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2015 Highlights

  • 12 months to December 31, 2015 Realized Net Revenues of US$17.6MM;    
  • Realized Netback of US$11.5MM;
  • Realized Funds from Operations of US$1.902MM;    
  • Invested US$6.4MM of capital expenditure into business;
  • Exited 2015 with cash on hand of US$8.2MM and zero debt;
  • Working capital excluding cash of US$3.4MM;
  • Average daily oil sales in 2015 of 1,519 barrels of oil equivalent;
  • Average daily natural gas and natural gas liquids production in 2015 of 152 BOE/D      
 

 
 

Sea Dragon’s Business & Egypt

Sea Dragon delivered record production and positive cash flow, a solid payment record and collections from local authorities. We also focused on capital preservation by reducing discretionary spending and focused on operating cost reductions across the portfolio of assets.

It has been a year of consolidation for the Company and one in which we have continued to make progress in many areas of the business.  The business platform operated at a reduced cost base and continues to adapt rapidly to the oil price drop and volatility in the last quarter.

In our North West Gemsa (NWG) concession, we reached peak production in the 2nd quarter of 2014 at 13 MBopd and 12 MMscfd when the first phase of development was completed.  This allowed the partners to release both the drilling and work-over rigs and generate significant cash flow from the asset.  NWG has subsequently settled into a plateau rate of approximately 9,000 Bopd and 10 MMscfd, which is the  average rate that will be maintained for 2015. This is due to a modest work program of 3 infill producing wells in the 2nd half of the year. These wells will target additional production potential in the central part of the field, located in bypassed fault blocks.

In our South Disouq concession, we successfully farmed out 45% of our equity in return for a well carry and a promote on the signature bonus.  We also tendered for a 3D seismic program, the results of which are currently being evaluated.  The work program in South Disouq is still being determined.  Our intent to acquire the 3D seismic in 2015 and drill an exploration well shortly thereafter remains under discussion with our partner and until we have agreement it will remain a contingent activity.

In our South Ramadan concession, we completed our farm-in activities. We also acquired and organized the remainder of our technical data set and identified a prospective area that was covered with several vintages of 3D seismic that needed to be reprocessed.  The work program for 2015 is to complete the seismic reprocessing, update the prospectivity of the area and then high grade the identified opportunities to drillable locations for a 2016 program.

In our Shukheir Marine concession, we completed our commercial evaluation and determined that in the current price environment it was no longer an attractive asset.  The Shukheir Marine concession required high levels of fixed expenditures to maintain its aging offshore platform and infrastructure. The remaining prospectivity, that had been identified, was not sufficiently attractive to warrant further investment.  As a result, the 10-year extension request was rescinded and the concession relinquished as at end January 2015.

The Company will continue to benefit from stable production as it deals with lower oil prices and cash flow in 2015.  Adapting to the changing oil price environment has been and will continue to be challenging.  However, given Egypt’s improved business climate, its low operating costs and its significant business upside, we believe it’s one of the best places to be operating in this environment.

Outlook

The Company’s expected capital expenditure program for 2015 is approximately $2.1 million.  This consists of US$1.8 Million in NW Gemsa for 3 new development wells plus one work-over of a Rahmi water injector. The objective in NW Gemsa for 2015 is to maintain the field at its plateau production rate of approximately 10,000 boepd.

In South Ramadan the capital expenditure program for 2015 will be $0.3 million.  This represents the Company’s share of the reprocessing costs for the merged 3D data set that has recently been acquired and the follow on technical work required to identify suitable development locations. In South Disouq the capital expenditure program is still a work in progress.  The intent is to acquire 400 km2 of 3D seismic but this dependent upon 3D tender results and the approval of both the government and our partner. In addition to the above, the company continues to seek high quality assets to add to its portfolio and plans to be actively pursuing additional opportunities throughout 2015.

 

Fourth Quarter and Year End 2015 Financials Announced
(PDF, 199KB)
2015 - Annual Financial Statements
(PDF, 339KB)
2014 - Annual MD&A
(PDF, 301KB)

Conference Call

We will be starting to have conference calls shortly and will announce the dial-in details here.