Sizable increases in production, revenues and operating funds flow1 with three wells added in recent months
CALGARY, Aug. 8, 2018 /CNW/ - Oryx Petroleum Corporation Limited ("Oryx Petroleum" or the "Corporation") today announces its financial and operational results for the three and six months ended June 30, 2018. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.
Financial Highlights:
_____________________________ |
1 Operating Funds Flow is a non-IFRS measure. See the table below for a definition of and other information related to the term |
Operations Update:
2H 2018 Forecasted Work Program and Capital Expenditures:
Liquidity Outlook:
CEO's Comment
Commenting today, Oryx Petroleum's Chief Executive Officer, Vance Querio, stated:
"In recent months we have significantly increased production bringing three new wells online in the Hawler license area and we continued to mature our AGC Central exploration prospects.
Gross (100%) oil production from the Hawler licence area averaged 4,400 bbl/d in Q2 2018 and 6,100 bbl/d in July 2018 versus an average of 2,900 bbl/d in Q2 2017 and 3,800 bbl/d in Q1 2018. All oil production has been sold via the export pipeline and payments for export sales through the end of April 2018 have been received in full. Higher realised oil prices and lower operating expenses helped us achieve our highest quarterly netback and operating funds flow on record.
We have been very active with the drill bit in recent months. We spudded and successfully completed the Banan-3 appraisal well targeting the Tertiary reservoir at the Banan West field. The well is on extended test with average daily production of 1,600 bbl/d in July. We also spudded and successfully completed the Zey Gawra-3 well targeting the Cretaceous reservoir at Zey Gawra. A horizontal well design was utilised for the first time in the Hawler license area and this enabled the successful isolation of the oil producing interval from the underlying aquifer and the free gas in the natural gas cap. The Zey Gawra-3 well has produced at an average rate of 1,700 bbl/d over the past 10 days. Most recently, we completed the Banan-2 well, drilled in 2014 but suspended due to security developments in 2014, in the Cretaceous reservoir at the Banan West field. The Banan-2 well has been producing at an average rate of approximately 1,100 bbl/d over the past 5 days but we intend to increase the production rate in the coming days now that all drilling equipment has been demobilised from the well site.
We have an active drilling program planned for the remainder of 2018. We are planning to drill or workover five additional wells: two wells targeting the Demir Dagh Cretaceous, two targeting the Banan Tertiary and one targeting the Zey Gawra Cretaceous.
During Q2 2018 we also continued to study the AGC Central license area with additional interpretation and prospect selection ongoing and drilling preparation to follow as we prepare to begin exploration drilling.
We look forward to continuing to implement our plans in 2018 and achieving higher production in the Hawler license area and preparing for an exciting exploration drilling program in the AGC Central license area."
Selected Financial Results
Financial results are prepared in accordance with International Financial Reporting Standards ("IFRS") and the reporting currency is United States dollars. References in this news release to the "Group" and/or "the Corporation" refer to Oryx Petroleum and its subsidiaries. The following table summarises selected financial highlights for Oryx Petroleum for the three and six month periods ended June 30, 2018 and June 30, 2017, as well as the year ended December 31, 2017.
Three Months Ended |
Six Months Ended |
Year Ended December 31 | |||
($ in millions unless otherwise indicated) |
2018 |
2017 |
2018 |
2017 |
2017 |
Revenue |
17.9 |
7.1 |
31.8 |
15.0 |
37.4 |
Working Interest Oil Production (bbl) |
261,700 |
169,100 |
483,800 |
340,300 |
781,400 |
Average WI Oil Production per day (bbl/d) |
2,900 |
1,900 |
2,700 |
1,900 |
2,100 |
Working Interest Oil Sales (bbl) |
262,000 |
168,800 |
484,700 |
338,500 |
779,200 |
Average Sales Price ($/bbl) |
61.51 |
37.93 |
59.12 |
39.94 |
43.17 |
Operating Expense |
3.6 |
4.0 |
6.8 |
8.3 |
15.5 |
Field production costs ($/bbl)(1) |
10.60 |
18.25 |
10.66 |
18.71 |
15.20 |
Field Netback ($/bbl)(2) |
19.45 |
0.27 |
18.22 |
0.80 |
5.89 |
Operating expenses ($/bbl) |
13.86 |
23.89 |
13.94 |
24.46 |
19.87 |
Oryx Petroleum Netback ($/bbl)(3) |
23.00 |
(1.15) |
21.49 |
(0.53) |
5.99 |
Net Profit (Loss) |
(3.5) |
(9.2) |
(7.8) |
(5.1) |
(39.1) |
Earnings (Loss) per Share ($/sh) |
(0.01) |
(0.03) |
(0.02) |
(0.02) |
(0.11) |
Operating Funds Flow(4) |
4.1 |
(2.1) |
6.1 |
(4.5) |
(5.4) |
Net Cash (used in) / generated by operating activities |
(1.6) |
(1.2) |
(4.2) |
1.0 |
(9.7) |
Net Cash used in investing activities |
5.1 |
10.9 |
12.3 |
14.3 |
22.3 |
Capital Expenditure(5) |
8.8 |
0.8 |
14.9 |
(5.1) |
3.3 |
Cash and Cash Equivalents |
21.3 |
57.4 |
21.3 |
57.4 |
38.6 |
Total Assets |
744.4 |
774.8 |
744.4 |
774.8 |
744.8 |
Total Liabilities |
197.5 |
191.3 |
197.5 |
191.3 |
190.4 |
Total Equity |
546.8 |
583.5 |
546.9 |
583.5 |
554.4 |
(1) |
Field production costs represent Oryx Petroleum's working interest share of gross production costs and exclude the partner share of production costs carried by Oryx Petroleum. | ||||
(2) |
Field Netback is a non-IFRS measure that represents the Group's working interest share of oil sales net of the Group's working interest share of royalties, the Group's working interest share of operating expenses and the Group's working interest share of taxes. Management believes that Field Netback is a useful supplemental measure to analyse operating performance and provides an indication of the results generated by the Group's principal business activities prior to the consideration of production sharing contract and joint operating agreement financing characteristics, and other income and expenses. Field Netback does not have a standard meaning under IFRS and may not be comparable to similar measures used by other companies. | ||||
(3) |
Oryx Petroleum Netback is a non-IFRS measure that represents Field Netbacks adjusted to reflect the impact of carried costs incurred and recovered through the sale of cost oil during the reporting period. Management believes that Oryx Petroleum Netback is a useful supplemental measure to analyse the net cash impact of the Group's principal business activities prior to the consideration of other income and expenses. Oryx Petroleum Netback does not have a standard meaning under IFRS and may not be comparable to similar measures used by other companies. | ||||
(4) |
Operating Funds Flow is a non-IFRS measure that represents cash generated from operating activities before changes in non-cash assets and liabilities and changes in the retirement benefit obligation balance. The term Operating Funds Flow should not be considered an alternative to or more meaningful than "cash flow from operating activities" as determined in accordance with IFRS. Management considers Operating Funds Flow to be a key measure as it demonstrates the Group's ability to generate the cash flow necessary to fund future growth through capital investment. Operating Funds Flow does not have any standardised meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. In previous disclosure, Operating Funds Flow was referred to as Operating Cash Flow. | ||||
(5) |
Capital Expenditure for the six months ended June 30, 2017 and year ended December 31, 2017 include credits of $7.3 million and $7.5 million, respectively, reflecting revisions of previously estimated costs related to the Hawler and OML 141 license areas. Capital expenditures for the three and six months ended June 30, 2017 and the year ended December 31, 2017, include non-cash credits of $2.8 million, $2.4 million and $2.4 million, respectively, relating to revisions to estimates associated with the Hawler license area decommissioning liabilities. |
2H 2018 Capital Expenditure Forecast
Oryx Petroleum planned capital expenditures for the second half of 2018 are $36 million as summarised in the following table:
Location |
License/Field/Activity |
2H 2018 Forecast | |
$ millions | |||
Kurdistan Region |
Hawler |
||
Zey Gawra-Drilling |
8 | ||
Demir Dagh-Drilling |
4 | ||
Demir Dagh-Facilities |
2 | ||
Banan-Drilling |
8 | ||
Banan-Facilities |
2 | ||
Other |
3 | ||
Total Hawler(1) |
27 | ||
West Africa |
AGC Central--Drilling Prep |
2 | |
AGC Central?Other |
7 | ||
Capex Total(1) |
36 | ||
Note: |
Kurdistan Region of Iraq -- Hawler License Area
Demir Dagh drilling--consists of costs related to the workover of the Demir Dagh-8 well and, subject to the results of the Demir Dagh-8 workover, a short radius sidetrack of the previously drilled Demir Dagh-5 well.
Zey Gawra drilling--consists of the drilling of one new well targeting the Zey Gawra Cretaceous reservoir. This well was not previously planned.
Banan drilling--consists of i) the now completed re-entry, completion and testing of the Banan-2 well targeting the Cretaceous reservoir, which had been suspended since 2014 due to security developments, and ii) the drilling of two new wells targeting the Tertiary reservoir, subject to the ongoing performance of the first well targeting the Tertiary reservoir successfully drilled and completed in June 2018.
Demir Dagh facilities--comprised of modifications to the Hawler truck loading station needed to accommodate increased production, and minor infrastructure works.
Banan facilities--comprised of the construction of a truck loading station, a new drilling pad, and flowlines at the Banan field.
AGC Central License Area
Consists of preparation for drilling, facilities studies, and a final payment for the acquisition of 3D seismic data contingent upon entering the first renewal of the exploration period under the applicable production sharing contract which is expected in September 2018.
Regulatory Filings
This announcement coincides with the filing with the Canadian securities regulatory authorities of Oryx Petroleum's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2018 and the related management's discussion and analysis thereon. Copies of these documents filed by Oryx Petroleum may be obtained via www.sedar.com and the Corporation's website, www.oryxpetroleum.com.
ABOUT ORYX PETROLEUM CORPORATION LIMITED
Oryx Petroleum is an international oil exploration, development and production company focused in Africa and the Middle East. The Corporation's shares are listed on the Toronto Stock Exchange under the symbol "OXC". The Oryx Petroleum group of companies was founded in 2010 by The Addax and Oryx Group P.L.C. Oryx Petroleum has interests in three license areas, one of which has yielded an oil discovery. The Corporation is the operator in two of the three license areas. One license area is located in the Kurdistan Region of Iraq and two license areas are located in West Africa in the AGC administrative area offshore Senegal and Guinea Bissau, and Congo (Brazzaville). Further information about Oryx Petroleum is available at www.oryxpetroleum.com or under Oryx Petroleum's profile at www.sedar.com.
Reader Advisory Regarding Forward-Looking Information
Certain statements in this news release constitute "forward-looking information", including statements related to forecast work program and capital expenditure for 2018, drilling and well workover plans, development plans and schedules and chance of success, future drilling of wells and the reservoirs to be targeted, ultimate recoverability of current and long-term assets, expected completion of interpretation of 3D seismic data from the AGC Central license area and plans to identify and map prospects in the AGC Central license area and prepare for drilling, expected entry into the first renewal of the exploration period under the AGC Central PSC in September 2018, possible commerciality of our projects, plateau production rates, future expenditures and sources of financing for such expenditures, expectations that cash on hand as of June 30, 2018, cash receipts from export sales exclusively through the Kurdistan Region-Turkey Export Pipeline, expected net proceeds from the sale of its interests in the Haute Mer B license area, and, if needed, additional debt or equity capital of $10 - $15 million will allow the Corporation to fund its forecasted cash expenditures and to meet its obligations through the end of 2019, expected closing of a transaction to transfer the Corporation's interests in the Haute Mer B license area in Q3 2018, expected restructuring of the AOG Credit Facility, expected production rate increases for individual wells, management expectations regarding revisions to oil reserves estimates, the issuance of shares as a result of the vesting of Long Term Incentive Plan awards and in consideration of interest under the Loan Agreement with AOG, future requirements for additional funding, estimates for the fair value of the contingent consideration arising from the acquisition of OP Hawler Kurdistan Limited in 2011, the expected timing for settlement of liabilities including the credit facility with AOG and the contingent consideration arising from the acquisition of OP Hawler Kurdistan Limited in 2011, and statements that contain words such as "may", "will", "could", "should", "anticipate", "believe", "intend", "expect", "plan", "estimate", "potentially", "project", or the negative of such expressions and statements relating to matters that are not historical fact, constitute forward-looking information within the meaning of applicable Canadian securities legislation.
Although Oryx Petroleum believes these statements to be reasonable, the assumptions upon which they are based may prove to be incorrect. For more information about these assumptions and risks facing the Corporation, refer to the Corporation's annual information form dated March 23, 2018 available at www.sedar.com and the Corporation's website at www.oryxpetroleum.com. Further, statements including forward-looking information in this news release are made as at the date they are given and, except as required by applicable law, Oryx Petroleum does not intend, and does not assume any obligation, to update any forward-looking information, whether as a result of new information, future events or otherwise. If the Corporation does update one or more statements containing forward-looking information, it is not obligated to, and no inference should be drawn that it will make additional updates with respect thereto or with respect to other forward-looking information. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
Reader Advisory Regarding Certain Figures
Unless provided otherwise, all production and capacity figures and volumes cited in this news release are gross (100%) values, indicating that figures (i) have not been adjusted for deductions specified in the production sharing contract applicable to the Hawler license area, and (ii) are attributed to the license area as a whole and do not represent Oryx Petroleum's working interest in such production, capacity or volumes.
SOURCE Oryx Petroleum Corporation Limited
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