- Financial performance progressing strongly thanks to
the continued budget discipline in a favourable economic
environment
- Sales totalled $500 million, up by 52% thanks to the increase
in the average sale price of oil ($72.5/bbl compared with $40.1/bbl
in 2020)
- Strict operational and financial discipline in place, with opex
and G&A maintained at 2020 levels
- Net income was $121 million, at its highest level since
2011
- Strong cash flow generation allowing for substantial
deleveraging
- Operating cash flow was $280 million, and free cash flow stood
at $108 million after payment of $100 million following the
agreement with the Gabonese Republic
- Net debt totalled $343 million at year’s-end 2021, down by $112
million vs. 2020
- Resumption of the dividend to return value created to
shareholders
- The Board of Directors proposes the payment of a dividend of
€0.07 per share, equivalent to $15 million in total, which is the
maximum allowed under current provisions of the Term Loan
- Subject to the removal of this restriction in case of
completion of the refinancing of the Term Loan, the remuneration of
shareholders will be increased to $30 million for the calendar year
2022
- Active management of asset portfolio with a view to
growth
- Preparations underway for a 3D seismic data acquisition
campaign on the Ezanga permit in 2022
- Reinforcement of the Group’s presence in Colombia via the
purchase of Frontera Energy’s stake in M&P Colombia and the
award of the VSM-4 licence
- Divestment of the stake in Sawn Lake in Canada, as the
development does not meet the Group’s economic and environmental
criteria
Regulatory News:
Maurel & Prom (Paris:MAU):
Audio conference for
analysts and investors M&P will hold an
analyst/investor conference via an audio webcast in French and
English, today at 10:00 a.m., followed by a Q&A session.
To attend this webcast
live or listen to the recording, click the following link:
https://channel.royalcast.com/landingpage/maureletpromen/20220318_2/
Key financial indicators
in $mm
2021
2020
Change
Income statement
Sales
500
330
+52%
Opex & G&A
-168
-164
Royalties and production taxes
-77
-50
Change in overlift/underlift position
25
-27
Other
–
6
EBITDA
280
95
+195%
Depreciation, amortisation and provisions
and impairment of production assets
-107
-592
Expenses on exploration assets
-0
-31
Other
-16
-6
Operating income
158
-534
N/A
Net financial expenses
-16
-11
Income tax
-44
-29
Share of income/loss of associates
23
-18
Net income
121
-592
N/A
O/w net income before non-recurring
items
136
-54
N/A
Cash flows
Cash flow before income tax
280
91
Income tax paid
-82
-35
Operating cash flow before change in
working capital
198
56
+256%
Change in working capital
82
53
Operating cash flow
280
109
+158%
Development capex
-164
-46
Exploration capex
–
-47
M&A
-8
–
Free cash flow
108
16
+595%
Net cost of debt
-96
-95
Dividends received
15
12
Dividends paid
–
–
Other
1
5
Change in cash position
27
-63
N/A
Opening cash
168
231
Closing cash
196
168
At its meeting of 17 March 2022, chaired by John Anis, the Board
of Directors of the Maurel & Prom Group (“M&P” or “the
Group”) approved the audited financial statements1 for the year
ended 31 December 2021.
Olivier de Langavant, Chief Executive Officer of M&P,
stated: “The financial results for the year 2021 are up sharply,
supported of course by the recovery in crude oil prices, but also
thanks to the ongoing control of costs and expenses that we
initiated in 2020. This enables us today to accelerate the pace of
deleveraging, which remains as a priority objective, while at the
same time reintroducing the dividend. This remuneration testifies
to the discipline that we have shown in our capital allocation
strategy and our pledge to immediately return value creation to
shareholders. M&P is also preparing its future and its
continuing development: in Gabon, where the extension of our
exploration periods and the granting of new contractual terms allow
us to envisage plans for future growth with serenity, and in
Colombia, where we have recently reinforced our exploration
portfolio. Finally, our withdrawal from the Sawn Lake asset in
Canada shows our commitment to concentrate on projects that not
only respect the Group’s economic criteria, but are also in line
with our environmental targets.”
Financial position
Consolidated sales in 2021 amounted to $500 million, a
year-on-year increase of 52%. This was mainly due to an average oil
sale price during the period of $72.5/bbl, which was a sharp
increase (81%) over 2020 ($40.1/bbl).
Operating expenses and G&A stood at $168 million and were
largely kept at their 2020 level ($164 million), demonstrating the
sustainability of the measures introduced under the adaptation plan
implemented in March 2020 with the aim of significantly reducing
the Group’s expenses. Royalties and production taxes increased
significantly ($77 million compared to $50 million in 2020) due to
their proportionality to sale prices. The Group also recorded a
positive change in the overlift/underlift position for $25 million,
due to a favourable lifting programme in the second half of
2021.
EBITDA therefore came in at $280 million, an increase of 195%
compared to the previous fiscal year ($95 million). Depreciation
and amortisation charges amounted to $107 million in 2021, versus
$114 million (excluding exceptional items) in 2020. Current
operating income stood at $158 million, after taking into account
expenses of $16 million, mostly related to workover expenses in
Angola that were impaired immediately.
Net financial expenses on the income statement amounted to $16
million for 2021.
M&P’s share of income from equity associates was $23
million, corresponding almost exclusively to its 20.46% stake in
Seplat Energy.
The Group’s net income for 2021 was $121 million, while net
income before non-recurring items was $136 million, versus negative
$54 million in 2020.
Cash flow from operating activities before change in working
capital was $198 million (versus $56 million in 2020). After change
in working capital (positive impact of $82 million), cash flow from
operating activities was $280 million.
There was a substantial increase in development capex once
operations resumed. It stood at $164 million (compared to $46
million in 2020), of which $97 million was for M&P’s share in
the $100-million comprehensive agreement entered into with the
Gabonese Republic in November 2021. The remainder was mainly split
between development operations that had resumed on the Ezanga asset
in Gabon ($40 million, of which $21 million was drilling) and
operations in Angola ($22 million).
Free cash flow for fiscal 2021 stood at $108 million.
In terms of financing flows, the debt expense was relatively
unchanged at $96 million versus $95 million in 2020. Of this, $84
million was for loan repayments ($75 million for bank borrowings
and $9 million for the Shareholder Loan) and $12 million for cost
of debt. In 2021 M&P received $15 million in dividends, net of
taxes, from its 20.46% stake in Seplat Energy.
As at 31 December 2021, M&P’s cash position stood at $185
million, a year-on-year increase of $27 million. Debt at 31
December 2021 amounted to $539 million (nominal value), i.e. a net
debt of $343 million (versus $455 million at 31 December 2020).
The Group’s gross debt as at 31 December 2021 amounted to $539
million, i.e., net debt of $343 million after taking into account
the cash position ($196 million). This net debt was $112 million
lower than at the end of 2020, when it stood at $455 million.
In fiscal 2021, M&P repaid $84 million in debt, which
included $75 million for the Term Loan ($450 million drawn at 31
December 2020) and $9 million for the Shareholder Loan ($89 million
drawn at 31 December 2020). The amount to be repaid in 2021 is $191
million, which includes $175 million for the Term Loan.
Aside from its robust cash position, M&P has access to
additional liquidity thanks to the undrawn $100-million tranche of
the Shareholder Loan.
M&P is currently (as at March 2022) working on refinancing
its Term Loan beyond its December 2023 term, mainly to spread the
maturities due in 2023 over a longer term (particularly the
$275-million Term Loan). M&P is examining the most advantageous
options available to it under current market conditions, knowing
that the maturities scheduled for 2022 are entirely sustainable,
even without refinancing, especially in view of current crude oil
prices.
Debt repayment profile at 31 December
2021:
Object omitted.
- Operating and financial forecasts for 2022
The Group expects M&P’s working interest production to reach
26,000 boepd in 2022, including:
- 16,000 boepd in Gabon (equivalent to gross production of 20,000
bopd at Ezanga)
- 38.5 mmcfd (equivalent to gross production of 80.0 mmcfd at
Mnazi Bay)
- 3,600 bopd in Angola (equivalent to gross production of 18,000
bopd on Block 3/05)
With these production assumptions, the forecasts for cash flow
from operating activities in 2022 under various Brent price
assumptions2 are as follows:
- $70/bbl: $250 million
- $80/bbl: $290 million
- $90/bbl: $330 million
Other significant cash outflows budgeted for the year, for a
total of $355 million:
- Development capex: $95 million
- $75 million in Gabon
- $5 million in Tanzania
- $15 million in Angola (non-operated)
- Exploration investments:
Contingent budget of $60 million, including in particular:
- The acquisition of 3D seismic data for the Ezanga permit in
Gabon
- The drilling of two wells on the COR-15 permit in Colombia
- Financing: $200 million (in the
absence of refinancing):
- $188 million in debt repayment
- $12 million in net cost of debt
M&P’s internal forecasts for the next 12 months indicate
that the Group will be in a position to carry on with its business
activities and maintain sufficient liquidity. In addition to its
cash on hand ($196 million at 31 December 2021), and even assuming
a lower oil price environment, M&P has access if necessary to
$100 million in immediate liquidity via the undrawn portion of its
Shareholder Loan.
After examining the Group’s financial situation and its
performance during fiscal 2021, the Board of Directors proposes to
pay a dividend of €0.07 per share, equivalent to a total payment of
$15 million, which is the maximum currently permitted under the
restrictions attached to the Bank loan.
Subject to the removal of this restriction in case of completion
of the refinancing of the Term Loan, the remuneration of
shareholders will be increased to $30 million for the calendar year
2022.
2021 activity
- Environment, Health, Safety and Security (EHS-S)
performance
The Lost Time Injury Frequency (“LTIF”) rate was 0 in 2021,
versus 1.83 in 2020. The Total Recordable Incident Rate (“TRIR”)
was 2.52.
Object omitted.
- Highlights of the fiscal year
Like the previous year, 2021 was characterised by the effects of
the Covid-19 pandemic. The Group took all necessary steps to ensure
business continuity, in full compliance with the recommendations of
the relevant health authorities. At operational sites, measures
exceeding recommendations have been implemented to ensure business
continuity, which so far has not been in question since the
outbreak began.
After a volatile and bearish 2020, crude oil prices experienced
a sustained and almost uninterrupted increase over the course of
2021. Brent began the year at around $50/bbl, finishing at just
below $80/bbl at end-December. It averaged $70/bbl over the full
year, versus $40/bbl in 2020. There were two main reasons behind
this sharp increase. One was the earlier- and
stronger-than-expected economic recovery from the pandemic, and the
other was the relative weakness of global oil production in a
context of marked underinvestment.
From an operational standpoint, M&P paid close attention in
2021 to the sustainability of the efforts undertaken as part of the
adaptation and cost reduction plan, which was rolled out in 2020.
Cost-reduction initiatives were ongoing and there was little change
in the level of operating expenses and G&A ($168 million in
2021 vs $164 million in 2020). This financial discipline did not,
however, exclude capital expenditure. In that regard, a drilling
campaign and stimulation operations on existing wells got under way
in summer 2021 on the Ezanga asset to support the fields’
production potential.
In Gabon, M&P and the Gabonese Republic signed a
comprehensive agreement in November 2021 settling a number of
outstanding issues between the parties. Under this agreement, the
parties approved the immediate release to the Gabonese Republic of
the $43 million that had been placed in an escrow account for
pre-2018 carrying costs on the Ezanga permit, as well as the
payment of an additional sum of $57 million to the Gabonese
Republic.
In return, the agreement provided for:
- The signature of an amendment to the Production Sharing
Contract (“PSC”) on the Ezanga permit (M&P being the operator
with an 80% working interest), which included changing certain
terms and extending the exploration period to 2026;
- The signature of new PSCs for the Kari and Nyanga-Mayombé
regions (M&P being the operator with a 100% working interest)
and for which the exploration periods will now run until 2029;
- The establishment of a mechanism by which M&P will, over
time, recover certain receivables (amounting to $98 million at 30
September 2021).
This mutually beneficial agreement reflects M&P’s long-term
commitment in Gabon, and its economic effects are already being
felt through changes to the fiscal terms on the Ezanga permit.
The Group’s policy is to manage its exploration and appraisal
asset portfolio dynamically. To that end, in 2021 and early 2022,
M&P cemented its presence in Colombia before disposing of its
operations in Canada:
- In Colombia, the Group acquired the 50% stake previously held
by Frontera Energy in M&P Colombia (owner of the COR-15 asset,
for which the drilling of two exploration wells is scheduled),
before being awarded the VSM-4 licence during the “Ronda Colombia
2021” exploration licensing round in December 2021;
- In Canada, M&P sold its 25% stake in the Sawn Lake project
in March 2022 to its partner Andora, which already owned 50% of the
asset and is the operator. M&P decided to exit Canada after
concluding that development of the asset would not meet its
economic and environmental criteria.
In Venezuela, due to international sanctions against PDVSA,
operations conducted by the Group in relation to its stake in
Petroregional del Lago (“PRDL”) are strictly limited to maintenance
related to the safety of staff and assets, and to environmental
protection. Consequently, no contribution to M&P’s net income
has been recognised, despite the fact that the asset is still in
production (gross production of 11,954 bopd in 2021, or 4,782 bopd
theoretically for the 40% consolidated stake held by M&P) and
still has development potential. In addition, M&P is currently
working on the possibility to lift oil with respect to sums owed by
PRDL and corresponding to past dividends.
Q1 2021
Q2 2021
Q3 2021
Q4 2021
2021
2020
Change 2021 vs 2020
M&P working interest
production
Gabon (oil)
bopd
15,120
15,256
15,104
16,668
15,540
16,896
-8%
Angola (oil)
bopd
3,333
3,786
3,698
2,848
3,416
3,933
-13%
Tanzania (gas)
MMcfd
40.7
36.5
35.6
44.0
39.2
31.5
+25%
Total
boepd
25,240
25,124
24,738
26,847
25,490
26,076
-2%
In fiscal 2021, M&P’s working interest production stood at
25,490 boepd, a 2% increase over 2020 (26,076 boepd).
In Gabon, M&P’s working interest oil production (80%) on the
Ezanga permit was 15,540 bopd (gross production: 19,425 bopd) for
the year. The drop in crude prices and production cuts under OPEC
quotas led M&P to limit its working interest production on the
Ezanga permit to 15,200 bopd (gross production: 19,000 bopd) up to
first quarter 2021. Field production increased again at the end of
2021, after development operations resumed in July 2021
(development drilling and stimulation operations on existing
wells).
In Tanzania, M&P’s working interest gas production (48.06%)
on the Mnazi Bay permit stood at 39.2 mmcfd (gross production: 81.6
mmcfd) for 2021, up 25% from 2020. This was just short of the
annual production record achieved in 2018 (40.0 mmcfd for M&P
working interest), demonstrating the steady nature of Tanzania’s
demand for gas.
In Angola, M&P working interest production (20%) in Block
3/05 in 2021 was 3,416 bopd (gross production: 17,079 bopd), a
year-on-year decline of 13%. Production was affected in the second
half of the year by maintenance operations carried out between
end-October and mid-November.
- Exploration and appraisal activities
Exploration and appraisal activities resumed in 2021 after being
paused in 2020 due to the outbreak of Covid-19 and the application
in March 2020 of the adaptation and cost reduction plan.
Under a comprehensive agreement entered into with the Gabonese
Republic in November 2021, the Group was granted an extension to
the exploration periods for its three assets in Gabon. The Ezanga
permit will now expire in 2026, while the Kari and Nyanga-Mayombé
permits will expire in 2029.
M&P is currently preparing a 3D seismic data acquisition
campaign for the Ezanga permit, which is expected to take place in
2022. This will be used to identify opportunities for development
in the vicinity of fields currently in production. This campaign is
intended to ensure the continuing development of the asset, thanks
in particular to the visibility provided by the agreement reached
with the Gabonese authorities in November 2021.
Following the finalisation of the agreement concluded in Q4 2021
with PRE-PSIE Co�peratief, a wholly owned subsidiary of Frontera
Energy, M&P strengthened its position in Colombia. It now owns
100% of M&P Colombia, which holds the COR-15 and Muisca
exploration permits. Plans are in place to drill two shallow
exploration wells on the COR-15 permit in 2022.
Meanwhile, in the “Ronda Colombia 2021” exploration licensing
round, M&P was awarded the permit for VSM-4, located in the
upper part of the Rio Magdalena valley (Valle Superior del
Magdalena), in December 2021. The contract for the block was
officially signed on 21 January 2022. In consideration for being
granted a six-year exploration licence, M&P has agreed to drill
an exploration well. M&P has already identified a potential
prospect on this block, which is in close proximity to several
permits currently in production and to existing
infrastructure.
The production test that began in the first half of 2021 on the
Mios permit was still ongoing in March 2022. The Group is awaiting
a response from the French authorities as to whether it will be
granted a concession to continue operating the licence.
In March 2022, M&P finalised the sale of its 25% interest in
the Sawn Lake project in Alberta to Andora Energy Corporation
(“Andora”), which already owned 50% of the asset and is the
operator. In consideration for a payment to Andora of $0.5 million,
M&P has transferred all of its financial commitments pertaining
to Sawn Lake, and particularly those related to site abandonment
costs. M&P has also agreed to grant an exclusivity period to
discuss the potential direct or indirect acquisition by Andora of
M&P’s 19.57% stake in Deep Well oil & Gas, Inc., whose
subsidiaries collectively hold a 25% participating interest in the
Sawn Lake project.
Although the production pilot conducted between 2014 and 2016
provided encouraging technical results, development of the Sawn
Lake project is not part of M&P’s strategy. Firstly, the
economics of the project are adversely affected by local crude oil
price dynamics, with substantial discounts relative to global crude
benchmarks. Secondly, the project’s carbon intensity, particularly
greenhouse gas emissions generated by the production of steam
required for the oil recovery technique known as “SAGD”
(steam-assisted gravity drainage), is incompatible with the Group’s
investment criteria.
The sale marks the end of the Group’s operations in Canada.
The Group provides drilling services through its wholly owned
subsidiary Caroil. After a reorganisation in 2020 as part of the
adaptation and cost reduction plan, Caroil’s management functions
were relocated to its operational headquarters in Pau, France.
Caroil also offers training in drilling activities in both France
and Gabon.
The resumption of drilling activities on the Ezanga permit saw
the restart of the C3 rig. Five wells were drilled in the second
half of 2021 and the drilling campaign has been continued into
2022.
In Gabon, operations at Caroil S.A.S., which were previously run
by a Gabonese branch of the French parent company, were transferred
to a new Gabon-based company set up in the context of a partial
asset contribution. The new company, Caroil Drilling Solution S.A.,
is still wholly owned by Caroil S.A.S.
Additionally, a letter of intent was signed in March 2022 with a
third-party operator for the execution of a drilling programme
including in particular a firm commitment for five wells.
Group reserves as at 31 December
2021
The Group’s reserves correspond to the volumes of technically
recoverable hydrocarbons on permits where production is currently
underway—proportionate to the Group’s share of interest in those
permits—plus those revealed by discovery and delineation wells that
can be operated commercially. These reserves were certified as at
31 December 2021 by DeGolyer and MacNaughton in Gabon and Angola,
and by RPS Energy in Tanzania.
The Group’s 2P reserves stood at 171.2 mmboe at 31 December
2021, of which 108.8 mmboe are proven reserves (1P).
2P reserves for M&P’s working
interest:
Oil (mmbbls)
Oil (mmbbls)
Gas (bcf)
mmboe
Gabon
Angola
Tanzania
Group total
31/12/2020
132.4
14.6
214.0
182.73
Production
-5.7
-1.4
-13.8
-9.3
Revision
-3.2
+0.4
+4.0
-2.1
31/12/2021
123.5
13.7
204.3
171.2
O/w 1P reserves
79.6
11.4
106.5
108.8
As a % of 2P
64%
83%
52%
64%
Note that these figures do not take into account M&P’s
20.46% interest in Seplat Energy, one of Nigeria’s main operators
listed on the London and Lagos stock exchanges. As a reminder,
Seplat Energy’s 2P reserves were 449 mmboe4 at 31 December 2021
(i.e. 92 mmboe for M&P’s 20.46% interest).
In addition, due to international sanctions against Venezuela’s
state oil company PDVSA, the activity associated with M&P’s
interest in PRDL is, for the time being, limited to operations
related solely to the safety of staff and assets, and to
environmental protection. Accordingly, no reserves have been
recognised for this interest.
Français
Anglais
pieds cubes
pc
cf
cubic feet
millions de pieds cubes par
jour
Mpc/j
mmcfd
million cubic feet per day
milliards de pieds cubes
Gpc
bcf
billion cubic feet
baril
B
bbl
barrel
barils d’huile par jour
b/j
bopd
barrels of oil per day
millions de barils
Mb
mmbbls
million barrels
barils équivalent pétrole
bep
boe
barrels of oil equivalent
barils équivalent pétrole par
jour
bep/j
boepd
barrels of oil equivalent per day
millions de barils équivalent
pétrole
Mbep
mmboe
million barrels of oil equivalent
For more information, please visit www.maureletprom.fr/en/.
This document may contain forward-looking
statements regarding the financial position, results, business
activities and industrial strategy of Maurel & Prom. By nature,
forward-looking statements contain risks and uncertainties to the
extent that they are based on events or circumstances that may or
may not happen in the future. These projections are based on
assumptions we believe to be reasonable, but which may prove to be
incorrect and which depend on a number of risk factors, such as
fluctuations in crude oil prices, changes in exchange rates,
uncertainties related to the valuation of our oil reserves, actual
rates of oil production and the related costs, operational
problems, political stability, legislative or regulatory reforms,
or even wars, terrorism and sabotage.
Maurel & Prom is listed for trading on
Euronext Paris CAC All-Tradable – CAC Small – CAC Mid & Small –
Eligible PEA-PME and SRD Isin FR0000051070/Bloomberg MAU.FP/Reuters
MAUP.PA
___________________ 1 The financial statements
have been audited and certified without qualification 2 Average
price assumption for the period March-December 2022 3 2P reserves
at 31 December 2020 were restated by 0.2 mmbbls corresponding to
the Mios permit in France, for which the certification of reserves
was not renewed for the 2021 fiscal year 4 Gas to oil conversion
ratio of 6bcf per mmboe
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220317005951/en/
Maurel & Prom Press, shareholder and investor
relations +33 (0)1 53 83 16 45 ir@maureletprom.fr
NewCap Financial communications and investor
relations/Media relations Louis-Victor Delouvrier/Nicolas Merigeau
+33 (0)1 44 71 98 53/+33 (0)1 44 71 94 98
maureletprom@newcap.eu
Maurel Et Prom (EU:MAU)
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