Maha Energy AB: Announces Filing of Fourth Quarter and Year end 2017 Report
|Maha Energy AB (publ)|
|SE-111 46 Stockholm|
Maha Energy AB (publ)
SE-111 46 Stockholm
27 February 2018
This press release is not for release, publication or distribution, directly or indirectly, in or into Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, Switzerland or the United States, or in any other jurisdiction where distribution of this press release could be illegal or subject to legal restrictions.
Maha Energy AB Announces Filing of Fourth Quarter and Year end 2017 Report
Maha Energy AB (publ) (“Maha” or the “Company”) has today released its fourth quarter and 2017 year-end report. The report is attached to this press release and available on the Company’s website at www.mahaenergy.ca.
Fourth Quarter 2017
· Daily oil & gas net production for the fourth quarter averaged 1,597 BOEPD (Q4 2016: 44 BOEPD)
· Revenue of USD 6.9 million (Q4 2016: USD 0.047 million)
· EBITDA of USD 3 million (Q4 2016: USD -1.1 million)
· Result for the period of USD 1.1 million (Q4 2016: USD -0.087 million)
· Earnings per share of USD 0.01 (Q4 2016: USD 0.00)
· Operating netback of USD 31.77 per barrel (Q4 2016: N/A)
· The Company initiated post-acquisition consolidation of the Brazilian operations by closing the Aracaju office and reducing its staff
· Subsequent to year end, the Company received proceeds of USD 1.7 million (SEK 13.3 million) for the exercise of 2,074,717 Maha-A TO 1 Warrants at a strike price of SEK 6.40 prior to expiry on January 15, 2018 (representing approximately one third of all of the IPO related Warrants outstanding)
12 Months 2017
· Total Production for the year: 334,579 BOEs compared to 16,838 BOEs for the same period 2016
· Revenue of USD 14.6 million compared to USD 0.3 million from Canadian discontinued operations for the same period 2016
· Net Result after tax of USD -4.3 million compared to USD -1.9 million for the same period 2016
· Net Result of USD -0.05/share for the period compared to USD -0.03/share for the same period 2016
· The Company does not anticipate any dividend distributions during 2018
There will be a live webcast will on February 28 at 1600 CET (Stockholm time) to review and discuss the 4th Quarter Financial Results and to provide an operational update. The webcast will be broadcast live on Nyhetsbyrån Direkts Youtube Channel and will be hosted by Laikas Mr. Mats Jonsson and will feature Maha Energy’s CEO Jonas Lindvall and Maha Energy’s CFO Andres Modarelli. For further details please consult the Company’s website: www.mahaenergy.ca
Letter to Shareholders
Dear Friends and Fellow Shareholders of Maha Energy AB,
We closed 2017 on a very positive note with Maha reaching a number of key milestones in an improved industry business environment. First- this is the first quarter in the history of the Company that a positive net result is reported; second- Maha’s reserves continue to increase; and, third- Maha has enjoyed an increasing oil price trend that continued throughout the last quarter.
Whilst 2017 was a year of growth by acquisition; 2018 will be a year of growth through the drill bit. Maha has a very ambitious capital budget for 2018 that should result in solid and steady growth for Maha. The key highlights for the Q4 are as follows:
· EBITDA for Q4 was TUSD 2,965
· Net Result (after tax) for Q4 was TUSD 1,059
· Proven Reserve are up 11% at 9.5 million barrels
· Proven plus Probable Reserves are up 26% at 34.3 million barrels
· Maha produced and sold 133,619 barrels of oil during the quarter.
· Maha produced and sold 79.828 MMSCF of gas during the quarter.
· Average Daily production for the quarter was 1,597 BOEs/day
· Company Netback USD 31.77 /BOE
With the acquisitions of the Tie Field and the Tartaruga Field, the Company is rapidly moving into a more robust stage of growth. Along with the improving quarterly results, the Company’s reserves growth reflects the Company’s now solid asset foundation as shown in the graph below.
(Please see Graph in PDF attached)
Petrophysical and geophysical work undertaken at the end of 2017 along with material balance analysis has provided further evidence of larger volume accumulations at Tartaruga. The lack of water production and a steady gas oil ratio after the jet pump installation indicates larger reserves volumes than initially mapped. Remapping and an in-depth investigation of the petrophysical characteristics of the 20+ sandstone layers in the Penedo sandstone now provides for a more realistic volume model for the Pendeo sandstone. Since only 2 of the 27 mapped sandstone layers in the
Penedo have been placed on production and only 2 additional sandstone layers have been tested, this analysis confirms Tartaruga as a future robust production asset.
Remapping of the Tie field confirmed the Proven and Probable (2P) volumes and the revised geophysics changed the shape of the subsurface structures somewhat. The Tie Field produced 0.48 million barrels in 2017 which resulted in slightly reduced reported Proven Reserves. The Proven and Probable (2P) Reserves remain very similar to those of reported as at December 31st, 2016.
The Proven Reserves remain small (34,000 bbls), however, the very decent values for Probable and Possible reserves continue to validate this asset’s potential. Remember, the oil in place is only between 200 m – 600 m below the earth’s surface.
A natural progression of the Company’s assets is that reserves will continue to migrate from the Possible category into the Probable, and from the Probable to the Proven category.
During the recent remapping of the Tie Field structures, a deeper structure very similar to the currently producing Sergei and Agua Grande formations was mapped. This structurally closed sandstone formation, the “Boipeba”, is a regionally producing sandstone. The Boipeba has not been drilled on the Tie Field, and hence constitutes an excellent Near Field Exploration target.
In an effort to evenly distribute the production load over the two producing reservoirs on the Tie field, and to increase production, a new production well will be drilled on the Tie field during 2018. The position of this production well will be placed so that the Boipeba formation can be penetrated and tested in an optimal position. This type of drilling for Near Field Exploration targets is ideal; should the Boipeba prove to not contain oil, it will still be completed at the shallower producing intervals. Really a free shot at a significant exploration structure. The Boipeba well will be drilled on the crest of the structure and will intersect the Agua Grande, Sergei and the Boipeba at an optimal position.
Both the Agua Grande and the Sergei formations are expected to flow to surface without the requirements for artificial lift.
As we continue into 2018, the pace of growth at Maha is expected to increase. The capital plan (as previously announced on February 22, 2018) and work program to increase production is now well on its way and we look forward to a very busy and productive year.
We thank you for your continued support.
FNCA Sweden AB is the Company’s Certified Adviser.
For more information, please contact:
Jonas Lindvall (CEO)
Tel: +1 403 454 7560
Ron Panchuk (CCO)
Tel: +1 403 454 7560
Andres Modarelli (CFO)
This information is published in accordance with the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on February 27th, 2018, at 5:30 pm CET.
Maha in Brief
Maha Energy AB is a Swedish public limited liability company. FNCA Sweden AB has been engaged as Certified Adviser. The Company’s auditors are Deloitte. The Company’s predecessor Maha Energy Inc. was founded in 2013 in Calgary, Canada, by Jonas Lindvall and Ron Panchuk. In May 2016, the new group was formed with Maha Energy AB as parent company for purposes completing an initial public offering on the Nasdaq First North Sweden stock exchange. Jonas Lindvall, CEO and Managing Director, has 26 years of international experience in the oil and gas industry, starting his career with Lundin Oil during the early days of E&P growth. After 6 years at Shell and Talisman, Jonas joined, and helped secure the success of, Tethys Oil AB. Maha’s strategy is to target and develop underperforming hydrocarbon assets on global basis. The Company operates three oil fields, Tartaruga and Tie in Brazil and LAK Ranch, in Wyoming, U.S. For more information, please visit our website www.mahaenergy.ca.
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