CALGARY,
AB, Aug. 10, 2022 /CNW/ - Pan Orient Energy
Corp. ("Pan Orient" or the "Company") (TSXV: POE) reports 2022
second quarter consolidated financial and operating results.
Please note that all amounts are in Canadian dollars unless
otherwise stated and BOPD refers to barrels of oil per
day.
The Company is today filing its unaudited consolidated financial
statements as at and for the six months ended June 30, 2022 and related management's discussion
and analysis with Canadian securities regulatory authorities.
Copies of these documents may be obtained online at www.sedar.com
or the Company's website, www.panorient.ca.
Commenting today on Pan Orient's 2022 second quarter results,
President and CEO Jeff Chisholm
stated: "The Pan Orient sale transaction is progressing smoothly
into the August 23, 2022 shareholder
vote. Pan Orient management and directors recommend that
shareholders support this transaction given the late stage
development of the Thailand L53
asset."
HIGHLIGHTS
Thailand (net to Pan Orient's
50.01% equity interest in the Thailand Joint Venture)
- Net to Pan Orient's 50.01% equity interest in the Thailand
Joint Venture, oil sales from Concession L53 in the second quarter
of 2022 were 1,124 BOPD compared with 1,105 BOPD in the first
quarter of 2022.
- Thailand adjusted funds flow
from operations of $7.6 million
($73.93 per barrel) in the second
quarter of 2022 compared with $5.7
million ($57.19 per barrel) in
the first quarter of 2022. The average realized oil price per
barrel increased 27% in the second quarter of 2022 to $156.27 per barrel compared with $122.67 in the first quarter of 2022.
- In the first half of 2022, Thailand adjusted funds flow from operations
of $13.2 million funded $2.5 million of Thailand exploration and development
activities. Working capital and long-term deposits, net to Pan
Orient's 50.01% equity interest in the Thailand Joint Venture, at
June 30, 2022 was $12.7 million.
Sawn Lake (Operated by Andora Energy Corporation, in which Pan
Orient has a 71.8% ownership)
- In March 2022, Andora entered
into an agreement with a joint venture partner at Sawn Lake whereby
Andora acquired certain assets and assumed certain liabilities at
Sawn Lake. Through the transaction, Andora increased its working
interest in the Sawn Lake joint venture to 75%.
- The March 31, 2022 Contingent
Bitumen Resources Report ("Resources Report"), a National
Instrument 51-101 compliant resources evaluation for Andora's oil
sands interests at Sawn Lake Alberta based on exploitation using
Steam Assisted Gravity Drainage ("SAGD") as evaluated by Sproule
Associates Limited, assigned unrisked "Best Estimate" contingent
resources for Andora of 292.0 million barrels of bitumen
recoverable (209.6 million barrels net to Pan Orient's 71.8%
interest in Andora) and unrisked "Best Estimate" net present value,
discounted at 15%, for Andora's interests of $192 million on an after-tax basis ($138 million net to Pan Orient's 71.8% interest
in Andora). The Sawn Lake operations are currently suspended and
awaiting restart and commercial expansion. Contingent resources are
those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations by the application
of development projects, but which are not currently considered to
be commercially recoverable due to one or more contingencies. The
contingent resources volumes estimated in the Resources Report are
considered contingent until such time as there are additional
delineation wells confirming reservoir quality and continuity,
refinement of the commercial development plan, regulatory approval
for full field development, corporate commitment to move forward
and financing for commercial development. There is uncertainty that
it will be commercially viable to produce any portion of the
reported contingent resources volumes. Please refer to Pan Orient's
press release of June 13, 2022 for
additional information.
- Western Canada Select reference prices for heavy oil remained
strong in the second quarter of 2022. At August 8, 2022, the price for Western Canada
Select was Cdn$91.34 per barrel and
the forward market for Western Canada Select in 2024 was
Cdn$79.13 per barrel. Andora is
considering alternatives to restart the existing steam SAGD
facility and wellpair at Sawn Lake and move the Sawn Lake project
forward with minimum development costs to Andora, including
partnership, farmout, sourcing additional funds, partial sale or
outright sale, and achieve value for shareholders.
- For the first half of 2022, Pan Orient reports total operating
expenses of $171 thousand associated
with the Sawn Lake suspended SAGD facility and wellpair.
Corporate
- On June 6, 2022 Pan Orient
announced that it had entered into an agreement to be acquired by a
subsidiary of Dialog Group Berhad ("Dialog") and for Pan Orient's
non-Thailand business to be
transferred to CanAsia Energy Corp. ("CanAsia"), a new company to
be owned by Pan Orient shareholders (the "Arrangement"). Upon
completion of the transaction, a holder of a common share of Pan
Orient will receive, for each such common share, cash consideration
of USD $0.788 and one common share of
CanAsia. The cash consideration is approximately CAD $1.01 at the current exchange rate.
As a result of the Arrangement: (a) Dialog, through a subsidiary,
will hold all of the issued and outstanding Pan Orient shares, and
Pan Orient will continue to own Pan Orient's Thailand business; (b) Pan Orient shareholders
(other than dissenting shareholders) will receive, through a series
of steps, for each Pan Orient share held, a cash payment of USD
$0.788 and one CanAsia share; and (c)
CanAsia will be a new public company with its shares expected to be
listed on the TSX Venture Exchange ("TSXV") (subject to
satisfaction of the conditions of the TSXV), that will own Pan
Orient's non-Thailand business, which includes: Pan Orient's 71.8%
interest in Andora Energy Corporation, which has interests in oil
sands properties in Sawn Lake, Alberta; convertible loans
receivable from Andora; Pan Orient's interests in Indonesia, which
operations are, effective January 1, 2020, considered discontinued
operations for accounting purposes; and working capital and long
term deposits, estimated to be approximately $6.7 million. The
estimate of working capital and long-term deposits has been reduced
to reflect changes in foreign exchange rates and higher transaction
expenses, mainly legal fees.
Completion of the Arrangement is subject to certain conditions,
including approval of the Pan Orient shareholders, final approval
of the Court of Queen's Bench of Alberta and conditional approval
of the delisting of the Pan Orient shares and listing of the
CanAsia shares by the TSXV. If all conditions to the completion of
the Arrangement are satisfied or waived, Pan Orient anticipates
that the Arrangement will become effective on or about August 25,
2022.
- Net income attributable to common shareholders for the second
quarter of 2022 was $4.8 million ($0.10 per share) compared with
net income attributable to common shareholders for the first
quarter of 2022 of $3.5 million ($0.07 per share). Corporate
adjusted funds flow from operations (including Pan Orient's 50.01%
equity interest in the Thailand Joint Venture) in the second
quarter of 2022 were $6.1 million ($0.12 per share) compared with
$4.5 million ($0.09 per share) in the first quarter of 2022.
- Common shares outstanding were 49.8 million at June 30,
2022.
- Pan Orient paid a $0.40 per common share return of capital
distribution to shareholders on February 10, 2022 following
shareholder approval on January 18, 2022. The total amount of the
distribution was $19.9 million.
- Pan Orient maintains a strong financial position with working
capital and non-current deposits of $12.8 million and no long-term
debt at June 30, 2022. In addition, the Thailand Joint Venture has
$12.7 million in working capital and long-term deposits, net to Pan
Orient's 50.01% equity interest.
OUTLOOK
A special meeting of Pan Orient shareholders to vote on the
Arrangement and other matters will be held on Tuesday, August 23,
2022. If all conditions to the completion of the Arrangement
are satisfied or waived, Pan Orient anticipates that the
Arrangement will become effective on or about August 25, 2022.
The Arrangement is an opportunity for Pan Orient shareholders to
realize value for their investment in Pan Orient while continuing
to participate, through CanAsia, in the Sawn Lake heavy oil project
and potential exploration and development activities in
Thailand through an anticipated
future bid round for new oil concessions
Pan Orient is a Calgary,
Alberta based oil and gas exploration and production company
with operations currently located onshore Thailand and Western
Canada.
Cautionary
Statements
This press release contains forward-looking information.
Forward-looking information is generally identifiable by the
terminology used, such as "will", "expect", "believe", "estimate",
"should", "anticipate", "potential", "opportunity" or other similar
wording. Forward-looking information in this press release
includes, but is not limited to, references, express
or implied, to: estimates of recoverable contingent resources and
the net present value thereof; forward prices for Western Canada
Select heavy oil; the strength of Pan Orient's financial position;
closing of the Arrangement transaction generally; transfer of Pan
Orient's non-Thailand business to
CanAsia; payment of cash consideration by the Purchaser and
distribution of common shares of CanAsia to Pan Orient shareholders
at closing; approval of the transaction by Pan Orient shareholders,
the court and the TSXV; the date of closing; satisfaction of
conditions to closing; the opportunity for Pan Orient shareholders
to realize value for their investment and to continue to
participate in the Sawn Lake heavy oil project and potential
exploration and development activities in Thailand.
By its very nature, the forward-looking information contained
in this press release requires Pan Orient and its management to
make assumptions that may not materialize or that may not be
accurate. The assumptions on which the forward-looking information
is based include, but are not limited to: the satisfaction of the
conditions to closing of the Arrangement in a timely manner;
completing the Arrangement on the expected terms and on the timing
anticipated; the ability of the parties to receive, in a timely
manner and on satisfactory terms, the necessary shareholder, court
and TSXV approvals; and other matters.
In addition, the forward-looking information is subject to
known and unknown risks and uncertainties and other factors, some
of which are beyond the control of Pan Orient, which could cause
actual events, results, expectations, achievements or performance
to differ materially. These risks and uncertainties include,
without limitation, the ability to complete the Arrangement on the
terms contemplated by the Arrangement Agreement and a related
Separation Agreement on the timing and terms anticipated or at all;
and that completion of the Arrangement is subject to a number of
conditions which are typical for transactions of this nature and
failure to satisfy any of these conditions, the emergence of a
superior proposal or the failure to obtain approval of the
shareholders, the court or the TSXV may result in the termination
of the Arrangement Agreement. imprecision of reserves
estimates and estimates of recoverable quantities of oil, changes
in project schedules, operating and reservoir performance, the
effects of weather and climate change, the results of exploration
and development drilling and related activities, demand for oil and
gas, commercial negotiations, other technical and economic factors
or revisions and other factors, many of which are beyond the
control of Pan Orient. The foregoing list of risks and
uncertainties is not exhaustive.
Although Pan Orient believes that the expectations reflected
in its forward-looking information are reasonable, it can give no
assurances that those expectations will prove to be correct. Pan
Orient undertakes no obligation to update publicly or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
|
Financial and
Operating Summary
|
Three Months
Ended
June 30,
|
Six Months
Ended
June 30,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2022
|
2021
|
2022
|
2021
|
|
FINANCIAL
|
|
|
|
|
|
|
Financial Statement
Results – Excluding 50.01% Interest in Thailand Joint
Venture (Note 1)
|
|
|
|
|
|
|
Net income attributed
to common shareholders
|
4,849
|
1,516
|
8,363
|
2,656
|
215 %
|
|
Per share – basic and
diluted
|
$
0.10
|
$ 0.03
|
$
0.17
|
$ 0.05
|
215 %
|
|
Cash flow used in
operating activities (Note 2 & 3)
|
(1,044)
|
(620)
|
(2,011)
|
(1,611)
|
25 %
|
|
Per share – basic and
diluted
|
$
(0.02)
|
$
(0.01)
|
$
(0.04)
|
$ (0.03)
|
25 %
|
|
Cash flow from
investing activities (Note 2 & 3)
|
2,693
|
6,012
|
2,976
|
8,622
|
-65 %
|
|
Per share – basic and
diluted
|
$
0.05
|
$ 0.12
|
$
0.06
|
$ 0.17
|
-65 %
|
|
Cash flow used in
financing activities (Note 2 & 3)
|
-
|
(388)
|
(19,918)
|
(1,628)
|
1,123 %
|
|
Per share – basic and
diluted
|
$
0.00
|
$ (0.01)
|
$
(0.40)
|
$ (0.03)
|
1,123 %
|
|
Change in cash and cash
equivalents from discontinued operations (Note 3)
|
4
|
(103)
|
(147)
|
(136)
|
8 %
|
|
Working capital
(Other Financial Measure) (Note 6)
|
11,917
|
28,931
|
11,917
|
28,931
|
-59 %
|
|
Working capital &
non-current deposits (Other Financial Measure) (Note
6)
|
12,756
|
29,542
|
12,756
|
29,542
|
-57 %
|
|
Long-term
debt
|
-
|
-
|
-
|
-
|
-
|
|
Shares outstanding
(thousands)
|
49,794
|
49,881
|
49,794
|
49,881
|
0 %
|
|
Capital Commitments
(Note 4)
|
1,590
|
801
|
1,590
|
801
|
99 %
|
|
Working Capital and
Non-current Deposits (Other Financial Measure) (Note
6)
|
|
|
|
|
|
|
Beginning of period –
Excluding Thailand Joint Venture
|
11,513
|
23,415
|
32,084
|
23,577
|
36 %
|
|
Adjusted funds flow
used in continuing operations (Note 3 & 6)
|
(1,298)
|
(1,163)
|
(2,460)
|
(2,087)
|
18 %
|
|
Adjusted funds flow
used in discontinued operations (Note 3)
|
(154)
|
(2)
|
(192)
|
(22)
|
773 %
|
|
Cash and deposits
acquired (Note 13)
|
-
|
-
|
752
|
-
|
100 %
|
|
Special distribution
(Note 14)
|
-
|
-
|
(19,917)
|
-
|
100 %
|
|
Amounts received from
(advanced to) Thailand Joint Venture
|
132
|
38
|
(71)
|
48
|
-250 %
|
|
Dividend received from
Thailand Joint Venture
|
2,565
|
5,974
|
2,565
|
8,574
|
-70 %
|
|
Finance lease
payments
|
-
|
(17)
|
(1)
|
(19)
|
-95 %
|
|
Normal course issuer
bid
|
-
|
(371)
|
-
|
(1,609)
|
-100 %
|
|
Automatic shares
purchase plan (Note 8)
|
-
|
1,574
|
-
|
945
|
-100 %
|
|
Effect of foreign
exchange and other
|
(2)
|
94
|
(4)
|
135
|
-102 %
|
|
End of period
- Excluding Thailand Joint
Venture
|
12,756
|
29,542
|
12,756
|
29,542
|
-57 %
|
|
Pan Orient 50.01%
interest in Thailand Joint Venture Working Capital and Non-
Current Deposits
|
12,699
|
1,383
|
12,699
|
1,383
|
818 %
|
|
Economic Results –
Including 50.01% Interest in Thailand Joint Venture
|
|
|
|
|
|
|
Total corporate
adjusted funds flow (used in) from operations by region (Note
6)
|
|
|
|
|
|
|
Canada
|
(1,290)
|
(1,158)
|
(2,444)
|
(2,074)
|
18 %
|
|
Thailand (Note
9)
|
(8)
|
(5)
|
(16)
|
(13)
|
23 %
|
|
From continuing
operations
|
(1,298)
|
(1,163)
|
(2,460)
|
(2,087)
|
18 %
|
|
Indonesia –
Discontinued Operations
|
(154)
|
(2)
|
(192)
|
(22)
|
773 %
|
|
Adjusted funds flow
used in operations (excl. Thailand Joint Venture)
|
(1,452)
|
(1,165)
|
(2,652)
|
(2,109)
|
26 %
|
|
Share of Thailand Joint
Venture (Notes 1 & 5)
|
7,571
|
5,045
|
13,265
|
9,371
|
42 %
|
|
Total corporate
adjusted funds flow from operations
|
6,119
|
3,880
|
10,613
|
7,262
|
46 %
|
|
Per share – basic
and diluted
|
$
0.12
|
$ 0.08
|
$
0.21
|
$ 0.14
|
48 %
|
|
Capital Expenditures –
Petroleum and Natural Gas Properties (Note 7)
|
|
|
|
|
|
|
Share of Thailand
Joint Venture capital expenditures
|
1,209
|
1,848
|
2,545
|
3,677
|
-31 %
|
|
Total capital
expenditures (incl. Thailand Joint Venture)
|
1,209
|
1,848
|
2,545
|
3,677
|
-31 %
|
|
Investment in
Thailand Joint Venture
|
|
|
|
|
|
|
Beginning of
period
|
28,164
|
26,252
|
24,094
|
28,329
|
-15 %
|
|
Net income from Joint
Venture
|
6,071
|
2,669
|
10,421
|
4,571
|
128 %
|
|
Other comprehensive
loss from Joint Venture
|
(693)
|
(1,011)
|
(1,177)
|
(2,380)
|
-51 %
|
|
Dividend
paid
|
(2,565)
|
(5,974)
|
(2,565)
|
(8,574)
|
-70 %
|
|
Amounts (received from)
advanced to Joint Venture
|
(132)
|
(37)
|
72
|
(47)
|
-253 %
|
|
End of
period
|
30,845
|
21,899
|
30,845
|
21,899
|
41 %
|
|
Three Months
Ended
June 30,
|
Six Months
Ended
June 30,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2022
|
2021
|
2022
|
2021
|
|
Thailand
Operations
|
|
|
|
|
|
|
Economic Results –
Including 50.01% Interest in Thailand Joint Venture (Note
5)
|
|
|
|
|
|
|
Oil sales
(bbls)
|
102,295
|
127,266
|
201,719
|
248,999
|
-19 %
|
|
Average daily oil sales
(BOPD) by Concession L53
|
1,124
|
1,399
|
1,114
|
1,376
|
-19 %
|
|
Average oil sales
price, before transportation (CDN$/bbl)
|
$
156.27
|
$
78.43
|
$
139.71
|
$
76.18
|
83 %
|
|
Reference Price (volume
weighted) and differential
|
|
|
|
|
|
|
Crude oil (Brent
$US/bbl)
|
$
113.68
|
$
68.96
|
$
106.67
|
$
64.78
|
65 %
|
|
Exchange Rate
$US/$Cdn
|
1.29
|
1.24
|
1.29
|
1.26
|
2 %
|
|
Crude oil (Brent
$Cdn/bbl)
|
$
146.65
|
$
85.40
|
$
137.10
|
$
81.50
|
68 %
|
|
Sale price / Brent
reference price
|
107 %
|
92 %
|
102 %
|
93 %
|
9 %
|
|
Adjusted funds flow
from (used in) operations (Note 6)
|
|
|
|
|
|
|
Crude oil
sales
|
15,986
|
9,982
|
28,182
|
18,968
|
49 %
|
|
Government
royalty
|
(824)
|
(538)
|
(1,442)
|
(1,017)
|
42 %
|
|
Transportation
expense
|
(254)
|
(296)
|
(498)
|
(588)
|
-15 %
|
|
Operating
expense
|
(685)
|
(689)
|
(1,321)
|
(1,445)
|
-9 %
|
|
Field
netback
|
14,223
|
8,459
|
24,921
|
15,918
|
57 %
|
|
General and
administrative expense (Note 9)
|
(195)
|
(164)
|
(402)
|
(411)
|
-2 %
|
|
Interest
income
|
1
|
1
|
1
|
1
|
0 %
|
|
Foreign exchange
loss
|
(10)
|
(29)
|
(9)
|
(15)
|
-40 %
|
|
Current income
tax
|
(6,456)
|
(3,227)
|
(11,262)
|
(6,136)
|
84 %
|
|
Thailand - Adjusted
funds flow from operations
|
7,563
|
5,040
|
13,249
|
9,357
|
42 %
|
|
Adjusted funds flow
from (used in) operations / barrel (CDN$/bbl) (Note 6)
|
|
|
|
|
|
|
Crude oil
sales
|
$
156.27
|
$
78.43
|
$
139.71
|
$
76.18
|
83 %
|
|
Government
royalty
|
(8.06)
|
(4.23)
|
(7.15)
|
(4.08)
|
75 %
|
|
Transportation
expense
|
(2.48)
|
(2.33)
|
(2.47)
|
(2.36)
|
5 %
|
|
Operating
expense
|
(6.70)
|
(5.41)
|
(6.55)
|
(5.80)
|
13 %
|
|
Field
netback
|
$
139.04
|
$
66.47
|
$
123.54
|
$
63.93
|
93 %
|
|
General and
administrative expense (Note 9)
|
(1.91)
|
(1.29)
|
(1.99)
|
(1.65)
|
21 %
|
|
Interest
Income
|
0.01
|
0.01
|
-
|
-
|
23 %
|
|
Foreign exchange
loss
|
(0.10)
|
(0.23)
|
(0.04)
|
(0.06)
|
-26 %
|
|
Current income
tax
|
(63.11)
|
(25.36)
|
(55.83)
|
(24.64)
|
127 %
|
|
Thailand – Adjusted
funds flow from operations
|
$
73.93
|
$
39.60
|
$
65.68
|
$
37.58
|
75 %
|
|
Government royalty as
percentage of crude oil sales
|
5.2 %
|
5.4 %
|
5.1 %
|
5.4 %
|
0 %
|
|
Income tax as
percentage of crude oil sales
|
40 %
|
32 %
|
40 %
|
32 %
|
8 %
|
|
As percentage of crude
oil sales
|
|
|
|
|
|
|
Expenses -
transportation, operating, G&A and other
|
7 %
|
12 %
|
8 %
|
13 %
|
-5 %
|
|
Government royalty, SRB
and income tax
|
46 %
|
38 %
|
45 %
|
38 %
|
7 %
|
|
Adjusted funds flow
from operations, before interest income
|
47 %
|
50 %
|
47 %
|
49 %
|
-2 %
|
|
Wells
drilled
|
|
|
|
|
|
|
Gross
|
-
|
1
|
-
|
3
|
-100 %
|
|
Net
|
-
|
0.5
|
-
|
1.5
|
-100 %
|
|
Financial Statement
Presentation
Results – Excl.
50.01% Interest in Thailand Joint Venture (Note 1)
|
|
|
|
|
|
|
General and
administrative expense (Note 9)
|
(8)
|
(4)
|
(16)
|
(13)
|
23 %
|
|
Adjusted funds flow
used in consolidated operations
|
(8)
|
(4)
|
(16)
|
(13)
|
23 %
|
|
Adjusted fund flow
Included in Investment in Thailand Joint Venture
|
|
|
|
|
|
|
Net income from
Thailand Joint Venture
|
6,071
|
2,669
|
10,421
|
4,571
|
128 %
|
|
Add back non-cash items
in net income
|
1,500
|
2,376
|
2,844
|
4,800
|
-41 %
|
|
Adjusted funds flow
from Thailand Joint Venture
|
7,571
|
5,045
|
13,265
|
9,371
|
42 %
|
|
Thailand – Economic
adjusted funds flow from operations (Note 5)
|
7,563
|
5,041
|
13,249
|
9,358
|
42 %
|
|
Three Months
Ended
June 30,
|
Six Months
Ended
June 30,
|
% Change
|
|
(thousands of
Canadian dollars except where indicated)
|
2022
|
2021
|
2022
|
2021
|
|
Canada
Operations
|
|
|
|
|
|
|
Interest
income
|
6
|
12
|
10
|
18
|
-44 %
|
|
General and
administrative expenses (Note 9)
|
(527)
|
(521)
|
(1,105)
|
(1,041)
|
6 %
|
|
Operating expense (Note
10)
|
(105)
|
(97)
|
(171)
|
(139)
|
23 %
|
|
Transaction
costs
|
(910)
|
-
|
(910)
|
-
|
100 %
|
|
Stock based
compensation on restricted share units (note 11)
|
(101)
|
(253)
|
(368)
|
(352)
|
5 %
|
|
Realized foreign
exchange (loss) gain (Note 12)
|
(50)
|
2
|
(72)
|
1
|
-7,300 %
|
|
Unrealized foreign
exchange gain (loss) (Note 12)
|
397
|
(301)
|
172
|
(561)
|
-131 %
|
|
Canada – Adjusted
funds flow used in operations
|
(1,290)
|
(1,158)
|
(2,444)
|
(2,074)
|
18 %
|
|
Add Thailand general
and administrative expense (note 9)
|
(8)
|
(4)
|
(16)
|
(13)
|
23 %
|
|
Add back changes in
non-cash working capital, continuing operations
|
651
|
242
|
621
|
(85)
|
-831 %
|
|
Add back unrealized
foreign exchange gain (loss)
|
(397)
|
300
|
(172)
|
561
|
-131 %
|
|
Cash flow used in
operating activities, continuing operations
|
(1,044)
|
(620)
|
(2,011)
|
(1,611)
|
25 %
|
|
Indonesia -
Discontinued Operations
|
|
|
|
|
|
|
General and
administrative expense (Note 9)
|
(54)
|
(48)
|
(94)
|
(99)
|
-5 %
|
|
Exploration recovery
(expense)
|
3
|
(2)
|
(79)
|
(3)
|
2,533 %
|
|
Unrealized foreign
exchange (loss) gain
|
(103)
|
48
|
(19)
|
80
|
-124 %
|
|
Indonesia – Adjusted
funds flow used in operations
|
(154)
|
(2)
|
(192)
|
(22)
|
773 %
|
|
Add back changes in
non-cash working capital, discontinued operations
|
172
|
(101)
|
81
|
(114)
|
-171 %
|
|
Settlement of
decommissioning provision
|
(14)
|
-
|
(36)
|
-
|
100 %
|
|
Cash flow from (used
in) operating activities, discontinued operations
|
4
|
(103)
|
(147)
|
(136)
|
8 %
|
|
(1)
|
Pan Orient holds a
50.01% equity interest in Pan Orient Energy (Siam) Ltd. as a joint
arrangement where the Company
shares joint control with the 49.99% equity interest holder.
The resulting joint arrangement is classified as a Joint
Venture
under IFRS 11 and is accounted for using the equity method of
accounting where Pan Orient's 50.01% equity interest in the
assets, liabilities, working capital, operations and capital
expenditures of Pan Orient Energy (Siam) Ltd. are recorded in
Investment in Thailand Joint Venture.
|
|
(2)
|
As set out in the
Consolidated Statements of Cash Flows in the Consolidated Financial
Statements of Pan Orient Energy Corp.
|
|
(3)
|
The East Jabung
Production Sharing Contract ("PSC") expired in January 2020 and the
operator is determining final steps
to be taken for formal approval of the expiry from the Government
of Indonesia, including reclamation requirements. Pan
Orient is withdrawing from operations in Indonesia and the office
in Jakarta was closed March 31, 2020. For accounting
purposes, the operation in Indonesia for accounting purposes is
considered a discontinued operation since 2020.
|
|
(4)
|
Refer to Commitments
note disclosure of the June 30, 2022 and June 30, 2021 Interim
Condensed Consolidated Financial
Statements.
|
|
(5)
|
For the purpose of
providing more meaningful economic results from operations for
Thailand, the amounts presented include
50.01% of results of the Thailand Joint Venture. Pan Orient
has a 50.01% ownership interest in Pan Orient Energy (Siam)
Ltd., but does not have any direct interest in, or control over,
the crude oil reserves, operations or working capital of
on-shore
Concession L53.
|
|
(6)
|
Total corporate
adjusted funds flow from operations (non-GAAP Financial
Measure) is cash flow from operating activities prior
to changes in non-cash working capital, unrealized foreign exchange
gain or loss plus the corresponding amount from Pan
Orient's 50.01% interest in the Thailand Joint Venture which is
recorded in Joint Venture for financial statement
purposes.
This measure is used by management to analyze operating performance
and leverage. Adjusted funds flow as presented
does not have any standardized meaning prescribed by IFRS and
therefore it may not be comparable with the calculation of
similar measures of other entities. Adjusted funds flow is
not intended to represent operating cash flow or operating profits
for
the period nor should it be viewed as an alternative to cash flow
from operating activities, net earnings or other measures of
financial performance calculated in accordance with IFRS.
Refer to Management's Discussion and Analysis for the Six
Months
Ended June 30, 2022 for definitions of Non-GAAP and Other Financial
Measures.
|
|
(7)
(8)
|
Cost of capital
expenditures excluded decommissioning costs and the impact of
changes in foreign exchange.
In December 2020, the
Company entered into an Automatic Share Purchase Plan ("ASPP"),
which permits an independent
broker to repurchase shares during certain blackout periods under
the Company's normal course issuer bid, subject to agreed
trading parameters and other instructions for such purchases.
At March 31, 2021, the Company recognized a provision of
$1.5 million (December 31, 2020 - $0.9 mill) in accounts payable
and accrued liabilities as an estimate for the number of
shares that may be repurchased during potential blackout periods at
the maximum share price under the ASPP. The
Company was not in a blackout period at June 30, 2021 and not was
required to provide a provision for ASPP. As such, the
provisions provided for at December 31, 2020 and March 31, 2021
were reversed.
|
|
(9)
|
General &
administrative expenses, excluding non-cash accretion
expense. The nominal amount of G&A shown in the six
months ended June 30, 2022 and June 30, 2021 for Thailand
operations related to G&A of the holding company of Pan
Orient Energy (Siam) Ltd.
|
|
(10)
|
Operating expense
related to Andora's suspended demonstration project facility and
wellpair at Sawn Lake Central.
|
|
(11)
|
The Company granted
1,050,000 and 520,000 restricted share units ("RSUs") to directors,
senior management, employees
and consultant on May 19, 2020 and May 14, 2021, respectively. At
June 30, 2022, 599,998 RSUs are outstanding. The
amount represents the stock-based compensation expenses.
|
|
(12)
|
Realized and
unrealized foreign exchange gain or loss mainly related to the U.S.
dollars denominated cash balances held in Canada.
|
|
(13)
|
In March 2022, Andora
entered into an agreement with a joint venture partner at Sawn Lake
whereby Andora acquired certain
assets and assumed certain liabilities at Sawn Lake. Assets
acquired consist of (i) an additional 25% working interest in
the
Sawn Lake joint venture (Sawn Lake Central Block), (ii) security
deposits of the vendor for Sawn Lake placed with the Alberta
Energy Regulator and other parties, and (iii) a payment from the
vendor of $578 thousand. In connection with the
acquisition,
Andora assumed the abandonment and reclamation costs, and natural
gas tariff commitments associated with the additional
25% working interest in the Sawn Lake joint venture.
Following the transaction, Andora has a 75% working interest in
the
Sawn Lake joint venture.
|
|
|
(14)
|
In February 2022, the
Company paid a $0.40 per share special distribution to shareholders
following shareholder approval
of a reorganization of the Company's share capital. The amount paid
on February 10, 2022 was $19.9 million.
|
|
|
(15)
|
Tables may not add
due to rounding.
|
|
SOURCE Pan Orient Energy Corp.