Panoro Energy – Third Quarter 2024 Trading and Financial Update

Oslo, 20 November 2024 – Panoro Energy ASA (“Panoro” or the “Company”) is pleased to report that its objective of reaching over 13,000 bopd working interest production by year-end has been achieved ahead of time.

Gross production at the Dussafu Marin Permit offshore Gabon has reached targeted levels of over 40,000 bopd with Equatorial Guinea also making an increased contribution following the successfully concluded infill drilling campaign.

Financial performance is in line with expectations, and reflects the Company’s previously communicated crude oil lifting schedule whereby approximately 40 per cent of all 2024 liftings will occur in Q4.

Drilling has commenced at the Akeng Deep infrastructure led exploration (“ILX”) well offshore Equatorial Guinea with the Bourdon ILX well offshore Gabon to be drilled in early 2025.  These ILX wells represent exciting organic growth catalysts with potential to add material value for modest financial exposure if successful.

John Hamilton, CEO of Panoro, commented:

“I am delighted to report that we have achieved our target production rate at both asset and group levels, ahead of time. These important milestones start to demonstrate the underlying developed production capacity across our high quality and diversified production assets. With further wells due onstream over the remainder of Q4, Panoro will further expand and diversify its producing well inventory which provides us with scope to sustain higher production capacity for an extended period of time.

With approximately 40 per cent of 2024 liftings occurring in Q4 we expect full-year EBITDA to come in at around the USD 150 million level assuming an average oil price of USD 70 per barrel for remaining liftings, pointing towards 2024 being another year of record financial performance for Panoro.

Panoro’s outlook is one of higher production, decreasing capital expenditure, strong free cash flow generation translating into meaningful shareholder returns. With drilling now underway at the high-impact Akeng Deep ILX well on Block S offshore Equatorial Guinea, to be followed by the Bourdon ILX well at Dussafu offshore Gabon in early 2025, we have an exciting organic growth pipeline of activity.”

Production Update

• Group working interest production target of over 13,000 bopd by year-end has been reached ahead of time
• In Gabon, gross production at Dussafu has reached over 40,000 bopd with production from three wells yet to be brought onstream
  • Scope exists for FPSO nameplate capacity of 40,000 bopd to be exceeded by approximately 10 per cent
• In Equatorial Guinea, the first infill well at the Ceiba field was successfully put onstream at an initial rate in excess of 5,000 bopd, with one further infill well at the Okume Complex now completed and starting up production
• Group working interest production for Q3 and the first nine months was:

• Full year 2024 working interest production is expected to average approximately 10,000 bopd after adjusting for the later start-up of the new infill wells in Equatorial Guinea during Q4  

Crude Oil Liftings

• Crude oil volumes lifted and sold in Q3 and the first nine months were:

• In Q4 to date Panoro has completed aggregate scheduled liftings of 351,067 barrels (which included a Tunisian lifting of 171,498  barrels previously expected to occur in late Q3) at an average realised oil price of USD 73.27 per barrel
• Full-year 2024 liftings are expected to be approximately 3.5 million barrels (unchanged) with approximately 1.4 million barrels lifted / to be lifted in Q4 (approximately 40 per cent of annual volume lifted in Q4)
• The Company has hedges in place covering 490,000 barrels of remaining Q4 liftings at an average floor price of USD 70.9 per barrel through a mix of collars and swaps

Financial Update

• Reported revenue in Q3 was USD 36 million (Q2: USD 73.9 million)
• Q3 EBITDA was USD 23.7 million (Q2: USD 39.1 million) with profit before tax of USD 4.3 million (Q2: USD 21.3 million) and net profit for the period of USD 0.3 million (Q2: 12.1 million)
• Reported revenue for the first nine months was USD 178.8 million (9M 2023: USD 173.5 million)
• EBITDA for the first nine months was USD 101.4 million (9M 2023: USD 103.7 million) with profit before tax of USD 46.6 million (9M 2023: USD 61.2 million) and net profit of USD 24.4 million (9M 2023: 28.8 million) 
• Based on barrels already lifted and sold and scheduled remaining liftings in Q4 the Company expects EBITDA for full year 2024 will be approximately USD 150 million (assuming an average price realisation of USD 70 per barrel for remaining 2024 liftings)
• Cash at bank at 30 September was USD 18.7 million which includes advances taken against future oil liftings of USD 10.4 million
• The amount owing under the Company’s RBL facility at 30 September 2024 was USD 72.8 million which included USD 2.4 million accrued interest which was paid in early October (excluding accrued interest the amount owing at 30 September 2024 was USD 70.5 million)
• As previously communicated there has been upwards pressure on the Company’s full-year capital expenditure guidance of USD 75 million, now estimated at approximately USD 95 million primarily due to the amended drilling programs in both Equatorial Guinea and Gabon:
  • Note that capital expenditure at producing assets is cost recoverable under the terms of Panoro’s production sharing contracts and tax provisions
  • The rig extension and expanded drilling campaign offshore Gabon has resulted in a total of eight new production wells (compared to six wells originally planned) and a gross 2P reserve addition of 23.1 million barrels from new discoveries made with E&A pilot wells also added into the drilling programme
  • The rescheduled infill drilling campaign offshore Equatorial Guinea has resulted in excess capital expenditure
  • Lower than expected spend in Tunisia partially offsetting the above
• Preliminary expectations for group capital expenditure in 2025 are unchanged at approximately USD 40 million
• Post period end in October the Company made use of additional capacity in its lending facility of an additional USD 12 million to provide additional short-term working capital during this period of heavy development activity

Shareholder returns

• Panoro today declares a Q3 2024 cash distribution of NOK 50 million to be paid in December as a return of paid in capital
• Under the share buy-back programme announced on 23 May 2024 (of up to NOK 100 million) the Company, as at close of business on 15 November, had purchased a total of 1,281,500 of its own shares at a weighted average price of NOK 31.8821 per share, corresponding to 1.10 per cent of Panoro’s share capital
• Panoro remains committed to delivering regular and sustainable shareholder returns in line with its previously communicated 2024 shareholder returns policy

Production Operations Update

Equatorial Guinea – Block G (Panoro 14.25 per cent)

• The C-45 and OF-19 infill wells were drilled with the Noble Venturer drill ship and both encountered good quality oil saturated reservoir sands in un-swept zones of the Ceiba field and Okume Complex respectively
• The C-45 infill was put onstream on 1 November at an initial gross rate in excess of 5,000 bopd.  The OF-19 infill well is now starting up production as planned
• Current gross production at Block G following start-up of the C-45 well is approximately 29,000 bopd
• The Noble Venturer is now drilling the Kosmos Energy operated Akeng Deep ILX well on the adjacent Block S which is the final operation of the current drilling campaign

Gabon – Dussafu Marin Permit (Panoro 17.5 per cent)

• Gross production averaged 27,417 bopd in Q3, the highest quarterly rate achieved since production commenced on the block in 2018
• Following completion and start-up of the DHBSM-2H well at the Hibiscus South field in July and DHIBM-7H well at the Hibiscus field in October, gross production at Dussafu has increased to current rates of 40,000 bopd from five out of the eight wells drilled in the current campaign in addition to the six pre-existing production wells at the Tortue field
• A workover and ESP change-out of the DHIBM-4H well on the Hibiscus field was successfully completed in early November with production now being re-instated from the well
• Three further workovers for ESP installation are planned during Q4 2024 and upon conclusion of this activity all eight production wells drilled in the current campaign will have conventional ESP systems installed
• The Bourdon prospect test well (DBM-1) will be the last rig operation under the current contract in early 2025

Tunisia – TPS Assets (Panoro 49.0 per cent)

• New production opportunities include a workover campaign comprising ESP replacement and well stimulations
• Detailed planning for development drilling campaign on the Rhemoura and Guebiba fields

Exploration and Appraisal Activities

ILX wells

Equatorial Guinea – Akeng Deep ILX well, Block S (Panoro 12.0 per cent)

• The Noble Venturer drill ship has commenced drilling of the Kosmos Energy operated Akeng Deep ILX well (S-6) in Block S with results expected in December.  
• The S-6 well is intended to test a play in the Albian, targeting an estimated gross mean resource of approximately 180 million barrels of oil in close proximity to existing infrastructure at Block G
• Other partners in Block S are GEPetrol and Trident Energy
• A successful outcome at Akeng Deep can have a positive read across to the adjacent Panoro operated Block EG-01 where Panoro has a 56 per cent interest and is conducting subsurface studies based on existing 3D seismic data. The seismic data re-processing project for EG-01 is proceeding to plan and will conclude during Q4

Gabon - Bourdon ILX well, Dussafu Marin (Panoro: 17.5 per cent)

• The Bourdon prospect test well, DBM-1, is planned to be drilled in early 2025
• Located in a water depth of 115 metres approximately 7 kilometres to the southeast of the BW MaBoMo production facility and 14 kilometres west of the BW Adolo FPSO. The Bourdon Prospect has an estimated mid-case potential of 83 million barrels in place and 29 million barrels recoverable in the Gamba and Dentale formations

Portfolio expansion

Equatorial Guinea – PSC signed for Block EG-23 (Panoro: 80.0 per cent, operator)

• Located offshore north of Bioko Island and adjacent to the producing Alba gas and condensate field. 19 wells have been drilled to date resulting in seven hydrocarbon discoveries, some of which have been tested
• Based on existing data, the Ministry of Mines and Hydrocarbons estimates Block EG-23 holds gross contingent resources of approximately 104 million barrels of oil and condensate and 215 billion cubic feet of gas
• Initial period of three years to conduct subsurface studies based on existing seismic. Following this, the partners will have the option to enter into a further two-year period, during which they will undertake to drill an exploration well.  Partnered with GEPetrol (20 per cent)

Gabon - PSCs signed for Niosi and Guduma blocks (Panoro: 25.0 per cent)

• Adjacent to the Company’s producing Dussafu Marin Permit and the producing Etame Marin Permit which is operated by VAALCO Energy
• The PSC covering the Niosi block has an initial exploration period of five years with a work commitment of new 3D seismic data acquisition and one well. The PSC covering the Guduma block has an initial exploration period of three years with a work commitment of geological and geophysical studies. Both blocks have an option to extend the exploration period and enter a second phase with an additional well commitment
• Partners in the Niosi and Guduma blocks are BW Energy (37.5 per cent and operator) and VAALCO Energy (37.5 per cent).

Webinar Presentation

The company will hold a live webinar presentation at 09:00 a.m. CEST today, Wednesday 20 November 2023, during which management will discuss the results and operations followed by a Q&A session.

The webinar presentation can be accessed through registering at the link below and the online event will be equipped with features to ask live questions. Joining instructions for participating online or through using local dial-in numbers will be available upon completion of registration. The webinar details are as follows:

Please join the event at least ten minutes before the scheduled start time.

A replay of the webinar will be available shortly after the event is finished and will remain on our website (www.panoroenergy.com) for approximately 7 days.

Enquiries

Qazi Qadeer, Chief Financial Officer
Tel: +44 203 405 1060
Email: investors@panoroenergy.com

About Panoro Energy

Panoro Energy ASA is an independent exploration and production company based in London and listed on the main board of the Oslo Stock Exchange with the ticker PEN. Panoro holds production, exploration and development assets in Africa, namely interests in Block-G, Block S, Block EG-01 and Block EG-23 offshore Equatorial Guinea, the Dussafu Marin, Niosi Marin and Guduma Marin blocks offshore southern Gabon, the TPS operated assets, Sfax Offshore Exploration Permit and Ras El Besh Concession, offshore Tunisia, and onshore Exploration Right 376 in South Africa.

Visit us at www.panoroenergy.com.

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