PAN ORIENT ENERGY CORP. - 2022 Second Quarter Financial & Operating Results
Canada NewsWire
CALGARY, AB, Aug. 10, 2022
CALGARY, AB, Aug. 10, 2022 /CNW/ - Pan Orient Energy Corp. ("Pan Orient" or the "Company") (TSXV: POE) reports 2022 second 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 six months ended June 30, 2022 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 2022 second quarter results, President and CEO Jeff Chisholm stated: "The Pan Orient sale transaction is progressing smoothly into the August 23, 2022 shareholder vote. Pan Orient management and directors recommend that shareholders support this transaction given the late stage development of the Thailand L53 asset."
HIGHLIGHTS
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 second quarter of 2022 were 1,124 BOPD compared with 1,105 BOPD in the first quarter of 2022. -- Thailand adjusted funds flow from operations of $7.6 million ($73.93 per barrel) in the second quarter of 2022 compared with $5.7 million ($57.19 per barrel) in the first quarter of 2022. The average realized oil price per barrel increased 27% in the second quarter of 2022 to $156.27 per barrel compared with $122.67 in the first quarter of 2022. -- In the first half of 2022, Thailand adjusted funds flow from operations of $13.2 million funded $2.5 million of Thailand exploration and development activities. Working capital and long-term deposits, net to Pan Orient's 50.01% equity interest in the Thailand Joint Venture, at June 30, 2022 was $12.7 million.
Sawn Lake (Operated by Andora Energy Corporation, in which Pan Orient has a 71.8% ownership)
-- In March 2022, Andora entered into an agreement with a joint venture partner at Sawn Lake whereby Andora acquired certain assets and assumed certain liabilities at Sawn Lake. Through the transaction, Andora increased its working interest in the Sawn Lake joint venture to 75%. -- The March 31, 2022 Contingent Bitumen Resources Report ("Resources Report"), a National Instrument 51-101 compliant resources evaluation for Andora's oil sands interests at Sawn Lake Alberta based on exploitation using Steam Assisted Gravity Drainage ("SAGD") as evaluated by Sproule Associates Limited, assigned unrisked "Best Estimate" contingent resources for Andora of 292.0 million barrels of bitumen recoverable (209.6 million barrels net to Pan Orient's 71.8% interest in Andora) and unrisked "Best Estimate" net present value, discounted at 15%, for Andora's interests of $192 million on an after-tax basis ($138 million net to Pan Orient's 71.8% interest in Andora). The Sawn Lake operations are currently suspended and awaiting restart and commercial expansion. Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by the application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. The contingent resources volumes estimated in the Resources Report are considered contingent until such time as there are additional delineation wells confirming reservoir quality and continuity, refinement of the commercial development plan, regulatory approval for full field development, corporate commitment to move forward and financing for commercial development. There is uncertainty that it will be commercially viable to produce any portion of the reported contingent resources volumes. Please refer to Pan Orient's press release of June 13, 2022 for additional information. -- Western Canada Select reference prices for heavy oil remained strong in the second quarter of 2022. At August 8, 2022, the price for Western Canada Select was Cdn$91.34 per barrel and the forward market for Western Canada Select in 2024 was Cdn$79.13 per barrel. Andora is considering alternatives to restart the existing steam SAGD facility and wellpair at Sawn Lake and move the Sawn Lake project forward with minimum development costs to Andora, including partnership, farmout, sourcing additional funds, partial sale or outright sale, and achieve value for shareholders. -- For the first half of 2022, Pan Orient reports total operating expenses of $171 thousand associated with the Sawn Lake suspended SAGD facility and wellpair.
Corporate
-- On June 6, 2022 Pan Orient announced that it had entered into an agreement to be acquired by a subsidiary of Dialog Group Berhad ("Dialog") and for Pan Orient's non-Thailand business to be transferred to CanAsia Energy Corp. ("CanAsia"), a new company to be owned by Pan Orient shareholders (the "Arrangement"). Upon completion of the transaction, a holder of a common share of Pan Orient will receive, for each such common share, cash consideration of USD $0.788 and one common share of CanAsia. The cash consideration is approximately CAD $1.01 at the current exchange rate.As a result of the Arrangement: (a) Dialog, through a subsidiary, will hold all of the issued and outstanding Pan Orient shares, and Pan Orient will continue to own Pan Orient's Thailand business; (b) Pan Orient shareholders (other than dissenting shareholders) will receive, through a series of steps, for each Pan Orient share held, a cash payment of USD $0.788 and one CanAsia share; and (c) CanAsia will be a new public company with its shares expected to be listed on the TSX Venture Exchange ("TSXV") (subject to satisfaction of the conditions of the TSXV), that will own Pan Orient's non-Thailand business, which includes: Pan Orient's 71.8% interest in Andora Energy Corporation, which has interests in oil sands properties in Sawn Lake, Alberta; convertible loans receivable from Andora; Pan Orient's interests in Indonesia, which operations are, effective January 1, 2020, considered discontinued operations for accounting purposes; and working capital and long term deposits, estimated to be approximately $6.7 million. The estimate of working capital and long-term deposits has been reduced to reflect changes in foreign exchange rates and higher transaction expenses, mainly legal fees.Completion of the Arrangement is subject to certain conditions, including approval of the Pan Orient shareholders, final approval of the Court of Queen's Bench of Alberta and conditional approval of the delisting of the Pan Orient shares and listing of the CanAsia shares by the TSXV. If all conditions to the completion of the Arrangement are satisfied or waived, Pan Orient anticipates that the Arrangement will become effective on or about August 25, 2022. -- Net income attributable to common shareholders for the second quarter of 2022 was $4.8 million ($0.10 per share) compared with net income attributable to common shareholders for the first quarter of 2022 of $3.5 million ($0.07 per share). Corporate adjusted funds flow from operations (including Pan Orient's 50.01% equity interest in the Thailand Joint Venture) in the second quarter of 2022 were $6.1 million ($0.12 per share) compared with $4.5 million ($0.09 per share) in the first quarter of 2022. -- Common shares outstanding were 49.8 million at June 30, 2022. -- Pan Orient paid a $0.40 per common share return of capital distribution to shareholders on February 10, 2022 following shareholder approval on January 18, 2022. The total amount of the distribution was $19.9 million. -- Pan Orient maintains a strong financial position with working capital and non-current deposits of $12.8 million and no long-term debt at June 30, 2022. In addition, the Thailand Joint Venture has $12.7 million in working capital and long-term deposits, net to Pan Orient's 50.01% equity interest.
OUTLOOK
A special meeting of Pan Orient shareholders to vote on the Arrangement and other matters will be held on Tuesday, August 23, 2022. If all conditions to the completion of the Arrangement are satisfied or waived, Pan Orient anticipates that the Arrangement will become effective on or about August 25, 2022.
The Arrangement is an opportunity for Pan Orient shareholders to realize value for their investment in Pan Orient while continuing to participate, through CanAsia, in the Sawn Lake heavy oil project and potential exploration and development activities in Thailand through an anticipated future bid round for new oil concessions
Pan Orient is a Calgary, Alberta based oil and gas exploration and production company with operations currently located onshore Thailand and Western Canada.
Cautionary Statements
(MORE TO FOLLOW) Dow Jones Newswires
August 10, 2022 08:30 ET (12:30 GMT)
Comments