Panoro Energy ASA

OSE:PEN

Earnings Call Analysis

Earnings Call Transcript 2024-Q1

[John Hamilton, executive]

Good morning, everyone. Thank you for joining us. This is John Hamilton. I'm joined today with -- I'm joined to had some colleagues and certain board members as well from sunny Oslo today. Welcome, everybody.

As a reminder, today's conference call contains certain statements that are or may be deemed to be forward-looking statements, which include all statements other than statements of historical fact. Forward-looking statements involve making certain assumptions based on the company's experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, actual events or results may differ materially from those projected or implied in such forward-looking statements given known or unknown risks, uncertainties and other factors. And for reference, we've made a series of announcements this morning, which are available on our website, www.panoroenergy.com.

Next slide, please. [Operator Instructions]

Next slide, please. So today, we've announced our first quarter results. I think most of the numbers are sort of within guidance and as expected and as recently announced through our trading update. So it was a good quarter for us in terms of liftings, revenue, EBITDA, cash flow, our balance sheet numbers are there as well. So I think this is largely as guided, and it's good to see the production coming through, liftings coming through, which looks like, and we'll touch on the lifting a little bit more on an even pattern.

I think most importantly, this morning, we've also announced 2 things in line with our shareholder distribution framework, which is a launch of up to NOK 100 million share buyback, which will be valid until the end of September. And also a cash distribution paid in the form of a return of paid-in capital of NOK 50 million. So continuing our strong trend of cash distribution that we've started a little over a year ago now with a cumulative cash payout to date, including today's announcement of NOK 240 million.

Next slide, please. So here is our quarterly production bar chart, which we show every time. You can see we had a quarter sort of within guidance around 9,600 barrels a day. Second quarter will be a little lighter. We have a 3-week shutdown. That's a little bit longer than originally planned. It was 2 weeks announced, a 3-week shutdown, which is annual planned maintenance and do stuff through, which will affect quarterly production. Up until that time, we are producing in excess of 10,000 barrels a day. So everything seems to be going quite well.

We do have a group target of 13,000 barrels a day when the current wells and the current campaign, which we'll touch on are online. So that's unchanged. We're still targeting for great 13,000 barrels a day during the course of the year with a range of between 8,000 barrels a day in terms of the group average.

Next slide, please. We recently announced on our annual statement of reserves, a 70% reserve replacement in 2023. This is an important part of our business, an important thing for us to continue where we can is to organically replace our reserves that we've produced during the course of the year through reserve revisions, which we do through a third-party auditor every year, Netherland Sewel. And 70% is a good number. And the important point to note here is we've obviously made some recent announcements, some positive drilling results in Gabon.

Obviously, those happened after the year-end. So this is as at the 31st of December 2023. So we can expect some further upward provisions, particularly in the case of Dussafu, this additional oil that we found, which we will touch on. Next slide, please. So here's our lifting plan for the year. If we look back at last year, we lifted at about 2.6 million barrels, average about $83 a barrel. This year, we're hoping to have a roughly 40% increase on that 3.7 million barrels with about 800,000 lifted in the first quarter already.

Second quarter around 900,000 barrels, a slightly weaker third quarter and then a strong fourth quarter, which should take us to approximately 3.7 million barrels for the year, which, again, is reflecting the growth in production of the assets. Our average realized price to date is a little over $81 a barrel. What's very nice about the lifting program is that we are joint lifting in Gabon together with BW Energy. So the smoothness of the liftings is quite different than last year. As you can see, we had almost no liftings in the second quarter last year. So hopefully, we have now created a platform by which we can have smoother quarterly lifting patterns and liftings equate to revenue recognition and they equate to cash flow. So these are important -- this is an important development for the company.

Next slide, please. We have a slide on debt. I won't dwell on it too much. We have an amortization program. I think the important point to make here is that we went through our annual redetermination process, which is a process where the bank lenders coordinate with the company and using third-party reservoir consultants determine the overall health of the business and the result of that is our RBL has been redetermined. We have substantial headroom within our banking facilities, it has allowed us to actually increase our banking facility by $10 million, which we used during the quarter.

Post period, we will have repaid during the second quarter of $10 million. So this number will come right back down when you see our second quarter results. Our capital guidance remains at $75 million for the moment. We're obviously in a very heavy CapEx year. The CapEx is also very much weighted towards the first half of the year. And so for the moment, that number is still valid. We think that still is a strong number in terms of guidance.

Next slide, please. Our cash flow reconciliation again we show this slide every time. Two things to note would be the investment and assets, $27 million, that's our CapEx. So again, getting back to the point of our CapEx being weighted towards the first half of the year. This demonstrates it. I'll point out to a couple of other things here. One is that we have some lifting back end of March, so reflected in revenue, but cash not received yet.

So there will be cash receipts, having been received in April, but not reflected obviously in the cash flow reconciliation. And post period end, so in April, we announced that the Operator BW Energy do a sale and leaseback of our MaBoMo production facility, and that has resulted in a new flow post period $26 million, not reflected in this current waterfall here. And again, those funds will be used to repay some debt and to facilitate shareholder distributions and our ongoing business development activities, working capital.

Next slide, please. So Gabon has been quite active recently. We've had a series of very good updates. I'll first touch on production. Production in the quarter averaged 29,000 barrels a day, almost 30,000 barrels a day, as we were able to bring some new wells online and replace a couple of ESPs in there. We still have the same status. We have 3 and 4 wells in production at Hibiscus field on ESP one under natural flow and fourth well will be worked over in the current campaign.

We have drilled the Ruche well and that will be put on stream with a conventional ESP rather than the retrievable ESPs that we've used in the past. The Tortue field continued very strongly, and we do have this 3-week maintenance period currently where we are shutting this planned maintenance in May.

Now what's happened more recently is we first drilled what we call the Hibiscus South extension. You can see it on the left side of the screen there, the kind of shaded area. This was an area that was -- had some 3P reserves in -- 2P reserves, but 3P reserves in it. And we decided together with BW to drill into this structure that we could easily see on the seismic and found a 25-meter net oil column of Gamba. So good quality Gamba sands. Initial estimates around 14 million barrels in place. That translates, let's call it, 6 million barrels recoverable. And we will be putting a production well into this structure as the very next operation.

We also used a little bit of time prior to getting into the workovers and the development wells to put a well into where the star is there, the Hibiscus Northern flank, where we encountered again 24 meters of net oil pay a bigger column than that, 37-meter column, both Gamba and Dentale sands looks like very good reservoir quality.

It's a little bit early days to talk about volumes there. And the reason is something that we can touch on perhaps a little later and then perhaps there will be some questions around it. But this opens up the area to the north here on the flank. And so there's quite a bit of more technical work done prior to determining volumes on it, but nonetheless, a very, very positive result.

So what's happening next in Gabon is we're going to be drilling the production well there in the Hibiscus South extension area. That operation is now underway. We'll be performing a number of well workovers. And what well workovers means is we will be replacing the retrievable ESPs with more conventional ESPs. It means we'll be putting conventional ESPs in place into the wells that we currently do not have a pump. And so you're going to see a mixing and matching of development drilling, use of the rig time for development drilling, Hibiscus South, Hibiscus Northern flank where we found this new oil zone together with well workovers to maximize production is the intention here.

So we're sort of juggling logistics with maximizing production and using our rig time as we think most efficient to maximize production, give ourselves the best chance of getting back to that 40,000 barrels a day that we very much believe is in sights through this activity. So in the end, we will have 8 production wells on this asset, which is a very nice place to be. It's greater than the initial 6, which allows us to think about maintaining production plateaus for higher for longer over time. So really a fantastic set of results.

I think this Hibiscus area just keeps getting bigger, which is wonderful. The reservoir quality seems excellent. Lastly, there's the Bourdon prospect, which is a prospect that both ourselves and BW Energy would very much like to drill as part of this campaign. So as long as we have some rig time left after the core production activities that we have with the rig, we will put a well down. It's the last activity on this block before releasing the rig.

So hopefully, the stars and the moon align, and we're able to get in and drill Bourdon as part of this activity as well, which is a very, very nice looking structure with an estimated up to 29 million barrels of recoverable in the Gamba and the Dentale. So it's something we'd very much like to drill as part of this campaign.

Next slide, please. So we had a little bit of a delayed start in Equatorial Guinea. For people who followed us, we had a rig that didn't work out and the rig left. We're very happy to announce that as we had hoped our fourth quarter results call in February that we'd identified a rig that would be available, that would be suitable in the time period that we needed it to arrive.

That has now happened. We have a rig contract award with Noble for the Venturer, it's a drill ship currently active in Ghana. We'll be on its way to our fields shortly. And that is to recommence the development drilling campaign that we previously announced. So we're a few months behind on this one. But nonetheless, it is back on track now, which is wonderful news from our perspective.

And this rig will drill 2 development wells. So this is where the red circles are. That's one at Ceiba and one in Okume. These wells are targeting production -- strong production wells where we can see that we have strong reserves that are developable. And once the rig is finished with the development wells, we'll move then to the star there, which is the Akeng Deep prospect, which I'll touch on in the next slide. This is a very exciting prospect. This is a Kosmos-operated exploration well that we believe is quite interesting.

We also, in Equatorial Guinea have the Panoro operated Block EG-01, which is the inboard block there in the light-shaded blue, which is busy with seismic reprocessing, Kosmos to join us on that block. And together, we are reprocessing and interpreting that seismic, which could yield some very interesting drillable prospects, both in the sort of Okume Complex type of target, but also the deeper Albian, which is what Akeng Deep is targeting. So it's a very prospective block that we're in the early stages of getting to know a little bit better.

Next slide, please. So we've got 2 panels here. The left panel is the recent announcement. We signed an memorandum of understanding with the ministry in Equatorial Guinea together with GEPetrol, the state-owned oil company to go after Block EG-23 we do not yet have this production sharing contract. It's in negotiation with the government, but we have a period of exclusivity into which to complete that production sharing contract.

The reason we like this asset is that it's in a very, very good neighborhood to the Southwest, you have the Zafiro field, which is to date Exxon operated over 1 billion barrels already recovered. And just to the south of us, we have the Marathon operated Alba field, which has produced in excess of 1.2 billion barrels equivalent. So these are giant world-class fields. And we have a block that sits right in that same neighborhood and benefits from both petroleum systems that both Zafiro and Alba have. Again, if there are any questions in the Q&A, we'd be glad to have them. And Richard, I think, will give you a little bit more detail on that.

But what we feel is this is a very, very good neighborhood, there are existing discoveries on the block and we look forward to updating people as we get into the PSC negotiations there. The panel on the right is the Akeng Deep prospect that I touched on earlier, just outboard with the Ceiba, the FPSO, it's quite near the existing infrastructure. The play here is to go for a deeper objective, the Albian, which is not drilled in this area. But the seismic suggests that there is an interesting structure there. We know a lot of oil has been generated in this area.

The source rock here, the Ceiba and Okume have already produced almost 0.5 billion barrels of oil. So we know there's a lot of oil generated in this area. And the question then is, whether it's accumulated and whether we have good quality reservoir here. So this is about a 25% chance of success. So it is a pure exploration. But if it is successful, it opens up a new play fairway in the area and it's quite close to infrastructure. So this would be a very, very nice outcome. And the plan is to drill as well as soon as the 2 development wells have been completed on Block G. So think about late third quarter, early fourth quarter, probably in terms of the spot of that well.

Next slide, please. Tunisia is not as catalyst rich as the other 2 assets in terms of drilling activity, in terms of exploration activity, but continues to provide us with very strong reserves, good production, plenty of long-life activity here on the block. At the moment, it doesn't have very much newsworthiness to it, but continues to be a very important asset for the company.

We're also busy there with some field extension processes. So in Rhemoura and Cercina, we have applications to extend out the field life of these assets and those processes are going very well, in this normal process, but very positive momentum in terms of those activities.

And the final slide, please. So just a summary, we are still on the production growth ladder here, going from the 9,000 and 10,000, hopefully up to 11,000 to 13,000 during the course of the year, very strong reserve and resource position. So this business will be around for a long time, 63 million barrels of 2P and 2C, which gives a very, very long reserve life to the company.

We have continued development activity in all 3 of our core assets. So we have a very, very strong organic development pipeline within all 3 of our assets. We also, in the middle section, we have something we're quite proud of is continuing to organically have interesting exploration activity in the company. Further exploration is very important lifeblood for the company. It replaces hopefully, reserves and resources that we're producing and replaces them.

We've had some very good success as people have seen both in Hibiscus South and in Hibiscus Northern flank. These are discoveries that can be brought back into production quite quickly, easily monetizable, high-value barrels coming across an existing fixed cost infrastructure. So very, very happy with those kind of developments.

And then we also have the high-impact wells both in Equatorial Guinea and Gabon, Akeng Deep and Bourdon. Maybe not all of these will work, hopefully, most of them will, and this is a very important pillar to our company's success going forward, we believe.

And on the final column, we believe this is all set up in a company that has what we do believe to be a very sustainable shareholder return base, well-governed company, strong board, good governance practices, sustainability report and with a real focus on targeting distribution to shareholders through the quarterly sustainable dividend and topped up through shareholder distributions.

We've announced the share buyback this morning. And opportunistically, obviously, looking always at business development, how do we grow this business in an accretive way to continue to be able to deliver this platform for many years to come. So that concludes my slide presentation.

Next slide, please. [Operator Instructions]

My only caution is that we have our Annual General Meeting of Shareholders starting shortly. So depending on how many and how long the questions go, we may need to cut it off. And if your question has not been answered, please do send us an e-mail, and we will hopefully be able to get back to you. Time is just a little bit short this morning with the Annual General Meeting. Right, so my colleague, Andy will survey for questions.

[Unknown Executive]

Thank you, Tom. We will move on to a question from Christoffer Bachke.

[Christoffer Bachke, analyst]

Christoffer from Clarksons here. Congrats on a strong quarter. I have 3 questions today. First question is, can you elaborate a little bit on the exact timing or finalizing the production well program in Gabon? Additionally, when do you expect to put the Ruche well on stream and at what growth rate do you expect?

The second question, can you please provide additional insight into the expected split between buybacks and dividends going forward? As you have now declared buybacks and distribution of roughly NOK 115 million of the initial NOK 400 million to NOK 500 million, what can we expect in terms of additional buybacks going forward?

And the third question is regarding the discovery at the northern flank of the Hibiscus field. Can you say anything about your expectation to the recoverable oil estimate? And can we assume anything close to the Hibiscus South discovery last year?

[John Hamilton, executive]

Great. Okay. Well, I'll take the first 2, Christoffer, and ask Richard my colleague, our Technical Director, to talk to you a little bit about the Northern Flank. We probably have a few questions on that, Richard.

So what we're finding in Gabon in terms to your timing of all the well activity and when Ruche is coming online and exactly, well, I think what we're finding is that BW Energy are doing an excellent job of -- obviously, we've come through a sort of difficult period with these retrievable ESPs.

All eyes are focused on maximizing production. And there are many, many logistical, technical considerations constantly being weighed against each other in terms of what to do next. And it's quite dynamic, actually. And that dynamism has actually yielded some interesting opportunities like drilling this Northern Flank, where we had a little bit of kind of big time, we're waiting for something to happen in terms of some of the other development activity, and we decided to go and drill over there and look what we found.

So at dynamism, I think, we'll continue. So it's kind of hard to really time it down to exactly what the next sequence of operations here is. But I can go through what the priorities are. The priorities are to drill 2 more development wells. So that would be the Hibiscus South extension that we found and to put a well into the Northern Flank where we've found this additional column. So those would be 2 new wells.

On top of that, we have existing 6 wells in the Hibiscus, Ruche area. And we have some pumps that need installation, and we probably have some pumps that need replacing. So I think the feeling of the joint venture is that we will go a little bit old school now. I think we've had our fun with the retrievables, and we'll probably be migrating towards using conventional ESPs. So there will be a program of mixing that development activity I talked about together with replacing those ESPs.

And again, there are a number of logistical considerations that come in, in terms of the exact order, sequence order if that happens. But the punchline is that the joint venture is fully focused on getting production as high as possible as quick as possible. And so I think we'll continue to try and update the market together with BW Energy in terms of how that sequencing comes. But the real target is to get back to that 40,000 barrels a day that we came close to hitting prior to some of our issues in the back end of last year. Get there in the best and the most responsible way as quickly as we can.

So I know that's not entirely answered your question, but hopefully, you get a feeling for the sort of dynamic situation over there, which is, frankly, it's going quite well at the moment. But nonetheless, we constantly have to kind of keep on our toes and trying to maximize that production.

The split of the buyback and the dividend, again, we're trying to stay a little dynamic here. I think we've hopefully surprised the market a little bit this morning with the share buyback a little earlier than most had expected it. Our shareholder distributions were very much clearly signaled to be second half weighted. We're very happy to have brought forward some of that activity. And I think we just need to see how the year plays out in terms of what that mix might look like as we get further developments on oil price, production activity, also looking at the share price development and the macro as well.

So I think we need to stay a little bit flexible, but we have again reiterated the shareholder distribution framework that the Board has approved. We've reiterated that this morning. So hopefully, that gives people some confidence in and around our desire to achieve that.

Richard, do you want to try and talk a little bit about the northern flank and maybe answer Christoffer's question, but also maybe talk a little bit about what you've seen there because I'm sure there'll be some other questions on it.

[Richard Morton, executive]

Yes. Thanks, John. So Christoffer, yes, good question. We're very excited about the results of this well. So just for a bit of background, we have this kind of gap in the drilling program and the operators suggested to drill this well. We agreed, it was a good idea. The reason for doing that is we have the 6H well producing at Hibiscus, which is on natural flow. And that's one of the best wells in the field. So there was some evidence that there was a bit more oil in that area. And this area we targeted is just north of the 6H well. So we took the opportunity to drill out there about 800 meters north of the 6H location.

And we found a good column of Gamba, about 37-meter column with 24 meters of net pay. There is an interesting aspect, which we didn't mention in our press release, but BW did that, the oil extends down into the Dentale as well. So that's -- we haven't seen that in other wells in the field. So we think we need a little bit of time to work out what's going on here. So we're gathering data. We'll have some discussions in the joint venture, and then we'll come to an estimate for the recoverable resources in due course. Suffice to say that we've mentioned that there will be another well in the area. So we think there's enough certainty to justify an initial production well in that flank of the field.

[Unknown Executive]

The next question is from Stephane Foucaud.

[Stephane Guy Foucaud, analyst]

I've got really two. The first one is, well, brilliant success in Gabon, Bourdons coming up could be quite large. Is there a scenario where you discover so much resources with Bourdon and Hibiscus and South Hibiscus that you justify an expansion of the infrastructure and therefore, the overall production plateau could go up. That's my first question.

My second question is around CapEx. So what's the -- your view of the remaining CapEx in Gabon for the rest of the year? The reason I'm asking is because I was looking at the Q1 CapEx in Gabon, which is, I think you said, most of the CapEx in Q1, so $25 million. the budget is 35% of $75 million, which already is very close to this $25 million. So I was wondering whether the CapEx in Q1 in Gabon was because a lot of stuff has been foreclosed or otherwise? So any color would be great.

[John Hamilton, executive]

Sure. So yes, I mean, in -- we keep finding more oil in this general Hibiscus area. If we're fortunate enough to find oil in Bourdon in due course, that would trigger an additional development phase, so that would require its own production facility there. The FPSO has a nameplate capacity of 40,000 barrels a day. I think it's generally assumed that, that can be exceeded by 10% or perhaps a little bit more than that. So I think there will be a luxury situation we need to consider is exactly how and when we would serve to develop that. But certainly, It's all very, very positive. It's extending out the reserve life of the fields and allows us to potentially sit at plateau for longer.

There is and always has been the potential to expand the top side facility with the FPSO to get to a higher throughput that would require obviously some capital expenditure which has not been prioritized at the moment. But certainly, the vessel could, through modifications handle more liquids than the nameplate capacity.

The CapEx in Gabon, so we've retained the rig for longer. We've had to undertake the workover activity that we're doing. So CapEx is, I would say, running, is going to be more than the sort of the budget we set out at the beginning of the year. However, there are other moving parts in the wider portfolio, some ups and some downs. So we just not sort of -- I wouldn't read too much into the percentages there. We maintained the $75 million guidance in today's report. How that gets built up as we get through the year between EG and Tunisia and Gabon is still a moving feast. So I wouldn't read too much into that, but there's still definitely some remaining CapEx in Gabon.

[Unknown Executive]

The next question is from Teodor Sveen-Nilsen.

[Teodor Nilsen, analyst]

First on the 13,000 barrels per day rate you're talking about. It looks like there's some upside to that given the Hibiscus South discovery and North flank discovery. So just if you could discuss some potential to that target?

Second question is on Q2 cash flow. Given the fact that you'll have proceeds from the sale leaseback and also probably that the CapEx is front-end loaded and also a third point is maybe working capital release in Q2. Should we expect a much stronger free cash flow in the second quarter than in the first quarter? And then third question is on the Bourdon prospect. Could you just remind us of the predrill estimate?

[John Hamilton, executive]

There's certainly upside to the 13,000 barrels a day. I mean, again, we've been through a tricky time with these ESPs. So we simply don't want to get ahead of ourselves by trying to point to bigger numbers, but there's clearly some upside there. I think the only caveat to that, Teodor, obviously in Equatorial Guinea, we've recommenced, thankfully, the drilling program that got delayed. We have dropped 1 well from that program. Now we are drilling 2 really, really good wells there. So I'd say, yes, there's certainly upside to 13. We just don't feel the need to stick our neck out much further than that at the moment. But absolutely, I mean we're seeing such positive results.

Some of these wells in Gabon are doing better than the models. So we're seeing very, very good, strong reserve quality and good pressure support. So we do have some upside there. But again, the vessel is constrained as well in terms of its overall capacity, let's call it, 45,000 barrels a day for a gross -- for an example. But your point is noted and clearly, the positive drilling results to provide some upside potential.

Second quarter cash flow, still probably a heavy CapEx quarter for us. But you're right, the release of working capital from the first quarter plus the proceeds of the sale and leaseback, we'll see probably a stronger free cash flow number in Q2, definitely a stronger free cash flow number in Q2. Bourdon, Richard, do you want to remind people what this is all about?

[Richard Morton, executive]

Yes. Yes. Thanks, Teodor. Good question on the Bourdon rigs, I think this is very exciting well. This is one we've had in our prospect inventory for some time and it's changed in nature during that period. It's a separate structure to the southeast of where we're doing all our Hibiscus work. It's quite a large structure that we've seen on the seismic data set. We have a closure at Gamba and underlying that, we have a large Dentale structure.

So it's a little bit different to what we've been drilling in the past at Ruche and at Hibiscus. We are carrying about 30 million barrels for that prospect, split between the Gamba and Dentale. There's potential for more, I think. But it's very uncertain. There's a whole large range of uncertainty on that resource at the moment. So this is quite away from the Hibiscus facility.

So if we find something, it will probably require a separate facility there, and there's a way to tie back into the pipeline that goes from Hibiscus to Adolo. So we kind of set ourselves up in the case of success to get going quickly on it. It will probably require a couple more wells to delineate it, so correctly in the case of success as we're doing at Hibiscus we're drilling around and finding a bit more and refining the reserves. But yes, we're looking at about 30 million barrels for that one.

[Teodor Nilsen, analyst]

Just as you will lease some more facilities, could you also indicate what the commercial threshold will be in terms of volumes, assuming it will be below 30 million?

[Richard Morton, executive]

Yes. Yes, it will.

[John Hamilton, executive]

Yes. And you're asking what the commercial threshold is?

[Teodor Nilsen, analyst]

Yes.

[John Hamilton, executive]

We have a number there. I mean we sanctioned sort of Hibiscus Ruche with what, about 50, but probably in total at the time, a little less.

[Richard Morton, executive]

Yes, a little less. So this one, you wouldn't be such a big facility as Hibiscus likely and we've already got a tie-in point on the line back to Adolo. So a small on line platform or something like that to get going and then we'll drill out and see how big it is.

[John Hamilton, executive]

Andy, I think we can probably take another question or a couple of quick ones, but we probably need to sign off in the next few minutes here to get ready for the Annual General Meeting. Are there remaining questions?

[Unknown Executive]

Yes, sure. We'll take 2 more questions. The next question is from [indiscernible].

[Unknown Analyst]

So I've got 2 questions, and I'll try to be quick. So my first question is how many conventional ESPs do you currently have. And maybe you can clarify how many unit because you need 2 for the 2 wells that are on the retrievable line you need 1 that on the 1 natural flow. I guess you need 1 for that well that will be worked over. And do you need 2 more basically for the 2 development wells? Or do you plan to basically put those new development wells in natural flow first from day 1 or you need an ESP from day 1?

And then my second question is whether you got to the bottom of what happened with retrievable line ESPs and whether you're entitled to any compensation from the JVs? So those would be 2 questions, please.

[John Hamilton, executive]

So the idea here is that the current thinking in the JV is that we will end up with these 8 wells, and those 8 wells will have conventional ESPs in them. We have a number of those with us in Gabon and a number on their way and a couple more sort of still being manufactured for us. So the way we see it is that we will have a full supply of conventional ESPs as we need them. Again, I think from a risk management perspective, for lack of a better term, I think that we've decided to go old school on the ESPs and go back to something that's tried and tested rather than the newer technology.

So I think you'll see us eventually migrating to full conventional ESPs, and we have working very strongly Baker, the supplier making sure we have them just in time for our activities. So that workover activity that we talked about in the Gabon slide is principally either putting a pump in where there isn't one or replacing -- we have 2 wells, 3 wells actually with the retrievable ESPs in them right now. So those would that need to be replaced. That process takes a period of 2 to 3 weeks to -- per well to replace. So they're quite quick little operations not to do that.

The new wells -- gosh, I think going into these new areas, I think these wells probably can free flow. We've got really good, strong reservoir, good pressure on them that can be brought online without an ESP. I think we just need to figure out exactly as we're sitting there, completing the wells, whether we free flow them or whether we go ahead and take the time to put the conventional ESP in or whether we prioritize putting potential ESP into one of the other wells and let the well free flow for a while and then eventually put the pump in. But yes, I think we believe these 2 new well areas will probably free flow on their own.

Richard talked a little bit about the Hibiscus 6 well, which is the one that's free flowing on its own now, and it's -- that's been doing so for a while now and still extremely strong. In terms of the ESPs and compensation and all that, there are still a number of, sort of, investigations going on. I think we've previously touched on the fact that we believe that, it's probably a combination of factors that have led to the issues that we've had with these ESPs. It would be premature for me to say anything definitive about it. But I think you can tell from our decision on moving to conventional that we have decided that solution is probably not the one for us going forward on this asset. In terms of compensation, again, that's an ongoing discussion between the operator and the supplier. And I'm confident we'll come to a good landing on that one, but it would be inappropriate for me to discuss that here on this call.

Well, as a reminder, if anybody else feels they haven't had a question answer, please do send us an e-mail. I think Andy may also be contacted, if any questions that we haven't answered. So we'll endeavor to try and get back to you. But we're going to sign off now to attend the AGM. So I thank you everybody very much for attending and continue to follow the story. Thank you very much.