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Maurel et Prom : Maurel et Prom : 2012 Results



                Maurel et Prom : Maurel et Prom : 2012 Results

                                                          Paris, 28 March 2013
                                                                              
 

                                                                      No 07-13

                                 2012 RESULTS

  

 

2012: a year of consolidation

1/ a strong cash flow generation

  * Average production 2012: 15,688 bopd Maurel & Prom share 

  * The 22,000 bopd level was surpassed in Gabon in December 2012 (100%) 

  * Limited production start-up at Sabanero while awaiting the production
    licence 

  * Sales: €472 million (+26%) 

  * Income from production activities: €255 million (+23%) 

  * Operating income: €201 million (+48% excluding disposals) 

  * Financial income: -€42 million 

  * Net income: €58 million (+93% excluding disposals) 

  * Reserve replacement rate: >300% 

2/ Pursue of exploration activity with a limited risk

  * Success on the CPO-17 and Sabanero permits (Colombia) 

  * Failure at Etekamba (Gabon) 

3/ Debt restructuration

  * Cash at 31 December 2012: €67 million 

  * Bank borrowing at 31 December 2012: 

       * BGFI: €11 million  

       * Reserve Based Loan (RBL): US$130 million 

  * OCEANE convertible bonds: €368 million 

  * Cash at 28 February 2013: €231 million 

  * Bank borrowing at 28 February 2013: 

       * SSF: US$350 million 

  * OCEANE convertible bonds: €368 million 

2013:reinforce the strong cash-flow generation and increase reserves

  * Continuous increase in production in Gabon 

  * Intense exploration activity with limited financial risk 

  * Free cash flow expected 

  * Several investment projects in study 

SIGNIFICANT EVENTS 2012

Activity in  fiscal year  2012  focused mainly  on  exploiting assets  in  the 
Group's portfolio through development work, managing production and uncovering
potential areas for exploration.

Development of existing fields

In Gabon, the  ramping up  of regular production  following the  start of  the 
water injection programme was interrupted early in the year as a result of  an 
incident at platform 100 on the  Omoc-Nord field. The impact of this  incident 
had consequences throughout  the year on  production levels, which  fluctuated 
between 12,000  and 17,000  bopd in  the first  six months  before  surpassing 
22,000 bopd at the end of the year,  as well as on the pace of development  at 
the field as additional drilling had to be carried out.

However, following development  work and improved  production management,  the 
water injection  programme  at  the  Omko (Kissenda)  field  has  become  more 
effective and similar results are expected at the Omoc-Nord field. At the Omgw
(Grès de Base) field, the water injection begun in February 2012 is continuing
and is enabling the pressure  in the reservoir to  be stabilised. At the  Onal 
field, when early water breakouts were  observed at some producing wells,  the 
injection  rigs  responsible  were  modified   to  remedy  the  problem,   the 
consequences of which will affect production at this field in 2013.

On the Mnazi Bay permit in Tanzania, the Group carried out workovers at  three 
gas production wells. Only  one of them now  remains in limited production  in 
order to supply  gas to  an electricity  plant, generating  US$1.3 million  in 
sales for the Group.

A sustained program of exploration studies in 2012

The Group  has undertaken  campaigns of  seismic acquisition  on most  of  its 
exploration assets. After interpretation, these campaigns allow Group teams to
highlight prospects for drilling. The  drillings of fifteen wells are  planned 
during the year 2013.  The risk is  limited due to  the agreements signed  for 
being carried or financed by third parts.

Asset consolidation in East Africa

Maurel & Prom exercised  its pre-emption right on  Cove Energy's interests  in 
the Mnazi Bay concession in Tanzania.

The transaction  is  worth a  total  of  US$18.9 million,  paid  to  Wentworth 
following the approval of this transaction by the Tanzanian authorities on  26 
July 2012. An  additional payment  of up  to US$5.1  million will  be made  if 
future gas production exceeds certain thresholds.

After this transaction, the various Mnazi Bay interests are as follows:

               Production Exploration
M&P (operator) 48.06%     60.075%
Wentworth      31.94%     39.925%
TPDC           20.00%     -

Restructuring the line of credit

On 29 May 2009, the Group entered into a US$255 million bank facility (Reserve
Based Loan or  "RBL"). This  RBL was increased  to US$330  million in  January 
2011. The amount drawn down as at 31 December 2012 was US$130 million.

On 8 November 2012, the Group announced that a new line of credit had been set
up in the amount of US$350  million (Senior Secured Facility). This was  drawn 
down in full on 25 January 2013. At the same time, the Group repaid the entire
outstanding RBL (US$130 million) as well as the BGFI loan (€11 million).

KEY FINANCIAL DATA

                                         2012  2011
€/US$ rate                              1.286 1.392
In millions of euros
Sales                                     472   374
Income from production activities         255   208
                        as a % of sales   54%   55%
Operating income                          201   258
         of which income from disposals     0   122
Financial income                          -42   -17
Income before tax                         158   241
Net income from consolidated companies     63   143
Equity associates                          -5     9
Net income from discontinued activities     0    16
Net income, Group share                    58   165
                     of which disposals     0   135
Cash at opening                            61    95
Cash at closing                            67    61

Disclaimer: The Group income for fiscal year 2012 are not comparable with that
of the previous year; the sale of MP Colombia, the sale of Caroil and the sale
of MP Venezuela produced an non recurrent  income for the Group in the  amount 
of €135 million for fiscal year 2011.

Sales

Group consolidated sales were €472 million, up 26% on fiscal year 2011.

This increase  was  mainly  due  to  higher  volumes  sold  in  Gabon,  in  an 
environment of  steady  sale  prices  (average  US$110.6/bbl  in  2012  versus 
US$110.9/bbl in 2011).

Oil hedges had a limited impact over the fiscal year 2012 due to the reduction
in volumes hedged in comparison with the previous year. As at the date of this
press release,  hedges  for  fiscal  year  2013  cover  significantly  reduced 
volumes, the impact of which on consolidated sales in fiscal year 2013 will be
500 bopd sold at an average price of US$87. Note the favourable impact of  the 
movement in the US$/€ exchange rate (-8%) in 2012.

In addition, the Group reported oil sales at the Sabanero field in Colombia of
€16.8 million (Group share 50.01%) for fiscal year 2012.

Operating income

Operating income for  fiscal year 2012  was €201 million,  compared with  €258 
million in 2011 (which included €122 million from disposals in 2011).

In millions of euros                                     31/12/2012 31/12/2011
Sales                                                           472        374
Gross margin                                                    382        311
Gross operating surplus                                         339        273
Amortisation and depreciation of depletion and other
impairment                                                     (83)       (66)
Income from production activities                               255        207
as a % of sales                                                 54%        55%
Depreciation of exploration and production assets              (42)       (37)
Income from disposal of assets                                    0        122
Other operating items                                          (13)       (35)
Operating income                                                201        258

The improvement in income from production activities was mainly due to  higher 
volumes sold  in  Gabon  (15,541  bopd  versus 14,264  bopd  in  2011)  in  an 
environment of steady sale prices.

Excluding changes in consolidation scope, operating margins remained stable.

Impairment of exploration and production assets  was €42 million for the  full 
year 2012.

  
Financial income

Financial income for the period mainly corresponds to Group financing  charges 
via convertible bonds (OCEANE 2014 and 2015), a Reserve Based Loan and a  BGFI 
line of credit.

A new line of credit in the amount of US$350 million (Senior Secured Facility)
set up in November 2012 was drawn down in full on 25 January 2013. At the same
time, the Group repaid the entire outstanding RBL (US$130 million) as well  as 
the BGFI loan (€11 million).

Net income

Pre-tax income  was  €158 million.  The  tax  charge was  unchanged  from  the 
previous year at €95 million, €29 million of which is payable for this  fiscal 
year.

Net income, Group  share, was therefore  €58 million versus  €165 million  for 
fiscal year 2011, including €135 million from non-recurring disposals.

Investments

The investments made in 2012 are shown by country in the table below.

In €M       GABON CONGO TANZANIA MOZAMBIQUE OTHER SUB-TOTAL COLOMBIA TOTAL
Exploration  42     3      12        6        4      67        22     89
Development  153           5         -               159       47     206
TOTAL        195    3      18        6        4      226       69     295

In Colombia, following the agreement signed in 2011, all the investments  made 
were financed by Pacific Rubiales Energy.

In Gabon, development work mainly related  to ramping up production and  water 
injection facilities.

Cash and net debt

As at 31 December 2012, Maurel &  Prom reported net cash of €67 million.  Cash 
fluctuations in fiscal year 2012 were due to the following:

  *  cash flow generated by operating activities (+€248 million); 

  *  payments related to investments (-€295 million); 

  *  dividend payment in the amount of €46 million;  

  *  additional drawdown of US$50 million (€41 million) of the RBL. 

The investments  financed by  Pacific Rubiales  Energy are  recognised  partly 
under assets and partly under "Other creditors and miscellaneous liabilities".

RESERVES AT 1 JANUARY 2013

Oil reserves (M&P share net of royalties)

As at 1 January 2013, the Group's P1+P2 oil reserves amounted to 198 mmbls, up
7% on the figure for the same date the previous year. These amounts are  shown 
as the Group's share, net of royalties.

                     2012             2013
                    P1+P2    P1    P2    P1+P2   P3
                                                  
OMOUEYI   85% mmbls 176.8   53.8  140.5  194.4  94.5
BANIO    100% mmbls  0.4    0.3    0.1    0.4   0.2
GABON         mmbls 177.2   54.2  140.6  194.8  94.7
SABANERO  50% mmbls  7.8    2.1    1.3    3.4   3.6
COLOMBIA      mmbls  7.8    2.1    1.3    3.4   3.6
TOTAL         mmbls 185.0   56.3  141.9  198.2  98.4

Gas resources (M&P share net of royalties)

Group C1+C2 resources at the Mnazi Bay field were 294 Bscf, or 52.5 Mboe.

C3 resources at this Mnazi Bay field were  433 Bscf, or 77 Mboe. A 3D  seismic 
campaign is  under  way regarding  the  possible extension  of  this  offshore 
deposit in order to refine our understanding of this region prolific in gas.

To this, the potential linked to the drilling of the Mafia Deep well, must  be 
added. The  volume  of  local natural  gas  for  this well  was  evaluated  by 
Schlumberger to  be  between  1.97 and  4.15  Tscf  (the Group  share  net  of 
royalties would be between 1.0 and 2.2 Tscf).

Additional resources (M&P share net of royalties)

The hydrocarbon volumes shown in the  table below correspond to an  evaluation 
of resources (net of  royalties) linked to discoveries  or to wells that  have 
revealed the presence of hydrocarbons, but which have not yet been assessed.

                               Type of hydrocarbon       2013  
COLOMBIA CPO-17         25.00%                 Oil   41 Mbls
SICILY   Fiume Tellaro 100.00%                 Gas   1.8 Tscf

 

Indications from the one Godric field discovered in December 2012 allowed  the 
Group to  report  additional resources  of  13.3  mmbls (Group  share  net  of 
royalties).

Additional exploration potential

The resources mentioned above do not take into account the potential linked to
the intensive  exploration  which began  this  year  in the  form  of  seismic 
campaigns and well drilling.

EVENTS OCCURRING AFTER CLOSING

Restructuring the line of credit

On 29 May 2009, the Group entered into a US$255 million bank facility (Reserve
Based Loan or  "RBL"). This  RBL was increased  to US$330  million in  January 
2011. The amount drawn down as at 31 December 2012 was US$130 million.

On 8 November 2012, the Group announced that a new line of credit had been set
up in the amount of US$350  million (Senior Secured Facility). This was  drawn 
down in full on 25 January 2013. At the same time, the Group repaid the entire
outstanding RBL, amounting to US$130 million.

Exploration results in Colombia (Chaman-1)

On the  Sabanero permit  in  Tanzania, the  Group  began drilling  the  Chaman 
prospect in December 2012. This drilling  revealed a new oil discovery in  the 
C7 formation (12° API).

On the SSJN-9 permit, after abandoning  the SantaFe-1 well, the Group  decided 
to free up this permit in northern Colombia.

TUSCANY

Exercise of Tuscany warrants

On 19 March 2012, Maurel & Prom informed its shareholders of the exercising of
the Tuscany ordinary-share warrants, held since the sale of Caroil, with a
view to acquiring 27,500,000 ordinary shares in the capital of Tuscany without
consideration.

Equity associates

Financial information published by Tuscany and the book value of this
participation led Maurel & Prom to adjust the value of equity for €8m.

2013 OUTLOOK

In Gabon,  the connection  of  new wells  and  the development  of  production 
processes, along  with the  improved performance  of water  injection,  should 
allow the Group to increase its production to more than 27,500 bopd by the end
of 2013.

In parallel, an intense exploration program has begun under two ways:

  * New plays with significant potential (Peru, Mozambique, Namibia); 

  * Already studied  plays but  with interesting  potential (Tanzania,  Gabon, 
    Colombia). 

The Group still examines new investment projects.

FINANCIAL STATEMENTS AT 31 DECEMBER 2012

The consolidated  financial statements  have been  audited. The  certification 
report  is  in  the  process  of  being  issued.  The  consolidated  financial 
statements, approved by the Board of Directors on 27 March 2013, are available
on the Company's website: www.maureletprom.fr.

To attend audiocast of  2012 annual results presentation  of the Group  please 
click     on      the     following      link      from     11:      pm      : 
http://www.media-server.com/m/p/2sdt76sj/lan/en

For more information: www.maureletprom.fr

Communication:
INFLUENCES
Phone: +33 1 42 72 46 76
Mail: communication@agence-influences.fr  

This document may contain  forward-looking statements regarding the  financial 
position, results,  business  and  industrial strategy  of  Maurel  &  Prom.By 
nature, forward-looking  statements contain  risks  and uncertainties  to  the 
extent that they  are based on  events or  circumstances that may  or may  not 
happen in the future.These projections are based on assumptions we believe  to 
be reasonable, but  which may  prove to  be incorrect  and which  depend on  a 
number of risk factors  such as fluctuations in  crude oil prices, changes  in 
exchange rates, uncertainties related  to the valuation  of our oil  reserves, 
actual rates of oil  production and the  related costs, operational  problems, 
political  stability,  legislative  or  regulatory  reforms,  or  even   wars, 
terrorism and sabotage.

 Maurel & Prom is listed for trading on Euronext Paris - Compartment A - CAC®
   Mid 60 - SBF120® - CAC® Mid & Small - CAC® All-Tradable - CAC® All-Share
            ISIN FR0000051070 / Bloomberg MAU.FP / Reuters MAUP.PA

 

RN13_MAU-28MAR13_ENG.pdf

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(ii) they are solely responsible for the content, accuracy and originality  of 
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information contained therein.

Source: Maurel et Prom via Thomson Reuters ONE
HUG#1688795
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