Pan Orient Energy Corp. ("Pan Orient") (TSX VENTURE:POE) is providing its 2013
third quarter consolidated financial and operating results. Please note that all
amounts are in Canadian dollars unless otherwise stated and BOPD refers to
barrels of oil per day net to Pan Orient.
The Corporation is today filing its unaudited consolidated financial statements
as at and for the nine months ended September 30, 2013 and related management's
discussion and analysis with Canadian securities regulatory authorities. Copies
of these documents may be obtained online at www.sedar.com or the Corporation's
website, www.panorient.ca.
2013 THIRD QUARTER OPERATING RESULTS
-- Total corporate funds flow from operations for the third quarter of 2013
were $4.8 million compared with $5.7 million in the first quarter of
2013 and $6.5 million for the second quarter of 2013. Funds flow from
operations per share was $0.08 for the third quarter of 2013.
-- During the third quarter of 2013 there was a net loss attributable to
common shareholders of $3.1 million, or $0.05 per share, compared with
net income attributable to common shareholders of $0.3 million, or $0.01
per share, for the first quarter of 2013 and a net loss attributable to
common shareholders of $97.7 million, or $1.73 per share, for the second
quarter of 2013. The 2013 cumulative net loss for the first three
quarters of 2013 of $100.4 million largely resulted from the $104.2
million write-down of exploration and evaluation assets associated with
the Citarum and South CPP Production Sharing Contracts ("PSC's") in
Indonesia. For this write-down, $99.6 million was recorded in the second
quarter of 2013 and a further $4.6 million was recorded in the third
quarter of 2013 primarily relating to costs incurred to complete
drilling operations of the Cataka-1A well in July.
-- Capital expenditures were $17.6 million for the third quarter of 2013
and included $13.2 million in Indonesia and $5.5 million in Thailand.
There was a $1.1 million recovery of capital costs in Canada at the Sawn
Lake steam assisted gravity drainage ("SAGD") demonstration project of
Andora Energy Corporation ("Andora") due to the joint venture partners
electing to participate for a 50% working interest in the project. The
reduction of Pan Orient capital expenditures in the third quarter from
$34.5 million in the first quarter of 2013 and $38.0 million for the
second quarter of 2013 reflects completion of all 2013 drilling and
seismic programs in Thailand and Indonesia except for completion of the
seismic program at East Jabung which is currently underway. Capital
expenditures were funded partially by the $4.8 million of funds flow
from operations and the remainder through existing working capital.
-- At September 30, 2013 Pan Orient had $40.9 million of working capital
and non-current deposits, and no long-term debt. In addition, Pan Orient
had $7.5 million of equipment inventory to be utilized for future
Thailand and Indonesia operations which is included in exploration and
evaluation assets in the consolidated statement of financial position.
-- Thailand
-- In the third quarter of 2013 Concession L53 averaged oil sales of
809 BOPD and generated $5.4 million in after tax funds flow from
operations, or $73.13 per barrel. This compares with oil sales in
the second quarter of 2013 of 955 BOPD and $6.6 million in after tax
funds flow from operations, or $76.27 per barrel. Oil sales
decreased 15% from the second quarter of 2013 primarily due to the
L53-G2 well being shut-in from July 14th, when it was producing at
approximately 301 BOPD, to September 3rd when permission was
received to resume production testing, the shut-in of the L53-G3ST1
well on September 12th, and declines in other wells in the L53-A and
L53-D fields which were partially offset with oil sales from the new
L53-EXT and L53-G4 wells which were brought on during the quarter.
-- Oil sales in October 2013 at Concession L53 were 1,156 BOPD.
Estimated oil sales over the past 30 days has averaged 986 BOPD and
current Thailand oil production is approximately 939 BOPD, excluding
approximately 115 BOPD that is currently shut-in.
-- The L53-G2 well drilled in late March 2013 was a new pool discovery
outside of the existing production license areas in Concession L53
and a production license and associated environmental approval is
required for the new L53-G field before permanent production can
commence. The Company applied for the new production license for the
L53-G oil pool in mid-August. Until a production license is granted
and environmental approval received for the L53-G field, wells in
the L53-G field (including L53-G2, L53-G3ST1 and L53-G4) are shut-in
at the end of their respective 90 day test periods as per government
regulations. Approval of the L53-G production license is anticipated
in late November 2013 and environmental approval is anticipated
sometime between late November 2013 and mid-January 2014. The
Company received permission for an additional 90 day test period for
the L53-G2 well only and this production testing extension will end
on December 3rd. The L53-G2 well is currently producing 501 BOPD.
-- On a per barrel basis, after tax funds flow from operations of
$73.13 in the third quarter of 2013 was fairly consistent with the
first two quarters of 2013 and resulted from oil sales of $99.34,
transportation expenses of $1.60, operating expenses of $14.56,
general and administrative expenses of $5.13 and a royalty to the
Thailand government of $4.94. Oil sales revenue during this period
was allocated 21% to expenses for transportation, operating, and
general & administrative, 5% to the government of Thailand for
royalties, and 74% to Pan Orient.
-- Capital expenditures of $5.5 million in Thailand during the third
quarter of 2013 included $2.2 million in drilling costs in
Concession L53, including the L53-G4 well, and $3.3 million for well
workovers in Concession L53 to evaluate different zones and add oil
production. Pan Orient drilled the L53-G4 appraisal well in the
third quarter to complete the drilling program. The well is
currently producing at approximately 42 BOPD.
-- The Thailand drilling program in Concession L53 was completed in
August and consisted of 13 wells which resulted in:
-- The L53-DC1, L53-DC2, L53-DC3 and L53-DC4 wells have produced
oil from a new pool discovery from a new fault compartment
within the L53-D East oil field area. Production from the heavy
oil zones encountered in the shallow zones at the L53-DC East
field has been inconsistent and various procedures are being
implemented in an effort to improve oil production and deal with
sand production. Installation of progressive cavity pumps is
planned for the L53-DC3 well and two other wells in the L53-DC
field and we are awaiting delivery of the pumps.
-- The L53-DEXT exploration well was drilled in the second quarter
of 2013 into a new fault compartment at the L53-D field. This
well produced approximately 40 BOPD of 14 degree API heavier oil
from a shallow "A3" sands during testing. The well is currently
shut-in awaiting a workover to perforate additional possible oil
pay zones above the existing perforations.
-- The L53-G2 discovery well and the appraisal L53-G4 are producing
oil from the new L53-G pool, and the L53-G3ST1 appraisal well
has been shut-in since September 12th when it completed its 90
production test period. Oil sales to October 31, 2013 from these
three wells have totaled 63,729 barrels of oil.
-- Unsuccessful exploration wells at L53-DB1 (targeting the L53-D
West prospect), L53-A4 (targeting the L53-H prospect), L53-F,
and L53-EXT1 (targeting the deeper "A5" to "A3" oil bearing
sands that were logged in the L53-DC4 pilot well). The L53-DB1
well has been converted to a water disposal well.
-- The L53-A4ST1 exploration well drilled to test a small
independent structural closure south east of the L53-A field and
outside the L53-A production license area. This well encountered
net oil pay in the "K40-A" sand and had produced on a 90 day
production test at approximately 15 to 50 BOPD with a water cut
of approximately 93%. L53-A4ST1 is currently shut-in and Pan
Orient plans to convert the well to a water disposal well.
-- Wells drilled in this drilling program added an average of 533
BOPD in the third quarter of 2013, despite the L53-G2 well being
shut in temporarily from July 14th to September 3rd, and the
L53-G3ST1 well being shut-in temporarily on September 12th. Pan
Orient has recently received environmental approval for drilling
the L53-A Central prospect in Concession L53 and is waiting for
environmental approval for drilling of the L53 North prospect
and additional locations in L53-G field. The drilling of
prospects at L53-A Central and L53 North is anticipated in 2014.
-- Indonesia
-- The Company has conducted significant exploration activities in
Indonesia during the first three quarters of 2013 with exploration
drilling at the Batu Gajah and Citarum PSC's and seismic programs at
the Batu Gajah, South CPP and East Jabung PSC's to evaluate
exploration potential.
-- Capital expenditures in Indonesia of $13.2 million in the third
quarter of 2013 were $4.0 million for completion of drilling of the
Cataka-1A well at the Citarum PSC, $8.4 million at the Batu Gajah
PSC associated with the 3D seismic program, and $0.8 million at the
East Jabung PSC for the 3D seismic program.
-- During the first nine months of 2013 capital expenditures in
Indonesia have been $48.3 million with $15.2 million at the Citarum
PSC, $26.6 million at the Batu Gajah PSC, $4.5 million at the South
CPP PSC and $2.0 million at the East Jabung. For the first nine
months of 2013, capital expenditures were $22.9 million for
exploration drilling, $21.7 million for seismic programs, $2.9
million for capitalized general and administrative expenses, and
$0.8 for other exploration expenses.
-- Citarum PSC onshore Java (Pan Orient operator and 97% ownership)
-- Capital expenditures of $15.2 million in the first nine months
of 2013 were associated with the continued drilling operations
at the Jatayu-1 and Cataka-1A wells.
-- Exploration drilling to date at the Citarum PSC has been very
technically challenging and has not led to commercial
discoveries. Pan Orient announced in July that the Company was
initiating a farm-out process to seek a partner for continued
exploration of the Citarum PSC and the farm-out process has
commenced. The Citarum PSC has significant prospectivity for
commercial quantities of crude oil and natural gas, including
the defined Cataka and Jatayu prospects, within a region of
existing infrastructure and a large deficit of natural gas
supply relative to demand, good fiscal terms and an attractive
large cost recovery pool.
-- Pan Orient's decision to discontinue drilling at the Citarum PSC
and to initiate a farm-out process for continued exploration of
the Citarum PSC and the future value of the Citarum PSC is
dependent on the success of exploration drilling operations
through the intended farm-out arrangement. As such, the Company
reduced the carrying value of the Citarum PSC exploration and
evaluation assets to zero in the second quarter of 2013 and
recorded an impairment charge of $86.3 million and recorded a
further $4.6 million impairment charge in the third quarter of
2013 primarily relating to costs incurred to complete drilling
operations of the Cataka-1A well in July.
-- Batu Gajah PSC onshore Sumatra (Pan Orient operator and 77%
ownership)
-- On January 16, 2013 an additional 1,730 square kilometers
(gross) of exploration lands were relinquished at the Batu Gajah
PSC, to hold 793 square kilometers (gross).
-- Capital expenditures in the first nine months of 2013 of $26.6
with $4.7 million for drilling of the Shinta-1 exploration well,
$4.5 million for the Buana-1 appraisal well, $16.3 million for
the 400 square kilometer 3D seismic program which was completed
in the third quarter and other capital expenditures of $1.1
million.
-- With respect to the 400 square kilometers 3D seismic program,
field acquisition has been completed over the Raka, Takar, Rafa
and western prospect areas, and the 3D data is being processed
and mapped.
-- The operator of the Lemang PSC (directly adjacent to and west of
a retained portion of Pan Orient's Batu Gajah PSC), has
announced that significant hydrocarbons have been encountered in
two wells located close to the Lemang PSC / Batu Gajah PSC
boundary. Mapping of 2D seismic data over these wells combined
with 2D seismic acquired by Pan Orient in 2010 indicates a
portion of this structural closure extends into the Batu Gajah
PSC. Articles of the PSC contract indicate that unitization of
the potential field will be mandatory in the event of a "shared"
field. Pan Orient is currently evaluating the field and the
potential for drilling a well in our portion of the field.
-- South CPP PSC onshore Sumatra (Pan Orient operator and 77%
ownership).
-- Capital expenditures were $4.5 million in the first nine months
of 2013 with $4.2 million for the 227 kilometer 2D seismic
program which was completed in May 2013 and $0.3 million for
capitalized general and administrative expenses and other
capital expenditures.
-- After the evaluation of the seismic program results, the Company
decided in the second quarter of 2013 to relinquish the South
CPP PSC. As part of the relinquishment, it is expected that the
Company is required to pay the Government of Indonesia for
unfulfilled firm commitments in the amount of $2.8 million, and
this amount has been accrued for in the financial statements. As
a result of the intended relinquishment the Company is reducing
the carrying value of the South CPP PSC exploration and
evaluation assets to zero and the Company recorded an impairment
charge of $13.3 million for the exploration and evaluation
assets of the South CPP PSC as at June 30, 2013.
-- East Jabung PSC on-shore and offshore Sumatra (Pan Orient operator
and 100% ownership)
-- Capital expenditures of $2.0 million in the first nine months of
2013 related primarily to the initial costs of the 430 kilometer
2D seismic program which is expected to be completed in early
2014.
-- Subsequent to September 30, 2013, the Company submitted an
application to the GOI to voluntarily relinquish approximately
3,242.72 square kilometers of the PSC's offshore area. The
result of the relinquishment does not impact the PSC's onshore
exploration activities.
-- As at September 30, 2013 estimated commitments for Indonesia
PSC's to October 2015 were $14.0 million for the Batu Gajah,
Citarum and East Jabung PSC's.
-- Canada
-- The Sawn Lake SAGD demonstration project is significantly underway,
in which Andora is the operator and has a 50% working interest.
Andora is owned 71.8% by Pan Orient. The Sawn Lake SAGD
demonstration project in 2013 consists of drilling one SAGD well
pair, construction of a facility for steam generation, water
handling and oil treating, and installing water source and disposal
facilities with an estimated cost of $24.1 million. The SAGD wells
have been drilled to a depth of 650 meters and have a horizontal
length of 780 meters. Work is proceeding on installation of the
facility.
-- In the third quarter of 2013 our joint venture partners in the
demonstration project provided notice of their election to
participate for 50% in the demonstration project and provided the
necessary funding to Andora. As part of the arrangement for the
demonstration project, our joint venture partners have purchased a
50% interest in water facilities from Andora for $850,000 in the
fourth quarter of 2013 and it is expected the joint venture partners
will repurchase the 3% gross overriding royalty on their 40% working
interest in the 12 sections of the Central Block for $2.8 million,
under certain terms and conditions.
OUTLOOK
-- Thailand
Between now and year end Thailand activities will be focused on a number
of workovers and pump replacements on a number of the shallow heavy oil
wells at the L53-D East field, and complete location construction for
the L53 A Central prospect. Drilling at L53 A Central is currently
planned for early in the first quarter of 2014, subject to rig
availability.
-- Indonesia
Pan Orient possesses a diverse portfolio of high quality, high impact
exploration and production opportunities in Indonesia and is currently
seeking to farm-out a portion of the Company's interests in the Batu
Gajah, East Jabung and Citarum PSC's. Initial response has been strong
from a wide range of companies, necessitating the opening of a second
data room. It is expected that farmout activities will extend into early
2014 and be followed by the drilling of up to seven wells in mid-2014,
subject to a number of variables.
Data processing of the 400 square kilometer Batu Gajah PSC 3D seismic
survey is currently underway and 2D seismic acquisition continues in
East Jabung PSC with completion expected in the first quarter of 2014.
-- Canada - Sawn Lake (Operated by Andora, in which Pan Orient has a 71.8%
ownership)
At the Sawn Lake demonstration project drilling of the first SAGD well
pair has been completed, final site preparation and construction is
underway, and equipment for the facility is ready for installation.
Steam injection at the Sawn Lake SAGD demonstration project is scheduled
for January 2014, with production anticipated early in the second
quarter of 2014.
Pan Orient is a Calgary, Alberta based oil and gas exploration and production
company with operations currently located onshore Thailand, Indonesia and in
Western Canada.
This news release contains forward-looking information. Forward-looking
information is generally identifiable by the terminology used, such as "expect",
"believe", "estimate", "should", "anticipate" and "potential" or other similar
wording. Forward-looking information in this news release includes, but is not
limited to, references to: well drilling programs and drilling plans, estimates
of reserves and potentially recoverable resources, and information on future
production and project start-ups. By their very nature, the forward-looking
statements contained in this news release require Pan Orient and its management
to make assumptions that may not materialize or that may not be accurate. The
forward-looking information contained in this news release is subject to known
and unknown risks and uncertainties and other factors, which could cause actual
results, expectations, achievements or performance to differ materially,
including without limitation: imprecision of reserve estimates and estimates of
recoverable quantities of oil, changes in project schedules, operating and
reservoir performance, the effects of weather and climate change, the results of
exploration and development drilling and related activities, demand for oil and
gas, commercial negotiations, other technical and economic factors or revisions
and other factors, many of which are beyond the control of Pan Orient. Although
Pan Orient believes that the expectations reflected in its forward-looking
statements are reasonable, it can give no assurances that the expectations of
any forward-looking statements will prove to be correct.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
--------------------------------------------------
Financial and Operating Three Months Ended Nine Months Ended
Summary September 30, September 30, Change
(thousands of Canadian
dollars except where
indicated) 2013 2012 2013 2012
----------------------------------------------------------------------------
FINANCIAL
----------------------------------------------------------------------------
Oil revenue, before
royalties and
transportation expense 7,379 7,808 23,316 45,964 -49%
Funds flow from operations
(Note 1) 4,797 3,348 16,998 28,982 -41%
Per share - basic and
diluted $ 0.08 $ 0.06 $ 0.30 $ 0.51 -41%
Funds flow from operations
by region (Note 1)
Canada (48) (2,021) (236) (3,010) -92%
Thailand 5,445 5,653 17,937 32,397 -45%
Indonesia (600) (284) (703) (405) 74%
--------------------------------------------------
Total 4,797 3,348 16,998 28,982 -41%
--------------------------------------------------
--------------------------------------------------
Funds flow - Thailand
disposition net proceeds
(Note 2) - 553 - 158,505 -100%
Net income (loss)
attributed to common
shareholders (3,109) (1,626) (100,445) 85,783 -217%
Per share - basic and
diluted $ (0.05) $ (0.03) $ (1.77) $ 1.51 -217%
Working capital 38,667 130,470 38,667 130,470 -70%
Working capital & non-
current deposits 40,879 134,061 40,879 134,061 -70%
Long-term debt - - - - 0%
Capital expenditures (Note
3) 17,649 12,021 90,136 57,472 57%
Shares outstanding
(thousands) 56,760 56,720 56,760 56,720 0%
----------------------------------------------------------------------------
Funds Flow from Operations
per Barrel (Note 1)
----------------------------------------------------------------------------
Canada operations $ (0.64) $ (26.07) $ (1.01) $ (7.02) -86%
Thailand operations 73.13 72.96 76.30 75.59 1%
Indonesia operations (8.06) (3.67) (2.99) (0.94) 218%
--------------------------------------------------
$ 64.43 $ 43.22 $ 72.30 $ 67.63 7%
----------------------------------------------------------------------------
Capital Expenditures (Note
3)
----------------------------------------------------------------------------
Canada (1,065) 85 3,427 259 1267%
Thailand 5,506 3,961 38,444 30,730 25%
Indonesia 13,208 7,975 48,265 26,483 82%
--------------------------------------------------
Total 17,649 12,021 90,136 57,472 57%
----------------------------------------------------------------------------
Working Capital and Non-
current Deposits
----------------------------------------------------------------------------
Beginning of period 54,345 184,536 116,376 51,632 125%
Funds flow from
operations (Note 1) 4,797 3,348 16,998 28,982 -41%
Thailand disposition net
proceeds (Note 2) - 553 - 158,505 -100%
Thailand disposition -
sale of working capital
(Note 2) - - - (4,591) -100%
Special dividend - (42,540) - (42,540) -100%
Recovery of 2012 taxes
paid on Thailand
disposition - - 1,785 - 100%
Capital expenditures
(Note 3) (17,649) (12,021) (90,136) (57,472) 57%
Accrued relinquishment
costs 45 - (2,733) - 100%
Foreign exchange impact
on working capital (659) 185 (1,541) (455) 239%
Net proceeds on share
transactions - - 130 - 100%
--------------------------------------------------
End of period 40,879 134,061 40,879 134,061 -70%
----------------------------------------------------------------------------
Canada Operations
(excluding 2012 Thailand
disposition)
----------------------------------------------------------------------------
Interest income and
realized foreign exchange
loss 13 (1,404) 514 (1,076)
General and administrative
expense (Note 4) (161) (617) (1,002) (1,934) -48%
Current income tax
recovery 100 - 252 - 100%
--------------------------------------------------
Funds flow from operations
(Note 1) (48) (2,021) (236) (3,010) -92%
--------------------------------------------------
--------------------------------------------------
Funds flow from operations
per barrel
Interest income and
realized foreign
exchange loss $ 0.16 $ (18.11) $ 2.18 $ (2.51)
General and
administrative expense
(Note 4) (2.16) (7.96) (4.26) (4.51) -6%
Current income tax
recovery 1.34 - 1.07 - 100%
--------------------------------------------------
$ (0.64) $ (26.07) $ (1.01) $ (7.02) -86%
----------------------------------------------------------------------------
Indonesia Operations
----------------------------------------------------------------------------
General and administrative
expense (Note 4) (695) (284) (817) (405) 102%
Realized foreign exchange
gain 95 - 114 - 100%
--------------------------------------------------
Indonesia - Funds flow
from operations (600) (284) (703) (405) 74%
--------------------------------------------------
--------------------------------------------------
Wells drilled
Gross - - 3 1 200%
Net - - 3.0 0.8 275%
----------------------------------------------------------------------------
--------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------------------------------------
(thousands of Canadian
dollars except where
indicated) 2013 2012 2013 2012 Change
----------------------------------------------------------------------------
THAILAND OPERATIONS (Note
2)
----------------------------------------------------------------------------
Oil sales (bbls) 74,458 77,477 235,073 428,635 -45%
Average daily oil sales
(BOPD) by Concession
L53 809 842 861 906 -5%
L44, L33, SW1 (interests
sold June 15, 2012) - - - 658 -100%
--------------------------------------------------
Total 809 842 861 1,564 -45%
--------------------------------------------------
Average oil sales price,
before transportation
(CDN$/bbl) $ 99.34 $ 100.78 $ 99.19 $ 107.23 -8%
Reference Price (volume
weighted) and
differential
Crude oil (Brent $US/bbl)$ 110.31 $ 108.76 $ 108.04 $ 114.95 -6%
Exchange Rate $US/$Cdn 1.02 1.02 1.03 1.01 2%
Crude oil (Brent
$Cdn/bbl) $ 112.09 $ 110.51 $ 111.38 $ 116.61 -4%
Sale price / Brent
reference price 89% 91% 89% 92% -3%
Funds flow from operations
(Note 1)
Crude oil sales 7,397 7,808 23,316 45,964 -49%
Government royalty (368) (390) (1,152) (2,282) -50%
Other royalty - - - (49) -100%
Transportation expense (119) (103) (371) (796) -53%
Operating expense (1,084) (1,357) (2,747) (5,244) -48%
--------------------------------------------------
Field netback 5,826 5,958 19,046 37,593 -49%
General and
administrative expense
(Note 4) (382) (307) (1,134) (1,831) -38%
Interest income 2 4 27 43 -37%
Current income tax (1) (2) (2) (3,408) -100%
--------------------------------------------------
Thailand - Funds flow
from operations (Note 1) 5,445 5,653 17,937 32,397 -45%
--------------------------------------------------
--------------------------------------------------
Funds flow from operations
/ barrel (CDN$/bbl) (Note
1)
Crude oil sales $ 99.34 $ 100.78 $ 99.19 $ 107.23 -8%
Government royalty (4.94) (5.04) (4.90) (5.32) -8%
Other royalty - - - (0.11) -100%
Transportation expense (1.60) (1.33) (1.58) (1.86) -15%
Operating expense (14.56) (17.51) (11.69) (12.23) -4%
--------------------------------------------------
Field netback 78.25 76.90 81.02 87.71 -8%
General and
administrative expense
(Note 4) (5.13) (3.96) (4.82) (4.27) 13%
Interest Income 0.03 0.05 0.11 0.10 15%
Current income tax (0.01) (0.03) (0.01) (7.95) -100%
--------------------------------------------------
Thailand - Funds flow
from operations (Note 1)$ 73.13 $ 72.96 $ 76.30 $ 75.59 1%
--------------------------------------------------
--------------------------------------------------
Government royalty as
percentage of crude oil
sales 5% 5% 5% 5% 0%
SRB as percentage of crude
oil sales 0% 0% 0% 0% 0%
Income tax as percentage
of crude oil sales 0% 0% 0% 7% -100%
As percentage of crude oil
sales
Expenses -
transportation,
operating and G&A 21% 23% 18% 17% 6%
Government royalty and
income tax 5% 5% 5% 12% -60%
Funds flow from
operations, before
interest income and
realized foreign
exchange gain 74% 72% 77% 70% 9%
Wells drilled
Gross 1 - 13 7 86%
Net 1.0 - 13.0 5.0 160%
----------------------------------------------------------------------------
(1) Funds flow from operations ("funds flow" before changes in non-cash
working capital and reclamation costs) is used by management to analyze
operating performance and leverage. Funds flow as presented does not
have any standardized meaning prescribed by IFRS and therefore it may
not be comparable with the calculation of similar measures of other
entities. Funds flow is not intended to represent operating cash flow or
operating profits for the period nor should it be viewed as an
alternative to cash flow from operating activities, net earnings or
other measures of financial performance calculated in accordance with
IFRS.
(2) Thailand Concessions SW1, L44 and L33 were sold on June 15, 2012.
Proceeds of $185.3 million less transaction costs of $11.2 million and
estimated tax of $15.6 million results in proceeds net of expenses of
$158.5 million. After deducting $80.6 million related to the carrying
value of petroleum and equipment, exploration and evaluation costs, and
working capital sold (including the elimination of the associated
deferred tax liabilities, employee pension liabilities, and
decommissioning provision). The net after tax gain on sale is $77.9
million. The 2012 financial statements and operating results include
revenue, expenses and capital expenditures associated with these
properties to June 14, 2012.
(3) Cost of capital expenditures, excluding any decommissioning provision
and excluding the impact of changes in foreign exchange rates.
(4) General & administrative expenses, excluding non-cash accretion and gain
on settlement of decommissioning provision.
To view accompanying map and table, visit the following link:
http://media3.marketwire.com/docs/POE_111413_Map_Well_Table.pdf
FOR FURTHER INFORMATION PLEASE CONTACT:
Pan Orient Energy Corp.
Jeff Chisholm
President and CEO (located in Bangkok, Thailand)
jeff@panorient.ca
Pan Orient Energy Corp.
Bill Ostlund
Vice President Finance and CFO
(403) 294-1770
www.panorient.ca
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