* Gabon downtime - limited impact
Maurel indicates that production is being limited while maintenance is performed on the export line
from its Ezanga license onshore Gabon. March production should be impacted by 30%, which
shouldn’t change the FY16 guidance of gross c.28kbo/d from Gabon. Importantly, Maurel has met
its 1 Dec -29 Feb 16 production covenant, which should delay the amortisation of the USD400m
RCF to 2017, thus providing M&P with EUR51m in additional liquidity in 2017/18. Immaterial
impact for Tullow, which also partners M&P in the Ezanga block with a 7.5% stake.
* Pressure limitations to reduce March Gabon production
Total received the final intelligent pigging report, which looked to identify any weaknesses in the
routing lines around the Coucal station, which are used by Maurel for its Ezanga/Gabon oil exports.
As a result, production is being constrained to allow work to be undertaken. Gross Ezanga
production started the month at just over 28kbo/d, before dropping to c.2-3kbo/d for a few days
from around 12 March and is now stabilised around 20kbo/d – production should remain at this
level until the end of the maintenance period, indicated as the end of March. As a result, gross
March production should average c.20kbo/d – down 30% on the year to date run-rate.
* Partners still in negotiation with Shell/Sinopec for alternative route
Maurel is in discussions with Shell/Sinopec for an alternative export South towards the Gamba
field. Should an arrangement be found (potentially by mid-year), c.5kbo/d of Ezanga production
could continue being exported even if there is unplanned downtime on the Total export pipeline.
* Positive that production covenant met
One of the covenants on the Maurel USD400m revolving credit facility required production from the
Gabon assets to exceed 22kbo/d (net) from 1 December 2015 to 29 February 2016. Maurel
announced that they achieved 22.088kbo/d, with strong, stable production since the start of the
year. As a result, Maurel’s RCF amortisation should only begin in Q1 17 at a rate of c.EUR17m per
quarter, rather than from Q2 16. This should provide c.EUR51m in additional liquidity in 2017/18.