- Om Tethys Oil
- 1P reserves 12,905 thousand barrels (11,794)
- 2P reserves 18,244 thousand barrels (17,779)
- 3P reserves 27,863 thousand barrels (25,080)
|MSEK (unless specifically stated)||Fourth quarter 2015||Fourth quarter 2014||Third quarter 2015|
|Net daily production before government take (bbl)||10,956||8,350||10,087|
|Net barrels sold, after government take (bbl)||366,746||434,035||584,399|
|Average selling price per barrel, USD||47.90||97.09||61.77|
|Result for the period||27||-1||78|
|Investments in oil and gas properties||79||101||85|
|Earnings per share, SEK||0.78||-0.02||2.23|
 Tethys Oil has made changes to its accounting principles with regard to valuation of underlift and allocation and presentation of over- and underlift compared to previous reports, which has had an effect on current as well as historic financial data. Historical financial data has been restated in accordance with the new accounting principles. Please see page 17 and section "Accounting principles" for more information.
|MSEK (unless specifically stated)||Full year 2015||Full year 2014|
|Net daily production before government take (bbl)||9,804||7,692|
|Net barrels sold, after government take (bbl)||1,805,056||1,464,228|
|Average selling price per barrel, USD||58.09||103.87|
|Result for the period||198||340|
|Investments in oil and gas properties||324||259|
|Earnings per share, SEK||5.66||9.56|
Letter to shareholders
Dear Friends and Investors
Also in this fourth quarter report, events outside of our control - movements in the oil price - have had a large impact on our results. The oil price has fallen for 18 months and as we entered January 2016, the fall accelerated before bouncing in mid January. At the time of writing, there are signs that the week of January 15 saw the bottom of the downturn. Irrespective of whether we have seen the low of the cycle or not, I strongly believe we are close in time to the end of the down turn. Prices will bottom out and stabilize. At what level prices will stabilize and how quickly they rise again is a different matter. In any case, Tethys will be able to continue to generate a positive gross profit also at prices below 30 dollars per barrel!
Strong production growth
Now, turning to more pleasant subject, namely events that are under our control. A year ago, we believed that we had every reason to expect our production to continue to increase also in 2015. And in fact, in 2015 we produced more oil than ever before. Our oil production increased at an average pace of over seven per cent each quarter, and by the end of the year, we had produced 31 per cent more oil in the fourth quarter 2015 than we did in the last quarter 2014. And, just like the oil price but in the opposite direction, the rate of increase accelerated in January and average daily production for the year's first month surpassed 12,000 barrels!
The recent surge is primarily related to the successful bringing on stream of a new reservoir within the Shahd field, the Lower Khufai Carbonates. This new reservoir has responded very well to horizontal drilling, and is dramatically complementing the other primary producer in Shahd field, the Buah layer.
Reserves continue to increase
A year ago we were also optimistic that our reserve numbers would continue to increase also in 2015. And indeed our 2P reserve replacement ratio stands at 113 per cent. The 1P number is even better showing an increase in absolute numbers of more than one million barrels underscoring the robustness of our producing reserves. So having moved reserves from 3P into 2P and 1P we are happy to note a 3P number of 27.9 million barrels as we enter 2016, showing an increase of almost 3 million barrels for the year after taking account of the 3.5 million barrels produced in 2015.
Continued positive financial results
Our average selling price fell 22 per cent quarter on quarter down to USD 47.9 per barrel. In the fourth quarter, we report revenues of MSEK 222. Our EBITDA for the quarter amounted to MSEK 113. Our cash flow from operations amounted to MSEK 23, and our net result amounted to MSEK 27. Our net cash stood at MSEK 436 as per 31 December 2015.
Our two Blocks onshore the desert of the Sultanate of Oman have turned into a world class asset. A few years ago we described the Blocks as a smorgasbord of opportunity - and what a buffet they have turned into. With the addition of production from the Lower Khufai, we have shown that the Blocks hold massive potential for growth. The Buah overlays the Khufai and both reservoirs are present in large parts at least of the eastern area of the Blocks.
As exploration and appraisal continues in 2016 within and close to the producing areas in all three fields, we have every reason to believe that much more oil can be found. With the successful bringing on stream of the new reservoir within the Shahd field, a water injection programme in the Buah layer showing signs of working combined with a steady production on Farha South field, we also believe that production will continue to increase during 2016. As the production from the new reservoirs is optimized, the production for individual months will fluctuate, and possibly show more volatility than during 2015. And commencing in April, planned maintenance work at first in Farha South and then in Shahd will lead to temporary production disruption. Our focus on cash flow will continue, and the work programme will be continually monitored to stay optimized in relation to oil prices.
Our balance sheet remains one of the strongest of our peer group and as the oil price has fallen further, our relative strength has increased. There is a lot of opportunity out there. We are well positioned and are continuously evaluating new projects. We continue to be a cash dividend company, and propose a dividend of SEK 1 per share. Depending on how oil prices, production levels investments and other events unfold we will continually evaluate the sense in distributing more cash to shareholders in accordance with our long term financial goals.
So stay with us, we expect that Tethys will produce a fair amount of oil, at least in relativity terms, but most likely not enough to influence the international oil price.
Stockholm in February 2016
Date: Tuesday, 9 February 2016
Time: 10.00 CET
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For further information, please contact:
Magnus Nordin, managing director, phone: +46 8 505 947 00
Morgan Sadarangani, CFO, phone: +46 8 505 947 00