Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tethys Oil AB (FRA:TZB0, Financial) reported a stable revenue of $30.8 million for Q3, consistent with the previous quarter.
- The company saw an increase in production from blocks 3 and 4, marking the first quarterly increase in years.
- Tethys Oil AB is close to obtaining a Field Development Plan (FDP) for block 56, which could enhance future production.
- The company received a public offer from Rock Oil of Australia, representing a significant premium of 89.5% over the share price.
- Exploration activities in block 58 have shown promising results with multiple fractures found, indicating potential for future oil production.
Negative Points
- Cash from operations decreased from $19.9 million in the previous quarter to $15.4 million in Q3.
- The company experienced a negative free cash flow of $9 million during the quarter.
- There is uncertainty surrounding the FDP approval for block 56, which has been delayed.
- The acceptance period for Rock Oil's offer is tight, potentially limiting shareholders' ability to make informed decisions based on ongoing exploration results.
- Operational challenges were encountered during drilling in block 58, including drilling blind due to fractures, which could impact timelines and outcomes.
Q & A Highlights
Q: Could you provide an update on the resource estimate for the Kunooz-1 well?
A: Magnus Nordin, Managing Director, stated that pre-drill estimates were around 120 million barrels with an 18% chance of success. Petter Hjertstedt, CFO, added that the mean estimate was about 45 million barrels. They have no new updates until the test results are available.
Q: What are your best memories as CEO, considering this might be the last earnings call as a public company?
A: Magnus Nordin highlighted the major discoveries in blocks 3 and 4 and the resilience of these projects. He also mentioned the excitement of building a portfolio of exploration opportunities in Oman. Petter Hjertstedt reflected on seeing long-term strategies come to fruition, such as the drilling of the Kunooz well.
Q: Why has the Field Development Plan (FDP) for Block 56 not been approved yet?
A: Magnus Nordin explained that there has been a detailed dialogue with the Ministry of Energy and Minerals focusing on optimizing resources between production and exploration. They expect the FDP to be approved within the next month.
Q: How will the ongoing testing on Block 58 and the delayed announcement of production plans for Block 56 affect the acceptance of Rock Oil's offer?
A: Magnus Nordin stated that the acceptance period is determined by the buyer, Rock Oil. The company aims to provide shareholders with as much information as possible to make informed decisions. The outcome depends on shareholder acceptance by December 2nd.
Q: Is there any scenario where the board might rescind its recommendation to accept Rock Oil's offer based on new information from Blocks 58 and 56?
A: Petter Hjertstedt emphasized that both management and the board are acutely aware of the situation. Any decision would be based on sound information, and shareholders will be kept informed to make the best decision possible.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
