Panoro Energy ASA

Good morning, everyone. This is John Hamilton, Chief Executive Officer of Panora. I'm joined today by my colleague, Richard Mork, Technical Director, Nigel McKim, Projects Director, Christopher Grunewald, Group Financial Controller, and Andy Diamond, Head of Corporate Finance and Communications. Welcome today to our fourth quarter 2021 Trading and Financial Update, which also comprises our annual figures ahead of our annual report, which we published at the end of April. What I'm going to do is typically I'm just going to go through the slides, which have already been made available on our website and through the Oslo Stock Exchange. And then we'll be open to some questions, which myself or my colleagues will endeavor to answer your questions that you've got. As a reminder, today's conference call contains certain statements that are or may be deemed to be forward statements, which include all statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the company's experience and perception of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances. Although we believe that the expectations reflected in these forward-looking statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking statements due to known or unknown risks, uncertainties, and other factors. So as a reminder, the system that we have here, you can see our housekeeping slide here. If you want to ask a question verbally, you can raise your hand using the raise hand icon. Or if you'd rather type a question for us, you can type it in to the questions panel, and we will hopefully try to answer those questions as well. What we'll probably do is go through and answer the verbal questions first, and then address any remaining questions that haven't been already addressed through the questions panel.

Next slide, please.

Next slide, please. Thank you. These are the results highlights. I think they speak for themselves. This has been a very, very big year for us with huge growth in Revenue in EBITDA, in cash from operations, pretty much every metric that you can imagine this company is completely transformed from what you saw exactly one year ago. I won't dwell so much on the numbers here. We have a couple more slides which go through it. But needless to say, I think that we're in a very, very strong position from a revenue perspective, a P&L perspective, a cash flow perspective, and a balance sheet perspective. At the year end, we had $24 million in cash and about $40 million in receivables, which we've already received. Those related to a lifting that happened towards the end, two liftings that happened towards the end of the year, where the cash was only received in January. Next slide, please. So here it is in a slightly different format. And just to remind people, we were showing numbers based on IFRS reporting and a pro forma basis. And just to remind people, the difference here really is that we effectively owned the new barrels that we bought from Tullow as of the 1st of January 2021, although we did not complete the transactions until the second quarter. One actually right at the end of the first quarter and the second in the second quarter. So from an IFRS perspective, we can't book all the revenue that was associated with that until we completed the transactions. But what we're trying to show on a pro forma basis is what it actually looked like from a from a real perspective, which is that we did own the barrels from the 1st of January. So that's why we're trying to show that you will not see this continuing in 2022. We'll be purely reporting on the RFRS reporting basis. But in order to kind of demystify all the major movements and some of the things that were less clear because of the trickiness around the closing of these transactions, we did want to show our shareholders this on a pro forma basis as well. The main items here really are just looking at, again, the cash balance, I think, and the cash flow is kind of what the main drivers are, and really, I think, the best evidence of the strength of this business. Next slide, please. So here's what production looked like. Obviously, from 2019, 2020, we've completely transformed the business through positive developments in Gabon, but also through the acquisitions that we made last year this time. We also have provided guidance for next year, which should see us between 8,000 and 9,000 barrels a day guidance, so an uplift from 2021. None of this is new. This has all been previously guided, including the 2023 target, which sees us trying to exceed 12,500 barrels during 2023 as hibiscus rouge wells start coming on and that we get some additional uplift from Equatorial Guinea as well. None of this is new information, but it's just a graphic way of explaining that we believe we're on an upward trajectory at a time when oil prices are very strong. So we feel that this is an important message to get across, that we are growing organically our business here. with already identified and approved projects. There's more to come, I think, as well, but this gives you an idea of the trajectory that we're on in the coming two years. Next slide, please. So, just a few high-level updates on the business. Equatorial Guinea is by far and away our most important production asset at the moment. Gabon will catch up and become more important. But at the moment, Equatorial Guinea is roughly 60% of our business. And we had a very successful drilling campaign in 2021. Two new wells on stream. There's a third well, which requires a small sidetrack on it, already previously announced. We'll try and bring that online perhaps even this year. working together with the operator to try and get that well online as well. There's been a new gas lift distribution unit installed at the SEBA field. And we are working on further growth activities right now with the operator. And a potential drilling, a development drilling campaign is being planned for 2023 and beyond that as well. So these are not yet approved. However, when we entered this asset, we always hoped and expected that the operator would continue to go after the substantial 2P reserves and contingent resources in this asset. And as we get through 2022, I think we're going to start talking more and more about the upside potential here. But at the moment, the asset is doing extremely well, higher than expectation. And we're very, very pleased with what's going on there with the operator Trident. In Gabon, our production there, this is a production from last year on a pro forma basis, with the two new production wells having been drilled, and those are now on stream. Production is being optimized during the course of this year. We have some issues with gas lift capacity on the FPSO, which have been previously flagged, and remediation of that is underway. We hope to get these wells operating at their full capacity during the course of this year. And then a big hibiscus roost development, which is really what's going to catapult this asset into a much bigger asset for us and for Gabon, is underway. At the moment, it's on schedule, on a budget. We're looking at first oil from the first couple of wells in Q4 of this year. So you're really going to see further development of our Japanese acreage. Indonesia is now our smallest asset in terms of production, but remains a very important foundation to the company in terms of its cash flow and its reserves. There is a huge beehive of activity going on there, particularly in the Kudbiba and Susina fields. We've had some real successes with workovers and ESP replacements, and we are busy really getting under the hood of of the subsurface models and these assets, something that OMV had left unattended for many years, and we really are getting after remodeling everything here and trying to accelerate the full potential of these assets. We've done very well since buying them from OMV. Production's up about 30 or 40% from the time we bought them, but we believe there's more to be done.