Earnings Release • May 27, 2021
Earnings Release
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Panoro Energy: Q1 2021 Trading and financial update
Oslo, 27 May 2021 - Panoro Energy ASA ("Panoro" or the "Company" with OSE
Ticker: PEN) delivered on a pro-forma basis, record high revenues of USD 77.2
million in this year's first quarter, with an EBITDA-result of USD 25.3 million,
showcasing the scale effects of the Company's announced acquisitions, which
either have been or are in process of being completed.
On an IFRS Reporting Basis, Panoro had gross revenues of USD 11.8 million,
EBITDA of USD 5.3 million and EBIT of USD 3.2 million in this year's first
quarter.
Panoro today also notes a target 2021 exit rate production of approximately
9,500 bopd, compared to current level of 8,000 bopd, and estimates that average
production in 2023 will reach in excess of 12,000 bopd.John Hamilton, CEO
Panoro, commented: "The first quarter of 2021 is the most significant in our
history. Through the acquisition announced in February, Panoro is transformed.
We can now point to a diversified production business across three countries, a
long-term reserves and contingent resource foundation, and an extensive
exploration portfolio. The resultant cash flow and strong balance sheet ensure
Panoro is fully financed through its organic growth plans, and positioned to pay
cash dividends in 2023. In the near term, we can look forward to five new
production wells coming on stream, and two exploration wells to be drilled. We
look forward to updating shareholders on this exciting growth trajectory."
Financial Highlights
+--------------+--------------------------------------+--------------+
| Metric |IFRS Reporting Basis |Pro-forma |
| | |Basis |
+--------------+--------------------------------------+--------------+
|Net Production|2,400 bopd |8,000 bopd |
|(approximate) | | |
+--------------+--------------------------------------+--------------+
|Gross revenue |USD 11.8 million |USD 77.2 |
| | |million |
+--------------+--------------------------------------+--------------+
| Number of |2 International |3 Internationa|
| liftings |2 Domestic |l |
| | |2 Domestic |
+--------------+--------------------------------------+--------------+
| EBITDA |USD 5.3 million |USD 25.3 |
| | |million |
| | |(reduced by |
| | |the effect of |
| | |USD 31.1 |
| | |million over |
| | |lift position |
| | |in EG |
| | |recognised at |
| | |fair value |
| | |which will |
| | |unwind in |
| | |coming |
| | |quarters with |
| | |inventory |
| | |accumulation) |
+--------------+--------------------------------------+--------------+
| EBIT |USD 3.2 million |USD 18.8 |
| | |million(after |
| | |DD&A on a |
| | |historical |
| | |basis. |
| | |Following |
| | |completion of |
| | |acquisitions, |
| | |DD&A expected |
| | |to be higher |
| | |due to |
| | |depletion of |
| | |fair value |
| | |uplift on |
| | |purchase |
| | |price |
| | |allocation). |
+--------------+--------------------------------------+--------------+
| Cash balance |USD 54.6 million |To be reduced |
|(including USD| |by |
| 10 | |approximately |
| million held | |USD 14 |
| for bank | |million |
| guarantee) | |related to |
| | |completion of |
| | |acquisitions |
+--------------+--------------------------------------+--------------+
| Receivables |USD 71.4 million (including USD 59.1 |Substantial |
|from crude oil|million related to Block G, Equatorial|portion of |
| sales |Guinea) |the |
| | |receivables |
| | |realised in |
| | |April 2021 |
+--------------+--------------------------------------+--------------+
| Gross Debt |USD 74 million |To be |
| | |increased by |
| | |USD 35 |
| | |million |
| | |following |
| | |completion of |
| | |Dussafu |
| | |Transaction |
+--------------+--------------------------------------+--------------+
In February 2021, Panoro announced two transformational acquisitions of assets
in West Africa. On 31 March 2021, the acquisition of Tullow Equatorial Guinea
Limited ("TEGL") (the "EG Transaction") was completed and has been recognised
in the balance sheet of the Group in accordance with IFRS 3. The results of TEGL
for the first quarter 2021 have not been consolidated and will be included from
the date of completion. The second transaction of acquisition of an additional
10% working interest in Dussafu permit (the "Dussafu Transaction") has not
completed as of the reporting date of 31 March 2021 and as such has not been
included in the balance sheet or the income statement of the Group.
In order to provide insights into the performance of the Group's existing
operations combined with the Company's aforementioned acquisitions in West
Africa, certain unaudited key information has been prepared and included in the
highlights on a pro-forma basis after including the results and operations of
both transactions from 1 January 2021.
The pro-forma information above is prepared for indicative purposes only and
should not be construed as past performance of the Group or be seen as a forward
-looking guidance. The purpose of this information is solely to provide
illustration and highlight the key metrics of the business on an indicative
basis after considering potential acquisitions. For information on the
assumptions used to prepare pro-forma information, please refer to note 7 of the
published Q1 2021 Trading and financial update.
Operational Highlights
·
Production and lifting operations maintained and largely unaffected through the
quarter
· Health and Safety systems and protocols proved resilient
Equatorial Guinea
·
Average first quarter production of approximately 30,200 bopd gross (4,300 bopd
net)
· Prior to completion, one cargo under Panoro's entitlement was lifted from
Equatorial Guinea during the quarter, generating sales of USD 59.1 million
· The Okume upgrade project is nearing completion, adding additional power,
water injection and gas lift capacity necessary for further facilities de
-bottlenecking and additional electrical submersible pumps (ESPs). In April,
partners commenced the second phase of the planned ESP program and upgraded the
G-19 flowline, which has significantly enhanced production from that well. A
rig has also been contracted for the upcoming infill drilling campaign, which is
expected to arrive in country during 2Q to drill the three wells planned on the
Elon field this year
· Three new production wells are planned for the Elon field in 2021
Gabon
·
Average first quarter production of 13,600 bopd gross on average (1,020 bopd net
increasing to 2,380 bopd following completion of 10% additional working
interest)
· Material cost and time savings through an alternative development plan for
the Hibiscus/Ruche area using jack-up rigs in place of a wellhead platform
· USD 100 million gross in capital savings as compared to previous concept
· Break-even for next development phases of approximately USD 25 per barrel
· One crude oil lifting in 1Q, sold at USD 67 per barrel with cost of sales of
USD 23 per barrel
Tunisia
·
Average first quarter production In Tunisia of 4,543 bopd gross on average
during the quarter (1,336 bopd net)
· A lifting of 96,000 bbls net to Panoro was completed during the quarter
achieving a price of approximately USD 60/bbl. Additional domestic liftings also
supplemented the revenues for this period.
Corporate Highlights
·
Completion of acquisition from Tullow Oil plc of a 14.25% working interest in
Block G, offshore Equatorial Guinea ("EG Transaction") with remaining additional
10% working interest in Dussafu Marin Permit, offshore Gabon expected to
complete in 2Q
· Equity private placement and subsequent offering during the quarter with net
proceeds of USD 77.1 million
· First drawdown of USD 55 million under the USD 90 million debt facility with
Trafigura/MCB to partially fund the EG Transaction
· Completion of farm-in of 12.5% working interest in Block 2B, offshore South
Africa in April 2021
Outlook and Guidance
·
Five new production wells to be completed during Q2 and Q3 (3 EG and 2 Gabon)
· Targeting 2021 exit rate production in excess of 9,500 bopd
· Production growth activity in Tunisia to continue with workovers planned at
El Ain-3 and Cer-3
· Drilling of Hibiscus North exploration well in Q3
· Drilling of Gazania-1 exploration well in Block 2B by end of 2021
· Three international liftings expected in 2Q 2021
· Dividend of PetroNor shares to Panoro shareholders (upon completion of sale
of Aje)
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 | 27 May 2021, 09:00 .a.m. CEST |
| Time: | |
+-------------+--------------------------------------------------------------+
|Registration:|https://attendee.gotowebinar.com/register/8707133050516680971 |
| | |
| |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). |
+-------------+--------------------------------------------------------------+
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: [email protected]
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)
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