Etablissements Maurel & Prom S.A. (MAU) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to this presentation of the annual results of Maurel & Prom for fiscal year 2021. Today, we have our Chief Executive Officer, Olivier de Langavant. I'm Patrick Deygas, Chief Financial Officer; and we have Matthieu Lefrancq, Head of Investor Relations. Olivier, on to you.

Thank you, Matthieu -- Patrick -- Matthieu rather, yes. Good morning, everyone. I'm pleased that we can -- all 3 of us comment fiscal year 2021 results, which were published online this morning. We'll look at the presentation, and then, of course, happy to take a Q&A session, which we hope will be extensive -- like comprehensive Q&A session. So a good financial performance for 2021, progressing strongly, thanks in part to the maintenance of budget discipline as well as for an average sale price of oil, which is very significant in 2021 relative to 2020, $72.5 per bbl compared to $40 in 2020, as we also have a sales totaling $500 million, up by 52%. Strict operational and financial discipline in place with operational expansion and G&A maintained at 2020 levels, which had already been very significantly reduced after the 2019 crisis. We had launched an implementation plan and a net income at $121 million at its highest level since 2011. 2011 was a period when the oil price was 50% higher than it was in 2021. A strong cash flow generation along with substantial deleveraging. Flow was of $280 million and free cash flow, which stood at $108 million after payment of $100 million, relative to Gabonese Republic agreement. And net debt totaling $343 million at year-end 2021, down by $121 million (sic) [ $112 million ] in 2020, a significant deleveraging. Resumption of the dividend to return value created to shareholders. The Board of Directors met yesterday and proposed a payment of a dividend of EUR 0.07 per share, equivalent to $15 million in total. This is the maximum allowed under the current provisions of our term loan. Now subject to the removal of this restriction in case of completion of the refinancing of the term loan, which should happen rather soon, the shareholders' remuneration will be increased to $30 million for calendar year 2022, $0.14 per share rather in total active management of asset portfolio with a view to growth. We will prepare a 3D seismic data acquisition campaign on the one hand for the Ezanga permit by the end of this year. And there are also reinvestments carried on in drilling last year. Our enhanced presence in Colombia via the purchase of Frontera's energy stake in M&P Colombia and the award of VSM-4 licence. As regards to Sawn Lake in Canada, our stake there, this is a project or a development that does not meet our group's economic criteria, and it also does not meet our environmental criteria. So our production is close to that of 2020, 25,000 boepd. OpEx and GA expenses of $168 million, so almost a difference of $3 million from 2021 at the highest of our position. Operating cash flow of $280 million, plus $172 million from 2020 or an increase of 160%. Free cash flow of $108 million, in other words, almost double relative to 2020. And a net debt brought back to $343 million, a quarter or less than what we had a year earlier, which was $112 million. I'd like to now expand on these points. Let's look first at a subject which is very important for me and the group, which is our EHS (sic) [ EHS-S ] performance. So security and safety rather is the utmost important. We had a rather positive early start to 2021, contrasted year, but very good improvement of the key performance indicators related to lost time injury with no reportable injury and a slight decrease in our recordable injury rates, TRIR injuries, with no lost time. So these indicators keep improving. We are -- we will have even fewer such cases of injuries by the end of the month. Cumulated days without significant environmental incident, 848 days. And we have almost reached 669 cumulated days without lost time injury, LTI, which is a very positive performance. And then therefore, these are very significantly positive results. ISO -- so M&P certifications, ISO 45001, health and safety, is maintained as well as ISO 14001, environmental management. And we are ranked -- we obtained a rank of B for environmental commitment in 2021 and average sector rank C. Let's look at production activities in 2021. Ezanga site in 2021 sat at 19,000 barrel of -- bopd, rather, 15,200 bopd net to M&P's 80% working interest as a consequence of OPEC's quotas established in 2020. And the resumption of development operations in 2021 led to a significant rise in the production potential. And finally, during the last quarter, we sat at almost 21,000. Since the beginning of the year, we encountered a number of challenges with respect to equipment and well failures, production reduced in the last few months, 18,000 bopd per day, and we are trying now to bring back production of barrel of oil per day to a more significant volume, above 20,000 barrel of oil per day. Now Mnazi Bay, a more significant production has been seen on average of 4 -- rather an increase of 24%, which is a record. Sustained demand from the industrial sector is expected to continue. And the gas demand sharply is -- sharply back up as well, back to 2018 level of 80 mmcfd. We will also have a compression installation begun. It will be set up in 2022, which should allow a reduction of production pressure and support the production plateau with a total CapEx estimated $20 million over 3 years. Now for Blocks 3/05 and 3/05A, they were carried out between mid-October, right up till the end of November, the maintenance operations, and we've seen an improvement in the -- production was affected rather in the second half of the year by maintenance operations between mid-October and -- end of October, mid-November, but we have ongoing JV discussions ahead of the license expiry on blocks 3/05 and -- in 2025. There will be -- this will be done because the contractor group has requested changes in fiscal terms as well as an improved governance. Now in Venezuela, given the sanctions applied to this country for the Urdaneta West site, Maurel & Prom will not carry out any activities to -- therefore M&P's activities will be limited to strictly authorized activities, in other words, operations related to essential activities and security and integrity maintenance. Production increased slightly. It was 12,000 bopd in 2021 against -- at a less -- a little under 9,000 bopd in 2020. But again, we cannot carry on with our activities. And in -- on this site, the joint company does not allow for these activities. So we are trying to recover the oil volumes relative -- or which match the previous dividends paid out. We will follow and monitor closely the changes in the situation in Venezuela. And we hope that we can produce at least one cargo shortly in the next -- in the near term to recover these dividends. Again, this is something that will be done to pay a refund that do not give money to government coffers. With respect to the guidance versus actual performance. In Gabon, gross production was 20,000 barrel of oil per day, a little under our guidance in Tanzania. So Gabon was actually 21,000. Tanzania was 70 (sic) [ 80 ] mmcfd. And there's a 15% difference for Angola given the performance that I've mentioned. And total performance is under 3% relative to the forecast or the guidance we had set out initially. Our cash flow, we had announced $275 million in an hypothesis of $70 per barrel. We are at $72.5, so $280 million. Investment $90 million. We managed to spend a little bit less, $67 million excluding the transaction with the Gabonese Republic. Financing, we had forecasted $105 million to be spent. We spent $96 million. So performance of the group, which is quite compliant with the guidance and the forecast that we had given. I'd like now to go back in detail in the transaction background in between the Gabonese Republic and ourselves, an agreement that has been signed and announced in last November, an agreement that was depended on a number of conditions in between the group and the country. So in the framework of this transaction -- of this agreement, we have liberated $43 million, which had been placed in an escrow account and also payment of a complementary amount of $57 million to the Gabonese Republic. So $100 million that Gabonese Republic had received. In return, the agreement provided for, on the one hand, the signature of an amendment to the production sharing contract, or a PSC on the Ezanga permit, the change of the amendment of certain terms and also the extension up until 2025. The signature of new PSCs of the Kari and Nyanga-Mayombé regions, exploration for -- are now until 2029. And the establishment of a mechanism by which M&P will over time recover certain receivables, $98 million, at 30 September of 2021. So we've solved this problem of VAT. We paid $100 million, and we received a permit extension and improvement. In particular, it is worth highlighting that the changes include a reduction on the royalty rate, what we call the [ R&P ]. This has been reduced. An increase in the cost stop on the barrels that we produce. And this improves significantly our cash flow and also an increase on the contractor's share of profit oil after the cost we share in between the states and ourselves. This has been amended and improved. Also, this agreement allowed to retrieve a certain number of -- just to -- of cost or another license. So an agreement, which is quite satisfactory for the Gabonese Republic because it has allowed them to obtain satisfaction on -- especially the sum that were in the escrow account and also gives through the extension of the license and good for fiscal conditions and improvement for our results. In this context, we had last August start a 3D seismic data acquisition campaign on the bulk of the permit. This is quite a large permit. You see the yellow here. What is interesting to know -- now you see the area where we produce. We have our development area, and this represents but a small part of the permit. The rest has been not explored well for the moment. So we launched this campaign, allowing us to identify some interesting zones, and we are actually preparing a seismic 3D data acquisition campaign that we will start before the end of the year so to highlight opportunities and possible prospects in the south of the block. We will have a better idea of what we have in this block after this assessment. Recent activities in Colombia, quite a lot of things in Colombia. Essentially, we have finalized an agreement with our partner to resell the total of the interest in the permit of COR-15 and Muisca and VSM-4. In COR-5, other permits, which are ongoing. We are 100% on this permit for the moment. Since the exploration, we have two prospects that we quite like, and we are preparing to drill in -- due in July or August. In exchange of the exit of our partner, we also have received a total of $6 million because of the obligation that still were present on the block. This funded partially the drilling of these wells. And then there has been a license at the end of the year, and we had identified in the high Magdalena, a -- something -- a spot that we quite like, and we won this block with -- for 6 year against an obligation to drill an exploration well. We have a prospect that is looking quite good. We signed the license last January, and so we are starting working on this right now. Our presence in Colombia is then strengthened. In our portfolio, there are some things that are less active. In Libya, the situation hasn't changed. We continue -- Namibia, sorry, we continue to had to carry out technical studies and the drilling of an exploration well. These blocks are actually at 100% and contrary to Colombia is not an -- it is a more costly, more risky exploration. And so we are looking for partners to accompany us, to support us. There are some prospects, but we are on deep offshore. As you know, this country attracts more attention and interest of companies after the latest discoveries of Shell and Total in the south of the country. In France, the production test begun in the first half of 2021. This is still ongoing at this time. But we have always the agreement. We had to stop at the end of the month, and we are awaiting response from the French authorities on the demand submitted. This response -- this reply will be -- will come when will come. In Italy, acquisition realized in 2020. Interpretation is still ongoing. We are pending finalization of the prospectivity evaluation before we position ourselves on this permit and in -- on the country because this is the only one in the country. Canada. We concluded that the development of Sawn Lake, would not mean the group economic environment -- would not meet the group economic environmental criteria. The prices are higher than we thought there. And so we sold our 25% interest in the -- of the project to the operator, Andora, in March 2022, 2 days ago. In consideration of a payment of $0.5 million taking into account all the financial commitments, this will be the end of our activities in Canada. Something important concerning Seplat, where we have a participation of 20%, Seplat Energy. It was Seplat. Now it's Seplat Energy -- to signify their engagement into the transition. These are the informations that are supplied by Seplat, and these are public, on their website. And I'd like to insist or highlight the agreement they signed with ExxonMobil for acquisition and transformation and Seplat because it would lead to -- once the closing is done, the operation has been signed, but there we're still pending the authorization of the authorities. That would mean multiplying by 3 the production and move from 240 to 350 barrels, gas increasing as well and so something, which is quite important in consideration of $1.3 million -- $1.3 billion, of course. Less important, but still important anyway, Seplat is finalizing the exports alternative pipeline. The project is quite important, and we can surely appreciate that. Now I'll leave the floor to Patrick. That will give us the financial results, treasury, P&L and several elements. And then I will come back afterwards to talk about our perspectives.

Hello, ladies and gentlemen. Some comments about the financial performance 2021, 2020. We have a favorable environment. Average price of oil is $72.5 per barrel, a sharp increase, 81%, since 2020. Our revenue evolved in consequence. The turnover is $500 million. The spending are $68 million. These are comparable to the previous year. The cost -- the operational cost remained contained, the same, and controlled. We see an increasing on the debt linked to the fluctuation of the barrel, $95 million last year and $280 million this year. So our residual is positive and more than $158 million and integrating the cost of the debt, which is quite reasonable, although I'd like to remind you that our debt without interest has an interest of 8%. Thanks to this result, and the contribution of our Seplat branch for $23 million, we have $121 million as net income. We couldn't get to this result for the last 10 years. In terms of treasury, the generation brought forward by the general favorable context that we have $280 million compared to $91 million last year. We have had investment after the conclusion of the agreement in Gabon, $100 million, as we talked about previously, and investment of $45 million in order to resume the activities of drilling and several activities necessary to sustain the production. And then, investment in Angola. After all of this, the cash flow -- the free cash flow is superior to $108 million. Integrating to that, the reimbursement of the debt, the variation of treasury is $27 million, which brings us towards the end of the year near to the $200 million. Now cost control and the changes in the debt for 2021. So you will see here the costs -- the operational costs have dropped by 6% and -- without considering the recurrent elements and also 6% savings for the operated assets. Now for the change in debt position, 2016 to 2021, we've seen a strengthening of the capital structure. The net debt at end of 2021 was $455 million, was refunded to the tune of $112 million on that period for a total of $343 million. Keeping in mind, again, that we have a very strong cash flow position of $387 million. On these aspects, M&P has a very strong balance sheet and in a very good position to benefit in the coming months of a favorable oil price environment for crude oil. Now for the capital structure. Our debt -- gross debt at the end of the year is $539 million. We have a term loan of $450 million at end 2020 -- December 2023 with a -- for LIBOR plus 1.5% and a shareholder loan of $89 million comparable changes to be forecast. By the end of 2023 -- 2024 these are the figures we should reach. For the end of 2022, the amount of refunds that should take part will be to the tune of $175 million. And we also need to refund a certain amount of $343 million for our net debt. We are currently in discussions for the reimbursement of our debt and to try to have a longer maturity for refund of this debt. And we do hope that they will address our request for a longer debt maturity. I remain available to answer any questions you may have on the financial aspect. And then, I'd like to hand over now to Olivier.

Thank you very much, Patrick. So let's look now at objectives for 2022. Well, evidently, we will continue to strive for excellence in the EHS-S sector, so environmental health and safety and sustainability, which is a prerequisite to all our operations. We need to maintain the LTIF at zero, reduce TRIR by 30% relative to 2021 performance. And this -- there's been an improvement noted already. There's also an ongoing reduction of flaring and venting of methane. So venting is what we call the issuance of methane on the Ezanga permit. Now we need to ramp up the production on Ezanga. That's for the maintenance of operation and financial focus. We will ramp up production on Ezanga, the drilling of wells, stimulation operations at the beginning of the year. We will maintain our cost base at current level, and we will be on the lookout for optimization opportunities as we have done in 2020 when we carried out a product -- rather program for cost reduction and cost optimization in the crude price. And we want to avoid the 2020 situation by maintaining a good cost base. We also need to streamline our processes. We have rolled out an enterprise resource planning software. It is now being implemented after the fine-tuning period. And it will enable us to better monitor our costs and financial situation. Now a restart of the exploration preparations are underway for the 3D seismic campaign on the Ezanga permit this year and a drilling of 2 shallow exploration wells for the second part of the year -- this year, on the COR-15 permit, which is important in Colombia. And then a return of value to shareholders. Today, that is something we can do. And the Board of Directors will need to address this matter at the Annual General Assembly. As I said earlier EUR 0.16 per -- rather EUR 0.07 per share, which is the maximum allowed under current provisions. And as soon as we will have finalized our funding structure in the coming weeks, we will be able to be freed up of the constraints on the dividends from the previous agreement. And we will be able to double this value of dividends that should be paid out in July. We have good reason to think they will amount to EUR 0.14 per share, $500 million paid up to shareholders for 2022 with a return of the value to the shareholders. This is a good start. There will also -- this is also a promising development for our future. Operational and financial guidance for 2022. So in essence, production should be a little over 20,000 barrel of oil per day for Gabon. And our cash flow should be to the tune of $250 million with the cash flow generated by operations, $250 million at $70 per barrel. Another $40 million, reaching $290 million at $80 a barrel. And at $90 a barrel, will -- this will lead to $330 million. We'll see how the context evolves. The current geopolitical context is extremely volatile. Now development CapEx in Gabon, $75 million, $5 million in Tanzania, $15 million in Angola, totaling $95 million, with the budget -- contingent budget rather of $60 million for exploration CapEx in Gabon as mentioned. Now for financing or in the absence of refinancing, we will quickly do refinancing. We will reach 200 -- a requisite amount of $200 million, $188 million in debt repayment and $12 million for the net cost of debt. So our cash flow at the beginning of the year was $196 million, which gives us a rather comfortable position to manage all of this, including the dividend that you do not see on this slide, but the dividend is included in this figure. This is an important slide. I think we need to really establish our objectives with respect to our carbon footprint. So our goal is to reduce our emissions, 25% reduction of flaring by 2023, a reduction by half of the greenhouse gas emissions and Scopes 1 and 2. I don't have Scope 3 here. And this for the medium term, of course. And then for the long term, we need to reduce by 90% our flaring. This is necessary. Those are concrete measures we need to take and some have been already rolled out to reach those objectives. Carbon offset now. Well, that's something we can do in Gabon. This is more for the medium term. It's under review. And then carbon capture, it represents some possible opportunities and alternative investments. This is something that we do not include neither in the short term nor the medium term in our operations. But it is absolutely fundamental we look into carbon capture. Our strategy is one where we need to maintain our field of expertise and stick to what we know best. We also need to expand more efforts to reduce our carbon footprint relative to our production of oil barrel per day. So our production sits in the best part of the benchmarking exercise, but we still need to improve. We want to improve. And we'll need to give priority to development projects that met our commitments. But in essence, at the moment, we really want to remain a pure -- a responsible pure player. As a result, we will maintain our long-term objectives, which have remained the same. So first -- the first priority, relentlessly focusing on environmentally -- environmental health and safety sustainability; maximize value from existing assets, everything that creates value in a sense and brings about income for the company and shareholders. Capital discipline. We need to strengthen our balance sheet and maintain liquidity. And we need to grow our business through exploration and M&A operations, mergers and acquisitions, which need to be targeted relative to our current position. And as a result, we will create value, which is our sole objective so that we can return the value to the shareholders, which is why we have an operational flexibility with control of operatorship of main assets, Ezanga, Mnazi Bay and exploration. Operations are being rationalized as part of the adaptation plan. Our assets need to be resilient. Free cash flow breakeven has been reduced below $30 of -- per bbl given the price of crude. And this will remain so in the short and medium term. We have resilient assets. We have a net income breakeven, which was reduced below $45 per bbl in 2020, and it still sits at that figure. And then we have a financial -- good financial strength. Still on asset resilience, as I said, our net income is below $45 per bbl. So financial strength now, $196 million of cash balance as of end of 2021. $100 million immediately available via the shareholder loan if necessary and Pertamina group's support, right? So our group benefits today from a very favorable environment, oil-wise, and we have projects and ambitions. So perhaps the time has come now to look at a number of questions.

Thank you, Olivier. Maybe we'll look at a number of questions that we think...

We start with a question of Baptiste Lebacq from ODDO asking if in parallel to this -- if it could exist in the future, a Maurel & Prom Energy? And the second question on a potential partner in Namibia. Are we looking for an expertise? Or just a financial partner?

Thank you very much for these 2 questions. Now for Maurel & Prom Energy, why not. We could name ourself Maurel & Prom Energy. But I think it's more important to have clear what we want to do today. I was talking -- I was saying previously -- in the previous slide, what we want is to be in our core business, what we know how to do. And I'm not confident as a principle on diversifications, on doing something that we do not know how to do we can make errors. And we also realize that alternative energies and renewable energies. Of course, as a citizen, I want them. I want them to develop, but I'm not certain on the return on investment we could have as a group. So I'd like to be conservative on this topic. And if in the future we want to assess and evaluate some possible transition, we will do. But as of today, there is no question to try and do things too fast in this sense. This will maybe change in the future, but I'd like to insist for the moment, anyway, to stay in our core business. Hopefully, oil is a product that the planet still needs for the next century to come. At least, there are important quantities that will be on demand, and we will be able to supply them but we will do that responsibly, lowering the emissions and trying to do that as best we can. Gas is also considered as a transition energy and we are positioned on that, and we would like to develop further in the future. But for the moment, for the time being, we will stay in our core business. The second question was regarding Namibia. Are we looking for a partner in financial terms or technical terms? There are 2 elements. It is an exploration well in deep offshore. It is a really important investment, as you might imagine. The prospect that we have are quite good, but it's quite a risky business, nevertheless. So the risks are too high to be able to tackle the buyers ourselves. Of course, I think that to do -- in order to do that, to do this project, we need to be able to share the financial burden. And also -- we are also looking for a -- in the same partner for technical expertise. Two years ago, we started a team and we are able to drill this well. It is -- the question is that to have somebody else apart ourselves ready to believe on this project. So we need to find a partner believing in this project as we do and sharing the burden, not only in financial terms, but in expertise, in technical terms as well. Of course, there are several things that need to be finalized and defined for the moment. We will start data rooms to tackle this.

To complete -- before I move to other questions, are there intentions in terms of cost for certain oil businesses because of the increase in prices? Do we have an increase of associated costs?

It is a good question. I'd like to say that no, we do not see that -- this increase for the moment. The price of certain materials and certain services will be increasing probably because of the conflict. It's not a major concern for the moment. I'd like to remind you that the drilling service that we use for the moment we had our own company, Caroil, which ensures the drilling activities. So it's something of quite well balanced. I'd like to remind you that Caroil signed an increase for a third-party company in order to supply drilling services to another company, not only Maurel & Prom. So they are expanding as well.

Then we have a question for BNP Paribas to detail a little bit our plan for the drilling in Gabon in 2022 and to quantify a little bit the quantity in respect to 2021.

For Gabon, we will have the drilling station all the year in Ezanga, supplied by Caroil in between 10 and 12 wells in the year. Last year, we restarted this machine in the mid of the year. This year, we will have a complete year of drilling. So we will see -- I'm not sure if we will have a second one for the end of the year, but for the moment it's advanced.

And another question from Nicola. Could you give us some details on your M&A strategy? What kind of operation and transaction you are envisaging?

Thank you very much. It's not an easy question, but it's a good question. So the M&A, we are active. We are looking at everything that exists. We are not in a hurry, but we do not want to go into the operation who do not make sense in respect to what we want or cannot give us the results that we expect. We are not going to do things with the actual price, which are not long-term prices. I think there will be things that we will be able to do on the market. There are some operation that correspond to what we know how to do and what we do well. We are waiting for the moment to be more favorable, but we are ready to tap into any opportunities. We are working on our debt for the moment. The things are going better in terms of debt and in terms of free cash flow as well. We are starting to reimburse our debt. We didn't do it before. We advanced quite well on that. We have a debt rate, which becomes to be acceptable. And so on everything that we are following up on, maybe there will be something that will be doable. But do not wait for us to be in a hurry to announce something rapidly, something that could not correspond to what makes sense to us and what we know how to do.

Do you have project for the participation of 20%? And do you see that more of a financial investment? This was the first question.

It is a complex question. 20%, we can say that it's a financial participation that is not really strategical participation. We are happy to have this 20% supply. It's a really good company that has a good growth. That shows today, even though the closing has not been done yet with the Exxon deal, they show that they are capable to do ambitious things. And I think that through this participation -- well, in any case, we do not wish to reduce it and -- but to increase it is always a little bit complicated. We will see what the future will bring, but for the moment no project for changing our participation.

And then a question from Anish on Venezuela. Could you remind the amount of the dividends from [ internal ] to Maurel & Prom? And will Maurel & Prom be able to retrieve them? And what would be the use of these funds, the case being?

We have received questions by other shareholder on the potential of production in Venezuela in case of resuming the activities, the calendar and also the sums in order to resume the production. Many questions. Of course, these are important and quite sensitive. So the dividends that are due to us, what is actually recognized and audited and immediately due, we are talking about a little over $100 million for 2008 and 2009, of course, an important amount. This will be evolving with the audit and the account audit also for 2020, 2021. So $100 million for the moment. If we do receive these sums, we will use them as smartly as we can. But it is usable money. If we receive them, maybe we will use them as we use any other cash that we have. This will allow us to think that things are getting better in Venezuela. But to do a new project in Venezuela, we need either the restriction to be taken by or either to work on a domain, which is not under sanction, for instance, gas or other. But for the moment, that's the situation. I'd like to remind you, I don't know what the future will bring for the American sanctions. You know that there are discussions ongoing for -- at the moment to take away these sanctions or at least partially do so. We have people that say that there is no need to change the situation just because the situation hasn't changed. So there are different signals in different directions. And something important concerning our dividends. Firstly, we do not sustain primary sanction if the case being is the secondary sanction. So I'd like to remind you that behind all this, the exports of oil by paying dividends do not correspond to any return of funds to Venezuela. So it is quite complicated. But we work to try to retrieve these monies. And if things move forward swiftly, the -- we could bring production up to 25,000, 30,000 barrels per day. Resources, we are talking about 80,000 barrel per day. Resources are there. It's a great project. So we could increase in a reasonable time. So how much money do we need in order to do that? All of that can be done in the framework generate -- of the cash flow generated by the operation. So these are sites with great potential. So we should not have to use our own cash flow in order to do that.

So a question of a shareholder. It was surprised by the acquisition of ExxonMobil. Even in the variable part, our -- is asking our point of view -- our view on the situation on this topic seeing that the valorization is quite weak in respect to other assets that we have in Gabon or elsewhere. Could there be reasonable cost?

Well, I cannot comment. All I can say is I can comment relative to the public information available. And I think this is a very good, very positive acquisition, in fact, and that has been carried out in very positive environment. Now it must be said that the production remains very significant. And there are many hurdles, tax-wise, fiscal framework or tax framework is complex. But nevertheless, this is a very good acquisition, a valuable one. As regards this acquisition, well, it is a meaningful one for SEPLAT, this acquisition. Now as regards Maurel & Prom today, I would look at the amount of -- in dollars per barrel of acquisition. We'll have to look at the value created and the return on investment expected as regards the acceleration of the acquisition. Today, there are many things that we can find and tap into on the market that will be attractive acquisition cost, whether it's $5 per barrel, or I wouldn't say $5, that's $2, but we can have attractive costs.

There's another question now. In terms of the refinancing framework, what is your approach on the dividend payment on the medium term? Also, do you consider that there will be a variable part? What is your strategy in this respect?

Well, in the long term, we have yet to define a strategy. After the first dividend, which was proposed yesterday by the Board of Directors, we have not yet set out the exact remuneration policy, whether it's an expected return on the share or other. This is a first step, and we will be able to increase that amount in the future. So our policy is based on the return on investment and will probably be based on the crude price. We can expect and forecast a very good performance and solid performance in the future. So I think we will be able to set aside monies to remunerate the shareholders, and we will be able to step up the remuneration. I think this is definitely a possibility, but I'll -- I won't say more for the moment. I'll just stick to the guidelines set out by the Board.

Can you please flesh out the exploration program for the -- COR-15 exploration program? Do you have already provisional data for the drilling? And what is the period covered or forecast period?

Okay. So at the moment, we have no more -- we no longer have obligations. So we will be drilling on the prospects that we favor. And on those prospects that we prioritize, we will probably start drilling the first pipeline in July, and then we'll be able to have a better understanding of the situation on the ground. Depending on the outcome of this well, either the first well will be drilled in the -- during that period or we will do drilling later on. But for the moment, we're looking at different case scenarios. In principle, the program provides for a beginning of the drilling in July or perhaps later on.

A new question from a shareholder. This is the last question. And if you have any other questions, please send them just in writing. A shareholder asks us this. Given the rise in crude in 2021, why not -- why did you not look at the provisions for 2020 -- recovery of the provisions? Was that not -- could that not be envisaged?

Well, those are accounting flows, and the available cash flow -- the free cash flow is to take out loans and pay dividends. So the recovery of provisions is not something we usually do. If the economic situation has changed and the price of barrels changed, that's a different situation, but we don't usually do these recoveries. Most companies will not do that and neither will we. That won't create any value aside from our net result of $121 million. If we have $120 million of provision recovery, the shareholder wouldn't be better off. So the answer is no.

Thank you, Olivier. No other questions. No other questions on the platform. So we will be able to wrap up.

Well, thank you very much to each and every one of you for attending this call. Thank you for the questions as well, both the straightforward questions and those less. So I hope our presentation and answers helped shed light on certain points for you. And on our side, this is the message that we're trying to express. We can have full confidence in what we do and have full confidence in our recovered financial health, and we can also be confident in the future as well as the activities we will probably want to carry out in the coming months and coming years. So I do thank you very much for taking part in this call this morning. Thank you to each and everyone. Good day.