Page 16 - AfrOil Week 18 2020

AfrOil
NEWS IN BRIEF
AfrOil
In Gabon, a li ing was completed in March for the account of the Panoro, BWE and Tullow, fol- lowed by a li ing in April on behalf of the State of Gabon.
The March lifting was for approximately 44,000 barrels net sold volumes to Panoro at a realised price of $33 per barrel.
In Q2-2020, the Company expects to see a further li ing in June with approximately 53,000 barrels net sold volumes to Panoro.
In Q1-2020, domestic sales in Tunisia of 27,000 barrels were achieved at an average real- ised price of $54 per barrel.
An international li ing was made in April for 90,000 barrels and achieved a realised price of approximately $19 per barrel, re ecting the severe dislocation in pricing a ecting the indus- try (Dated Brent averaged approximately $18 per barrel in April). Revenue from this li ing will be recognised in Q2-2020 along with some further domestic sales in Tunisia.
Production in Gabon for 2020 is now expected to average 15,000-16,500 bpd (gross), with the 10% reduction in range due to the uncertain timing of hooking up the successfully completed DTM-6 well. e well was expected to be connected in June but, given the COVID- 19 restrictions, the timing of this activity is estimated to occur later this year. Current pro- duction is approximately 17,500 bpd (gross), with operating costs decreased from 2019 levels to $16-18 per barrel.
Production in Tunisia is steady at approxi- mately 4,000 bpd (gross), and the Company is on track to bring on the anticipated additional production as soon as the COVID-19 opera- tional restrictions lessen. Operating costs remain under $15 per barrel.
Panoro’s 2020 li ings are heavily weighted to H2-2020. Based on current assumptions, we expect the rst Q3-2020 li ings to be in August, one in Tunisia and one in Gabon. Overall, the 2020 annual li ing guidance is for 9-10 interna- tional li ings (supplemented by smaller domes- tic sales in Tunisia), with 60% of sales in the second half of the year..
Given the unprecedented uncertainties being experienced, the li ing guidance will be updated during the course of the year and actual li ing volumes and months may vary from those indicated.
Panoro’s oil o ake and marketing contracts are with first class counterparties. In Gabon, Panoro benefits from an offtake contract for 2020 with BP International, while in Tunisia, Mercuria, one of the world’s largest independ- ent trading companies, manages the marketing of Tunisian crude oil. Mercuria is also provid- ing risk management solutions to Panoro, as the counterparty of the Company’s crude oil hedges.
Panoro has hedged 20,286 barrels per month (equivalent to approximately 667 bpd) for the
entire calendar years of 2020 and 2021. ese are predominantly costless collars with a oor of $55 per barrel and a cap of around $61 per bar- rel. e hedges are settled on a monthly basis on the average of Dated Brent during the calendar month.
As additional Brent price protection, Panoro has additional hedges in place of 24,000 barrels for each of March and July 2020 to coincide with planned li ings. ese were done as costless col- lars and swaps with a oor at approximately $62 per barrel.
For the rst quarter, hedge income of approx- imately $1.2mn was recognised, resulting in an average realised price per barrel sold (includ- ing hedging) of $57 per barrel. (Note: hedging income is recognised in the P&L a er EBIT and not reported as part of revenue and EBITDA.)
As at March 31, the mark-to market value of the Company’s remaining hedge positions is $9mn net to Panoro.
As 31 March 31, Panoro held $24mn in cash (including the $10mn held against the bank guarantee for Sfax Offshore). Debt as at end March was $23mn, with $2.1mn having been repaid in Q1-2020.
Remaining capital expenditure to be spent this year in Gabon is approximately $5mn. As announced, in Tunisia any material capi- tal expenditure is paused pending return to a normal environment for conducting drilling operations. Material cost cutting initiatives at the operating and corporate level have been achieved with further reduction underway.
Panoro’s break even costs (operating costs plus all taxes) at the asset level are on average
below $25 per barrel, and with modest corpo- rate costs, Panoro is well positioned to withstand these adverse market conditions.
Panoro Energy, May 04 2020
EVENTS
Angola Oil & Gas
Conference & Exhibition
2020 confirms new dates
e second edition of the Angola Oil & Gas (AOG) Conference & Exhibition 2020 will o - cially take place on October 14-15, 2020. e new dates come a er Angola’s Ministry of Min- eral Resources, Petroleum and Gas, together with event organiser, Africa Oil & Power (AOP), took vigilant action to keep delegates, speakers and participants safe during the COVID-19 pan- demic and postponed the event.
“We have been monitoring the global COVID-19 pandemic closely and felt that it would be in everyone’s best interest to push the dates of the conference to the end of the year. Despite COVID-19’s impact on the global energy industry, con dence in Angola’s oil and gas sector remains on an upward trajectory,” says James Chester, Acting CEO of AOP.
Under the theme “New Era of Growth and Prosperity in Angola,” the Ministry of Mineral Resources, Petroleum and Gas aims to promote and attract foreign direct investment in what is one of Africa’s biggest economies.
AOG 2020 will also feature key industry play- ers such as ENI, who is currently developing the Agogo eld in Block 15/06, o shore Angola with partners Sonangol P&P and SSI Fi een Ltd.
Production currently stands at approxi- mately 10,000 barrels per day (bpd) of oil and is expected to increase to 20,000 bpd in the near future.
Angola’s national oil company Sonangol, which is currently undergoing a restructuring phase, will also be in attendance. Major inter- national companies including Total, Baker Hughes, Equinor, Certex, Bureau Veritas, Plus- petrol, Angola Cables, Poliedro Oil Corporation and MikaMedical have already signed on as sponsors.
Companies active in Angola’s investment, health, energy and telecommunication sectors including Prezioso Angola, Brimont, FMCH Group, Huawei, Vista Waste Management, Welltec, NCR Angola, International SOS, Total, Angola Cables, BIC Seguros and Teleservice, have already secured exhibition space, and the event organisers expect even more diversi ed companies to come on board.
Africa Oil & Power, May 05 2020
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Week 18 06•May•2020