CALGARY, Alberta, March 14, 2019 (GLOBE NEWSWIRE) -- Pan Orient Energy Corp. (“Pan Orient”) (POE – TSXV) reports 2018 year-end and fourth quarter consolidated financial and operating results. Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day.
The Corporation is today filing its audited consolidated financial statements as at and for the year ended December 31, 2018 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 Corporation’s website, www.panorient.ca.
Commenting today on Pan Orient’s 2018 results, President and CEO Jeff Chisholm stated:
"2018 was an excellent year for the Thailand operation with substantial increases in year-end reserves and production as a result of the L53-DD oil discovery made in October. This was then followed up with the success of the L53-DD4 appraisal well confirming oil in a fault compartment that had been assigned possible reserves in the year-end 2018 reserve report. The success at L53-DD highlighted the hydrocarbon potential of the northern portion of Concession L53 and provided an increased understanding of the petroleum system in the immediate discovery area. As a result of post discovery analysis, an aggressive four to five well exploration drilling program is planned for the remainder of 2019 with the first 2 wells to commence in July.
Approval of the L53-DD Production License is anticipated in April 2019, at which point the L53-DD1 & L53-DD2 wells will be brought back on stream. A 90 day test application has been submitted for the recently completed L53-DD4 well with approval anticipated shortly. The L53-DD3 appraisal well is currently drilling through the target zone to a total depth that will be reached shortly.
Construction for the Anggun-1X exploration well in Indonesian East Jabung PSC has been making steady progress despite heavy rain at times. The operator has indicated rig mobilization is anticipated to commence in early May with drilling to start in late June to July, subject to weather, of course. Of note, press reports indicate that Repsol, the operator of the East Jabung PSC, has made a significant gas discovery in the nearby Sakakemang PSC. This large discovery has resulted in significant interest by industry players and has highlighted the potential for large discoveries still to be made within this region of South Sumatra."
2018 HIGHLIGHTS
Thailand (net to Pan Orient’s 50.01% equity interest in the Thailand Joint Venture)
Indonesia East Jabung Production Sharing Contract (Pan Orient is non-operator with a 49% ownership interest)
Corporate
2018 FOURTH QUARTER OPERATING RESULTS
Net to Pan Orient’s 50.01% equity interest in POS, proved plus probable crude oil reserves of 1,365,500 barrels at December 31, 2018 from conventional sandstone reservoirs, an increase of 150% compared with the prior year primarily as a result of the discovery of the L53-DD oil field in the fourth quarter of 2018 which has been assigned proved reserves of 199,500 barrels and proved plus probable reserves of 859,500 barrels at December 31, 2018. Net to Pan Orient’s 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable crude oil reserves at December 31, 2018, using forecast prices and costs discounted at 10% per year, of $39.5 million, or $0.72 per Pan Orient share based on the current 54.9 million Pan Orient shares outstanding.
Given the early stage development of the recent L53-DD oil discovery, the Company requested the inclusion of possible oil reserves at December 31, 2018 in order to define the potential upside of the field. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. Possible oil reserves were not evaluated at December 31, 2017. Net to Pan Orient’s 50.01% equity interest in POS, proved plus probable plus possible crude oil reserves were 2,927,000 barrels at December 31, 2018. Net to Pan Orient’s 50.01% equity interest in POS, net present value (after tax) of Thailand proved plus probable plus possible crude oil reserves at December 31, 2018, using forecast prices and costs discounted at 10% per year, of Cdn$76.8 million, or $1.40 per Pan Orient share based on the current 54.9 million Pan Orient shares outstanding.
OUTLOOK
INDONESIA
East Jabung PSC, Onshore Sumatra Indonesia (Pan Orient 49% ownership & Non Operator)
The Anggun-1X exploration well is approximately 5.6 kilometers to the northwest of the Ayu-1X exploration well drilled in 2017 and approximately 70 meters structurally up-dip from Ayu-1X at the Gumai sandstone target level. The Anggun-1X exploration well will target the Gumai sandstones (primary target) in a structural closure up-dip of the Ayu-1X drilling location and the Batu Raja limestone (secondary target) that is expected to be an independent closure from the Ayu-1X well. The estimated dry hole cost of the Anggun-1X well, including permanent road, well pad construction and drilling, is US$15.4 million (Cdn$21.0 million), with Pan Orient’s 49% share of US$7.5 million (Cdn$10.2 million). The cost of the Anggun-1X well to the end of 2018 has been US$5.0 million, with Pan Orient’s 49% share being US$2.5 million (Cdn$3.3 million).
The operator has advised that drilling of Anggun-1X is anticipated to commence in late June to July 2019. There is a potential follow-up appraisal well in 2020 in the event of Anggun-1X success.
THAILAND
Concession L53 Onshore (Pan Orient Energy (Siam) Ltd., in which Pan Orient has 50.01% ownership)
A two well appraisal drilling program commenced with the spudding of the L53-DD4 well on February 11, 2019. The well encountered an interpreted, combined 15.6 meters of net oil pay within the AA2 and BB/CC sandstones between the true vertical depth of 1,010 to 1,103 meters. The L53-DD4 well penetrated a fault compartment with assigned year-end 2018 possible reserves (no proved or probable reserves were assigned) adjacent to and north of the main DD oil field fault compartment that was drilled previously by the L53-DD1 and L53-DD2 wells. As a result, proved and probable reserves additions within this new fault compartment are anticipated at year-end 2019. The CC sand at L53-DD4 was encountered 7.5 meters structurally higher than at L53-DD1 and possesses superior reservoir quality and thickness. The AA sand at L53-DD4 (no proved or probable reserves assigned at this location at year-end 2018) was poorly developed; however, high quality oil pay was encountered in the deeper AA2 sand resulting in a new oil pool discovery. The DD/EE sands (no proved or probable reserves assigned at this location at year-end 2018) were water bearing at L53-DD4. A 90 day well test application for L53-DD4 has been submitted to the Government of Thailand and testing will commence when the approval is received.
The L53-DD3 was spudded on March 3, 2019 and is currently drilling. The L53-DD3 well is essentially a twin of the earlier L53-DD2 well with the exception being that the AA sand that was faulted out in L53-DD2 is expected to be penetrated in a structurally higher position than at L53-DD1. L53-DD3 is designed to effectively drain the thick, high quality oil pay within the BB/CC sands at this structurally high location in a timely manner.
Seismic mapping incorporating the DD field drilling results has been completed and on the basis of this information, permits for a multi-well exploration drilling program to commence late in the second quarter to early in the third quarter of 2019 are underway. It is anticipated two prospects will be tested initially in the immediate DD field area with the first two exploration wells. A second three well exploration drilling program is expected to commence in late 2019. All exploration and development activities in 2019 are expected to be financed by Thailand working capital and adjusted funds flow from operations.
CANADA
Sawn Lake, Alberta (Operated by Andora, in which Pan Orient has a 71.8% ownership)
Sawn Lake is a top quartile SAGD asset that has been de-risked through the demonstration project. Pan Orient continues to work with joint venture partners to move towards the potential commercial expansion to 3200 BOPD at the Sawn Lake, Alberta SAGD project (in which Andora has a 50% working interest and is the operator). It is recognized that stable crude oil prices, and specifically higher Western Canada Select reference prices, will have a significant impact on any decision regarding the timing and extent of future development.
Corporate
Pan Orient continues to maintain a strong cash balance, denominated mainly in United States dollar deposits that will allow the Company to conduct key exploration and development activities and ensure financial flexibility. The Company constantly reviews 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. Exploration and development activities in Indonesia and Thailand, and the heavy oil situation in Canada in 2019 will be key in defining the go forward opportunities and strategies for Pan Orient.
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.
This news release contains forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "expect", "believe", "estimate”, "should", "anticipate" and "potential" or other similar wording. Forward-looking information in this news release includes, but is not limited to, references to: renewal, extension or termination of oil concessions and production sharing contracts; other regulatory approvals; well drilling programs and drilling plans; the benefits of patented technology; estimates of reserves and potentially recoverable resources; information on future production and project start-ups; and sufficiency of financial resources. By their very nature, the forward-looking statements contained in this news release require Pan Orient and its management to make assumptions that may not materialize or that may not be accurate. The forward-looking information contained in this news release is subject to known and unknown risks and uncertainties and other factors, which could cause actual results, expectations, achievements or performance to differ materially, including without limitation: imprecision of reserve estimates and estimates of recoverable quantities of oil, changes in project schedules, regulatory changes and delays, operating and reservoir performance, the effects of weather and climate change, the results of exploration and development drilling and related activities, demand for oil and gas, commercial negotiations, other technical and economic factors or revisions and other factors, many of which are beyond the control of Pan Orient. Although Pan Orient believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Pan Orient Energy Corp.
Jeff Chisholm, President and CEO (located in Bangkok, Thailand)
Email: jeff@panorient.ca
- or -
Bill Ostlund, Vice President Finance and CFO
Telephone: (403) 294-1770, Extension 233
Financial and Operating Summary | Three Months Ended December 31, | Twelve Months Ended December 31, | % Change | ||||||||||||||||||
(thousands of Canadian dollars except where indicated) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||
FINANCIAL | |||||||||||||||||||||
Financial Statement Results – Excluding 50.01% Interest in Thailand Joint Venture (Note 1) | |||||||||||||||||||||
Net income (loss) attributed to common shareholders | 1,409 | (578 | ) | (40 | ) | (5,132 | ) | -99 | % | ||||||||||||
Per share – basic and diluted | $ | 0.03 | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.09 | ) | -99 | % | ||||||||
Cash flow used in operating activities (Note 2) | (245 | ) | (485 | ) | (2,407 | ) | (2,396 | ) | 0 | % | |||||||||||
Per share – basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | 0 | % | |||||||
Cash flow used in investing activities (Note 2) | (1,052 | ) | (1,990 | ) | (5,500 | ) | (4,810 | ) | 14 | % | |||||||||||
Per share – basic and diluted | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.09 | ) | 14 | % | |||||||
Working capital | 32,546 | 32,536 | 32,546 | 32,536 | 0 | % | |||||||||||||||
Working capital & non-current deposits | 33,139 | 36,897 | 33,139 | 36,897 | -10 | % | |||||||||||||||
Long-term debt | - | - | - | - | 0 | % | |||||||||||||||
Shares outstanding (thousands) | 54,900 | 54,900 | 54,900 | 54,900 | 0 | % | |||||||||||||||
Capital commitments (Note 3) | 738 | 139 | 738 | 139 | 431 | % | |||||||||||||||
Working Capital and Non-current Deposits | |||||||||||||||||||||
Beginning of period – Excluding Thailand Joint Venture | 32,993 | 40,416 | 36,897 | 49,818 | -26 | % | |||||||||||||||
Adjusted funds flow from (used in) operations (excluding Thailand Joint Venture) (Note 5) | 972 | (409 | ) | 346 | (4,392 | ) | -108 | % | |||||||||||||
Issue of common shares | - | - | - | 22 | -100 | % | |||||||||||||||
Consolidated capital expenditures (Note 7) | (998 | ) | (2,889 | ) | (4,256 | ) | (7,888 | ) | -46 | % | |||||||||||
Amounts advanced from Thailand Joint Venture | 31 | 31 | 159 | 169 | -6 | % | |||||||||||||||
Disposal of petroleum and natural gas assets (Note 8) | - | - | 133 | 133 | 0 | % | |||||||||||||||
Settlement of decommissioning liabilities | - | (295 | ) | - | (752 | ) | -100 | % | |||||||||||||
Effect of foreign exchange | 141 | 43 | (140 | ) | (213 | ) | -34 | % | |||||||||||||
End of period – Excluding Thailand Joint Venture | 33,139 | 36,897 | 33,139 | 36,897 | -10 | % | |||||||||||||||
Pan Orient 50.01% interest in Thailand Joint Venture Working Capital and Non-Current Deposits | 6,385 | 4,867 | 6,385 | 4,867 | 31 | % | |||||||||||||||
Economic Results – Including 50.01% Interest in Thailand Joint Venture (Note 5) | |||||||||||||||||||||
Total corporate adjusted funds flow from (used in) operations by region (Note 5) | |||||||||||||||||||||
Canada (Note 6) | 1,021 | (230 | ) | 651 | (3,473 | ) | -119 | % | |||||||||||||
Thailand (Note 1) | (7 | ) | (14 | ) | (32 | ) | (38 | ) | -16 | % | |||||||||||
Indonesia | (42 | ) | (165 | ) | (273 | ) | (881 | ) | -69 | % | |||||||||||
Adjusted funds flow from (used in) operations (excl. Thailand Joint Venture) | 972 | (409 | ) | 346 | (4,392 | ) | -108 | % | |||||||||||||
Share of Thailand Joint Venture (Note 4) | 2,029 | 916 | 5,171 | 3,716 | 39 | % | |||||||||||||||
Total corporate adjusted funds flow from (used in) operations | 3,001 | 507 | 5,517 | (676 | ) | -916 | % | ||||||||||||||
Per share – basic and diluted | $ | 0.05 | $ | 0.01 | $ | 0.10 | $ | (0.01 | ) | -1105 | % | ||||||||||
Capital Expenditures – Petroleum & Natural Gas Properties (Note 7) | |||||||||||||||||||||
Canada (Note 6) | 233 | 209 | 897 | 1,130 | -21 | % | |||||||||||||||
Indonesia | 765 | 2,680 | 3,359 | 6,758 | -50 | % | |||||||||||||||
Consolidated capital expenditures (excl. Thailand Joint Venture) | 998 | 2,889 | 4,256 | 7,888 | -46 | % | |||||||||||||||
Share of Thailand Joint Venture capital expenditures | 2,321 | 1,033 | 3,835 | 1,849 | 107 | % | |||||||||||||||
Total capital expenditures (incl. Thailand Joint Venture) | 3,319 | 3,922 | 8,091 | 9,737 | -17 | % | |||||||||||||||
Disposition – Petroleum & Natural Gas Properties (Note 8) | - | - | (133 | ) | (133 | ) | 0 | % |
Investment in Thailand Joint Venture | |||||||||||||||||||||||
Beginning of period | 32,864 | 31,601 | 32,185 | 32,795 | -2 | % | |||||||||||||||||
Net income (loss) from Joint Venture | 492 | (172 | ) | 114 | (1,004 | ) | -111 | % | |||||||||||||||
Other comprehensive gain from Joint Venture | 1,179 | 787 | 2,364 | 563 | 320 | % | |||||||||||||||||
Amounts advanced to Joint Venture | (31 | ) | (31 | ) | (159 | ) | (169 | ) | -6 | % | |||||||||||||
End of period | 34,504 | 32,185 | 34,504 | 32,185 | 7 | % |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
(thousands of Canadian dollars except where indicated) | 2018 | 2017 | 2018 | 2017 | Change | ||||||||||||||
Thailand Operations | |||||||||||||||||||
Economic Results – Including 50.01% Interest in Thailand Joint Venture (Note 4) | |||||||||||||||||||
Oil sales (bbls) | 33,702 | 21,470 | 91,090 | 92,568 | -2 | % | |||||||||||||
Average daily oil sales (BOPD) by Concession L53 | 366 | 233 | 250 | 254 | -2 | % | |||||||||||||
Average oil sales price, before transportation (CDN$/bbl) | $ | 83.75 | $ | 70.80 | $ | 84.82 | $ | 64.68 | 31 | % | |||||||||
Reference Price (volume weighted) and differential | |||||||||||||||||||
Crude oil (Brent $US/bbl) | $ | 64.54 | $ | 61.37 | $ | 69.62 | $ | 53.94 | 29 | % | |||||||||
Exchange Rate $US/$Cdn | 1.34 | 1.29 | 1.32 | 1.32 | 0 | % | |||||||||||||
Crude oil (Brent $Cdn/bbl) | $ | 86.78 | $ | 79.38 | $ | 91.91 | $ | 71.43 | 29 | % | |||||||||
Sale price / Brent reference price | 97 | % | 89 | % | 92 | % | 91 | % | 1 | % | |||||||||
Adjusted funds flow from (used in) operations (Note 5) | |||||||||||||||||||
Crude oil sales | 2,823 | 1,520 | 7,727 | 5,987 | 29 | % | |||||||||||||
Government royalty | (137 | ) | (72 | ) | (379 | ) | (294 | ) | 29 | % | |||||||||
Transportation expense | (68 | ) | (35 | ) | (172 | ) | (150 | ) | 15 | % | |||||||||
Operating expense | (386 | ) | (295 | ) | (1,236 | ) | (1,061 | ) | 16 | % | |||||||||
Field netback | 2,232 | 1,118 | 5,940 | 4,482 | 33 | % | |||||||||||||
General and administrative expense (Note 9) | (227 | ) | (232 | ) | (835 | ) | (831 | ) | 0 | % | |||||||||
Interest income | 21 | 13 | 37 | 21 | 76 | % | |||||||||||||
Foreign exchange gain (loss) | (4 | ) | 3 | (3 | ) | 6 | -150 | % | |||||||||||
Thailand – Adjusted funds flow from operations | 2,022 | 902 | 5,139 | 3,678 | 40 | % | |||||||||||||
Adjusted funds flow from (used in) operations / barrel (CDN$/bbl) (Note 5) | |||||||||||||||||||
Crude oil sales | $ | 83.75 | $ | 70.80 | $ | 84.82 | $ | 64.68 | 31 | % | |||||||||
Government royalty | (4.07 | ) | (3.35 | ) | (4.16 | ) | (3.18 | ) | 31 | % | |||||||||
Transportation expense | (2.02 | ) | (1.63 | ) | (1.89 | ) | (1.62 | ) | 17 | % | |||||||||
Operating expense | (11.45 | ) | (13.75 | ) | (13.57 | ) | (11.46 | ) | 18 | % | |||||||||
Field netback | $ | 66.21 | $ | 52.07 | $ | 65.20 | $ | 48.42 | 35 | % | |||||||||
General and administrative expense (Note 9) | (6.74 | ) | (10.81 | ) | (9.17 | ) | (8.98 | ) | 2 | % | |||||||||
Interest Income | 0.62 | 0.61 | 0.41 | 0.23 | 77 | % | |||||||||||||
Foreign exchange gain (loss) | (0.12 | ) | 0.14 | (0.03 | ) | 0.06 | -155 | % | |||||||||||
Thailand – Adjusted funds flow from operations | $ | 59.97 | $ | 42.01 | $ | 56.41 | $ | 39.73 | 42 | % | |||||||||
Government royalty as percentage of crude oil sales | 5 | % | 5 | % | 5 | % | 5 | % | 0 | % | |||||||||
Income tax & SRB as percentage of crude oil sales | - | - | - | - | 0 | % | |||||||||||||
As percentage of crude oil sales | |||||||||||||||||||
Expenses - transportation, operating, G&A and other | 24 | % | 36 | % | 28 | % | 34 | % | -6 | % | |||||||||
Government royalty, SRB and income tax | 5 | % | 5 | % | 5 | % | 5 | % | 0 | % | |||||||||
Adjusted funds flow from operations, before interest income | 72 | % | 59 | % | 67 | % | 61 | % | 6 | % | |||||||||
Wells drilled | |||||||||||||||||||
Gross | 2 | 1 | 2 | 1 | 100 | % | |||||||||||||
Net | 1 | 0.5 | 1 | 0.5 | 100 | % | |||||||||||||
Financial Statement Presentation Results – Excl. 50.01% Interest in Thailand Joint Venture (Note 1) | |||||||||||||||||||
General and administrative expense (Note 9) | (7 | ) | (14 | ) | (32 | ) | (38 | ) | -16 | % | |||||||||
Adjusted funds flow used in consolidated operations | (7 | ) | (14 | ) | (32 | ) | (38 | ) | -16 | % | |||||||||
Adjusted funds flow included in Investment in Thailand Joint Venture | |||||||||||||||||||
Net income (loss) from Thailand Joint Venture | 492 | (172 | ) | 114 | (1,004 | ) | -111 | % | |||||||||||
Add back non-cash items in net loss | 1,537 | 1,088 | 5,057 | 4,720 | 7 | % | |||||||||||||
Adjusted funds flow from Thailand Joint Venture | 2,029 | 916 | 5,171 | 3,716 | 39 | % | |||||||||||||
Thailand – Economic adjusted funds flow from operations (Note 4) | 2,022 | 902 | 5,139 | 3,678 | 40 | % |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(thousands of Canadian dollars except where indicated) | 2018 | 2017 | 2018 | 2017 | Change | ||||||||||
Canada Operations (Note 7) | |||||||||||||||
Interest income | 105 | 88 | 494 | 308 | 60 | % | |||||||||
General and administrative expenses (Note 9) | (420 | ) | (482 | ) | (1,910 | ) | (2,092 | ) | -9 | % | |||||
Realized foreign exchange gain | 13 | - | 20 | 1 | 1900 | % | |||||||||
Unrealized foreign exchange gain (loss) (Note 16) | 1,323 | 164 | 2,047 | (1,838 | ) | -211 | % | ||||||||
Current income tax | - | - | - | 148 | -100 | % | |||||||||
Canada – Adjusted funds flow from (used in) operations | 1,021 | (230 | ) | 651 | (3,473 | ) | -119 | % | |||||||
Indonesia Operations | |||||||||||||||
General and administrative expense (Note 9) | (63 | ) | (151 | ) | (255 | ) | (823 | ) | -69 | % | |||||
Exploration recovery | 30 | - | - | (5 | ) | -100 | % | ||||||||
Realized foreign exchange loss | (9 | ) | (14 | ) | (18 | ) | (53 | ) | -66 | % | |||||
Indonesia – Adjusted funds flow used in operations | (42 | ) | (165 | ) | (273 | ) | (881 | ) | -69 | % | |||||
Wells drilled | |||||||||||||||
Gross | - | - | - | 2 | |||||||||||
Net | - | - | - | 1.0 |
Year Ended December 31, | Change | |||||||||||||||||
(thousands of Canadian dollars except where indicated) | 2018 | 2017 | ||||||||||||||||
RESERVES AND CONTINGENT RESOURCES | ||||||||||||||||||
Onshore Thailand – Concession L53 (50.01% economic interest) (Note 1) | (Note 10) | (Note 11) | ||||||||||||||||
Proved oil reserves (thousands of barrels) | 451 | 272 | 65 | % | ||||||||||||||
Proved plus probable oil reserves (thousands of barrels) | 1,366 | 547 | 150 | % | ||||||||||||||
Net present value of proved + probable reserves, after tax discounted at 10% | 39,507 | 13,982 | 182 | % | ||||||||||||||
Per Pan Orient share – basic (Note 12) | $ | 0.72 | $ | 0.25 | 188 | % | ||||||||||||
Canada (Pan Orient’s 71.8% share of the oil sands leases of Andora at Sawn Lake, Alberta) | (Note 13) | |||||||||||||||||
INTERNATIONAL INTERESTS AT DECEMBER 31, 2018 | ||||||||||||||||||
All amounts reflect Pan Orient's economic interest | Status | Net Square Kilometers | December 31, 2018 Financial Commitments (Cdn thousands) | 2018 Avg. Production (BOPD) | P+P Reserves (thousands of barrels) | |||||||||||||
Onshore Thailand Concession (Recorded in Investment in Joint Venture) | ||||||||||||||||||
L53/48 (Pan Orient 50.01% ownership as at December 31, 2018) (Note 1 & 14) | Partially developed | 118 | - | to January 2021 (Note 14) | 250 | 1,366 | ||||||||||||
Onshore Indonesia PSC (Consolidated subsidiary) | ||||||||||||||||||
East Jabung PSC, South Sumatra (49% interest & non-operator) (Note 15) | Undeveloped | 610 | 19 | to January 2020 | ||||||||||||||
728 | 19 | |||||||||||||||||
(1) | Pan Orient holds a 50.01% equity interest in Pan Orient Energy (Siam) Ltd. as a joint arrangement where the Company shares joint control with the 49.99% equity interest holder. The resulting joint arrangement is classified as a Joint Venture under IFRS 11 and is accounted for using the equity method of accounting where Pan Orient’s 50.01% equity interest in the assets, liabilities, working capital, operations and capital expenditures of Pan Orient Energy (Siam) Ltd. are recorded in Investment in Thailand Joint Venture. | |
(2) | As set out in the Consolidated Statements of Cash Flows in the Consolidated Financial Statements of Pan Orient Energy Corp. | |
(3) | Refer to Commitments note disclosure of the December 31, 2018 and December 31, 2017 Consolidated Financial Statements. | |
(4) | For the purpose of providing more meaningful economic results from operations for Thailand, the amounts presented include 50.01% of results of the Thailand Joint Venture. | |
(5) | Total corporate adjusted funds flow from operations is cash flow from operating activities prior to changes in non-cash working capital, decommissioning expenditures and settlements, unrealized foreign exchange gain or loss plus the corresponding amount from Pan Orient’s 50.01% interest in the Thailand Joint Venture which is recorded in Joint Venture for financial statement purposes. This measure is used by management to analyze operating performance and leverage. Adjusted funds flow as presented does not have any standardized meaning prescribed by IFRS and therefore it may not be comparable with the calculation of similar measures of other entities. Adjusted funds flow is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. | |
(6) | The Sawn Lake Demonstration Project in Alberta has not yet proven that it is commercially viable and all related costs and revenues are being capitalized as exploration and evaluation assets until commercial viability is achieved. | |
(7) | Cost of capital expenditures excluded decommissioning costs, the impact of changes in foreign exchange and capitalized stock-based compensation expense. | |
(8) | In 2018, the Sawn Lake joint venture sold some inventory of pipe to outside third party. In 2017, the Company sold some equipment inventory from its Indonesian operations to its Thailand joint venture. | |
(9) | General & administrative expenses, excluding non-cash accretion on decommissioning provision. The nominal amount of G&A shown in the three and twelve months ended December 31, 2017 and 2018 for Thailand operations related to G&A of the holding company of Pan Orient Energy (Siam) Ltd. | |
(10) | Thailand reserves as at December 31, 2018 as evaluated by Sproule International Limited of Calgary assessed at forecast crude oil reference prices and costs. The US$ reference price for crude oil per barrel (US$ UK Brent per barrel) in the evaluation is $70.00 for 2019, $72.00 for 2020, $73.00 for 2021, $74.46 for 2022, $75.95 for 2023, and prices increase at 2.0% per year thereafter. Foreign exchange rate used of Cdn$1=US$0.77 for 2019, Cdn$1=US$0.80 for 2020 and Cdn$1=US$0.80 thereafter. The engineered values disclosed may not represent fair market value. | |
(11) | Thailand reserves as at December 31, 2017 as evaluated by Sproule International Limited of Calgary assessed at forecast crude oil reference prices and costs. The US$ reference price for crude oil per barrel (US$ UK Brent per barrel) in the evaluation is $58.00 for 2018, $67.00 for 2019, $72.00 for 2020, $75.00 for 2021, $76.50 for 2022 and prices increase at 2.0% per year thereafter. Foreign exchange rate used of Cdn$1=US$0.79 for 2018, Cdn$1=US$0.82 for 2019 and Cdn$1=US$0.85 thereafter. The engineered values disclosed may not represent fair market value. | |
(12) | Per share values calculated based on 54,900,407 Pan Orient Shares outstanding at December 31, 2018 and December 31, 2017. | |
(13) | The evaluation of Andora’s contingent resources of the oil sands project at Sawn Lake Alberta, Canada as at June 30, 2016 was conducted by Sproule Unconventional Limited. The evaluation assigned an 85% chance of development for Sawn Lake, or a 15% development risk, and the risked “Best Estimate” contingent resources for Andora were 196.9 million barrels of bitumen recoverable (141.4 million barrels net to Pan Orient’s interest in Andora). Andora’s unrisked “Best Estimate” contingent resources were 231.6 million barrels (166.3 million net to Pan Orient’s interest in Andora) of recoverable bitumen as at June 30, 2016. The June 30, 2016 report had been updated for results of the Sawn Lake demonstration project, the June 30, 2016 price forecasts for crude oil, bitumen, natural gas and exchange rates, and a revised date of 2020 for the estimated commencement of commercial production. | |
(14) | At December 31, 2018 Concession L53/48 in Thailand consisted of 22.22 square kilometers associated with the L53-A, L53-B, L53-D and L53-G fields held through production licenses (with a 20 year primary term to 2036 plus an additional 10 year renewal period that can be applied for) and 213.91 square kilometers of “reserved area” exploration lands. The Company has submitted the application for the production license for the L53-DD field and approval is anticipated in April or May of 2019. The original nine year exploration period for Concession L53 expired on January 7, 2016. The Government of Thailand approved a 215.87 square kilometer "reserved area" within Concession L53 for up to five years, with the payment of a surface reservation fee of $0.8 million gross ($0.4 million net to Pan Orient), for each year the Company elects to retain the reserved area. The Company is entitled to receive a refund of the surface reservation fee for a particular year in an amount equal to the petroleum exploration expenditures spent in that year within the reserved area up to the reservation fee paid. The Company intends to spend at least the full amount each year the reserved area is renewed and, therefore, it is expected that the annual reservation fee will be fully refunded. | |
(15) | In 2014 the Company entered into a farmin agreement for the transfer of a 51% direct working interest and operatorship of the East Jabung PSC. The agreement included a firm commitment by the farminee to fund the first US$10.0 million towards the first exploration well and a contingent commitment to fund the first US$5.0 million towards an appraisal well, if justified. The transaction closed on June 1, 2015 and the Company transferred the operatorship of the PSC to the farminee and reduced its interest to 49%. The drilling of the Ayu-1X well and Elok-1X well in 2017 qualified for the two wells under the firm 3 year exploration work program. The original expiry of the East Jabung PSC occurred on November 21, 2017 and was extended by the Government of Indonesia (“GOI”) to January 20, 2019. Subsequent to year end, the East Jabung PSC joint venture received approval for a four year exploration extension period of the PSC to January 20, 2023. Capital commitments for the first year of the PSC exploration extension include drilling of one exploration well and geological studies. The drilling of the Anggun-1X well will qualify as the exploration well commitment. The estimated dry hole cost of the Anggun-1X well, including permanent road, well pad construction and drilling is USD 15.4 million (CAD 21.0 million), with Pan Orient’s 49% share of US$7.5 million (Cdn$10.2 million). Additional commitments for the second to fourth year PSC extension will be determined on a year-by-year basis through submission of a work program and approval from the GOI. During the four year exploration extension period, the joint venture has the option of exiting or continuing with the PSC on an annual basis.. The final remaining PSC area after the extension is 1,245.56 square kilometers, representing 20% of the original PSC area. | |
(16) | Unrealized foreign exchange gain or loss in Canada is related to the U.S. dollars denominated cash balances held in Canada. | |
(17) | Tables may not add due to rounding. |