1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2015
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to
_______________
Commission File Number: 333-107002
MNP PETROLEUM
CORPORATION
(Exact name of registrant as specified in its
charter)
Nevada |
91-1918324 |
(State or other jurisdiction of incorporation or
organization) |
(I.R.S. Employer Identification No.) |
Bahnhofstrasse 9, 6341 Baar, Switzerland
(Address of principal executive offices) (Zip Code)
41 (44) 718 10 30
(Registrants
telephone number, including area code)
N/A
(Former name, former address and
former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes
[ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] |
|
Accelerated
filer
[ ] |
Non-accelerated filer [ ] |
(Do not check if a smaller
reporting company) |
Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
[ ]
Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
166,112,792 shares of common stock as of August 20, 2015.
2
TABLE OF CONTENTS
3
PART I. FINANCIAL INFORMATION
Item 1. Financial
Statements.
MNP PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited) |
|
|
|
|
|
|
06.30.2015 |
|
|
12.31.2014 |
|
|
|
USD |
|
|
USD |
|
ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents |
|
69,816 |
|
|
1,369,778 |
|
Restricted cash |
|
100,416 |
|
|
208,621 |
|
Accounts
receivable |
|
45,406 |
|
|
14,359 |
|
Investment in associate (Petromanas) |
|
- |
|
|
206,382 |
|
Prepaid expenses
and other current assets |
|
81,472 |
|
|
184,506 |
|
Total current assets |
|
297,110 |
|
|
1,983,646 |
|
|
|
|
|
|
|
|
Tangible fixed assets |
|
67,857 |
|
|
83,254 |
|
Investment |
|
12,000,000 |
|
|
- |
|
Oil and gas properties (unproved) |
|
1,008,638 |
|
|
687,645 |
|
Receivable due
from related party |
|
44,832 |
|
|
- |
|
Other non-current assets |
|
530,778 |
|
|
586,697 |
|
Transaction
prepayment |
|
- |
|
|
12,000,000 |
|
Total non-current assets |
|
13,652,105 |
|
|
13,357,596 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
13,949,215 |
|
|
15,341,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Accounts payable |
|
1,775,577 |
|
|
1,165,472 |
|
Other accrued
expenses |
|
176,300 |
|
|
146,825 |
|
Total current liabilities |
|
1,951,877 |
|
|
1,312,297 |
|
|
|
|
|
|
|
|
Pension liabilities |
|
340,349 |
|
|
340,349 |
|
Total
non-current liabilities |
|
340,349 |
|
|
340,349 |
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
2,292,226 |
|
|
1,652,646 |
|
|
|
|
|
|
|
|
Common Stock
(600,000,000 shares authorized as of June 30, 2015 and December 31, 2014,
USD
0.001 par value, 172,592,292 shares issued, 166,112,792 shares
outstanding) |
|
172,592 |
|
|
172,592 |
|
Additional paid-in capital |
|
78,657,941 |
|
|
78,622,945 |
|
Treasury stock
(6,479,500 shares) |
|
(551,018 |
) |
|
(551,018 |
) |
Accumulated deficit |
|
(66,673,527 |
) |
|
(64,606,924 |
) |
Currency
translation adjustment |
|
51,001 |
|
|
51,001 |
|
TOTAL SHAREHOLDERS' EQUITY |
|
11,656,989 |
|
|
13,688,596 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
13,949,215 |
|
|
15,341,242 |
|
4
MNP PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS -
UNAUDITED
|
|
For the three months ended |
|
|
For the six months ended |
|
|
|
06.30.2015 |
|
|
06.30.2014 |
|
|
06.30.2015 |
|
|
06.30.2014 |
|
|
|
USD |
|
|
USD |
|
|
USD |
|
|
USD |
|
OPERATING REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Total revenues |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs |
|
(417,076 |
) |
|
(377,362 |
) |
|
(847,931 |
) |
|
(777,022 |
) |
Exploration costs |
|
(90,323 |
) |
|
(369,636 |
) |
|
(229,323 |
) |
|
(662,064 |
) |
Depreciation |
|
(9,490 |
) |
|
(12,120 |
) |
|
(18,976 |
) |
|
(24,270 |
) |
Consulting fees |
|
(211,802 |
) |
|
(438,071 |
) |
|
(450,669 |
) |
|
(769,467 |
) |
Administrative
costs |
|
(260,593 |
) |
|
(422,742 |
) |
|
(555,165 |
) |
|
(733,303 |
) |
Total operating expenses |
|
(989,284 |
) |
|
(1,619,931 |
) |
|
(2,102,064 |
) |
|
(2,966,126 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING INCOME / (EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
differences |
|
48 |
|
|
(18,779 |
) |
|
54,088 |
|
|
(45,258 |
) |
Change in fair value of investment in associate |
|
- |
|
|
1,066,625 |
|
|
(18,572 |
) |
|
2,686,428 |
|
Interest income |
|
17 |
|
|
- |
|
|
53 |
|
|
- |
|
Interest expense |
|
(99 |
) |
|
(85 |
) |
|
(108 |
) |
|
(153 |
) |
Total
non-operating income/(loss) |
|
(34 |
) |
|
1,047,761 |
|
|
35,461 |
|
|
2,641,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
taxes |
|
(989,318 |
) |
|
(572,170 |
) |
|
(2,066,603 |
) |
|
(325,109 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
- |
|
|
(2,350 |
) |
|
- |
|
|
(5,089 |
) |
Net loss |
|
(989,318 |
) |
|
(574,520 |
) |
|
(2,066,603 |
) |
|
(330,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net comprehensive loss |
|
(989,318 |
) |
|
(574,520 |
) |
|
(2,066,603 |
) |
|
(330,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of outstanding shares (basic) |
|
166,112,792 |
|
|
172,592,292 |
|
|
166,112,792 |
|
|
172,592,292 |
|
Weighted average
number of outstanding shares (diluted) |
|
166,112,792 |
|
|
172,592,292 |
|
|
166,112,792 |
|
|
172,592,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share |
|
(0.01 |
) |
|
(0.00 |
) |
|
(0.01 |
) |
|
(0.00 |
) |
Diluted loss per share |
|
(0.01 |
) |
|
(0.00 |
) |
|
(0.01 |
) |
|
(0.00 |
) |
5
MNP PETROLEUM CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS - UNAUDITED
|
|
For the six months ended |
|
|
|
06.30.2015 |
|
|
06.30.2014 |
|
|
|
USD |
|
|
USD |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
Net loss |
|
(2,066,603 |
) |
|
(330,198 |
) |
|
|
|
|
|
|
|
To reconcile
net loss to net cash used in operating activities |
|
|
|
|
|
|
Change in fair value of investment in associate |
|
18,572 |
|
|
(2,686,428 |
) |
Depreciation |
|
18,976 |
|
|
24,270 |
|
Exchange differences |
|
(54,088 |
) |
|
45,258 |
|
Stock-based
compensation |
|
34,996 |
|
|
42,294 |
|
Decrease / (increase) in receivables and prepaid expenses |
|
71,987 |
|
|
(258,607 |
) |
Increase in
accounts payable |
|
351,999 |
|
|
244,921 |
|
(Decrease) / increase in accrued expenses |
|
29,475 |
|
|
(207,135 |
) |
Cash flow used
in operating activities |
|
(1,594,686 |
) |
|
(3,125,625 |
) |
|
|
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
Capitalized oil and gas properties |
|
(5,440 |
) |
|
(281,506 |
) |
Capitalized other
non-current assets |
|
(1,528 |
) |
|
- |
|
Purchase of tangible fixed assets and software |
|
(3,579 |
) |
|
(10,690 |
) |
Proceeds from sale
of investment |
|
184,094 |
|
|
7,570,842 |
|
Receivable due from related party |
|
(44,832 |
) |
|
- |
|
Decrease /
(increase) restricted cash |
|
108,205 |
|
|
(56,639 |
) |
Cash flow from investing activities |
|
236,920 |
|
|
7,222,007 |
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
Repurchase of
shares |
|
- |
|
|
(102,242 |
) |
Increase in refundable deposits |
|
- |
|
|
1,648 |
|
Cash flow from
financing activities |
|
- |
|
|
(100,594 |
) |
|
|
|
|
|
|
|
Net change in
cash and cash equivalents |
|
(1,357,766 |
) |
|
3,995,788 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period |
|
1,369,778 |
|
|
3,063,947 |
|
Currency translation effect on cash and cash equivalents |
|
57,804 |
|
|
(12,574 |
) |
Cash and cash
equivalents at the end of the period |
|
69,816 |
|
|
7,047,161 |
|
|
|
|
|
|
|
|
Supplement
schedule of non-cash investing and financing activities: |
|
|
|
|
|
|
Offset of impairment of oil and gas properties and
renegotiation of accrued expenses |
|
- |
|
|
312,000 |
|
Transfer from
transaction prepayment to restricted cash due to acquisition of TF
Petroleum AG |
|
- |
|
|
111,656 |
|
Completion of EPA acquisition, reclass of transaction
prepayment to investment |
|
12,000,000 |
|
|
- |
|
Reclass of
non-current assets to oil and gas properties due to delivery |
|
315,553 |
|
|
- |
|
Additions in non-current assets not yet paid (accounts
payable) |
|
258,106 |
|
|
- |
|
6
MNP PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY -
UNAUDITED
SHAREHOLDERS' EQUITY |
Number of shares
issued |
Share capital |
Additional
paid-in capital |
Treasury stock
|
Deficit
accumulated |
Accumulated other
comprehensive income |
Total share- holders'
equity |
|
|
|
|
|
|
|
|
Balance January 1, 2015 |
172,592,292 |
172,592 |
78,622,945 |
(551,018) |
(64,606,924) |
51,001 |
13,688,596 |
Stock-based compensation |
- |
- |
34,996 |
- |
- |
- |
34,996 |
Net loss for the year |
- |
- |
- |
- |
(2,066,603) |
- |
(2,066,603) |
Balance June 30, 2015 |
172,592,292 |
172,592 |
78,657,941 |
(551,018) |
(66,673,527) |
51,001 |
11,656,989 |
7
1. BASIS OF PRESENTATION
The financial statements presented in this Form 10-Q comprise
MNP Petroleum Corporation (MNP or the Company) and its subsidiaries
(collectively, the Group). The unaudited interim Consolidated Financial
Statements included in this Form 10-Q have been prepared in accordance with
accounting principles generally accepted in the United States of America (US
GAAP) and present our financial position, results of operations, cash flows and
changes in stockholders equity. These financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto,
included in the Companys Annual Report on Form 10-K for the year ended December
31, 2014.
The Company is in the business of exploring for oil and gas,
primarily in Central and East Asia. If the Company discovers sufficient reserves
of oil or gas, it intends to exploit them. The Company has not commenced planned
principal operations and therefore has not realized any revenues to date. The
Company carries out its operations both directly and through participation in
ventures with other oil and gas companies. It is actively involved in
exploration projects in Tajikistan and Mongolia. In addition, the Company
recently purchased a stake in producing oilfields in Tajikistan. As the Company
currently depends upon funding from various sources to continue operations and
to implement its growth strategy, the Companys activities are subject to
significant risks and uncertainties, including failing to secure additional
funding to operationalize the Companys licenses.
The Company, formerly known as Express Systems Corporation, was
incorporated in the State of Nevada on July 9, 1998.
On April 10, 2007, the Company completed the Exchange
Transaction whereby it acquired its then sole subsidiary DWM Petroleum AG, Baar
(DWM Petroleum) pursuant to an exchange agreement signed in November 2006
whereby 100% of the shares of DWM Petroleum were exchanged for 80,000,000 common
shares of the Company. As part of the closing of this exchange transaction, the
Company issued 800,000 shares as finders fees at the closing price of USD 3.20.
The acquisition of DWM Petroleum was accounted for as a merger
of a private operating company into a non-operating public shell. Consequently,
the Company is the continuing legal registrant for regulatory purposes and DWM
Petroleum is treated as the continuing accounting acquirer for accounting and
reporting purposes. The assets and liabilities of DWM Petroleum remained at
historic cost. Under accounting principles generally accepted in the United
States of America, in transactions involving the merger of a private operating
company into a non-operating public shell, the transaction is equivalent to the
issuance of stock by DWM Petroleum for the net monetary assets of the Company,
accompanied by a recapitalization. The accounting is identical to a reverse
acquisition, except that no goodwill or other intangibles are recorded.
The Company has a focused strategy on exploration and
developing oil and gas resources in Central Asia and East Asia (Tajikistan and
Mongolia).
2. GOING CONCERN
The condensed consolidated financial statements have been
prepared on the assumption that the Group will continue as a going concern. The
Group has no operating income and therefore will remain dependent upon continued
funding from its shareholders or other sources. The Companys cash balance as of
June 30, 2015 was USD 170,232, of which USD 100,416 has been restricted leaving
a balance of USD 69,816.
These matters raise substantial doubt about the Groups ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Based on the Groups expected monthly burn rate of USD 349,616
on basic operational activities, management estimates that the Company has
sufficient working capital to fund operations for one month.
In order to continue to fund operations for the next twelve
months and implement the work program for the Groups projects in Central Asia
as well as to finance continuing operations, the Group will require further
funds.
8
The Company is currently negotiating additional equity and debt
facilities though there can be no assurance that these negotiations will
complete and result in a financing. The Companys current efforts include
continuing discussions with Stichting VB Vagobel, which is in material breach of
its obligations to complete a transaction initially disclosed on September 9,
2014. The Company has given to Stichting VB Vagobel formal notice that it is in
material breach of contract and Vagobel has failed to cure the breach. As
Stichting VB Vagobel is physically located in the Netherlands, the Company has
retained Dutch counsel and is evaluating next steps.
The Company is also negotiating a potential transaction with a
US-Dubai consortium. This transaction was originally announced in a press
release dated April 1, 2015, and discussions are ongoing.
On July 15, 2015 MNP Petroleum Corp., through its subsidiary TF Petroleum AG (“TFP”), and C.E.G. International Ltd. (“CEG”), part of a Dubai based renowned Group of Companies, signed a Debt Finance Agreement. Pursuant to the Agreement CEG will procure a credit facility issued by a prime western bank to secure a loan for the Company which is confirmed to be issued by an Austrian based bank. The facility is valid for 12 months with a face value of EUR 10 million (approximately USD 11 million). Also pursuant to the Finance Agreement MNP has agreed to pledge part of its assets as collateral. Both MNP and CEG are in the final stages of completing the process with the banks. However, the proceeds from this bridge provide only temporary relief while the Company pursues a larger facility.
If the Company is not able to raise the required funds, it may
consider other alternatives, including a possible farm-out of one or more of its
projects in order to reduce short term financial commitments. If the Company is
unable to obtain the funding that it needs or arrive at an acceptable
alternative solution, the Company will not be able to continue its business. In
addition, any equity financing may be dilutive to shareholders, and debt
financing, if available, will increase expenses and may involve restrictive
covenants. The Company will be required to raise additional capital on terms
which are uncertain, especially under the current capital market conditions. If
the Company is unable to obtain capital or is required to raise it on
undesirable terms, it may have a material adverse effect on the Companys
financial condition.
3. ACCOUNTING
POLICIES
The accompanying financial data as of June 30, 2015 and
December 31, 2014 and for the three and six month periods ended June 30, 2015
and 2014, has been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (SEC).
The complete accounting policies followed by the Group are set
forth in Note 3 to the audited consolidated financial statements contained in
the Groups Annual Report on Form 10-K for the year ended December 31, 2014.
The preparation of financial statements in conformity with US
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities and disclosures, if any, of contingent
assets and liabilities at the date of the financial statements. Actual results
could differ from these estimates.
In the opinion of management, all adjustments (which include
normal recurring adjustments, except as disclosed herein) necessary to present a
fair statement of financial position as of June 30, 2015 and December 31, 2014,
results of operations for the three and six month periods ended June 30, 2015
and 2014, cash flows for the six month periods ended June 30, 2015 and 2014 and
statement of shareholders equity for the period from January 1, 2015 to June
30, 2015, as applicable, have been made. The result of operations for the three
and six month periods ended June 30, 2015 is not necessarily indicative of the
operating results for the full fiscal year or any future periods.
On January 15, 2015, DWM Petroleum AG, the Companys
wholly-owned Swiss subsidiary, acquired a 65% equity interest in EPA.at
Beteiligungsgesellschaft mbH (EPA). The details of this acquisition are
discussed in note 7 to these financial statements, below. Due to this
acquisition, the Group has updated its accounting policies as follows.
9
Investments
Investments in the common stock of entities in which the
company owns a minority interest and is unable to exercise significant influence
are accounted for using the cost method. If the Company is unable to obtain
consolidated financial statements on a timely basis, it accounts for its
investments using the cost method.
The fair value of the Companys cost method investment is not
estimated as there have been no identified events or changes in circumstances
that may have a significant adverse effect on the fair value of the investment
and the Company has determined that it is not practicable to estimate the fair
value of the investment at this time. Any earnings distributed by the investee
are presented as dividend income on the statements of comprehensive loss.
Reclassifications
In the prior year balance sheet an amount of USD 586,697 was
reclassified from Prepaid expenses and other current assets to Other
non-current assets to conform to the current period presentation since this
amount constitutes prepayments for Oil and gas properties (unproved) and
therefore is non-current in nature.
4. RECENT ACCOUNTING
PRONOUNCEMENTS
Recently adopted accounting pronouncements
In August 2014, the FASB released Accounting Standards Update
2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as
a Going Concern. This ASU requires management to determine whether
substantial doubt exists regarding the entitys going concern presumption. If
substantial doubt exists but is not alleviated by managements plans, the
footnotes must specifically state that there is substantial doubt about the
entitys ability to continue as a going concern within one year after the
financial statements are issued. In addition, if substantial doubt exists
entities must disclose (a) principal conditions or events that raise substantial
doubt about the entitys ability to continue as a going concern (before
consideration of managements plans, if any); (b) managements evaluation of the
significance of those conditions or events in relation to the entitys ability
to meet its obligations; and (c) managements plans that are intended to
mitigate the conditions or events that raise substantial doubt, or that did
alleviate substantial doubt, about the entitys ability to continue as a going
concern. This ASU applies prospectively to all entities for annual periods
ending after December 15, 2016, and to annual and interim periods thereafter.
Early adoption is permitted.
The Company is in the process of evaluating the impact of ASU
2014-15 and has not adopted it for this reporting period. There have been no
other new accounting pronouncements to date in 2015 that are expected to have a
material effect on the Companys consolidated financial statements.
5. CASH AND CASH EQUIVALENTS
|
USD
(held in USD) |
USD
(held in EUR) |
USD
(held in CHF) |
USD
(held in other currencies)
|
USD Total
Jun 30, 2015 |
USD Total
Dec 31, 2014 |
|
|
|
|
|
|
|
Cash and cash equivalents |
27,993 |
21,174 |
18,978 |
1,671 |
69,816 |
1,369,778
|
Cash and cash equivalents are available to the Group without
restriction or limitation on withdrawal and/or use of these funds. The Groups
cash equivalents are placed with high credit rated financial institutions. The
carrying amount of these assets approximates their fair value.
10
6. TANGIBLE FIXED ASSETS
2015 (in USD) |
|
Office equipment &
furniture |
|
|
Vehicles |
|
|
Leasehold
improvements |
|
|
Total |
|
Cost at Jan 1, 2015 |
|
53,770 |
|
|
115,773 |
|
|
7,269 |
|
|
176,812 |
|
Additions |
|
3,579 |
|
|
- |
|
|
- |
|
|
3,579 |
|
Disposals |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Cost at Jun 30,
2015 |
|
57,349 |
|
|
115,773 |
|
|
7,269 |
|
|
180,391 |
|
Accumulated depreciation at Jan 1, 2015 |
|
(29,655 |
) |
|
(62,958 |
) |
|
(945 |
) |
|
(93,558 |
) |
Depreciation |
|
(6,672 |
) |
|
(11,577 |
) |
|
(727 |
) |
|
(18,976 |
) |
Disposals |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Accumulated
depreciation at Jun 30, 2015 |
|
(36,327 |
) |
|
(74,535 |
) |
|
(1,672 |
) |
|
(112,534 |
) |
Net book value at Jan 1, 2015 |
|
24,115 |
|
|
52,815 |
|
|
6,324 |
|
|
83,254 |
|
Net book value at Jun 30, 2015 |
|
21,022 |
|
|
41,238 |
|
|
5,597 |
|
|
67,857 |
|
Depreciation expense for the six month periods ended June 30,
2015 and 2014 was USD 18,976 and USD 24,270 respectively. Depreciation expense
for the three month periods ended June 30, 2015 and 2014 was USD 9,490 and USD
12,120, respectively.
7. INVESTMENT
On January 15, 2015, DWM Petroleum AG acquired a 65% interest
in EPA.at Beteiligungsgesellschaft mbH (EPA) for the purpose of diversifying
its portfolio of oil and gas assets. Total consideration paid was USD
12,000,000.
EPA, a company registered in Vienna, Austria, holds a 57.42%
interest in the company Petroleum Sugd LLC (PSL), which owns 10 producing oil
and gas fields in the north of Tajikistan. Through its investment, EPA
participates in the profits from the sale of oil and gas.
The acquisition of EPA was accounted for using the cost method
as although the Company owns a 65% equity interest, under ASC 810, EPA is
considered to be a variable interest entity and the other EPA shareholder has
veto rights which limit the power of the Company to make significant decisions.
In addition, as Petroleum Sugd LLC operates in the Republic of Tajikistan it is
not subject to such stringent reporting deadlines as in the US. The difference
between the financial reporting dates of the investee and the Company is over
the allowed period in accordance with ASC 323, and as such the investment may
not be presented under the equity method.
Investments at cost (in USD) |
|
Jun 30, 2015 |
|
|
Dec 31, 2014 |
|
EPA |
|
12,000,000 |
|
|
- |
|
Total investments at cost |
|
12,000,000 |
|
|
- |
|
During the six month period ended June 30, 2015, the investment
balance has not been evaluated for impairment.
8. OIL AND GAS PROPERTIES
Capitalized exploration costs |
|
Jun 30, 2015 |
|
|
Dec 31, 2014 |
|
Unproved, not subject to depletion |
|
1,008,638 |
|
|
687,645 |
|
Proved subject to depletion |
|
- |
|
|
- |
|
Accumulated depletion |
|
- |
|
|
- |
|
Total capitalized exploration costs |
|
1,008,638 |
|
|
687,645 |
|
On May 28, 2014, the Company wrote to the Petroleum Authority
of Mongolia requesting the moratorium be extended an additional year. As at June
30, 2015, the Company has not received any response to its request.
11
During the year ended December 31, 2014, the Companys
capitalized balance of USD 687,645 consisted of the following: well site
preparation costs of Kayrakkum B in the Republic of Tajikistan in the amount of
USD 514,368 and one well design and the cost of certain drilling equipment in
Mongolia in the amount USD 173,277.
Additionally, as of June 30, 2015, the Company has reclassed
USD 315,553 from prepaid expenses to oil and gas properties for casings and well
heads that have been received, and it capitalized USD 5,440 relating to the
storage of this well site equipment in the Republic of Tajikistan.
9. STOCK COMPENSATION
PROGRAM
Amended 2011 Stock Option Plan
The Amended 2011 Stock Option Plan, which was approved at
Annual Shareholders Meeting dated February 20, 2014, authorizes the Company to
issue options to purchase such number of the Companys common shares as is equal
to an aggregate, together with options issued under any prior plan, of up to
34,500,000 shares of the Companys common stock (it is the type of stock option
plan referred to as a fixed stock option plan).
If all or any portion of any stock option granted under the
2011 Stock Option Plan expires or terminates without having been exercised in
full, the unexercised balance will be returned to the pool of stock available
for grant under the 2011 Stock Option Plan.
Recognition of Stock-based Compensation Costs
Stock-based compensation costs are recognized in earnings using
the fair-value based method for all awards granted. For employees fair value is
estimated at the grant date and for non-employees fair value is re-measured at
each reporting date. Compensation costs for unvested stock options and unvested
share grants are expensed over the requisite service period on a straight-line
basis.
Grants
9.1. Stock Option
Grants
The Company calculates the fair value of options granted by
applying the Black-Scholes option pricing model. Expected volatility is based on
the Companys own historical share price volatility. The Companys share price
data can be traced back to April 2, 2007, and the Company believes that this set
of data is sufficient to determine expected volatility as input for the
Black-Scholes option pricing model.
During the six month periods ended June 30, 2015 and 2014 the
Company did not grant any options.
The following table shows the Companys outstanding and
exercisable stock options as of June 30, 2015:
Outstanding Options 2015 |
|
Shares under option |
|
|
Weighted-average exercise price
|
|
|
Weighted-average remaining
contractual term (years) |
|
Outstanding at December 31, 2014 |
|
12,300,000 |
|
|
USD 0.24 |
|
|
5.72 |
|
Granted |
|
- |
|
|
- |
|
|
- |
|
Exercised |
|
- |
|
|
- |
|
|
- |
|
Forfeited, canceled
or expired |
|
- |
|
|
- |
|
|
- |
|
Outstanding at Jun 30, 2015 |
|
12,300,000 |
|
|
USD 0.24 |
|
|
5.72 |
|
Exercisable at Jun 30, 2015 |
|
11,925,000 |
|
|
USD 0.24 |
|
|
5.69 |
|
The following table depicts the Companys non-vested options as
of June 30, 2015 and changes during the period:
Non-vested options |
|
Shares under option |
|
|
Weighted-average grant date fair
value |
|
|
|
|
Non-vested at December 31, 2014 |
|
1,043,750 |
|
|
USD 0.06 |
|
|
|
|
12
Non-vested granted |
|
- |
|
|
- |
|
|
|
|
Vested |
|
(668,750 |
) |
|
USD 0.06 |
|
|
|
|
Non-vested, forfeited or canceled |
|
- |
|
|
- |
|
|
|
|
Non-vested at Jun 30, 2015 |
|
375,000 |
|
|
USD 0.06 |
|
|
|
|
As of June 30, 2015, the expected total of unrecognized
compensation costs related to unvested stock-option grants was USD 10,293. The
Company expects to recognize this amount over a weighted average period of 0.89
years.
9.2. Summary of
Stock-based Compensation Expenses
A summary of stock-based compensation expense for the
respective reporting periods is presented in the following table:
Stock based
compensation |
|
Three
months ended |
|
|
Six
months ended |
|
expenses |
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Option grants |
|
11,695 |
|
|
20,980 |
|
|
34,996 |
|
|
42,294 |
|
Total |
|
11,695 |
|
|
20,980 |
|
|
34,996 |
|
|
42,294 |
|
Recorded under Personnel |
|
2,226 |
|
|
8,282 |
|
|
7,269 |
|
|
16,750 |
|
Recorded under
Consulting fees |
|
9,469 |
|
|
12,698 |
|
|
27,727 |
|
|
25,544 |
|
10. SHAREHOLDERS EQUITY
Share repurchase program
On May 13, 2014, MNP Petroleum Corp. announced a plan to
repurchase up to 8,296,614 of its common shares, or up to five percent of the
172,592,292 common shares that were then outstanding, in a normal course issuer
bid to be conducted by Jennings Capital Inc. All purchases of common shares
under the bid were effected on the TSX Venture Exchange in accordance with the
rules and policies of the TSX Venture Exchange and applicable securities laws.
During the course of the bid the Company repurchased an aggregate of 6,479,500
shares of its common stock in the open market, which were booked as treasury
shares upon repurchase. The program expired May 18, 2015. During the six month
period ended June 30, 2015, the Company did not repurchase any shares of common
stock.
11. RELATED PARTY DISCLOSURE
The consolidated financial statements include the financial
statements of MNP Petroleum Corporation and the entities listed in the following
table:
Equity share Equity share
Company |
Country |
Jun 30, 2015 |
Dec 31, 2014 |
DWM Petroleum AG, Baar (1) |
Switzerland |
100% |
100% |
DWM
Energy AG Baar (2) |
Switzerland |
100%
|
100%
|
Petromanas Energy Inc., Calgary (3) |
Canada |
0.07% |
0.6% |
CJSC
Somon Oil Company, Dushanbe (4) |
Republic of Tajikistan |
90%
|
90%
|
Manas Management Services Ltd., Nassau (5) |
Bahamas |
100% |
100% |
Manas Chile Energia Limitada, Santiago (6) |
Chile
|
100%
|
100%
|
Gobi Energy Partners LLC, Ulaan Baator (7) |
Mongolia |
74% |
74% |
Gobi
Energy Partners GmbH (8) |
Switzerland |
74%
|
74%
|
TF Petroleum AG (9) |
Switzerland |
100% |
100% |
EPA.at Beteiligungsgesellschaft mbH (10) |
Austria |
65%
|
-
|
Petroleum Sugd LLC (11) |
Tajikistan |
37.3% |
- |
|
(1) |
Included Branch in Albania that was sold in February
2010. |
|
(2) |
Founded in 2007. |
|
(3) |
Petromanas Energy Inc. participation resulted from
partial sale of Manas Adriatic GmbH; fair value method applied. |
|
(4) |
CJSC Somon Oil Company was founded by DWM Petroleum AG.
As CJSC Somon Oil has been in a loss position since its inception its
inception and MNP is legally required to fund the losses, no
no-controlling interest has been recorded. |
|
(5) |
Founded in 2008. |
|
(6) |
Manas Chile Energia Limitada was founded by Manas
Management Services Ltd.; founded in 2008. |
|
(7) |
Gobi Energy Partners LLC was founded in 2009 by DWM
Petroleum AG (formerly Manas Gobi LLC). Gobi Energy Partners GmbH holds
record title to 100% of Gobi Energy Partners
LLC. |
13
|
(8) |
Gobi Energy Partners GmbH was founded in 2010. DWM
Petroleum AG holds 74% of Gobi Energy Partners GmbH. The Company
determined that no value needs to be ascribed to the non-controlling
interest due to the fact that the non-controlling parties do not carry any
costs. |
|
(9) |
TF Petroleum was founded in 2012 Pursuant to the
Supplement Agreement dated March 31, 2014; DWM Petroleum AG acquired 100%
for a purchase price of CHF 1.00 (USD 1.13) pursuant to a Share Purchase
Agreement signed on April 4, 2014. |
|
(10) |
EPA, founded in 2003, is registered in Vienna, Austria
and holds a 57.42% interest in the company Petroleum Sugd LLC; TF
Petroleum acquired 65% for a purchase price of USD 12,000,000 on January
15, 2015; EPA is accounted for under the cost method. |
|
(11) |
Founded in 2000, registered in the Republic of
Tajikistan. |
- Related parties
The following table provides the total amount of transactions,
which have been entered into with related parties for the specified period:
Related parties
transactions |
|
Three
months ended |
|
|
Six
months ended |
|
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
Management services performed to
Petromanas* |
|
- |
|
|
- |
|
|
|
|
|
(278 |
) |
Receivable due from EPA |
|
44,832 |
|
|
- |
|
|
44,832 |
|
|
- |
|
Board of directors |
|
|
|
|
|
|
|
|
|
|
|
|
Payments to directors for office rent |
|
6,406 |
|
|
6,737 |
|
|
12,852 |
|
|
13,463 |
|
Payments to related companies controlled by directors for
rendered consulting services |
|
58,123 |
|
|
74,273 |
|
|
116,704 |
|
|
148,432 |
|
* Services invoiced or accrued are recorded net against
expenses in personnel cost and administrative cost.
12. COMMITMENTS & CONTINGENT
LIABILITIES
Legal actions and claims (Kyrgyz Republic, Republic of
Tajikistan, Mongolia)
In the ordinary course of business, members of the Group doing
business in Mongolia, Republic of Tajikistan, and the Kyrgyz Republic may be
subject to legal actions and complaints. Management believes that the ultimate
liability, if any, arising from such actions or complaints will not have a
material adverse effect on the financial condition, the results of future
operations or cash flows of the associates/subsidiaries in Mongolia, Republic of
Tajikistan, and the Kyrgyz Republic.
Management believes that the members of the Group are in
substantial compliance with the tax laws affecting their respective operations
in the Kyrgyz Republic, Republic of Tajikistan and Mongolia. However, the risk
remains that relevant authorities could take differing positions with regards to
interpretative issues.
Work program and social responsibility project
On June 10, 2014, the governor of the Farkhor district of
Tajikistan decreed that EPA has a two year funding obligation related to a
social responsibility project concerning the construction of a secondary school
in this district. Additionally, in the fourth quarter of 2014, Petroleum Sugd
LLC completed its work program budget. EPA, as a 57.42% owner of Petroleum Sugd
has a funding obligation that amounts to USD 14.9 million relating to its
portion of this work program for Petroleum Sugd in Tajikistan. The Company
agreed to cover these commitments on EPAs behalf under a loan structure.
13. PERSONNEL COSTS AND EMPLOYEE
BENEFIT PLANS
Defined benefit plan
The Company maintains Swiss defined benefit plans for eight of
its employees. These plans are part of independent collective funds providing
pensions combined with life and disability insurance. The assets of the funded
plans are held independently of the Companys assets in a legally distinct and
independent collective trust fund which serves various unrelated employers. The
funds benefit obligations are fully reinsured by AXA Winterthur Insurance Company. The plans are valued by independent actuaries using
the projected unit credit method. The liabilities correspond to the projected
benefit obligations of which the discounted net present value is calculated
based on years of employment, expected salary increases, and pension
adjustments.
14
|
|
Three months ended |
|
|
Six
months ended |
|
Pension expense |
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Net service cost |
|
20,519 |
|
|
8,212 |
|
|
41,038 |
|
|
12,318 |
|
Interest cost |
|
3,033 |
|
|
10,809 |
|
|
6,065 |
|
|
16,213 |
|
Expected return on
assets |
|
(2,197 |
) |
|
(8,834 |
) |
|
(4,395 |
) |
|
(13,250 |
) |
Amortization of
loss |
|
10,559 |
|
|
11,625 |
|
|
21,118 |
|
|
17,437 |
|
Net periodic pension cost |
|
31,913 |
|
|
21,812 |
|
|
63,827 |
|
|
32,717 |
|
During the six month periods ended June 30, 2015 and 2014, the
Company made cash contributions of USD 128,121 and USD 115,067, respectively, to
its defined benefit pension plan. The Company does not expect to make any
additional cash contributions to its defined benefit pension plans during the
remainder of 2015.
14. FAIR VALUE MEASUREMENT
14.1. Fair Value
Measurements
ASC 820 establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These tiers include: Level
1, defined as observable inputs such as quoted prices in active markets; Level
2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and Level 3, defined as unobservable inputs
in which little or no market data exists, therefore requiring an entity to
develop its own assumptions. The Company holds no financial assets or
liabilities carried at fair value as of June 30, 2015.
Financial assets and liabilities carried at fair value as of
December 31, 2014:
Financial assets 2014 (in USD) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Investment in associate (Petromanas) |
|
206,382 |
|
|
- |
|
|
- |
|
Total |
|
206,382 |
|
|
- |
|
|
- |
|
14.2. Fair Value of
Financial Instruments
In addition to the methods and assumptions the Company uses to
record the fair value of financial instruments as discussed in the Fair Value
Measurements section above, the Company used the following methods and
assumptions to estimate the fair value of its financial instruments.
- Cash and cash equivalents carrying amount approximated fair
value.
- Restricted cash carrying amount approximated fair value.
- Accounts receivable carrying amount approximated fair value.
- Investment in Petromanas the fair value was calculated based on
quoted market prices.
- Accounts Payable carrying amount approximated fair value.
The fair value of the Companys financial instruments is
presented in the table below (in USD):
|
|
Jun 30, 2015 |
|
|
Dec 31, 2014 |
|
|
Fair Value
Levels |
|
|
Reference |
|
|
|
Carrying
Amount |
|
|
Fair Value |
|
|
Carrying
Amount |
|
|
Fair Value |
|
|
Cash and cash equivalents |
|
69,816 |
|
|
69,816 |
|
|
1,369,778 |
|
|
1,369,778 |
|
|
1 |
|
|
Note 5 |
|
Restricted cash |
|
100,416 |
|
|
100,416 |
|
|
208,621 |
|
|
208,621 |
|
|
1 |
|
|
|
|
Transactions prepayment |
|
- |
|
|
- |
|
|
12,000,000 |
|
|
12,000,000 |
|
|
1 |
|
|
|
|
Accounts receivable |
|
45,406 |
|
|
45,406 |
|
|
14,359 |
|
|
14,359 |
|
|
1 |
|
|
|
|
Investment in Petromanas |
|
- |
|
|
- |
|
|
206,382 |
|
|
206,382 |
|
|
1 |
|
|
|
|
Accounts Payable |
|
1,775,577 |
|
|
1,775,577 |
|
|
1,165,472 |
|
|
1,165,472 |
|
|
1 |
|
|
|
|
15
15. EARNINGS PER SHARE
Basic earnings per share result by dividing the Companys net
income (or net loss) by the weighted average number of shares outstanding for
the contemplated period. Diluted earnings per share are calculated applying the
treasury stock method. When there is a net income, dilutive effects of all
stock-based compensation awards or participating financial instruments are
considered. When the Company posts a loss, basic loss per share equals diluted
loss per share.
The following table depicts how the denominator for the
calculation of basic and diluted earnings per share was determined under the
treasury stock method:
|
|
Three months ended |
|
|
Six
months ended |
|
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Company posted |
|
Net loss |
|
|
Net loss |
|
|
Net loss |
|
|
Net loss |
|
Basic weighted
average shares outstanding |
|
166,112,792 |
|
|
172,592,292 |
|
|
166,112,792 |
|
|
172,592,292 |
|
Dilutive effect of common stock equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
- stock options and non-vested
stock under
employee compensation plans |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Diluted weighted average shares
outstanding |
|
166,112,792 |
|
|
172,592,292 |
|
|
166,112,792 |
|
|
172,592,292 |
|
The following table shows the total number of stock equivalents
that was excluded from the computation of diluted earnings per share for the
respective period because the effect would have been anti-dilutive:
|
|
Three months ended |
|
|
Six
months ended |
|
Stock equivalent |
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Options |
|
12,300,000 |
|
|
12,100,000 |
|
|
12,300,000 |
|
|
12,100,000 |
|
Total |
|
12,300,000 |
|
|
12,100,000 |
|
|
12,300,000 |
|
|
12,100,000 |
|
16. SUBSEQUENT EVENT(S)
On July 15, 2015 MNP Petroleum Corp., through its subsidiary TF Petroleum AG (“TFP”), and C.E.G. International Ltd. (“CEG”), part of a Dubai based renowned Group of Companies, signed a Debt Finance Agreement. Pursuant to the Agreement CEG will procure TFP a credit facility issued by a prime western bank to secure a loan for the Company which is confirmed to be issued by an Austrian based bank. The facility is valid for 12 months with a face value of EUR 10 million (approximately USD 11 million). Also pursuant to the Finance Agreement MNP has agreed to pledge part of its assets as collateral. Both MNP and CEG are in the final stages of completing the process with the banks.
16
Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.
Forward-Looking Statements
This quarterly report contains forward-looking statements.
Forward-looking statements are statements that relate to future events or future
financial performance. In some cases, you can identify forward-looking
statements by the use of terminology such as may, should, intend,
expect, plan, anticipate, believe, estimate, project, predict,
potential, or continue or the negative of these terms or other comparable
terminology. These statements speak only as of the date of this quarterly
report. Examples of forward-looking statements made in this quarterly report
include statements pertaining to, among other things:
- managements assessment that our company is a going concern;
- our plans to rehabilitate a producing asset in Tajikistan;
- our plans to form a new consortium to pursue Somon Oils project in
Tajikistan;
- the quantity of potential natural gas and crude oil resources;
- potential natural gas and crude oil production levels;
- capital expenditure programs;
- projections of market prices and costs;
- supply and demand for natural gas and crude oil;
- our need for, and our ability to raise, capital; and
- treatment under governmental regulatory regimes and tax laws.
The material assumptions supporting these forward-looking
statements include, among other things:
- our monthly burn rate of approximately USD 349,616 (corporate USD 236,420
ventures USD 113,197) for our operating costs excluding exploration expenses;
- our ability to obtain necessary financing on acceptable terms;
- timing and amount of capital expenditures;
- our ability to obtain necessary drilling and related equipment in a timely
and cost-effective manner to carry out exploration activities;
- our venture partners successful and timely performance of their
obligations with respect to the exploration programs in which we are involved;
- retention of skilled personnel;
- the timely receipt of required regulatory approvals;
- continuation of current tax and regulatory regimes;
- current exchange rates and interest rates; and
- general economic and financial market conditions.
Although management considers these assumptions to be
reasonable based on information currently available to it, they may prove to be
incorrect. These forward-looking statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including:
- our ability to establish or find resources or reserves;
- our need for, and our ability to raise, capital;
- volatility in market prices for natural gas and crude oil;
- liabilities inherent in natural gas and crude oil operations;
- uncertainties associated with estimating natural gas and crude oil
resources or reserves;
- competition for, among other things, capital, resources, undeveloped lands
and skilled personnel;
- political instability or changes of law in the countries we operate and
the risk of terrorist attacks;
- assessments of the acquisitions;
- geological, technical, drilling and processing problems; and
- other factors discussed under the section entitled Risk Factors in our
annual report on Form 10-K filed on March 31, 2015.
These risks, as well as risks that we cannot currently
anticipate, could cause our companys or our industrys actual results, levels
of activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements.
17
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance; except as required by applicable law,
including the securities laws of the United States and Canada, and we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
As used in this quarterly report, the terms we, us, and
our refer to MNP Petroleum Corporation, its wholly-owned subsidiaries DWM
Petroleum AG, a Swiss company, DWM Energy AG (formerly Manas Petroleum AG), a
Swiss company, Manas Management Services Ltd., a Bahamian company, and TF
Petroleum AG, a Swiss company, and its partially owned subsidiaries CJSC Somon
Oil Company, a Tajikistan company, Gobi Energy Partners GmbH, a Swiss company,
and Gobi Energy Partners LLC, a Mongolian company, its 65% interest in Energy
Partners Austria Beteiligungsgesellschaft mbH, an Austria registered company and
EPAs 57.42% equity interest in Petroleum Sugd LLC, a Tajik company, as the
context may require.
The following discussion and analysis provides a narrative
about our financial performance and condition that should be read in conjunction
with the unaudited consolidated financial statements and related notes thereto
included in this quarterly report.
Overview of Business Operations
We are in the business of exploring for and producing oil and
gas, primarily in Central and East Asia. If we discover sufficient reserves of
oil and/or gas, we intend to exploit them. Although we are currently focused
primarily on projects located in certain geographic regions, we remain open to
attractive opportunities in other areas. Since the acquisition of 65% of the
equity in EPA, we have a 37.32% working interest in ten oil fields located in
the Fergana basin in Tajikistan.
We carry out our operations both directly and through
participation in ventures with other oil and gas companies. We are actively
involved in projects in Mongolia and Tajikistan.
We have no operating income to date, however, we are eligible
to any profit or loss from our investment in EPA. Therefore, we depend upon
funding from various sources to continue operations and to implement our
established work program.
Results of Operations (the six month period ended June
30, 2015 compared to the six month period ended June 30, 2014)
Net income/net loss
Net loss for the six month period ended June 30, 2015 was USD
2,066,603 compared to net loss of USD 330,198 for the same period in 2014. This
increase of USD 1,736,405 was primarily attributable to a change in fair value
of our investment in Petromanas.
Operating expenses
Operating expenses for the six month period ended June 30,
2015, decreased to USD 2,102,064 from USD 2,966,126 reported for the same period
in 2014. This is a decrease of 29% in our total operating expenses and is mainly
due to reduction in exploration costs and consulting fees.
Personnel costs
For the six month period ended June 30, 2015, personnel costs
increased to USD 847,931 from USD 777,022 for the same period in 2014. This
increase of 9% is attributable to higher costs related to our staff in
Switzerland as well as our operations in Tajikistan.
18
Exploration costs
For the six month period ended June 30, 2015, we incurred
exploration costs of USD 229,323 as compared to USD 662,064 for the same period
in 2014. This is a decrease of 65% and is due to decreased exploration activity
at our project in Tajikistan.
Consulting fees
For the six month period ended June 30, 2015, we incurred
consulting fees of USD 450,669 as compared to consulting fees of USD 769,467 for
the same period in 2014. This is a decrease of 41% and is primarily attributable
to a reduction in consulting costs related to regulatory, legal and
administration services.
Administrative costs
For the six month period ended June 30, 2015, we recorded
administrative costs of USD 555,165 compared to USD 733,303 for the same period
in 2014. This decrease of 24% is mainly attributable to a reduction in travel
costs, computer system costs and bank charges.
Non-operating income/expense
For the six month period ended June 30, 2015, we recorded a
non-operating income of USD 35,461 compared to a non-operating income of USD
2,641,017 for the same period in 2014. This is a decrease of USD 2,605,556 and
is mainly attributable to a change in the value of our investment in
Petromanas.
For the six month period ended June 30, 2015, we recorded a
decrease in fair value of investment in associate (Petromanas) of USD 18,572
compared to an increase in fair value of investment in associate of USD
2,686,428 for the same period in 2014.
Results of Operations (the three month period ended June
30, 2015 compared to the three month period ended June 30, 2014)
Net income/net loss
Net loss for the three month period ended June 30, 2015 was USD
989,318 compared to net loss of USD 574,520 for the same period in 2014. This
increase of USD 414,798 was primarily due to a change in fair value of our
investment in Petromanas.
Operating expenses
Operating expenses for the three month period ended June 30,
2015, decreased to USD 989,284 from USD 1,619,931 reported for the same period
in 2014. This is a decrease of 39% in our total operating expenses and is mainly
due to reduction in exploration costs, administration costs and consulting fees.
Personnel costs
For the three month period ended June 30, 2015, personnel costs
increased to USD 417,076 from USD 377,362 for the same period in 2014. This
increase of 11% is attributable to higher costs related to our staff in the
Switzerland as well as our operations in Tajikistan.
Exploration costs
For the three month period ended June 30, 2015, we incurred
exploration costs of USD 90,323 as compared to USD 369,636 for the same period
in 2014. This is a decrease of 76% and is due to decreased exploration activity
at our project in Tajikistan.
19
Consulting fees
For the three month period ended June 30, 2015, we incurred
consulting fees of USD 211,802 as compared to consulting fees of USD 438,071 for
the same period in 2014. This is a decrease of 52% and is primarily attributable
to a reduction in consulting costs related to regulatory, legal and
administration services.
Administrative costs
For the three month period ended June 30, 2015, we recorded
administrative costs of USD 260,593 compared to USD 422,742 for the same period
in 2014. This decrease of 38% is mainly attributable to a reduction in travel
costs, computer system costs and bank charges.
Non-operating income/expense
For the three month period ended June 30, 2015, we recorded a
non-operating loss of USD 34 compared to a non-operating income of USD 1,047,761
for the same period in 2014. This is a decrease of USD 1,047,795 and is mainly
attributable to the Company no longer holding an investment in Petromanas.
As all our shares of Petromanas were sold before June 30, 2015,
we did not record a change in fair value of investment in associate for the 3
month period ended June 30, 2015, compared to an increase in fair value of
investment in associate of USD 1,066,625 for the same period in 2014.
Liquidity and Capital Resources
Our cash balance as of June 30, 2015 was USD 69,816.
Shareholders equity as of June 30, 2015 was USD 11,656,989. As of June 30,
2015, total current assets were USD 297,110 and total current liabilities were
USD 1,951,877, resulting in net working capital of USD (1,654,767). Of our cash
balance at June 30, 2015, USD 69,816 was on bank accounts of MNP Petroleum Corp.
and its subsidiaries. Since our company considers foreign subsidiaries to be
permanently invested, taxes will be due in the event of repatriation.
We initially owned 200,000,000 shares of Petromanas Energy.
Between July 2012 and September 2013, we sold 100,000,000 of these shares to
various purchasers. After the sale of a further 4,000,000 Petromanas shares on
October 25, 2013, 46,000,000 Petromanas shares on November 5, 2013, 42,000,000
between February 26, 2014 and March 6, 2014 respectively and a further 8,000,000
between March 16, 2014 and April 8, 2015, we no longer hold any common shares of
Petromanas.
Cash Flows (in USD)
|
|
Six months ended |
|
|
|
Jun 30, 2015 |
|
|
Jun 30, 2014 |
|
Net Cash used in Operating Activities |
|
(1,596,214 |
) |
|
(3,125,625 |
) |
Net Cash from Investing Activities |
|
238,448 |
|
|
7,222,007 |
|
Net Cash used in Financing Activities |
|
- |
|
|
(100,594 |
) |
Change in Cash and Cash Equivalents during the
period |
|
(1,357,766 |
) |
|
3,995,788 |
|
Operating Activities
Net cash used in operating activities of USD 1,596,214 for the
six month period ended June 30, 2015 changed from net cash used in operating
activities of USD 3,125,625 for the same period in 2014. This decrease in net
cash used in operating activities of USD 1,529,411 is mainly due to a reduction
in prepaid expenses and change in fair value of investment.
20
Investing Activities
Net cash from investing activities of USD 238,448 for the six
month period ended June 30, 2015 changed from net cash from investing activities
of USD 7,222,007 for the same period in 2014. This decrease of USD 6,983,559 in
cash from investing activities is mainly attributable to a reduction in proceeds
from the sale of investment.
Financing Activities
During the six month period ended June 30, 2015 there were no
cash flows from or used in financing activities, compared to net cash used for
financing activities of USD 100,594 for the same period in 2014.
As all our shares of Petromanas were sold before June 30, 2015,
we did not record a change in fair value of investment in associate for the 3
month period ended June 30, 2015, compared to an increase in fair value of
investment in associate of USD 1,066,625 for the same period in 2014.
Cash Requirements
The following table outlines the estimated cash requirements
for our operations for the next 12 months (in USD):
Expenses |
|
Amount in USD |
|
Corporate |
|
2,837,039
1 |
|
Kyrgyzstan |
|
28,800 1 |
|
Mongolia |
|
53,985
2 |
|
Tajikistan -
Exploration |
|
1,155,573 3 |
|
Business Development |
|
120,000 |
|
Total |
|
4,195,397 |
|
|
(1) |
The information presented in the table above includes the
costs related to our normal operational activities only. |
|
(2) |
The information presented in the table above includes the
costs related to our normal operational activities. It does not include
financial commitments as we are subject to certain expenditures and
commitments in order to maintain our licenses which are currently pending
re-negotiations. |
|
(3) |
The information presented in the table above includes the
costs related to our normal operational activities but does not include
any drilling activity. |
Our monthly burn rate (excluding exploration, drilling
equipment) amounts to approximately USD 349,617 (corporate USD 236,420, ventures
USD 113,197). Considering our net working capital, we believe that we are able
to fund our planned operations for one month.
These matters raise substantial doubt about the Groups ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In order to continue to fund operations for the next twelve
months and implement the work program for the Groups projects in Central Asia
as well as to finance continuing operations, the Group will require further
funds. The Company is currently negotiating additional equity and debt
facilities though there can be no assurance that these negotiations will
complete and result in a financing. The Companys current efforts include
continuing discussions with Stichting VB Vagobel, which is in material breach of
its obligations to complete a transaction initially disclosed on September 9,
2014. The Company has given to Stichting VB Vagobel formal notice that it is in
material breach of contract and Vagobel has failed to cure the breach. As
Stichting VB Vagobel is physically located in the Netherlands, the Company has
retained Dutch counsel and is evaluating next steps.
The Company is also negotiating a potential transaction with a
US-Dubai consortium. This transaction was originally announced in a press
release dated April 1, 2015, and discussions are ongoing.
On July 15, 2015 MNP Petroleum Corp., through its subsidiary TF Petroleum AG (“TFP”), and C.E.G. International Ltd. (“CEG”), part of a Dubai based renowned Group of Companies, signed a Debt Finance Agreement. Pursuant to the Agreement CEG will procure TFP a credit facility issued by a prime western bank to secure a loan for the Company which is confirmed to be issued by an Austrian based bank. The facility is valid for 12 months with a face value of EUR 10 million (approximately USD 11 million). Also pursuant to the Finance Agreement MNP has agreed to pledge part of its assets as collateral. Both MNP and CEG are the final stages of completing the process with the banks. However, the proceeds from this bridge provide only temporary relief while the Company pursues a larger facility.
21
If the Company is not able to raise the required funds, it may
consider other alternatives, including a possible farm-out of one or more of its
projects in order to reduce short term financial commitments. If the Company is
unable to obtain the funding that it needs or arrive at an acceptable
alternative solution, the Company will not be able to continue its business. In
addition, any equity financing may be dilutive to shareholders, and debt
financing, if available, will increase expenses and may involve restrictive
covenants. The Company will be required to raise additional capital on terms
which are uncertain, especially under the current capital market conditions. If
the Company is unable to obtain capital or is required to raise it on
undesirable terms, it may have a material adverse effect on the Companys
financial condition.
EPA.at Beteiligungsgesellschaft mbH
On January 15, 2015, our subsidiary, DWM Petroleum AG acquired
a 65% equity interest in EPA for the purpose of diversifying our portfolio of
oil and gas assets. Total consideration paid was USD 12,000,000. The purchase
price was partially funded through available cash resources as well as from the
proceeds from the sale of a separate investment.
EPA, a company registered in Vienna, Austria, holds a 57.42%
interest in the company Petroleum Sugd LLC, which owns 10 producing oil and gas
fields in the north of Tajikistan. Through its equity investment, EPA
participates indirectly in the profits from the sale of oil and gas.
A field development program for the first five years has been
developed. This program consists of light work overs (such as changing pumps,
tubing, pumping units and clean ups), heavy work overs (plug backs,
reperforations, stimulations, fishing and casing repairs) and new wells mainly
in the shallow fields. The program will also include replacing the gathering
lines, the pumping units and setting up the necessary operating facilities.
The focus will be initially on the low risk shallow fields and
then gradually moving to the deeper fields.
CJS Somon Oil, Tajikistan
The Production Sharing Contract for the Western and
Northwestern Licenses was ratified in May 2012. Before the ratification, the
company acquired 1,310 Km of onshore and offshore 2D seismic, including regional
as well as prospect related 2D seismic. The survey was very complex due to the
different landscapes which had to be covered. It consisted of vibro-seismic,
dynamite seismic and offshore seismic on Lake Kayrakkum.
Our interest in the Somon Oil project was fully carried by
Santos International Ventures Pty Ltd pursuant to a 2007 Option Agreement but,
on December 21, 2012, Santos International informed us that it had decided not
to pursue its option. Santos International continued to fund Somon Oils
operations through January, 2013. During 2013 Santos transferred all data to DWM
Petroleum and Somon Oil. Reprocessing and reinterpretation resulted in a new
sequence of drilling candidates. Based on its review of the data, Somon Oil
continues to be confident in the projects high exploration potential and we are
actively working on establishing a new consortium. There are no liquidated
damages in case of failure. On January 16, 2014, Somon Oil entered into a
contract with JSC Sugdnaftugaz for the construction of the drilling location and
the access road for the Kayrakkum B exploration well. The work at the Kayrakkum
B well site was completed without incident in June 2014. On March 20, 2014,
Somon Oil entered into a purchase agreement for the wellhead and the first two
casing sections for Kayrakkum B, with Dongying Qihai Petroleum Engineering Co.,
Ltd, based in the PR of China. After the manufacturing, all materials will be
delivered to Mahram Base for storage, close to the Kayrakkum B location. On June
24 and 26, 2015, both casing sections were delivered and unloaded at Mahram
Base. The ordered wellhead sections were completed in June 2015 and arrived in
July 2015 at Mahram Base. Upon the extension of the Western License in February
2015, for three years (until July 25, 2017), we continued with the second
contract for casings. The third contract for the supply of the remaining casings
was entered into on February 27, 2015.
22
Mongolia
Early in 2012, Gobi Energy Partners LLC focused on the
integration and interpretation of seismic data acquired in 2011. From April to
May 2012, it conducted a passive seismic campaign using low-frequency
spectroscopy to support the seismic. From June to August, 2012, Gobi Energy also
conducted a 2D seismic acquisition (vibroseis) program covering 335 kilometers
over both blocks.
Gobi Energy spudded its first well, Ger Chuluu A1, on August
23, 2012. It stopped drilling at a depth of 1098 meters without having
encountered any seal. The initially planned second well East Sainshand A1 was
located in another sub-basin 170 kilometers away. In order to have a conclusive
evaluation of the Ger Chuluu sub-basin, Gobi Energy decided to drill a second
well before moving to East Sainshand. Ger Chuluu D1, the second well in the Ger
Chuluu sub-basin, was spudded on September 21, 2012. Drilling was stopped after
reaching 600 meters without any hydrocarbon shows. After logging, the well was
plugged and abandoned.
Gobi Energy had originally focused on six sub-basins in
Mongolia; after drilling in the Ger Chuluu sub basin and conducting additional
studies, Gobi Energy is now focusing on two sub basins, East and West Sainshand.
In order to enlarge the area to define more prospects to drill the outstanding
commitments, Gobi Energy signed a moratorium with the government of Mongolia for
the duration of one year ending in May 2014. During this period Gobi Energy
expected the government to be awarded with relinquished areas from adjacent
blocks. The government of Mongolia has not taken a decision on Gobi Energys
application to expand its exploration acreage before the end of the moratorium.
Consequently, Gobi Energy has applied for an extension of the moratorium for one
additional year.
Item 3. Quantitative
and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4. Controls and
Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as that term
is defined in Rule 13a-15(e), promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our companys reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions
rules and forms, and that such information is accumulated and communicated to
our management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.
As required by paragraph (b) of Rules 13a-15 under the
Securities Exchange Act of 1934, our management, with the participation of our
principal executive officer and our principal financial officer, evaluated our
companys disclosure controls and procedures as of the end of the period covered
by this quarterly report. Based on this evaluation, our principal executive
officer and our principal financial officer concluded that as of the end of the
period covered by this quarterly report, our disclosure controls and procedures
were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial
reporting during the fiscal quarter ended June 30, 2015, that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.
23
PART II. OTHER INFORMATION
Item 1. Legal
Proceedings
There are no pending legal proceedings to which our company or
any of our subsidiaries is a party or of which any of our properties, or the
properties of any of our subsidiaries, is the subject. In addition, we do not
know of any such proceedings contemplated by any governmental authorities.
Item 1A. Risk Factors
Information regarding risk factors appears in Item 1A of the
Companys Annual Report on Form 10-K for the year ended December 31, 2014. There
have been no material changes for the six month period ended June 30, 2015 from
the risk factors disclosed in the 2014 Annual Report on Form 10-K.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Purchase of equity securities by the issuer and
affiliated purchasers
None.
Item 3. Defaults upon
Senior Securities
None.
Item 4. Mine Safety
Disclosures.
Not applicable.
Item 5. Other
Information
None.
Item 6. Exhibits
EXHIBIT
Number |
Description |
(3) |
Articles of
Incorporation and Bylaws |
3.1 |
Articles of Incorporation (incorporated by reference to
an exhibit to our Registration Statement on Form SB-2 filed on July 14,
2003) |
3.2 |
Certificate of Amendment to Articles of Incorporation of
Express Systems Corporation filed on April 2, 2007 (changing name to Manas
Petroleum Corporation) (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on April 17, 2007) |
3.3 |
Certificate of Amendment to Articles of Incorporation
filed on April 22, 2013 (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q filed on May 20, 2013) |
3.4 |
Certificate of Amendment dated effective January 20, 2014
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on January 14, 2014) |
24
Number |
Description |
3.5 |
Amended and Restated Bylaws (incorporated by reference to
an exhibit to our Current Report on Form 8- K filed on November 1, 2011)
|
(4) |
Instruments Defining the Rights of Security Holders,
including Indentures |
4.1 |
Warrant Indenture dated May 6, 2011 with Equity Financial
Trust Company (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on May 9, 2011) |
(10) |
Material Contracts |
10.1 |
Share Exchange Agreement, dated November 23, 2006
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on April 17, 2007) |
10.2 |
Farm-In Agreement, dated October 4, 2006 (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on April
17, 2007) |
10.3 |
Letter Agreement Phase 2 Work Period with Santos
International Operations Pty. Ltd, dated July 28, 2008 (incorporated by
reference to an exhibit to our Annual Report on Form 10-K filed on April
15, 2009) |
10.4 |
Side Letter Agreement Phase 1 Completion and Cash
Instead of Shares with Santos International Holdings Pty Ltd., dated
November 24, 2008 (incorporated by reference to an exhibit to our Annual
Report on Form 10-K filed on April 15, 2009) |
10.5 |
2007 Revised Omnibus Plan (incorporated by reference to
an exhibit to our Annual Report on Form 10-K filed on April 15, 2009)
|
10.6 |
Production Sharing Contract for Contract Area Tsagaan
Els-13 between the Petroleum Authority of Mongolia and DWM Petroleum
(incorporated by reference to an exhibit to our Quarterly Report on Form
10-Q/A filed on July 24, 2009) |
10.7 |
Production Sharing Contract for Contract Area
Zuunbayan-14 between the Mineral Resources and Petroleum Authority of
Mongolia and DWM Petroleum (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q/A filed on July 24, 2009) |
10.8 |
Letter from AKBN regarding Production Sharing Contracts
for Blocks A-B and D-E dated May 5, 2009 (incorporated by reference to an
exhibit to our Quarterly Report on Form 10-Q/A filed on July 24, 2009)
|
10.9 |
Employment Agreement between Ari Muljana and MNP
Petroleum Corporation dated April 1, 2009 (incorporated by reference to an
exhibit to our Registration Statement on Form S-1 filed on July 30, 2009)
|
10.10 |
Consultancy Agreement dated November 21, 2008 with Dr.
Richard Schenz (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on August 13, 2009) |
10.11 |
Share Purchase Agreement dated February 12, 2010 between
Petromanas Energy Inc. (formerly WWI Resources Ltd.), DWM Petroleum AG and
Petromanas Albania GmbH (formerly Manas Adriatic GmbH) (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on
February 25, 2010) |
10.12 |
Form of Stock Option Agreement (Investor Relations)
(incorporated by reference to an exhibit to our Annual Report on Form 10-K
filed on March 18, 2010) |
10.13 |
Form of Stock Option Agreement (Non-Investor Relations)
(incorporated by reference to an exhibit to our Annual Report on Form 10-K
filed on March 18, 2010) |
10.14 |
Agreement dated January 29, 2010 relating to the
assignment of the interest in the Chilean project (incorporated by
reference to an exhibit to our Annual Report on Form 10-K filed on March
18, 2010) |
10.15 |
Agreement between Gobi Energy Partners LLC and DQE
International Tamsag (Mongol) LLC (incorporated by reference to an exhibit
to our Current Report on Form 8-K filed on September 7, 2010) |
10.16 |
Appointment as Director dated September 16, 2010 by Dr.
Werner Ladwein (incorporated by reference to an exhibit to our Quarterly
Report on Form 10-Q filed on November 15, 2010) |
10.17 |
Employment and Non-Competition Agreement dated October 1,
2010 with Peter-Mark Vogel (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q filed on November 15, 2010) |
10.18 |
Cooperation Agreement dated November 5, 2010 with
Shunkhlai Group LLC (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on December 2, 2010) |
10.19 |
Form of Lock-Up Agreement with Raymond James Ltd. and
executive officers and directors (incorporated by reference to an exhibit
to our Registration Statement on Form S-1/A filed on April 28, 2011)
|
25
Number |
Description |
10.20 |
Escrow Agreement dated May 3, 2011 with Equity Financial
Trust Company and our officers and directors (incorporated by reference to
an exhibit to our Current Report on Form 8-K filed on May 9, 2011) |
10.21 |
Share Purchase Agreement dated December 31, 2012
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on January 15, 2015) |
10.22 |
Amendment 1 to Share Purchase Agreement effective
December 31, 2012 (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on January 15, 2015) |
10.23 |
Amendment 2 to Share Purchase Agreement effective April
30, 2013 (incorporated by reference to an exhibit to our Current Report on
Form 8-K filed on January 15, 2015) |
10.24 |
Amendment 3 to Share Purchase Agreement effective April
30, 2013 (incorporated by reference to an exhibit to our Current Report on
Form 8-K filed on January 15, 2015) |
10.25 |
Form of Amendment to IR Consulting Agreement dated
February 1, 2013 with General Research GmbH (incorporated by reference to
an exhibit to our Current Report on Form 8-K filed on February 28, 2013) |
10.26 |
Form of Stock Option Agreement (incorporated by reference
to an exhibit to our Current Report on Form 8-K filed on February 28,
2013) |
10.27 |
Form of Stock Option Cancellation Agreement (incorporated
by reference to an exhibit to our Current Report on Form 8-K filed on
February 28, 2013) |
10.28 |
Consulting agreement dated June 18, 2013 with
Undiscovered Equities Inc. (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on July 11, 2013) |
10.29 |
Form of Stock Option Agreement (incorporated by reference
to an exhibit to our Current Report on Form 8-K filed on July 11, 2013) |
10.30 |
Loan Agreement dated August 8, 2013 between DWM Petroleum
AG and Tulip Fund NV (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q filed on August 19, 2013) |
10.31 |
Supplement Agreement to Share Purchase Agreement
effective September 27, 2013 (incorporated by reference to an exhibit to
our Annual Report on Form 10-K filed on March 31, 2014) |
10.32 |
Private Placement Agreement dated November 29, 2014 with
Stichting VB Vagobel (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on December 1, 2014) |
10.33 |
Broker Agreement dated September 26, 2014 with Sidewinder
Investment AG (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on December 1, 2014) |
(14) |
Code of Ethics |
14.1 |
Code of Ethics, adopted May 1, 2007 (incorporated by
reference to an exhibit to our Registration Statement on Form SB-2 filed
on November 21, 2007) |
(31) |
Rule 13a-14 Certifications |
31.1* |
Section 302 Certification of Chief Executive Officer
|
31.2* |
Section 302 Certification of Chief Financial Officer |
(32) |
Section 1350 Certifications |
32.1* |
Section 906 Certification of Chief Executive Officer |
32.2* |
Section 906 Certification of Chief Financial Officer |
(99) |
Additional Exhibits |
99.1 |
Audit Committee Charter (incorporated by reference to an
exhibit to our Registration Statement on Form S-1 filed on February 2,
2011) |
(101) |
XBRL |
101.INS* |
XBRL INSTANCE DOCUMENT |
101.SCH* |
XBRL TAXONOMY EXTENSION SCHEMA |
101.CAL* |
XBRL TAXONOMY EXTENSION CALCULATION LINKBASE |
101.DEF* |
XBRL TAXONOMY EXTENSION DEFINITION LINKBASE |
101.LAB* |
XBRL TAXONOMY EXTENSION LABEL LINKBASE |
101.PRE* |
XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE |
* Filed herewith.
26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
|
MNP PETROLEUM CORPORATION |
|
|
|
By |
|
/s/ Dr. Werner Ladwein |
|
Dr. Werner Ladwein |
|
Chief Executive Officer, President and Director
|
|
(Principal Executive Officer) |
|
Date: August 19, 2015 |
|
|
|
|
|
By |
|
/s/ Peter-Mark Vogel |
|
Peter-Mark Vogel |
|
Chief Financial Officer, Treasurer and
Secretary |
|
(Principal Financial Officer and Principal
Accounting Officer) |
|
Date: August 19, 2015 |
Exhibit 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Dr. Werner Ladwein, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of MNP
Petroleum Corporation; |
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a15(f) and 15d15(f)) for the registrant and
have: |
|
(a) |
designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
(b) |
designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
(c) |
evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
(d) |
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
(a) |
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
(b) |
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
August 19, 2015
Dr. Werner Ladwein
Dr. Werner
Ladwein
Chief Executive Officer, President and Director
(Principal
Executive Officer)
Exhibit 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Peter-Mark Vogel, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of MNP
Petroleum Corporation; |
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a15(f) and 15d15(f)) for the registrant and
have: |
|
(a) |
designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
(b) |
designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
(c) |
evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
(d) |
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
(a) |
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
(b) |
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
August 19, 2015
Peter-Mark Vogel
Peter-Mark Vogel
Chief Financial Officer, Treasurer and Secretary
(Principal Financial
Officer and Principal Accounting Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The undersigned, Dr. Werner Ladwein, hereby certifies, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
(a) |
the quarterly report on Form 10-Q of MNP Petroleum
Corporation for the period ended June 30, 2015 fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
|
|
(b) |
information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of MNP Petroleum Corporation. |
Date: August 19, 2015
Dr. Werner Ladwein
Dr. Werner
Ladwein
Chief Executive Officer, President and Director
(Principal
Executive Officer)
Exhibit 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The undersigned, Peter-Mark Vogel, hereby certifies, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
(a) |
the quarterly report on Form 10-Q of MNP Petroleum
Corporation for the period ended June 30, 2015 fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
|
|
(b) |
information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of MNP Petroleum Corporation. |
Date: August 19, 2015
Peter-Mark Vogel
Peter-Mark Vogel
Chief Financial Officer, Treasurer and Secretary
(Principal Financial
Officer and Principal Accounting Officer)
MNP Petroleum (CE) (USOTC:MNAP)
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