SKA Energy Keeps Iraq’s Essential Fuels Flowing

Despite the combined pressures of a global pandemic, political deadlock, falling oil prices and continued violence against government forces and others, SKA has continued to deliver over 90% of Iraq's imported fuel requirements.

SKA's unique partnership with the Ministry of Oil's Oil Pipeline Company (OPC) and the close cooperation of Ministry of Transport's General Company for the Ports of Iraq (GCPI) have ensured that vital supplies of imported diesel and gasoline continue to flow.

SKA's CEO, Mr Mike Douglas said:

"This is what SKA does. We stand firm in the face of adversity and get the job done. These combined challenges just make us more determined to succeed. Fuel supplies are vital to industry, transport and power generation and we will keep them flowing.

"Of note, the vital dredging we just completed during the curfew, guarantees that the biggest cargos on LR2 vessels, are not stalled; before we started, that size of ship had never been seen in the river. The company was built on the motto of "doing difficult jobs in difficult places" and now, more than ever, that is true."

"We thank all our local and expatriate staff, and the Iraq Government, for their steadfast support and cooperation. We realize that it is not easy to be away from homes and families in these challenging times, but together we will continue to ensure that the Iraqi people get what they need to overcome these daily challenges. We hope and pray that SKA as a company and Iraq as a nation will emerge stronger at the end of all this".

SKA operates the only private Maritime Oil Storage and Distribution Terminal in Iraq. Combined with the joint operation of the oil import jetties in Khor Al Zubair Port, SKA is responsible to the importation of over 90% of Iraq's oil product import demand. SKA has ensured that this vital infrastructure is operated, maintained and enhanced during this difficult time.

SKA, in partnership with the Iraq Government, hopes to build on this success in the future with further enhancements to the import and export infrastructure. Mike Douglas said:

"We will overcome the current challenges and in the future build and operate more oil product storage in Khor Al Zubair. This will provide increased volumes for import and much needed cargo consolidation for export. It will also provide much needed employment for the local population. We have been in Iraq for 17 years and are here to stay."

(Source: IBBC)

Genel Energy’s new Deputy Chairman Buys Shares

By John Lee.

Genel Energy's newly-appointed Senior Independent Non-Executive Director and Deputy Chairman has purchased shares in the company.

Former UK Minister for Defence Sir Michael Fallon bought 9,000 shares on Thursday at £1.0967 per share, for a total price of £9,870.30.

He was appointed to the board in early February.

(Source: Genel Energy)

CPECC wins $204m Contract at Majnoon

By John Lee.

The China Petroleum Engineering & Construction Corp (CPECC) has reportedly won a $203.5 million engineering contract to treat sour gas at the Majnoon oilfield in Iraq.

According to Reuters, the field is now producing around 240,000 barrels per day (bpd), with plans to boost output to 450,000 bpd in 2021.

Originally awarded to Shell (45%), Petronas (30%) and the Maysan Oil Company (25%) in 2009, the field was taken over by the state-owned Basra Oil Company (BOC) at the end of June 2018, with operations and maintenance contracted to Chinese company Anton Oilfield Services Group (Antonoil) and the US company KBR.

(Source: Reuters)

GKP Updates on Iraq Operations

Gulf Keystone Petroleum (GKP) has issued providing an operational and corporate update:

Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:

 "In these challenging times, we remain focused on the safety of our people and have adapted our operations to ensure their continued welfare.  With the associated economic backdrop compounded by a delay in payments, we are taking a prudent approach to running our business with a sharp focus on financial discipline and maintaining liquidity.  While we were on track to deliver the expansion to 55,000 bopd in Q3 2020, flexibility is the order of the day and as such, beyond our existing commitments, we have suspended further expansion activity until conditions improve. 

 "Underpinning the Company's strong investment case is the quality and scale of the Shaikan Field, which continues to perform well with current production of c.38,000 bopd.  

"Given our strong balance sheet with cash of $154 million at 23 March 2020, no debt repayment until mid-2023, limited capital expenditure commitments and a low-cost structure, we are highly confident in our future ability to capture the significant value in Shaikan, for the benefit of all stakeholders."   


  • Production from the field continues in line with expectations at c.38,000 bopd, currently unaffected by the impact of COVID-19.
  • GKP was on track to achieve 55,000 bopd in Q3 2020, prior to the previously announced suspension of expansion activity.  
  • The Company remains committed to the elimination of routine gas flaring. Its gas management plan now envisages the export of sweet gas instead of gas reinjection. This follows the results of the SH-9 well, which did not encounter a gas cap. The well has been completed as an oil producer and is in the process of being tied into PF-1.
  • A revised Field Development Plan ("FDP") is currently expected to be submitted this year, reflecting the new gas management project. Upon FDP approval, planning will commence for FEED ("Front End Engineering and Design").


  • GKP will maintain a conservative financial position with a clear focus on cost control and cash preservation. At current production levels, the Company covers all operating, general and administrative costs and interest payments with a Brent price of c.$35 per barrel.
  • In the absence of further expansion activity, 2020 capital expenditures, including expenditures incurred to date and remaining firm commitments, are estimated to be between $50 million and $60 million (gross).
  • The delay of further investment into Shaikan is expected to impact prior gross 2020 production guidance of 43,000-48,000 bopd and achieving 55,000 bopd in Q3 2020.
  • Given the macro uncertainty, the Board is suspending guidance until such time as the outlook becomes clearer.
  • The Board recognises the importance of distributions to shareholders and intends to consider the appropriateness and timing of the ordinary dividend and any share buyback - upon resumption of payments and when it has a clearer view of the scale and duration of the impact of COVID-19 and the macro-economic effects on the business.

(Source: GKP)

Anton Oilfield Services Targets Expansion in Iraq

By John Lee.

China's Anton Oilfield Services (AntonOil) has reported that the Group has received written confirmation from its Iraqi customer in advance that it will automatically renew the 2-year contract after its expiry on July 1, 2020 for one year.

In its unaudited interim results for the one year ended 31 December 2019, it added:

"The Group is confident to rely on quality management to continue to create value for customers and strive to provide long-term and continuous management services for the oilfield. In addition, the Group will make every effort to expand towards the markets of other international oil companies in Iraq, actively seek cooperation opportunities with more international oil companies."

It said that its large-scale integrated oilfield management project in Iraq has been running smoothly for one and a half years, and:

"in 2019, the Company obtained a total of approximately RMB2,137.2 million of new orders in the Iraqi market, an increase of approximately 22.8% compared to RMB1,740.5 million in the same period last year; the Company recorded revenue of approximately RMB1419.8 million, an increase of approximately 21.3% from the RMB1,170.6 million in the same period last year."

The company is involved in the development of the Majnoon Oil Field in Basra.

(Source: Anton Oilfield Services)

Genel Energy “Resilient to an Oil Price of $30”

Genel Energy has announces its audited results for the year ended 31 December 2019.

Bill Higgs, Chief Executive of Genel, said:

"The industry is currently facing headwinds that challenge companies to demonstrate their resilience and flexibility. Genel has a business model and strategy designed to shelter us from such extreme circumstances, with low-cost oil production, robust finances, and flexibility in our expenditure allowing us to pay a material dividend while retaining sufficient liquidity to capitalise on opportunities and take advantage of future upside.

"Our strong balance sheet with limited capital commitments allows us to invest in the most value accretive areas and pay this dividend at the prevailing oil price, even in a scenario with a temporary delay in payments from the KRG. We are a business that can generate excess cash at a sustained oil price of $40/bbl.

"Given the resilience of the business, our strong performance in 2019, and our view of future prospects, we have retained our dividend of 10¢ per share, deferring an increase until external conditions improve.

"This is a yield of over 20% on our current share price, offering investors the compelling combination of a significant yield from a sustainable dividend and funded growth. Our portfolio positions us well for a future of fewer and better natural resources projects. It is low-cost and low-carbon - the right assets, in the right location, with the right footprint."

Results summary ($ million unless stated)

2019 2018
Production (bopd, working interest) 36,250 33,700
Revenue 377.2 355.1
EBITDAX1 321.8 304.1
  Depreciation and amortisation (158.5) (136.2)
  Exploration (expense) / credit (1.2) 1.5
  Impairment of oil and gas assets (29.8) (424.0)
Operating profit / (loss) 132.3 (254.6)
Underlying profit2 134.9 138.9
Cash flow from operating activities 272.9 299.2
Capital expenditure 158.1 95.5
Free cash flow3 99.0 172.7
Dividends declared 40.8 -
Cash4 390.7 334.3
Cash after dividend5 377.1 334.3
Total debt 300.0 300.0
Net cash6 92.8 37.0
Dividend (declared and proposed) per share (¢ per share) 15.0 -
Basic EPS (¢ per share) 37.8 (101.6)
Underlying EPS (¢ per share)2 49.0 49.8
  1. EBITDAX is operating profit / (loss) adjusted for the add back of depreciation and amortisation ($158.5 million), exploration expense ($1.2 million) and impairment of property, plant and equipment ($29.8 million).
  2. Underlying profit is reconciled on page 13
  3. Free cash flow is reconciled on page 14
  4. Cash reported at 31 December 2019 excludes $3.0 million of restricted cash
  5. Cash reported at 31 December 2019 less interim dividend paid ($13.6 million) on 8 January 2020
  6. Reported cash less IFRS debt


  • Ongoing strategic delivery from a strong financial platform, as highly cash-generative oil production increased to 36,250 bopd, up 8% year-on-year
  • Free cash flow ('FCF') of $99 million in 2019, pre dividend payment
    • This increases to $153 million (2018: $173 million), or $0.55 per share, taking into account the receipt of $54 million in payments from the Kurdistan Regional Government, due in 2019 and subsequently received in January 2020
  • Maiden dividend declared and $41 million distributed to shareholders
  • Cash of $391 million at 31 December 2019 ($334 million at 31 December 2018)
  • Net cash of $93 million at 31 December 2019 (net cash of $37 million at 31 December 2018)
  • Production cost of $2.9/bbl in 2019
  • Continued focus on safety: zero lost time incidents and zero losses of primary containment in 2019


  • Genel is resilient to an oil price of $30/bbl, as low-cost production, a flexible capital structure, and robust balance sheet allows the payment of a material dividend, and the retention of a material net cash position at year-end 2020
  • Genel has significant capital allocation flexibility with limited commitments, is committed to retaining a strong balance sheet, and will ensure expenditure matches the external environment
    • Capital expenditure can be reduced to as little as $60 million in 2020, with an expectation that it will be around $100 million at the prevailing oil price, covering maintenance expenditure across our producing licences and investment at Sarta
    • Genel will sanction activity relating to the expenditure covered in the original $160 million to $200 million guidance range, as and when the external environment improves
  • COVID-19 is impacting the ease of operating in the Kurdistan Region of Iraq. Our producing operations are currently continuing with a reduced staff, but further activity is under review
    • Given the current market conditions, coupled with the delay in payments from the KRG, drilling activity at the Tawke PSC has been scaled back
    • Due to the delayed expenditure, 2020 net production guidance of close to Q4 2019 levels of 35,410 bopd is expected to be impacted, with the reduced producing asset work programme increasing cash flow generation in 2020 at the prevailing oil price, although a lower exit rate production will impact 2021
    • The Qara Dagh-2 well, which was set to spud in Q2 2020, is now likely to be delayed
  • Payments for production in October and November 2019, due in January and February 2020, have not been received. The KRG continues to state the importance of ongoing payments to oil companies, and we expect the government to deliver on this promise
  • Operating cash costs per barrel expected to be $3/bbl, amongst the lowest in the industry, fitting into a world of fewer and better natural resources projects
  • Genel is yet to receive draft legal documents reflecting the commercial understanding reached on Bina Bawi in September 2019, despite promises from the KRG
  • Emissions at Tawke and Taq Taq will reduce to 7kg CO2/bbl following completion of the enhanced oil recovery project at Tawke PSC in H1 2020
  • Given the resilience of the business and our strong performance in 2019, the Board is accordingly recommending a final dividend of 10¢ per share (2019: 10¢ per share), a distribution of c.$27.8 million, with a view to increasing the 2020 interim distribution should market conditions improve
  • Genel will seek to take advantage of opportunities to repurchase bonds at a value-accretive price

More here.

(Source: Genel Energy)

Petronas Suspends Operations at Garraf Oil Field

By John Lee.

Malaysia's Petronas has said it has shut down production and safely evacuated all of its Malaysian employees from Iraq due to coronavirus (COVID-19).

In a statement, the company said:

"In view of the COVID-19 pandemic and as a precautionary measure to ensure the health, safety and well-being of our employees, PETRONAS has safely evacuated all 80 of our Malaysian employees from PETRONAS Carigali Iraq Holding B.V. (PCIHBV), located at the Garraf Contract Area, in the Thi Qar Province, Republic of Iraq.

"This is certainly an unfortunate and unforeseeable event that is not within PCIHBV's control. PCIHBV had accordingly issued the necessary notice in accordance with the provisions of the Development and Production Service Contract and engaged with the host authority prior to the suspension of operations and evacuation of our employees.

"Operations at the Garraf Contract Area are now temporarily suspended until further notice.

"We are also closely monitoring the situation."

(Source: Petronas)

Genel Energy Update on Oil Reserves

Genel Energy plc has updated its oil reserves and resources across its portfolio.

Bill Higgs (pictured), Chief Executive of Genel, said:

"Genel's producing assets are profitable even at an oil price of $30/bbl and this, coupled with our robust balance sheet, supports investment in growth and the payment of a material dividend. The reduction of reserves at Tawke largely relates to production towards the end of the life of the field, and consequently our mid-term production outlook is materially unchanged and there is no reserves impact on our business plan.

"Our production funds an approved but flexible capital programme that, in the right market conditions, enables us to drill the wells necessary to evaluate the potential to convert the 2C oil resources in our portfolio, validated for the first time by ERCE, into reserves and production, boosting our cash generation potential."

Net oil reserves (MMbbls) 1P 2P 3P
31 December 2018 99.3 154.9 219.3
Production (13.2) (13.2) (13.2)
Technical revisions (17.2) (17.8) (11.2)
31 December 2019 68.8 123.8 194.9

International petroleum consultants DeGolyer and MacNaughton assess that on a gross basis, at the Tawke licence in the Kurdistan Region of Iraq containing the Tawke and Peshkabir fields, year-end 2019 1P reserves stood at 228 MMbbls, compared to 348 MMbbls at year-end 2018, after adjusting for production of 45 MMbbls and a downward technical revision of 75 MMbbls. Tawke licence 2P reserves stood at 400 MMbbls (502 MMbbls in 2018) and 3P reserves at 641 MMbbls (697 MMbbls in 2018).

Broken down by field, Tawke field gross 1P reserves stood at 176 MMbbls (294 MMbbls in 2018), 2P reserves at 284 MMbbls (376 MMbbls in 2018) and 3P reserves at 421 MMbbls (477 MMbbls in 2018). Peshkabir field gross 1P reserves stood 51 MMbbls (54 MMbbls in 2018), 2P reserves at 116 MMbbls (126 MMbbls in 2018) and 3P reserves at 220 MMbbls (unchanged from 2018).

Genel continues to take a conservative view of the Enhanced Oil Recovery project at the Tawke PSC, and will look to book reserves in relation to the project, which has the potential to increase recovery over the life of field, once enhanced performance has been demonstrated at the field.DeGolyer and MacNaughton has included23MMbbls of 2P and 45 MMbbls of 3P gross reserves, working interest portions of which are not included in the table above.

At Taq Taq, there is a minor technical downward revision of 2.1 MMbbls of gross 2P reserves associated with the unsuccessful TT-33 well, and these now total 44 MMbbls, with gross 1P reserves increasing by 3.3 MMbbls to 20.1 MMbbls, illustrating the continued strong underlying performance of the asset. McDaniel & Associates carried out the independent assessment of the Taq Taq licence.

Genel's gross 2P reserves estimate relating to Phase 1A of the Sarta development remains 34.3 MMbbls.


Net oil resources (MMbbls) 1C 2C 3C
31 December 2018 36.8 73.7 121.3
Technical revisions 29.7 78.3 224.5
31 December 2019 66.5 152 345.8

Following completion of the acquisition in 2019, Genel estimated gross resources at Sarta to be c.500 MMbbls. This potential has now been validated through an external audit conducted by ERCE, who has estimated a mid-case total recoverable oil resource of 593 MMbbls, of which 264 MMbbls is classified as 2C resource. Production performance in 2020, and the results of the upcoming three well campaign in 2021, will set out a roadmap for the conversion of these resources into reserves.

The Bina Bawi oil development has been certified by ERCE as 17.1 MMbbls of 2C resources, 13.6 MMbbls of which are expected to be converted into 2P reserves should a commercial agreement be reached and FID be taken on the first phase of the oil project.

At Qara Dagh the QD-2 well will test the crestal portion of the prospect which, based on a rigorous re-mapping exercise, has a mean prospective resource estimated by Genel at c.400 MMbbls. Genel estimates that the downdip segment tested by the QD-1 well defines a 2C resource of 47 MMbbls.

(Source: Genel)

GKP Shares Fall as Coronavirus Delays Plans

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) were trading down 9.6 percent on Monday, compared to a broader market fall of 7.4 percent, as the company announced that expansion plans will be delayed due to coronavirus (COVID-19).

In a statement to the markets, the company said:

The Company has been closely monitoring the Coronavirus (COVID-19) situation in the Kurdistan Region of Iraq.  Gulf Keystone's priority is the welfare of its staff, contractors and the communities close to its operations. We remain committed to deliver safe operations, protection of the asset and the underlying business.

In an attempt to limit the spread of Coronavirus (COVID-19), the Kurdistan Regional Government, in line with many other jurisdictions, has put in place a series of tight controls on the movement of personnel into and around the region.  With these controls, along with the increasing global restrictions on movement, it has become difficult to ensure Gulf Keystone has the appropriate drilling personnel and equipment on site in order to continue safe drilling operations.

Therefore, with the SH-13 well - the current well in the campaign - at a safe stage, the decision has been taken to suspend drilling activities until conditions improve to ensure safe operations.

Production rates from the field are at c.38,000 bopd and production currently continues unaffected by the impact of Coronavirus (COVID-19).  However, as a precaution, the Company has restricted the access to its production facilities.  As a result, certain construction activities related to the expansion to 55,000 bopd have also been suspended until circumstances improve.

The current situation is extraordinary and we believe that our actions protect the long-term value of the asset.  The planned production increase to 55,000 bopd, scheduled for Q3 2020, and average production guidance for 43,000 - 48,000 bopd remain priorities.

However, the suspension of drilling and certain expansion operations may impact Gulf Keystone's ability to meet these targets in the timeframes currently in place.  Gulf Keystone will continue to closely monitor this fast-moving situation and will provide updates, as appropriate. As previously announced, the Company will release its Full Year results on 26 March 2020.

Notwithstanding the above, the Company remains in a strong financial position to manage through these turbulent times with a cash balance of $159 million, as at 13 March 2020.

Jón Ferrier, CEO, commented:

"As a Company we place the welfare of our people and those we work with and near as our absolute priority.  We also have to be confident of having the right people on site to continue safe operations.  Whilst we are not aware of any employees or contractors having been infected, we believe it is prudent to suspend drilling and certain production facility expansion operations during this time. 

"We are watching the situation closely and will keep all of our stakeholders informed of developments.  Meanwhile, the Shaikan Field itself is performing well."

(Source: GKP)

Oryx announces 80% Increase in Production

Oryx Petroleum has announced its financial and operational results for the year ended December 31, 2019.

The Corporation also announces agreements with AOG International Holdings Limited ("AOG") to amend the Loan Agreement dated March 13, 2015 and to establish a new short term credit facility. All dollar amounts set forth in this news release are in United States dollars, except where otherwise indicated.

2019 Financial Highlights:

  • Total revenues of $150.5 million on working interest sales of 2,780,800 barrels of oil ("bbl") and an average realised sales price of $48.72/bbl for 2019
    - 54% annual increase in revenues versus 2018
    - Q4 2019 revenues increased 14% versus Q3 2019
    - The Corporation has received full payment in accordance with Production Sharing Contract entitlements for all oil sale deliveries into the Kurdistan Oil Export Pipeline through September 2019
  • Operating expenses of $28.9 million ($10.41/bbl) and an Oryx Petroleum Netback(1) of $18.90/bbl for 2019
    - 17% decrease in operating expenses per barrel versus 2018
  • Loss of $59.2 million ($0.11 per common share) in 2019 versus Profit of $43.8 million in 2018 ($0.09 per common share)
    - Loss in 2019 primarily attributable to an impairment expense related to the Hawler license area and an impairment expense and a provision related to the Corporation's former interest in the Haute Mer B license area
    - Profit in 2018 primarily attributable to an impairment reversal related to the Hawler license area
  • Net cash generated by operating activities was $28.1 million in 2019 versus net cash generated by operating activities of $8.1 million in 2018 comprised of Operating Funds Flow(2) of $26.9 million and an $1.2 million decrease in non-cash working capital
  • Net cash used in investing activities during 2019 was $35.1 million including payments related to drilling and facilities work in the Hawler license area, preparation for drilling in the AGC Central license area, and an increase in non-cash working capital
  • $8.9 million of cash and cash equivalents as of December 31, 2019
  1. Oryx Petroleum Netback is a non-IFRS measure. See the table below for a definition of and other information related to the term.
  2. Operating Funds Flow is a non-IFRS measure. See the table below for a definition of and other information related to the term.

2019 Operations Highlights:

  • Average gross (100%) oil production of 11,700 bbl/d (working interest 7,600 bbl/d) for the year ended December 31, 2019 versus 6,500 bbl/d (working interest 4,200 bbl/d) for the year ended December 31, 2018
    - 80% increase in gross (100%) oil production in 2019 versus 2018; 12% increase in gross (100%) oil production in Q4 2019 versus Q3 2019
    - Successful completion of four producing wells during 2019
    - First successful completion of a well targeting the Cretaceous reservoir at the Demir Dagh field utilising a horizontal well design
  • Gross (working interest) proved plus probable oil reserves of 103 million barrels as at December 31, 2019
  • Environmental and Geohazard Assessments related to planned drilling in the AGC Central license area initiated and largely completed

2020 Operations Update:

  • Average gross (100%) oil production of 14,500 bbl/d (working interest 9,400 bbl/d) and 14,400 bbl/d (working interest 9,400 bbl/d) in January and February 2020, respectively
  • The drilling of a horizontal sidetrack of the previously drilled Banan-1 well in the portion of the Banan field east of the Great Zab river was completed in early 2020
  • Data obtained during drilling indicate that the Tertiary reservoir in the eastern portion of the Banan field contains oil of similar density to oil produced from the Tertiary reservoir in the portion of the Banan field west of the Great Zab river
  • Attempts to complete the well as a producer in the Cretaceous reservoir were unsuccessful
  • Further drilling targeting both the Tertiary and Cretaceous reservoirs is planned in 2020
  • Operations in recent weeks were successful in shutting off water production from the Banan-5 well which is producing oil from the Cretaceous reservoir in the portion of the Banan field west of the Great Zab river
  • The worldwide outbreak of the COVID-19 virus, including within Iraq, has not impacted operations. The Corporation is taking precautions to protect its employees and contractors but does not at this time expect that the virus outbreak will restrict operations
  • The planned drilling of an exploration well in 2020 in the AGC Central license area has been deferred. In 2019, the Corporation requested that the First Renewal Period of its Production Sharing Contract (due to end on October 1, 2020) be extended as a result of ongoing negotiations between Senegal and Guinea Bissau in relation to the accord governing the jointly-administered area offshore Senegal and Guinea Bissau. The Corporation is currently in discussions with the AGC regarding an amendment to its Production Sharing Contract that would implement the requested extension and expects the amendment to be finalised in the coming months.

2020 Forecasted Work Program and Capital Expenditures:

  • 2020 capital expenditure forecast of $53 million (versus $106 million budget). Forecast activities consist of:
    - $50 million dedicated to the Hawler license area: six wells including two wells targeting the Banan Cretaceous reservoir, one well targeting the Zey Gawra Tertiary reservoir, one well targeting the Demir Dagh Cretaceous reservoir, one well targeting the Banan Tertiary reservoir, and a completion of the previously suspended Ain Al Safra-2 well; a pipeline connecting the Banan field to the Hawler production facilities at the Demir Dagh field; storage tanks at the Hawler production facilities and pads, flowlines and infrastructure modifications needed to accommodate incremental drilling and production and to reduce operating costs
    - $3 million dedicated to the AGC Central license area including studies, technical support and license maintenance costs
  • The forecast reflects the deferment of planned drilling in the AGC license area and the deferment of two wells and certain facilities expenditures in the Hawler license area that were included in the budget.

Extension of AOG Loan and New Short Term Credit Facility:

  • AOG has agreed to extend the maturity date of the credit facility provided to Oryx Petroleum in 2015 from July 1, 2020 to July 1, 2021 in consideration for the issuance of 33,149,000 warrants to purchase common shares of Oryx Petroleum. The Toronto Stock Exchange ("TSX") has reviewed the applicable transaction materials. It is anticipated that the TSX will conditionally approve the extension five business days after the issuance of this news release.
  • AOG has further agreed to provide the Corporation with a $5 million short term credit facility to provide access to working capital in the event of any further delays in receiving payments for oil sales. The TSX has reviewed the applicable transaction materials. It is anticipated that the TSX will conditionally approve the short term credit facility five business days after the issuance of this news release.

Liquidity Outlook:

  • The Corporation expects cash on hand as of December 31, 2019 and cash receipts from net revenues and export sales will allow it to fund its forecasted capital expenditures and operating and administrative costs into early 2021. Additional capital is expected to be required to be able to both meet any contingent consideration obligations that become payable and to fund drilling in the AGC Central license area now planned in 2021.

CEO's Comment

Commenting today, Oryx Petroleum's Chief Executive Officer, Vance Querio (pictured), stated:

"2019 was a good year for Oryx Petroleum. During the year we substantially increased production from the Hawler license area thanks to the successful completion of four new producing wells, increasing production from the Banan and Demir Dagh Cretaceous reservoirs. One of the four new wells was a sidetrack of the previously drilled Demir Dagh-3 well utilizing a horizontal well design that is integral to our development plans for the Cretaceous reservoirs in the Hawler area fields.

"In the AGC Central license area, that has best estimate unrisked gross (working interest) prospective oil resources of 2.2 billion barrels, we continue to prepare for exploration drilling. In 2019 we initiated and now have largely completed environmental impact and geohazard assessments with regards to our drilling plans. However, the timing of exploration drilling remains uncertain as we wait for Senegal and Guinea Bissau to agree on a renewal or extension of the accord governing the jointly-administered offshore area. We fully expect that an agreement will be reached but the timing is uncertain.

"Importantly, we completed our work in 2019 without incurring any Lost Time Injuries or having any significant releases or other adverse environmental incidents.

"Our 2020 capital program is focused primarily on the Hawler license area in the Kurdistan Region of Iraq where our program includes the drilling or re-entry of six wells and has been designed to allow us to increase production and to better define the remaining development potential of the four fields in the license. We have completed the sidetrack of the Banan-1 well in recent weeks and expect to spud a second well in the late Spring. In the AGC Central license area, our forecasted capital expenditures include costs related to studies and preparations for exploration drilling in 2021 assuming the AGC accord is renewed or extended in 2020.

"The combination of higher production and regular payments for oil sales in most of 2019 resulted in higher funds flow which together with cash on hand allowed us to fund our business in 2019 without seeking additional capital. We expect that cash on hand and cash receipts from net revenues will fund forecasted capital expenditures and operating and administrative costs into early 2021. AOG, our largest shareholder, has recently agreed to provide us with a short term credit facility to strengthen our liquidity position due to the recent delays in receiving cash payments for oil sales. Most of our capital expenditures are planned in the second half of 2020 and we are prepared to adjust our plans and consider other measures to strengthen our liquidity should recent market developments persist and should there be additional delays in cash receipts for oil sales.

"We look forward to implementing our plans safely in 2020 and to higher production in the Hawler license area while continuing to prepare for an exploration drilling program in the AGC Central license area."

(Source: Oryx)