TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin
Islands, April 29, 2013 /CNW/
- Orca Exploration Group Inc. ("Orca" or "the Company") announces
its results for the year ended 31 December
2012.
- Orca Exploration operated its Tanzania Songo Songo gas field at
maximum plant and pipeline capacity resulting in record operating
and financial results.
- Profit after tax for the year was a record US$18.3 million, or US$0.52 per share diluted, up 130% over 2011.
- An 18% increase in gas sales volumes plus a 10% increase in the
average gas price, together with higher cost recoveries as a result
of capital spending combined to double funds flow from operations
over 2011 to a record US$45.8
million, or US$1.30 per share
diluted.
- Capital spending in 2012 was US$54.7
million (2011: US$18.1
million) of which US$38
million was expended on SS-11 drilling and completion,
US$7.9 million on preparation for
SS-12 and Songo Songo West drilling,
and US$7.5 million on the
unsuccessful La Tosca exploration well in Italy.
- Given TANESCO and Songas non-payments, record funds flow did
not translate to cash -- balances at the end of 2012 were
US$16.0 million, down 54% from 2011,
net of US$54.7 million in capital
spending during the year and including US$6.0 million in bank borrowings. Accordingly,
the Company has incorporated a going concern note into its 2012
Consolidated Financial Statements.
- Working capital was US$46.8
million, which included a US$33.3
million receivable from TANESCO -- at the end of the year
the Company had drawn US$6.0 million
of a US$10.0 million senior debt
facility which was set up in Q3 to assist in financing TANESCO
receivables.
- Average gas prices up 10% in 2012 to US$4.31/Mcf (2011: US$3.92/Mcf), industrial gas prices were down
7.5% in 2012 to US$9.31/Mcf from
changes in the sales mix, and average power sector gas prices
increased 15% over 2011 to US$3.18/mcf from US$2.77/mcf, pursuant to the PGSA and ARGA.
- Current TANESCO receivable is US$49.3
million, or about US$0.90 per
share on a net basis - Government of Tanzania has raised US$600 million in debt and US$100 million in World Bank budget support
finance and assured the Company that arrears will be paid from
these proceeds.
- Songo Songo PSA and GNT issues remain unresolved, however the
Company has continued to work in cooperation with the Government
and has tabled a PSA amendment for the Government's
consideration.
- Establishing commercial terms for future incremental gas sales
is a key condition to the Company's commitment to Songo Songo development - the Company has
recently entered into discussions with TPDC concerning a gas sales
agreement.
- Government of Tanzania
succeeded in arranging a US$1.2
billion project financing with the China Exim Bank to
deliver a major natural gas infrastructure expansion project which
was inaugurated in November 2012 and
expected to be completed by the end of 2014.
- On 1st November 2012, the
Government of Tanzania issued a
draft natural gas policy which contemplates a restructuring of
TPDC, strategic participation throughout the upstream, midstream
and downstream sectors, ownership and control over gas
infrastructure and setting domestic natural gas prices - at the
request of the Government, the Company submitted its views on the
draft policy and a second draft policy is expected in the near
future.
- The La Tosca well in the Longastrino exploration block in the
Po Valley, Northern Italy was
drilled in August and has been plugged and abandoned having
encountered gas shows -- Orca has earned a 70% working interest
and, subject to government approval, operatorship of the block. The
Company intends to review the technical and drilling data to
determine whether or not to continue exploration on the block. The
offshore Italy Elsa appraisal well
is now expected to be drilled in 2014.
- With the completion of SS-11, brought onstream in October 2012, the Company has substantially
upgraded the quality of its wellbore portfolio. Subsequent to
bringing SS-11 onstream, the SS-9 and SS-3 wells were taken off
production leaving the field producing at maximum capacity and
having no redundancy.
- Songo Songo gas reserves remain
solid with a 9% decrease in Songo
Songo's Total Proved Additional Gas reserves to the end of
the license period, with no change on a life of field basis; total
Additional Gas production of 20.6 Bcf during the year; an 11%
decrease in the Proved plus Probable Additional Gas reserves on a
Gross Company life of license basis from 548.5 Bcf to 489.3 Bcf.
NPV10% 2P was estimated at US$386
million.
Financial and Operating Highlights
|
|
|
|
|
YEAR ENDED/ AS AT 31
DECEMBER |
|
2012 |
2011 |
Change |
Financial (US$'000 except where otherwise
stated) |
|
|
|
|
Revenue |
|
77,259 |
45,893 |
68% |
Profit before taxation |
|
35,454 |
15,320 |
131% |
Operating netback (US$/mcf) |
|
2.82 |
2.05 |
38% |
Cash and cash equivalents |
|
16,047 |
34,680 |
(54%) |
Working capital(1) |
|
46,820 |
56,006 |
(16%) |
Shareholders' equity |
|
125,935 |
106,659 |
18% |
Earnings per share - basic (US$) |
|
0.53 |
0.23 |
130% |
Earnings per share - diluted (US$) |
|
0.52 |
0.22 |
136% |
Funds flow from operating activities |
|
45,949 |
22,658 |
103% |
Funds per share from operating activities -
basic (US$) |
|
1.33 |
0.65 |
105% |
Funds per share from operating activities -
diluted (US$) |
|
1.30 |
0.63 |
106% |
Net cash flows from operating activities |
|
30,568 |
4,577 |
568% |
Net cash flows per share from operating activities
- basic (US$) |
|
0.88 |
0.13 |
577% |
Net cash flows per
share from operating activities - diluted (US$) |
|
0.86 |
0.13 |
562% |
Outstanding Shares ('000) |
|
|
|
|
Class A shares |
|
1,751 |
1,751 |
0% |
Class B shares |
|
32,892 |
32,746 |
0% |
Options |
|
1,922 |
3,057 |
(37%) |
Operating |
|
|
|
|
Additional Gas sold (MMcf) -
industrial |
|
3,813 |
2,742 |
39% |
Additional Gas sold (MMcf) - power |
|
16,832 |
14,722 |
14% |
Additional Gas sold (MMcfd) -
industrial |
|
10.4 |
7.5 |
39% |
Additional Gas sold (MMcfd) - power |
|
46.0 |
40.3 |
14% |
Additional Gas sold (MMcfd) |
|
56.4 |
47.8 |
18% |
Average price per mcf (US$) -
industrial |
|
9.30 |
10.05 |
(7%) |
Average price per
mcf (US$) - power |
|
3.18 |
2.77 |
15% |
Additional Gas Gross Recoverable Reserves to
end of licence (Bcf)(2) |
|
|
|
|
Proved |
|
429 |
469 |
(9%) |
Probable |
|
60 |
79 |
(24%) |
Proved plus probable |
|
489 |
548 |
(11%) |
Net Present Value, discounted at 10% (US$
million)(2) |
|
|
|
|
Proved |
|
354 |
328 |
8% |
Proved plus probable |
|
386 |
351 |
10% |
- Working capital as at 31 December
2012 includes a TANESCO receivable of US$33.3 million (2011: US$24.2 million) and a net Songas receivable of
US$5.9 million (2011: US$0.7 million)
- Based on report prepared by Orca Exploration's independent
reserve evaluator McDaniel & Associates Consultants Ltd. dated
effective December 31, 2012, which
was prepared in accordance with definitions, standards and
procedures contained in the Canadian Oil and Gas Evaluation
Handbook. It should not be assumed that the undiscounted or
discounted net present value of future net revenue attributable to
the Company's reserves estimated by McDaniel represent the fair
market value of those reserves.
Consolidated Statement of Comprehensive
Income
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
YEARS ENDED 31 DECEMBER |
|
|
|
|
US$'000 except per share
amounts |
|
|
2012 |
2011 |
|
|
|
|
|
Revenue |
|
|
77,259 |
45,893 |
Cost of sales |
|
|
|
|
Production and distribution expenses |
|
|
(5,953) |
(6,088) |
Depletion expense |
|
|
(8,968) |
(8,092) |
|
|
|
62,338 |
31,713 |
General and administrative expenses |
|
|
(17,989) |
(15,440) |
Exploration asset impairment |
|
|
(8,284) |
- |
Net finance costs |
|
|
(611) |
(953) |
Profit before taxation |
|
|
35,454 |
15,320 |
Taxation |
|
|
(17,125) |
(7,334) |
Profit after taxation |
|
|
18,329 |
7,986 |
Foreign currency translation gain from foreign
operations |
|
|
89 |
- |
Total comprehensive income for the
year |
|
|
18,418 |
7,986 |
|
|
|
|
|
Earnings per share |
|
|
|
|
Basic (US$) |
|
|
0.53 |
0.23 |
Diluted (US$) |
|
|
0.52 |
0.22 |
Consolidated Statement of Financial
Position
ORCA EXPLORATION GROUP INC.
|
|
|
|
AS AT |
|
31-Dec |
31-Dec |
US$'000 |
|
2012 |
2011 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
|
16,047 |
34,680 |
Trade and other receivables |
|
73,495 |
40,348 |
Taxation receivable |
|
14,692 |
5,880 |
Prepayments |
|
246 |
302 |
|
|
104,480 |
81,210 |
Non-current assets |
|
|
|
Exploration and evaluation assets |
|
5,720 |
2,921 |
Property, plant and equipment |
|
102,044 |
67,713 |
|
|
107,764 |
70,634 |
Total Assets |
|
212,244 |
151,844 |
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
45,496 |
22,801 |
Bank loan |
|
5,842 |
- |
Taxation payable |
|
6,322 |
2,403 |
|
|
57,660 |
25,204 |
Non-Current Liabilities |
|
|
|
Deferred income taxes |
|
20,399 |
15,194 |
Deferred additional profits tax |
|
8,250 |
4,787 |
|
|
28,649 |
19,981 |
Total Liabilities |
|
86,309 |
45,185 |
|
|
|
|
Equity |
|
|
|
Capital stock |
|
84,983 |
84,610 |
Contributed surplus |
|
6,753 |
6,268 |
Accumulated other comprehensive income |
|
89 |
- |
Accumulated income |
|
34,110 |
15,781 |
|
|
125,935 |
106,659 |
Total Equity and Liabilities |
|
212,244 |
151,844 |
Consolidated Statement of Cash Flows
ORCA EXPLORATION GROUP INC
|
|
|
|
YEARS ENDED 31 DECEMBER |
|
|
|
US$'000 |
|
2012 |
2011 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
Profit after taxation |
|
18,329 |
7,986 |
Adjustment for: |
|
|
|
|
Depletion and depreciation |
|
9,281 |
8,389 |
|
Impairment of assets |
|
8,284 |
- |
|
Gain on disposal of vehicle |
|
- |
(5) |
|
Stock-based compensation |
|
1,152 |
851 |
|
Deferred income taxes |
|
5,205 |
2,385 |
|
Deferred additional profits tax |
|
3,463 |
2,527 |
|
Interest received |
|
(23) |
(5) |
|
Unrealised loss on foreign exchange |
|
258 |
530 |
Funds flow from operating
activities |
|
45,949 |
22,658 |
Increase in trade and other
receivables |
|
(33,133) |
(27,171) |
Increase in taxation receivable |
|
(8,812) |
(1,871) |
Decrease in prepayments |
|
56 |
107 |
Increase in trade and other
payables |
|
22,589 |
10,451 |
Increase in taxation payable |
|
3,919 |
403 |
Net cash flows from operating
activities |
|
30,568 |
4,577 |
CASH FLOWS USED IN INVESTING
ACTIVITIES |
|
|
|
Exploration and evaluation
expenditures |
|
(11,083) |
(1,979) |
Property, plant and equipment
expenditures |
|
(43,612) |
(16,156) |
Interest received |
|
23 |
5 |
Proceeds from sale of vehicle |
|
- |
5 |
(Decrease)/increase in trade and other
payables |
|
(716) |
3,541 |
Net cash used in investing
activities |
|
(55,388) |
(14,584) |
CASH FLOWS (USED IN)/FROM FINANCING
ACTIVITIES |
|
|
|
Normal course issuer bid |
|
(12) |
(681) |
Proceeds from exercise of options |
|
150 |
|
Bank loan proceeds |
|
5,842 |
- |
Net cash flow from/ (used in)
financing activities |
|
5,980 |
(681) |
Decrease in cash and cash
equivalents |
|
(18,840) |
(10,688) |
Cash and cash equivalents at the
beginning of the year |
|
34,680 |
45,519 |
Effect of change in foreign
exchange |
|
207 |
(151) |
Cash and cash equivalents at the
end of the year |
|
16,047 |
34,680 |
Consolidated Statement of Changes in
Shareholders' Equity
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
|
US$'000 |
Capital stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
Balance as at 1 January 2012 |
84,610 |
6,268 |
- |
15,781 |
106,659 |
|
|
|
|
|
|
Stock based compensation |
- |
720 |
- |
- |
720 |
|
|
|
|
|
|
Options exercised |
383 |
(233) |
- |
- |
150 |
|
|
|
|
|
|
Normal course issuer bid |
(10) |
(2) |
- |
- |
(12) |
|
|
|
|
|
|
Foreign currency translation of
foreign operations |
- |
- |
89 |
- |
89 |
|
|
|
|
|
|
Total comprehensive income for the
period |
- |
- |
- |
18,329 |
18,329 |
|
|
|
|
|
|
Balance as at 31 December
2012 |
84,983 |
6,753 |
89 |
34,110 |
125,935 |
|
|
|
|
|
|
US$'000 |
Capital stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
Balance as at 1 January 2011 |
85,100 |
5,288 |
- |
7,795 |
98,183 |
|
|
|
|
|
|
Stock based compensation |
- |
1,171 |
- |
- |
1,171 |
|
|
|
|
|
|
Normal course issuer bid |
(490) |
(191) |
- |
- |
(681) |
|
|
|
|
|
|
Total comprehensive income for the period |
- |
- |
- |
7,986 |
7,986 |
Balance as at 31 December
2011 |
84,610 |
6,268 |
- |
15,781 |
106,659 |
Orca Exploration Group Inc.
Orca Exploration Group Inc. is an international
public company engaged in natural gas exploration, development and
supply in Tanzania through the
wholly-owned subsidiary PanAfrican Energy Tanzania Limited, as well
as oil and gas appraisal in Italy.
Orca trades on the TSXV under the trading symbols ORC.B and ORC.A.
The complete Audited Consolidated Financial Statements and Notes,
Management Discussion & Analysis, and the NI-51-101 Standards
of Disclosure for Oil and Gas Activities filing may be found on the
Company's website www.orcaexploration.com or on www.sedar.com .
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains forward-looking
statements. More particularly, this press release contains
statements concerning, but not limited to, repayment of the TANESCO
receivable; expected timing of completion of a major natural
infrastructure project; terms of the Government of Tanzania's draft natural gas policy and
anticipated timing of second draft policy; the Company's plans to
review technical and drilling data on the La Tosca well to
determine whether or not to continue exploration on the block;
expected timing of drilling of an offshore Italy Elsa appraisal
well; industry conditions; industry conditions; and the Company's
strategic plans. In addition, statements relating to "reserves" or
"resources" are by their nature forward-looking statements, as they
involve the implied assessment, based on certain estimates and
assumptions that the resources and reserves described can be
profitably produced in the future. The recovery and reserve
estimates of Orca's reserves provided herein are estimates only and
there is no guarantee that the estimated reserves will be
recovered. As a consequence, actual results may differ
materially from those anticipated in the forward looking
statements. Although management believes that the expectations
reflected in the forward-looking statements are reasonable, it
cannot guarantee future results, levels of activity, performance or
achievement since such expectations are inherently subject to
significant business, economic, operational, competitive, political
and social uncertainties and contingencies. Many factors could
cause Orca's actual results to differ materially from those
expressed or implied in any forward-looking statements made by
Orca.
These forward-looking statements involve
substantial known and unknown risks and uncertainties, certain of
which are beyond Orca's control, including, but not limited to, the
impact of general economic conditions in the areas in which Orca
operates; civil unrest; industry conditions; changes in laws and
regulations including the adoption of new environmental laws and
regulations and changes in how they are interpreted and enforced;
increased competition; the lack of availability of qualified
personnel or management; fluctuations in commodity prices; foreign
exchange or interest rates; stock market volatility; competition
for, among other things, capital, drilling equipment and skilled
personnel; failure to obtain required equipment for drilling;
delays in drilling plans; failure to obtain expected results from
drilling of wells; effect of changes to the PSA on the Company;
failure to receive payments from TANESCO; changes in laws;
imprecision in reserve estimates; the production and growth
potential of the Company's assets; obtaining required approvals of
regulatory authorities; risks associated with negotiating with
foreign governments; ability to access sufficient capital; and risk
that the Company will not be able to fulfill its obligations. In
addition there are risks and uncertainties associated with oil and
gas operations, therefore Orca's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking estimates and, accordingly, no
assurances can be given that any of the events anticipated by the
forward-looking estimates will transpire or occur, or if any of
them do so, what benefits that Orca will derive therefrom.
Such forward-looking statements are based on
certain assumptions made by Orca in light of its experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors Orca believes are
appropriate in the circumstances, including, but are not limited
to, the ability of Orca to add production at a consistent rate;
infrastructure capacity; commodity prices will not deteriorate
significantly; the ability of Orca to obtain equipment in a timely
manner to carry out exploration, development and exploitation
activities; future capital expenditures; availability of skilled
labour; timing and amount of capital expenditures; uninterrupted
access to infrastructure; the impact of increasing competition;
conditions in general economic and financial markets; effects of
regulation by governmental agencies; that the Company will have
sufficient cash flow, debt or equity sources or other financial
resources required to fund its capital and operating expenditures
and requirements as needed; current or, where applicable, proposed
industry conditions, laws and regulations will continue in effect
or as anticipated as described herein; and other matters.
The forward-looking statements contained in
this press release are made as of the date hereof and Orca
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Orca Exploration Group Inc.