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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Orca Energy Group Inc | TSXV:ORC.B | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.03 | -26.14% | 2.91 | 2.92 | 3.20 | 3.95 | 2.70 | 3.95 | 98,012 | 20:59:40 |
TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin Islands, May 30, 2012 /CNW/ - Orca Exploration Group Inc ("Orca Exploration" or the "Company") announces its resultsor the quarter ended 31 March 2012.
Highlights
.
Financial and Operating Highlights | |||
Three months ended or as at | |||
31-Mar | 31-Mar | ||
2012 | 2011 | Change | |
Financial (US$ 000 except where otherwise stated) | |||
Revenue | 17,207 | 9,640 | 78% |
Profit before taxation | 10,154 | 4,030 | 152% |
Operating netback (US$/mcf) | 2.55 | 2.16 | 18% |
Cash and cash equivalents | 30,635 | 47,776 | (36%) |
Working capital | 47,063 | 55,759 | (16%) |
Shareholders' equity | 113,051 | 100,573 | 12% |
Earnings per share - basic (US$) | 0.19 | 0.07 | 171% |
Earnings per share - diluted (US$) | 0.18 | 0.07 | 157% |
Funds flow from operating activities | 9,888 | 4,947 | 100% |
Funds flow per share from operating activities - basic (US$) | 0.28 | 0.14 | 100% |
Funds flow per share from operating activities - diluted (US$) | 0.28 | 0.14 | 100% |
Net cash flows from operating activities | 6,653 | 3,496 | 90% |
Net cash flows per share from operating activities - basic (US$) | 0.19 | 0.10 | 90% |
Net cash flows per share from operating activities - diluted (US$) | 0.19 | 0.10 | 90% |
Outstanding Shares ('000) | |||
Class A shares | 1,751 | 1,751 | 0% |
Class B shares | 32,743 | 32,939 | (1%) |
Options | 2,257 | 2,557 | (12%) |
Additional Gas sold (MMcf) - industrial | 835 | 550 | 52% |
Additional Gas sold (MMcf) - power | 3,973 | 2,794 | 42% |
Additional Gas sold (MMcfd) - industrial | 9.2 | 6.1 | 51% |
Additional Gas sold (MMcfd) - power | 43.7 | 31.0 | 41% |
Average price per mcf (US$) - industrial | 9.63 | 9.42 | 2% |
Average price per mcf (US$) - power | 2.72 | 2.62 | 4% |
Chairman & CEO's Letter to Shareholders
2012 is a pivotal year for the Orca Exploration Group. Continuing global economic uncertainties and their impact on capital markets requires that we focus even more carefully on the business that shapes the Company. At the same time we are acutely aware of the critical role Orca plays within Tanzania to develop the country's natural gas resources and make them available to the country's power and industrial sectors to the ultimate benefit of all Tanzanians. To play its part in meeting that challenge Orca is moving forward to increase gas production from Songo Songo Island and is working closely with the Government of Tanzania and other Songo Songo stakeholders.
Orca has already taken the first steps in the US$130 million expansion program it announced last November. The drilling of the first development well SS-11 has now been completed on Songo Songo Island and negotiations are proceeding to have a jack-up rig available for the drilling of the Songo Songo West exploratory well later this year. The drilling of Orca's farm-in well in Italy is scheduled to begin in Q3 2012.
FINANCIAL RESULTS
Revenue grew by 78% to US$17.2 million in Q1 2012 (Q1 2011: US$9.6 million). The revenue increase was aided by strong Additional Gas sales of 4,808 MMcf or 52.9 MMcfd (Q1 2011: 3,344 MMcf and 37.1 MMcfd) and the fact that cost recovery was maximised following the first phase of our capital expenditure programme. Funds from operations before working capital changes increased by 100% to US$9.9 million. With significant expenditure on drilling programmes available working capital decreased from US$56.0 million at 31 December 2011 to US$47.1 million at 31 March 2012.
Orca continues to experience significant cash flow challenges due to delays in payments owed by TANESCO. The state electric utility currently owes the Company US$22.9 million. To help alleviate the funding gap caused by the delays in TANESCO payments, the Company is in the process of finalising a short-term US$10 million bank facility in Tanzania. Further funding will be required if TANESCO continues to be significantly in arrears with its payments.
TANZANIA OPERATIONS
In Q1 2012 Orca pushed ahead with the drilling of the SS-11 development well. The well was drilled at an angle of 40 degrees entering the top Neocomian reservoir in its highest position in the Songo Songo field. A total of 352 meters of total gas reservoir was encountered and extensive new reservoir data was acquired during the drilling of the well. SS-11 is expected to be an excellent producer and will be brought on production later this year. The intention was to drill a further development well SS-12 from the same drilling location. However, this well has been deferred as it was considered imprudent to drill a further well whilst there was still considerable uncertainty over the timing of the receipts from TANESCO.
To increase infrastructure capacity to deliver gas to Dar es Salaam, the Company assisted the Tanzanian Petroleum Development Corporation ("TDPC") in Q1 2012 with the design of a pipeline and expanded infrastructure facilities that the Government has announced its intention to construct by the end of 2013. Initially this expansion is expected to increase the Songo Songo infrastructure capacity to 200 MMcfd. Orca's production is currently restricted by infrastructure limits to a maximum of 102 MMcfd. In the short term, production could be further restricted in the event that the SS-9 well is taken off production following a current corrosion assessment of the well. If that happens there may be a period where Orca can only deliver 80 MMcfd until the new SS-11 well is connected later in 2012.
The Company is continuing its plans to drill the Songo Songo West exploration well in Q4 2012. During Q1 2012, the Company purchased long lead items and conducted seismic surveys to pinpoint the best drilling location. A suitable jack up rig will be operating in Mozambique in Q3 2012 and Orca is negotiating to contract the rig once it has completed the work programme there.
Drilling Songo Songo West is dependent on TANESCO clearing its arrears and resuming regular payments as well as completion of a reserve-based lending facility that is currently under discussion. This financing is also dependent on a satisfactory outcome of discussions with the Government Negotiation Team ('GNT') on various issues in Orca's Production Sharing Agreement ("PSA") including, but not limited to, TPDC back in rights, profit sharing arrangements, the unbundling of the downstream assets, cost recovery and Orca's management of the upstream operations. The Company has presented a package proposal to the GNT that aims to resolve all the outstanding issues and is expecting to receive a counterproposal. While changes to the PSA could have material adverse impacts, the Company reserves its right to defend its position if no satisfactory agreement is reached. The drilling of Songo Songo West could be delayed if no good faith satisfactory resolution is negotiated and TANESCO continues to delay payments.
ITALIAN OPERATIONS
In Italy we are moving forward with a land-based exploration programme. The drilling of the La Tosca farm-in well is scheduled to spud in July 2012. Northern Petroleum, as operator, will drill the well in the Longastrino Block in the Po Valley region of northern Italy. Orca will pay 100% of the costs of the La Tosca 1 well up to €4.3 million (US$5.4 million) and 70% thereafter for the drilling phase, together with back-in costs of €0.6 million (US$0.7 million) to earn a 70% interest in the block. If the well is tested and completed, Orca will earn an additional 5% (taking it to 75%) by paying 100% of the testing costs up to €1.3 million (US$1.6 million) and 75% thereafter. There are a number of other prospects on the Longastrino block that will be evaluated following the completion of the drilling of the La Tosca well.
BOARD AND MANAGEMENT CHANGES
At the Annual General Meeting in June, the Company will be seeking the appointment of two new board members. Mr William (Bill) Smith was secretary of the Board at Pan-Ocean Energy Corporation Limited ("PanOcean"). Mr. Robert Wynne was the Chief Financial Officer at PanOcean. Currently serving Board members, Lord Howard of Lympne, Robert (Bob) Wigley, John Patterson, Beer van Straten and Robin Gaeta, are stepping down with our sincere thanks and will assume new advisory roles.
Two new executive appointments have also been made. Beer van Straten has been named Chief Operating Officer replacing Dale Rollins who resigned in March 2012. He is responsible for the Company's field operations including the current large scale development and exploration drilling programme in Tanzania. Robert Wynne is assuming the role of Chief Financial Officer following the resignation of Nigel Friend who has been a valued member of Orca's management team for the past seven years.
NEXT STEPS
Orca's commitment to fully meet all its obligations and contribute to Tanzania's energy self-sufficiency is clearly on the record. In that spirit, the Company is engaged with the Government of Tanzania in a joint review of all performance and financial concerns. We are doing this with transparency and full cooperation.
Orca is proud of its contributions to Tanzania's self-sufficiency and to the businesses and people of Tanzania. We are equally proud of the value that the Company is building for its shareholders. None of this would be possible without the high quality performance of our employees, management and advisors. Looking ahead we will continue to work on strategic growth initiatives, maintaining strong partnerships, controlling costs, creating value and continuing to build sustainable relationships wherever we operate.
W. David Lyons
Chairman & CEO
Condensed Consolidated Interim Statement of Comprehensive Income (unaudited)
ORCA EXPLORATION GROUP INC.
Three months ended | |||
31-Mar | 31-Mar | ||
(thousands of US dollars except per share amounts) | 2012 | 2011 | |
Revenue | 17,207 | 9,640 | |
Cost of sales | |||
Production and distribution expenses | (1,316) | (1,026) | |
Depletion expense | (1,938) | (1,582) | |
13,953 | 7,032 | ||
General and administrative expenses | (3,664) | (2,850) | |
Finance income | 38 | - | |
Finance costs | (173) | (152) | |
Profit before taxation | 10,154 | 4,030 | |
Taxation | (3,762) | (1,640) | |
Profit after taxation and comprehensive income | 6,392 | 2,390 | |
Earnings per share | |||
Basic (US$) | 0.19 | 0.07 | |
Diluted (US$) | 0.18 | 0.07 |
Condensed Consolidated Interim Statement of Financial Position (unaudited)
ORCA EXPLORATION GROUP INC
AS AT | 31-Mar | 31-Dec | |
(thousands of US dollars) | 2012 | 2011 | |
ASSETS | |||
Current Assets | |||
Cash and cash equivalents | 30,635 | 34,680 | |
Trade and other receivables | 42,435 | 40,348 | |
Taxation receivable | 9,708 | 5,880 | |
Prepayments | 342 | 302 | |
83,120 | 81,210 | ||
Non- Current Assets | |||
Exploration and evaluation assets | 4,500 | 2,921 | |
Property, plant and equipment | 82,863 | 67,713 | |
87,363 | 70,634 | ||
Total Assets | 170,483 | 151,844 | |
EQUITY AND LIABILITIES | |||
Current Liabilities | |||
Trade and other payables | 31,437 | 22,801 | |
Taxation payable | 4,620 | 2,403 | |
36,057 | 25,204 | ||
Non-Current Liabilities | |||
Deferred income taxes | 15,916 | 15,194 | |
Deferred additional profits tax | 5,459 | 4,787 | |
21,375 | 19,981 | ||
Total Liabilities | 57,432 | 45,185 | |
Equity | |||
Capital stock | 84,610 | 84,610 | |
Contributed surplus | 6,268 | 6,268 | |
Accumulated income | 22,173 | 15,781 | |
113,051 | 106,659 | ||
Total Equity and Liabilities | 170,483 | 151,844 |
Condensed Consolidated Interim Statement of Cash Flows (unaudited)
ORCA EXPLORATION GROUP INC
THREE MONTHS ENDED | 31-Mar | 31-Mar | ||
(thousands of US dollars) | 2012 | 2011 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Profit after taxation | 6,392 | 2,390 | ||
Adjustment for : | ||||
Depletion and depreciation | 2,019 | 1,630 | ||
Stock-based compensation | 6 | 73 | ||
Deferred income taxes | 722 | 538 | ||
Deferred additional profits tax | 672 | 193 | ||
Gain on disposal of vehicle | - | (5) | ||
Interest income | (1) | (3) | ||
Unrealised foreign exchange loss | 78 | 131 | ||
(Increase) in trade and other receivables | (2,118) | (887) | ||
(Increase) in taxation receivable | (3,828) | (1,462) | ||
Decrease/(increase) in prepayments | (40) | 28 | ||
(Decrease)/increase in trade and other payables | 534 | (232) | ||
Increase in taxation payable | 2,217 | 1,102 | ||
Net cash flows from operating activities | 6,653 | 3,496 | ||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||
Exploration and evaluation expenditures | (1,578) | (224) | ||
Property, plant and equipment expenditures | (17,170) | (1,132) | ||
Proceeds from sale of vehicle | - | 3 | ||
Interest received | 1 | 5 | ||
Increase in trade and other payables | 8,072 | 106 | ||
Net cash used in investing activities | (10,675) | (1,242) | ||
(Decrease)/Increase in cash and cash equivalents | (4,022) | 2,254 | ||
Cash and cash equivalents at the beginning of the period | 34,680 | 45,519 | ||
Effect of change in foreign exchange | (23) | 3 | ||
Cash and cash equivalents at the end of the period | 30,635 | 47,776 |
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (unaudited)
ORCA EXPLORATION GROUP INC
(thousands of US dollars) | Capital stock | Contributed surplus | Accumulated income | Total | |||
Balance as at 1 January 2011 | 85,100 | 5,288 | 10,185 | 100,573 | |||
Stock-based compensation | - | - | - | - | |||
Total comprehensive income for the period | - | - | 2,390 | 2,390 | |||
Balance as at 31 March 2011 | 85,100 | 5,288 | 10,185 | 100,573 | |||
(thousands of US dollars) | Capital stock | Contributed surplus | Accumulated income | Total | |||
Note | |||||||
Balance as at 1 January 2012 | 84,610 | 6,268 | 15,781 | 106,659 | |||
Stock-based compensation | - | - | - | - | |||
Total comprehensive income for the period | - | - | 6,392 | 6,392 | |||
Balance as at 31 March 2012 | 84,610 | 6,268 | 22,173 | 113,051 |
Orca Exploration is an international public company engaged in natural gas exploration, development and supply in Tanzania and oil appraisal and gas exploration in Italy. Orca Exploration trades on the TSXV under the trading symbols ORC.B and ORC.A.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains forward-looking statements. More
particularly, this press release contains statements concerning, but
not limited to, timing of evaluation of new reservoir data for the
SS-11 development well on Songo Songo Island and expected timing of
connecting the well to the gas processing plant; anticipated timing of
conducting corrosion logging on the offshore well SS-9; efforts to
secure a jack up rig for the drilling of the Songo Songo West well and
the expected timing of securing the rig and drilling of the well; the
Company's plans for drilling of a La Tosca well in the Longastrino
exploration block in the Po Valley, northern Italy and expected timing
for spudding the well; the Company's plans to finalize a short-term
bank facility; future funding requirements; anticipated timing of
bringing the SS-11 development well on Songo Songo Island on
production; expected increases to Songo Songo infrastructure capacity
as a result of expanded infrastructure facilities; effect of corrosion
assessment on bringing the SS-9 well on production; conditions to
drilling of the Songo Songo West well and bank financing; effect of
changes to the PSA on the Company and on timing of drilling of the
Songo Songo West well; and the Company's strategic plans. These
forward-looking statements involve substantial known and unknown risks
and uncertainties, certain of which are beyond Orca Exploration's
control, including, but not limited to, the impact of general economic
conditions in the areas in which Orca Exploration operates; civil
unrest; industry conditions; changes in laws and regulations including
the adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced; increased competition; the lack
of availability of qualified personnel or management; fluctuations in
commodity prices; foreign exchange or interest rates; stock market
volatility; competition for, among other things, capital, drilling
equipment and skilled personnel; failure to obtain required equipment
for drilling; failure to obtain short-term bank facility; delays in
drilling plans; failure to meet conditions to drilling of Songo Songo
West well; effect of changes to the PSA on the Company; and obtaining
required approvals of regulatory authorities. In addition there are
risks and uncertainties associated with oil and gas operations,
therefore Orca Exploration's actual results, performance or achievement
could differ materially from those expressed in, or implied by, these
forward-looking estimates and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking estimates
will transpire or occur, or if any of them do so, what benefits,
including the amounts of proceeds, that Orca Exploration will derive
therefrom. Such forward-looking are based on certain assumptions made
by Orca Exploration in light of its experience and perception of
historical trends, current conditions and expected future developments,
as well as other factors Orca Exploration believes are appropriate in
the circumstances, including, but are not limited to, the ability of
Orca Exploration to add production at a consistent rate; commodity
prices will not deteriorate significantly; the ability of Orca
Exploration to obtain equipment in a timely manner to carry out
exploration, development and exploitation activities; and future
capital expenditures. The forward-looking statements contained in this
press release are made as of the date hereof and Orca Exploration
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Orca Exploration Group Inc.
Copyright 2012 Canada NewsWire
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