EX-1 2 a2015q3ernearningsrelease_.htm EXHIBIT 1 Exhibit

News Release
November 9, 2015

Erin Energy Announces Third-Quarter 2015 Results

Provides Operational Update on its West and East Africa Operations

HOUSTON, November 9, 2015 - Erin Energy Corporation (Erin Energy or the Company) (NYSE MKT:ERN) (JSE:ERN) announced today financial and operational results for the quarter ended September 30, 2015. The Company has filed its Form 10-Q for the third quarter 2015 with the Securities and Exchange Commission.
Highlights:
•
First revenues from Oyo redevelopment campaign on crude sales volumes of 571,000 barrels;
•
Gross production of approximately 1.1 million barrels of oil;
•
Completed 3-D seismic acquisition on The Gambia A2 and A5 blocks;
•
In-place volumes of approximately 500 MMbbls and 282 BCF of gas offshore Ghana;
•
Moved into next phase of exploration of onshore Kenya blocks L1B and L16;
•
Extended exploration period on offshore Kenya blocks L27 and L28.
“During the quarter, we produced approximately 1.1 million barrels of oil and sold 571,000 barrels, generating revenues of more than $28 million.” said Kase Lawal, Chairman and Chief Executive Officer. “Growth is at the center of the Erin Energy story and we are positioning ourselves now to create value, to capitalize on lower costs in the current market, and to accelerate our activity so that we are in the right place for when the market begins to reward growth again.”
Operations Summary
During the quarter, Erin Energy’s sales volumes of crude totaled 571,000 barrels of oil, net to the Company. Average daily production was approximately 10,200 barrels of oil per day (BOPD), net to the Company (~11,600 BOPD gross).
In The Gambia, the Company completed an acquisition of 1,613 square kilometer 3-D seismic data over its offshore A2 and A5 blocks, which is currently being processed and is a key step in high-grading the asset.
Based on the Company’s interpretation of the 2-D seismic acquired on its onshore Kenya blocks, Erin Energy moved to the next exploration phase and entered the First Additional Exploration Period (FAEP) of both onshore blocks, L1B and L16. Additionally, Erin Energy was granted an 18-month extension of the Initial Exploration Period for its offshore Kenya blocks L27 and L28 in order to seek a farm-in partner and to acquire 3-D seismic data.
In Ghana, the Company completed its economic and commercial evaluation of the three previously discovered oil fields on the Expanded Shallow Water Tano block. Subsequent to third quarter end, Erin Energy announced the total discovered in-place volumes have been assessed at approximately 500 million barrels of oil and 282 BCF of gas. The Company is working with its joint venture partners and relevant government entities on further optimization studies to enhance the development and exploration opportunities.

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Financial Summary
For the quarter, Erin Energy reported revenues of $28.7 million, up 50% from the third quarter 2014. In the third quarter 2015, the Company lifted and sold approximately 571,000 net barrels of oil at an average price of $50.2 per barrel. For the same period in 2014, the Company sold approximately 189,000 net barrels of oil at an average price of $100.9 per barrel.
Erin Energy reported a net loss of $58.7 million, or $0.28 per basic and diluted share. Production expense for the third quarter of 2015 was $28.0 million compared with 34.3 million during the same period 2014.
Conference Call and Webcast
The Company will host a conference call on Tuesday, November 10, 2015 at 10 a.m. CT (11 a.m. ET) to discuss third quarter results and current operations. The dial-in number is 1 877-270-2148 in the United States or +1 412-902-6510 internationally. A live audio webcast of the call can be accessed on the Investors page of Erin Energy’s website at erinenergy.eventsandpresentations.com. A replay of the webcast will be available on Erin Energy’s website for approximately one year following the event.
Erin Energy Corporation is an independent oil and gas exploration and production company focused on energy resources in sub-Saharan Africa. Its asset portfolio consists of 9 licenses across 4 countries covering an area of 40,000 square kilometres (10 million acres), including current production and other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana, Kenya and The Gambia, and onshore Kenya. Erin Energy is headquartered in Houston, Texas, and is listed on the New York and Johannesburg Stock Exchanges under the ticker symbol ERN. More information about Erin Energy can be found at www.erinenergy.com.
Oil-in-Place Estimates
This press release refers to volumes of discovered oil- and gas-in-place. The Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only “reserves,” as that term is defined under SEC rules. Discovered petroleum initially-in-place is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place is subject to application of recovery efficiency factors and economic analysis before any such volumes can be categorized as reserves. There is no certainty that any such volumes will ultimately be categorized as reserves or that it will be commercially viable to produce any portion of the petroleum initially-in-place.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, concerning activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Although the Company believes the expectations reflected in these forward-looking statements are reasonable, they involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect.
The Company’s actual results could differ materially from those anticipated or implied in these forward-looking statements due to a variety of factors, including the Company’s ability to successfully finance, drill, produce and/or develop the wells and prospects identified in this release, and risks and other risk factors discussed in the Company’s periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. You should not place undue reliance on forward-looking statements, which speak only as of their respective dates. The Company undertakes no duty to update these forward-looking statements.

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Source:  Erin Energy Corporation
Contact:
Lionel McBee, +1 713 797 2960
Director, Investor Relations and Corporate Communications
lionel.mcbee@erinenergy.com

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ERIN ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Crude oil sales, net of royalties
$
28,667

 
$
19,010

 
$
28,667

 
$
53,844

 
 
 
 
 
 
 
 
Operating costs and expenses:
 
 
 
 
 
 
 
Production costs
28,019

 
34,261

 
43,731

 
72,617

Workover expenses
354

 
—

 
972

 
—

Exploratory expenses
5,266

 
1,148

 
13,283

 
3,851

Depreciation, depletion and amortization
43,815

 
21,720

 
44,934

 
32,676

Loss on settlement of asset retirement obligations
779

 
—

 
4,233

 
—

General and administrative expenses
3,857

 
3,427

 
12,789

 
12,200

Total operating costs and expenses
82,090

 
60,556

 
119,942

 
121,344

 
 
 
 
 
 
 
 
Operating loss
(53,423
)
 
(41,546
)
 
(91,275
)
 
(67,500
)
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Currency transaction gain
176

 
394

 
2,167

 
426

Interest expense
(5,650
)
 
(771
)
 
(12,485
)
 
(1,637
)
Other, net
—

 
(300
)
 
—

 
(300
)
Total other income (expense)
(5,474
)
 
(677
)
 
(10,318
)
 
(1,511
)
 
 
 
 
 
 
 
 
Loss before income taxes
(58,897
)
 
(42,223
)
 
(101,593
)
 
(69,011
)
Income tax expense
—

 
—

 
—

 
—

Net loss before non-controlling interest
(58,897
)
 
(42,223
)
 
(101,593
)
 
(69,011
)
 
 
 
 
 
 
 
 
Net loss attributable to non-controlling interest
215

 
—

 
690

 
—

 
 
 
 
 
 
 
 
Net loss attributable to Erin Energy Corporation
$
(58,682
)
 
$
(42,223
)
 
$
(100,903
)
 
$
(69,011
)
 
 
 
 
 
 
 
 
Net loss per common share:
 
 
 
 
 
 
 
Basic
$
(0.28
)
 
$
(0.20
)
 
$
(0.48
)
 
$
(0.40
)
Diluted
$
(0.28
)
 
$
(0.20
)
 
$
(0.48
)
 
$
(0.40
)
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
211,517

 
210,274

 
211,036

 
174,247

Diluted
211,517

 
210,274

 
211,036

 
174,247




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ERIN ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share and per share amounts)

 
September 30, 
 2015
 
December 31, 2014
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
4,201

 
$
25,143

Restricted cash
9,277

 
1,496

Accounts receivable - partners
145

 
496

Accounts receivable - related party
624

 
624

Accounts receivable - other
50

 
54

Crude oil inventory
36,694

 
1,089

Prepaids and other current assets
1,815

 
2,929

Total current assets
52,806

 
31,831

 
 
 
 
Property, plant and equipment:
 
 
 
Oil and gas properties (successful efforts method of accounting), net
659,330

 
595,269

Other property, plant and equipment, net
1,169

 
1,060

Total property, plant and equipment, net
660,499

 
596,329

 
 
 
 
Other non-current assets:
 
 
 
Restricted cash
—

 
8,909

Debt issuance costs
1,044

 
1,307

Other non-current assets
67

 
67

Other assets, net
1,111

 
10,283

 
 
 
 
Total assets
$
714,416

 
$
638,443

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Accounts payable and accrued liabilities
$
188,918

 
$
108,047

Accounts payable and accrued liabilities - related party
26,154

 
9,391

Accounts payable - partners
35

 
—

Asset retirement obligations
—

 
12,703

Current portion of long-term debt
24,609

 
6,200

Short-term note payable - related party
2,000

 
—

Short-term borrowings
11,303

 
—

Total current liabilities
253,019

 
136,341

 
 
 
 
Long-term notes payable - related party
119,352

 
61,185

Term loan facility
73,827

 
93,000

Asset retirement obligations
24,360

 
13,830

Other long-term liabilities
—

 
82

 
 
 
 
Total liabilities
470,558

 
304,438

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Preferred stock $0.001 par value - 50,000,000 shares
   authorized; none issued and outstanding at September 30, 2015 and
December 31, 2014
—

 
—

Common stock $0.001 par value - 416,666,667 shares
   authorized; 211,562,664 and 210,307,502 shares
   outstanding as of September 30, 2015 and December 31, 2014
212

 
210

Additional paid-in capital
788,986

 
778,095

Accumulated deficit
(545,857
)
 
(444,954
)
Total equity - Erin Energy Corporation
243,341

 
333,351

Non-controlling interests
517

 
654

Total equity
243,858

 
334,005

Total liabilities and equity
$
714,416

 
$
638,443



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ERIN ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

 
Nine Months Ended September 30,
 
2015
 
2014
Cash flows from operating activities
 
 
 
Net loss, including non-controlling interest
$
(101,593
)
 
$
(69,011
)
 
 
 
 
Adjustments to reconcile net loss to cash used in operating activities:
 
 
 
Depreciation, depletion and amortization
43,536

 
31,327

Accretion of asset retirement obligations
1,398

 
1,349

Amortization of debt discount and debt issuance costs
1,920

 
—

Loss on settlement of asset retirement obligations
4,233

 
—

Foreign currency transaction gain
(2,167
)
 
—

Share-based compensation
4,398

 
2,216

Related party liability offset
—

 
(32,880
)
Payments to settle asset retirement obligations
(17,220
)
 
—

Other
—

 
21

Change in operating assets and liabilities:
 
 
 
Decrease (increase) in accounts receivable
390

 
(10
)
Decrease (increase) in inventories
(9,493
)
 
13,715

Decrease (increase) in prepaids and other current assets
324

 
(7,103
)
Increase in accounts payable and accrued liabilities
58,126

 
27,277

Net cash used in operating activities
(16,148
)
 
(33,099
)
 
 
 
 
Cash flows from investing activities
 
 
 
Capital expenditures
(83,156
)
 
(59,481
)
Allied transaction
—

 
(170,000
)
Net cash used in investing activities
(83,156
)
 
(229,481
)
 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from the issuance of common stock
—

 
270,000

Proceeds from exercise of stock options and warrants
1,855

 
415

Proceeds from term loan facility
—

 
50,000

Proceeds from notes payable - related party, net
63,815

 
10,649

Proceeds from short-term borrowings, net
11,303

 
—

Debt issuance costs
—

 
(1,943
)
Allied transaction adjustments
—

 
(12,440
)
Funding from non-controlling interest
553

 
—

Net cash provided by financing activities
77,526

 
316,681

 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
836

 
—

 
 
 
 
Net increase (decrease) in cash and cash equivalents
(20,942
)
 
54,101

Cash and cash equivalents at beginning of period
25,143

 
163

Cash and cash equivalents at end of period
$
4,201

 
$
54,264

 
 
 
 
Supplemental cash flow information
 
 
 
Cash paid for:
 
 
 
Interest, net
$
7,886

 
$
8

Non-cash investing and financing activities:
 
 
 
Issuance of common shares for settlement of liabilities
$
125

 
$
—

Discount on notes payable pursuant to issuance of warrants
$
4,911

 
$
—

Related party liability offset
$
—

 
$
32,880

Reduction in accounts payable from settlement of Northern Offshore contingency
$
24,307

 
$
—


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