Panoro Energy ASA

Regulatory Filings • Mar 18, 2020

Panoro Energy Announces Impact of Coronavirus (COVID-19) on Operations and Corporate Update

Panoro Energy Announces Impact of Coronavirus (COVID-19) on Operations and Corporate Update

Oslo, 18 March 2020 -Panoro Energy ASA (the "Company" or "Panoro") today

provides a corporate and core operations update in response to the Coronavirus

(COVID-19) pandemic and concurrent low oil price environment.

· Panoro Energy has been closely monitoring the developing Coronavirus (COVID

-19) situation globally and is fully focused to safeguard the health of its

staff, contractors, and other stakeholders, whilst maintaining operating

capability. Coordinated actions have been taken to respond to government

directives in Gabon, the UK and Tunisia to ensure preventative measures are

taken whilst production is maintained, and ongoing well operations completed

where possible.

· In Gabon, a scale back of activities is underway, resulting in a 40%

reduction in capital expenditure for 2020 and a modest adjustment in guided

production.

· In Tunisia, production and development plans remain intact although these

may experience some timing delays due to the COVID-19 pandemic.

· Group net production guidance range for 2020 reduced by approximately 6%,

now at 2,500-2,900 bopd (versus previous guidance of 2,600 - 3,100 bopd).

· The Company's cash position and financial liquidity are solid and are

further strengthened by the deferred capital expenditure.

John Hamilton, CEO Panoro Energy, said: "The safety of our people and operations

is our absolute priority. With 25-30% of our high-quality oil production hedged

in 2020, together with our significantly reduced capital expenditure budget,

Panoro has taken steps to mitigate the impact of the recent dramatic collapse in

oil prices. These actions have further strengthened our balance sheet. Our focus

is on protecting our highly valuable reserves and resources and preserving cash

until the extraordinary macro environment improves."

Deferment of expenditure in Gabon

In an attempt to limit the spread of Coronavirus (COVID-19), international

travel restrictions currently in place are limiting the ability to move

essential personnel, subcontractors and equipment to and from Gabon. With these

controls, and the increasing global restriction on movement, it is likely to

affect the planned timing of the DTM-7H well and the subsequent firm exploration

well. The major supplier contracts provide for certain termination rights under

exceptional circumstances. As a precaution, the Dussafu JV has for the same

reason also taken the decision not to exercise the options for additional

exploration wells.

Further, in response to recent commodity volatility and price uncertainty, the

Dussafu JV has decided to temporarily postpone the commencement of the Ruche

Phase 1 Development process until conditions improve.

The revised capital spending program for 2020 amounts to approximately USD 13

million net to Panoro, of which about USD 3 million was spent as at end of

February. The downward revised program represents a 40% reduction to the

Company's previously announced net capital expenditure program of approximately

USD 21 million for Dussafu in 2020.

Dussafu daily operations continue to perform in line with expectations with four

wells (DTM-2H, DTM-3H, DTM-4H and DTM-5H) producing into the FPSO BW Adolo at a

current gross production rate of approximately 20,000 barrels of oil per day.

The DTM-6H well is nearing conclusion of its drilling and completion operations.

This well is scheduled to be brought online by June.

Based on current assumptions, Dussafu gross production for 2020 is projected to

be 16,000-18,500 barrels of oil per day assuming the DTM-7H well is postponed

until a later date. This represents a reduction of approximately only 10% in the

production range previously guided.  Operating costs per barrel are expected to

be approximately USD 15 -17 per barrel, compared to USD 21 per barrel on average

for 2019.

Tunisian production activities remain intact

The TPS assets are currently producing in excess of 4,000 bopd gross, with the

previously announced work over activities in the final stages of completion.

Tunisia, like other jurisdictions, is also experiencing the effect of the global

pandemic, in restricted movement of personnel and services. Based on Panoro's

current assessment, the expected production growth to 5,000 bopd gross remains

on track, albeit with some potential for delays due to these increasing

restrictions. Panoro remains committed to its further Tunisian activities and

will monitor the effects of the global pandemic on their planning.

Financial and hedging

Panoro held cash balances as at the end of February of USD 27 million (including

restricted cash held for the bank guarantee towards Sfax Offshore Exploration

Permit). As previously announced, Panoro has a hedging position for

approximately 25-30% of its 2020 production, and its lifting schedule is

weighted towards 2H20. Break even for production operations is less than USD 25

per barrel and cost control measures are in place. As a result, when combined

with the capex reductions as detailed above, Panoro's balance sheet remains

strong despite the low oil price environment.

Panoro will continue to closely monitor this fast-moving and exceptional

situation and will provide operational and corporate updates, as appropriate.

Enquiries

John Hamilton, Chief Executive Officer

Tel:     +44 203 405 1060

Email: investors@panoroenergy.com

About Panoro Energy

Panoro Energy ASA is an independent E&P company based in London and listed on

the Oslo Stock Exchange with ticker PEN. The Company holds high quality

production, exploration and development assets in Africa, namely the Dussafu

License offshore southern Gabon, OML 113 offshore western Nigeria, and the TPS

operated assets, Sfax Offshore Exploration Permit and Ras El Besh Concession,

offshore Tunisia. For more information visit the Company's website at

www.panoroenergy.com.

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.