CALGARY, AB, May 8, 2024 /CNW/ - Tenaz Energy Corp. ("Tenaz", "We", "Our", "Us" or the "Company") (TSX: TNZ) is pleased to announce its financial and operating results for the three months ended March 31, 2024.  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 months ended March 31, 2024 appear below and should be read in conjunction with the related financial statements and MD&A. A webcast presentation to accompany this release is available on Tenaz's website at www.tenazenergy.com. HIGHLIGHTS First Quarter Operating and Financial Results Production volumes averaged 2,887 boe/d(1) in Q1 2024, down 8% from Q4 2023, due to natural decline in Leduc-Woodbend ("LWB") wells drilled in 2023 and Netherlands downtime. Production increased 24% over Q1 2023 due to LWB drilling and the acquisition of additional interest in the Netherlands in July 2023. Funds flow from operations ("FFO")(2) for the first quarter was $7.0 million, down 47% from Q4 2023 and 3% from Q1 2023. Lower FFO versus Q4 2023 resulted primarily from lower production levels. In the year-over-year comparison lower prices in Q1 2024 were largely offset by higher production levels. Q1 2024 capital expenditures ("CAPEX") were $3.8 million. Most of the CAPEX was in the Netherlands for well stimulation activities. The bulk of our 2024 CAPEX will occur in the second half of the year, with Canadian drilling planned for Q3. Free cash flow(2) in Q1 2024 was $3.2 million. During Q1, we executed a definitive agreement to acquire a gas plant and proximal oil and gas leasehold assets from a private company for expected consideration at close of $2.8 million, net to Tenaz. We posted cash into escrow to fund this purchase during Q1. The acquisition is conditional on approval of the Alberta Energy Regulator ("AER") and is expected to close during Q2 2024. After closing, Tenaz will own 100% of the gas plant and 87.5% of the acquired leasehold assets.The acquisition provides us with ownership and operating control of the gas plant and pipeline infrastructure that processes our gas production from the LWB field. In addition, the plant generates processing revenue from third-party gas volumes, with significant unused capacity to process more gas. The leasehold assets have minor current production, but contain several potential drilling opportunities in the Rex Member and Ellerslie Formation of the Mannville Group.    An independent evaluation by McDaniel and Associates with an effective date of January 1, 2024 has estimated an after-tax NPV10 of $9.3 million for the plant and developed portion of the leasehold. In addition, we have identified multiple undeveloped horizontal drilling opportunities in the Ellerslie Formation providing further upside to the acquisition. Net loss for Q1 2024 was $0.6 million, as compared to net income of $3.5 million in Q4 2023 and $2.9 million in Q1 2023. Lower income compared to Q4 2023 resulted primarily from lower production, decreased natural gas prices, and higher Netherlands operating expense due to higher field activity. We ended the quarter with positive adjusted working capital(2) of $48.7 million, little changed from year-end 2023 and up substantially from Q1 2023, primarily due to the Netherlands XTO acquisition in Q3 2023. Our Normal Course Issuer Bid ("NCIB") program retired 0.2 million common shares at an average cost of $3.67 per share during Q1 2024. As of the end of April 2024, we have retired 2.0 million shares at an average cost of $2.77 per share (7.0% of basic common shares) through the NCIB. _________________________________ (1) 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. Refer to "Barrels of Oil Equivalent" section included in the "Advisories" section of this press release. (2) This is a non-GAAP and other financial measure. Refer to "Non-GAAP and Other Financial Measures" included in the "Advisories" section of this press release. Budget and Outlook Annual guidance for capital expenditures remains unchanged at $26 to $28 million, with Canadian drilling activity slated for the second half of the year. Annual production guidance of 2,700 to 2,900 boe/d remains unchanged. FINANCIAL AND OPERATIONAL SUMMARY Three months ended ($000 CAD, except per share and per boe amounts) Mar 31 2024 Dec 31 2023 Mar 31 2023 FINANCIAL Petroleum and natural gas sales 17,886 21,261 17,926 Cash flow from operating activities 6,218 8,927 5,117 Funds flow from operations(1) 7,043 13,401 7,274 Per share – basic(1) 0.26 0.50 0.26 Per share – diluted(1) 0.24 0.45 0.25 Net income (loss) (557) 3,515 2,882      Per share – basic (0.02) 0.13 0.10      Per share – diluted (0.02) 0.12 0.10 Capital expenditures(1) 3,816 2,967 683 Adjusted working capital (net debt) (1) 48,740 49,338 18,763 Common shares outstanding      End of period – basic 26,703 26,793 27,733      Weighted average for the period – basic 26,779 26,963 27,917      Weighted average for the period – diluted 29,494 29,970 28,545 OPERATING Average daily production Heavy crude oil (bbls/d) 1,149 1,342 937 Natural gas liquids (bbls/d) 70 75 63 Natural gas ­(Mcf/d) 10,005 10,310 8,022 Total (boe/d)(2) 2,887 3,135 2,337 ($/boe)(2) Petroleum and natural gas sales 68.08 73.71 85.23 Royalties (5.81) (5.89) (6.28) Transportation expenses (2.99) (3.50) (3.41)