- Strong operational performance and increased
profitability in a favourable oil price environment
- M&P’s working interest production in 2022 was stable at
25,584 boepd
- Sales totalled $676 million, an increase of 35%, in line with
the increase in the average sale price of oil ($97.8/bbl compared
with $72.5/bbl in 2021)
- EBITDA of $443 million and recurring net income of $211
million, up 58% and 55% respectively
- Strong cash flow generation through continued cost
discipline
- Operating and administrative expenses at their lowest since the
adaptation plan was introduced in 2020; over $100 million in
cumulative savings over three years
- Free cash flow of $198 million for the year ($275 million
excluding M&A)
- Continued deleveraging and very strong financial
position
- Net debt of $200 million as at 31 December 2022, down $143
million over the year despite external growth transactions ($78
million) and the dividend ($29 million)
- Debt refinanced in 2022, offering visibility and favourable
terms until 2028
- Closing of the acquisition of Wentworth Resources expected
between Q2 and Q3 2023
- Approval of Wentworth Resources shareholders obtained on 23
January 2023
- Completion of the acquisition subject to the approval of the
Tanzanian authorities
- Immediate redistribution of the value created to
shareholders
- Dividend of €0.14 per share ($29 million) paid in July 2022 for
2021
- Dividend of €0.23 per share ($50 million) submitted to
shareholders’ vote for 2022
Regulatory News:
Maurel & Prom (Paris:MAU):
Audio conference for
analysts and investors M&P will hold an
analyst/investor conference via an audio webcast in French and
English, today at 10:00 a.m., followed by a Q&A session.
To attend this webcast live or listen to the recording,
click the following link:
https://channel.royalcast.com/landingpage/maureletpromfr/20230314_1/
Key financial indicators
in $ million
2022
2021
Change
Income statement
Sales
676
500
+35%
Opex & G&A
-161
-168
Royalties and production taxes
-85
-77
Change in overlift/underlift position
13
25
Other
–
–
EBITDA
443
280
+58%
Depreciation, amortisation and provisions
and impairment of production assets
-85
-107
Expenses on exploration assets
-1
-0
Other
-4
-16
Operating income
352
158
+124%
Net financial expenses
-23
-16
Income tax
-145
-44
Share of income/loss of associates
22
23
Net income
206
121
+71%
O/w net income before non-recurring
items
211
136
+55%
Cash flows
Cash flow before income tax
444
280
Income tax paid
-112
-82
Operating cash flow before change in
working capital
331
198
+67%
Change in working capital requirement
34
82
Operating cash flow
366
280
+31%
Development capex
-92
-164
Exploration capex
-11
–
M&A
-78
-8
Dividends received
12
15
Free cash flow
198
123
+61%
Net debt service
-224
-96
Dividends paid
-29
–
Other
-2
1
Change in cash position
-58
27
N/A
Cash and debt
Closing cash
138
196
Closing gross debt
337
539
Closing net debt
200
343
-42%
At its meeting of 13 March 2023, chaired by John Anis, the Board
of Directors of the Maurel & Prom Group (“M&P” or “the
Group”) approved the audited financial statements1 for the year
ended 31 December 2022.
Olivier de Langavant, Chief Executive Officer of M&P,
stated: “For the second year in a row, the Group’s financial
results have seen significant improvement. This is obviously linked
to macroeconomic circumstances and the high crude oil price
environment, especially in the first half of 2022. However, our
cost discipline has also played a key role in a context of high
inflation. The resulting strong cash flow generation has allowed us
to pursue our capital allocation strategy: deleveraging, growth,
and distribution. Firstly, deleveraging, with net debt now below
$200 million. Growth, including the purchase of the new C18 Maghèna
drilling rig for Caroil in Gabon as well as the ongoing acquisition
of Wentworth Resources to increase our presence in Tanzania.
Finally, distribution to shareholders, with a new dividend of €0.23
per share proposed for fiscal year 2022, after the dividend of
€0.14 per share paid for fiscal year 2021. This sharp increase is a
testament to our commitment to return value creation to
shareholders, whilst continuing to steadfastly develop the
Group.”
Financial position
Consolidated sales in 2022 amounted to $676 million, an increase
of 35% compared to fiscal year 2021 ($500 million). This increase
is in line with the increase in the average sale price of oil from
$72.5/bbl in 2021 to $97.8/bbl in 2022.
Operating and administrative expenses amounted to $161 million,
the lowest level in recent years ($180 million in 2019, $164
million in 2020, and $168 million in 2021). This demonstrates the
sustainability of the measures taken to significantly and
sustainably reduce the Group’s costs and expenses. Royalties and
production taxes increased significantly ($85 million compared to
$77 million in 2021) due to their proportionality to sale prices.
The positive change in the overlift/underlift position has resulted
in a gain of $13 million.
EBITDA came in at $443 million, an increase of 58% compared to
the previous fiscal year ($280 million). Depreciation and
amortisation charges amounted to $85 million in 2022, versus $107
million in 2021. Current operating income amounted to $352
million.
The net financial expenses shown in the income statement
amounted to $23 million for 2022, up from $16 million in 2021, due
in particular to the rise in interest rates.
In addition to the increase in gross price, the surge in income
tax ($145 million in 2022 compared to $44 million in 2021) results
from the progressive depreciation of the VAT receivable of $56
million as they are being recovered as cost oil, as permitted under
the agreement signed with the Gabonese Republic in November
2021.
M&P’s share in net income from equity associates was $22
million, and corresponds almost exclusively to the 20.46% stake in
Seplat Energy.
Net income for fiscal year 2022 amounted to $206 million, an
increase of 71% compared to 2021 ($121 million). Recurring net
income (excluding extraordinary items) was $211 million, an
increase of 55%.
Before changes in working capital, cash flow from operating
activities was $331 million (compared with $198 million in 2021).
After taking into account changes in working capital (positive
impact of $34 million), the operating cash flow reached $366
million.
Development capex amounted to $92 million, compared to $164
million in the previous year (including $97 million for M&P’s
share of the comprehensive agreement signed with the Gabonese
Republic in November 2021). These investments included $67 million
for development activities on the Ezanga asset in Gabon, $9 million
for activities in Angola, and $15 million for the Caroil drilling
subsidiary, covering in particular the purchase of a new C18
Maghèna drilling rig.
Exploration capex amounted to $11 million, of which $10 million
corresponded to the drilling campaign on the COR-15 licence in
Colombia.
Asset acquisition expenditure was $78 million in 2022, of which
$76 million corresponded to the placement in an escrow account of
the amount required to complete the acquisition of Wentworth
Resources announced in December 2022.
In 2022, M&P received $12 million in dividends, net of
taxes, from its 20.46% stake in Seplat Energy.
Free cash flow (now calculated after dividends received) for
fiscal year 2022 therefore amounted to $198 million, an increase of
61% compared to 2021 ($123 million).
In terms of financing flows, the debt service amounted to $224
million, including $201 million in repayments ($195 million in bank
loans and $6 million in shareholder loans) and $22 million in debt
costs.
Finally, M&P distributed $29 million in dividends in 2022,
€0.14 per share, paid in July 2022.
The cash position at the close of 31 December 2022 was $138
million (31 December 2021: $196 million). This amount excludes $76
million placed on escrow as part of the offer announced on 5
December 2022 for Wentworth Resources, which is therefore already
fully provisioned.
During fiscal year 2022, M&P repaid a total of $201 million
in gross debt, reducing its gross debt to $337 million at 31
December 2022, of which $255 million under the bank loan (RCF of
$67 million fully drawn at 31 December 2022) and $82 million under
the shareholder loan. It is worth noting that gross debt has been
reduced by more than half over the past three years, from $700
million at the end of 2019.
Over fiscal year 2022, net debt decreased by $143 million to
$200 million, compared to $343 million at 31 December 2021.
With the refinancing concluded in May 2022 and effective from
July 2022, M&P continues to have financing at favourable rates
(SOFR + spread (0.11%) + 2.00% for the $188 million amortised
tranche of the bank loan, and SOFR + spread (0.11%) + 2.25% for the
$67 million RCF tranche), for a term now extended to 2027. The
first quarterly repayment of the bank loan is due in April
2023.
Aside from its robust cash position, M&P has access to
additional liquidity thanks to the undrawn $100-million tranche of
the shareholder loan.
Debt repayment profile at 31 December
2022:
Object omitted.
Key terms of the refinanced debt
facilities at 31 December 2022:
Bank loan Amortising
portion
Bank loan RCF
tranche
Shareholder loan
Amount drawn
$188 million
$67 million
$82 million
(+ $100 million available)
Interest rate
SOFR + spread (0.11%) + 2.00%
SOFR + spread (0.11%) + 2.25%
(0.675% on the undrawn
portion)
SOFR + spread (0.11%) + 2.10%
Repayments
18 quarterly instalments
At maturity
22 quarterly instalments
First deadline
Q2 2023
–
Q2 2023
Last instalment
Q3 2027
Q3 2027
Q3 2028
- Operating and financial forecasts for 2023
The Group expects M&P’s working interest production to reach
26,200 boepd in 2023, including:
- 15,600 bopd in Gabon (equivalent to gross production of 19,500
bopd at Ezanga)
- 43.2 mmcfd (equivalent to gross production of 90.0 mmcfd at
Mnazi Bay)
- 3,400 bopd in Angola (equivalent to gross production of 17,000
bopd on Block 3/05)
With these production assumptions, the forecasts for cash flow
from operating activities in 2023 under various Brent price
assumptions are as follows:
- At $70/bbl: $260 million
- At $80/bbl: $310 million
- At $90/bbl: $360 million
Other significant cash outflows budgeted for the year, for a
total of $273 million:
- Development investments: $100
million, allocated as follows:
- $85 million in Gabon
- $5 million in Tanzania
- $10 million in Angola (non-operated)
- Exploration investments: Budget of
$45 million, including $35 million contingent, including:
- The end of the drilling campaign on the COR-15 permit in
Colombia (completed in February 2023)
- The potential acquisition of 3D seismic data for the Ezanga
permit in Gabon
- Financing: $128 million, allocated
as follows:
- $58 million in debt repayments
- $20 million in net cost of debt
- $50 million in dividends
This guidance is given on a constant scope basis, excluding the
potential impact of the ongoing acquisition of Wentworth
Resources.
After reviewing the Group’s financial situation and its
performance for the year 2022, the Board of Directors proposes to
pay a dividend of €0.23 per share, for a total amount of $50
million.
This amount of €0.23 per share represents an increase of 64%
compared to the €0.14 dividend paid in 2022 for financial year
2021. This reflects the significant improvement in the Group’s
financial performance and demonstrates its desire to immediately
return to creating value for shareholders.
2022 activity
- Environment, Health, Safety and Security (EHS-S)
performance
For the second year in a row, the lost time injury rate (“LTIR”)
rate was nil. The total recordable injury Rate (“TRIR”) per million
hours worked was 1.61, compared to 2.52 in 2021.
Object omitted.
Note: Lost Time Injury Rate (LTIR) and Total Recordable Injury
Rate (TRIR) are calculated per million hours worked
As part of its decarbonisation policy, the Group implemented a
number of measures in 2022 to reduce its greenhouse gas emissions.
This includes, for example, the connection of the well platforms to
the Onal power plant grid on the Ezanga permit in Gabon. Thanks to
these initiatives, greenhouse gas emissions (scope 1 and 2) on
operated assets in production stood at 220kt of CO2 equivalent,
down 14% compared to 2021 (256kt). Compared to 2020, the impact of
flaring is down by 47%, and that of venting by 54%, both ahead of
the long-term objectives respectively defined by the Group in 2021
and 2022.
The carbon intensity (scope 1 and 2) of the Group's operated
production stands at 18.1kg of CO2 equivalent per barrel, down 15%
compared to 2021 (21.3kg) and 40% compared to 2020 (30.3kg).
Greenhouse gas emissions and intensity
per barrel of operated assets in production:
Object omitted.
Note: Greenhouse gas emissions for previous years have been
adjusted to take into account the new calculation methodology
including venting
Q1 2022
Q2 2022
Q3 2022
Q4 2022
2022
2021
Change 2022 vs. 2021
M&P working interest
production
Gabon (oil)
bopd
14,222
13,439
15,253
15,650
14,646
15,540
-6%
Angola (oil)
bopd
3,856
3,916
3,695
3,465
3,732
3,416
+9%
Tanzania (gas)
mmcfd
47.3
41.5
41.3
43.0
43.2
39.2
+10%
Total
boepd
25,966
24,257
25,824
26,283
25,584
25,490
+0%
In fiscal 2022, M&P’s working interest production stood at
25,584 boepd, stable compared to 2021 (25,490 boepd).
In Gabon, M&P’s working interest oil production (80%) on the
Ezanga permit was 14,646 bopd (gross production: 18,308 bopd) for
2022. Average production for the year is therefore 6% lower than in
2021, mainly due to the disruption caused by the incident at the
end of April at the Cap Lopez export terminal, the situation having
returned to normal in the third quarter. The well stimulation
campaign that began in the fourth quarter of 2022 finished in early
2023. Tangible results are visible, with a significant increase in
the field's production potential, which is now above 21,000
bopd.
In Tanzania, M&P’s working interest gas production (48.06%)
on the Mnazi Bay permit stood at 43.2 mmcfd (total production: 90.0
mmcfd) for 2022, up 10% from 2021, which was already a record
year.
In Angola, M&P’s working interest production (20%) from
Block 3/05 in 2022 is 3,732 bopd (gross production: 18,660 bopd),
up 9% from 2021. Discussions on extending the licence beyond its
current term in June 2025 are now well underway. It is expected
that the licence extension will be accompanied by new tax terms
that will enhance the economics of the permit.
- Exploration and appraisal activities
Colombia
In Colombia, drilling operations on the Zorro-1 exploration
wells on the COR-15 permit were launched in November 2022 and
completed in early January 2023. The well encountered oil
indications in the Guadalupe formations, the main objective of the
drilling, and Lower Socha, from which a 20° API oil sample was
taken. However, the production test conducted on Lower Socha only
produced formation water. Consequently, it was decided to abandon
the well, which was done in January 2023.
The second Oveja-1 well, drilled in sequence with the Zorro-1
well, reached its final depth of 884 metres in nine days. Oveja-1
found the Lower Socha reservoir at a depth of 670 metres, with oil
shows comparable to those of Zorro-1. The various measurements
carried out did not indicate the presence of producible
hydrocarbons, and the abandonment of the well was completed in
early February 2023.
The final total cost of this two-well exploration programme was
$15 million, of which M&P financed $8 million. These two wells
mark the end of M&P’s commitment activity within the COR-15
permit. Further studies and a full analysis of the results will be
carried out before deciding on the future of the licence. Also in
Colombia, M&P retains the VSM-4 exploration licence in the
upper Magdalena Valley; a major anticline structure has been
identified on this 970 sq km licence in the vicinity of eight oil
and gas fields, including the San Francisco field. Drilling is
expected to begin in 2024.
Gabon
In Gabon, a 3D seismic data acquisition campaign was initially
planned for 2022 in the southern part of the Ezanga permit. This is
still under study, with a final schedule yet to be confirmed.
Wholly-owned drilling subsidiary Caroil is currently active in
Gabon with the C3 and C16 rigs.
The C3 rig continues to operate as part of the development
drilling campaign on the Ezanga licence, where 15 wells were
drilled in 2022. The C16 rig restarted operations in August 2022
and drilled 2 wells during the year under contract to Assala
Energy.
To cope with the complexity of upcoming operations on the Ezanga
field and to replace the C3 rig, Caroil acquired a new high-tech
drilling rig (C18 Maghèna) which is expected to enter service in
March 2023 in Gabon.
- Other highlights of the fiscal year
Offer for Wentworth Resources
On 5 December 2022, M&P and Wentworth Resources
(“Wentworth”) jointly announced that they had reached agreement on
the terms of a recommended acquisition of Wentworth by M&P for
a cash consideration of 32,5 pence per share, or approximately $76
million. Wentworth’s only asset (excluding its $30 million cash
balance as at 1 November 2022) is its 31.94% direct and indirect
interest in the Mnazi Bay gas asset in Tanzania, operated by
M&P. If the acquisition is completed, M&P’s stake in Mnazi
Bay will increase from 48.06% to 80%.
Wentworth Resources published the Scheme Document for the
acquisition on 25 January 2023. On 23 February 2023, the requisite
majority of shareholders voted to approve the Scheme at the Court
Meeting and to pass the resolution to amend Wentworth’s articles of
association and to implement the Scheme at the General Meeting.
The completion of the acquisition of Wentworth remains subject
to the approval of the Tanzanian authorities, which is currently
expected between Q2 and Q3 2023. M&P will communicate on this
subject in due course.
Presence in Venezuela
In Venezuela, due to international sanctions against PDVSA,
operations conducted by the Group in relation to its stake in
Petroregional del Lago (“PRDL”) are strictly limited to maintenance
related to the safety of staff and assets, and to environmental
protection. Consequently, no contribution to M&P’s net income
has been recognised, despite the fact that the asset is still in
production (gross production of 16,281 bopd in 2022, or 6,512 bopd
theoretically for the 40% consolidated stake held by M&P) and
still has development potential.
In addition, M&P has entered into negotiations with the
Venezuelan government to obtain a new operating framework similar
to that of Chevron. In early December 2022 and with the approval of
the US government, Chevron signed an agreement with the Venezuelan
authorities allowing for the payment of debts owed by PDVSA as well
as enhanced control over the operations of their joint venture with
PDVSA, particularly in the areas of procurement, cash management
and crude sales.
Group reserves as at 31 December
2022
The Group’s reserves correspond to the volumes of technically
recoverable hydrocarbons on permits where production is currently
underway—proportionate to the Group’s share of interest in those
permits—plus those revealed by discovery and delineation wells that
can be operated commercially. These reserves were certified as at
31 December 2022 by DeGolyer and MacNaughton in Gabon and Angola,
and by RPS Energy in Tanzania.
The Group’s 2P reserves stood at 173.2 mmboe at 31 December
2022, of which 108.5 mmboe are proven reserves (1P).
2P reserves for M&P’s working
interest:
Oil (mmbbls)
Oil (mmbbls)
Gas (bcf)
MMboe
Gabon
Angola
Tanzania
Group total
31/12/2021
123.5
13.7
204.3
171.2
Production
-5.3
-1.4
-15.8
-9.3
Revision
+2.6
+5.7
+17.7
+11.2
31/12/2022
120.8
18.0
206.2
173.2
O/w 1P reserves
77.1
15.5
96.2
108.5
As a % of 2P
64%
86%
47%
63%
Note that these figures do not take into account M&P’s
20.46% interest in Seplat Energy, one of Nigeria’s main operators
listed on the London and Lagos stock exchanges. As a reminder,
Seplat’s 2P reserves were 430 mmboe (206 million barrels of oil and
1,343 billion cubic feet of gas) at 31 December 2022, i.e. 88 mmboe
for M&P’s 20.46% interest.
In addition, due to international sanctions against Venezuela’s
state oil company PDVSA, the activity associated with M&P’s
interest in PRDL is, for the time being, limited to operations
related solely to the safety of staff and assets, and to
environmental protection. Accordingly, no reserves have been
recognised for this interest.
____________________________
Français
English
pieds cubes
pc
cf
cubic feet
millions de pieds cubes par
jour
Mpc/j
mmcfd
million cubic feet per day
milliards de pieds cubes
Gpc
bcf
billion cubic feet
baril
B
bbl
barrel
barils d’huile par jour
b/j
bopd
barrels of oil per day
millions de barils
Mb
mmbbls
million barrels
barils équivalent pétrole
bep
boe
barrels of oil equivalent
barils équivalent pétrole par
jour
bep/j
boepd
barrels of oil equivalent per day
millions de barils équivalent
pétrole
Mbep
mmboe
million barrels of oil equivalent
____________________________
For more information, please visit www.maureletprom.fr/en/.
This document may contain forecasts regarding
the financial position, results, business and industrial strategy
of Maurel & Prom. By nature, forecasts contain risks and
uncertainties to the extent that they are based on events or
circumstances that may or may not happen in the future. These
forecasts are based on assumptions we believe to be reasonable, but
which may prove to be incorrect and which depend on a number of
risk factors, such as fluctuations in crude oil prices, changes in
exchange rates, uncertainties related to the valuation of our oil
reserves, actual rates of oil production and the related costs,
operational problems, political stability, legislative or
regulatory reforms, or even wars, terrorism and sabotage.
Maurel & Prom is listed for trading on
Euronext Paris CAC All-Tradable – CAC Small – CAC Mid & Small –
Eligible PEA-PME and SRD Isin FR0000051070/Bloomberg MAU.FP/Reuters
MAUP.PA
____________________________
1 The financial statements have been audited and certified
without qualification
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230313005845/en/
Maurel & Prom Press, shareholder and investor
relations +33 (0)1 53 83 16 45 ir@maureletprom.fr
NewCap Financial communications and investor
relations/Media relations Louis-Victor Delouvrier/Nicolas Merigeau
+33 (0)1 44 71 98 53/+33 (0)1 44 71 94 98
maureletprom@newcap.eu
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