Provides Operational Update on its West and East Africa Operations
HOUSTON - Wednesday, August 12th 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 June 30, 2015. The Company has filed its Form 10-Q for the second quarter 2015 with the Securities and Exchange Commission.
Second Quarter 2015 Highlights:
Tied in the Oyo-7 and Oyo-8 wells;
Gross production of more than 450,000 barrels of oil;
Significant progress made on the technical evaluation of ESWT block in Ghana;
Extended exploration period on The Gambia blocks A2 and A5 through 2018; and
Application made to move to next phase of exploration of onshore Kenya blocks L1B and L16.
“Erin Energy continued to build momentum during the second quarter,” said Kase Lawal, Chairman and Chief Executive Officer. “Bringing the Oyo-7 and Oyo-8 wells on production were significant milestones in your company’s history. During the quarter, we delivered production in excess of 450,000 barrels of oil once the Oyo field was brought online. Growth is at the center of Erin Energy and this achievement is just the beginning for us.”
Operations Summary
During the quarter, the Company commenced production of Oyo-7 and Oyo-8 wells offshore Nigeria. As of August 1, 2015, the combined production rate of Oyo-7 and Oyo-8 wells was approximately 13,100 barrels of oil per day (BOPD) (~11,500 BOPD net to the Company). The Company continues to operate the wells by employing good reservoir management techniques and the wells have outperformed Erin Energy’s pre-drill projections for the period.
The Company was granted an extension to the initial exploration period for the A2 and A5 blocks in The Gambia during the quarter, and subsequently commenced a 1,500 square kilometre 3D seismic data acquisition over the blocks, which is expected to be completed in September 2015 and is a key step in high-grading the asset.
In June, based on the 2D seismic interpretation and in accordance with the provisions of the PSC, Erin Energy met with the Kenyan government and submitted the required applications to enter the First Additional Exploration Period (FAEP) of both onshore blocks L1B and L16. The Company expects the FAEP on both blocks will be granted during the third quarter 2015.
Additionally, Erin Energy has applied for a two-year extension of the Initial Exploration Period for the offshore Kenya blocks L27 and L28 in order to seek a farm-in partner and to acquire 3D seismic data.
In Ghana, significant progress was made on the technical evaluation of the three previously discovered oil fields on the Expanded Shallow Water Tano block. The Company has now commenced the economic evaluation of the resource volumes in place and expects to complete the economic modelling and engage with the joint venture partners by September 2015. Additionally, Erin Energy’s technical team continues the maturation process on several identified prospects on the block.
Financial Summary
For the quarter, Erin Energy reported a net loss of $9.2 million, or $0.04 per basic and diluted share. Following the tie-in of the Oyo-8 and Oyo-7 wells during the second quarter, oil production averaged 7,642 BOPD (6,725 BOPD net to the Company). Second quarter revenues were nil as liftings of Oyo crude did not commence until the beginning of the third quarter 2015. Subsequent to second quarter ending, The Company generated revenue of $15.3 million from crude lifting in July and received an additional $26.5 million as advance payment for a scheduled August lifting of Oyo crude.
Production expense for the second quarter of 2015 was a net credit of $5.6 million due to an agreed price reduction in the operating day rate with the operator of the FPSO for the period from July 2014 to April 2015. This resulted in a $26 million production cost reduction recorded in June 2015. Production expense for the same period 2014 was $15.5 million.
The Company incurred exploration expenses totaling $1.5 million during the second quarter of 2015, compared to $0.4 million in the same period 2014. Total capital expenditures in the second quarter were approximately $68.1 million.
Conference Call and Webcast
The Company will host a conference call on Tuesday, August 11, 2015 at 10 a.m. CT (11 a.m. ET) to discuss second 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 aterinenergy.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 43,000 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.
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.
To view the full report and tables please click here.
Contacts
Erin Energy Corporation
Lionel McBee, +1 713 797 2960
Director, Investor Relations and Corporate Communications
lionel.mcbee@erinenergy.com
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