of the 57 oil and gas companies listed on the TSX and in the top one percent of TSX-listed issues in all sectors. Our Board of Directors and employees remain aligned with shareholders, and we will redouble our efforts to deliver value.

/s/ Anthony Marino
President and Chief Executive Officer
November 7, 2024

About Tenaz Energy Corp.

Tenaz is an energy company focused on the acquisition and sustainable development of international oil and gas assets. Tenaz has domestic operations in Canada along with offshore natural gas and midstream assets in the Netherlands. The domestic operations consist of a semi-conventional oil project in the Rex Member of the Mannville Group at Leduc-Woodbend in central Alberta. The Netherlands natural gas assets are located in the Dutch sector of the North Sea. Additional information regarding Tenaz is available on SEDAR+ and its website at www.tenazenergy.com. Tenaz’s Common Shares are listed for trading on the Toronto Stock Exchange under the symbol “TNZ”.

ADVISORIES

Notes Offering

The Notes are being offered for sale to qualified buyers in Canada on a private placement basis pursuant to certain prospectus exemptions. The Notes have not been registered under the U.S. Securities Act, or any state securities laws, and may not be offered and sold in the United States or to U.S. persons.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.

Non-GAAP and Other Financial Measures

This press release contains the terms funds flow from operations and capital expenditures which are considered “non-GAAP financial measures” and operating netback which is considered a “non-GAAP financial ratio”. These terms do not have a standardized meaning prescribed by GAAP. In addition, this press release contains the term adjusted working capital (net debt), which is considered a “capital management measure”. Accordingly, the Company’s use of these terms may not be comparable to similarly defined measures presented by other companies. Investors are cautioned that these measures should not be construed as an alternative to net income (loss) determined in accordance with GAAP and these measures should not be considered to be more meaningful than GAAP measures in evaluating the Company’s performance.

Non-GAAP Financial Measures

Funds flow from operations (“FFO”)

Tenaz considers funds flow from operations to be a key measure of performance as it demonstrates the Company’s ability to generate the necessary funds for sustaining capital, future growth through capital investment, and settling liabilities. Funds flow from operations is calculated as cash flow from operating activities plus income from associate and before changes in non-cash operating working capital and decommissioning liabilities settled. Funds flow from operations is not intended to represent cash flows from operating activities calculated in accordance with IFRS. A summary of the reconciliation of cash flow from operating activities to funds flow from operations, is set forth below:

Capital Expenditures

Tenaz considers capital expenditures to be a useful measure of the Company’s investment in its existing asset base calculated as the sum of exploration and evaluation asset expenditures and property, plant and equipment expenditures from the consolidated statements of cash flows that is most directly comparable to cash flows used in investing activities. The reconciliation to primary financial statement measures is set forth below:

Free Cash Flow (“FCF”)

Tenaz considers free cash flow to be a key measure of performance as it demonstrates the Company’s excess funds generated after capital expenditures for potential shareholder returns, acquisitions, or growth in available liquidity. FCF is a non-GAAP financial measure most directly comparable to cash flows used in investing activities and is comprised of funds flow from operations less capital expenditures. A summary of the reconciliation of the measure, is set forth below:

Midstream Income

Tenaz considers midstream income an integral part of determining operating netback. Operating netbacks assists management and investors with evaluating operating performance. Tenaz’s midstream income consists of the income from its associate, Noordtgastransport B.V. and excludes the amortization of fair value increment of NGT that is included in the equity investment on the balance sheet. Under IFRS, investments in associates are accounted for using the equity method of accounting. Income from associate is Tenaz’s share of the investee’s net income and comprehensive income.

Non-GAAP Financial Ratio

Operating Netback

Tenaz calculates operating netback on a dollar or per boe basis, as petroleum and natural gas sales less royalties, operating costs and transportation costs, plus midstream income (income from associate, as described above). Operating netback is a key industry benchmark and a measure of performance for Tenaz that provides investors with information that is commonly used by other crude oil and natural gas producers. The measurement on a per boe basis assists management and investors with evaluating operating performance on a comparable basis. Tenaz’s operating netback is disclosed in the “Operating Netback” section of this press release.

Capital Management Measure

Adjusted working capital (net debt)

Management views adjusted working capital (net debt) as a key industry benchmark and measure to assess the Company’s financial position and liquidity. Adjusted working capital (net debt) is calculated as current assets less current liabilities, excluding the fair value of derivative instruments. Tenaz’s adjusted working capital (net debt) is disclosed in the “Financial and Operation summary” section of this press release.

Supplementary Financial Measures

• “Operating expense per boe” and “Transportation expense per boe” are comprised of the respective line item from the consolidated statements of net income, as determined in accordance with IFRS, divided by the Company’s or business units total production.
• “Funds flow from operations per basic share” is comprised of funds flow from operations divided by basic weighted average Common Shares.
• “Funds flow from operations per diluted share” is comprised of funds flow from operations divided by diluted weighted average Common Shares.
• “Realized heavy crude oil price”, “Realized natural gas liquids price”, “Realized natural gas price”, and “Realized petroleum and natural gas sales price” are comprised of commodity sales from the respective commodity, as determined in accordance with IFRS, divided by the Company’s production of the respective commodity.
• “Royalties as a percentage of sales” is comprised of royalties, as determined in accordance with IFRS, divided by commodity sales from production as determined in accordance with IFRS.

Barrels of Oil Equivalent

The term barrels of oil equivalent (“boe”) may be misleading, particularly if used in isolation. Per boe amounts have been calculated by using the conversion ratio of six thousand cubic feet (6 Mcf) of natural gas to one barrel (1 bbl) of crude oil. The boe conversion ratio of 6 Mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

Forward-looking Information

This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “budget”, “forecast”, “guidance”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “potential”, “intends”, “strategy” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to: the Offering including, without limitation the expected timing of closing; our beliefs about liquidity; expectations for our base business and our financial position upon closing of the Offering and before and after closing of the NOBV acquisition; potential future debt offerings; Tenaz’s capital plans; activities and budget for 2024, and our anticipated operational and financial performance; expected well performance; potential drilling opportunities; our production and capital guidance including forecast average production volumes and capital expenditures for 2024; the ability to grow our assets domestically and internationally; statements relating to a potential CCS project; and the Company’s strategy. In addition, this press release contains forward-looking information and statements pertaining to the acquisition of NOBV including, without limitation: the timing of closing; expectations regarding estimated cash to close, and sources of funding thereof.

The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Tenaz including, without limitation: the continued performance of Tenaz’s oil and gas properties in a manner consistent with its past experiences; that Tenaz will continue to conduct its operations in a manner consistent with past operations; expectations regarding future development; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; expectations regarding future acquisition opportunities; the accuracy of the estimates of Tenaz’s reserves and resource volumes; certain commodity price and other cost assumptions; the continued availability of oilfield services; and the continued availability of adequate debt and equity financing and cash flow from operations to fund its planned expenditures.

Tenaz believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable, but no assurance can be given that these factors, expectations, and assumptions will prove to be correct.

The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Tenaz’s products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Tenaz or by third party operators of Tenaz’s properties, increased debt levels or debt service requirements; inaccurate estimation of Tenaz’s oil and gas reserve volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; a failure to obtain necessary approvals as proposed or at all and certain other risks detailed from time to time in Tenaz’s public documents.

The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Tenaz does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

SOURCE Tenaz Energy Corp.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2024/07/c9069.html

Generated $10.7 million of insurance segment Spread Related Earnings (“SRE”) for the trailing twelve months ended September 30, 2024, a substantial increase over the prior year period, demonstrating the earnings power of the insurance segment

Solid quarter for the asset management segment, earning $3.6 million in management and incentive fees, an increase of 41% over the prior year period. Achieved Fee Related Earnings (“FRE”) of $1.6 million for the quarter, up 126% as compared to third quarter 2023, and $7.5 million for the trailing twelve month period, a 37% increase compared to the prior year period

During October, Mount Logan announced it, alongside BCP Partners Credit, will be acquiring Runway Growth Capital LLC, a $1.4 billion AUM private credit asset manager. Mount Logan will be participating in the transaction through a minority stake purchase via an issuance of common shares of Mount Logan

TORONTO, Nov. 07, 2024 (GLOBE NEWSWIRE) — Mount Logan Capital Inc. (Cboe Canada: MLC) (“Mount Logan” or the “Company”) announced today its financial results for the quarter ended September 30, 2024. All amounts are stated in United States dollars, unless otherwise indicated.

Third Quarter 2024 Highlights

• Total revenue for the asset management segment of the Company of $3.8 million, an increase of $0.6 million, or 20%, as compared to the third quarter of 2023. The increase is primarily due to growth in fees attributable to the increase in Opportunistic Credit Interval Fund (“SOFIX”), CLOs and sub-advisory fees. Third quarter asset management revenues exclude $1.5 million of management fees associated with Mount Logan’s management of the assets of Ability Insurance Company (“Ability”), a wholly-owned subsidiary of the Company, during the third quarter of 2024. These Ability management fees represent an increase of $0.4 million, or 35% as compared to third quarter 2023 of $1.1 million.
• Total net investment income for the insurance segment was $23.7 million for the three months ended September 30, 2024, a decrease of $2.5 million, or 10%, as compared to the third quarter of 2023, driven primarily by the write-off of $1.1 million of accrued investment income. Excluding the funds withheld under reinsurance contracts and Modco, insurance segment’s net investment income was $13.5 million, a decrease of $1.7 million, or 11%, as compared to the third quarter of 2023.
• 8.3%¹ yield on the insurance investment portfolio as of September 30, 2024, due to ongoing portfolio and capital optimization across the insurance solutions portfolio alongside the benefit of higher base rates. Excluding the funds withheld under reinsurance contracts and Modco, the yield was 8.7%.
• Ability’s total assets managed by Mount Logan increased to $628.5 million as of September 30, 2024, up $218.9 million from third quarter 2023 of $409.6 million. As of September 30, 2024, the insurance segment included $1.1 billion in total investment assets, up $93.8 million or 10% from third quarter 2023 investment assets of $1.0 billion.
• Book value of the insurance segment as of September 30, 2024 was $73.7 million, an increase of $8.6 million as compared to $65.1 million for third quarter 2023, driven by higher insurance net income.
• SRE for the insurance segment increased to $10.7 million for the trailing twelve months ended September 30, 2024, up $9.7 million from trailing twelve months ended September 30, 2023 of $1.0 million primarily driven by an increase in net investment income, lower cost of funds and lower operating expenses. SRE is a non-IFRS financial measure used to assess the insurance segment’s generation of profits excluding the impact of certain market volatility and other one-time, non-core components of insurance segment income (loss). The Company believes this measure is useful to shareholders as it provides additional insight into the underlying economics of the insurance segment.
• FRE for the asset management segment was $1.6 million for the three months ended September 30, 2024, an increase of 126% compared to third quarter 2023. FRE was $7.5 million for the trailing twelve months ended September 30, 2024, an increase of $2.0 million, or 37%, compared to the trailing twelve months ended September 30, 2023 of $5.5 million primarily driven by growth in fees across Ability, CLOs, Ovation, SOFIX and sub-advisory fees.
• Mount Logan announced the hiring of Scott Chan, previously a Managing Director at Canaccord Genuity, to expand its Canadian and Investor Relations presence.

Subsequent Events

• Declared a shareholder distribution in the amount of C$0.02 per common share for the quarter ended September 30, 2024, payable on November 29, 2024 to shareholders of record at the close of business on November 22, 2024. This cash dividend marks the twenty-first consecutive quarter of the Company issuing a C$0.02 distribution to its shareholders. This dividend is designated by the Company as an eligible dividend for the purpose of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.
• Announced Mount Logan has agreed to purchase a minority stake in Runway Growth Capital LLC (“Runway”), an SEC registered investment adviser, managing approximately $1.4 billion in private credit assets. Mount Logan is acquiring the minority stake alongside BC Partners Credit, who is acquiring the majority stake in the platform. There will be no change to Runway’s management team or day-to-day operations following close of the transaction. The closing of the transaction, which is expected to occur in the fourth quarter of 2024, is subject to customary closing conditions, including approval of the new investment advisory agreement with Runway by Runway Growth Finance’s stockholders and the approval of the Cboe for the issuance of common shares of the Company to the selling members of Runway.

Management Commentary

• Ted Goldthorpe, Chief Executive Officer and Chairman of Mount Logan stated, “We are excited to announce our third quarter 2024 results, which demonstrate the earnings power of both our asset management and insurance segments. Fee Related Earnings, or FRE, of the asset management segment was up significantly year-over-year and highlights the growing profitability of our asset management business. Additionally, our Spread Related Earnings, or SRE, highlights the continued profitability of our insurance segment. The integration of our businesses and focus on profitability are driving consistent improvements in operating performance, while we focus on creating scale through organic and inorganic growth initiatives, which includes the recent Runway announcement.”

_______________________________

¹The yield is calculated based on the net investment income excluding reinsured portfolio income less management fees paid to Mount Logan divided by the average of investments in financial assets for the current and prior period, and then is annualized.

Selected Financial Highlights

• Total Capital of the Company was $132 million as at September 30, 2024, an increase of $2.1 million as compared to December 31, 2023. Total capital consists of debt obligations and total shareholders’ equity.
• Consolidated net income (loss) before taxes was $(17.4 million) for the three months ended September 30, 2024, a decrease of $33.6 million from $16.2 million for third quarter 2023. The decrease was primarily attributable to the increase in net insurance finance expenses resulting from significant decreases in risk-adjusted market interest rates. This decrease was partially offset by revenue growth in both asset management and insurance segments. Asset management revenue increased due to higher management fees, and improvement in insurance segment revenue resulting from better insurance service results and higher net gains from investment activities. Additionally, the decrease was also offset by reduced administrative expenses under the Insurance segment.
• Basic Earnings per share (“EPS”) was $(0.68) for the three months ended September 30, 2024, a decrease of $1.30 from $0.62 for the third quarter 2023.
• Adjusted basic EPS was $(0.67) for the third quarter 2024, a decrease of $1.35 from $0.68 for the third quarter 2023.

Results of Operations by Segment

($ in Thousands)

(1) Certain comparative figures have been reclassified to conform with the current year’s presentation, including the reclassification of “Net realized and unrealized gain (loss)” to “Revenue”
(2) Insurance Revenue line item is presented net of insurance service expenses and net expenses from reinsurance contracts held.
(3) Transaction costs are related to business acquisitions and strategic initiatives transacted by the Company.
(4) Acquisition integration costs are consulting and administration services fees related to integrating a business into the Company. Acquisition integration costs are recorded in general, administrative and other expenses.
(5) Non-cash items include amortization of acquisition-related intangible assets and impairment of goodwill, if any. 

Asset Management

Total Revenue – Asset Management

Quarter Ended Fee Related Earnings (“FRE”)

FRE is a non-IFRS financial measure used to assess the asset management segment’s generation of profits from revenues that are measured and received on a recurring basis and are not dependent on future realization events. The Company calculates FRE, and reconciles FRE to net income from its asset management activities, as follows:

($ in Thousands)

(1) Includes add-back of management fees paid to ML Management (as defined below).
(2) Represents net income for asset management, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).

The following table presents FRE, the performance measure of our asset management segment for the trailing twelve month period ended September 30, 2024 and September 30, 2023 respectively:

Trailing Twelve Month FRE

($ in Thousands)

(1) Includes add-back of management fees paid to ML Management.
(2) Represents net income for asset management, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).

Insurance

IFRS 17 Insurance Contracts (“IFRS 17”) is effective for years beginning as of January 1, 2023, and has been applied retrospectively with a transition date of January 1, 2022. IFRS 17 does not impact the underlying economics of the business, nor does it impact the Company’s business strategies.

Total Revenue – Insurance

($ in Thousands)

Spread Related Earnings (“SRE”)

Effective March 31, 2024, the Company has introduced a new non-IFRS measure, SRE. The Company uses SRE to assess the performance of the insurance segment, excluding the impact of certain market volatility and other one-time, non-core components of insurance segment income (loss). Excluded items under SRE are investment gains (losses), effects of discount rates and other financial variables on the value of insurance obligations (which is a component of “net insurance finance income/(expense)”), other income and certain general, administrative & other expenses. The Company believes this measure is useful to securityholders as it provides additional insight into the underlying economics of the insurance segment, as further discussed below.

For the insurance segment, SRE equals the sum of (i) the net investment income on the insurance segment’s net invested assets (excluding investment income earned on funds held under reinsurance contracts) less (ii) cost of funds (as described below) and (iii) certain operating expenses.

Cost of funds includes the impact of interest accretion on insurance and investment contract liabilities and amortization of losses recognized for new insurance contracts that are deemed onerous at initial recognition. It also includes experience adjustments which represents the difference between actual and expected cashflows and includes the impact of certain changes to non-financial assumptions.

The Company reconciles SRE to net income (loss) before tax from its insurance segment activities, as follows:

(1) Includes add-back of management fees paid by Ability to ML Management.
(2) Represents net income for insurance segment, as presented in the Interim Consolidated Statement of Comprehensive Income (Loss).
(3) Excludes net (gains) losses from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and Vista.
(4) Represents non-operating income.
(5) Includes the impact of changes in interest rates and other financials assumptions and excludes interest accretion on insurance contract liabilities and reinsurance contract assets.
(6) Represents the unamortized portion of future interest accretion and ceded commissions paid at the time of issue of new MYGA insurance contracts. Future interest accretion and ceded commissions are amortized over the average duration of MYGA contracts reinsured which aligns with the recognition of insurance service revenue. Loss on onerous contracts are part of Insurance service expense.
(7) Represents certain costs incurred by the insurance segment for purposes of IFRS reporting but not the day to day operations of the insurance company.

The following table presents SRE, the performance measure of the insurance segment:

($ in Thousands)

(1) Excludes net investment income from investment activities on assets retained by the Company under funds withheld arrangement with Front Street Re and Vista Life and Casualty Reinsurance Company (“Vista”).

Spread related earnings (“SRE”) was $10.7 million for the trailing twelve months ended September 30, 2024 compared with $1.0 million for the trailing twelve months ended September 30, 2023, an increase of $9.7 million. SRE increased year over year due to increased investment income, lower cost of funds, and lower other operating expenses. Investment income increased primarily due to an increase in total insurance investment assets as a result of new MYGA business and improvements in yield across the investment portfolio. Cost of funds decreased primarily because of a decrease in the amortization of reinsurance CSM in the current period due to change in the CSM amortization methodology, as well as the one-time benefit of $4.8 million in the first quarter of 2024 as a result of an in-force update to Long Term Care business. Other operating expenses decreased as a result of efforts to reduce overall operating costs.

SRE as a percentage of average net invested assets was 1.8% for the trailing twelve months ended September 30, 2024 compared with 0.2% for the trailing twelve months ended September 30, 2023.

Liquidity and Capital Resources

As of September 30, 2024, the asset management segment had $71.8 million (par value) of borrowings outstanding, of which $33.8 million had a fixed rate and $38 million had a floating rate. As of September 30, 2024, the insurance segment had $14.3 million (par value) of borrowings outstanding. Liquid assets, including high-quality assets that are marketable, can be pledged as security for borrowings, and can be converted to cash in a time frame that meets liquidity and funding requirements. As of September 30, 2024 and December 31, 2023, the total liquid assets of the Company were as follows:

($ in Thousands)

The Company defines working capital as the sum of cash, restricted cash, investments that mature within one year of the reporting date, management fees receivable, receivables for investments sold, accrued interest and dividend receivables, and premium receivables, less the sum of debt obligations, payables for investments purchased, amounts due to affiliates, reinsurance liabilities, and other liabilities that are payable within one year of the reporting date.

As at September 30, 2024, the Company had working capital of $227 million, reflecting current assets of $244 million, offset by current liabilities of $17.2 million, as compared with working capital of $183 million as at December 31, 2023, reflecting current assets of $231 million, offset by current liabilities of $47.4 million. The increase in working capital was attributed to an increase in cash and cash equivalents from new MYGA business in the first half of 2024, as well as the settlement of payables related to MYGA against the new MYGA policies assumed. Additionally, there was an increase in cash within the asset management segment from increased management and incentive fee receipts, the redemption of SOFIX shares, and net proceeds from the issuance of debenture units, as well as a decrease in due to affiliates and accrued expenses. The decrease in due to affiliates is due to a reclassification of the maturity of these balances from current to unspecified, and the decrease in accrued expenses was driven by lower transaction costs, transition services agreement costs, and legal fee accruals.

Interest Rate Risk

The Company has obligations to policyholders and other debt obligations that expose it to interest rate risk. The Company also owns debt assets and interest rate swaps that are exposed to interest rate risk. The fair value of these obligations and assets may change if base rate changes in interest rates occur.

The following table summarizes the potential impact on net assets of hypothetical base rate changes in interest rates assuming a parallel shift in the yield curve, with all other variables remaining constant.

(1) Losses are presented in brackets and gains are presented as positive numbers.

Actual results may differ significantly from this sensitivity analysis. As such, the sensitivities should only be viewed as directional estimates of the underlying sensitivities for the respective factors based on the assumptions outlined above.

Conference Call

The Company will hold a conference call on Tuesday, November 12, 2024 at 12:00 p.m. Eastern Time to discuss the third quarter 2024 financial results. Shareholders, prospective shareholders, and analysts are welcome to listen to the call. To join the call, please use the dial-in information below. A recording of the conference call will be available on our Company’s website www.mountlogancapital.ca in the ‘Investor Relations’ section under “Events”.

Canada Dial-in Toll Free: 1-833-950-0062
US Dial-in Toll Free: 1-833-470-1428
International Dial-ins
Access Code: 672430

About Mount Logan Capital Inc.

Mount Logan Capital Inc. is an alternative asset management and insurance solutions company that is focused on public and private debt securities in the North American market and the reinsurance of annuity products, primarily through its wholly-owned subsidiaries Mount Logan Management LLC (“ML Management”) and Ability Insurance Company (“Ability”), respectively. The Company also actively sources, evaluates, underwrites, manages, monitors and primarily invests in loans, debt securities, and other credit-oriented instruments that present attractive risk-adjusted returns and present low risk of principal impairment through the credit cycle.

Ability is a Nebraska domiciled insurer and reinsurer of long-term care policies acquired by Mount Logan in the fourth quarter of fiscal year 2021. Ability is unique in the insurance industry in that its long-term care portfolio’s morbidity risk has been largely re-insured to third parties, and Ability is no longer insuring or re-insuring new long-term care risk.

Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of the Company’s results of operations from management’s perspective. The Company’s definitions of non-IFRS measures used in this press release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.

Opportunistic Credit Interval Fund Important Disclosures

An investor should consider the investment objectives, risks, charges, and expenses of SOFIX carefully before investing. To obtain a copy of the prospectus containing this and other information, please call (833) 404-4103 or download the file from www.opportunisticcreditintervalfund.com. Read the prospectus carefully before you invest.

Investing involves risk. Investment return and the principal value of an investment will fluctuate, and an Investor’s shares, when redeemed, may be worth more or less than their original cost. SOFIX is subject to the general risks associated with investing in debt and loan instruments, including market, credit, liquidity, and interest rate risk. The Fund is subject to management and other expenses, which will be paid by SOFIX. Because of the risks associated with SOFIX’s ability to use leverage, an investment in SOFIX should be considered speculative and involving a high degree of risk, including the risk of a substantial loss of investment.

There currently is no secondary market for SOFIX ‘s shares and SOFIX expects that no secondary market will develop. Shares of SOFIX will not be listed on any securities exchange, which makes them inherently illiquid. An investment in SOFIX ‘s shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than the liquidity provided through the SOFIX ‘s repurchase policy. Limited liquidity is provided to shareholders only through SOFIX’s quarterly repurchase offers, regardless of how SOFIX performs. SOFIX ‘s distributions policy may, under certain circumstances, have certain adverse consequences to SOFIX and its shareholders because it may result in a return of capital, resulting in less of a shareholder’s assets being invested in SOFIX, and, over time, increase SOFIX ‘s expense ratio. Any invested capital that is returned to the shareholder will be reduced by the SOFIX’s fees and expenses, as well as the applicable sales load. Investments in lesser-known, small and medium capitalization companies may be more vulnerable than larger, more established organizations. The sales of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the SOFIX’s NAV.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions “seeks”, “expects”, “believes”, “estimates”, “will”, “target” and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of the Company regarding future results or events and are based on information currently available to it. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking statements discussed in this release include, but are not limited to, statements relating to the Company’s continued transition to an asset management and insurance platform business and the entering into of further strategic transactions to diversify the Company’s business and further grow recurring management fee and other income and increasing Ability’s assets; the Company’s plans to focus Ability’s business on the reinsurance of annuity products; the potential benefits of combining Mount Logan’s and Ovation’s platform including an increase in fee-related earnings as a result of the acquisition; the decrease in expenses in the asset management segment; the historical growth in the asset management segment and insurance segment being an indicator for future growth; the growth and scalability of the Company’s business the Company’s business strategy, model, approach and future activities; portfolio composition and size, asset management activities and related income, capital raising activities, future credit opportunities of the Company, portfolio realizations, the protection of stakeholder value; the expansion of the Company’s loan portfolio; synergies to be achieved by both the Company and Runway through the Company’s strategic minority investment in Runway and the satisfaction of the conditions upon which closing of the Runway transaction is conditional; and the expansion of Mount Logan’s capabilities. All forward-looking statements in this press release are qualified by these cautionary statements. The Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company can give no assurance that the actual results or developments will be realized by certain specified dates or at all. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including that the Company has a limited operating history with respect to an asset management oriented business model; Ability may not generate recurring asset management fees, increase its assets or strategically benefit the Company as expected; the expected synergies by combining the business of Mount Logan with the business of Ability may not be realized as expected; the risk that Ability may require a significant investment of capital and other resources in order to expand and grow the business; the Company does not have a record of operating an insurance solutions business and is subject to all the risks and uncertainties associated with a broadening of the Company’s business; the risk that the expected synergies of the acquisition of Ovation may not be realized as expected and the matters discussed under “Risks Factors” in the most recently filed annual information form and management discussion and analysis for the Company. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.

This press release is not, and under no circumstances is it to be construed as, a prospectus or an advertisement and the communication of this release is not, and under no circumstances is it to be construed as, an offer to sell or an offer to purchase any securities in the Company or in any fund or other investment vehicle. This press release is not intended for U.S. persons. The Company’s shares are not and will not be registered under the U.S. Securities Act of 1933, as amended, and the Company is not and will not be registered under the U.S. Investment Company Act of 1940 (the “1940 Act”). U.S. persons are not permitted to purchase the Company’s shares absent an applicable exemption from registration under each of these Acts. In addition, the number of investors in the United States, or which are U.S. persons or purchasing for the account or benefit of U.S. persons, will be limited to such number as is required to comply with an available exemption from the registration requirements of the 1940 Act.

Contacts:
Mount Logan Capital Inc.

365 Bay Street, Suite 800
Toronto, ON M5H 2V1
info@mountlogancapital.ca

Nikita Klassen
Chief Financial Officer
Nikita.Klassen@mountlogancapital.ca

ATHENS, Greece, Nov. 08, 2024 (GLOBE NEWSWIRE) — Okeanis Eco Tankers Corp. (together with its subsidiaries, unless context otherwise dictates, “OET” or the “Company”) ECOOET) today reported its unaudited condensed financial results for the third quarter and nine-month period of 2024, which are attached to this press release.

Financial performance of the Third Quarter Ended September 30, 2024

• Revenues of $84.9 million in Q3 2024, compared to $89.1 million in Q3 2023.
• Profit of $14.6 million in Q3 2024, compared to $19.4 million in Q3 2023.
• Earnings per share of $0.45 in Q3 2024, compared to $0.60 in Q3 2023.
• Cash (including restricted cash) of $56.0 million as of September 30, 2024, compared to $82.1 million as of September 30, 2023.

Financial performance of the Nine Months Ended September 30, 2024

• Revenues of $308.0 million in 9M 2024, compared to $321.4 million in 9M 2023.
• Profit of $95.7 million in 9M 2024, compared to $124.0 million in 9M 2023.
• Earnings per share of $2.97 in 9M 2024, compared to $3.85 in 9M 2023.

Alternative performance metrics and market developments

• Time charter equivalent (“TCE”, a non-IFRS measure*) revenue of $52.2 million in Q3 2024, compared to $59.7 million in Q3 2023.
• EBITDA* and Adjusted EBITDA* (non-IFRS measures*) of $38.4 million and $37.9 million, respectively, in Q3 2024.
• Adjusted profit* and Adjusted earnings per share* (non-IFRS measures*) of $14.5 million or $0.45 per basic and diluted share in Q3 2024.
• Fleetwide daily TCE rate of $43,900 per operating day in Q3 2024; VLCC and Suezmax TCE rates of $43,100 and $44,800 per operating day, respectively, in Q3 2024.
• Daily vessel operating expenses (“Opex”, a non-IFRS measure) of $9,811 per calendar day, including management fees, in Q3 2024.
• In Q4 2024 to date, 63% of the available VLCC spot days have been booked at an average TCE rate of $46,900 per day and 70% of the available Suezmax spot days have been booked at an average TCE rate of $40,200 per day.

Declaration of Q3 2024 dividend

The Company’s board of directors declared a dividend of $0.45 per common share to shareholders. Dividends payable to common shares registered in the Euronext VPS will be distributed in NOK. The cash payment will be classified as a return of paid-in-capital and will be paid on December 4, 2024, to shareholders of record as of November 18, 2024. The common shares will be traded ex-dividend on the NYSE as from and including November 18, 2024, and the common shares will be traded ex-dividend on the Oslo Børs as from and including November 15, 2024. Due to the implementation of the Central Securities Depository Regulation (CSDR) in Norway, dividends payable on common shares registered with Euronext VPS are expected to be distributed to Euronext VPS shareholders on or about December 9, 2024.

Presentation

OET will be hosting a conference call and webcast at 14:30 CET on Friday November 8, 2024 to discuss the Q3 2024 and 9M 2024 results. Participants may access the conference call using the below dial-in details:

Standard International Access: +44 20 3936 2999
USA: +1 646 664 1960
Norway: +47 815 03 308
Password: 041313

The webcast will include a slide presentation and will be available on the following link:
https://events.q4inc.com/attendee/805202822

An audio replay of the conference call will be available on our website:
https://www.okeanisecotankers.com/reports/

Contacts

Company:
Iraklis Sbarounis, CFO
Tel: +30 210 480 4200
ir@okeanisecotankers.com

Investor Relations / Media Contact:
Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1540, New York, N.Y. 10169
Tel: +1 (212) 661-7566
okeanisecotankers@capitallink.com

About OET

OET is a leading international tanker company providing seaborne transportation of crude oil and refined products. The Company was incorporated on April 30, 2018 under the laws of the Republic of the Marshall Islands and is listed on Oslo Børs under the symbol OET and the New York Stock Exchange under the symbol ECO. The sailing fleet consists of six modern scrubber-fitted Suezmax tankers and eight modern scrubber-fitted VLCC tankers.

Forward Looking Statements

This communication contains “forward-looking statements”, including as defined under U.S. federal securities laws. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “hope,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. The Company’s actual results could differ materially from those anticipated in forward-looking statements for many reasons, including as described in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Factors that could cause actual results to differ materially include, but are not limited to, the Company’s operating or financial results; the Company’s liquidity, including its ability to service its indebtedness; competitive factors in the market in which the Company operates; shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand; future, pending or recent acquisitions and dispositions, business strategy, areas of possible expansion or contraction, and expected capital spending or operating expenses; risks associated with operations; broader market impacts arising from war (or threatened war) or international hostilities; risks associated with pandemics (including COVID-19), including effects on demand for oil and other products transported by tankers and the transportation thereof; and other factors listed from time to time in the Company’s filings with the SEC. Except to the extent required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based. You should, however, review the factors and risks the Company describes in the reports it files and furnishes from time to time with the SEC, which can be obtained free of charge on the SEC’s website at www.sec.gov.

This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.

A PDF associated with this press release can be found here http://ml.globenewswire.com/Resource/Download/43d3c8b5-36f4-4350-b052-f7ca766e2610