Interim / Quarterly Report • Aug 11, 2023
Interim / Quarterly Report
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Q2 Report for the SIX MONTHS ENDED 30 June 2023 (org number: 559018-9543)
(all amounts are in US dollars unless otherwise noted)
The amounts below are related only to continuing operations.
The table below presents the highlights of the continuing operations:
| Q2 | Q1 | Q4 | Q3 | Q2 | H1 | H1 | |
|---|---|---|---|---|---|---|---|
| (TUSD, unless otherwise noted) | 2023 | 2023 | 2022 | 2022 | 2022 | 2023 | 2022 |
| Net Daily Production (BOEPD) | 211 | 233 | 280 | 314 | 542 | 222 | 502 |
| Revenue | 1,325 | 1,486 | 1991 | 2,567 | 4,053 | 2,811 | 7,769 |
| Operating netback | 470 | 648 | 1002 | 1,379 | 2,219 | 1,118 | 4,142 |
| EBITDA1 | (1,788) | (237) | (1335) | (234) | 616 | (2,025) | 1,149 |
| Net result for the period | 90 | (2,378) | (3579) | (3,928) | (2,329) | (2,288) | (5,022) |
| Earnings per share – Basic & | |||||||
| Diluted (USD) | 0.00 | (0.02) | (0.03) | (0.03) | (0.02) | (0.02) | (0.04) |
| Cash and cash equivalents | |||||||
| (including restricted cash) | 102,406 | 110,395 | 19,520 | 9.317 | 13,066 | 102,406 | 13,066 |
1 See page 31-32 for the alternative performance measurement.
Dear Friends and Fellow Shareholders of Maha Energy AB,
The second quarter 2023 could be viewed as the first quarter for the new Maha. The sale of our onshore assets (Tiê and Tartaruga) in Brazil was already closed in the first quarter, but in the second quarter we concluded the business combination with DBO Invest and other shareholders involving our new offshore assets in Brazil (Papa Terra and Peroá), which we from now on will refer to as Maha Offshore (instead of DBO 2.0). Through this transaction we restored our production to almost 2,000 BOEPD and reserves plus contingent resources up to 44.7 mm BOE, to levels as before of the sale of the onshore assets. In addition to that, we have achieved a substantial and robust cash position to pursue attractive new opportunities within the O&G sector worldwide.
The business combination with DBO Invest and other shareholders involving Maha Offshore was completed just before the AGM in May. Through the transaction, we increased our reserves with 18.8 MMBoe (indirect equity interest of 15% on 3R Offshore) and we are pleased to report that our new assets have gotten off with an excellent initial performance. The production increased by 24% from the first to the second quarter and amounted to 1,988 BOEPD (including 211 BOEPD from our US assets). But there is still room for further increases, specially if we consider that we had a temporary interruption (maintenance) at the Papa Terra cluster in May 2023 and ongoing investments. For the first time we are reporting our share in income from investment in associate from Maha Offshore (non-cash), which amounted to TUSD 454 since the date of closing May 23rd .
In Oman, we continued the work with the initial short-term production test launched in mid March 2023. All eight production wells drilled in the 2022/2023 drilling program were tested for short term and five produced oil to surface at an initial estimated average rate of 300 barrels of oil per day per well, while three had to be suspended after producing water and gas but before producing any oil. Even though more than 4,000 barrels of heavy, high viscosity oil (between 11-13 degrees API) were produced, filling all tank capacity available at Block 70, oil offloading has not yet initiated. Maha is now scaling up chemical treatment of the produced oil to reduce viscosity and enhance flowability to achieve the required specification to offload the produced oil to the third-party facility for further processing and transportation through the Omani national pipeline system.
Also, during the second quarter of 2023, the Minimum Work Obligations of the EPSA have been fully concluded as planned and, as Maha approaches the end of the Initial Phase in late October 2023, Maha has requested the extension of this Phase of the EPSA to the Ministry of Energy and Minerals of the Sultanate of Oman ("MEM"). During the extended Initial Phase, Maha intends to implement activities necessary to support any potential decision regarding Block 70's declaration of commerciality.
Our total cash balance amounts to USD 102.4 million (including restricted cash of USD 41.1 million). On top of that, we expect the second installment of USD 55.0 million from the onshore Brazil sale later in the end of August. We have actively managed these funds. For the second quarter 2023, we report a Financial Income of USD 4.3 million. We are very excited with this moment and confident to continue investing these resources into new transactions and continue our growth momentum based on a robust M&A strategy. We stick to our growth path and are eager to conclude more transactions at attractive multiples. We appreciate you taking this journey with us.
Yours sincerely,
Paulo T. Arantes de Mendonça (CEO)
| Country | Concession name | Maha Working Interest (%) |
Status | Net Area (acres) |
BOEPD (2 ) |
Partner |
|---|---|---|---|---|---|---|
| USA | Il Basin (various) | 97% | Producing | 3,297 | 211 | |
| USA | LAK Ranch | 99% | Pre-Production | 6,475 | - | SEC (1%) |
| Brazil | Peroá cluster | 15% | Producing | 3,411 | 560 | 3R Offshore |
| Brazil | Papa Terra cluster |
9.375% | Producing | 4,234 | 1,217 | 3R Offshore |
| Oman | Block 70 | 65% | Pre-Production | 102,635 | - | Mafraq Energy LLC (35%) |
On 23 May 2023, Maha completed the previously announced business combination with DBO 2.0 S.A. ("DBO"). The consideration for all shares in DBO amounted to 34,829,057 new shares in Maha. DBO holds indirectly, through shareholding in 3R Petroleum Offshore S.A., interests in the offshore oil and gas fields called Peroá cluster (15% indirect interest) and the Papa Terra cluster (9.375% indirect interest). Subsequent to the quarter end, the Company changed the name of its subsidiary DBO 2.0 to Maha Energy Offshore (Brasil) Ltda.
Maha owns a 15 percent indirect working interest (through its 15 percent equity interests in 3R Offshore) in Peroá, Cangoa and Malombe concession agreements (together, the "Peroá cluster"). The Peroá gas cluster is located in the Espírito Santo basin, offshore Brazil in shallow waters, and includes the Peroá and Cangoa producing fields, along with the Malombe discovery. Peroá and Cangoa are being developed and producing natural gas via the Peroá platform. Approximately 72.5 percent gas has been recovered and remaining gross 2P reserves are estimated at 13.5 mmboe per year-end 20223 . Subsequent to the quarter end, the production at Peroá cluster increased due to the new gas sales agreement as well as gas sales into the Brazilian spot market.
Maha indirectly owns (through its 15% equity interests in 3R Offshore) a 9.375 percent indirect working interest in Papa Terra cluster – which is directly owned by 3R Offshore and Nova Técnica Energia (37.5 percent). Papa Terra is a heavy oil field located in deep waters in the Campos Basin, approximately 100 km offshore the coast of the State of Rio de Janeiro, Brazil and features state-of-the-art assets with six years of operations. Historical investments into infrastructure total approximately USD 3 billion (gross) and all assets are owned by the license holders. Approximately 2.6 percent of the oil has been recovered as of December 2022 and gross 2P reserves are estimated to be 178.6 mm boe per year-end 20223 . This represents a 11.9 percent recovery factor, which compares with an average of 15.4 percent for the Campos Basin, suggesting further upside potential beyond the 2P reserves.
Papa Terra was discovered in 2003 and production started in November 2013. The field is developed with an FPSO (3R-3) and a Tension Leg Wellhead Platform (3R-2), both owned pro rata by the joint venture partners (i.e., 3R Offshore and Nova Técnica Energia) of the oil field, with a combined processing capacity of 140,000 barrels of oil per day, an injection capacity of 340,000 barrels of water per day, a storage capacity of 1.4 million barrels and slots to
2 As per the current quarter reported net production volumes to Maha before royalties. 1 BBL = 6,000 SCF of gas.
3 Based on Maha's estimates considering the reserve reports from DeGolyer and MacNaughton.
connect up to 21 producing wells and 11 injecting wells. Currently, 4 production wells and 3 injection wells are active and all systems have idle capacity to implement revitalization and redevelopment activities.
On 28 February 2023, Maha completed the sale of Maha Energy Brasil Ltda ("Maha Brazil") to Brazilian PetroRecôncavo S.A. ("PetroRecôncavo"). The total purchase price, including adjustments, amounted to USD 150.9 million to be paid in two installments: (a) USD 95.9 million at the closing date (which occurred on 28 February 2023), and (b) USD 55.0 million, six months after the closing date. In addition, earn-outs of up to USD 36.1 million, which could be paid based on certain contractual conditions being met, whereof up to USD 24.1 million refers to the average annual Brent oil price for the next three years. It will start to be payable from yearly average of USD 80.0 per barrel with a maximum to be reached if the price is above USD 90 per barrel. The remaining payment will be subject to synergies with Petrorconcavo's potential new assets. Due to uncertainty of actualizing these earn-outs, contingent proceeds relating to the earn-outs have not been recognized as at 30 June 2023. Part of proceeds from the transaction were used as collateral for Maha's outstanding debt to BTG Pactual (related to the Credit Agreement dated 30 March 2021). See Note 18 for further details. As a result of this announcement, Maha Brazil has been presented as discontinued operations in the interim condensed consolidated statement of operations.
During the second quarter 2023, the Company completed routine maintenance activities such as workovers and well repairs at its assets in the Illinois Basin. The quarter production continued with only minor well workover activity required to repair routine pump failures.
Average net production from the Illinois basin during the second quarter was 211 BOPD of oil.
The LAK Ranch heavy oil asset was in 2020 shut in no activity occurred during Q2 2023 other than routine maintenance activities and some short term well testing activities.
In the first quarter, Maha farmed out 35% work interest to Mafraq Energy LLC. Maha remains the Operator of Block 70 with 65% interest. The consideration for the assignment of this interest to Mafraq Energy LLC is USD \$11.2 million which includes reimbursement of all past costs (including some general and administrative costs) accrued to that date and the commitment to bear 35% of all future costs.
The Company continued the 2022-2023 drilling program on Block 70 which had commenced in late 2022 and has been concluded as per the plan in the second quarter 2023, along with other commitments of the EPSA. The program consisted in drilling a total of 11 wells including 2 appraisal and 1 exploration wells and seismic data reprocessing and interpretation.
In March, the Company commenced the short-term production test on Block 70 at the "Alpha pad" on wells Mafraq-9, Mafraq-7, Mafraq-10 and Mafraq-8 and proceeded to the remaining wells during Q2. All 8 production wells drilled during this campaign were tested for short term and five (5) produced oil to surface at an initial estimated average rate of 300 barrels of oil per day, while three (3) had to be suspended after producing water and gas but before producing any oil.
Even though more than 4,000 barrels of heavy, high viscosity oil (between 11-13 degrees API) were produced, filling all tank capacity available at Block 70, oil offloading has not yet initiated. Maha is now scaling up chemical treatment of the produced oil, based on those products that provided the best results in the lab to reduce viscosity and enhance
flowability. Thereafter, the aim is to achieve the required specification to offload the produced oil to the third-party facility for further processing and transportation through the Omani national pipeline system. Once it becomes possible to offload the oil currently stored, Maha intends to restart the cold production of wells for further data gathering and production information.
During the second quarter of 2023, the Minimum Work Obligations of the EPSA have been fully concluded as planned and, as Maha approaches the end of the Initial Phase in late October 2023, different extension scenarios were evaluated by the Company and discussed with Omani authorities. Hence, driven by Maha's commitment to conclude testing effectively, and to ensure an appropriate and robust request for a potential declaration of commerciality, the Company has requested the extension of the Initial Phase of the EPSA to the Ministry of Energy and Minerals of the Sultanate of Oman ("MEM").
During the extended Initial Phase, Maha intends to implement activities necessary to support any decision regarding Block 70's declaration of commerciality, such as: (i) run detailed simulations of the long-term behavior of the reservoir and wells at Block 70; (ii) restart the cold production of wells and troubleshoot for the maximum possible sustained rates contingent on reaching specifications; and (iii) prepare a detailed plan for enhanced oil recovery ("EOR") such as steam, waterflooding or other production enhancement methods to be performed during a possible second stage of the extended Initial Phase.
Continuing Operations
| Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | |
|---|---|---|---|---|
| 4 Total consolidated Production (BBL) |
19,187 | 49,361 | 40,128 | 90,929 |
| Average Daily Production (BOEPD) | 211 | 542 | 222 | 502 |
Production volumes are net working interest volumes before any royalties. The Company's continuing operations with producing oil and gas assets are in the Illinois Basin. Production from Maha's Brazilian assets, where Maha holds indirect interest, is not consolidated, and is instead included in the Group's financial reporting as share in income from investment in associates. Average daily production volumes in the Illinois Basin for the second quarter and first half of the year ("H1 2023") decreased as compared to the comparative period due to natural decline of the wells and lack of new production resulting from delay in the capital projects and temporary weather events such as localized flooding. Production volumes for the comparative period included higher production from the 12 new wells drilled as part of the drilling campaign in 2021. The 4,000 barrels produced under the test production at Block 70 in Oman were not recorded since offloading from Block 70 has not been possible yet.
| (TUSD, unless otherwise noted) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Total Sales volume (BBL) | 18,800 | 38,525 | 39,117 | 79,180 |
| Oil and Gas revenue | 1,325 | 4,053 | 2,811 | 7,769 |
| Oil realized price (USD/BBL) | 70.50 | 105.19 | 71.87 | 98.11 |
| Reference price – Average WTI (USD/BBL) | 73.76 | 108.72 | 74.92 | 101.59 |
Revenue from the continuing operations for the second quarter amounted to TUSD 1,325 (Q2 2022: TUSD 4,053) representing a decrease by 67% mainly due to lower sales volumes by 51% and lower realized oil price for the period. Revenue for the first half of 2023 amounted to TUSD 2,811 as compared to first half of 2022 ("H1 2022") which amounted to TUSD 7,769, representing a decrease of 64%. This decrease in revenue is consistent with lower realized
4 BOE takes into account gas delivered and sold. 1 bbl = 6,000 SCF of gas.
oil price by 27% and lower sales volume by 51%. More revenue information is detailed in Note 4 to the Condensed Consolidated Financial Statements.
| (TUSD, unless otherwise noted) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Royalties | 386 | 980 | 739 | 1,877 |
| Royalties as a % of revenue | 29.1% | 24.2% | 26.3% | 24.2% |
Royalties are settled in cash and based on realized prices before discounts. Royalty expense decreased by 61% for the second quarter and 61% for H1 2023 as compared to the same periods in 2022 which is consistent with lower revenue for the same periods.
| (TUSD, unless otherwise noted) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Production expenses | 469 | 854 | 954 | 1,750 |
| Per unit (USD/BOE) | 24.90 | 22.17 | 24.38 | 22.10 |
Production expenses for the continuing operations were lower for the second quarter and H1 2023 as compared to the comparative periods mainly due to lower sales volumes which was slightly offset by an increase in overall costs resulting from inflation. Production expenses increased on a per unit bases as compared to the comparative periods due to lower sales volumes to absorb the high fixed costs.
| (TUSD, unless otherwise noted) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Operating Netback | 470 | 2,219 | 1,118 | 4,142 |
| Netback (USD/BOE) | 25.06 | 57.57 | 28.60 | 52.30 |
Operating netback is a non-GAAP financial metric used in the oil and gas industry to compare performance internally and with industry peers and is calculated as revenue less royalties and production expenses. Operating netback for the second quarter was 56% lower than the comparative period mainly due to lower sales volumes. Operating netback for H1 2023 is 45% lower than the comparative period mainly due to lower sales volume and lower oil realized prices slightly offset by lower production costs year to date.
The depletion rate is calculated on proved and probable oil and natural gas reserves, taking into account the future development costs to produce the reserves. Depletion expense is computed on a unit-of-production basis. The depletion rate will fluctuate on each re-measurement period based on the capital spending and reserves additions for the period.
DD&A expense for the second quarter amounted to TUSD 533 (at an average depletion rate of USD \$28.36 per BOE) as compared to TUSD 687 (at an average depletion rate of USD \$17.83 per BOE) for the comparative period. Total depletion expense was lower than the comparative period mainly due to lower total production volumes as compared to the same period last year. Depletion rate on a per BOE basis increased because of a higher depletable base and lower sales volumes to absorb the costs per barrel. For H1 2023, DD&A expense decreased by 27% and amounted to TUSD 1,019 (at an average depletion rate of USD \$26.05 per BOE) as compared to TUSD 1,405 (at an average depletion rate of USD \$17.74 per BOE) for the comparative period. Depletion expense was lower whilst the depletion rate on a per BOE basis increased because of the same reasons as above.
G&A expense for the second quarter amounted to TUSD 2,678, an increase of 103% from the comparative period which amounted to TUSD 1,321. G&A expenses increased mainly due to nonrecurring indirect costs associated with due diligence work for current and future potential transactions that Maha has been engaged in and G&A expenses related to the newly formed Maha Brazil Holding Company in Brazil. G&A expense for the H1 2023 amount to TUSD 4,061 which is higher by 58% from the comparative period of TUSD 2,565 mainly due to the same reasons described above.
The net foreign currency exchange loss for the second quarter amount to TUSD 10 (Q2 2022: TUSD 176 gain) and amounted to TUSD 9 gain for H1 2023 (H1 2022: TUSD 100 gain). Foreign exchange movements occur on settlement of transactions denominated in foreign currencies. Foreign exchange gain for the second quarter is related to the Swedish Krona bank accounts held by the parent company that has US dollars as itsfunctional currency. The Swedish Krona steadily weakened against the US dollars during the second quarter of the year.
Share in income from investment in associate amounted to TUSD 454 (Q2 2022: nil) for the second quarter and H1 2023 and is further detailed in Note 9 and DBO combination above. This represents Maha Energy's net income portion (non-cash) resulting from 15 percent ownership in 3R offshore for the month of June 2023. The Company has significant influence over 3R Offshore due to the Company's share ownership and representation on 3R Offshore's Board of Directors. These investments are consolidated through the equity method and the net result of these entities is therefore recognised as a single line item in the condensed consolidated statement of operations.
Finance income for the second quarter increased to TUSD 4,309 (Q2 2022: TUSD 16) and for H1 2023 amounted to TUSD 4,643 (H1 2022: TUSD 27) and is mainly related to investment income generated from short-term investments. The Company regularly invests most of its available cash balances in low-risk short term Time Deposits or low volatile investments. In addition, the Company generated positive investment income from small equity positions. Finance costs for the second quarter continued to decrease as the Company amortizes bank debt and amounted to TUSD 1,888 (Q2 2022: TUSD 2,450) and for H1 2023 amounted to TUSD 3,896 (H1 2022: TUSD 4,893) and are detailed in Note 5.
During the second quarter, the Company recognized other income of TUSD 159 (Q2 2022: nil) and for H1 2023 other income of TUSD 900 (H1 2022: nil) which is primarily related to the reimbursement of past costs of Block 70 which were previously expensed during the previous years as per the terms of the Block 70 JOA with Mafraq Energy LLC (as described above).
The presentation currency of the Company is US Dollars; therefore, the translation differences of foreign operations are recorded within other comprehensive income. The exchange differences on translation of foreign operations presented in Statement of Comprehensive Earnings amounted to TUSD -2,174 (Q2 2022: TUSD -14,632). The cumulative impact of exchange differences on translation of foreign operations for H1 2023 amounted to TUSD - 9,858 (H1 2022: 6,092). Upon completion of the Maha Brazil Transaction, the Company recognized TUSD 26,612 of foreign exchange translation and was included in the net loss from discontinued operations (see Note 6).
EBITDA (Earnings before interest, taxes, depreciation, and amortization and impairment) for the second quarter 2023 amounted to TUSD -1,788, down from TUSD 616 in second quarter 2022 driven by lower sales volumes and lower realized oil price. EBITDA for H1 2023 amounted to TUSD -2,025, down from TUSD 1,149 in H1 2022 driven by the same reasons. EBITDA is a non-IFRS financial measure and is reconciled as follows:
| (TUSD, unless otherwise noted) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Operating result | (2,331) | 105 | (3,035) | (156) |
| Depletion, depreciation and amortization | 533 | 687 | 1019 | 1405 |
| Foreign currency exchange gain (loss) | 10 | (176) | (9) | (100) |
| EBITDA | (1,788) | 616 | (2,025) | 1,149 |
The net result from continuing operations for the second quarter amounted to TUSD 90 (Q2 2022: TUSD -2,329) representing earnings per share of USD 0.00 (Q2 2022: USD -0.02). The net result for the first half of 2023 amounted to TUSD -2,288 representing earnings per share of USD -0.02 as compared to the first half of 2022 which amounted to TUSD -5,022 representing earnings per share of USD -0.04. Net results for the second quarter and H1 periods are higher than the comparative periods mainly due to income from investment in associate and higher finance income resulting from investment of cash. Higher income was offset by higher general and administrative costs and lower net revenue from oil and gas sales.
The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying oil and natural gas assets. To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general market and industry conditions. The annual budget and subsequent updates are approved by the Board of Directors.
The Company considers its capital structure to include shareholders' equity of USD 183.6 million (31 December 2022: USD 140.9 million). The Company's restricted cash balance of USD 41.1 million has been escrowed to use as a collateral for the Company's debt balance of USD 37.8 million. In addition, the Company cash balance amounted to USD 61.3 million resulting from the sale of Maha Brazil. The second installment of the proceeds from the sale of Maha Brazil, expected at the end of August 2023, will further increase the Company's cash balance. For the remainder the year, management will continue to use internally generated cash flow to fund its 2023 exploration and development program and is dedicated to keeping a strong statement of financial position, which has proven to be very important, especially in times of volatile commodity prices. The significant increase in cash shall be deployed to complete opportunistic acquisitions at attractive multiples to build a portfolio of stable producing assets.
| Shares outstanding | Class A |
|---|---|
| 31 December 2022 | 143,615,696 |
| 31 March 2023 | 143,615,696 |
| Shares issued for DBO 2.0 acquisition* | 34,829,057 |
| 30 June 2023 | 178,444,753 |
*All 34,829,057 new shares have been subscribed for, fully paid and allocated to the subscribers and in total 34,829,057 paid-up subscribed shares (BTA) have been issued to be delivered to the subscribers. No new shares issued within the framework of the transaction will however be registered with the Swedish Companies Registrations Office or admitted to trading on Nasdaq Stockholm before a prospectus has been published by the Company. BTA will be converted into shares after registration of the shares with the Swedish Companies Registrations Office. BTA will not be admitted to trading on Nasdaq Stockholm.
The Company thoroughly examines the various risks to which it is exposed and assesses the impact and likelihood of those risks. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and to monitor market conditions and the Company's activities. This approach actively addresses risk as an integral and continual part of decision making within the Company and is designed to ensure that all risk is identified, fully acknowledged, understood and communicated well in advance. Nevertheless, oil and gas exploration, development and production involve high operational and financial risks, which even a combination of experience, knowledge and careful evaluation may not be able to fully eliminate, or which are beyond the Company's control. The Board of Directors has overall responsibility for establishment and oversight of the Company's risk management.
A detailed analysis of Maha's operational, financial, and external risks, and the mitigation of those risks through risk management is described in Maha Energy's 2022 Annual Report (page 42 – Page 47).
The Company has different ongoing legal matters concerning labor, regulatory and taxation, being mostly related to Maha Brazil (entity sold as part of Maha Brazil Transaction). All of these are considered routine and consistent with doing business in Brazil. Maha Brazil Transaction closed at the end of February 2023; however, the Company remains liable for the financial commitment of certain lawsuits and contingent liabilities existing on the Transaction's effective date. Such amount will be retained in escrow upon the payment of the second installment of the purchase price, being released as necessary for the purposes of payment of applicable liabilities and condemnation amounts. Any balance will be released to Maha on the closing of the last lawsuit, or within six (6) years from closing date, as applicable. Provisions for lawsuits are estimated in consultation with the Company's Brazilian legal counsel and were part of the non-current liabilities and provisions of the discontinued operations.
Maha's Board of Directors, elected at the AGM in May 2023, consist of seven members: Fabio Vassel (chairman), Halvard Idland, Paulo Mendonça, Viktor Modigh, Richard Norris, Enrique Peña and Kjetil Solbraekke.
Through responsible operations and strategic planning, Maha seeks to create long-term value for all of its stakeholders. Thereby, Maha conducts its operations in a manner respects its workforce, neighboring communities, and the environment. Part of contributing to society and being a good global citizen is to not only to adhere to laws and regulations, but to integrate stakeholder interests into its Corporate Strategy. Part of Maha's business and operational development is engaging with stakeholders as their interests play an important role in the Company's business activities and success. The Company defines stakeholders as individuals, communities, and organizations that are and may be affected by Maha's operations; or whose actions can reasonably be expected to affect the ability of the Company to successfully implement its strategies and achieve its objectives. Stakeholder engagement is the process whereby information and perspectives in relation to Maha's activities are exchanged. For more information on Maha's ESG initiatives, please review Maha's Sustainability Report on our website (www.mahaenergy.ca).
Respecting and minimizing impacts to the environment is a key component in Maha's development plans and operations. Thereby, Maha incorporates environmental management strategies into operational planning, execution, and is considered throughout all stages of Maha's business activities. Company operations are conducted in a manner that respects the environment and is, at minimum, in compliance with the applicable environmental laws and regulations. A key component in Maha's environmental management is the notion of being proactive rather than reactive. Proactively identifying, anticipating, planning, and preventing costly and impactful scope changes in development plans and operational activities help Maha minimize, if not eliminate, environmental and social impacts prior to them possibly occurring. Proactive management can also address potential irreversible impacts and allows for decisions to be made on strategy and management, rather than responding out of necessity to a situation. This
allows Maha to plan to fully utilize its resources, minimize waste, as well as minimize potential environmental and social impacts. For example, Maha recycles or reinjects produced water at the facilities, which not only reduces having to find water from another source, but also reduces wastewater treatment requirements. In Brazil, while operating the assets part of Maha Brazil Transaction, Maha was reducing the release of natural gas by using the waste gas from oil production to generate electricity.
Maha values the relationship with its employees, community members, and other stakeholders. Therefore, efforts are made to engage with its employees and local communities in a transparent and respectful manner. One example of promoting two-way communication is the implementation of the MahaConnect program. This Program is a twoway communication channel that allow local stakeholders to formally connect with Maha. MahaConnect helps Maha understand local questions, concerns and inquiries as well as allow for the opportunity to address them. To ensure stakeholders have the available tools to connect with Maha, the MahaConnect program allows for three different communication channels to be utilized: 1) Email, 2) Physical mail, and 3) Community meetings. The information about the program has been distributed to local communities through the educational pamphlet and community meetings, and can be found on Maha's website. All inquiries may be submitted anonymously, but Maha encourage all individuals to identify themselves to facilitate a proper two-way transparent conversation.
Additionally, Maha seeks to ensure local communities benefit from its operations, both directly and indirectly. Direct hiring and encouraging subcontractors to hire local suppliers wherever possible is a way for Maha to contribute to the local communities and economy. Maha has also connected with Local Community Associations to maintain an open and transparent dialogue with the communities near its operations and to promote local hiring wherever possible.
Corporate Governance is an integral part of the company's foundation that guides Maha's corporate culture, business objectives, and helps accommodate stakeholder interests. Maha is committed to conducting business honestly, safely, ethically, and with integrity in full compliance with laws, rules, and regulations applicable to the business in the countries in which it operates. Personal and business ethics are taken seriously at Maha and underlie all the regulations in Corporate Governance. All employees must at all times comply with applicable laws, rules, and regulations, as well as adhere to internal policies and procedures. All employees must avoid any situation that could be perceived as improper, unethical, or indicate a casual attitude towards compliance with such laws, rules and regulations. Employees must not contribute to any violations that might be committed by other parties in Maha's business relationships or other stakeholders. Part of Maha's Corporate Governance is that Maha does not tolerate any form of corrupt practices and has in place Corporate Governance Policies that clearly define how business must be conducted. The best way to prevent corruption is through transparency - one of our core values. The Company has established a Code of Business Conduct and Anti-Corruption policies for all its employees, contractors and workers to adhere to. In addition to Corporate policies review sessions, all of Maha's Corporate Governance policies, procedures and guidelines are acknowledged and readily available to employees.
Business activities for Maha Energy AB focuses on: a) management and stewardship of all group affiliates, subsidiaries and foreign operations; b) management of publicly listed Swedish entity; c) fundraising as required for acquisitions and group business growth; and d) business development.
The net result for the Parent Company for Q2 2023 amounted to TSEK 89,854 (Q2 2022: TSEK -11,796) which is significantly higher than the comparative period mainly due to higher finance income of TSEK 56,389 (Q2 2022: TSEK 9,838) resulting from short term investments of cash available to the Company; higher foreign exchange gain of TSEK 60,363 (Q2 2022: TSEK -5,636) and lower finance costs of TSEK 20,086 (Q2 2022: TSEK 24,576). This was offset by higher general and administrative expenses of TSEK 6,812 (Q2 2022: TSEK 2,694) resulting from non recurring costs related to new business opportunities.
The net result for the Parent Company for H1 2023 amounted to TSEK 1,008,954 (H1 2022: TSEK -25,627) which is significantly higher than the comparative period mainly due to higher finance income of TSEK 1,001,297 (H1 2022: TSEK 21,361) resulting from short term investments of cash available to the Company and dividends received from group companies; higher foreign exchange gain of TSEK 59,633 (H1 2022: TSEK 4,989) and lower finance costs of TSEK 40,932 (H1 2022: TSEK 47,563). This was offset by higher general and administrative expenses of TSEK 11,044 (H1 2022: TSEK 4,414) due to same reasons as the second quarter.
| (TUSD) except per share amounts | Note | Q2 2023 | Q2 20225 | H1 2023 | H1 20225 |
|---|---|---|---|---|---|
| Revenue | |||||
| Oil and gas sales | 4 | 1,325 | 4,053 | 2,811 | 7,769 |
| Royalties | (386) | (980) | (739) | (1,877) | |
| Net Revenue | 939 | 3,073 | 2,072 | 5,892 | |
| Cost of sales | |||||
| Production expense | (469) | (854) | (954) | (1,750) | |
| Depletion, depreciation and amortization | 7 | (533) | (687) | (1,019) | (1,405) |
| Gross profit | (63) | 1,532 | 99 | 2,737 | |
| General and administration | (2,678) | (1,321) | (4,061) | (2,565) | |
| Stock-based compensation | 13 | (193) | (178) | (436) | (324) |
| Exploration and business development costs | - | (104) | - | (104) | |
| Foreign currency exchange gain (loss) | (10) | 176 | 9 | 100 | |
| Share of income from investment in associate | 9 | 454 | - | 454 | - |
| Other Income | 159 | - | 900 | - | |
| Operating result | (2,331) | 105 | (3,035) | (156) | |
| Finance income | 5 | 4,309 | 16 | 4,643 | 27 |
| Finance costs | 5 | (1,888) | (2,450) | (3,896) | (4,893) |
| Net Finance items | 2,421 | (2,434) | 747 | (4,866) | |
| Result before tax | 90 | (2,329) | (2,288) | (5,022) | |
| Current and deferred tax | - | - | - | - | |
| Net result from continuing operations | 90 | (2,329) | (2,288) | (5,022) | |
| Discontinued Operations | |||||
| Net result from discontinued operations | 6 | - | 10,548 | (1,647) | 25,271 |
| Net result | 90 | 8,219 | (3,935) | 20,249 | |
| Basic and diluted earnings per share | |||||
| From continuing operations | 0.00 | (0.02) | (0.02) | (0.04) | |
| From discontinued operations | - | 0.09 | (0.01) | 0.21 | |
| 0.00 | 0.07 | (0.03) | 0.17 | ||
| Weighted average number of shares: | |||||
| Before dilution | 158,159,698 | 119,715,696 | 150,927,874 | 119,715,696 | |
| After dilution | 158,159,698 | 120,452,364 | 150,927,874 | 120,231,090 |
5 The comparative periods have been restated to reflect continuing operations.
| (TUSD) | Note | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|---|
| Net Result for the period | 90 | 8,219 | (3,935) | 20,249 | |
| Items that may be reclassified to profit or loss: | |||||
| Exchange differences on translation of | |||||
| foreign operations | (2,174) | (14,632) | (9,858) | 6,092 | |
| Transfer of accumulated other comprehensive | |||||
| Income on disposition | 6 | - | - | 26,612 | - |
| Comprehensive result for the period | (2,084) | (6,413) | 12,819 | 26,341 | |
| Attributable to: | |||||
| Shareholders of the Parent Company | (2,084) | (6,413) | 12,819 | 26,341 |
| (TUSD) | Note | 30 June 2023 | 31 December 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 7 | 12,959 | 14,015 |
| Exploration and evaluation assets | 8 | 28,190 | 29,202 |
| Investment in associate | 9 | 30,524 | - |
| Other long-term assets | 302 | 302 | |
| Restricted cash | 18 | 18,000 | - |
| Total non-current assets | 89,975 | 43,519 | |
| Current assets | |||
| Assets held for sale | 6 | - | 153,986 |
| Prepaid expenses and deposits | 449 | 590 | |
| Crude oil inventory | 162 | 172 | |
| Accounts receivable and other credits | 59,008 | 568 | |
| Restricted cash | 18 | 23,136 | - |
| Cash and cash equivalents | 61,270 | 19,520 | |
| Total current assets | 144,025 | 174,836 | |
| TOTAL ASSETS | 234,000 | 218,355 | |
| EQUITY AND LIABILITIES Equity |
|||
| Shareholder's equity | 183,597 | 140,897 | |
| Liabilities | |||
| Non-current liabilities | |||
| Bank debt | 10 | 16,093 | 26,590 |
| Decommissioning provision | 11 | 2,469 | 1,700 |
| Lease liabilities | 12 | 48 | 78 |
| Total non-current liabilities | 18,610 | 28,368 | |
| Current liabilities | |||
| Liabilities held for sale | 6 | - | 19,889 |
| Bank debt | 10 | 21,750 | 19,500 |
| Accounts payable | 1,957 | 3,649 | |
| Accrued liabilities and provisions | 8,009 | 5,975 | |
| Current portion of lease liabilities | 12 | 77 | 77 |
| Total current liabilities | 31,793 | 49,090 | |
| TOTAL LIABILITIES | 50,403 | 77,458 | |
| TOTAL EQUITY AND LIABILITIES | 234,000 | 218,355 |
| (TUSD) | Note | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|---|
| Operating Activities | |||||
| Net result from continuing operations | 90 | (2,329) | (2,288) | (5,022) | |
| Net result from discontinued operations | - | 10,548 | (1,647) | 25,271 | |
| Depletion, depreciation, and amortization | 7 | 533 | 3,122 | 1,019 | 7,388 |
| Stock based compensation | 13 | 193 | 178 | 436 | 324 |
| Accretion of decommissioning provision | 5,11 | 20 | 38 | 35 | 70 |
| Amortization of deferred financing fees | 10 | 368 | 477 | 771 | - |
| Share of income from investment in associate | (454) | - | (454) | - | |
| Other gains | - | - | - | 954 | |
| Interest expense | 1,483 | 2,021 | 3,071 | 4,011 | |
| Income tax expense | - | (1,989) | - | (2,194) | |
| Deferred tax expense | - | 3,347 | - | 6,841 | |
| Unrealized investment income | (2,880) | (2,880) | |||
| Unrealized foreign exchange amounts | (2,215) | 127 | (2,210) | (265) | |
| Settlement of decommissioning liabilities | - | - | |||
| Interest received | 1,374 | 27 | 1,707 | 107 | |
| Interest paid | (1,498) | (2,001) | (3,082) | (3,914) | |
| Tax paid | - | (460) | - | (2,338) | |
| Changes in working capital | 17 | 1,488 | 3,108 | (1,085) | (314) |
| Cash from operating activities | (1,498) | 16,214 | (6,607) | 30,919 | |
| Investing activities | |||||
| Capital expenditures - property, plant, and equipment | 7 | (8) | (13,811) | (32) | (24,762) |
| Capital expenditures - exploration and evaluation assets | 8 | (3,278) | (2,121) | (8,442) | (2,931) |
| Investment in associate | 9 | (592) | - | (592) | - |
| Farmout proceeds | 8 | 2,621 | - | 9,591 | - |
| Restricted cash | 5,410 | - | (41,136) | - | |
| Cash used in investment activities | 4,153 | (15,932) | (40,611) | (27,693) | |
| Financing activities | |||||
| Lease payments Repayment of bank debt |
12 10 |
(19) (5,250) |
(342) (3,750) |
(38) (9,000) |
(671) (3,750) |
| Shares subscription (net of issue costs) | 13 | (10) | - | (33) | - |
| Cash from (used in) financing activities | (5,279) | (4,092) | (9,071) | (4,421) | |
| Change in cash and cash equivalents | (2,624) | (3,810) | (56,289) | (1,195) | |
| Proceeds from sale of discontinued operations | - | - | 95,883 | - | |
| Discontinued operations | - | - | (1,596) | - | |
| Cash and cash equivalents at the beginning of the period | 63,849 | 29,416 | 23,228 | 25,535 | |
| Currency exchange differences in cash and cash | |||||
| equivalents | 45 | (1,743) | 44 | (477) | |
| Cash and cash equivalents at the end of the period | 61,270 | 23,863 | 61,270 | 23,863 | |
| - of which is included in discontinued operations |
6 | - | 10,797 | - | 10,797 |
| - of which is included in the continued operations |
61,270 | 13,066 | 61,270 | 13,066 |
| Total | |||||
|---|---|---|---|---|---|
| Contributed | Other | Retained | Shareholders' | ||
| (TUSD) | Share Capital | Surplus | Reserves | Earnings | Equity |
| Balance on 1 January 2022 | 146 | 86,292 | (40,010) | 44,997 | 91,425 |
| Comprehensive result | |||||
| Result for the period | - | - | - | 20,249 | 20,249 |
| Currency translation difference | - | - | 6,092 | - | 6,092 |
| Total comprehensive result | - | - | 6,092 | 20,249 | 26,341 |
| Transactions with owners | |||||
| Stock based compensation | - | 323 | - | - | 323 |
| Balance on 30 June 2022 | 146 | 86,615 | (33,918) | 65,246 | 118,089 |
| Comprehensive result | |||||
| Result for the period | - | - | 2,684 | 2,684 | |
| Currency translation difference | - | - | 651 | - | 651 |
| Total comprehensive result | - | - | 651 | 2,684 | 3,335 |
| Transactions with owners | |||||
| Stock based compensation | - | 479 | - | - | 479 |
| Share issuance (net of issue costs) | 25 | 18,969 | - | - | 18,994 |
| Balance on 31 December 2022 | 171 | 106,063 | (33,267) | 67,930 | 140,897 |
| Comprehensive result | |||||
| Result for the period | - | - | - | (3,935) | (3,935) |
| Currency translation difference | - | - | 16,754 | - | 16,754 |
| Total comprehensive result | - | - | 16,754 | (3,935) | 12,819 |
| Transactions with owners | |||||
| Share issuance (net of issue costs) | 36 | 29,409 | - | - | 29,445 |
| Stock based compensation | - | 436 | - | - | 436 |
| Balance on 30 June 2023 | 207 | 135,908 | (16,513) | 63,995 | 183,597 |
| (Expressed in thousands of Swedish Krona) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Revenue | - | - | - | - |
| Expenses | ||||
| General and administrative | (6,812) | (2,694) | (11,044) | (4,414) |
| Foreign currency exchange (loss) gain | 60,363 | 5,636 | 59,633 | 4,989 |
| Operating result | 53,551 | 2,942 | 48,589 | 575 |
| Finance costs | (20,086) | (24,576) | (40,932) | (47,563) |
| Finance income | 56,389 | 9,838 | 1,001,297 | 21,361 |
| Result before tax | 89,854 | (11,796) | 1,008,954 | (25,627) |
| Income tax | - | - | - | - |
| Net result for the period 6 | 89,854 | (11,796) | 1,008,954 | (25,627) |
| Parent Company Balance Sheet | ||||
| (Expressed in thousands of Swedish Krona) | Note | 30 June 2023 | 31 December 2022 | |
| Assets | ||||
| Non-current assets | ||||
| Investment in subsidiaries | 360,876 | 16,153 | ||
| Loans to subsidiaries | 711,149 | |||
| 1,072,025 | 708,002 | |||
| Current assets | ||||
| Accounts receivable and other | 229 | 167 | ||
| Restricted cash | 450,584 | 50 | ||
| Cash and cash equivalents | 592,060 | 152,391 | ||
| 1,042,873 | 152,608 | |||
| Total Assets | 2,114,898 | 860,610 | ||
| Equity and Liabilities | ||||
| Share capital | 1,963 | 1,580 | ||
| Contributed surplus | 1,209,369 | 892,763 | ||
| Retained earnings | 480,181 | (528,773) | ||
| Total equity | 1,691,513 | 365,570 | ||
| Non-current liabilities | ||||
| Bank debt | 10 | 186,071 | 288,246 | |
| Current liabilities | ||||
| Accounts payable and accrued liabilities | 2,753 | 3,604 | ||
| Bank debt | 10 | 234,561 | 203,190 | |
| 237,314 | 206,794 | |||
| Total liabilities | 423,385 | 495,040 | ||
| Total Equity and Liabilities | 2,114,898 | 860,610 |
6 A separate report over Other comprehensive Income is not presented for the Parent Company as there are no items included in Other Comprehensive Income for the Parent Company.
| Restricted | ||||
|---|---|---|---|---|
| equity | Unrestricted equity | |||
| Contributed | Retained | |||
| (Thousands of Swedish Krona) | Share capital | surplus | Earnings | Total Equity |
| Balance on 1 January 2022 | 1,317 | 686,398 | (463,895) | 223,820 |
| Total comprehensive income | - | - | (25,627) | (25,627) |
| Transaction with owners | ||||
| Stock based compensation | - | 3,108 | - | 3,108 |
| Balance on 30 June 2022 | 1,317 | 689,506 | (489,522) | 201,300 |
| Total comprehensive income | - | - | (39,251) | (39,251) |
| Transaction with owners | ||||
| Stock based compensation | - | 5,087 | - | 5,087 |
| Share issuance (net of issuance costs) | 263 | 198,170 | - | 198,433 |
| Total transaction with owners | 263 | 203,257 | - | 203,520 |
| Balance on 31 December 2022 | 1,580 | 892,763 | (528,773) | 365,570 |
| Total comprehensive income | - | - | 1,008,954 | 1,008,954 |
| Transaction with owners | ||||
| Stock based compensation | - | 4,572 | - | 4,572 |
| Share issuance (net of issuance costs) | 383 | 312,034 | - | 312,417 |
| Total transaction with owners | 383 | 316,606 | - | 316,989 |
| Balance on 30 June 2023 | 1,963 | 1,209,369 | 480,181 | 1,691,513 |
Maha Energy AB ("Maha (Sweden)" or "the Company") Organization Number 559018-9543 and its subsidiaries (together "Maha" or "the Group") are engaged in the acquisition, exploration and development of oil and gas properties.
The Company has operations in Oman and the United States. The head office is located at Eriksbergsgatan 10, SE-114 30 Stockholm, Sweden. The Company's subsidiary, Maha Energy Inc., maintains its technical office in Calgary, Canada. The Company has operations offices in Grayville, IL, Newcastle, WY, USA , Muscat, Oman and Rio de Janeiro, Brazil.
The Company completed the sale of Maha Brazil on 28 February 2023. Therefore, such entity is no longer part of the Group. The Company formed a new wholly owned subsidiary in Brazil, Maha Energy (Holding) Brasil Ltda., having its headquarters in Rio de Janeiro, RJ, Brazil, and engaged in activities related to the participation and acquisition of companies or assets in Brazil or abroad. On 23 May 2023 the Company acquired 100 percent of the shares of DBO 2.0 as the wholly owned subsidiary and now owns 15 percent of the shares in 3R Offshore, which holds operated working interests in producing oil and gas offshore fields in Brazil. Subsequent to the quarter end, the Company changed the name of its subsidiary DBO 2.0 to Maha Energy Offshore (Brasil) Ltda.
The unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), and the Swedish Annual Accounts Act.
The unaudited interim condensed consolidated financial statements are stated in thousands of United States Dollars (TUSD), unless otherwise noted, which is the Company's presentation and functional currency. These unaudited interim consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments which are stated at fair value.
The financial reporting of the Parent Company (Maha Energy AB) has been prepared in accordance with accounting principles generally accepted in Sweden, applying RFR 2 Reporting for legal entities, issued by the Swedish Financial Reporting Board and the Annual Accounts Act. Under Swedish company regulations it is not allowed to report the Parent Company results in any other currency than Swedish Krona or Euro and consequently the Parent Company's financial information is reported in Swedish Krona and not the Group's presentation currency of US Dollar.
The accounting principles as described in the Annual Report 2022 have been used in the preparation of this report. Certain information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or have been disclosed on an annual basis only. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2022.
Amendments in standards effective 1 January 2023 has not had any significant impact on the Group's financial statements.
The Company does not record any expenditure made by the farmee on its account. It also does not recognize any gain or loss on its exploration and evaluation farmout arrangements, but redesignates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained. Any cash consideration received directly from the farmee is credited against costs previously capitalized in relation to the whole interest with any prior period costs accounted for by the farmor as other income.
An associate is an entity over which the Company has significant influence, and which is neither a subsidiary nor a joint arrangement. The Company has significant influence over an entity when it has the power to participate in the financial and operating policy decisions of the associate but does not have control or joint control.
The Company's investment in the common shares of DBO 2.0 has been treated as an investment in an associate and has been accounted for using the equity method.
Under the equity method, the Company's investment in the common shares of the associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of net income and losses of the associate, after any adjustments necessary to give effect to uniform accounting policies, any other movement in the associate's reserves, and for impairment losses after the initial recognition date. The Company's share of income and losses of the associate is recognized in consolidated statement of operations during the period and is included in the EBITDA.
Dividends and repayment of capital received from an associate are accounted for as a reduction in the carrying amount of the Company's investment. Intercompany balances and interest expense and income arising on loans and borrowings between the Company and its associates are not eliminated.
At the end of each reporting period, the Company assesses whether there is any objective evidence that an investment in an associate is impaired. Objective evidence includes observable data indicating there is a measurable decrease in the estimated future cash flows of the investee's operations. When there is objective evidence that an investment is impaired, the carrying amount of such investment is compared to its recoverable amount, being the higher of its fair value less costs of disposal and value‐in‐use. If the recoverable amount of an investment is less than its carrying amount, the carrying amount is reduced to its recoverable amount and an impairment loss, being the excess of carrying amount over the recoverable amount, is recognized in the period in which the relevant circumstances are identified. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
The Company prepared these consolidated financial statements on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business as they become due. The Company manages its capital structure to support the Company's strategic growth and has positive cash flow from operations.
Operating segments are based on a geographic perspective and reported in a manner consistent with the internal reporting provided to the executive management as follows:
The following tables present the operating result for each segment. Revenue and income relate to external (nonintra group) transactions.
| Q2 2023 (TUSD) | USA | Corporate | Consolidated |
|---|---|---|---|
| Revenue | 1,325 | - | 1,325 |
| Royalties | (386) | - | (386) |
| Production and operating | (469) | - | (469) |
| Depletion, depreciation, and amortization | (513) | (20) | (533) |
| General and administration | (120) | (2,558) | (2,678) |
| Stock-based compensation | - | (193) | (193) |
| Foreign currency exchange gain | - | (10) | (10) |
| Share of income from investment in associate | 454 | 454 | |
| Other income | - | 159 | 159 |
| Operating results | (163) | (2,168) | (2,331) |
| Net finance costs | (10) | 2,431 | 2,421 |
| Net results from continuing operations | (173) | 263 | 90 |
| Q2 2022 (TUSD) | USA | Corporate7 | Consolidated |
|---|---|---|---|
| Revenue | 4,053 | - | 4,053 |
| Royalties | (980) | - | (980) |
| Production and operating | (854) | - | (854) |
| Depletion, depreciation, and amortization | (668) | (19) | (687) |
| General and administration | (96) | (1,225) | (1,321) |
| Stock-based compensation | - | (178) | (178) |
| Exploration and business development cost | - | (104) | (104) |
| Foreign currency exchange loss | - | 176 | 176 |
| Operating results | 1,455 | (1,350) | 105 |
| Net finance costs | (7) | (2,427) | (2,434) |
| Net results from continuing operations | 1,448 | (3,777) | (2,329) |
| H1 2023 (TUSD) | USA | Corporate | Consolidated |
|---|---|---|---|
| Revenue | 2,811 | - | 2,811 |
| Royalties | (739) | - | (739) |
| Production and operating | (954) | - | (954) |
| Depletion, depreciation, and amortization | (973) | (46) | (1,019) |
| General and administration | (180) | (3,881) | (4,061) |
| Stock-based compensation | - | (436) | (436) |
| Foreign currency exchange gain | - | 9 | 9 |
| Share of income from investment in associate | - | 454 | 454 |
| Other Income | 900 | 900 | |
| Operating results | (35) | (3,000) | (3,035) |
| Net finance costs | (19) | 766 | 747 |
| Net results from continuing operations | (54) | (2,234) | (2,288) |
7 Corporate segment has been restated as per the current presentation.
| H1 2022 (TUSD) | USA | Corporate8 | Consolidated |
|---|---|---|---|
| Revenue | 7,769 | - | 7,769 |
| Royalties | (1,877) | - | (1,877) |
| Production and operating | (1,750) | - | (1,750) |
| Depletion, depreciation, and amortization | (1,369) | (36) | (1,405) |
| General and administration | (141) | (2,424) | (2,565) |
| Stock-based compensation | - | (324) | (324) |
| Exploration and business development cost | - | (104) | (104) |
| Foreign currency exchange loss | - | 100 | 100 |
| Operating results | 2,632 | (2,788) | (156) |
| Net finance costs | (13) | (4,853) | (4,866) |
| Net results from continuing operations | 2,619 | (7,641) | (5,022) |
The Company derives revenue from the transfer of goods at a point in time from oil production in the USA.
| TUSD | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Continuing operations - Total revenue from | ||||
| contracts with customers | 1,325 | 4,053 | 2,811 | 7,769 |
Revenue is measured at the consideration specified in the contracts and represents amounts receivable net of discounts and sales taxes. Performance obligations associated with the sale of crude oil are satisfied when control of the product is transferred to the customer. This occurs when the oil is physically transferred at the delivery point agreed with the customer and the customer obtains legal title.
The continuing operations of the Company has one main customer that individually accounts for 100 percent of the Company's consolidated gross sales. There were no intercompany sales or purchases of oil and gas during the period.
The Company had no contract asset or liability balances during the period presented. As at 30 June 2023, accounts receivable and other credits included nil of sales revenue which related to the current quarter's production.
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Interest and investment income | 4,309 | 16 | 4,643 | 27 |
| Finance income | 4,309 | 16 | 4,643 | 27 |
| Accretion of decommissioning provision (Note 11) | 20 | 8 | 35 | 14 |
| Amortisation of deferred financing fees (Note 10) | 368 | 477 | 771 | 954 |
| Interest expense (Note 10) | 1,500 | 1,965 | 3,090 | 3,925 |
| Finance costs | 1,888 | 2,450 | 3,896 | 4,893 |
| Net finance income (costs) | 2,421 | (2,434) | 747 | (4,866) |
On 28 December 2022, Maha announced the divestment of its Brazilian subsidiary, the Maha Brazil Transaction. On 27 January 2023, the Maha Brazil Transaction was approved by the Brazilian antitrust authority. On 28 February
8 Corporate segment has been restated as per the current presentation.
2023, the Company completed the sale of Maha Brazil. The results of Maha Brazil are included in the financial statements until 28 February 2023 and are shown as discontinued operations.
The purchase price was USD 138.0 million, with additional adjustment of net working capital of USD 9.3 million and net cash of USD 3.7 million, in a total amount of adjusted purchase price of USD 150.9 million to be paid in two installments: (a) USD 95.9 million at the closing date (which occurred on 28 February 2023), and (b) USD 55.0 million, 6 (six) months after the closing date. In addition, earn-outs of up to USD 36.1 million, which could be paid based on certain contractual conditions being met, whereof up to USD 24.1 million refers to the average annual Brent oil price for the next three years. It will start to be payable from yearly average of USD 80.0 per barrel with a maximum to be reached if the price is above USD 90 per barrel. The remaining payment will be subject to synergies with Petroreconcavo's potential new assets. Due to uncertainty of actualizing these earn-outs, contingent proceeds relating to the earn-outs have not been recognized as at 30 June 2023.
| (TUSD) except per share amounts | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Revenue | ||||
| Oil and gas sales | - | 19,965 | 9,049 | 47,080 |
| Royalties | - | (1,822) | (776) | (4,892) |
| Net Revenue | - | 18,143 | 8,273 | 42,188 |
| Cost of sales | ||||
| Production expense | - | (2,954) | (1,518) | (6,394) |
| Depletion, depreciation and amortization | - | (2,435) | - | (5,983) |
| Gross profit | - | 12,754 | 6,755 | 29,811 |
| General and administration | - | (290) | (925) | (498) |
| Other income/(loss) | - | (894) | 336 | 245 |
| Other gains | - | - | - | - |
| Operating result | - | 11,570 | 6,166 | 29,558 |
| Net finance income (costs) | - | 336 | (2) | 360 |
| Result before tax | - | 11,906 | 6,164 | 29,918 |
| Current tax recovery (expense) | - | 1,989 | (261) | 2,194 |
| Deferred tax expense | - | (3,347) | (90) | (6,841) |
| - | 10,548 | 5,813 | 25,271 | |
| Gain on sale of discontinued operations | - | - | 19,152 | - |
| Realized accumulated other comprehensive loss | ||||
| on discontinued operations | - | - | (26,612) | - |
| Net result from discontinued operations | - | 10,548 | (1,647) | 25,271 |
| Gain on the sale of Maha Brazil is detailed in the following table: | ||||
| (TUSD) | 28 February 2023 | |||
| Cash Consideration | 138,000 | |||
| Working capital and other adjustment | 12,913 | |||
| 150,913 | ||||
| Net assets of discontinued operations sold | (131,761) | |||
| Gain on sale of discontinued operations | 19,152 |
Results of Discontinued Operations
Assets and Liabilities held for Sale
| (TUSD) | 30 June 2023 | 31 December 2022 |
|---|---|---|
| Assets held for sale | ||
| Property, plant and equipment | - | 141,761 |
| Prepaid expenses and deposits | - | 863 |
| Crude oil inventory | - | 557 |
| Accounts receivable and other credits | - | 7,097 |
| Cash and cash equivalents | - | 3,708 |
| Total assets held for sale | - | 153,986 |
| Liabilities held for sale | ||
| Decommissioning provision | - | 1,020 |
| Deferred tax liabilities | - | 8,169 |
| Lease liabilities | - | 3,488 |
| Other long-term liabilities and provisions | - | 353 |
| Accounts payable | - | 3,182 |
| Accrued liabilities and provisions | - | 3,676 |
| Total liabilities held for sale | - | 19,888 |
| Net assets held for sale | - | 134,098 |
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Cash from operating activities | - | 18,781 | 4,552 | 33,332 |
| Cash used in investment activities | - | (13,111) | (2,820) | (22,992) |
| Cash from (used in) financing activities | - | (3,896) | - | (6,805) |
| Oil and gas | Equipment and | Right-of-use | ||
|---|---|---|---|---|
| (TUSD) | properties | Other | assets | Total |
| Cost | ||||
| 31 December 2021 | 130,547 | 2,181 | 5,974 | 138,702 |
| Additions | 43,277 | 367 | 1,396 | 45,040 |
| Transfer to assets held for sale | (164,070) | (710) | (7,176) | (171,956) |
| Change in decommissioning cost | (104) | - | - | (104) |
| Currency translation adjustment | 7,407 | 39 | 62 | 7,508 |
| 31 December 2022 | 17,057 | 1,877 | 256 | 19,190 |
| Additions | 3 | 35 | - | 38 |
| Dispositions | - | (60) | - | (60) |
| 30 June 2023 | 17,060 | 1,852 | 256 | 19,168 |
| Accumulated depletion, depreciation and amortization | ||||
| 31 December 2021 | (18,562) | (874) | (1,855) | (21,291) |
| DD&A | (11,483) | (133) | (1,378) | (12,994) |
| Transfer to assets held for sale | 26,719 | 420 | 3,057 | 30,196 |
| Currency translation adjustment | (1,105) | (22) | 41 | (1,086) |
| 31 December 2022 | (4,431) | (609) | (135) | (5,175) |
| DD&A | (985) | (24) | (25) | (1,034) |
| 30 June 2023 | (5,416) | (633) | (160) | (6,209) |
| Carrying amount | ||||
| 31 December 2022 | 12,626 | 1,268 | 121 | 14,015 |
| 30 June 2023 | 11,644 | 1,219 | 96 | 12,959 |
| (TUSD) | |
|---|---|
| 31 December 2021 | 13,660 |
| Additions in the period | 15,685 |
| Change in decommissioning cost | (143) |
| 31 December 2022 | 29,202 |
| Additions in the period | 8,908 |
| Change in decommissioning cost | 261 |
| Farmout proceeds | (10,181) |
| 30 June 2023 | 28,190 |
On 8 August 2022, the Company entered into a farmout agreement with Mafraq Energy LLC whereby the Company will transfer a 35% working interest in the Block 70 in Oman in exchange for Mafraq Energy LLC reimbursing Maha for their prorated share of all past costs. On 28 January 2023, the Company entered into the joint operating agreement with Mafraq Energy LLC for Block 70 in Oman. The signature of the joint operating agreement alongside the Governmental approval ratified by Royal Decree 74/2022 and other relevant procedures, marked the satisfaction of all condition's precedent required for the conclusion of the assignment of Maha's 35% work interest to Mafraq Energy LLC. Total consideration for the assignment of this interest is USD \$11.2 million to the Company which includes reimbursement of all past costs. As at 30 June 2023, USD 1.6 million of the farmout proceeds were included in other receivable.
On 23 May 2023, the Company acquired 100 percent of all the outstanding shares in DBO 2.0 (the "DBO Transaction"). Through the DBO Transaction, Maha acquired all outstanding shares in DBO against payment of 34,829,057 new shares in the Company (issued pursuant to the resolution of the extraordinary general meeting held on 29 March 2023) and transaction costs of TUSD 592. DBO owns 15 percent of the shares in 3R Offshore, which holds operated working interests in producing oil and gas offshore fields in Brazil.
The Company applies equity accounting to the investment in the 3R offshore as the Company has significant influence over 3R Offshore due to the Company's ownership and representation on 3R Offshore's Board of Directors. As a result, investment in DBO 2.0 was recognized as investment in associates.
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Income from Investment in 3R Offshore | 454 | - | 454 | - |
| TUSD | TSEK | |
|---|---|---|
| Bank debt | 60,000 | 504,276 |
| Currency translation adjustment | - | 43,524 |
| Deferred financing costs | (4,516) | (32,758) |
| 31 December 2021 | 55,484 | 515,042 |
| Loan repayment | (11,250) | (119,500) |
| Deferred financing costs | 1,856 | 19,064 |
| Currency translation adjustment | - | 76,830 |
| 31 December 2022 | 46,090 | 491,436 |
| Loan repayment | (9,000) | (95,411) |
| Deferred financing costs | 753 | 8,190 |
| Currency translation adjustment | - | 16,417 |
| 30 June 2023 | 37,843 | 420,632 |
| Less: Current portion | 21,750 | 234,561 |
| Non current | 16,093 | 186,071 |
The Company has a credit agreement for a senior secured term loan of USD 60 million (the "Term Loan"), maturing 31 March 2025. The Term Loan bears interest at a step-rate increasing from 12.75% to 13.5% as nearing maturity time, payable quarterly in arrears and secured by substantially all the assets and shares of Maha Energy and its subsidiaries. The principal amount is to be repaid in quarterly instalments over the four (4) year period, commencing 15 months from the credit agreement date.
The Term Loan requires the Company to maintain certain covenants including a Net interest-bearing debt to trailing twelve months EBITDA ratio of greater than 3.0 at the end of each quarter. Under the terms of the loan, the Company is subject to certain restrictions in its ability to make certain payments and distributions to persons outside of the Maha Group, as well as other customary provisions applicable for similar credit agreements. The Company has obtained necessary consent from its creditor for the divestment of Maha Brazil. As a condition of the divestment of Maha Brazil, the Company has to maintain deposited one hundred percent (100%) of the outstanding principal amount of the Term Loan, plus one hundred percent (100%) of the interest due for one quarter in the interest period owed on each relevant date, in order to continue to secure the obligations owed under the Term Loan. The repayment of the Term Loan is made using the amount deposited in such account, in each due date.
The following table presents the reconciliation of the opening and closing decommissioning provision:
| (TUSD) | |
|---|---|
| 31 December 2021 | 2,264 |
| Accretion expense | 146 |
| Additions | 769 |
| Transfer to liabilities related to assets held for sale | (1,020) |
| Liability settled | (103) |
| Change in estimate | (411) |
| Foreign exchange movement | 55 |
| 31 December 2022 | 1,700 |
| Accretion expense | 43 |
| Additions | 726 |
| 30 June 2023 | 2,469 |
| (TUSD) | |
|---|---|
| 31 December 2021 | 3,457 |
| Additions | 1,416 |
| Interest expense | 139 |
| Lease payments | (1,357) |
| Transfer to liabilities related to assets held for sale | (3,486) |
| Foreign currency translation | (14) |
| 31 December 2022 | 155 |
| Interest expense | 8 |
| Lease payments | (38) |
| 30 June 2023 | 125 |
| Less current portion | 77 |
| Lease liability – non current | 48 |
| Shares outstanding | A | B | Total |
|---|---|---|---|
| 31 December 2021 | 119,715,696 | - | 119,715,696 |
| Share subscription | 23,900,000 | - | 23,900,000 |
| 31 December 2022 | 143,615,696 | - | 143,615,696 |
| Share subscription | 34,829,057 | - | 34,829,057 |
| 30 June 2023 | 178,444,753 | - | 178,444,753 |
The Company has a long-term incentive program ("LTIP") as part of the remuneration package for management and employees. Following incentive warrants were outstanding at 30 June 2023:
| Warrants | Exercise | Expired or | |||||
|---|---|---|---|---|---|---|---|
| incentive | price, | Issued | Exercised | Cancelled | |||
| programme | Exercise period | SEK | 1 Jan 2023 | 2023 | 2023 | 2023 | 30 June 2023 |
| 2020 | 1 June 2023 – 29 | ||||||
| (LTIP-4) | February 2024 | 10.90 | 460,000 | - | - | (90,000) | 370,000 |
| 2021 | 1 June 2024 – | ||||||
| (LTIP-5) | 28 February 2025 | 12.40 | 1,048,286 | - | - | (30,000) | 1,018,286 |
| 2021 | 1 June 2023 – | ||||||
| (LTIP-6) | 29 February 2024 | 12.40 | 524,143 | - | - | - | 524,143 |
| 2022 | 1 June 2025 – 28 | ||||||
| (LTIP-7) | February 2030 | 20.65 | 1,197,157 | - | - | (25,000) | 1,172,157 |
| Total | 3,229,586 | - | - | (145,000) | 3,084,586 |
Each warrant shall entitle the warrant holder to subscribe for one new Share in the Company at the subscription price per share. The fair value of the warrants granted under the warrant incentive program has been estimated on the grant date using the Black & Scholes model.
Weighted average assumptions and fair value are as follows:
| 2022 | |
|---|---|
| incentive | |
| programme | |
| Risk free interest rate (%) | 1.55 |
| Average Expected term (years) | 8.0 |
| Expected volatility (%) | 55 |
| Forfeiture rate (%) | 10.0 |
| Weighted average fair value (SEK) | 11.02 |
Total share-based compensation expense for Q2 2023 was TUSD 193 (Q2 2022: TUSD 178).
For financial instruments measured at fair value in the balance sheet, the following fair value measurement hierarchy is used:
– Level 1: based on quoted prices in active markets;
– Level 2: based on inputs other than quoted prices as within level 1, that are either directly or indirectly observable;
– Level 3: based on inputs which are not based on observable market data.
The Company's cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities are assessed on fair value hierarchy described above. The fair value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximate their carrying value due to the short term to maturity of these instruments. The bank debt is carried at amortized cost and which approximates the fair value.
The Company thoroughly examines the various risks to which it is exposed and assesses the impact and likelihood of those risks. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and to monitor market conditions and the Company's activities. This approach actively addresses risk as an integral and continual part of decision making within the Company and is designed to ensure that all risk is identified, fully acknowledged, understood, and communicated well in advance. Nevertheless, oil and gas exploration, development and production involve high operational and financial risks, which even a combination of experience, knowledge and careful evaluation may not be able to fully eliminate, or which are beyond the Company's control. The Board of Directors has overall responsibility for establishment and oversight of the Company's risk management.
A detailed analysis of Maha's operational, financial, and external risks and mitigation of those risks through risk management is described in Maha Energy's 2022 Annual Report.
The Company manages its capital structure to support the Company's strategic growth. The Company's objectives when managing its capital structure are to maintain financial flexibility, preserve access to capital markets, ensure its ability to finance internally generated growth and to fund potential acquisitions while maintaining the ability to meet the Company's financial obligations as they come due. The Company's policy is to limit credit risk by limiting the counterparties to major banks. The Company considers credit ratings of the major banks that it holds its cash with. Currently Maha's investments are composed of low-risk assets and short-term investments with high liquidity. In addition, the Company, from time to time may invest in potential attractive equity positions or high yield fixed income assets but always keeping within Maha's internal investment policies.
The Company considers its capital structure to include shareholders' equity of USD 183.6 million (31 December 2022: USD 140.9 million) and current assets of USD 173.4 million.
The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying oil and natural gas assets. To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general market and industry conditions. The annual budget and subsequent updates are approved by the Board of Directors.
| (TUSD) | 30 June 2023 | 30 June 2022 |
|---|---|---|
| Change in: | ||
| Accounts receivable | (1,614) | (2,549) |
| Inventory | 46 | (663) |
| Prepaid expenses and deposits | 140 | (178) |
| Accounts payable and accrued liabilities | 343 | 3,076 |
| Total | (1,085) | (314) |
The Parent Company had pledged shares of all itssubsidiaries, concessions rights and other assets in Brazil in relation to the security of the Term Loan. Those pledges were released upon conclusion of the sale of Maha Brazil, and the consequent execution of a charge over the account (restricted cash with the Bank) where the Company has to maintain deposited (a) one hundred percent (100%) of the outstanding principal amount of the Term Loan, plus (b) one hundred percent (100%) of the interest due for one quarter in the interest period owed on each relevant date, in order to continue to secure the obligations owed under the Term Loan. The repayment of the Term Loan is made
using the amount deposited in such account, in each due date. Additionally, as part of Maha Brazil Transaction's terms, the parties have agreed to retain in escrow a parcel of the second installment of the transaction's price, due in August 2023 and equivalent to BRL 29 million, as a security for Maha's retained liabilities. The amount retained in escrow will be released to cover applicable losses regarding the retained liabilities or in Maha's favor, upon achieved certain conditions established under the relevant agreements, as the case may be.
The Company also has contractual commitments in the USA and Oman (See Note 19).
The Company had minimum work commitments for Blocks 117 and 118 (part of Maha Brazil) which was sold as part of Maha Brazil Transaction. As part of Maha Brazil Transaction's terms, the parties have agreed to request to an exception to such commitments before the ANP, and in case such waiver is not obtained up to the payment of the second installment of the purchase price, a parcel of the price equivalent to such commitments shall be retained in escrow, being released upon exemption's confirmation.
In the Illinois Basin, the Company has commitments to drill four (4) operated and one (1) net (0.5) non-operated well per year during the five-year period from 2023 to 2027.
With the acquisition of the Block 70 in Oman, the Company had undertaken minimum work obligations during the initial exploration period of three years, which included interpretation and reprocessing of 3D seismic and drilling 11 (eleven) shallow wells. Costs for these activities were estimated at gross USD 20.0 million (Net USD 13.0 million). All commitments have been fulfilled by the Company during the second quarter of 2023.
The company had no related party transactions during the year.
Maha believes that the alternative performance measures provide useful supplemental information to management, investors, securities analysts, and other stakeholders and are meant to provide an enhanced insight into the financial development of Maha's business operational.
| TUSD Q2 2023 Q2 2022 H1 2023 H1 2022 Revenue 1,325 4,053 2,811 7,769 Operating netback from continuing operations 470 2,219 1,118 4,142 EBITDA from continuing operations (1,788) 616 (2,025) 1,149 Net result from continuing operations 90 (2,329) (2,288) (5,022) Cash flow from operations (1,498) 16,214 (6,607) 30,919 Free cash flow 2,655 282 (47,218) 3,226 Net debt (net cash) (23,427) 28,843 (23,427) 28,843 Key ratios9 Q2 2023 Q2 2022 H1 2023 H1 2022 Return on equity (%) 0 7 1 17 Equity ratio (%) 78 61 78 61 Data per share9 Q2 2023 Q2 2022 H1 2023 H1 2022 Weighted number of shares (before dilution) 158,159,698 119,715,696 150,927,874 119,715,696 Weighted number of shares (after dilution) 158,159,698 120,452,364 150,927,874 120,231,090 Earnings per share before dilution, USD 0.00 (0.02) (0.02) (0.04) Earnings per share after dilution, USD 0.00 (0.02) (0.02) (0.04) |
Financial data | ||
|---|---|---|---|
| Dividends paid per share n/a n/a n/a n/a |
| Operating Netback from continuing operations | ||||
|---|---|---|---|---|
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
| Revenue | 1,325 | 4,053 | 2,811 | 7,769 |
| Royalties | (386) | (980) | (739) | (1,877) |
| Operating Expenses | (469) | (854) | (954) | (1,750) |
| Operating netback | 470 | 2,219 | 1,118 | 4,142 |
| EBITDA from continuing operations | ||||
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
| Operating results | (2,331) | 105 | (3,035) | (156) |
| Depletion, depreciation and amortization | 533 | 687 | 1,019 | 1,405 |
| Foreign currency exchange loss / (gain) | 10 | (176) | (9) | (100) |
| EBITDA | (1,788) | 616 | (2,025) | 1,149 |
9 Key ratios and data per share are based on continuing operations only.
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
|---|---|---|---|---|
| Cash flow from operating activities | (1,498) | 16,214 | (6,607) | 30,919 |
| Less: cash from (used) in investing | ||||
| activities | 4,153 | (15,932) | (40,611) | (27,693) |
| Free cash flow | 2,655 | 282 | (47,218) | 3,226 |
| Net debt | ||||
| (TUSD) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 |
| Bank debt | 37,843 | 52,706 | 37,843 | 52,706 |
| Less: cash and cash equivalents | (61,270) | (23,863) | (61,270) | (23,863) |
| Net debt (net cash) | (23,427) | 28,843 | (23,427) | 28,843 |
Cash flow from operations: Cash flow from operating activities in accordance with the consolidated statement of cash flow.
EBITDA (Earnings before interest, taxes, depreciation, and amortization and impairment): Operating profit before depletion of oil and gas properties, depreciation of tangible assets, impairment, foreign currency exchange adjustments, interest and taxes.
Earnings per share: Net result attributable to shareholders of the Parent Company divided by the weighted average number of shares for the year.
Earnings per share fully diluted: Net result attributable to shareholders of the Parent Company divided by the weighted average number of shares after considering any dilution effect for the year.
Equity ratio: Total equity divided by the balance sheet total assets.
Free cash flow: Cash flow from operating activities less cash flow from investing activities in accordance with the consolidated statement of cash flow.
Net debt: Interest bearing debt, excluding leases, less cash and cash equivalents.
Net debt to EBITDA ratio (NIBD/EBITDA): Net interest-bearing debt divided by trailing 4 quarters EBITDA.
Operating netback: Operating netback is defined as revenue less royalties and operating expenses.
Return on equity: Net result divided by ending equity balance
Total debt to EBITDA ratio (TIBD/EBITDA): Total interest-bearing debt divided by trailing 4 quarters EBITDA.
Weighted average number of shares for the year: The number of shares at the beginning of the year with changes in the number of shares weighted for the proportion of the year they are in issue.
Weighted average number of shares for the year fully diluted: The number of shares at the beginning of the year with changes in the number of shares weighted for the proportion of the year they are in issue after considering any dilution effect.
| SEK | Swedish Krona | BBL or bbl | Barrel |
|---|---|---|---|
| USD | US Dollar | BOPD | Barrels of Oil Per Day |
| TSEK | Thousand SEK | Mbbl | Thousand barrels of Oil |
| TUSD | Thousand USD | MMbbl | Million barrels of Oil |
| CAD | Canadian Dollar | BOE or boe | Barrels of Oil Equivalents |
|---|---|---|---|
| SEK | Swedish Krona | BBL or bbl | Barrel |
| BRL | Brazilian Real | BOEPD | Barrels of Oil Equivalents Per Day |
| USD | US Dollar | BOPD | Barrels of Oil Per Day |
| TSEK | Thousand SEK | Mbbl | Thousand barrels of Oil |
| TUSD | Thousand USD | MMbbl | Million barrels of Oil |
| MSEK | Million SEK | Mboe | Thousand barrels of oil equivalents |
| MUSD | Million USD | MMBoe | Millions of barrels of oil equivalents |
| Mboepd | Thousand barrels of oil equivalents per day |
||
| Mbopd | Thousand barrels of oil per day | ||
| MCF | Thousand Cubic Feet | ||
| MSCF | Thousand Standard Cubic Feet | ||
| MSCFPD | Thousand Standard Cubic Feet per day | ||
| MMSCF | Million Standard Cubic Feet | ||
| MMSCFPD | Million Standard Cubic Feet Per Day | ||
| BWPD | Barrels of Water Per Day | ||
6,000 cubic feet = 1 barrel of oil equivalent
The Board of Directors and the Managing Director and the Chairman of the Board certify that the half year report for the period ended 30 June 2023 gives a fair view of the performance of the business, position, and income statements of Maha Energy AB (publ.) and Maha Energy Group and describes the principal risks and uncertainties to which the Company and the Group are exposed.
Approved by the Board
Fabio Vassel Chairman
Halvard Idland Director
Paulo Mendonca CEO and Director Viktor Modigh Director
Kjetil Solbraekke Director
Richard Norris Director
Enrique Peña Director
Financial calendar
2023 Third Quarter: 14 November 2023
Contact information For further information please contact:
Paulo Thiago Mendonça (CEO) Tel: +46 8 611 05 11 Email: [email protected]
Guilherme Guidolin de Campos (CFO) Tel: +46 8 611 05 11 Email: [email protected]
Jakob Sintring (Head of Investor Relations) Tel: +46 8 611 05 11 Email: [email protected]
| Maha Energy AB | |
|---|---|
| Head Office | Eriksbergsgatan 10, SE-114 30 Stockholm, Sweden |
| +46 8 611 05 11 | |
| Technical Office | Suite 240, 23 Sunpark Drive SE Calgary, Alberta T2X 3V1 +1-403-454-7560 |
| Email: | [email protected] |
This interim report has not been subject to review by the Company's auditors.
This information is information that Maha Energy AB is required to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact persons set out above, at 15:20 CEST on 11 August 2023.
Forward-Looking Statements in this report relating to any future status or circumstances, including statements regarding future performance, growth and other trend projections are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as "anticipate", "believe", "expect", "intend", "plan", "seek", "will", "would" or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that could occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to several factors, many of which are outside the company's control. Any forward looking statements in this report speak only as of the date on which the statements are made and the company has no obligation (and undertakes no obligation) to update or revise any of them, whether as a result of new information, future events or otherwise.
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