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Erin Energy Corporation - Third Quarter 2016 Results And Operational Update On Its West And East Africa Operations

Release Date: 15/11/2016 07:05:00      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 Third Quarter 2016 Results
Provides Operational Update on its West and East Africa Operations

HOUSTON, November 14, 2016 - Erin Energy Corporation (?Erin Energy? or the ?Company?)
(NYSE MKT:ERN) (JSE:ERN) announced today financial and operational results for the quarter
ended September 30, 2016. The Company also provided an update on its upstream operations
in Africa.

Third Quarter 2016 Highlights:

Realized revenues of $28.6 million;

Achieved net average daily production of 6,100 barrels of oil per day (bbls/d);

Lifted and sold 583,000 net barrels of oil.

Segun Omidele, Chief Executive Officer commented: ?In the third quarter, our strategy remained
focused on how restructuring our balance sheet and growing our production. We had success in
lowering some of our outstanding AP balances and our effort to raise additional capital for our
next drilling campaign is progressing well with the expectation that drilling activities will
commence soon.?

Operations Summary

In Nigeria, the Company continues to make progress in preparation for the next drilling
campaign, which is planned to commence later this quarter or early 2017 depending on rig
availability. Erin Energy has secured all required permits to drill and the operational planning
process is currently being finalized.

A key part of the Company?s planned drilling campaign is the drilling of an additional
development well, the Oyo-9 well, located within the central area of the Oyo field in Oil Mining
Lease 120, offshore Nigeria. Oyo-9 is planned to be tied-back to the Oyo field production facility
via planned new subsea infrastructure. This phase of development, expected to be completed in
the second quarter of 2017, will increase field production by approximately 6,000 to 7,000
barrels of oil per day (bopd).

In July 2016, the Oyo-7 well was shut-in as a result of an emergency shut-in of the Oyo field
production facility (FPSO). The well was unable to come back online naturally due to high water
production and resulted in a temporary loss of approximately 1,400 bopd. The Company
attempted an intermittent nitrogen lift gas injection from the facility to attempt to bring the well
back on production, which was not fully implemented due to some operational constraints. Erin
Energy is now looking at another nitrogen lift attempt and other technical options that can
provide continuous lift assistance for well startup.

In Ghana, the Company is conducting geotechnical subsurface studies of existing 2-D seismic
data to further high-grade its prospect inventory on the Expanded Shallow Water Tano block.
The key activity to high-grading the exploration prospects and firming up drilling locations will be
a new 3-D marine seismic acquisition survey. The Company expects to issue a formal invitation
to tender to marine seismic vendors shortly. Actual field operations await the resolution of the
Ghana-Cote d?Ivoire maritime border dispute arbitration in mid-2017.

In The Gambia, Erin Energy completed an intensive study of existing 2-D data of its offshore A2
and A5 blocks and has continued to mature existing leads whilst awaiting the depth processing
of 3-D seismic data recently acquired. The Company expects to have the processed data by the
end of 2016.

In Kenya, the Company completed the interpretation of 2-D seismic data acquired on its
onshore blocks L1B and L16, and identified a number of potential leads to pursue. Erin Energy
continues to mature these leads and is currently designing additional targeted 2-D seismic to be
acquired in 2017 on the two onshore blocks to provide a better understanding of the identified
leads.

While examining ways to rationalize its exploration      assets in Kenya, and focus on its most
prospective of the Kenyan assets, Erin Energy has         intensified efforts to identify and farm in
partners in order to share exploration costs and risks   in the ultra-deep water offshore blocks, L-
27 and L-28. The Initial Exploration Period for the       L-27 and L-28 blocks is set to expire in
February 2017.

Financial Summary

Erin Energy reported revenue for the third-quarter was $28.6 million, compared with $23.2
million for the previous quarter and $28.7 million for the third quarter 2015. In the third-quarter,
the Company lifted and sold 583,000 net barrels of oil at an average price of $49.07 per barrel,
compared to 571,000 net barrels at an average price of $50.20 during the same period 2015.

For the third-quarter of 2016, the Company reported a net loss of $23.5 million, or $(0.11) per
basic and diluted share, compared to a net loss of $58.7 million, or $(0.28) per basic and diluted
share for the same period in 2015.

Average net daily production for the quarter was approximately 6,100 barrels of oil per day,
compared to 10,200 net barrels of oil per day for the same period 2015. The period-over-period
decline in production is due to a combination of the revised well management policy to prevent
excessive gas production, temporary loss of Oyo-7 production and natural production decline.

Erin Energy has continued its efforts to strengthen its balance sheet. These efforts have thus
far resulted in a successful restructuring of its term loan facility, modest reductions in its
accounts payable balances and extensions to the maturity dates of some of its related-party
debt. The Company will continue these efforts to make further progress on its outstanding
accounts payable balance using various methods including payment plans and equity
payments.

Conference Call and Webcast

The Company will host a conference call on Tuesday, November 15, 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 1-844-883-3907 in the United States or 1-412-317-9253
internationally. Participants should ask the call operator to be placed on the ?Erin Energy Third-
Quarter Results Conference Call.?

To access the live audio webcast, please visit the ?Investors? section of the Company?s website
at www.erinenergy.com.

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 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. More information about Erin Energy can be found at
www.erinenergy.com.

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


Contact:

Lionel McBee
Director, Investor Relations
+1 713 797 2960
lionel.mcbee@erinenergy.com

Chris du Toit,
VP, Corporate Finance
+27 11 593 7301
chris.dutoit@erinenergy.com

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

                                                             Three Months Ended September 30,     Nine Months Ended September 30,
                                                                 2016              2015               2016              2015
Revenues:
  Crude oil sales, net of royalties                      $          28,619 $          28,667 $          56,699 $          28,667
Operating costs and expenses:
  Production costs                                                  24,928            27,651            69,615            53,224
  Crude oil inventory (increase) decrease                              636               368               534            (9,493)
  Workover expenses                                                    207               354             7,792               972
  Exploratory expenses                                               1,672             5,266             4,934            13,283
  Depreciation, depletion and amortization                          18,925            43,293            38,593            43,536
  Accretion of asset retirement obligations                            472               522             1,385             1,398
  Loss on settlement of asset retirement obligations                    ?                779               205             4,233
  General and administrative expenses                                3,596             3,857            10,950            12,789
     Total operating costs and expenses                             50,436            82,090           134,008           119,942
Operating loss                                                     (21,817)          (53,423)          (77,309)          (91,275)
Other income (expense):
  Currency transaction gain                                          3,282               176            14,610             2,167
  Interest expense                                                  (5,038)           (5,650)          (16,417)          (12,485)
      Total other expense, net                                      (1,756)           (5,474)           (1,807)          (10,318)
Loss before income taxes                                           (23,573)          (58,897)           (79,116)        (101,593)
Income tax expense                                                      ?                 ?                  ?                ?
Net loss before non-controlling interest                           (23,573)          (58,897)           (79,116)        (101,593)
   Net loss attributable to non-controlling interest                     102              215                662               690
   Net loss attributable to Erin Energy Corporation      $         (23,471) $        (58,682) $        (78,454) $       (100,903)
Net loss attributable to Erin Energy Corporation per
common share:
  Basic                                                  $              (0.11) $       (0.28) $           (0.37) $          (0.48)
  Diluted                                                $              (0.11) $       (0.28) $           (0.37) $          (0.48)
Weighted average common shares outstanding:
  Basic                                                            212,524           211,517           212,220           211,036
  Diluted                                                          212,524           211,517           212,220           211,036

ERIN ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share and per share amounts)
                                                                                                                     September 30,       December 31,
                                                                                                                          2016               2015



ASSETS
Current assets:
   Cash and cash equivalents                                                                                     $             8,304 $            8,363
   Restricted cash                                                                                                             2,600              8,661
   Accounts receivable - trade                                                                                                    ?               1,029
   Accounts receivable - partners                                                                                                558                287
   Accounts receivable - related party                                                                                         1,844              1,186
   Accounts receivable - other                                                                                                    44                 28
   Crude oil inventory                                                                                                         4,932              4,789
   Prepaids and other current assets                                                                                           1,128                684
       Total current assets                                                                                                   19,410             25,027
Property, plant and equipment:
Oil and gas properties (successful efforts method of accounting), net                                                        321,976            368,891
Other property, plant and equipment, net                                                                                         892              1,174
       Total property, plant and equipment, net                                                                              322,868            370,065
Other non-current assets                                                                                                         90                     67
       Total assets                                                                                              $           342,368 $          395,159
LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
   Accounts payable and accrued liabilities                                                                      $           239,173 $          213,120
   Accounts payable and accrued liabilities - related party                                                                   27,236             30,133
   Current portion of long-term debt, net                                                                                      8,141             96,558
       Total current liabilities                                                                                             274,550            339,811
Long-term notes payable - related party, net                                                                                 128,987            120,006
Term loan facility, net                                                                                                       78,075                 ?
Asset retirement obligations                                                                                                  21,994             20,609
       Total liabilities                                                                                                     503,606            480,426
Commitments and contingencies (Note 10)
Capital deficiency:
    Preferred stock $0.001 par value - 50,000,000 shares authorized; none issued and outstanding as of
September 30, 2016 and December 31, 2015, respectively                                                                           ?                      ?
    Common stock $0.001 par value - 416,666,667 shares authorized; 212,686,734 and 211,615,773 shares
issued as of September 30, 2016 and December 31, 2015, respectively                                                             213                 212
    Additional paid-in capital                                                                                               792,319            789,615
    Accumulated deficit                                                                                                     (954,345)          (875,891)
    Treasury stock at cost, 90,347 and -0- shares as of September 30, 2016 and December 31, 2015, respectively                  (206)                ?
      Total deficit - Erin Energy Corporation                                                                               (162,019)           (86,064)
   Non-controlling interest                                                                                                      781                797
      Total capital deficiency                                                                                              (161,238)           (85,267)
      Total liabilities and capital deficiency                                                                   $           342,368 $          395,159



ERIN ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
                                                                                               Nine Months Ended September 30,
                                                                                                   2016              2015
Cash flows from operating activities
Net loss, including non-controlling interest                                               $         (79,116) $      (101,593)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
  Depreciation, depletion and amortization                                                           38,593            43,536
  Accretion of asset retirement obligations                                                           1,385             1,398
  Amortization of debt discount and debt issuance costs                                               2,640             1,920
  Loss on settlement of asset retirement obligations                                                     ?              4,233
  Foreign currency transaction gain                                                                 (14,610)           (2,167)
  Share-based compensation                                                                            2,288             4,398
  Payments to settle asset retirement obligations                                                        ?            (17,220)
  Change in operating assets and liabilities:
     Decrease in accounts receivable                                                                    730               390
     Decrease (increase) in crude oil inventory                                                         534            (9,493)
     Decrease (increase) in prepaids and other current assets                                          (467)              324
     Increase in accounts payable and accrued liabilities                                            54,700            58,126
        Net cash provided by (used in) operating activities                                           6,677           (16,148)
Cash flows from investing activities
Capital expenditures                                                                                (16,475)          (83,156)
         Net cash used in investing activities                                                      (16,475)          (83,156)
Cash flows from financing activities
Proceeds from exercise of stock options and warrants                                                     364            1,855
Payments for treasury stock arising from withholding taxes upon restricted stock vesting                (206)              ?
Repayments of term loan facility                                                                      (6,492)              ?
Proceeds from short-term notes payable                                                                   504               ?
Proceeds from notes payable - related party, net                                                       6,829           63,815
Repayment of short-term notes payable                                                                   (449)              ?
Proceeds from short-term borrowings, net                                                                  ?            11,303
Debt issuance costs                                                                                   (1,040)              ?
Funds released from restricted cash, net                                                               6,061               ?
Funding from non-controlling interest                                                                     ?               553
         Net cash provided by financing activities                                                     5,571           77,526
Effect of exchange rate changes on cash and cash equivalents                                           4,168                836
Net decrease in cash and cash equivalents                                                                (59)         (20,942)
Cash and cash equivalents at beginning of period                                                       8,363           25,143
Cash and cash equivalents at end of period                                                 $           8,304 $          4,201
Supplemental disclosure of cash flow information
Cash paid for:
 Interest, net                                                                             $         10,090 $            7,886
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                                $              53 $           4,911
 Reduction in oil and gas properties arising from settlement of accounts payable and
 accrued liabilities                                                                       $           9,540 $               ?
 Reduction in accounts payable from settlement of Northern Offshore contingency            $              ? $          24,307

Houston
15 November 2016

Sponsor: Sasfin Capital ( a division of Sasfin Bank Limited)

Date: 15/11/2016 07:05:00 Supplied by www.sharenet.co.za                     
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