Erin Energy Announced Full Year & Fourth Quarter 2015 Results

Erin Energy Corporation (“Erin Energy” or the “Company”) (NYSE MKT: ERN) (JSE: ERN) announced financial and operational results for the year ended December 31, 2015.

    2015 Highlights:

– PROVED RESERVES UP 32%
– CRUDE SALES VOLUMES OF MORE THAN 1.4 MILLION NET BARRELS OF OIL, A 186% INCREASE OVER 2014
– $68.4 MILLION IN REVENUE, A 27% INCREASE OVER 2014
– ACHIEVED PEAK GROSS PRODUCTION RATE OF 13,100 BARRELS OIL PER DAY (11,500 NET)

    COMPLETED SEISMIC ACQUISITIONS IN THE GAMBIA AND KENYA

“During 2015, we produced approximately 1.6 million net barrels of oil and generated revenues of more than $68 million,” said Kase Lawal, Chairman and Chief Executive Officer. “Even with the huge decline in commodity prices, 2015 was a year of significant milestones for Erin Energy, in which we completed the phase one of the Oyo expansion campaign, increased our reserves, and completed seismic acquisitions on two of our assets, which will help in high-grading our exploration portfolio.”
Lawal continued,

“Our plan for 2016 includes the drilling of an additional development well to increase production, delaying some exploration activities, implement cost reduction by reducing our G&A and taking advantage of the low oil price environment to negotiate reduced cost of goods and services from vendors. We will continue to execute on the essential projects that will build long-term value for our shareholders.”

    OPERATIONAL UPDATE

In 2015, the Company successfully completed and tied-in Oyo-8 and Oyo-7 wells with production commencing in May and June, respectively. Total oil production from the two wells in 2015 was 1.6 million barrels of oil, a 358% increase on 2014. This was notwithstanding the impact of initial curtailment in production from the Oyo-8 well necessitated total oil stored approaching the FPSO storage capacity while waiting for the export permit and the subsequent failure of the subsurface controlled sub-surface safety valve (SCSSV) after the permit was received.
Following several unsuccessful attempts to open the valve by normal methods, the Company has entered into a contract for the provision of light well intervention services, using the Island Constructor vessel to bring the well back to production. The Company expects to complete the intervention in April and re-establish production from Oyo-8.
Average net daily production for 2015, over the days production occurred, increased almost five-fold to 6,400 barrels of oil per day (bopd) compared to 1,300 bopd for 2014. For the fourth quarter 2015, during which time Oyo-8 was shut-in, net daily production was approximately 2,500 bopd compared with nil for the comparative period in 2014.
Sales for the year were 1.4 million barrels of oil, a more than three-fold increase from 2014. The average price received for the period, however, was $47.24 per barrel, a 125% drop on the average price of $106.41 for 2014, reflecting the decline in global oil commodity prices. Crude oil inventory was approximately 0.2 million barrels at December 31, 2015.
In The Gambia, the Company completed a 1,613 square kilometer 3-D seismic data acquisition over its offshore A2 and A5 blocks. The seismic data is currently being processed and is expected to be completed mid-year 2016.
the gambia
In Kenya, Erin Energy completed the acquisition of 2-D seismic on its onshore Kenya blocks, L-1B and L-16. The processing has been completed and interpretation is ongoing. Based on the preliminary interpretation of the 2-D data, the Company applied for and was granted an additional two-year exploration period for these two blocks. The Company was also granted an 18-month extension of its Initial Exploration Period for its offshore Kenya blocks, L-27 and L-28.
map-of-ghanaIn Ghana, the Company completed its technical and commercial evaluation of the three previously discovered oil fields on the Expanded Shallow Water Tano block and announced total discovered in-place volumes were assessed at approximately 500 million barrels of oil and 282 billion cubic feet of gas. Erin Energy is working with its joint venture partners and relevant government entities on further optimization studies and adjustments to the fiscal terms in the agreement to enhance the economics of the development in this low oil price environment.
The Company’s total net proved oil reserves as of December 31, 2015 increased 32.4% to 12.0 million barrels (MMbbls), versus 9.1 MMbbls at year-end 2014. The Company’s reported reserves are prepared by DeGolyer and MacNaughton.
More: FINANCIAL SUMMARY
Source: Erin Energy Corporation
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