- Om Tethys Oil
|MSEK (unless specifically stated)||Second quarter 2014||First quarter 2014||Second quarter 2013||% Q2 2014 to Q1 2014|
|Production, before government take (bbl)||658,123||608,582||399,839||8%|
|Average daily production, before government take (bbl)||7,232||6,762||4,394||7%|
|Net sales, after government take (bbl)||350,059||280,782||156,816||25%|
|Average selling price per barrel, USD||105.89||106.56||107.26||-1%|
|Net sales of oil and gas||245||195||110||26%|
|Result for the period||107||58||39||86%|
|Earnings per share before and after dilution, SEK||3.02||1.62||1.10||86%|
|MSEK (unless specifically stated)||First half 2014||First half 2013||% H1 2014 to H1 2013|
|Production, before government take (bbl)||1,266,705||768,321||65%|
|Average daily production, before government take (bbl)||6,998||4,245||65%|
|Net sales, after government take (bbl)||630,841||366,354||72%|
|Average selling price per barrel, USD||106.19||107.68||-1%|
|Net sales of oil and gas||440||256||72%|
|Result for the period||165||144||15%|
|Earnings per share before and after dilution, SEK||4.64||4.04||15%|
Dear Friends and Investors
Once upon a time, actually not too long ago, Tethys was an event driven fringe-company. An exploration company offering lots of optimism and hope, but with a poor income statement and a weak balance sheet. Today, when we present this report filled with record numbers, that time seems a distant past. Gone are the zero sales lines and discussions on future capital needs. The revenues of MSEK 245 this quarter was a record high. EBITDA for the quarter was a healthy MSEK 192 and our net result for the quarter amounted to MSEK 107 (incidentally both also record numbers). In brief, we are now an oil company with substantial assets and strong finances. Future exploratory and appraisal work can now be funded from cash flow, or bank borrowing secured by reserves.
Now, analysts can have opinions about our upcoming reports and investors can speculate in share buy backs or even future dividends. It is great, at least in some respects, to be part of 'quarterly capitalism'. But this marvelous transition does not mean that we have lost our soul. We made it here, not through mergers or acquisitions, but through success with the drill bit. Through persistent and systematic efforts of appraisal and exploration along our strategic lines.
The main driver behind our record high production of 7,232 barrels of oil per day in the second quarter (superseded in July by a new record production number of 8,239 barrels of oil per day) was the continued successful appraisal of the Lower Buah reservoir on Block 4. We have drilled four new appraisal/exploration wells in the Lower Buah reservoir and one in the Khufai reservoir on Block 4. All have been successful and put in production.
As a consequence, we commissioned an interim reserve report from our reserve auditors, DeGolyer and MacNaughton, to estimate Lower Buah reserves as at 30 June 2014. But before we look at the numbers, let us just bear in mind that our appraisal strategy remains focused on production and cash flow, and only thereafter on reserve estimates. However, also with this conservative strategy, our reserve increase in Lower Buah for the first six months of 2014 has been quite satisfactory. When we compare the Lower Buah numbers to the reserve report as per 31 December 2013, our June 2P is larger than our December 3P number and the Lower Buah continues to show promise as one of our most important reservoirs. The 3P number for June stands at no less than 7.4 million barrels. But let us not forget that we have also made additional discoveries in the Khufai and that most of our production still comes from the Barik reservoir in the Farha South field. Exploration and appraisal work will continue throughout 2014 and we look forward to a new year-end reserve audit.
Onshore Oman is not our only project area. Lithuania should offer exploration wells later this year, our assets in France are quiet but not dead and new areas and other projects may loom in the future. As our growth continues, we are staffing up with new senior colleagues. In Muscat, on 1 September Mr Hussain Al Lawati, a former Director General of Exploration of the Ministry of Oil and Gas, will join Tethys, most recently from a senior position with Oman Oil Company Exploration and Production. And in Stockholm, former investment banker Mr. Jesper Alm, has recently joined us.
So stay with us - the journey continues, albeit at a higher level!
Stockholm in August 2014
For further information, please contact:
Magnus Nordin. Managing Director. phone: +46 8 505 947 02. e-mail: email@example.com
Morgan Sadarangani. CFO. phone +46 8 505 947 01. e-mail: firstname.lastname@example.org
Tethys Oil is a Swedish energy company focused on exploration and production of oil and natural gas. Tethys Oil's core area is Oman, where the company is one of the largest onshore oil and gas concession holders. Tethys Oil also have exploration and production assets onshore Lithuania and France.
The shares are listed on NASDAQ OMX Stockholm (TETY).