April 27, 2021, Vancouver, Canada – Renaissance Oil Corp. (“Renaissance” or the “Company”) (TSX-V:ROE / OTCQB: RNSFF) reports its fourth quarter and full year 2020 results. All dollar figures are in Canadian dollars, unless otherwise noted.
RESULTS FOR THE YEAR ENDED 2020
- Renaissance signed an option agreement for a 50% working interest, in all rights from surface to basement, in a large petroleum licence, comprising 2.22 million acres in the deep Kavango sedimentary basin, in Botswana, Africa (the “Botswana Licence”);
- Renaissance entered into a letter of intent (the “LOI”) setting forth the material terms and conditions upon which Reconnaissance Energy Africa Ltd. (“ReconAfrica”) will acquire all of the issued and outstanding common shares and convertible securities of Renaissance (the “Transaction”); and
- Revenue and operating netback in the fourth quarter of 2020 were $3.8 million and $0.6 million respectively, with production of 1,193 boe/d in line with previous quarters.
||Three Months Ended
||Dec 31, 2020
||Dec 31, 2019
| Crude oil (Bbl/d)
| Natural gas (Mcf/d)
| Crude oil ($/Bbl)
| Natural gas ($/Mcf)
| Operating Costs
|Net income (loss)
| Per share, basic & diluted
|Funds flow from operations1
| Per share, basic & diluted1
1See Non-GAAP Measures Section 13 of the MD&A
In June 2020, the Company entered into a binding letter agreement to acquire an option for a 50% working interest, in all rights from surface to basement, for the Botswana Licence. This option agreement provides Renaissance with an important and potentially high impact oil and gas play, through the opening of the Kavango basin, a previously unrecognized, deep sedimentary basin in north-western Botswana and north-eastern Namibia. Botswana is considered a stable, industry friendly jurisdiction which offers attractive fiscal terms.
With ReconAfrica’s recent drilling success in the Kavango Basin, the Company’s Board of Directors determined that consolidating all interests in the Kavango Basin to 8,500,000 acres, which covers the entire sedimentary basin, is an accretive transaction for both ReconAfrica and Renaissance. The Company therefore entered into a LOI setting forth the material terms and conditions upon which ReconAfrica will acquire all of the issued and outstanding common shares and convertible securities of Renaissance. The Transaction is expected to be implemented by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia).
The global impact of the COVID-19 pandemic has fostered a great deal of uncertainty as to the health of the global economy over the near term. For the Amatitlán Contract, this has caused delays in further negotiations to migrate the contract. Renaissance, and its partner LUKOIL, continue to negotiate towards the development plan for the Amatitlán block for the commercialization of all prospective zones, with particular emphasis on the Upper Jurassic formations. Specifically, management is progressing the migration of Amatitlán from a service contract to a mutually beneficial contract structure for all partners.
The Company produced an average of 1,214 boe/d at the Mundo Nuevo and Malva blocks in Chiapas during 2020, which has been consistent with previous production levels while Topén-3 has been shut in. The Company continues to pursue various measures of relief, provided by Mexican oil and gas regulations, to required work programs in Chiapas due to the operational and logistical challenges created by the COVID-19 pandemic. Renaissance has deferred royalty payments due since September 2019. Failure to make the royalty payments may result in penalties and could jeopardize the license agreements on the Company’s Chiapas properties.