President, Range, Genel
President has supplied the market with 2018 unaudited highlights this morning which confirm a ‘dramatic improvement ‘ from the previous year. A 160% increase in turnover to $47.2m (17.9), adjusted EBITDA in excess of $16m (loss 1.4) giving operational profit of $14.3 (loss 4.3). Perhaps more tellingly the free cash generation was up 498% to $21.5m (3.6) and well operating costs per barrel decreased 16% to $29.50 ($35.05).
The company says that these figures show that they ‘have not been materially adversely affected by recent macroeconomic turbulence in Argentina’ with equity and bond bourses recovering and a much more stable forex rate.
Production this year continues to be sustained at 3,300 boepd in particular from the now core Rio Negro assets which show a y/y improvement of some 70%. This year will see six workovers of currently shut in producing wells together with additional reactivations scheduled to commence at the end of March. To add to that a drilling programme of both oil and gas wells will get under way which have the potential to ‘materially increase production ‘ and after last year who would bet against it. The focus on gas is of some significance as explained by Peter Levine in the recent conference call, where he detailed the advantages that it would offer. The company will, by the second half not only be producing enough gas to power its own fields but be selling gas through its own pan-regional pipeline network as well as selling electricity to the national grid.
I expect the excellent performance from last year to carry on in 2019 and for President to continue to deliver the goods this year. With a substantial drilling programme and the ability to sniff out more M&A opportunities they have all the bases covered for ‘exponential growth ‘ as they put it, couldn’t phrase it better myself, certainly huge upside potential from here.
Range has released its quarterly activities report for 4Q 2018, production suffered as did many with the weather but was only slightly lower at 572 bopd. The company is focusing on balance sheet restructuring and is in continuing discussions with the debt holder to reach a solution ‘for the benefit of all parties’.
The company is also continuing to reduce costs of the Trinidad operation and maintain their $6m of cash. Notwithstanding that they are progressing key exploration studies at the St Mary’s block wh8ch is potentially one of the most prospective onshore blocks in Trinidad. It is in a proven basin with world class source rock and on a good trend with the Shell operated Central Block. With a number of other blocks being progressed such as at Morne Diablo there appears to be some light at the end of the tunnel in this exciting oil province.
Genel has announced that they have agreed with the KRG to extend the deadline to meet the conditions precedent related to the Bina Bawi gas lifting agreement until 30 April 2019 ‘ allowing time to finalise the ongoing commercial discussion’. This is further good news from Genel who have much going on at the moment that bodes well for the future.