Microsoft Word - CUE ASX Release CoverNEW
ABN 45 066 383 971
22 October 2015 PAGES (including this page): 15
ASX Market Announcements ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
Sydney NSW 2000
Quarterly Report for Period Ended 30 September 2015
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 & gas company with activities in Australia, New Zealand, Indonesia and the USA.
THE COMPANY HAS:
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
Q01 FY16 | September 2015
SUMMARY OF ACTIVITIES
Production
-
The Maari development drilling programme is now complete with current production at
~16,000 barrels of oil per day (bopd). Over the 18 month project, a total of four new production wells were drilled using the Ensco 107 jack-up rig. The Joint Venture is planning to further increase the field's production rate up to 20,000 bopd with the optimisation of production and 2015/16 work-over campaign, which commenced in August, with the workover of the MR3 and MR9 wells.
-
The Sampang PSC well workover programme in Indonesia, to increase production and extend field life, has concluded and Oyong production is now averaging 1300 bopd (100%). Installation of onshore gas compression at the Grati gas plant has also now been completed resulting in increased deliverability from Wortel to 45 mmcf of gas per day(100%). This will maintain gas production from Oyong and Wortel and extend field life beyond 2018.
Exploration
-
Preparations in Indonesia continue for drilling in the Mahakam Hilir PSC at the Naga Selatan-2 location. Construction of the road and drilling location has commenced and a rig contract is under negotiation. The estimated spud date for this exploration well is early January, 2016.
-
Planning is underway by the operator to drill two wells in the Mahato PSC in Indonesia in 2016.
-
Cue has identified and matured the 15 TCF Mungaroo Formation Ironbark gas prospect which straddles both the WA-359-P and WA-409-P permits offshore Western Australia (Cue 100% and operator). A process is now underway to farm-out a material interest in both permits and initial industry response to the opportunity has been very positive.
Financial
-
Quarterly revenue receipts from hydrocarbon production for the quarter were $10.57 million on sales of 66,120 barrels of oil at an average price of US$51 per barrel and 669,199 thousand cubic feet (Mcf) of gas at an average price of $8.72 per Mcf.
-
Cue has no hedging in place.
-
Cue has no debt.
-
$26.61 million cash on hand at the end of the quarter.
Production & Financial Summary
|
KEY PERFORMANCE METRICS
|
Sept Quarter Q1 FY16
|
June Quarter Q4 FY15
|
Change
%
|
|
Oil Production (net to Cue)
|
bbl
|
86,800
|
75,532
|
14.92
|
|
Gas Production (net to Cue)
|
mmcf
|
764.19
|
606.52
|
26.00
|
|
Oil Liftings (net to Cue receipts)
|
bbl
|
66,120
|
82,012
|
(19.38)
|
|
Gas Liftings (net to Cue receipts)
|
mmcf
|
669.20
|
622.75
|
7.46
|
|
Total Revenue Receipts
|
$m
|
10.57
|
11.72
|
(9.81)
|
|
Production Expenditure
|
$m
|
5.14
|
3.51
|
46.44
|
|
Closing Cash Position
|
$m
|
26.61
|
27.61
|
(3.62)
|
ACTIVITY REVIEW
AUSTRALIA EXPLORATION - Carnarvon Basin
WA-359-P
Cue Interest: 100%
Operator: Cue Exploration Pty Ltd
Cue has evaluated the regional prospectivity in all of its Western Australia offshore permits and has identified an exciting new play type associated with the prolific gas- bearing Mungaroo Formation. The 'Ironbark' prospect, a Mungaroo Formation prospect with multiple objectives, has been identified as the primary candidate for drilling and Cue estimates that it holds a success case best technical estimate of 15TCF of gas reserves. Cue has received approval from the Federal regulator, NOPTA, to have the year 3 well commitment date extended until October 2016. Cue has commenced a farm-out process to find suitable joint venture partner(s) to participate in the drilling of the well and will be hosting potential partners in a data-room in Melbourne in Q4 this year.
WA-409-P
Cue Interest: 100%
Operator: Cue Exploration Pty Ltd
Cue acquired 100% of WA-409-P in February 2015 and is now operator of the permit. A 12 month extension to year 6 of WA-409-P until April 2016 has been granted by NOPTA to allow further technical analysis of the Ironbark prospect which has been mapped as straddling both WA-359-P and WA-409-P. Cue plans to farm-out a material interest in both the WA-359-P and WA-409-P permits which ensures the entire prospect is included in the commercial offer. Ironbark is planned for testing by a well in WA-359-P and if successful, subsequent possible appraisal drilling would take place in WA-409-P.
WA-360-P
Cue Interest: 37.5%
Operator: MEO Australia Limited
The WA-360-P Joint Venture is completing the reprocessing of approximately 650 km² of existing 3D seismic data over the Maxwell prospect to improve imaging of the structure. There is no well commitment in the current licence term which ends on 5 March 2016.
WA-361-P
Cue Interest: 15% Operator: MEO Australia Limited
NOPTA has approved an application for a work programme variation to allow the Joint Venture to complete geotechnical studies ahead of deciding whether to make any commitment to drill a well. The work programme term concludes on 30 January 2016.
WA-389-P
Cue Interest: 40%
Operator: BHP Billiton Petroleum (Australia) Pty Ltd
Reprocessing of existing 2D and 3D seismic data has been approved by the Joint Venture and is underway.
NEW ZEALAND EXPLORATION - Taranaki Basin
PEP 51149
Cue Interest: 20%
Operator: Todd Exploration Limited
The Te Kiri North-1 well is now expected to be drilled in late Q4 2015 or early Q1 2016. The operator has proposed a well which will be deviated from the surface location to intersect a potentially oil-bearing objective in the Miocene-age Mount Messenger Formation and a deeper Eocene-age gas- bearing objective.
Cue's estimate of the mean prospective recoverable resource is 2 million boe net to Cue. Existing infrastructure nearby will facilitate early commercialisation in a success case.
PEP 54865
Cue Interest: 20%
Operator: Todd Exploration Limited
The permit carries a minimum work program of 285 km² of 3D seismic to be acquired, processed and interpreted prior to June 2016. The Joint Venture may elect to commit to a well before December 2017 or surrender the permit. Planning for the 3D seismic survey has commenced and acquisition is planned for early 2016 subject to vessel availability.
PEP 51313
Cue Interest: 14% interest
Operator: OMV New Zealand Limited
The Joint Venture is focused on assessing the remaining potential associated with the Matariki trend, up-dip of the Maari field. Studies are being completed by the operator to determine the feasibility of acquiring additional 3D seismic to reduce the geologic risk of the remaining prospects.
NEW ZEALAND PRODUCTION
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 62,558 barrels which generated $4.51 million in revenue received.
The average oil production rate in the quarter was approximately 14,718 gross bopd (Cue net: 736 bopd).
The Maari development drilling programme is now complete and both the MR3 and MR9 wells have been worked over and are back on production. The field is now averaging ~16,000 bopd from nine Maari field producers and one Manaia producer. Over the 18 month long
project, a total of four new production wells were drilled using the Ensco 107 jack-up rig. The Joint Venture is planning to further increase the field's production rate up to 20,000 bopd with the optimisation of production and 2015/2016 work-over campaign.
INDONESIA EXPLORATION
Mahakam Hilir PSC Kutei Basin Cue Interest: 100%
Operator: Cue Kalimantan Pte Ltd
Cue now holds a 100% interest in, and is the operator of, the Mahakam Hilir PSC in the prolific Kutei Basin onshore Kalimantan, Indonesia.
Naga Selatan 2 well planning is progressing, with construction of the drilling pad and access roads now underway. The technical work on the prospect is complete and a final well proposal will soon be submitted to SKKMIGAS for approval to drill in early January 2016. Signing of a firm rig contract is imminent and all relevant remaining tenders are almost complete.
Extensive field mapping in the block has helped identify a final location for the Naga Selatan-2 well.
Field geologists have identified several active oil seeps during their work and this critical information has been used in updating the structural interpretation of the prospect and selecting an initial drill location which is very close to an active seep. Regional work has also established the near-by Sanga Sanga oilfield as an analogy to the trap type that Cue are pursuing. Cue plans to suspend the well as a future producer and carry out a production test in 2016 if the drilling successfully calibrates our prospect model.
Mahato PSC
Central Sumatra Basin Cue Interest: 12.5%
Operator: Texcal Mahato Ltd
The Mahato PSC covers a highly prospective area close to several large producing oil fields. Multiple appraisal and exploration opportunities have been mapped and 2 wells are currently planned for 2016. A 2D seismic programme to high grade further exploration prospects is also planned for late 2015/early 2016.
INDONESIA PRODUCTION
Sampang PSC- Madura Strait Cue Interest: 15%
Operator: Santos (Sampang) Pty Ltd
Oyong Field
During the quarter Cue's share of condensate sales receipts was $1,237 from the sale of 27 barrels and gas sales receipts was $1.86 million from the sale of 237.33 mmcf. Cue did not lift any Oyong oil in the quarter.
The Oyong average oil production rate for the quarter was 1,256 bopd (gross) and the daily gas average rate was 24.37 mmcf (gross) (Cue net: 162 bopd and 2.99 mmcf - both net of government take under the PSC).
The Sampang PSC well workover programme to increase production and extend field life has concluded and Oyong is now averaging 1300
bopd. Oyong is also now benefitting from an amendment to the existing gas contract, which included a significant price increase and became effective in July. The field maintains an average rate of 30mmcfgd primarily produced as associated gas from the oil producing wells.
Wortel Field
During the quarter Cue's share of gas sales receipts was $3.97 million from the sale of 431.87 mmcf.
Cue's share of condensate sales from the Wortel field was 40 barrels which generated $1,769 in revenue.
Wortel-3 and Wortel-4 flowed gas at a combined average daily rate of 38.27 mmcf (gross) during the quarter (Cue net 5.31 mmcf net of government take under the PSC.)
Installation of onshore gas compression at the Grati gas plant has also now been completed and all three compressors are fully functional. Compression capacity has resulted in increased deliverability from Wortel to 45mmcfg/d. This will also help maintain gas production from Oyong and Wortel and extend field life.
USA PRODUCTION
Pine Mills - East Texas Cue Interest: 80%
Operator: Cue Resources, Inc
On the 5 June 2015, Cue finalised an agreement to purchase an 80% working interest in a conventional Woodbine oilfield in the prolific East Texas Basin. Cue now operates the field and is implementing a plan to stabilise and grow production over the coming months by working over and reactivating existing wells.
Oil sales in the quarter from the Pine Mills field was 3,495 barrels which generated $0.220 million in revenue received.
The average gross oil production rate for the quarter was approximately 70 gross bopd (Cue net: 44 bopd).
.
CORPORATE
During the quarter G.J. King and A.A. Young were removed as directors at an Extraordinary General Meeting of the Company on 29 July 2015. The Company thanks them for their contribution as directors of Cue.
Koh Ban Heng joined the board of directors on 29 July 2015.
Mr Koh joined Singapore Petroleum Co Ltd (SPC) in March 1974 and held several key positions in the company before being appointed CEO in August 2003. He retired as CEO on 30 June 2011 and subsequently served as Senior Advisor from 1 July 2011 until 31 December 2014. Currently Mr
Koh is an independent director of Keppel Infrastructure Holdings Pte Ltd, a fully owned subsidiary of Keppel Corporation, Independent Director and Non-Executive Chairman of Keppel Infrastructure Fund Management Pte Ltd as Trustee-Manager of Keppel Infrastructure Trust which is listed on SGX and an independent director of Tipco Asphalt PLC, a listed company in Thailand. In addition, Mr
Koh is the Chairman of the ASEAN Council of Petroleum (ASCOPE) National Committee of Singapore. He also serves as Advisor to the Chairman and CEO of Dialog Group Berhad of Malaysia.
Cue's 2015 Annual General Meeting will be held at the Langham Hotel Melbourne, Flinders Room, 1 Southgate Avenue, Southbank 3006, Victoria, Australia on Thursday 19th November 2015, commencing at 10:00am (AEDT).
Andrew Knox
Chief Financial Officer
Various statements in this report constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve unknown risks, expectations, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or impliedly portrayed herein.
Some of the more important of these risks, expectations and uncertainties are pricing and production levels from the properties in which the Company has interests and the extent of the recoverable reserves at those properties. In addition, the Company has a large number of exploration permits. Exploration for oil and gas is expensive, speculative and subject to a wide range of risks. Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their accountant, lawyer or other professional adviser as to the suitability for them of an investment in the Company.
Appendix 5B Mining exploration entity quarterly report
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
Rule 5.3
Cue Energy Resources Limited
ABN Quarter ended ('current quarter')
45 066 383 971
30 September 2015
Consolidated statement of cash flows
|
Cash flows related to operating activities
-
Receipts from product sales and related debtors
-
Payments for (a) exploration and evaluation
-
development
-
production
-
administration
-
Dividends received
-
Interest and other items of a similar nature received
-
Interest and other costs of finance paid
-
Income taxes paid
-
Other
(refer 2.2)
Net Operating Cash Flows
|
Current quarter
$A'000
|
Year to date 3 months
$A'000
|
|
10,571
(2,302)
(4,241)
(5,139)
(2,245)
-
16
-
-
-
|
10,571
(2,302)
(4,241)
(5,139)
(2,245)
-
16
-
-
-
|
|
(3,340)
|
(3,340)
|
|
Cash flows related to investing activities
-
Payment for purchases of:
-
prospects
-
equity investments
-
other fixed assets
-
Proceeds from sale of:
-
prospects
-
equity investments
-
other fixed assets
-
Loans to other entities
-
Loans repaid by other entities
-
Other (provide details if material)
-
Total operating and investing cash flows (carried forward)
Net investing cash flows
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
-
|
-
|
|
(3,340)
|
(3,340)
|
CUE ENERGY RESOURCES LTD | QUARTERLY REPORT 30 SEPTEMBER 2015
Appendix 5B Page 1
Appendix 5B
Mining exploration entity quarterly report
|
1.13
|
Total operating and investing (brought forward)
|
cash
|
flows
|
(3,340)
|
(3,340)
|
|
Cash flows related to financing activities
|
-
|
-
|
|
1.14 Proceeds from issues of shares, options, etc.
|
|
1.15 Proceeds from sale of forfeited shares
|
-
|
-
|
|
1.16 Proceeds from borrowings (refer 3.1(i))
|
-
|
-
|
|
1.17
|
Repayment of borrowings
|
-
|
-
|
|
1.18
|
Dividends paid
|
-
|
-
|
|
1.19 Share Issue Costs
|
-
|
-
|
|
Net financing cash flows
|
-
|
-
|
|
Net increase (decrease) in cash held
|
27,605
|
27,605
|
|
1.20
|
Cash at beginning of quarter/year to date
|
|
1.21
|
Exchange rate adjustments to item 1.20
|
2,347
|
2,347
|
|
1.22
|
Cash at end of quarter
|
26,612
|
26,612
|
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
-
Aggregate amount of payments to the parties included in item 1.2 176
-
Aggregate amount of loans to the parties included in item 1.10 -
Directors' fees / consultancy
-
Explanation necessary for an understanding of the transactions
Non-cash financing and investing activities
-
Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
-
-
Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest.
CUE ENERGY RESOURCES LTD | QUARTERLY REPORT 30 SEPTEMBER 2015
Appendix 5B Page 2
Financing facilities available
Add notes as necessary for an understanding of the position.
Appendix 5B Mining exploration entity quarterly report
|
Amount available
$A'000
|
Amount used
$A'000
|
|
-
|
-
|
|
-
|
-
|
-
Loan facilities
-
Credit standby arrangements
Estimated cash outflows for next quarter
|
-
Exploration and evaluation
-
Development
-
Production
-
Administration
|
$A'000
|
|
7,224
|
|
1,342
|
|
3,905
|
|
1,658
|
|
Total
|
14,129
|
Reconciliation of cash
|
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
|
Current quarter
$A'000
|
Previous quarter
$A'000
|
-
Cash on hand and at bank
-
Deposits at call
-
Bank overdraft
-
Other (provide details)
|
678
|
226
|
|
25,934
|
27,379
|
|
-
|
-
|
|
-
|
-
|
|
Total: cash at end of quarter (item 1.22)
|
26,612
|
27,605
|
Changes in interests in mining tenements
|
Tenement reference
|
Nature of interest (note (2))
|
Interest at beginning of quarter
|
Interest at end of quarter
|
|
-
|
-
|
-
|
-
|
|
-
|
-
|
-
|
-
|
-
Interests in mining tenements relinquished, reduced or lapsed
-
Interests in mining tenements acquired or increased
CUE ENERGY RESOURCES LTD | QUARTERLY REPORT 30 SEPTEMBER 2015
Appendix 5B Page 3