Oryx Petroleum Q1 2019 Financial and Operational Results
07 May 2019
Calgary, Alberta, May 7, 2019
Oryx Petroleum Q1 2019 Financial and Operational Results
185% increase in oil Production and 144% increase in Revenues versus Q1 2018; Average daily gross (100%) oil production of 11,000 bbl/d in April 2019
Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Corporation”) today announces its financial and operational results for the three months ended March 31, 2019. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.
Financial Highlights:
- Total revenues of $34.0 million on working interest sales of 633,300 barrels of oil (“bbl”) and an average realised sales price of $48.35/bbl for Q1 2019
- 144% increase in revenues versus Q1 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 January 2019 - Operating expenses of $7.3 million ($11.48/bbl) and an Oryx Petroleum Netback1 of $11.1 million ($17.49/bbl) for Q1 2019
- 18% decrease in operating expenses per barrel versus Q1 2018 - Profit of $1.5 million ($0.00 per common share) in Q1 2019 versus loss of $4.3 million in Q1 2018 ($0.01 per common share)
- Improvement primarily attributable to higher Oryx Petroleum Netback - Net cash generated by operating activities in Q1 2019 was $8.6 million versus net cash used in operating activities of $2.6 million in Q1 2018 comprised of Operating Funds Flow2 of $9.2 million partially offset by a $0.5 million increase in non-cash working capital
- Net cash used in investing activities during Q1 2019 was $9.0 million including payments related to drilling and facilities work in the Hawler license area, preparation for drilling in the AGC Central license area, and an increase in non-cash working capital
- $14.1 million of cash and cash equivalents as of March 31, 2019
[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.
Operations Update:
- Average gross (100%) oil production of 10,800 bbl/d (working interest 7,000 bbl/d) for Q1 2019 versus 3,800 bbl/d (working interest 2,500 bbl/d) for Q1 2018
- 185% increase in gross (100%) oil production in Q1 2019 versus Q1 2018; 1% increase in gross (100%) oil production in Q1 2019 versus Q4 2018 - - Production in February was curtailed due to a four day shut-down of the Kurdistan Region Export Pipeline for scheduled maintenance
- - Average gross (100%) oil production of 11,000 bbl/d in April 2019
- The Banan-6 appraisal well targeting the Cretaceous reservoir was spudded in March 2019. The well has recently been drilled to a measured depth of 1,840 metres and is expected to be completed as a producing well in the coming weeks
- Final prospect ranking has been completed in the AGC Central license area. Initial planning and preparations for an exploration drilling campaign are underway. A third party service provider needed to conduct an environmental and social impact assessment planned for 2019 has recently been selected and preparation of the assessment has commenced
2019 Re-forecasted Work Program and Capital Expenditures:
- 2019 capital expenditures have been re-forecast to $42 million (versus $41 million previous forecast). Forecast activities consist of:
- $34 million dedicated to the Hawler license area: eight wells including two short radius sidetrack wells targeting the Demir Dagh Cretaceous reservoir, one short radius sidetrack well targeting the Zey Gawra Tertiary reservoir, two wells 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 - - $8 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 March 31, 2019, cash receipts from net revenues and export sales, and cash proceeds available under an interim 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 contingent consideration 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:
“The first quarter of 2019 was a good quarter for Oryx Petroleum, during which we once again increased production from the Hawler license by increasing production rates from wells brought online in late 2018. Average daily oil production was just over 11,000 bbl/d in April. We also began our 2019 drilling program in the Hawler Area with the drilling of the Banan-6 well targeting the Cretaceous reservoir. The well has recently been drilled to a measured depth of 1,840 metres and we expect to run production equipment into the well in the next few days.
We finalised the ranking of our prospect inventory in the AGC Central license area and have begun planning and preparation for an exploration drilling campaign. The next major step in that process is the completion of an environmental and social impact assessment and we have recently selected a third party service provider to conduct the assessment. Exploration drilling is expected to follow the completion and formal approval of the assessment.
We have revised our 2019 capital expenditure program somewhat so that it now includes the drilling or re-entry of eight wells in the Hawler Area, including the Banan-6 well that is nearly complete. The program has been designed to allow us to significantly increase production and to refine our understanding of the remaining development potential of the four fields in the license. We expect to spud the second 2019 well, a horizontal side track of the Demir Dagh-5 well in the Cretaceous reservoir soon after we complete Banan-6 in the coming weeks.
During Q1 2019 we generated operating funds flow which exceeded cash used in investing activities. We expect that cash on hand, cash receipts from net revenues and proceeds from an undrawn interim 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 contingent consideration obligations expected to become payable in 2019 and exploration drilling in the AGC Central license area in 2020.
We look forward to continuing to implement our plans in 2019 and to achieve higher production in the Hawler license area while continuing preparations for an exploration drilling program in the AGC Central license area.”