Good day. Thank you for standing by. Welcome to the Tethys Oil Q3 earnings report 2022. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Magnus Nordin, Managing Director, and Petter Hjertstedt, CFO. Please go ahead. Thank you very much. Good morning, everyone. This is Magnus addressing you from a still very mild Stockholm autumn weather. Very much the season of mists and mellow fruitfulness. We are grateful as long as this weather stays with us. Welcome to yet another quarter with Tethys, highlights from Q3 2022. It's been one of those quarters where we have a strong financial and a lot preparatory work for some interesting exploration and growth objectives for next year. Those primarily relating to Block 56, where we completed two wells into the Al Jumd structure, both encountered good shows, and we have now a very good geological idea of what the structure holds. We are moving on to do an extended well test. This we expect to start within the next weeks. Virtually all the equipment is in place. We are just waiting for a meter to measure the oil we actually deliver from the field into the Omani national pipeline system. As soon as that's been commissioned and ready to go, we'll be off to start the long-term production test. On Block 58, the seismic interpretation is almost completed. So far, all the leads are still there. We've done some important geological work, and we are gearing up for an interesting drilling campaign next year. Production for the quarter, slightly disappointing, 9,788 barrels of oil per day. On the positive side is that we have had lots of interesting data from the operator on what's actually going on in the field, and I think we are getting more and more confident that the production will stabilize and should be in a good position to start climbing again next year. In summary, I think we can say that the corona effects and surface constraints and the time it's taken to rectify surface constraints, also with getting new equipment in, has been underestimated. We believe we know what needs to be done, and we are getting there. As we say in the highlights, it's very much of a deep bottlenecking action taking place. Of course, high oil prices and continued cost discipline and fiscal discipline has been a main driver behind the increased earnings for the quarter. Turning to the Block 56 appraisal activities. It's one of our more interesting blocks. The Al Jumd is a story by itself, an oil discovery that we have now proven significant amounts of oil in place. We are waiting to do extended production tests to get a better idea of what kind of recovery rates and how much oil we can actually plan to get out of this structure over the next couple of years. The central area is a slightly different story. It's larger prospects than Al Jumd. We have some 12 leads we are focusing on within the new 3D seismic area. We are well underway in processing and then interpreting that area. So far, the good news is that all our 2D identified leads are still there. We hope to have them in the prospect shape within the next six months. Testing operations on the Al Jumd near wells, Sarha and Sahab, is on hold pending the arrival of rigs and also increased focus on the Al Jumd area. We will get back to that in the early part of next year. Al Jumd, of course, is the main discovery so far in Block 56. We have three horizontal wells. We have delineated the structure well. We have oil throughout the structure, which of course is the good news. The Al Jumd-2 well tested at an initial rate of 700 barrels of oil per day, but the real test of the productivity of the Al Jumd reservoir and potential field will come early next year as we can assess the long-term production test. Everything is in place in the field. The tanks are filled with oil from the earlier testing. I'm certainly not going to go into this drawing in any detail. The main item we are waiting for to get installed is the Coriolis meter on the far right corner of this drawing. This has been manufactured in Abu Dhabi, is currently undergoing tests to prove its ability to deliver. After it will be moved to the field and installed. As I said, we are expecting somewhere between four to six weeks at most before this is fully commissioned and up and running. Turning to Blocks 3 and 4, as you can see very clearly here, we peaked out at 11,585 barrels of oil per day in Q1 2021. We have seen production fall virtually since then. In particular, 2022 has been weak. What we have concluded, in first quarter, we had a water breakthrough from one of the smaller fields, which then never quite recovered. That has also been followed by surface constraints. We've seen increased water cut in the far south field. There have been difficulties in separating out and handling the amount of water to get more oil out of the field. The problems have been identified. We now know what's going on. The operator is working hard to fix this. The main disappointment is that it's taking a bit longer than we originally envisaged. We are hopeful that things will stabilize over the fourth quarter. We will see production increase again in 2023. Let me know, though, of course, that we still expect to have some 10,000 barrels of oil per day for the full year. That of course, in this oil price environment, continues to yield us very good operating cash flow out of Blocks 3 and 4. Blocks 3 and 4 will also be focused on more exploration and appraisal as the quarter starts in Q3. We are doing one exploration well that has been postponed for drilling more production wells during the course of the third quarter. We are also gearing up to drill a quite significant well, the Jari-1 well that is scheduled to start in early next year. It's an exploration well drilled in a very underexplored area in Block 4. Previous wells have encountered oil, but no flows to surface have been established. As you can see from the map here, there are a number of fairly large leads and prospects in the area. Jari-1, where we'll expect results during the course of first quarter next year, is going to be quite an important well to see if also that part of Block 4 would warrant a development on its own. Seismic campaign is continuing. Before the end of next year, we expect to have most, if not all, of Blocks 3 and 4 covered by state-of-the-art new 3D seismic. Results so far from the exploration side this year has been rather limited, primarily because we have not really drilled any exploration wells. Last but certainly not least, Block 58, where we see seismic activity and also geological upgrade. Processing of the seismic study that we did earlier this year is completed. Prospect generation is fully ongoing. We expect to have this completed by the end of this year. There are some quite sizable prospects on this block. It's not quite as prolific from a prospects perspective as 56 is. Sizes are quite large, and if they work, of course, it will be of a great interest to the future growth to complement both 56 and 3 and 4. On 49 is desktop work. We completed the well last year, encountered oil and gas shows while drilling, good logs, no flows to surface. We are now preparing to do a proper hydraulic fracturing operation in 2023 to see if we can fracture the rock in such a way that we can get the hydrocarbons out of that rock. Don't expect results until the second half of 2023. If it works, of course, it will have a significant impact for the understanding of this part of Oman, which is currently not in production. That briefly sums up what we've been doing on the operational side. Now I will happily turn the floor to Petter for the financial highlights. Thank you, Magnus, and good morning, everyone. Financially, we have yet another strong quarter, and you can see from the graph, trend-wise, we're doing very well on both earnings and revenues, with the oil price being the main driver of revenues and with stable costs ensuring that we have EBITDA growth in the same level. We are now at revenue and earnings levels that are comparable to levels we saw in, last saw in early 2019, which is in itself impressive given that production levels are a bit more modest than at that point. In the quarter, we had achieved oil price of $107 per barrel. That's up versus $100 the quarter before, and that's reflected in the earnings line. We've also seen significant investments continue at $20 million, resulting in a free cash flow of just above $3 million as we continue to invest significantly in both Blocks 3 and 4 and Block 56. Yet the year has offered a lot of shareholder returns, most recently we activated a share buyback program and 89,000 shares were repurchased before we went into the silent period. We also remain with a solid financial position of over $40 million cash on hand and no debts. Speaking of returns, we can see that our return on equity and return on capital employed are currently at levels that we have not seen since 2019, and these are comparable almost with 2018 levels, showing that we've been now seeing the financial turnaround that we've been seeing in the P&L quite solidly in these metrics as well. The oil price being the main driver for our P&L earnings. You can see the average OSP in the quarter was $107.8. Our achieved price is somewhat lower. That's a consequence of the very timing of liftings and the slightly different mix of lifting volumes versus production. As you're familiar with, there is a slight delay of the OSP versus the spot prices we see in the markets. We already now see that the potential unweighted average OSP in Q4 is around $93 per barrel. That's reflecting the levels we've seen in recent months in the markets. The differential versus Brent for the Oman blend is now at less than a dollar per barrel, coming down significantly from higher levels that were up as high as $4 per barrel the previous quarter. That's good to see that the Oman oil quality is strengthening vis-a-vis its peers in the market. Moving on. We saw a quarter with significant oil sales of about 420,000 barrels. That's up significantly versus Q2. As I'm sure you recall, this was because of Q2 only capturing two liftings instead of the customary three, which means that this quarter we had four liftings instead of three. We had June through September liftings captured in those sales, and that's also reflected in the achieved oil price. This also means we had an overlift movement in the quarter of about 41,000 barrels. That is the number of barrels sold compared to the entitlement. Our underlift has been reduced by that same number. Speaking of entitlement, that is the barrels of oil that we are entitled to sell. It's fairly stable throughout the year. We're about 42% of production, with higher prices, of course, that means we get fewer barrels for cost oil, but that is offset by the higher total expenditure in Blocks 3 and 4, so they balance each other out. As we know, it's not the number of barrels, it's the kind of barrels and the value of barrels. That's the important metric to keep track of. As you can see on the graph to the left, net entitlement value has been growing steadily throughout the past few quarters. That means the profit oil portion is growing as well in value, and that's the profit we receive from the operations on Blocks 3 and 4. OpEx is quite stable over the quarters. OpEx per barrel is up somewhat, but that's mainly effect of the lower production quarter-on-quarter. You can see that on a total level, it's basically flat compared to previous quarters. What we see is that cost savings that are being done, and savings that are as a result of the lower production, are offsetting the cost pressures on energy and other consumables that are coming up. We're now looking for a full year number o f about $13.5 per barrel in OpEx. Moving on. Cash flow. The operating cash flow mirrors very much our earnings trend. You can see it's trending upwards quite solidly in the recent quarters with the working capital adding some volatility to that, and that's a consequence of timing effects of liftings and the over-underlift, and it's really not something that has a sustainable effect on the actual cash flows. It just creates intra-quarter volatility. You can see a strong operating cash flow of $27 million and a negative change in net working capital. If you just look back a few quarters, you see this evens out over time. After that, we have quite a significant investment program. This year we are investing levels that we have not seen for many years, and that is both a step up in Blocks 3 and 4 investment as we have invested in seismic to push exploration further, but also adding a fourth rig to increase the drilling capacity and to push a turnaround in production and hopefully also in the exploration success. Also, we've been seeing some significant investments on Block 56, with both seismic in Q1 and significant drilling throughout the year. Despite the significant investment program, which is the largest since 2012, we have seen overall some positive free cash flow in the year, with the Q1 being the big spend in the negative when the 3D seismic on Block 56 was paid for. Otherwise, we're seeing good free cash flows and seeing that this year we probably had a peak in exploration spend. We will have turned a corner in this respect. There will be fluctuation from one quarter to another as significant discretionary exploration spend impacts. The overall picture is quite rosy, I'd say. We have good cash flow generation in the operations, and more than offsetting the investments, leaving us with plenty of room this year to return cash to shareholders, $23 million this year so far, and leaving with a cash balance of $42 million at the end of this quarter. The netback trend, I think is worth keeping an eye on. This is where we see the underlying value being created in Blocks 3 and 4, where we kind of can look beyond the fluctuations of working capital and timing effects, but rather seeing the net value being generated in total dollars but also dollars per barrel. You see that is trending up quite nicely in USD per barrel. We saw a big step up in Q3 to 15.8 from 12.9 in the Q2. Trend-wise, it's very strong, and this is the underlying value being created, and this can generally be seen as a proxy for profit oil. That is the netback net of CapEx, so to speak, on three and four. Looking forward to our guidance, we have, as Magnus already mentioned, revised our full-year guidance to 10,000 barrels per day, reflecting some of the constraints we see on the surface. We are confident that we're investing for a turnaround, and equally, the operating expenditure per barrel is a reflection of that change in production levels. We now expect to have total CapEx for the year of about $84 million, just down somewhat from $87, reflecting both timing and changes in spending priority. With that, I hand the floor back to Magnus. Thank you, Petter. Very impressive numbers, I must say. All right. As you're all aware, those numbers would not be where they were if it was not that oil prices were as strong as they are. I think it's worthwhile that we spend a little bit of time in trying to give a possible view of oil prices. Well, the main point is I would like to try and make here is that oil prices are where they are primarily because of demand, and as that demand is outstripping available supply. If you look at the graph here, we can see that oil prices were already coming up by January 2022. Then we had, for geopolitical reasons, a massive uptick that lasted until July, August of this year. If you take the trend we've seen since late August, early September, it follows fairly well the uptick and the increase in prices we have been seeing as we have come back out of the Corona environment. Turning to the other side of the slide, you see how demand has come back strongly. Despite fears of recession, despite fear of lockdown in China, we are seeing demands now well above 100 million barrels of oil per day. This is a return that I think is certainly stronger than was originally envisaged just a year ago. I would argue that is the main reason why we are seeing prices and why we think prices will remain at these rather lofty levels. Turning to the next slide and look at the supply side. We have a purportedly managed market from OPEC, where they also cut production barrels at the latest meeting. If you do look closely at the numbers, there is not actually that much spare capacity even within the OPEC countries. The compliance rates continue to be way above 100% within the OPEC+ group. This suggests that there are actually supply constraints given the current demand. The recent swing producer, U.S. Shale, shows a slipping production over the last couple of months, and we've seen also both the drilling rigs and fracking crews numbers have come down over the last couple of months. As we understand it also, the guidance from the major U.S. companies is to focus on cash flow and capital discipline. Based on that, I would argue that we are going to see an oil market primarily driven by demand and with little spare capacity, where any weaknesses in demand can easily be met by supply cuts. Based on that, we would expect, or we would argue that we are going to see oil prices at these or possibly even higher levels for the foreseeable future. That said, we are hopeful and planning for a year of high prices. As we summarize the third quarter, we have had what is now amounting to a stable production of around 10,000 barrels of oil per day that we will see for the year. As Petter has said, given the ample cash flow both to fund buybacks or for other cash distribution to shareholders, but also to fund other growth projects. The operating cash flows out of Blocks 3 and 4 both goes to stabilizing and increasing production, but also finding more oil in Blocks 3 and 4. Of course, we are spending it on future growth. 2022, from that perspective, will be a year of a lot of seismic expenditure, which is money that you see coming out of cash flow and coming out of the cash, but you don't necessarily see the results until almost a year later. We are in that stage right now where we are taking the seismic data and turning it into drillable prospects. As we concluded, 2022 has seen a peak exploration spend. We've been very fortunate in being able to use cash and cash flow to pay for this. As we move into next year, we will see a more visible activity on Blocks 56 and 58, with prospect sizes being delineated, with prospective resource bases being determined, and eventually also drill bit being brought out to test those prospects integrity. On Blocks 3 and 4, a fourth rig has now been made operational while debottleneck operations are seriously gaining speed. I would again say that has been the main reason why production in the second half has been as lackluster as it has been. On that note, we continue to show very strong financials. We are having a very interesting growth year next year. Fourth quarter should yield a continued good oil price, good cash generation, and a good cash position towards the end of the year as we move into an interesting 2023. On that note, we'd like to open the floor for questions. Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. Once again, if you would like to ask a question, please press star one and one on your telephone. We will now go to your first question. One moment, please. Your first question comes from the line of Stephane Foucaud from Auctus Advisors. Please go ahead. Your line is open. Morning, gents. Thanks for taking my question. I've got a few. The first one is around debottlenecking activity at Blocks 3 and 4. Assuming there was no bottleneck problem, that you could handle the water and so forth, what do you think the production could be without the debottlenecking issues? That's my first question. My next question is on this Jari-1 exploration well. You mentioned that the well will be drilled in an area, from what I understood, where you encountered oil before, but it didn't flow. What would be a good result looking like? You're looking for flow rates for Jari-1. You're going to encounter again net pay. Then you say it could be quite material. What sort of volume are we talking about for this area that would be de-risked by the Jari-1 well in case of success? I've got a few others. Let's start by that. Thank you. Okay, thanks. Thank you, Stephane. Very relevant questions and not necessarily easy to answer. If we start with production, I can't really give you a hard number, and also it would be speculative. Obviously, we will come with a guidance for next year as we see how the work is progressing and what we think would be realistic for next year. I showed the trend of production for the last quarters, and obviously we would be hopeful to be able to return production to higher levels that we've seen in the past. To actually give a number, I think would be too speculative, and we must refer to the guidance for next year that we will publish in connection with the Q4 report. Turning to exploration, yes, you noted the Jari. Well, the area where Jari is being drilled is the entire southern part of Block 4, where both previous operators and also CCED and ourselves, the current operator, have drilled wells before. There is clearly a petroleum system present. Seismic has been sketchy in the past. We used 3D data when we drilled, but it has then been reprocessed and reinterpreted. There are a number of prospects in that area that can be quite large. I don't really want to put a number to it, but I would say that given that it is as far away from the current infrastructure, we would certainly expect something, if the area turns into being commercially viable, that it would be a size that would warrant installation of production facilities, et cetera, or in that part of the block. It would be something that would be significant. Let us revert with numbers when we get a little bit closer to the spot date. Okay. Thanks for that. Sure. Thank you. A follow-on, and then I'll turn to, Magnus probably wanted to ask a question. You talk about exploration drilling on Block 56 and Block 58 next year. I was wondering what we are talking about. Are we talking about one well per block? Could it be more? I appreciate you're still thinking that, but it would be great to have some sort of sense of how busy you could be on the drilling side on those two blocks. Thank you. Of course, Stephane. That, of course, will be the minimum that we would expect to drill. Depending on both Al Jumd results, depending on the continued testing of the Al Jumd, shall we say, satellite structures, and of course, depending on the size and geological chance of success of the prospect inventory once we're completed, that could very well impact the drilling schedules. We will get back to that with much more details as next year unfolds. But as a direct answer to your question, between 56 and 58, a minimum of three wells will be drilled. Wonderful. Thank you, Magnus. Most appreciated. No problem. Thank you. Once again, if you would like to ask a question, please press star one and one on your telephone. Again, that is star one and one on your telephone to ask a question. There are currently no further questions. Oh, we've just had one question come in. One moment. I will now take the question for you. Your next question comes from the line of Knut Martin Karlsen from Commandeer Capital. Please go ahead. Your line is open. Good morning, Magnus and Petter. Just a short question on the CapEx side. Could you try to break down the CapEx in maintenance and growth CapEx? It's sort of hard to get around whether or not the majority of the CapEx goes toward keeping the growth stable or if it's going to increasing growth. Thank you. Yeah, thanks for the question. It is a difficult question to answer, in that it's not always easy to say exactly what is growth and what is maintenance. A significant part of CapEx is, in fact, drilling, if we take both 3 and 4 in particular. Of course, drilling can be both to stabilize and to grow. Whereas I would say that the majority of the drilling is actually going into to maintain the current production levels. 3 and 4 is a drilling-intensive asset, so the majority of drilling CapEx is certainly going to maintaining levels. The split between is not always easy to ascertain, and it depends on a number of other factors as well. As we've seen this year, we have been investing in drilling, and yet we haven't fully been able to realize that growth, given surface constraints and in particular in water handling systems and such, and also in work over capacity to ensure that we stabilize the current producing wells. The seismic, however, I would say that is clearly a growth investment. While it doesn't give immediate returns, it does open up for future exploration drilling. The lead times are slightly longer than our drilling, but it is a necessary part of the investment. Looking at a total CapEx program, I would say, taking into consideration exploration spend, we're probably somewhere around 50/50 between the two on the back of the envelope. I would say that there's significant investment being made this year in terms of growth, even if we haven't seen that realized in that short time span. Okay. Thank you. Thank you. Once again, *1 and 1 if you would like to ask a question. We will now take your next question. One moment, please. Your question comes from the line of Stephane Frossard from Auctus Advisors. Please go ahead. Your line is open. Yes. I have a follow-on on Al Jumd, please. You talk about a well test that could deliver an initial flow rate of 800 barrel a day. Given that one of the well was the first one flowed at 700, could you perhaps talk about what's behind the 800, and is it constrained by any chance? Was it because you're playing with different flow rate to see how the reservoir flow? That would be great to have a bit of more color. Certainly. Thank you. It is an extended well test. Wells will be put on stream, they will be shut in, they will be expanded, their choke will be increased, they will be choked back. It's all really a program to evaluate and to establish the, shall we say, the recoverable parameters of the oil in place. That number is really chosen just to manage expectations as to what this could do for contributing to our production during the period of well testing. It is neither to be construed as an absolute number or a guaranteed number either way. It's putting in perspective what we could expect to see once we start producing here. Again, we should remember, it's not commercial production, it is test production, and the main purpose of that test production is to get data, not to get oil for sale. We are happy that we are allowed to actually sell the oil during the test production phase. It's an add-on. It's not the main purpose of the test. Got it. Thank you, Magnus. Thank you. Thank you. There are no further questions at this time. I will hand the call back to you. Yes. Thank you so much for listening, and do stay tuned. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by. 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