Emerald Announces Interim Results

Emerald Energy (EEN), has today announced its Interim Results for 1H09.

Link: http://www.emeraldenergy.com/documents/EEN-1H2009RESULTS.pdf

And has been covered by the following agencies:

http://www.reuters.com/article/rbssEnergyNews/idUSBNG52367320090727
http://www.rttnews.com/ArticleView.aspx?Id=1016263

The key highlights are:

Exploration

Gigante-2

Increased production rate from the Caballos from 185bopd to 745bopd through the use of an Electrical Submersible Pump (ESP). The company is looking at ways to further reduce formation damage and further increase production rates. Hopefully, they can prove beyond doubt the Caballos is commercial before moving on to produce the Tetuan horizon, which ought to have a significant impact on Colombian production levels.

Mirto

The Mirto-1 well has now reached target depth and encountered both oil and gas shows across the target horizons. The well will now be evaluated over the next two weeks.

Capella

A slim-hole rig has been contracted to drill 2 wells delineate the extent of the thicker upper horizon discovered around the Capella-6 well. The company re-iterated plans to drill the C-7 horizontal well later in the year. There was no mention of the previously announced plans to drill in the NE part of the block after C-7H, but presumably those plans are still in place.

Syria

It appears that the EPF expansion is on track to come on stream soon to increase gross production up to 16,000bopd (50% WI to EEN) as the new wells are brought on stream. The KHE-11 horizontal well is still being drilled. The processed data from the recent 3-D seismic survey are expected late in 3Q-09. More exploratory drilling in Block 26 may commence before year end.

Financials

In 1Q09, EBITDA was $9.9m, or thereabouts. Total EBITDA for 1H09, was $32.2m, so 2Q09 is $22.3m, or more than double the 1Q09 number. Production fairly stable, so, a big impact from higher oil prices.

But cash has gone down from ~$59m to ~$37.8m - which shows the level of investment being put in to Colombia and Syria - G-2, Mirto, Capella, 3-D seismic and development wells.

All in all, this looks like a very solid set of results that bode well for even further improved 2H09 results together with significant increases in reserves and production.

Corporate

Interestingly, the directors have options in the company, some of which expire in August this year. However, because of the bid approach, the company is in a "closed period" so the directors cannot exercise their options. Under the scheme rules, they have extended the option expiry period until 10 days after this "offer period" expires. Perhaps an indication that they do not expect this bid approach process to complete quickly.