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Erin Energy Corporation - Erin First Quarter 2017 Results Update On Its West And East Africa Operations And Conference Call And Webcast Info

Release Date: 11/05/2017 07:06:00      Code(s): ERN     
 Update on its West and East Africa Operations and Conference Call and Webcast Info

Erin Energy Corporation
(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 First Quarter 2017 Results

Provides Operational Update on its West and East Africa Operations

HOUSTON, May 10, 2017 ? Erin Energy Corporation (Erin Energy or the Company) (NYSE MKT:ERN)
(JSE:ERN) announced today financial and operational results for the quarter ended March 31, 2017.
First Quarter Highlights:
Crude sales volumes of more than 597,000 net barrels of oil, a 271% increase over 1Q 2016;
$31.3 million in revenue;
Average daily production of 5,500 net barrels of oil.
?During the first quarter, we produced approximately 597,000 net barrels of oil and generated revenues of
approximately $31.3 million,? said Jean-Michel Malek, Interim Chief Executive Officer.
?We closed on the capital necessary for this year?s drilling and farmed-out a portion of our assets in The
Gambia. As we look ahead, we are excited to kick off our drilling campaign, increase Oyo production, and
look to turn to the exploration of the Miocene in Nigeria.?

Operational Update

Production volumes for the quarter were approximately 5,500 net barrels of oil compared to
approximately 1,800 net barrels in the comparative period 2016. The Company?s crude oil inventory was
approximately $3.9 million at March 31, 2017.

Erin Energy recently announced it has entered into a drilling services contract with Pacific Drilling and
secured a sixth generation drillship, the Pacific Bora. The Company will drill the Oyo-9 well (Oyo-9) first.
The Oyo-9 is a development well, which will be drilled on the Oyo field and will be tied in to the field?s
current production facility. The well is expected to add an additional 6,000 to 7,000 barrels of oil per day
from the field.

The Company has the option to drill up to two additional wells with the Pacific Bora. Subject to capital
availability, the Company will use the Pacific Bora to drill one to two of its Miocene exploration prospects.
Erin Energy has four drill-ready prospects, which target P50 Prospective Resources of 2.4 billion barrels
of oil.

In The Gambia, the Company announced in March 2017, it entered into a definitive farm-out agreement
with FAR Ltd. (FAR), an Australian Securities Exchange listed oil and gas company. As part of the farm-
out agreement, FAR will acquire an 80% interest and operatorship of Erin Energy?s offshore A2 and A5
blocks, with the Company retaining a 20% working interest in both blocks. Under the terms of the farm-
out agreement, which is subject to approval by the Government of the Republic of The Gambia, upon
receipt of this approval, FAR will pay the Company a purchase price of $5.2 million and will carry $8.0
million of the Company?s share of costs in a planned exploration well to be drilled in late 2018. In addition,
if the Company?s share of the exploration well is less than $8.0 million, the balance is to be paid in cash to
the Company.
In Kenya, the Company continues to evaluate the prospectivity of identified leads on its onshore blocks
and is currently designing an additional, targeted 2-D seismic acquisition on the blocks. Erin Energy has
stated that the most prospective of its Kenya assets are its onshore blocks and has focused the majority
of its work on these blocks. The Company also announced it would not seek an additional extension of its
offshore L-27 and L-28 blocks due to the high costs and risks associated with frontier exploration in the
current price and market environments. Erin Energy stated that relinquishment of the two blocks was in
the Company?s long-term best interest.

In Ghana, Erin Energy continues to conduct geotechnical subsurface studies of existing 3-D seismic data
to further high-grade its prospect inventory on the Expanded Shallow Water Tano block. The Company is
also planning a new 3-D marine seismic acquisition survey. The Company expects to issue a formal
invitation to tender to marine seismic vendors in the second half of 2017. Actual field operations will take
place after the resolution of the Ghana-Cote d?Ivoire maritime border dispute arbitration later this year.

Financial Summary

First-quarter 2017 revenues were $31.3 million, up from $4.9 million in 2016.

For the first quarter 2017, net daily production was approximately 5,500 bopd, compared with 1,800 bopd
for the comparative period in 2016. The Company lifted and sold approximately 597,000 net barrels of oil
at an average price of $52.41 per barrel, compared to approximately 161,000 net barrels of oil at an
average price of $30.54 per barrel.

In the first quarter 2017, the Company reported a net loss of $26.5 million, or a loss of $0.12 per basic
and diluted share, compared to a net loss of $32.4 million, or a loss of $0.15 per basic and diluted share
for the comparative period 2016.

As of March 31, 2017, cash, cash equivalents and restricted cash were approximately $28.5 million.

Conference Call and Webcast Information

The Company will host a conference call on Thursday, May 11, 2017 at 10:00 a.m. CT (11:00 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 Results
Conference Call.

For those unable to participate in the Company?s conference call, a replay will be available for audio
playback until March 23, 2017. 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 10102749.



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 19,000 square kilometres (~5 million acres), including current production and other
exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana 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
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, +1 713 797 2960
Director, Investor Relations and Corporate Communications
lionel.mcbee@erinenergy.com




ERIN ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)
                                                                         Three Months Ended March
                                                                            2017    31,   2016
Revenues:
Crude oil sales, net of royalties                                    $        31,278     $     4,929
Operating costs and expenses:
Production costs                                                             22,555          22,564
Crude oil inventory (increase) decrease                                       2,948            (831 )
Exploratory expenses                                                          1,596           2,062
Depreciation, depletion and amortization                                     25,411           4,812
Accretion of asset retirement obligations                                       468             452
Loss on settlement of asset retirement obligations                               ?              205
General and administrative expenses                                           3,392           3,958
Total operating costs and expenses                                           56,370          33,222
Operating loss                                                               (25,092 )       (28,293 )
Other income (expense):
Currency transaction gain                                                      2,135             863
Interest expense                                                              (3,966 )        (5,425 )
Total other expense, net                                                      (1,831 )        (4,562 )
Loss before income taxes                                                     (26,923 )       (32,855 )
Income tax expense                                                                ?               ?
Net loss before non-controlling interest                                     (26,923 )       (32,855 )
Net loss attributable to non-controlling interest                               417             444
Net loss attributable to Erin Energy Corporation                     $       (26,506) $      (32,411)
Net loss attributable to Erin Energy Corporation per common share:
Basic                                                                $          (0.12) $        (0.15)
Diluted                                                              $          (0.12) $        (0.15)
Weighted average common shares outstanding:
Basic                                                                       212,841          211,844
Diluted                                                                     212,841          211,844


ERIN ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)
(In thousands, except for share and per share amounts)
                                                                             March 31,      December 31,
                                                                               2017             2016
 ASSETS
 Current assets:
 Cash and cash equivalents                                               $         8,538    $        7,177
 Restricted cash                                                                 20,006             2,600
 Accounts receivable - trade                                                      5,153                 ?
 Accounts receivable - partners                                                   1,103               674
 Accounts receivable - related party                                              2,354             1,956
 Accounts receivable - other                                                          9                29
 Crude oil inventory                                                              3,900             9,398
 Prepaids and other current assets                                                2,498               872
 Total current assets                                                            43,561            22,706
 Property, plant and equipment:
 Oil and gas properties (successful efforts method of accounting), net          243,064           265,713
 Other property, plant and equipment, net                                           711               716
 Total property, plant and equipment, net                                       243,775           266,429
 Other non-current assets                                                            66                 66
 Total assets                                                            $      287,402     $      289,201
 LIABILITIES AND CAPITAL DEFICIENCY
 Current liabilities:
 Accounts payable and accrued liabilities                                $       247,224    $      244,963
 Accounts payable and accrued liabilities - related party                        31,019            29,513
 Current portion of long-term debt, net                                          41,994            12,627
 Derivative liability                                                               807                 ?
 Total current liabilities                                                      321,044           287,103
 Long-term notes payable - related party, net                                   129,804           129,796
 Long-term debt, net                                                             64,444            74,446
 Asset retirement obligations                                                    22,944            22,476
 Total liabilities                                                              538,236           513,821
 Commitments and contingencies
 Capital deficiency:
 Preferred stock $0.001 par value - 50,000,000 shares authorized;                    ?                  ?
 none issued and outstanding as of March 31, 2017 and December
 Common stock $0.001 par value - 416,666,667 shares authorized;
 31, 2016, respectively                                                            213                213
 213,351,764 and 212,622,218 shares issued as of March 31, 2017
 Additional paid-in capital respectively
 and December 31, 2016,                                                         793,933            792,972
 Accumulated deficit                                                         (1,044,798 )       (1,018,292 )
 Treasury stock at cost, 270,846 and 99,932 shares as of March 31,
                                                                                   (877 )            (228 )
 2017 and December 31, 2016, respectively
 Total deficit - Erin Energy Corporation                                       (251,529 )        (225,335 )
 Non-controlling interest                                                           695               715
 Total capital deficiency                                                      (250,834 )        (224,620 )
 Total liabilities and capital deficiency                                $       287,402 $         289,201



ERIN ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(In thousands)
                                                                            Three Months Ended March
                                                                               2017    31,  2016
Cash flows from operating activities
Net loss, including non-controlling interest                                $   (26,923) $      (32,855)
Adjustments to reconcile net loss to cash provided by (used in) operating
activities:
Depreciation, depletion and amortization                                        25,411           4,812
Accretion of asset retirement obligations                                          468             452
Amortization of debt discount and debt issuance costs                              242             878
Foreign currency transaction gain                                               (2,135 )          (863 )
Share-based compensation                                                           961             888
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable                                       (5,563 )           782
Decrease (increase) in crude oil inventory                                        2,948            (831 )
Increase in prepaids and other current assets                                    (1,626 )        (4,539 )
Increase in accounts payable and accrued liabilities                              6,889          21,123
Net cash provided by (used in) operating activities                                672          (10,153 )
Cash flows from investing activities
Capital expenditures                                                             (3,092 )        (3,554 )
Net cash used in investing activities                                            (3,092 )        (3,554 )
Cash flows from financing activities
Proceeds from exercise of stock options and warrants                                 ?             145
Payments for treasury stock arising from withholding taxes upon
restricted stock vesting and exercise of stock options                             (649 )          (189 )
Proceeds from MCB Finance Facility                                               28,237              ?
Repayments of term loan facility                                                     ?           (5,981 )
Proceeds from notes payable - related party, net                                     ?            3,000
Debt issuance costs                                                              (8,197 )            ?
Funds restricted in relation to the MCB Finance Facility drawdowns               (7,406 )            ?
Funds restricted for debt service                                               (10,000 )         8,121
Net cash provided by financing activities                                        1,985           5,096
Effect of exchange rate changes on cash and cash equivalents                     1,796             946
Net increase (decrease) in cash and cash equivalents                             1,361           (7,665 )
Cash and cash equivalents at beginning of period                                 7,177            8,363
Cash and cash equivalents at end of period                                  $     8,538     $       698
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net                                                               $     4,487     $     5,280
Supplemental disclosure of non-cash investing and financing
activities: notes payable pursuant to derivative liability
Discount on                                                                 $       807     $         ?

Headline Earnings

In addition to the Company?s primary listing on the NYSE MKT, the Company?s common stock is also
traded on the JSE. The JSE requires the Company to file certain documents that it files with the SEC. The
JSE also requires that we calculate Headline Earnings Per Share (HEPS) which, per the SEC, is
considered a non-GAAP measurement.

As defined in the Circular 3/2009 of The South African Institute of Chartered Accountants, headline
earnings is an additional earnings number that excludes certain separately identifiable re-measurements,
net of related tax, and related non-controlling interest.
The number of shares used to calculate basic and diluted HEPS is the same as basic and diluted
EPS. During the three months ended March 31, 2017 and 2016, there were no separate identifiable re-
measurements required and headline earnings was the same as net loss per share as disclosed on the
unaudited consolidated statements of operations. Therefore, HEPS for the three months ended March 31,
2017 and 2016, was a loss of $(0.12) and $(0.15), respectively.


Houston
11 May 2017
Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)

Date: 11/05/2017 07:06:00 Supplied by www.sharenet.co.za                     
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