TIDMAET
RNS Number : 2800J
Afentra PLC
26 April 2022
26 April 2022
AFENTRA PLC
ANNUAL RESULTS FOR THE YEARED 31 DECEMBER 2021
Afentra plc ('Afentra' or the 'Company'), is pleased to announce
its annual results for the year ended 31 December 2021.
2021 SUMMARY
Strategic
-- Established a new Executive team and Board, introduced new institutional and high net worth shareholders.
-- Rebranded Sterling Energy to Afentra ('African Energy
Transition') with a strategic imperative of capitalising on
opportunities resulting from the accelerating energy transition on
the African continent.
-- Established key focus areas with a comprehensive strategy to
capture production and development assets in Africa and create
value for all stakeholders.
-- Built a small, focused team with a history of identifying and
acquiring high quality assets, to rapidly assess business
development opportunities technically, operationally and
commercially.
-- Developed a robust Governance and ESG framework to support future growth ambitions.
Operations
-- Submitted a non-binding Expression of Interest to purchase
interests in Block 3/05 and Block 23 in Angola.
-- The Company continued to support the Operator of the Odewayne
block, Somaliland, in progressing the technical understanding of
the block; and continued to review its technical assessment and
outlook on block prospectivity.
Financial Highlights
-- Cash resources net to the Group at 31 December 2021 of $37.7 million (2020: $42.7 million).
-- Adjusted EBITDAX(1) : loss for the Group of $2.0 million (2020: $761k loss).
-- The Group remains debt free and fully carried for Odewayne
operations (Third and the Fourth Period).
(1) defined within the definitions and glossary of terms
Post year end highlights
-- In April, Afentra named preferred bidder to purchase interests in Block 3/05 and Block 23.
-- Afentra progressing final due diligence ahead of finalising
Sales and Purchase Agreement (SPA) with Sonangol.
Commenting, CEO Paul McDade, said:
"2021 was a year of transformation for Afentra. The Company
underwent a significant change of strategic focus and is now
extremely well placed to execute on our strategy to identify and
responsibly develop African opportunities and create value for all
stakeholders. Sonangol's recent announcement of our preferred
bidder status for Block 3/05 and Block 23 in Angola moved Afentra
one step closer to completing its first acquisition and we look
forward to moving ahead with that opportunity as we seek to
underpin the Company with stable cash flow and reserves.
As we look forward to 2022, our focus remains on the
implementation of our growth strategy, building scale and
stakeholder value within the Energy Transition in Africa. With a
strong balance sheet and an exceptional team behind us, the board
and management are excited for the journey ahead and look forward
to updating shareholders on our progress. "
For further information contact:
Afentra plc +44 (0)20 7405 4133
Paul McDade, CEO
Ian Cloke, COO
Anastasia Deulina, CFO
Buchanan (Financial PR) +44 (0)20 7466 5000
Ben Romney
Jon Krinks
Chris Judd
Peel Hunt LLP (Nominated Advisor and Joint Broker) +44 (0)20
7418 8900
Richard Crichton
David McKeown
Tennyson Securities (Joint Broker) +44 (0)20 7186 9033
Peter Krens
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
CHAIRMAN'S STATEMENT
Dear Shareholders
My first year as Chair of Afentra has been a period in which we
have seen significant changes in the industry landscape, and a
period where we have taken large strides to progress the strategic
objectives outlined when the Company was first launched in May
2021.
Starting with the industry macro backdrop, as the impact of
Covid abated during the second half of the year, and economies were
able to re-open, we observed a commensurate rebound in global
economic activity. In turn this has created a surge in global
demand for oil and gas, returning to and exceeding pre-pandemic
levels and leading to a considerable improvement in the commodity
price environment and overall confidence in the market. The easing
of travel restrictions has also enabled a better environment for
deal-making as counter-parties are able to meet in person which
always supports a better interaction and process for negotiating
and completing deals.
The recent shocking events in Ukraine have added further upward
pressure on energy prices as Russian crude is taken offline and
shunned by large swathes of the Western world and its allies.
Furthermore, the geopolitical uncertainty engendered by the crisis
has created major volatility in energy prices. This increase and
volatility in commodity prices is, however, a double edged sword.
Whilst the macro factors have resulted in increased interest in the
sector from the investment community it has also emphasised the
importance of continued investment to secure the required supply to
stabilise commodity prices as we progress through the energy
transition. The price volatility has also the potential to make the
difference in seller and buyers price expectations more difficult
to bridge. During this time, Afentra will continue to place high
importance on taking a disciplined approach to business development
as we screen our opportunity pipeline to ensure we deliver
long-term value for our shareholders.
Afentra was set up with a clear objective; to capitalise on
opportunities presented by the energy transition on the African
continent and in doing so support a responsible transfer of asset
ownership that provides beneficial outcomes for all stakeholders.
This current macro environment continues to provide an attractive,
opportunity-rich landscape for ambitious independents like
Afentra.
In the past year, we have successfully established our new Board
and executive team and continued to build upon the robust
governance and ESG frameworks that underpin our future growth
ambitions. With regards to the Governance framework that we
established, we will continue to review and update our policies and
commitments in these areas to ensure that we fully meet, and, where
possible, exceed our obligations, in line with our updated
strategic objectives.
Vendors and host governments are increasingly seeking credible
and responsible counterparties for divested assets to ensure best
practice, environmental stewardship, and the highest standards of
governance so that local communities and all stakeholders can
continue to realise the socio-economic benefits from existing,
discovered resources. With ESG considerations at the heart of
Afentra's strategy, and the Executive team's significant experience
in this area, the Company is well positioned to be an acquirer of
choice.
Taken together, the strengthening of the oil price and the
increasing importance of ESG considerations for both vendors and
the capital markets, provide strong tailwinds for your Company in
the longer term. However in the short term oil price volatility and
geopolitical uncertainty may create a challenging M&A
environment so we will ensure we retain a very strong focus on
value creation for you our shareholders and will therefore maintain
a disciplined approach to valuation, especially in this challenging
environment.
Afentra's Executive team, led by your CEO Paul McDade, have the
necessary technical and commercial expertise, and industry and
government networks across the African continent to capitalise on
opportunities that meet the Company's criteria, and we are
convinced that over the period we have put in place the necessary
foundations to deliver long-term value for all our
stakeholders.
In conclusion, your Company finds itself in a strong position as
we enter the second fiscal year of operation as Afentra. The market
drivers that underpin the global energy transition and support our
long-term strategy are gaining momentum and we are confident that
we have the right team and strategy to capitalise on these
opportunities for the benefit of all our stakeholders.
It only remains for me to thank you, our shareholders, for your
ongoing support for the Company, the management team and our
strategy. We look forward to updating you with positive news as we
move through the rest of the year.
Jeffrey MacDonald - Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
Creating a responsible new industry player
Dear Shareholders,
The year ended 31 December 2021 was a transformative period for
the Company with the inception of Afentra; a new E&P business
with a focused strategy tailored to the long-term structural
changes taking place within the global energy markets.
As set out at our launch in May 2021, Afentra has been
established as a responsible and credible independent E&P
company to capitalise on the opportunities that will result from
the accelerating divestment of producing assets and discoveries
from International Oil Companies ('IOCs') and host Governments in
Africa and to support an effective and just energy transition for
the continent.
Our focus since launch has been on developing the appropriate
corporate framework to support Afentra's long-term growth
objectives, ensuring Afentra is recognised in the region and the
industry as an attractive counterparty for divestments and identify
and pursue opportunities consistent with our well-defined strategy.
I am pleased to report that the team has made good progress in all
of these areas, as detailed below.
A tailored strategy
The oil market has changed considerably since our launch. The
oil price has rallied from around $60/bbl to well above $100/bbl as
a result of recovering and now growing demand, industry
underinvestment and of course the impact of the terrible events
that are ongoing in Ukraine. However, the market drivers that
support Afentra's growth strategy are unchanged. While the strong
commodity pricing environment has impacted the urgency of vendors
to divest, and the value they are seeking, the underlying market
drivers for major oil companies to decarbonise and high-grade their
portfolios remains.
At the outset, we adopted a highly disciplined approach to the
execution of our growth strategy to ensure any acquisitions were
strategically consistent with the criteria that we set ourselves.
As detailed within this report, those criteria covered technical,
operational and environmental considerations, and of course the
commercial requirement to deliver value accretive deals to our
shareholders. The latter remains a core focus in the current
market, and our disciplined approach dictates that we execute the
strategy with patience and in a manner that supports our
longer-term objectives. We are only too aware of the volatility
within our industry, with Brent trading below $30/bbl less than two
years ago and therefore we prioritise cost and value discipline
within our corporate mindset.
During the year there has been a steady evolution of energy
market commentary, and sector dynamics, that supports the central
themes upon which Afentra was built. First, the need for continued
and responsible investment into the oil and gas sector to ensure
the necessary supply of oil and gas to meet growing global demand
as the transition to renewable energy gradually progresses around
the world. Increasing commodity prices, which are translating to
growing financial and social concerns about the economic impact to
consumers, is a direct result of industry underinvestment alongside
sustained supply and demand concerns. The growing acceptance that
oil and gas will continue to play an important role in the global
energy mix for the coming years and decades supports Afentra's
ambition to be a responsible producer of discovered resources.
Second, recognition of the social impact that the energy
transition will have on emerging markets, and particularly on
Africa, has grown. At launch, Afentra promoted the need to ensure
there is a "Just transition for Africa", a transition that
recognises the need for the social impact to be balanced against
the climate impact. The commentary that certain economies are
reliant on hydrocarbons and should be able to capitalise on the
socio-economic benefits associated with them has become more
prominent and more widely acknowledged. Further strengthening this
view is the fact that these emerging nations represent a small
contribution to the global impact of climate change compared with
more developed nations that champion the need for a speedy
transition. The fact that the current gas crisis can have such an
impact on western economies highlights the devastating risks and
social impacts that too rapid a transition could have on the
nations and people of Africa.
It is in this context that Afentra's purpose and model is
directly aligned to the creation of shared value for all
stakeholders. By committing to strong environmental stewardship,
responsible social impact, and strong governance, we have placed
the objectives of all stakeholders at the core of our business
model. Our ambition to be a credible counterparty for divesting
IOCs and host governments supports our growth strategy. The proven
operating track record of the team we have assembled should provide
trust in our ability to safely and responsibly manage acquired
assets, reducing the environmental impact through operating
techniques wherever possible, while maintaining the positive
socio-economic impact that any acquired assets have on the
communities and countries of operation. Our proposition will
increasingly meet the specific targets of the United Nations
Sustainable Development Goals as we progress from acquisition
through to operatorship, production and development.
Progress - strong framework to support future growth
As we reflect on our first year of existence, we are pleased
with the considerable progress that we have made. We have
successfully assembled a highly competent and credible team with
the full suite of expertise required to execute the growth
strategy. We have established the corporate framework to support
the long-term growth of the Company, underpinned by robust
Governance, policies and values.
Afentra's profile is now established within the industry and our
brand is recognised across our focus region of West Africa as a
competent, reputable, and ambitious counterparty. On the back of
this, our team has leveraged well-established relationships with
IOC's, debt providers and host governments as we seek opportunities
consistent with the growth strategy, and we have been involved in
ongoing market sales processes as well as proactively making
approaches to acquire "off-market" assets.
In October 2021, we submitted an Expression of Interest to
purchase interests in Block 3/05 and Block 23 in Angola from
Sonangol, and updated in February 2022 that negotiations are
ongoing as we seek to reach agreement on the detailed terms of the
transaction. In April 2022 Sonangol announced that Afentra is the
preferred bidder to purchase these interests. These are high
quality assets, in a jurisdiction that we know well, which meet our
acquisition criteria in terms of the scale of Oil in Place
providing significant upside, with the potential to invest to
increase reserves and production.
Afentra's involvement in this process unfortunately resulted in
the suspension of shares, in accordance with Rule 14 of the AIM
Rules for Companies, however we hope to progress this process to a
conclusion as soon as possible, ideally with a satisfactory outcome
that sees Afentra complete its first acquisition.
Afentra has been active in the pursuit of other production
assets in West Africa. The Company continues to appraise multiple
acquisition opportunities that support its growth strategy in terms
of acquiring assets in the region with solid low-cost production,
proven reserves and significant upside.
In parallel to the above, we will continue to appraise our
existing asset in Somaliland with a view to establishing additional
value on behalf of shareholders. Given the asset profile is early
stage exploration which benefits from a full carry by our partner,
we need to carefully consider its positioning within our strategy
and ensure that we maximise the value of this asset.
Outlook - building a platform for long-term growth
It has been an active period for your Company and we expect
momentum to accelerate through 2022 as we strive to deliver our
first value accretive transaction for our shareholders. Afentra's
strategy to build a material portfolio of operated and non-operated
assets requires a patient approach, especially as we seek to
navigate the challenges of transacting in a volatile and high oil
price environment.
The market drivers that underpin the energy transition and our
strategic intent continue to gather momentum and will undoubtedly
evolve over the coming years, as they did in more mature operating
regions such as the UK North Sea and the Gulf of Mexico. The
current high oil price may have slowed down ongoing processes and
deterred certain sellers to divest, given the inflated cash flows
being generated by the assets, but conversely it also creates a
window of opportunity to sell.
It is our responsibility to remain highly disciplined in our
approach to ensure any deals delivered today stand-up to
retrospective scrutiny in the years ahead. We are proactively
seeking opportunities and feel confident that we have the right
team and strategy to deliver our objectives. It is certainly our
expectation to deliver transactions this year that provide a
platform for long-term growth and value creation.
I'd like to thank all our shareholders for their support since
we began this exciting journey and I look forward to updating you
all with our progress through this year.
Paul McDade - Chief Executive Officer
ASSET SUMMARY
SOMALILAND
Somaliland offers one of the last opportunities to target an
undrilled onshore rift basin in Africa. The Odewayne block, with
access to Berbera deepwater port less than a 100km to the north, is
ideally located to commercialise any discovered hydrocarbons. A 2D
geophysical survey acquired in 2017 and reprocessed in 2019, along
with gravity modelling and legacy geological field studies, was the
focus of the Company's 2021 work programme to determine if a
Mesozoic age sedimentary basin is present in the block and its
prospectivity.
Odewayne (W.I. 34%) Exploration block
Overview
This large, unexplored, frontier acreage position covers
22,840km(2) , the equivalent of c.100 UK North Sea blocks.
Exploration activity prior to the 2017 regional 2D seismic
acquisition program has been limited to the acquisition of airborne
gravity and magnetic data and surface fieldwork studies, with no
wells drilled on block.
The Company's wholly owned subsidiary, Afentra (East Africa)
Limited ('A(EA)L'), holds a 34% working interest in the PSA (fully
carried by Genel Energy Somaliland Limited for its share of the
costs of all exploration activities during the Third and Fourth
Periods of the PSA).
The Odewayne production sharing agreement was awarded in 2005.
It is in the Third Period, with a 1,000km, 10km by 10km 2D seismic
grid acquired in 2017 by BGP. The Third Period has been further
extended, through the 8th deed of amendment (as mentioned in the
Licence Status, below).
In 2021 the operator carried out 2D & 3D gravity modelling
and a re-interpretation of the 2D seismic grid. The data is
interpreted to show fold and thrust structures beneath the
interpreted Base Cretaceous Unconformity ('BCU'). If the fold and
thrust belt model is correct the petroleum system analogous to this
would be of Cryogenian in age and produces about 40 kbo/d in
Oman.
FINANCIAL REVIEW
Selected financial data 2021 2020
Year end cash net to Group $million 37.7 42.7
Adjusted EBITDAX $million (2.0) (0.8)
Loss after tax $million (5.0) (1.9)
Year end Share price Pence 14.6 9.4
Non-IFRS measures
The Group uses certain measures of performance that are not
specifically defined under IFRS or other generally accepted
accounting principles. These non-IFRS measures include capital
investment, debt and adjusted EBITDAX.
Income Statement
The loss from operations for 2021 was $5.0 million (2020: loss
$2.2 million) for the reasons described below.
During the year, net administrative expenditure increased to
$5.0 million (2020: $2.2 million) as a result of exceptional (one
off) items relating to costs associated with the migration to
Afentra, a change in management and an increase in contractors and
advisors.
In 2021, a portion of the Group's staff costs and associated
overheads have been expensed as pre-licence expenditure ($2.4
million), or capitalised/recharged ($77k) where they are directly
assigned to capital projects or recharged. This totalled $2.4
million in the year (2020: $1.3 million).
Finance income in the year of $36k (2020: $326k) represents
interest received ($13k) and foreign exchange gains ($23k) on cash
held by the Group. The reduction in interest received year on year
was as a result of the global pandemic amongst other factors
impacting interest rates.
Finance costs during 2021 totalled $45k (2020: $58k).
The loss for the year was $5.0 million (2020: loss $1.9
million):
$' Million
Loss for year 2020 (1.9)
Increase in G&A and pre-licence costs (2.8)
Decrease in finance income (0.3)
Loss for year 2021 (5.0)
Group adjusted EBITDAX loss totalled $2.0 million (2020: $761k
loss):
2021 2020
$' Million $' Million
Loss after tax (5.0) (1.9)
Interest and finance costs 0.0 (0.3)
Depletion and depreciation 0.2 0.2
Pre-licence costs 2.7 1.2
Total EBITDAX (Adjusted) (2.0) (0.8)
The basic loss per share was 2.3 cents per share (2020: loss 0.9
cents per share). No dividend is proposed to be paid for the year
ended 31 December 2021 (2020: $nil).
Statement of financial position
At the end of 2021, non-current assets totalled $22.0 million
(2020: $22.1 million) the majority of which relates to the Odewayne
block ($21.3 million).
Net assets/total equity stood at $58.9 million (2020: $63.9
million).
Net current assets reduced to $37.3 million (2020: $42.5
million).
At the end of 2021 cash and cash equivalents totalled $37.7
million (2020: $42.7 million), the reduction primarily being
related to spend on G&A.
Cash flow
Total net decrease in cash and cash equivalents in the year was
$4.9 million (2020: $2.2 million), a full reconciliation of which
is provided in the Consolidated Statement of Cash Flows.
During the year there were minimal cash investments on the
Odewayne Block in Somaliland due to the Group's interest being
fully carried by Genel Energy Somaliland Limited for its share of
the costs during the Third and Fourth Periods of the PSA.
Accounting Standards
The Group has reported its 2021 and 2020 full year accounts in
accordance with UK adopted international accounting standards.
Cautionary statement
This financial report 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 Directors believe the expectation
reflected herein to be reasonable in light of the information
available up to the time of their approval of this report, the
actual outcome may be materially different owing to factors either
beyond the Group's control or otherwise within the Group's control
but, for example, owing to a change of plan or strategy.
Accordingly, no reliance may be placed on the forward-looking
statements.
Anastasia Deulina - Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
31st December 31st December
2021 2020
$000 $000
Other administrative expenses (2,249) (953)
Pre-licence costs (2,734) (1,221)
Total administrative expenses (4,983) (2,174)
Loss from operations (4,983) (2,174)
Finance income 36 326
Finance expense (45) (58)
Loss before tax (4,992) (1,906)
Tax - -
Loss for the year attributable to
the owners of the parent (4,992) (1,906)
Other comprehensive (expense)/income
- items to be reclassified to the
income statement in
subsequent periods
Currency translation adjustments (5) 7
Total other comprehensive (expense)/income
for the year (5) 7
Total comprehensive expense for the
year attributable to the owners of
the parent (4,997) (1,899)
Basic and diluted loss per share
(US cents) (2.3) (0.9)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31st December 31st December
Note 2021 2020
$000 $000
Non-current assets
Intangible exploration and evaluation
assets 4 21,289 21,209
Property, plant and equipment 725 844
22,014 22,053
Current assets
Trade and other receivables 288 193
Cash and cash equivalents 37,727 42,674
38,015 42,867
Total assets 60,029 64,920
Equity
Share capital 28,143 28,143
Currency translation reserve (202) (197)
Retained earnings 30,953 35,945
Total equity 58,894 63,891
Current liabilities
Trade and other payables 518 209
Lease liability 234 205
752 414
Non-current liabilities
Lease liability 347 581
Long-term provision 36 34
383 615
Total liabilities 1,135 1,029
Total equity and liabilities 60,029 64,920
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Currency
Share translation Retained
capital reserve earnings Total
$000 $000 $000 $000
At 1 January 2020 28,143 (204) 37,851 65,790
Loss for the year - - (1,906) (1,906)
Currency translation adjustments - 7 - 7
Total comprehensive expense
for the year attributable to
the owners of the parent - 7 (1,906) (1,899)
At 31 December 2020 28,143 (197) 35,945 63,891
Loss for the year - - (4,992) (4,992)
Currency translation adjustments - (5) - (5)
Total comprehensive expense
for the year attributable to
the owners of the parent - (5) (4,992) (4,997)
At 31 December 2021 28,143 (202) 30,953 58,894
CONSOLIDATED STATEMENT OF CASH FLOWS
Note 2021 2020
$000 $000
Operating activities:
Loss before tax (4,992) (1,906)
Depreciation, depletion & amortisation 241 193
Finance income and gains (13) (326)
Finance expense and losses 45 59
Operating cash flow prior to working
capital movements (4,719) (1,980)
(Increase)/decrease in trade and
other receivables (95) 57
Increase/(decrease) in trade and
other payables 309 (230)
Increase in provision 2 4
Net cash flow used in operating activities (4,503) (2,149)
Investing activities
Interest received 13 326
Purchase of property, plant and equipment (127) (12)
Exploration and evaluation costs 4 (80) (90)
Net cash used in investing activities (194) 224
Financing activities
Principal paid on lease liability (234) (237)
Interest paid on lease liability (39) (46)
Net cash used in financing activities (273) (283)
Net decrease in cash and cash equivalents (4,970) (2,208)
Cash and cash equivalents at beginning
of year 42,674 44,851
Effect of foreign exchange rate changes 23 31
Cash and cash equivalents at end
of year 37,727 42,674
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
The results announcement is for the year ended 31 December
2021.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2021
or 2020, but is derived from those accounts. Statutory accounts for
2020 have been delivered to the Registrar of Companies and those
for 2021 will be delivered following the Company's Annual General
Meeting. The auditors have reported on those accounts; their
reports were unqualified, did not draw attention to any matters by
way of emphasis without qualifying their report and did not contain
statements under s498(2) or (3) Companies Act 2006.
While the financial information included in this announcement
has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
(IFRSs), this announcement does not itself contain sufficient
information to comply with IFRSs.
The Annual Report and Accounts and the notice for the Company's
Annual General meeting, which is to be held at 10.00 a.m. on 24 May
2022, will be posted to Shareholders on 29 April 2022.
2. Going concern
The Group business activities, together with the factors likely
to affect its future development, performance and position are set
out in the Asset summary. The financial position of the Group and
Company, its cash flows and liquidity position are described in the
Financial Review.
The Group has sufficient cash resources for its working capital
needs and its committed capital expenditure programme at least for
the next 12 months. As a consequence, the Directors believe that
both the Group and Company are well placed to manage their business
risks successfully despite the ongoing pandemic and uncertain
economic outlook.
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. This assessment has been made by the Directors who remain
confident the Group has sufficient cash resources at the date of
signing the annual report to meet its liabilities as they fall due
for a period of at least 12 months from the date of signing these
financial statements, notwithstanding; the impact COVID-19 has had,
and continues to have internationally and the current situation in
Ukraine and the impact to commodity prices and foreign exchange
rates. The Group currently has no unconditional, legally binding
commitments in relation to the disclosed transaction in Note 5. The
Directors believe that the Group is in a strong position to absorb
any potential impact on the Group arising from COVID-19, and thus,
they continue to adopt the going concern basis of accounting in
preparation of the financial statements.
3. Operating segments
Africa operations in 2021 focused on exploration and appraisal
activities in Somaliland. The UK corporate office is a technical
and administrative cost centre focused on new ventures. The
operating results of each segment are regularly reviewed by the
Board of Directors in order to make decisions about the allocation
of resources and to assess their performance.
The following tables present income, expense and certain asset
and liability information regarding the Group's operating segments
for the year ended 31 December 2021 and for the year ended 31
December 2020.
Corporate Africa Total
2021 2020 2021 2020 2021 2020
$000 $000 $000 $000 $000 $000
Other administrative
expenses (2,249) (953) - - (2,249) (953)
Pre-licence costs (2,734) (1,221) - - (2,734) (1,221)
Loss from operations (4,983) (2,174) - - (4,983) (2,174)
Finance income 36 326 - - 36 326
Finance expense (45) (58) - - (45) (58)
Segment loss before
tax (4,992) (1,906) - - (4,992) (1,906)
Other segment information
Depreciation 241 193 - - 241 193
Segment assets
and liabilities
Non-current assets
(1) 725 844 21,289 21,209 22,014 22,053
Segment assets
(2) 38,015 42,867 - - 38,015 42,867
Segment liabilities
(3) (1,121) (1,016) (14) (13) (1,135) (1,029)
(1) Segment non-current assets of $21.3 million in Somaliland
(2020: $21.2 million).
(2) Corporate segment assets include $37.7 million cash and
cash equivalents (2020: $42.7 million). Carrying amounts of
segment assets exclude investments in subsidiaries.
(3) Carrying amounts of segment liabilities exclude intra-group
financing.
4. Intangible Exploration and Evaluation assets
Group
$000
Net book value at 1 January 2020 21,119
Additions during the year 90
Net book value at 31 December
2020 21,209
Additions during the year 80
Net book value at 31 December
2021 21,289
Group intangible assets at the year end 2021:
Odewayne PSA, Somaliland: A(EA)L 34%, Genel Energy Somaliland
Limited 50%, Petrosoma 16%.
Classified as a joint arrangement in accordance with IFRS
11.
5. Subsequent events
On the 11 April 2022 the Company confirmed that Sonangol had
announced Afentra had been selected as preferred bidder to purchase
interests in Block 3/05 and Block 23. The next steps in the process
have involved finalising a sale and purchase agreement that
contains a number of conditions precedent that will need to be
satisfied or waived before the Acquisition can be completed. In
addition, a final due diligence exercise is required to be
completed in connection therewith. If Afentra ultimately proceeds
with the Acquisition, it would be classified as a reverse takeover
transaction in accordance with Rule 14 of the AIM Rules for
Companies. There is, however, no guarantee at this stage that the
Acquisition will be completed.
DEFINITIONS AND GLOSSARY OF TERMS
$ US dollars
Companies Act or Companies Act the Companies Act 2006, as amended
2006
2D two dimensional
AIM AIM, a SME Growth market of the London Stock Exchange
AGM Annual General Meeting
Articles the Articles of Association of the Company
Board the Board of Directors of the Company
Company Afentra plc
Directors the Directors of the Company
E&E exploration and evaluation assets
E&P exploration and production
EBITDAX (Adjusted) earnings before interest, taxation,
depreciation, depletion and amortisation, impairment, share-based
payments, provisions, and pre-licence expenditure
EITI Extractive Industries Transparency Initiative
Farm-in & farm-out a transaction under which one party
(farm-out party) transfers part of its interest to a contract to
another party (farm-in party) in exchange for a consideration which
may comprise the obligation to pay for some of the farm-out party
costs relating to the contract and a cash sum for past costs
incurred by the farm-out party
G&A general and administrative
G&G geological and geophysical
GBP pounds sterling
Genel Energy Genel Energy Somaliland Limited
Group the Company and its subsidiary undertakings
HSSE Health, Safety, Security and Environment
hydrocarbons organic compounds of carbon and hydrogen
IAS International Accounting Standards
IFRS International Financial Reporting Standards
IOCs international oil company
JV joint venture
k thousands
km kilometre(s)
km(2) square kilometre(s)
KPIs key performance indicators
lead indication of a potential exploration prospect
London Stock Exchange or LSE London Stock Exchange Plc
LTIP Long-term incentive plan
M&A mergers and acquisitions
m metre(s)
OECD Organisation for Economic Cooperation and Development
Ordinary Shares ordinary shares of 10 pence each
Petroleum oil, gas, condensate and natural gas liquids
Petrosoma Petrosoma Limited (JV partner in Somaliland)
Prospect an area of exploration in which hydrocarbons have been
predicted to exist in economic quantity. A group of prospects of a
similar nature constitutes a play.
PSA production sharing agreement
QCA Code Corporate Governance Code for Small and Mid-Size Quoted
Companies 2018
Reserves reserves are those quantities of petroleum anticipated
to be commercially recoverable by application of development
projects to known accumulations from a given date forward under
defined conditions. Reserves must satisfy four criteria; they must
be discovered, recoverable, commercial and remaining based on the
development projects applied. Reserves are further categorised in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project maturity
and/or characterised by development and production status
Seismic data, obtained using a sound source and receiver, that
is processed to provide a representation of a vertical
cross-section through the subsurface layers
Shares 10p ordinary shares
Shareholders ordinary shareholders of 10p each in the
Company
Subsidiary a subsidiary undertaking as defined in the 2006
Act
United Kingdom or UK the United Kingdom of Great Britain and
Northern Ireland
Working Interest or WI a Company's equity interest in a project
before reduction for royalties or production share owed to others
under the applicable fiscal terms
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END
FR UVAKRURUSUAR
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April 26, 2022 10:01 ET (14:01 GMT)
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