Oryx Petroleum 2018 Financial and Operational Results
13 March 2019
Calgary, Alberta, March 13, 2019
97% increase in Production and 160% increase in Revenues; 2019 capital program underway
Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Corporation”) today announces its financial and operational results for the year ended December 31, 2018. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.
2018 Financial Highlights:
- Total revenues of $97.6 million on working interest sales of 1,542,300 barrels of oil (“bbl”) and an average realised sales price of $57.00/bbl for 2018
- 160% annual increase in revenues versus 2017
- Q4 2018 revenues increased 24% versus Q3 2018
- The Corporation has received full payment in accordance with production sharing contract entitlements for all oil sale deliveries into the Kurdistan Region Export Pipeline through November 2018 - Operating expenses of $19.2 million ($12.48/bbl) and an Oryx Petroleum Netback[1] of $21.68/bbl
- 37% decrease in operating expenses per barrel versus 2017 - Profit of $43.8 million ($0.09 per common share) in 2018 versus loss of $39.1 million in 2017 ($0.11 per common share)
- Improvement primarily attributable to higher netback and impairment reversal - Net cash generated by operating activities was $8.1 million versus net cash used in operating activities of $9.7 million in 2017 comprised of Operating Funds Flow[2] of $23.2 million partially offset by a $15.1 million increase in non-cash working capital
- Net cash used in investing activities during 2018 was $32.8 million including payments related to drilling and facilities work in the Hawler license area, seismic processing and interpretation costs in the AGC Central license area, and partially offset by a decrease in non-cash working capital
- $14.4 million of cash and cash equivalents as of December 31, 2018
[1] Oryx Petroleum Netback is a non-IFRS measure. See the table below for a definition of and other information related to the term.
[2] Operating Funds Flow is a non-IFRS measure. See the table below for a definition of and other information related to the term.
2018 Operations Highlights:
- Average gross (100%) oil production of 6,500 bbl/d (working interest 4,200 bbl/d) for the year ended December 31, 2018 vs 3,300 bbl/d (working interest 2,100 bbl/d) for the year ended December 31, 2017
- 97% increase in gross (100%) oil production in 2018 versus 2017; 46% increase in gross (100%) oil production in Q4 2018 versus Q3 2018
- Successful completion of six producing wells during the year
- Commencement of production from the Tertiary and Cretaceous reservoirs at the Banan field - Gross (working interest) proved plus probable oil reserves of 127 million barrels as at December 31, 2018
- 4% increase versus 2017 - Processing and interpretation of 3D seismic data covering the AGC Central license area completed with prospects remapped and ranked
- Best estimate unrisked gross (working interest) prospective oil resources of 2.2 billion barrels as at December 31, 2018
2019 Operations Update:
- Average gross (100%) oil production of 11,400 bbl/d (working interest 7,400 bbl/d) and 9,800 bbl/d (working interest 6,300 bbl/d) in January and February 2019, respectively. Production in February was curtailed for a number of days due to a temporary shut-down of the Kurdistan Region Export Pipeline.
- The Banan-6 appraisal well targeting the Cretaceous reservoir is expected to be spudded in the coming days. The well is expected to be drilled to a measured depth of 1,840 metres and completed as a producing well.
- Final prospect ranking has been completed in the AGC Central license area with an environmental impact assessment planned for 2019 with preparation for drilling in 2020 to follow
2019 Forecasted Work Program and Capital Expenditures:
- 2019 capital expenditure forecast of $41 million (versus $52 million budget). Forecast activities consist of:
- $30 million dedicated to the Hawler license area: seven wells including two short radius sidetrack wells targeting the Demir Dagh Cretaceous reservoir, one short radius sidetrack well targeting the Zey Gawra Tertiary reservoir, one well targeting the Banan Cretaceous reservoir, two wells targeting the Banan Tertiary reservoir, and a test of the previously suspended Ain Al Safra-2 well; flowlines and required facilities modifications needed to accommodate incremental production
- $11 million dedicated to the AGC Central license area including preparations for exploration drilling in 2020.
Liquidity Outlook:
- The Corporation expects cash on hand as of December 31, 2018, cash receipts from net revenues and export sales, and cash proceeds available under a credit facility provided by shareholders in late 2018 will allow it to fund its forecasted capital expenditures and operating and administrative costs through the end of 2019. Additional capital is likely required to be able to both meet obligations expected to become payable in 2019 and to fund drilling in the AGC Central license area planned in 2020.
CEO’s Comment
Commenting today, Oryx Petroleum’s Chief Executive Officer, Vance Querio, stated:
“2018 was a good year for Oryx Petroleum. During the year we substantially increased production from the Hawler license area thanks to the successful completion of six new producing wells, increasing production from the Zey Gawra Cretaceous reservoir and commencing production from both the Cretaceous and Tertiary reservoirs in the Banan field.
We continued to refine our prospect inventory in the AGC Central license area with the remapping of 23 prospects in six structures. We have also identified and ranked a series of wells that will allow us to start exploring the license that has best estimate unrisked gross (working interest) prospective oil resources of 2.2 billion barrels.
Our 2019 capital program is once again focused on our two core license areas: the Hawler license area in the Kurdistan Region of Iraq and the AGC Central license area offshore Senegal and Guinea Bissau. In the Hawler license area our program includes the drilling or re-entry of seven wells and has been designed to allow us to significantly increase production and to better define the remaining development potential of the four fields in the license. We expect to spud the first of seven planned wells in the coming days. In the AGC Central license area, our forecasted capital expenditures include costs related to an environmental impact assessment and preparations for exploration drilling in 2020.
The combination of higher production, higher oil prices and regular payments for oil sales in 2018 resulted in higher funds flow which together with cash on hand allowed us to fund our business in 2018 without seeking additional capital. We expect that cash on hand, cash receipts from net revenues, and proceeds from an undrawn credit facility provided by shareholders will fund forecasted capital expenditures and operating and administrative costs in 2019, although additional capital will likely be required to fund exploration drilling in the AGC Central license area in 2020.
We look forward to implementing our plans in 2019 and to higher production in the Hawler license area while preparing for an exciting exploration drilling program in the AGC Central license area.”