Mr. Jeff Chisholm reports
PAN ORIENT ENERGY CORP. - 2022 FIRST QUARTER FINANCIAL & OPERATING RESULTS
Pan Orient Energy Corp. has released its 2022 first quarter consolidated financial and operating results. Please note that all amounts are in Canadian dollars unless otherwise stated, BOPD refers to barrels of oil per day and BOPD for Thailand operations represents volumes net to Pan Orient's 50.01% equity interest in the Thailand Joint Venture.
The Company is today filing its unaudited consolidated financial statements as at and for the three months ended March 31, 2022 and related management's discussion and analysis with Canadian securities regulatory authorities. Copies of these documents may be obtained online at www.sedar.com or the Company's website, www.panorient.ca.
Commenting today on Pan Orient's 2022 first quarter results, President and CEO Jeff Chisholm stated: "Pan Orient is currently engaged in the advanced stages of a due diligence process related to the sale of the Company's Thailand interests. We anticipate being in a position to make an announcement regarding this matter by the end of the second quarter 2022. Oil sales have been averaging approximately 1,250 BOPD (net to Pan Orient's 50.01%) over the first nine days in May and approximately four additional workovers are anticipated to be completed over the next 30 days, with an additional two well appraisal program planned to commence in early August."
net to Pan Orient's 50.01% equity interest in the Thailand Joint Venture)
-- 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 of Thailand exploration and development activities. Pan Orient's share of working capital and long-term deposits in Thailand at March 31, 2022 was $7.9 million.
Production Sharing Contract (
- -- Pan Orient is non-operator with a 49% ownership interest)
Pan Orient is withdrawing from operations in Indonesia and the office in Jakarta was closed March 31, 2020. The East Jabung Production Sharing Contract expired in January 2020 and the operator is completing final steps to be taken for formal approval of the expiry from the Government of Indonesia, including reclamation requirements.
- -- Activities of the Company in Indonesia are reported in 2020 and 2021 as discontinued operations. Discontinued operations in Indonesia 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.
Sawn Lake (Operated by Andora Energy Corporation, in which Pan Orient has a 71.8% ownership)
For the first quarter of 2022, Pan Orient reports total operating expenses of $66 thousand for Sawn 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 at Sawn Lake whereby Andora acquired certain assets and assumed certain liabilities at Sawn Lake. Assets acquired consist of (i) an additional 25% working interest in the Sawn Lake joint venture (Sawn Lake Central Block), (ii) security deposits of the vendor for Sawn Lake placed with the Alberta 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 the Sawn Lake joint venture. Following the transaction, Andora has a 75% working interest in the Sawn 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 at Sawn Lake based on exploitation using SAGD.
- -- There is continued strength in Western Canada Select reference prices for heavy oil. At May 2, 2022, the price for Western Canada Select was Cdn$118.42 per barrel and the forward market for Western Canada Select in 2024 was Cdn$81.07 per barrel. Andora is considering alternatives to move the Sawn 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 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 on February 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 at March 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, and Thailand funds flow from operations are expected to expand the Company's cash balance through the remainder of 2022.
Pan Orient is currently engaged in the advanced stages of a due diligence process related to the sale of the Company's Thailand interests. We anticipate being in a position to make an announcement regarding this matter by the end of the second quarter 2022.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand, Indonesia and in Western Canada.
We seek Safe Harbor.
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