Page 19 - LatAmOil Week 20 2020

LatAmOil
NEWS IN BRIEF
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FFO was reduced due to a higher percentage of March sales at lower Brent prices and an inven- tory build.
Utilised free cash flow of $26.0mn to pur- chase 3.865mn of the Company’s common shares for a total cost of $51.0mn (average price of CAD18.53 per share) pursuant to the Com- pany’s normal course issuer bid programme (NCIB).
Capital expenditures were $71.3mn in the period. Capex was fully funded from FFO.
Working capital was $330.4mn (CAD3.35 per share basic) at March 31, 2020 compared to $344.0mn at December 31, 2019, and $207.4mn at March 31, 2019. The Company has an undrawn syndicated bank credit facility of $200.0mn.
Participated in drilling 20 gross (13.05 net) wells in Colombia resulting in 10 oil wells, two abandoned wells, three suspended wells and five wells under test, for a success rate of 83%.
Parex is well-positioned for the challenges presented in the current business environment, as the Company exited Q1-2020 debt-free with a cash position of $397.4mn, working capital of $330.4mn and an undrawn credit facility of $200mn. With low sustaining capital require- ments, the Company is able to withstand a pro- longed period of low and volatile energy pricing. Parex Resources, May 13 2020
Canacol Energy reports
65% increase in realised
gas sales, 48% increase in
EBITDAX in Q1-2020
Canacol Energy is pleased to report its financial and operating results for the three months ended March 31, 2020. Dollar amounts are expressed in United States dollars, except as otherwise noted.
Charle Gamba, President and CEO of the Corporation, commented: “The first quarter of 2020 marked a milestone for the Corporation as we achieved record natural gas sales of 202 mcf per day, up 65% from the same first quar- ter of 2019 and up 12% from the last quarter of 2019. We also closed the first quarter of 2020 with $49mn in cash, and remain well funded to execute the remainder of the 2020 capital programme.
“In the first quarter of 2020, we announced our December 31, 2019, year-end reserves, with a proved plus probable (2P) reserves replacement ratio of 224%, along with a 12% increase in 2P reserves year over year as a result of our contin- ued exploration and development success. The before tax net present value of our 2P reserves, discounted at 10%, increased 40% to $2.15bn. A new third party engineering resource report was
released containing gross prospective resources of 4.7tn cubic feet in over 160 identified explo- ration prospects and leads as at December 31, 2019, up 79% since the previous report issued as at December 31, 2017.
“The Corporation also drilled two successful natural gas wells in the quarter, Nelson-14 and Clarinete-5. The Clarinete-5 development well finished drilling in March 2020 and encountered 309 feet true vertical depth of net gas pay within the primary Cienaga de Oro sandstone reservoir, which represents the thickest gas pay section of any well drilled in the history of Canacol. The well will be completed and tied in late May 2020 when drilling operations resume in the field.
“The first quarter of 2020 also saw us announce our second consecutive quarterly dividend, which is approximately 6% annually at current share prices, as Canacol remains com- mitted to maintaining our ongoing quarterly distribution.
“The Corporation posted record EBITDAX of $59mn in the first quarter of 2020, resulting from its record natural gas sales. Net income during the first quarter of 2020 was negatively impacted by the depreciation of the Colombian Peso (COP). The 24% depreciation of the COP effectively incurred a $41mn non-cash deferred tax expense. Without such non-cash expense, net income would have been a robust $15mn for the quarter. Should the COP normalise in the coming periods, as it has strengthened by approximately 5% since March 31, a portion of this expense would effectively be reversed add- ing to net income realised in future periods.”
Financial and operational highlights of the Corporation include: Realised contractual nat- ural gas and LNG sales increased 65% to 201.5 mcf per day for the three months ended March 31, 2020, compared to 122 mcf per day for the
same period in 2019. Average natural gas and LNG production volumes increased 63% to 201.4 mcf per day for the three months ended March 31, 2020, compared to 123.3 mcf per day for the same period in 2019.
“The increase is primarily due to the com- pletion of the 100 mcf per day pipeline expan- sion in late Q3-2019; in addition, the LNG plant commenced operation during the three months ended March 31, 2020.
“Total natural gas and LNG revenue, net of royalties and transportation expenses for the three months ended March 31, 2020 increased 48% to $69.9mn, compared to $47.4mn for same period in 2019, mainly attributable to the increase of natural gas production.
“Adjusted funds from operations increased 51% to $45.3mn for the three months ended March 31, 2020, compared to $29.9mn for the same period in 2019. Adjusted funds from oper- ations per basic share increased 47% to $0.25 per basic share from $0.17 per basic share.
“EBITDAX increased 48% to $58.9mn for the three months ended March 31, 2020, compared to $39.8mn for the same period in 2019.
“The Corporation realised a net loss of $26mn for the three months ended March 31, 2020, compared to a net income of $6.3mn for the same period in 2019. The net loss is solely due to the non-cash deferred tax expense of $41.1mn, which is primarily due to the effect of the reduction in the Colombian Peso exchange rate on the value of unused tax losses and cost pools as further explained in the Income Tax sec- tion of the MD&A.
“The Corporation also realised a foreign exchange loss of $4.3mn during the three months ended March 31, 2020, as a result of the 24% devaluation of COP during the period.” Canacol Energy, May 13 2020
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