TSX-V: ORC.A, ORC.B
TORTOLA, British Virgin Islands, Aug. 28, 2013 /CNW/ - Orca Exploration
Group Inc. ("Orca" or "the Company") announces its results for the
second quarter ended 30th June 2013.
Highlights
-
A total of US$35.2 million has been received from TANESCO since the end
of Q1 2013 - US$19.8 million during Q2 and a subsequent payment of
US$15.4 million in July 2013.
-
At 30 June 2013, TANESCO owed the Company US$46.3 million including
arrears of US$39.7 million (31 March 2013: US$48.8 million, including
arrears of US$44.0 million). Current TANESCO arrears are US$31.2
million.
-
Additional Gas sales continued near field capacity during Q2 averaging
58.4 MMcfd being an increase of 6% over the prior period (Q2 2012:
54.9 MMcfd) and down 5% over Q1 2013 (61.6 MMcfd).
-
Industrial sales volume decreased by 11% to 11.7 MMcfd from 13.1 MMcfd
in Q1 2013. Power sector sales volumes during Q2 averaged 46.7 MMcfd
down 4% over Q1 2013 at 48.5 MMcfd.
-
Average Industrial gas price for the quarter was US$8.60/mcf up 11% from
Q1 2013 (US$7.78/mcf) and Power sector gas prices averaged US$3.63/mcf
for the quarter up 2% over Q1 2013 price of US$3.55/mcf.
-
Cost pools were depleted in Q4 2012, which together with capital
spending of only US$0.1 million adding to cost pools, constraining
earnings and funds from operations. Accordingly, revenue of US$12.0
million was down 9% over Q1 2013 (US$13.2 million).
-
Stronger gas sales prices and cost reductions drove Q2 funds from
operations before working capital changes of US$10.5 million (US$0.30
per share diluted), up 20% from Q1 2013 (US$8.7 million or US$0.25 per
share diluted).
-
Q2 posted a loss of US$6.8 million or US$0.19 per share diluted, down
331% from Q1 2013 earnings of US$3.0 million or US$0.08 per share
diluted. Whilst the Company continues to believe it will collect the
full TANESCO receivable, the outstanding amount has been discounted by
US$7.9 million reflecting the time value of money resulting from delays
in collection, such charge applied directly to earnings.
-
Working capital decreased by 59% during the quarter to US$22.5 million
as at 30 June 2013 (US$54.8 million as at 31 March 2013) as a
consequence of reclassifying that portion of TANESCO receivables in
excess of 60 days as a long-term receivable and providing US$7.1
million for doubtful accounts.
-
Substantive negotiations to conclude an agreed form of amendment to the
Songo Songo Production Sharing Agreement (PSA) and resolution of the
remaining issues continued with the Government Negotiating Team (GNT) -
the Company has committed to work together with the Government to
expedite the conclusion of these negotiations.
-
Active negotiations which commenced in April 2013 with the Tanzania
Petroleum Development Corporation (TPDC) in its capacity as gas
aggregator and continued during the quarter and subsequent regarding a
long-term sales agreement for incremental gas volumes of up to
approximately 110 MMcfd.
-
The Company has continued in good faith during the quarter preparing a
full field development plan for Songo Songo whilst issues are being
resolved, and in July 2013 submitted a plan to the Ministry of Energy
and Minerals. The execution of the plan, including workovers of
existing wells and the drilling of an additional production well SS-12,
continue to be on hold until TANESCO arrears and surety of payments is
addressed, GNT issues are fully resolved and acceptable commercial
terms for the sale of incremental gas has been agreed.
Financial and Operating Highlights
|
|
|
|
|
|
|
|
Three months ended/As at
|
30-Jun-2013
|
30-Jun- 2012
|
% Change
|
31-Mar 2013
|
% Change
|
|
|
|
|
|
|
|
|
Financial (US$000 except where otherwise stated)
|
|
|
|
|
|
|
Revenue
|
11,996
|
16,914
|
(29)
|
13,197
|
(9)
|
|
Profit/(loss) before taxation
|
(8,509)
|
8,672
|
(198)
|
4,660
|
(283)
|
|
Operating netback (US$/mcf)
|
2.10
|
2.56
|
(18)
|
2.15
|
(2)
|
|
Cash and cash equivalents
|
18,752
|
20,194
|
(7)
|
13,421
|
40
|
|
Working capital (1)
|
22,527
|
38,689
|
(42)
|
54,758
|
(59)
|
|
Shareholders' equity
|
122,068
|
118,938
|
3
|
128,885
|
(5)
|
|
Total comprehensive income
|
(6,817)
|
5,167
|
(232)
|
2,950
|
(331)
|
|
Earnings per share - basic (US$)
|
(0.19)
|
0.15
|
(227)
|
0.08
|
(338)
|
|
Earnings per share - diluted (US$)
|
(0.19)
|
0.15
|
(227)
|
0.08
|
(338)
|
|
Funds flow from operating activities
|
10,546
|
9,982
|
6
|
8,699
|
21
|
|
Funds per share from operating activities - basic (US$)
|
0.30
|
0.29
|
7
|
0.25
|
20
|
|
Funds per share from operating activities - diluted (US$)
|
0.30
|
0.28
|
7
|
0.25
|
20
|
|
Net cash flows from operating activities
|
8,101
|
5,689
|
42
|
(5,748)
|
241
|
|
Net cash flows per share from operating activities - basic (US$)
|
0.23
|
0.16
|
44
|
(0.17)
|
235
|
|
Net cash flows per share from operating activities - diluted (US$)
|
0.23
|
0.16
|
44
|
(0.16)
|
244
|
|
|
|
|
|
|
|
|
Outstanding Shares ('000)
|
|
|
|
|
|
|
Class A shares
|
1,751
|
1,751
|
0
|
1,751
|
0
|
|
Class B shares
|
32,892
|
32,892
|
0
|
32,892
|
0
|
|
Options
|
1,922
|
2,172
|
12
|
1,922
|
0
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
Additional Gas sold (MMcf) - industrial
|
1,067
|
829
|
29
|
1,176
|
(9)
|
|
Additional Gas sold (MMcf) - power
|
4,250
|
4,172
|
2
|
4,363
|
(3)
|
|
Additional Gas sold (MMcfd) - industrial
|
11.7
|
9.1
|
29
|
13.1
|
(11)
|
|
Additional Gas sold (MMcfd) - power
|
46.7
|
45.8
|
2
|
48.5
|
(4)
|
|
Additional Gas sold (MMcfd)
|
58.4
|
54.9
|
6
|
61.6
|
(5)
|
|
Average price per mcf (US$) - industrial
|
8.60
|
10.14
|
(15)
|
7.78
|
11
|
|
Average price per mcf (US$) - power
|
3.63
|
2.80
|
30
|
3.55
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Working capital as at 30 June 2013 includes a TANESCO receivable of
US$11.5 million (31 December 2012: US$33.3 million) and a net Songas
receivable of US$5.2 million (31 December 2012: US$5.9 million). Given
the payment pattern, US$34.9 million of TANESCO receivables in excess
of 60 days have been discounted by US$7.9 million and classified as
long-term receivables. Total long and short-term TANESCO receivables as
at 30 June 2013 total US$46.3 million prior to discounting. Subsequent
to the end of the quarter, TANESCO paid US$15.4 million, and the
current TANESCO arrears total US$31.2 million.
Condensed Consolidated Interim Statement of Comprehensive Income/(Loss)
(Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|
|
|
|
|
|
|
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|
US$'000s except per share amounts
|
NOTE
|
|
30 Jun
2013
|
30 Jun 2012
|
30 Jun
2013
|
30 Jun 2012
|
|
|
|
|
|
|
|
|
|
Revenue
|
4
|
|
11,996
|
16,915
|
25,193
|
34,121
|
|
Cost of sales
|
|
|
|
|
|
|
|
Production and distribution expenses
|
|
|
(620)
|
(1,813)
|
(1,414)
|
(3,127)
|
|
Depletion expense
|
9
|
|
(2,612)
|
(2,017)
|
(5,335)
|
(3,955)
|
|
|
|
|
|
|
|
|
|
|
|
|
8,764
|
13,085
|
18,444
|
27,039
|
|
General and administrative expenses
|
|
|
(3,430)
|
(4,362)
|
(6,960)
|
(8,026)
|
|
Provision for doubtful accounts
|
7
|
|
(7,100)
|
-
|
(7,100)
|
-
|
|
Net finance costs
|
5
|
|
(6,743)
|
(51)
|
(8,233)
|
(188)
|
|
|
|
|
|
|
|
|
|
Profit/(Loss) before taxation
|
|
|
(8,509)
|
8,672
|
(3,849)
|
18,825
|
|
Taxation
|
6
|
|
1,943
|
(3,505)
|
57
|
(7,266)
|
|
|
|
|
|
|
|
|
|
Profit/(Loss) after taxation
|
|
|
(6,566)
|
5,167
|
(3,792)
|
11,559
|
|
Foreign currency translation gain from foreign operations
|
|
|
(251)
|
-
|
(75)
|
-
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/(loss) for the period
|
|
|
(6,817)
|
5,167
|
(3,867)
|
11,559
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic (US$)
|
12
|
|
(0.19)
|
0.15
|
(0.11)
|
0.33
|
|
Diluted (US$)
|
12
|
|
(0.19)
|
0.15
|
(0.11)
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed consolidated interim financial
statements.
Condensed Consolidated Interim Statement of Financial Position
(Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
AS AT
|
|
US$'000s
|
NOTE
|
30 Jun 2013
|
31 Dec 2012
|
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
|
18,752
|
16,047
|
|
Trade and other receivables
|
7
|
48,852
|
73,495
|
|
Taxation receivable
|
6
|
14,285
|
14,692
|
|
Prepayments
|
|
429
|
246
|
|
|
|
82,318
|
104,480
|
|
Non-Current Assets
|
|
|
|
|
Long-term trade receivable
|
7
|
26,979
|
-
|
|
Exploration and evaluation assets
|
8
|
5,722
|
5,720
|
|
Property, plant and equipment
|
9
|
96,948
|
102,044
|
|
|
|
129,649
|
107,764
|
|
Total Assets
|
|
211,967
|
212,244
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Trade and other payables
|
10
|
49,758
|
45,496
|
|
Bank loan
|
11
|
6,603
|
5,842
|
|
Taxation payable
|
|
3,430
|
6,322
|
|
|
|
59,791
|
57,660
|
|
Non-Current Liabilities
|
|
|
|
|
Deferred income taxes
|
6
|
15,432
|
20,399
|
|
Deferred additional profits tax
|
6
|
14,676
|
8,250
|
|
|
|
30,108
|
28,649
|
|
Total Liabilities
|
|
89,899
|
86,309
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Capital stock
|
|
84,983
|
84,983
|
|
Contributed surplus
|
|
6,753
|
6,753
|
|
Accumulated other comprehensive income
|
|
14
|
89
|
|
Accumulated income
|
|
30,318
|
34,110
|
|
|
|
122,068
|
125,935
|
|
Total Equity and Liabilities
|
|
211,967
|
212,244
|
See accompanying notes to the condensed consolidated interim financial
statements.
Future operations (Note 1)
Contractual obligations and committed capital investment (Note 13)
Contingencies (Note 14)
The consolidated condensed interim financial statements were approved by
the Board of Directors on 26th August 2013.
Condensed Consolidated Interim Statement of Cash Flows (Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|
US$'000s
|
NOTE
|
30 Jun 2013
|
30 Jun 2012
|
30 Jun 2013
|
30 Jun 2012
|
|
CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Profit/(Loss) after taxation
|
|
(6,566)
|
5,167
|
(3,792)
|
11,559
|
|
Adjustment for:
|
|
|
|
|
|
|
|
Depletion and depreciation
|
9
|
2,693
|
2,136
|
5,502
|
4,156
|
|
|
Provision for doubtful debt
|
7
|
7,100
|
-
|
7,100
|
-
|
|
|
Discount on long-term receivable
|
5, 7
|
7,900
|
-
|
7,900
|
-
|
|
|
Stock-based compensation
|
12
|
(44)
|
615
|
(315)
|
621
|
|
|
Deferred income taxes
|
6
|
(4,381)
|
1,350
|
(4,967)
|
2,072
|
|
|
Deferred additional profits tax
|
6
|
3,390
|
717
|
6,425
|
1,389
|
|
|
Interest received
|
|
-
|
(1)
|
-
|
(2)
|
|
|
Unrealised loss on foreign exchange
|
|
454
|
(2)
|
1390
|
76
|
|
Funds flow from operating activities
|
|
10,546
|
9,982
|
19,243
|
19,871
|
|
Decrease/(Increase) in trade and other receivables
|
|
29,597
|
(9,373)
|
8,669
|
(11,491)
|
|
Decrease/(Increase) in taxation receivable
|
|
86
|
(3,077)
|
407
|
(6,905)
|
|
(Increase)/Decrease in prepayments
|
|
(221)
|
(500)
|
(183)
|
(540)
|
|
(Decrease)/Increase in trade and other payables
|
|
(3,138)
|
6,503
|
4,254
|
7,036
|
|
(Decrease)/Increase in taxation payable
|
|
(1,623)
|
2,154
|
(2,892)
|
4,371
|
|
(Increase) in long-term receivable
|
|
(26,979)
|
-
|
(26,979)
|
-
|
|
Net cash flows from operating activities
|
|
8,268
|
5,689
|
2,519
|
12,342
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES
|
|
|
|
|
|
|
Exploration and evaluation expenditures
|
|
-
|
(2,978)
|
(2)
|
(4,557)
|
|
Property, plant and equipment expenditures
|
|
(138)
|
(15,486)
|
(406)
|
(32,656)
|
|
Interest received
|
|
-
|
1
|
-
|
2
|
|
Increase in trade and other payables
|
|
-
|
2,332
|
-
|
10,405
|
|
Net cash used in investing activities
|
|
(138)
|
(16,131)
|
(408)
|
(26,806)
|
|
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
Bank loan proceeds
|
|
-
|
-
|
4,000
|
-
|
|
Bank loan repayments
|
11
|
(2,455)
|
-
|
(3,239)
|
-
|
|
Net cash flow from/ (used in) financing activities
|
|
(2,455)
|
-
|
761
|
-
|
|
Increase/(Decrease) in cash and cash equivalents
|
|
5,675
|
(10,442)
|
2872
|
(14,464)
|
|
Cash and cash equivalents at the beginning of the period
|
|
13,421
|
30,634
|
16,047
|
34,680
|
|
Effect of change in foreign exchange on cash in hand
|
|
(344)
|
2
|
(167)
|
(22)
|
|
Cash and cash equivalents at the end of the period
|
|
18,752
|
20,194
|
18,752
|
20,194
|
See accompanying notes to the condensed consolidated interim financial
statements.
Condensed Consolidated Interim Statement of Changes in Shareholders'
Equity (Unaudited)
ORCA EXPLORATION GROUP INC.
|
|
|
|
|
|
|
|
US$'000
|
Capital stock
|
Contributed
surplus
|
Cumulative
translation
adjustment
|
Accumulated
income
|
Total
|
|
Note
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2013
|
84,983
|
6,753
|
89
|
34,110
|
125,935
|
|
Foreign currency translation adjustment on foreign operations
|
-
|
-
|
(75)
|
-
|
(75)
|
|
Loss after tax for the period
|
-
|
-
|
-
|
(3,792)
|
(3,792)
|
|
Balance as at 30 June 2013
|
84,983
|
6,753
|
14
|
30,318
|
122,068
|
|
|
|
|
|
|
|
|
US$'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
|
-
|
-
|
-
|
-
|
-
|
|
Stock based compensation
|
-
|
720
|
-
|
-
|
720
|
|
Profit after tax for the period
|
-
|
-
|
-
|
11,559
|
11,559
|
|
Balance as at 30 June 2012
|
84,610
|
6,988
|
-
|
27,340
|
118,938
|
See accompanying notes to the condensed consolidated interim financial
statements.
Orca Exploration Group Inc.
Orca Exploration Group Inc. is an international public company engaged
in natural gas exploration, development and supply in Tanzania through
its 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, and Management 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, the Company's beliefs regarding its ability to collect
the full TANESCO receivable; status of negotiations with the GNT to
conclude an agreed form of amendment to the Songo Songo PSA;
incremental gas sales volumes; status of negotiations with the TPDC
regarding a long-term sales agreement for incremental gas volumes;
status of execution of a full field development plan for Songo Songo;
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; failure to collect the full TANESCO receivable; failure to
successfully negotiate agreements; 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.
