Interoil recorded an EBITDAx (EBITDA adjusted for exploration expenses) of USD 9 million in Q2 2014 on operating revenues of USD 19 million. EBIT came in at USD 2 million while net loss amounted to USD 1 million. The results were affected by exploration expenses of USD 5 million, a build-up of inventory amounting to USD 3 million and other non-recurring items of USD 1 million.
Working interest production after royalty fell by 11% on the previous quarter, to 2 608 boe, reflecting a 12% production decrease in Peru and 9% decrease in Colombia.
The operational improvement projects aiming to increase production on the Puli-C field in Colombia continued in Q2 with perforations of new zones in 8 wells. The results from these perforations were positive and led to an incremental production in excess of 200 bopd. However the overall production from Puli-C decreased due to system pressure restrictions, contract issues with Ecopetrol and the malfunctioning of operational equipment. During 2H 2014 the various operational improvement projects and the replacement and upgrade of operational equipment will be continued. The Company remains optimistic about the quality of the Puli C field, but acknowledge that the effects of historical lack of maintenance on operational equipment and infrastructure have been underestimated. More importantly, we need to increase the pressure of the field to substantially increase both production and the recovery factor and thereby reserves. The commencement of the gas and water re-injection program in early 2015 will be essential constituents in order to increase production from the Puli-C field.
The value potential of the LLA-47 exploration license was confirmed by the 3D seismic acquired in Q2. The 3D seismic imaging is of high quality and more than 10 opportunities have been identified. A conservative estimate indicates that there are more than 100 million barrels of original oil in place (OOIP) and our expectation of a risked reserve potential of more than 30 million barrels has been confirmed. To reduce our investment commitments, we are aiming to farm-down up to 50% of this asset and to conclude such a transaction in the coming months.
The qualification requirements for the upcoming bid round for Blocks III and IV in Peru are now public. The requirements are perceived as challenging, as are the investment commitments and royalty rates demanded by Perupetro. We are currently assessing our options and strategy in Peru and in while doing so, we continue to focus on optimizing cash flows.
Detailed information on the operational and financial activities of Interoil is presented in Interoil's Q2 2014 report and the Q2 2014 presentation enclosed.
The Q2 2014 report will be presented by a web presentation made available 21 August 07:00 CET on our website: http://www.interoil.no/?page_id=65
A Q2 Q&A conference call will be held at 21 August at 14:00 CET.
Participants are asked to dial in 5-10 minutes prior to the start time using the number and confirmation code below:
|Participants, Local - Oslo, Norway:||+472350 0486|
|Participants, Local - New York, United States of America:||+1212 444 0895|
|Participants, Local - London, United Kingdom:||+44(0)20 3427 1908|
|Participants, National free phone - Colombia:||01800 915 7426|
Participants dialing in from outside these countries may use the UK or US-number.
For more information please contact:
Thomas J. Fjell
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 currently employs approximately 230 people and is headquartered in Oslo.