TIDMSEY
RNS Number : 3661M
Sterling Energy PLC
28 July 2017
28 July 2017
Sterling Energy plc
Results for the six months ending 30 June 2017
Sterling Energy plc ('Sterling' or the 'Company'), together with
its subsidiary undertakings (the 'Group'), an upstream oil and gas
company listed on the AIM market of the London Stock Exchange
(Ticker Symbol: SEY) today announces its results for the six month
period ending 30 June 2017.
Sterling is an experienced operator of international exploration
and production licences, with a primary geographic focus on Africa
and the Middle East. The Group has high potential exploration
projects in Mauritania and Somaliland together with a production
and royalty interest in Mauritania. The Company has an active
strategy to deliver shareholder value through disciplined, material
exploration and production projects; leveraging the Company's
African and Middle Eastern experience, with a primary emphasis on
securing near term cash flow generative opportunities.
Financial summary
-- Cash net to Group, as at 30 June 2017 of $83.5 million (30
June 2016: $92.4 million), no debt.
-- Group turnover of $2.2 million (1H 2016: $1.3 million).
-- Loss after tax of $2.2 million (1H 2016: loss $8.2 million).
-- Average net Group entitlement to production of 320 barrels of
oil per day ('bopd') (1H 2016: 214 bopd).
-- Adjusted EBITDAX loss of $1.6 million (1H 2016: loss $1.7 million).
Operations summary
-- Production performance for the Chinguetti field, offshore
Mauritania has been consistent with the operator's projected 2017
forecast. The depressed oil price continues to have an onerous
impact on the Chinguetti project and future joint venture
economics. The joint venture continues to move towards cessation of
production at year end 2017, followed by Abandonment and
Decommissioning ('A&D') of the field.
-- In early April, Sterling agreed to revised Farmout Agreement
terms for the Odewayne block, Somaliland; reducing the amounts due
by Sterling to Petrosoma Limited ('Petrosoma') and reducing
Sterling's interest in the block by 6% to 34%.
-- The Odewayne Somaliland 2D seismic campaign commenced early
June 2017, with final data due in-house Q4 2017.
-- The Mauritania C-10 joint venture ('JV') continues to
negotiate with the Ministry of Petroleum, Energy and Mines) on an
extension to the current period, to allow for a drill-worthy
prospect to be matured.
Corporate summary
-- Non-executive Directors appointed 19 January 2017.
-- Completion of Capital restructuring 14 June 2017.
-- Continued strategic mandate to execute M&A driven transformational growth.
-- Continued focus on capital discipline with move to new office
in Q4 2017 at a cost saving of approximately 55% on current
premises.
For further information contact:
Sterling Energy plc +44 (0)20 7405 4133
Eskil Jersing, Chief Executive Officer
Michael Kroupeev, Chairman
www.sterlingenergyplc.com
Peel Hunt LLP +44 (0)20 7418 8900
Richard Crichton
Ross Allister
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
CEO Statement
As of January 2017, the refreshed Sterling Board has worked
diligently at ensuring the Company's strategic focus is on
minimising our Chinguetti project liability exposure, maintaining
our fiscal discipline, proactively managing our exploration assets,
continuing to reduce our overheads and pursuing an aggressive
mandate to bring a transformational M&A led opportunity into
the Company.
On the Chinguetti oil field, we continue to persevere with SMHPM
and key stakeholders to safely and effectively implement the
A&D project, subject to Government of Mauritania approval.
Chinguetti is due to cease production in late 2017, with
decommissioning operations commencing shortly thereafter. At this
point, the A&D project quantum, schedule, dependencies and
contingencies continue to be fine-tuned amongst the joint venture
partners. As soon as the overall A&D project and associated
Environmental plan are sanctioned by the Government of Mauritania
(expected to be in Q4 2017), Sterling will update the market of the
anticipated cost exposure to Sterling of the decommissioning and
abandonment phase.
We have continued with our portfolio re-alignment efforts in
April on the Somaliland Odewayne block by reducing from $8 million
to $3.5 million our exposure to a deferred consideration payment to
Petrosoma. In return, Sterling's participating interest will
(subject to Government consent) reduce from 40% to a still material
stake at 34%.
In addition, a 2D seismic campaign commenced over the Odewayne
block in early June 2017. This seismic data will be the first ever
acquired over this frontier basin. We expect to have the first
ca.500kms of fast track Post Stack Time Migrated ('PSTM') in house
in early Q4 2017 for interpretation. To date, we have viewed two
early brute stack 2D seismic lines and are highly encouraged with
regards to signal penetration, reflectivity, structuring and depth
of sedimentary fill.
With regards our Mauritania C-10 exploration asset, the operator
Tullow Oil continues to negotiate with the Ministry of Petroleum,
Energy and Mines on seeking a fair and equable licence extension,
in order to allow the joint venture a suitable period of time,
beyond November 2017, to mature a drill-worthy prospect on the
block. In parallel we await with interest the results of the
forthcoming Kosmos phase two well campaign, due to drill the ca.2-3
billion boe (gross un-risked) Lamantin prospect in Q3 2017, in
block C-6/C-12 just outboard and northwest of C-10.
The primary focus of the Company has been to continue to
originate, conduct full due diligence and ultimately execute
transformative growth driven M&A projects. Over the last six
months the technical and commercial team have focused solely on
those few jurisdictions which offer palatable above ground risk
exposure, along with robust and material subsurface potential.
Sterling has always taken a disciplined capital allocation view to
investing only in those opportunities with capex flexibility and
favourable fiscal and commercial terms. In this prolonged oil price
down cycle, it is critical that we leverage our robust cash
position appropriately to benefit not only on a discounted entry
proposition, but also over the lifecycle of any asset that we seek
to bring into the portfolio. We continue to focus the majority of
our manpower and efforts on this mandate and hope to be able to
bring suitable revenue generating assets into the Company in the
near term.
In June 2017, we completed our capital restructuring, with our
nominal ordinary share value reducing from 40 pence to 10 pence and
the cancellation of the share premium, creating a distributable
reserve for Sterling. This has given us enhanced flexibility to
make returns of capital to shareholders (should the Company
determine that this is appropriate), the ability to issue new
capital and allowed us to eliminate our retained deficit which was
ca.$449 million as at 31 December 2016.
The Company continues its efforts to reduce the Group's
administrative expenses in reaction to external market conditions.
As part of this initiative we will move into a smaller office in Q4
2017, with the aim of further reducing our office costs by
approximately 55%.
As of late June, Matthew Bowyer, our Exploration Manager, and
Tony Hawkins, our Head of Legal and Commercial, have decided to
pursue new opportunities. On behalf of the Company, I truly wish
them well and thank them for their numerous material contributions
over the last five years with Sterling.
More recently, we welcomed Anish Airi to the team as our new
Reservoir Engineering and Subsurface Manager. Anish is a Chemical
Engineer by training and has over 19 years of varied international
upstream experience working with Shell, Nexen and more latterly as
Technical Director Europe Middle East and Africa (EMEA) at
Macquarie bank.
In addition, Simon Compton will be joining us as Head of
Commercial and Legal in August 2017. Simon has over 29 years of
international upstream experience, specialising in investment
appraisal, economics and business development. Simon has worked
with BHP, Enterprise Oil, Hess, Premier Oil, Gulf Keystone and more
latterly at BMO Capital.
Looking forward, with a refreshed board and leadership team; we
continue with efforts to limit our liability exposure on
Chinguetti, deliver on our portfolio and focus on executing a
transformative M&A project, for the Company. I look forward to
updating our shareholders with our progress.
Eskil Jersing CEO
28 July 2017
Operations Review
Mauritania
PSC C-10 (WI 13.5%) Exploration block
Block C-10 covers an area of approximately 8,025km(2) and lies
in water depths of 50 to 2,400m within the Nouakchott sub-basin,
offshore Mauritania, and wholly surrounds the Chinguetti field. The
C-10 production sharing contract ('PSC') is held by the Company's
wholly owned subsidiary Sterling Energy Mauritania Limited ('SEML')
(13.5% working interest), Tullow Oil (76.5% working interest and
operator) and SMHPM (10% working interest). SMHPM is carried by
SEML and Tullow Oil, pro-rata to their working interests, during
the exploration phases. The PSC is in the second phase of the
exploration period, which is due to expire on 30 November 2017 and
has a minimum work obligation of one exploration well.
Following entry into the C-10 block in mid-2015, Sterling and
its JV partners have been actively maturing and ranking the
technical description of the play, prospect and lead portfolio on
the 3D seismic dataset.
Since 2014, Kosmos Energy has discovered and appraised in deep
water block C-8, immediately outboard of C-10, several world class
LNG scale gas discoveries of Albian to Cenomanian age, with the
Tortue West (Ahmeyim) structure alone reported to have Pmean gas
resources of ca.15 Tcf. In 2017, Kosmos and new partner BP have
continued exploration within the Cenomanian/Albian play with a
focus on proving an oil fairway adjacent to the northwestern
boundary of the C-10 block, intending to drill the ca.2-3Bn boe
(gross un-risked) Lamantin prospect in Q3 2017 in block C-6/C-12
just outboard and northwest of C-10.
Tullow Oil and the JV continue in discussions with SMHPM and the
Ministry with regards to the appropriate future path on the C-10
block, with a view to securing an extension for one year and
recognising that a well will not be drilled prior to the current
Phase 2 expiry in November 2017.
Should the JV not fulfil the minimum work obligations the gross
liability owing to the Mauritanian government would be $7.5 million
($1.1 million net to SEML). Following the completion of Phase 2 the
JV may elect to enter into Phase 3 (with a 3 year term) with a
minimum work obligation of a further two exploration wells.
Chinguetti oil field (ca.9.5% of cumulative production through
the Funding Agreement and a 6% royalty)
The Company has an economic interest in the Chinguetti field via
a Funding Agreement with SMHPM and a Royalty Agreement with Premier
Oil ('Premier'). The average production during 1H 2017 was 4,271
bopd gross (320 bopd net entitlement to Sterling).
Production from the Chinguetti field is stored on location in
the Berge Helene floating, production storage and offloading vessel
('FPSO'), with economic rights being transferred to the seller on
the completion of each cargo lifting; of which one cargo was sold
in the period (March 2017) totaling 41,950 bbls net to
Sterling.
The Chinguetti JV (Petronas, Tullow Oil, SMHPM, Premier, Kufpec)
are converging on the optimal solution to the current end of field
life challenges. Discussions continue to be held with the
Government of Mauritania and relevant stakeholders on how best to
both manage current operations and agree on a plan for a safe,
cost-effective and technically robust decommissioning and
abandonment phase commencing end 2017.
Somaliland
Odewayne (WI 34%) Exploration block
This large, unexplored frontier block comprises an area of
22,840km(2) . Extensive legacy geological field data provides
strong encouragement for a deep sedimentary basin and has
additionally highlighted the presence of oil seeps at surface,
suggesting that a working hydrocarbon system exists.
The Odewayne production sharing agreement ('PSA') was awarded in
2005. It is in the Third Period with an outstanding minimum work
obligation of 500km of 2D seismic. The Third Period was recently
extended in 2016 by two years to 2 November 2018. The minimum work
obligation during the optional Fourth Period of the PSA (also
extended by 2 years to May 2020) is for 1,000km of 2D seismic and
one exploration well.
As of the 3 April 2017, the Petrosoma Farmout Agreement has been
amended such that the parties will cancel the $8 million contingent
consideration in return for (i) a payment by Sterling Energy (East
Africa) Limited ('SE(EA)L') to Petrosoma of $3.5 million; and (ii)
a transfer from SE(EA)L to Petrosoma of a 6% interest in the PSA.
Approval for the transfer of the participating interest was granted
in July 2017 by the Government of Somaliland. SE(EA)L will retain a
34% interest in the Odewayne Block, fully carried by Genel Energy
for its share of the costs of all exploration activities during the
Third and Fourth Periods of the PSA.
From 2016, the Somaliland Ministry of Energy and Minerals
('MOEM') has progressed a directed speculative survey to allow the
acquisition of 2D seismic data. The project is led by the Ministry
who in Q4 2016 signed a contract with BGP (a Chinese geophysical
and drilling contractor) to acquire seismic data over a number of
blocks, including Odewayne.
The seismic acquisition program on the Odewayne block, commenced
early June 2017. The program is intended to fulfil (at least) the
minimum work obligation for the current phase and is the first
seismic data ever acquired on the block. As of 30 June 2017,
ca.870km of line clearance had been undertaken and two seismic
lines acquired. The seismic acquisition program continues to
progress smoothly, with MOEM intending to release data in 500km
tranches to the joint venture partners, with a view to a fast track
post stack time migration over the Odewayne block being in-house
early Q4 and a final product in-house towards the end of 2017.
M&A led Growth
Since mid-2015, Sterling has actively transitioned the portfolio
out of long cycle exploration assets requiring third party funding
and continues to actively search for near to mid-term value
creation and transformative growth / monetisation options in both
Africa and the Middle East.
A prudent, selective and persistent M&A led effort is
directed towards shorter cycle revenue generating projects that
will deliver in a
sustained lower oil price landscape, in progressive
jurisdictions.
The Company maintains a disciplined approach to all M&A
efforts at a corporate and asset level, only pursuing and executing
those growth options that the Company believes to have the best
opportunity to ultimately deliver value for shareholders.
Qualified person
In accordance with the guidelines of the AIM Market of the
London Stock Exchange, Eskil Jersing, CEO of the Company, who has
been involved in the oil industry for over 31 years, is the
qualified person that has reviewed the technical information set
out above.
Financial Review
Selected financial data
1H 2017 1H 2016 FY 2016
Net entitlement from production
(bopd) 320 214 279
--------------------------------- -------- -------- ----------------------
Net cargo liftings (bbls) 41,950 42,812 121,031
/ # liftings / 1 / 2 / 4
--------------------------------- -------- -------- ----------------------
Sales revenues (including
royalty) ($m) 2.2 1.3 4.8
--------------------------------- -------- -------- ----------------------
Average realised oil price
($/bbl) 48.7 29.2 39.8
--------------------------------- -------- -------- ----------------------
G&A cash expenditures ($m) 1.9 2.4 4.6
--------------------------------- -------- -------- ----------------------
Adjusted EBITDAX (1) ($m) (1.6) (1.7) (3.1)
--------------------------------- -------- -------- ----------------------
Loss after tax ($m) (2.2) (8.2) (8.5)
--------------------------------- -------- -------- ----------------------
Cash and cash equivalents
net to Group ($m) 83.5 92.4 88.1
--------------------------------- -------- -------- ----------------------
Debt ($m) - - -
--------------------------------- -------- -------- ----------------------
Share price (at period end)
(GBP pence) 15 15 15
--------------------------------- -------- -------- ----------------------
(1) Adjusted EBITDAX is calculated as earnings before interest,
taxation, depreciation, amortisation, impairment, pre-licence
expenditure, provisions and share-based payments.
Revenues and cost of sales
Net entitlement from Chinguetti field production for the period
was 320 bopd (including royalty barrels), an increase of 49% from
the 214 bopd in 1H 2016. Production in Q1 2016 was unusually low
due to technical difficulties, hence the improvement compared to 1H
2017.
During the period, there was one lifting from Chinguetti
resulting in (net to the Company) 41,950 bbls sold (1H 2016: 42,812
bbls sold, from two liftings). Group turnover increased by 68% to
$2.2 million (1H 2016 $1.3 million) due to the improved oil price
realised in 1H 2017.
Total cost of sales increased to $2.7 million (1H 2016: $424k).
In 1H 2016 cost of sales included the onerous provision release of
$2.1 million; like for like cost of sales is therefore $2.5
million.
Loss from operations
The loss from operations for 1H 2017 was $2.5 million (1H 2016:
loss $8.1 million). The improvement in net loss is in main due to
the 1H 2016 impairments totalling $7.4 million (Ambilobe and C-3
evaluation assets).
During the period, net administrative expenditure increased to
$2.0 million (1H 2016: $1.6 million) and includes pre-licence costs
of $1.0 million (1H 2016: $1.1 million). The increase in net
administrative expenditure is, in part, a result of a reduction in
recharges during the period.
Cash G&A expenses decreased by 23% in the period to $1.9
million (1H 2016: $2.4 million) as the Group continues to focus on
such expenditures in reaction to external market conditions.
A summary of the G&A movements is provided below.
1H 2017 1H 2016 2016
$ million $ million $ million
Other administrative expenses
per accounts (1.0) (0.5) (2.0)
Add back recharges
---------------------------- ----------------------------
Costs capitalised - (0.7) (0.8)
Costs recharged to JV partners - (0.1) (0.1)
Pre-licence expenditure (0.8) (1.0) (1.8)
-------------------------------- ---------------------------- ---------------------------- ----------------------
(0.8) (1.8) (2.7)
Add back share based payment
expense (0.1) - 0.1
Add back other non-cash items - (0.1) -
Group cash G&A expenses (1.9) (2.4) (4.6)
============================ ============================ ======================
Adjusted EBITDAX and loss after tax
Adjusted EBITDAX totalled a loss of $1.6 million (1H 2016: loss
$1.7 million).
The loss after tax totalled $2.2 million (1H 2016: loss $8.2
million). Basic loss per share was 0.99 USc per share (1H 2016:
3.74 USc loss per share).
Finance income of $522k (1H 2016: $294k) represents interest
received on cash held by the Group. Foreign exchange gains of $74k
on GBP denominated cash balances, reported in US Dollars (1H 2016:
loss $186k). Finance costs totalled $264k (1H 2016: $436k).
No dividend is proposed to be paid for the six months to 30 June
2017 (1H 2016: nil).
Cash flow
Net cash outflow from operating activities (pre-working capital
movements) totalled $2.6 million (1H 2016: outflow $778k). After
working capital, net cash outflow from operating activities
totalled $1.4 million (1H 2016: outflow $5.1 million).
Net cash investments in oil and gas assets totalled $3.6 million
in the period (1H 2016: $1.1 million), relating to exploration and
evaluation expenditure on Odewayne ($3.5 million) and C-10 ($100k)
assets.
Statement of financial position
At 30 June 2017, Sterling held $83.5 million cash and cash
equivalents available for its own use (30 June 2016: $92.4
million).
Group net assets at 30 June 2017 were $76.1 million (30 June
2016: $78.6 million). Non-current assets totalled $22.5 million (30
June 2016: $18.8 million) with net current assets reducing to $78.1
million (30 June 2016: $92.3 million).
The Group's Chinguetti decommissioning provision (current and
non-current) at 30 June 2017 was $31.6 million (30 June 2016: $32.4
million) reflecting the Group's current estimate of gross
abandonment and decommissioning cost.
On 14 June 2017, the reduction of capital was approved by the
High Court of Justice of England and Wales has been registered with
the Registrar of Companies and accordingly has now become
effective. The nominal value of each ordinary share has been
reduced from 40 pence to 10 pence. The Company's share premium
account has also been cancelled and along with the reduction of
capital has created a distributable reserve for Sterling.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the CEO Statement and in the Operations Review. The
financial position of the Group is described in the Financial
Review.
The Company has sufficient cash resources for its working
capital needs and its committed capital expenditure programme for
at least the next 12 months. As a consequence, the Directors
believe the Company is well placed to manage its business risks.
The Directors have a reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the results for the six
months ended 30 June 2017.
Disclaimer
This document contains certain forward-looking statements that
are subject to the usual risk factors and uncertainties associated
with the oil and gas exploration and production business. Whilst
the Group believes the expectation reflected herein to be
reasonable in light of the information available to it at this
time, the actual outcome may be materially different owing to
factors either beyond the Group's control or otherwise within the
Group's control but where, for example, the Group decides on a
change of plan or strategy. Accordingly, no reliance may be placed
on the figures contained in such forward-looking statements.
Definitions
$ US Dollars
---------------- --------------------------------------------
2D two dimensional
---------------- --------------------------------------------
3D three dimensional
---------------- --------------------------------------------
A&D Abandonment and Decommissioning
---------------- --------------------------------------------
bbl barrel(s) of oil
---------------- --------------------------------------------
boe barrels of oil equivalent, a measure
of the gas component converted into
its equivalence in barrel of oil
---------------- --------------------------------------------
bopd barrels of oil per day
---------------- --------------------------------------------
Adjusted EBITDAX earnings before interest, taxation,
depreciation, amortisation, impairment,
pre-
licence expenditure, provisions and
share based payments
---------------- --------------------------------------------
FPSO Floating, production, storage and offloading
vessel
---------------- --------------------------------------------
JV joint venture
---------------- --------------------------------------------
km kilometre
---------------- --------------------------------------------
m metre
---------------- --------------------------------------------
PSTM Post Stack Time Migrated
---------------- --------------------------------------------
PSA production sharing agreement
---------------- --------------------------------------------
PSC production sharing contract
---------------- --------------------------------------------
km(2) square kilometre
---------------- --------------------------------------------
USc US$ cents
---------------- --------------------------------------------
Tcf Trillion cubic feet
---------------- --------------------------------------------
WI working interest
---------------- --------------------------------------------
Condensed consolidated income statement for the six months to 30
June 2017
Six months Six months
to to Year ended
30th June 30th June 31st December
2017 2016 2016
$000 $000 $000
(unaudited) (unaudited) (audited)
------------ ------------ --------------
Revenue 2,217 1,320 4,815
Cost of sales (2,704) (424) (2,262)
Gross (loss)/profit (487) 896 2,553
Other administrative expenses (1,047) (508) (2,045)
Impairment of oil and gas
assets - (7,403) (7,375)
Pre-licence costs (977) (1,077) (1,951)
--------------------------------------- ------------ ------------ --------------
Total administrative expenses (2,024) (8,988) (11,371)
Loss from operations (2,511) (8,092) (8,818)
Finance income 596 294 683
Finance expense (264) (436) (394)
Loss before tax (2,179) (8,234) (8,529)
Tax - - -
Loss for the period attributable
to the owners of the parent (2,179) (8,234) (8,529)
------------ ------------ --------------
Other comprehensive (expense)/income
- items to be
reclassified to the income
statement in subsequent periods
Currency translation adjustments (2) (1) 50
Total comprehensive (expense)/income
for the period (2) (1) 50
------------ ------------ --------------
Total comprehensive expense
for the period attributable
to the owners of the parent (2,181) (8,235) (8,479)
============ ============ ==============
Basic loss per share (USc) (0.99) (3.74) (3.88)
Diluted loss per share
(USc) (0.99) (3.74) (3.88)
Condensed consolidated statement of financial position as at 30
June 2017
As at As at As at
30th June 30th June 31st December
Note 2017 2016 2016
$000 $000 $000
(unaudited) (unaudited) (audited)
------------ ------------ --------------
Non-current assets
Intangible exploration
and evaluation assets 3 22,483 18,739 18,846
Property, plant and equipment 13 28 17
22,496 18,767 18,863
------------ ------------ --------------
Current assets
Inventories 2,501 2,126 1,948
Trade and other receivables 707 636 6,540
Cash and cash equivalents 83,493 92,540 88,058
86,701 95,302 96,546
------------ ------------ --------------
Total assets 109,197 114,069 115,409
============ ============ ==============
Equity
Share capital 28,143 149,014 149,014
Share premium - 378,863 378,863
Currency translation
reserve (171) (220) (169)
Retained earnings 48,161 (449,050) (449,318)
------------ ------------ --------------
Total equity 76,133 78,607 78,390
------------ ------------ --------------
Non-current liabilities
Long-term provisions 24,456 32,414 14,472
24,456 32,414 14,472
------------ ------------ --------------
Current liabilities
Trade and other payables 1,463 1,456 1,363
Short-term provisions 7,145 1,592 21,184
8,608 3,048 22,547
------------ ------------ --------------
Total liabilities 33,064 35,462 37,019
------------ ------------ --------------
Total equity and liabilities 109,197 114,069 115,409
============ ============ ==============
Condensed consolidated statement of changes in equity for the
six months ended 30 June 2017
Currency
Share Share translation Retained
capital premium reserve earnings(*) Total
$000 $000 $000 $000 $000
------------------ --------------- ------------------- ---------------- ---------------
At 1 January 2016
(audited) 149,014 378,863 (219) (440,862) 86,796
------------------------- ------------------ --------------- ------------------- ---------------- ---------------
Total comprehensive
expense for the
period attributable
to the owners of
the parent - - (1) (8,234) (8,235)
Share option charge
for the period - - - 46 46
At 30 June 2016
(unaudited) 149,014 378,863 (220) (449,050) 78,607
------------------------- ------------------ --------------- ------------------- ---------------- ---------------
Total comprehensive
expense for the
period attributable
to the owners of
the parent - - 51 (295) (244)
Share option charge
for the period - - - 27 27
At 31 December
2016 (audited) 149,014 378,863 (169) (449,318) 78,390
------------------------- ------------------ --------------- ------------------- ---------------- ---------------
Total comprehensive
expense for the
period attributable
to the owners of
the parent - - (2) (2,179) (2,181)
Share option charge
for the period - - - (76) (76)
Share capital reduction (120,871) (378,863) - 499,734 -
At 30 June 2017
(unaudited) 28,143 - (171) 48,161 76,133
------------------------- ------------------ --------------- ------------------- ---------------- ---------------
(*) The share option reserve has been included within the
retained earnings reserve.
Condensed consolidated statement of cash flows for the six
months ended 30 June 2017
Six months Six months
to to Year ended
30th June 30th June 31st December
Note 2017 2016 2016
$000 $000 $000
(unaudited) (unaudited) (audited)
------------ ------------ --------------
Operating activities:
Loss before tax (2,179) (8,234) (8,529)
Finance income and gains (596) (294) (683)
Finance expense and losses 257 427 380
Depletion and amortisation 5 20 32
Impairment expense 3 - 7,403 7,375
Share-based payment charge (76) 46 75
Onerous provision - - (3,700)
Gain on disposal of subsidiary - (146) -
------------ ------------ --------------
Operating cash outflow
prior to working capital
movements (2,589) (778) (5,050)
Increase in inventories (553) (807) (628)
Decrease/(increase) in
trade and other receivables 5,833 (86) (5,990)
Increase/(decrease) in
trade and other payables 100 (1,283) (1,377)
(Decrease)/increase in
provisions (4,200) (2,108) 4,200
Net cash outflow from
operating activities (1,409) (5,062) (8,845)
Investing activities
Interest received 522 294 683
Purchase of property,
plant and equipment (1) (15) (15)
Exploration and evaluation
costs 3 (3,637) (1,068) (1,147)
Decommissioning costs (125) - (1,088)
Net cash used in investing
activities (3,241) (789) (1,567)
.
Net decrease in cash
and cash equivalents (4,650) (5,851) (10,412)
Cash and cash equivalents
at beginning of period 88,058 98,653 98,653
Effect of foreign exchange
rate changes 85 (262) (183)
Cash and cash equivalents
at end of period 83,493 92,540 88,058
============ ============ ==============
Notes to the consolidated results for the six months ended 30
June 2017
1. Basis of preparation
The financial information contained in this announcement does
not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006.
The financial information for the six months ended 30 June 2017
is unaudited. In the opinion of the Directors, the financial
information for this period fairly represents the financial
position of the Group. Results of operations and cash flows for the
period are in compliance with International Financial Reporting
Standards as adopted by the EU ('EUIFRS'). The accounting policies,
estimates and judgements applied are consistent with those
disclosed in the annual financial statements for the year ended 31
December 2016. These financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2016.
All financial information is presented in USD, unless otherwise
disclosed.
An unqualified audit opinion was expressed for the year ended 31
December 2016, as delivered to the Registrar.
The Directors of the Company approved the financial information
included in the results on 28 July 2017.
2. Results & dividends
The Group has a retained earnings at the end of the period of
$48.2 million (30 June 2016: $449.1 million retained deficit) to be
carried forward. The Directors do not recommend the payment of a
dividend (1H 2016: nil).
3. Intangible exploration and evaluation (E&E) assets
Total
$000
(unaudited)
------------
Net book value
at 1 January 2016 25,074
------------
Additions during
the period 1,068
Impairment for
the period (7,403)
Net book value
at 30 June 2016 18,739
------------
Additions during
the period 79
Impairment reversal
for the period 28
Net book value
at 31 December
2016 18,846
------------
Additions during
the period 3,637
Net book value
at 30 June 2017 22,483
------------
The amount for intangible exploration and evaluation assets
represents investments in respect of exploration licences. E&E
assets are reviewed for impairment when circumstances arise which
indicate that the carrying value of an E&E asset exceeds the
recoverable amount.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DDLFLDDFXBBE
(END) Dow Jones Newswires
July 28, 2017 02:00 ET (06:00 GMT)
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