Second quarter 2016
* Production amounted to 12,164 barrels per day, which is in line with
the first quarter 2016. The production has been negatively affected by
planned maintenance work continued from the first quarter 2016
* Revenue amounted to MUSD 21, up 5 per cent compared to first quarter
2016
* EBITDA amounted to MUSD 8, down 18 per cent compared to first quarter
2016
* Net result amounted to MUSD -3, down from first quarter 2016
* Earnings per share amounted to USD -0.08 during second quarter 2016
* Dividend of SEK 1.00 per share amounting to MUSD 4 was distributed to
shareholders during the second quarter 2016
| MUSD (unless specifically stated) | Second quarter 2016 | First quarter
2016 | Second quarter 2015 |
| | | | |
| Net daily production before government take (bbl) | 12,164 | 12,212 | 9,434 |
| Net barrels sold, after government take (bbl) | 740,844 | 531,918 | 545,019 |
| | | | |
| Average selling price per barrel, USD | 35.88 | 35.70 | 57.77 |
| | | | |
| Revenue | 21 | 20 | 26 |
| EBITDA | 8 | 10 | 15 |
| Operating result | -3 | -1 | 7 |
| Result for the period | -3 | -2 | 4 |
| Net cash | 41 | 45 | 39 |
| Investments in oil and gas properties | 9 | 15 | 6 |
| | | | |
| Earnings per share, USD | -0.08 | -0.07 | 0.13 |
| MUSD (unless specifically stated) | First half
2016 | First half 2015 |
| | | |
| Net daily production before government take (bbl) | 12,188 | 9,075 |
| Net barrels sold, after government take (bbl) | 1,272,762 | 853,911 |
| | | |
| Average selling price per barrel, USD | 35.80 | 59.95 |
| | | |
| Revenue | 40 | 51 |
| EBITDA | 19 | 27 |
| Operating result | -3 | 12 |
| Result for the period | -5 | 12 |
| Net cash | 41 | 39 |
| Investments in oil and gas properties | 24 | 22 |
| | | |
| Earnings per share, USD | -0.15 | 0.34 |
Starting 1 January 2016, the Tethys Oil group presents the financial
reports in USD. Please note that all comparative financials have been
restated. For further information, please see Accounting principles on
page 14.
Letter to shareholders
Dear friends and investors,
it is a pleasure to report a continued solid operational and financial
performance for Tethys Oil. We produced over 12,000 barrels of oil per
day, which was in line with our production in the first quarter, even
though our producing fields on Blocks 3 and 4 in Oman were partially
shut down for planned maintenance.
Robust balance sheet
In the second quarter, we report revenue of MUSD 21, up 5 per cent
quarter on quarter. Our EBITDA for the quarter amounted to MUSD 8, a
decrease quarter on quarter after slightly higher operating costs. We
invested MUSD 9 in oil and gas assets during the second quarter 2016,
and again we report positive cash flow after investments of MUSD 2. Our
net result this quarter was negative amounting to MUSD -3. Our net cash
stood at MUSD 41 as per 30 June 2016.
Stronger macro environment
An element of stability and possibly predictability returned to the
industry in the course of the second quarter as oil prices increased and
volatility dropped. A price range for Brent oil of between USD 40-50 per
barrel emerged, a price at which our producing assets in Oman generate
strong profitability and cash flow. As we have a two months lag in our
selling price, our average selling price in the second quarter was in
line with the first quarter. We will see the benefit of the price
increase in the third quarter.
Infrastructure on Blocks 3 and 4 upgraded
Planned maintenance work was carried out on all three fields on Blocks 3
and 4 during the first half of 2016. The maintenance work caused some
temporary shut downs of the fields, which had a limited impact on
production. The main objectives of the maintenance work were to verify
asset integrity of the systems and to add and change components. The
assets are now fully served to handle present and future volumes.
Outlook
The new oil price environment favours consolidation and forward looking.
For Tethys Oil, this is an excellent opportunity to strengthen the
organisation, recruit new colleagues and expand the data base, to
broaden the long term outlook and implement a more systematic approach
to surveying opportunities within the industry. We would expect more
corporate transactions in general in the oil industry in the second half
of 2016, as the expectations of price recovery for underfunded projects
are not fulfilled and the lack of available capital firmly establishes a
buyer’s market. We are calmly, collectedly and systematically evaluating
possibilities to expand our portfolio of value creating projects.
Blocks 3 and 4 in Oman are maturing as we gain an increasing
understanding of our producing plays, resulting in even better
predictability and enhanced ability to map out further opportunities. A
number of far field exploration and appraisal opportunities remain, and
we gain a better and better understanding of where they may be located.
We have ample seismic coverage, and from a staff point of view, Tethys
Oil has never been stronger. We take advantage of the overall lower cost
environment to cleverly and systematically mature prospects and develop
play concepts.
So stay with us, time is on our side and we intend to continue to share
our strong balance sheet with our investors as we let our other
strengths play out within our chosen industry!
Stockholm in August 2016
Magnus Nordin
Managing director
Conference call
Date: 2016-08-16
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/evk7z3jz
For further information, please contact:
Magnus Nordin, managing director, phone: +46 8 505 947 00
Morgan Sadarangani, CFO, phone: +46 8 505 947 00
(For full report, please see attached file)
