|
Erin Energy Announces Third-Quarter 2015 Results
Provides Operational Update on its West and East Africa Operations
Erin Energy Corporation (Erin Energy or the Company) (NYSE MKT:ERN)
(JSE:ERN) announced today financial and operational results for the
quarter ended September 30, 2015. The Company has filed its Form 10-Q
for the third quarter 2015 with the Securities and Exchange Commission.
Highlights:
-
First revenues from Oyo redevelopment campaign on crude sales volumes
of 571,000 barrels;
-
Gross production of approximately 1.1 million barrels of oil;
-
Completed 3-D seismic acquisition on The Gambia A2 and A5 blocks;
-
In-place volumes of approximately 500 MMbbls and 282 BCF of gas
offshore Ghana;
-
Moved into next phase of exploration of onshore Kenya blocks L1B and
L16;
-
Extended exploration period on offshore Kenya blocks L27 and L28.
“During the quarter, we produced approximately 1.1 million barrels of
oil and sold 571,000 barrels, generating revenues of more than $28
million,” said Kase Lawal, Chairman and Chief Executive Officer. “Growth
is at the center of the Erin Energy story and we are positioning
ourselves now to create value, to capitalize on lower costs in the
current market, and to accelerate our activity so that we are in the
right place for when the market begins to reward growth again.”
Operations Summary
During the quarter, Erin Energy’s sales volumes of crude totaled 571,000
barrels of oil, net to the Company. Average daily production was
approximately 10,200 barrels of oil per day (BOPD), net to the Company
(~11,600 BOPD gross).
In The Gambia, the Company completed an acquisition of 1,613 square
kilometer 3-D seismic data over its offshore A2 and A5 blocks, which is
currently being processed and is a key step in high-grading the asset.
Based on the Company’s interpretation of the 2-D seismic acquired on its
onshore Kenya blocks, Erin Energy moved to the next exploration phase
and entered the First Additional Exploration Period (FAEP) of
both onshore blocks, L1B and L16. Additionally, Erin Energy was granted
an 18-month extension of the Initial Exploration Period for its
offshore Kenya blocks L27 and L28 in order to seek a farm-in partner and
to acquire 3-D seismic data.
In Ghana, the Company completed its economic and commercial evaluation
of the three previously discovered oil fields on the Expanded Shallow
Water Tano block. Subsequent to third quarter end, Erin Energy announced
the total discovered in-place volumes have been assessed at
approximately 500 million barrels of oil and 282 BCF of gas. The Company
is working with its joint venture partners and relevant government
entities on further optimization studies to enhance the development and
exploration opportunities.
Financial Summary
For the quarter, Erin Energy reported revenues of $28.7 million, up 50%
from the third quarter 2014. In the third quarter 2015, the Company
lifted and sold approximately 571,000 net barrels of oil at an average
price of $50.2 per barrel. For the same period in 2014, the Company sold
approximately 189,000 net barrels of oil at an average price of $100.9
per barrel.
Erin Energy reported a net loss of $58.7 million, or $0.28 per basic and
diluted share. Production expense for the third quarter of 2015 was
$28.0 million compared with 34.3 million during the same period 2014.
Conference Call and Webcast
The Company will host a conference call on Tuesday, November 10, 2015 at
10 a.m. CT (11 a.m. ET) to discuss third quarter results and current
operations. The dial-in number is 1 877-270-2148 in the United States or
+1 412-902-6510 internationally. A live audio webcast of the call can be
accessed on the Investors page of Erin Energy’s website at erinenergy.eventsandpresentations.com.
A replay of the webcast will be available on Erin Energy’s website for
approximately one year following the event.
Erin Energy Corporation is an independent oil and gas exploration
and production company focused on energy resources in sub-Saharan
Africa. Its asset portfolio consists of 9 licenses across 4 countries
covering an area of 40,000 square kilometres (10 million acres),
including current production and other exploration projects offshore
Nigeria, as well as exploration licenses offshore Ghana, Kenya and The
Gambia, and onshore Kenya. Erin Energy is headquartered in Houston,
Texas, and is listed on the New York and Johannesburg Stock Exchanges
under the ticker symbol ERN. More information about Erin Energy can be
found at www.erinenergy.com.
Oil-in-Place Estimates
This press release refers to volumes of discovered oil- and
gas-in-place. The Securities and Exchange Commission (SEC) permits oil
and gas companies, in their filings with the SEC, to disclose only
“reserves,” as that term is defined under SEC rules. Discovered
petroleum initially-in-place is that quantity of petroleum that is
estimated, as of a given date, to be contained in known accumulations
prior to production. The recoverable portion of discovered petroleum
initially-in-place is subject to application of recovery efficiency
factors and economic analysis before any such volumes can be categorized
as reserves. There is no certainty that any such volumes will ultimately
be categorized as reserves or that it will be commercially viable to
produce any portion of the petroleum initially-in-place.
Forward-Looking Statements
This news release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. All statements, other than
statements of historical fact, concerning activities, events or
developments that the Company expects, believes or anticipates will or
may occur in the future are forward-looking statements. Although
the Company believes the expectations reflected in these forward-looking
statements are reasonable, they involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
The Company’s actual results could differ materially from those
anticipated or implied in these forward-looking statements due to a
variety of factors, including the Company’s ability to successfully
finance, drill, produce and/or develop the wells and prospects
identified in this release, and risks and other risk factors discussed
in the Company’s periodic reports filed with the Securities and Exchange
Commission. All forward-looking statements are expressly qualified in
their entirety by this cautionary statement. You should not place
undue reliance on forward-looking statements, which speak only as of
their respective dates. The Company undertakes no duty to update these
forward-looking statements.
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|
ERIN ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil sales, net of royalties
|
|
|
$
|
28,667
|
|
|
$
|
19,010
|
|
|
|
$
|
28,667
|
|
|
$
|
53,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Production costs
|
|
|
28,019
|
|
|
34,261
|
|
|
|
43,731
|
|
|
72,617
|
|
|
Workover expenses
|
|
|
354
|
|
|
-
|
|
|
|
972
|
|
|
-
|
|
|
Exploratory expenses
|
|
|
5,266
|
|
|
1,148
|
|
|
|
13,283
|
|
|
3,851
|
|
|
Depreciation, depletion and amortization
|
|
|
43,815
|
|
|
21,720
|
|
|
|
44,934
|
|
|
32,676
|
|
|
Loss on settlement of asset retirement obligations
|
|
|
779
|
|
|
-
|
|
|
|
4,233
|
|
|
-
|
|
|
General and administrative expenses
|
|
|
3,857
|
|
|
3,427
|
|
|
|
12,789
|
|
|
12,200
|
|
|
Total operating costs and expenses
|
|
|
82,090
|
|
|
60,556
|
|
|
|
119,942
|
|
|
121,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(53,423
|
)
|
|
(41,546
|
)
|
|
|
(91,275
|
)
|
|
(67,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
Currency transaction gain
|
|
|
176
|
|
|
394
|
|
|
|
2,167
|
|
|
426
|
|
|
Interest expense
|
|
|
(5,650
|
)
|
|
(771
|
)
|
|
|
(12,485
|
)
|
|
(1,637
|
)
|
|
Other, net
|
|
|
-
|
|
|
(300
|
)
|
|
|
-
|
|
|
(300
|
)
|
|
Total other income (expense)
|
|
|
(5,474
|
)
|
|
(677
|
)
|
|
|
(10,318
|
)
|
|
(1,511
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(58,897
|
)
|
|
(42,223
|
)
|
|
|
(101,593
|
)
|
|
(69,011
|
)
|
|
Income tax expense
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Net loss before non-controlling interest
|
|
|
(58,897
|
)
|
|
(42,223
|
)
|
|
|
(101,593
|
)
|
|
(69,011
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to non-controlling interest
|
|
|
215
|
|
|
-
|
|
|
|
690
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Erin Energy Corporation
|
|
|
$
|
(58,682
|
)
|
|
$
|
(42,223
|
)
|
|
|
$
|
(100,903
|
)
|
|
$
|
(69,011
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.28
|
)
|
|
$
|
(0.20
|
)
|
|
|
$
|
(0.48
|
)
|
|
$
|
(0.40
|
)
|
|
Diluted
|
|
|
$
|
(0.28
|
)
|
|
$
|
(0.20
|
)
|
|
|
$
|
(0.48
|
)
|
|
$
|
(0.40
|
)
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
211,517
|
|
|
210,274
|
|
|
|
211,036
|
|
|
174,247
|
|
|
Diluted
|
|
|
211,517
|
|
|
210,274
|
|
|
|
211,036
|
|
|
174,247
|
|
|
|
|
|
|
|
|
|
|
ERIN ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2015
|
|
|
December 31,
2014
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
4,201
|
|
|
|
$
|
25,143
|
|
|
Restricted cash
|
|
|
9,277
|
|
|
|
1,496
|
|
|
Accounts receivable - partners
|
|
|
145
|
|
|
|
496
|
|
|
Accounts receivable - related party
|
|
|
624
|
|
|
|
624
|
|
|
Accounts receivable - other
|
|
|
50
|
|
|
|
54
|
|
|
Crude oil inventory
|
|
|
36,694
|
|
|
|
1,089
|
|
|
Prepaids and other current assets
|
|
|
1,815
|
|
|
|
2,929
|
|
|
Total current assets
|
|
|
52,806
|
|
|
|
31,831
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
|
|
Oil and gas properties (successful efforts method of accounting), net
|
|
|
659,330
|
|
|
|
595,269
|
|
|
Other property, plant and equipment, net
|
|
|
1,169
|
|
|
|
1,060
|
|
|
Total property, plant and equipment, net
|
|
|
660,499
|
|
|
|
596,329
|
|
|
|
|
|
|
|
|
|
|
Other non-current assets:
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
-
|
|
|
|
8,909
|
|
|
Debt issuance costs
|
|
|
1,044
|
|
|
|
1,307
|
|
|
Other non-current assets
|
|
|
67
|
|
|
|
67
|
|
|
Other assets, net
|
|
|
1,111
|
|
|
|
10,283
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
714,416
|
|
|
|
$
|
638,443
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
188,918
|
|
|
|
$
|
108,047
|
|
|
Accounts payable and accrued liabilities - related party
|
|
|
26,154
|
|
|
|
9,391
|
|
|
Accounts payable - partners
|
|
|
35
|
|
|
|
-
|
|
|
Asset retirement obligations
|
|
|
-
|
|
|
|
12,703
|
|
|
Current portion of long-term debt
|
|
|
24,609
|
|
|
|
6,200
|
|
|
Short-term note payable - related party
|
|
|
2,000
|
|
|
|
-
|
|
|
Short-term borrowings
|
|
|
11,303
|
|
|
|
-
|
|
|
Total current liabilities
|
|
|
253,019
|
|
|
|
136,341
|
|
|
|
|
|
|
|
|
|
|
Long-term notes payable - related party
|
|
|
119,352
|
|
|
|
61,185
|
|
|
Term loan facility
|
|
|
73,827
|
|
|
|
93,000
|
|
|
Asset retirement obligations
|
|
|
24,360
|
|
|
|
13,830
|
|
|
Other long-term liabilities
|
|
|
-
|
|
|
|
82
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
470,558
|
|
|
|
304,438
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Preferred stock $0.001 par value - 50,000,000 shares
authorized;
none issued and outstanding at September 30, 2015 and
December
31, 2014
|
|
|
-
|
|
|
|
-
|
|
Common stock $0.001 par value - 416,666,667 shares
authorized;
211,562,664 and 210,307,502 shares
outstanding as of September
30, 2015 and December 31, 2014
|
|
|
212
|
|
|
|
210
|
|
|
Additional paid-in capital
|
|
|
788,986
|
|
|
|
778,095
|
|
|
Accumulated deficit
|
|
|
(545,857
|
)
|
|
|
(444,954
|
)
|
|
Total equity - Erin Energy Corporation
|
|
|
243,341
|
|
|
|
333,351
|
|
|
Non-controlling interests
|
|
|
517
|
|
|
|
654
|
|
|
Total equity
|
|
|
243,858
|
|
|
|
334,005
|
|
|
Total liabilities and equity
|
|
|
$
|
714,416
|
|
|
|
$
|
638,443
|
|
|
|
|
|
|
|
ERIN ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2015
|
|
|
2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net loss, including non-controlling interest
|
|
|
$
|
(101,593
|
)
|
|
|
$
|
(69,011
|
)
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
43,536
|
|
|
|
31,327
|
|
|
Accretion of asset retirement obligations
|
|
|
1,398
|
|
|
|
1,349
|
|
|
Amortization of debt discount and debt issuance costs
|
|
|
1,920
|
|
|
|
-
|
|
|
Loss on settlement of asset retirement obligations
|
|
|
4,233
|
|
|
|
-
|
|
|
Foreign currency transaction gain
|
|
|
(2,167
|
)
|
|
|
-
|
|
|
Share-based compensation
|
|
|
4,398
|
|
|
|
2,216
|
|
|
Related party liability offset
|
|
|
-
|
|
|
|
(32,880
|
)
|
|
Payments to settle asset retirement obligations
|
|
|
(17,220
|
)
|
|
|
-
|
|
|
Other
|
|
|
-
|
|
|
|
21
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
Decrease (increase) in accounts receivable
|
|
|
390
|
|
|
|
(10
|
)
|
|
Decrease (increase) in inventories
|
|
|
(9,493
|
)
|
|
|
13,715
|
|
|
Decrease (increase) in prepaids and other current assets
|
|
|
324
|
|
|
|
(7,103
|
)
|
|
Increase in accounts payable and accrued liabilities
|
|
|
58,126
|
|
|
|
27,277
|
|
|
Net cash used in operating activities
|
|
|
(16,148
|
)
|
|
|
(33,099
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(83,156
|
)
|
|
|
(59,481
|
)
|
|
Allied transaction
|
|
|
-
|
|
|
|
(170,000
|
)
|
|
Net cash used in investing activities
|
|
|
(83,156
|
)
|
|
|
(229,481
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Proceeds from the issuance of common stock
|
|
|
-
|
|
|
|
270,000
|
|
|
Proceeds from exercise of stock options and warrants
|
|
|
1,855
|
|
|
|
415
|
|
|
Proceeds from term loan facility
|
|
|
-
|
|
|
|
50,000
|
|
|
Proceeds from notes payable - related party, net
|
|
|
63,815
|
|
|
|
10,649
|
|
|
Proceeds from short-term borrowings, net
|
|
|
11,303
|
|
|
|
-
|
|
|
Debt issuance costs
|
|
|
-
|
|
|
|
(1,943
|
)
|
|
Allied transaction adjustments
|
|
|
-
|
|
|
|
(12,440
|
)
|
|
Funding from non-controlling interest
|
|
|
553
|
|
|
|
-
|
|
|
Net cash provided by financing activities
|
|
|
77,526
|
|
|
|
316,681
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
836
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(20,942
|
)
|
|
|
54,101
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
25,143
|
|
|
|
163
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
4,201
|
|
|
|
$
|
54,264
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
|
Interest, net
|
|
|
$
|
7,886
|
|
|
|
$
|
8
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Issuance of common shares for settlement of liabilities
|
|
|
$
|
125
|
|
|
|
$
|
-
|
|
|
Discount on notes payable pursuant to issuance of warrants
|
|
|
$
|
4,911
|
|
|
|
$
|
-
|
|
|
Related party liability offset
|
|
|
$
|
-
|
|
|
|
$
|
32,880
|
|
|
Reduction in accounts payable from settlement of Northern Offshore
contingency
|
|
|
$
|
24,307
|
|
|
|
$
|
-
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151109006874/en/ Copyright Business Wire 2015
Source: Business Wire
(November 9, 2015 - 6:35 PM EST)
News by QuoteMedia
www.quotemedia.com
|
