Oryx Petroleum Q2 2019 Financial and Operational Results
30 July 2019
Calgary, Alberta, July 30, 2019
156% increase in oil production and 123% increase in revenues versus Q2 2018; Average daily gross (100%) oil production of 11,900 bbl/d in June 2019
Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Corporation”) today announces its financial and operational results for the three and six months ended June 30, 2019. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.
Financial Highlights:
- Total revenues of $39.9 million on working interest sales of 671,300 barrels of oil (“bbl”) and an average realised sales price of $53.47/bbl for Q2 2019
- 123% increase in revenues versus Q2 2018 and 17% increase in revenues versus Q1 2019
- 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 April 2019 - Operating expenses of $6.9 million ($10.33/bbl) and an Oryx Petroleum Netback(1) of $14.6 million ($21.71/bbl) for Q2 2019
- 26% decrease in operating expenses per barrel versus Q2 2018
- Record quarterly Oryx Petroleum Netback(1) - Profit of $2.3 million ($0.00 per common share) in Q2 2019 versus loss of $3.5 million in Q2 2018 ($0.01 per common share)
- Improvement primarily attributable to higher Oryx Petroleum Netback - Net cash generated by operating activities in Q2 2019 was $11.4 million versus net cash used in operating activities of $1.6 million in Q2 2018 and is comprised of Operating Funds Flow(2) of $11.9 million partially offset by a $0.5 million increase in non-cash working capital
- Net cash used in investing activities during Q2 2019 was $8.6 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
- $16.8 million of cash and cash equivalents as of June 30, 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 11,300 bbl/d (working interest 7,400 bbl/d) for Q2 2019 versus 4,400 bbl/d (working interest 2,900 bbl/d) for Q2 2018
- 156% increase in gross (100%) oil production in Q2 2019 versus Q2 2018; 6% increase in gross (100%) oil production in Q2 2019 versus Q1 2019
- Average gross (100%) oil production of 11,900 bbl/d in June 2019
- Commencement of oil production from the Banan-6 well and modest increases from other existing wells at Demir Dagh and Banan fields partially offset by declines at the Zey Gawra field - The Banan-6 appraisal well targeting the Cretaceous reservoir was spudded in March 2019, was drilled to a measured depth of 1,840 metres and was completed as a producing well in late May
- Drilling of a horizontal sidetrack of the Demir Dagh-5 well targeting the Cretaceous reservoir has been completed. Acid stimulation is planned in the coming weeks in order to facilitate oil production
- The Banan-7 well targeting the Cretaceous reservoir will be spudded in the coming weeks
- Initial planning and preparations for an exploration drilling campaign in the AGC Central license area are ongoing. An environmental and social impact assessment is progressing.
2H 2019 Forecasted Work Program and Capital Expenditures:
- 2019 capital expenditures have been re-forecast to $43 million (versus $42 million previous forecast). Capital expenditures for the second half of 2019 are forecasted to be $30 million. Forecast activities in the second half of 2019 consist of:
- $24 million dedicated to the Hawler license area: seven wells including two short radius sidetracks of previously drilled wells targeting the Demir Dagh Cretaceous reservoir (including the Demir Dagh-5 well), 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
- $6 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 June 30, 2019 and cash receipts from net revenues and export sales will allow it to fund its forecasted capital expenditures and operating and administrative costs through the end of 2019. Additional capital is expected to be required to be able to both meet contingent consideration obligations projected to become payable in 2019 and 2020 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 second quarter of 2019 was an active and productive quarter for Oryx Petroleum. We were able to achieve record average daily production for the quarter due primarily to the successful completion of the Banan-6 well as a producer in May. We also completed drilling of a horizontal sidetrack of the Demir Dagh-5 well and expect to bring the well onto production in the coming weeks. We are moving ahead with the next wells in our 2019 drilling program starting with the Banan-7 well targeting the Cretaceous reservoir..
Our capital expenditure program for the second half of 2019 in the Hawler license area includes the drilling or re-entry of seven wells. The program has been designed to allow us to significantly increase production and to refine our understanding of the development potential of the four fields in the Hawler license.
In the AGC Central license area we continue planning and preparation for an exploration drilling campaign. An environmental and social impact assessment is underway with exploration drilling expected to follow the completion and formal approval of the assessment.
During Q2 2019 we generated operating funds flow which exceeded cash used in investing activities. We expect that cash on hand and cash receipts from net revenues and export sales will fund forecasted capital expenditures and operating and administrative costs in 2019, although additional capital may be required to fund contingent consideration obligations, should they become payable, and exploration drilling in the AGC Central license area planned 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.”