Q2 2026 PetroNor E&P ASA Earnings Call
Speaker #1: Morning. Thank you for joining us today. Before we begin, I'd like to acknowledge the very sad news that we've heard about the passing of His Majesty King Harold.
Speaker #1: I know on behalf of all in Petra Nor that I wish sincere condolences to the royal family and the people of Norway from the conversations I've had in Oslo this week.
Speaker #1: I know that his loss will be keenly felt across the country. With that, I think we will begin our presentation about the second quarter results for Petra Nor.
Speaker #1: We sent out a report earlier this morning, and I'm here to summarize some of the high points of that and mainly to answer your questions.
Speaker #1: So please send those in, and we'll respond to them after a few slides. In many ways, it's been a great quarter for Petra Nor.
Speaker #1: We saw improved production back over 5,000 barrels of oil per day on average for the quarter, which is welcome. This came from the benefits of the infield drilling program that we completed in 2025, but also more stable infrastructure uptime and a higher production efficiency as a result of that.
Speaker #1: So we were pleased with the production performance. And we were also able to lift and sell nearly a million barrels of entitlement oil in April in this quarter, and that the timing of that was somewhat fortuitous in that we realized a significantly higher oil price than expected and that in resulted in a 112 million post-tax cash injection in terms of US dollars that was realized in May.
Speaker #1: And this supported our balance sheet and encouraged the board to recommend a repayment of capital to shareholders of 50 million dollars that was made effective in June.
Speaker #1: So looking at the overall financial delivery and, you know, I always look to see what our cash balances and at the end of the quarter we're at 85.2 million.
Speaker #1: Which is up from the beginning of the year. We were nearly 60 million at the beginning of the year. So we've continued to add cash.
Speaker #1: There's no debt in the company. Revenue for the half year, which includes the taxes that we've paid, to the government in the Congo in terms of royalties and profit share is about 163 million dollars.
Speaker #1: Taxes that we've paid to the government in the Congo in terms of royalties and profit share is about $163 million. And gross assets of nearly $250 million, which are bolstered somewhat by the cash that's in the top line there.
Jens Pace: The taxes that we've paid to the government in the Congo in terms of royalties and profit share is about $163 million. Gross assets of nearly $250 million, which are void up somewhat by the cash that's in the top line there. EBITDA for the H1 of just under $90 million. You can see from the chart on the right-hand side of the slide that we, like other small companies, have a quite a lumpy lifting kind of.
Jens Pace: The taxes that we've paid to the government in the Congo in terms of royalties and profit share is about $163 million. Gross assets of nearly $250 million, which are void up somewhat by the cash that's in the top line there. EBITDA for the H1 of just under $90 million. You can see from the chart on the right-hand side of the slide that we, like other small companies, have a quite a lumpy lifting kind of.
Speaker #1: And gross assets of nearly 250 million dollars, which are boiled up somewhat by the cash that's in the top line there. EBITDA for the half year of just under 90 million dollars.
Speaker #1: You can see from the chart on the right-hand side of the slide that, you know, we like other small companies have quite a lumpy lifting kind of pattern, which makes it difficult to manage cash flows sometimes.
Speaker #1: EBITDA for the half-year of just under 90 million dollars. You can see from the chart on the right-hand side of the slide that, you know, we, like other small companies, have quite a lumpy lifting kind of you can see from the we've had one lifting this year in April, and you can see from the bottom chart that that lifting, which is the large blue column in the middle of the slide here of nearly a million barrels, almost half of that was what we call an overlift, which means that the barrels that we haven't actually produced yet, we are now having to pay that back and we're paying back that back at a rate of about 100,000 barrels per month.
Speaker #1: But you can see from the we've had one lifting this year in April, and you can see from the bottom chart that that lifting, which is the large blue column in the middle of the slide here of nearly a million barrels, almost half of that was what we call an overlift, which means that the barrels that we haven't actually produced yet, we are now having to pay that back.
Jens Pace: We've had one lifting this year in April. You can see from the bottom chart that that lifting, which is the large blue column in the middle of the slide here of nearly a million barrels. Almost half of that was what we call an overlift, which means that they are barrels that we haven't actually produced yet.
Jens Pace: We've had one lifting this year in April. You can see from the bottom chart that that lifting, which is the large blue column in the middle of the slide here of nearly a million barrels. Almost half of that was what we call an overlift, which means that they are barrels that we haven't actually produced yet.
Speaker #1: And we're paying back that back at a rate of about 100,000 barrels per month. So we will be back in balance by probably October this year, and then start to build towards our next lifting.
Jens Pace: We are now having to pay that back. We're paying back that back at a rate of about 100,000 barrels per month. We will be back in balance by probably October this year, and then start to build towards our next lifting. This is the cash waterfall for the H1. Starting in the beginning of the year with $60 million of cash.
Jens Pace: We are now having to pay that back. We're paying back that back at a rate of about 100,000 barrels per month. We will be back in balance by probably October this year, and then start to build towards our next lifting. This is the cash waterfall for the H1. Starting in the beginning of the year with $60 million of cash.
Speaker #1: So, we will be back in balance by probably October this year, and then start to build towards our next lifting. This is the cash waterfall for the half-year, starting at the beginning of the year with $60 million of cash.
Speaker #1: This is the cash waterfall for the half year. Starting in the beginning of the year with 60 million dollars of cash, the oil sales of 112 million dollars and then the treatment of tax and royalties as another 50 million dollars.
Speaker #1: And then accounting adjustment for that overlift that I just described of 41 million dollars, that will disappear as we produce the barrels that I just mentioned.
Speaker #1: The oil sales of $112 million, and then the treatment of tax and royalties is another $50 million. And then the accounting adjustment for that overlift, that I just described, of $41 million—that will disappear as we produce the barrels I just mentioned.
Jens Pace: Oil sales of $112 million, and then the treatment of tax and royalties is another $50 million. Then an accounting adjustment for that overlift that I just described of $41 million, that will disappear as we produce the barrels I just mentioned. OpEx, $11 million, and CapEx of $5.5 million. This is the reinvestment into our main asset in the Congo. Admin of $4.1 million is what it takes to run the company.
Jens Pace: Oil sales of $112 million, and then the treatment of tax and royalties is another $50 million. Then an accounting adjustment for that overlift that I just described of $41 million, that will disappear as we produce the barrels I just mentioned. OpEx, $11 million, and CapEx of $5.5 million. This is the reinvestment into our main asset in the Congo. Admin of $4.1 million is what it takes to run the company.
Speaker #1: OPEX, 11 million dollars, and CAPEX of 5.5 million dollars. This is the reinvestment into our main asset in the Congo. Admin of 4.1 million dollars is what it takes to run the company.
Speaker #1: OPEX, 11 million dollars, and CAPEX of 5 and a half million dollars. So this is the reinvestment into our main asset in the Congo.
Speaker #1: That's people costs, our legal fees, professional services like our audits and other consulting that we use to run the company as well as our office and IT and things like that.
Speaker #1: Administration of $4.1 million is what it takes to run the company. That covers people costs, our legal fees, professional services like our audits, and other consulting that we use to run the company, as well as our office, IT, and things like that.
Jens Pace: That's people costs, our legal fees, professional services like our audits and other consulting that we use to run the company as well as our office and IT and things like that. That's come down quite a lot over the last couple of years. We're trying to run the company as lean as we can. The big $50 million brick there is a return of capital to our shareholders, a repayment of paid in capital of $50 million.
Jens Pace: That's people costs, our legal fees, professional services like our audits and other consulting that we use to run the company as well as our office and IT and things like that. That's come down quite a lot over the last couple of years. We're trying to run the company as lean as we can. The big $50 million brick there is a return of capital to our shareholders, a repayment of paid in capital of $50 million.
Speaker #1: That's come down quite a lot over the last couple of years. And we're trying to run the company as lean as we can. The big 50 million dollar brick there is the return of capital to our shareholders, the repayment of paid-in capital, 50 million dollars, and then 10 million dollars is part of moving money through the company is through dividends is the leakage of dividends to our subsidiary shareholders.
Speaker #1: That's come down quite a lot over the last couple of years. And we're trying to run the company as lean as we can. The big 50 million dollar brick there is the return of capital to our shareholders, the repayment of paid-in capital, 50 million dollars, and then 10 million dollars is part of moving money through the company is through dividends is the leakage of dividends to our subsidiary shareholders.
Jens Pace: Then $10 million is part of moving money through the company is through dividends, is the leakage of dividends to our subsidiary shareholders. Which leaves us with the $85 million that's in the bank as of the end of the quarter. Just a couple of slides on the portfolio and our main asset is in the Congo. It's a Perenco-operated field complex called PNGF Sud.
Jens Pace: Then $10 million is part of moving money through the company is through dividends, is the leakage of dividends to our subsidiary shareholders. Which leaves us with the $85 million that's in the bank as of the end of the quarter. Just a couple of slides on the portfolio and our main asset is in the Congo. It's a Perenco-operated field complex called PNGF Sud.
Speaker #1: Which leaves us with the 85 million dollars that's in the bank as of the end of the quarter. Just a couple of slides on the portfolio and our main asset is in the Congo.
Speaker #1: Which leaves us with the $85 million that's in the bank as of the end of the quarter. Just a couple of slides on the portfolio, and our main asset is in the operated field complex called PNGF Sud.
Speaker #1: It's a Perenco operated field complex called PNGF Sud. Large field in terms of 2 billion over 2 billion barrels originally oil in place and about 500 million barrels recovered to date.
Speaker #1: Large field, in terms of 2 billion—over 2 billion—barrels originally oil in place, and about 500 million barrels recovered to date. So a long tail of production to exploit here.
Jens Pace: Large field in terms of over 2 billion barrels originally oil in place and about 500 million barrels recovered to date. So a long tail of production to exploit here. It's long-lived production which responds well to infill drilling as has been demonstrated in the last few years of reinvestment. This is something that we are working on in terms of starting drilling again in 2027. We've had a bit of a break this year.
Jens Pace: Large field in terms of over 2 billion barrels originally oil in place and about 500 million barrels recovered to date. So a long tail of production to exploit here. It's long-lived production which responds well to infill drilling as has been demonstrated in the last few years of reinvestment. This is something that we are working on in terms of starting drilling again in 2027. We've had a bit of a break this year.
Speaker #1: So a long tail of production to exploit here. And it's so it's long live production which responds well to infield drilling as has been demonstrated in the last few years of reinvestment.
Speaker #1: And so, it's long-life production, which responds well to infield drilling, as has been demonstrated in the last few years of reinvestment. And so, you know, this is something that we are working on in terms of starting drilling again in 2027.
Speaker #1: And so, you know, this is something that we are working on in terms of starting drilling again in 2027. We've had a bit of a break this year.
Speaker #1: Net reserves of just under 16 million barrels. If we carry on producing at the current rates, then that's another nine years of production. With two sea resources of 9.6 million barrels would mean that we could extend that to nearly 14, 15 years of production at current rates.
Speaker #1: We've had a bit of a break this year. Net reserves are just under 16 million barrels. If we carry on producing at the current rates, then that's another nine years of production.
Jens Pace: Net reserves of just under 16 million barrels. If we carry on producing at the current rates, then that's another nine years of production. With 2 C resources of 9.6 million barrels would mean that we could extend that to nearly 14, 15 years of production at current rates. And very high margin in terms of efficient addition of progression of reserves from 2 C to 2 P at about $11 a barrel and OpEx of $12 a barrel. So at current prices, this is a profitable asset.
Jens Pace: Net reserves of just under 16 million barrels. If we carry on producing at the current rates, then that's another nine years of production. With 2C resources of 9.6 million barrels would mean that we could extend that to nearly 14, 15 years of production at current rates. And very high margin in terms of efficient addition of progression of reserves from 2C to 2P at about $11 a barrel and OpEx of $12 a barrel. So at current prices, this is a profitable asset.
Speaker #1: With 2C resources of 9.6 million barrels, that would mean we could extend that to nearly 14 or 15 years of production at current rates. And very high margin, in terms of efficient addition or progression of reserves from 2C to 2P, at about $11 a barrel and OPEX of $12 a barrel.
Speaker #1: And very high margin in terms of, you know, efficient addition of progression of reserves from two sea to two P at about 11 dollars a barrel.
Speaker #1: And OPEX of 12 dollars a barrel. So it's you know at current prices it's this is a profitable asset. You can see the production slide in terms of this year's production in the bottom right of the slide.
Speaker #1: So it's you know at current prices it's this is a profitable asset. You can see at the production slide in terms of this year's production in the bottom right of the slide you can see that although we've enjoyed a fantastic quarter in Q2 we have seen a tailing off during Q3 with a fall off in the production efficiency.
Speaker #1: You can see that although we've enjoyed a fantastic quarter in Q2, we have seen a tailing off during Q3 with a fall off in the production efficiency.
Jens Pace: You can see in the production slide in terms of this year's production, in the bottom right of the slide, you can see that although we've enjoyed a fantastic quarter in Q2, we have seen a tailing off during Q3 with a fall off in the production efficiency. This is a number of key wells have needed repairs and are in the workover queue. Perenco have added a workover crew to the asset, and so they're addressing that situation. So we expect that to improve, but Q3 will be a softer quarter in terms of production than Q2 has been.
Jens Pace: You can see in the production slide in terms of this year's production, in the bottom right of the slide, you can see that although we've enjoyed a fantastic quarter in Q2, we have seen a tailing off during Q3 with a fall off in the production efficiency. This is a number of key wells have needed repairs and are in the workover queue. Perenco have added a workover crew to the asset, and so they're addressing that situation. So we expect that to improve, but Q3 will be a softer quarter in terms of production than Q2 has been.
Speaker #1: This is a number of key wells of needed repairs and are in the work over queue. Perenco have added a work over crew to the asset.
Speaker #1: There are a number of key wells that have needed repairs and are in the workover queue. Perenco have added a workover crew to the asset, and so they're addressing that situation. We expect that to improve, but Q3 will be a softer quarter in terms of production than Q2 has been.
Speaker #1: And so they're addressing that situation and so we expect that to improve. But Q3 will be a softer quarter in terms of production than Q2 has been.
Speaker #1: We will ultimately address that in 27 with additional infield drilling program that will bring us back up. We anticipate to over. 30,000 barrels a day.
Speaker #1: We will ultimately address that in '27 with an additional infield drilling program that will bring us back up. We anticipate to be over 30,000 barrels a day.
Jens Pace: We will ultimately address that in 2027 with additional infill drilling program that will bring us back up, we anticipate to over 30,000 barrels a day. Moving to Aje in Nigeria, which is this redevelopment project that we've been working on for a couple of years now. We came into the project with a fractured partnership and a project that needed improvement in terms of economics.
Jens Pace: We will ultimately address that in 2027 with additional infill drilling program that will bring us back up, we anticipate to over 30,000 barrels a day. Moving to Aje in Nigeria, which is this redevelopment project that we've been working on for a couple of years now. We came into the project with a fractured partnership and a project that needed improvement in terms of economics.
Speaker #1: Moving to Ajay and Nigeria, which is this redevelopment project that we've been working on for a couple of years now. We came into the project with a fractured partnership and a project that needed improvement in terms of economics.
Speaker #1: Moving to Ajay and Nigeria, which is this redevelopment project that we've been working on for a couple of years now. We came into the project with a fractured partnership and a project that needed improvement in terms of economics.
Speaker #1: I think we've demonstrated a consolidated partnership position by acquiring interests from misaligned partners. And we've defined a project with attractive economics, which is getting better as we improve the subsurface definition.
Speaker #1: I think we've demonstrated a consolidated partnership position by acquiring interests from misaligned partners, and we've defined a project with attractive economics, which is getting better as we improve the subsurface definition.
Jens Pace: I think we've demonstrated a consolidated partnership position by acquiring interests from misaligned partners. We've defined a project with attractive economics, which is getting better as we improve the subsurface definition. We've worked hard on that this year with a new static and dynamic reservoir model, which is enhancing the economics even more.
Jens Pace: I think we've demonstrated a consolidated partnership position by acquiring interests from misaligned partners. We've defined a project with attractive economics, which is getting better as we improve the subsurface definition. We've worked hard on that this year with a new static and dynamic reservoir model, which is enhancing the economics even more.
Speaker #1: We've worked hard on that this year with a new static and dynamic reservoir model, which is in enhancing the economics even more. That said, despite our enthusiasm for this redevelopment, Petronor is not the right company to approach the financial markets for project finance at this stage.
Speaker #1: We've worked hard on that this year with a new static and dynamic reservoir model, which is enhancing the economics even more. That said, despite our enthusiasm for this redevelopment, PetroNor is not the right company to approach the financial markets for project finance at this stage.
Jens Pace: That said, despite our enthusiasm for this redevelopment, PetroNor is not the right company to approach the financial markets for project finance at this stage because of our legal challenges in Norway. So we've appointed an advisor, Challenger Capital, to identify commercial options and look at a farm-down or a divestment of some or all of our interests here. So we have a number of potential acquirers that are viewing data under non-disclosure agreements.
Jens Pace: That said, despite our enthusiasm for this redevelopment, PetroNor is not the right company to approach the financial markets for project finance at this stage because of our legal challenges in Norway. So we've appointed an advisor, Challenger Capital, to identify commercial options and look at a farm-down or a divestment of some or all of our interests here. So we have a number of potential acquirers that are viewing data under non-disclosure agreements.
Speaker #1: Because of our legal challenges in Norway. So we've appointed an advisor, Talanger Capital, to identify commercial options and look at a farm down or a divestment of some of all of or all of our interests here.
Speaker #1: Because of our legal challenges in Norway. So we've appointed an advisor Talenture Capital to identify commercial options and look at a farm down or a divestment of some of all of or all of our interests here.
Speaker #1: So we have a number of potential acquirers that are viewing data under a non-disclosure agreements and so we're progressing that with our advisor. It goes without saying I have to mention the Urka Crime Indictment of one of our indirect subsidiaries.
Speaker #1: So we have a number of potential acquirers that are viewing data under non-disclosure agreements, and so we're progressing that with our advisor. It goes without saying, I have to mention the Urka Krim indictment of one of our indirect subsidiaries, Hemra Africa Holding.
Jens Pace: So we're progressing that with our advisor. It goes without saying, I have to mention the Økokrim indictment of one of our indirect subsidiaries, Hemla Africa Holding. This is in relation to historic allegations of corruption. The company categorically contests this indictment, and we're looking forward to the opportunity to have this thoroughly examined in court, and that hearing will start in November this year.
Jens Pace: So we're progressing that with our advisor. It goes without saying, I have to mention the Økokrim indictment of one of our indirect subsidiaries, Hemla Africa Holding. This is in relation to historic allegations of corruption. The company categorically contests this indictment, and we're looking forward to the opportunity to have this thoroughly examined in court, and that hearing will start in November this year.
Speaker #1: Hemra Africa Holding. This is in relation to historic allegations of corruption. The company categorically condessed this indictment and we're looking forward to the opportunity to have this thoroughly examined in court.
Speaker #1: This is in relation to historic allegations of corruption. The company categorically contests this indictment, and we're looking forward to the opportunity to have this thoroughly examined in court. That hearing will start in November this year.
Speaker #1: And that hearing will start in November this year. And so I'm working with our legal team between now and then to get prepared for that.
Speaker #1: But this is still the beginning of quite a long road because the initial outcome which will be expected in probably March next year will be subject to appeals and so if the process runs to its ultimate conclusion of a Supreme Court hearing then it could be as late as fourth quarter 2028 that we get a final outcome of this.
Speaker #1: And so, I'm working with our legal team between now and then to get prepared for that. This is still the beginning of quite a long road, because the initial outcome, which will be expected probably in March next year, will be subject to appeals and so on.
Jens Pace: And so I'm working with our legal team between now and then to get prepared for that. This is still the beginning of quite a long road because the initial outcome, which will be expected in probably March next year, will be subject to appeals. So if the process runs to its ultimate conclusion of a Supreme Court hearing, then it could be as late as Q4 2028 that we get a final outcome of this.
Jens Pace: And so I'm working with our legal team between now and then to get prepared for that. This is still the beginning of quite a long road because the initial outcome, which will be expected in probably March next year, will be subject to appeals. So if the process runs to its ultimate conclusion of a Supreme Court hearing, then it could be as late as Q4 2028 that we get a final outcome of this.
Speaker #1: If the process runs to its ultimate conclusion of a Supreme Court hearing, then it could be as late as the fourth quarter of 2028 that we get a final outcome of this.
Speaker #1: In the meantime, we've been very focused on shareholder value. The operational delivery and a very focused strategy has generated cash to support distributions of paid in capital to shareholders.
Speaker #1: In the meantime, we've been focused on shareholder value. The operational delivery and a very focused strategy have generated cash to support distributions of paid-in capital to shareholders.
Jens Pace: In the meantime, we've been very focused on shareholder value. The operational delivery and a very focused strategy has generated cash to support distributions of paid-in capital to shareholders. We paid out NOK 4.2 per share in 2025 in two payments. And then this year the NOK 3.25 per share was paid out in June.
Jens Pace: In the meantime, we've been very focused on shareholder value. The operational delivery and a very focused strategy has generated cash to support distributions of paid-in capital to shareholders. We paid out NOK 4.2 per share in 2025 in two payments. And then this year the NOK 3.25 per share was paid out in June.
Speaker #1: We paid out 4.2 NOC per share in 2025 in two payments. And then this year the 3.25 NOC was paid out per share was paid out in June.
Speaker #1: We paid out 4.2 NOC per share in 2025 in two payments. And then this year, the 3.25 NOC was paid out per share in June.
Speaker #1: In aggregate with the performance of the share price the total shareholder return over the past two years is about 100% which I think is has been an attractive return for our shareholders.
Speaker #1: In aggregate with the performance of the share price, the total shareholder return over the past two years is about 100 percent, which I think has been an attractive return for our shareholders.
Jens Pace: In aggregate with the performance of the share price, the total shareholder return over the past two years is about 100%, which I think has been an attractive return for our shareholders. Our current market capitalization is about NOK 1.6 billion, and 50% of that is represented by the cash we are holding in the bank. I think a very strong balance sheet in terms of our valuation.
Jens Pace: In aggregate with the performance of the share price, the total shareholder return over the past two years is about 100%, which I think has been an attractive return for our shareholders. Our current market capitalization is about NOK 1.6 billion, and 50% of that is represented by the cash we are holding in the bank. I think a very strong balance sheet in terms of our valuation.
Speaker #1: Our current market capitalization is about 1.6 billion NOC and 50% of that is represented by the cash we're holding in the bank. So I think, you know, a very strong balance sheet in terms of our valuation.
Speaker #1: Our current market capitalization is about NOK 1.6 billion, and 50 percent of that is represented by the cash we're holding in the bank. So I think, you know, a very strong balance sheet in terms of our valuation.
Speaker #1: To wrap this up now, a summary of the key points and production capacity has been demonstrated over the second quarter with production over 5,000 barrels a day for the whole quarter.
Speaker #1: To wrap this up now, a summary of the key points: production capacity has been demonstrated over the second quarter, with production over 5,000 barrels a day for the whole quarter.
Jens Pace: To wrap this up now, a summary of the key points and production capacity has been demonstrated over the Q2 with production over 5,000 barrels a day for the whole quarter, which we are pleased about. We are preparing additional infill drilling investments in 2027. We are pleased with the lifting of 1 million barrels, and the timing of it giving us a big cash injection of $112 million in May.
Jens Pace: To wrap this up now, a summary of the key points and production capacity has been demonstrated over the Q2 with production over 5,000 barrels a day for the whole quarter, which we are pleased about. We are preparing additional infill drilling investments in 2027. We are pleased with the lifting of 1 million barrels, and the timing of it giving us a big cash injection of $112 million in May.
Speaker #1: Which we're pleased about. We're preparing additional infield drilling investments in 2027. We're re pleased with the lifting of a million barrels and the timing of it giving us a big cash injection of 112 million in May.
Speaker #1: Which we're pleased about. We're preparing additional infield drilling investments in 2027. We're pleased with the lifting of one million barrels, and the timing of it, giving us a big cash injection of $112 million.
Speaker #1: And we're currently able to rebuild that inventory of entitlement oil for sale at about 100,000 barrels per month. So we will anticipate being back in balance by the fourth quarter.
Speaker #1: In May, and we're currently able to rebuild that inventory of entitlement oil for sale at about 100,000 barrels per month. So, we anticipate being back in balance by the fourth quarter.
Jens Pace: We are currently able to rebuild that inventory of entitlement oil for sale at about 100,000 barrels per month. We will anticipate being back in balance by the Q4. We are making progress with our advisor process to look for candidates to farm-down or divest our Nigerian assets too. That is really all I wanted to say today. Thank you very much. I would welcome any questions that you have.
Jens Pace: We are currently able to rebuild that inventory of entitlement oil for sale at about 100,000 barrels per month. We will anticipate being back in balance by the Q4. We are making progress with our advisor process to look for candidates to farm-down or divest our Nigerian assets too. That is really all I wanted to say today. Thank you very much. I would welcome any questions that you have.
Speaker #1: And we're making progress with our advisor process to look for candidates to farm down or divest our Nigerian assets too. So that's really all I wanted to say today.
Speaker #1: And we're making progress with our advisor process to look for candidates to farm down or divest our Nigerian assets to. So that's really all I wanted to say today.
Speaker #1: And so thank you very much. But I welcome any questions that you have.
Speaker #2: Thank you, Jens. We will now go through our online questions. First one is why are you holding on to so much cash?
Speaker #1: And so, thank you very much. I welcome any questions that you have.
Speaker #2: Thank you, Jens. We will now go through our online questions. The first one is: Why are you holding on to so much cash?
Speaker #1: This is, yeah, this is a good question. 85 million dollars if we're spending modestly it looks like we're holding on to cash and our policy is to distribute excess cash.
Operator: Thank you, Jens. We will now go through our online questions. First one is: why are you holding on to so much cash?
Operator: Thank you, Jens. We will now go through our online questions. First one is: why are you holding on to so much cash?
Speaker #1: This is—yeah, this is a good question. Eighty-five million dollars—if we're spending modestly, it looks like we're holding on to cash, and our policy is to distribute excess cash.
Jens Pace: This is a good question. $85 million. If we are spending modestly, it looks like we are holding on to cash, and our policy is to distribute excess cash. I think the real reason is really about the issue I mentioned before about timing of liftings. We have to be prepared for quite a long wait before our next lifting and oil sale. We are currently paying back our overlift that we made. Given that we would be back in balance in October, we would need to wait a few months of continued production to build up an inventory to sell later on in 2027. Right now, we anticipate that would be probably around May next year. We need to retain cash to run the company in the meantime and to continue to fulfill our obligations under our licenses.
Jens Pace: This is a good question. $85 million. If we are spending modestly, it looks like we are holding on to cash, and our policy is to distribute excess cash. I think the real reason is really about the issue I mentioned before about timing of liftings. We have to be prepared for quite a long wait before our next lifting and oil sale. We are currently paying back our overlift that we made.
Speaker #1: I think the real reason is really about the issue I mentioned before about timing of liftings. We have to be prepared for quite a long wait before our next lifting and oil sale.
Speaker #1: I think the real reason is really about the issue I mentioned before, about the timing of liftings. We have to be prepared for quite a long wait before our next lifting and oil sale.
Speaker #1: We're currently paying back our overlift that we made. And so given that we would be back in balance in October we would need to wait a few months of continued production to build up an inventory to sell later on in 2027.
Speaker #1: We're currently paying back our overlift that we made, and so, you know, given that we would be back in balance in October, we would need to wait a few months of continued production to build up an inventory to sell later on in 2027.
Jens Pace: Given that we would be back in balance in October, we would need to wait a few months of continued production to build up an inventory to sell later on in 2027. Right now, we anticipate that would be probably around May next year. We need to retain cash to run the company in the meantime and to continue to fulfill our obligations under our licenses.
Speaker #1: Right now we anticipate that would be probably around May next year. And so we need to retain cash to run the company in the meantime and to continue to fulfill our obligations under our licenses and in particular this means the capex and opex billing that we have for PNGF sood.
Speaker #1: Right now, we anticipate that will be probably around May next year. So, we need to retain cash to run the company in the meantime and to continue to fulfill our obligations under our licenses.
Speaker #1: If we go into a drilling program next year our capex will be increased and so we need to be ready to manage that. And so that's the reason that we're holding on to the current stock that we have of 85 million dollars.
Speaker #1: And, in particular, this means the capex and opex billing that we have for PNGF Sud. If we go into a drilling program next year, our capex will be increased, and so we need to be ready to manage that.
Jens Pace: And in particular, this means the CapEx and OpEx billing that we have for PNGF Sud. If we go into a drilling program next year, our CapEx will be increased, and so we need to be ready to manage that. That is the reason that we are holding on to the current stock that we have of $85 million. And the board is focused on finding opportunities to repay capital where we can. But I would anticipate that would be as part of the normal cycle and approved at our next AGM in May next year.
Jens Pace: And in particular, this means the CapEx and OpEx billing that we have for PNGF Sud. If we go into a drilling program next year, our CapEx will be increased, and so we need to be ready to manage that. That is the reason that we are holding on to the current stock that we have of $85 million. And the board is focused on finding opportunities to repay capital where we can. But I would anticipate that would be as part of the normal cycle and approved at our next AGM in May next year.
Speaker #1: And so that's the reason that we're holding on to the current stock that we have of $85 million. And, you know, the board is focused on finding opportunities to repay capital where we can.
Speaker #1: And the board is focused on finding opportunities to repay capital where we can. But I would anticipate that would be as part of the normal cycle and approved at our next AGM in May next year.
Speaker #1: But I would anticipate that would be as part of the normal cycle and approved at our next AGM in May next year.
Speaker #2: Thank you. Following up on the timing of lifting, when do you expect the next lifting to take place?
Speaker #1: Well that's kind of related to my answer to the first question and we don't know when we get to the front of the queue.
Speaker #2: Thank you. Following up on the timing of lifting, when do you expect the next lifting to take place?
Operator: Thank you. Following up on the timing of lifting, when do you expect the next lifting to take place?
Operator: Thank you. Following up on the timing of lifting, when do you expect the next lifting to take place?
Speaker #1: Well, that's kind of related to my answer to the first question, and we don't know when we'll get to the front of the queue.
Speaker #1: In the Geno terminal we anticipate it'll be in May. But we will be working with the terminal operator and our oil trader Adnoc, the national oil company of Abu Dhabi.
Jens Pace: Well, that is kind of related to my answer to the first question. And we do not know when we get to the front of the queue at the Geno Terminal. We anticipate it will be in May, but we will be working with the terminal operator and our oil trader, ADNOC, the national company of Abu Dhabi, to get the timing for the next lifting. So I expect it to be in May, but it could be a little earlier, it could be a bit later than that.
Jens Pace: Well, that is kind of related to my answer to the first question. And we do not know when we get to the front of the queue at the Geno Terminal. We anticipate it will be in May, but we will be working with the terminal operator and our oil trader, ADNOC, the national company of Abu Dhabi, to get the timing for the next lifting. So I expect it to be in May, but it could be a little earlier, it could be a bit later than that.
Speaker #1: In the Geno terminal, we anticipate it'll be in May. But we will be working with the terminal operator and our oil trader, ADNOC—the national oil company of Abu Dhabi—to get the timing for the next lifting.
Speaker #1: To get the timing for the next lifting. So I would, I expect it to be in May but it could be a little earlier.
Speaker #1: It could be a little bit later than that.
Speaker #2: Okay. Why are you continuing to invest in Ajay if you are selling out?
Speaker #1: So I would expect it to be in May, but it could be a little earlier; it could be a little bit later than that.
Speaker #1: We are investing modestly in Ajay in terms of really enhancing the project definition. We think that value added work and will be of use to any incoming partner.
Speaker #2: Okay. Why are you continuing to invest in Ajay if you are selling out?
Operator: Okay. Why are you continuing to invest in Aje if you are selling out?
Operator: Okay. Why are you continuing to invest in Aje if you are selling out?
Speaker #1: We are investing modestly in Ajay in terms of really enhancing the project definition. We think that's value-added work and will be of use to any incoming partner.
Jens Pace: We are investing modestly in Aje in terms of really enhancing the project definition. We think that is value-added work and will be of use to any incoming partner. It is aligned with what we have agreed with the Aje partnership. We cannot simply stop work and down tools and leave the asset stranded. It is a balancing act of doing work that will be useful, that will not have a shelf life, in that it will be out of date with an incoming party. So I anticipate that if we can get a transaction agreed in Q4, we would have a discussion with an incoming party while we are awaiting regulatory approval for what would be useful for us to continue to do. In the meantime, we will continue to add value to the project with the work we are doing.
Jens Pace: We are investing modestly in Aje in terms of really enhancing the project definition. We think that is value-added work and will be of use to any incoming partner. It is aligned with what we have agreed with the Aje partnership. We cannot simply stop work and down tools and leave the asset stranded. It is a balancing act of doing work that will be useful, that will not have a shelf life, in that it will be out of date with an incoming party.
Speaker #1: It's aligned with what we've agreed with the Ajay partnership. We can't simply stop work and down tools and leave the assets stranded. And so it's a balancing act of doing work that will be useful that will not have a shelf life in that it will be out of date.
Speaker #1: It's aligned with what we've agreed with the Ajay partnership. We can't simply stop work and down tools and leave the assets stranded, and so it's a balancing act of doing work that will be useful, that will not have a shelf life in that it will be out of date.
Speaker #1: If with an incoming party. So I anticipate that if we can get a transaction agreed in the fourth quarter we would have a discussion with an incoming party while we're awaiting regulatory approval for what would be useful for us to continue to do.
Speaker #1: If with an incoming party. So, I anticipate that if we can get a transaction agreed in the fourth quarter, we would have a discussion with an incoming party while we're awaiting regulatory approval for what would be useful for us to continue to do.
Jens Pace: So I anticipate that if we can get a transaction agreed in Q4, we would have a discussion with an incoming party while we are awaiting regulatory approval for what would be useful for us to continue to do. In the meantime, we will continue to add value to the project with the work we are doing.
Speaker #1: In the meantime we will continue to add value to the project with the work we're doing.
Speaker #2: Moving on to capex, how do you expect capex to develop going into the next year?
Speaker #1: In the meantime, we will continue to add value to the project with the work we're doing.
Speaker #1: Capex is pretty much driven by our infield drilling program. There are no major infrastructure investments at the current stage in visage. So we've had a bit of a holiday this year I think our capex this year will be around 10 million dollars.
Speaker #2: Moving on to capex, how do you expect capex to develop going into next year?
Operator: Moving on to CapEx. How do you expect CapEx to develop going into the next year?
Operator: Moving on to CapEx. How do you expect CapEx to develop going into the next year?
Speaker #1: Capex is pretty much driven by our infield drilling program. There are no major infrastructure investments at the current stage envisaged. So, we've had a bit of a holiday this year. I think our capex this year will be around $10 million.
Jens Pace: CapEx is pretty much driven by our infill drilling program. There are no major infrastructure investments at the current stage envisaged. We have had a bit of a holiday this year. I think our CapEx this year will be around $10 million. Next year it will be more like it was in 2025, which is closer to $20 million. So I expect that will be the 2027 CapEx. We will not know that for certain until our operating committee meeting with the operator, Perenco, which will be held in November, which is when they will present the proposed budget.
Jens Pace: CapEx is pretty much driven by our infill drilling program. There are no major infrastructure investments at the current stage envisaged. We have had a bit of a holiday this year. I think our CapEx this year will be around $10 million. Next year it will be more like it was in 2025, which is closer to $20 million. So I expect that will be the 2027 CapEx. We will not know that for certain until our operating committee meeting with the operator, Perenco, which will be held in November, which is when they will present the proposed budget.
Speaker #1: And next year it will be more like it was in 2025 which is closer to 20 million dollars. So I expect that will be the 2027 capex.
Speaker #1: And next year, it will be more like it was in 2025, which is closer to $20 million. So I expect that will be the 2027 capex.
Speaker #1: But we won't know that for certain until our operating committee meeting with the operator Perenco which will be held in November which is when they will present their proposed budget.
Speaker #1: But we won't know that for certain until our operating committee meeting with the operator, Perenco, which will be held in November. That is when they will present their proposed budget.
Speaker #2: Thank you. Next question contains two topics. First, can you give an any specifics so we can understand the strength of the company's case in defense of the corruption allegation?
Speaker #2: Thank you. The next question contains two topics. First, can you give any specifics so we can understand the strengths of the company's case in defense of the corruption allegation?
Operator: Thank you. Next question contains two topics. First, can you give any specifics so we can understand the strength of the company's case in defense of the corruption allegation? Secondly, any ballpark value for the Aje asset?
Operator: Thank you. Next question contains two topics. First, can you give any specifics so we can understand the strength of the company's case in defense of the corruption allegation? Secondly, any ballpark value for the Aje asset?
Speaker #2: And secondly, any ballpark value for the Ajay asset assets?
Speaker #1: I'm going to decline to be drawn too much on both of those questions. It would be inappropriate for me to comment on a case that is going to trial at the trial is going to be where that debate will be had.
Speaker #2: And secondly, any ballpark value for the Ajay asset assets?
Speaker #1: I'm going to decline to be drawn too much on both of those questions. It would be inappropriate for me to comment on, you know, a case that is going to trial. The trial is going to be where that debate will be had.
Jens Pace: I'm going to decline to be drawn too much on both of those questions. It would be inappropriate for me to comment on a case that is going to trial. The trial is going to be where that debate will be had. Clearly, we contest the indictment and we're working with our legal team to make sure that we can present the facts as we see them in that context. As for the value of Aje, we see an attractive asset there with half a TCF of gas and a sizable amount of liquids. I think our 2 C resources of 70 million barrels of oil equivalent. This is ready baked for development in a situation where there's local infrastructure to accept the gas and offshore loading of the liquids. This is an attractive project, and we expect that to be recognized in the market.
Jens Pace: I'm going to decline to be drawn too much on both of those questions. It would be inappropriate for me to comment on a case that is going to trial. The trial is going to be where that debate will be had. Clearly, we contest the indictment and we're working with our legal team to make sure that we can present the facts as we see them in that context.
Speaker #1: Clearly. We contest the indictment and we're working with our legal team to make sure that we can present the facts as we see them in that context.
Speaker #1: Clearly, we contest the indictment, and we're working with our legal team to make sure that we can present the facts as we see them in that context.
Speaker #1: As for value of Ajay, we see attractive asset there with half a TCF of gas. And a sizable amount of liquids I think our 2C resources are 70 million barrels of oil equivalent.
Speaker #1: As for the value of Ajay, you know, we see an attractive asset there with half a TCF of gas and a sizable amount of liquids. I think our 2C resources are 70 million barrels of oil equivalent.
Jens Pace: As for the value of Aje, we see an attractive asset there with half a TCF of gas and a sizable amount of liquids. I think our 2 C resources of 70 million barrels of oil equivalent. This is ready baked for development in a situation where there's local infrastructure to accept the gas and offshore loading of the liquids. This is an attractive project, and we expect that to be recognized in the market.
Speaker #1: And this is ready baked for development in a situation where there's local infrastructure to accept the gas. And offshore loading of the liquids. So this is an attractive project and we expect that to be recognized in the market.
Speaker #1: And this is ready-baked for development in a situation where there's local infrastructure to accept the gas, and offshore loading of the liquids.
Speaker #2: Thank you. Can you talk about how Perenco plans to further develop the PNGF sood license and efforts to boost production capacity?
Speaker #1: So, this is an attractive project, and we expect that to be recognized in the market.
Speaker #2: Thank you. Can you talk about how Perenco plans to further develop the PNGF Sud license and efforts to boost production capacity?
Speaker #1: I think more of the same. Perenco I think are specialists on mature field management. They have a particular operating ethos that works well here.
Operator: Thank you. Can you talk about how Perenco plans to further develop the PNGF Sud license and efforts to boost production capacity?
Operator: Thank you. Can you talk about how Perenco plans to further develop the PNGF Sud license and efforts to boost production capacity?
Speaker #1: I think more of the same. Perenco, I think, are specialists in mature field management. They have a particular operating ethos that works well here.
Jens Pace: I think more of the same. Perenco, I think, are specialists on mature field management. They have a particular operating ethos that works well here. They like to have access to the wellheads so they don't like sub-sea wellheads. They're all reachable on the platforms in shallow water. That allows them to use their expertise and workovers very effectively, which is what we've seen in the Congo asset. There's also an opportunity in a field complex that has multiple stacked reservoirs to address areas where there hasn't been an efficient sweep of oil. The infill drilling program and wells that extend the perimeter of some of these fields has been very successful, and we expect more of that. I think we see a long tail of production here that is effectively managed at low cost.
Jens Pace: I think more of the same. Perenco, I think, are specialists on mature field management. They have a particular operating ethos that works well here. They like to have access to the wellheads so they don't like sub-sea wellheads. They're all reachable on the platforms in shallow water. That allows them to use their expertise and workovers very effectively, which is what we've seen in the Congo asset.
Speaker #1: They like to have access to the wellheads so that they don't like subsea wellheads. They're all reachable by on the platforms. In shallow water.
Speaker #1: They like to have access to the wellheads, so they don't like subsea wellheads. They're all reachable on the platforms in shallow water, and that allows them to use their expertise and workovers very effectively, which is what we've seen in the Congo asset.
Speaker #1: And that allows them to use their expertise and workovers very effectively which is what we've seen in the Congo asset. There's also an opportunity to in a field complex that has multiple stacked reservoirs to address areas where there hasn't been an efficient sweep of oil.
Speaker #1: There's also an opportunity, in a field complex that has multiple stacked reservoirs, to address areas where there hasn't been an efficient sweep of oil.
Jens Pace: There's also an opportunity in a field complex that has multiple stacked reservoirs to address areas where there hasn't been an efficient sweep of oil. The infill drilling program and wells that extend the perimeter of some of these fields has been very successful, and we expect more of that. I think we see a long tail of production here that is effectively managed at low cost.
Speaker #1: So the infield drilling program and wells that extend the perimeter of some of these fields is being very successful. And we expect more of that.
Speaker #1: So, the infield drilling program, and wells that extend the perimeter of some of these fields, is being very successful. We expect more of that.
Speaker #1: So I think we see a long tail of production here that is effectively managed at low cost.
Speaker #1: So, I think we see a long tail of production here that is effectively managed at low cost.
Speaker #2: Thank you. There are no further questions so that concludes today's presentation.
Speaker #2: Thank you. There are no further questions, so that concludes today's presentation.
Operator: Thank you. There are no further questions, so that concludes today's presentation.
Operator: Thank you. There are no further questions, so that concludes today's presentation.
Jens Pace: Thank you for your attention.
Jens Pace: Thank you for your attention.
