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Hello. Good morning, welcome to Panoro Energy's Q1 2026 trading and financial update. Before we commence, I'd like to very quickly read a brief disclaimer. This presentation contains certain statements that are, or may be deemed to be, forward-looking statements, which include all statements other than statements of historical 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 that 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. Next slide, please. Thank you. As usual, we will have time at the end for Q&A. We will endeavor to take as many questions as we can.
The platform today may have a slightly different look and feel to prior webinars, but the functionality is the same. I would note that we think there may be some platform issues today with our meeting, so on this occasion, we very much appreciate if as default you could please use the written Q&A panel as a first means of asking a question. Alternatively, you may submit a question at investors@panoroenergy.com and we will get back to you as soon as we can. Thank you. Next slide, please. I will now hand over to Julien Balkany to take you through a highlight of our results.
Good morning, everyone. I'm Julien Balkany, Executive Chairman of Panoro Energy. I'm joined on the call today by Eric d'Argentré, Panoro's COO and President, and Qazi Qadeer, our CFO. Before Eric and Qazi take you through our result and operation in detail, I would like to share with you some highlights and outline the good operational progress we are making with our successful accretive growth strategy.
Our performance in Q1 was in line with expectation with pro forma working interest production of around 15,000 barrels of oil per day, and we are on course to reach the milestone of 20,000 barrels of oil per day in 2027, when our various work program is completed. Our recent annual statement of reserves has validated a substantial pro forma 2P reserve of 84 million barrels, which based on Q1 production equate to about a 15-year reserve life for Panoro.
A pro forma 2P plus 2C base of 169 million barrels of oil equivalent emphasizes our exciting pipeline of organic growth opportunity that is larger than ever. We are actively developing our asset with near-term catalysts including the MaBoMo Phase II drilling campaign and the Bourdon discovery advancing further as planned. In Equatorial Guinea, we have received independent 2C resources recognition at Block EG-23 for the first time. We have high-graded the Estrella project as a potential fast-track development. Personally, I'm very excited by this asset that has a true potential to be a game changer for Panoro. At the corporate level, we have continued to prudently manage the business with disciplined capital allocation and commitment to deliver strong return for our shareholders. We announced today the payment of a NOK 50 million dividend for the quarter.
More significantly, during the Q1, as you are all aware, we extended a strong track record of highly accretive growth through M&A, with a well-timed and opportune acquisition of an additional 40.375% interest in Block G, which I will discuss further in a moment. Before I do so, I want to highlight the extremely bright outlook I see for Panoro. Acquisition of producing asset have been and are still a core part of our DNA. I'm also very excited by strong price realization we have locked in so far during Q2, subsequently to our Q1 result. With the vast majority of our 2026 crude lifting ahead of us, we are extremely well-placed to benefit from the higher oil prices environment. Next slide, please. Acquisition of an additional 40.375% interest in Block G.
As you are all aware of the transformational and well-timed acquisition we announced in February, where we are purchasing an additional interest in Block G from our partner, Kosmos Energy. Since this announcement, we have seen benchmark oil prices surge by over 50%, which is very clearly a strong positive for the entire period calculation in Panoro's favor. The transaction metrics highlighted on the right side of the slide were highly attractive at the time of the acquisition.
Obviously, are even more compelling into their oil prices environment with three-digit numbers. We received an overwhelming endorsement of the acquisition from the capital market with a $150 million bond tap and a $49 million private placement, both multiple times oversubscribed and closed within a matter of hours. As we outlined at the time of the announcement, we have already secured all governmental approval and no preemptive right apply.
I want to reassure and highlight that we are on track for a smooth completion of the acquisition in Q3, as announced and planned. The only remaining condition to satisfy is a competition clearance from CEMAC. We have made the necessary application in March and fully expect to receive clearance in Q3. As you can imagine, we are very eager to close this acquisition and take ownership of this enlarged interest in Block G so we can work with our esteemed operating partner, Trident Energy, to unlock the vast remaining potential of Ceiba oil field and Okume Complex that have been a world-class asset for a long time. I will now hand over to Qazi, our CFO, who will take you through the next slide and Q1 result.
Thank you very much, Julien. Next slide, please. Good morning, everyone. I will take you through some highlights this morning. You would see that we have, on an IFRS basis, reported a revenue of $34.9 million. This is largely a reflection of the volumes we have sold this quarter. A lot of it is skewed towards the early part of the year when we were not in a period where oil prices were exponentially increasing. That's basically the reflection of it, which translates into the results, which is showing an EBITDA of $10.9 million. Henceforth, the realizations are a little bit on the lower average than what you're currently seeing in oil prices. Having said that, on a pro forma basis, the results including the potential acquisition volumes and the revenues are $57.4 million US with a pro forma EBITDA of $18.4 million.
All in all, we have 735,000 barrels of pro forma net sales during the Q1 of 2026. We continue to maintain a strong balance sheet with $218 million of cash on the balance sheet as of end of the quarter, which includes restricted cash of about $148 million US. As a reminder, this will be released and available to use once we conclude on the acquisition of Block G from Kosmos. We expect the timeline, as Julien mentioned, to be in the early H2 of the year, we remain on track to deliver that. We have continued to make our distributions. For this quarter, we are announcing a $50 million pro rata distribution, which is in line with the communication we made earlier and is consistent with the capacity we have available within our bond framework. Next slide, please.
Just to take a step back and look at some history of our distributions. We have consistently returned cash to our shareholders and continue to do that with the NOK 50 million that we paid in March. Again, today, we have announced another NOK 50 million. Again, this is restricted due to the bond framework we have in place for this year, with another headroom of NOK 105 million equivalent to be available throughout the year. As a policy, we will continue to monitor the situation closely before making any distribution decisions, which every prudent oil company continues to do. Next slide, please. A little bit of detail about the liftings. As I said, the Q1 liftings were largely before the escalation of oil prices. We have sold lesser volumes in the Q2 .
This is largely driven by the buildup of entitlements and the lifting program schedule between the partners. We have continued to see a very strong conversion of price realizations here, averaging $114 a barrel on a pro forma basis. Next major lifting program in our program is in July, with about 1.1 million barrels to be lifted in Gabon and Equatorial Guinea. If we include it on a pro forma basis, we are talking about close to 1.5 million barrels, including the potential acquired volumes from Kosmos. We have continued to take an active approach towards our hedging program. We are currently protected at a blended average of $76.50 a barrel for our upcoming liftings in 2026.
There is no hedging in place for 2027 currently, but for 2026, we believe that we are adequately balanced for leaving some upside for the company and also protecting the downside if the oil prices were to retreat back to normalized levels. This is the Q1 we are taking a recognition of the change in fair value of the hedges. You would see, obviously that the results reflect a rather large, unrealized position on hedges. We will see that this will continue to just be trued up as the quarters progress. Expect lesser volatility as we basically convert the program into realizations and also the price movements are not as impactful as they would be in the first period of recognition.
This is a kind of a unique quarter where we had to basically introduce this, but from next quarter, we would expect it to not be as impactful as it is right now. Next slide, please. CapEx guidance, again, a lot of information, but starting from the left, we have a strong balance sheet, as I mentioned, with a very good cash position, largely driven by financings. The $150 million tap issue back in March, and also the highly successful $49 million equity issue, which we completed in the month of February earlier this year. The bond currently stands at $300 million with a $25 million repayment coming in last quarter of this year. Then from next year, subject to closing the Kosmos transaction, we will follow the pattern as it is displayed on the screen on the bottom half left-hand side chart. Capital expenditure.
We have continued to maintain the guidance of a full year $55 million. This excludes the acquisition costs. Again, we believe that we will continue to maintain the budget as well on Block G with the added interest when we have completed the transaction. On a full year basis, this will increase our expenditure to about $17 million on a pro forma basis. Next slide, please. I'll now hand over to Eric d'Argentré to take us through the production details and some background on performance of the assets.
Thank you, Qazi. Good morning, everyone. This slide illustrates, on the production update, the very successful years of Panoro in increasing production year on year from the beginning. You can see on this slide that 2025, as announced before, was our historical high above 10,000 barrels of oil per day net to Panoro. As seen here, the Block G additional equity acquisition is a step change to Panoro production, with a pro forma guidance for 2026 of between 15,000-17,000 barrel of oil per day. We are on the road to the 20,000 nets to Panoro in 2027 with the Ceiba potential full recovery, as well as a list of productive work on our asset as well, including the MaBoMo Phase II well on stream, and some additional investments in Okume, Ceiba, and even in Tunisia. Next, please. Our reserves number are very strong.
Julien mentioned in his introduction the 15 years' production equivalent with our 2Ps. That's a very healthy position to be in for the group. The announced transaction is doubling our reserve base, as you can see on this slide. In 2025, we have achieved a good reserve replacement ratio, with the 3.7-million-barrel discovery, which you can see on the right-hand side on the top, which is a Bourdon discovery recognition. We are more or less at a flat number. Our 2P plus 2C remain strong at 170 million barrels on the pro forma basis. 15 years' production, that's what needs to be remembered in this slide, and a lot of additional resources to be worked on and transformed into 2P with the appropriate work program on the coming years. Next, please. Block G is a multimillion-barrel accumulation, world-class asset.
As you can see here on the table, the recovery factor of Ceiba and Okume Complex is approximately 20%-21% today. The target is to reach the 30% recovery in the long term by 2035, 2040. There is a work plan for that. Just want to stress, to highlight that every 1% of recovery factor we can gain on Block G is equivalent to $25 million barrel of reserves, or, for those who are familiar with the Panoro story, the $25 million barrel is equivalent to the Bourdon discovery that was announced last year on Dussafu block in Gabon. The partnership is working together on the productive investment program for the next three to five years, including targeted well intervention, especially on the Okume Complex, with platform and dry trees and additional drilling, first in Elon or Oveng field on Okume Complex within 2028, 2029. That's the objective.
Later in the 2030, 2031 on the Ceiba accumulation with subsea wells. The clear objective in Block G for the partnership is to bring the production back to the 30,000 barrels of oil per day level. Next, please. On Gabon, Dussafu, our cornerstone asset, production and uptime in Dussafu remained very strong for the quarter. Uptime is in the up 95% and above. MaBoMo Phase II drilling campaign is on track for this summer, as previously announced, and we anticipate being back within summer 2027 at the 40,000 barrels of oil per day, which is the nameplate capacity of the FPSO, once all four wells on MaBoMo Phase II are online. That's on track.
In the meantime, the joint venture is progressing the Bourdon development, as well as the review of additional identified potential in the Bourdon area and in the northern part of the block where we shot the seismic a few months ago. The strategy in Dussafu is to maintain a long-term plateau between 30,000 and 40,000 barrels of oil per day. With all the identified potential, we are on track in 2027, 2028, and in the further years. Thank you. Next, please.
Next slide, please. In Tunisia, the asset, the update, we operate the asset onshore and offshore in the region of Sfax. The TPS asset production is very similar with good performance above the 3,000 barrels of oil per day. We have rationalized cost and maintain production. The ongoing project and well intervention will not only maintain the plateau and extend it but increase production in the course of the year and next year. Next, please. I have discussed a little bit before on the Dussafu block about the potential. As you know, we shot the seismic in December, January, a 3D seismic on new Guduma block, which you can see on this map around the Dussafu area. Part of the Dussafu area, which was an area of interest. The seismic processing and interpretation is ongoing as per plan.
The objective is to confirm the great potential seen in this prospective area in a well-known hydrocarbon basin. You can see all the Dussafu production. You can see the Etame field operated by VAALCO Energy up north. The trend and the hydrocarbon play is there. We are progressing well on this project for an exploration well sometimes in 2029. It is worth noting that on the Dussafu block, obviously the seismic was shot in this highly prolific area, and we also expect to unlock some material upside. Next, please. Block EG-23 and Estrella discovery that we high-graded. This is a very exciting block and exciting project where Panoro holds a 80% working interest and is the operator with its partner, GEPetrol, holding 20%. As I said, it's a very exciting asset in our portfolio.
We have received resources recognition, which are confirming the potential on the Estrella and surrounding prospects, namely Rodo and Ryaba, which you can see on the map in green just above Estrella discovery. Work is progressing on the conceptual development plan of Estrella discovery, as well as Rodo and Ryaba oil discovery with multimillion barrels of recovery expected in the commingled joint development plan with one drilling center that will target on one side the Estrella discovery and accumulation gas and condensate, and on the other side, target and drill the Rodo oil accumulation and the Ryaba one in a reachable distance from one central platform. That would be a very cost-effective solution, and we are looking at fast-tracking the drilling of the Estrella discovery. Next, please. Just to come back on this slide, and that will be the last slide of the presentation.
We are on track to deliver as per our guidance. As we said, and as I said earlier, on the road to the 20,000 barrels of oil per day in the course of 2027, once all the recovery of potential in Ceiba and additional development in Gabon will be done and online. We are in a very good position in terms of reserves with 15 years ahead of us and with a very strong organic growth pipeline of projects to unlock additional potential on our asset base. That will conclude today's presentation. Thank you.
Thank you very much, Eric. We will now open for Q&A. The functionality has been restored, so if you'd like to ask a question, you can please raise your hand under the react icon on the toolbar, or alternatively, submit it through the Q&A panel. The first question has been submitted online. Qazi, perhaps could you please maybe provide a little bit more color on the phasing of our hedges throughout the remainder of the year? Timing of settlement expected for those?
Yes, certainly, Andy. As I mentioned, we take an active approach towards hedging, and our strategy is always to align our hedge positions to the lifting events, so to the extent possible. In summary, the hedge positions are bespokely concentrated for the same periods when we are basically selling and pricing our cargoes. The current portfolio or the current positions we have are, again, concentrated towards the lifting events, which are largely in the H2 of the year, and they will be unwound as we lift those barrels in the coming months.
Thank you very much, Qazi. Thank you. Eric, a question has come in on Equatorial Guinea, Block G. Could you please elaborate on the current status of Ceiba field and the work ongoing to restore and normalize production?
Thank you, Andy. Okay, sure. The Ceiba field, as you were aware, we had some issues last year with the famous multi-phase pump, MPP, sitting on the seabed, on the subsea clusters, how we call them, with wells being impacted in terms of production. We have had three MPP issues in 2025. Two of them have been restored already. As per planning, one in October last year and one in January, February this year. We have the central cluster that needs some additional equipment, which is being engineered and supplied. We expect to get back to a full, steady, and reliable production on the Ceiba accumulation and complex in the course of the H1 of 2027 once everything has been restored and the long lead items have been supplied and reinstalled. It does require some subs intervention, which are being engineered and planned accordingly.
Thank you. Thank you very much, Eric. A question has come in. Perhaps, Julien, you may want to take this one. Obviously, the Block G acquisition was very well timed. How are we seeing or is potential for further external growth opportunities, or is the focus now going to be more on the internal organic opportunity set?
As mentioned, our acquisition of Kosmos Interest has been extremely well timed. We have been announcing it a couple of days before the start of the Middle East conflict. Clearly, our core focus is to close this transaction. As mentioned, we are on track to close it during the next quarter, and we have a very strong and exciting pipeline of growth opportunities. In the meantime, we are always considering new M&A transaction. It has always been part of the DNA of Panoro, as I mentioned, and it's a very core to our focus. Let's be quite candid here. In the current higher oil prices environment, it's not going to be that easy to replicate the recent announced transaction with Kosmos.
Thank you. Thank you very much. Question for Qazi again. Qazi, how is the current oil price environment affecting your thinking about further hedging?
I think we obviously, as I say, take an active approach towards hedging. Insofar as we have certainty of the lifting program, we are not averse to hedging. Certainly, our approach has always been towards downside protection rather than being speculative on oil price. We will continue to expose the company to upside through introducing a proportion of our barrels to be protected from the downside. Certainly, we will not consider a very kind of heavy hedging program. The hedging program inherently for us is on a kind of a rolling basis. We always look at upcoming liftings and continue to be hedged out six to eight months in advance for the events that are happening. We are reasonably certain that will happen in that timeframe.
The answer is yes, there's always an appetite to hedge, but in the current environment, near-term months, we are not expecting or looking to extend any more positions because the prices are high as it is, and it gives us a nice upside to our barrels that are currently available for sale.
Thank you very much. A further question is regarding the final payment to Kosmos when the acquisition is closed, and can it be assumed that the final proceeds will be reduced proportionally to the cash flow produced by the EG asset and the corresponding adjustment made? Julien, perhaps you'd like to take that one.
Yeah. This assumption is totally correct, and as we mentioned, the effective date of the transaction with Kosmos is January 1st, 2025. We're anticipating closing sometime during this summer. We mentioned in the past that we were anticipating to the final cash consideration to be paid at time of completion to be somewhere around $140-$150 million. That was a number we provided to the market back in February when we announced the deal. Obviously, that was before the strong surge in oil prices. Again, it will depend on when we will close with all the lifting and revenues that will be generated. We can assume that this number will probably have drastically improved and be much lower.
Thank you. Thank you very much, Julien. Eric, a question has been submitted. Obviously, given the extension to 2053 of the Dussafu permit offshore Gabon, how should people be thinking about the longevity and positive implications that long date of extension has for extending the production today?
Okay. That's a very good question. The first benefit of this long-term extension to 2053 versus the 2038 that our PSC was giving us, two times five years post 2028. We will be able to enjoy the long end tail of the current production. Today, we are developing reserves. As you can see, the story, it's a success story, Dussafu, Hibiscus field, and discoveries. The early production reserves will reach maturity and long-term final production post-2038. It's maximizing, capturing the end of production of the current fields as well as being able to have a long-term view on, first, the Bourdon discovery, which will be developed, the Walt Whitman, and some other objects which we know we have potential, not just in the Bourdon area with Bourdon Southwest Extension and some others.
We have potential in the northern part of the block, and this will take from now on until 2000 and maybe 2030, and even 2035, we would still be analyzing and drilling some new object and tying them back to the existing production center and facilities. This will extend post-2038. We'll be able to maintain and carry on investing on the fantastic potential of the block.
Thank you. Thank you very much, Eric. Just a clarification, perhaps, Qazi, just on how the stronger oil price environment, when it may be reflected in the shareholder distribution capacity, and just to confirm that the 2025 capacity has been predetermined and won't change.
Yes. The 2025 capacity has been predetermined. This is in line with the bond framework we have and the kind of available capacity that it unlocks on a structural basis. We had about just north of $21 million of capacity, which is in accordance with the bond terms at 50% of free cash flow to equity, which is a defined term in the bondholder agreement. That is available to us for this year. For next year, 2026 cash flows will be the benchmark, and 50% of that, or 2025 cash flows, whichever is higher. This is on the assumption that the amendments that were proposed under the bond terms back in February have been implemented, and that only happens once we close the Kosmos transaction.
Thank you. Thank you very much, Qazi. A further question submitted online. Are you able to comment on the expected timeline for the CEMAC approval, and if there are any other factors that may affect the timing of completion of the acquisition?
We don't envisage any roadblocks to the completion of acquisition. CEMAC approval from the anti-competition division, let's say, is on track. All the applications, associated filings, explanations have been filed, and we are continuing to engage with the excellent team at CEMAC to progress our case. The decision obviously needs to be reached in a maximum of six months from the filing date which is still within our completion period. We see no reason why it can't be completed within this timeframe. Hopefully, we will continue to monitor it actively as we do, but there's no suggestion or any indication that we can't get there as we communicated earlier.
Thank you. Thank you very much, Qazi. Eric, a question has come in regarding the exciting Estrella project in Equatorial Guinea. Could you please comment what you see as the key steps, events, or catalysts to achieving first gas and oil?
Sure. Thank you, Andy. Estrella, yes, very exciting project. We are still today in the first exploration period until Q1 2028 with no well obligation. This being said, we have the opportunity and the option of fast-tracking and accelerating the drilling. The first step is we are in the seismic reprocessing study, which should finalize. We'll have the final numbers and view this summer. I see Estrella, and as I said earlier, the commingled development of Estrella and Rodo together by its typical shallow water development, close to existing infrastructure, which is the Alba Complex. By the time we supply the platform, long lead items, the well engineering, the pipeline, it's more or less a two years process from now. Summer of 2026, we can expect first oil and first gas, Q1, Q2 2028. That would be our approach.
Thank you. Thank you very much. That will conclude the Q&A for today's webinar. Once again, we thank you for your attendance. If you have any further questions, please do contact us on investors@panoroenergy.com, and we will get back to you. Thank you.