The net increase in cash and cash equivalent for the six months
ended 30 June 2014 was $5.27 million compared with $69,000 for the
comparative period. The increase reflected the net proceeds of
$12.24 million received on the issue of new equity in February
2014. Net cash outflows from operating activities amounted to $1.90
million (2013: net inflows $290,000) after interest payments of
$1.18 million. Expenditure on exploration and evaluation assets in
the current period amounted to $4.94 million, relating to the
ongoing seismic acquisition on the Ruvuma PSA acreage, continuing
licence costs and the settlement of liabilities carried forward
from 2013. Expenditure on property, plant and equipment of $132,000
mainly related to licence costs and settlement of 2013 liabilities
on the Kiliwani North licence. The cash balance at 30 June 2014
totalled $5.44 million (30 June 2013: $564,000).
Related Party Transactions
There were no related party transactions during the six-month
period to 30 June 2014 that have materially affected the financial
position or performance of the Group. In addition, there were no
changes in the related parties set out in Note 27 to the Financial
Statements contained in the 2013 Annual Report that could have had
a material effect on the financial position or performance of the
Group during the six-month period.
Going Concern
The Directors have given careful consideration to the Group's
ability to continue as a going concern. During the year ended 31
December 2013, the Group signed a loan facility for $8 million with
a fund managed by Argo Capital Management (Cyprus) Limited ('Argo
loan') which was drawn down in full and applied to the Group's
working capital commitments. In February 2014, the Group reached
agreement with its lender to extend the scheduled repayment date of
its loan to July 2015. The Directors are satisfied that the Group
has sufficient cash resources, together with a reasonable
expectation of revenues commencing from the Kiliwani North gas
field, to enable the Group to continue as a going concern until the
date of repayment of the Argo Loan in July 2015, which falls within
the twelve-month going concern forecast period. The Directors are
therefore seeking one or more solutions to enable the Group to be
able to repay or re-finance the Argo Loan before repayment of the
loan is due. The Group's capital expenditure programme does not
include the drilling of the well commitment in respect of the Nyuni
Area PSA; the well was originally due to be spudded in April 2014
but the Group is currently seeking to renegotiate the terms of the
PSA to focus on deep water exploration in the PSA area.
The Argo loan falls due for repayment in July 2015 and based on
current cash flow projections, the Group will not be in a position
to repay this loan in full on its due date. The Group expects its
Kiliwani North gas field to commence production in the first
quarter of 2015, and these revenues, together with other
alternative measures available to the Group, including the
successful sale of assets, deferral of planned expenditure,
re-financing of the loan or an alternative method of raising
capital, give the Directors a reasonable expectation that the Group
will have sufficient funds to enable it to discharge its loan when
it falls due.
These factors indicate the existence of a material uncertainty
that may cast significant doubt on the Group's ability to continue
as a going concern and, therefore, it may be unable to realise its
assets and discharge its liabilities in the normal course of
business. Notwithstanding the above, it is the Directors'
reasonable expectation that, having considered the cash flow
projections of the Group for a period of twelve months from the
date of approval of the interim financial statements, and the
alternative measures available to the Group as set out above,
taking into account that the Directors believe that a successful
outcome can be negotiated with the Tanzanian authorities in respect
of the Nyuni Area PSA, the Group will have sufficient funds
available to finance its ongoing working capital requirements and
other capital commitments for the foreseeable future. Based on the
above, the Directors continue to adopt the going concern basis for
the preparation of the financial statements.
Principal Risks and Uncertainties
Aminex's Group activities are currently carried out in East
Africa, North Africa and until August 2014 the USA. The Directors
carry out periodic reviews to identify risk factors which might
affect the business and financial performance. Although the summary
set out below is not exhaustive as it is not possible to identify
every risk that could affect the Group's business, the following
risks have been identified as the principal risks and uncertainties
facing the business over the next six months:
Finance risk - arising from uncertain factors detailed in the
basis of preparation note (Note 1) relating to the Group as a going
concern.
Exploration risk - exploration and development activities may be
delayed or adversely affected by factors outside the Group's
control, in particular: climatic and oceanographic conditions;
performance of joint venture partners; performance of suppliers and
exposure to rapid cost increases; availability, delays or failures
in installing and commissioning plant and equipment; unknown
geological conditions resulting in dry or uneconomic wells;
remoteness of location; actions of host governments or other
regulatory authorities (relating to, inter alia, the grant,
maintenance, changes or renewal of any required authorisations,
environmental regulations - in particular in relation to plugging
and abandonment of wells, or changes in law).
Production risks - operational activities may be delayed or
adversely affected by factors outside the Group's control, in
particular: blowouts; unusual or unexpected geological conditions;
performance of joint venture partners on non-operated and operated
properties; seepages or leaks resulting in substantial
environmental pollution; increased drilling and operational costs;
uncertainty of oil and gas resource estimates; production,
marketing and transportation conditions; and actions of host
governments or other regulatory authorities.
Commodity prices - the demand for, and price of, oil and gas is
dependent on global and local supply and demand, weather
conditions, availability of alternative fuels, actions of
governments or cartels and general global economic and political
developments.
Currency risk - although the Group's reporting currency is the
US dollar, which is the currency most commonly used in the pricing
of petroleum commodities and for significant exploration and
production costs, other expenditures (in particular for the Group's
central administrative costs) are made in local currencies (as was
the Group's recent equity funding), thus creating currency
exposure.
Political risks - as a consequence of the Group's activities in
different parts of the world, Aminex may be subject to political,
economic and other uncertainties, including but not limited to
terrorism, military repression, war or other unrest,
nationalisation or expropriation of property, changes in national
laws and energy policies, exposure to less developed legal
systems.
A more detailed listing of risks and uncertainties facing the
Group's business is set out on page 8 of the 2013 Aminex PLC Annual
Report and Accounts (available on the Aminex website
www.aminex-plc.com).
Forward Looking Statements
Certain statements made in this half-yearly financial report are
forward-looking statements. Such statements are based on current
expectations and are subject to a number of risks and uncertainties
that could cause actual events or results to differ materially from
the expected future events or results referred to in these
forward-looking statements.
Statement of the Directors in respect of the Half-Yearly
Financial Report
Each of the directors whose names and functions are listed on
page 13 of the most recent annual report, confirm our
responsibility for preparing the half year financial report in
accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007, the Transparency Rules of the Central Bank of
Ireland and the Disclosure and Transparency Rules of the UK
Financial Conduct Authority and with IAS 34 Interim Financial
Reporting, as adapted by the EU and to the best of each person's
knowledge and belief:
-- the condensed set of interim financial statements comprising
the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated statement of
changes in equity, the condensed consolidated statement of
cashflows and the related notes have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU.
-- the interim management report includes a fair review of the information required by:
(a)Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(b)Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
J.C. BHATTACHERJEE M.V. WILLIAMS
Chief Executive Officer Chief Financial Officer/Company Secretary
28 August 2014
Independent Review Report to Aminex PLC
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