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CEO's Quarterly Message

“In recent months we continued to increase production bringing new wells online in the Hawler license area and we continued to refine and prioritise our AGC Central exploration prospect inventory.

Gross (100%) oil production from the Hawler licence area averaged 7,200 bbl/d in Q3 2018 and 10,000 bbl/d in October 2018 versus an average of 3,600 bbl/d in Q3 2017 and 4,400 bbl/d in Q2 2018. All oil production has been sold via the export pipeline and payments for export sales through the end of August 2018 have been received in full.  Higher realised oil prices and lower operating expenses helped us achieve our highest quarterly netback and operating funds flow on record.

We have continued to be active with the drill bit in recent months. We spudded and successfully completed the Banan-4 appraisal well in the Tertiary reservoir at the Banan West field. The well was put on extended test with average daily production of 2,600bbl/d in October with further increases expected in the coming weeks. We also spudded andsuccessfully completed the Zey Gawra-4 well and very recently placed it on extended well test.

We plan to complete a workover of the Demir Dagh-8 well targeting the Cretaceous reservoir in December 2018.

Our budgeted capital expenditures for 2019 are $52 million with further appraisal and early development drilling planned in the Hawler license area and continued preparation for exploration drilling planned in the AGC Central license area. In the Hawler license area we are planning to drill or workover eight additional wells. In the AGC Central license area we are in the final stages of interpretation and prospect selection and expect to complete an environmental impact assessment and well engineering work over the coming months as we prepare for the drilling of exploration wells.

In recent weeks we have reached agreements to restructure a number of key liabilities and secured an interim credit facility to ensure we can manage our cash flows through the coming year and beyond. Overall we expect revenues from sales, proceeds from the pending sale of our interest in the Haute Mer B license and, if needed, borrowing available under the interim credit facility to fund our planned expenditures and obligations through the end of 2019. 

We look forward to continuing to implement our plans in 2018 and 2019, achieving higher production in the Hawler license area and preparing for an exciting exploration drilling program in the AGC Central license area.”