News

Oryx Petroleum Q3 2014 Financial and Operational Results and 2015 Capital Budget

05 November 2014

Calgary, Alberta, November 5, 2014

Development progress and increased production capacity at Demir Dagh

Oryx Petroleum Corporation Limited (“Oryx Petroleum” or the “Group”) today is pleased to announce its financial and operational results for the quarter ended September 30, 2014 and its capital expenditure budget for 2015.

Highlights:

• Gross (100%) production of oil during Q3 2014 averaging 2,600 bbl/d (working interest 1,700 bbl/d)
  - Gross (100%) production averaged 3,900 bbl/d (working interest 2,500 bbl/d) for the actual 61 days of production in Q3 2014
  
  
• Total revenues of $10.4 million on working interest sales of 152,000 bbls of oil and average realized sales price of $57.47/bbl 
  
  
• Net loss of $1.6 million ($0.01 per common share) in Q3 2014 compared to net loss of $65.1 million ($0.65 per common share) in Q3 2013
  
  
• $206.7 million in net proceeds raised from an offering of common shares in July 2014
  
  
• $190.0 million of cash and cash equivalents as of September 30, 2014 
  
  
• Revised full-year 2014 capital expenditure forecast of approximately $360 million 
  
  
• 2015 capital expenditure budget of approximately $350 million focused on development of the Demir Dagh field in the Hawler license area in the Kurdistan Region of Iraq
  
  
• Operating Update and Outlook – Hawler License Area (Kurdistan Region of Iraq)
  - Appraisal and development activities at the Demir Dagh field have fully resumed; Activities at the Zey Gawra and Ain Al Safra fields have been limited due to operational priorities; Activities on the westernmost portion of the Banan field remain temporarily suspended as a precaution due to security risks
  
  - Demir Dagh Facilities and Processing Capacity – A 20,000 bbl/d processing facility was commissioned in late September 2014; Demir Dagh-2 (“DD-2”) well tie-in lines have been upgraded and the Demir Dagh-4 (“DD-4”) well has been tied into production facilities; Construction of a 40,000 bbl/d Early Production Facility (“EPF”) is progressing with commissioning expected mid 2015; The Group is also planning to retain current initial production facilities to provide total capacity of 60,000 bbl/d
  
  - Demir Dagh Appraisal and Development Drilling – Drilling of the Demir Dagh-7 (“DD-7”) and the Demir Dagh-8 (“DD-8”) development wells has been completed; The DD-7 well successfully tested crude oil in the Cretaceous; Testing of the DD-8 well was unsuccessful due to mechanical failure but a short sidetrack well is planned for late 2014; the Demir Dagh-10 (“DD-10”) development well was spudded in late October and has reached a measured depth of 1,200 metres; The Demir Dagh-9 (“DD-9”) well was spudded in early November; Drilling and testing of the two wells are expected to be completed in late 2014 or early 2015; 3D seismic data covering the Demir Dagh structure was recently acquired; Seven additional development wells are planned for the Demir Dagh field in 2015
  
  - Demir Dagh Production Capacity – Gross (100%) production of oil has averaged 4,400 bbl/d in the month of October with the highest daily production achieved just under 7,000 bbl/d; Four wells capable of production represent estimated gross (100%) wellhead production capacity of more than 15,000 bbl/d
  
  - Demir Dagh Sales and Exports – All crude oil sales to date into the domestic market; Domestic sales have been interrupted from time to time due to complex and evolving regional market dynamics for crude oil; Management expects that the Group’s Demir Dagh processing facilities will be tied-in to the KRI – Turkey export pipeline in early 2015; Upon commissioning of these tie-in facilities, the physical infrastructure necessary to export crude oil production to international markets will be in place; Oryx Petroleum understands that technical upgrades to the KRI – Turkey export pipeline are underway which when completed are expected to significantly increase the pipeline export capacity
  
  - Demir Dagh Production and Sales Guidance – Gross (100%) production and sales are expected to reach 15,000 bbl/d by the end of 2014, 25,000 to 30,000 bbl/d by mid-2015 and 35,000 to 45,000 bbl/d by the end of 2015
  
  - Banan Appraisal – The Banan-2 (“BAN-2”) appraisal well was spudded in early June 2014 and reached a measured depth of 2,700 metres before being temporarily suspended in August due to security developments; BAN-2 drilling is expected to resume in the first half of 2015; 3D seismic data covering the portion of the Banan structure east of the Zab river has been acquired
  
  - Ain Al Safra Appraisal – The Ain Al Safra-2 (“AAS-2”) appraisal well reached total measured depth of 3,700 metres before being temporarily suspended in August due to security developments; The security environment in the Ain Al Safra field area has since improved thereby allowing operations to resume; However, on the basis of operational priorities Oryx Petroleum has moved the KS Discover-1 drilling rig from AAS-2 to DD-9 during October 2014 and the AAS-2 testing program is now planned for the second half of 2015
  
  - Zey Gawra Appraisal – The Zey Gawra-2 (“ZEG-2”) appraisal well is expected to be spudded in the second half of 2015
  
  
• Operations Update and Outlook – West Africa
  - AGC Shallow – An exploration well targeting the Dome Iris prospect is planned for mid-2015
  
  - AGC Central – An interest in the exploration license has recently been awarded to Oryx Petroleum
  
  - Haute Mer A – An exploration well is planned for the first half of 2015
  
  - Haute Mer B – An exploration well is planned for the second half of 2015

CEO´s Comment

Commenting today, Oryx Petroleum’s Chief Executive Officer, Michael Ebsary, stated:

“The third quarter was eventful for companies operating in the Kurdistan Region of Iraq with some interruptions resulting from regional security developments. However, in late August the security situation in the region stabilised and subsequent improvements have permitted us to resume operations in most of the Hawler license area.

Notwithstanding the interruptions during the quarter, we have achieved substantial progress with our development of the Demir Dagh field. We have been drilling appraisal/development wells, upgrading facilities infrastructure, completing a large scale 3D seismic program, commissioning a new production facility and continuing works on a larger production facility on track to be commissioned in 2015. This activity is allowing us to ramp-up our production and production capacity.

Looking ahead to 2015, our capital plans again reflect our expectations for a very dynamic year. The principal focus of our budget is the continued development of Demir Dagh and associated increases in production and sales revenue. Our budget has been designed to provide maximum flexibility with the majority of our more discretionary exploration and appraisal expenditures planned to occur during the second half of the year, thereby allowing us to better align our planned expenditures with our expected revenues. 2015 promises to be another exciting and pivotal year for Oryx Petroleum on its path to becoming a balanced exploration, development and production company.”