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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Pan Orient Energy Corp | TSXV:POE | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.21 | 1.19 | 1.24 | 0 | 01:00:00 |
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Pan Orient Energy Corp. ("Pan Orient") (TSX VENTURE:POE) reports its 2014 first
quarter consolidated financial and operating results. Please note that all
amounts are in Canadian dollars unless otherwise stated and BOPD refers to
barrels of oil per day net to Pan Orient.
The Corporation is today filing its unaudited consolidated financial statements
as at and for the three months ended March 31, 2014 and related management's
discussion and analysis with Canadian securities regulatory authorities. Copies
of these documents may be obtained online at www.sedar.com or the Corporation's
website, www.panorient.ca.
Commenting today on Pan Orient's first quarter 2014 results, President and CEO
Jeff Chisholm stated: "The first quarter of 2014 and subsequent period have seen
positive results and significant progress made across all three of Pan Orient's
operating regions. Of particular note, a significant milestone was achieved with
first steam injection at the Sawn Lake steam assisted gravity drainage ("SAGD")
demonstration project. With regard to recent political events in Thailand, we
have not experienced any impact to our current operations and do not anticipate
any impact on our planned future operations."
Highlights
-- First Steam injection commenced at the Sawn Lake, Canada, SAGD
demonstration project.
-- Thailand Concession L53 production is currently 996 BOPD after
successfully perforating a new zone at the L53-D2ST3 well.
-- Preparations were completed towards a planned Thailand three well
drilling program in Concession L53 which is anticipated to commence in
July 2014.
-- Significant progress on the soon to be concluded farm-out of a 49%
interest in the East Jabung PSC in Indonesia.
2014 FIRST QUARTER OPERATING RESULTS
-- For the first quarter of 2014, the Company recorded total corporate
funds flow from operations of $4.4 million ($0.08 per share) and a net
loss attributable to common shareholders of $0.2 million ($0.00 loss per
share).
-- At March 31, 2014 Pan Orient had $44.0 million of working capital and
non-current deposits, and no long-term debt. In addition, Pan Orient had
$7.5 million of equipment inventory to be utilized for future Thailand
and Indonesia operations which is included in exploration and evaluation
assets in the consolidated statement of financial position. Working
capital and non-current deposits were comprised of $35.7 million cash,
$2.3 million of non-current deposits, $12.9 million of Canadian taxes
receivable and other receivables of $6.4 million and less payables of
$13.3 million.
-- Capital expenditures were $11.0 million in the first quarter of 2014,
with $4.3 million in Indonesia, $2.6 million in Thailand and $4.1
million in Canada at the Sawn Lake SAGD demonstration project of Andora
Energy Corporation ("Andora"), which is owned 71.8% by Pan Orient and
consolidated with Pan Orient for reporting purposes. Capital
expenditures were funded partially by the $4.4 million of funds flow
from operations, $2.7 million from a joint venture partner repurchasing
a gross overriding royalty interest at Sawn Lake as part of an overall
agreement entered into in 2013 for the advancement of the Sawn Lake
demonstration project and the remaining $3.9 million through existing
working capital.
-- At March 31, 2014 Pan Orient had outstanding capital commitments of
$130,000 in Thailand associated with Concession L53, $9.1 million in
Indonesia associated with the East Jabung production sharing contract
("PSC"), and $665,000 in Canada with respect to outstanding purchase
orders and natural gas pipeline tie-in and tariff charges associated
with the Sawn Lake SAGD demonstration project of Andora.
-- Thailand
-- Concession L53 averaged oil sales of 712 BOPD during the quarter and
generated $5.0 million in after tax funds flow from operations, or
$77.69 per barrel. This compares with oil sales in fourth quarter of
2013 of 963 BOPD and $6.3 million in after tax funds flow from
operations, or $70.79 per barrel. The reference price of Brent crude
oil in Canadian dollars and the realized oil price increased by 5%
during the first quarter of 2014. Concession L53 oil sales in the
first quarter of 2014 decreased 26% from the fourth quarter of 2013
primarily due to the L53-G field being shut-in until the L53-G field
production environmental impact assessment ("EIA") was approved by
the Government of Thailand on February 19, 2014 (decline of 184
BOPD) and a 99 BOPD production decline at L53-D field, partially
offset by an increase of 11 BOPD at the L53-A field resulting from a
workover.
-- Oil sales in April 2014 at Concession L53 were 743 BOPD and
production is currently 996 BOPD after recently perforating a new
reservoir zone at the L53-D2ST3 well.
-- On a per barrel basis, first quarter 2014 after tax funds flow from
operations of $77.69 resulted from oil sales of $105.28,
transportation expenses of $1.62, operating expenses of $16.19,
general and administrative expenses of $4.66 and a royalty to the
Thailand government of $5.13. Oil sales revenue during this period
was allocated 21% to expenses for transportation, operating, and
general & administrative, 5% to the government of Thailand for
royalties, and 74% to Pan Orient. No Thailand petroleum income taxes
or Special Remuneratory Benefit tax was recorded during the quarter.
-- The L53-A Central exploration well drilled during the first quarter
of 2014 failed to encounter commercial hydrocarbons and was
abandoned.
-- Capital expenditures of $2.6 million in Thailand during the first
quarter of 2014 in Concession L53 included $1.8 million for the
L53A-Central exploration well, $0.3 million for equipment inventory,
$0.1 million for capitalized general and administrative expenses and
$0.4 million for other capital expenditures.
-- Thailand Concession L45 expired on April 27, 2014 and $0.5 million
has been accrued for expected unfulfilled commitments that will be
payable to the Government of Thailand.
-- Indonesia
-- Capital expenditures in Indonesia of $4.3 million with $4.0 million
at the East Jabung PSC related primarily to the 440 kilometer 2D
seismic program, $0.2 million at the Batu Gajah PSC related to
capitalized general and administrative expenses, and $0.1 million
for equipment inventory.
-- Canada
-- Capital expenditures for the Sawn Lake demonstration project during
the first quarter of 2014 were $4.1 million relating to the
construction of the SAGD facility for steam generation, water
handling and oil treating, and for final installation of the water
source and disposal facilities.
OUTLOOK
-- Thailand
-- The Company is waiting for EIA approval for several locations, and
which include the L53A-North prospect in the northeastern portion of
Concession L53. Approval for these locations is now expected in the
July to August 2014 time frame.
-- Thailand drilling plans for the remainder of 2014 include two
appraisal wells to be drilled at the L53-D East field in mid July
2014 and an exploration well at the L53A-North prospect once EIA
approval is received. One of the appraisal wells to be drilled at
the L53-D East field will be targeting an undrilled fault
compartment where a portion of the 2013 year-end downward reserve
revision was the result of a reclassification of reserves to
prospective resourced based on new seismic mapping integrated with
the wells drilled in 2013.
-- Indonesia
-- The Indonesian farm-out process is continuing as Pan Orient seeks
partners for exploration drilling through farm-out arrangements at
the Batu Gajah, East Jabung and Citarum PSCs.
-- The Company has received and evaluated farm-in proposals for the
East Jabung PSC and is currently negotiating the farm-in and joint
operating agreements. The timing of an exploration well at East
Jabung targeting the Anggun prospect will be directly dependent upon
the timing of the intended farm-out and the completion of the road
access to this remote well site. The Anggun prospect is interpreted
as having a maximum structural closure of approximately 85 to 100
square km at three primary target levels.
-- Discussions are continuing with potential farm-in partners for the
Batu Gajah and Citarum PSCs.
-- At the East Jabung PSC, the last portion of an approximately 440 km
2D seismic program over the North lead has been completed.
Processing and interpretation of this data is expected to be
completed in July 2014.
-- At the Batu Gajah PSC, Pan Orient is currently in discussions with
the Indonesian oil and gas regulator relating to unitization of the
potential new field in the adjacent Lemang PSC, and is working
towards the drilling of a well in the area in 2014 / 2015. Under an
agreement with the operator of the Lemang PSC, Pan Orient has the
rights to the portion of a recently acquired 3D seismic survey over
the Selong-1 discovery that extended into POE's adjacent Batu Gajah
PSC. Once received, this data will be used to optimally locate an
appraisal well within Pan Orient's acreage.
-- Canada - Sawn Lake (Operated by Andora, in which Pan Orient has a 71.8%
ownership interest)
-- Andora has a 50% working interest in the Sawn Lake SAGD
demonstration, and is the operator. For Phase 1 of the SAGD
demonstration project, one SAGD well pair was drilled in the fourth
quarter of 2013 to a depth of 650 meters and have a horizontal
length of 780 meters, and construction of the SAGD facility for
steam generation, water handling and oil treating has been completed
in 2014. Steam injection at the Sawn Lake SAGD demonstration project
commenced on May 21, 2014. After three months of steam injection,
bitumen production is anticipated in approximately August 2014.
-- Depending on results of the first SAGD well pair in Phase 1, Andora
will proceed with Phase 2 of the demonstration project. The second
phase would include the drilling of two additional SAGD well pairs
and the associated expansion of the SAGD facility.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production
company with operations currently located onshore Thailand, Indonesia and in
Western Canada.
This news release contains forward-looking information. Forward-looking
information is generally identifiable by the terminology used, such as "expect",
"believe", "estimate", "should", "anticipate" and "potential" or other similar
wording. Forward-looking information in this news release includes, but is not
limited to, references to: well drilling programs and drilling plans, estimates
of reserves and potentially recoverable resources, and information on future
production and project start-ups. By their very nature, the forward-looking
statements contained in this news release require Pan Orient and its management
to make assumptions that may not materialize or that may not be accurate. The
forward-looking information contained in this news release is subject to known
and unknown risks and uncertainties and other factors, which could cause actual
results, expectations, achievements or performance to differ materially,
including without limitation: imprecision of reserve estimates and estimates of
recoverable quantities of oil, changes in project schedules, operating and
reservoir performance, the effects of weather and climate change, the results of
exploration and development drilling and related activities, demand for oil and
gas, commercial negotiations, other technical and economic factors or revisions
and other factors, many of which are beyond the control of Pan Orient. Although
Pan Orient believes that the expectations reflected in its forward-looking
statements are reasonable, it can give no assurances that the expectations of
any forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
------------------------------------------
Three Months Ended
Financial and Operating Summary March 31, Change
(thousands of Canadian dollars
except where indicated) 2014 2013
----------------------------------------------------------------------------
FINANCIAL
----------------------------------------------------------------------------
Oil revenue, before royalties and
transportation expense 6,750 7,444 -9%
Funds flow from operations (Note
1) 4,367 5,664 -23%
Per share - basic and diluted $ 0.08 $ 0.10 -23%
Funds flow from (used in)
operations by region (Note 1)
Canada 100 (123) -181%
Thailand 4,981 5,860 -15%
Indonesia (714) (73) 878%
------------------------------------------
Total 4,367 5,664 -23%
------------------------------------------
------------------------------------------
Net income (loss) attributed to
common shareholders (185) 341 -154%
Per share - basic and diluted $ (0.00) $ 0.01 -119%
Working capital 41,699 85,215 -51%
Working capital & non-current
deposits 44,040 87,442 -50%
Long-term debt - - 0%
Petroleum and natural gas
properties
Capital expenditures (Note 2) 11,010 34,509 -68%
Capital disposals (Note 3) (2,698) - 100%
Shares outstanding (thousands) 56,760 56,760 0%
----------------------------------------------------------------------------
Funds Flow from (Used In)
Operations per Barrel (Note 1)
----------------------------------------------------------------------------
Canada operations $ 1.56 $ (1.67) -193%
Thailand operations 77.69 79.55 -2%
Indonesia operations (11.14) (0.99) 1025%
------------------------------------------
Total $ 68.11 $ 76.89 -11%
----------------------------------------------------------------------------
Capital Expenditures (Note 2)
----------------------------------------------------------------------------
Canada 4,146 2,224 86%
Thailand 2,554 13,793 -81%
Indonesia 4,310 18,492 -77%
------------------------------------------
Total 11,010 34,509 -68%
----------------------------------------------------------------------------
Working Capital and Non-current
Deposits
----------------------------------------------------------------------------
Beginning of period 47,889 116,376 -59%
Funds flow from operations (Note
1) 4,367 5,664 -23%
Capital expenditures (Note 2) (11,010) (34,509) -68%
Disposal of petroleum and
natural gas assets (Note 3) 2,698 - 100%
Foreign exchange impact on
working capital 96 (219) -144%
Net proceeds on share
transactions - 130 -100%
------------------------------------------
End of period 44,040 87,442 -50%
----------------------------------------------------------------------------
Canada Operations
----------------------------------------------------------------------------
Interest income 88 305 -71%
General and administrative expense
(Note 4) (547) (430) 27%
Current income tax recovery - 82 -100%
Realized foreign exchange gain
(loss) 559 (80) -799%
------------------------------------------
Funds flow from (used in)
operations (Note 1) 100 (123) -181%
------------------------------------------
------------------------------------------
Funds flow from (used in)
operations per barrel
Interest income $ 1.37 $ 4.14 -67%
General and administrative
expense (Note 4) (8.53) (5.84) 46%
Current income tax recovery - 1.11 -100%
Realized foreign exchange gain
(loss) 8.72 (1.08) -907%
------------------------------------------
Canada - Funds flow (used in)
from operations $ 1.56 $ (1.67) -193%
----------------------------------------------------------------------------
Indonesia Operations
----------------------------------------------------------------------------
General and administrative expense
(Note 4) (297) (75) 296%
Exploration expense (Note 5) (309) - 100%
Realized foreign exchange (loss)
gain (108) 2 5500%
------------------------------------------
Indonesia - Funds flow (used in)
operations (714) (73) 878%
------------------------------------------
------------------------------------------
Wells drilled
Gross - 2 -100%
Net - 2.0 -100%
----------------------------------------------------------------------------
----------------------------------------
Financial and Operating Summary Three Months Ended
(continued) March 31,
(thousands of Canadian dollars
except where indicated) 2014 2013 Change
----------------------------------------------------------------------------
Thailand Operations
----------------------------------------------------------------------------
Oil sales (bbls) 64,117 73,666 -13%
Average daily oil sales (BOPD) by
Concession L53 712 819 -13%
Average oil sales price, before
transportation (CDN$/bbl) $ 105.28 $ 101.05 4%
Reference Price (volume weighted)
and differential
Crude oil (Brent $US/bbl) $ 108.07 $ 112.17 -4%
Exchange Rate $US/$Cdn 1.12 1.02 10%
Crude oil (Brent $Cdn/bbl) $ 120.93 $ 114.23 6%
Sale price / Brent reference price 87% 88% -1%
Funds flow from operations (Note 1)
Crude oil sales 6,750 7,444 -9%
Government royalty (329) (359) -8%
Transportation expense (104) (111) -6%
Operating expense (1,038) (752) 38%
----------------------------------------
Field netback 5,279 6,222 -15%
General and administrative expense
(Note 4) (299) (364) -18%
Interest income 2 3 -33%
Current income tax (1) (1) 0%
----------------------------------------
Thailand - Funds flow from
operations (Note 1) 4,981 5,860 -15%
----------------------------------------
----------------------------------------
Funds flow from operations / barrel
(CDN$/bbl) (Note 1)
Crude oil sales $ 105.28 $ 101.05 4%
Government royalty (5.13) (4.87) 5%
Transportation expense (1.62) (1.51) 7%
Operating expense (16.19) (10.21) 59%
----------------------------------------
Field netback 82.34 84.46 -3%
General and administrative expense
(Note 4) (4.66) (4.94) -6%
Interest Income 0.03 0.04 -25%
Current income tax (0.02) (0.01) 100%
----------------------------------------
Thailand - Funds flow from
operations (Note 1) $ 77.69 $ 79.55 -2%
----------------------------------------
----------------------------------------
Government royalty as percentage of
crude oil sales 5% 5% 0%
Income tax as percentage of crude
oil sales 0% 0% 0%
As percentage of crude oil sales
Expenses - transportation,
operating and G&A 21% 16% 30%
Government royalty and income tax 5% 5% 0%
Funds flow from operations, before
interest income 74% 79% -6%
Wells drilled
Gross 1 6 -83%
Net 1.0 6.0 -83%
----------------------------------------------------------------------------
(1) Funds flow from operations ("funds flow" after tax and before changes
in non-cash working capital and reclamation costs) is used by
management to analyze operating performance and leverage. Funds flow as
presented does not have any standardized meaning prescribed by IFRS and
therefore it may not be comparable with the calculation of similar
measures of other entities. Funds flow is not intended to represent
operating cash flow or operating profits for the period nor should it
be viewed as an alternative to cash flow from operating activities, net
earnings or other measures of financial performance calculated in
accordance with IFRS.
(2) Cost of capital expenditures, excluding any decommissioning provision
and excluding the impact of changes in foreign exchange rates.
(3) In March 2014, joint venture a partner in Andora's Sawn Lake SAGD
demonstration project repurchased the 3% gross overriding royalty on a
portion of the non-owned working interests in 12 sections of the
Central Block and 24.5 sections of the North Block for $2.7 million.
(4) General & administrative expenses, excluding non-cash accretion on
decommissioning provision and stock-based payments.
(5) Exploration expense relates to exploration costs associated with the
Citarum and South CPP PSCs that are no longer being capitalized.
(6) Tables may not add due to rounding.
To view the figure associated with this press release, please visit the
following link: http://media3.marketwire.com/docs/pano0527.pdf
FOR FURTHER INFORMATION PLEASE CONTACT:
Pan Orient Energy Corp.
Jeff Chisholm
President and CEO (located in Bangkok, Thailand)
jeff@panorient.ca
Pan Orient Energy Corp.
Bill Ostlund
Vice President Finance and CFO
(403) 294-1770
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