Maurel & Prom : Production and sales for the first half of 2019

Paris, 12 July 2019, 7:00am cest

No. 09-19

Production and sales for the first half of 2019

• Oil production in Gabon up 16% from H1 2018, with 25,033 bopd for operated interest (20,026 bopd for M&P share) in H1 2019
  o Marked increase thanks to progress made on export management and consolidation of the production potential of the Ezanga permit
• Gas production in Tanzania was 66.2 MMcfpd for operated interest (31.8 MMcfpd for M&P share) in H1 2019
  o Down 17% from H1 2018 as a result of the lower demand for gas because of the early and heavy rainy season, which led to a marked increase in hydropower generation capacity at the expense of gas demand
• M&P total working interest production of 25,326 boepd for H1 2019, an increase of 7% compared to H1 2018
• H1 2019 sales at US$229 million, down slightly (-4%) from H1 2018 due to lifting imbalances

1. Entitlement revenues corrected for lifting imbalances stood at US$256 million in H1 2019, up 15% compared to H1 2018

1. Crude prices remained stable overall: average oil selling price over the period of US$68.4/bbl versus US$69.2/bbl in H1 2018

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Sales for the first half of 2019

														H1 2019
		Q1 2019		Q2 2019				H1 2019			H1 2018			vs.
										H1 2018
														change
Total production sold over the
period, M&P working interest
Million barrels of oil	1.4	1.6		3.0			3.1		-2%
Million MMBTU	3.3	2.6		5.9			7.1		-17%
Average sale price
Oil, in US$/bbl	63.9	72.5		68.4			69.2		-1%
Gas, in US$/MMBTU	3.26	3.28		3.27			3.17		3%
Sales (in US$m)
Oil production	100	123		222			231		-4%
Gabon	91	115		206			213		-3%
Tanzania	9	7		16			18		-14%
Drilling activities	4	3		7			6		10%
Consolidated sales (in US$m)		103		126				229			237			-4%
Lifting imbalances						-27			+14
Entitlement revenues adjusted for						256			223		+15%
lifting imbalances (in US$m)

Sales in the first half of 2019 amounted to US$229 million, a decrease of 4% from H1 2018.

The increase in production in Gabon during the first half of 2019 (+16% from H1 2018) in a similar pricing environment (average sale price of oil US$68.4/bbl in H1 20191 compared with US$69.2/bbl in H1 2018 and US$68.2/bbl in H2 2018) was not reflected in sales due to an evacuation delay of 591 thousand barrels: 382 thousand barrels produced but not evacuated over H1 2019, in addition to evacuation delays recorded in H1 2018 which had the reverse effect, as evacuations at the time exceeded production by 209 thousand barrels.

Excluding lifting imbalances, entitlement revenues are up 15% from H1 2018, standing at US$256 million vs. US$223 million in the first half of 2018.

Sales in Tanzania in H1 2019 remained stable overall at US$16 million, compared with US$18 million in H1 2018.

1 Sales included in this press release are based on provisional price data which may be slightly adjusted over the second half of July; actual sales recognised in the Group's half year accounts to be published on 1 August may vary slightly as a result.

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Hydrocarbon production for the first half of 2019

																H1 2019
		Units		Q1 2019		Q2 2019				H1 2019			H1 2018			vs
											H1 2018
																change
Production fully operated by
Maurel & Prom
Oil		bopd	24,666	25,395		25,033			21,561		16%
Gas		MMcfpd	73.7	58.7		66.2			79.3		-17%
TOTAL		boepd		36,950		35,812				36,061			34,780			4%
Maurel & Prom working
interest production
Oil		bopd	19,733	20,316		20,026			17,249		16%
Gas		MMcfpd	35.4	28.2		31.8			38.1		-17%
TOTAL		boepd		25,636		25,020				25,326			23,602			7%

• Gabon

In Gabon, operated oil production stood at 25,033 bopd (20,026 bopd for M&P working interest) in the first half of 2019, up 16% from the same period in 2018. Production increased during the first semester, from 25,003 bopd in January to 26,729 bopd in June, and without evacuation restrictions as faced in 2018.

This increase reflects the progress made on export management, as well as the consolidation of the production potential of the field, thanks to development drilling and continuation of the water injection programme.

Operated oil production in Gabon (bopd)

1. 000

1. 000

1. 000

1. 000

1. 000

1. 000
   0

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• Tanzania

In Tanzania, total operated production averaged 66.2 MMcfpd in the first half of 2019, or 31.8 MMcfpd for M&P working interest (48.06%), down 17% from H1 2018.

This decline was due to an early and heavy rainy season in eastern Africa this year, which led to a marked increase in hydropower generation capacity at the expense of gas demand.

Cash position

The Group's cash position stood at US$360 million at 30 June 2019, a significant increase compared with the position at 31 December 2018 (US$280 million). This was in part due to the signing in June 2019 of an agreement with the Gabon Oil Company (GOC), the Group's partner on the Ezanga permit, to end the carry mechanism which it benefited from.

This agreement notably includes a reassignment of lifting rights for 713 thousand barrels evacuated by M&P under the GOC carry mechanism for 2018 and early 2019. This reassignment was made in return for proceeds of US$45 million, included in the cash position at 30 June, which shall be offset in H2 2019, when the Group will therefore lift less oil.

Moreover, an amount of US$43 million was paid by GOC into an escrow account to settle the balance of the historical carry receivables (amounts prior to 2018). This amount shall be available for release in December 2019 and is therefore not recognized yet in M&P's cash position at 30 June.

A portion of this cash shall be used during the second half of 2019 to finance the sustained exploration programme (estimated at around US$65 million) and the balance of payments relating to 2018 acquisitions (Venezuela and Angola).

Outlook and development

• Continued operations on the Mios permit in France

The positive exploration result for the Caudos-Nord-2D(CDN-2D) well announced during the first half 2019 results led the Group to continue its drilling campaign with the completion of the Caudos-Nord-3D(CDN-3D) well. Drilling at this second well began in mid-April and came to a positive conclusion at the end of May, confirming the results of CDN-2D.

This discovery is however expected to remain modest in size, with estimated total commercial oil volume of approximately one million barrels.

• Exploration programme in Gabon

Civil engineering works to prepare the exploration drilling on the Kari permit in South Gabon began at the end of May 2019. Half of the access channel to the drilling area has been completed and work remains underway. The actual start-up of drilling is expected during the last quarter of 2019.

On the Ezanga permit, two exploration drilling projects will be carried out during the third quarter of 2019.

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• Acquisition of seismic data in Sicily

The beginning of the campaign to acquire seismic data on the Fiume-Tellaro permit is scheduled for September 2019.

French			English
pieds cubes	pc	cf	cubic feet
pieds cubes par jour	pc/j	cfpd	cubic feet per day
milliers de pieds cubes	kpc	Mcf	1,000 cubic feet
millions de pieds cubes	Mpc	MMcf	1,000 Mcf = million cubic feet
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
milliers de barils	kb	Mbbl	1,000 barrels
millions de barils	Mb	MMbbl	1,000 Mbbl = 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
milliers de barils équivalent pétrole	kbep	Mboe	1,000 barrels of oil equivalent
millions de barils équivalents pétrole	Mbep	MMboe	1,000 Mbbl = million barrels of oil equivalent

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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

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Isin FR0000051070 / Bloomberg MAU.FP / Reuters MAUP.PA

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