Panoro Energy ASA

Earnings Release • Nov 22, 2021

Panoro Energy: Third Quarter 2021 Trading and Financial Update

Panoro Energy: Third Quarter 2021 Trading and Financial Update

Oslo, 22 November 2021 - Panoro Energy ASA ("Panoro" or the "Company" with OSE

Ticker: PEN) today announced that, on a pro-forma basis, working interest

production for the first nine months stood at 7,500 bopd. With new production

wells in Equatorial Guinea and Gabon starting to contribute in the fourth

quarter and numerous portfolio-wide development initiatives underway and

planned, Panoro's outlook remains strong and one of visible production growth.

John Hamilton, CEO of Panoro, commented:

"With the development drilling programmes in Equatorial Guinea and Gabon

starting to contribute, and production stable in Tunisia, our current and

diversified daily net production is currently in excess of 8,000 bopd and is

expected to continue to build to around 8,500 bopd by year end.  We have

aggregate net liftings of around one million barrels occurring in the fourth

quarter that will coincide with current oil prices which remain strong. These

facts validate our recent strategic acquisitions and demonstrate the strength

and sustainability of our business. As a result, we are committed to begin

returning capital to our shareholders whilst continuing to advance our exciting

growth pipeline. Our commitment is to pay a sustainable cash dividend and there

is potential for this to be brought forward, perhaps significantly, from the

original guidance."

Financial Highlights

· The Company recognises revenue when liftings of its crude oil entitlement

occur. As previously guided, there were no Panoro liftings in the third quarter

in Equatorial Guinea or Gabon, with only one domestic lifting occurring in

Tunisia

· Consequently, revenue for the first nine months was USD 107.6 million on a

pro-forma basis and EBITDA USD 67.4 million

· In the fourth quarter the Company has to date completed one lifting of

approximately 130,000 barrels net in Gabon (with pricing in excess of USD 80 per

barrel anticipated) and expects three further liftings net to Panoro of

approximately 900,000 barrels in aggregate in Equatorial Guinea, Gabon and

Tunisia before year end

· At 30 September cash at bank stood at USD 45 million (including USD 10

million cash held for bank guarantee) and gross debt USD 97 million, resulting

in a net debt position of approximately USD 52 million

· Balances at 30 September reflect principal debt repayments of approximately

USD 7 million in the third quarter and profits tax payments in Equatorial Guinea

of approximately USD 12 million, where profits taxes due are paid annually in

the third quarter

· Capital expenditures for 2021 (excluding acquisition costs) are expected to

be USD 45 million, of which USD 25.4 million was spent in the first nine months

· On an IFRS Reporting Basis, gross revenues were USD 38.6 million, EBITDA USD

29.7 million and working interest production approximately 5,300 bopd in the

first nine months

Shareholder Returns Policy

· Consistent with its strategy to create and deliver shareholder value, the

Panoro Board is committed to sustainable shareholder returns, balanced alongside

future organic and inorganic growth. The adoption of formal communications

regarding the implementation of future dividends clearly demonstrates the Boards

strong commitment to shareholder returns through the oil cycle

· At the time of the Tullow acquisitions, Panoro stated its intention to pay

cash dividends starting in mid-2023, coinciding with planned completion of the

Hibiscus/Ruche Phase 1 development in Gabon

· Recognising that oil prices have strengthened since the time of the Tullow

acquisitions, Panoro is assessing the feasibility of bringing forward, perhaps

significantly, the initiation of a cash dividend. The key external drivers

affecting timing include oil prices, capital expenditure requirements, debt

service obligations, underlying operational performance, and critically the

timing of crude oil liftings

· Panoro's ultimate intention is to pay out a sustainable quarterly dividend

and return a significant portion of free cash flow generated during the

applicable financial year

· Panoro may also consider the use of share buy-backs as a complementary

mechanism to return capital to shareholders, in accordance with the AGM

resolution approved by its shareholders. As part of its Shareholder Returns

Policy Panoro intends on refreshing this resolution at the 2022 AGM and will

continually assess the possibility of implementation as part of its overall

returns policy

· As further information and data are gathered over the coming months, Panoro

expects to make additional announcements related to the Shareholder Returns

Policy including our refined estimates of timing of a first dividend payment,

the clear objective being to initiate this at the earliest opportunity

Operational Highlights

Equatorial Guinea - Block G (Panoro 14.25%)

· Company working interest production in the first nine months averaged 4,240

bopd (29,700 bopd on a gross basis)

· The operator of the Ceiba field and Okume Complex, Trident Energy, completed

drilling of the first new infill well since 2015 at the Okume Complex in August,

encountering good quality oil saturated reservoir sands. Hook-up of the well has

been completed and production initiated. Drilling and completion of a second

well is underway with production start-up expected in the fourth quarter. A

third well that was originally anticipated to form part of the current campaign

is now expected to be deferred as a result of rig commitments elsewhere, with

the production outperformance of the first well compensating for deferral of the

third

· The partners are now focussed on defining further production growth

activities in 2022 and beyond, comprising additional workover activity and

potential development drilling

· Panoro expects to make one crude lifting of approximately 700,000 barrels in

December 2021

Gabon - Dussafu Marin Permit (Panoro 17.5%)

· Company working interest production in the first nine months averaged 1,920

bopd (11,000 bopd on a gross basis)

· As part of the Tortue Phase 2 field development, production from the final

two development wells DTM-6H and DTM-7H commenced in October

· The DTM-6H and DTM-7H wells conclude the Tortue Phase 2 development, whereby

the Tortue field now comprises six production wells tied back to the FPSO BW

Adolo. The operator BW Energy is in the process of optimising production, with

the previously communicated shortage of gas lift capacity currently affecting

the ability for all wells to simultaneously produce at their potential

· In September drilling operations were concluded at the Hibiscus North

exploration well (DHBNM-1) with plans for the discovery to be incorporated into

future development planning

· The Hibiscus/Ruche Phase 1 development project is progressing on schedule

and within budget with first oil anticipated in Q4 2022

Tunisia - TPS Assets (Panoro 29.4%)

· Company working interest production in the first nine months averaged 1,340

bopd (4,555 bopd on a gross basis)

· At the Guebiba, Rhemoura and Cercina fields a number of well operations

facilities upgrades to enhance and optimise production are ongoing

· At the Guebiba field a recent workover at GUE-14 has again demonstrated the

benefits of stimulation activities undertaken in conjunction with ESP

replacements where the well productivity was boosted by some 50%

· A team comprising ETAP and Panoro staff are progressing a subsurface re

-modelling exercise for the Guebiba field. This is expected to lead to further

field optimisation and development drilling recommendations

Exploration and Other Assets

· In October Panoro was provisionally awarded a 25% non-operated interest in

exploration blocks G12-13 and H12-13 offshore shallow water Gabon, part of the

12th Offshore Licensing Round. Partners in the blocks will include BW Energy

(37.5% and operator) and VAALCO Energy (37.5%)

· In South Africa the Block 2B joint venture partners tendered for a semi

-submersible rig and completed a seabed survey in preparation for drilling the

Gazania-1 well. The operator, Azinam, finalised the well plan and is currently

conducting negotiations with various rig contractors to optimize the well budget

and drill the Gazania-1 well before the Exploration Right expires in November

2022. Panoro holds a 12.5% interest in Block 2B

· Panoro continues to make progress towards the sale of its interest in OML

113 and the Aje field to PetroNor E&P. Due to further delays the long stop date

was extended to 30th November to allow additional time for the statutory

approvals process to complete. Upon completion Panoro will dividend shares in

PetroNor E&P received as consideration to shareholders

· Post period end, discussions on the Sfax Offshore Permit situation with the

Tunisian authorities proceeded towards a potential resolution. Such envisioned

resolution includes a proposal to renew the license period, the bank guarantee

partially drawn (USD 6.3 million) and the remaining amount cancelled and cash

returned to Panoro (USD 3.6 million). The amount drawn under the bank guarantee

represents the amount the Tunisian authorities believe is payable from DNO's non

-fulfilment of a work programme at Sfax Offshore. Panoro is evaluating the

amount claimed and will consider its next steps in due course

Outlook and Guidance

Panoro expects working interest production to climb to a level of approximately

8,500 bopd by year end. Operational guidance and expectations for next year will

be provided in early 2022.

Live Presentation Webcast Dial in Details

The Company will hold a live presentation at 09:00 a.m. CEST today, during which

management will discuss the results and operations of the period. After

conclusion of the discussion, participants will be invited to ask questions on

the results update.

The presentation can be accessed through registering at the link below and the

online access to the event will be equipped with features to ask live

questions. The audio Q&A feature will only be available for attendees who join

online. Joining instructions for participating online or through using local

dial-in numbers will be available upon completion of registration. The

presentation details are as follows:

Date and 22 November 2021, 09:00 .a.m. CET

Time:

Registration: https://attendee.gotowebinar.com/register/301224823107537163

After registering, participants will receive a confirmation

email containing information about joining the results

presentation.  Participants can use their telephone or computer

microphone and speakers (VoIP).

Please join the event at least five minutes before the scheduled start time.

A replay of the webinar presentation will be available shortly after the event

is finished and will remain on our website (www.panoroenergy.com) for

approximately 7 days.

Enquiries

Qazi Qadeer, Chief Financial Officer

Tel:     +44 203 405 1060

Email: investors@panoroenergy.com

About Panoro Energy

Panoro Energy ASA is an independent exploration and production company based in

London and listed on the main board of the Oslo Stock Exchange with the ticker

PEN. Panoro holds production, exploration and development assets in Africa,

namely a producing interest in Block-G, offshore Equatorial Guinea, the Dussafu

License offshore southern Gabon, OML 113 offshore western Nigeria (held-for

-sale, subject to completion), the TPS operated assets, Sfax Offshore

Exploration Permit and Ras El Besh Concession, offshore Tunisia and

participation interest in an exploration Block 2B, offshore South Africa.

Visit us at www.panoroenergy.com

Follow us on Linkedin (https://www.linkedin.com/company/panoro-energy)