CALGARY, AB, March
17, 2022 /CNW/ - Pan Orient Energy Corp. ("Pan Orient" or
the "Company") (TSXV: POE) reports 2021 year-end and fourth quarter
consolidated financial and operating results. Please note
that all amounts are in Canadian dollars unless otherwise stated,
BOPD refers to barrels of oil per day and BOPD for Thailand operations represents volumes net to
Pan Orient's 50.01% equity interest in the Thailand Joint
Venture.
The Company is today filing its audited consolidated financial
statements as at and for the year ended December 31, 2021 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 Company's website,
www.panorient.ca.
Commenting today on Pan Orient's 2021 results, President and CEO
Jeff Chisholm stated:
"In the fourth quarter of 2021 the Company announced its
intention to take a number of steps that would accelerate Pan
Orient shareholder value. The first of these steps was completed in
February 2021 with the payment of a
$0.40 per share special distribution
to Pan Orient shareholders. Since late 2021 the Company has also
been actively engaged in a process that would potentially result in
the sale of the Company's onshore Thailand L53 asset. Industry interest has been
very strong and oil prices have certainly been a positive factor.
Pan Orient hopes to be in a position to announce a potential
transaction late in the first half of 2022."
HIGHLIGHTS
Thailand (Pan Orient's 50.01%
equity interest in the Thailand Joint Venture)
- Net to Pan Orient's 50.01% equity interest in the Thailand
Joint Venture, oil sales from Concession L53 were 1,395 BOPD in
2021, an increase of 15% from 1,213 BOPD in 2020. The L53-DD10 and
L53-DD11 appraisal wells were drilled in the L53-DD field and
brought onto production in 2021. In addition, water disposal
capacity at the L53-DD field was increased through conversion of
the L53-DD8 well to a water disposal well and drilling of the
L53-DD12 water disposal well.
- Adjusted Thailand funds flow
from operations of $20.4 million in
2021 ($40.10 per barrel), with
$5.7 million ($43.56 per barrel) in the fourth quarter, net to
Pan Orient's 50.01% equity interest in the Thailand Joint Venture.
During 2021, the realized price of Concession L53 crude oil was
higher than the previous year by 56% as the Brent reference price
increased 60%. Operating expenses in 2021 declined 27% to
$5.66 per barrel primarily due to
increased water handling capacity for the L53-DD field and higher
oil volumes.
- Net to Pan Orient's 50.01% equity interest in the Thailand
Joint Venture, adjusted funds flow from Thailand operations of $20.4 million in 2021 funded $5.8 million of Thailand exploration and development
activities and $13.7 million of
dividends from the Thailand Joint Venture to Pan Orient. Pan
Orient's share of working capital and long-term deposits in
Thailand at December 31, 2021 was $5.0
million.
- December 31, 2021 reserves report
assigned proved plus probable crude oil reserves of 2.3 million
barrels (a decrease of 3%), net to Pan Orient's 50.01% equity
interest in the Thailand Joint Venture, with an after tax net
present value using forecast prices and costs discounted at 10% per
year of $54.1 million (an 39%
increase). The 3% decrease in proved plus probable crude oil
reserves results from 509,195 barrels of oil sales largely offset
by a 445,809 barrel increase from positive technical revisions,
economic factors and extension of fields. The 39% increase in the
net present value is the result of the 31% increase average oil
sales prices more than offsetting the 3% decrease in proved plus
probable reserves.
Indonesia East Jabung
Production Sharing Contract (Pan Orient is non-operator with a 49%
ownership interest)
- The operator of the East Jabung Production Sharing Contract
("PSC") provided notice to the Government of Indonesia in January
2020 of withdrawal from the East Jabung PSC and is
continuing to complete final steps to be taken for formal approval
of the expiry from the Government of Indonesia, including reclamation requirements.
Pan Orient is withdrawing from operations in Indonesia and the office in Jakarta was closed March 31, 2020.
- Activities of the Company in Indonesia for 2021 are reported as
discontinued operations. Discontinued operations in Indonesia for 2021 were $212 thousand of G&A expense, $23 thousand in foreign exchange loss and
$165 thousand increase of impairment
expense for the East Jabung PSC.
Sawn Lake (Operated by Andora Energy Corporation ("Andora"), in
which Pan Orient has a 71.8% ownership)
- Since March 31, 2020, no Sawn
Lake operating expenses or G&A have been capitalized. For 2021,
Pan Orient reports total operating expense of $279 thousand associated with the Sawn Lake
suspended SAGD facility and wellpair.
Corporate
- Total 2021 corporate adjusted funds flow from operations
(including Pan Orient's 50.01% equity interest in the Thailand
Joint Venture) of $16.7 million
($0.33 per share), with $4.4 million ($0.09
per share) in the fourth quarter of 2021. The 75% increase from
$9.5 million ($0.18 per share) in 2020 is largely due to the
Thailand Joint Venture with 56% higher realized prices of
Concession L53 crude oil and 15% higher oil sales volume.
- Net income attributable to common shareholders was $8.5 million ($0.17
per share) for 2021 and $3.0 million
($0.06 per share) for the fourth
quarter of 2021.
- Pan Orient repurchased 1,950,100 common shares in 2021 at an
average price of $0.87 per share
(before the $0.40 per share special
distribution to Pan Orient shareholders in February 2022). There have been no shares
repurchased in 2022 to date.
- Pan Orient had working capital and non-current deposits of
$32.1 million and no long-term debt
at December 31, 2021. In addition,
the Thailand Joint Venture had $5.0
million in working capital and long-term deposits, net to
Pan Orient's 50.01% equity interest, and Thailand funds flow from operations are
expected to fund remaining development activities at Concession
L53.
- At the Annual and Special Meeting of Shareholders January 18, 2022, shareholders approved the
previously announced capital reorganization resulting in a
$0.40 per common share return of
capital distribution to shareholders on February 10, 2022. The total amount of the
distribution was $19.9 million.
OUTLOOK
CORPORATE
In the fourth quarter of 2021, the
Company announced a process to accelerate shareholder value given
the mid to late stage development of Thailand, intention to minimize further
investment into the Sawn Lake asset, and strength in current oil
prices. This process will involve both the Thailand assets and the Sawn Lake,
Canada assets and it is expected
that there will be two distinct transactions due to the contrasting
nature of the assets. It is intended that the proceeds from
any potential sale of any of the assets will be paid or distributed
to Pan Orient shareholders.
An updated December 31, 2021 independent reserves evaluation
for Thailand on-shore Concession
L53/48 of Pan Orient Energy (Siam) Ltd. was prepared at the end of
January 2022 and financial statements
for December 31, 2021 are now
available. Both the Brent and Western Canada Select reference
prices for oil have continued to increase. Pan Orient is
reviewing alternatives and having discussions with interested
parties to achieve value for Pan Orient shareholders. The
outcome, timing and amount of potential transactions is uncertain
at this time.
It is currently proposed that in
the period after the sale of the Company's oil and gas interests,
and the distribution of the vast majority of cash to shareholders,
the Company will continue to pursue international oil and gas
opportunities with a substantially scaled down cost structure.
THAILAND
Pan Orient Energy (Siam) Ltd. is
currently undertaking an approximately eight to ten well workover
program with the aim of increasing oil production and take
advantage of the current oil price environment.
Pan Orient is a Calgary,
Alberta based oil and gas exploration and production company
with operations currently located onshore Thailand and 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 express or implied to
estimates of reserves and potentially recoverable resources; oil
price expectations; Thailand funds
flow from operations being expected to fund remaining development
activities at Concession L53; Pan Orient's intention and efforts to
sell its Thailand assets and Sawn
Lake, Canada assets; the timing of
any sale transactions and required shareholder approval; Pan
Orient's future business plans after the sale of its oil and gas
interests; withdrawal from the East Jabung PSC in Indonesia; and potential purchases of common
shares under the normal course issuer bid. 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 reserves 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 Summary
|
Three Months
Ended
December
31,
|
Year
Ended
December
31,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2021
|
2020
|
2021
|
2020
|
|
FINANCIAL
|
|
|
|
|
|
|
Financial
Statement Results – Excluding 50.01% Interest in Thailand Joint
Venture (Note 1)
|
|
|
|
|
|
|
Net income (loss)
attributed to common shareholders
|
2,951
|
(417)
|
8,479
|
(59,631)
|
-114%
|
|
Per share – basic and
diluted
|
$
0.06
|
$ (0.01)
|
$
0.17
|
$ (1.13)
|
-114%
|
|
Cash flow used in
operating activities (Note 2 & 3)
|
(1,212)
|
(597)
|
(3,050)
|
(1,942)
|
57%
|
|
Per share – basic and
diluted
|
$
(0.02)
|
$ (0.01)
|
$
(0.06)
|
$ (0.04)
|
57%
|
|
Cash flow from (used
in) investing activities (Note 2 & 3)
|
5,098
|
(26)
|
13,712
|
6,984
|
96%
|
|
Per share – basic and
diluted
|
$
0.10
|
$
0.00
|
$
0.27
|
$ 0.13
|
96%
|
|
Cash flow used in
financing activities (Note 2 & 3)
|
(3)
|
(225)
|
(1,728)
|
(1,733)
|
0%
|
|
Per share – basic and
diluted
|
$
(0.00)
|
$ (0.00)
|
$
(0.03)
|
$ (0.03)
|
0%
|
|
Change in cash &
cash equivalents from discontinued operations (Note 3)
|
(9)
|
(46)
|
(153)
|
(795)
|
-81%
|
|
Working
capital
|
31,472
|
22,968
|
31,472
|
22,968
|
37%
|
|
Working capital &
non-current deposits
|
32,084
|
23,577
|
32,084
|
23,577
|
36%
|
|
Long-term
debt
|
-
|
-
|
-
|
-
|
0%
|
|
Shares outstanding
(thousands)
|
49,794
|
51,744
|
49,794
|
51,744
|
-4%
|
|
Capital Commitments
(Note 4)
|
1,060
|
801
|
1,060
|
801
|
32%
|
|
Working Capital and
Non-current Deposits
|
|
|
|
|
|
|
Beginning of period –
Excluding Thailand Joint Venture
|
28,443
|
26,411
|
23,577
|
22,158
|
6%
|
|
Adjusted funds flow
used in continuing operations (Note 3 & 5)
|
(1,072)
|
(1,754)
|
(3,376)
|
(3,340)
|
1%
|
|
Adjusted funds flow
from (used in) discontinued operations (Note 3)
|
(239)
|
47
|
(400)
|
395
|
-201%
|
|
Consolidated capital
expenditures (Note 6)
|
-
|
-
|
-
|
(85)
|
|
|
Amounts advanced to
Thailand Joint Venture
|
(8)
|
(25)
|
31
|
(43)
|
-172%
|
|
Dividend received
from Thailand Joint Venture
|
5,141
|
-
|
13,715
|
7,112
|
93%
|
|
Finance lease
payments
|
(3)
|
(3)
|
(24)
|
(139)
|
-83%
|
|
Changes in current
decommissioning liabilities
|
125
|
-
|
(518)
|
-
|
|
|
Normal course issuer
bid
|
-
|
(222)
|
(1,704)
|
(1,705)
|
0%
|
|
Automatic share
purchase plan (Note 7)
|
-
|
-
|
945
|
-
|
|
|
Effect of foreign
exchange and other
|
(303)
|
(877)
|
(162)
|
(776)
|
-79%
|
|
End of period -
Excluding Thailand Joint Venture
|
32,084
|
23,577
|
32,084
|
23,577
|
36%
|
|
Pan Orient 50.01%
interest in Thailand Joint Venture Working Capital and Non-Current
Deposits
|
5,023
|
4,875
|
5,023
|
4,875
|
3%
|
|
Economic Results –
Including 50.01% Interest in Thailand Joint Venture
|
|
|
|
|
|
|
Total corporate
adjusted funds flow from (used in) operations by region (Note
5)
|
|
|
|
|
|
|
Canada
|
(1,055)
|
(1,745)
|
(3,329)
|
(3,310)
|
1%
|
|
Thailand (Note
8)
|
(17)
|
(9)
|
(47)
|
(30)
|
57%
|
|
From continuing
operations
|
(1,072)
|
(1,754)
|
(3,376)
|
(3,340)
|
1%
|
|
Indonesia –
Discontinued Operations
|
(239)
|
47
|
(400)
|
395
|
-201%
|
|
Adjusted funds flow
used in operations (excl. Thailand Joint Venture)
|
(1,311)
|
(1,707)
|
(3,776)
|
(2,945)
|
28%
|
|
Share of Thailand
Joint Venture (Note 1 & 9)
|
5,731
|
3,235
|
20,466
|
12,492
|
64%
|
|
Total corporate
adjusted funds flow from operations
|
4,420
|
1,528
|
16,690
|
9,547
|
75%
|
|
Per share –
basic and diluted
|
$
0.09
|
$ 0.03
|
$
0.33
|
$ 0.18
|
84%
|
|
Capital Expenditures
– Petroleum and Natural Gas Properties (Note 6)
|
|
|
|
|
|
|
Consolidated capital
expenditures (excl. Thailand Joint Venture)
|
-
|
-
|
-
|
85
|
-100%
|
|
Share of Thailand
Joint Venture capital expenditures
|
853
|
1,644
|
5,803
|
10,248
|
-43%
|
|
Total capital
expenditures (incl. Thailand Joint Venture)
|
853
|
1,644
|
5,803
|
10,333
|
-44%
|
|
Investment in
Thailand Joint Venture
|
|
|
|
|
|
|
Beginning of
period
|
24,636
|
26,809
|
28,329
|
34,127
|
-17%
|
|
Net income from Joint
Venture
|
4,259
|
1,294
|
12,146
|
1,906
|
537%
|
|
Other comprehensive
gain (loss) from Joint Venture
|
332
|
201
|
(2,635)
|
(635)
|
315%
|
|
Dividend
paid
|
(5,141)
|
-
|
(13,715)
|
(7,112)
|
93%
|
|
Amounts advanced to
(from) Joint Venture
|
8
|
25
|
(31)
|
43
|
-172%
|
|
End of
period
|
24,094
|
28,329
|
24,094
|
28,329
|
-15%
|
|
Three Months
Ended
December
31,
|
Year Ended
December
31,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2021
|
2020
|
2021
|
2020
|
|
Thailand
Operations
|
|
|
|
|
|
|
Economic Results –
Including 50.01% Interest in Thailand Joint Venture (Note
9)
|
|
|
|
|
|
|
Oil sales
(bbls)
|
131,207
|
137,137
|
509,195
|
444,020
|
15%
|
|
Average daily oil
sales (BOPD) by Concession L53
|
1,426
|
1,491
|
1,395
|
1,213
|
15%
|
|
Average oil sales
price, before transportation (CDN$/bbl)
|
$
98.03
|
$
56.95
|
$
84.69
|
$
54.18
|
56%
|
|
Reference Price
(volume weighted) and differential
|
|
|
|
|
|
|
Crude oil (Brent
$US/bbl)
|
$
79.73
|
$
44.62
|
$
70.78
|
$
41.73
|
70%
|
|
Exchange Rate
$US/$Cdn
|
1.27
|
1.32
|
1.27
|
1.35
|
-6%
|
|
Crude oil (Brent
$Cdn/bbl)
|
$
101.41
|
$
58.71
|
$
89.61
|
$
56.16
|
60%
|
|
Sale price / Brent
reference price
|
97%
|
97%
|
95%
|
96%
|
-2%
|
|
Adjusted funds flow
from (used in) operations (Note 5)
|
|
|
|
|
|
|
Crude oil
sales
|
12,862
|
7,810
|
43,123
|
24,055
|
79%
|
|
Government
royalty
|
(688)
|
(419)
|
(2,308)
|
(1,252)
|
84%
|
|
Transportation
expense
|
(316)
|
(314)
|
(1,208)
|
(1,005)
|
20%
|
|
Operating
expense
|
(766)
|
(1,094)
|
(2,883)
|
(3,424)
|
-16%
|
|
Field
netback
|
11,092
|
5,983
|
36,724
|
18,374
|
100%
|
|
General and
administrative expense (Note 8)
|
(283)
|
(306)
|
(911)
|
(968)
|
-6%
|
|
Interest
income
|
-
|
1
|
2
|
7
|
-71%
|
|
Foreign exchange gain
(loss)
|
2
|
4
|
(36)
|
46
|
-178%
|
|
Current income
tax
|
(5,097)
|
(2,456)
|
(15,360)
|
(4,997)
|
207%
|
|
Thailand - Adjusted
funds flow from operations
|
5,714
|
3,226
|
20,419
|
12,462
|
64%
|
|
Adjusted funds flow
from (used in) operations / barrel (CDN$/bbl) (Note
5)
|
|
|
|
|
|
|
Crude oil
sales
|
$
98.03
|
$
56.95
|
$
84.69
|
$
54.18
|
56%
|
|
Government
royalty
|
(5.24)
|
(3.06)
|
(4.53)
|
(2.82)
|
61%
|
|
Transportation
expense
|
(2.41)
|
(2.29)
|
(2.37)
|
(2.26)
|
5%
|
|
Operating
expense
|
(5.84)
|
(7.98)
|
(5.66)
|
(7.71)
|
-27%
|
|
Field
netback
|
$
84.54
|
$
43.63
|
$
72.12
|
$
41.38
|
74%
|
|
General and
administrative expense (Note 8)
|
(2.16)
|
(2.22)
|
(1.79)
|
(2.18)
|
-18%
|
|
Interest
Income
|
-
|
0.01
|
0.00
|
0.02
|
-75%
|
|
Foreign exchange gain
(loss)
|
0.02
|
0.03
|
(0.07)
|
0.10
|
-168%
|
|
Current income
tax
|
(38.85)
|
(17.91)
|
(30.17)
|
(11.25)
|
168%
|
|
Thailand – Adjusted
funds flow from operations
|
$
43.56
|
$
23.54
|
$
40.10
|
$
28.07
|
43%
|
|
Government royalty as
percentage of crude oil sales
|
5.3%
|
5.4%
|
5.4%
|
5.2%
|
0%
|
|
Income tax & SRB
as percentage of crude oil sales
|
40%
|
31%
|
36%
|
21%
|
15%
|
|
As percentage of
crude oil sales
|
|
|
|
|
|
|
Expenses -
transportation, operating, G&A and other
|
11%
|
22%
|
12%
|
22%
|
-11%
|
|
Government royalty,
SRB and income tax
|
45%
|
37%
|
41%
|
26%
|
15%
|
|
Adjusted funds flow
from operations, before interest income
|
44%
|
41%
|
47%
|
52%
|
-4%
|
|
Wells
drilled
|
|
|
|
|
|
|
Gross
|
-
|
1
|
3
|
8
|
-63%
|
|
Net
|
-
|
0.5
|
1.5
|
4.0
|
-63%
|
|
Financial
Statement Presentation
Results – Excl.
50.01% Interest in Thailand Joint Venture (Note 1)
|
|
|
|
|
|
|
General and
administrative expense (Note 8)
|
(17)
|
(9)
|
(47)
|
(30)
|
57%
|
|
Adjusted funds flow
used in consolidated operations
|
(17)
|
(9)
|
(47)
|
(30)
|
57%
|
|
Adjusted fund flow
included in Investment in Thailand Joint Venture
|
|
|
|
|
|
|
Net income from
Thailand Joint Venture
|
4,259
|
1,294
|
12,146
|
1,906
|
537%
|
|
Add back non-cash
items in net income
|
1,472
|
1,941
|
8,320
|
10,586
|
-21%
|
|
Adjusted funds flow
from Thailand Joint Venture
|
5,731
|
3,235
|
20,466
|
12,492
|
64%
|
|
Thailand – Economic
adjusted funds flow from operations (Note 9)
|
5,714
|
3,226
|
20,419
|
12,462
|
64%
|
|
Three Months
Ended
December
31,
|
Year Ended
December
31,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2021
|
2020
|
2021
|
2020
|
|
Canada
Operations
|
|
|
|
|
|
|
Interest
income
|
13
|
19
|
48
|
220
|
-78%
|
|
General and
administrative expenses (Note 8)
|
(564)
|
(546)
|
(2,036)
|
(2,070)
|
-2%
|
|
Operating expense
(Note 10)
|
(59)
|
(54)
|
(279)
|
(210)
|
33%
|
|
Stock based
compensation on restricted share units (note 11)
|
(375)
|
(156)
|
(1,001)
|
(383)
|
161%
|
|
Realized foreign
exchange gain (Note 12)
|
53
|
1
|
53
|
2
|
2550%
|
|
Unrealized foreign
exchange loss (loss) (Note 12)
|
(123)
|
(1,009)
|
(114)
|
(869)
|
-87%
|
|
Canada – Adjusted
funds flow used in operations
|
(1,055)
|
(1,745)
|
(3,329)
|
(3,310)
|
1%
|
|
Add back Thailand
general and administrative expense (note 8)
|
(17)
|
(9)
|
(47)
|
(30)
|
57%
|
|
Add back changes in
non-cash working capital, continuing operations
|
(263)
|
148
|
212
|
529
|
-60%
|
|
Add back unrealized
foreign exchange loss
|
123
|
1,009
|
114
|
869
|
-87%
|
|
Cash flow used in
operating activities, continuing operations
|
(1,212)
|
(597)
|
(3,050)
|
(1,942)
|
-57%
|
|
Indonesia –
Discontinued Operations
|
|
|
|
|
|
|
General and
administrative expense (Note 8)
|
(45)
|
(61)
|
(212)
|
(284)
|
-25%
|
|
Impairment recovery
(expense) (Note 13)
|
(164)
|
1
|
(165)
|
675
|
-124%
|
|
Foreign exchange gain
(loss)
|
(30)
|
107
|
(23)
|
4
|
-675%
|
|
Indonesia – Adjusted
funds flow from (used in) operations
|
(239)
|
47
|
(400)
|
395
|
-201%
|
|
Add back changes in
non-cash working capital, discontinued operations
|
366
|
(93)
|
383
|
(1,079)
|
-135%
|
|
Settlement of
decommissioning provision
|
(136)
|
-
|
(136)
|
-
|
|
|
Cash flow used in
operating activities, discontinued operations
|
(9)
|
(46)
|
(153)
|
(684)
|
-122%
|
|
|
|
|
|
Year Ended
December
31,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2021
|
2020
|
|
RESERVES AND
CONTINGENT RESOURCES
|
|
|
|
|
Onshore Thailand –
Concession L53 (50.01% economic interest) (Note 1)
|
(Note
15)
|
(Note
14)
|
|
|
Proved oil reserves
(thousands of barrels)
|
1,540
|
1,418
|
9%
|
|
Proved plus probable
oil reserves (thousands of barrels)
|
2,313
|
2,377
|
-3%
|
|
Net present value of
proved + probable reserves, after tax discounted at 10%
|
54,095
|
38,888
|
39%
|
|
|
Per Pan Orient share
– basic (Note 16)
|
$
1.09
|
$
0.75
|
45%
|
|
Canada (Pan Orient's
71.8% share of the oil sands leases of Andora at Sawn Lake,
Alberta)
|
(Note
17)
|
|
|
|
INTERNATIONAL
INTERESTS AT DECEMBER 31, 2021
|
|
All amounts
reflect Pan Orient's economic
interest
|
Status
|
Net Square
Kilometers
|
December 31,
2021
Financial
Commitments
(Cdn
thousands)
|
2021 Avg.
Production
(BOPD)
|
P+P
Reserves
(thousands of barrels)
|
|
Onshore Thailand
Concession (Recorded in Investment in Joint
Venture)
|
|
L53/48 (Pan Orient
50.01% ownership in
Pan Orient Energy (Siam) Ltd. (Note 1 &
18)
|
Partially
developed
|
13.66
|
-
|
1,395
|
2,313
|
|
Onshore Indonesia PSC
(Consolidated subsidiary)
|
|
|
|
|
|
|
East Jabung PSC,
South Sumatra (49%
interest & non-operator) (Note 3)
|
Expired
|
|
|
|
|
|
|
(1)
|
Pan Orient holds a
50.01% equity interest in Pan Orient Energy (Siam) Ltd. as a joint
arrangement where the Company shares joint
control with the 49.99% equity interest holder. The resulting
joint arrangement is classified as a Joint Venture under IFRS 11
and is
accounted for using the equity method of accounting where Pan
Orient's 50.01% equity interest in the assets, liabilities, working
capital,
operations and capital expenditures of Pan Orient Energy (Siam)
Ltd. are recorded in Investment in Thailand Joint
Venture.
|
|
(2)
|
As set out in the
Consolidated Statements of Cash Flows in the Consolidated Financial
Statements of Pan Orient Energy Corp.
|
|
(3)
|
The East Jabung
Production Sharing Contract ("PSC") expired in January 2020 and the
operator is continuing to complete the final
steps to be taken for formal approval of the expiry from the
Government of Indonesia, including reclamation requirements. Pan
Orient
is withdrawing from operations in Indonesia and the office in
Jakarta was closed March 31, 2020. For accounting purposes,
the operation
in Indonesia for accounting purposes is considered a discontinued
operation since 2020.
|
|
(4)
|
Refer to Commitments
note disclosure of the December 31, 2021 and December 31, 2020
Consolidated Financial Statements.
|
|
(5)
|
Total corporate
adjusted funds flow from operations is cash flow from operating
activities prior to changes in non-cash working capital,
unrealized foreign exchange gain or loss plus the corresponding
amount from Pan Orient's 50.01% interest in the Thailand Joint
Venture
which is recorded in Joint Venture for financial statement
purposes. This measure is used by management to analyze
operating
performance and leverage. Adjusted 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. Adjusted 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.
|
|
(6)
|
Cost of capital
expenditures excluded decommissioning costs and the impact of
changes in foreign exchange.
|
|
(7)
|
In December 2020, the
Company entered into an Automatic Share Purchase Plan ("ASPP"),
which permits an independent broker to
repurchase shares during certain blackout periods under the
Company's normal course issuer bid, subject to agreed trading
parameters
and other instructions for such purchases. At December 31,
2021, the Company recognized a provision of $nil (December 31, 2020
-
$0.9 mill) in accounts payable and accrued liabilities as an
estimate for the number of shares that may be repurchased during
potential
blackout periods at the maximum share price under the
ASPP.
|
|
(8)
|
General &
administrative expenses excluding non-cash accretion expense. The
nominal amount of G&A shown in the three months and
years ended December 31, 2021 and 2020 for Thailand operations
related to G&A of the holding company of Pan Orient Energy
(Siam)
Ltd.
|
|
(9)
|
For the purpose of
providing more meaningful economic results from operations for
Thailand, the amounts presented include 50.01%
of results of the Thailand Joint Venture. Pan Orient has a
50.01% ownership interest in Pan Orient Energy (Siam) Ltd., but
does not
have any direct interest in, or control over, the crude oil
reserves, operations or working capital of on-shore Concession
L53.
|
|
(10)
|
Operating expense
related to Andora's suspended demonstration project facility and
wellpair at Sawn Lake Central. These expenses
were previously capitalized prior to the E&E impairment
recorded during the first quarter of 2020.
|
|
(11)
|
The Company granted
1,050,000 and 520,000 restricted share units ("RSUs") to directors,
senior management, employees and
consultant on May 19, 2020 and May 14, 2021, respectively. At
December 31, 2021, 599,998 RSUs are outstanding. The
amount
represents the stock-based compensation expenses.
|
|
(12)
|
Realized and
unrealized foreign exchange gain or loss mainly related to the U.S.
dollars denominated cash balances held in Canada.
|
|
(13)
|
Adjustment to
previously booked capital expenditures at East Jabung
PSC.
|
|
(14)
|
Thailand reserves as
at December 31, 2020 as evaluated by Sproule International Limited
of Calgary assessed at forecast crude oil
reference prices and costs. The US$ reference price for crude oil
per barrel (US$ UK Brent per barrel) in the evaluation is $48.00
for
2021, $50.00 for 2022, $55.00 for 2023, $56.10 for 2024, $57.22 for
2025 and prices increase at 2.0% per year
thereafter. Foreign
exchange rate used of Cdn$1=US$0.77. The engineered values
disclosed may not represent fair market value.
|
|
(15)
|
Thailand reserves as
at December 31, 2021 as evaluated by Sproule International Limited
of Calgary assessed at forecast crude oil
reference prices and costs. The US$ reference price for crude oil
per barrel (US$ UK Brent per barrel) in the evaluation is $75.00
for
2022, $72.00 for 2023, $70.00 for 2024, $71.40 for 2025, $72.83 for
2026 and prices increase at 2.0% per year
thereafter. Foreign
exchange rate used of Cdn$1=US$0.80. The engineered values
disclosed may not represent fair market value.
|
|
(16)
|
Per share values
calculated based on 49,793,907 and 51,744,007 Pan Orient Shares
outstanding at December 31, 2021 and 2020,
respectively.
|
|
(17)
|
The evaluation of
Andora's contingent resources of the oil sands project at Sawn Lake
Alberta, Canada as at September 30, 2019 was
conducted by Sproule Associates Limited. Andora's unrisked
"Best Estimate" contingent resources were 227.8 million barrels
(163.6
million net to Pan Orient's interest in Andora) of recoverable
bitumen as at September 30, 2019 using forecast prices at September
30,
2019. At March 31, 2020 low commodity prices indicated there was no
expected commercial development at Sawn Lake in that market
and Andora recorded a full non-cash net impairment charge on the
Sawn Lake Exploration and Evaluation assets
|
|
(18)
|
At December 31, 2021
Concession L53/48 in Thailand consisted of 27.32 square kilometers
associated with the L53-A, L53-B, L53-D,
L53-G, L53-DD and L53-AA South and L53-AA fields held through
production licenses (with a 20 year primary term ending in 2036
plus
an additional 10 year renewal period that can be applied
for).
|
|
(19)
|
Tables may not add
due to rounding.
|
SOURCE Pan Orient Energy Corp.