Etablissements Maurel & Prom SA (MAU) reported a 29 percent jump in first-half operating profit due to higher output in Gabon, where the French explorer is planning new wells to raise production by year-end.
Operating income climbed to 111 million euros ($147 million) compared with 86 million euros a year earlier, the Paris-based company said in a statement. The explorer had a net loss of 8.5 million euros, compared with 32 million euros profit previously, because of a provision on its stake in Tuscany International Drilling, exploration well failures in the Republic of Congo, and after it relinquished two permits.
Gabonese output, which rose 36 percent to 27,000 barrels of oil equivalent a day in the period, should surpass 30,000 barrels a day next year, Chief Executive Officer Jean-Francois Henin said on a conference call.
Maurel is moving into riskier exploration and unconventional projects in Canada, Myanmar and Iraq in a bid to boost reserves, Henin has said. The explorer, in which he has a 24 percent stake, has struggled to raise output and make new discoveries since selling Congolese fields to Eni SpA (ENI) in 2007. Henin has tried to sell or find partners to bolster Maurel’s size.
“We have worked on this for three years and we have not been able to reach a conclusion,” Henin said today about a potential tie up with another company. “One difficulty we have is being listed in Paris. We are undervalued compared with our peer companies listed in London. We are still discussing with potential partners.”
The shares rose as much as 1.9 percent and were trading 18 cents higher at 12.58 euros at 12:05 a.m. in Paris.
Maurel expects to have ‘significant’ free cash flow at the end of 2014, according to Henin. About 15 percent of cash flow from production will be invested in exploration.
“A sizeable increase of the dividend is more for 2015 than for 2014,” Henin said.
Over the past three months, Maurel has announced the acquisition of stakes offshore Myanmar, the Alberta oil sands in Canada and a deal to explore and develop unconventional reserves in the Gaspe region of Quebec. Maurel may also get permits in Iraq through investment unit, Saint-Aubin Energie, it said.
Maurel confirmed an output target in Gabon of 27,500 barrels a day for this year and plans to add production wells at the Ombg and Omko fields.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org