Good morning, everyone. This is John Hamilton. Welcome to our first quarter results at Panoro Energy. We have a presentation which we intend to go through. Just wait for that to fire up. Next slide, please. I won't read our disclaimer, but just to note our disclaimer regarding forward-looking statements. As usual, we will be making certain statements, and this disclaimer is meant to cover off on some of those things. Next slide, please. As a reminder, this system that we use allows participation both by voice and by text. If you have any questions, we will endeavor to try and answer as many as we can.
You can either raise your hand, as you see on the right side of the panel, that will then allow us to open up your microphone, or you can enter it into a text, as you see on the left side, and we will try to answer those questions as well. There'll be a reminder of how to do this as the final slide as well. Next slide, please. Right. Here are our quarterly results and a few of the key things that we wanted to point out. I think this is more or less in line. We've guided on the production and on the lifting side.
I think that these are more or less in line with our guidance, with the revenue of about $60 million and EBITDA of about $35 million. We ended the quarter with a net debt position of $25 million. I'll come back to that one when we talk about the balance sheet in one of the future slides, because we had a rather large principal debt repayment in the period as well of about $13 million. I'll come back to that one as well. Next slide, please. We recently announced our annual statement of reserves, and we made a press release talking about our organic reserve replacement of 92% this year, which is quite formidable, we believe. Here's a reconciliation of that.
I won't go through all the details, but I would like to just point out a few things, which again is that we replaced 92% of our reserves during the course of 2022. We only announced this recently. If you look at our 2P and our 2C resources there on the right of 65 million barrels, and you look at the breakdown of where those reserves and resources are, you can see that we're a very well-diversified business, which is really what we've set out to do as Panoro, is to create a diversified business with multiple production hubs. Next slide, please. Just a standard slide for us, just kind of showing where we've been and where we're going.
Quarter one production was impacted as guided due to a rather extended shutdown of the FPSO in Gabon in preparation for the tie-in of the MaBoMo, the production facility of Hibiscus. That was a planned shutdown. It was a little longer than expected, which resulted in probably lower production in the quarter than originally anticipated. Everything is up and running now, and we're maintaining our guidance of between 9,500 and 11,500 barrels a day for the year. The range there is highly dependent really on the timing of when the new Dussafu wells come online. If they're quick, it'll be at the upper end of the range. If they're a little slower, it might then be towards the lower end of the range.
At the moment, we're more or less on target. And we hope to get to about 13,000 barrels a day, in excess of 13,000 barrels a day, once all the 6 wells are online in Gabon, which is guided as around the year-end. It could be into early January, but right around the year-end, we should be targeting about 13,000 barrels a day. Current production has been quite strong, up to about 8,500 barrels a day, sometimes a little bit higher than that. We're just waiting now for the next well in Gabon to come up, and I think that during the course of June you're gonna see another step change in that production from that 8,500 number up to quite a bit higher number as the new well comes online.
A couple of other activities in Tunisia come back online as well. Next slide, please. Here's our lifting. This guidance on the lifting is more or less as we've had it before. I think we did have a slightly higher lifting in Q3, and some of that's moved down to Q4. But as you can see, we're again, heavily weighted towards the second half of the year in terms of our lifting volumes with something like, you know, 75% of our volumes being lifted there in the third and fourth quarter. We're targeting about 3 million barrels of sales this year. You know, comfortable number and very much in line with guidance.
The second quarter, as previously guided, is gonna be a very, very slow quarter for us in terms of sales with just some domestic sales in Tunisia really coming through. The big international liftings, the ones that really move the needle, are gonna be in the third and fourth quarter. Next slide, please. I won't go through a great deal of detail here, but we do try every quarter to update the market in terms of our debt profile. Nothing really has majorly changed here, but I would like to point out one thing, which is the RBL facility. Our debt, our gross debt at the time of the balance sheet close, 31st of March, was $68.4 million. You can see it there kind of in the top left.
What happened there, we ended up acquiring the Tunisian business, and that closed in the first part of April, so effectively in the second quarter, where we drew down $15 million of RBL. What we actually ended up doing was we increased our debt by about $9 million, but we repaid some debt to affect that transaction in the first quarter, we'll see that coming back a little bit. You would expect in the second quarter our gross debt number to go up to $83 million. I just do wanna point that out a little bit. It's a little bit of an anomaly, but, so, you know, entirely within what we had announced before. It's just the way that the quarter ended, it kind of fell between the two quarters.
CapEx is still being guided around $75 million this year. We've spent 7 of that so far, so there's still quite a bit to go on the CapEx side. Next slide, please. Again, I won't go through this in great detail, but we do try every quarter to reconcile cash flow. You can see the net cash from operations, the CapEx, loan repayments, dividends paid, and the cash at the end of the period. We'll do this, this waterfall, at every quarter. Next slide, please. Gabon is really the main story driving the production growth this year. As those of you who follow us know, we are drilling 6 new production wells in the Hibiscus / Ruche area.
The first well came online, it's doing extremely well, probably even a little bit better than expectation. We're very happy with that well. The second well is currently drilling and running completion on that. We should hopefully have in June some further announcement on that second well. Everything looks to be going to plan for the moment on that one. The crude is then transported from the MaBoMo production platform back to the FPSO. Everything is on target. So far we're very happy with what we've been finding subsurface on these production wells, and we're very happy with the production rates that have been demonstrated so far. Everything is going to plan or perhaps slightly better than plan on this development so far.
The gas lift compressor on the FPSO in the Tortue field is installed and is currently in commissioning. It should be starting up in the next few days, and that will support production from the existing Tortue wells. Next slide, please. In Equatorial Guinea, we haven't talked so much about it, but the rig has been contracted. We have a 3-well infill drilling program, which should really boost production further. That's not been really included in our guidance of our production. That's principally an early 2024 event, was when we start feeling the impact of that. It is nonetheless as we come out of the drilling program in Dussafu with the 6 wells there, we have 3 more production wells coming online in the first part of 2024, which is quite exciting.
There's lots of work going on there as well. As we've announced recently, we've farmed into Block S, which is the blue, the big blue block on the left with the star in it. We've also been awarded as operator with Kosmos joining us in EG-01 which is an inboard block. I've got one more slide, the next slide, please, which talks a little bit about what that is all about. What we are chasing here with Kosmos operating this well is something called Akeng Deep. Akeng Deep is a large four-way structure that we can see on the seismic. It looked to be about a 180 million barrel prospect. To put that in the context of that, we've got 12% of this asset.
it's, you know, extremely material if we find reserves here through a successful exploration drilling campaign. For Panoro it would be a, you know, really significant discovery. The beauty of this one is it's infrastructure-led exploration. Discovery here can be tied right back into the Ceiba field where we have an existing FPSO, existing production facilities. While Panoro is not really an exploration story this year, next year you're gonna see us drilling what many people are calling one of the most exciting exploration drilling prospects in the world. That is being talked about by many people now. Suddenly people are waking up to the possibilities here. If this comes in, it's about a 20% or 25% chance of success, so it is exploration.
If it comes in, it's a bit of a game changer in the area because it de-risks a whole bunch of those other yellow prospects that you can see in both of our exploration blocks. You'll see us increasingly talk about this asset, this prospect. Again, it won't be drilled probably until the second quarter of next year, so about a year from now, let's call it. This is potentially a very, very interesting development for Panoro and its shareholders. Next slide, please. In Tunisia, we are constantly doing work here. We have recently as well completed the acquisition of our minority interest in there, which you probably followed.
That's gonna add about 3 million barrels of 2P reserves into our reserve bucket for 2023, so you won't see that until the ASR next year. Nonetheless, it's adding reserves and production. We acquired it, we think, quite cleverly at around $6 a 2P barrel, which I think is a very accretive transaction for us. It's really helped simplify our corporate structure too. We own the asset 100% now. It really has been an easy acquisition for us. We haven't had to really change much at all in terms of the company, in terms of accommodating that acquisition. We still see a lot of potential in this asset. We really still have a aspiration, although it's not baked into our production guidance.
We do have an aspiration to try and get this to approximately 6,000 barrels a day if we can, and we're working hard at that. We see a number of opportunities we're working on as we speak that may get us there. This asset, we believe, still has a great future and potentially quite a bit of upside as well. Next slide, please. We also came out with our first sustainability report, which is a big landmark for Panoro. We have been extremely committed to putting out a sustainability report which supports shareholders in their analysis of our commitment to ESG. It supports our wider stakeholder groups, whether those be banks or insurance companies or joint venture partners or host governments.
This sustainability transparency is extremely critical for companies like Panoro and our commitment to publishing real data and real information regarding our operations. It's been very, very well received, our sustainability report. We're quite proud of it. I'm not sure anybody's read it. A lot of work's gone into it, and we feel very happy with this. If you do have any questions on those, we'd be happy to answer those as well. Next slide, please. In summary, we have 10 wells we're drilling in the next 12 months. We have options over additional rig slots. What we're really seeing with Panoro now is a huge growth in the production, with our stated targets that we've already put in the market.
We believe there's upside beyond those as well as we get into 2024, particularly with our Equatorial Guinea drilling. There's really a lot of catalysts, a lot of production-led catalysts in this company over the next 12 months, including the exploration well at Akeng Deep. The first of the wells has gone extremely well, so that doesn't necessarily mean the rest are gonna go perfectly as well, but we hope it does. We've started off certainly with a bang. Our 3-well campaign in Equatorial Guinea is gonna commence probably in the back end of Q4. The rig is contracted, and hopefully will be there on time. We've already touched on our acquisition of our Tunisian business, we've demonstrated we can still do clever and accretive transactions, whether it be small or big.
In this case, quite a small one, but nonetheless very accretive to the company. We've completed the farm into Block S and Block EG01, we've continued to refresh our exploration, our infrastructure-led exploration portfolio, which is of course critical for the medium-term business prospects as well. We're committed to continuing to try and find the right kind of exploration asset for this company. The Akeng Deep well is planned to drill in 2024, which is really quite a major catalyst potentially in about a year's time, but it's an exciting one. We've of course announced today as well our commitment to a quarterly cash dividend. We've announced a dividend today as well as part of our results. We still have a very clear framework, we believe, in terms of the shareholder return policy.
That is the conclusion of my presentation. We have one slide which reminds you on how to ask questions. I think. Or we do at least. If you do want to ask a question, you can raise your hand and we'll try and unmute you, or you can type in questions into the question pane. Perfect. My colleague Andy will try and identify the questions.
Thank you, Jon. The first question is from Stéphane Foucart. Stéphane?
Morning, James. Thanks for taking my questions. I've got three actually, hopefully quite straightforward. First, when the future new Hibiscus well will come on stream, so 2, 3, 4, 5, 6, should we also expect the platform or production to be restricted for a certain amount of time? That's my first question. Second question, you talk about I think 8,500 barrels per day current production. Could you give us a sense of splits across the asset? Lastly, an accounting question. I was looking at the cash flow statement, it seems that this quarter, for some reason, the DD&A, the depreciation interest is not added back. I was wondering what was happening. Perhaps it's in this working capital adjustment. Really appreciate some color.
Thank you.
Sure. on Hibiscus, no. The shutdown that we had on the FPSO in the first quarter, which we flagged reasonably well, was for the initial connection of the production facility at MaBoMo to the FPSO. That is all hooked up now, and that's fine, so we will not have shutdowns related to that. We typically will have a couple of smaller shutdowns during the course of the year where certain maintenance is done, but that's all planned, and that's all built into production assumptions and guidance. There will not be another, certainly planned, shutdown of the FPSO to deal with the new wells, you know, 2, 3, 4, 5, 6 coming online. You won't see big interruptions due to that.
The breakdown of the production, let me come back to you on that one. I don't have it right to hand, Stéphane. Generally speaking, you know, Equatorial Guinea is still our largest, our largest producer, with Dussafu then coming in second and Tunisia in third. That's obviously going to change once we get a few of these Dussafu wells online, where Dussafu will probably contribute, you know, the largest of the production in due course. I'll have to come back to you in terms of exact breakdown. We do have on the slides the quarterly production from the first quarter. I appreciate that's not exactly where we are at the moment, with the new well online and with the acquisition of the Tunisian business.
We'll have to come back to you for a breakdown on that. Qazi, the question on depreciation?
Yes, John. I think it's been mapped to the working capital line. I've just checked. I think it's a typo, which we can, we can confirm that it belongs in the operating activities.
Yeah, it's what I thought, that everything has been perhaps combined-
Yeah
... to that. Okay.
Yes.
Okay.
Thank you.
Thank you.
Thank you. The next question is from Steffen Evjen.
Morning, Steffen.
Yes. Good morning, guys. Thank you. Thank you for your presentation. I have two questions. The first one is on cash flow. Looking at Q2, you have very few liftings, and it seems like your CapEx is being more tilted towards the second half of this year as well. Just wondered whether we should expect a significant cash outflow in Q2 given those two elements. That's my first question. My second question really in relation to this, given the oil price now being below $80 per barrel, and you having a very solid lifting schedule for the second half, how should we view your dividend policy and whether you'll reach sort of the $20 million mark you've set? Thank you.
Sure. No, very good questions. Yes, I think the second quarter is gonna be definitely a cash outflow quarter. We don't have significant revenue coming through. We still have capital expenditure and normal taxes and, you know, the normal outgoings. You should expect that the second quarter will be a quarter of cash outflow. Our balance sheet will probably, you know, change. A certain amount, a certain net debt position will change during the quarter, and then it'll of course reverse itself back out in the third and fourth quarters when things get the liftings start coming through. Yes, unfortunately, the second quarter is gonna be a tricky quarter in that respect. Again, it's as expected from our side. There's nothing that's changed there.
I think we've always guided that the second quarter is gonna be, it's gonna be a little bit funny. How do we see dividends? You know, we set out what we think was a pretty clear dividend policy that was basically saying as long as operations were going to plan, as long as oil was around $80 a barrel, that we were targeting $20 million dividend this year, and that dividend would be second half weighted. Nothing, nothing at all has changed there.
Oil has been a little bit lower, as we've all seen than that $80 target, but the company is still very much committed to, and the board have recently confirmed that in our meetings yesterday, confirmed that they want to continue to be a regular dividend payer as long as oil price is sensible. Our 2023 is of course, a cautious year for us because of the delivery of all these new wells and the capital expenditure we have this year, which is why we've kind of kept this year a little bit on the conservative side. We've always guided it's gonna be weighted towards the second half when we knew that we had the heavier lifting program, but also when some of these Dussafu wells were being de-risked.
We've got the first one online, the second one hopefully online soon. I think you're just gonna see that de-risking happening also in this period coinciding then with the bigger lifting. You know, all eyes for us are really on the oil price. The oil price is fine where it is now. Wish it was a little bit higher, but it's fine and that's why you've also seen us maintain the dividend, despite oil being and the realizations from our liftings being less than $80 year to date, but we're still committed to pay that dividend. Hopefully that answers your question.
Thank you, John. Very clear. I'll hand it over to you guys. Thanks.
Thank you. Thank you. The next question is from Chris Aristides . You were on mute.
Thanks for taking.
Yes, go ahead.
Hi. Thanks for taking my question. I was wondering if you can give the timeline of the Hibiscus Ruche wells 3-6. You mentioned that the second one should be coming on stream in June. How about 3, 4, 5, and 6? Can you give a bit of indication how those wells will come on stream?
Sure. What we've guided in the market and what we actually, you know, think about internally is roughly 2 months between wells. That's kind of the way that the work program's been set up. I would expect that, you know, every 2 months we should have a new well online. It could be a little bit faster in some cases, could be a little bit slower in others. It all really depends on drilling operations and what we encounter along the way. Again, we're drilling into reservoirs that are very well understood. It's prolific Gamba Reservoir. We're drilling in reasonably shallow water in reasonably good conditions.
There are always things that can throw you off the scent a little bit, or you can lose some time, or you can gain it if things are going particularly well. Roughly every 2 months is what you should expect. When the, when the next well in June comes online, don't have a precise date for you right this moment, but hopefully it's reasonably soon into June. You can then add 2 months to that, and then add 2 months to that, and then add 2 months to that, and that should probably get you to where you need to get.
Thanks, John. On the gas compressor, maybe it's just, maybe I'm wrong, but I thought that would come online a bit sooner. Is that, is that, is that fair? If it is, then, can you say what was the issue that delayed? Is it, you know, logistics? Is it operations? Or, if you've got any color there. Thank you.
Your voice came in and out, but I think I got the question around the gas compressor and the timing of it. I think in our trading update, and also that of the operator, BW recently, we indicated that it should be online during the course of this month imminently. We're almost at the end of the month, so hopefully it'll be online in the very near future. There have been delays on that.
The principal delay has been, more recently, has been a little bit deliberate, which is that the, with the timing of the new production facilities, I think that they didn't wanna do too many simultaneous operations, at the same, you know, at the same time hooking in the new production facility, receiving that first new oil at the same time commissioning what may sound like it's a small piece of kit, but it's indeed a very large piece of kit on the FPSO. It's very deliberately that they weren't trying to rush that at the same time as trying to rush first oil and end up jeopardizing one or the other. We prioritized the first oil from the new well. Nonetheless, it's probably been a little bit slower than we would've hoped.
It should be online, imminently, I think is the word we used. BW have got it this morning in May. Hopefully it'll be soon.
Thank you very much for that. Thanks for taking my questions.
Sure.
Hey, John, just a question, submitted online. We mention the options over additional rig slots that we have at Dussafu Marin in particular. Can you please elaborate a bit on the thinking around those additional options over slot rig slots, and how that might add on to the work program?
Sure. Indeed, we have up to eight slots on the Borr Norve rig. We've discussed openly, as have BW, the operator, six production wells, which we've covered in this presentation and the questions. That's all going to plan. We have two additional slots that we could activate. We have some time in which to make that option decision, and I think you'll see that the joint venture is now concentrating obviously on the production wells and that. As we get into probably the third quarter and into that period, we'll probably start debating it a little bit more. There are a lot of ideas within the group of both Panoro and BW about what might be interesting to drill.
My personal view is that we would like to see at least one exploration well drilled in Dussafu. As you'll remember, you're effectively drilling for free exploration wells in this block because of the way that the cost recovery works on the production sharing contract and the tax makeup. You know, there's so much more to go for in the Dussafu block than just Hibiscus, Ruche and Tortue, and it'd be nice to, every time we have a rig there, to try and find another oil field. We know that there are lots more there. We have to find them. We would really like to see an exploration well drilled.
The way that you need to think about it at the moment is it's probably too early for us to commit to anything, but I think that you would find that both ourselves and BW, as long as, you know, the things were stable in terms of oil price and sentiment and all that kind of stuff, that we would see us exercising those options and either drilling an exploration well or 2, or maybe an exploration well and perhaps a, who knows, another production well. We need to gather the data from the 6 wells we're drilling to figure out whether we're looking at, you know, other undrained areas that we think might be interesting to drill an, yeah, a seventh production well to create some additional capacity through that production.
I'd say the glass is half full at the moment in terms of exercising those options, but it's a little early for us to talk about. I would expect that we would probably exercise them and drill an exploration well, would be my personal feeling at this moment. Things may change and, you know, Panoro's not the only voice in the joint venture, so we'll have to see how that goes. It's nice to have these options. It provides a great platform for us, if everything is going well, to come in and retain that rig as we get into 2024.
Thank you, John. That concludes today's Q&A.
Perfect. Well, thanks, everybody, and we look forward to continuing to update you. I think the next updates for the company will probably be as we get the second well in Gabon online, hopefully in the near future. We can update further on oil production at that time as well. Thank you very much.