The Company is today filing its unaudited consolidated financial statements as at and for the three months ended
Commenting today on Pan Orient's 2022 first quarter results, President and CEO
HIGHLIGHTS
- Net to Pan Orient's 50.01% equity interest in the Thailand Joint Venture, oil sales from Concession L53 in the first quarter of 2022 were 1,105 BOPD. Oil sales declined 23% from 1,426 BOPD in the fourth quarter of 2021 primarily due to natural declines related to flush production from workovers completed in late 2021 and delays in the commencement of the 2022 multi-well workover program.
- Adjusted
Thailand funds flow from operations of$5.7 million ($57.19 per barrel) in the first quarter of 2022 compared with$5.7 million ($43.56 per barrel) in the fourth quarter of 2021. The average realized oil price per barrel increased 25% in the first quarter of 2022 to$122.67 per barrel compared with$98.02 in the fourth quarter of 2021. Thailand adjusted funds flow from operations funded$1.3 million ofThailand exploration and development activities. Pan Orient's share of working capital and long-term deposits inThailand atMarch 31, 2022 was$7.9 million .
- Pan Orient is withdrawing from operations in
Indonesia and the office inJakarta was closedMarch 31, 2020 . The East Jabung Production Sharing Contract expired inJanuary 2020 and the operator is completing final steps to be taken for formal approval of the expiry from the Government ofIndonesia , including reclamation requirements. - Activities of the Company in
Indonesia are reported in 2020 and 2021 as discontinued operations. Discontinued operations inIndonesia for the first quarter of 2022 were$122 thousand of expenses and$84 thousand in unrealized foreign exchange gains on currency exchange rates since the end of 2021.
- For the first quarter of 2022, Pan Orient reports total operating expenses of
$66 thousand forSawn Lake , primarily associated with maintaining the suspended Steam Assisted Gravity Drainage ("SAGD") facility and wellpair. - In
March 2022 , Andora entered into an agreement with a joint venture partner atSawn Lake whereby Andora acquired certain assets and assumed certain liabilities atSawn Lake . Assets acquired consist of (i) an additional 25% working interest in theSawn Lake joint venture (Sawn Lake Central Block), (ii) security deposits of the vendor forSawn Lake placed with theAlberta Energy Regulator and other parties, and (iii) a payment from the vendor of$578 thousand . In connection with the acquisition, Andora assumed the abandonment and reclamation costs, and natural gas tariff commitments associated with the additional 25% working interest in theSawn Lake joint venture. Following the transaction, Andora has a 75% working interest in theSawn Lake joint venture. - An updated contingent bitumen resources evaluation effective
March 31, 2022 is being prepared for Andora by an independent qualified reserves evaluator to evaluate all of Andora's Oil Sands Leases atSawn Lake based on exploitation using SAGD. - There is continued strength in
Western Canada Select reference prices for heavy oil. AtMay 2, 2022 , the price for Western Canada Select wasCdn$118.42 per barrel and the forward market for Western Canada Select in 2024 wasCdn$81.07 per barrel. Andora is considering alternatives to move theSawn Lake project forward with minimum development costs to Andora, including partnership, farmout, sourcing additional funds, partial sale or outright sale, and achieve value for Andora and Pan Orient shareholders.
Corporate
- Corporate adjusted funds flow from operations (including Pan Orient's 50.01% equity interest in the Thailand Joint Venture) in the first quarter of 2022 were
$4.5 million ($0.09 per share) compared with$4.4 million ($0.09 per share) in the fourth quarter of 2021. - Net income attributable to common shareholders for the first quarter of 2022 was
$3.5 million ($0.07 income per share) compared with net income attributable to common shareholders for the fourth quarter of 2021 of$3.0 million ($0.06 per share). - At the Annual and Special Meeting of Shareholders on
January 18, 2022 , shareholders approved the previously announced capital reorganization resulting in a$0.40 per common share return of capital distribution to shareholders onFebruary 10, 2022 . The total amount of the distribution was$19.9 million . - Common shares outstanding were 49.8 million at
March 31, 2022 . Pan Orient has not repurchased any common shares in 2022 under its normal course issuer bid. - Pan Orient continues to maintain a strong financial position with working capital and non-current deposits of
$11.5 million and no long-term debt atMarch 31, 2022 . In addition, the Thailand Joint Venture has$7.9 million in working capital and long-term deposits, net to Pan Orient's 50.01% equity interest, andThailand funds flow from operations are expected to expand the Company's cash balance through the remainder of 2022.
OUTLOOK
CORPORATE
Pan Orient is currently engaged in the advanced stages of a due diligence process related to the sale of the Company's
Pan Orient is a
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate", "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references express or implied to Pan Orient's intention and efforts to sell its
Neither
Financial and Operating Summary | Three Months Ended | % Change | ||
(thousands of Canadian dollars except where indicated) | 2022 | 2021 | ||
FINANCIAL | ||||
Financial Statement Results – Excluding 50.01% Interest in | ||||
Net income attributed to common shareholders | 3,514 | 1,140 | 208% | |
Per share – basic and diluted | 208% | |||
Cash flow used in operating activities (Note 2 & 3) | (967) | (991) | -2% | |
Per share – basic and diluted | -2% | |||
Cash flow from investing activities (Note 2 & 3) | 283 | 2,610 | -89% | |
Per share – basic and diluted | $ 0.01 | $ 0.05 | -89% | |
Cash flow used in financing activities (Note 2 & 3) | (19,918) | (1,240) | 1506% | |
Per share – basic and diluted | 1506% | |||
Change in cash and cash equivalents used in discontinued operations (Note 3) | (151) | (33) | 358% | |
Working capital | 10,675 | 22,805 | -53% | |
Working capital & non-current deposits | 11,513 | 23,415 | -51% | |
Long-term debt | - | - | ||
Shares outstanding (thousands) | 49,794 | 50,303 | -1% | |
Capital Commitments (Note 4) | 1,590 | 801 | 99% | |
Working Capital and Non-current Deposits | ||||
Beginning of period – Excluding Thailand Joint Venture | 32,084 | 23,577 | 36% | |
Adjusted funds flow used in continuing operations (Note 3 & 6) | (1,162) | (924) | 26% | |
Adjusted funds flow used in discontinued operations (Note 3) | (38) | (20) | 90% | |
Cash and deposits acquired (Note 13) | 752 | - | ||
Special distribution (Note 14) | (19,917) | - | ||
Amounts received from (advanced to) Thailand Joint Venture | (204) | 10 | ||
Dividend received from Thailand Joint Venture | - | 2,600 | -100% | |
Finance lease payments | (1) | (2) | -50% | |
Normal course issuer bid | - | (1,238) | -100% | |
Automatic shares purchase plan (Note 8) | - | (629) | -100% | |
Effect of foreign exchange | (1) | 41 | -102% | |
End of period – Excluding Thailand Joint Venture | 11,513 | 23,415 | -51% | |
Pan Orient 50.01% interest in | 7,925 | 4,438 | 79% | |
Economic Results – Including 50.01% Interest in | ||||
Total corporate adjusted funds flow from (used in) operations by region (Note 6) | ||||
(1,154) | (916) | 26% | ||
(8) | (8) | 0% | ||
From continuing operations | (1,162) | (924) | 26% | |
(38) | (20) | 90% | ||
Adjusted funds flow used in operations (excl. Thailand Joint Venture) | (1,200) | (944) | 27% | |
Share of Thailand Joint Venture (Notes 1 & 5) | 5,694 | 4,326 | 32% | |
Total corporate adjusted funds flow from operations | 4,494 | 3,382 | 33% | |
Per share – basic and diluted | 35% | |||
Capital Expenditures - | ||||
Share of Thailand Joint Venture capital expenditures | 1,336 | 1,829 | -27% | |
Total capital expenditures (incl. Thailand Joint Venture and discontinued operations) | 1,336 | 1,829 | -27% | |
Investment in | ||||
Beginning of period | 24,094 | 28,329 | -15% | |
Net income from Joint Venture | 4,350 | 1,902 | 129% | |
Other comprehensive loss from Joint Venture | (484)
| (1,369)
| -65% | |
Dividend paid | - | (2,600) | -100% | |
Amounts (received from) advanced to Joint Venture | 204 | (10) | ||
End of period | 28,164 | 26,252 | 7% |
Three Months Ended | % | |||
(thousands of Canadian dollars except where indicated) | 2022 | 2021 | Change | |
Thailand Operations | ||||
Economic Results – Including 50.01% Interest in | ||||
Oil sales (bbls) | 99,424 | 121,733 | -18% | |
Average daily oil sales (BOPD) by Concession L53 | 1,105 | 1,353 | -18% | |
Average oil sales price, before transportation (CDN$/bbl) | 66% | |||
Reference Price (volume weighted) and differential | ||||
Crude oil (Brent $US/bbl) | 65% | |||
Exchange Rate $US/$Cdn | 1.28 | 1.28 | -0% | |
Crude oil (Brent $Cdn/bbl) | 64% | |||
Sale price / Brent reference price | 96% | 95% | 1% | |
Adjusted funds flow from (used in) operations (Note 6) | ||||
Crude oil sales | 12,196 | 8,986 | 36% | |
Government royalty | (618) | (479) | 29% | |
Transportation expense | (244) | (292) | -16% | |
Operating expense | (636) | (756) | -16% | |
Field netback | 10,698 | 7,459 | 43% | |
General and administrative expense (Note 9) | (207) | (247) | -16% | |
Foreign exchange gain | 1 | 14 | -93% | |
Current income tax | (4,806) | (2,909) | 65% | |
5,686 | 4,317 | 32% | ||
Adjusted funds flow from (used in) operations / barrel (CDN$/bbl) (Note 6) | ||||
Crude oil sales | 66% | |||
Government royalty | (6.22) | (3.93) | 58% | |
Transportation expense | (2.45) | (2.40) | 2% | |
Operating expense | (6.40) | (6.21) | 3% | |
Field netback | 107.60 | 61.27 | 76% | |
General and administrative expense (Note 9) | (2.08) | (2.03) | 3% | |
Foreign exchange gain | 0.01 | 0.12 | -91% | |
Current income tax | (48.34) | (23.90) | 102% | |
61% | ||||
Government royalty as percentage of crude oil sales | 5.1% | 5.3% | 0% | |
Income tax & SRB as percentage of crude oil sales | 39% | 32% | 7% | |
As percentage of crude oil sales | ||||
Expenses - transportation, operating, G&A and other | 9% | 14% | -5% | |
Government royalty, SRB and income tax | 44% | 38% | 7% | |
Adjusted funds flow from operations, before interest income | 47% | 48% | -1% | |
Wells drilled | ||||
Gross | - | 2 | -100% | |
Net | - | 1.0 | -100% | |
Financial Statement Presentation Results – Excl. 50.01% Interest in | ||||
General and administrative expense (Note 9) | (8) | (9) | -11% | |
Adjusted funds flow used in consolidated operations | (8) | (9) | -11% | |
Adjusted fund flow Included in Investment in | ||||
Net income from Thailand Joint Venture | 4,350 | 1,902 | 129% | |
Add back non-cash items in net income | 1,344 | 2,424 | -45% | |
Adjusted funds flow from Thailand Joint Venture | 5,694 | 4,326 | 32% | |
5,686 | 4,317 | 32% |
Canada Operations | ||||
Interest income | 4 | 6 | -33% | |
General and administrative expenses (Note 9) | (578) | (520) | 11% | |
Operating expense (Note 10) | (66) | (42) | 57% | |
Stock based compensation on restricted share units (Note 11) | (267) | (99) | 170% | |
Realized foreign exchange loss (Note 12) | (22) | (1) | 2100% | |
Unrealized foreign exchange gain (loss) (Note 12) | (225) | (260) | -13% | |
(1,154) | (916) | 26% | ||
Add | (8) | (9) | -11% | |
Add back changes in non-cash working capital, continuing operations | (30) | (327) | -91% | |
Add back unrealized foreign exchange loss | 225 | 261 | -14% | |
Cash flow used in operating activities, continuing operations | (967) | (991) | -2% | |
| ||||
General and administrative expense (Note 9) | (40) | (51) | -22% | |
Other expense | (82) | (1) | ||
Unrealized foreign exchange gain (loss) | 84 | 32 | 163% | |
(38) | (20) | 90% | ||
Add back changes in non-cash working capital, discontinued operations | (91) | (13) | 600% | |
Settlement of decommissioning provision | (22) | - | ||
Cash flow used in operating activities, discontinued operations | (151) | (33) | 358% |
(1) | Pan Orient holds a 50.01% equity interest in |
(2) | As set out in the Consolidated Statements of Cash Flows in the Consolidated Financial Statements of Pan Orient Energy Corp. |
(3) | The East Jabung Production Sharing Contract ("PSC") expired in |
(4) | Refer to Commitments note disclosure of the |
(5) | For the purpose of providing more meaningful economic results from operations for |
(6) | Total corporate adjusted funds flow from operations is cash flow from operating activities prior to changes in non-cash working capital, unrealized foreign exchange gain or loss plus the corresponding amount from Pan Orient's 50.01% interest in the Thailand Joint Venture which is recorded in Joint Venture for financial statement purposes. This measure is used by management to analyze operating performance and leverage. Adjusted funds flow as presented does not have any standardized meaning prescribed by IFRS and therefore it may not be comparable with the calculation of similar measures of other entities. Adjusted funds flow is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. |
(7) (8) | Cost of capital expenditures excluded decommissioning costs and the impact of changes in foreign exchange. In |
(9) | General & administrative expenses, excluding non-cash accretion expense. |
(10) | Operating expense related to Andora's suspended demonstration project facility and wellpair at Sawn Lake Central. |
(11) | The Company granted 1,050,000 and 520,000 restricted share units ("RSUs") to directors, senior management, employees and consultant on |
(12) | Realized and unrealized foreign exchange gain or loss mainly related to the |
(13) | In |
(14) | In |
(15) | Tables may not add due to rounding. |
SOURCE
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