Mr. Jeff Chisholm reports
PAN ORIENT ENERGY CORP. 2016 YEAR END FINANCIAL & OPERATING RESULTS
Pan Orient Energy Corp. has released its 2016 year-end and fourth quarter consolidated financial and operating results.
The corporation is today filing its audited consolidated financial statements as at and for the year ended Dec. 31, 2016, and related management's discussion and analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained on-line on SEDAR or on the corporation's website.
Commenting today on Pan Orient's 2016 results, president and chief executive officer Jeff Chisholm stated: "While 2016 was a difficult year for the industry as a whole, Pan Orient weathered the storm by virtue of a very strong balance sheet, large cash position, low-cost and high-netback onshore Thailand oil production, and made progress towards providing shareholders potentially substantial near-term growth at the East Jabung PSC [production-sharing contract] in Indonesia, with the completion of the permitting process and the start of road and well pad construction for the upcoming AYU-1 exploration well. We now look forward to the drilling of AYU-1, which is anticipated to commence in late April after a modest delay in construction activities due to very heavy rain."
2016 highlights
Indonesia:
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Construction of the road to the AYU-1 exploration well location was completed on March 9, and well pad construction is currently under way. Heavy rain has been experienced throughout the construction period, and, as a result, the first exploration well at the Anggun prospect of the East Jabung production-sharing contract is estimated to commence in late April, 2017.
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The Batu Gajah PSC expired on Jan. 15, 2017. The requested two-year extension to the PSC allowing for drilling throughout the PSC was not going to be granted, and information on nearby wells indicated that the Akeh-1 accumulation was much more complex and substantially smaller than first believed. Pan Orient decided not to drill the Akeh-2 appraisal well and allowed the PSC to expire.
Thailand:
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Net to Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture, oil sales were 258 barrels of oil per day in 2016 (compared with 324 barrels of oil per day in 2015), and funds flow from operations was $2.4-million, or $25.89 per barrel (compared with $3.9-million and $32.92 per barrel in 2015).
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Approval was received from the government of Thailand, effective on Jan. 8, 2016, for a 215.87-square-kilometre reserved area for exploration at concession L53 for a period of up to five years.
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The 2016 exploration and development program included a number of workovers and the ANE-A1 exploration well at the A northeast prospect which failed to encounter hydrocarbons.
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It is expected that the 2017 Thailand capital program will include at least one exploration well and a multiwell workover program.
Sawn Lake, Canada (Pan Orient's 71.8-per-cent subsidiary Andora owns a 50-per-cent working interest and is the operator):
- The steam-assisted gravity drainage (SAGD) demonstration project reached a steady-state production level in January and February, 2016, with an average of 615 barrels per day (307 barrels of oil per day net to Andora) and an average instantaneous steam-oil ratio (ISOR) of 2.1 from the one SAGD well pair.
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The demonstration project established the viability of the SAGD process in the Bluesky formation at Sawn Lake, indicated the productive capability and ISOR, and provided critical information required for well and facility design associated with potential future commercial development. The demonstration project was suspended on Feb. 29, 2016.
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Andora's June 30, 2016, contingent resources report estimated unrisked best-estimate contingent resources of 231.6 million barrels of recoverable bitumen (166.3 million barrels net to Pan Orient's 71.8-per-cent interest in Andora).
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Andora submitted an application for a potential commercial expansion at Sawn Lake to 3,200 barrels of oil per day and is waiting for regulatory approval. Expansion is dependent on completion of detailed engineering and higher commodity prices to support project economics and financing.
Corporate:
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On Feb. 16, 2016, Pan Orient returned $22-million (40 cents per common share) to shareholders.
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Corporate funds flow used in operations for 2016 was $1.3-million with $2.5-million used in the first nine months of 2016, corporate funds flow from operations was $1.2-million in the fourth quarter of 2016. Corporate funds flow in the fourth quarter resulted from increased oil sales and oil prices associated with Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture and foreign exchange gains on U.S.-dollar holdings.
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The net loss attributable to common shareholders in 2016 was $82.8-million, with a $78.1-million net loss attributable to common shareholders in the fourth quarter of 2016, primarily due to the net impairment expense associated with the expiry of the Batu Gajah PSC.
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Pan Orient has a strong financial position at Dec. 31, 2016, for planned exploration activities in Indonesia and Thailand, with working capital and non-current deposits of $49.8-million and no long-term debt.
2016 fourth quarter operating results
The financial statements reflect that, on Feb. 2, 2015 the company sold a 49.99-per-cent equity interest in its subsidiary Pan Orient Energy (Siam) Ltd. (POS) and retained a 50.01-per-cent equity interest. From Feb. 2, 2015, forward, the retained 50.01-per-cent equity interest is reclassified as a jointly controlled joint venture, and Pan Orient's 50.01-per-cent equity interest in the working capital, assets, capital expenditures, liabilities and operations of POS are recorded as investment in the Thailand joint venture:
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Net loss attributable to common shareholders for the fourth quarter of 2016 was $78.1-million ($1.42 loss per share), compared with a $900,000 loss (two-cent loss per share) in the third quarter of 2016 and a $4-million loss (seven-cent loss per share) in the fourth quarter of 2015. In the fourth quarter of 2016, the company reported a $102.3-million impairment charge of Batu Gajah exploration and evaluation assets, offset by the $22.6-million associated reduction in accumulated other comprehensive income related to foreign currency translation for a net impairment expense of $79.7-million.
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For the fourth quarter of 2016, the company recorded total corporate funds flow from operations, which includes the economic results of the 50.01-per-cent interest in the Thailand joint venture, of $1.2-million (two cents per share). This compares with total corporate funds flow from operations for the third quarter of 2016 of $300,000 (one cent per share). Compared with corporate funds flow from operations from the third quarter of 2016, the fourth quarter of 2016 had:
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Economic funds flow from Thailand operations were 71 per cent higher, driven by a 19-per-cent increase in the realized crude oil price and a 23-per-cent increase in oil sales volume;
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Foreign exchange gains in Canada of $696,000 ($242,000 gain in the third quarter) from the stronger U.S. dollar;
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Indonesia exploration expense recovery of $101,000 ($4,000 expense in the third quarter) from receiving the refund of a government deposit associated with the Citarum PSC.
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Pan Orient had capital expenditures of $400,000 in the fourth quarter of 2016, with $200,000 in Indonesia and $200,000 in Canada at the Sawn Lake SAGD demonstration project of Andora. In addition, Pan Orient's share of the Thailand joint venture capital expenditures was $1-million, which was recorded in investment in the Thailand joint venture.
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Capital expenditures for 2016, net of dispositions, were $5.2-million, with $1.9-million in Indonesia, $1.8-million in Canada at the Sawn Lake SAGD demonstration project of Andora and $1.5-million for Pan Orient's share of the Thailand joint venture capital expenditures.
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At Dec. 31, 2016, Pan Orient had $49.8-million of working capital and non-current deposits. Working capital and non-current deposits comprised $46.9-million cash, $4.4-million of non-current deposits, other receivables of $300,000, and less Canadian taxes payable of $100,000 and accounts payable of $1.7-million. In addition, Pan Orient's investment in the Thailand joint venture includes $3-million of Thailand working capital and non-current deposits, and $1.9-million of equipment inventory to be utilized for future Thailand joint venture operations.
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Pan Orient had outstanding capital commitments as at Dec. 31, 2016, of $2-million in Indonesia, associated with the company's 49-per-cent participating interest in the East Jabung PSC. In Canada, capital commitments are $300,000 with respect to contracted natural gas pipeline tie-in and tariff charges associated with the Sawn Lake SAGD demonstration project of Andora.
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Results net to Pan Orient's 50.01-per-cent interest in the Thailand joint venture for concession L53:
- The company had
average oil sales of 290 barrels of oil per day during the fourth quarter of 2016 and generated $1-million in funds flow from operations, or $37.30 per barrel. This compares with 2016 third quarter results of 236 barrels of oil per day (a 23-per-cent increase) and $26.74 per barrel in funds flow from operations (a 39-per-ecnt increase). The average realized sales price per barrel has increased to $60.22 in the fourth quarter from $37.07 in the first quarter and $50.68 in the third quarter.
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Per-barrel amounts during the fourth quarter of 2016 were a realized price for oil sales of $60.22, transportation expenses of $1.54, operating expenses of $10.81, general and administrative (G&A) expenses of $7.57, and a 5-per-cent royalty to the Thailand government of $3. Oil sales revenue during this period was allocated 33 per cent to expenses for transportation, operating, and general and administrative, 5 per cent to the government of Thailand for royalties, and 62 per cent to the Thailand joint venture. No Thailand petroleum income taxes or special remuneratory benefit tax was recorded during the quarter.
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Capital expenditures were $1-million during the fourth quarter of 2016 and $1.5-million for 2016. Capital expenditures for 2016 comprised $900,000 for drilling of the ANE-A1 exploration well at the A northeast prospect, $500,000 for workovers and other capital expenditures, and $100,000 for capitalized general and administrative expenses. The ANE-A1 exploration well at the A northeast prospect did not encounter hydrocarbons.
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Oil sales in January and February, 2017, at concession L53, net to Pan Orient's 50.01-per-cent interest, averaged 254 barrels of oil per day.
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The Dec. 31, 2016, independent reserves evaluation for Thailand on-shore concession L53 was prepared for POS, a 50.01-per-cent-owned subsidiary of Pan Orient, which is the operator and has a 100-per-cent working interest. The evaluation was conducted by Sproule International Ltd. of Calgary and was prepared in accordance with Canadian Securities Administrators' National Instrument 51-101, standards of disclosure for oil and gas activities. Pan Orient has a 50.01-per-cent ownership in POS but does not have any direct interest in, or control over, the crude oil reserves or operations of on-shore concession L53. The values at Dec. 31, 2016, identified as net to Pan Orient's 50.01-per-cent equity interest in Pan Orient Energy (Siam) represent 50.01 per cent of POS reserves and values.
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Net to Pan Orient's 50.01-per-cent equity interest in POS, proved plus probable crude oil reserves of 570,000 barrels at Dec. 31, 2016, from conventional sandstone reservoirs decreased 5 per cent compared with the prior year. Net to Pan Orient's 50.01-per-cent equity interest in POS, the net present value (after tax) of Thailand proved plus probable crude oil reserves at Dec. 31, 2016, using forecast prices and costs discounted at 10 per cent per year, was $13.2-million, or $24 cents per Pan Orient share, based on the current 54.9 million Pan Orient shares outstanding.
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Indonesia:
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At the East Jabung PSC, onshore Sumatra, Pan Orient has a 49-per-cent participating interest and is a non-operator. In 2015, Pan Orient completed a farmout of a 51% participating interest and operatorship of the East Jabung PSC to a subsidiary of Repsol SA, whereby the farminee finances the first $10-million (U.S.) toward the first exploration well and a contingent commitment to finance the first $5-million (U.S.) toward an appraisal well if the farminee elects to drill an appraisal well as a follow-up to success in the first exploration well. In addition, the farminee bears 100 per cent of the general and administrative costs associated with the first exploration well and for any appraisal well. Efforts in 2016 were focused toward drilling of the AYU-1 exploration well, the first exploration well at the Anggun ELOK prospect complex of the East Jabung PSC. Construction of the five-kilometre access road was completed on March 9, and well pad construction is currently under way. Drilling rig mobilization is planned to start prior to month-end, and the commencement of drilling of the approximately 21-day well is anticipated on or about the end of April. Rain has impacted timelines throughout the entire period of road and well pad construction, resulting in a departure from the original timelines as mitigation measures are carried out.
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Pan Orient's 2016 capital expenditures for the East Jabung PSC were $600,000, comprising $500,000 at the East Jabung PSC accrued for the subsurface portion of the 2012, 2013 and 2014 land and building tax assessments, and $100,000 for seismic reprocessing and capitalized G&A expenses.
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At the Batu Gajah PSC, onshore Sumatra, Pan Orient was the operator with a 77-per-cent participating interest. During 2016, Pan Orient worked toward drilling the Akeh-2 appraisal well to the Akeh-1 exploration well drilled in the fourth quarter of 2015, which resulted in a natural gas and condensate discovery, but recognizing that the test results for Akeh-1 are not necessarily indicative of long-term performance, ultimate recovery or commercial viability. In early 2016, the oil and gas regulator of the government of Indonesia (GOI) informed the company that an additional appraisal well of the Akeh discovery was required prior to granting of release from exploration status as a conclusive discovery. The Batu Gajah PSC 10-year exploration phase had an expiry date of Jan. 15, 2017, and the company submitted an application for a two-year extension in June, 2016, the earliest date for an application allowed under oil and gas regulations. The requested two-year extension would provide time to drill the Akeh-2 appraisal well, potentially obtain the release from exploration status, move forward to prepare a plan of development to determine the likelihood of the commerciality of the Akeh-1 discovery and to undertake other drilling activities within the PSC. Discussions with the GOI at the end of 2016 indicated the possibility of a one-year extension to the exploration term of the PSC, specifically only allowing the Akeh-2 appraisal well in early 2017 and no other drilling activity. Additionally, information at that time indicated that nearby wells, in close proximity to the Batu Gajah PSC boundary, have performed in a fashion suggesting that the Akeh-1 accumulation is both much more complex and substantially smaller than first believed. The implications are that it appears very unlikely Pan Orient would achieve the required commercial threshold for an approved plan of development for the Akeh structure, and, as a result, it is not possible to justify the expenditures required for the drilling of the Akeh-2 appraisal well, particularly combined with the current and foreseeable oil price environment. Pan Orient notified the GOI that the PSC would expire at the end of the 10-year term on Jan. 15, 2017. As a result, the company reported a $102.3-million impairment charge of Batu Gajah exploration and evaluation assets, offset by the $22.6-million associated reduction in accumulated other comprehensive income related to foreign currency translation for a net impairment expense of $79.7-million.
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Pan Orient's 2016 capital expenditures for the Batu Gajah PSC were $1.3-million, comprising $1.4 million for capitalized G&A expenses and less a $100,000 recovery from the expected refund of a government deposit associated with the Batu Gajah PSC.
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During 2016, Pan Orient recorded $800,000 of exploration expenses associated with the Citarum PSC, which expired in 2015. These expenses related to final drilling expenses associated with the PSC, expenses associated with the relinquishment of the PSC and less recovery of $100,000 from receiving the refund of a government deposit associated with the Citarum PSC.
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Sawn Lake, Alberta, heavy oil (operated by Andora, in which Pan Orient has a 71.8-per-cent ownership):
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Capital expenditures for the Sawn Lake demonstration project during the fourth quarter of 2016 were $100,000 and $1.8-million for 2016. Capital expenditures related to the suspension of demonstration project operations at the end of February, 2016, costs associated with filing the application for potential commercial expansion at the demonstration project site, capitalization of expenses and revenues of the demonstration project, and capitalized G&A. Andora capitalized $1.1-million of demonstration project expenses less revenues in 2016.
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The demonstration project successfully captured the key data associated with its objectives, which were used to update the Sawn Lake reservoir model and prepare an updated contingent resources report. Production results to date are not necessarily indicative of long-term performance or of ultimate recovery, and the Sawn Lake demonstration project has not yet proven that it is commercially viable.
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The June 30, 2016, contingent resources report is a National Instrument 51-101-compliant resources evaluation for Andora's oil sands interests at Sawn Lake, Alberta, Canada, as evaluated by Sproule Unconventional. The evaluation included all of Andora's oil sands leases at Sawn Lake based on exploitation using SAGD. Results of the demonstration project increased unrisked recoverable resources by 8 per cent, significantly increased average peak production rates and decreased the requirement for natural gas by 16 per cent. Andora's unrisked best-estimate contingent resources increased 8 per cent to 231.6 million barrels of recoverable bitumen (166.3 million barrels net to Pan Orient's 71.8-per-cent interest in Andora). The estimated before-tax net present value, discounted at 10 per cent, of Andora's unrisked best-estimate contingent resources increased 21 per cent to $568-million ($408-million net to Pan Orient's 71.8-per-cent interest in Andora), despite a 15-per-cent decrease in the forecast average realized price per barrel for bitumen, given the performance of the demonstration project in terms of peak production rate and cumulative steam-oil ratio. The estimated after-tax net present value, discounted at 10 per cent, of Andora's unrisked best-estimate contingent resources increased 26 per cent to $374-million ($268-million net to Pan Orient's 71.8-per-cent interest in Andora). The evaluation assigned an 85-per-cent chance of development for Sawn Lake, or a 15-per-cent development risk, and the risked best-estimate contingent resources for Andora are 196.9 million barrels of bitumen recoverable (141.4 million barrels net to Pan Orient's 71.8-per-cent interest in Andora). The risked best-estimate net present value, discounted at 10 per cent, for Andora's interests is $482-million on a before-tax basis and $318-million on an after-tax basis ($346-million and $228-million net to Pan Orient's 71.8-per-cent interest in Andora, respectively).
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An application for a potential expansion at the demonstration project site to 3,200 barrels of oil per day was submitted in April, 2016. It is expected that a reactivation of the demonstration project facility and well pair would be considered as part of a potential commercial expansion to 3,200 barrels of oil per day. The expansion application requests the drilling of up to seven additional SAGD well pairs which are tied into the existing demonstration project facility. The facility would be expanded to generate the additional necessary steam, and it is anticipated that additional steam generation would include the test installation of Andora's proprietary produced water boiler. Andora believes that its produced water boiler could achieve significant benefits for Sawn Lake SAGD field development. An expansion is dependent on regulatory approval, completion of detailed engineering and a higher commodity price environment to support project economics and financing.
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Andora is completing detailed engineering for its proprietary thermal system and process for producing steam from oil field produced water.
Outlook
Indonesia
East Jabung PSC, onshore Sumatra, Indonesia (Pan Orient -- 49-per-cent ownership and non-operator)
Drilling of the AYU-1 exploration well, the first exploration well at the Anggun prospect of the East Jabung production-sharing contract, is estimated to commence in late April, 2017. Construction of the five-kilometre access road has been completed, and well pad construction is under way. Exploration success with AYU-1 could have a significant impact on Pan Orient. With the expiry of the Batu Gajah PSC, Pan Orient will have substantially reduced overhead and G&A in Indonesia.
Thailand
Concession L53, onshore (Pan Orient Energy (Siam), in which Pan Orient has 50.01-per-cent ownership)
Concession L53 has continued to generate funds flow from operations throughout 2016 due to its low cost structure. Exploration activities in 2017 are expected to be financed by Thailand working capital and funds flow from operations. The 2017 Thailand capital program, soon to be finalized with partners, will include at least one exploration well and a multiwell workover program.
Canada
Sawn Lake (operated by Andora, in which Pan Orient has a 71.8-per-cent ownership)
Pan Orient continues to move forward with steps toward potential future development at Sawn Lake. It is recognized that higher crude oil prices, and specifically higher Western Canada Select reference prices, will have a significant impact on any decision regarding the timing of future development. The first steps will be receiving approval for the Sawn Lake expansion and completing detailed engineering for its proprietary produced water boiler.
Corporate
The company maintains a strong financial position to conduct key exploration and development activities in all three countries during 2017 and ensure financial flexibility. Pan Orient continues to review its worldwide exploration and development asset portfolio with the aim of maximizing corporate value and the best allocation of a substantial net cash balance that is in excess of future capital commitments. These activities range from the potential divestment of existing assets to the continuing screening of new venture opportunities.
Pan Orient is an oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
FINANCIAL AND OPERATING SUMMARY
(thousands of dollars, except where indicated)
Three months ended 12 months ended
Dec. 31, Dec. 31,
2016 2015 2016 2015
Financial
Financial statement results -- excluding 50.01% interest
in Thailand joint venture from Feb. 2, 2016, onward
Net income (loss) attributed to common shareholders $(78,149) $(3,980) $(82,837) $29,053
Per share -- basic and diluted $(1.42) $(0.07) $(1.51) 0.52
Cash flow from operating activities 82 80 8,620 1,439
Per share -- basic and diluted 0 0 0.16 0.03
Cash flow from (used in) investing activities (65) (6,057) (5,864) 40342
Per share -- basic and diluted $(0.00) $(0.11) $(0.11) 0.72
Working capital 45,447 74,901 45,447 749,01
Working capital and non-current deposits 49,818 79,160 49,818 79,160
Long-term debt - - - -
Capital commitments 2,318 2,399 2,318 2,399
Contingencies
Working capital and non-current deposits
Beginning of period 49,945 81,128 79,160 40,854
Corporate funds flow from (used in) operations 251 558 (3,778) 1,088
Special distribution - - (21,954) -
Funds flow from sale of Thailand interest - - - 48,877
Working capital and non-current deposits derecognized - - - (3,151)
Consolidated capital expenditures (431) (4,301) (3,905) (17,055)
Amounts received from Thailand joint venture 40 1,391 172 1,293
Disposal of petroleum and natural gas assets 56 - 161 9,764
Normal course issuer bid - - - (2,691)
Foreign operations -- unrealized foreign exchange gain (loss) (43) 384 (38) 181
End of period 49,818 79,160 49,818 79,160
Economic results -- including 50.01% interest in Thailand joint
venture from Feb. 2, 2015, onward
Total corporate funds flow from (used in) operations 1,249 1,837 (1,301) 4,676
Per share -- basic and diluted 0.02 0.03 $(0.02) 0.08
Corporate funds flow from (used in) operations by region
Canada 255 1063 (2,424) 4,222
Thailand -- 100% to Feb. 1, 2015 (2) 19 (29) 305
Indonesia (2) (524) (1,325) (3,439)
Funds flow from (used in) consolidated operations 251 558 (3,778) 1,088
Share of funds flow from Thailand joint venture 998 1279 2,477 3588
Total corporate funds flow from (used in) operations 1,249 1,837 (1,301) 4,676
Funds flow from sale of Thailand interest - - - 48,877
Petroleum and natural gas properties
Capital expenditures 1,444 4,538 5,400 20,997
Dispositions -- excluding sale of Thailand interest (56) - (161) (9,764)
Capital expenditures
Canada 176 703 1,980 4,669
Thailand -- 100% to Feb. 1, 2015 - - - 60
Indonesia 255 3,598 1,925 12,326
Consolidated capital expenditures 431 4,301 3,905 17,055
Share of Thailand joint venture capital expenditures 1,013 237 1,495 3,942
Total capital expenditures 1,444 4,538 5,400 20,997
Investment in Thailand joint venture
Beginning of period 33,316 36,328 35,088 -
Investment retained on sale of Thailand interest - - - 38,587
Net (loss) from joint venture (226) (928) (1,542) (1,992)
Other comprehensive gain (loss) from joint venture (255) 1,078 (579) (214)
Amounts received from joint venture (40) (1,391) (172) (1,293)
End of period 32,795 35,088 32,795 35,088
Thailand operations
Economic results -- including 50.01% interest
in Thailand joint venture from Feb. 2, 2015, onward
Oil sales (bbl) 26,702 38,740 94,539 118,269
Average daily oil sales (bopd) by concession L53 290 421 258 324
Average oil sales price, before transportation ($/bbl) $60.22 $49.61 $48.95 $57.94
Reference price (volume weighted) and differential
Crude oil (Brent U.S. $/bbl) $49.12 $44.02 $43.51 $50.84
Exchange rate U.S. $/Canadian 1.34 1.35 1.34 1.28
Crude oil (Brent $/bbl) $65.72 $59.34 $58.33 $65.23
Sale price/Brent reference price 92% 84% 84% 89%
Funds flow from (used in) operations
Crude oil sales 1,608 1,922 4,628 6,853
Government royalty (80) (94) (229) (336)
Transportation expense (41) (56) (143) (186)
Operating expense (289) (371) (1,057) (1,626)
Field netback 1,198 1,401 3,199 4,705
General and administrative expense (202) (102) (756) (777)
Interest income 5 2 11 9
Foreign exchange (loss) (5) (3) (5) (44)
Current income tax - - (1) -
Funds flow from operations -- Thailand 996 1,298 2,448 3,893
Funds flow from (used in) operations/barrel ($/bbl)
Crude oil sales $60.22 $49.61 $48.95 $57.94
Government royalty (3.00) (2.43) (2.42) (2.84)
Transportation expense (1.54) (1.45) (1.51) (1.57)
Operating expense (10.81) (9.58) (11.18) (13.75)
Field netback $44.87 $36.16 $33.84 $39.78
General and administrative expense (7.57) (2.63) (8.01) (6.57)
Interest income 0.19 0.05 0.12 0.08
Foreign exchange (loss) (0.19) (0.08) (0.05) (0.37)
Current income tax - - (0.01) -
Funds flow from operations -- Thailand $37.30 $33.51 $25.89 $32.92
Government royalty as percentage of crude oil sales 5% 5% 5% 5%
Income tax and SRB as percentage of crude oil sales - - - -
As percentage of crude oil sales
Expenses -- transportation, operating, G&A and other 33% 28% 42% 38%
Government royalty, SRB and income tax 5% 5% 5% 5%
Funds flow from operations, before interest income 62% 68% 53% 57%
Wells drilled
Gross 1 - 1 3
Net 0.5 - 0.5 1.5
Financial statement presentation results -- excluding
50.01% interest in Thailand joint venture from
Feb. 2, 2015, onward
Crude oil sales - - - 809
Government royalty - - - (38)
Transportation expense - - - (24)
Operating expense - - - (257)
Field netback - - - 490
General and administrative expense (3) (2) (30) (199)
Interest income - - - 1
Foreign exchange gain 1 21 1 13
Funds flow from (used in) consolidated operations (2) 19 (29) 305
Funds flow included in investment in Thailand joint venture
Net (loss) from Thailand joint venture (226) (928) (1,542) (1,992)
Add back non-cash items in net (loss) 1,224 2,207 4,019 5,580
Funds flow from Thailand joint venture 998 1,279 2,477 3,588
Thailand -- economic funds flow from operations 996 1,298 2,448 3,893
RESERVES AND CONTINGENT RESOURCES
(thousands of dollars, except where indicated)
Year ended Dec. 31,
2016 2015
Onshore Thailand -- concession L53 (50.01% economic interest)
Proved oil reserves (thousands of barrels) $273 $253
Proved plus probable oil reserves (thousands of barrels) 570 599
Net present value of proved plus probable reserves, after tax,
discounted at 10% 13,187 13,051
Per Pan Orient share -- basic 0.24 0.24
Canada (Pan Orient's 71.8% share of the oil sands leases of Andora
at Sawn Lake, Alberta)
INTERNATIONAL INTERESTS AT DEC. 31, 2016
(all amounts reflect Pan Orient's economic interest)
Dec. 31, 2016 2016 P+P
Net financial average reserves
square commitments production (thousands
Status kilometres (thousands) (bopd) of barrels)
Onshore Thailand concession (recorded
in investment in joint venture)
L53/48 (Pan Orient 50.01% ownership Partially $- to
as at Dec. 31, 2016) developed 108 January, 2021 258 570
Onshore Indonesia PSCs (consolidated
subsidiaries)
East Jabung PSC, South Sumatra $2,049 to
(49% interest and non-operator) Undeveloped 1,445 November, 2017
Batu Gajah PSC, South Sumatra PSC expired on
(77% interest and operator) Undeveloped - Jan. 15, 2017
1,553 $2,049
We seek Safe Harbor.
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