Interoil recorded an EBITDAX (EBITDA adjusted for exploration expenses) of USD 17 million in Q4 2013 on operating revenues of USD 25 million. EBIT came in at USD 10 million while net profit amounted to USD 7 million. For the full year, the company generated an EBITDAX of USD 57 million and a net profit of USD 19 million.
Production increased slightly for the quarter, to just above 3 000 boe (working interest after royalty). For the full year, Interoil produced more than 1,5 million boe before royalty.
As previously communicated, the 12-well drilling program in Colombia was completed in early November on time and budget, with a production increase of 66%. On average, the wells had an initial production in-line with expectations and although the drilling program has been profitable on all metrics, the in-fill wells have been affected by the depleted pressure in the reservoir and the initial declination rates were therefore higher than anticipated. Total production is therefore at the low end of our initial estimates.
The thorough evaluation of the first phase of the drilling program conducted by the new management team of Interoil Colombia has shown that the existing 35 wells in the Puli-C license has significant potential for increased production and reduced declination. The next phase of the development program for Puli-C will therefore mainly focus on substantially increasing the recovery factor from existing wells through work overs and operational improvements. In addition to the work-over program the next phase will include drilling 3 strategic wells that will delineate the reservoir and increase reserves.
It is expected that the revised development plan for Puli-C will generate higher production and reserves while requiring significantly less capital.
In Peru, the key focus has been to maintain production on very limited investments until the license situation is resolved. Production has declined by 6% year on year which is promising and well above expectations.
The ruling from the ICC arbitral tribunal is expected to be made public in March. A positive outcome will entitle Interoil Peru to license extensions for Blocks III and IV until January 2016 and October 2014 respectively. This will establish that Interoil's licenses are "in force" and therefore eligible for additional 10 year extensions. Although Interoil believes that the licenses are currently "in force", and therefore, should have been extended before the arbitration ruling, we, and our legal advisors, are of the opinion that Interoil has a strong case against Perupetro in the arbitration court.
Detailed information on the operational and financial activities of Interoil is presented in Interoil's Q4 2013 Report and the Q4 2013 Presentation enclosed. The annual statement of reserves is enclosed.
The Q4 2013 accounts will be presented by a web presentation Wednesday 26 February at CET 07:00 on our website: http://www.interoil.no/?page_id=65.
A Q4 2013 conference call will be held at Wednesday 26 February at CET 14:00.
Participants are asked to dial in 5-10 minutes prior to the start time using the number/confirmation code below:
Confirmation Code: 2111528
Participants, Local - Oslo, Norway: +472350 0486
Participants, Local - London, United Kingdom: +44(0)20 3450 9987
Participants, Local - New York, United States of +1718 354 1357
Participants, National free phone - Colombia: 01800 915 7426
Participants dialling in from outside these countries may use the UK or US number.
For more information please contact:
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.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.