Q3 2017 Results Published
TORONTO, Canada, November 27, 2017. PetroMaroc Corporation plc (TSXV: PMA), an independent oil and gas company focused on Morocco (the “Company” or “PetroMaroc”) is pleased to announce its financial and operating results for the third quarter of 2017.
Commenting, D. Campbell Deacon, Chief Executive Officer of PetroMaroc, said: ‘‘PetroMaroc’s ownership of consideration shares in Sound Energy plc enable the Company to be positioned to leverage off Sound Energy’s operating capability in country and balance sheet while retaining material upside with its ownership of the Sidi Moktar Net Profit Interests. Following Sound Energy PLC’s successful clean up flow test of the Jurassic, Upper Argovian section in the Koba-1 well in Q2 2017, an extended well test of this interval is planned. In conjunction, additional seismic will be acquired in 2018, to enhance the appraisal of the Jurassic section over the Kechoula structure, and evaluate the significant potential believed to exist in the deeper pre-salt Triassic and Paleozoic objectives. An exploration and appraisal programme will follow in early 2019. The Sound Energy work program is well conceived and PetroMaroc remains wholly supportive of management’s efforts and strategy”. “During the quarter the Company successfully completed settlement agreements with all of its unsecured creditors”.
PetroMaroc today filed its financial statements for the quarter ended September 30, 2017, together with its Management’s Discussion and Analysis in respect of the Company’s financial results for the quarter ended September 30, 2017. These documents are available on the PetroMaroc website at www.petromaroc.co or under the Company’s profile on SEDAR at www.sedar.com.
- General and administrative costs totalled US$0.14 million (excluding US$0.3 million non-cash share for debt settlement), a 30% decrease in comparison to Q3 2016 (US$0.20 million), and a 65% decrease in comparison to Q3 2015 (US$0.40 million).
- Cash as at September 30, 2017, US$0.8 million (US$1.0 million as at June 30, 2017).
- The Company’s Cdn $11.09 million principal amount of secured debentures principal and interest are due and payable in full on January 31, 2018.The Series 1 New Debentures (principal amount Cdn $4,762,400) bear interest at the rate of 10% per annum and are convertible, at the option of the holder, into ordinary shares of the Company at a conversion price equal to $0.06 per share in the first 12 months of the term (January 1, 2017 to December 31, 2017) and $0.10 per share in the last month of the term (January 1, 2018 to January 31, 2018). The Series 1 New Debentures are convertible into an aggregate of 79,373,333 ordinary shares, assuming a conversion price of $0.06 per share. The Series 2 New Debentures (principal amount Cdn $6,327,600) bear interest at the rate of 15% per annum, with no right to convert into ordinary shares of the Company.
- During the quarter the Company confirmed it has successfully completed settlement agreements with all of its unsecured creditors.
- Sidi Moktar onshore:
- The proceeds from a sale (in whole or in part) of the Sound Energy ordinary shares held (15,943,506 shares held as at 30 September 2017, and as at 27 November 2017) will be shared between PetroMaroc and Sound Energy, with PetroMaroc receiving all proceeds from sale(s) up to 50 pence per consideration share, and sale proceeds in excess of 50 pence per consideration share will be shared equally between PetroMaroc and Sound Energy.
- The Company retains a 10% net profit interest in any future cash flows from the Kechoula structure within the Sidi Moktar licences, and the Company retains a 5% net profit interest in any future cash flows from structures within the Sidi Moktar licences other than the Kechoula structure.
- Zag onshore:
- The Company committed to its percentage share of further geophysical studies and the drilling of one exploration well, subject to receiving and approving a satisfactory proposal from San Leon Morocco Limited (the “Operator”), as per the terms of the “First Extension Period” as set out in the petroleum agreement (the “Zag Petroleum Agreement”) dated June 18, 2009 between Office National des Hydrocarbures et des Mines (“ONHYM”), the Operator and Longreach Oil and Gas Ventures Limited. Following the joint venture not completing the minimum work commitment of the First Extension Period, a twelve month extension to the First Extension Period was agreed by the joint venture, to May 2016. During the twelve month extension the Company continued to seek a mutually agreed technical, commercial and financial proposal to reduce its financial exposure insofar as possible. In Q1 2017, ONHYM advised the Operator and the Company that the bank guarantee had been deemed forfeited, and in addition, that the joint venture should pay the residual penalty (US$0.6 million net to the Company), to ONHYM. The Company has accrued US$0.6 million based on its working interest in the joint venture but challenges its obligation to pay such amount and has notified ONHYM that a “force majeure” has occurred pursuant to the Zag Petroleum Agreement due to financial, commercial and operational challenges on the licence over a number of years. The Company will seek to work with ONHYM and the Operator to expedite a mutually agreed resolution, however reserves the right to preserve its rights, which may include legal arbitration.
- Previously capitalised costs, which were impaired in 2014, continue to remain impaired.
PetroMaroc Corporation plc is an independent oil and gas exploration company. PetroMaroc holds a substantial share ownership position in Sound Energy plc, and net profit interests in the Sidi Moktar licence (onshore Morocco), which the Company considers to be a committed long-term partner who will work to unlock the hydrocarbon potential of the Essaouira region. PetroMaroc is a public company and its ordinary shares are listed on the TSX Venture Exchange under the symbol “PMA”.
Special Note Regarding Forward Looking Statements
This press release contains forward-looking statements. Such forward-looking statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “project”, “potential”, “targeting”, “intend”, “could”, “might”, “continue” or the negative of these terms or other similar terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the strength of the ongoing relationship between the Company and Sound Energy, including the ability of the Company to leverage off Sound Energy’s operating capabilities in Morocco, the degree of success in connection with the proposed drilling of the Kechoula structure to prove the commercial viability of Sidi Moktar and the value of the net profit interests held by the Company thereon, the degree of success of Sound Energy’s seismic program to further delineate the area, the value of Sound Energy shares held by the Company which may impact the ability of the Company to repay the principal and interest owing under the New Debentures on maturity, the ability of the Company to negotiate with ONHYM to reduce its potential exposure in respect of the Zag concession, the completion of evaluations and processing and interpretation of data, the performance characteristics of the Company’s interests in oil and gas properties, capital expenditure programmes, supply and demand for oil, gas and commodities, prices for oil and gas, drilling plans, and realization of the anticipated benefits of acquisitions.
Forward-looking statements are only predictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: unsuccessful test results to be conducted by Sound Energy in respect of the Sidi Moktar concession, the potential decline in the value of the shares in Sound Energy held by the Company which may impact upon the ability of the Company to repay the New Debentures on maturity, the general economic conditions in Canada, the Kingdom of Morocco and globally; industry conditions, including fluctuations in the price of oil and gas, governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; risks inherent in oil and gas operations; political risk, including geological, technical, drilling and processing problems; unanticipated operating events which could cause commencement of drilling and production to be delayed; the need to obtain consents and approvals from industry partners, regulatory authorities and other third-parties; stock market volatility and market valuations; competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions or resource estimates; any future inability to obtain additional funding, when required, on acceptable terms or at all; credit risk; changes in legislation; any unanticipated disputes or deficiencies related to title matters; dependence on management and key personnel; and risks associated with operating in and being part of a joint venture.
Although the forward-looking statements contained in this press release are based upon factors and assumptions which management of the Company believes to be reasonable, the Company cannot assure that actual results will be consistent with its expectations and assumptions. Undue reliance should not be placed on the forward-looking statements contained in this news release as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements speak only as of the date of this press release, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of PetroMaroc in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.
For further information contact:
PetroMaroc Corporation plc
Chief Financial Officer
Tel: +44 (0) 7901 728168