Mr. Jeff Chisholm reports
PAN ORIENT ENERGY CORP.: 2019 FIRST QUARTER FINANCIAL & OPERATING RESULTS
Pan Orient Energy Corp. has released 2019 first quarter consolidated financial and operating results.
The company is today filing its unaudited consolidated financial statements as at and for the three months ended March 31, 2019, and related management's discussion and analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained on-line at
SEDAR or the company's website.
Commenting today on Pan Orient's 2019 first quarter results, president and chief executive officer Jeff Chisholm stated: "Two thousand nineteen is shaping up to be one of the company's best years in recent memory with strong cash flow from concession L53 generated from the recent L53 DD oil field discovery supporting significant, potential exploration upside in Thailand that will commence in July, 2019, and Indonesia exploration drilling that will commence in August, 2019."
Thailand (net to Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture):
Two successful Thailand appraisal wells were drilled in the first quarter of 2019 as follow-up to the discovery of the concession L53-DD field in the fourth quarter of 2018. The L53-DD production licence was approved on April 22 and these two wells, plus the original L53-DD1 and L53-DD2 wells, were put on production April 25.
Net to Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture, oil production from concession L53 averaged 1,412 barrels of oil per day during the 10-day period from April 27 to May 6 with 1,234 bopd from the four L53-DD wells that commenced stable production on April 27, 2019.
- The company reported strong financial results in Thailand during the first quarter of 2019. Net to Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture, oil sales increased to 507 bopd, adjusted funds flow from operations was $2.8-million ($60.35 per barrel) and working capital and long-term deposits at March 31, 2019, were $6.3-million.
production sharing contract (Pan Orient is non-operator with a 49-per-cent ownership interest):
East Jabung production sharing contract (PSC) received approval on Jan. 11, 2019, for a four-year exploration extension period to Jan. 20, 2023, with a remaining area of 1,245.56 square kilometres, representing 20 per cent of the original PSC area.
- Construction of the access road and well pad for the Anggun 1X exploration well at the East Jabung PSC in Indonesia is proceeding. The operator has advised that the estimated rig mobilization date is approximately July 1, 2019, with drilling to commence approximately Aug. 1, 2019.
On Jan. 22, 2019, Pan Orient received the net $3.0-million refund from the government of Indonesia relating to Pan Orient's successful appeal of the 2013 and 2014 land and building tax assessment.
- Total corporate adjusted funds flow from operations in the first quarter of 2019 was $1.6-million (three cents per share), including Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture.
- The net loss attributable to common shareholders was $800,000 (two-cent loss per share) with a foreign exchange loss of $400,000 on U.S. dollar holdings and higher expenses with respect to general and administrative expenses and stock-based compensation.
- Pan Orient maintains a strong financial position for the planned exploration activities at the East Jabung PSC in Indonesia and at concession L53 in Thailand with working capital and non-current deposits at March 31, 2019, of $31.6-million and no long-term debt. In addition, Pan Orient's 50.01-per-cent equity interest in the Thailand joint venture includes working capital and long-term deposits of $6.4-million and $2.2-million of equipment inventory to be utilized for future Thailand joint venture operations.
- The normal course issuer bid has been renewed and Pan Orient is authorized to purchase, for cancellation, up to 4,504,064 of its common shares (10 per cent of the public float) during the period of May 16, 2019, to May 16, 2020.
- The annual and special meeting of shareholders will be held on July 4, 2019, in Calgary.
East Jabung PSC,
onshore Sumatra (Pan Orient 49-per-cent ownership and non-operator)
The Anggun-1X exploration well is expected to commence drilling approximately Aug. 1, 2019. The estimated cost (dry hole) for the well is $15.4-million (U.S.) (Pan Orient's 49-per-cent share $7.5-million (U.S.)). Approximately $5.8-million (U.S.) (Pan Orient's 49-per-cent share $2.8-million (U.S.)) in capital expenditures have been recorded to date. A contingent multizone testing program will also be conducted if justified by drilling results.
Concession L53 onshore (Pan Orient Energy (Siam) Ltd., in which Pan Orient has 50.01-per-cent ownership)
Current activities are focused on the L53-DD3 workover that will commence in three days and a multiwell exploration/appraisal drilling program that is expected to commence in late July to early August, 2019, targeting exploration prospects offsetting the L53-DD field and appraisal drilling at L53-B. A second multiwell exploration drilling program focused mainly in the L53-DD field area is anticipated in late 2019 to early 2020 subject to the timing of required government of Thailand approvals. All exploration and development activities in 2019 are expected to be financed by Thailand working capital and Thailand adjusted funds flow from operations.
Sawn Lake (operated by Andora, in which Pan Orient has a 71.8-per-cent ownership)
Since January, 2019, the WTI (West Texas Intermediate) reference price for crude oil has strengthened and the differential between WTI and the Western Canada Select reference price for heavy oil has narrowed. Pan Orient continues to work with joint venture partners towards potential commercial expansion to 3,200 bopd at the Sawn Lake, Alberta, steam-assisted gravity drainage (SAGD) project (in which Andora has a 50-per-cent working interest and is the operator) using Andora's proprietary produced water boiler. The level of stability in heavy oil prices will have a significant impact on any decision by the Sawn Lake partners regarding the timing and extent of investment in future development, and the ability to finance the project.
Pan Orient maintains a strong cash balance, denominated mainly in U.S. dollar deposits, which allows the company to conduct key exploration and development activities and ensure financial flexibility. The company is continually reviewing its exploration and development asset portfolio in Indonesia, Thailand and Canada with the aim of maximizing corporate value and achieving the best allocation of resources. The next six months will be important in defining the go-forward opportunities and strategies for Pan Orient based on drilling results in Indonesia and Thailand, and the evolving heavy oil situation in Canada.
About Pan Orient Energy Corp.
Pan Orient is an oil and gas exploration and production company based in Calgary, Alta., with operations currently located onshore Thailand, Indonesia and in Western Canada.
FINANCIAL AND OPERATING SUMMARY
(thousands of dollars except where indicated)
Three months ended March 31
Financial statement results -- excluding
50.01% interest in Thailand joint venture
Net (loss) attributed to common shareholders ($849) ($338)
Per share (loss) -- basic and diluted (0.02) (0.01)
Cash flow (loss) used in operating activities (2,449) (4,670)
Per share (loss) -- basic and diluted (0.04) (0.09)
Cash flow from (used in) investing activities 2,180 (1,573)
Per share (loss) -- basic and diluted 0.04 (0.03)
Cash flow (used in) financing activities (26) -
Per share -- basic and diluted 0.00 -
Working capital 30,970 36,159
Working capital and non-current deposits 31,566 36,867
Long-term debt - -
Shares outstanding (thousands) 54,900 54,900
Capital commitments 2,068 104
Working capital and non-current deposits
Beginning of period -- excluding Thailand joint venture 33,139 36,897
Adjusted funds flow from (used in)
operations (excluding Thailand joint venture) (1,172) 116
Consolidated capital (expenditures) (705) (303)
Amounts received from Thailand joint venture 113 25
Disposal of petroleum and natural gas assets - 133
Finance lease payments (loss) (26) -
Effect of foreign exchange 217 (1)
End of period -- excluding Thailand joint venture 31,566 36,867
Pan Orient 50.01% interest in
Thailand joint venture working
capital and non-current deposits 6,413 5,435
Economic results -- including 50.01%
interest in Thailand joint venture
Total corporate adjusted funds
flow from (used in) operations by region
Canada (used in) (1,179) 244
Thailand (used in) (8) (13)
Indonesia (used in) 15 (115)
Adjusted funds flow from (used in)
operations (excl. Thailand joint venture) (1,172) 116
Share of Thailand joint venture 2,760 702
Total corporate adjusted funds flow from operations 1,588 818
Per share -- basic and diluted 0.03 0.01
Capital expenditures -- petroleum
and natural gas properties
Canada 124 218
Indonesia 581 85
Consolidated capital expenditures
(excl. Thailand joint venture) 705 303
Share of Thailand joint venture capital expenditures 2,678 466
Total capital expenditures (incl. Thailand joint venture) 3,383 769
Disposition -- petroleum and natural gas properties - (133)
Investment in Thailand joint venture
Beginning of period 34,504 32,185
Net income (loss) from joint venture 654 (191)
Other comprehensive gain from joint venture 135 1,906
Amounts (loss) advanced to joint venture (113) (25)
End of period 35,180 33,875
We seek Safe Harbor.
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