CALGARY, ALBERTA--(Marketwire - May 26, 2011) - Pan Orient Energy Corp. ("Pan Orient") (TSX VENTURE:POE) is pleased to provide highlights of its 2011 first 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 net to Pan Orient.
The Corporation today filed its unaudited consolidated financial statements as at and for the three months ended March 31, 2011 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.
2011 FIRST QUARTER HIGHLIGHTS
2011 Thailand Outlook
Thailand Production
Thailand oil production is currently 2,380 BOPD with 675 BOPD from Concession L53 and 1,705 BOPD from Concessions L44, SW1 and L33, up 420 BOPD from the 1,960 BOPD reported on April 26, 2011. All increases are attributed to conventional sandstone production added from the L53-B, L53-A3, L53-A2 and WBEXT-1E wells.
Concession L53
L53-B is currently producing at 58 BOPD from the K40-A sand and will be perforated in a structurally higher sandstone interval within the next seven days. No reserves at December 31, 2010 had been attributed to the L53-B lobe at any stratigraphic level.
L53-A3 is currently producing at 195 BOPD from the K40-C sand and L53-A2 is producing at 34 BOPD from the K40-A sand. L53-A2 will be sidetracked to target the K40-A sand near the L53-A3 well (currently producing from the K40-C sand) in order to produce from the excellent quality K40-A reservoir encountered by the L53-A3 well, targeting production additions of 250-400 BOPD. Drilling of the sidetrack will commence in the next five to six days.
The L53-D discovery well (240 BOPD) is currently being twinned after the initial well had been sidetracked in 2010 to appraise the extent of the reservoir and shut in after failing to encounter the target sand. It is anticipated this will be completed in the next four days, at which time the rig will move to the L53-A2 sidetrack discussed above. Upon the completion of the L53-A2 sidetrack, the rig will be mobilized to Concession L44 for development and exploration drilling until post monsoon (approximately October 2011) when the L53-G and L53-E exploration prospects in Concession L53 will be drilled.
Concessions L44 & L33
The WBEXT-1E development well encountered an excellent quality "E" sand reservoir approximately 500 meters west of the original WBEXT-1B discovery well, and is currently producing at 139 BOPD. Results from the WBEXT field "E" sand have been encouraging with stabilized rates of between 140-180 BOPD and an inventory of approximately 15-20 locations remaining in the main fault compartment alone. This reservoir will be a near term focus of drilling activity.
In the Wichian Buri field, approximately 45 BOPD is currently shut-in while two new cellars are added at the POE-3. POE-6 and WBN-2 surface locations. A six well infill program is planned to commence shortly, targeting rates of 25-60 BOPD per well with each well taking approximately 4 days to complete a vertical well and slightly longer time to complete highly deviated / horizontal wells. Any success in the initial infill program will immediately be followed up by a second, larger infill program.
Summary
Over the past 4 weeks 405 BOPD of production has been added from conventional sandstone reservoirs, and with the WBEXT-1F well about to commence testing. Within the next 7 days an additional 480 BOPD is anticipated to be added from the twin of the L53-D discovery well which had briefly tested 240 BOPD before being shut-in to drill a sidetrack well, and the WBEXT-1F development well which had penetrated approximately 80 meters of gross "E" sand (measured thickness) in the structurally highest position the "E" sand has been encountered to date.
Drilling is currently focused on the development of conventional sandstone reservoirs at Concessions L53 and L44 in order to establish a stable platform of production from which development of the main volcanic reservoir fields will be launched in conjunction with further exploration drilling that will be targeting 75% volcanic and 25% sandstone reservoirs.
The Company is pleased with the production adds of the new conventional sandstone reservoir wells and the performance of the older volcanic reservoir wells whose performance has been very stable. The two active drilling rigs for the remainder of 2011 provide Pan Orient with the flexibility to finally pursue development of a number of sandstone fields that had been neglected in the past while pursing higher initial flow rate wells with only 1 active rig.
Earlier guidance of 5,000 to 6,000 BOPD average for 2011 will be reviewed at the end of the second quarter after the initial results of the development program outlined above.
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: well drilling programs and drilling plans, estimates of reserves and potentially recoverable resources, and information on future production and project start-ups. 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, 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.
Financial and Operating Summary | Three Months Ended March 31, | Change | |||||
(thousands of Canadian dollars except where indicated) | 2011 | 2010 | |||||
FINANCIAL | |||||||
Oil revenue, before royalties and transportation expense | 18,449 | 25,038 | -26 | % | |||
Funds flow from operations (Note 1) | 12,362 | 12,336 | 0 | % | |||
Per share – basic | $ 0.24 | $ 0.26 | -7 | % | |||
Per share – diluted | $ 0.24 | $ 0.25 | -4 | % | |||
Funds flow from operations by region (Note 1) | |||||||
Canada | (424 | ) | 29 | ||||
Thailand | 12,859 | 12,364 | 4 | % | |||
Indonesia | (73 | ) | (57 | ) | 28 | % | |
Total | 12,362 | 12,336 | 0 | % | |||
Net income attributable to common shareholders | 3,928 | 4,070 | -3 | % | |||
Per share - basic | $ 0.08 | $ 0.09 | -11 | % | |||
Per share - diluted | $ 0.08 | $ 0.08 | 0 | % | |||
Working capital | 64,512 | 21,498 | 200 | % | |||
Working capital plus non-current deposits | 69,166 | 25,358 | 173 | % | |||
Long-term debt | - | - | |||||
Capital expenditures (Note 2) | 19,972 | 20,269 | -1 | % | |||
Acquisitions – Indonesia (Note 3) | 1,780 | - | |||||
Acquisition – Sawn Lake, Canada (Note 3) | 3,192 | - | |||||
Shares outstanding (thousands) | 56,544 | 47,414 | 19 | % | |||
Funds Flow from Operations per Barrel (Note 1) | |||||||
Canada operations | $ (2.10 | ) | $ 0.09 | ||||
Thailand operations | 63.61 | 36.01 | 77 | % | |||
Indonesia operations – G&A expense | (0.36 | ) | (0.17 | ) | 113 | % | |
$ 61.15 | $ 35.93 | 70 | % | ||||
Capital Expenditures (Note 2) | |||||||
Canada | 68 | 63 | 8 | % | |||
Thailand | 14,414 | 13,419 | 7 | % | |||
Indonesia | 5,490 | 6,787 | -19 | % | |||
Total | 19,972 | 20,269 | -1 | % | |||
Working Capital and Non-current Deposits | |||||||
Working capital & non-current deposits - beginning of period | 31,396 | 32,738 | -4 | % | |||
Funds flow from operations (Note 1) | 12,362 | 12,336 | 0 | % | |||
Capital expenditures (Note 2) | (19,972 | ) | (20,269 | ) | -1 | % | |
Acquisitions – Indonesia (Note 4) | (1,436 | ) | - | ||||
Non-cash settlement of Andora receivable | - | (600 | ) | ||||
Foreign exchange impact on working capital | (314 | ) | (373 | ) | -2 | % | |
Net proceeds on share transactions | 47,130 | 1,526 | |||||
Working capital & non-current deposits - end of period | 69,166 | 25,358 | 173 | % | |||
Canada Operations | |||||||
Interest income | 21 | 8 | |||||
General and administrative recovery (expense) | (263 | ) | 29 | ||||
Realized foreign exchange (loss) | (182 | ) | (8 | ) | |||
Funds flow from operations (Note 1) | (424 | ) | 29 | ||||
Funds flow from operations per barrel (Note 1) | |||||||
Interest income | $ 0.10 | $ 0.02 | |||||
General and administrative (expense) recovery | (1.30 | ) | 0.09 | ||||
Realized foreign exchange (loss) | (0.90 | ) | (0.02 | ) | |||
$ (2.10 | ) | $ 0.09 |
Indonesia Operations |
General and administrative (expense) recovery | (73 | ) | (57 | ) | 28 | % | |
Wells drilled | |||||||
Gross | 1 | - | |||||
Net | 1.0 | - | |||||
Three Months Ended March 31, | Change | ||||||
(thousands of Canadian dollars except where indicated) | 2011 | 2010 | |||||
Thailand Operations | |||||||
Total oil sales volume (bbls) | 202,167 | 343,400 | -41 | % | |||
Average daily oil sales by concession (BOPD) | |||||||
L44 | 1,501 | 3,601 | -58 | % | |||
SW1 | 121 | 215 | -43 | % | |||
L33 | 210 | - | |||||
L53 | 414 | - | |||||
Total | 2,246 | 3,816 | -41 | % | |||
Average oil sales price, before transportation (CDN$/bbl) | $ 91.26 | $ 72.91 | 25 | % | |||
Reference Price (volume weighted) and differential | |||||||
Crude oil (WTI $US/bbl) | $ 94.48 | $ 78.83 | 20 | % | |||
Exchange Rate $US/$Cdn | 1.00 | 1.06 | -5 | % | |||
Crude oil (WTI $Cdn/bbl) | $ 94.48 | $ 83.39 | 13 | % | |||
Sales price / WTI reference price | 97 | % | 87 | % | 10 | % | |
Funds flow from operations (Note 1) | |||||||
Crude oil sales | 18,449 | 25,038 | -26 | % | |||
Government royalty | (956 | ) | (1,589 | ) | -40 | % | |
Other royalty | (45 | ) | (21 | ) | 115 | % | |
Transportation expense | (469 | ) | (864 | ) | -46 | % | |
Operating expense | (2,137 | ) | (2,198 | ) | -3 | % | |
Field netback | 14,842 | 20,366 | -27 | % | |||
General and administrative expense | (992 | ) | (1,274 | ) | -22 | % | |
Interest income | 17 | 28 | -39 | % | |||
Special Remuneratory Benefit (SRB) | (23 | ) | (2,169 | ) | -99 | % | |
Current income tax | (985 | ) | (4,587 | ) | -79 | % | |
Funds flow from operations | 12,859 | 12,364 | 4 | % | |||
Funds flow from operations / barrel (CDN$/bbl) (Note 1) | |||||||
Crude oil sales | $ 91.26 | $ 72.91 | 25 | % | |||
Government royalty | (4.73 | ) | (4.63 | ) | 2 | % | |
Other royalty | (0.22 | ) | (0.05 | ) | 347 | % | |
Transportation expense | (2.32 | ) | (2.52 | ) | -8 | % | |
Operating expense | (10.57 | ) | (6.40 | ) | 65 | % | |
Field Netback | 73.41 | 59.31 | 24 | % | |||
General and administrative expense | (4.90 | ) | (3.70 | ) | 33 | % | |
Interest Income | 0.08 | 0.08 | 0 | % | |||
Special Remuneratory Benefit (SRB) | (0.11 | ) | (6.32 | ) | -98 | % | |
Current income tax | (4.87 | ) | (13.36 | ) | -64 | % | |
Thailand - Funds flow from operations | $ 63.61 | $ 36.01 | 77 | % | |||
Government royalty as percentage of crude oil sales | 5.2 | % | 6.3 | % | -1.2 | % | |
SRB as percentage of crude oil sales | 0.1 | % | 8.7 | % | -8.5 | % | |
Income tax as percentage of crude oil sales | 5.3 | % | 18.3 | % | -13.0 | % | |
As percentage of crude oil sales | |||||||
Expenses - transportation, operating, G&A and other | 19.7 | % | 17.4 | % | 2 | % | |
Government royalty, SRB and income tax | 10.6 | % | 33.3 | % | -23 | % | |
Funds flow from operations, before interest income and realized foreign exchange | 69.6 | % | 49.3 | % | 20 | % | |
Wells drilled | |||||||
Gross | 6 | 5 | 20 | % | |||
Net | 4.4 | 3.0 | 47 | % |
(1) | Funds flow from operations ("funds flow" before changes in non-cash working capital and reclamation costs) is used by management to analyze operating performance and leverage. 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. 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. All references to funds flow throughout this MD&A are based on funds flow from operations before changes in non-cash working capital and reclamation costs. |
(2) | Cost of capital expenditures, excluding any asset retirement obligation and excluding the impact of changes in foreign exchange rates. |
(3) | Cost of acquisitions, including deemed value of equity issued in the transaction. |
(4) | Cost of acquisitions, excluding deemed value of equity issued in the transaction. |
To view the Thailand 2011 Drilling - Concessions L33/43 & L44/43 map, the Thailand 2011 Drilling - Concession L53 map and the Pan Orient 2011 Drilling charts, please visit the following link: http://media3.marketwire.com/docs/526poe.pdf
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.
Contact Information: