TIDMAMER
RNS Number : 3187A
Amerisur Resources PLC
28 September 2015
28(th) September 2015
Amerisur Resources Plc ("Amerisur", "the Company" or "the
Group")
Interim Results for the six months ended 30(th) June 2015
"Cash generative, strong balance sheet, OBA interconnector
pipeline under construction"
Amerisur Resources Plc, the oil and gas producer and explorer
focused on South America, is pleased to announce its interim
results for the six months ended 30(th) June 2015 (the
"Period").
Highlights:
Operational
-- Oleoducto Binacional Amerisur ("OBA") interconnector pipeline
system under construction:
o Agreement with PETROAMAZONAS EP signed for the construction
and use of the pipeline from the Ecuadorian border to the point of
connection with the RODA gathering system for the transport of
Amerisur's crude oil
o Modification of the Platanillo environmental license
approved
o Photographs of the civil works can be seen on the website
www.amerisurresources.com
o On track for first oil transport end 2015
-- Successful acquisition of Petro Dorado South America SA
(PDSA), a subsidiary of Petro Dorado
Energy Ltd (PDEL) for US$6m including:
o 30% (non-operated) working interest in the CPO-5 contract,
located in the Llanos basin. ONGC Videsh Ltd holds a 70% working
interest and is the Operator
o 49.5% (non-operated) working interest in the Tacacho contract,
located in the Caguan-Putumayo basin. Pacific Stratus Energy holds
50.5% and is the Operator
o Potential tax benefit to the Company of up to approximately
US$20m from acquired tax losses
-- Schlumberger comprehensive report on strategic options for
optimised Platanillo field production being studied and applied
-- H1 2015 average production of 4,524 BOPD, average realised price of US$49 per barrel
Financial
As a result of the lower oil price environment and the planned
reduction in production:
-- Revenue of US$40.3m (H1 2014: US$114.1m)
-- Positive operating cash flow for the period of $8.1m (H1 2014: US$62.3m)
-- Non-cash amortisation charge increased to $11.3m caused by
technical reduction in reserves
-- Operating loss of US$6.5m (H1 2014: Profit of US$51.5m)
-- Loss before tax US$5.8m (H1 2014: Profit of US$50.8m)
-- Cash position at period end is US$55.6m with no debt
Post period end
-- Loto-2 spudded, targeting a previously tested structure
-- 405 km(2) 3D seismic acquisition programme completed in CPO-5
-- Drilling of Jaguarete-1 in Paraguay extended until May 2016
Outlook
-- 2015 targeted production exit rate of 5,000 BOPD from Platanillo
-- OBA interconnector pipeline on track for operations end 2015
-- Cash operating and transportation costs for Platanillo field
to fall from $27 per barrel to approximately $16 once the OBA
interconnector pipeline is operational
-- All commitments and planned discretionary programmes for the
full year remain fully funded
Giles Clarke, Chairman of Amerisur said:
"We changed the Company's operational strategy at the beginning
of the year in the context of the low oil price environment with
the aim of protecting the Company's valuable reserve base and
ensuring that operating cashflow exceeded exploration capex to
protect the balance sheet. These aims have been achieved and due to
the progress made on the construction of the OBA interconnector
pipeline, we are on track to begin the New Year with lower cost,
more profitable production, with the prospect of higher production
from Platanillo and new production and reserves in CPO-5.
"Your Board looks to the future with confidence."
ENQUIRIES:
Billy Clegg/Georgia Tel: +44(0)203 757 4980
Mann
Camarco
Jeremy Low/Daniel Conti Tel: +44 (0)207 653 4000
RBC Capital Markets
Chris Sim Tel: +44 (0)207 597 4000
Investec
Notes to editors
Amerisur Resources is an independent full-cycle oil and gas
company focused on South America, with assets in Colombia and
Paraguay. Amerisur's strategy is to acquire, explore and develop
large acreage positions in major underexplored basins located in
South America. The Company's distinctive approach has been to own
100% of its assets at early stages in order to have full control
over the fields' development. That requirement is now being relaxed
as a sound production baseline has been established and in response
to the widening opportunity set to which the Company has
access.
In Colombia, the Company is operator and has a 100% working
interest in the Platanillo block. The 11,341 hectare block is
located in the Putumayo Basin, in the south of Colombia. In
addition, the Company has a 60% working interest and operatorship
in block Put-12, a 55,000 hectare block which is adjacent to
Platanillo and shares its geology and a 50% working interest in
Put-30 a 38,514 hectare block, approximately 55km to the north of
both the Company's 100% owned Platanillo field and Put-12. In June
2015 the Company bought Petro Dorado South America SA (PDSA) for
US$6m which has brought to the Company a 30% (non-operated) working
interest in the CPO-5 contract, located in the Llanos basin, where
ONGC Videsh Ltd holds a 70% working interest and is the Operator
and 49.5% (non-operated) working interest in the Tacacho contract,
located in the Caguan-Putumayo basin. Pacific Stratus Energy holds
50.5% and is the Operator. In addition PDSA carries current tax
losses of approximately US$57m.
In Paraguay, Amerisur is the largest acreage holder in the
country, with 6.2 million hectares covering five 100% owned oil and
gas permits in the Paraguayan part of the Chaco and Parana
Basins.
John Wardle is CEO of Amerisur, having worked in Colombia since
1994, first for BP Exploration and subsequently for Emerald Energy.
The Company is chaired by Giles Clarke and is listed on the AIM
Market of the London Stock Exchange.
Competent person: Technical information in this announcement has
been reviewed by John Wardle PhD, the Company's Chief Executive.
John Wardle has 29 years' experience in the industry, having worked
for BP, Britoil, Emerald Energy and Pebercan, and is a trained
drilling engineer.
www.amerisurresources.com
Chairman's Statement
Introduction
We are pleased to announce the Company's Interim Results for the
six months ended 30(th) June 2015. The first half was categorised
by a responsible management of the Company's significant reserves
through a reduced production profile, focussing on profitable
production and preserving the asset base. We have also made very
significant progress with the OBA interconnector pipeline which is
under construction and on track for first oil at the end of the
year. This pipeline will open up a number of potentially valuable
options for the Company, many of which will add value to
shareholders. In addition, just before the half year end we
acquired Petro Dorado South America SA (PDSA), a subsidiary of
Petro Dorado Energy Ltd (PDEL) for a total consideration of US$6m,
broadening the Company's asset base at a time of low oil
prices.
We have done all of the above whilst protecting the Company's
balance sheet and managing the financials conservatively such that
we exited the period with US$55.6m of cash, no debt and with a
renewed commitment not to spend in exploration capex more than the
cashflow we generate. The vast majority of the pipeline cost will
be in this year, which is reflected in our year end projection of
cash.
I was pleased to note that some of this good work was recognised
when in March, Amerisur won "Best Oil & Gas PLC" at the 2015 UK
Stock Market Awards. The awards celebrate the best of UK PLC and
recognise companies which have created shareholder value. The other
nominees for the category of "Best Oil & Gas PLC" included; BP,
Shell, Sound Oil and Premier Oil.
Financial summary
As a result of the lower oil price environment and the planned
reduction in production, turnover reduced to US$40.3m. We report a
positive operating cash flow for the period of $8.1m and as a
result of the increase in the non-cash amortisation charge of
$11.3m caused by reduction in reserves, the operating loss was
US$6.5m and loss before tax was US$5.8m. At the period end net cash
was US$55.6m and the Company had no debt.
Low oil price strategy
In the latter part of 2014 management undertook a strategy
review in the context of the dramatic fall in the oil price. The
Board used $48 per barrel in its planning.
The aim of the review was to minimise the use of high cost
transportation until such time as the OBA interconnector pipeline
to Ecuador is operational, and / or a rapid return to a higher oil
price, thus protecting the Company's balance sheet and highly
valuable reserve base, guaranteeing positive operational cashflow
at low oil prices. The programme was designed to be totally
scalable.
Acquisition
In June, the Company acquired Petro Dorado South America SA
(PDSA), a subsidiary of Petro Dorado Energy Ltd (PDEL) for a total
consideration of US$6m payable in three instalments, US$3MM which
was paid upon closing in July, and two further instalments of
US$1.5m at three-monthly intervals thereafter. Amerisur elected to
issue stock for the first instalment and issued 5,148,447 priced at
37.0214p. Amerisur also agreed to provide a 2.5% net royalty to
PDEL on production arising from the assets acquired. This royalty
is post any overriding government royalties and payment by Amerisur
of 50% of PDSA net costs (estimated at US$2m net) for the completed
405km(2) 3D seismic programme in Block CPO-5. Amerisur will
reimburse PDEL for the remaining 50% of those seismic costs from a
further 2.5% royalty on net production until those costs have been
recovered.
(MORE TO FOLLOW) Dow Jones Newswires
September 28, 2015 02:01 ET (06:01 GMT)
The assets acquired through this transaction are a 30%
(non-operated) working interest in the CPO-5 contract, located in
the Llanos basin where ONGC Videsh Ltd holds a 70% working interest
and is the Operator and a 49.5% (non-operated) working interest in
the Tacacho contract, located in the Caguan-Putumayo basin, where
Pacific Stratus Energy holds 50.5% and is the Operator. In
addition, PDSA has brought to the Company current tax losses of
approximately US$57m, representing a potential tax benefit to the
Company of up to approximately US$20m.
Board, Corporate Governance and People
During the period, the Board and the executive team have been
strengthened. In January, Stephen Foss was appointed to the Board
as Senior Independent Director. Stephen has over 30 years of
experience in the capital markets industry, having spent his career
in Australia, Canada and the UK. He previously led the Royal Bank
of Canada's International Equities business for Europe and
Austral-Asia, prior to joining its global investment banking
division in February 2011 to concentrate on senior client coverage,
Sovereign Wealth Funds and origination in the natural resources
sector. After graduating with a Batchelor of Arts with Honours from
the University of Western Ontario, Mr. Foss began his career at the
Sydney Stock Exchange and subsequently held a number of senior
management positions with another global investment bank.
Stephen has made a number of changes to the way Amerisur is
governed, including changing the construct of the various
committees to increase the independence of those committees. The
committees are made up of the below Directors:
-- Audit Committee
Nigel Luson - Chairman
Stephen Foss
Doug Ellenor
-- Remuneration Committee
Stephen Foss - Chairman
Nigel Luson
Doug Ellenor
-- Nominations Committee
Giles Clarke - Chairman
John Wardle
Following the significant increase in the number of licenses the
Company owns, we were pleased to appoint George Woodcock as
Executive Director of Exploration at Amerisur. George Woodcock,
previously Non- Executive Director of the Company, has spent his
entire career in the oil and gas industry since joining BP
Exploration in 1968. During his 20 years with BP he held a number
of positions including Vice President of Exploration and Production
at BP Developments Australia and Chief Geophysicist at BP Colombia.
On leaving BP, George was responsible for the running of the
Rubiales field in Colombia from 1990 to 1992 in his role at Tuskar
Petroleum and has co-founded and managed various private
exploration companies in Colombia. George is supporting John Wardle
in the important technical side of the operations.
I would like to take this opportunity to thank all of the
Amerisur staff for their hard work and dedication.
Outlook
In the first half we responded to the lower oil price
environment swiftly, decisively and responsibly. The OBA
interconnector pipeline system is now under construction and we are
delighted with the support shown in both Ecuador and Colombia
towards the project. We expect the pipeline to be in operation at
the end of Q4 2015. Once open and flowing, the interconnector opens
numerous possibilities for our shareholders. We have also taken the
opportunity in this low oil price environment to broaden the
company's asset base at low entry cost.
As a result of all of these factors, your Board looks to the
future with confidence.
Giles Clarke
Chairman
28(th) September 2015
Chief Executive's Statement
Following a strategic review at the end of 2014, in the early
part of this year we revised our 2015 work programme to ensure we
maintained a cash generative platform with good upside potential.
The main actions and savings were implemented immediately and
maximised operational netbacks and importantly provided us with the
flexibility to ramp up production once sales prices rose and or
when the OBA interconnector pipeline becomes operational in the
fourth quarter of the year.
Production
In the Platanillo field, production was suspended from higher
cost pads where transportation, lifting and royalties would have
been close to the then oil price. We initially produced
approximately 4,500 BOPD from Pads 5 and 9, where lifting costs
were approximately US$12 per barrel and transported through Orito,
where costs were similar. Rio Loro transportation at a cost of
US$23 per barrel was initially reduced to a nominal daily volume
and later suspended in order to support net back benefits. Amerisur
also made significant progress in the reduction of field operating
costs through optimisation and also important discounts obtained
from contractors and other suppliers. We have installed efficient
Horizontal Electrical Hydraulic Lifting systems on Pads 5 and 9 and
a 7,500 Gun Barrel tank at Pad 5. We also plan to construct a
10,000 BO storage tank at Pad 5 to increase flexibility in the
production system and further reduce lifting costs.
Due to reductions in production implemented by other operators
in the area, available discharge volume at Orito increased thus
allowing the Company to take advantage of this increased available
capacity, despite some continued interruption in OTA uptime. In the
first half average volumes through Orito were 4,605 BOPD relative
to 922 BOPD in H1 2014.
By May, the Company reactivated a limited production volume from
Pad 3N. This decision was taken due to an improvement in
operational netback from this production pad, on the basis of cost
reductions achieved through efficiencies and negotiations of
tariffs with service providers and the availability of additional
reception volumes at the Orito station operated by Ecopetrol, as
mentioned above. This increased field production at times to over
5,000 BOPD, but always controlled by reception capacity at Orito,
where 100% of production was delivered. At the same time, Amerisur
took the opportunity to re-enter certain wells to perform chemical
treatments to improve well production and test a number of
techniques for future field maintenance. Current field production
is running at 4,700 BOPD, operating netbacks are US$20.30 per
barrel and selling prices are currently US$47.5 per barrel. During
the first half of 2015 Platanillo total field production was
825,633 BO.
Platanillo Production Strategy
Platanillo has produced a total of 5,862,733 BO to date and
enjoys a strong aquifer support, which ensures good recovery
factors from the reservoir and necessitates efficient disposal
systems to handle the water produced along with the oil and hence
minimise operating costs. These systems are now installed and
optimised on Pads 9 and 1. Given the production history now
established in March, Amerisur commissioned an integrated study by
Schlumberger of the entire field well inventory. This study
encompassed petrophysical, reservoir core, production data and
fluids characteristics. The objective of the study was to recommend
an ongoing production strategy for the field, together with
individual well recommendations for optimum performance. These
recommendations ranged from chemical treatments to alleviate scale
and asphaltene formation, (now partially tested in the
interventions performed on Pads 9 and 5 during the period) to
recompletions and changes to perforation strategy. The analysis of
the study and results obtained is continuing, with the objective of
optimising field production in time for the availability of
pipeline transport at the end of the year. The eventual field
plateau production will depend upon the results of these analyses
and pilot tests.
Colombia Ecuador OBA Interconnector Pipeline System
Significant progress was made during the period on the project
to access export capacity through Ecuador. This involves the
installation of a pipeline to run from the Platanillo field under
the Putumayo River into the Victor Hugo Ruales (VHR) facilities and
thence to the RODA (Red de Oleoductos del Distrito Amazonas)
pipeline infrastructure in Ecuador, allowing expensive road
transport costs to be significantly reduced and allowing field
production to increase. This pipeline is named OBA - (Oleoducto
Binacional Amerisur).
In May, the Company signed an agreement with PETROAMAZONAS EP
entitled "Convenio de Cooperacion para el Uso de la Red de
Oleoductos del Distrito Amazonico" which permited the construction
and operation of the 10" (nominal - 10.8" physical) pipeline from
the Ecuadorian border to the point of connection with the RODA
gathering system for the transport of Amerisur's crude oil. In
addition the agreement included the definition of construction and
responsibilities during use of the system, a minimum volume
commitment and transport tariffs applicable to Amerisur crude oil.
The minimum transport volume guaranteed by PETROAMAZONAS EP to
Amerisur is 5,000 BOPD. The transport tariff from the point of
reception to the point of delivery at Lago Agrio has been agreed at
US$1.09 per bbl. Negotiations are underway to confirm the routes,
usages and tariffs for onward transport and potentially local sale
for refining. The technical capacity of OBA is between 50,000 and
70,000 BOPD, hence additional transport capacity may become
available in the future as the system is commissioned and upgrades
to RODA are implemented. In Colombia, as previously reported, the
modification of the Platanillo environmental license to include the
construction and operation of the pipeline within Colombian
territory has been approved. The Ecuadorian Environmental Ministry
(MAE) has approved the terms of reference for the environmental
permit required from the point of reaching Ecuadorian territory to
the location VHR-20. Studies are well advanced and the award of
this license is not expected to impact the critical path of the
project. Construction is on track and the Company expects the OBA
to be in operation at the end of Q4 2015. A presentation
illustrating the civil works progress is now available on the
updated Company website.
(MORE TO FOLLOW) Dow Jones Newswires
September 28, 2015 02:01 ET (06:01 GMT)
Platanillo Exploration
The 58km2 of 3D programme in the northern portion of the
Platanillo block was completed on 1(st) of July, within budget. The
analysis of this data reveals some interesting structures which are
independent of the Platanillo main field. We have included these
opportunities in our strategic planning of our activities within
the portfolio.
Platanillo Reserves
In March and following receipt of an independent reserves report
for the Platanillo field as at 31 December 2014 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 16.2 million
barrels of oil ("MMBO") (2013: 19.8 MMBO) after production of 2.278
MMBO during 2014 and 2P (Proven and Probable) gross field reserves
were 24.55 MMBO (2013: 32.8 MMBO).
Taking into account 2014 production, the 1P reserves showed an
effective 6% reduction from year end 2013. This technical reduction
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) for current producing wells and for
all future planned wells is a conservative view based upon several
factors, including the relatively poor initial production result of
wells Platanillo-15 and Platanillo-16, which served to reset the
future average expected initial production rates. Additionally, the
shut-ins of producing wells due to social and export issues during
the year resulted in lower average production rates which also
caused an increase in the future projected decline rate, resulting
in lower overall volumes being recovered in the model through time.
Reserves have also been impacted by the Board's responsible
decision to reduce drilling activity in order to ensure capex at
Amerisur is matched by cash flows in the current lower oil price
environment, since some planned wells will not be delivered within
the previous timeframe. Additionally there have been no significant
reserves additions for either the T sand or the N sand since
currently there are no development operations planned for those
horizons in 2015, despite successful testing of the N sand in wells
Platanillo-2 and Platanillo-18 and that the T sand remains under
successful Long Term Test in well Platanillo-20. The technical
reduction this year was owed to certain factors which, once full
production can be re-established and stabilised with the entry of
the export flow line later this year, can be recovered within the
reserves model. The reserves reduction served to increase
amortisation per barrel, which is reflected in the first half
figures.
It is important to note that the encouraging porosity and
permeability data indicated by the initial core analysis of
Platanillo-20, which are likely to have a positive impact on
overall field recovery rates, were not fully incorporated in the
2014 reserves evaluation since the detailed analysis of the several
reservoir horizons is still ongoing. The results of this Special
Core Analysis became available in June of this year and are
currently being analysed in house. This analysis will be refined
and validated with the static and dynamic reservoir models
currently under construction using field production data and the
core results from Platanillo-20, and also the Schlumberger
integrated study described above.
In summary, the volumetric parameters of the several reservoirs
in the Platanillo field have not changed; in fact the Company
believes that recoverable volumes will in fact be higher than those
previously certified, due to the improved reservoir properties seen
in the Platanillo-20 cores, applying appropriate and optimised
reservoir management.
In terms of Prospective Resources in the Platanillo field,
currently estimated at 44.7 MMBO, the Company has taken a
conservative view of potential recoveries while including a
component relating to the structures seen in the far north of the
block.
Putumayo-12
In November 2012, the Company was awarded a 60% working interest
in the Put-12 license which is to the east of and adjacent to the
Platanillo block in the Putumayo Basin and bounded to the south by
the Putumayo River and the Ecuadorian border. The block covers
55,000 hectares and has similar geology to Platanillo. Amerisur is
the operator of the contract, with our partner Pluspetrol holding
the remaining 40%. The acquisition of the 2D seismic programme has
been delayed due to social issues in the Putumayo region, which
have prevented the entry of the technical teams. These issues are
directed against the National Government and in some cases other
operators in the region; however Amerisur has been affected in a
knock-on manner. The Company has engaged with the relevant
government agencies and we expect a prompt resolution of these
issues and we expect to commence the 2D seismic programme within
three months. The currently planned programme is directed at the
western prospects in the block, which are the most relevant for
now, since on success they can be rapidly tied back into the
Platanillo infrastructure. The delays in commencing the seismic
acquisition are regrettable, particularly since the issues at stake
were not directed at the Company, however we are confident these
can be overcome and look forward to consistent progress thereafter
in this very prospective block. The data acquisition for the
drilling environmental license is underway. It is envisaged that
the first well in Put-12 could be spudded by Q3 2016.
Putumayo-30
In October 2014 the Company announced the award of a new
exploration license, Put-30 to Talisman Colombia Oil & Gas Ltd.
("Talisman Colombia") in the Ronda Colombia 2014 licensing round.
The Company has formed a joint venture with Talisman Colombia, an
affiliate of Talisman Energy Inc. (NYSE/TSX) with the parties
owning 50% and 50% respectively of the license. The Put-30 block
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. Only local
scouting activity took place in the first half of 2015, although we
are on track to commence 2D seismic programme covering 209km in
early 2016.
Fenix
Given the lack of a planned development programme in Fenix over
the next 12 months, the previous reserves have been reassigned to
the Contingent Resources category, which currently stand at up to
30 MMBO.
Paraguay
Amerisur has the largest acreage position in the country with
two exploration and production and three prospecting permits
covering 6.2 million hectares. The Ministry of Public Works (MPOC)
accepted a claim for Force Majeure by the Company in San Pedro,
suspending the current period until May 2016. We continue to refine
the design and costs of the well Jaguareté-1.
Acquisition
In line with our strategy to incorporate attractive, value
adding opportunities to our portfolio, we were pleased to acquire
Petro Dorado South America SA which has brought to Amerisur some
interesting assets and activity. CPO-5 is an Exploration and
Production Contract with an 8% sliding scale royalties and a 23% X
Factor. It covers 198,000Ha and is 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 indicated 61ft of
net pay within the Mirador. 408km(2) of new 3D data has recently
been acquired in the north western sector of the block, adjacent to
the Guatiquia and Akira discoveries, and covering the entirety of
the Loto structure. A further two wells within the north western
sector of the block, Kamal and Metica also tested oil, and these
structures are also covered by the new 3D data. Amerisur's
interpretation of the pre-3D data indicates potential oil in place
for the Loto structure of approximately 44.46MMBO. This estimate
will be refined once the 3D data is processed and interpreted. The
participating interest distribution in CPO-5 is ONGC Videsh Ltd
-70% and PDSA - 30% with ONGC Videsh Ltd being the Operator of the
Block.
Loto-2, designed and managed by PDSA (Amerisur) under an EPC
(Engineering, Procurement and Construction) agreement with the
Operator ONGC Videsh Ltd, spudded on September 19(th) 2015 and will
take a month to drill and is expected to cost US$6.5MM (gross). If
successful, we are confident the lifting costs in that part of the
Llanos basin are low enough for production to be profitable from
CP0-5 at US$50 per barrel.
In the event of commercial success in Loto-2, a further two
wells may be drilled on a back-to-back basis. The contract is
currently in Phase 2, where exploration commitments are 250km(2) of
3D seismic and one exploration well.
Tacacho is an Exploration and Production contract with an 8%
sliding scale royalties and a 0% X Factor, covering 238,000Ha in
the eastern Caguan-Putumayo basin. This 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, with an estimated
cost of US$9MM (gross). The phase is currently suspended while
social consultations and security planning is performed.
Capex and Forward Planning
(MORE TO FOLLOW) Dow Jones Newswires
September 28, 2015 02:01 ET (06:01 GMT)
The Company also reviewed in detail its capital expenditure for
2015 in the context of the lower oil price environment and revised
its guidance from US$95 million to US$45 million, which is fully
funded from operating cash flow and cash resources. This sum
includes all one-off costs associated with the construction and
commissioning of the OBA export line. The 2015 capex plan outlined
at the time has been reduced slightly to US$43m. This capex plan is
subject to constant review, given the dynamic nature of our
opportunities, which now include CPO-5 and Tacacho.
We had previously planned to drill two wells in Platanillo North
in the second half, the exact locations of which would be defined
by the full field mapping afforded by the Platanillo North 3D data.
However the acquisition of PDSA and the drilling programme in CPO-5
will in all probability reduce that to a single well in Q4.
Our operational focus is currently concentrated on four
fronts:
1. The construction and Commissioning of OBA
2. The successful drilling and testing of the Loto-2 and following wells
3. Optimisation of production and reserves from Platanillo
4. Portfolio assessment and management to optimise future
opportunities in the current environment
Financial Review
As a result of the lower oil price environment and the planned
reduction in production, turnover reduced to US$40.3m. We report a
positive operating cash flow for the period of $8.1m and as a
result of a significant increase in the per barrel non-cash
amortisation charge to $11.3m caused by reduction in reserves, the
operating loss was US$6.5m and loss before tax was US$5.8m.
Cash netbacks after royalties, high prices tariff and
amortisation averaged $22 per barrel. Overall cash operating and
transportation costs averaged $27 per barrel. These were adversely
affected by additional port taxes and handling charges imposed by
the pipeline operators later in the period averaging $4.5 per
barrel. These costs will not be repeated for production flowing
through the Ecuador interconnector and we anticipate overall cash
operating costs for the Platanillo field to fall to approximately
$16 per barrel once the OBA interconnector pipeline is
operational.
At the period end, the Group had US$55.6m of cash (H1 2014:
US$56.3m) with no debt. All commitments and planned discretionary
programmes for the full year are fully funded from internal
resources. First half capex was US$14.6m, and full year guidance
for capex is US$43m, which includes a cost of $18m for the
construction of the OBA interconnector pipeline and associated
facilities and previously unplanned expenditure on CPO5. The
company's forecast year end cash position is in the range of
$40-$45m. The Directors will not be recommending payment of an
interim dividend.
Summary and Outlook
We have consolidated our position in the first half and run the
business with great discipline to focus on cash generative,
profitable production and the reduction of operating costs to
ensure all exploration capex is funded from operating cash flow. We
have also expanded the Company's asset base using the low oil price
environment to buy resources and reserves at attractive valuations,
while expanding the portfolio of opportunities, thus creating
greater flexibility and diversity in our forward planning. The very
material progress we have made with OBA, which is being constructed
and is on track to be operational in Q4 of this year will allow us
to increase profitable production and will drive all sorts of value
accretive optionality from our diverse and attractive portfolio in
the months and years ahead.
John Wardle
Chief Executive Officer
28(th) September 2015
Condensed consolidated
income statement
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
USD '000 USD '000 USD '000
Unaudited Unaudited
Notes
Revenue 40,290 114,127 199,464
Cost of sales (38,710) (54,842) (117,501)
---------- --------------- -------------
Gross profit 1,580 59,285 81,963
Other administrative expenses (8,081) (7,826) (13,168)
Operating (loss) / profit (6,501) 51,459 68,795
Impairment of intangible
assets - - (26,485)
Net foreign exchange gains
/ (losses) 602 (722) 5,081
Finance income 91 66 103
(Loss) / Profit before
tax (5,808) 50,803 47,494
Taxation (capital) (313) (261) (522)
---------- --------------- -------------
(Loss) / Profit after capital
taxes (6,121) 50,542 46,972
Taxation (revenue) (306) (18,774) (19,584)
---------- --------------- -------------
(Loss) / Profit for the
period attributable to
the equity holders of the
parent (6,427) 31,768 27,388
========== =============== =============
Earnings per share - total
and continuing 4
Basic (cents per share) (0.60) 3.00 2.58
Diluted (cents per share) (0.60) 2.96 2.55
Consolidated statement of comprehensive
income
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
USD '000 USD '000 USD '000
Unaudited Unaudited
(Loss) / Profit attributable
to equity holders of the parent (6,427) 31,768 27,388
Other comprehensive income:
Items that may be subsequently
reclassified to profit and loss:
Foreign exchange differences 436 (87) 65
Revaluation of available
for sale financial assets - 1,593 -
Recycle of profit on available-for-sale
financial asset to income
statement for the year - - (704)
---------- --------------- -------------
Total other comprehensive income 436 1,506 (639)
----------
Total comprehensive income for
the year (5,991) 33,274 26,749
========== =============== =============
Condensed consolidated
balance sheet
30 June 30 June 31 December
2015 2014 2014
USD '000 USD '000 USD '000
Unaudited Unaudited
Notes
Assets
Non-current assets
Goodwill 5 514 514 514
Other intangible assets 6 10,084 31,631 8,215
Property, plant and equipment 7 136,109 119,154 135,303
Total non-current assets 146,707 151,299 144,032
Current assets
Trade and other receivables 35,758 52,500 28,006
Inventory (crude oil) 1,248 929 550
Available for sale financial -
assets - 19,667
Cash and cash equivalents 55,592 56,325 95,629
---------- -------------- ------------
Total current assets 92,598 129,421 124,185
---------- -------------- ------------
Total assets 239,305 280,720 268,217
========== ============== ============
Equity and liabilities
Equity
Issued capital 8 1,544 1,543 1,544
Share premium 109,070 109,070 109,070
Other reserve 9,132 5,141 7,060
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Revaluation reserve - 2,297 -
Foreign exchange reserve 9,844 9,256 9,408
Retained earnings 73,752 84,634 80,179
---------- -------------- ------------
Total equity 203,342 211,941 207,261
Non-current liabilities
Remediation provision 7,350 - 7,350
Deferred tax liability 10,085 15,575 10,084
---------- -------------- ------------
Total non-current liabilities 17,435 15,575 17,434
Current liabilities
Trade and other payables 18,226 38,742 34,383
Current tax liabilities 302 14,462 9,139
Total current liabilities 18,528 53,204 43,522
---------- -------------- ------------
Total liabilities 35,963 68,779 60,956
Total equity and liabilities 239,305 280,720 268,217
========== ============== ============
Condensed consolidated statement of changes in equity
Issued Share Other Investments Foreign Retained Total
share premium reserve revaluation exchange earnings equity
capital reserve reserve
USD USD USD USD '000 USD USD USD
'000 '000 '000 '000 '000 '000
At 1 January
2014 1,535 108,160 3,932 704 9,343 52,281 175,955
Share options
exercised 8 910 (585) - - 585 918
Equity settled
share options - - 1,794 - - - 1,794
--------- --------- --------- ------------- ---------- ---------- --------
Transactions
with owners 8 910 1,209 - - 585 2,712
Profit for
the period - - - - - 31,768 31,768
Other comprehensive
income - - - 1,593 - - 1,593
Foreign exchange
differences
on retranslation
to presentational
currency - - - - (87) - (87)
--------- --------- --------- ------------- ---------- ---------- --------
Total comprehensive
income - - - 1,593 (87) 31,768 33,274
--------- --------- --------- ------------- ---------- ---------- --------
At 30 June
2014 1,543 109,070 5,141 2,297 9,256 84,634 211,941
Share options
exercised 1 - 75 - - (75) 1
Equity settled
share options - - 1,844 - - - 1,844
--------- --------- --------- ------------- ---------- ---------- --------
Transactions
with owners 1 - 1,919 - - (75) 1,845
Loss for the
period - - - - - (4,380) (4,380)
Foreign exchange
differences
on retranslation
to presentational
currency - - - - 152 - 152
Recycle of
profit on available-for-sale
financial asset
to profit and
loss for the
year - - - (2,297) - - (2,297)
Total comprehensive
income - - - (2,297) 152 (4,380) (6,525)
--------- --------- --------- ------------- ---------- ---------- --------
At 31 December
2014 1,544 109,070 7,060 - 9,408 80,179 207,261
Equity settled
share options - - 2,072 - - - 2,072
--------- --------- --------- ------------- ---------- ---------- --------
Transactions
with owners - - 2,072 - - - 2,072
Loss for the
period - - - - - (6,427) (6,427)
Foreign exchange
differences
on retranslation
to presentational
currency - - - - 436 - 436
--------- --------- --------- ------------- ---------- ---------- --------
Total comprehensive
income - - - - 436 (6,427) (5,991)
--------- --------- --------- ------------- ---------- ---------- --------
At 30 June
2015 1,544 109,070 9,132 - 9,844 73,752 203,342
========= ========= ========= ============= ========== ========== ========
Condensed consolidated
cash flow statement
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
USD '000 USD '000 USD '000
Unaudited Unaudited
Cash flows from operating
activities
(Loss) / Profit for the
period (6,427) 31,768 27,388
Adjustments for:
Finance income (91) (66) (103)
Tax - capital and income 619 19,035 20,106
Depreciation 11,921 9,818 20,005
Impairment - - 26,485
Share based payment expense 2,072 1,794 3,638
Loss on disposal of investment - - 381
(Increase) / Decrease in
inventory (698) 275 654
Increase in trade and other
receivables (1,991) (31,799) (7,305)
Decrease in trade and other
payables (16,158) (4,806) (1,406)
Net cash (used in) / generated
by operations (10,753) 26,019 89,843
Income tax paid (15,215) (14,786) (26,671)
Net cash (used in) / generated
by operating activities (25,968) 11,233 63,172
Cash flows from investing
activities
Interest received 91 66 103
Payments for property,
plant and equipment (12,727) (16,003) (42,339)
Receipt for disposal of
property, plant and equipment - - -
Payments for available
for sale financial assets - (6,695) (6,695)
Disposal of investment - - 16,989
Payments for intangible
assets (1,869) (5,051) (8,120)
Net cash used in investing
activities (14,505) (27,683) (40,062)
Cash flows from financing
activities
Proceeds from issue of
equity shares - 918 919
Net cash generated by financing
activities - 918 919
Net (decrease) / increase
in cash and cash equivalents (40,473) (15,532) 24,029
Foreign exchange differences 436 257 -
Cash and cash equivalents
at the start of the period 95,629 71,600 71,600
-------------- ---------- ------------------
Cash and cash equivalents
at the end of the period 55,592 56,325 95,629
============== ========== ==================
1. The Company
Amerisur Resources Plc ("the Company") is principally involved
in the exploration for and production of oil and gas in South
America.
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The Company is a public limited company incorporated and
domiciled in England and Wales. The address of its registered
office is Amerisur Resources plc, Lakeside, St. Mellons, Cardiff,
CF3 0FB, United Kingdom.
The Company has its listing on the AIM Market ("AIM") of the
London Stock Exchange.
2. Basis of preparation
These unaudited consolidated interim financial statements are
for the six month period ended 30 June 2015. They do not include
all the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2014, which
were prepared under International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU").
The consolidated financial statements have been prepared under
the historical cost convention except for share based payments
which are valued at the date of grant and available-for-sale
financial assets which are held at fair value.
These interim consolidated financial statements have been
prepared in accordance with accounting policies consistent with
those set out in the Group's financial statements for the year
ended 31 December 2014. These extracts do not constitute statutory
accounts under s434 of the Companies Act 2006 (the "Act").
The Company's consolidated statutory accounts for the year ended
31 December 2014 have been filed with the Registrar of Companies.
Those accounts have received an unqualified audit report and did
not contain statements or matters to which the auditors drew
attention under the Act.
3. Segmental reporting
Segment Reporting
Our management information system produces reports for the
Executive Board grouping financial performance under the following
business areas:
-- Colombia
-- Paraguay
-- United Kingdom
All business areas are responsible initially for the exploration
and evaluation of oil reserves and then the development and
production of oil wells. As permitted by IFRS 8, since these
business areas are deemed to have similar economic characteristics
and are similar, if not the same, in all of the following:
-- business areas derive their revenue from the supply of crude oil,
-- the production and distribution process is the same across all business areas,
-- business areas supply to similar customers,
-- all business areas are subject to the same regulatory environment.
The business areas have been aggregated into a single reportable
operating segment, namely oil exploration and development. Each
month the Executive Board is presented with financial information
prepared in accordance with IFRS as adopted in the EU and the
accounting policies set out in Note 2 to the financial information
as such information regarding this operating segment has already
been disclosed in the financial statements.
In the period, two customers contributed to the majority of
revenue:
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
USD % USD % USD %
'000 '000 '000
Customer A 7,816 20 94,924 83 158,162 79
Customer B 31,817 80 19,203 17 41,302 21
------- ---- -------- ---- --------- ----
39,633 100 114,127 100 199,464 100
======= ==== ======== ==== ========= ====
Geographical information
Non-current assets Revenue
6 months 6 months 12 months
30 June 30 June 31 December to to to
30 June 30 June 31 December
2015 2014 2014 2015 2014 2014
USD '000 USD '000 USD '000 USD '000 USD '000 USD '000
Colombia 138,290 143,363 136,930 40,290 114,127 199,464
Paraguay 7,292 4,871 6,482 - - -
United
Kingdom 1,125 3,065 620 - - -
---------- ---------- -------------- --------- --------- -------------
146,707 151,299 144,032 40,290 114,127 199,464
========== ========== ============== ========= ========= =============
The revenue split is based on revenue by origin by supply.
4. Earnings per share
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2015 2014 2014
USD '000 USD '000 USD '000
Earnings for the period
attributable to equity shareholders
of the parent (6,427) 31,768 27,388
Earnings per share
Basic (cents per share) (0.60) 3.00 2.58
Diluted (cents per share) (0.60) 2.96 2.55
Shares Shares Shares
Issued ordinary shares at
start of the period 1,062,719,634 1,057,094,034 1,057,094,034
Ordinary shares issued in
the period - 5,075,000 5,625,600
-------------- -------------- --------------
Issued ordinary shares at
end of the period 1,062,719,634 1,062,169,034 1,062,719,634
============== ============== ==============
Weighted average number
of shares in issue for the
period 1,062,719,634 1,060,577,183 1,061,516,923
Dilutive effect of options
in issue 11,088,359 12,214,093 13,269,277
-------------- -------------- ----------------
Weighted average number
of shares for diluted earnings
per share. 1,073,807,993 1,072,791,276 1,074,786,200
============== ============== ================
5. Goodwill
The Group has goodwill resulting from past business combinations
as follows:
Goodwill
on acquisition
USD '000
1 January 2014 514
Foreign exchange -
At 30 June 2014, 31 December
2014 and 30 June 2015 514
================
The Directors have reviewed the carrying value of these
intangible assets and consider that no impairment is required.
6. Other intangible assets
Deferred exploration costs
The Group has made investments in deferred exploration costs as
follows:
PUT-12 Fenix Other Total
- Paraguay
/ Ecuador
Share of field 60% 100% 100%
USD '000 USD '000 USD '000 USD '000
Cost
1 January 2014 - 24,749 1,831 26,580
Additions 1,212 1,536 2,303 5,051
30 June 2014 1,212 26,285 4,134 31,631
Additions 721 200 2,148 3,069
31 December 2014 1,933 26,485 6,282 34,700
Additions 520 - 1,349 1,869
30 June 2015 2,453 26,485 7,631 36,569
========= ========= ============ =========
Accumulated amortisation
and impairment
At 1 January 2014 - - - -
and 30 June 2014
Impairment - (26,485) - (26,485)
------ --------- ------ ---------
31 December 2014 - (26,485) - (26,485)
Impairment - - - -
------ --------- ------ ---------
At 30 June 2015 - (26,485) - (26,485)
====== ========= ====== =========
Net book value
30 June 2015 2,453 - 7,631 10,084
31 December 2014 1,933 - 6,282 8,215
30 June 2014 1,212 26,285 4,134 31,631
1 January 2014 - 24,749 1,831 26,580
The Directors have reviewed the carrying value of these
intangible assets and consider that no impairment is required.
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