Pan Orient Energy Corp. (POE:TSX.V) reported in a news release its Q1/20 operating and financial results.
Pan Orient and its joint venture partner intend to commence the second phase of the Thailand drilling program in June, provided the government removes the current 14-day quarantine mandate. Drilling will begin with L53-BB1, which was suspended earlier in Q1/20 so the L53BB well pad could be reinforced. That since has been done.
Production for the quarter ended March 31, 2020, from the Thailand operations averaged 1,186 barrels of oil per day (1,186 bbl/d). This is despite the shut-in of about 77 bbl/d, 17 bbl/d of which are higher operating expense production, and 60 bbl/d of which are from the L53-DD5ST1 well, for which the company is awaiting receipt of a production license, expected in June 2020.
Oil sales in Q1/20 from Concession L53 net to Pan Orient's interest were 1,186 bbl/d, with 791 bbl/d coming from the L53-DD field. During the three-month period, despite a decrease in the Brent crude oil price of 22%, the company's realized price for crude from that concession increased 2% to $63.63 per barrel, less a 5% royalty to the Thailand government of $3.28, transportation expenses of $2.33 and operating expenses of $6.85. The increase was due to two factors: a new crude oil sales agreement effective Feb. 1, 2020, and a higher exchange rate for the U.S. dollar.
The field netback from Concession L53 during the quarter was $51.16 per barrel, which was up 3% from $49.52 per barrel in Q4/19.
"Pan Orient currently sits in the position of being one of the lowest cost oil producers in Southeast Asia with operating expenses of $6.85 per barrel in Q1/20," President and CEO Jeff Chisholm said in the release.
Pan Orient's total Q1/20 corporate adjusted cash flow from operations (including its 50.01% equity interest in the Thailand joint venture) was $4.4 million, or $0.08 per share.
At quarter's end, the energy firm stated it had a sound financial position with $26.4 million in working capital and noncurrent deposits and no long-term debt. The cash flow from the Thailand operations is expected to fund exploration and development activities in Thailand throughout 2020.
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