Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Maurel & Prom    MAU   FR0000051070

MAUREL & PROM

(MAU)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Maurel & Prom: 2019 Annual Results

share with twitter share with LinkedIn share with facebook
share via e-mail
04/01/2020 | 01:31am EDT

Regulatory News:

Maurel & Prom (Paris:MAU):

  • 2019: sound financial results led by operational delivery
    • Working interest production of 27,340 boepd, a 19% increase compared to 2018
    • Operating cash flow before change in working capital of $263 million, up 35% compared to 2018 despite a 2% dip in average oil sale price ($67.2/bbl vs. $68.8/bbl)
    • Exploration capex of $43 million, and closing of the Angola acquisition in July 2019 for a cash consideration of $35 million
  • Strongly positioned thanks to a robust capital structure and high liquidity
    • $231 million cash balance as of 31 December 2019, plus an additional $100 million available via the undrawn tranche of the Shareholder Loan
    • Renewed support from banks and majority shareholder PIEP, as amendments with lenders were obtained in March 2020 to ease debt repayments in 2020 and 2021
    • Committed to debt reduction, as repayments started in March 2020
  • Taking immediate actions to address the fall in oil price
    • Flexibility provided by the operational control of key assets
    • Drastic and thorough action plan launched to reduce opex, G&A, and capex programmes
    • Suspension of development drilling activities on the Ezanga licence in Gabon
    • The Board of Directors has decided not to propose the payment a dividend for FY 2019

Analyst and investor call

M&P will hold a call to discuss this announcement via a webcast in French, today at 9:30. This will be immediately followed by a Q&A (questions may be asked in English). A version of the webcast translated into English will be available by the end of the day.

 

To join the webcast or play the on-demand version, please use this link:

https://www.maureletprom.fr/en/article/fy-2019-audio-webcast-1er-avril-2020-a-9h30

Key financial results

$mm

 

FY 2019

 

FY 2018

 

Change

       

Income statement

     

Sales

 

504

 

440

 

+14%

Opex & G&A

 

(195)

 

(140)

 

 

Royalties and production taxes

 

(65)

 

(45)

 

 

Change in overlift/underlift position

 

34

 

(13)

 

 

Other

 

9

 

3

 

 

EBITDA

 

286

 

245

 

+17%

Depreciation, amortisation, and provisions

 

(163)

 

(115)

 

 

Expenses and impairment of exploration assets

 

(48)

 

(1)

 

 

Other

 

(4)

 

(3)

 

 

Operating income

 

70

 

126

 

-45%

Net financial expenses

 

(31)

 

(27)

 

 

Income tax

 

(62)

 

(68)

 

 

Share of income/loss of associates

 

59

 

31

 

 

Net income

 

35

 

62

 

-43%

 

 

 

 

 

 

Cash flows

 

 

 

 

 

 

Cash flow before income tax

 

298

 

236

 

 

Income tax paid

 

(35)

 

(41)

 

 

Operating cash flow before change in working capital

 

263

 

195

 

+35%

Change in working capital

 

(102)

 

(3)

 

 

Operating cash flow

 

162

 

192

 

-16%

Development capex

 

(104)

 

(104)

 

 

Exploration capex

 

(43)

 

(7)

 

 

M&A

 

(35)

 

(51)

 

 

Free cash flow

 

(21)

 

30

 

N/A

Net cost of debt

 

(24)

 

(22)

 

 

Dividends received

 

12

 

12

 

 

Dividends paid

 

(9)

 

 

 

Other

 

(7)

 

0

 

 

Change in cash

 

(49)

 

20

 

N/A

 

 

 

 

 

 

Opening cash

 

280

 

259

 

 

Closing cash

 

231

 

280

 

 

Olivier de Langavant, CEO of M&P, declared: “We are currently experiencing strong economic headwinds, but are firmly positioned to weather this environment. M&P is a resilient company, and we have a strong capacity to manage adverse market conditions. In response to the current pandemic, we have put in place all appropriate measures to ensure the safety of our staff and the continuity of our operations. With regards to economic conditions, our teams are fully operational and focused on delivering on our cost savings plan to preserve cash flow generation and secure M&P’s future. Thanks to the recently announced amendments to our debt facilities, we have also managed to enhance our liquidity for 2020 and 2021, which will help us maintain a robust profile. We will take advantage of these challenging times to reshape the Company and strengthen it for the long term.”

Financial update

  • Sound financial results led by operational delivery

On the income statement, sales were up 14% thanks to the increase in production (27,340 boepd in 2019, +19% compared to 2018), driven in particular by Gabon, despite a slightly lower oil price environment (average oil sale price of $67.2/bbl in 2019, down from $68.8/bbl in 2018).

Operating expenditures increased as a result of the integration of the Angolan acquisition from August 2019. Royalties and other production taxes were also higher, due to the marked increase in production in Gabon. EBITDA was up 17% at $286 million.

Depreciation and amortisation rose sharply (+53%) to reach $163 million as a result of the higher production from Ezanga (depreciation based on unit of production method). $48 million of exploration expenses were recorded, including $31 million for the Kama-1 well in Gabon.

As a consequence of the exploration activity and higher depreciation and amortisation charges, operating income decreased to $70 million, compared to $126 million in 2018. Net financial expenses on the income statement amounted to $31 million for 2019.

M&P’s share in income from equity associates was $59 million, compared to $31 million in 2018. This marked increase results in particular from one-off items boosting Seplat’s net income (recovery of historical tolling revenue and sale of Oben gas plant).

After taking into account all of the above factors, FY 2019 net income decreased stood at $35 million.

From the cash flow perspective, cash flow from operating activities before change in working capital rose by 35% to reach $263 million (up from $195 million in 2018). After taking into account the large working capital effect (negative impact of $102 million, $52 million of which coming from the change in the overlift/underlift position), operating cash flow came at $162 million.

Development capex was in line with previous year at $104 million. $43 million were spent in exploration capex, the majority of which on the Kama-1 well drilling in Gabon. The $35 million M&A charge consists in the net cash consideration paid to AJOCO in July 2019 at closing of the Angolan acquisition.

It is worth highlighting that the $20 million deferred consideration payable to Shell in December 2020 with respect to the Venezuela acquisition was postponed in agreement with Shell, and will be paid in full by April 2020.

M&P received $12mm of dividends from its 20.46% stake in Seplat, the same amount as in 2018.

A $9 million dividend (€0.04 per share) was paid to M&P’s shareholders in June 2019, the first one since 2012.

At 31 December 2019, the cash position stood at $231 million. The gross debt at 31 December 2018 amounted to $700 million (nominal value), i.e. a net debt of $469 million.

  • Strongly positioned thanks to a robust capital structure and high liquidity

In March 2020, M&P announces the signature of amendment agreements (together the “Amendments”) to re-profile the repayment of its two debt facilities, the $600 million term loan with a syndicate of lenders (the “Term Loan”) and the $200 million loan ($100 million drawn and $100 million undrawn) from M&P’s controlling shareholder PT Pertamina International Eksplorasi Dan Produksi (“PIEP”) (the “Shareholder Loan”).

Under the terms of the Amendments, the scheduled debt repayments for both facilities have been reduced in 2020 and 2021, allowing M&P to maintain ample liquidity and better adapt debt repayments to cash flow generation and investment profile. The amendment to the Shareholder Loan also demonstrates the continued support of PIEP to M&P, as a significant amount of its repayment has now been pushed to 2024, beyond the final maturity date for the Term Loan.

Impact of the Amendments on M&P’s repayment profile:

M&P’s total outstanding debt currently amounts to $700 million ($600 million under the Term Loan and $100 million under the Shareholder Loan). As of end of December 2019, M&P’s cash position stood at $231 million, resulting in a net debt of $469 million. M&P can also immediately unlock additional liquidity thanks to the undrawn $100 million tranche of the Shareholder Loan.

Business review and outlook

  • Impact of the COVID-19 outbreak on M&P’s operations

M&P is taking all necessary measures to ensure business continuity, in full compliance with all recommendations from relevant health authorities. Work from home is the preferred option whenever possible, and strict proactive measures to minimise contamination risks have been enforced in offices when work from home is not possible. Those initiatives include entry controls, distancing measures, and reinforced hygiene and disinfection practices.

On operations sites, reinforced measures going beyond recommendations have been implemented to ensure resilience. At this stage and for the short term, M&P does not foresee major disruptions in the conduct of its operations arising from the COVID-19 outbreak. Should the circumstances change, M&P will update the market in due course.

  • Update on oil markets

Over the last couple of months, oil markets have been strongly impacted on both the demand and supply sides. The oil demand worldwide has shrunk considerably due to the economic slowdown triggered by the COVID-19 outbreak, and in particular its impact on the Chinese economy.

This contraction has been severely amplified by the recent decision taken by Saudi Arabia to materially increase its oil production, as well as the end of the informal alliance between OPEC and Russia which had kept oil prices relatively steady over the past two years.

As a result, oil prices plunged, with Brent falling under $25/bbl in March 2020, compared to $60/bbl in average in January and February.

  • Cost control and capital discipline initiatives

Immediately after the drop in oil prices in early March, M&P has launched a comprehensive review of cost saving opportunities. A number of areas for improvement have been identified, and an action plan has been prepared and launched before the end of the month.

This plan targets savings of:

  • On operated assets, a reduction of over 20% in opex and over 15% in G&A (equivalent to $25 to $30 million of savings on an annualised basis)
    • Optimisation of logistics, reorganisation of well interventions, optimisation of consumables and chemicals, reduction in contractor staff count
  • Over 60% in development capex compared to the 2020 budget (reduced from $130mm to $50mm)
    • Development drilling activities on Ezanga suspended as of March 2020

Further initiatives are under review, and it is expected that more measures will be implemented.

It is worth highlighting that, as operator of the asset and owner of its in-house drilling company, M&P retains full flexibility to promptly restart development drilling on Ezanga as soon as conditions improve.

Additionally, as part of the cash preservation measures, the Board of Directors of M&P has decided not to propose a dividend for FY 2019.

  • Production and financial guidance for 2020

For 2020, M&P is targeting a working interest group production of 28,000 boepd, consisting in:

  • 18,400 bopd in Gabon (equivalent to 23,000 bopd gross production on Ezanga)
  • 34 mmcfd in Tanzania (equivalent to 70 mmcfd gross production on Mnazi Bay)
  • 4,000 bopd in Angola (equivalent to 20,000 bopd gross production on Block 3/05)

These production assumptions reflect the announced revisions in work and capex programmes, in particular the suspension of development drilling on Ezanga as of March 2020.

Under these production assumptions and taking into account the cost saving initiatives previously detailed, the guidance for operating cash flow in FY 2020 under various Brent price assumptions1 is as follows:

  • At $25/bbl: $70 million
  • At $30/bbl: $100 million
  • At $35/bbl: $125 million

Other significant cash outflows for the year will consist in:

  • Capex (including M&A): $80 million
    • $50 million of development capex
    • $30 million of M&A (includes $20mm payment to Shell related to the acquisition of the interest in Urdaneta West)
  • Exploration: $30 million
    • Includes Kama-1 well costs in 2020 and seismic acquisition in Sicily
  • Financing: $105 million
    • $77 million of debt repayments
    • $28 million of net cost of debt

M&P’s internal forecasts show that it will be able to operate and maintain adequate headroom for the next 12 months from the date of approval of the 2019 accounts (31 March 2020). In addition to its cash on hand ($231mm as of 31 December 2019), M&P has access, if necessary, to $100 million of immediate liquidity via the undrawn portion of the Shareholder Loan.

As explained in the financial statements (note 3.3), the impairment tests as of 31 December 2019 have been run under different assumptions, reflecting the market conditions at year-end 2019. Given sensitivity to oil price, it is expected that impairments would have to be recognised under assumptions reflecting current market conditions as of March 2020. The assumptions will be revisited in light of prevailing market conditions for new impairment tests to be run as of June 2020.

2019 activity

  • Environmental, health, Safety, and security (EHS-S) performance

2019 saw a 54% decrease in lost time injury frequency (“LTIF”) which amounted to 0.45, as total recordable injury rate (“TRIR”) increased slightly at 2.70 in 2019, compared to 2.46 in 2018.

Over the last two years, M&P has been engaged in an effort to improve its internal processes and had them certified by third party auditors, which resulted in M&P obtaining two certifications in December 2019: ISO 45001 related to health and safety, and ISO 14001 for environmental management. These certifications highlight M&P’s commitment to comply with highest industry standards, and work relentlessly to improve its EHS-S performance.

  • Production and sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1
2019

 

Q2
2019

 

Q3
2019

 

Q4
2019

 

 

FY
2019

 

FY
2018

Change

 

 

 

 

 

 

 

 

   

 

 

Working interest production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gabon (oil)

bopd

 

19,733

 

20,316

 

20,654

 

18,612

 

 

19,828

 

16,273

+22%

Angola (oil)

bopd

 

 

 

3,0412

 

4,415

 

 

1,879¹

 

/

Tanzania (gas)

mmcfd

 

35.4

 

28.2

 

37.4

 

34.1

 

 

33.8

 

40.0

-15%

Total

boepd

 

25,636

 

25,020

 

29,937

 

28,706

 

 

27,340

 

22,934

19%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average sale price

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil

$/bbl

 

63.9

 

72.5

 

65.8

 

66.8

 

 

67.2

 

68.8

-2%

Gas

$/BTU

 

3.26

 

3.28

 

3.25

 

3.26

 

 

3.26

 

3.17

+3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gabon

$mm

 

103

 

126

 

118

 

107

 

 

454

 

376

+21%

Angola

$mm

 

 

 

11

 

19

 

 

31

 

/

Tanzania

$mm

 

9

 

7

 

9

 

9

 

 

34

 

39

-13%

Valued production

$mm

 

112

 

133

 

139

 

135

 

 

519

 

415

+25%

Drilling activities

$mm

 

4

 

3

 

3

 

2

 

 

12

 

12

 

Trading of third-party oil3

$mm

 

 

 

 

7

 

 

7

 

 

Adjustment for lifting imbalances

$mm

 

 

 

 

 

 

 

 

 

 

(34)

 

13

 

Consolidated sales

 

 

 

 

 

 

 

 

 

 

 

504

 

440

+14%

M&P’s working interest oil production (80%) on the Ezanga permit in Gabon was 19,828 bopd (gross production of 24,785 bopd) for 2019, up 22% from 2018. The technical measures implemented allowed for the resolution of export issues faced in 2018, thanks to the optimisation of crude oil evacuation. No production interruptions due to pipeline problems were recorded in 2019.

In Tanzania, average production for M&P’s working interest (48.06%) in Mnazi Bay in 2019 was 33.8 mmcfd (gross production: 70.3 mmcfd), down 15% from 2018.

Since 1 August 2019, the Group has consolidated its production in Angola in Blocks 3/05 and 3/05A. This production amounted to 4,415 bopd for M&P’s working interest (20%) in Q4 2019.

  • Exploration activities

In the spring of 2019, two wells were drilled on the Mios permit in France, resulting in a modest discovery (0.8mmbbls of certified 2P reserves as of 31 December 2019). A long term production test is planned to start in the second half of 2020.

In December 2019, M&P spud the Kama-1 well, first high impact exploration well for the Company since 2015. On 25 February 2020, M&P announced that the well encountered several series of oil shows between 1,865 and 2,701 metres (total depth of the well) in the Kissenda formation, main objective of the drilling, and a sample of 35° API oil was collected. However, no commercial test was attempted due to the poor quality of the reservoirs. The drilling nevertheless confirmed the presence of an active petroleum system in the region. It also provided valuable data which will be helpful for the continuation of exploration activities in the area.

In Sicily, a 3D and 2D seismic acquisition campaign started in Q4 2019. As of March 2020, the 3D acquisition is completed, and 2D acquisition is coming to its term. Interpretation is expected to take place by the end of 2020.

  • Significant events for the year

M&P Trading, a French subsidiary wholly owned by the Group, now buys oil volumes produced by M&P Gabon and M&P Angola, and sells them on the international markets. M&P Trading may also lift barrels on behalf of third parties, including joint venture partners. Since the first lifting completed by M&P Trading in March 2019 in Gabon, the company has marketed 4.8 million barrels.

In June 2019 M&P entered into an agreement with Gabon Oil Company (GOC), partner for the Ezanga permit, to end the carry mechanism from which GOC benefited. Under the terms of the agreement, GOC gained priority access to 812,000 barrels (corresponding to the rights carried after 31 December 2017) in return for payment to M&P of $52.5 million in 2019. Additionally, the sum of $43 million corresponding to historical carry receivables (prior to 31 December 2017) was paid by GOC into an escrow account which is expected to be released after an audit currently ongoing.

The acquisition from AJOCO of 20% interests in Block 3/05 and Block 3/05A offshore Angola was finalised in July 2019. In accordance with the sales and purchase agreement, the transaction amount of $80 million (less a deposit of $2 million paid when the transaction was announced) was adjusted by $43 million to take into account working capital and cash flow received and disbursed by AJOCO on behalf of M&P since the economic effective date of 1 January 2018. Consequently, the net consideration paid at closing to AJOCO was $35 million.

In July 2019, Sucre Energy took a 20% stake in Maurel & Prom Iberoamerica, which holds a 40% interest alongside the national oil company PDVSA in the Petroregional del Lago (“PRDL”) mixed company operating the Urdaneta West field in Venezuela. As a result of the transaction, M&P holds a 32% net economic interest in PRDL.

Due to international sanctions against PDVSA, operations conducted locally by the M&P’s Venezuelan subsidiary, M&P Servicios Integrados U.W., are strictly limited to maintenance related to the safety of staff and assets, and to environmental protection. As a result, and in spite of an asset that remains in production (gross production of 9,475 bopd in 2019) and that has retained its development potential, no contribution to M&P’s net income has been recognised.

Olivier de Langavant was appointed Chief Executive Officer of the Maurel & Prom Group effective 1 November 2019, replacing Michel Hochard. Olivier de Langavant spent over 35 years at French major Total within the exploration and production division, and held key managing positions, including head of Myanmar, head of Angola, Senior VP for Finance, Economics & Information Systems, Senior VP for Strategy, Business Development and R&D, and finally Senior VP for Asia-Pacific.

French

 

 

 

 

 

English

pieds cubes

 

pc

 

cf

 

cubic feet

millions de pieds cubes par jour

 

Mpc/j

 

mmcfd

 

million cubic feet per day

milliards de pieds cubes

 

Gpc

 

bcf

 

billion cubic feet

baril

 

B

 

bbl

 

barrel

barils d'huile par jour

 

b/j

 

bopd

 

barrels of oil per day

millions de barils

 

Mb

 

mmbbls

 

million barrels

barils équivalent pétrole

 

bep

 

boe

 

barrels of oil equivalent

barils équivalent pétrole par jour

 

bep/j

 

boepd

 

barrels of oil equivalent per day

millions de barils équivalent pétrole

 

Mbep

 

mmboe

 

million barrels of oil equivalent

For more information, visit www.maureletprom.fr

This document may contain forward-looking statements regarding the financial position, results, business and industrial strategy of Maurel & Prom. By nature, forward-looking statements contain risks and uncertainties to the extent that they are based on events or circumstances that may or may not happen in the future. These projections are based on assumptions we believe to be reasonable, but which may prove to be incorrect and which depend on a number of risk factors, such as fluctuations in crude oil prices, changes in exchange rates, uncertainties related to the valuation of our oil reserves, actual rates of oil production and the related costs, operational problems, political stability, legislative or regulatory reforms, or even wars, terrorism and sabotage.

Maurel & Prom is listed for trading on Euronext Paris
CAC All-Tradable – CAC Small – CAC Mid & Small – PEA-PME and SRD eligible
Isin FR0000051070 / Bloomberg MAU.FP / Reuters MAUP.PA

___________________________
1 Brent price assumption from 1 April 2020 (average Brent price in Q1 2020: $51/bbl)
2 Production in Angola was 4,484 bopd for M&P’s working interest (20%) for the period during which the asset was held (since 1 August 2019), corresponding to 4,587 bopd in Q3 (two months only) and 4,415 bopd for the full Q4
3 M&P Trading buys and markets M&P’s production in Angola and Gabon. Third-party production may also be traded by M&P Trading. In such instances, it is shown in consolidated sales


© Business Wire 2020
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on MAUREL & PROM
04/23MAUREL & PROM : Q1 2020 Activity – Date of the Annual General Meeting
BU
04/23MAUREL & PROM : Q1 2020 activity - Date of the annual General Meeting
PU
04/23MAUREL & PROM : 1st quarter earnings
CO
04/01MAUREL & PROM :  2019 Annual Results
BU
03/27MAUREL & PROM : annual earnings release
03/16MAUREL & PROM : secures the re-profiling of its debt repayments
PU
03/16MAUREL & PROM : M&P Secures the Re-Profiling of Its Debt Repayments
BU
02/25MAUREL & PROM : Results of the Kama-1 well in Gabon
PU
02/25MAUREL & PROM :  Results of the Kama-1 Well in Gabon
BU
02/06ACTIVITY AND SALES FOR 2019 : US$504m (+14%)
PU
More news
Financials (EUR)
Sales 2020 368 M
EBIT 2020 26,7 M
Net income 2020 -161 M
Debt 2020 422 M
Yield 2020 -
P/E ratio 2020 -2,01x
P/E ratio 2021 12,0x
EV / Sales2020 2,04x
EV / Sales2021 1,53x
Capitalization 327 M
Chart MAUREL & PROM
Duration : Period :
Maurel & Prom Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends MAUREL & PROM
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 4
Average target price 3,70 €
Last Close Price 1,67 €
Spread / Highest target 380%
Spread / Average Target 122%
Spread / Lowest Target 8,04%
EPS Revisions
Managers
NameTitle
Olivier Cleret de Langavant Chief Executive Officer
Aussie B. Gautama Chairman
Philippe Corlay Chief Operating Officer
Roman A. Gozalo Independent Director
Nathalie Delapalme Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
MAUREL & PROM-40.92%356
CNOOC LIMITED-33.49%49 620
CONOCOPHILLIPS-33.45%46 415
EOG RESOURCES, INC.-37.58%30 429
CANADIAN NATURAL RESOURCES LIMITED-39.64%21 336
PIONEER NATURAL RESOURCES COMPANY-38.94%15 237