Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Revenue

v3.23.3
Note 6 - Revenue
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

6. REVENUE

 

Gabon

 

The Company currently sells crude oil production from Gabon under term crude oil sales and purchase agreements (“COSPAs”) or crude oil sales and marketing agreements ("COSMA or COSMAs") with pricing based upon an average of Dated Brent in the month of lifting, adjusted for location and market factors. The following table presents revenues from contracts with customers as well as revenues associated with the obligations under the Etame PSC.

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Revenues from customer contracts:

  

(in thousands)

  

Sales under the COSPA or COSMA

   $ 64,100     $ 87,661     $ 194,179     $ 289,290  

Other items reported in revenue not associated with customer contracts:

                                

Carried interest recoupment

     1,378       2,360       3,590       5,843  

Royalties

     (8,203 )     (11,924 )     (25,833 )     (37,395 )

Net revenues

   $ 57,275     $ 78,097     $ 171,936     $ 257,738  

 

With respect to the government’s share of Profit Oil, the Etame PSC provides that corporate income tax is satisfied through the payment of Profit Oil. In the consolidated statements of operations and comprehensive income, the government’s share of revenues from Profit Oil is reported in revenues with a corresponding amount reflected in the current provision for income tax expense. Prior to February 1, 2018, the government did not take any of its share of Profit Oil in-kind. These revenues have been included in revenues to customers as the Company entered the contract with the customer to sell the crude oil and was subject to the performance obligations associated with the contract. For the in-kind sales by the government beginning February 1, 2018, these sales are not considered revenues under a customer contract as the Company is not a party to the contracts with the buyers of this crude oil. However, consistent with the reporting of Profit Oil in prior periods, the amount associated with the Profit Oil under the terms of the Etame PSC is reflected as revenue with an offsetting amount reported in current income tax expense. Payments of the income tax expense are reported in the period that the government takes its Profit Oil in-kind, i.e. the period in which it lifts the crude oil. The Company has a $29.2 million foreign income tax payable as of  September 30, 2023 related to Gabon. As of December 31, 2022, the Company had a foreign taxes receivable of $2.8 million, as the Gabonese government lifted more oil-in-kind than what was owed in foreign taxes in December 2022.

 

Egypt

 

The following table presents revenues in Egypt from contracts with customers: 

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2023

    

2023

  

Revenues from customer contracts:

  

(in thousands)

  

Gross sales

   $ 88,748     $ 193,570  

Royalties

     (37,944 )     (86,176 )

Selling costs

     (497 )     (995 )

Net revenues

   $ 50,307     $ 106,399  

 

Canada

 

The following table presents revenues in Canada from contracts with customers:

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2023

    

2023

  

Revenues from customer contracts:

  

(in thousands)

  

Oil revenue

   $ 7,832     $ 22,811  

Gas revenue

     988       2,649  

NGL revenue

     2,073       6,421  

Royalties

     (2,206 )     (4,304 )

Net revenues

   $ 8,687     $ 27,577