TIDMAMER
RNS Number : 9953B
Amerisur Resources PLC
10 April 2017
10(th) April 2017
Amerisur Resources Plc
Final Results for the year ended 31 December 2016
A year of delivery, transition and consolidation
Amerisur Resources Plc ("Amerisur" or the "Company"), the oil
and gas producer and explorer focused on South America, announces
its audited results for the full year ended 31 December 2016.
Highlights:
Production and reserves
-- Completion of the OBA pipeline and successful
operational commissioning delivered on budget
in December 2016
-- Cash opex per barrel produced expected to reduce
from approximately $26 to $15 once volumes reach
5,000 BOPD
-- FY 2016 average production of 3,081 BOPD, average
realised price of $38.42 per barrel
-- Since year end, significant increase in production
from the Platanillo field, which averaged 4,345
BOPD during March 2017 and volumes through the
OBA, which averaged 4,180 BOPD during the same
period and a peak of 5,008 BOPD on 6 April 2017
-- Targeting 2017 average production of between
6,000 and 7,000 BOPD and an exit rate in excess
of 7,000 BOPD
-- Independent reserve report at 31 December 2016
for the Platanillo field confirming 1P (Proven)
gross field reserves of 15.1 MMBO (2015: 15.2
MMBO) after production of 1.13 MMBO during 2016
and 2P (Proven and Probable) gross field reserves
of 24.5 MMBO (2015: 23.7 MMBO)
Exploration and Appraisal
-- Platanillo-8 and Platanillo-24 successfully
drilled and brought into production at a rate
of 411 BOPD and 420 BOPD respectively
-- Platanillo-22 successfully drilled post period
end to a total depth of 8,720ft, under time
and budget, testing underway with results expected
shortly
-- Jaguareté-1 well, on the San Pedro Block
in Paraguay, drilled on budget and safely encountered
hydrocarbons in uncommercial reservoirs
-- Loto-1 in CPO-5 re-entered to test Mirador L4
zone, with results undergoing analysis
Corporate
-- Acreage position in the Caguan-Putumayo basin
including the OBA cluster area further strengthened
through the acquisition of:
o Platino Energy for a total consideration of
$7.6m (in Amerisur stock) for 50% working interest
in Put-8, 100% working interest in the Coati
Evaluation Area and 100% of Andaquies, plus
tax pools of $24m.
o The remaining 50% working interest in Put-30
and 40% working interest in Put-9 from Talisman
Colombia Oil and Gas Ltd for a non material
consideration
o Pacific Exploration and Production subsidiaries
for the outstanding working interest in the
Put-9 and Tacacho blocks, 100% of Terecay block
and 58% of Mecaya block, for a total consideration
of $4.85m (in cash), post period end and subject
to ANH approval
-- Board significantly strengthened with the appointment
of two Independent Non-executive Directors:
Chris Jenkins in May 2016 and Dana Coffield
post period end
Financial
-- Cash balance at year end of $42 million with
no debt
-- As a result of the lower oil price environment
and the planned reduction in production:
o Revenue of $47m (FY 2015: $61m)
o Positive EBITDA of $0.4m (FY 2015: $4.3m)
o Operating loss of $27.7m following a one-off
impairment charge of $15.3m in relation to the
Group's investment in Paraguay (FY 2015: $23.8m)
o Loss after tax of $28.5m (FY 2015: $26.7m)
-- 2017 work programme fully funded with capex
planned to be up to $44m
-- Successfully raised net proceeds of approximately
$36m in March 2016 through a share placing to
fund growth
Outlook
-- H2 2016 saw some improvement in global oil prices
which, coupled with a reduction in transport
costs following the opening of the OBA, resulted
in an improved performance in the fourth quarter
of the year. This trend has continued into Q1
2017
-- Active work programme over the next 18 months
with a minimum of nine wells fully funded at
$45 oil including three on Platanillo (including
Platanillo-22 currently testing), two on Put-12,
two on CPO-5, a Platanillo N Sand anomaly well
and one on the Coati block
-- Continue to focus on acquisitions in the Putumayo
which have a strong strategic fit
-- Targeting sustainable net production of 20,000
BOPD by the end of 2019
-- Search process ongoing with Preng & Associates,
a leading executive search firm dedicated to
the energy industry and overseen by Chris Jenkins,
for a further independent Non-executive Director
appointment with considerable City experience
Giles Clarke, Chairman of Amerisur, commented:
"2016 will be remembered as the year the management team
delivered the final construction and the operations of the OBA
pipeline from our Platanillo Block in Colombia into neighbouring
Ecuador. During the year and subsequently, we have also again
broadened our Colombia assets in the Putumayo basin around the OBA
pipeline, creating a cluster of assets and exploration
opportunities, which when drilled and in production, will all
benefit from the significantly reduced operating costs associated
with the OBA export route as opposed to historical trucking.
"The Board considers that the Company has delivered against its
stated strategy very competently in the context of the oil market
environment. To remind shareholders, Amerisur has considerable cash
on the balance sheet, it generates strong cash flow at current oil
prices and has a solid reserves base, all of which have served the
Company well over the last few years.
"The significant work of the Chief Executive, supported by
myself, with the Colombian Government, and in the UK with the UK
Government and the invaluable help and advice of H.E. the Colombian
Ambassador, and our Colombian staff in the field, has finally
enabled much progress to be made with the local communities
following the start of the Peace Process. A very complex time but
with huge future potential for Colombia, its people and foreign
investor partners"
"The outlook for Amerisur is strong. Despite the lower oil price
environment, we can see the prospect of increasing profitable
production as the OBA volumes increase and we have nine wells fully
funded at $45 oil in the work plan. The recent acquisitions have
given Amerisur a tremendous platform to create a very significant
position in the Caguan-Putumayo basin, which will be of immense
benefit to shareholders."
Ends
Enquiries:
Nick Harrison, CFO Tel: +44 (0)330
Amerisur Resources 333 8246
Billy Clegg/Georgia Edmonds Tel: +44 (0)203
Camarco 757 4980
Callum Stewart/Ashton Clanfield/Nicholas Tel: +44 (0)20
Rhodes 7710 7600
Stifel Nicolaus Europe Limited
Chris Sim/George Price Tel: +44 (0)207
Investec 597 4000
Darrell Uden/Marcus Jackson Tel: +44 (0)207
RBC Capital Markets 653 4000
Notes to editors
Amerisur Resources is an independent full-cycle oil and gas
company focused on South America, with assets in Colombia and
Paraguay and production from the Platanillo field in southern
Colombia. In 2016 Amerisur successfully built and is 100% owner of
the strategic OBA oil transfer line into Ecuador.
In Colombia, the Company is operator and has a 100% working
interest in the Platanillo block which includes the Platanillo
field. The Company has a strong position in the Putumayo basin and
has a cluster of near term activity assets around the OBA export
line. It has a diverse portfolio of longer term exploration
assets.
This announcement contains inside information as defined in EU
Regulation No. 596/2014 and is in accordance with the Company's
obligations under Article 17 of that Regulation.
www.amerisurresources.com
Glossary
"BOPD" barrels of oil per day
"MMBO" million barrels of oil
"OBA" or "OBA pipeline" Oleoducto Binacional Amerisur pipeline
"Proven Reserves" or "1P" those quantities of petroleum, which, by analysis of geoscience and engineering
data, can
be estimated with reasonable certainty to be commercially recoverable, from a
given date forward,
from known reservoirs and under defined economic conditions, operating methods,
and government
regulations. If deterministic methods are used, the term reasonable certainty is
intended
to express a high degree of confidence that the quantities will be recovered. If
probabilistic
methods are used, there should be at least a 90% probability that the quantities
actually
recovered will equal or exceed the estimate.
"Proven + Probable Reserves" or "2P" those additional Reserves which analysis of geoscience and engineering data
indicate are less
likely to be recovered than Proved Reserves but more certain to be recovered
than Possible
Reserves. It is equally likely that actual remaining quantities recovered will
be greater
than or less than the sum of the estimated Proved plus Probable Reserves (2P).
In this context,
when probabilistic methods are used, there should be at least a 50% probability
that the actual
quantities recovered will equal or exceed the 2P estimate.
CHAIRMAN'S STATEMENT
2016 will be remembered as the year the management team
delivered the final construction and the operations of the OBA
pipeline from our Platanillo block in Colombia into neighbouring
Ecuador. It is the first ever, privately owned piece of cross
border infrastructure between these two great countries. During the
year, we have also again broadened our Colombia assets around the
OBA pipeline, creating a cluster of assets, which when drilled and
in production, will all benefit from the significantly reduced
operating costs associated with the OBA export as opposed to
historical trucking.
The Board considers that the Company has delivered against it
stated strategy very competently in the context of the oil market
environment. To remind shareholders, Amerisur has considerable cash
on the balance sheet, it generates cash flow at current oil prices
and has a solid reserves base, all of which have served the Company
well over the last few years.
Amerisur has weathered the low oil price environment relatively
well. Since the current management team took over in 2007,
considerable value has been created for shareholders, despite the
oil price fall. The Company has raised GBP81m and has significantly
increased the market capitalisation, which currently stands at
GBP273m.
Board, Governance and People
2016 and early 2017 has seen a process of Board refreshment and
succession planning. Much work has been done to upgrade the
Company's corporate governance, which has included extensive
shareholder engagement. In May, Chris Jenkins, joined the Board as
an independent Non-executive Director. Chris is a chartered
accountant (FCA), and was a partner for more than 20 years in
KPMG's London office, during a 30-year career with the firm. He was
lead audit partner for six FTSE-100 companies. At KPMG he also
fulfilled various leadership roles in the global Energy and Natural
Resources practice. Chris chairs the Audit Committee and sits on
the Nomination and Remuneration Committees.
Post period end the Company announced the retirement from the
Board of Directors of Nigel Luson, Victor Valdovinos, and George
Woodcock. I would like to thank them all for their valuable
contribution to the development of the business over the past
years.
The Board has also conducted a search process to appoint two
additional independent Non-executive Directors: one with
significant City experience; and one with considerable oil industry
experience, a process overseen by Chris Jenkins, an independent
Non-executive Director. In line with corporate governance and
recruitment best practice the exercise was managed by Preng &
Associates, a leading executive search firm dedicated to the energy
industry. Following an extensive and thorough process, on 6 April
the Board announced the appointment of Dana Coffield to the Board
as an independent Non-executive Director.
It is expected that a further independent non-executive Director
appointment with considerable City experience will be made in the
near future.
Dana Coffield has over thirty years of international E&P
experience encompassing North and South America, North Africa,
Middle East and South East Asia. Between 2005 and 2015 Dana was
co-founder and CEO of Gran Tierra Energy and during his 10 years at
the helm, the company successfully grew reserves and production
year on year becoming a leading player in the operationally
challenging Putumayo basin in southern Colombia.
It is intended that Dana Coffield will join the Remuneration
Committee.
BOARD COMPOSITION
Following these changes, the Board of Amerisur has two Executive
Directors, four Non-executive Directors and a Chairman, which sees
the Board exceed the expected level of independent director
representation for an AIM listed company. All of these Board
changes have been made with Sections A and B of the Corporate
Governance Code 2014 in mind.
In addition, the Remuneration Committee has completed an initial
review of its remuneration policy and practices with the support of
a respected third party remuneration consultancy. The Remuneration
Committee does not intend to make any option awards in 2017 except
to a select number of Colombia based personnel, and the Chairman
has indicated that he wishes no longer to receive options in the
Company. In addition, as a commitment to ongoing interaction with
shareholders, and as was the case at last year's AGM, the Board
confirms that it will again be voluntarily submitting the
Remuneration Report to a shareholder vote at the AGM to be held in
May. Only 31% of the AIM 100 do this and below the AIM 100, the
levels are half that.
By way of stock market communications and investor relations
('IR'), Chief Financial Officer Nick Harrison has responsibility
for investor and analyst relations, modelling and clarity on
guidance. He is supported by a financial PR and IR consultancy
which deals with media and general IR enquiries. Additionally, John
Wardle and Nick Harrison, supported by Giles Clarke and Senior
Independent Director Stephen Foss led all institutional roadshows.
During 2016 three institutional roadshows were conducted with 46
institutions seen and nine corporate governance meetings
undertaken. A trip to the Platanillo field in Colombia took place
in September 2016 which was attended by 10 sell-side analysts. As
part of our improved corporate governance processes, the Company
has put in place measures to improve its stock market
communications. We are committed to more regular updates and post
year end have started issuing monthly production and OBA volume
export updates. The Company has appointed additional resource in
the finance team to enable Nick Harrison to allocate more time to
IR.
Political and social developments
The Colombian peace process made very significant progress in
2016 with a peace deal being agreed and ratified in December. Peace
in Colombia is clearly a positive thing for the people of Colombia
and for businesses which will find it easier to grow and attract
international capital. As the biggest UK investor in Colombia, we
are heavily committed to all our social programmes in the Putumayo
province and whilst in the short term the slight disruption to the
peace process in mid-2016 inevitably led to some local social
issues, the social outlook in the medium to long term is positive.
Both the Chief Executive and myself have devoted a very large
amount of time to this vital area. We were very proud that Amerisur
was invited to all the major events of President Santos's historic
state visit to the UK in November, including the State Banquets and
private Breakfast at Buckingham Palace, enabling us to ensure the
Putumayo region has considerable focus at the national level.
We note with sadness the recent natural disaster in Mocoa
Putumayo. Amerisur is cooperating with the response activities led
by the Colombian Authorities, having provided specialist equipment,
fuel, fresh water in bulk and logistical support including
helicopter work, and we remain in close contact with Government
officials to help those impacted by this natural disaster. The area
affected in Mocoa does not include the main road, and Amerisur
operations have not been affected by the event.
Current trading and outlook
The outlook for Amerisur is strong. Despite the lower oil price
environment, we can see the prospect of increasing profitable
production as the OBA volumes increase and we have nine wells fully
funded at an oil price of $45 in the work plan. There continues to
be the possibility of social unrest but we are working hard with
the Colombian authorities to engage with and help manage these
issues. There had been some disruption and the result has been a
delay in the activity programme in certain blocks such as Put-12,
but this has been balanced by activity elsewhere in the
portfolio.
Selling prices are much improved relative to this time last year
and this has been enhanced by cost reductions resulting from the
OBA pipeline export route.
The recent acquisitions have given Amerisur a tremendous
platform to create a very significant position in the
Caguan-Putumayo basin, which will be of immense benefit to
shareholders.
A huge amount of work has been done across the Company to grow
the business and get the OBA on stream. I would like to thank our
employees for their hard work
Your Board looks to the year ahead with confidence.
Giles Clarke
Chairman
7 April 2017
CHief executive's STATEMENT
2016 was a busy year for the Company. We delivered the OBA oil
transfer system on budget, performed important work in the
Platanillo field in terms of infill drilling and optimisation of
all kinds and we broadened the portfolio further around the OBA
given its unique strategic value and attractive economics. We now
have a strong cluster of assets with a diversity of exploration
opportunities in what has become the core area on which to build
our future. The OBA system is an integral part of the strategy we
have been working towards for many years and which we now see
unfolding, and a key part at that, since access to oil transport at
low cost will always be an important factor in any remote,
infrastructure-poor basin. The absence of export options drives up
the economic cut-off point for any prospect in terms of prospective
resources while driving down the projected NPV per barrel. This can
serve as a strong disincentive to explore, particularly in times of
low or volatile oil prices.
Amerisur, with its unique position both in acreage and the
possession of the OBA, enjoys high potential NPV on even small
accumulations, and of course large finds will be very profitable.
That is not to say that we are targeting small accumulations, for
we are not, but our positioning allows us to profitably exploit
even such small accumulations. Within our portfolio in the Putumayo
we have a range of very significant resources we are aiming to
discover in the next years, with the objective of building
Amerisur's sustainable production level to 20,000 barrels of oil
per day (BOPD) by the end of 2019. So, although important, the OBA
is not everything, it is not the entire strategy, but just the
start, where we focussed while awaiting the opportunity to expand
within the immediate area without paying excessive prices for that
expansion. The expanded portfolio gives us the ability to be
selective and responsive in where we put our exploration dollars,
seeking a balance of low risk, material upside and the ability to
move quickly by optimising our position and managing social and
other surface issues.
Our view is that the greater Platanillo area, particularly to
the east, holds important resources in a variety of relatively
simple and technologically definable play types. The latest
acquisition from the subsidiaries of Pacific Exploration and
Production ('Pacific'), announced post period end is in line with
our strategy and completes our dominance in the greater Platanillo
area. That dominance has been our objective in terms of positioning
and has been achieved. It now remains to access those
opportunities, explore intelligently and produce oil.
OBA pipeline
After some delay due to administrative issues and inclement
weather in both Colombia and Ecuador, in October the regulatory
agency of Ecuador, ARCH, issued the decree to Petroamazonas EP for
the operation of the OBA system in Ecuador, which was constructed
and commissioned on budget for approximately $18m. As a result,
transport of Platanillo crude oil commenced at an initial rate of
1,500 BOPD via the Petroamazonas EP owned and operated Amazonas Oil
Pipeline System (RODA) to Lago Agrio, for further onward transport
to the port of Esmeraldas. The OBA transported an average of
approximately 4,180 BOPD of Platanillo crude during March 2017.
The Company has a throughput capacity under current agreements
with Petroamazonas of 5,000 BOPD. This capacity was only reached in
April 2017 due to the delays caused by equipment deficiencies and
additional competing volumes within the northern part of Ecuador.
The technical capacity of the transfer system is approximately
50,000 BOPD and the line has a currently installed export pump
capacity of 18,000 BOPD. The Company is working diligently with
Petroamazonas to resolve the restrictions in Ecuador in order to
achieve a consistent throughput of 5,000 BOPD, and we are also
working on solutions which will give Amerisur additional carrying
capacity beyond that volume. An example of this is the detailed
engineering and costing work underway with respect to the
construction of the Chiritza pumping station within the RODA
system, which will serve to increase system efficiency and hence
Amerisur's transport quota. An agreement for the Chiritza project
is currently being negotiated with Petroamazonas.
Acquisitions
During the year, the Company made two acquisitions to increase
the Company's acreage position around the OBA pipeline. In January
2016, we acquired Platino Energy (Barbados) Ltd ('Platino'), a
private company, from COG Energy ("COG") for a total consideration
of $7.59m. The consideration was paid in Amerisur stock.
The assets acquired through this transaction were a 50%
(non-operated) working interest in Put-8 block adjacent to the west
of Platanillo. Vetra Energia S.L. ("Vetra") holds a 50% working
interest and is the Operator. The block is currently in Phase 1 of
exploration. We also acquired a 100% (Operator) working interest in
the Coati Evaluation Area (Temblon Field) within the Coati block
located in the South West of the Putumayo basin. Canacol Energy
Colombia SA ("Canacol"), a subsidiary of Canacol Energy Ltd. of
Canada, has a 40% working interest in the exploration area of the
Coati contract. A Consulta Previa with local indigenous groups is
currently underway. Once that is completed, a global environmental
license will be applied for to advance the planned exploitation and
exploration programme. Finally, we acquired the 100% owned and
operated Andaquies block located in the north east of the Putumayo
basin, contiguous with our block Put-30, which has a one well
commitment by May 2017. The Company is currently reviewing options
with the Agencia Nacional de Hidrocarburos (ANH) to defer that well
until the regional seismic study commissioned by Amerisur over its
entire portfolio is completed.
In June, the Company signed a modification of the farm out
agreement with Canacol. The modification increases the farm in
participation of Canacol from 20% to 40% working interest in the
exploration area of the Coati contract. The consideration for the
farm in is a total carry of $10.75m, of which $6.95m is outstanding
in favour of Amerisur. This carry will fund investments associated
with Exploration Phase III within the Coati block, and may be
allocated towards seismic and drilling operations. Subsequent to
the carry being satisfied, costs will be shared 60%
Amerisur/Platino (Operator), 40% Canacol. The Coati Evaluation area
(Temblon field), remains 100% owned and operated by
Platino/Amerisur.
In addition to bringing new OBA cluster assets to the portfolio,
Platino carried tax pools of approximately $24m which may be offset
against future taxable profits.
During the year, the Company also acquired from Talisman
Colombia Oil & Gas Ltd (Talisman Colombia), the remaining 50%
working interest in the Put-30 contract area and a new 40% working
interest in the Put-9 contract. The application for approval to ANH
includes the appointment of Amerisur as Operator of Put-30. Put-9
is located immediately to the north of Put-12 and to the east of
Platanillo and, prior to the acquisition noted below was operated
by Meta Petroleum Corp. with a working interest of 60%.
Post period end, and subject to ANH approval, the Company
acquired the outstanding working interest in the Put-9 and Tacacho
blocks plus 100% working interest in Terecay and 58% of Mecaya from
the Pacific subsidiaries.
Drilling
We drilled two wells during the year. Platanillo - 8 was a
successful infill well drilled from Pad 5 and was tied back into
production facilities on that pad. We also drilled the high impact
Jaguarete-1 well in Paraguay which encountered a reasonable oil
column inferred from logs but in a tight reservoir. Post balance
sheet we drilled Platanillo-24, a successful producer, from Pad-3N
as an infill well which came into production shortly after being
completed.
Our drilling programme over the next 18 months is expected to
include at least nine fully funded wells. The exact order and
location of the wells will be subject to social, indigenous and
licensing factors, however the overall plan is to drill three on
the Platanillo field (including Platanillo 22 currently testing),
two on Put-12, two on CPO-5, a Platanillo N Sand anomaly well and
one on the Coati block. Naturally the acquisition from the Pacific
subsidiaries post period end may affect this plan, in terms of
potential drilling within Put-9 in preference to other
opportunities. We also plan to conduct an important 3D seismic
programme on the Coati block. Total 2017 capital expenditure is
expected to be up to $44m and is planned to be fully funded from
operational cashflows. The recently announced result from
Platanillo-22, where we have logged a total of 40ft of net pay in
the N and U sands, is very exciting, extending the current envelope
of the Platanillo field to the north.
SUCCESSFUL production
During the year, the Platanillo field production was 1,126,504
barrels, averaging 3,086 BOPD. The cash opex per barrel of oil
produced at Platanillo during the year was $22.8 per barrel due to
the trucking required to export the crude. This was lower in the
last few months of the year as the OBA came onstream and as volumes
increased. Opex per barrel will reduce further to $15 per barrel
once volumes reach 5,000 BOPD through the OBA pipeline and we are
targeting average production in 2017 of between 6,000 and 7,000
BOPD and a 2017 exit rate in excess of 7,000 BOPD. Current
production from the Platanillo field averaged 4,345 BOPD during
March and volumes through the OBA averaged 4,180 BOPD during the
same period, rising to just over 5,000 BOPD in early April.
John Wardle
Chief Executive Officer
7 April 2017
Group business model
Amerisur's business model encompasses the fundamentals that must
be in place to manage business risks and help deliver its strategy.
These include:
-- Sustainable operations;
-- Protecting employees, communities and the environment;
-- Assets with high potential;
-- Colombia-based CEO, with majority of management in
country;
-- High equity stakes where possible;
-- Operatorship where possible;
-- Self-funding of those assets;
-- Strong skill set of our people;
-- Low cost acquisitions;
-- Typically targeting lower risk exploration after detailed
analysis; and
-- Low cost production and attractive production potential.
Overview of blocks
Amerisur is focusing on developing its assets in Colombia, which
has a well-established petroleum industry with highly productive
basins, yet remains relatively unexplored. The Company believes
there remains significant opportunity to explore lower risk
opportunities aiming to deliver strong medium term cash flows
through focussed exploration in Colombia.
Amerisur has a cluster of assets around the OBA pipeline
including Platanillo, Put-8, Put-9, Coati and Put-12 which are able
to utilise the lower cost OBA export route. In addition, Amerisur
has interests in Put-30, Andaquies, CPO-5, Terecay, Mecaya and
Tacacho. It will continue to review new portfolio additions in
Colombia that offer near to mid-term production opportunities that
provide value for shareholders.
As of 7 April 2017, and in some cases subject to ANH approval,
the Company has interests in the following blocks:
-- 100% Platanilllo, Operator
-- 100% Coati block evaluation area (Temblon Field), Operator
-- 60% Coati block exploration area, Operator
-- 60% Put-12, Operator
-- 100% Put-9, Operator
-- 50% Put-8
-- 100% Put-30, Operator
-- 30% CPO-5
-- 100% Andaquies, Operator
-- 100% Fenix, Operator
-- 100% Tacacho, Operator
-- 58% Mecaya, Operator
-- 100% Terecay, Operator
Platanillo - OBA Cluster
The Company is Operator and has a 100% working interest in the
block. This 11,119-hectare block is located in the Putumayo basin,
in the south of Colombia. Despite delays due to external factors,
the Company has continued to build upon its successful drilling
track record in Platanillo and drilled 17 wells and 3
sidetracks.
The OBA interconnector oil transport system connects production
from the Platanillo field under the Putumayo River into the Victor
Hugo Ruales pipeline infrastructure in Ecuador. The pipeline is now
operational with a significant impact on transport costs. The
highest daily throughput previously reported was 4,509 barrels of
oil on 27 March 2017 and in the early part of April 2017 is
transporting an average of approximately 5,003 BOPD.
In the summer, Amerisur commenced drilling operations on well
Platanillo 8 as an infill well on Pad 5 in the Platanillo field
using the Serinco Rig D-10. The infill well was drilled to Total
Depth ("TD") of 8,719ft on Pad 5S and a 7-inch casing was run and
successfully cemented. Schlumberger electric logs indicated the
well encountered oil columns in the Upper U, Lower U and T sands,
with excellent reservoir quality. The N sand was not well developed
at this position, in line with Amerisur's seismic attribute
predictive model. In the U-sand total net pay of 27 feet was
estimated, with an Oil Water Contact ("OWC") in the lower part of
the Lower U sand. The T sand reservoir exhibited 14 feet of net pay
within excellent quality reservoir with no OWC shown on the logs,
for a total of 41ft of net pay. The well was drilled ahead of
schedule, reaching TD in 15 days compared to the planned 21 days
due to operational enhancements and excellent operational
performance. These significant time and cost savings will be
important in the future drilling programme. Platanillo-8 was
brought into production at a rate of 411 BOPD.
Subsequently Platanillo 24 was drilled as an infill well under
time and under budget, to a total depth of 8,485ft measured depth
("MD"), achieving an offset of 1,275 feet to the east of Platform
3N. This well was designed as an infill well on the most northern
developed lobe of the Platanillo field, located between wells
Platanillo 7 and 17. The reservoir section was logged and initial
log analysis indicated the presence of 67.5ft gross, 38ft net oil
column in the U sand formation. The analysis of T sand indicates a
14ft gross and 8ft net oil column. The N sand was not well
developed at this location, in line with the Company's seismic
attributes model. Platanillo 24 was tested and placed on commercial
production at a rate of approximately 420 BOPD in natural flow. An
interval of 7ft was perforated in the Lower U sand only. Water cut
is currently 0.1% with 80psi wellhead pressure through a 28/64"
choke.
Post period end, and following the resolution by the national
Government of local social protests, the Company mobilised the
Serinco Rig D-10 to Pad 2N, and drilled Platanillo 22, the first
appraisal well from Pad 2N, the northernmost Pad on the Platanillo
block.
Post the drilling on Pad 2N, we intend to complete the studies
required to license drilling pads located over the N sand anomaly
defined in the central part of the Platanillo block, to the north
of Pad 2N. It is expected these studies will be completed in H1
2017.
The N sand prospect in this part of the block has unrisked
prospective resources of 37.3 million barrels of oil (MMBO).
Putumayo-8 - OBA Cluster
Our interest in Put-8 was acquired in January 2016. The Put-8
block is adjacent to the west of the Platanillo field and is in
Phase 1 of its exploration period with a 2% X Factor (see glossary)
and low work commitments of one exploration well and 208km2 of 3D
seismic. Amerisur has a 50% (non-operated) working interest and
Vetra holds the remaining 50% and is Operator. Given the social and
security conditions, operational progress on the block has been
slower than hoped in 2016. We have however performed valuable
technical work involving inversion processing 2D and 3D seismic
data in order to better understand how the geology fits with the
Platanillo field.
Coati block - OBA Cluster
Amerisur acquired the Coati block in January 2016 as part of the
Platino transaction. The Coati block is 100% owned and operated by
Amerisur, with Canacol holding a 40% working interest in the
exploration area of the Coati contract. The Coati block is located
in the South West of the Putumayo basin, adjacent to the Loro and
Hormiga oil fields and is in Phase 3 of its exploration period with
no X Factor and low work commitments.
There is an existing discovery on the block of which Amerisur
owns 100% called Temblon and the Company is currently performing
the Consulta Previa required by law with local indigenous
communities in order to initiate the seismic and long term test
("LTT") programmes in this block. The Company expects to complete
this process during H1 2017 and the LTT is expected to begin
thereafter and we are hoping to be drilling the Coati-2 well by the
end of 2017. The block has unrisked resources of 31.6MMBO.
Putumayo-12- OBA Cluster
Put-12 was acquired following a successful bid in November 2012,
in a joint arrangement with Pluspetrol. It is a 54,434-hectare
block which is adjacent to Platanillo to the East and shares its
geology. The Company is Operator with a 60% working interest. The
bid included a commitment to a seismic acquisition programme and
the drilling of one exploration well during the first three-year
exploration phase and the block carries a 29% X factor. Social
issues associated with the peace process have prevented us
progressing activity materially on the block in 2016. Assuming
social issues can be resolved, a 2D seismic programme is due to be
conducted which is anticipated during H1 2017. The Company believes
that these issues will diminish and allow full access as the peace
process advances. The block has unrisked prospective resources of
211.9MMBO.
Put-9 - OBA Cluster
Put-9 is located immediately to the north of Put-12 and to the
east of Platanillo. Post period end and subject to ANH approval the
Company acquired the remaining 60% of this block from a Pacific
subsidiary, Meta Petroleum Corp. and is now Operator with a 100%
working interest. On the basis of existing seismic data there are
several interesting structures which are shared between Put-12 and
Put-9. There are also independent structures which lie within
Put-9. We are currently performing detailed work to link the
geological models of Put-12 and Put-9, after which an independent
resources report will be commissioned covering both these and other
assets in the portfolio. Oil production from Put-9 can be exported
using the Platanillo infrastructure. The block has unrisked
prospective resources of 53.5MMBO.
Putumayo-30
Put-30 covers approximately 38,514 hectares and lies within the
Putumayo basin, approximately 55km to the north of both the
Company's 100% owned Platanillo field and 60% owned Put-12
Contract. The Company has a joint arrangement with Talisman
Colombia, with each party owning 50% respectively. In December 2016
Amerisur bought out Talisman and has applied to become the
Operator. The transaction and operatorship is subject to ANH
approval. The block has cretaceous potential and is a recognized
Tertiary play concept. We plan to explore to evaluate the potential
of producible heavy oil deposits in the Neme formation. The social
consultation process is in progress and is expected to be completed
in 2017. The block has unrisked prospective resources of
449MMBO.
Andaquies block
The Andaquies block, 100% owned and operated by Amerisur, was
also part of the Platino acquisition and is located in the north
east of the Putumayo basin with no X Factor and low work
commitments of one exploration well by May 2017, which is under
negotiation as outlined below. The Company is currently reviewing
options with ANH to defer that well until the regional seismic
study commissioned by Amerisur over its entire portfolio is
completed. The block has multiple proven reservoir targets, six
mapped leads targeting both proven and novel plays and unrisked
resources of 66MMBO. It sits to the north east of a proven
structural play within the Putumayo basin. The environmental
management plan ("PMA") is currently under preparation.
CPO-5
CPO-5 was acquired in June 2015 through the acquisition of
Petrodorado South America SA ("PDSA") a subsidiary of Petrodorado
Energy Ltd. Amerisur has a 30% (non-operated) working interest in
the contract, ONGC Videsh Ltd holds a 70% working interest and is
the Operator.
CPO-5 is an Exploration and Production Contract, covering
198,000 hectares and located to the south of block Llanos 34 and to
the east of the Corcel fields. The block includes the evaluation
area related to the Loto-1 oil discovery. That well was drilled in
2013 and tested oil in the Mirador formation during a short test
however lack of zonal isolation prevented performance of a
long-term test. Core and electric log data indicate 61ft of net pay
within the Mirador. A further 30 day test of Loto-1 was performed
in 2016 in the Mirador L4 interval. The testing data from the test
is undergoing analysis, but does not appear to be commercial as a
single accumulation. A further two wells within the north-western
sector of the block, Kamal and Metica also tested oil. Amerisur and
ONGC Videsh have defined the location of two exploratory wells
within the North-West 3D seismic data. The Company commenced
drilling operations on the Mariposa-1 well in March 2017 and
expects to commence drilling of the Sol-1 in Q3 2017. The block has
unrisked resources of 142.3MMBO.
Tacacho
Tacacho was acquired in June 2015 through the Company's
acquisition of PDSA. Amerisur had a 49.5% (non-operated) working
interest in the Tacacho contract, Pacific Stratus Energy held 50.5%
and was the Operator. Post period end and subject to ANH approval,
the Company acquired the remaining 50.5% of this block from
Pacific.
Tacacho is an Exploration and Production contract, covering
238,000 hectares in the eastern Caguan-Putumayo basin. It is a
heavy oil exploration play, supported by regional studies which
indicate a continuation of the heavy oil trend extending from the
eastern Llanos basin through to the ITT field complex in the
eastern Oriente basin of Ecuador. Additionally, the well Solita-1,
drilled nearby by Texaco in 1948 indicated the presence of
hydrocarbons in the Pepino formation. Large structures have been
defined on existing 2D seismic, with closures at both the base and
top of the Pepino formation. The contract is currently in Phase 1,
where the exploration commitment is 480km of 2D seismic. The phase
is currently suspended while social consultations and security
planning is performed. The block has unrisked resources of
179MMBO.
Paraguay
The exploration well Jaguarete-1 was spudded on 22 April 2016
and reached TD of 8,626ft in the Itajuru basement formation in
June. Positive indications of oil and gas in potential reservoir
sections were seen in the mud logs while drilling. The well was
drilled on budget and safely. The potential reservoirs of the Lima
and Santa Elena formations were encountered slightly deeper than
anticipated, and from initial mud logs appear to be complete in
their development. The well was ultimately completed shallower than
the originally planned maximum depth since the crystalline quartz
basement Itajuru formation was encountered at the higher end of the
prognosis range.
The electrical logs obtained in the exploration well,
Jaguarete-1, were interpreted and initial analysis indicated the
presence of oil saturations within low porosity sandstones of the
Lima and Santa Elena formations. The Company believes that the log
data acquired and the cuttings samples obtained are the first
demonstration of oil presence in the Paraguayan Parana basin. The
reservoir quality indicated that the accumulations at this
particular point in the structure and block were not commercially
extractable. A technical programme involving the detailed analysis
of well data and samples and the reprocessing and reinterpretation
of the seismic data set is almost complete. Until the results of
this have been studied, very little capital will be spent on the
Paraguay acreage.
The absence of viable producible conventional reservoirs in the
Parana basin has resulted in the Company taking the decision to
impair its total investment to date in this block. E&E
investment attributable to the Western blocks have not been
impaired on the basis that these are located in a different
sedimentary basin to those in the Eastern part of Paraguay where
several oil fields are currently producing oil.
Reserves and resources
In March 2017, the Company took receipt of an independent
reserves report for the Platanillo field as at 31 December 2016
undertaken by Petrotech Engineering Ltd, using the standards set by
the Oil and Gas Reserves Committee of the Society of Petroleum
Engineers. Certified 1P (Proven) gross field reserves were 15.1MMBO
(2015: 15.2 MMBO) after production of 1.13MMBO during 2016 and 2P
(Proven and Probable) gross field reserves were 24.5MMBO (2015:
23.7MMBO).
Production during 2016 was 1.13MMBO; hence current 1P reserves
represent an increase of approximately 1MMBO from the 2015 year
end. This technical increase of the Expected Ultimate Recovery
("EUR") (a forward-looking model which assumes a decline factor and
projects the volume of oil which will ultimately be recovered from
each well) takes account of the successful infill wells and
optimisation work undertaken during the year, together with the
cost savings generated by optimisation and the operation of the OBA
transfer system. During the period, there were no reserve additions
from the drilling of new wells outside the current established
limits of the Platanillo field. The Company is currently drilling
Platanillo-22, which has reached 5,651ft, where 9.5/8" casing has
been successfully set and cemented. Should this well encounter
commercial oil in the Pad 2N structure, further reserves will be
added to the field.
Amerisur's resources stood at 1,133.6MMBOE.
strategy
Amerisur's long term strategy is to acquire, explore and develop
large acreage positions in major underexplored basins located in
South America, with a current major focus on the Putumayo basin in
Colombia. In our view, the Putumayo is geologically prolific yet
under explored due to the basin historically being the heartland
for the FARC Guerrilla group, whose presence and activities
rendered exploration and production operations unviable beyond the
near-montane urbanised areas. The Company has operated the
Platanillo field since 2009, and has developed the strategies to
manage those risks. This has allowed the Platanillo field to be
developed and brought onto production profitably. Amerisur, through
both bid rounds and right-timed acquisitions has now built a large
portfolio of assets in the basin, with a particular emphasis around
the OBA with a cluster of assets whose prospects, many similar to
Platanillo can be drilled and on success can benefit from the lower
transport costs associated with exporting through the OBA pipeline.
Additionally, the low opex learning acquired in Platanillo can be
rolled out to those new fields from the outset of production.
Given our success in Platanillo, and our understanding of the
basin, we have great faith in the potential of our augmented
portfolio. That portfolio has been a long-standing objective of the
Company, and has been achieved at low cost and at the right time.
The blocks encompass almost 1 million hectares under contract and
the entire sweep of exploration opportunity from
near-Platanillo/OBA look-a-likes to large stratigraphic potential
in all sand horizons from the T sand upwards through the Tertiary
formations. Importantly, within these blocks there is also
discovered oil. Mecaya-1, drilled in 1988 produced 782 BOPD of
medium quality 27.3-degree API oil. Airu-1, drilled in 1998 also
produced 450 BOPD of the same crude. The producing horizon in those
days was misidentified as Villeta/Caballos due to a poor
understanding of the basin. Amerisur understands that the producing
horizon is the M2 sand based upon our studies and proprietary data.
With the latest low cost acquisition, the Board considers the
Company has sufficient running room to propel it through its target
of 20,000 BOPD net by the end of 2019, given the diversity of
opportunity.
Financial review
Results for the period
2016 continued to be a challenging year for the Group, and
indeed the whole oil industry. This coupled with the reduction in
production levels in a lower oil price environment impacted on
revenue which reduced to $47m (2015: $61m).
The second half of the year saw some improvement in global oil
prices which, coupled with a reduction in transport costs following
the opening of the OBA resulted in an improved performance in the
fourth quarter of the year. This trend has continued into the first
quarter of 2017.
The operating loss for the year of $27.7m (2015: $23.8m) is
stated after taking a one-off impairment charge of $15.3m in
relation to the Group's investment in Paraguay. The overall loss
after tax is $28.5m (2015: $26.7m).
Production and Revenue
Production levels for the year ended 31 December 2016 averaged
3,081 BOPD per calendar day, 4,206 BOPD per operational day
compared with 4,437 BOPD in 2015. The movement reflects a full year
of reduced production and the impact of certain social issues
associated with the peace process during the year.
Average realised prices, net of royalties, reduced from $42.85
per barrel in 2015 to $38.42 in 2016. Revenue reduced from $61m in
2015 to $47m in 2016 as the Group continued to produce from
profitable low cost wells and pads on the Platanillo field, leaving
valuable oil stored in the ground so it can be profitably produced
in a higher oil price environment. Oil prices recovered somewhat in
the second half of 2016 with realised prices averaging $39.75 per
barrel in H2 relative to $35.01 per barrel in H1.
The Group does not currently hedge any of its forecast oil sales
although this is kept under review.
Operating Costs
Despite reduced year on year production impacted by the peace
process operating costs per barrel reduced during the year by over
$4. Opex per barrel is expected to continue to fall as production
increases and more crude oil volume goes through the OBA.
The one-off impairment charge of $15.3m (2015: $nil m)
represents the write off of the full cost of the Group's investment
in blocks in the East of Paraguay - primarily the San Pedro
block.
General and administrative expenses showed a small increase from
$11.5m to 2015 to $11.9m in 2016 largely as a result of
appreciation of the Colombian peso during the year, the currency of
a significant proportion of the Group's administrative costs.
CApital expenditure
During the year to 31 December 2016, the Group invested $19.5m
in Exploration and Evaluation assets of which $7m related to the
acquisition of blocks from Platino Energy. In addition, the Group
invested $18.6m in Property Plant and Equipment, principally in
relation to the completion of the OBA.
Taxation
The tax credit for the year of $1.541m (2015: $0.981m charge)
consists of a deferred tax credit of $2.319m (2015: charge of
$0.431m) offset by a current tax charge, in relation to Colombian
operations, of $0.778m. Corporation tax in Colombia also includes a
charge based on the Company's net worth at the end of the previous
tax year, called the presumptive tax charge.
liquidity and funding
The Group continues to have a robust balance sheet with a cash
position at the period end of $42m. The Company has an undrawn
reserve based lending facility of $40m. This is a three-year
facility expiring in November 2017. The Company is in discussions
with a number of institutions regarding its replacement.
Equity and DividendS
In March 2016, the Company undertook an equity placing of
106,000,000 new ordinary shares of 0.1 pence each at a price of 25
pence per placing share, a discount of 15% to the market price,
raising net proceeds of approximately $36m. The net proceeds of the
placing were used to accelerate exploration, appraisal and
development activity. The percentage increase in issued share
capital due to non-pre-emptive issuance for cash over the
three-year period preceding the issue 2016 is 10.5%.
24.3 million shares were also issued during the period as
consideration for the acquisition of Platino.
The Company does not propose to pay a dividend this year. The
potential for the group to pay dividends in the future is regularly
reviewed by the Board.
Nick Harrison
Chief Financial Officer
7 April 2017
Consolidated Income statement
for the year ended 31 December
2016 2015
$'000 $'000
------------------------------------- --------- ---------
Revenue 47,174 61,201
Cost of sales (47,687) (73,534)
-------------------------------------- --------- ---------
Gross loss (513) (12,333)
Total administrative expenses (11,895) (11,459)
Impairment of assets (15,263) -
------------------------------------- --------- ---------
Operating loss (27,671) (23,792)
Net foreign exchange (losses)/gains (1) 1,230
Finance charges (1,965) (2,767)
Finance income 289 191
-------------------------------------- --------- ---------
Loss before tax (29,348) (25,138)
Capital taxation (646) (625)
-------------------------------------- --------- ---------
Loss after capital taxation (29,994) (25,763)
Income taxation 1,541 (981)
-------------------------------------- --------- ---------
Loss attributable to equity
holders of the parent (28,453) (26,744)
-------------------------------------- --------- ---------
Loss per share
Basic (cents per share) (2.40) (2.51)
Diluted (cents per share) (2.40) (2.51)
-------------------------------------- --------- ---------
Consolidated statemeNt of comprehensive income
for the year ended 31 December
2016 2015
$'000 $'000
--------------------------------------- ---------- ----------
Loss attributable to equity holders
of the parent (28,453) (26,744)
Other comprehensive income
Other comprehensive (loss)/income
to be classified to profit or loss
in subsequent periods:
Foreign exchange differences on
retranslation of foreign operations (285) 421
---------------------------------------- ---------- ----------
Total comprehensive loss (28,738) (26,323)
---------------------------------------- ---------- ----------
Consolidated Balance Sheet
as at 31 December
Restated
2016 2015
$'000 $'000
------------------------------- ----------- -----------
ASSETS
Non-current assets
Goodwill - 514
Intangible assets 32,704 27,002
Property, plant and equipment 147,866 141,437
-------------------------------- ----------- -----------
180,570 168,953
Current assets
Inventory (crude oil) 5,085 6,958
Cash and cash equivalents 40,051 40,160
Restricted cash deposits 2,233 2,163
Trade and other receivables 15,078 13,571
--------------------------------
62,447 62,852
------------------------------- ----------- -----------
Total assets 243,017 231,805
-------------------------------- ----------- -----------
LIABILITIES
Current liabilities
Trade and other payables (23,793) (28,914)
Current tax liabilities (842) -
------------------------------- ----------- -----------
(24,635) (28,914)
Non-current liabilities
Remediation provision (2,633) (2,730)
Deferred tax liability (8,079) (10,515)
-------------------------------- ----------- -----------
(10,712) (13,245)
----------- -----------
Total liabilities (35,347) (42,159)
-------------------------------- ----------- -----------
Net assets 207,670 189,646
-------------------------------- ----------- -----------
Equity
Share capital 1,761 1,560
Share premium 144,941 109,070
Merger reserve 13,532 4,485
Other reserves 11,112 10,979
Foreign exchange reserve 9,544 9,829
Retained earnings 26,780 53,723
Total equity 207,670 189,646
-------------------------------- ----------- -----------
These consolidated financial statements were authorised for
issue by the Board of Directors on 7 April 2017 and were signed on
its behalf by:
N. Harrison
Director
Company number: 04030166
Consolidated Statement of changes in equity
for the year ended 31 December
Share Share Merger Other Foreign Retained Total
capital premium Reserve reserves exchange earnings equity
reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
At 1 January
2015 1,544 109,070 - 7,060 9,408 80,179 207,261
Loss for
the year - - - - - (26,744) (26,744)
Other comprehensive
loss 421 - 421
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Total comprehensive
loss - - - - 421 (26,744) (26,323)
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Share options
exercised - - - (288) - 288 -
Equity settled
share options - - - 4,207 - - 4,207
Allotments
during the
year:
Issue of
shares related
to acquisitions 14 - 4,485 - - - 4,499
Issue of
shares under
share option
schemes 2 - - - - - 2
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Transactions
with owners 16 - 4,485 3,919 - 288 8,708
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
At 31 December
2015 (Restated) 1,560 109,070 4,485 10,979 9,829 53,723 189,646
Loss for
the year - - - - - (28,453) (28,453)
Other comprehensive
loss - - - - (285) - (285)
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Total comprehensive
loss - - - - (285) (28,453) (28,738)
Share options
exercised - - - (1,510) - 1,510 -
Equity settled
share options - - - 1,643 - - 1,643
Allotments
during the
year:
Issue of
shares under
share option
schemes 6 - - - - - 6
Issue of
shares related
to acquisitions 43 - 9,047 - - - 9,090
Net proceeds
from shares
issued 152 35,871 - - - - 36,023
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Transactions
with owners 201 35,871 9,047 133 - 1,510 46,762
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
At 31 December
2016 1,761 144,941 13,532 11,112 9,544 26,780 207,670
--------------------- --------- --------- --------- ---------- ---------- ---------- ---------
Consolidated CASH FLOW STATEMENT
Restated
2016 2015
Year to 31 December $'000 $'000
------------------------------------------- --------- ---------
Cash flows from operating activities
Loss for the year (28,453) (26,744)
Adjustments for:
Finance income (289) (191)
Finance charges 1,965 2,767
Taxation (895) 1,606
Depreciation 11,147 23,860
Impairment charges 15,263 -
Share options charge 1,643 4,207
Decrease/(increase) in inventory 1,873 (6,408)
(Increase)/decrease in trade and
other receivables (2,197) 14,435
Decrease in trade and other payables (4,309) (9,668)
-------------------------------------------- --------- ---------
Net cash (used in)/generated by
operations (4,252) 3,864
Tax receipt/(paid) 907 (10,314)
-------------------------------------------- --------- ---------
Net cash used in operating activities (3,345) (6,450)
-------------------------------------------- --------- ---------
Cash flows from investing activities
Interest received 289 191
Payments for property, plant and
equipment (18,568) (29,994)
Payments for exploration and evaluation
assets (12,478) (14,288)
-------------------------------------------- --------- ---------
Net cash used in investing activities (30,757) (44,091)
-------------------------------------------- --------- ---------
Cash flows from financing activities
Proceeds from exercise of share
options 6 2
Net proceeds from issue of equity 36,022 -
shares on share placing
Interest paid (1,965) (2,767)
-------------------------------------------- --------- ---------
Net cash generated by/(used in)
financing activities 34,063 (2,765)
-------------------------------------------- --------- ---------
Net decrease in cash and cash equivalents (39) (53,306)
Cash and cash equivalents at the
start of the year 42,323 95,629
-------------------------------------------- --------- ---------
Cash and cash equivalents at the
end of the year 42,284 42,323
-------------------------------------------- --------- ---------
Notes to the preliminary announcement
1 Basis of preparation
The summary accounts do not constitute statutory accounts as
defined in section 435 of the Companies Act 2006, but has been
extracted from the statutory accounts for the period ended 31
December 2016 on which an unqualified audit report has been issued.
The statutory accounts for the period ended 31 December 2016 were
approved by the directors on 7 April 2017, but have not yet been
delivered to the Registrar of Companies.
The Group financial statements have been prepared in accordance
with applicable International Financial Reporting Standards (IFRS)
and International Financial Reporting Interpretation Committee
(IFRIC) interpretations as adopted by the EU. The Group financial
statements consolidate those of the Company and of its subsidiary
companies drawn up to 31 December 2016.
Intra-group transactions are eliminated on consolidation and all
figures relate to external transactions only.
The 2015 balance sheet and statement of changes in equity have
been restated in relation to a reclassification between Share
premium and Merger reserve for the shares issued on acquisition of
PDSA.
The 2015 cash flow has been restated due to a reclassification
between 'proceeds from issue of shares on exercise of options' and
'payments for exploration and evaluation assets' in relation to the
PDSA assets acquired which were paid in shares rather than
cash.
2 Posting of accounts
The Annual Report and Accounts for the period ended 31 December
2016 will shortly be available on the Company's website and will be
sent to registered shareholders who have elected to receive paper
communications by post in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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