TIDMGBP
RNS Number : 1727L
Global Petroleum Ltd
29 September 2016
29 September 2016
Global Petroleum Limited
("the Company" or "Global")
Final Results for the Year Ended 30 June 2016
The Directors of Global Petroleum Limited present their report
together with the consolidated financial statements of the Group
comprising Global Petroleum Limited and the entities it controlled
at the end of, or during, the year ended 30 June 2016
("Consolidated Entity" or "Group").
Chairman and CEO's Review
During the period covered by this report macro-economic factors
have remained challenging and continue to form the context for both
operational and commercial activity in the upstream energy
business. The Company has made significant progress in reducing its
costs in response to these factors. The Brent oil price averaged
$45 per barrel in the reporting year to 30 June 2016, compared to
$75 in the preceding year to end June 2015. It is instructive to
note that the average oil price in the twelve months to June 2014
(just before the oil price began to fall) was $109 per barrel.
The Company's Petroleum Exploration Licence offshore Namibia was
extended in December 2015 into Phase 2, which has a duration of 24
months, with a reduced Minimum Work Programme. In place of the
previous well commitment in Phase 2, the Company undertook to
reprocess and re-interpret previously acquired 2D seismic and to
shoot 800 kilometres of new 2D. To this end the Company's technical
team has evaluated reprocessed 2D seismic data from the 1990s which
was purchased earlier this year, and has recently taken delivery of
reprocessed speculative 2D seismic data shot over its blocks in
2011/12 by the seismic company, TGS. The evaluation of this
reprocessed data has proven to be very encouraging with regard to
the hydrocarbon potential in Global's blocks. Notably the work has
increased confidence in a syn-rift oil play in the outboard or deep
water region offshore Namibia, and the likely presence of both
reservoir and source within the Company's blocks. Combined with the
existing prospect portfolio within the blocks, this has improved
Global's view on the overall prospectivity of the acreage. Planning
for the acquisition of infill 2D seismic survey data - likely to be
shot in 2017- is also in progress in liaison with the Namibian
Ministry of Mines and Energy.
The Company's four exploration applications offshore Italy are
progressing and we are currently awaiting an Environmental Decree
from the Italian Ministry of the Environment.
Financial
During the year ended 30 June 2016, the Group recorded a loss
after tax of US$2,336,513 (2015: loss US$4,469,837). Cash balances
at 30 June 2016 amounted to US$10,172,598 (2015: US$12,707,727).
The Group has no debt.
Board
In January 2016 Mr Peter Dighton resigned from the Board to
devote more time to his other business interests, and we thank
Peter for his valuable contribution over the years he was a
Non-Executive Director.
On 10 June 2016 we welcomed Mr Andrew Draffin to the Board as a
Non-Executive Director. Andrew is a Melbourne based Chartered
Accountant with a strong focus on corporate, treasury and financial
services, provided to both listed and private companies covering a
broad range of industries, including the energy and mining
sectors.
Strategy and Outlook
The Company has continued to seek opportunities which would
balance its existing higher risk/reward portfolio in Namibia and
Italy (once awarded), prioritising investment in discovered
contingent resources and/or exploration in proven hydrocarbon
provinces.
Accordingly, over the past 12 months we have continued to engage
with counterparties holding appropriate assets. We have found that
a common feature of such assets is the presence of heavy work
commitments, undertaken in a better macro-economic environment.
This factor, combined with structural issues regarding availability
of finance, continues to be a major hindrance for us in concluding
transactions.
We would note, by way of contrast, that over the equivalent
period Global Petroleum has not taken on acreage with short-term
well commitments. Still less have we utilised our funds to drill
high-risk frontier exploration wells.
Your Company is therefore well placed in comparison to many of
its peers. We retain a strong cash position and remain confident of
making a key investment in due course.
John van der Welle Peter Hill
Chairman Chief Executive Officer
Operating and Financial Review
Namibian Project
The Namibian Project consists of an 85% participating interest
in Petroleum Exploration Licence Number 29 ("Licence") covering
Offshore Blocks 1910B and 2010A in the Republic of Namibia. The
Licence, issued on 3 December 2010, originally covered 11,730
square kilometres and is located offshore Namibia in water depths
ranging from 1,300 metres to 3,000 metres (Refer Figure 1). The
Initial Exploration Period of the Licence expired in December 2014,
and Global fulfilled its corresponding work obligations
approximately halfway through the initial four year term. The
Company agreed with the Namibian Ministry of Mines and Energy
("MME") a 12 month extension of the Initial Exploration Period to
December 2015, on the basis of an agreed work programme which
entailed further interpretation work on existing seismic data.
In December 2015, the Company entered into the First Renewal
Exploration Period (Phase 2) of the Licence, making a mandatory
relinquishment of 50% of the Licence Area. Phase 2 is for a
duration of 24 months with a reduced Minimum Work Programme which
does not now contain a well commitment. Instead, the Company has
undertaken to reprocess and re-interpret previously acquired 2D
seismic and to shoot 800 kilometres of new 2D. To this end the
Company's technical team has evaluated reprocessed 2D seismic data
from the 1990s which was purchased earlier this year, and has
recently taken delivery of reprocessed speculative 2D seismic data
shot over its blocks in 2011/12 by the seismic company, TGS. Work
on the seismic continues to be very encouraging with regard to the
hydrocarbon potential in Global's blocks. Notably the work has
increased confidence in a syn-rift oil play in the outboard or deep
water region offshore Namibia and the likely presence of both
reservoir and source within the Company's blocks. Combined with the
existing prospect portfolio within the blocks, this has improved
Global's view on the overall prospectivity of the acreage. Planning
for the acquisition of infill 2D seismic survey data - likely to be
shot in 2017- is also in progress in liaison with the Namibian
Ministry of Mines and Energy.
The Company's wholly owned subsidiary, Jupiter Petroleum
(Namibia) Limited, remains operator with an 85% interest in the two
blocks, with partners NAMCOR and Bronze Investments Pty Ltd
(Bronze) holding 10% and 5% respectively, both as carried
interests.
Permit Applications in the Southern Adriatic, Offshore Italy
In August 2013, the Company submitted an application and
proposed work programme and budget to the Italian Ministry of
Economic Development for four exploration areas offshore Italy (the
"Permit Applications").
The overall political context in Italy over the period since the
submission of the Permit Applications has complicated the process.
Notwithstanding, we believe that the Permit Applications are
progressing satisfactorily. The Italian authorities have now
confirmed that the requirements relating to financial and technical
capacity have been met by Global, and we are currently awaiting an
Environmental Decree from the Italian Ministry of the Environment,
which is the last stage before final award of the Permits.
In the meantime, the Company has been working closely with the
Italian Ministry of Economic Development to clarify and refine the
proposed work programme on all applications.
Concurrently, the Company has been carrying out a review of
available well and seismic data and previous studies to assess the
prospectivity of the licences. The review demonstrates that the
licences are favourably positioned within, or at the edge of, the
proven Southern Adriatic basin in which the currently producing
'Aquila' field is located. Multiple prospects and leads can be
defined of which the most significant is the 'Daunio' lead, which
as currently mapped has a large areal extent of close to 100 sq
km.
Currently available seismic data are sparse and once the
licences are finally awarded, acquisition of new 2D seismic data
will be carried out, which will allow the prospects to be defined
in more detail.
The Southern Adriatic and adjacent areas continue to be the
focus of industry activity. Within the Italian Southern Adriatic
for example, seismic acquisition companies are planning to run
large multi-client 2D acquisition programmes. Recent licensing
rounds in neighbouring countries have attracted the interest of
large companies.
In Montenegro, offshore concessions have very recently been
awarded to Marathon, OMV and Eni, with these companies also having
been awarded offshore licences in Croatia. In Albania, an onshore
licensing round has concluded, with several applicants. Shell have
operated with some success in Albania exploring and developing
fields with similar geological characteristics to those encountered
offshore in the Southern Adriatic. There has also been significant
corporate activity in Albania with a Chinese company purchasing the
interests of Bankers Petroleum.
In Greece, there has been a major offshore licensing round off
the west coast of the country, and also to the south of Crete. This
has followed a major multi-client seismic survey in the area. The
offshore Katakolon field, which has similar geology to the Southern
Adriatic area, has had a field development plan prepared by the
operator, Energean, with the aim of development drilling starting
in the next 18 months.
Ratification of many of these licence awards has only recently
taken place, so very little firm activity in terms of drilling and
seismic is currently scheduled. This may also be a reflection of
the low oil price environment. Nevertheless, the activity in terms
of licensing and the size of companies involved underscores the
interest in the Adriatic area and is viewed very positively by the
Company as an endorsement of its Mediterranean focus.
Business Development
Global remains in a strong financial position from which to fund
work activity on its Namibian acreage, its Italian application
interests (subject to award), and to implement a change of focus
through acquisition. Accordingly, we have continued over the past
12 months to engage with counterparties holding appropriate assets.
However, the ability to raise the finance necessary for funding
asset development following an acquisition remains challenging in
the context of the relative slump in the commodity price. A
consistent feature in many potential opportunities which we have
reviewed is the onerous work commitments which were undertaken by
potential counterparties in a better macro-economic
environment.
We would note, by way of contrast, that over the equivalent
period Global Petroleum has not taken on acreage with short-term
well commitments. Still less have we utilised our funds to drill
high-risk frontier exploration wells.
Your Company is therefore well placed in comparison to many of
its peers. We retain a strong cash position and remain confident of
making a key investment in due course.
Results of Operations
2016 2015
US$ US$
---------------------------------------- ------------ ------------
Loss from continuing operations before
tax (2,336,513) (4,469,837)
---------------------------------------- ------------ ------------
Income tax benefit (expense) - -
---------------------------------------- ------------ ------------
Net profit (loss) (2,336,513) (4,469,837)
======================================== ============ ============
The results of the Consolidated Entity include revenue from
interest income of US$43,942 (2015: US$72,880).
Presentation currency
The financial information in this annual report is presented in
United States dollars (US$).
Review of financial condition
As at 30 June 2016, the Group had cash of US$10,172,598 (2015:
US$12,707,727) and has no debt.
Dividends
No Dividends were paid during the financial year ended 30 June
2016 (2015: Nil).
Events Subsequent to Reporting Date
The Company decided on 19 July 2016, following 12 months of
operation of the discretionary share scheme for directors
previously approved by shareholders, and following a substantial
reduction achieved in the Company's costs and a significant
improvement in the Company's trading position and market conditions
generally, to discontinue the discretionary share scheme
immediately following the grant and allotment of a final tranche of
such shares in August 2016. In addition, with effect 1 August 2016,
Directors' fees and salary would revert to the pre 1 August 2015
levels.
As at the date of this report, there are no other matters or
circumstances which have arisen since 30 June 2016 that have
significantly affected or may significantly affect:
- the operations, in financial years subsequent to 30 June 2016,
of the Consolidated Entity;
- the results of those operations, in financial years subsequent
to 30 June 2016, of the Consolidated Entity; or
- the state of affairs, in financial years subsequent to 30 June
2016, of the Consolidated Entity.
Likely Developments
It is the Board's current intention that the Consolidated Entity
will focus on maximising the value of its oil and gas exploration
assets in Africa and continue to examine new opportunities in the
oil and gas sector.
All of these activities are inherently risky and the Board is
unable to provide certainty that any or all of these activities
will be able to be achieved. In the opinion of the Directors, any
further disclosure of information regarding likely developments in
the operations of the Consolidated Entity and the expected results
of these operations in subsequent financial years may prejudice the
interests of the Group, and accordingly has not been disclosed.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2016
Notes 2016 2015
US$ US$
-------------------------------------------- ----- ----------- -----------
Continuing operations
Salaries and employee benefits expense (366,325) (549,896)
Administrative expenses (1,280,992) (1,441,982)
Other expenses 7 (540,856) (1,155,434)
Impairment of exploration asset 9 - (354,695)
Foreign exchange gain (loss) 10 (139,099) (901,551)
Equity based remuneration (53,183) (139,159)
Results from operating activities before
income tax (2,380,455) (4,542,717)
-------------------------------------------- ----- ----------- -----------
Finance income 6 43,942 72,880
Net finance income 43,942 72,880
-------------------------------------------- ----- ----------- -----------
Profit (loss) from continuing operations
before tax (2,336,513) (4,469,837)
Income tax benefit (expense) 11 - -
-------------------------------------------- ----- ----------- -----------
Profit (loss) from continuing operations
after tax (2,336,513) (4,469,837)
-------------------------------------------- ----- ----------- -----------
Profit (loss) for the year (2,336,513) (4,469,837)
-------------------------------------------- ----- ----------- -----------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Transfer from foreign exchange reserve
on dissolution of a controlled entity 15 - 270,384
Other comprehensive income (loss) for
the year, net of tax (2,336,513) 270,384
-------------------------------------------- ----- ----------- -----------
Total comprehensive income (loss) for
the year (2,336,513) (4,199,453)
============================================ ===== =========== ===========
Earnings per share
Basic earnings (loss) per share (cents) 16 (1.167) (2.241)
------------------------------------------ ------- -------
Diluted earnings (loss) per share (cents) 16 (1.167) (2.241)
------------------------------------------ ------- -------
The Notes are an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 JUNE 2016
Notes 2016 2015
US$ US$
------------------------------ ----- ------------ ------------
Assets
Cash and cash equivalents 13 10,172,598 12,707,727
Trade and other receivables 12 128,710 150,386
Prepayments 58,925 117,711
Total current assets 10,360,233 12,975,824
------------------------------ ----- ------------ ------------
Plant and equipment 8 12,341 15,354
Exploration assets 9 286,667 -
Total non-current assets 299,008 15,354
------------------------------ ----- ------------ ------------
Total Assets 10,659,241 12,991,178
------------------------------ ----- ------------ ------------
Liabilities
Trade and other payables 18 193,543 246,542
Current tax payable 11 - -
Provisions 19 98,553 94,161
Total current liabilities 292,096 340,703
------------------------------ ----- ------------ ------------
Total non-current liabilities - -
------------------------------ ----- ------------ ------------
Total Liabilities 292,096 340,703
------------------------------ ----- ------------ ------------
Net Assets 10,367,145 12,650,475
============================== ===== ============ ============
Equity
Share capital 15 39,198,764 39,145,581
Reserves 15 1,423,555 1,423,555
Accumulated losses 15 (30,255,174) (27,918,661)
------------------------------ ----- ------------ ------------
Total Equity 10,367,145 12,650,475
============================== ===== ============ ============
The Notes are an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Attributable to owners of the Company
------------------------ -----------------------------------------------------------------
Foreign
Currency
Option Translation Accumulated
Share Capital Reserve Reserve Losses Total Equity
US$ US$ US$ US$ US$
------------------------ ------------- -------- ------------ ------------ ------------
2016
Balance at 1 July
2015 39,145,581 836,728 586,827 (27,918,661) 12,650,475
Issue options - - - - -
Issue of shares 53,183 - - - 53,183
Total comprehensive
(loss) for the year:
Profit (loss) for
the year - - - (2,336,513) (2,336,513)
Other comprehensive
profit (loss) for -
the year: - - - -
Total comprehensive
income (loss) for
the year - - - (2,336,513) (2,336,513)
Balance at 30 June
2016 39,198,764 836,728 586,827 (30,255,174) 10,367,145
======================== ============= ======== ============ ============ ============
2015
Balance at 1 July
2014 39,145,581 697,569 316,443 (23,448,824) 16,710,769
Issue of options - 139,159 - - 139,159
Total comprehensive
profit (loss) for
the year:
Profit (loss) for
the year - - - (4,469,837) (4,469,837)
Other comprehensive
profit (loss) for
the year:
Transfer of foreign
exchange
reserve on dissolution
of a controlled
entity - - 270,384 - 270,384
Total comprehensive
income (loss) for
the year - - 270,384 (4,469,837) (4,199,453)
Balance at 30 June
2015 39,145,581 836,728 586,827 (27,918,661) 12,650,475
======================== ============= ======== ============ ============ ============
Amounts are stated net of tax
The Notes are an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Notes 2016 2015
US$ US$
--------------------------------------------- ----- ----------- -----------
Cash flows from operating activities
Cash paid to suppliers and employees (2,290,121) (2,902,272)
Interest received 43,942 72,880
GST/VAT refunds received 252,410 290,302
Tax (paid)/refund 11 - (3,248)
Net cash from (used in) operating activities 14 (1,993,769) (2,542,338)
--------------------------------------------- ----- ----------- -----------
Cash flows from investing activities
Exploration and business development
expenditure (596,704) (1,134,743)
Net cash from (used in) investing activities (596,704) (1,134,743)
--------------------------------------------- ----- ----------- -----------
Net decrease in cash and cash equivalents (2,590,473) (3,677,081)
Cash and cash equivalents at 1 July 12,707,727 16,608,591
Effects of exchange rate fluctuations
on cash and cash equivalents 55,344 (223,783)
--------------------------------------------- ----- ----------- -----------
Cash and cash equivalents at 30 June 13 10,172,598 12,707,727
============================================= ===== =========== ===========
The Notes are an integral part of these consolidated financial
statements.
The Company confirms that a copy of its latest Annual Report and
Accounts will be available shortly on the Company's website
(www.globalpetroleum.com.au) and full copies of the Directors'
Report and 2015-2016 Financial Statements are available at:
http://www.asx.com.au/asx/research/company.do#!/GBP
The Company also confirms that the full version of the Annual
Report and Accounts has today been posted to shareholders.
Global Petroleum Limited
Peter Hill, Managing Director & CEO +44 (0)20 7495 6802
Damien Cronin, Company Secretary +61 (0)7 3310 8732
RFC Ambrian Limited (Nominated Adviser
& Joint Broker)
Oliver Morse +44 (0)20 3440 6800
FirstEnergy Capital LLP (Joint Broker)
Hugh Sanderson +44 (0)20 7448 0200
Tavistock (Financial PR & IR)
Simon Hudson / Niall Walsh +44 (0)20 7920 3150
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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