Third quarter 2016
* Production amounted to 12,297 barrels per day, up 1 per cent compared
to second quarter 2016
* Revenue amounted to MUSD 26, up 26 per cent compared to second quarter
2016
* EBITDA amounted to MUSD 16, up 86 per cent compared to second quarter
2016
* Net result amounted to MUSD 6, compared with MUSD -3 in the second
quarter 2016
* Earnings per share amounted to USD 0.19 during third quarter 2016
* EGM held 25 October 2016 resolved to distribute SEK 3.00 per share
through a redemption programme. The share redemption will be completed
by the end of November and total distributed amount will be
approximately MUSD 12
| MUSD (unless specifically stated) | Third quarter 2016 | Second quarter
2016 | Third quarter 2015 |
| | | | |
| Net daily production before government take (bbl) | 12,297 | 12,164 | 10,087 |
| Net barrels sold, after government take (bbl) | 501,167 | 740,844 | 584,399 |
| | | | |
| Average selling price per barrel, USD | 45.8 | 35.9 | 61.8 |
| | | | |
| Revenue | 26 | 21 | 30 |
| EBITDA | 16 | 8 | 18 |
| Operating result | 4 | -3 | 8 |
| Result for the period | 6 | -3 | 8 |
| Net cash | 48 | 41 | 59 |
| Investments in oil and gas properties | 9 | 9 | 13 |
| | | | |
| Earnings per share, USD | 0.19 | -0.09 | 0.23 |
| | MUSD (unless specifically stated) |
Nine months 2016 | Nine months 2015 |
| | | | |
| | Net daily production before government take (bbl) | 12,224 | 9,417 |
| | Net barrels sold, after government take (bbl) | 1,773,929 | 1,438,310 |
| | | | |
| | Average selling price per barrel, USD | 38.6 | 60.7 |
| | | | |
| | Revenue | 66 | 81 |
| | EBITDA | 34 | 45 |
| | Operating result | 1 | 19 |
| | Result for the period | 1 | 20 |
| | Net cash | 48 | 59 |
| | Investments in oil and gas properties | 34 | 35 |
| | | | |
| | Earnings per share, USD | 0.03 | 0.58 |
Letter to shareholders
Dear friends and investors,
One of the most important parameters for our business – the oil price –
stabilised further during the third quarter as demand continued to
increase and more importantly producers sent clear signals that ’ever
lower prices’ is not a viable long term option. This strengthened our
view that long term prices below USD 40-45 per barrel are highly
unlikely. Sustainable prices above USD 55 per barrel are also unlikely
for the near term. Until more clarity is reached in understanding what
the real marginal cost for US shale oil producers actually is, and how
easy access to new capital such producers have, forecasts for price
increases will remain speculative.
Oil production
Another vital parameter is the production, and in 2016 Tethys Oil is
pumping more oil than ever before. The average daily production amounted
to 12,297 barrels of oil per day, the highest in the company’s history.
Our production has grown over 20 per cent per compared with the third
quarter 2015.
Opex
A third important parameter is the operating expenses, and Tethys Oil’s
operating expenses per barrel are substantially lower in 2016 than in
last year as a result of general cost reductions and higher production.
From the range USD 10.3 to 14.4 per barrel in 2015, the operating
expenses per barrel have in 2016 been reduced to the range USD 7.3 to
9.3.
Solid financial results
Following higher achieved oil prices, higher production and lower
operating expenses per barrel, Tethys Oil returned to profitability
during the third quarter and we report a net result of MUSD 6. Our
revenue increased 26 per cent quarter on quarter to MUSD 26 and our
EBITDA increased 86 per cent to MUSD 16. Our investments in oil and gas
assets continued at unchanged level and amounted to MUSD 9. Our cash
flow, which has remained positive throughout the year, strengthened
further and the operating cash flow after investments in oil and gas
assets amounted to MUSD 6. Tethys Oil’s cash position increased further
during the quarter and amounted to MUSD 48 at the end of September.
Distribution to shareholders
Since our project in Oman has proven to be as robust as we believed it
would be, and based on our strong financial position and on our
continued ability to generate free cash even at prices below USD 40 per
barrel, we got the confidence to revisit the issue of cash distribution
to shareholders. As a result, an EGM in late October resolved on an
additional distribution to shareholders of 3.00 SEK per share in a
redemption procedure. After completing the redemption procedure in
November and also including the share repurchase programme during the
year, we will in total have distributed around MUSD 18 (MSEK 151) to
shareholders during 2016, undisputedly a sign of significant financial
strength.
Outlook
Although we are happy over our numbers for the third quarter, we aim
higher. We are hopeful that the drilling program for the fourth quarter
will increase our production and result in another volume record by year
end.
The fourth quarter will also see some interesting exploration activity
particularly in the area between the Shahd and Farha South oil fields.
Depending on the outcome of this exploration activity, we may be able to
establish an overlap between the fields in the three main producing
reservoirs – Buah, Khufai and Barik. And in addition to our organic
growth, our new venture screening activity remains high.
So stay with us, exciting times continue!
Stockholm in November 2016
Magnus Nordin
Managing director
Conference call
Date: 2016-11-01
Time: 10.00 CET
To participate in the conference call you may choose one of the
following options:
To participate via phone, please call:
Sweden: +46 8 505 564 74
Switzerland: +41 225 675 541
UK: +44 203 364 5374
North America: +1 855 753 2230
To participate via web:
Link to webcast: http://edge.media-server.com/m/p/6yptaty6
For further information, please contact:
Magnus Nordin, managing director, phone: +46 8 505 947 00
Morgan Sadarangani, CFO, phone: +46 8 505 947 00
This information is information that Tethys Oil AB is obliged to make
public pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the contact persons set
out above, at 07.30 CET on 1 November 2016.
(For full report, please see attached file)
