TIDMCAB
RNS Number : 5533J
Cabot Energy PLC
20 August 2019
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014. With the publication of this announcement, this
information is now considered to be in the public domain.
20 August 2019
Cabot Energy plc
("Cabot", the "Group" or the "Company")
Q2 2019 Financial, Operational and Trading Update
Cabot Energy plc (AIM: CAB), the AIM quoted oil and gas company
focussed on creating predictable production growth in Canada,
provides an update on its financial position, operations and
trading for the quarter and six months ended 30 June 2019.
Group Production and Sales
Production
-- Gross production in H1 2019 averaged 485 barrels of oil per
day ("bopd") (H1 2018: 761 bopd), reflecting the fact that, since
June 2018, expenditure has only been made on critical items
resulting in deferred production, in addition to the normal wells
and field declines
o Q2 2019 gross production averaged 459 bopd (Q2 2018: 781
bopd)
Sales Volumes & Prices
-- Sales volume in H1 2019 totalled 87,555 bbls (H1 2018: 139,632 bbls)
o Q2 2019 sales volume of 41,284 bbls (Q2 2018: 73,021 bbls)
-- Average H1 2019 Edmonton Light Oil ("Edmonton") sales price
(after transportation costs and crude oil marketing fees) of
US$46/bbl (H1: 2018: US$52.83/bbl)
o Q2 2019 average Edmonton sales price of US$48/bbl (Q1 2019:
US$44/bbl), representing a 9% quarter-on-quarter increase in
2019
-- Edmonton average price discount to West Texas Intermediate in
H1 was approximately 8%, reflecting the restoration of the historic
price differential in 2019
-- Based on crude oil sales prices for June 2019 of CAD$64.13
(pre-tariff) and CAD$56.03 (net), Cabot's Canadian operations are
currently cash flow break-even, excluding the continuing settlement
of legacy Canadian trade creditors with whom the Group secured
voluntary binding agreements in January 2019 (the outstanding
payable balance being US$0.4 million)
Financial Update
Canadian Work Programme - Asset-Level Debt Financing
Cabot continues to engage with a specialist financial advisory
firm to source Canada asset-level debt financing to fund the
Company's proposed winter work programme comprising new wells. To
date, detailed proposals have been received from two potential
lenders, both of whom require production to be increased through a
summer workover programme comprising well reinstatements and
production stimulation prior to any debt drawdown. The Company is
considering the proposals, in particular how to fund the summer
workover programme in order to access the development debt
financing. At present, no assurances can be given that either of
the detailed proposals will progress to formal funding agreements
so the Company will also consider the option of seeking further
equity funding to support the Group's growth prospects.
Group Financial Position
As stated on 10 July 2019, the Group received US$0.5 million
gross (GBP401,123), before expenses, through a subscription by its
supportive majority shareholder, High Power Petroleum LLC ("H2P").
The Group's cash balance was US$213,000 as at 16 August 2019 and
the Group currently has sufficient working capital through to the
end of August 2019. As such, management continues to implement
disciplined cost controls across the business. Additionally, in
accordance with its strategy, the Company continues to assess the
benefits of divesting its interest in certain non-core assets to
generate funds for ongoing working capital requirements. A further
announcement regarding the Group's financial position will be made
as soon as practicable.
Italy Update
As announced previously, the Italian government signed a decree
on 12 February 2019 enacting the suspension of work on oil and gas
exploration permits or applications for new exploration permits in
Italy whilst a national review is undertaken. Whilst Cabot's
licences are in suspension the Company is reviewing the Italian
portfolio with a view to prioritising the Company's significant
off-shore opportunities in The Adriatic and The Sicily Channel.
Divestment of non-core assets will enable Cabot to focus management
time on fundraising activities and advancing the rest of the
Group's assets.
Scott Aitken, Chief Executive Officer, said: "Having
successfully reduced production costs to less than US$20/bbl, we
are seeing average sales prices rising quarter-on-quarter this
year. Our key focus now is to finalise the crucial asset-level debt
financing and, if necessary, any further equity funding required to
fund our work programmes in Canada. Provided that a positive
outcome is reached, we look forward to executing our plans for
these scheduled work programmes."
Enquiries:
Cabot Energy Plc +44 (0)20 7469 2900
Scott Aitken, CEO
Petro Mychalkiw, CFO
SP Angel Corporate Finance LLP +44 (0)20 3470 0470
Nominated Adviser and Joint Broker
David Hignell, Richard Hail, Richard
Redmayne
Luther Pendragon +44 (0)20 7618 9100
Financial PR
Harry Chathli, Alexis Gore, Joe Quinlan
In Accordance with AIM Rules - Guidance for Mining and Oil &
Gas Companies, the information contained in this announcement has
been reviewed and signed off by the CTO of Cabot Energy, Mr
Campbell Airlie, who has over 35 years' experience as a petroleum
engineer. He has read and approved the technical disclosure in this
regulatory announcement.
Note to Editors:
Cabot Energy plc (AIM: CAB) is an oil and gas company focussed
on creating predictable production growth in Canada. Comprehensive
information on Cabot and its oil and gas operations, including
press releases, annual reports and interim reports are available
from Cabot's website: www.cabot-energy.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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