Interoil recorded an EBITDA of USD 17 million in Q3 2013 on operating revenues of USD 27 million. This is an increase from Q2 of 130% and 28% respectively, reflecting higher production and oil price, and lower costs. Year to date, the company has generated an EBITDA of USD 40 million and a profit before tax of USD 31 million.
The 12-well drilling program in Colombia was completed in early November on time and budget. The program targeted mainly low risk in-fill wells to maximize the likelihood of drilling commercial wells. On average, the wells had an initial production in-line with expectations. Production has increased by 44% since Q2 and now account for more than 40% of total production in Colombia. We are happy to see that the drilling program has been profitable on all metrics and we therefore continue to have a strong belief in the potential of the Puli C asset. Notwithstanding the above, the in-fill wells have been affected by the depleted pressure in the reservoir and the declination rates are therefore higher than anticipated. Total production is therefore below our initial estimates.
Interoil is in the process of adjusting our forecasts for the next phase of the drilling program based on the results of the first phase. The evaluation of the first phase along with an investment program will be communicated to the market prior to starting the next phase of the drilling program in the first half of 2014.
In Peru, production increased relative to Q2, to above 2,650 bopd. Production has since dropped below this level, due to a failed gas compressor. The new gas compressor was installed in early November and production has since gradually increased back to above 2,500 bopd.
The license extension process has seen positive developments since October. The board of Perupetro resolved to extend the licenses for the North-Western blocks, including blocks III and IV belonging to Interoil, by 10 years. Perupetro has stated that the licenses have to be in force as a prerequisite for the licenses' extension. Interoil is of the opinion that our licenses for blocks III and IV are in force due to the injunction granted in June 2012 by a Peruvian court (and confirmed by the ICC arbitral tribunal), and that we therefore fulfill the prerequisite set by Perupetro. Notwithstanding, Interoil's legal counsel remains confident that Interoil will obtain a positive ruling from the ICC arbitral tribunal that will establish that the licenses are in force. The deadline for the arbitral award has been set by the ICC to 31 December, however there is a risk that this deadline may be extended to Q1 2014.
Detailed information on the operational and financial activities of Interoil is presented in Interoil's Q3 2013 Report and the Q3 2013 Presentation enclosed.
The Q3 2013 accounts will be presented Thursday 21 November at 8.15 at Continental Hotel. The presentation can also be followed by webcast on our website : http://www.interoil.no/?page_id=65
Thomas J. Fjell
Mob: +47 958 15 300
Mob: +47 488 94 426
Interoil Exploration and Production ASA is a Norwegian based exploration and production company - listed on the Oslo Stock Exchange - with focus on Latin-America. The company is operator of several production and exploration assets in Peru and Colombia. Interoil is headquartered in Oslo