VANCOUVER, BC, Nov. 25, 2020 /CNW/ - Renaissance Oil Corp. ("Renaissance" or the "Company") (TSXV: ROE) (OTCQB: RNSFF) reports its third quarter 2020 results. All dollar figures are in Canadian dollars, unless otherwise noted.
RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020
- Renaissance closed the option agreement for a 50% working interest, in all rights from surface to basement, in a large Petroleum Licence, comprising 2.45 million acres in the deep Kavango sedimentary basin, in Botswana, Africa (the "Licence"); and
- Revenue and operating netback in the third quarter of 2020 were $3.3 million and $0.4 million respectively, with production of 1,206 boe/d in line with previous quarters.
| | | | Three Months Ended |
| | | | Sep 30, 2020 | Jun 30, 2020 | Sep 30, 2019 |
| Production | | | | |
| | Crude oil (bbl/d) | 348 | 364 | 381 |
| | Natural gas (mcf/d) | 5,146 | 5,101 | 5,300 |
| Total (Boe/d) | | 1,206 | 1,215 | 1,264 |
| | | | | | |
| Prices | | | | |
| | Crude oil ($/bbl) | 49.91 | 30.32 | 77.31 |
| | Natural gas ($/mcf) | 3.87 | 3.21 | 4.42 |
| | | | | | |
| Revenue | | 3,264,029 | 2,551,370 | 4,832,555 |
| | Royalties | | (2,626,206) | (1,967,756) | (3,747,438) |
| | Operating costs | (229,374) | (240,730) | (238,742) |
| Operating netback | 408,449 | 342,884 | 846,375 |
| | | | | | |
| Net income (loss) | (1,534,924) | (2,163,374) | (266,995) |
| | Per share, basic & diluted | (0.00) | (0.01) | (0.00) |
| | | | | | |
| Funds flow from operations1 | (220,464) | (416,812) | (70,149) |
| | Per share, basic & diluted1 | 0.00 | 0.00 | (0.00) |
| 1 See Non-GAAP Measures Section 13 of the MD&A | | |
PRESIDENT'S MESSAGE
In light of the ongoing political and regulatory challenges in Mexico, the Company determined that until government policies become more favorable, it is in the best interest of shareholders for management to diversify Renaissance's interests outside of Mexico, while continuing to maintain its existing, high potential assets, within Mexico. On June 16, 2020, the Company entered into a binding letter agreement (the "Letter Agreement") to acquire an option for a 50% working interest, in all rights from surface to basement, for the Botswana Licence. The Company made a cash payment of $100,000 and issued 30 million shares pursuant to the terms of the option agreement.
This opportunity in Botswana provides Renaissance with an important and potentially high impact oil and gas play, through the opening of the Kavango basin, a previously unrecognized, deep Permian aged sedimentary basin in northwestern Botswana and northeastern Namibia. Botswana is considered a stable, industry friendly jurisdiction which offers some of the most attractive fiscal terms worldwide.
Renaissance, and its partner LUKOIL, continue to negotiate towards the development plan for the Amatitln block for the commercialization of all prospective zones, with particular emphasis on the Upper Jurassic formations. Specifically, management is progressing the migration of Amatitln from a service contract to a mutually beneficial contract structure for all partners.
The Company produced an average of 1,206 boe/d at the Mundo Nuevo and Malva blocks in Chiapas during the third quarter of 2020, which has been consistent with previous production levels while Topn-3 has been shut in. The global impact of the COVID-19 pandemic as well as declines in spot prices for oil and gas have fostered a great deal of uncertainty as to the health of the global economy over the near term. The Company continues to pursue various measures of relief, provided by Mexican oil and gas regulations, to required work programs in Chiapas due to the operational and logistical challenges created by the COVID-19 pandemic.
Renaissance has deferred royalty payments due since September 2019. Management continues discussions with funding sources in Europe, North America and Mexico, however, there is no assurance further financing efforts will be successful. Failure to make the royalty payments may result in penalties and could jeopardize the license agreements on the Company's Chiapas properties.
For further information, please visit our website at www.renaissanceoil.com.
RENAISSANCE OIL CORP.
Per: Craig Steinke
Chief Executive Officer
This news release should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2020 and related management's discussion and analysis. These filings are available for review on SEDAR at www.sedar.com.