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Main » 2015 » May » 11 » Erin Energy Announces First Quarter 2015 Results
9:00 AM
Erin Energy Announces First Quarter 2015 Results

 Provides Operational Update on its West and East Africa Operations

HOUSTON - Saturday, May 9th 2015 [ME NewsWire]

(BUSINESS WIRE)-- Erin Energy Corporation (“Erin Energy” or the “Company”) (NYSE MKT:ERN) announced today financial and operational results for the quarter ended March 31, 2015. The Company plans to file its Form 10-Q for the first quarter 2015 with the Securities and Exchange Commission later today.

First Quarter 2015 Highlights:

    Successfully completed the Oyo-8 well and commenced production;
    Progressed Oyo field expansion project;
    Completed the 2-D seismic data acquisition program in Kenya; and
    Signed a Joint Operating Agreement with partners in Ghana.

Operations Summary

In Nigeria, Oyo-8 was successfully completed in the Pliocene formation by the Sedco Express drilling rig, and has since commenced production into the Armanda Perdana FPSO. The well is currently undergoing choke optimization and has exceeded projections through each choke size progression. As of May 7, 2015, the Oyo-8 was producing light sweet crude (35.5 degree API) at a stabilized oil rate of more than 6,000 barrels per day (“bbls/d”) on a 52/64-inch choke. The plan is to further increase the choke size to achieve or exceed a 7,000 bbls/d rate.

Significant progress was made on the Oyo field expansion project and the Company is currently conducting drilling and completion operations on the Oyo-7 well. The Company expects to bring Oyo-7 on production in the next few weeks.

Erin Energy also continued discussions with potential farm-in partners on its drill-ready Miocene prospects in Nigeria and its assets in The Gambia. In Kenya, the Company completed the required 2-D seismic data acquisition and processing for onshore blocks L-1B and L-16 and interpretation of the data is on-going. Erin Energy will be submitting an application for an additional two-year exploration period.

For offshore Kenya blocks L-27 and L-28, the Company is pursuing completion of the exploration work program and is working to identify a suitable partner on the blocks.

In Ghana, the Company signed a joint operating agreement and is making significant progress toward determining the economic viability of developing the three previously discovered fields on its Expanded Shallow Water Tano block while also working to mature exploration prospects.

Financial Summary

During the first quarter, Erin Energy reported a net loss of $33.1 million, or $0.16 per basic and diluted share. There was no production in the first quarter due to the shut-in of the Oyo-5 and Oyo-6 wells in preparation of tying-in the Oyo-7 and Oyo-8 wells. Available liquidity to the Company including cash and cash equivalents and available borrowing facilities at March 31, 2015 was approximately $37.7 million.

The Company incurred exploration expenses totaling $6.5 million during the first three months of the year and capital expenditures of approximately $68.2 million.

Conference Call

The Company will host a conference call today, May 8, 2015 at 10 a.m. CT (11 a.m. ET) to discuss first quarter results and current operations. The dial-in number is 1 877-270-2148 in the United States or +1 412-902-6510 internationally. To access the live audio webcast, please visit the “Investors” section of the Erin Energy’s website at www.erinenergy.com.

About Erin Energy

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 43,000 square kilometers (10 million acres), including current production and other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana, Kenya and 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.

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.
 
ERIN ENERGY CORPORATION
(formerly CAMAC ENERGY INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
            
            Three Months Ended March 31,
            2015           2014
Revenues:                       
Crude oil sales, net of royalties           $     —                 $     19,894     
                        
Operating costs and expenses:                       
Production costs           21,328                 22,897     
Exploratory expenses           6,515                 2,276     
Depreciation, depletion and amortization           697                 4,971     
General and administrative expenses           3,491                 4,433     
Total operating costs and expenses           32,031                 34,577     
                        
Operating loss           (32,031     )           (14,683     )
                        
Other income (expense):                       
Currency transaction gain (loss)           1,436                 —     
Interest expense           (2,611     )           (185     )
Other, net           —                 10     
Total other income (expense)           (1,175     )           (175     )
                        
Loss before income taxes           (33,206     )           (14,858     )
Income tax expense           —                 —     
Net loss before non-controlling interest           (33,206     )           (14,858     )
Net loss attributable to non-controlling interest           147                 —     
                        
Net loss attributable to Erin Energy Corporation           $     (33,059     )           $     (14,858     )
                        
Net loss per common share:                       
Basic           $     (0.16     )           $     (0.13     )
Diluted           $     (0.16     )           $     (0.13     )
Weighted average common shares outstanding:                       
Basic           210,470                 112,821     
Diluted           210,470                 112,821     
 
ERIN ENERGY CORPORATION
(formerly CAMAC ENERGY INC.)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share and per share amounts)
                        
            

March 31, 2015
          

December 31, 2014
ASSETS                       
Current Assets:                       
Cash and cash equivalents           $     7,741                 $     25,143     
Restricted cash           10,266                 1,496     
Accounts receivable - partners           —                 496     
Accounts receivable - related party           624                 624     
Accounts receivable - other           52                 54     
Crude oil inventory           1,065                 1,089     
Prepaids and other current assets           3,819                 2,929     
Total current assets           23,567                 31,831     
                        
Property, plant and equipment:                       
Oil and gas properties (successful efforts method of accounting), net           663,234                 595,269     
Other property, plant and equipment, net           1,115                 1,060     
Total property, plant and equipment, net           664,349                 596,329     
                        
Other non-current assets                       
Restricted cash           —                 8,909     
Debt issuance costs           1,153                 1,307     
Other non-current assets           67                 67     
Other assets, net           1,220                 10,283     
Total assets           $     689,136                 $     638,443     
                        
LIABILITIES AND EQUITY                       
Current Liabilities:                       
Accounts payable and accrued liabilities           $     156,147                 $     108,047     
Accounts payable and accrued liabilities - related party           15,617                 9,391     
Accounts payable - partners           397                 —     
Asset retirement obligations           6,705                 12,703     
Current portion of long-term debt           12,307                 6,200     
Total current liabilities           191,173                 136,341     
                        
Long-term notes payable - related party           93,050                 61,185     
Term loan facility           86,150                 93,000     
Asset retirement obligations           14,123                 13,830     
Other long-term liabilities           81                 82     
Total liabilities           384,577                 304,438     
                        
Commitments and contingencies                       
                        
Equity:                       

Preferred stock $0.001 par value - 50,000,000 shares authorized; none issued and outstanding at March 31, 2015 and December 31, 2014
          —                 —     

Common stock $0.001 par value - 416,666,667 shares authorized; 210,849,951 and 210,307,502 shares outstanding as of March 31, 2015 and December 31, 2014
          211                 210     
Additional paid-in capital           781,480                 778,095     
Accumulated deficit           (478,013     )           (444,954     )
Total equity - Erin Energy Corporation           303,678                 333,351     
Non-controlling interests           881                 654     
Total equity           304,559                 334,005     
Total liabilities and equity           $     689,136                 $     638,443     
            
ERIN ENERGY CORPORATION
(formerly CAMAC ENERGY INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
            
            Three Months Ended March 31,
            2015           2014
Cash flows from operating activities                       
Net loss, including non-controlling interest           $     (33,206     )           $     (14,858     )
                        
Adjustments to reconcile net loss to cash used in operating activities:                       
Depreciation, depletion and amortization           120                 4,531     
Accretion of asset retirement obligations           577                 440     
Amortization of debt discount and debt issuance costs           267                 —     
Foreign currency transaction gain           (1,436     )           —     
Share-based compensation           1,320                 507     
Payments to settle asset retirement obligations           (6,282     )           —     
Change in operating assets and liabilities:                       
(Increase) decrease in accounts receivable           894                 (3,042     )
Decrease in inventories           13                 7,437     
Increase in prepaids and other current assets           (1,012     )           (6,175     )
Increase in accounts payable and accrued liabilities           22,157                 7,388     
Net cash used in operating activities           (16,588     )           (3,772     )
                        
Cash flows from investing activities                       
Capital expenditures           (35,300     )           (2,050     )
Allied transaction           —                 (85,000     )
Net cash used in investing activities           (35,300     )           (87,050     )
                        
Cash Flows from Financing Activities                       
Proceeds from the issuance of common stock           —                 135,000     
Proceeds from exercise of stock options           —                 415     
Proceeds from notes payable - related party, net           33,815                 650     
Allied transaction adjustments           —                 (9,171     )
Funding from non-controlling interest           374                 —     
Net cash provided by financing activities           34,189                 126,894     
                        
Effect of exchange rate changes on cash and cash equivalents           297                 —     
                        
Net increase (decrease) in cash and cash equivalents           (17,402     )           36,072     
Cash and cash equivalents at beginning of period           25,143                 163     
Cash and cash equivalents at end of period           $     7,741                 $     36,235     
                        
Supplemental cash flow information                       
Cash paid for:                       
Interest, net           $     2,093                 $     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           $     2,067                 $     —     

Contacts

Erin Energy Corporation

Investors:

Chris Heath, +1 713-797-2945

chris.heath@erinenergy.com

 

Media:

Lionel McBee, +1 713-797-2960

lionel.mcbee@erinenergy.com

 

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