TSX-V: ORC.A, ORC.B
TORTOLA, British
Virgin Islands, Aug. 28, 2013
/CNW/ - Orca Exploration Group Inc. ("Orca" or "the Company")
announces its results for the second quarter ended 30th
June 2013.
Highlights
- A total of US$35.2 million has
been received from TANESCO since the end of Q1 2013 - US$19.8 million during Q2 and a subsequent
payment of US$15.4 million in
July 2013.
- At 30 June 2013, TANESCO owed the
Company US$46.3 million including
arrears of US$39.7 million
(31 March 2013: US$48.8 million, including arrears of
US$44.0 million). Current TANESCO
arrears are US$31.2 million.
- Additional Gas sales continued near field capacity during Q2
averaging 58.4 MMcfd being an increase of 6% over the prior
period (Q2 2012: 54.9 MMcfd) and down 5% over Q1 2013 (61.6
MMcfd).
- Industrial sales volume decreased by 11% to 11.7 MMcfd from
13.1 MMcfd in Q1 2013. Power sector sales volumes during Q2
averaged 46.7 MMcfd down 4% over Q1 2013 at 48.5 MMcfd.
- Average Industrial gas price for the quarter was US$8.60/mcf up 11% from Q1 2013 (US$7.78/mcf) and Power sector gas prices averaged
US$3.63/mcf for the quarter up 2%
over Q1 2013 price of US$3.55/mcf.
- Cost pools were depleted in Q4 2012, which together with
capital spending of only US$0.1
million adding to cost pools, constraining earnings and
funds from operations. Accordingly, revenue of US$12.0 million was down 9% over Q1 2013
(US$13.2 million).
- Stronger gas sales prices and cost reductions drove Q2 funds
from operations before working capital changes of US$10.5 million (US$0.30 per share diluted), up 20% from Q1 2013
(US$8.7 million or US$0.25 per share diluted).
- Q2 posted a loss of US$6.8
million or US$0.19 per share
diluted, down 331% from Q1 2013 earnings of US$3.0 million or US$0.08 per share diluted. Whilst the Company
continues to believe it will collect the full TANESCO receivable,
the outstanding amount has been discounted by US$7.9 million reflecting the time value of money
resulting from delays in collection, such charge applied directly
to earnings.
- Working capital decreased by 59% during the quarter to
US$22.5 million as at 30 June 2013 (US$54.8
million as at 31 March 2013)
as a consequence of reclassifying that portion of TANESCO
receivables in excess of 60 days as a long-term receivable and
providing US$7.1 million for doubtful
accounts.
- Substantive negotiations to conclude an agreed form of
amendment to the Songo Songo Production Sharing Agreement (PSA) and
resolution of the remaining issues continued with the Government
Negotiating Team (GNT) - the Company has committed to work together
with the Government to expedite the conclusion of these
negotiations.
- Active negotiations which commenced in April 2013 with the Tanzania Petroleum Development Corporation
(TPDC) in its capacity as gas aggregator and continued during the
quarter and subsequent regarding a long-term sales agreement for
incremental gas volumes of up to approximately 110 MMcfd.
- The Company has continued in good faith during the quarter
preparing a full field development plan for Songo Songo whilst issues are being resolved,
and in July 2013 submitted a plan to
the Ministry of Energy and Minerals. The execution of the plan,
including workovers of existing wells and the drilling of an
additional production well SS-12, continue to be on hold until
TANESCO arrears and surety of payments is addressed, GNT issues are
fully resolved and acceptable commercial terms for the sale of
incremental gas has been agreed.
Financial and Operating Highlights
|
|
|
|
|
|
Three months ended/As
at |
30-Jun-2013 |
30-Jun- 2012 |
% Change |
31-Mar 2013 |
% Change |
|
|
|
|
|
|
Financial (US$000 except
where otherwise stated) |
|
|
|
|
|
Revenue |
11,996 |
16,914 |
(29) |
13,197 |
(9) |
Profit/(loss) before taxation |
(8,509) |
8,672 |
(198) |
4,660 |
(283) |
Operating netback
(US$/mcf) |
2.10 |
2.56 |
(18) |
2.15 |
(2) |
Cash and cash equivalents |
18,752 |
20,194 |
(7) |
13,421 |
40 |
Working capital
(1) |
22,527 |
38,689 |
(42) |
54,758 |
(59) |
Shareholders' equity |
122,068 |
118,938 |
3 |
128,885 |
(5) |
Total comprehensive income |
(6,817) |
5,167 |
(232) |
2,950 |
(331) |
Earnings per share -
basic (US$) |
(0.19) |
0.15 |
(227) |
0.08 |
(338) |
Earnings per share - diluted
(US$) |
(0.19) |
0.15 |
(227) |
0.08 |
(338) |
Funds flow from operating
activities |
10,546 |
9,982 |
6 |
8,699 |
21 |
Funds per share from operating
activities - basic (US$) |
0.30 |
0.29 |
7 |
0.25 |
20 |
Funds per share from operating
activities - diluted (US$) |
0.30 |
0.28 |
7 |
0.25 |
20 |
Net cash flows from operating
activities |
8,101 |
5,689 |
42 |
(5,748) |
241 |
Net cash flows per share from
operating activities - basic (US$) |
0.23 |
0.16 |
44 |
(0.17) |
235 |
Net cash flows per share from
operating activities - diluted (US$) |
0.23 |
0.16 |
44 |
(0.16) |
244 |
|
|
|
|
|
|
Outstanding Shares
('000) |
|
|
|
|
|
Class A shares |
1,751 |
1,751 |
0 |
1,751 |
0 |
Class B shares |
32,892 |
32,892 |
0 |
32,892 |
0 |
Options |
1,922 |
2,172 |
12 |
1,922 |
0 |
|
|
|
|
|
|
Operating |
|
|
|
|
|
Additional Gas sold (MMcf)
- industrial |
1,067 |
829 |
29 |
1,176 |
(9) |
Additional Gas sold (MMcf)
- power |
4,250 |
4,172 |
2 |
4,363 |
(3) |
Additional Gas sold (MMcfd)
- industrial |
11.7 |
9.1 |
29 |
13.1 |
(11) |
Additional Gas sold (MMcfd)
- power |
46.7 |
45.8 |
2 |
48.5 |
(4) |
Additional Gas sold
(MMcfd) |
58.4 |
54.9 |
6 |
61.6 |
(5) |
Average price per mcf (US$)
- industrial |
8.60 |
10.14 |
(15) |
7.78 |
11 |
Average price per mcf (US$)
- power |
3.63 |
2.80 |
30 |
3.55 |
2 |
|
|
|
|
|
|
|
|
|
|
|
- Working capital as at 30 June
2013 includes a TANESCO receivable of US$11.5 million (31
December 2012: US$33.3
million) and a net Songas receivable of US$5.2 million (31
December 2012: US$5.9
million). Given the payment pattern, US$34.9 million of TANESCO receivables in excess
of 60 days have been discounted by US$7.9
million and classified as long-term receivables. Total long
and short-term TANESCO receivables as at 30
June 2013 total US$46.3
million prior to discounting. Subsequent to the end of the
quarter, TANESCO paid US$15.4
million, and the current TANESCO arrears total US$31.2 million.
Condensed Consolidated Interim Statement of Comprehensive
Income/(Loss)
(Unaudited)
ORCA EXPLORATION GROUP INC.
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|
|
THREE MONTHS
ENDED |
SIX MONTHS
ENDED |
|
|
|
|
|
|
|
US$'000s except per share
amounts |
NOTE |
|
30 Jun
2013 |
30 Jun 2012 |
30 Jun
2013 |
30 Jun 2012 |
|
|
|
|
|
|
|
Revenue |
4 |
|
11,996 |
16,915 |
25,193 |
34,121 |
Cost of sales |
|
|
|
|
|
|
Production and distribution
expenses |
|
|
(620) |
(1,813) |
(1,414) |
(3,127) |
Depletion expense |
9 |
|
(2,612) |
(2,017) |
(5,335) |
(3,955) |
|
|
|
|
|
|
|
|
|
|
8,764 |
13,085 |
18,444 |
27,039 |
General and administrative
expenses |
|
|
(3,430) |
(4,362) |
(6,960) |
(8,026) |
Provision for doubtful
accounts |
7 |
|
(7,100) |
- |
(7,100) |
- |
Net finance costs |
5 |
|
(6,743) |
(51) |
(8,233) |
(188) |
|
|
|
|
|
|
|
Profit/(Loss) before
taxation |
|
|
(8,509) |
8,672 |
(3,849) |
18,825 |
Taxation |
6 |
|
1,943 |
(3,505) |
57 |
(7,266) |
|
|
|
|
|
|
|
Profit/(Loss) after
taxation |
|
|
(6,566) |
5,167 |
(3,792) |
11,559 |
Foreign currency translation
gain from foreign operations |
|
|
(251) |
- |
(75) |
- |
|
|
|
|
|
|
|
Total comprehensive income/(loss) for the
period |
|
|
(6,817) |
5,167 |
(3,867) |
11,559 |
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
Basic (US$) |
12 |
|
(0.19) |
0.15 |
(0.11) |
0.33 |
Diluted (US$) |
12 |
|
(0.19) |
0.15 |
(0.11) |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed
consolidated interim financial statements.
Condensed Consolidated Interim Statement of
Financial Position (Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
AS
AT |
US$'000s |
NOTE |
30 Jun 2013 |
31 Dec 2012 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
|
18,752 |
16,047 |
Trade and other receivables |
7 |
48,852 |
73,495 |
Taxation receivable |
6 |
14,285 |
14,692 |
Prepayments |
|
429 |
246 |
|
|
82,318 |
104,480 |
Non-Current Assets |
|
|
|
Long-term trade receivable |
7 |
26,979 |
- |
Exploration and evaluation assets |
8 |
5,722 |
5,720 |
Property, plant and equipment |
9 |
96,948 |
102,044 |
|
|
129,649 |
107,764 |
Total Assets |
|
211,967 |
212,244 |
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Trade and other payables |
10 |
49,758 |
45,496 |
Bank loan |
11 |
6,603 |
5,842 |
Taxation payable |
|
3,430 |
6,322 |
|
|
59,791 |
57,660 |
Non-Current Liabilities |
|
|
|
Deferred income taxes |
6 |
15,432 |
20,399 |
Deferred additional profits tax |
6 |
14,676 |
8,250 |
|
|
30,108 |
28,649 |
Total Liabilities |
|
89,899 |
86,309 |
|
|
|
|
Equity |
|
|
|
Capital stock |
|
84,983 |
84,983 |
Contributed surplus |
|
6,753 |
6,753 |
Accumulated other comprehensive income |
|
14 |
89 |
Accumulated income |
|
30,318 |
34,110 |
|
|
122,068 |
125,935 |
Total Equity and Liabilities |
|
211,967 |
212,244 |
See accompanying notes to the condensed consolidated interim
financial statements.
Future operations (Note 1)
Contractual obligations and committed capital investment (Note
13)
Contingencies (Note 14)
The consolidated condensed interim financial statements were
approved by the Board of Directors on 26th August 2013.
Condensed Consolidated Interim Statement of
Cash Flows (Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
|
|
|
THREE MONTHS ENDED |
SIX MONTHS ENDED |
US$'000s |
NOTE |
30 Jun 2013 |
30 Jun 2012 |
30 Jun 2013 |
30 Jun 2012 |
CASH FLOWS (USED
IN)/FROM OPERATING ACTIVITIES |
|
|
|
|
|
Profit/(Loss) after
taxation |
|
(6,566) |
5,167 |
(3,792) |
11,559 |
Adjustment for: |
|
|
|
|
|
|
Depletion and depreciation |
9 |
2,693 |
2,136 |
5,502 |
4,156 |
|
Provision for doubtful debt |
7 |
7,100 |
- |
7,100 |
- |
|
Discount on long-term
receivable |
5, 7 |
7,900 |
- |
7,900 |
- |
|
Stock-based compensation |
12 |
(44) |
615 |
(315) |
621 |
|
Deferred income taxes |
6 |
(4,381) |
1,350 |
(4,967) |
2,072 |
|
Deferred additional profits
tax |
6 |
3,390 |
717 |
6,425 |
1,389 |
|
Interest received |
|
- |
(1) |
- |
(2) |
|
Unrealised loss on foreign
exchange |
|
454 |
(2) |
1390 |
76 |
Funds flow from
operating activities |
|
10,546 |
9,982 |
19,243 |
19,871 |
Decrease/(Increase) in
trade and other receivables |
|
29,597 |
(9,373) |
8,669 |
(11,491) |
Decrease/(Increase) in
taxation receivable |
|
86 |
(3,077) |
407 |
(6,905) |
(Increase)/Decrease in
prepayments |
|
(221) |
(500) |
(183) |
(540) |
(Decrease)/Increase in
trade and other payables |
|
(3,138) |
6,503 |
4,254 |
7,036 |
(Decrease)/Increase in taxation
payable |
|
(1,623) |
2,154 |
(2,892) |
4,371 |
(Increase) in
long-term receivable |
|
(26,979) |
- |
(26,979) |
- |
Net cash flows from
operating activities |
|
8,268 |
5,689 |
2,519 |
12,342 |
CASH FLOWS USED IN
INVESTING ACTIVITIES |
|
|
|
|
|
Exploration and
evaluation expenditures |
|
- |
(2,978) |
(2) |
(4,557) |
Property, plant and
equipment expenditures |
|
(138) |
(15,486) |
(406) |
(32,656) |
Interest received |
|
- |
1 |
- |
2 |
Increase in trade and
other payables |
|
- |
2,332 |
- |
10,405 |
Net cash used in
investing activities |
|
(138) |
(16,131) |
(408) |
(26,806) |
CASH FLOWS (USED
IN)/FROM FINANCING ACTIVITIES |
|
|
|
|
|
Bank loan
proceeds |
|
- |
- |
4,000 |
- |
Bank loan
repayments |
11 |
(2,455) |
- |
(3,239) |
- |
Net cash flow from/
(used in) financing activities |
|
(2,455) |
- |
761 |
- |
Increase/(Decrease)
in cash and cash equivalents |
|
5,675 |
(10,442) |
2872 |
(14,464) |
Cash and cash
equivalents at the beginning of the period |
|
13,421 |
30,634 |
16,047 |
34,680 |
Effect of change in
foreign exchange on cash in hand |
|
(344) |
2 |
(167) |
(22) |
Cash and cash
equivalents at the end of the period |
|
18,752 |
20,194 |
18,752 |
20,194 |
See accompanying notes to the condensed
consolidated interim financial statements.
Condensed Consolidated Interim Statement of
Changes in Shareholders' Equity (Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
|
US$'000 |
Capital
stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
Note |
12 |
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January
2013 |
84,983 |
6,753 |
89 |
34,110 |
125,935 |
Foreign currency translation
adjustment on foreign operations |
- |
- |
(75) |
- |
(75) |
Loss after tax for the period |
- |
- |
- |
(3,792) |
(3,792) |
Balance as at 30 June
2013 |
84,983 |
6,753 |
14 |
30,318 |
122,068 |
|
|
|
|
|
|
US$'000 |
Capital
stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
Balance as at 1 January
2012 |
84,610 |
6,268 |
- |
15,781 |
106,659 |
Foreign currency translation
adjustment on foreign operations |
- |
- |
- |
- |
- |
Stock based compensation |
- |
720 |
- |
- |
720 |
Profit after tax for the period |
- |
- |
- |
11,559 |
11,559 |
Balance as at 30 June
2012 |
84,610 |
6,988 |
- |
27,340 |
118,938 |
See accompanying notes to the condensed
consolidated interim financial statements.
Orca Exploration Group Inc.
Orca Exploration Group Inc. is an international
public company engaged in natural gas exploration, development and
supply in Tanzania through its
wholly-owned subsidiary PanAfrican Energy Tanzania Limited, as well
as oil and gas appraisal in Italy.
Orca trades on the TSXV under the trading symbols ORC.B and ORC.A.
The complete condensed interim consolidated financial statements
and notes, and Management Discussion & Analysis may be found on
the Company's website www.orcaexploration.com or on
www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward Looking Statements
This press release contains forward-looking
statements. More particularly, this press release contains
statements concerning, but not limited to, the Company's beliefs
regarding its ability to collect the full TANESCO receivable;
status of negotiations with the GNT to conclude an agreed form of
amendment to the Songo Songo PSA; incremental gas sales volumes;
status of negotiations with the TPDC regarding a long-term sales
agreement for incremental gas volumes; status of execution of a
full field development plan for Songo
Songo; and the Company's strategic plans. Although
management believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee
future results, levels of activity, performance or achievement
since such expectations are inherently subject to significant
business, economic, operational, competitive, political and social
uncertainties and contingencies. Many factors could cause Orca's
actual results to differ materially from those expressed or implied
in any forward-looking statements made by Orca.
These forward-looking statements involve
substantial known and unknown risks and uncertainties, certain of
which are beyond Orca's control, including, but not limited to, the
impact of general economic conditions in the areas in which Orca
operates; civil unrest; industry conditions; changes in laws and
regulations including the adoption of new environmental laws and
regulations and changes in how they are interpreted and enforced;
increased competition; the lack of availability of qualified
personnel or management; fluctuations in commodity prices; foreign
exchange or interest rates; stock market volatility; competition
for, among other things, capital, drilling equipment and skilled
personnel; failure to obtain required equipment for drilling;
delays in drilling plans; failure to obtain expected results from
drilling of wells; effect of changes to the PSA on the Company;
changes in laws; imprecision in reserve estimates; the production
and growth potential of the Company's assets; obtaining required
approvals of regulatory authorities; risks associated with
negotiating with foreign governments; ability to access sufficient
capital; failure to collect the full TANESCO receivable; failure to
successfully negotiate agreements; and risk that the Company will
not be able to fulfill its obligations. In addition there are risks
and uncertainties associated with oil and gas operations, therefore
Orca's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these
forward-looking estimates and, accordingly, no assurances can be
given that any of the events anticipated by the forward-looking
estimates will transpire or occur, or if any of them do so, what
benefits that Orca will derive therefrom.
Such forward-looking statements are based on
certain assumptions made by Orca in light of its experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors Orca believes are
appropriate in the circumstances, including, but are not limited
to, the ability of Orca to add production at a consistent rate;
infrastructure capacity; commodity prices will not deteriorate
significantly; the ability of Orca to obtain equipment in a timely
manner to carry out exploration, development and exploitation
activities; future capital expenditures; availability of skilled
labour; timing and amount of capital expenditures; uninterrupted
access to infrastructure; the impact of increasing competition;
conditions in general economic and financial markets; effects of
regulation by governmental agencies; that the Company will have
sufficient cash flow, debt or equity sources or other financial
resources required to fund its capital and operating expenditures
and requirements as needed; current or, where applicable, proposed
industry conditions, laws and regulations will continue in effect
or as anticipated as described herein; and other matters.
The forward-looking statements contained in
this press release are made as of the date hereof and Orca
undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Orca Exploration Group Inc.