M&P Announces Activity for the Year 2022

Source: www.gulfoilandgas.com 1/26/2023, Location: Africa

? M&P working interest production in 2022: 25,584 boepd
o M&P working interest production of 14,646 bopd on the Ezanga permit in Gabon, down 6% from 2021 following the terminal issues encountered in the second quarter
o M&P working interest production of 3,732 bopd in Angola, up 9% from 2021
o M&P working interest gas production of 43.2 mmcfd in Tanzania, up 10% from 2021

? Valued production of $700 million in 2022, an increase of 43% from 2021
o Average oil price of $97.8/bbl in 2022, versus $72.5/bbl in 2021
o Negative impact of $35 million for restatement of lifting imbalances and inventory revaluation, with a net underlift position of 718,000 barrels at end of December 2022
o Sales of $676 million in 2022, up 35% from 2021

? Growth transactions are not slowing down the continued deleveraging
o Cash position of $138 million at 31 December 2022, excluding the $76 million placed in an escrow account as part of the announced offer for Wentworth Resources
o Gross debt of $337 million, with $201 million in gross debt repaid during the year
o Net debt of $199 million at year-end 2022, down by $144 million vs. 2021 year-end (down by $220 million excluding the Wentworth Resources transaction)

? Zorro-1 exploration well abandoned on the COR-15 permit in Colombia
o Zorro-1 production test unsuccessful despite oil traces during drilling; abandonment of well completed mid-January 2023
o Drilling of Oveja-1 began on 23 January 2023

? 2P reserves for M&Pís working interest as at 31 December 2022: 173 mmboe
o Reserves up by 7% after restatement of 2022 production

M&Pís working interest production stood at 25,584 boepd in 2022, stable compared to 2021 (25,490 boepd). The average sale price of oil was $97.8/bbl for the period, a sharp increase (35%) compared to 2021 ($72.5/bbl).

The Groupís valued production (income from production activities, excluding lifting imbalances and inventory revaluation) was $700 million for 2022, up 43% from the previous year. The restatement of lifting imbalances, net of inventory revaluation, had a negative impact of $35 million for the year, mainly due to a net underlift position of 718,000 barrels at the end of 2022. After incorporating income from drilling activities ($12 million), consolidated sales for 2022 are therefore $676 million, an increase of 35% compared to 2021.

Production activities

? Gabon
M&Pís working interest oil production (80%) on the Ezanga permit stood at 14,646 bopd (gross production: 18,308 bopd) for 2022. Average production for the year is therefore 6% lower than in 2021, mainly due to the disruption caused by the incident at the end of April at the Cap Lopez export terminal, the situation having returned to normal in the third quarter.

The well stimulation campaign that began in the fourth quarter of 2022 is continuing. Tangible results are already visible, with a noticeable increase in the field's production potential, which is now above 21,000 bopd.

? Tanzania
M&Pís working interest gas production (48.06%) on the Mnazi Bay permit in Tanzania was 43.2 mmcfd (gross production: 90.0 mmcfd) for 2022, up 10% from 2021.

? Angola
M&Pís working interest production (20%) from Block 3/05 in 2022 is 3,732 bopd (gross production: 18,660 bopd), up 9% from 2021.

Discussions regarding the extension of the Block 3/05 licence beyond its current term of June 2025 are now well underway. It is expected that the licence extension will be accompanied by new fiscal terms to strengthen the economics of the permit.

Exploration and appraisal activities

? Colombia
Drilling operations on the Zorro-1 exploration wells on the COR-15 permit were completed in early January 2023. The well encountered oil traces in the Guadalupe formations, the main objective of the drilling, and Lower Socha, from which a 20į API oil sample was taken. However, the production test conducted on Lower Socha only produced formation water. Consequently, it was decided to abandon the well.

The drilling of a second well named Oveja-1, whose target is a structural top of the Socha formation, has been decided, and it began on 23 January 2023. This second well will fulfill the obligations of the licence COR-15 (two wells).

Information on the situation in Venezuela
In early December 2022 and with the approval of the US government, Chevron reached an agreement with the Venezuelan authorities to obtain payment of debts owed by PDVSA, as well as greater control over the operations of their joint venture with PDVSA, particularly in the areas of procurement, cash management and crude sales. M&P has entered negotiations with the Venezuelan government to obtain an arrangement similar to Chevronís in relation to its interest in Urdaneta West.

Information on the current offer for Wentworth Resources
Wentworth Resources published the Scheme Document in connection with the acquisition on 25 January 2023 which contains the full terms and conditions of the acquisition together with notices of the court meeting and the general meeting (expected to be held on 23 February 2023), the expected timetable of the Scheme, and specifies the action to be taken by Wentworth Resourcesí shareholders.

Group reserves as at 31 December 2022
The Groupís reserves correspond to the volumes of technically recoverable hydrocarbons on permits where production is currently underwayóproportionate to the Groupís share of interest in those permitsóplus those revealed by discovery and delineation wells that can be operated commercially.

These reserves were certified as at 31 December 2022 by DeGolyer and MacNaughton in Gabon and Angola, and by RPS Energy in Tanzania.

The Groupís 2P reserves stood at 173.2 mmboe at 31 December 2022, of which 108.5 mmboe are proven reserves (1P).

2P reserves for M&Pís working interest:
Note that these figures do not take into account M&Pís 20.46% interest in Seplat, one of Nigeriaís main operators listed on the London and Lagos stock markets. As a reminder, Seplatís 2P reserves were 449 mmboe at 31 December 2022 (i.e. 92 mmboe for M&Pís 20.46% interest).

In addition, due to international sanctions against Venezuelaís state oil company PDVSA, the activity associated with M&Pís interest in PRDL is, for the time being, limited to operations related solely to the safety of staff and assets, and to environmental protection. Accordingly, no reserves have been recognised for this interest.

Financial position
The cash position at the close of 31 December 2022 was $138 million (31 December 2021: $196 million). This amount excludes $76 million placed on escrow as part of the offer announced on 5 December 2022 for Wentworth Resources, which is therefore already fully provisioned.

During the 2022 fiscal year, M&P repaid a total of $201 million in gross debt, reducing its gross debt to $337 million at 31 December 2022 (from $539 million at the end of 2021), of which $255 million in a bank loan (RCF of $67 million fully drawn at 31 December 2022) and $82 million in a shareholder loan.

As a result, net debt has decreased by $144 million over the year 2022 to $199 million, compared to $343 million at 31 December 2021.

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