Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Panoro Energy ASA (FRA:1PZ, Financial) achieved its production target of 13,000 barrels per day, marking a significant milestone.
- The company announced a shareholder distribution in the form of a return of paid-in capital of NOK50 million, demonstrating a commitment to shareholder returns.
- Production in Gabon has exceeded 40,000 barrels per day, with additional wells coming online, indicating strong operational performance.
- The company has a robust pipeline of infrastructure-led exploration opportunities, including the Bourdon well and Akeng Deep, which could enhance future production.
- Panoro Energy ASA (FRA:1PZ) anticipates a significant reduction in CapEx for 2025, potentially increasing free cash flow and reducing sensitivity to oil price fluctuations.
Negative Points
- The company experienced a quiet quarter in terms of liftings, impacting revenue recognition for Q3.
- CapEx for the year increased to $95 million, higher than the initially guided $75 million, due to expanded drilling programs and unforeseen expenditures.
- Production in Tunisia has been soft due to political changes causing delays in regulatory approvals, affecting overall activity.
- Oil prices have been soft recently, which could impact future revenue and profitability.
- The company's debt profile includes a net debt position of around $51 million, which may pose financial challenges if not managed carefully.
Q & A Highlights
Q: Can you discuss the capital allocation for next year, especially in the context of debt and cash flow?
A: John Hamilton, CEO: We are exploring the bond market to diversify our capital structure. With lower CapEx next year, we expect higher free cash flow and less sensitivity to oil prices. Our capital allocation will focus on shareholder distributions, maintaining cash for working capital, and exploring growth opportunities. We aim to balance being well-funded and proactive in shareholder returns.
Q: What is the expected gross production stabilization in Equatorial Guinea once the second well is on stream?
A: John Hamilton, CEO: The program aims to increase production from around 24,000-25,000 barrels per day to approximately 35,000 barrels per day. This would align Block G's production with Dussafu's, providing a stable output.
Q: What was the entitlement production for Q3?
A: John Hamilton, CEO: We don't have the exact Q3 entitlement production number at hand, but we will provide it later. The nine-month entitlement is included in the presentation.
Q: Regarding Niosi and Guduma, is there existing seismic data, or will new seismic be shot?
A: Richard Morton, Technical Director: There is vintage seismic data, but we plan to acquire new 3D seismic over the Niosi block to enhance prospectivity. We may also acquire additional data over the Guduma block.
Q: How will the 2025 shareholder returns framework evolve?
A: John Hamilton, CEO: We are formulating our 2025 plans, aiming to be at the top in terms of return yields. With less sensitivity to oil prices next year, we will maintain a balanced approach between shareholder distributions and company growth. Specifics will be shared in due course.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
