Welcome!

News Feed Item

InterOil Streamlines Business in Q2 2014

Focus on exploration and production

SINGAPORE and PORT MORESBY, Papua New Guinea, Aug. 13, 2014 /PRNewswire/ --

  • Net profit for the quarter of $52.3 million
  • Refinery and downstream businesses sold to Puma Energy
  • $885 million available at June 30, 2014
  • Preparation well advanced for Antelope appraisal wells
  • Chris Finlayson, ex-CEO of FTSE100 BG Group appointed Chairman-designate

InterOil Corporation (NYSE:IOC; POMSoX:IOC) has announced another significant quarter with the sale of its refinery and downstream businesses, continued drilling in Papua New Guinea's largest exploration campaign, and with preparations well advanced for appraisal of the Elk-Antelope gas field.

Net profit for the quarter ended June 30, 2014 was $52.3 million, compared with a net loss of $13.2 million for the same quarter in 2013.

The increase of $65.5 million was mainly attributable to a one-time gain of $49.5 million from the sale of the refinery and downstream businesses to Singapore-based Puma Energy Group Pte.

Net profit for the six months ended June 30, 2014 was $370.9 million, compared with a net loss of $9.2 million for the same period in 2013, an increase of $380.1 million.

At June 30, 2014, InterOil had access to $885 million, including $585 million in cash and an undrawn credit facility of $300 million.

The company's only long-term debt was $70 million from the convertible notes that mature in November 2015.

Focused and funded

InterOil's Chief Executive, Dr Michael Hession, who has now been in the role for a year, said the company's strategy was paying off.

"A year ago, we set out to stabilize the business, monetize our resource base, and secure our exploration portfolio for the future," Dr Hession said.

"We have done that -- we now have a streamlined business with a strong balance sheet, a multi-billion-dollar agreement for our largest gas resource, Elk-Antelope, and a highly promising exploration drilling campaign.

"Our strategy has been clear and we are pleased with progress on its execution as we continue to transform the company.

"We are also delighted that Chris Finlayson has joined the board as Chairman-designate.

"His appointment is a sign of InterOil's growing maturity."

Highlights

Refinery and downstream assets sold for $525.6 million

On June 30, 2014, InterOil completed the sale of companies holding its refinery and downstream businesses in Papua New Guinea to Puma Energy Group Pte for $525.6 million, which included adjustments for cash and working capital.

The downstream businesses included the Napa Napa refinery in Port Moresby, 52 service stations, and 30 fuel depots, terminals and aviation sites.

The sale ensured the transition to Puma Energy of all InterOil staff in the refinery and downstream businesses.

New $300 million credit facility

On June 17, 2014, InterOil signed a new $300 million syndicated, senior secured capital expenditure facility through a consortium of banks led by Credit Suisse AG.

The facility, which has an annual interest rate of LIBOR plus 5%, matures at the end of 2015 and along with existing cash balances, will fund InterOil's key capital and operating expenditure for exploration and appraisal in the Eastern Papuan Basin of Papua New Guinea.

If the facility is drawn down, InterOil expects to repay it at maturity using the variable resource payments that Total SA is obliged to make on certification of Elk-Antelope reserves as part of Total's purchase of an interest in Petroleum Retention Lease 15.

PRL15 update

Preparations are well advanced for spudding the Antelope-4 and Antelope-5 appraisal wells with well pads and camps complete.  

Antelope-4 will test the southern extremity of the Antelope field and Antelope-5 will test the western front.

The wells will provide key information for certification of the Elk-Antelope field and for continued planning of a potential two-train LNG development, which includes concept selection, basis of design and front-end engineering and design.

Certification is expected to be completed in 2015.

Exploration update

Drilling of Raptor-1 in PPL 475 and Bobcat-1 in PPL 476 continues.

Subsequent to quarter end, on July 14, 2014, InterOil announced the suspension of drilling in Wahoo-1 in PPL 474 after intersecting gas and higher-than expected pressures that could compromise rig safety.

Significant concentrations of methane, ethane, propane and butane had been recorded and were believed to be entering the well bore from permeable zones above the predicted reservoir, which was yet to be penetrated.

The PNG Department of Petroleum and Energy approved the suspension to enable InterOil to re-evaluate the drilling plan.

InterOil will advise of drilling results as soon as they become available.

Key events subsequent to quarter end

On July 21, 2014, InterOil announced it would buy up to $50 million of its own common shares. The buyback program is an effective tool to minimize the cost or equity dilution effect from the $70 million convertible senior notes that are due for redemption in November 2015 with a conversion price of $95.625 per share.   

As of August 12, 2014, the company had purchased approximately $41 million of shares at an average weighted cost of $57.17 per share.

On August 10, 2014, InterOil announced the appointment of Chris Finlayson as Chairman-designate.

Mr Finlayson is the former Chief Executive Officer of FTSE100 company BG Group and a former long-serving Shell executive.

He joins the board immediately, and will replace Dr Gaylen Byker, after an appropriate handover.

Financial reporting of discontinued operations

InterOil's refinery and downstream businesses that were sold to Puma were previously included in InterOil's midstream refining and downstream segments.

In addition, the shipping business, which was previously included within the corporate segment, has also been transferred to Puma.

Following the Puma transaction, the results of these operations have been classified as "discontinued operations" and InterOil is no longer organized as separate segments for reporting purposes.

The continuing operations are considered to be a consolidated Upstream -- Exploration and Production business.

InterOil has also reclassified prior year information to conform to current period presentation.

Full details can be found in Note 4 of the Condensed Consolidated Interim Financial Statements for the quarter and six months ended June 30, 2014 and 2013.

Conference call information

The full text of the media release and accompanying financials are available on the company's website at www.interoil.com.

A conference call will be held on August 13, 2014 at 8am US Eastern time (8pm Singapore) to discuss the results and the company's outlook.

The conference call can be heard through a live audio web cast on the company's website at www.interoil.com or accessed by dialing (877) 260-8898 in the US, or +1 (612) 332-0932 from outside the US.

A replay of the broadcast will be available soon afterwards on the website.

***

Summary of Consolidated Quarterly Financial Results for Past Eight Quarters

Financial Statements


Quarters ended
($ thousands except per share data)

2014

2013

2012

Jun-30

Mar-31 (2)

Dec-31  (2)

Sep-30  (2)

Jun-30  (2)

Mar-31  (2)

Dec-31  (2)

Sep-30  (2)

Total revenues

13,689

1,903

712

617

831

602

8,188

2,235

EBITDA (1)

(10,252)

316,949

(27,272)

(99)

(11,293)

(5,138)

(22,452)

(2,528)

Net profit/(loss)

52,266

318,637

(24,812)

(6,317)

(13,230)

4,003

(3,732)

5,336

From continuing operations

(15,764)

310,825

(32,024)

(3,555)

(15,240)

(8,096)

(27,512)

(4,975)

From discontinued operations                 

68,030

7,812

7,212

(2,762)

2,010

12,099

23,780

10,311

Basic earnings/(loss) per share 

1.05

6.46

(0.50)

(0.13)

(0.27)

0.08

(0.08)

0.11

From continuing operations

(0.31)

6.30

(0.65)

(0.07)

(0.31)

(0.17)

(0.57)

(0.10)

From discontinued operations

1.36

0.16

0.15

(0.06)

0.04

0.25

0.49

0.21

Diluted earnings/(loss) per share

1.05

6.38

(0.50)

(0.13)

(0.27)

0.08

(0.09)

0.11

From continuing operations

(0.31)

6.22

(0.65)

(0.07)

(0.31)

(0.17)

(0.57)

(0.10)

From discontinued operations

1.36

0.16

0.15

(0.06)

0.04

0.25

0.48

0.21

(1) EBITDA is a non-GAAP measure and is reconciled to IFRS under the heading "Non-GAAP Measures and Reconciliation".

(2) Revised to effect reclassification of discontinued operations -- refer to Note 4 of the Condensed Consolidated Interim Financial Statements for the quarter and six months ended June 30, 2014 and 2013 for further details.

About InterOil

InterOil Corporation is an independent oil and gas business with a primary focus on Papua New Guinea. InterOil's assets include one of Asia's largest undeveloped gas fields, Elk-Antelope, in the Gulf Province, and exploration licences covering about 16,000sqkm. The company employs more than 2000 staff and contractors. Its main offices are in Singapore and Port Moresby. InterOil is listed on the New York and Port Moresby stock exchanges.

Investor contacts

Singapore


United States

Michael Lynn

David Wu

Meg LaSalle

Senior Vice President, Investor Relations

Vice President, Investor Relations

Investor Relations Coordinator

[email protected]

[email protected]

[email protected]

+65-6507-0222

+65-6507-0222

+1-281-292-1800

Media contacts

Singapore

Australia

Rob Millhouse

John Hurst

Vice President, Corporate Affairs

Cannings Corporate Communications

[email protected]

[email protected]

+65-8112-5694

+61-418-708-663

Forward Looking Statements

This press release includes "forward-looking statements" as defined in United States federal and Canadian securities laws. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that InterOil expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements, which include statements as to planning for or the timing of the proposed LNG project and future exploration, are based on our current beliefs as well as assumptions made by, and information currently available to us. No assurances can be given however, that these events will occur. Actual results could differ, and the difference may be material and adverse to the Company and its shareholders. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause our actual results to differ materially from those implied or expressed by the forward-looking statements. Some of these factors include the risk factors discussed in the Company's filings with the Securities and Exchange Commission and on SEDAR, including but not limited to those in the Company's Annual Report for the year ended 31 December 2013 on Form 40-F and its Annual Information Form for the year ended 31 December 2013. In particular, there is no established market for natural gas or gas condensate in Papua New Guinea and no guarantee that gas or gas condensate from the Elk and Antelope fields will ultimately be able to be extracted and sold commercially. Investors are urged to consider closely the disclosure in the Company's Form 40-F, available from us at www.interoil.com  or from the SEC at www.sec.gov  and its Annual Information Form available on SEDAR at www.sedar.com.

SOURCE InterOil Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership abi...
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
The essence of cloud computing is that all consumable IT resources are delivered as services. In his session at 15th Cloud Expo, Yung Chou, Technology Evangelist at Microsoft, demonstrated the concepts and implementations of two important cloud computing deliveries: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). He discussed from business and technical viewpoints what exactly they are, why we care, how they are different and in what ways, and the strategies for IT to transi...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.