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First quarter report 2015

2015-05-05T07:30:00 CET
  • New production record during first quarter 2015. Average daily production is up 4 per cent quarter on quarter. Total production amounted to 784,207 barrels corresponding to 8,714 barrels per day
  • First quarter 2015 net sales of MSEK 163 compared to MSEK 310 in the fourth quarter 2014, a decrease with 47 per cent quarter on quarter. The sales decrease is due to both a movement from over to underlift position of more than 90,000 barrels and lower achieved oil price
  • Net cash position of MSEK 371 as per 31 March 2015 compared to MSEK 347 as per 31 December 2014. The currency exchange effect on cash and cash equivalents amounted during the first quarter 2015 to MSEK 44, which has positively affected net result
  • Net result after tax during first quarter 2015 amounted to MSEK 39. The result is up 116 per cent compared to MSEK 18 during fourth quarter 2014. The result for the fourth quarter 2014 was negatively affected by write downs of MSEK 127
  • First quarter 2015 earnings per share before and after dilution amounted to SEK 1.11 compared to SEK 0.51 during fourth quarter 2014
  • Board of directors propose to the AGM 2015 a distribution to shareholders of SEK 3.00 per share
MSEK (unless specifically stated) First quarter 2015 Fourth quarter 2014 First quarter 2014 % Q1 2015 to Q4 2014
Production, before government take (bbl) 784,207 768,226 608,582 2%
Average daily production, before government take (bbl) 8,714 8,350 6,762 4%
Net sales, after government take (bbl) 308,892 434,035 280,782 -29%
Average selling price per barrel, USD 63.80 97.09 106.56 -34%
Net sales of oil and gas 163 310 195 -47%
EBITDA 76 200 130 -62%
Operating result 13 14 83 -7%
Result for the period 39 18 58 117%
Earnings per share before and after dilution, SEK 1.11 0.51 1.62 118%
Net debt/(net cash) (371) (347) 60 7%
Investments 131 101 45 30%

Dear Friends and Investors

The first quarter 2015 is, as expected following the fall in oil prices, considerable weaker than previous quarters. But we are happy to report that Tethys remains profitable. Our sales in the first quarter 2015 amounted to MSEK 163. Our EBITDA amounted to MSEK 76 and our net result amounted to MSEK 39.

During the quarter 2015, we continued to invest heavily in Blocks 3 and 4. Total investments of MSEK 130 were made in wells, seismic studies and infrastructure. Drilling activity increased markedly, and eleven wells were completed in the first quarter. And at least so far this year, production has responded very well to our investments. We reported a new quarterly production record of 8,714 barrels of oil per day for the first quarter and March showed the highest production we ever had in one month with our share of production from Blocks 3 and 4 amounting to 9,154 barrels of oil per day.

Our strong cash position, which at the end of the first quarter stood at MSEK 400, corresponding to more than SEK 11 per share, and our financial and operational numbers for the first quarter suggest that Tethys must be one of the financially strongest oil companies of our peer group. We have a solid balance sheet, also after the proposed distribution to shareholders of SEK 3 per share. Our large pile of cash and untapped credit line of up to MUSD 100, give ample room for continued investments as well as for other opportunities and/or further distributions to shareholders.

Outlook

Looking forward, indications are that we may have seen the bottom of the oil price. Volatility has dropped dramatically the last couple of months. We are currently seeing Brent trading at well over USD 60 per barrel. A price level that we are quite comfortable with!

We expect drilling activity to remain at a high level also going forward. New rigs have been contracted and are expected to start work later this summer bringing us to a total of five rigs in operation. We believe that our oil production will continue to increase in 2015, but we expect the monthly production numbers to fluctuate.

Leaving the deserts of Oman and looking across the Baltic Sea to Lithuania, the production on the Gargzdai licence is currently cash flow positive, even if barely so. In the near term, we have higher hopes for the Raseiniai licence further to the east, where the exploration programme will enter the drilling phase later this quarter.

So stay with us - we are in a strong position and we intend to strengthen it further! And remember, an oil price of USD 60 per barrel is not a bad price. At least not for us!

Stockholm in May 2015

Magnus Nordin

Managing director

For further information, please contact:

Magnus Nordin, Managing director, phone: +46 8 505 947 00

or

Morgan Sadarangani, CFO, phone +46 8 505 947 01

This report has not been subject to review by the auditors of the company.

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 has exploration and production assets onshore Lithuania and France.

The shares are listed on Nasdaq Stockholm (TETY).

Bilagor

Om Tethys Oil

Tethys Oil är ett svenskt oljebolag med fokus på onshoreområden med kända oljefynd. Tethys kärnområde är Oman, där bolaget har 22 miljoner fat i bevisade och sannolika oljereserver och 17 miljoner fat i betingade resurser 2C. Under 2017 hade Tethys Oil en genomsnittlig oljeproduktion om 12 162 fat om dagen från Block 3&4. Tethys Oil har också prospekteringstillgångar onshore Frankrike och Litauen och viss produktion i Litauen. Aktierna är noterade på Nasdaq Stockholm (TETY).