8 May 2012 07:00
Exillon Energy plc
Interim Management Statement
8 May 2012
Exillon Energy plc (EXI.LN), a London listed independent oil producer with assets in two oil-rich regions of northern Russia, Timan-Pechora ("Exillon TP") and West Siberia ("Exillon WS"), today issues its Interim Management Statement and April Production Report. The financial and production data are for the period from 1 January 2012 to 30 April 2012 and all other information, including details on operations is as at 7 May 2012.
Highlights
- Average production for the reporting period was up 55% from last year. An all time high production peak of 12,810 bbl/day reached during April.
- We currently have six rigs drilling new wells. Three wells are being drilled in Exillon TP and three in Exillon WS.
- Our recently installed gas turbines in Exillon WS are fully operational. The Transneft Entry Point is expected to be operational end of Q2 2012.
- Our oil processing unit in Timan Pechora has been put in operation, resulting in 100% of our oil being prepared to commodity quality on well pad site.
April Production Report
In the latter part of April production climbed to a historical peak of 12,810 bbl/day, up by 5.2% from the latest historical peak of 12,177 bbl/day reached in March.
The impact of increased production was offset by shutting in key producing wells for scheduled workovers in Exillon TP, which resulted in an average Exillon TP production for the month declining to 2,844 bbl/day from 3,261 bbl/day, and Group production declining to 11,463 bbl/day from 11,785 bbl/day in the earlier month. All workovers were successful and Exillon TP current production rate is 3,839 bbl/day.
In May, the Group expects to carry out planned optimization of the pipeline in Exillon WS, which requires installation of booster pump station in the vicinity of EWS II field, and a tie in of pipeline from well pads 5 and 6. During infrastructure optimizations, we may need to temporarily shut in some wells in Exillon WS, which may impact average production numbers during the month.
Before the end of the second quarter, the Group expects to complete wells 7601 in Exillon TP and 38 in Exillon WS, which were originally anticipated to be on stream in April. Operational expenses resulting from the delays are being borne by our subcontractors.
For the period covered by this Interim Management Statement (1 January to 30 April 2012) our production averaged 11,448 bbl/day. This is an increase of 55% over the 7,386 bbl/day in the equivalent period last year.
Jan | Feb | Mar | Apr | |
Exillon WS Avg. Production (bbl/day) | 7,877 | 8,481 | 8,525 | 8,579 |
Exillon TP Avg. Production (bbl/day) | 3,094 | 3,103 | 3,261 | 2,884 |
Avg. Production (bbl/day) | 10,972 | 11,584 | 11,785 | 11,463 |
Peak Production (bbl/day) | 11,836 | 12,106 | 12,177 | 12,810 |
Drilling
We currently have six rigs drilling new wells - three in Exillon TP and three in Exillon WS:
- Well 7601 on the ETP III field has reached a depth of 3000 m, with a target depth of 3820m. This well is being drilled by the contractor, Novator, that drilled neighbouring Well 76 in 2011.
- Well 2003 on the ETP IV field spudded on 2 May. This is the first of three wells planned from ETP Well Pad 1 in 2012 to be drilled by contractor RS Buriniye.
- Well 5 on the ETP IV field spudded on 7 May. This is the first of three wells planned from ETP Well Pad 5 in 2012 to be drilled by contractor Usinsk Geo Neft.
- Well 38 on the EWS I field is a first horizontal sidetrack drilled by the Group. The well is drilled by contractor KNG Services.
- Well 571 on the EWS I field spudded on 7 May. This is the first of five wells planned from EWS Well Pad 5 in 2012 to be drilled by contractor KNG Services. Well 50 was drilled from the same pad last year, and is currently producing approximately 1600 bpd.
- Well 61 on the EWS I field spudded on 1 May. This is the first of four wells planned from EWS Well Pad 6 in 2012 to be drilled by contractor KNG Services.
Infrastructure
The gas turbines that we have rented in EWS are operational. The two units are currently generating 1.5 MW to power our operations.
The testing and commissioning of the Transneft Entry Point is continuing, and we anticipate connection in Q2 2012.
Oil processing facility in ETP has been put into operation resulting in 100% of our Timan Pechora crude being prepared to commodity quality at the pad site.
Financials
Our financial performance in the first three months of the year has exceeded budget. The average selling price for our oil continues to be higher than our budgeted level of US$95/ barrel Urals (and the equivalent level for domestic sales). In addition we have benefited during the period from the way in which the export duty that we pay lags behind increases in the oil price.
During the period, we exported 369,718 barrels of oil at an average realised price of approximately US$ 110 per barrel, and sold 656,075 barrels within Russia at an average realised price of US$ 49.1. Our netbacks for domestic and export sales are similar because of the effect of Export Duty.
Our cash balance was US$ 150.4 million at 30 April 2012. We have US$ 100 million of debt so our net cash position is US$ 50.4 million.
Capital expenditure in the period to 30 April 2012 was approximately US$ 33.0 million (2011: US$ 30.2 million).
A conference call with the Exillon Energy management to discuss this announcement will be held today, 14 May 2012, at 12:00 GMT. In order to register for participation in this call and to receive dial-in details, please contact Chris McMahon at M: Communications on +44 20 7920 2358 or mcmahon@mcomgroup.com.