Encana spinoff PrairieSky posts $23.9-million profit in first financial report

CALGARY – PrairieSky Royalty Ltd. (TSX:PSK), the Encana Corp. spinoff that made its trading debut this spring, posted a $23.9-million profit in its first financial report.

The net earnings and comprehensive income for the period between PrairieSky’s May 27 inception and June 30 amounted to one dollar per diluted share, or 18 cents on an adjusted basis.

Revenues were $37.2 million while funds from operations were $31 million.

Production averaged 15,664 barrels of oil equivalent per day, with 44 per cent crude oil, 10 per cent natural gas liquids and 46 per cent natural gas.

At the end of June, PrairieSky had working capital of $57.4 million.

“The first several weeks of active operations have been very busy and productive and I would like to thank all of our employees and directors for their contributions and hard work in ensuring a successful start for PrairieSky” CEO Andrew Phillips said in a release.

As part of a sweeping new strategy unveiled last fall, Calgary-based energy producer Encana (TSX:ECA) decided to separate a big chunk of its royalty lands into a new publicly traded company, PrairieSky.

PrairieSky aims to bring in revenues by allowing other energy companies to develop oil and gas on its land, which spans 5.2 million acres in southern and central Alberta.

Encana, which reports its second-quarter results on Thursday, raised about $1.67 billion from the spinoff and retains a 54-per-cent stake in PrairieSky.

PrairieSky had a high-profile initial public offering on May 29. Since then, its stock price has been well above the IPO price of $28, closing at $38.18 on the Toronto Stock Exchange on Monday.