PANORO ENERGY ASA
Q3 2022 TRADING AND FINANCIAL UPDATE
30 NOVEMBER 2022
WEBINAR HOUSEKEEPING – TIME FOR QUESTIONS
DISCLAIMER
This presentation does not constitute an offer to buy or sell shares or other financial instruments of Panoro Energy ASA ("Company"). This presentation contains certain statements that are, or may be deemed to be, "forward-looking statements", which include all statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the Company's experience and perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances. Although we believe that the expectations reflected in these forward-looking statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking statements due to known or unknown risks, uncertainties and other factors.
These risks and uncertainties include, among others, uncertainties in the exploration for and development and production of oil and gas, uncertainties inherent in estimating oil and gas reserves and projecting future rates of production, uncertainties as to the amount and timing of future capital expenditures, unpredictable changes in general economic conditions, volatility of oil and gas prices, competitive risks, counterparty risks including partner funding, regulatory changes and other risks and uncertainties discussed in the Company's periodic reports.
Forward-looking statements are often identified by the words "believe", "budget", "potential", "expect", "anticipate", "intend", "plan" and other similar terms and phrases. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation, and we undertake no obligation to update or revise any of this information.
RECORD QUARTERLY AND 9M FINANCIAL PERFORMANCE
STEP UP IN LIFTINGS FROM JULY ONWARDS REFLECTED IN FINANCIAL RESULTS
9M 2022 HIGHLIGHTS Q3 2022 HIGHLIGHTS BALANCE SHEET
9M 2022 revenue USD 117.8 million
9M 2021: USD 38.6 million
9M 2022 EBITDA USD 89.2 million
9M 2021: USD 29.7 million
9M 2022 cash flow from operations
USD 78.8 million
9M 2021: USD 41.1 million
Q3 2022 revenue
USD 96.1 million
Q3 2021: USD 3.7 million
Q3 2022 EBITDA
USD 68.4 million
Q3 2021: USD 1.5 million
Q3 2022 cash flow from operations
USD 65.2 million
Q3 2021: USD (19.7) million
Cash at bank at 30 September 2022
USD 34.1 million
30 September 2021: USD 35.1 million
Gross debt at 30 September 2022 USD 82.4 million
30 September 2021: USD 97.4 million
Net debt at 30 September 2022
USD 48.3 million
30 September 2021: USD 52.3 million
INAUGURAL CASH DIVIDEND TO BE DECLARED AT Q4 RESULTS IN FEBRUARY 2023
CAPITAL ALLOCATION FRAMEWORK
DISCIPLINED APPROACH PRIORITISING SHAREHOLDER RETURNS
2023 SHAREHOLDER RETURN POLICY
INAUGURAL QUARTERLY CASH DIVIDEND TO BE DECLARED AT Q4 RESULTS IN FEBRUARY 2023
PRODUCTION PERFORMANCE AND OUTLOOK
PANORO BENEFITS FROM A DIVERSIFIED PRODUCTION BASE
- › Working interest production averaged approximately 7,700 bopd in the first nine months
- › Q3 production temporarily affected by ESP replacements in both Equatorial Guinea and Tunisia (since restored)
- › Production expected to return to in excess of 8,000 bopd level around year end with activities across all production assets underway
- › Panoro remains on track to reach ~12,500 bopd net working interest production during the course of 2023 (without contribution from new production wells at Block G)
* Average working interest production to 27th November 2022
CRUDE LIFTING SCHEDULE
THE MAJORITY OF CRUDE LIFTINGS OCCUR IN H2 2022
2022 CRUDE LIFTINGS
- › Crude liftings are based on Panoro's entitlement volumes after respective PSC terms have been applied, and will differ from produced volumes expressed on a working interest basis
- › 2022 lifting schedule in line with previously communicated expectations
- › Completed scheduled liftings of 880,896 barrels in Q3 at an average realised price of USD 105.5/bbl after customary discounts and sales fees
- › Lifted 1,686,908 barrels year-to-date at an average realised price of USD 100.2/bbl (after customary discounts and sales fees) including major October lifting of 647,111 barrels in Gabon
- › Next large cargo of ~650,000 barrels in Equatorial Guinea anticipated in Q1 2023
ROLLING HEDGING STRATEGY TO PROVIDE CASH FLOW ASSURANCE
- › 600 bopd (approximately 7% of 2022E production) hedged in 2022 with costless collars (USD 55/bbl floor and USD 67.5/bbl cap)
- › Tactical hedging strategy around liftings going forward with objective of helping to underpin shareholder returns
Note: Current lifting schedule anticipated by management remains subject to possible changes due to commercial and operational factors
DEBT MATURITY PROFILE & 2022 CAPEX BUDGET
CAPEX GUIDANCE OF USD 65 MILLION AND DEBT REPAYMENT OF USD ~19 MILLION FOR THE YEAR UNCHANGED
| Facility |
Maturity |
Amount |
Rate |
| Non recourse loan |
n/a |
USD 2.8 MM |
7.5% p.a |
Senior
secured loan |
2024 |
USD 7.9 MM |
LIBOR + 6% |
| RBL facility |
2026 |
USD 71.7 MM |
LIBOR + 7.5% |
| Advance payment facility |
n/a |
USD 20 MM (undrawn) |
LIBOR + 4.0% |
CURRENT DEBT MATURITY PROFILE
2022 FULL YEAR CAPITAL EXPENDITURE GUIDANCE
2021 guidance in relation to ongoing
million carried forward in relation to
36 22 USD 65 million ~USD 6 million capex carried forward from development of Dussafu (Gabon) and ~USD 6 exploration drilling at Block 2B (South Africa)
1 6
› Capex of USD 40.3 million in the first nine months of 2022 attributable to the Hibuscus Ruche Phase 1 development project in Gabon and Block G in Equatorial Guinea
- › USD ~25 million capex expected in Q4
- › 2023 guidance maintained at USD 65 million
- › Panoro is fully funded through its organic growth plans
- › 9M debt principal repayments of USD 15.6 million made
Note: Cumulative external debt in the Balance Sheet as of 30 September 2022 was USD 82.4 million which includes effects of accrued interest to period end, offset by un-amortised borrowing cost which is to be expensed over the life of the loan instruments.
RECONCILIATION OF 9M 2022 CASH FLOW
ROBUST FINANCIAL POSITION MAINTAINED
EQUATORIAL GUINEA OPERATIONS UPDATE
9M 2022 PRODUCTION 31,980 BOPD (4,560 BOPD NET TO PANORO)
BLOCK G (PANORO 14.25%)
- › Operator Trident Energy is undertaking a workover programme at the Okume Complex
- › First 2022 ESP conversion completed in May and second 2022 ESP installation completed in November
- › In late August the JV partners entered into a rig contract for the next drilling campaign
- › Three-well development drilling programme expected to commence in H2 2023
- › New wells expected to add >10,000 bopd gross
FARM IN TO BLOCK S (PANORO 12.00%)
- › Infrastructure led exploration in alignment with Block G partners Kosmos Energy (operator), Trident Energy and GEPetrol
- › Akeng Deep exploration well planned at Block S to test an Albian play
- › Targeting gross mean un-risked prospective resource of ~180 MMboe in 2024
- › Within tie-back distance to existing Block G production infrastructure
- › Farm-in is subject to customary approvals
GABON OPERATIONS UPDATE 9M 2022 PRODUCTION 10,920 BOPD (1,910 BOPD NET TO PANORO)
New gas lift compressor in Gabon. Photo from BW Energy
DUSSAFU MARIN (PANORO 17.5%)
- › 4 out of 6 wells on continuous production at Tortue owing to previously communicated gas lift capacity constraints
- › New gas lift compressor has arrived in Gabon
- › Installation on the BW Adolo FPSO by operator BW Energy during December with compressor start up expected in Q1 2023
- › Ultimate recovery from Tortue unchanged production deferral
HIBISCUS RUCHE PHASE 1 DEVELOMENT
- › Production facility BW MaBoMo has been installed and is being prepared for operations
- › Installation of 20 Km subsea pipeline to connect the BW MaBoMo to the BW Adolo FPSO was completed in October
- › Borr Norve drilling rig contracted and expected to arrive on location towards year end
- › Initial drilling campaign comprises 4 Hibiscus Gamba wells and 2 Ruche Gamba wells (with options over rig slots for two further wells)
- › Preparing for drilling operations in January with first well expected onstream late Q1 2023
- BW MaBoMo installed on location. Photo from BW Energy › The six new wells are expected to add gross production of ~30,000 bopd
TUNISIA OPERATIONS UPDATE
9M 2022 PRODUCTION 4,090 BOPD (1,200 BOPD NET TO PANORO)
TPS ASSETS (PANORO 29.4%)
- › GUE-3 and CER-2 workovers to replace failed ESPs successfully completed and wells brought online safely without incident
- › Wells are being monitored with encouraging increase in production rates observed
- › There has in addition been a production optimisation campaign across the asset to boost well performance which has lifted Q4 gross production to date to an average of ~4,600 bopd
NEW PRODUCTION OPPORTUNITIES AND OTHER BLOCKS
- › New production opportunities include completion of the Douleb reservoir in GUE-10AST expected in the coming months and perforation and stimulation activities on three further Cercina wells scheduled for Q2/Q3 2023
- › Joint ETAP and Panoro team is progressing a subsurface re-modelling exercise which is expected to lead to further field optimisation and development drilling recommendations
- › Increasing water injection capacity to boost production
- › Sfax Offshore Exploration Permit has been extended by two years until December 2024 and seismic re-processing work is underway
SOUTH AFRICA OPERATIONS UPDATE
INCUBATING A POTENTIALLY HIGH VALUE RESOURCE BASE WITH MODEST FINANCIAL EXPOSURE
TCP 218 (PANORO 100%)
- › Northern Karoo basin a proven natural gas and Helium generating basin
- Natural gas with Helium concentrations of >4% have been recorded in analogue areas
- › ~6,608 km2 Technical Co-operation Permit (218 TCP) located in northern Free State province
- › Proven gas reservoirs in surrounding area have been successfully developed
- › 12 month study underway to evaluate prospectivity after which Panoro has the option to apply for an exploration right
BLOCK 2B (PANORO 12.5%)
- › Gazania-1 exploration well was safely drilled to a depth of 2,360 metres
- › Did not encounter commercial hydrocarbons
COMMITTED TO DELIVERING SHAREHOLDER RETURNS
- › Record Q3 and 9M financial performance reflects step up in liftings from July onwards and cash generation potential of underlying assets
- › Value adding work programme driving strong visible organic production growth
- › Further upside from new wells in Equatorial Guinea
- › Extended portfolio with TCP 218 and Block S in line with strategy to selectively explore for large upside with modest financial exposure
- › Clear shareholder returns policy
- › Inaugural cash dividend to be declared at Q4 2022 results in February
WEBINAR HOUSEKEEPING – TIME FOR QUESTIONS
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