May 27, 2021, Vancouver, Canada – Renaissance Oil Corp. (“Renaissance” or the “Company”) (TSX-V:ROE / OTCQB: RNSFF) reports its first quarter 2021 results. All dollar figures are in Canadian dollars, unless otherwise noted.
RESULS FOR THE FIRST QUARTER OF 2021
- Revenue and operating netback in the first quarter of 2021 were $5 million and $0.8 million respectively, with production of 1,180 boe/d in line with previous quarters.
||Three Months Ended
||Mar 31, 2021
||Dec 31, 2020
||Mar 31, 2020
| Crude oil (Bbl/d)
| Natural gas (Mcf/d)
| Crude oil ($/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
Subsequent to Q1 2021, Renaissance entered into a definitive arrangement agreement pursuant to which Reconnaissance Energy Africa Ltd. (“ReconAfrica”) will acquire all of the issued and outstanding common shares and convertible securities of Renaissance (the “Transaction”).
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 is an accretive transaction for both ReconAfrica and Renaissance. The Company therefore entered into a definitive arrangement agreement upon which ReconAfrica will acquire all of the issued and outstanding common shares and convertible securities of Renaissance. Completion of the Transaction will, among other things, require the approval of at least two-thirds (662/3 percent) of the votes cast by Renaissance shareholders, optionholders and warrantholders, voting together as a single class, at Renaissance’s upcoming annual general and special meeting to be held on July 8, 2021.
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 1,180 boe/d at the Mundo Nuevo and Malva blocks in Chiapas during Q1 2021, which has been consistent with previous production levels while Topén-3 has remained 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. While the deadline to complete these work programs was in December 2020, the Comisión Nacional de Hidrocarburos has offered extensions to licence holders which Renaissance has applied for.
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.