Maurel & Prom - Strong Growth in 2010 Sales to EUR345.8 Million

PARIS, February 3, 2011 /PRNewswire-FirstCall/ --

- Gabon: Entitled Production of 12,051 boepd in 2010 (365 Days)

- Nigeria: Entitled Production of 3,570 boepd for 128 Production Days in 2010

    Sales for FY 2010 up 80% over 2009

    (In EUR m)    Q1 2010 Q2 2010 Q3 2010 Q4 2010  2010  2009 Chg. 2008  Chg.
                                                             09/08      10/09

    Exchange rate   1.383   1.273   1.291   1.358 1.326 1.394     1.471

    Oil production   33.6    65.0    75.7   110.2 284.5 124.2       7.8

    Oil services     23.5    27.5    24.0    24.2  99.2  83.5      84.8

    Sales            57.1    92.5    99.7   134.4 383.7 207.7 +85% 92.6 +124%

    Impact of hedges -8.1   -10.2    -7.3   -12.3 -37.9 -15.9       0.1

    Consolidated
    sales            49.0    82.3    92.4   122.1 345.8 191.8 +80% 92.7 +107%

The increase in sales reflect the continued rise in production from the Gabon fields as well as the first-time consolidation of OMLs 4, 38 and 41 with two liftings carried out in the fourth quarter of 2010.

Change in accounting methods used to treat the share of oil corresponding to the corporation tax included in profit oil: As from 1 January 2010, the corporation tax paid in kind to the State is recognised in the Group's financial statements, generating a corresponding increase in sales (EUR17.8m for 2010). This tax, included in the profit oil paid in kind to the State, was not previously recognised as such. The data for 2009 and 2008 have been restated as EUR8.6m for 2009 and EUR0.4m for 2008, respectively.

    GABON

    (In EUR m) Q1 2010 Q2 2010 Q3 2010 Q4 2010  2010  2009 2008
         Gabon    33.5    64.8    75.5    80.1 253.9 124.0  7.3
         Banio     1.1     1.7     1.0     1.9   5.7   5.3  7.3
          Onal    26.8    49.1    52.5    58.9 187.3  90.8    -
          Omko     5.6     5.6     4.1     4.3  19.6  27.9    -
          Omgw     0.0     7.2    16.8    14.0  38.0     -    -
          Ombg     0.0     1.2     1.1     1.1   3.4     -    -

The average sale price in Gabon for 2010 was $78.8/b for production from Onal, Omko, Ombg and Omgw, and $66.4/b for production from Banio.

    TANZANIA

    (In EUR m)     Q1 2010 Q2 2010 Q3 2010 Q4 2010  2010  2009       2008

          Tanzania     0.1     0.2     0.0     0.3   0.6   0.0        0.0
         Mnazi Bay     0.1     0.2     0.0     0.3   0.6   0.0        0.0

The Group achieved sales of EUR0.6 million on the Mnazi Bay field in Tanzania in which it acquired a 38.22% equity interest in 2009. A limited volume of 435.5 Mscf to fuel the neighbouring power plant was produced and sold at a price of $5.36/MBTU in 2010.

    NIGERIA

    (In EUR m)        Q1 2010 Q2 2010 Q3 2010 Q4 2010  2010  2009   2008

              Nigeria       -       -       -    29.7  29.7   0.0    0.0
    OMLs 4, 38 and 41       -       -       -    29.7  29.7   0.0    0.0

In Nigeria, two liftings were carried out in the fourth quarter of 2010 for a total of 1.1 million barrels in SEPLAT working interest (with 45% accruing to Maurel & Prom) resulting in a position of over-lifting at 31.12.2010 of 82,887 barrels for SEPLAT. The sale price averaged $86.1/b.

    OIL SERVICES

    (In EUR m)    Q1 2010 Q2 2010 Q3 2010 Q4 2010  2010  2009       2008

     Oil services    23.5    27.5    24.0    24.2  99.2  83.5       84.8

Caroil's contribution to sales (business conducted with third parties outside the Group) for 2010 totalled EUR99.2 million, against EUR83.5 million in 2009, an increase of 19%. Expressed in US dollars, the sales contribution generated by this business was $131.5 million compared to $116.4 million in 2009.

On a cumulative 12-month basis, Caroil's corporate sales were stable at US$ 187.7 million.

Caroil conducted 70% of its business with customers other than Maurel & Prom. The utilisation rate was 88% for the full year 2010.

OTHER

In early 2009, when securing financing for the reserve based loan, the Group set up hedges of operating cash flows based on oil prices.

In the first half of 2010, 7,500 bopd were hedged at a price of $60.25/b and in the second half of 2010, 6,750 bopd were hedged at a price of $60.7/b. Accordingly, the average hedge price for the full year 2010 came to $60.4/b while the average price of Brent was $79.4/b; this resulted in a negative adjustment of EUR37.9 million.

    Economic data                2010      2009  Change
                            12 months 12 months

    Exchange rate (EUR/US$)      1.33      1.39     -5%
    Exchange rate (US$/EUR)      0.75      0.72     +4%
    Brent (US$/barrel)           79.4      61.5    +29%

Group production: Increased output from Gabon and progressive consolidation of Nigeria

GABON

The following table summarises 2010 production data, in barrels per day, for fields in production in Gabon.

        2010            Gross production (100%)
    in boepd       Q1          Q2     Q3     Q4     2010
                                                  365 days

    Gabon        10,654      13,299 17,441 16,981  14,618
    Banio           354         251    364    335     326
    Onal          8,534      10,197 12,422 12,921  11,034
    Omko          1,610       1,088    944    973   1,152
    Omgw            156       1,518  3,472  2,556   1,936
    Ombg             -          245    238    196     170
    (cont)

        2010
    in boepd       Q1          Q2     Q3     Q4     2010
                                                  365 days

    Gabon         9,132      11,607 15,436 14,831  12,774
    Banio           354         251    364    335     326
    Onal          7,254       8,668 10,559 10,983   9,379
    Omko          1,369         925    803    827     979
    Omgw            156       1,518  3,472  2,495   1,921
    Ombg              -         245    238    191     169

        2010                 Entitlements

    in boepd       Q1          Q2     Q3     Q4     2010
                                                  365 days

    Gabon         8,611      10,945 14,565 13,994  12,051
    Banio           320         227    329    301     294
    Onal          6,852       8,188  9,974 10,375   8,860
    Omko          1,293         874    758    781     925
    Omgw            146       1,424  3,280  2,357   1,812
    Ombg              -         232    225    180     160
    (cont)
        2010 Production sold

    in boepd       Q1          Q2     Q3     Q4     2010
                                                  365 days

    Gabon         7,100      11,985 14,043 13,845  11,768
    Banio           306         342    243    349     310
    Onal          5,627       9,011  9,699 10,151   8,638
    Omko          1,167       1,014    746    745     916
    Omgw              -       1,392  3,136  2,418   1,747
    Ombg              -         226    218    182     157

In Gabon, the Group received an exclusive development authorisation on 17 December 2010 for the Gwedidi (OMGW) and M'Bigou (OMBG) fields. Maurel & Prom holds a 100% equity interest in these two fields for which Tulip Oil holds a 15% right of reversion (option exercisable within 120 days); if exercised, this would reduce Maurel & Prom's interest to 85%.

View of the AEE obtained on the Omoueyi exploration licence

The Group's production in Gabon, which peaked at 20,198 boepd on 31 December 2010, was impacted in the fourth quarter 2010 by more extensive maintenance work than expected on the well pumps at the Onal field, the start of water injection at the Omko field, improvements to surface installations at the Gwedidi field, and the connection of two wells: OMOC-N-301 and OMOC-N-302. As a result, production in Gabon averaged 16,981 boepd in the fourth quarter and 14,618 boepd for the full year 2010.

The sanding up of the OMOC-N-301 wells and a set of audit work performed by TOTAL on the pipeline to Cap Lopez limited current production which averaged some 17,000 bopd over the month of January 2011.

NIGERIA

In Nigeria, production was progressively integrated during the second half of 2010.

During this transitional period, a certain number of work projects were carried out, including in particular the installation of provisional metering systems. Consequently, the volumes of fluids worked by SEPLAT are currently under discussion with SPDC to establish a definitive allocation of production share accruing to SEPLAT. Work is now underway to install the definitive fiscal meter, which should come into operation in the first half of 2011.

On a basis of 128 production days in 2010, field production amounted to 17,632 boepd, or 3,570 boepd in working interest production for Maurel & Prom.

VENEZUELA

Oil and gas production in Venezuela, after oil taxes in kind of 30%, came to 993 barrels of oil equivalent per day for the full year 2010. Oil accounted for 66% of production. This business, consolidated by the equity method (EAI), is not included in the Group's sales.

GLOSSARY

Gross production: production at 100%.

Working interest production: Gross production - partner's share.

Mining royalties in Gabon: royalties are paid in foreign currencies in Gabon.

Entitlements: working interest production - in-kind royalties - in-kind State share of profit oil + corporation tax if the State's profit oil is paid in kind.

Production sold: entitlements -/+ stock.

Sale price: in Gabon, prices are set by the State based on the oil quality and benchmark prices. The mutually-agreed costs to achieve commercial viability are then deducted from these prices.

Sales: entitlements x sale price. Sales are recognised on the production extraction date.

Taxes and duties: profit oil due to the Gabonese State is paid in foreign currencies for the Banio field and in kind for the Onal, Omko, Omgw and Ombg fields. Corporation tax in Gabon is included in the State profit oil and systematically recognised under sales.

Second-quarter sales: sales for the second quarter are calculated by deducting sales for the first quarter from the figure for half-year sales.

Third-quarter sales: sales for the third quarter are calculated by deducting sales for the first half of the year from sales for the first nine months.

Fourth-quarter sales: sales for the fourth quarter are calculated by deducting sales for the first nine months of the year from aggregate sales for full 12 months.

                               Next announcements:

    31/3/2011   2010 full-year earnings (after close of trading)

    1/4/2011    Presentation to analysts (10 am)

    12/5/2011   Annual General Meeting (10 am)

This document may contain forward-looking statements regarding the financial position, results, business and industrial strategy of Maurel & Prom. By nature, forward-looking statements contain risks and uncertainties to the extent that they are based on events or circumstances that may or may not happen in the future. These projections are based on assumptions we believe to be reasonable, but which may prove to be incorrect and which depend on a number of risk factors such as, fluctuations in crude oil prices, changes in exchange rates, uncertainties related to the valuation of our oil reserves, actual rates of oil production and the related costs, operational problems, political stability, legislative or regulatory reforms, or even wars, terrorism and sabotage.

             Maurel & Prom is listed for trading on Euronext Paris -
                     Compartment A - CAC mid 100 Index

             ISIN FR0000051070 / Bloomberg MAU.FP / Reuters MAUP.PA

    For more information, visit http://www.maureletprom.fr

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SOURCE Maurel & Prom