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Erin Energy Corporation - Erin Energy Announces Full Year And Fourth Quarter 2015 Results

Release Date: 16/03/2016 08:47:00      Code(s): ERN     
Erin Energy Corporation
(Formerly CAMAC Energy Inc)
(Incorporated and registered in Delaware, United States of America)
Share code on the NYSE MKT: ERN
Share code on the JSE: ERN
ISIN: US1317452001
(?Erin Energy? or ?the Company?)

Erin Energy Announces Full Year and Fourth Quarter 2015 Results

Provides Operational Update on its West and East Africa Operations

HOUSTON, March 15, 2016 ? Erin Energy Corporation (?Erin Energy? or the ?Company?) (NYSE MKT:
ERN) (JSE: ERN) announced today financial and operational results for the year ended December 31,

2015 Highlights:

Proved reserves up 32%

Crude sales volumes of more than 1.4 million net barrels of oil, a 186% increase over 2014

$68.4 million in revenue, a 27% increase over 2014

Achieved peak gross production rate of 13,100 barrels oil per day (11,500 net)

Completed seismic acquisitions in The Gambia and Kenya

?During 2015, we produced approximately 1.6 million net barrels of oil and generated revenues of more
than $68 million,? said Kase Lawal, Chairman and Chief Executive Officer. ?Even with the huge decline
in commodity prices, 2015 was a year of significant milestones for Erin Energy, in which we completed
the phase one of the Oyo expansion campaign, increased our reserves, and completed seismic
acquisitions on two of our assets, which will help in high-grading our exploration portfolio.?

Lawal continued, ?Our plan for 2016 includes the drilling of an additional development well to increase
production, delaying some exploration activities, implement cost reduction by reducing our G&A and
taking advantage of the low oil price environment to negotiate reduced cost of goods and services from
vendors. We will continue to execute on the essential projects that will build long-term value for our

Operational Update

In 2015, the Company successfully completed and tied-in Oyo-8 and Oyo-7 wells with production
commencing in May and June, respectively. Total oil production from the two wells in 2015 was 1.6
million barrels of oil, a 358% increase on 2014. This was notwithstanding the impact of initial
curtailment in production from the Oyo-8 well necessitated total oil stored approaching the FPSO
storage capacity while waiting for the export permit and the subsequent failure of the subsurface
controlled sub-surface safety valve (SCSSV) after the permit was received.
Following several unsuccessful attempts to open the valve by normal methods, the Company has
entered into a contract for the provision of light well intervention services, using the Island Constructor
vessel to bring the well back to production. The Company expects to complete the intervention in April
and re-establish production from Oyo-8.

Average net daily production for 2015, over the days production occurred, increased almost five-fold to
6,400 barrels of oil per day (bopd) compared to 1,300 bopd for 2014. For the fourth quarter 2015,
during which time Oyo-8 was shut-in, net daily production was approximately 2,500 bopd compared
with nil for the comparative period in 2014.

Sales for the year were 1.4 million barrels of oil, a more than three-fold increase from 2014. The
average price received for the period, however, was $47.24 per barrel, a 125% drop on the average
price of $106.41 for 2014, reflecting the decline in global oil commodity prices. Crude oil inventory was
approximately 0.2 million barrels at December 31, 2015.

In The Gambia, the Company completed a 1,613 square kilometer 3-D seismic data acquisition over its
offshore A2 and A5 blocks. The seismic data is currently being processed and is expected to be
completed mid-year 2016.

In Kenya, Erin Energy completed the acquisition of 2-D seismic on its onshore Kenya blocks, L-1B and
L-16. The processing has been completed and interpretation is ongoing. Based on the preliminary
interpretation of the 2-D data, the Company applied for and was granted an additional two-year
exploration period for these two blocks. The Company was also granted an 18-month extension of its
Initial Exploration Period for its offshore Kenya blocks, L-27 and L-28.

In Ghana, the Company completed its technical and commercial evaluation of the three previously
discovered oil fields on the Expanded Shallow Water Tano block and announced total discovered in-
place volumes were assessed at approximately 500 million barrels of oil and 282 billion cubic feet of
gas. Erin Energy is working with its joint venture partners and relevant government entities on further
optimization studies and adjustments to the fiscal terms in the agreement to enhance the economics of
the development in this low oil price environment.

The Company?s total net proved oil reserves as of December 31, 2015 increased 32.4% to 12.0 million
barrels (MMbbls), versus 9.1 MMbbls at year-end 2014. The Company?s reported reserves are
prepared by DeGolyer and MacNaughton.

Financial Summary

Full year 2015 revenues were $68.4 million, up 27% from $53.8 million in 2014. Fourth quarter 2015
revenues were $39.8 million in spite of the shut-in, and compared to nil for the same period in 2014.

The Company had a non-cash impairment of $281.8 million resulting in a reported net loss of $451.5
million or $2.13 per share for full year 2015 compared with a net loss of $96.1 million or $0.49 loss per
share for full year 2014. This was due primarily to the non-cash write-down of the value of its oil and
gas properties, given the current commodity price, and higher depreciation, depletion and amortization
costs of $99.1 million. When adjusted for certain items that impact the comparability of results, the
Company had an adjusted net loss (1) of $70.6 million or (2) $0.33 loss per share.

Exploration expenses totaled $16.4 million for the full year, primarily related to the seismic acquisitions
in The Gambia and Kenya. Total exploration expenses for the fourth quarter were $3.2 million. As of
December 31, 2015 cash, cash equivalents and restricted cash were approximately $17.0 million.

(1) (2) Non-GAAP financial measures. Please see attached Appendix A for the reconciliations of
    adjusted net loss and adjusted net loss per share.
Conference Call and Webcast Information

The Company will host a conference call on Wednesday, March 16, 2016 at 10:00 a.m. CT (11:00 a.m.
ET) to discuss the results and update its current operations. The dial-in number to access the
conference call is +1-877-270-2148 in the United States or +1-412-902-6510 internationally.
Participants should ask the call operator to be placed on the ?Erin Energy Fourth Quarterly Conference
Call.? To access the live audio webcast, please visit the ?Investors? section of the Company?s website at

For those unable to participate in the conference call, a replay will be available for audio playback until
March 23, 2016. The number to access the conference call replay is 1-877-344-7529 or outside the US
1-412-317-0088. The passcode for the replay is 10081051.

Erin Energy Corporation is an independent oil and gas exploration and production company focused
on energy resources in sub-Saharan Africa. Its asset portfolio consists of 9 licenses across 4 countries
covering an area of 40,000 square kilometres (~10 million acres), including current production and
other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana, Kenya and
The Gambia, and onshore Kenya. Erin Energy is headquartered in Houston, Texas, and is listed on the
New York and Johannesburg Stock Exchanges under the ticker symbol ERN.

For more information about Erin Energy or to request a hard copy of the Company?s most recent
complete audited financial statements free of charge, please call +1 713 797 2940 or visit

Non-GAAP Financial Measures

Adjusted net loss and adjusted net loss per share are supplemental non-GAAP financial measures
used by management and external users of the Company's consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies. The Company defines adjusted net loss as
net loss excluding certain non-cash and non-recurring items, including non-cash changes in the fair
value of assets, non-cash and non-recurring charges. The Company defines adjusted net loss per
share as adjusted net loss per common share attributable to Erin Energy Corporation. We believe
adjusted net loss and adjusted net loss per share are useful to investors because they provide
investors with a more meaningful measure of our profitability before recording certain items for which
the timing or amount cannot be reasonably determined. However, these measures are provided in
addition to, not as an alternative for, and should be read in conjunction with, the information contained
in our financial statements prepared in accordance with GAAP. Our computations of adjusted net loss
and adjusted net loss per share may not be comparable to other similarly titled measures of other
companies. The attached table presents a reconciliation of net loss and net loss per share, the most
directly comparable GAAP financial measures, to adjusted net loss and adjusted net loss per share,
respectively, for the periods indicated.

Forward-Looking Statements

This news release contains ?forward-looking statements? within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical fact, concerning activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future are forward-looking statements. Although
the Company believes the expectations reflected in these forward-looking statements are reasonable,
they involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect.
The Company?s actual results could differ materially from those anticipated or implied in these forward-
looking statements due to a variety of factors, including the Company?s ability to successfully finance,
drill, produce and/or develop the wells and prospects identified in this release, and risks and other risk
factors discussed in the Company?s periodic reports filed with the Securities and Exchange
Commission. All forward-looking statements are expressly qualified in their entirety by this cautionary
statement. You should not place undue reliance on forward-looking statements, which speak only as of
their respective dates. The Company undertakes no duty to update these forward-looking statements.

Source: Erin Energy Corporation

Lionel McBee, +1 713 797 2960
Director, Investor Relations and Corporate Communications

Chris du Toit, +27 11 593 7301

Sasfin Capital (a division of Sasfin Bank Limited)
                                         ERIN ENERGY CORPORATION
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (In thousands, except for per share amounts)

                                                                                 Years Ended December 31,
                                                                          2015            2014              2013
  Crude oil sales, net of royalties                                   $     68,429 $         53,844 $         63,736
Operating costs and expenses:
  Production costs                                                          90,079           80,296           84,431
  Crude oil inventory (increase) decrease                                   (2,502)          14,512          (14,004)
  Workover expenses                                                            972               ?                ?
  Exploratory expenses                                                      16,437           14,283            5,501
  Depreciation, depletion and amortization                                  99,110           23,756           16,875
  Impairment of oil and gas properties                                     281,768               ?                ?
  Loss on settlement of asset retirement obligations                         3,653               ?                ?
  General and administrative expenses                                       15,905           14,322           14,460
      Total operating costs and expenses                                   505,422          147,169          107,263
Operating loss                                                            (436,993)         (93,325)         (43,527)
Other income (expense):
  Currency transaction gain (loss)                                           2,520            1,758                224
  Interest expense                                                         (17,986)          (4,383)               (99)
  Other, net                                                                    ?              (358)               (87)
      Total other income (expense)                                         (15,466)          (2,983)              38
Loss from continuing operations before income taxes                       (452,459)         (96,308)         (43,489)
Income tax expense                                                              ?                ?                ?
Net loss from continuing operations                                       (452,459)         (96,308)         (43,489)
Discontinued operations
   Net loss from discontinued operations, net of tax                             ?               ?                 (36)
  Net loss from discontinued operations                                         ?                ?               (36)
Net loss before non-controlling interest from continuing operations       (452,459)         (96,308)         (43,525)
  Net loss attributable to non-controlling interest                            962              246               ?
   Net loss attributable to Erin Energy Corporation                   $   (451,497) $       (96,062) $       (43,525)
Net loss per common share attributable to Erin Energy Corporation -
   Continuing operations                                              $      (2.13) $          (0.49) $        (0.30)
   Discontinued operations                                            $         ? $               ? $             ?
   Total                                                              $      (2.13) $          (0.49) $        (0.30)
Net loss per common share attributable to Erin Energy Corporation -
   Continuing operations                                              $      (2.13) $          (0.49) $        (0.30)
   Discontinued operations                                            $         ? $               ? $             ?
   Total                                                              $      (2.13) $          (0.49) $        (0.30)
Weighted-average common shares outstanding:
   Basic                                                                   211,616          194,745          146,452
   Diluted                                                                 211,616          194,745          146,452
                                                  ERIN ENERGY CORPORATION
                                               CONSOLIDATED BALANCE SHEETS
                                          (In thousands, except for share and per share data)

                                                                                                           As of December 31,
                                                                                                         2015              2014
Current assets:
  Cash and cash equivalents                                                                          $          8,363 $          25,143
  Restricted cash                                                                                               8,661             1,496
  Accounts receivable - trade                                                                                   1,029                ?
  Accounts receivable - partners                                                                                  287               496
  Accounts receivable - related party                                                                           1,186               624
  Accounts receivable - other                                                                                      28                54
  Crude oil inventory                                                                                           4,789             1,089
  Prepaids and other current assets                                                                             2,245             2,929
      Total current assets                                                                                  26,588               31,831
Property, plant and equipment:
Oil and gas properties (successful efforts method of accounting), net                                     348,331               595,269
Other property, plant and equipment, net                                                                    1,173                 1,060
      Total property, plant and equipment, net                                                            349,504               596,329
Other non-current assets
   Restricted cash                                                                                                ?               8,909
   Debt issuance costs                                                                                            ?               1,307
   Other non-current assets                                                                                       67                 67
      Other assets, net                                                                                        67                10,283
      Total assets                                                                                   $    376,159 $             638,443
Current liabilities:
  Accounts payable and accrued liabilities                                                           $    213,120 $             108,047
  Accounts payable and accrued liabilities - related party                                                 30,133                 9,391
  Asset retirement obligations                                                                                 ?                 12,703
  Current portion of long-term debt - Term loan facility                                                   98,118                 6,200
       Total current liabilities                                                                          341,371               136,341
Term loan facility                                                                                             ?                 93,000
Long-term notes payable - related party                                                                   120,006                61,185
Asset retirement obligations                                                                               20,609                13,830
Other long-term liabilities                                                                                    ?                     82
       Total liabilities                                                                                  481,986               304,438
Commitments and contingencies
Equity (Capital deficiency):
Preferred stock $0.001 par value - 50,000,000 shares authorized; none issued and outstanding as of
December 31, 2015 and 2014, respectively                                                                          ?                 ?
Common stock $0.001 par value - 416,666,667 shares authorized; 211,615,773 and
  210,307,502 shares outstanding as of December 31, 2015 and 2014, respectively                                  212               210
   Additional paid-in capital                                                                              789,615           778,095
   Accumulated deficit                                                                                    (896,451)         (444,954)
     Total equity (deficit) - Erin Energy Corporation                                                     (106,624)             333,351
   Non-controlling interests                                                                                   797                  654
      Total equity (capital deficiency)                                                                   (105,827)             334,005
      Total liabilities and equity (capital deficiency)                                              $     376,159 $            638,443
                                          ERIN ENERGY CORPORATION
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (In thousands)
                                                                                                    Years Ended December 31, 2015
                                                                                            2015                2014                2013
Cash flows from operating activities
Net loss, including non-controlling interest                                            $     (452,459) $          (96,308) $          (43,525)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
   Depreciation, depletion and amortization                                                    97,179               21,590             14,640
   Impairment of oil and gas properties                                                       281,768                   ?                  ?
   Asset retirement obligation accretion                                                        1,931                2,166              2,235
   Amortization of debt issuance costs                                                          2,766                  147                 ?
   Loss on settlement of asset retirement obligations                                           3,653                   ?                  ?
   Related party liability offset                                                                  ?               (32,880)                ?
   Unrealized currency transaction (gain) loss                                                 (2,520)              (1,572)              (224)
   Share-based compensation                                                                     5,027                3,095              2,013
   Payments to settle asset retirement obligations                                            (16,640)                  ?                  ?
   Other                                                                                           ?                   (17)                16
   Changes in operating assets and liabilities:
       (Increase) decrease in accounts receivable                                                (804)                 562              (3,046)
       (Increase) decrease in crude oil inventory                                              (2,502)              14,512             (14,004)
       (Increase) decrease in prepaids and other current assets                                   746               (1,672)                156
       (Increase) decrease in other non-current assets                                             ?                   (15)                 ?
       Increase in accounts payable and accrued liabilities                                    84,000               56,845               5,114
           Net cash provided by (used in) operating activities                                     2,145           (33,547)            (36,625)
Cash flows from investing activities
Capital expenditures                                                                           (84,038)           (128,510)                (602)
Allied transaction                                                                                  ?             (170,000)                  ?
           Net cash used in investing activities                                               (84,038)           (298,510)                (602)
Cash flows from financing activities
Proceeds from the issuance of common stock                                                         ?               270,000                 ?
Proceeds from the exercise of stock options and warrants                                        1,855                  415                 ?
Proceeds from (repayments of) term loan facility                                                 (338)             100,000                 ?
Debt issuance costs                                                                                ?                (2,082)                ?
Proceeds from note payable - related party, net                                                61,815               10,649              4,350
Funds restricted for debt service                                                                  ?               (10,405)                ?
Allied Transaction adjustments                                                                     ?               (12,440)            29,234
Funding from non-controlling interest                                                             553                  900                 ?
            Net cash provided by financing activities                                           63,885             357,037             33,584
Effect of exchange rate on cash and cash equivalents                                             1,228                  ?                  ?
Net increase (decrease) in cash and cash equivalents                                           (16,780)             24,980             (3,643)
Cash and cash equivalents at beginning of year                                                  25,143                 163              3,806
Cash and cash equivalents at end of year                                                $          8,363 $          25,143 $               163
Supplemental disclosure of cash flow information
Cash paid for:
   Interest, net                                                                        $          11,114 $              8 $                99
Supplemental disclosure of non-cash investing and financing activities:
   Issuance of common shares for settlement of liabilities                              $         125      $            ?     $            ?
   Discount on notes payable pursuant to issuance of warrants                           $       4,911      $            ?     $            ?
   Reduction in accounts payable from settlement of Northern Offshore contingency       $      24,307      $            ?     $            ?
   Receivable from non-controlling interest                                             $         552      $            ?     $            ?
   Related party accounts payable, net, settled with related party notes payable        $          ?       $       (32,880)   $         1,274
   Non-cash gain from asset retirement obligation extinguishment                        $          ?       $            ?     $         5,833
   Change in asset retirement obligation estimate                                       $      (4,284)     $         3,766    $            ?
   Net assets contributed by parent                                                     $          ?       $            ?     $        61,205
Appendix A

                                      ERIN ENERGY CORPORATION
                              Adjusted Net Loss and Adjusted Net Loss Per Share
                                   (In thousands, except per share amounts)

                                                               Three Months Ended           For the Years Ended
                                                                  December 31                  December 31

                                                               2015          2014          2015             2014
 Net loss to Adjusted net loss reconciliation:
 Net loss attributable to Erin Energy Corporation          $(350,594)      $(27,051)   $(451,497)       $ (96,062)
 Depreciation, depletion and amortization                     54,176         (8,920)      99,110           23,756
 Impairment of oil and gas properties                        281,768               -     281,768                 -
 Adjusted net loss                                         $ (14,650)      $(35,971)   $ (70,619)       $ (72,306)

 Net loss per share attributable to Erin Energy
 Corporation - basic and diluted                           $     (1.66)    $ (0.13)    $     (2.13)     $     (0.49)
 Add: Impact of adjustments                                $      1.59     $ (0.04)    $      1.80      $      0.12
 Adjusted net loss per common share attributable to Erin
 Energy Corporation - Basic and diluted                    $     (0.07)    $ (0.17)    $     (0.33)     $     (0.37)

 Weighted-average common shares outstanding:
     Basic                                                     211,574      210,300        211,616          194,745
     Diluted                                                   211,574      210,300        211,616          194,745

16 March 2016


Sasfin Capital (a division of Sasfin Bank Limited)

Date: 16/03/2016 08:47:00 Supplied by www.sharenet.co.za                     
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