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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 |
The Corporation is today filing its audited consolidated financial statements as at and for the year ended December 31, 2019 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 2019 results, President and CEO Jeff Chisholm stated:
"2019 saw solid Thailand reserves growth and strong oil production, and we anticipate this to continue through 2020 despite the current low oil price environment. The Company is in a strong financial position going into 2020 with working capital and non-current deposits in Canada and Thailand of a combined $32.7 million. Low cost, high netback Thailand oil production is expected to fund the 2020 capital program, even at current oil prices. Operating expenses for Thailand operations in 2019 averaged a low $6.16 per barrel of oil, which was a 55% reduction from the prior year. We are constantly evaluating various means by which to further reduce the 2020 operating expenses with significant cost savings identified for optimized water handling at the L53DD production site that will see a water disposal well drilled there in the second quarter of 2020 as an example.
Reserves and production growth in 2020 is anticipated on the basis of a firm $10 million capital program, with an additional $2 million mainly related to well workovers, contingent upon oil prices. 2020 reserves growth is targeted through L53DD field reservoir performance augmented by a capital program that includes five exploration wells (including sidetracks), of which L53-AA2 is awaiting testing, L53-AA1 and L53-AAST1 failed to encounter oil bearing sands, and the L53-BB1 and L53AC-E wells are to be drilled. This exploration program will fully evaluate the Concession L53 “reserved area” exploration lands that expire in January 2021. Production growth is expected mainly through the granting of the L53 AA South production license in July 2020, the drilling of two L53DD appraisal wells in Q3 2020 and further supported by any exploration success.
With a very strong balance sheet, an active 2020 drilling program funded entirely through after tax cash flow from low cost high netback onshore Thailand Production, the Company possesses the financial and operational strength to withstand and grow in an environment of low oil prices and take advantage of any opportunities that may present themselves during this challenging time."
2019 HIGHLIGHTS
Thailand (net to Pan Orient’s 50.01% equity interest in the Thailand Joint Venture)
Indonesia East Jabung Production Sharing Contract (Pan Orient is non-operator with a 49% ownership interest)
Sawn Lake (Operated by Andora Energy Corporation, in which Pan Orient has a 71.8% ownership)
Corporate
OUTLOOK
THAILAND
Concession L53 Onshore (Pan Orient Energy (Siam) Ltd., in which Pan Orient has 50.01% ownership)Oil sales in January and February 2020 at Concession L53, net to Pan Orient’s 50.01% interest, averaged 1,106 BOPD, with 1,041 BOPD in January and 1,177 BOPD in February.
The Thailand capital budget is $12 million net to Pan Orient’s 50.01% interest for 2020, with $10 million firm and $2 million contingent on oil prices, which includes the drilling of five exploration wells (including side tracks), three development or appraisal wells (within the L53DD field), one L53DD water disposal well and a number of workovers. This program will be funded through Thailand cash flow.
The 2020 drilling program commenced with the drilling of the L53-DD6ST2 appraisal well which has been on production since February 11th. Oil production from the L53-DD6ST2 well February 15th to March 6th has averaged 409 BOPD (net to Pan Orient’s 50.01% interest) from the BB/CC sand and a water cut of 1.1%. Test results are not necessarily indicative of long-term performance or ultimate recovery.
The L53-AA2 exploration well was the second well drilled in the program. Confirmation of the potential of this well through a 90 day production test period will commence as soon as approval from the Government of Thailand is received. The L53-AA1 exploration well, that was targeting a structural closure approximately 1.2 kilometers due south of the L53-AA2 well AA sand penetration, has been abandoned after failing to encounter oil bearing sands. L53-AA1 was immediately sidetracked (L53-AAST1), targeting a structural closure separate and up dip and due west of the L53-AA2 exploration well but also failed to encounter oil bearing sands.
The drilling rig will now be demobilized with the drilling program planned to re-start in the second half of April 2020 utilizing a new drilling rig under contract with a substantially reduced day rate in comparison to the rig that just completed drilling the L53AA pad wells. Drilling will recommence initially with a water disposal well at the L53DD well pad, followed by the L53-BB1 exploration well that is targeting multiple sands on trend and north of the L53-DD field and then the L53AC-E exploration well targeting the West A1-A4 prospect fault compartments within the Kampaeng Saen basin, immediately north of the producing L53-D field. An additional two appraisal wells will also be drilled within the L53-DD field to complete this drilling program.
On January 7, 2021 the 211.69 square kilometers of “reserved area” exploration lands will expire and only exploration and development lands within production license areas will remain (with a 20 year primary term to January 7, 2036 plus an additional 10 year renewal period that can be applied for). Pan Orient Energy (Siam) Ltd. has 24.44 square kilometers associated with the L53-A, L53-B, L53-D, L53-G and L53-DD fields, has submitted a production license application for the L53-AA South field, and will submit production license applications for any other new discoveries. For this reason, the 2020 work program is focused on exploration drilling, and it is the intention that at the end of 2020 all main prospects will have been drilled and have production license applications approved.
CANADA
Sawn Lake (Operated by Andora Energy Corporation, in which Pan Orient has a 71.8% ownership) These are uncertain times for bitumen producers, especially junior companies, with the challenges of volatile prices, pipeline egress, regulatory uncertainty and access to capital. Sawn Lake is a quality SAGD project that has regulatory approval, the right development plan based on Andora’s proprietary produced water boiler and an existing facility that can be expanded for commercial production. Pan Orient is looking to have the project move forward in some manner for the benefit of Pan Orient shareholders.
Corporate
The Company maintains a strong cash position for conducting key exploration and development activities and to provide financial flexibility. Pan Orient is constantly reviewing its exploration and development asset portfolio in Thailand and Canada with the aim of maximizing corporate value and achieving the best allocation of resources. The near-term strategy for Pan Orient is to complete exploration drilling and development activities in Thailand prior to the “reserved area” exploration lands expiring in January 2021, and to monitor events impacting the Sawn Lake SAGD heavy oil project in the coming months to decide on how to best proceed.
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 “forecast”, "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: renewal, extension or termination of oil concessions and production sharing contracts; other regulatory approvals; well drilling programs and drilling plans; the benefits of patented technology; estimates of reserves and potentially recoverable resources; information on future production and project start-ups; expectations as to prices for oil produced and the impact of sales agreements; anticipated reductions in operating expenses; and sufficiency of financial resources. 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, regulatory changes and delays, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, supply, demand and resulting prices 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.
FOR FURTHER INFORMATION, PLEASE CONTACT:Pan Orient Energy Corp.Jeff Chisholm, President and CEO (located in Bangkok, Thailand)Email: jeff@panorient.ca
- or -
Bill Ostlund, Vice President Finance and CFOTelephone: (403) 294-1770, Extension 233
Financial and Operating Summary | Three Months Ended December 31, | Year Ended December 31, | % Change | ||||||||||||
(thousands of Canadian dollars except where indicated) | 2019 | 2018 | 2019 | 2018 | |||||||||||
FINANCIAL | |||||||||||||||
Financial Statement Results – Excluding 50.01% Interest in Thailand Joint Venture (Note 1) | |||||||||||||||
Net income (loss) attributed to common shareholders | (26,856 | ) | 1,409 | (25,304 | ) | (40 | ) | ||||||||
Per share – basic and diluted | $ | (0.49 | ) | $ | 0.03 | $ | (0.46 | ) | $ | (0.00 | ) | ||||
Cash flow from (used in) operating activities (Note 2) | (338 | ) | (245 | ) | (2,554 | ) | (2,407 | ) | 6 | % | |||||
Per share – basic and diluted | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.05 | ) | $ | (0.04 | ) | 6 | % | |
Cash flow from (used in) investing activities (Note 2) | (7,762 | ) | (1,052 | ) | (2,583 | ) | (5,500 | ) | -53 | % | |||||
Per share – basic and diluted | $ | (0.14 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.10 | ) | -53 | % | |
Cash flow used in financing activities (Note 2) | (718 | ) | - | (706 | ) | - | 0 | % | |||||||
Per share – basic and diluted | $ | (0.01 | ) | - | $ | (0.01 | ) | - | 0 | % | |||||
Working capital | 21,554 | 32,546 | 21,554 | 32,546 | -34 | % | |||||||||
Working capital & non-current deposits | 22,158 | 33,139 | 22,158 | 33,139 | -33 | % | |||||||||
Long-term debt | - | - | - | - | 0 | % | |||||||||
Shares outstanding (thousands) | 54,496 | 54,900 | 54,496 | 54,900 | -1 | % | |||||||||
Capital Commitments (Note 3) | 719 | 738 | 719 | 738 | -3 | % | |||||||||
Working Capital and Non-current Deposits | |||||||||||||||
Beginning of period – Excluding Thailand Joint Venture | 32,458 | 32,993 | 33,139 | 36,897 | -10 | % | |||||||||
Adjusted funds flow from (used in) operations (excluding Thailand joint venture) (Note 5) | (898 | ) | 972 | (3,125 | ) | 346 | -1003 | % | |||||||
Issuance of common shares | - | - | 222 | - | 0 | % | |||||||||
Consolidated capital expenditures (Note 7) | (8,433 | ) | (998 | ) | (12,833 | ) | (4,256 | ) | 202 | % | |||||
Amounts (advanced to) received from Thailand Joint Venture | (7 | ) | 31 | (519 | ) | 159 | -426 | % | |||||||
Disposal of petroleum and natural gas assets (Note 8) | - | - | - | 133 | -100 | % | |||||||||
Dividend received from Thailand Joint Venture | - | - | 6,624 | - | 0 | % | |||||||||
Finance lease payments | (47 | ) | - | (130 | ) | - | 0 | % | |||||||
Normal course issuer bid | (671 | ) | - | (798 | ) | - | 0 | % | |||||||
Effect of foreign exchange | (244 | ) | 141 | (422 | ) | (140 | ) | 201 | % | ||||||
End of period - Excluding Thailand Joint Venture | 22,158 | 33,139 | 22,158 | 33,139 | -33 | % | |||||||||
Pan Orient 50.01% interest in Thailand Joint Venture Working Capital and Non-Current Deposits | 10,493 | 6,385 | 10,493 | 6,385 | 64 | % | |||||||||
Economic Results – Including 50.01% Interest in Thailand Joint Venture (Note 7) | |||||||||||||||
Total corporate adjusted funds flow from (used in) operations by region (Note 5) | |||||||||||||||
Canada (Note 6) | (593 | ) | 1,021 | (2,692 | ) | 651 | -514 | % | |||||||
Thailand (Note 17) | (9 | ) | (7 | ) | (41 | ) | (32 | ) | 28 | % | |||||
Indonesia | (296 | ) | (42 | ) | (392 | ) | (273 | ) | 44 | % | |||||
Adjusted funds flow from (used in) operations (excl. Thailand Joint Venture) | (898 | ) | 972 | (3,125 | ) | 346 | -1003 | % | |||||||
Share of Thailand Joint Venture (Note 7) | 4,089 | 2,029 | 19,984 | 5,171 | 286 | % | |||||||||
Total corporate adjusted funds flow from operations | 3,191 | 3,001 | 16,859 | 5,517 | 206 | % | |||||||||
Per share – basic and diluted | $ | 0.06 | $ | 0.05 | $ | 0.31 | $ | 0.10 | 205 | % | |||||
Capital Expenditures – Petroleum and Natural Gas Properties (Note 7) | |||||||||||||||
Canada (Note 6) | 205 | 233 | 604 | 897 | -33 | % | |||||||||
Indonesia | 8,228 | 765 | 12,229 | 3,359 | 264 | % | |||||||||
Consolidated capital expenditures (excl. Thailand Joint Venture) | 8,433 | 998 | 12,833 | 4,256 | 202 | % | |||||||||
Share of Thailand Joint Venture capital expenditures | 2,872 | 2,321 | 9,113 | 3,835 | 138 | % | |||||||||
Total capital expenditures (incl. Thailand Joint Venture) | 11,305 | 3,319 | 21,946 | 8,091 | 171 | % | |||||||||
Disposition – Petroleum and Natural Gas Properties (Note 8) | - | - | - | (133 | ) | -100 | % | ||||||||
Investment in Thailand Joint Venture | |||||||||||||||
Beginning of period | 32,898 | 32,864 | 34,504 | 32,185 | 7 | % | |||||||||
Net income from Joint Venture | 1,186 | 492 | 4,890 | 114 | 4189 | % | |||||||||
Other comprehensive gain from Joint Venture | 37 | 1,179 | 839 | 2,364 | -65 | % | |||||||||
Dividend paid | - | - | (6,624 | ) | - | 0 | % | ||||||||
Amounts (received from) advanced to Joint Venture | 7 | (31 | ) | 519 | (159 | ) | -426 | % | |||||||
End of period | 34,128 | 34,504 | 34,128 | 34,504 | -1 | % |
Three Months Ended December 31, | Year Ended December 31, | % Change | |||||||||||||
(thousands of Canadian dollars except where indicated) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Thailand Operations | |||||||||||||||
Economic Results –50.01% Interest in Thailand Joint Venture (Note 4) | |||||||||||||||
Oil sales (bbls) | 113,324 | 33,702 | 386,877 | 91,090 | 325 | % | |||||||||
Average daily oil sales (BOPD) by Concession L53 | 1,232 | 366 | 1,060 | 250 | 325 | % | |||||||||
Average oil sales price, before transportation (CDN$/bbl) | $ | 62.64 | $ | 83.75 | $ | 74.65 | $ | 84.82 | -12 | % | |||||
Reference Price (volume weighted) and differential | |||||||||||||||
Crude oil (Brent $US/bbl) | $ | 63.32 | $ | 64.54 | $ | 63.91 | $ | 69.62 | -8 | % | |||||
Exchange Rate $US/$Cdn | 1.34 | 1.34 | 1.35 | 1.32 | 2 | % | |||||||||
Crude oil (Brent $Cdn/bbl) | $ | 84.96 | $ | 86.78 | $ | 86.48 | $ | 91.91 | -6 | % | |||||
Sale price / Brent reference price | 74 | % | 97 | % | 86 | % | 92 | % | -6 | % | |||||
Adjusted funds flow from (used in) operations (Note 5) | |||||||||||||||
Crude oil sales | 7,099 | 2,823 | 28,882 | 7,727 | 274 | % | |||||||||
Government royalty | (369 | ) | (137 | ) | (1,503 | ) | (379 | ) | 297 | % | |||||
Transportation expense | (272 | ) | (68 | ) | (934 | ) | (172 | ) | 443 | % | |||||
Operating expense | (846 | ) | (386 | ) | (2,385 | ) | (1,236 | ) | 93 | % | |||||
Field netback | 5,612 | 2,232 | 24,060 | 5,940 | 305 | % | |||||||||
General and administrative expense (Note 9) | (299 | ) | (227 | ) | (953 | ) | (835 | ) | 14 | % | |||||
Interest income | 21 | 21 | 43 | 37 | 16 | % | |||||||||
Foreign exchange gain (loss) | 23 | (4 | ) | 68 | (3 | ) | -2367 | % | |||||||
Current income tax | (1,277 | ) | - | (3,275 | ) | - | 0 | % | |||||||
Thailand - Adjusted funds flow from operations | 4,080 | 2,022 | 19,943 | 5,139 | 288 | % | |||||||||
Adjusted funds flow from (used in) operations / barrel (CDN$/bbl) (Note 5) | |||||||||||||||
Crude oil sales | $ | 62.64 | $ | 83.75 | $ | 74.65 | $ | 84.82 | -12 | % | |||||
Government royalty | (3.26 | ) | (4.07 | ) | (3.88 | ) | (4.16 | ) | -7 | % | |||||
Transportation expense | (2.40 | ) | (2.02 | ) | (2.41 | ) | (1.89 | ) | 28 | % | |||||
Operating expense | (7.47 | ) | (11.45 | ) | (6.16 | ) | (13.57 | ) | -55 | % | |||||
Field netback | $ | 49.52 | $ | 66.21 | $ | 62.19 | $ | 65.20 | -5 | % | |||||
General and administrative expense (Note 9) | (2.64 | ) | (6.74 | ) | (2.46 | ) | (9.17 | ) | -73 | % | |||||
Interest Income | 0.19 | 0.62 | 0.11 | 0.41 | -73 | % | |||||||||
Foreign exchange gain (loss) | 0.20 | (0.12 | ) | 0.18 | (0.03 | ) | -634 | % | |||||||
Current income tax | (11.27 | ) | - | (8.47 | ) | - | 0 | % | |||||||
Thailand – Adjusted funds flow from operations | $ | 36.00 | $ | 59.97 | $ | 51.55 | $ | 56.41 | -9 | % | |||||
Government royalty as percentage of crude oil sales | 5 | % | 5 | % | 5 | % | 5 | % | 0 | % | |||||
Income tax & SRB as percentage of crude oil sales | 18.0 | % | - | 11.3 | % | - | 0 | % | |||||||
As percentage of crude oil sales | |||||||||||||||
Expenses - transportation, operating, G&A and other | 19 | % | 24 | % | 14 | % | 28 | % | -14 | % | |||||
Government royalty, SRB and income tax | 23 | % | 5 | % | 17 | % | 5 | % | 12 | % | |||||
Adjusted funds flow from operations, before interest income | 57 | % | 72 | % | 69 | % | 67 | % | 3 | % | |||||
Wells drilled | |||||||||||||||
Gross | 1 | 2 | 7 | 2 | 250 | % | |||||||||
Net | 0.5 | 1 | 3.5 | 1 | 250 | % | |||||||||
Financial Statement PresentationResults – Excl. 50.01% Interest in Thailand Joint Venture (Note 1) | |||||||||||||||
General and administrative expense (Note 9) | (9 | ) | (7 | ) | (41 | ) | (32 | ) | 28 | % | |||||
Adjusted funds flow used in consolidated operations | (9 | ) | (7 | ) | (41 | ) | (32 | ) | 28 | % | |||||
Adjusted fund flow included in Investment in Thailand Joint Venture | |||||||||||||||
Net income from Thailand Joint Venture | 1,186 | 492 | 4,890 | 114 | 4189 | % | |||||||||
Add back non-cash items in net loss | 2,903 | 1,537 | 15,094 | 5,057 | 198 | % | |||||||||
Adjusted funds flow from Thailand Joint Venture | 4,089 | 2,029 | 19,984 | 5,171 | 286 | % | |||||||||
Thailand – Economic adjusted funds flow from operations (Note 4) | 4,080 | 2,022 | 19,943 | 5,139 | 288 | % |
Three Months Ended December 31, | Year Ended December 31, | % Change | |||||||||
(thousands of Canadian dollars except where indicated) | 2019 | 2018 | 2019 | 2018 | |||||||
Canada Operations (Note 6) | |||||||||||
Interest income | 119 | 105 | 397 | 494 | -20 | % | |||||
General and administrative expenses (Note 9) | (397 | ) | (420 | ) | (2,082 | ) | (1,910 | ) | 9 | % | |
Realized foreign exchange gain | 1 | 13 | 1 | 20 | -95 | % | |||||
Unrealized foreign exchange loss (Note 16) | (316 | ) | 1,323 | (1,008 | ) | 2,047 | -149 | % | |||
Canada – Adjusted funds flow from (used in) operations | (593 | ) | 1,021 | (2,692 | ) | 651 | -514 | % | |||
Indonesia Operations | |||||||||||
General and administrative expense (Note 9) | (274 | ) | (63 | ) | (442 | ) | (255 | ) | 73 | % | |
Exploration recovery | - | 30 | - | - | 0 | % | |||||
Realized foreign exchange gain (loss) | (22 | ) | (9 | ) | 50 | (18 | ) | -378 | % | ||
Indonesia – Adjusted funds flow used in operations | (296 | ) | (42 | ) | (392 | ) | (273 | ) | 44 | % |
Year Ended December 31, | % Change | |||||||||||||||||
(thousands of Canadian dollars except where indicated) | 2019 | 2018 | ||||||||||||||||
RESERVES AND CONTINGENT RESOURCES | ||||||||||||||||||
Onshore Thailand – Concession L53 (50.01% economic interest) (Note 1) | (Note 11) | (Note 10) | ||||||||||||||||
Proved oil reserves (thousands of barrels) | 618 | 451 | 37 | % | ||||||||||||||
Proved plus probable oil reserves (thousands of barrels) | 1,834 | 1,366 | 34 | % | ||||||||||||||
Net present value of proved + probable reserves, after tax discounted at 10% | 43,690 | 39,507 | 11 | % | ||||||||||||||
Per Pan Orient share – basic (Note 12) | $ | 0.80 | $ | 0.72 | 11 | % | ||||||||||||
Canada (Pan Orient’s 71.8% share of the oil sands leases of Andora at Sawn Lake, Alberta) | (Note 13) | |||||||||||||||||
INTERNATIONAL INTERESTS AT DECEMBER 31, 2019 | ||||||||||||||||||
All amounts reflect Pan Orient's economic interest | Status | Net Square Kilometers | December 31, 2019Financial Commitments(Cdn thousands) | 2019 Avg. Production (BOPD) | P+P Reserves (thousands of barrels) | |||||||||||||
Onshore Thailand Concession (Recorded in Investment in Joint Venture) | ||||||||||||||||||
L53/48 (Pan Orient 50.01% ownership in Pan Orient Energy (Siam) Ltd. as at December 31, 2019) (Note 1 & 14) | Partially developed | 119 | - | to January 2021 (Note 14) | 1,060 | 1,834 | ||||||||||||
Onshore Indonesia PSC (Consolidated subsidiary) | ||||||||||||||||||
East Jabung PSC, South Sumatra (49% interest & non-operator) (Note 15) | Undeveloped | 610 | - | to January 2020 | ||||||||||||||
729 | - | |||||||||||||||||
(1 | ) | Pan Orient holds a 50.01% equity interest in Pan Orient Energy (Siam) Ltd. as a joint arrangement where the Company shares joint control with the 49.99% equity interest holder. The resulting joint arrangement is classified as a Joint Venture under IFRS 11 and is accounted for using the equity method of accounting where Pan Orient’s 50.01% equity interest in the assets, liabilities, working capital, operations and capital expenditures of Pan Orient Energy (Siam) Ltd. are recorded in Investment in Thailand Joint Venture. |
(2 | ) | As set out in the Consolidated Statements of Cash Flows in the Consolidated Financial Statements of Pan Orient Energy Corp. |
(3 | ) | Refer to Commitments note disclosure of the December 31, 2019 and December 31, 2018 Consolidated Financial Statements. |
(4 | ) | For the purpose of providing more meaningful economic results from operations for Thailand, the amounts presented include 50.01% of results of the Thailand Joint Venture. Pan Orient has a 50.01% ownership interest in Pan Orient Energy (Siam) Ltd., but does not have any direct interest in, or control over, the crude oil reserves, operations or working capital of on-shore Concession L53. |
(5 | ) | Total corporate adjusted funds flow from operations is cash flow from operating activities prior to changes in non-cash working capital, unrealized foreign exchange gain or loss plus the corresponding amount from Pan Orient’s 50.01% interest in the Thailand Joint Venture which is recorded in Joint Venture for financial statement purposes. This measure is used by management to analyze operating performance and leverage. Adjusted 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. Adjusted 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. |
(6 | ) | The Sawn Lake Demonstration Project in Alberta has not yet proven that it is commercially viable and all related costs and revenues are being capitalized as exploration and evaluation assets until commercial viability is achieved. |
(7 | ) | Cost of capital expenditures excluded decommissioning costs, the impact of changes in foreign exchange and capitalized stock-based compensation expense. |
(8 | ) | In 2018, the Sawn Lake joint venture sold some inventory of pipe to outside third party. |
(9 | ) | General & administrative expenses, excluding non-cash accretion on decommissioning provision. The nominal amount of G&A shown in the three months and year ended 2019 and 2018 for Thailand operations related to G&A of the holding company of Pan Orient Energy (Siam) Ltd. |
(10 | ) | Thailand reserves as at December 31, 2018 as evaluated by Sproule International Limited of Calgary assessed at forecast crude oil reference prices and costs. The US$ reference price for crude oil per barrel (US$ UK Brent per barrel) in the evaluation is $70.00 for 2019, $72.00 for 2020, $73.00 for 2021, $74.46 for 2022, $75.95 for 2023, and prices increase at 2.0% per year thereafter. Foreign exchange rate used of Cdn$1=US$0.77 for 2019, Cdn$1=US$0.80 for 2020 and Cdn$1=US$0.80 thereafter. The engineered values disclosed may not represent fair market value. |
(11 | ) | Thailand reserves as at December 31, 2019 as evaluated by Sproule International Limited of Calgary assessed at forecast crude oil reference prices and costs. The US$ reference price for crude oil per barrel (US$ UK Brent per barrel) in the evaluation is $65.00 for 2020, $68.00 for 2021, $70.00 for 2022, $71.40 for 2023, $72.83 for 2024 and prices increase at 2.0% per year thereafter. Foreign exchange rate used of Cdn$1=US$0.76 for 2020, Cdn$1=US$0.77 for 2021 and Cdn$1=US$0.80 thereafter. The engineered values disclosed may not represent fair market value. |
(12 | ) | Per share values calculated based on 54,496,007 and 54,900,407 Pan Orient Shares outstanding at December 31, 2019 and 2018, respectively. |
(13 | ) | The evaluation of Andora’s contingent resources of the oil sands project at Sawn Lake Alberta, Canada as at September 30, 2019 was conducted by Sproule Associates Limited. The evaluation assigned an 85% chance of development for Sawn Lake, or a 15% development risk, and the risked “Best Estimate” contingent resources for Andora were 193.6 million barrels of bitumen recoverable (139.0 million barrels net to Pan Orient’s interest in Andora). Andora’s unrisked “Best Estimate” contingent resources were 227.8 million barrels (163.6 million net to Pan Orient’s interest in Andora) of recoverable bitumen as at September 30, 2019. |
(14 | ) | At December 31, 2019 Concession L53/48 in Thailand consisted of 24.44 square kilometers associated with the L53-A, L53-B, L53-D, L53-G and L53-DD fields held through production licenses (with a 20 year primary term to January 7, 2036 plus an additional 10 year renewal period that can be applied for) and 211.69 square kilometers of “reserved area” exploration lands. The Company has submitted the application for the production license for the L53-AA South field and approval is expected to be received in approximately June of 2020. The “reserved area” exploration lands expire on January 7, 2021.The original nine year exploration period for Concession L53 expired on January 7, 2016. The Government of Thailand approved a 215.87 square kilometer "reserved area" within Concession L53 for up to five years, with the payment of a surface reservation fee of $0.8 million gross ($0.4 million net to Pan Orient), for each year the Company elects to retain the reserved area. The Company is entitled to receive a refund of the surface reservation fee for a particular year in an amount equal to the petroleum exploration expenditures spent in that year within the reserved area up to the reservation fee paid. The Company intends to spend at least the full amount each year the reserved area is renewed and, therefore, it is expected that the annual reservation fee will be fully refunded. |
(15 | ) | Pursuant to a June 1, 2015 farmout agreement, the Company transferred a 51% direct working interest and operatorship of the East Jabung PSC. The farminee committed to funding US$10.2 million towards the first and second exploration wells and a contingent commitment to fund the first US$5.1 million towards an appraisal well, if justified. The drilling of the Ayu-1X and Elok-1X exploration wells in 2017 qualified for the two wells under the firm 3 year exploration work program. The original November 21, 2017 expiry date of the East Jabung PSC was extended by the Government of Indonesia to January 20, 2019. On January 11, 2019 the East Jabung PSC joint venture received approval for a four year exploration extension period with an exploration area of 1,245.56 square kilometers, where the joint venture has the option of exiting or continuing with the PSC on an annual basis. The Anggun-1X well was drilled in the fourth quarter of 2019. In January 2020 the PSC joint venture provided notice to the Government of Indonesia of withdrawal from the East Jabung PSC. |
(16 | ) | Realized and unrealized foreign exchange gain or loss mainly related to the U.S. dollars denominated cash balances held in Canada. |
(17 | ) | The nominal amount of G&A shown in the three months and year ended 2019 and 2018 for Thailand operations related to G&A of the holding company of Pan Orient Energy (Siam) Ltd. |
(18 | ) | Tables may not add due to rounding. |
1 Year Pan Orient Energy Chart |
1 Month Pan Orient Energy Chart |
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