ABN 45 066 383 971
27 July 2016 PAGES (including this page): 14
ASX Market Announcements ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
Sydney NSW 2000
Quarterly Report for Period Ended 30 June 2016
Attached please find Cue Energy Resources Limited's release with respect to the above mentioned.
Yours faithfully
Andrew M Knox
Chief Financial Officer
CUE ENERGY OVERVIEW
Cue is an Australian based oil and gas company with activities in Australia, New Zealand, Indonesia and the USA.
THE COMPANY HAS:
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Long life production
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A strong balance sheet
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An active exploration programme
CUE ENERGY DIRECTORS
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Grant Worner (Executive Chairman)
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Koh Ban Heng
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Andrew Knight
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Brian Smith
CUE ENERGY MANAGEMENT
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Andrew Knox (CFO)
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Jeffrey Schrull (Exp Man)
OFFICE
Level 19
357 Collins Street
Melbourne Vic 3000
CONTACT DETAILS
Tel: +613 8610 4000
Fax: +613 9614 2142
EMAIL
[email protected]
WEBSITE
www.cuenrg.com.au
LISTINGS
ASX: CUE
ADR/OTC: CUEYY
Quarterly Report
Q04 FY16 | June 2016
SUMMARY OF ACTIVITIES
In June Cue announced its three strategic objectives to deliver short, medium, and long-term prosperity:
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To have a sustainable business operating within its means;
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To deliver disciplined growth; whilst
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Pursuing opportunities that offer step-change returns to shareholders.
Sustainable Business
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$20.49 million cash on hand at the end of the quarter with no debt and approximately two-thirds of revenue emanating from non-oil linked gas sales which are not affected by current low oil prices.
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Total net production in the quarter of 173,747 barrels of oil equivalent (boe) comprised of 57,029 barrels (bbls) and 700 million cubic feet (mmcf).
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Revenue receipts from hydrocarbon production for the quarter were $9.63 million on sales of 67,639 bbls of oil at an average price of US$40 per barrel and 630 mmcf of gas at an average price of
$8.76 per thousand cubic feet (Mcf).
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Indonesia: Oyong and Wortel fields (Sampang PSC) continue strong production, with total combined average gross rates of 907 bopd and 67 mmcf per day during the quarter.
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New Zealand: Maari (PMP 38160) gross field production varied between ~9,000-13,000 barrels of oil per day (bopd) during the quarter.
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Actions to lower the Company's overheads and to have a more focused portfolio are underway.
Disciplined Growth
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Indonesia: A Sampang PSC Sustainabilty Project is underway to potentially extend field life for the Oyong and Wortel Fields by 2 years or more.
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Indonesia: A 4 year extension to the exploration phase of the Mahakam Hilir PSC has been granted by SKKMIGAS. The exploration well in the March quarter has now been fully paid and preparations are underway for airborne gravity gradiomentry and LIDAR data to be acquired in the September quarter.
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Indonesia: Cue is limiting its exploration expenditure on the Mahato PSC until the Company's legal rights are protected.
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New Zealand: The FPSO mooring upgrade project was completed on time and within budget whilst the water injection line repair program has been deferred to November.
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New Zealand: Cue is progressing the withdrawal from all exploration permits in New Zealand.
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USA: Cue will initiate a divestment process for its Pine Mills asset in the September quarter.
Step Change Opportunities
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Australia: Application for renewal of WA-409-P has been submitted to NOPTA. Farmout of the Ironbark prospect over WA-359-P and WA-409-P is progressing.
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Australia: Reprocessed seismic data over the WA-389-P permit is being used to high grade the prospect portfolio.
Production & Financial Summary
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KEY PERFORMANCE METRICS
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Jun Quarter Q4 FY16
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Mar Quarter Q3 FY16
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Change %
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Oil Production (net to Cue)
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bbl
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57,029
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69,220
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(17.61)
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Gas Production (net to Cue)
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mmcf
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700
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725
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(3.47)
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Oil Liftings (net to Cue receipts)
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bbl
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67,639
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77,039
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(12.20)
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Gas Liftings (net to Cue receipts)
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mmcf
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630
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801
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(21.40)
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Total Revenue Receipts
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$m
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9.63
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11.04
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(12.77)
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Production Expenditure
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$m
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4.81
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3.37
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42.73
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Closing Cash Position
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$m
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20.49
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22.40
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(8.53)
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PRODUCTION - NEW ZEALAND
PMP 38160
Cue Interest: 5%
Operator: OMV New Zealand Limited
Maari and Manaia Fields
Cue's net share of oil sales in the quarter from the Maari and Manaia fields was 43,031 bbls which generated $2.25 million in revenue
received.
The average oil production rate in the quarter was approximately 8,959 gross bopd (Cue net: 448 bopd). which was impacted by shut in and restart periods
The Maari FPSO mooring line upgrade was completed in May on schedule and within budget. The water injection line repair was deferred until later in the year due to a request from the work boat operator and is now planned for Dec 2016. A
multi-well work-over campaign is ongoing as planned with the highlight so far being the MR8A well additional perforation works with the well now producing ~1600 bopd. A similar workover is planned for the MN1 well in late August. While production during the mooring intervention continued, some wells were shut-in for short durations for operational reasons, resulting in a daily gross production range of ~9000 to 13,000 bopd during the quarter.
The water injection line repair is now scheduled to be completed in December, 2016. Once water injection is reinstated, daily production should be enhanced due to resumed pressure support for key producers. Once the field projects are completed and benefits from the well work-over campaign and water injection are realised the production from the field should be optimised and stable. Production is expected to be ~12,000 bopd average for the remainder of calendar 2016.
PRODUCTION - INDONESIA
Sampang PSC- Madura Strait Cue Interest: 15%
Operator: Santos (Sampang) Pty Ltd
The gross combined average production from Oyong and Wortel for the quarter was 907 bopd and 66 mmcf/day. Facility studies are ongoing to optimise recovery and extend field gas production from Oyong and Wortel. The Operator (Santos) is currently finalising a Sampang Sustainability Project to potentially extend Field life by 2 years or more. Exploration targets are being assessed by the JV as part of this initiative and more information regarding project approval is expected on these two activities in the current quarter.
Oyong Field
During the quarter Cue's share of gas sales
receipts was $1.79 million from the sale of 184 mmcf.
Cue's share of oil sales receipts was $1.07 million from the sale of 17,286 bbls and condensate sales receipts was $2,466 from the sale of 79 bbls.
The Oyong average oil production rate for the quarter was 907 bopd (gross) and the daily gas average rate was 25.37 mmcf/day (gross) (Cue net: 118 bopd and 3 mmcf/day - both net of government take under the PSC).
Wortel Field
During the quarter Cue's share of gas sales receipts was $4.17 million from the sale of 446 mmcf. Cue's share of condensate sales from the Wortel field was 174 bbls which generated $5,079 in revenue.
Wortel-3 and Wortel-4 flowed gas at a combined average daily rate of 41.52 mmcf/day (gross) during the quarter (Cue net 5 mmcfd net of government take under the PSC.)
Extension of the gas production from the Wortel field is being assessed as part of the life extension project mentioned above, to optimise the total production from the Sampang PSC.