TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin Islands, May 29, 2013 /CNW/ - Orca Exploration Group Inc. ("Orca" or "the Company") announces its results for the first quarter ended 31 March 2013.
Highlights
- During the quarter there were no payments received from TANESCO. At 31 March 2012, TANESCO owed the Company US$48.8 million (including arrears of US$44.0 million) compared to US$33.3 million (including arrears of US$28.4 million) as at 31 December 2012.
- Subsequent to the end of the quarter, the Company has received US$19.8 million from TANESCO and current arrears total US$29.1 million.
- Additional Gas sales continued at capacity during Q1 averaging 61.6 MMcfd being an increase of 16% over the prior period (Q1 2012: 52.9 MMcfd) and up 2% over Q4 2012 (60.2 MMcfd).
- Industrial sales volume increased by 7% to 13.1 MMcfd from 12.2 MMcfd in Q4 2012. Power sector sales volumes essentially unchanged over Q4 2012 at 48.5 MMcfd.
- Average Industrial gas price for the quarter was US$7.78/mcf down 9% from Q4 2012 (US$8.56/mcf) a result of applying contract terms applicable for 2013 as agreed with the largest industrial off-taker of natural gas which took effect in January 2013, together with the sales mix.
- Power sector gas price for the quarter was US$3.55/mcf down 2% over Q4 2012 price of US$3.61/mcf, a result of slightly lower volumes to the power sector which combined for a lower price under the terms of the PGSA.
- Capital cost pools were depleted in Q4 2012, which resulted in a significant reduction in net revenues, earnings and funds from operations. Accordingly, revenue of US$13.2 million was down 36% over Q4 2012 (US$20.7 million).
- Funds from operations before working capital changes of US$8.7 million (US$0.25 per share diluted) were down 26% from Q4 2012 (US$11.7 million or US$0.33 per share diluted).
- Q1 earnings were US$2.95 million or US$0.08 per share diluted, down 47% from Q4 2012 (US$5.6 million or US$0.16 per share diluted).
- Working capital increased by 16% to US$54.8 million at 31 March 2013 (US$46.8 million as at 31 December 2012) as a consequence of negligible capital expenditures during the quarter.
- Subsequent to the end of the quarter, in April 2013, the Company tabled a proposed amendment to the Songo Songo PSA for review and consideration by the Government of Tanzania. No further progress was made on the GNT issues.
- In April 2013, the Company commenced negotiations with TPDC as aggregator for the sale of incremental gas volumes of up to approximately 120 MMcfd.
- In May 2013, the Government of Tanzania tabled a second draft Natural Gas Policy in Parliament which limited the policy to mid- and down-stream issues, indicating a separate policy was being prepared on upstream issues.
- Development of Songo Songo production capacity, including workovers of existing wells and the drilling of an additional production well SS-12, continues to be on hold until TANESCO arrears are fully paid, GNT issues are fully resolved and acceptable commercial terms for the sale of incremental gas has been agreed.
Financial and Operating Highlights
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| Three months ended/As at |
31-Mar-2013 |
31-Mar- 2012 |
Change |
31-Dec-2012 |
Change |
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| Financial (US$000 except where otherwise stated) |
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| Revenue |
13,197 |
17,207 |
(23%) |
20,713 |
(36%) |
| Profit before taxation |
4,660 |
10,154 |
(54%) |
10,319 |
(55%) |
| Operating netback (US$/mcf) |
2.15 |
2.55 |
(16%) |
3.01 |
(29%) |
| Cash and cash equivalents |
13,421 |
30,635 |
(56%) |
16,047 |
(16%) |
| Working capital (1) |
54,757 |
47,063 |
16% |
46,819 |
17% |
| Shareholders' equity |
128,885 |
113,051 |
14% |
125,935 |
2% |
| Total comprehensive income |
2,950 |
6,392 |
(54%) |
5,593 |
(47%) |
| Earnings per share - basic (US$) |
0.08 |
0.19 |
(58%) |
0.16 |
(50%) |
| Earnings per share - diluted (US$) |
0.08 |
0.18 |
(56%) |
0.16 |
(50%) |
| Funds flow from operating activities |
8,699 |
9,888 |
(12%) |
11,699 |
(26%) |
| Funds per share from operating activities - basic (US$) |
0.25 |
0.28 |
(11%) |
0.34 |
(26%) |
| Funds per share from operating activities - diluted (US$) |
0.25 |
0.28 |
(11%) |
0.33 |
(24%) |
| Net cash flows from operating activities |
(5,748) |
6,653 |
(186%) |
9,138 |
(163%) |
| Net cash flows per share from operating activities - basic (US$) |
(0.17) |
0.19 |
(189%) |
0.26 |
(165%) |
| Net cash flows per share from operating activities - diluted (US$) |
(0.16) |
0.19 |
(184%) |
0.26 |
(162%) |
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| Outstanding Shares ('000) |
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| Class A shares |
1,751 |
1,751 |
0% |
1,751 |
0% |
| Class B shares |
32,892 |
32,743 |
0% |
32,892 |
0% |
| Options |
1,922 |
2,257 |
(15%) |
1,922 |
0% |
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| Operating |
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| Additional Gas sold (MMcf) - industrial |
1,176 |
835 |
41% |
1,127 |
4% |
| Additional Gas sold (MMcf) - power |
4,363 |
3,973 |
10% |
4,417 |
(1%) |
| Additional Gas sold (MMcfd) - industrial |
13.1 |
9.2 |
42% |
12.2 |
7% |
| Additional Gas sold (MMcfd) - power |
48.5 |
43.7 |
11% |
48.0 |
1% |
| Additional Gas sold (MMcfd) |
61.6 |
52.9 |
16% |
60.2 |
2% |
| Average price per mcf (US$) - industrial |
7.78 |
9.63 |
(19%) |
8.56 |
(9%) |
| Average price per mcf (US$) - power |
3.55 |
2.72 |
30% |
3.61 |
(2%) |
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- Working capital as at 31 March 2013 includes a TANESCO receivable of US$48.8 million (31 December 2012: US$33.3 million) and a net Songas receivable of US$5.5 million (31 December 2012: US$5.9 million). Subsequent to the end of the quarter, TANESCO paid US$19.8 million, and the current TANESCO arrears total US$29.1 million.
Condensed Consolidated Interim Statement of Comprehensive Income (Unaudited)
ORCA EXPLORATION GROUP INC.
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Three months ended |
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| US$'000s except per share amounts |
NOTE |
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31 Mar 2013 |
31 Mar 2012 |
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| Revenue |
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13,197 |
17,207 |
| Cost of sales |
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| Production and distribution expenses |
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(794) |
(1,316) |
| Depletion expense |
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(2,722) |
(1,938) |
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9,681 |
13,953 |
| General and administrative expenses |
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(3,530) |
(3,664) |
| Net finance costs |
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(1,491) |
(135) |
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| Profit before taxation |
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4,660 |
10,154 |
| Taxation |
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(1,886) |
(3,762) |
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| Profit after taxation |
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2,774 |
6,392 |
| Foreign currency translation gain from foreign operations |
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176 |
- |
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| Total comprehensive income for the period |
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2,950 |
6,392 |
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| Earnings per share |
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| Basic (US$) |
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0.08 |
0.19 |
| Diluted (US$) |
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0.08 |
0.18 |
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See accompanying notes to the condensed consolidated interim financial statements.
Condensed Consolidated Interim Statement of Financial Position (Unaudited)
ORCA EXPLORATION GROUP INC.
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AS AT |
| US$'000s |
NOTE |
31-Mar 2013 |
31-Dec 2012 |
| ASSETS |
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| Current Assets |
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| Cash and cash equivalents |
|
13,421 |
16,047 |
| Trade and other receivables |
|
93,267 |
73,495 |
| Taxation receivable |
|
14,371 |
14,692 |
| Prepayments |
|
208 |
246 |
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121,267 |
104,480 |
| Non-Current Assets |
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| Exploration and evaluation assets |
|
5,722 |
5,720 |
| Property, plant and equipment |
|
99,503 |
102,044 |
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105,225 |
107,764 |
| Total Assets |
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226,492 |
212,244 |
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| EQUITY AND LIABILITIES |
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| Current Liabilities |
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| Trade and other payables |
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52,398 |
45,496 |
| Bank loan |
|
9,058 |
5,842 |
| Taxation payable |
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5,053 |
6,322 |
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66,509 |
57,660 |
| Non-Current Liabilities |
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| Deferred income taxes |
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19,813 |
20,399 |
| Deferred additional profits tax |
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11,285 |
8,250 |
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31,098 |
28,649 |
| Total Liabilities |
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97,607 |
86,309 |
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| Equity |
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| Capital stock |
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84,983 |
84,983 |
| Contributed surplus |
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6,753 |
6,753 |
| Accumulated other comprehensive income |
|
265 |
89 |
| Accumulated income |
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36,884 |
34,110 |
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128,885 |
125,935 |
| Total Equity and Liabilities |
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226,492 |
212,244 |
See accompanying notes to the condensed consolidated interim financial statements.
Future operations (Note 1)
Contractual obligations and committed capital investment (Note 13)
Contingencies (Note 14)
The consolidated condensed interim financial statements were approved by the Board of Directors on 29 May 2013.
Condensed Consolidated Interim Statement of Cash Flows (Unaudited)
ORCA EXPLORATION GROUP INC.
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Three months ended |
| US$'000s |
NOTE |
31 Mar 2013 |
31 Mar 2012 |
| CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES |
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| Profit after taxation |
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2,774 |
6,392 |
| Adjustment for: |
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Depletion and depreciation |
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2,809 |
2,019 |
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Impairment of assets |
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- |
- |
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Stock-based compensation |
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(271) |
6 |
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Deferred income taxes |
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(582) |
722 |
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Deferred additional profits tax |
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3,035 |
672 |
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Interest received |
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- |
(1) |
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Unrealised loss on foreign exchange |
|
934 |
78 |
| Funds flow from operating activities |
|
8,699 |
9,888 |
| Increase in trade and other receivables |
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(20,928) |
(2,118) |
| Decrease/Increase in taxation receivable |
|
320 |
(3,828) |
| Decrease in prepayments |
|
38 |
(40) |
| Increase in trade and other payables |
|
7,392 |
534 |
| Increase in taxation payable |
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(1,269) |
2,217 |
| Net cash flows from operating activities |
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(5,748) |
6,653 |
| CASH FLOWS USED IN INVESTING ACTIVITIES |
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| Exploration and evaluation expenditures |
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(2) |
(1,578) |
| Property, plant and equipment expenditures |
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(268) |
(17,170) |
| Interest received |
|
- |
1 |
| Increase/(decrease) in trade and other payables |
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- |
8,072 |
| Net cash used in investing activities |
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(270) |
(10,675) |
| CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES |
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| Bank loan proceeds |
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4,000 |
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| Bank loan repayments |
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(785) |
- |
| Net cash flow from/ (used in) financing activities |
|
3,215 |
- |
| Decrease in cash and cash equivalents |
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(2,803) |
(4,022) |
| Cash and cash equivalents at the beginning of the period |
|
16,047 |
34,680 |
| Effect of change in foreign exchange |
|
177 |
(23) |
| Cash and cash equivalents at the end of the period |
|
13,421 |
30,635 |
See accompanying notes to the condensed consolidated interim financial statements.
Condensed Consolidated Interim Statement of Changes in Shareholders' Equity (Unaudited)
ORCA EXPLORATION GROUP INC.
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| US$'000 |
Capital stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
| Note |
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| Balance as at 1 January 2013 |
84,983 |
6,753 |
89 |
34,110 |
125,935 |
| Foreign currency translation adjustment on foreign operations |
- |
- |
176 |
- |
176 |
| Total comprehensive income for the period |
- |
- |
- |
2,774 |
2,774 |
| Balance as at 31 March 2013 |
84,983 |
6,753 |
265 |
36,884 |
128,885 |
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| US$'000 |
Capital stock |
Contributed
surplus |
Cumulative
translation
adjustment |
Accumulated
income |
Total |
| Balance as at 1 January 2012 |
84,610 |
6,268 |
- |
15,781 |
106,659 |
| Foreign currency translation adjustment on foreign operations |
- |
- |
- |
- |
- |
| Total comprehensive income for the period |
- |
- |
- |
6,392 |
6,392 |
| Balance as at 31 March 2012 |
84,610 |
6,268 |
- |
22,173 |
113,051 |
Orca Exploration Group Inc.
Orca Exploration Group Inc. is an international public company engaged in natural gas exploration, development and supply in Tanzania through the wholly-owned subsidiary PanAfrican Energy Tanzania Limited, as well as oil and gas appraisal in Italy. Orca trades on the TSXV under the trading symbols ORC.B and ORC.A. The complete condensed interim consolidated financial statements and notes, as well as Management's Discussion & Analysis may be found on the Company's website www.orcaexploration.com or on www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains forward-looking statements. More particularly, this press release contains statements concerning, but not limited to, incremental gas sales volumes; status of development of the Songo Songo production capacity; the terms of the Government of Tanzania's draft Natural Gas Policy; and the Company's strategic plans. Although management believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, operational, competitive, political and social uncertainties and contingencies. Many factors could cause Orca's actual results to differ materially from those expressed or implied in any forward-looking statements made by Orca.
These forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Orca's control, including, but not limited to, the impact of general economic conditions in the areas in which Orca operates; civil unrest; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; increased competition; the lack of availability of qualified personnel or management; fluctuations in commodity prices; foreign exchange or interest rates; stock market volatility; competition for, among other things, capital, drilling equipment and skilled personnel; failure to obtain required equipment for drilling; delays in drilling plans; failure to obtain expected results from drilling of wells; effect of changes to the PSA on the Company; changes in laws; imprecision in reserve estimates; the production and growth potential of the Company's assets; obtaining required approvals of regulatory authorities; risks associated with negotiating with foreign governments; ability to access sufficient capital; and risk that the Company will not be able to fulfill its obligations. In addition there are risks and uncertainties associated with oil and gas operations, therefore Orca's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits that Orca will derive therefrom.
Such forward-looking statements are based on certain assumptions made by Orca in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors Orca believes are appropriate in the circumstances, including, but are not limited to, the ability of Orca to add production at a consistent rate; infrastructure capacity; commodity prices will not deteriorate significantly; the ability of Orca to obtain equipment in a timely manner to carry out exploration, development and exploitation activities; future capital expenditures; availability of skilled labour; timing and amount of capital expenditures; uninterrupted access to infrastructure; the impact of increasing competition; conditions in general economic and financial markets; effects of regulation by governmental agencies; that the Company will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; current or, where applicable, proposed industry conditions, laws and regulations will continue in effect or as anticipated as described herein; and other matters.
The forward-looking statements contained in this press release are made as of the date hereof and Orca undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE: Orca Exploration Group Inc.
