Panoro Energy ASA

Good morning, everyone. This is Qazi Qadir from Canora Energy. I'm the CFO. With me joining today is Eric D'Argentre, our Chief Operating Officer, and Julian Balcony, our Chairman. We are also supported by Andy Diamond today, who is our Head of IR and Corporate Finance. I'll read out the disclaimer to you before we begin. This presentation does not constitute an offer or buy to sell, say. So, there's risks and uncertainties, including among others, uncertainties in the exploration and for the development and production of the gas and oil interest in estimating those as well, and we basically,

forward-looking statements that are often identified there in these presentations.

I think the disclaimer is, you know, understood to be right, so we can begin.

For the housekeeping, you know, we have a feature to do question and answers.

In the portal, you will be able to raise your hand and participate in the Q&A sessions and we can mute and unmute your line to take those questions. There's also a feature to ask questions via chat box, which will also be available through the course of the call. We are going to keep disciplined, you know, focus time on this call to take questions because we have a very, very packed agenda today, so I appreciate if the questions keep coming and we'll try to answer those after the call on an offline basis. Next slide, please, Sarah. I'll hand over now to our chairman, Julie Banskemi, who will take us to the meetings.

Thank you, Casey. Good morning, everyone. Before we move to our Q4 results, trading, financial, and operation update, I would like to say a few key words on the transformational and acquisition that we have announced last night. I'm very delighted to announce that we have agreed to purchase an additional 40.375% in Block G, from Cosmos Energy. The upfront headline consideration is $180 million, with interim adjustments in final favor from the effective date of the transaction, that is January 1, 2025, which expect to reduce the cash payment on completion between $140 to $150 million. Closing is anticipated sometime during summer 2026. There is a further deferred consideration of $29.5 million in aggregate link to certain production and all price threshold over 2026 to 2028. I would like to highlight that ourselves and our partner COSMOS have been able to fully de-risk the transaction, mitigating the execution risk, clearing all governmental approval and preemptive rights in advance. The only outstanding approval is SEMAC, which is an anti-competition assessment from Central Africa Regulator, which we expect to be concluded within a set six-month timeframe from submission to facilitated completion in summer 2026. Out of the effective date and initial consideration, we are acquiring 46 million bonds. at an enterprise value of about $3.91 per barrel, which is over a 50% discount to Panoro's last traded multiple market benchmark, including broker valuation and regional transaction comparable in West and Central Africa. Production net to the interest being acquired in 2025 was around 8,200 bytes of output debt. In terms of funding to finance this acquisition, we launched yesterday an equity private placement at yesterday's closing price at no discount for just below $50 million, which we have successfully closed and was multiple times oversubscribed last night. The demand for the placement, in fact, we completed it at no discount is a clear testament to the quality of Panoro asset base, including block G, and the compelling terms of the acquisition. We are also seeking to utilize the $150 million TAP headroom in our existing bond framework. And today we are commencing fixed income meetings with prospective bondholders.

Next slide, please. Transformative impact, materiality, and longevity.

I will set this slide quick for itself and show the transformational impact on Panoro's operating profile. Based on 2025 full year, the acquisition increased Panoro pro forma production by approximately 80%, and on a two-period basis, it increased Panoro's size by over 100%. This acquisition basically doubled the size of Panoro overnight. Other of the many benefits of the acquisition will be the increased and more frequent crude oil lifting, giving us better and greater regularity with the outcry through the years, which we fully expect to drive material cash flow expansion with the objective to enhance shareholder return for the next year to come. Next slide, please. Flood G overview. Before I hand over to Eric D'Agentre, our COO and President, I want to remind people that it is almost five years ago today since we announced our entry in Equatorial Guinea and the acquisition of our current 14.25% interest in Block G from Pelo Oil. That acquisition paid back in less than 18 months. And as you can see in the graph on the slide in front of you, our super reserve at our last annual report are greater than the 2p reserve at acquisition showing that we have replaced more reserves than we have produced there are clearly some parallels with the acquisition we have announced last night hopefully at the right time in the current old crisis cycle and vulnerability to transact swiftly and with certainty and also the strong support of the capital market and our shareholders

i will now hand over to eric who will take you through the operation of not only block g but also the exciting and high impact work program across a wider emp portfolio thank you very much julian good morning everybody um on this slide on the blog g uh you can see on the left hand side our ceiba and okuma complex blood g is composed of two uh two different oil accumulation, six fields on conventional, more shallow water, and the SEBA field, which is a subsea development. The key figures on the proforma basis are very strong. We have 115 million barrels of 2P. Our production for 25 on the proforma basis is 11,000 barrels of oil per day. as you can see um on the left-hand side the prediction curve uh delivery was strong through the years 2025 so a little low on prediction delivery is mainly on the seba field we have discussed that in the previous uh reports quarterly reports on the seba multi-phase pump failures or problems I'm pleased to say that back in October, one pump was back in service. Another one is being finalized now as we speak these coming weeks, and we expect the Saba field to gradually recover production and get back to its full potential in the course of the year 2026. Next, please. um so block g uh okume and seba uh it's important to know that it's a very large oil accumulation multi-billion barrels of oil in place originally 1.3 billion on okume and 1.1 on seba tail uh with the current recovery factor that is rather low at around 20 21 percent And with our long-term view and extension granted in 2022 until 2040, we expect with the work program to recover around 30%. That is the target. And you can see from 2025 going forward on the next five years, we have in the first few years focusing on the recovery of our cluster in Sabah field. uh additional well work over an intervention uh stimulation uh pop optimization on the Okume complex and then moved to in two to three years in 2028 and forward on the drilling campaign to add additional drainage point on the Okume fields and the Sabre accumulation over the years that we expect in our five-year plan to reach to get back above 30,000 barrels of oil per day and produce around 55, 54 million gross production at moderate development costs around averaging $10 a barrel. Next, please. And last, group production. Panoro has delivered consistently increase of production with historical level in 2025. at 2 300 barrels of oil per day pre-acquisition and you can see here the impact of the 40.3 percent acquisition of cosmos interest on 25 performer basis our production guidance for 2026 on the performer basis are around between 15 and 17 000 barrel of oil per day with the current program and as i mentioned in the previous slide on block g we have as well a strong program investment program on specifically on um block in gabon with the mabomo phase 2 drilling starting this summer and we are on the road to the 20 000 barrel of oil per day net to padaro group that It's very strong asset base is, as well, in terms of cash generation, very healthy and strong. You can see on the right-hand side, we are very resilient at lower price. Even at $60 a barrel, we have a healthy cash flow generation, way above our pro forma bondage. and going up to the 800 and 900 million mark uh once the brand price goes to 75 80 dollars next list so we have discussed this morning uh the transaction on block g but let's not forget uh the rest of our asset base and especially especially the dusafu asset which is a Cornerstone asset for final row has strongly delivered production with a very good uptime for the years. And here again with historical peak production in 2025, about 33,000 barrels. We have a strong 2P base. As I mentioned, the Mabobo Phase II was FID'd and drilling will start very soon. And we have, in parallel, we are maturing with the Bordeaux FID. Bordeaux was discovered late 24, 25. It's a 25 million barrel recoverable reserves, and we expect FID to be sanctioned in the coming months.

Next, please.

On Tunisia, it's a more modest asset base, but very steady, very important. In the portfolio as well, we have delivered good production last year, about 3,000 BOPD fighting decline, maintaining our baseline. And we have a list of productive projects and well-intervention projects uh in 2026 and and we are maturing some drilling project for later 27 28 that will not just maintain the plateau or extend the plateau above 3000 but increase production on the tunisian asset thank you next slide please another exciting project we have uh on on exploration uh we have the museum guduma blocks which are as you can see right in the middle of a very prolific basin with the dusafu uh production and the etham field of banco uh very close to it and we have um finalize the seismic survey back in December and January. It's now being processed and interpretation this year and part of 2027 to mature the already identified prospect, whether on the top corner of the block or on the Newsy trend as well. That's a very, very exciting project, and we aim to have a well Next slide, please. Another very exciting project and block, block EG23 in Epatorial, Guinea. We have high-graded the Estrella discovery, very exciting discovery with well-tested above 6,700 and almost 50 million standard cubic feet of gas. It's about 10 kilometers from existing producing facilities of the ALBA field, making it a very fast track and easy tieback. And you can see next to Australia the green RODO discovery that would conceptually could be a congenial development of Australian RODO with one platform and drilling center. So another exciting project to follow.

Next slide, please.

Thank you. I will hand over to Cassie Chadea to take you through your results.

Cassie Chadea Thank you so much, Eric, and good morning, everyone. I'm going to discuss very briefly the highlights for 2025. We are looking at, you know, $216 million, a little bit less compared to 2024, but it is a function of two items, which is oil price and the composition of liftings, which can basically affect the cutoff of the sales if they are very, very close to the period end. EBITDA was $98 million approximately. Again, this was driven by the volumes lifted during the year. versus the realization for the year compared to 2024. We came exactly on our guidance on the capital expenditure program of 40 million US dollars, which we believe is a good result for the discipline of capital we maintain at the company. Strong cash position, $77 million, and we are basically fully drawn on our bond, which we raised last year, and very, very healthy and strong cash flow generation from operations at $73 million. We are looking at cash distribution of 50 million kronas, which we have announced this morning, to be paid on or about 10th of March. And just looking at, you know, the few years we have started to declare our distributions, accumulated basis is about 710 million kronos, with a very healthy set of buybacks as well, at 135 million kronos. Next slide, please. Just to talk a little bit about the shareholder returns. So, you know, effectively we have returned, you know, 30% of our current market cap. Obviously, this will be a little bit, you know, different if you consider the market cap of this morning, but certainly when we wrote this presentation, 30% of market cap since we started the consistent distribution since March 2023. um a very healthy year so far we have maintained but obviously we are constrained by the uh by the framework that we have under our own terms which basically give us a finite capacity for distributions in 2026 which is about you know in equivalent terms 21 million us dollars uh and you know of this we have uh equivalent um next slide please uh we are going to talk a little bit about guidance on liftings and and you know also discuss you know how the announced acquisition affects our our business uh very very uh you know positive change uh from the acquisition of cosmos's interest which is expected to to be fully available to us in 2027, but certainly from the later part of the year when we complete the transaction in the third quarter, 2026. On an existing basis, business basis, we are talking about accumulation of inventories until the first half of the year, which is about, you know, uh close to 600 000 barrels but very very active you know sale campaign in later part of the year so for guidance purposes on existing asset base three million to three and a half million barrels of sales versus assuming on a performer basis we get about you know 5.1 million to five and a half billion barrels of sales for this year now what it also does is that it increases our frequency of the lifting and you know during the completion period with the cosmos transaction we are still taking the benefit of you know a more spread out you know profile of our food listings, which also exposes us to more data points on the pricing for our food. Next slide, please. So, again, you know, just talking about, you know, how the buildup for cash has been for this last past year. You mentioned, you know, very healthy cash flow generation from operations. We have also, you know, between the recycling of inventories through the advances, we are close to about, you know, $100 million of, you know, cash flow, including operations. With our, you know, disciplined delivery on the capital expenditure of about $40 million and, you know, after paying off for all our obligations, We are returning about, you know, close to $40 million in share buybacks and cash distributions for this year, ending with about $77 million of cash at the balance sheet as of 31st of December 2025. We are also, as you have seen, announcing a tap issue. uh for a 150 million dollar bond to fund the acquisition of our announcement this morning today the working interest of cosmos energy's block g 40.675 percent um this will basically be the the the source which will basically fund this acquisition later in the year. For guidance purposes, we have some capital expenditure, which is about, you know, 50 to 55 million US dollars on an existing basis of the assets. And on a pro forma basis, you know, I think when we complete the transaction with Cosmos, it is going to be another, you know, $15 to $17 million higher. Next slide, please. So just in summary, I will let Eric summarize, you know, the messaging, and then we'll go straight into P&A.

Thank you, Cathy. As a summary and the main message for you today is that we are delivering on our strategy, on our growth strategy. The first, you know, being the prediction baseline and the reserves. We have produced highest production this year, in 2025, last year, at record level. We have a 5D, the Mabomo Phase 2, as we discussed. That will take us back to 40,000 on the Dusafu block. That's it. Very exciting phase two drilling. So we have a consistent organic reserve replacement, whether it is in Gabon or in the Guadeloupe, as well as in Tunisia. In parallel to this strong pollution and reserve base, We are maturing growth project in our asset portfolio with the Bordeaux Discovery in Gabon. We mentioned, and I mentioned, the Australia project in block EG23. for which we expect resource recognition very soon. And the new 3D seismic we just acquired with our partners BW Energy and Valco on Yozi Guduma and Kusafu Block will allow us to mature and firm up extra additional growth within the south of Gabo area where we are already. And in terms of corporate, you know, growth strategy, Panoro has a strong track record of M&A. That's part of the company DNA, and we have on that strategy with the announcement yesterday of the acquisition of the 40.75% interest of Cosmos in Block G, offshore Equatorial Guinea. Thank you. That's the last slide. We'll now go on the Q&A for some time, and I would remind you to try and focus on the big news of last night and this morning on Block G so that we stay focused. Thank you.

Thank you, Eric. We will now open up to Q&A. As has previously been mentioned, for obvious reasons, we are on a tight timetable today. If we don't manage to answer your question or get to you, please do contact us on info at punaroenergy.com or IR at punaroenergy.com, and we will get back to you. um first question um is from stefan fukar stefan you're unmuted if you'd like to please go ahead and ask your question

Yes, good morning, gents, and thanks for taking my question. It's really around EEG and around the production profile over the coming years. So two on that. The first one, could you confirm if this production profile is indeed just on the 2PKs or whether it includes some 2Cs to achieve that target? And then I think you talk about the $540 million of CAPEXs. from 26 to 2031, I think it is. Could you give a sense of the timing of that capex, how it is spread over the years?

Thank you. Okay. All right. Thanks, Stéphane. So, to answer your question, we have... In terms of production and the five-year plan, about your 2P, 2Cs, we are talking here about the 2P, not the 2C. In this five-year plan, the 2C would come as an addition to this five-year plan. So the drilling we mentioned is on current recognized reserves, but not all developed, so underdeveloped reserves. And the other part of your question on the capex, so the next five years plan, net rate means producing around $55 million. barrel of oil at an average cost of $10 per barrel. You can only imagine that some of the work like stimulation or light work over on the Okume complex may come at $5, $4 to $5 a barrel development. Drilling in Okume complex is more within the $10 to $12 or $13 range, and the Ceiba drilling will be around $15 to $17 per barrel development costs. So the average of this large portfolio is around $10 per barrel development costs.

So we can understand, therefore, looking at this slide, that means that properly the higher costs in overall probably come in the later years rather than the earlier years of the program.

Yeah, exactly. Yeah, the Saba drilling needs more work, more engineering. It's higher investments. So we are going for the conventional shallow water first, easy barrels on Okume wells, well stocked. maximizing the existing one stock and then we will go on drilling and and and the saber drilling will come after the okumi um drilling content that's that's where we are we are we are very very much aligned with with your parallel okay great thank you very much and congratulations

Thank you. I'd remind anyone wanting to ask a question to please raise their hand. Okay.

On the basis that there are no further questions pending, I'd just like to remind you if you do have a question after this call, please feel free to contact us online and we will get back to you. Otherwise, that will conclude today's webinar. Thank you very much. Thank you. Thank you very much.