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Panoro Energy announces Q4 2022 trading and financial update

22 Feb 2023

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Panoro Energy has announced record full-year financial performance in 2022 with revenue up 58 percent year-on-year at USD 188.6 million and EBITDA up 78 percent year-on-year to USD 126.6 million. The Company has maintained a conservative leverage profile with net debt of USD 46.8 million at year end representing a net debt to EBITDA ratio of just 0.37x.

In line with its previously communicated 2023 Shareholder Returns Policy the Company has today declared an inaugural quarterly cash dividend of NOK 0.2639 per share to be paid on or around 16 March 2023 (equivalent to a cash payment to shareholders of approximately USD 3 million).  

Production drilling on the first of six Hibiscus Ruche Phase I development wells offshore Gabon commenced in January and is progressing according to plan. Panoro’s working interest production is expected to build to a peak of 12,500 bopd around year end once all six new wells are onstream. The next three well infill drilling campaign at Block G offshore Equatorial Guinea is scheduled to commence in Q4.

John Hamilton, CEO of Panoro, commented:

'Following a record year in 2022, in which Panoro consolidated its position as a significant independent oil producer in Africa, we have now entered an intensive phase of organic growth with continual drilling activity which will see at least 10 wells being drilled in Gabon and Equatorial Guinea over the next 12 to 15 months. This drilling programme will transform Panoro’s working interest oil production. We are also pleased to commence dividend payments with Panoro’s inaugural cash dividend declared today and to be paid in March 2023.  We remain fully committed to convert the strong fundamentals and cash generative potential of Panoro’s high-quality asset base into sustainable shareholder returns whilst maintaining our growth strategy and disciplined capital management.'

Corporate and Financial Update

  • Working interest production for the full year averaged 7,500 bopd (2021: 7,582 bopd). Working interest production in Q4 2022 averaged 7,000 bopd and reflects facilities maintenance and preparations for tie-in activities undertaken during the period
  • Reported revenue for the full year stood at USD 188.6 million (2021: USD 119.7 million) generated from crude sales of 1.8 million barrels sold at an average realised price of USD 99 per barrel after customary price adjustments and fees
  • Reported EBITDA for the full year stood at USD 126.6 million (2021: USD 70.8 million)
  • Underlying operating profit before tax (after adjusting for certain non-cash and unrealised gain/loss) for the full year stood at USD 61.9 million (2021: USD 30.8 million)
  • Reported net profit for the year stood at USD 23.7 million
  • Cash flow from operations for the full year stood at USD 98.4 million (2021: USD 70.4 million) against capital expenditures (excluding non-recurring project costs) of USD 54.4 million (USD 65 million including non-recurring project costs which formed the basis of 2022 capex guidance)
  • At 31 December 2022 cash at bank stood at USD 32.7 million and gross debt USD 79.5 million resulting in a net debt position of USD 46.8 million (representing a conservative net debt to EBITDA ratio of 0.37x) 
  • Inaugural quarterly cash dividend declared of NOK 0.2639 per share (equivalent to a cash payment to shareholders of approximately USD 3 million)
  • In line with its announcement made in November 2022 Panoro intends to pay out a USD 20 million core dividend in 2023 on a quarterly basis in cash weighted towards H2 and subject to average oil price realisation remaining above USD 80 per barrel after the effects of any hedging in place and no material change in operations

2023 Guidance and Outlook

  • Full year working interest production expected to average 9,000 bopd to 11,000 bopd in 2023, with the range being dependent on timing of the start-up of each of the new production wells at Dussafu Marin
  • Q1 2023 working interest production is expected to be 7,000 bopd to 7,500 bopd taking into account a planned shutdown during February at Dussafu Marin for final hook up and commissioning work.  Thereafter production is expected to increase progressively as the six new production wells at the Hibiscus Ruche Phase I development are drilled and brought onstream
  • Expenditure on capital and other non-recurring projects in 2023 is expected to be approximately USD 75 million and includes approximately USD 5 million associated with long lead items and planning for 2024 drilling activities. The majority of planned 2023 expenditure is associated with the production drilling campaign at the Hibiscus Ruche Phase I development offshore Gabon and infill drilling campaign at Block G offshore Equatorial Guinea
  • Minimum debt principal repayments in 2023 are USD 20 million
  • Panoro expects its crude liftings in Q1 to be approximately 750,000 barrels in Equatorial Guinea and Tunisia
  • Total crude liftings in 2023 are expected to be approximately 2.9 million barrels, a materially greater volume than the 1.8 million barrels lifted in 2022

Operations Update and Planned Activities in 2023

  • Equatorial Guinea – Block G (Panoro 14.25%)
    • Company working interest production in the fourth quarter averaged 3,954 bopd (27,746 bopd on a gross basis) and for the full year averaged 4,402 bopd (30,895 bopd gross)
    • Rig contracted for a three well infill drilling campaign which is expected to commence in Q4 2023
    • Workovers including an electrical submersible pump (“ESP”) conversion and behind pipe perforations
    • Ongoing field life extension and asset integrity projects including flowline replacements
    • Gas compression project at Okume
    • Planning for future gas injection project to reduce routine flaring
  • Gabon – Dussafu Marin Permit (Panoro 17.5%)
    • Company working interest production in the fourth quarter averaged 1,680 bopd (9,602 bopd on a gross basis) and for the full year averaged 1,852 bopd (10,582 bopd gross)
    • Production drilling at the first of six Hibiscus Ruche Phase I development wells commenced in early January and is scheduled to come onstream around the end of Q1 in line with previously communicated guidance
    • Installation of flexible pipelines and risers between the BW MaBoMo production facility and the FPSO BW Adolo has been completed with final hook up and commissioning work being undertaken in Q1
    • New gas lift compressor unit to support production from the six existing wells on the producing Tortue field is being installed onboard the FPSO BW Adolo with commissioning and startup of the compressor expected around the time of first oil from Hibiscus Ruche Phase I 
  • Tunisia – TPS Assets (Panoro 29.4%)
    • Company working interest production in the fourth quarter averaged 1,365 bopd (4,644 bopd on a gross basis) and for the full year averaged 1,244 bopd (4,232 bopd gross)
    • Recompletion of the GUE-10AST well on the high potential Douleb reservoir
    • Cercina workover campaign comprising ESP replacement and stimulation of three wells: CER-1; CER-6A; and CER-7
    • Detailed planning for development drilling campaign on the Rhemoura and Guebiba fields with operations expected to start at year end
  • Exploration
    • Panoro does not have any exploration wells planned during 2023
    • Panoro has been awarded a 56 percent operated interest in Block EG-01 offshore Equatorial Guinea. The award for an initial period of three years during which the partners will conduct subsurface studies based on existing seismic data to further define and evaluate the prospectivity of the block. Following this, the partners will have the option to enter into a further two-year period, during which they will undertake to drill one exploration well
    • Having reached agreement to farm into a 12 percent interest in Block S offshore Equatorial Guinea (subject to customary approvals) the partners are planning to drill the Kosmos Energy operated Akeng Deep exploration well in 2024 to test a play in the Albian, targeting an estimated gross mean resource of approximately 180 million barrels of oil equivalent in close proximity to existing infrastructure at Block G
    • Further exploration wells at Dussafu in Gabon are also being considered, using the optional wells slots under current contract
    • Complete study to evaluate the helium and natural gas prospectivity of Technical Co-operation Permit 218 onshore northern Free State, South Africa

Original announcement link

Source: Panoro Energy

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