Erin Energy announces second quarter 2017 results
10-08-2017 11:19:20 | by: Andrea Ayemoba | hits: 2 | Tags: ,

Erin Energy Corporation announces today financial and operational results for the quarter ended June 30, 2017.

Second Quarter Highlights:

  • Crude sales volumes of more than 309,000 net barrels of oil;
  • $14.6 million in revenue;
  • Average daily production of 5,100 net barrels of oil.

“During the second quarter, we produced more than 420,000 net barrels of oil and generated revenues of approximately $15 million,” said Femi Ayoade, Chief Executive Officer.

“We closed on our farm-out with FAR in The Gambia and completed preparations for our drilling campaign, which we plan to commence this week. We are excited to begin our drilling campaign, increase Oyo production, and look to turn to the exploration of the Miocene in Nigeria.”

Operational Update

Production volumes for the quarter were approximately 5,100 net barrels of oil compared to approximately 5,400 net barrels in the comparative period 2016. The Company’s crude oil inventory was approximately $8.9 million at June 30, 2017.

The Pacific Bora drilling rig arrived on the Oyo field on August 1 and will commence drilling of the Oyo-9 well within the week. The well is expected to add an additional 6,000 to 7,000 barrels of oil per day from the field.

The Company has the option to drill up to two additional wells with the Pacific Bora. Subject to capital availability, the Company will use the Pacific Bora to drill one to two of its Miocene exploration prospects. Erin Energy has four drill-ready prospects, which target P50 Prospective Resources of 2.4 billion barrels of oil.

In The Gambia, the Company closed on its farm-out agreement with FAR Ltd. (FAR), an Australian Securities Exchange listed oil and gas company. As part of the farm-out agreement, FAR acquired an 80% interest and the operatorship of offshore A2 and A5 blocks, with the Company retaining a 20% working interest in both blocks. Under the terms of the farm-out agreement, FAR will carry $8.0 million of the Company’s share of costs in a planned exploration well to be drilled in late 2018. In addition, if the Company’s share of the exploration well is less than $8.0 million, the balance is to be paid in cash to the Company.

In Kenya, the Company continues to evaluate the prospectivity of identified leads on its onshore blocks and is currently designing an additional, targeted 2-D seismic acquisition on the blocks.

In Ghana, Erin Energy continues to conduct geotechnical subsurface studies of existing 3-D seismic data to further high-grade its prospect inventory on the Expanded Shallow Water Tano block. The Company is also planning a new 3-D marine seismic acquisition survey. The Company expects to issue a formal invitation to tender to marine seismic vendors during the second half of 2017. Actual field operations will take place after the resolution of the Ghana-Cote d’Ivoire maritime border dispute arbitration later this year.

Financial Summary

Second-quarter 2017 revenues were $14.6 million compared to $23.2 million in the second-quarter 2016.

For the second-quarter 2017, net daily production was approximately 5,100 bopd, compared with 5,400 bopd for the comparative period in 2016. The Company lifted and sold approximately 309,000 net barrels of oil at an average price of $47.15 per barrel, compared to approximately 508,000 net barrels of oil at an average price of $45.58 per barrel during the comparative period 2016.

In the second-quarter 2017, the Company reported a net loss of $(98.6) million, or a loss of $(0.46) per basic and diluted share, primarily as a result of a non-cash impairment of its oil and gas properties of $78.7 million, compared to a net loss of $(22.6) million, or a loss of $(0.11) per basic and diluted share for the comparative period 2016. When adjusted for certain items that impact the comparability of results, the Company had an adjusted net lossof $(7.6) million or $(0.04) loss per basic and diluted share.

As of June 30, 2017, cash, cash equivalents and restricted cash were approximately $23.2 million.


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