CALGARY, AB – Pan Orient Energy Corp. (“Pan Orient” or the “Company”) (TSXV: POE) reports 2021 third 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 Company is today filing its unaudited consolidated financial statements as at and for the nine months ended September 30, 2021 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 Company’s website, www.panorient.ca.
Commenting today on Pan Orient’s 2021 third quarter results, President and CEO Jeff Chisholm stated: “The third quarter of 2021 saw the highest quarterly oil sales revenue since production first began in Thailand Concession L53. This was despite severe flooding conditions that resulted in some production shut-ins, from approximately October 13th, that are now mainly back on-stream. This was a testament to a job well done by Pan Orient’s operations staff. We are now focused on a series of workovers, that with success, will define new reserves in the AA2 sand, which had no reserves attributed to it at year-end 2020, and the asset sales process announced on October 28, 2021.”
Thailand (net to Pan Orient’s 50.01% equity interest in the Thailand Joint Venture)
- Net to Pan Orient’s 50.01% equity interest in the Thailand Joint Venture, oil sales from Concession L53 in the first nine months of 2021 were 1,385 BOPD, with 1,179 BOPD from the L53-DD field.
- Adjusted Thailand funds flow from operations after tax of $5.3 million ($41.45 per barrel) in the third quarter of 2021 increased 6% compared with $5.0 million ($39.60 per barrel) in the second quarter of 2021. Per barrel amounts during the third quarter of 2021 were a realized price for oil sales of $87.55, transportation expenses $2.36, operating expenses $5.21, general and administrative expenses $1.68, foreign exchange loss and other $0.18, a 5% royalty to the Thailand government $4.67 and income tax $32.00. Oil sales revenue during this period was allocated 11% to expenses for transportation, operating, and general & administrative, 42% to the government of Thailand for royalties & income tax, and 47% to the Thailand Joint Venture.
- Thailand adjusted funds flow from operations of $14.7 million in the first nine months of 2021 funded $5.0 million of Thailand exploration and development activities and dividends paid to Pan Orient from the Thailand Joint Venture of $8.6 million. Pan Orient’s share of working capital and long-term deposits in Thailand at September 30, 2021 was $5.3 million.
Indonesia East Jabung Production Sharing Contract (Pan Orient is non-operator with a 49% ownership interest)
- The East Jabung Production Sharing Contract (“PSC”) expired in January 2020 and the operator is determining final steps to be taken for formal approval of the expiry from the Government of Indonesia. The estimated cost by the operator for abandonment and reclamation of the East Jabung PSC is US$0.7 million (Cdn$0.9 million) net to Pan Orient’s 49% interest.
- Activities of the Company in Indonesia are reported in 2020 and 2021 as discontinued operations. Discontinued operations in Indonesia for 2021 were $168 thousand of expenses and $7 thousand of unrealized foreign exchange gains on currency exchange rates since the end of 2020. In addition, during the third quarter of 2021 the Company recorded $0.6 million in the current decommissioning expense for discontinued operations related to the East Jabung PSC. The total provision recorded for abandonment and reclamation for East Jabung PSC at September 30, 2021 is $0.9 million.
Sawn Lake (Operated by Andora Energy Corporation, in which Pan Orient has a 71.8% ownership)
- For the first nine months of 2021, Pan Orient reports total operating expenses of $220 thousand associated with the Sawn Lake suspended SAGD facility and wellpair. In addition, the estimated decommissioning provision for Sawn Lake was reduced by $0.9 million during the third quarter of 2021 based on an assessment of Sawn Lake by a specialized third-party reclamation company.
- Corporate adjusted funds flow from operations (including Pan Orient’s 50.01% equity interest in the Thailand Joint Venture) was $5.0 million ($0.10 per share) in the third quarter and a total of $12.3 million ($0.24 per share) for the first nine months of 2021. The increase in the third quarter from $3.9 million ($0.08 per share) in the second quarter of 2021 was primarily due to a $0.3 million increase in Pan Orient’s equity interest in Thailand Joint Venture adjusted funds flow from operations and unrealized foreign exchange gain on Canadian cash holdings denominated in US dollars.
- Net income attributable to common shareholders for the first nine months of 2021 was $5.5 million ($0.11 income per share). This compares to a net loss attributable to common shareholders for the first nine months of 2020 of $59.2 million ($1.12 loss per share), with a net $57.6 million impairment charge for the Sawn Lake, Alberta Exploration and Evaluation assets at March 31, 2020.
- Pan Orient repurchased 1,950,100 common shares in the first nine months of 2021, at an average price of $0.87 per share, for $1.7 million. The Company repurchased 87,100 shares in the third quarter at an average price of $1.09 per share. Common shares outstanding at September 30, 2021, and currently, are 49.8 million.
- Pan Orient is in a strong financial position with working capital and non-current deposits of $28.4 million, mainly comprised of cash and cash equivalents held in Canada, and no long-term debt at September 30, 2021. In addition, the Thailand Joint Venture has $5.3 million in working capital and long-term deposits, net to Pan Orient’s 50.01% equity interest, and Thailand funds flow from operations are expected to increase the Company’s cash balance during the remainder of 2021.