Panoro Energy ASA

Good morning, everyone, and thank you for joining our second quarter results presentation. This is John Hamilton, Chief Executive Officer of Panora Energy ASA. I'm joined today by a number of colleagues as well who will be available to assist with any questions that you might have following a short presentation. As a reminder, today's conference call contains certain statements that are or may be deemed to be forward-looking 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 we believe are appropriate under the circumstances. Although we believe 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. And for your reference, our results announcement was released this morning and is available also on our website, www.panoraenergy.com. So as a reminder, for those of you who've been here before, for those of you who haven't, you have the ability to ask questions. You can either type in a question, as you can see on the left pane there, and we'll endeavor to answer that question if it hasn't already been asked. Or you can raise your hand, as you can see on the right panel there. We will unmute you and you can then ask a question and there'll be ample time after the presentation to do so. Next slide, please. So just some highlights. The second quarter was obviously a slow quarter for us. That was all well communicated in terms of liftings. We didn't really have any liftings in the second quarter. So we're kind of focusing on the things that we think matter here. We recently had record production rates. of up to 11,000 barrels a day. This is a record for Panora, so it has been a very, very good recent set of events for us, triggered largely by the increase in production in Dusafu, which we'll talk a little bit about. We have crude liftings of a little over 800,000 barrels in the first half of the year. The second half is going to be much more active, and we'll talk a little bit about that as well. Our CAPEX is trending online with guidance at the moment. On the financial highlights, again, revenue of $66 million, EBITDA of $39 million. Again, we'll see that increase in the second half of the year as our liftings increase during the course of the year. And then there's some balance sheet figures as well, as well as an inventory position as at the end of 30th of June of inventory of oil on the vessel to our entitlement. And today we also announced a second quarter cash dividend of a NOC 0.342 per share, which is approximately 40 million kroner, which is a material increase from our first quarter dividend of 31 million kroner. So all in all, we think a very credible performance and within guidance. Next slide, please. So again, just looking at the trajectory of the business, if I can put it that way, as we always show this slide with quarterly performance on the production side, where we are hoping to get to in 2023, and most importantly, where we think we're going to get to the peak rate of in excess of 13,000 barrels a day, once the all six Hibiscus developed Roche wells are online, which should be around the end of the year, perhaps slipping into the first bit of next year, but right around that period. And that is really what we're aiming for, is to try and get that momentum up to that 13,000 barrels a day. And we're well on track to do that. Next slide, please. This is our lifting schedule. Again, it's a slide we always show to try and show where our liftings are. As a reminder, we recognize revenue and cash flow, not based on a daily basis as we produce the oil, but only when we sell it, and that creates Quarters like the second quarter where we hardly had any liftings at all. Again, that was well communicated. The second half of the year is obviously where it's going to be much more active. The third quarter, in fact, looks like it's going to be an extremely big quarter for us with over 1.5 million barrels of oil being lifted, which you'll see coming through in the third quarter P&L. And obviously some of the cash that comes usually 30 days later after the lifting. So some of the cash may actually accumulate only into the fourth quarter. But nonetheless, it's going to be a very active third quarter for us and a very interesting fourth quarter for us as well. Next slide, please. I won't dwell on this slide much, but we always like to provide the detailed granular information around our balance sheet. debt amortizations we're paying something like 26 million dollars worth of debt back this year and our capex is trending as per guidance as per expectation around the 75 million dollar mark is where we expect to be by the end of the year next slide please and again a cash flow waterfall where you can see the movements in cash I don't think there's terribly much to point out here, but again, for avoidance of any confusion, we like to really lay out the exact pattern of cash flow during the first half of the year, ending with a cash balance of around $31 million. Next slide, please. So I want to talk about each of our three assets at the moment, our three production assets. Most in focus is going to be Gabon right now, given all the activity there. There was some grumpiness perhaps, some negativity in the news yesterday around Gabon in particular. So I do want to make sure that we address what we think is an extremely successful ongoing development in Gabon. I'm going to ask my colleague Richard Morton who, incidentally, discovered the Roosh and Tortue fields originally and has been involved with this asset for 15 years now to talk a little bit about what's going on in Gabon. Richard?

Yeah, thank you. Thank you, John. Good morning, everyone. I'm the technical director for Panoros. John says I've been working on this project for a number of years. So it's great to see this go from an exploration project in the early days of Panoros history to a real core of the company and a production asset that's performing extremely well now. So we had a lot of activity in this asset the first part of the year. The first activities were the installation of the new platform at Mabomo at the Haviscus field and the installation of the pipeline down to the FPSO. So brand new facilities installed according to plan. The rig arrived and drilled three wells in hibiscus. They were all extremely good results in terms of reservoir quality. We've got long horizontal section in very good quality sandstone and very productive wells for the first three wells, hibiscus three, four, and five. And those wells kick off at a gross rate of around 6,000 barrels a day, which is well within our In fact, it seeds our expectations for the reservoir. So we're very happy with that. The fourth well, number six, is currently completing. We'll have that on production shortly. Then the rig will move to drill the first two wells in the Ruche field to the northeast, to the east of the platform, to tie that back in. So we've got plenty of activity upcoming and news flow for Hibiscus and Ruche. The rig still has a couple of options available. We're showing a couple more wells, possibly in 2024. We may have another production well to add to that. That's an optional thing. The joint venture needs to agree on that. And then there's an opportunity for some more exciting exploration in the area as well, which we're discussing. Down at Tour 2, we've put on a new gas lift compressor to increase the capacity there. And that means we can run all of the six tortue wells concurrently. So we're looking forward to, once these new hibiscus wells are all on, looking forward to some real gains in production towards the end of this year and the tortue contributing as well with the new gas lift. So I'll go to the next slide and talk a little bit about the project in EG. So we've got plenty of activity happening in EG as well. We have some ongoing work on the field, ESP conversions and some life extension projects which are currently underway, being carried out by Trident, the operator. There's also a gas compression project at Akume which is being started and that will help utilize gas injection to reduce flaring on the asset. The exciting news coming up here is we have a rig coming. That rig will drill three infra wells at Sabre first, and then two wells at, if you may have a title, three wells. And then the rig will move down to drill an exploration well in Block S. So Block S is a new project for us. We farmed into this asset at the end of last year, alongside Cosmos and Trident, who also are in our Block G fields. And we have 12% of the project. It's a new play we're testing that is very, very close to the FPSO, so about 10 kilometers from the FPSO, which means it's quite an easy tieback should we be successful. We also have acquired the block EG1, which you see on the map to the right. And that one is operated by ourselves with a partner, Cosmos. there we don't have a well commitment but we see some very interesting prospectivity which extends east from block s into this asset as well so we'll go to the next one please here's a little geoseismic cross section on the left hand side showing the king deep target so basically it's a very large four-way which we've identified 10 kilometers away from the fps so we've got a gross mean prospective resource in this of 180 million barrels. So it is potentially, if it comes in, potentially a significant game changer for the area and easily tied back into the production facilities in Equatorial Guinea. So thanks. I'll hand back to John now.

Thanks, Richard. We're very excited with this exploration prospect, and we can probably talk about it a little bit more in due course. Next slide, please. Tunisia, there's quite a bit going on in Tunisia as well. We, as everybody knows, bought this asset when it was doing about 3,500 barrels a day. We have recently been producing in excess of 5,000 barrels a day. So we see this as a great success where we are joint operator together with the state on this one. We still have an ambition to get to 6,000 barrels a day. It's hard work every day to do it, but we have definitely been showing some positive movements to get towards those levels. The big news in the quarter here was that we acquired our minority interest that we held in this asset, so we consolidated our position here. I think we announced that back in April. Most people would have followed it, but that happened in the quarter, which added another 3 million barrels roughly of net 2p to us and around 800 or 900 barrels a day of production at the time of the acquisition. So we're very, very happy with developments in Tunisia as well. Next slide, please. It's the final slide, and we're repeating the messages that we have here. We have a very, very active work program ongoing in Panoro. We have at least 10 wells drilling, with three, admittedly, have already been completed to date, but we're sort of just still in the beginning of a very, very active period for the company. and we have options over additional rig slots. Excellent results from the first new production wells, the first three. Richard touched on it, and again, we're extremely pleased. The timing of those three wells admittedly is a month or two behind the original schedule, which of course skews things. But again, there was a little bit of negativity in the market yesterday. We would counter that very strongly and say that we're extremely pleased with the progress and the development of these three wells to date and the overall hibiscus rouge development Kicking off right as we're finishing off in Gabon, we're moving into a three-well infill drilling program in Equatorial Guinea, so it's going to be much more news flow as we come into 2024. The rig is contracted. It's due to arrive in early Q4, and we'll start drilling this well probably towards the end of the fourth quarter. The next exciting thing is that there are up to three exploration wells. that we're going to be drilling in the next 12 months. So the Akheng Deep one, which Richard touched on, is firm and planned. But we have these two additional slots in Gabon as well. And there is debate within the joint venture about what to do with those two slots. It's too early to say what the decisions on those are. However, there is very much a positive sentiment towards drilling at least one exploration well. We'd like to see that happen as Panora. Our consolidated Tunisian business has really given us extra momentum in the country, and that's really helped solidify the company even further. And we've made a very, very clear framework, clear shareholder returns policy for 2023. Our 2024 shareholder policy will obviously come out in due course in November when we announce our third quarter results. We'll give some more information about 2024. we've been very clear in today's announcement around the dividend i think is a very positive indication in terms of the board's sentiment towards shareholder returns so with that i'll conclude uh and uh open the uh mic or the panel on the left you can see to type any questions if you don't want to speak um andy my colleague andy's going to um officiate here um