and welcome to the Panoro Energy First Quarter Results Conference Call. My name is Courtney, and I'll be your coordinator for today's event. For the duration of the call, you will be on listen only. However, you will have the opportunity to ask questions. I will now hand you over to your host, John Hamilton, to begin today's conference.
Thank you.
Thank you, Courtney, for the introduction, and good morning, everybody, and thank you for participating in our first quarter twenty nineteen conference call. On the call with me today are Qazi Gadeer, our CFO Richard Morton, our Technical Director and a new name, Nigel McKinn, who is our Projects Director and is joining us for the first time on this conference call. Following a brief introduction, Richard will take you through an update on the assets, and then we'll turn it over to Qazi to take you through some of the key issues on the financials, after which we'll open up for Q and A. As a reminder, today's conference call contains certain statements that are or may be deemed to be forward looking statements, which include all statements other than statements of fact. Forward looking statements involve making certain assumptions based on the company's experience and perception of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances.
Although we believe the expectations reflected in these forward looking statements are reasonable, actual events or results may differ materially from those projected or implied in such forward looking statements due to known or unknown risks, uncertainties and other factors. Now for your reference, our results announcement was released this morning. A copy of the press release and our first quarter twenty nineteen report are also available on our website, www.panoroenergy.com. So the financials we released today clearly demonstrate the transformation that we've made at Panoro over the past year. I'd like to just point out a few key high level takeaways, if I could, before turning over to Richard.
Firstly, very strong financials. We've had a particularly strong lifting schedule in quarter one where we had revenue of approximately $20,000,000 and EBITDA of over $11,000,000 for the quarter. So again, a very strong financial quarter. Second thing I'd like to point out is operational performance. Group production for the quarter was approximately 2,600 barrels a day net to Panoro, which is a sixfold increase from this quarter last year.
In Gabon, Ducifer production is stronger than expectations in Q1 with continued strength in Q2 to date of over 12,000 barrels a day on average. We know today as well that BW Offshore have produced their first quarter results today and also a series of other announcements. And in those announcements, you will see that they have raised their production guidance on as well as well as raising their reserve guidance on Dussafu to 80,000,000 barrels. That is an internal operator number. So BW are echoing the strong production information that we have also today released.
Continuing operational performance in Tunisia, we're approximately producing at the moment about 4,300 barrels a day gross. That is an uplift of a little bit less than 10% from when we took over the asset and is making headway towards our stated initial production target of raising production by 15% to 20% by the end of Q3. So we're well on the way there. We've also today announced with some upcoming drilling and workover activity, we're now targeting an exit rate for the TPS assets in Tunisia of 5,000 barrels a day gross production with additional opportunities being evaluated. The last thing I'd like to point out in terms of the high level is our large upcoming work program.
Starting in July, we'll commence a six well program at Dussafu consisting of one exploration well, followed by four production wells and an additional exploration well. The first oil from this new production drilling is expected in Q1 twenty twenty and has the potential to increase gross production at Dussefou to over 20,000 barrels a day of oil. The drilling of the Salloum West exploration well this year is also on target. We're working together with the state owned oil company, ETAP. Exploration success there could see production also fast tracked.
So I'll now turn it over to Richard, who'll take you a little bit more through the operational aspects of the assets. Richard?
Thank you, John, and good morning to everyone. Firstly, in Tunisia, on the exploration side, we've advanced our plans to drill the commitment well on the Sfax offshore exploration permit, the well, Salloum West. It's proposed to test a prospect which is located in a fault block to the west and updip of the Salloum structure, an ore discovery that was drilled and tested by British Gas in 1991. We're currently working closely with our partner, ETAP, regarding the technical program and the formalization of drilling plans, including the well planning, the location and approvals for drilling and testing. We've started building a drilling team in based in Sfax, and we've hired a experienced drilling manager who has drilled many similar wells in the past.
So that's all coming together to deliver the well towards the end of this year. The primary target of the Salloum West Well is the Berena formation, which produces from the neighboring El Ain and Guibiba fields, which are located in the TPS assets. The well is planned to test the Boreno at approximately 3,200 meters vertical depth, where we've identified on two d and three d seismic what we believe to be an independent fault block located west of the Salloum 1 discovery. So the objective of this well is to prove up additional resources in the vicinity of the discovery well and to aggregate them in order to fast track the development of Salloum through a tie in to the existing oil infrastructure at TPS. For TPS, the producing assets, production there during the first quarter was equivalent to an average rate of 3,930 barrels oil per day gross.
And current production rates remain very strong and are approximately 4,300 barrels a day gross. Activities undertaken on the fields during the quarter included detailed planning for the restart of production from the El Ain field, which has been shut in for over a year pending a new concession. The plan includes workovers for two existing wells on the field to install new ESP pumps. The plans are also being made to enhance production at the Gabiba field, where a sidetrack and two additional workovers are being considered alongside an enhanced water injection program. So we believe the near term opportunities here could provide a significant production uplift of between 15% to 20% by Q3 compared to the 4,000 barrels we were averaging at the end of last year.
And we think by the end of twenty nineteen, we can target gross production from these assets of about 5,000 barrels per day gross. So you can see that initial results of this program have been positive and production currently is at 4,300. So we're getting close to our 5,000 target already. There was one large international and two smaller domestic liftings from the TPS assets for the company during Q1 twenty nineteen of 118,490 barrels net to Panoro. Q2 lifting schedule is anticipated to include two domestic liftings only, and we anticipate 27,000 barrels net to Panoro from those two liftings.
The other exploration license acquired as part of the DNO transaction last year, the Hammamet Offshore Exploration Permit expired in September and is in the process of being relinquished. And costs approximately USD 2,000,000, which is USD 1,200,000.0 net to Panoro. Meanwhile, in Gabon, production from the Tortue field continued from the DTM 2H and 3H wells during the quarter at an average gross rate of over 12,500 barrels per day. This compares to an average gross rate of 11,900 in the fourth quarter twenty eighteen. Two liftings of approximately 650,000 barrels each were completed in the quarter in late January and late March, and we expect one lifting of a similar size to be completed during Q2.
Post period end, the production rates from Tortue have continued to exceed initial expectations and remained very strong in April and May at an average growth rate of over 12,000 barrels per day. So that's about 25% uplift on the forecast that we made when we started the project. The Phase two development at Tortue is underway and will consist of an additional four subsea horizontal oil development wells. Three of the wells will be drilled in the Gabba Reservoir and one well in the Dentale D6 Reservoir. The drilling campaign will be carried out in the 2019 and will conclude in early twenty twenty.
We expect production from these additional wells to come online in 2020. And VW estimates that the total production at that time could be up to 25,000 barrels of oil per day. Prior to that development drilling, we're going to drill an exploration well on the Hibiscus Up Dip prospect. We expect the rig for this well to be mobilized in July 2019. And this Hibiscus Updip prospect is mapped as a four way closure at the Gamba level.
And the Gamba is the reservoir that produces at Tortue. The operator has estimated that this structure may contain recoverable volumes in the same magnitude as the Ruche Ruche Northeast and Tortue discoveries previously drilled on the three d seismic. The well will be drilled Southwest of an exploration well, which was drilled in 1991, and that well found oil in core samples and good reservoir quality and dip meter data indicating a higher structure to the Southwest where we plan to drill. Following the development drilling, a further exploration well is planned in early twenty twenty. Candidate locations for this well include Prospect B to the South, which is a large dentile closure.
Another candidate is the Esperdome prospect to the north of Ruche North East discovery, which is closure at both the Gamba and the Dentale levels. The JV partners are currently reprocessing the three d seismic covering the Dussafu block, we will use this new data to help select the prospect location and also better define the Phase III development at Dussafu. As a reminder, we have prospect A and B area with a combined P50 prospective gross resources of four eighty two million barrels, and we think the reprocessing could refine this structure and maybe a good candidate for the drilling next year. Additional exploration drilling may be carried out in 2020 depending on the results of the reprocessing and the Phase two drilling. The concept work for Phase three at Ducefoe progressed during the quarter, and that phase will consist of development of the Ruche Field and the Ruche Northeast Fields, which are likely to be tied back to the BW Ferdolo FPSO, which is stationed at Tortue.
Furthermore, as previously indicated, Tullow has confirmed their intent to exercise a 10% back in right into the Dussafu license as stipulated in the production sharing contract. Antolo will be required to pay a portion of past costs. And following completion of this, Panoro's interest in the Dusufu license will be down to 7.5%. Finally, in Nigeria, the Ajei field produces continues to produce and produced an average of three eighty three barrels of oil per day net to Panoro during the quarter, and this compares to three sixty eight barrels of oil per day net in Q4 twenty eighteen. Production from the field continued from the four and five wells, with a four well producing from the Centaminian Oil Reservoir and the five producing from the oil rim of the Toromian Reservoir.
We had a crude lifting in March 2019, and the next lifting is anticipated for Q2 twenty nineteen. Proceeds from the crude sales are being applied to the JV by the JV towards operating expenses and the reduction of historical payables. The JV partners are continuing to progress the next phase of activity at the field, which is based around the Tronion gas field development plan. That concludes the review of the operational activities in the quarter, and I'll hand over to Qazi for the financial update.
Thank you very much, Richard, and good morning, everyone. In our results announced this morning, we have, as usual, included a detailed narrative on a line by line analysis of Q1 results. Comparing the previous quarters against the 2018 and to the first quarter of twenty nineteen. Therefore, on the call today, I'm only going to cover the key highlights of the first quarter twenty nineteen results. It is also customary to note here that the results published this morning and discussed on this call are unaudited.
Q1 twenty nineteen is the first quarter where we have included operational results of the producing assets acquired in Tunisia that completed in late December last year. Key highlights for this quarter on the income statement that I want to bring out are revenue in total, which was $19,900,000 comprising of $17,400,000 in oil sales revenue and $2,500,000 of other revenue that related to the gross up of state profit oil allocation under use of UPSC. This compares to $4,800,000 of oil sales revenue and other revenue of $877,000 in Q4 twenty eighteen. It should be noted that we account for our revenue on lifting basis under the IFRS standards. The lifting scheduling across various production assets will vary quarter on quarter and as such due to revenue recognition on a lifting basis, uneven quarterly financial results are to be expected despite stable operational performance.
Other revenue of $2,400,000 for the current quarter relates to the gross up of state profit oil allocation, as I've mentioned before, for a loss of PSC with a corresponding number included in the tax expense. This compares to $877,000 for the fourth quarter twenty eighteen. We also saw a significant improvement in EBITDA for the current quarter, increasing from $711,000 to in Q4 twenty eighteen to $11,200,000 in the current quarter. This is mainly driven by higher sales volume in the current quarter. Other than revenue, the most significant impacts of operations on the cost side are OpEx, which is up from $3,400,000 to $7,100,000 This has been expensed on a lifting basis as well.
G and A costs are up from 1,100,000 to $1,400,000 Again, this is due to a larger set of operations we have and also due to the inclusion of new staff members to cater to the increased activity in the group. Depreciation charge for the quarter is up from 1,200,000 to $2,400,000 This is again due to higher production base. Net finance costs also are up from $117,000 in Q4 to $1,200,000 in the current quarter. This is reflecting a full quarter of accumulated interest for Mercurial loan facility. And also the since the first oil on Dussafu, we have started to expense the interest cost on the nonrecourse loan, which was previously capitalized.
In accordance with the IFRS, we have to fair value our hedging contracts at each reporting date, which will generate unrealized non cash gains and losses in the income statement for each period presented. As a result, like many peers in the sector, we have introduced the reporting of adjusted non GAAP financial measures, which isolate items of such nature operational performance. Considering the non GAAP measure, our underlying profit before tax was $7,800,000 on an adjusted basis compared to the accounting net profit before tax of $3,500,000 on a reporting basis. The difference between the two is primarily the hedging contracts fair valuation charge as of the end of the first quarter. Thus the reported accounting net loss for the period is $1,500,000 compared to a similar number in Q4 twenty eighteen.
On an adjusted basis, the underlying operating profit after tax is $2,700,000 for the first quarter twenty nineteen versus an underlying loss of USD 1,800,000.0 for the fourth quarter twenty eighteen. On the balance sheet side, cash balances stood at $18,100,000 comprising $8,100,000 in available cash and $10,000,000 held for bank guarantee in relation to the obligation to drill a well at Saxe offshore exploration permit in Tunisia. This obligation will be discharged and cash released at the commencement of drilling operations. Crude oil inventory was down by half. This, again, is a function of higher sales in the quarter.
Trade and other receivables have increased increased from 5,600,000 in Q4 to $13,300,000 in Q1. This is mainly a result of crude sales receivables, which were collected in April 2019. And the nonrecourse load from the VW Energy also reduced by $1,700,000 due to repayments from our cost oil allocation. The last item I will discuss here is the corporation tax liability, which includes twenty eighteen taxes payable in TPS operations that are due in 2019. It also includes the provision for the 1Q twenty nineteen taxes on income.
This concludes my review of our financials, and I will now turn back the call to John for opening up for questions and his closing remarks.
Thanks, Kashy. Thanks, Richard. So this quarterly report, I think, underlines the new strength within the company and points the way towards further growth also over the coming twelve months, which could see the company's production reserves and financial performance continue upwards based solely on its current portfolio. As usual, we continue to evaluate other further growth opportunities. We look forward to updating shareholders during this busy upcoming and extended drilling program period we have in Gabon in Tunisia.
So I'd like to turn it over to questions now. If we could open up the line to any questions there may be.
Please press star one on your telephone keypad. Please ensure your line is unmuted locally and you will be advised when to ask your question. Okay. So our first question comes in from the line of Theodore Nielsen calling from SB1 Markets. Please go ahead.
Good morning, guys, and thanks
for taking my questions. And also, thank you
and congrats for with the strong, strong Q1 results. Three questions from me. First, regarding your revenue, could you indicate how much of the Q1 revenue that was related to inventory sales? Second question is related to TPS. Would like to share the comments regarding exit rate production for 2019.
But how should we think around the average production for 2020 for TPS? And then my third question, last question, could you please remind me of the predrill resource estimate for Salloum Westwell? Thank you.
Right. So the first question around revenue and how much of it was inventory sales.
I think it's a little bit sort of difficult to quantify that, on this call at least. But, we had, about 150,000 barrels sold for Tunisian lifting, the international lifting we had. And then there were some local liftings as well, which were part of the domestic sales. The real difference is basically Dussafu, which basically we were getting sort of higher inventories as of last quarter. And then we managed to sell two cargoes.
One of them was right at the very end. The parcel side, I think, was 650,000 barrels on a gross basis.
Okay. Yes. So as you know, we can probably get a little bit more into the gory detail there. But I think the key point is that with revenue recognition now, it's all about sales, not production. So certainly, we had a good quarter based on the volumes we sold, which included some inventory that was probably there at January 1.
On the TPS, yes. So we're we've been in the asset now for four or five months now. We're very encouraged by what we see. We've started to try and articulate some of that to the market. We're currently producing around 4,300 barrels a day gross, which is an uplift, as we said.
As Richard pointed out, we've kind of uplifted our year end target to try to get to about 5,000 barrels a day. So when you're looking at 2020 production based on what we're saying now, think that that's probably a good starting point. I mean, you're in the oil and gas business, you're always fighting a decline. But I think that that's probably a good place to be for your expectations for 2020 until such time as we perhaps make some further decisions around additional activity, which we'll obviously update the market on in due course. The pre drill estimates on Salloum West.
We the original Salloum discovery, which is what we've previously talked about, had been estimated at 5,000,000 barrels recoverable by the previous operator. And we don't see anything at the moment that would make us change our mind about that. And I think the predrill targets we're looking for in the Salloum West structure are kind of directionally about the same. We've not put out a specific predrill estimate on it, but you can kind of think about it in the same area.
Okay. Thank you. That's very helpful.
We currently have no further questions coming through. So we still have no questions coming through. So one final reminder that it's
Courtney. Thank you very much, and thank you, everybody, for joining. You let us off easy today with the questions, but we would encourage anybody who has an off line question to e mail us. The contact information is on the website. E mail us directly.
We'll try and respond to any questions that you might have that are not being articulated in the call. We thank everybody for joining, and we look forward to updating you in the near future as to our activities. Thank you very much.
Thank you for joining today's call. You may now disconnect your handsets.