News

Oryx Petroleum Second Quarter 2015 Financial and Operational Results

05 August 2015

Calgary, Alberta, August 5, 2015

Regular production, sales and payment throughout the quarter

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, 2015. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.

Financial Highlights:

• Total revenues of $9.4 million on working interest sales of 221,700 barrels of oil and average realised sales price of $35.37/bbl for the three months ended June 30, 2015
• Oil sales to a regional marketer that commenced in March 2015 have continued on a regular basis 
• Full cash payment received for all sales in the first half of 2015
• Net loss of $5.6 million ($0.05 per share) in Q2 2015 versus $8.7 million ($0.09 per share) in Q2 2014
• Capital expenditure of $25.3 million for Q2 2015 including $22.1 million in the Hawler license area
• $56.7 million of cash and cash equivalents as of June 30, 2015
• $50 million of $100 million credit facility provided by The Addax & Oryx Group P.L.C. (“AOG”) remains undrawn
• $60 million of capital expenditures forecasted for the second half of 2015 including $28 million for completion of the first phase of the Hawler Production Facilities and $25 million for the drilling or re-completion of up to three wells in the Hawler license area
• Initiatives to reduce overhead and operating costs, including significant reductions in staffing levels, continue to be implemented

Operations Highlights:

• Gross (100%) oil production averaged 3,800 bbl/d for the three months ended June 30, 2015 with production achieved on 97% of the days in the period. Gross (100%) oil production averaged 3,900 bbl/d for the month of July. Overall production levels have been constrained by the Corporation’s efforts to manage and assess the performance of the individual wells to determine the maximum efficient rate for each.
• Gross (100%) oil production 2015 exit rate from the Hawler license area is now estimated to be between 8,000 to 10,000 bbl/d reflecting production from existing producing wells and additional wells expected to be drilled or re-completed and online before year end.
• Development progress at the Hawler license area:
  - Six wells at the Demir Dagh field are tied into the Hawler Production Facilities and are capable of production. The process of determining the maximum efficient production rates is ongoing but has been protracted by the limitations of the temporary facilities, which do not allow for discrete measurement of each individual well’s performance
  - The Corporation plans to drill or re-complete up to three wells in the Hawler license area before year end with two expected to be on production before year end. Estimated oil production rates are expected to be lower than previously estimated while costs and drilling times are expected to be lower and shorter, respectively, than previous wells drilled
  - Commissioning of the first phase of the Hawler Production Facilities representing gross (100%) capacity of 40,000 barrels per day is in its final stages and is expected to be completed in the coming weeks
  - Pipeline infrastructure is in place to export oil via the Kurdistan Region of Iraq (KRI) to Turkey export pipeline with final commissioning to occur when oil production volumes and export payment dynamics justify export by pipeline

CEO´s Comment
Commenting today, Oryx Petroleum’s Chief Executive Officer, Michael Ebsary, stated:

“During the second quarter of 2015, we made progress managing operational challenges and achieved regular production and sales, both of which were quarterly records. Importantly, we have received full payment for all sales in the first half of 2015. Liftings under the crude sales agreement we signed in mid-March with a regional marketer are progressing well and we expect this to be our primary sales channel for Hawler crude oil in the near term while we seek to increase production.

Our capital expenditures in the quarter were dedicated primarily to completing our production facilities and related infrastructure at the Demir Dagh field and such facilities are now in the final commissioning phase. These facilities will support our efforts to grow production through both optimising performance of our existing wells and further development drilling.

In order to minimise drawdown pressure and limit water production from the Cretaceous reservoir at the Demir Dagh field, we are adjusting our outlook and approach to its development. We currently expect that future Cretaceous development wells will be completed as high as possible in the Shiranish reservoir and will require less time and cost to drill and complete than our previous design. However, we now expect the oil production rates from wells in the Demir Dagh Cretaceous reservoir to be lower than previously estimated. We will continue to seek ways to best optimize production from the Demir Dagh Cretaceous resource base while seeking to bring other discovered reserves at Demir Dagh and other fields in the Hawler license area on stream.

Looking ahead, we remain positive on the long term inherent value in our asset base and the future of the Kurdistan Region oil and gas industry and will continue to implement measures in the difficult current environment that will ensure the long term success of our business.”