SINGAPORE and PORT MORESBY, Papua New Guinea, March 17, 2015 /PRNewswire/ -- InterOil
Corporation (NYSE: IOC; POMSoX: IOC) announced its financial
results for the fourth quarter and full year ending December 31, 2014. The company is well placed for
development of the Elk-Antelope gas field in Papua New Guinea, potentially the lowest cost
new-build LNG project in the world.
In addition, the company has identified five targets, outside of
Elk-Antelope, with a potential of 17 trillion cubic feet of gas
equivalent (Tcfe) of gross contingent and prospective resource.
InterOil Chief Executive Dr Michael
Hession said the past year has enabled the company to focus
on developing Elk-Antelope and on maintaining its exploration
effort in the Eastern Papuan Basin, one of the world's most
exciting emerging hydrocarbon provinces.
Elk-Antelope the most competitive new-build LNG project
globally
"Independent analysis suggests Elk-Antelope is the most
competitive new-build LNG project globally, with the potential for
superior returns even at low commodity prices," Dr Hession
said.
"We are well placed with liquidity of $715 million and an anticipated certification
payment, to meet our commitments and pursue the LNG project
timetable.
Five targets with 17 Tcfe potential
"We have had five consecutive discoveries in the Eastern Papuan
Basin where we hold a premier license position.
"We are now planning five wells outside of Elk-Antelope to
target about 17 Tcfe of gross contingent and prospective resource;
8 Tcfe of which could be targeted by appraisal wells at Bobcat,
Raptor, and Triceratops-3 plus 9 Tcfe by exploration wells at
Antelope-South and Wahoo."
In releasing financial results for the fourth quarter and full
year to December 31, 2014, the
company reported net income of $289.8
million, primarily due to completing its Elk-Antelope
transaction with Total and the sale of its refinery and downstream
businesses to Puma Energy.
"We implemented structural changes in 2014, which allowed us to
run our business more efficiently while building a strong
foundation for growth," he said.
"These changes included establishing a new management team,
renewing our board, strengthening our balance sheet and
streamlining our operations."
For the CEO and Chairman's statements refer to the InterOil
website at http://www.interoil.com.
2014 financial results
Net profit after tax for the full year was $289.8 million, compared to a loss of
$40.4 million in 2013.
The increase in net profit was assisted by the completion
payment of the sale of an affiliated company (holding equity in
PRL15) to Total E&P PNG Limited, as well as the sale of the
company's refinery and downstream businesses to Puma Energy Pacific
Holdings Pte Ltd.
The company had $415 million in
cash and receivables plus $300
million in undrawn credit facilities at December 31, 2014.
PRL15 sales and purchase agreement
As part of InterOil's strategy to enable development of gas
resources, the company completed on March
26, 2014 a sales and purchase agreement under which Total
acquired, through the purchase of all shares of a wholly-owned
subsidiary, a gross participating interest of 40.1275% in PRL15,
which contains the Elk and Antelope gas fields.
InterOil retained 36.5375% of the license and received
$401.3 million as a completion
payment.
The company is entitled to additional resource certification
payments and milestone payments from Total, as the project
evolves.
Sale of PNG oil refinery and downstream businesses
On June 30, 2014, InterOil
completed the sale of its Papua New
Guinea oil refinery and distribution businesses to Puma
Energy for $525.6 million, generating
a gain of $49.5 million.
The sale streamlined InterOil's business and has helped fund the
company's upstream operations.
Elk-Antelope appraisal
Antelope-4 in PRL15, about 1km south of Antelope-2, and
the most southern well on the Elk-Antelope field, started drilling
on September 16, 2014.
The well intersected the top of the carbonate reservoir at 1,911
meters true vertical depth sub-sea (TVDSS) in line with expectation
and has eliminated the risk of a steeply dipping southern
flank.
The well is currently within reservoir at 2,038 meters (TVDSS).
Once total depth is reached, wireline logs will be run and, after
evaluation, it is planned to install gauges to monitor pressure
drawdown during the Antelope-5 extended well test.
Antelope-5, about 1.8km south-south-west of Antelope-3,
started drilling on December 23, 2014
to appraise the western extent of the Elk-Antelope field.
The well intersected the top of the carbonate reservoir at 1,534
meters (TVDSS), about 230 meters higher than InterOil's reference
case.
Initial results from Antelope-5 clearly identify this well as
providing the best reservoir thickness, quality and fracture
density of all the wells drilled on the Antelope field. In
particular, the thickness and quality of the dolomite zone is
superior at this location with porosity readings of up to 25%,
signifying a high-quality reservoir.
On February 24, 2015 the well
reached a total depth of 2,307 meters (TVDSS). Evaluation of the
field will include an extended well test at Antelope-5 with gauges
monitoring pressure drawdown in other appraisal wells.
As part of the 2015 appraisal drilling campaign, the PRL15 Joint
Venture has selected the location of Antelope-6 to provide
structural control and define reservoir quality on the eastern
flank of the field. The well is located about 1.9km east-north-east
of Antelope-2. Site preparation is under way and, following final
approvals, drilling is planned for mid-year.
InterOil is being carried by Total on the Antelope-4, Antelope-5
and Antelope-6 appraisal wells for 75% of the first $50 million gross well cost, in each well.
Elk-Antelope volume certification
As of December 31, 2014 GLJ, an
independent qualified reserves evaluator, has estimated gross
contingent natural gas and condensate resources for the
Elk-Antelope field to range from 7.5 Tcfe (P90), 9.9 Tcfe (P50) to
11.8 Tcfe (P10). These estimates are equivalent to that of
December 31, 2013.
The appraisal campaign on the Antelope field is not yet complete
and volume certification using all data from the three 2015
appraisal wells is expected towards the end of the year.
Exploration and appraisal drilling to target 17 Tcfe, outside
of Elk-Antelope
With success at Raptor in PPL475 and Bobcat in
PPL476 in late 2014, the company has had five consecutive
discoveries in the Eastern Papuan Basin.
Raptor, which is 12km west of Elk-Antelope, was drilled
to a measured depth of 4,032 meters below the rig rotary table.
Following the acquisition of additional seismic, an appraisal well
is likely to be drilled towards the end of 2015.
Bobcat, about 30km north-west of Elk-Antelope, was
drilled to a measured total depth of 3,207 meters below the rig
rotary table. Acquisition of seismic over Bobcat will assist in
identifying the potential location for an appraisal well.
Triceratops-3 appraisal well is scheduled to start in Q2
2015 and is designed to confirm additional volumes to the
north-west of Triceratops-1 and Triceratops-2. The Triceratops
field is about 45km west-north-west of Elk-Antelope.
InterOil's internal assessment of the Bobcat, Raptor and
Triceratops discoveries indicate that they may hold about 8 Tcfe in
cumulative gross, unrisked, contingent resource.
Resumption of exploration drilling at Wahoo in PPL474 is
planned before mid-year. Wahoo is about 135km south-east of
Elk-Antelope and 165km north-west of Port
Moresby. The exploration well was suspended on July 14, 2014, following safety concerns over
high pressures.
Antelope South, previously called Antelope Deep, is an
exploration well in PRL15 and is scheduled to be drilled in Q3 2015
to test a large structure that partially underlies, but is separate
to the Antelope field. It is about 1.9km south-east of
Elk-Antelope.
InterOil is being carried by Total on the Antelope South
exploration well for 75% of the first $60
million gross well cost.
InterOil's internal assessment of these two exploration targets
indicate that they potentially may hold a cumulative gross,
unrisked, prospective resource of about 9 trillion Tcfe.
Additional exploration
Planning for an airborne gravity gradiometry survey over most of
InterOil's acreage began in late 2014 and acquisition began in
early 2015. It is expected to be completed in 2H 2015.
The survey will help to identify new leads and optimize seismic
acquisition. Early results show a significant improvement in the
definition and detail of potential leads.
Between March and August 2014,
InterOil acquired a total of 124km of two-dimensional seismic.
Acquisition of a further 439km of seismic began in Q4 2014 and
is scheduled to finish in the second half of 2015.
PRL15 arbitration
Subsequent to the end of 2014, the International Chamber of
Commerce arbitration panel dismissed all claims by the PAC LNG
companies, affiliates of Oil Search Limited, to pre-emptive rights
over a share sale and purchase agreement involving an interest in
the Elk-Antelope field.
Consequently, Total E&P PNG Limited is a party to the PRL 15
joint venture operating agreement and, having complied with the
terms of the PRL 15 Joint Venture Operating Agreement, has full
rights from February 27, 2014, the
date of the original transfer of interest.
PRL15 operatorship and Elk-Antelope LNG
In February 2015, all participants
in the PRL15 Joint Venture unanimously voted to appoint Total
E&P PNG Limited as operator of the PRL15 Joint Venture.
The appointment will take effect in accordance with an operator
transition plan, the joint venture operating agreement and is
subject to any necessary PNG Government approvals.
Total, with input from the PRL 15 JV, has had a large team
working on the Elk-Antelope LNG development concept during 2014 and
the initial 24 LNG scenarios have been narrowed down to three
primary concepts.
In late 2014, Total presented its proposed project timeline
which targets:
- Concept select before the end of Q2 2015;
- Early works projects in 2016;
- Contract awards and construction in 2017.
Board renewal
During Q4 2014, Chris Finlayson,
who has nearly 40 years' global experience in the energy industry
and was the former chief executive officer for BG Group, became the
chairman of InterOil on the retirement of Dr Gaylen Byker.
The director appointments of Dr Ellis
Armstrong, former chief financial officer of BP E&P, and
Katherine Hirschfeld, a former
senior BP executive, were announced in Q4 2014 and were effective
January 1, 2015. The company also
recently announced the appointment of Mr Chee Keong Yap, a former chief financial officer
of Singapore Power, as a director effective from March 13, 2015. Mr Yap replaces Mr Samuel Delcamp as a director, who formally
retired from the Board on March 12,
2015.
These appointments provide the Board with significant additional
global oil and gas skills and board experience.
Financial summary
Consolidated - Operating
results
|
Year ended
December 31,
|
($ thousands,
except per share data)
|
2014
|
2013
|
2012
|
|
|
|
|
Interest
revenue
|
1,991
|
71
|
62
|
Other
|
11,168
|
2,692
|
10,361
|
Total
revenue
|
13,159
|
2,763
|
10,423
|
Adminstrative and
general expenses
|
(39,245)
|
(19,165)
|
(18,129)
|
Derivative
(losses)/gains
|
-
|
(146)
|
11
|
Legal and
professional fees
|
(14,091)
|
(9,801)
|
(3,847)
|
Exploration costs,
excluding exploration impairment
|
(34,529)
|
(18,794)
|
(13,901)
|
Finance costs,
excluding interest expense
|
(18,578)
|
(4,687)
|
-
|
Gain on conveyance of
exploration and evaluation assets
|
340,540
|
500
|
4,418
|
Gain on
available-for-sale investment
|
-
|
3,720
|
-
|
Foreign exchange
gains/ (losses)
|
4,421
|
(467)
|
(420)
|
Share of net
(losses)/gains of joint venture partnership
|
(17,558)
|
2,274
|
(490)
|
accounted for
using the equity method
|
|
|
|
EBITDA
(1)
|
234,119
|
(43,803)
|
(21,935)
|
Depreciation and
amortization
|
(3,628)
|
(5,733)
|
(4,045)
|
Interest
expense
|
(11,409)
|
(8,440)
|
(6,187)
|
Profit/(loss) for
the period from continuing operations before income
taxes
|
219,082
|
(57,976)
|
(32,167)
|
Income tax
expense
|
(1,119)
|
(940)
|
(321)
|
Profit/(loss) for
the period from continuing operations
|
217,963
|
(58,916)
|
(32,488)
|
Profit for the period
from discontinued operations, net of tax
|
71,803
|
18,558
|
34,092
|
Profit/(loss) for
the period
|
289,766
|
(40,358)
|
1,604
|
Note (1) EBITDA is a non-GAAP financial measure. Details can be
found in InterOil's MDA report for the year ended December 31,
2014.
|
Conference call information
The full text of the media release and accompanying financials
are available on the company's website at www.interoil.com.
A conference call will be held on March
17, 2015, at 8:00 a.m. US
Eastern time (8:00 p.m. Singapore) to discuss the financial and
operating results. The conference call can be heard through a live
audio web cast on the company's website at www.interoil.com or
accessed by dialing (800) 230-1059 in the US, or +1 (612) 234-9960
from outside the US.
A replay of the broadcast will be available soon afterwards on
the website.
About InterOil
InterOil Corporation is an independent oil and gas business with
a sole focus on Papuan New Guinea. InterOil's assets include one of
Asia's largest undeveloped gas
fields, Elk-Antelope, in the Gulf Province of Papua New Guinea, and exploration licences
covering about 16,000sqkm of the Eastern Papuan Basin. The company
employs more than 2,000 staff and
contractors. Its main offices are in Singapore and Port
Moresby. InterOil is listed on the New York and Port
Moresby stock exchanges.
Investor Contacts
Singapore
|
Singapore
|
United
States
|
Michael
Lynn
SVP, Investor
Relations
|
David Wu
VP, Investor
Relations
|
Cynthia
Black
Investor Relations –
North America
|
T: +65 6507
0222
E:
michael.lynn@interoil.com
|
T: +65 6507
0222
E:
david.wu@interoil.com
|
T: +1 212 653
9778
E:
cynthia.black@interoil.com
|
Media Contacts
Singapore
|
Australia
|
|
Rob
Millhouse
VP, Corporate
Affairs
|
John Hurst
Cannings Corporate
Communications
|
|
T: +65 8112
5694
E:
robert.millhouse@interoil.com
|
T: +61 418 708
663
E:
jhurst@cannings.net.au
|
|
Forward Looking Statements
This media release includes "forward-looking statements" as
defined in United States federal
and Canadian securities laws. All statements, other than statements
of historical facts, included in this release that address
activities, events or developments that InterOil expects, believes
or anticipates will or may occur in the future are forward-looking
statements. These statements are based on our current beliefs as
well as assumptions made by, and information currently available to
us. No assurances can be given however, that these events will
occur. Actual results could differ, and the difference may be
material and adverse to the company and its shareholders. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the company,
which may cause our actual results to differ materially from those
implied or expressed by the forward-looking statements. Some of
these factors include the risk factors discussed in the company's
filings with the Securities and Exchange Commission and on SEDAR,
including but not limited to those in the company's annual report
for the year ended December 31, 2014
on Form 40-F and its Annual Information Form for the year ended
December 31, 2014. In particular,
there is no established market for natural gas or gas condensate in
Papua New Guinea and no guarantee
that gas or gas condensate from the Elk and Antelope fields will
ultimately be able to be extracted and sold commercially. Investors
are urged to consider closely the disclosure in the company's Form
40-F, available from us at www.interoil.com or from the SEC at
www.sec.gov and its Annual Information Form available on SEDAR at
www.sedar.com.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/interoil-announces-positive-2014-results-300051567.html
SOURCE InterOil Corporation