TIDMAEX
RNS Number : 0899K
Aminex PLC
14 April 2015
Aminex plc
("Aminex" or "the Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
Aminex PLC ("Aminex" or "the Group" or "the Company"), the oil
and gas company listed on the London and Irish Stock Exchanges,
today announces its preliminary results for the year ended 31
December 2014.
HIGHLIGHTS
During the year:
-- $15 million equity raised (before expenses)
-- New seismic in the Ruvuma Basin which high graded drill targets
-- Regional gas pipeline completed with sales line to Kiliwani North being connected
-- Part sale of Kiliwani North reduces corporate debt
-- US assets divested
-- Nyuni Area deep water potential reassessed
-- Provisional agreement to sell Moldova interest
-- Technical team strengthened
-- Ongoing restructuring and cost monitoring
Looking ahead:
-- 2015 will be the year when Aminex begins to reap rewards
after a decade of exploration and development in Tanzania
-- In a difficult market favourable opportunities may present
themselves and the Company is actively engaged in looking for
production and development led opportunities
Aminex Chief Executive Officer Jay Bhattacherjee commented: "I
would like to thank shareholders for their continued support. This
is a very promising time for the Company, with a line of sight to
first commercial production from Kiliwani North and ongoing
appraisal of the Ntorya discovery. Going forward the Company will
maintain strict cost control measures while opportunistically using
the downturn in commodity prices to expand its business with
production and development led opportunities in Africa."
For further information:
Aminex PLC +44 20 7291 3100
Jay Bhattacherjee, Chief
Executive Officer
Max Williams, Finance
Director
Corporate Brokers
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Dominic Barretto
Kelsey Traynor
CHAIRMAN'S LETTER
Dear Shareholder,
Herewith are Aminex PLC's ("Aminex") results for the year ended
31 December 2014. The Group made a loss for the financial year of
$7.01 million (2013: $17.28 million).
Early in 2014 Aminex completed an equity raising of
approximately $15 million before expenses which strengthened its
balance sheet and enabled it to advance its projects in Tanzania.
In conjunction with the equity raising, Aminex agreed the delay in
the repayment date of its $8 million corporate debt until 31 July
2015 as detailed in the Financial Review section below. In the
latter part of the year it agreed a sale of part of its interest in
the Kiliwani North gas field and this has been completed since the
year end. The proceeds are being used to retire a portion of its
corporate debt which will de-gear the balance sheet. Also during
the year, the Company achieved its previously stated objective of
selling its remaining US properties and in doing so eliminating its
exposure to the oil price which has fallen materially since
then.
Further 2D seismic was acquired on the Ruvuma PSA during the
year which has high graded the prospectivity of the area. Partners
are being sought to accelerate development activity on the Ruvuma
acreage in order to provide gas into the country's new pipeline
infrastructure which is due to be completed and commissioned in the
first half of 2015. In the Nyuni Area, a technical review has led
Aminex and partners to favour exploration in the deep water part of
the licence where drilling success rates are in excess of 90%.
In 2015 Aminex will become an African producer of natural gas
for the first time when Kiliwani North comes on stream after delays
which have been outside the Company's control. Kiliwani North will
be connected to the main infrastructure via a sales line from the
Kiliwani North wellhead at no further cost to the joint venture
partners other than the supply and installation of a metering unit.
The Kiliwani North Gas Sales Agreement is expected to be completed
once it has passed the regulatory process and prior to any gas
being delivered.
The last quarter of 2014 was a difficult time for our industry
as crude prices fell beyond most people's expectations. Apart from
the effects of negative sentiment in the markets, however, Aminex
has not been badly affected by this new oil price environment which
is highly unlikely to change the prices which it expects to obtain
for its Tanzanian gas. Nevertheless, the Company has prudently
undertaken a round of cost cutting measures.
During the year, the composition of the Board has changed with
the appointment of Jay Bhattacherjee, Philip Thompson and Max
Williams in March 2014 as Executive Directors. Around that time
Mike Rego left the Company to take up an overseas appointment. In
the second half of the year, David Hooker and Derek Tughan retired
as Non-Executive Directors after long and valuable service to the
Company. On behalf of the Board I would like to thank all the
departing directors most warmly for their contributions. We were
pleased to welcome Tom Mackay to the Board as a Non-Executive
Director last September. Tom is a highly experienced oil industry
professional, both technically and commercially, and we will be
asking shareholders to approve his appointment at the forthcoming
Annual General Meeting. As a consequence of director retirements,
Andrew Hay has been appointed Senior Non-Executive Director and
Keith Phair has been appointed Chairman of the Audit Committee.
I would like to thank shareholders for staying with us in
turbulent times and for supporting our new management team as we
move into a new phase of becoming an African gas producer. We look
forward to seeing as many of you as possible at the Annual General
Meeting in Dublin on 20 May 2015.
Yours sincerely,
Brian Hall
Chairman
CHIEF EXECUTIVE'S REVIEW
Aminex will shortly become an African producer for the first
time and this will transform the Group. The team continues to
explore and maximise the prospectivity of the Group's assets in
preparation for production and the development of the onshore
Ruvuma Basin where the Company has an existing discovery.
Tanzania
The major new regional gas pipeline being developed by the
Tanzania Petroleum Development Corporation ('TPDC') was under
construction throughout 2014 and is expected to be ready to receive
commissioning gas in the first half of 2015. There is still work to
do but the lion's share is complete and finalisation is in sight.
The pipeline provides a commercialisation route for Kiliwani North
gas and opens up the future commercialisation of the Company's
Ntorya discovery and any other discoveries made in the Company's
onshore Ruvuma Basin acreage.
Kiliwani North is expected to produce initially at a rate of 20
MMcfd through a new processing plant currently being constructed by
the TPDC on Songo-Songo Island. The Company will sell gas directly
at wellhead which will entail minimal operating costs and no
liability to finance sales lines or for ongoing pipeline
transportation tariffs. A Gas Sales Agreement has been negotiated
and is passing through government approval stages. The agreement is
part of a larger commercial transaction with neighbouring producers
who will use the same facilities. The Company is aware of
shareholder frustration surrounding the delays in finalising the
agreement and appreciates the patience shown.
During 2014 the Company completed a new seismic acquisition
programme in the vicinity of its Ntorya-1 discovery well on the
Ruvuma PSA acreage. The programme was designed to identify the
channel fairway associated with the Tertiary and Cretaceous
reservoirs where the Ntorya-1 well tested gas at 20 MMcfd with 139
barrels of associated condensate. The seismic programme was
completed on time and within budget. Based on management
interpretations a resource increase from 1.3 TCF to 2.3 TCF was
determined. The Company currently has an obligation to drill a
minimum of four exploration wells by the end of 2016 but is in
discussions with the TPDC first to focus efforts on the development
of Ntorya with a view to accelerating the supply of gas into the
new regional pipeline system. Should the Company have success in
its appraisal and development drilling programme in the Ruvuma
basin, any gas discovered can be commercialised through the new
pipeline.
At the Nyuni Area PSA, the Company is looking to focus
exploration activity on the deep water sector of the licence. The
Tanzanian authorities have agreed to replace a commitment to shoot
2D seismic in the shallow zones with 3D seismic in the deep water
sector. This will enable the acquisition of 700 square kilometres
of new seismic in the deep water. As part of this approval, a two
well commitment due to be carried out this year has been deferred
to the next exploration phase which expires in October 2019.
United States
In 2014 the Company completed its US disposal programme through
selling Aminex USA, Inc., the main assets of which were the Shoats
Creek field, Louisiana, and Alta Loma field, Texas, to Northcote
Energy Ltd. and Springer Oil & Gas LLC. The Company is now
focused on developing its production-led business in Africa.
Egypt
At the West Esh el Mallaha-2 ("WEEM-2") concession in Egypt, the
Company holds a free-carried 10% interest. The South Malak-2 well
was drilled in 2014 and was declared a discovery well in February
2015 by the Ministry of Petroleum in Egypt. Further progress on the
concession is subject to the submission of a field development
plan. In view of Aminex's carried position and the funding
partner's cumulative costs which will need to be recovered, on
receipt of the proposed field development plan Aminex will review
the economic benefits which would accrue to the Company and act
accordingly.
Moldova
In line with its Africa-focused strategy, the Company has
reached a provisional agreement to dispose of its interests in
Moldova. The Company has a Partnership Agreement with a local
operator and no immediate further capital expenditures are planned
in the country.
Evaluation of new opportunities
Throughout the period, the Company's management and technical
team has been evaluating and analysing new business opportunities
with the aim of creating a larger and stronger base for its
activities in Africa, balancing risk against opportunity.
Looking Forward
I would like to thank our staff and all those that have been
associated with the Company's progress for their consistent hard
work and our shareholders for their continued support. This is a
very promising time for the Company, with a line of sight to first
commercial production from Kiliwani North and ongoing appraisal of
the Ntorya discovery.
Jay Bhattacherjee
Chief Executive
FINANCIAL REVIEW
Financing and future operations
After successfully completing a $15 million fundraising in
February 2014, Aminex achieved its targets to acquire, process and
interpret additional 2D seismic over the Ruvuma acreage in
Tanzania, dispose of its US assets and, with the successful
completion of a partial disposal in the Kiliwani North Development
Licence ('KNDL') for $3.5 million in February 2015, materially
reduce its indebtedness.
The $15 million, before expensese fundraising comprised a
placing, an open offer to existing shareholders and the support of
certain creditors agreeing to convert amounts owed to new Ordinary
Shares in Aminex. This was supplemented later in the year with the
conversion of other debts to equity and the exercise of warrants.
The Company also negotiated, through the continued support of the
lender, an extension to the repayment date for the $8 million
corporate loan to no later than 31 July 2015. The partial disposal
of 6.5% of the Kiliwani North Development Licence for a
consideration of $3.5 million in February 2015 has enabled the
Company to reduce the corporate loan materially since the
year-end.
The new 2D seismic acquired over Ruvuma enabled management to
increase its estimates of resources over the Ntorya and Likonde
prospects to 2.3 TCF and to identify at least four drillable
locations to assist with the development of the Ntorya appraisal
area. While discussions continue with a small number of potential
farmees for the Ruvuma PSA, Aminex and its joint venture partner
will also consider drilling the Ntorya-2 well based on the new
interpreted seismic without a farm-out. Other appraisal,
development and exploration targets are currently under review.
Production from the KNDL remains scheduled to commence in the
first half of 2015. The gas infrastructure being constructed by the
Tanzanian government is complete for all practical purposes and the
commissioning phase should start during the first half of 2015. The
KNDL joint venture anticipates minimal further capital outlay,
limited to the acquisition and installation of a gas metering unit.
All other facilities are being constructed and funded by the
Tanzania Petroleum Development Corporation ('TPDC'). There have
been delays in the finalisation of the Gas Sales Agreement ('GSA')
due to regulatory procedures in Tanzania. The GSA will be signed
prior to any commercial production. The agreement for a disposal of
6.5% of the KNDL since the year end gives the purchaser an option
to acquire a further 6.5% for $3.5 million within thirty days of
the GSA being signed. Although Aminex's interest in the KNDL would
be reduced to 52%, the exercise of this option would enable further
substantial corporate debt repayment prior to the final repayment
date of 31 July 2015.
The Directors are seeking to concentrate the Company's resources
on achieving high value for shareholders. The Company has been
reducing costs and commitments by implementing a strategy of
disposing of non-core assets. On 22 August 2014, Aminex received
the approval of shareholders for the disposal of the Group's
subsidiary company, Aminex USA, Inc. The consideration comprised
cash of $150,000 and shares with a value of $350,000 in Northcote
Energy Limited, an AIM-listed company, without any lock up
restrictions, together with monthly production payments of $10 per
barrel based on production from 1 January 2015 up to a maximum of
$4.5 million. The Directors are also looking to dispose of other
non-core assets.
Although the Company has reduced its cost base to reflect
current market conditions, it has strengthened its technical team
and will develop the team further as circumstances allow.
During 2015, Aminex will continue to seek alternative financing
options to enable the further reduction and full repayment of the
corporate loan or if necessary a refinancing solution. The Company
looks forward to the first commercial revenues from Kiliwani North
and is currently planning the drilling of Ntorya-2 in the Ruvuma
Basin. Following the formal agreement for deferral of a two well
commitment into the next work period on the Nyuni Area PSA, the
Company and its partners plan to acquire 3D seismic over the
outboard sector of that PSA where potential deep water leads have
been identified.
Revenue Producing Operations
The US oil and gas properties have been accounted for during the
period as discontinued operations to reflect their disposal,
following shareholder approval at an Extraordinary General Meeting
held on 22 August 2014. The results for the comparative period have
been restated accordingly.
Revenues for continuing operations arise from oilfield services,
comprising the provision of technical and administrative services
to joint venture operations and sales of equipment to third
parties. For the current period revenues were $444,000 (2013:
$724,000 restated). Cost of sales was $412,000 (2013: $516,000
restated). The gross profit for the period was $32,000 (2013:
$208,000 restated).
Group administrative expenses, net of costs capitalised against
projects, were $2.80 million (2013: $2.59 million restated). The
increase was due to one-off payroll costs, part of which related to
the senior management remuneration conditional on the successful
completion of the fundraising in February 2014, and consultancy
fees. These were off-set by management's continuing review of
services received and the implementation of cost savings throughout
the Group which has led to a reduction in the monthly overhead
while available resources are focused on technical and operational
capability. The Group's resulting net loss from operating
activities was $3.64 million (2013: $2.50 million restated).
Finance costs reflects an interest charge of $2.24 million
(2013: $4.42 million restated), which mainly consists of the charge
for the corporate loan, the basis of the charge having been
adjusted at the end of February 2014 for the extension of the
repayment date to 31 July 2015 and for a re-calculation of the
exercise price of warrants granted to the lender. The charge also
includes the unwinding of the discount on the decommissioning
provision and bank interest.
The results for the US operations are disclosed as discontinued
operations. The loss on discontinued operations for the current
period was $1.14 million after transaction costs (2013: $10.35
million restated).
The Group's net loss for the period amounted to $7.01 million
(2013: $17.28 million).
Balance Sheet
The Group's investment in exploration and evaluation assets
increased from $75.1 million at 31 December 2013 to $78.7 million
at 31 December 2014 as a result of 2D seismic acquisition,
processing and interpretation on the Ruvuma PSA and general ongoing
licence costs. After review, the Directors have concluded that
there is no impairment to these assets, which include the cost of
the Ntorya-1 gas discovery. Following the disposal of the US
assets, the carrying value of property, plant and equipment has
decreased from $19.0 million at 31 December 2013 to $13.5 million
at 31 December 2014, which represents the carrying value of the
Kiliwani North field and the net book value of the Group's plant
and equipment. Non-current assets also include the fair value of
the production payments up to a maximum of $4.5 million due from
future production on the US assets sold during the year and the
fair value of an investment in an AIM-listed company, Northcote
Energy Limited, which was received as part-consideration on the
sale of the US assets. Current assets include assets held for sale
of $0.85 million comprising the fair value of the Moldova assets.
The Directors consider that the Moldova assets are non-core and
they are expected to be sold within the short-term. After review,
the Directors concluded that the carrying value of the Moldova
assets remains impaired but consider the provision of $0.62 million
made at the half-year to be adequate. Other current assets comprise
trade and other receivables of $1.22 million and cash and cash
equivalents of $1.77 million.
Under current liabilities, loans and borrowings relating to the
corporate loan (see commentary under Going Concern Review) have
increased from $9.7 million at 31 December 2013 to $10.2 million at
31 December 2014: the increase reflects an additional loan charge
for the year of $2.2 million, an additional transfer of $0.5
million to the share warrant reserve and interest paid of $1.2
million. Trade payables amount to $1.9 million (2013: $7.2
million). The decommissioning provision, current and non-current,
has decreased to $0.4 million (2013: $2.3 million) after the
disposal of decommissioning liabilities on US properties on the
sale of Aminex USA, Inc. and now relates only to liabilities in
Tanzania. Total equity has increased by $9.0 million between 31
December 2013 and 31 December 2014 to $86.5 million. The movement
comprises the net increase in issued capital and share premium of
$15.5 million arising mainly from the fundraising in February and
an increase in the share warrant reserve of $0.5 million. The
foreign currency translation reserve remains in line with the
previous year and the loss of $7.0 million for the year under
review has increased the retained loss to $80.1 million.
Cash Flows
The net increase in cash and cash equivalents for the year ended
31 December 2014 was $1.60 million compared with a net decrease of
$0.33 million for the comparative period. The Company raised net
proceeds of $12.7 million received on the issue of new equity
through a placing and open offer in February 2014 and on the
exercise of certain warrants in September 2014. Net cash outflows
from operating activities amounted to $3.45 million (2013: net
inflows $0.8 million) after interest payments of $1.2 million
(2013: $0.2 million). Expenditure on exploration and evaluation
assets in 2014 amounted to $7.1 million, relating mainly to new 2D
seismic acquired on the Ruvuma PSA acreage, together with the
related cost of processing and interpretation, as well as
continuing licence costs and the settlement of liabilities carried
forward from 2013. Expenditure on property, plant and equipment of
$0.2 million mainly related to licence costs and settlement of 2013
liabilities on the KNDL. After transaction costs of $0.4 million
for the disposal of the US properties and offsetting interest
received and loan repayments, the cash balance at 31 December 2014
totalled $1.8 million (31 December 2013: $0.2 million).
Going Concern
The Directors have given careful consideration to the Group's
ability to continue as a going concern. During the year ended 31
December 2014, the Group reached agreement with Argo Capital
Management (Cyprus) Limited, representing the provider of an $8
million loan facility (the 'Argo Loan') (see Note 14), to extend
the scheduled repayment date of this loan to the end of July 2015.
Based on current cash flow projections, the Group will not be in a
position to repay the balance of the loan, (estimated to be
approximately $7.8 million including interest and redemption
premium and after actual and expected capital repayments since 31
December 2014), in full on the due date or meet its operational and
capital expenditure planned for 2015 and 2016.
However the Directors have taken into account that in February
2015 the Group completed the partial sale of its interest in the
Kiliwani North Development Licence, selling 6.5% for $3.5 million,
of which Aminex applied net proceeds of $3.3 million to pay down
the Argo Loan. Under the terms of the Asset Sale Agreement, the
purchaser has an option to acquire a further 6.5% for consideration
of $3.5 million: the option period is for thirty days following the
signing of a Gas Sales Agreement for Kiliwani North gas by Aminex's
subsidiary company, Ndovu Resources Limited. While the additional
sale of 6.5% in the Kiliwani North Development Licence remains at
the purchaser's option, the Directors have a reasonable expectation
of the option being taken up and the consideration received prior
to the Argo Loan repayment date of 31 July 2015 and therefore being
able to pay down an amount of approximately $3.3 million from net
proceeds of the second sale. The Directors are in discussions
regarding the amendment of the terms of the Argo Loan, including
the potential extension of the repayment period to enable the
balance of the loan to be repaid from revenues from Kiliwani North
expected to start being received in the second half of 2015. The
Directors are also in discussions with third parties to seek a
re-financing of the Argo Loan. The Directors are also reviewing
other measures available to the Group, including the sale of
assets, deferral of planned expenditure and alternative methods of
raising capital to enable it to repay the Argo Loan.
These factors indicate the existence of a material uncertainty
that may cast significant doubt on the Group's ability to continue
as a going concern and, therefore, it may be unable to realise its
assets and discharge its liabilities in the normal course of
business. Nevertheless, after making enquiries and having
considered the uncertainties described above and the options
available to the Group, the Directors have a reasonable expectation
that the Group either will be able to extend the repayment period
of or re-finance the Argo Loan and will have sufficient funds
available to it to meet other planned expenditures when they fall
due for the foreseeable future. Based on the above, the Directors
continue to adopt the going concern basis for the preparation of
the financial statements. The financial statements do not include
any adjustments that would result if the Group was unable to
continue as a going concern.
The Directors understand that, as in prior years, the auditor
will likely make reference to this in the auditor's report and that
the auditor's opinion will not be modified in this respect
Max Williams
Finance Director
OPERATIONS REPORT
TANZANIA
Kiliwani North Development Licence - Near-term production
At 31 December 2014 At date of report
Aminex (operator) 65% 58.5%
RAK Gas Commission 25% 25%
Bounty Oil 10% 10%
Solo Oil plc - 6.5%
Aminex expects first production from the Kiliwani North field
during the current half-year. This will start with the supply of
gas to pressure-test the new sales pipeline and gas plant. Revenue
gas will commence flowing shortly thereafter. The construction of
the major new regional gas pipeline system in Tanzania, from the
south-east corner of the Ruvuma Basin, close to the border with
Mozambique, to Dar es Salaam, is complete and commissioning is
expected during the first half of 2015. The new facilities are
within easy reach of Aminex's Kiliwani North and Ntorya discoveries
in Tanzania, making gas production on and close to shore in
Tanzania commercially viable. Negotiations on a Gas Sales Agreement
('GSA') remain subject to continuing delays as the draft agreement
passes through various Tanzanian governmental reviews but Aminex
expects the GSA to be completed and signed in the near future, with
satisfactory payment protection terms in place and prior to first
production from the Kiliwani North field. The Tanzanian
government's newly installed 540 km 36" diameter pipeline will
provide ample delivery capability for Kiliwani North gas and a new
treatment plant on Songo-Songo Island is located less than 2 km
from Kiliwani North. TPDC's contractors have constructed a sales
line from the Kiliwani North wellhead to the nearby processing
plant at their cost and Kiliwani North gas will be sold at wellhead
through a metering unit which the Company is installing at minimal
cost to the joint venture. The price that the Company will receive
will be net at wellhead and not subject to any pipeline tariff or
processing cost. Kiliwani North-1 has been production-tested at 40
MMscfd but production is expected to commence at 20 MMscfd
(approximately 3,500 BOED) from the field in order to manage
depletion most effectively. The Company believes that this level of
production can be maintained for 36 months and then declined in a
manner best suited to maximising the life of the reservoir. After a
partial disposal of Kiliwani North to Solo Oil plc, completed in
February 2015, Aminex's wholly-owned subsidiary Ndovu Resources
Limited ('Ndovu') has a 58.5% working interest and is the operator
of the field.
Ruvuma PSA - Onshore Appraisal and Exploration
Aminex (operator) 75%
Solo Oil plc 25%
An appraisal licence (or "Location") has been issued by the
Tanzanian Government for the Ntorya-1 gas discovery. Aminex
acquired 181 km of 2D seismic during 2014 to appraise the Ntorya
discovery and to select drill locations over the key Likonde and
Namisange prospects. The Ntorya-1 well, drilled in 2012, discovered
a gross 25-metre sandstone interval and, based on the new 2014
seismic, Aminex estimates 1.9 TCF Pmean gas in-place resource for
the Cenomanian sandstone reservoir. The Ntorya-1 well flowed over
20 million cubic feet per day on a 1" choke (equivalent to over
3,000 BOPD) with produced 139 barrels of 53Ëš API associated
condensate, believed by the Company to be the largest volume of
liquid hydrocarbons tested to date in the Ruvuma Basin, onshore or
offshore. The Ntorya-2 appraisal well, planned to be drilled in
2015, will target the primary Cenomanian and the secondary Tertiary
reservoir intervals. It will test a total of 2.3 TCF Pmean
estimated gas in-place.
Prior to Ntorya-1, the Company and its partners drilled
Likonde-1 in 2010 which identified a 250-metre reservoir section
with strong indications of migrated liquid hydrocarbons and which
encountered source gas at depth. The new seismic data has
identified two new drill locations updip of Likonde-1 and an
additional well location over the Namisange prospect aimed at
unlocking the potential of that part of the PSA area.
Drilling is scheduled to begin in the second half of 2015 to
appraise the Ntorya discovery. The new regional gas pipeline will
provide ample delivery capability for gas from the expected
development of Ntorya and probably for any subsequent discoveries
which the Company may make in the Ruvuma basin. The main pipeline
will pass within 12 km of the Ntorya-1 discovery well.
Exploration drilling is planned over key prospects prior to the
termination of the PSA in December 2016 when the remainder of the
exploration acreage, outside designated appraisal, development or
production licences, is due to be relinquished.
Nyuni Area PSA - Onshore, Shelf and Deepwater Exploration
Aminex (operator) 70%
RAK Gas Commission 25%
Bounty Oil 5%
The Nyuni Area PSA was awarded in late 2011 for an eleven year
period and replaced the Nyuni/East Songo-Songo PSA after it had
expired, with all obligations met and a commercial discovery
established. Aminex has drilled, as operator, four exploration
wells in the Nyuni Area, including the Kiliwani North gas discovery
which is now the subject of a separate development licence and
ready to produce.
With its partners, the Company's focus has now moved from the
shelf to the deep water, highly prospective outboard sector of the
PSA where 3D seismic is planned, for which a variation of the work
commitment and an extension to the current work period has recently
been approved by the TPDC. Aminex has identified the key Pande West
lead on 2D seismic in the deep water, eastern part of the PSA
acreage and expects to find more prospects on the basis of a new 3D
seismic programme. The drilling success rate from 3D seismic in the
deeper water east of the continental shelf is very high due to the
quality of the petroleum system in this basin. Aminex is currently
reviewing appropriate seismic vessel options operating in the close
vicinity, so as to minimise mobilisation/demobilisation costs, to
acquire 3D seismic data over this area. Lower oil prices are
currently impacting seismic costs, which should provide further
cost savings on the acquisition programme. As the Company's initial
focus is primarily on the Ruvuma PSA acreage and development of the
Ntorya discovery, the Company is unlikely to be in a position to
drill an expensive deep water well in the Nyuni Area in the
foreseeable future without introducing a larger company as farm-in
partner.
EGYPT - Onshore Exploration
Gulf of Suez - West Esh el Mellaha-2 PSC ('WEEM-2')
Aminex Petroleum Egypt Limited 80%
Triumph Energy Group 20%
Aminex has a 10% beneficial interest in this PSC through its
12.5% shareholding in Aminex Petroleum Egypt Limited. Aminex's
interest in this PSC is free-carried by a partner through to first
commercial production and the Company therefore has no day-to-day
control over the timing of drilling operations. Three wells were
drilled prior to 2014, of which one tested oil in non-commercial
quantities. Activity was restricted due to political issues in
Egypt and a change of control of Aminex Petroleum Egypt Limited's
ultimate parent company. The Egyptian authorities extended the
second period of the WEEM-2 PSC to facilitate completion of a
delayed drilling programme and Aminex was notified in September
2014 that the South Malak-2 ('SM-2') well had been spudded. In
February 2015 the SM-2 well was declared a discovery well by the
Ministry of Petroleum in Egypt. Tests showed production flow rates
of approximately 430 barrels per day of 40Ëš API crude. Based on the
success of SM-2, a full field development programme will be
presented to the Egyptian Authorities and partners prior to
commercial development. Once the full development plan has been
presented and in view of the Company's carried interest which will
generate income only after the funding partners have recovered
their cumulative investment, Aminex will assess the economic
benefit of this discovery to the Company and act accordingly.
MOLDOVA - Production
Following the acquisition of Canyon Oil & Gas Limited in
February 2014, Aminex has an interest under the terms of a
partnership agreement with Valiexchimp SRL, the concession-holder
of two licences for the Valeni and Victorovca oil and gas fields in
the Republic of Moldova. Since signing the agreement and prior to
its acquisition by Aminex, Canyon drilled two wells. As the Board
considers the Moldovan assets not to be core to Aminex's business,
no further wells are currently planned and the Company has reached
provisional agreement to dispose of its interest.
OILFIELD SUPPLY & LOGISTICS
During the year, Aminex ceased to supply equipment through its
service division, AMOSSCO, as part of the process of reducing costs
and concentrating on core exploration and production assets. The
Group will continue to provide technical and administrative support
to Aminex's operated joint ventures.
Group Income Statement
for the year ended 31 December 2014
2014 2014 2013 2013
Notes US$'000 US$'000 US$'000 US$'000
(restated) (restated)
Revenue 2 444 724
Cost of sales (412) (516)
Gross profit 32 208
Administrative expenses (2,795) (2,589)
Depreciation of other
assets (9) (11)
--------- -----------
(2,804) (2,600)
--------- -----------
Loss from operating
activities before other
items (2,772) (2,392)
Impairment provision
against assets held
for sale 11 (622) -
Impairment loss on available
for sale assets (243) -
Loss on disposal of
quoted financial investment - (108)
--------- -----------
Loss from operating
activities (3,637) (2,500)
Finance income 3 11 -
Finance costs 4 (2,239) (4,423)
--------- -----------
Loss before tax (5,865) (6,923)
Income tax expense - -
--------- -----------
Loss from continuing
operations 2 (5,865) (6,923)
Discontinued operations
Loss from discontinued
operations 5 (1,143) (10,354)
Loss for the financial
year attributable to
equity holders of the
Company (7,008) (17,277)
Basic and diluted loss
per Ordinary Share (in
US cents) 6 (0.41) (2.11)
--------- -----------
Basic and diluted loss
per Ordinary Share (in
US cents) - continuing
operations 6 (0.34) (0.85)
--------- -----------
Group Statement of Comprehensive Income
for the year ended 31 December 2014
2014 2013
US$'000 US$'000
Loss for the financial
year (7,008) (17,277)
Other comprehensive income:
Items that are or maybe
reclassified to profit
or loss:
Currency translation differences (19) (234)
Total comprehensive income
for the financial year
attributable to the equity
holders of the Company (7,027) (17,511)
========= =========
Group Balance Sheet
at 31 December 2014
2014 2013
Notes US$'000 US$'000
ASSETS
Exploration and evaluation
assets 7 78,734 75,050
Property, plant and
equipment 8 13,510 19,039
Available for sale
assets 10 107 -
Trade and other receivables 12 2,800 -
Total non-current assets 95,151 94,089
---------- ----------
Assets held for sale 11 850 -
Trade and other receivables 1,217 2,515
Cash and cash equivalents 1,765 166
---------- ----------
Total current assets 3,832 2,681
---------- ----------
Total assets 98,983 96,770
---------- ----------
LIABILITIES
Current liabilities
Loans and borrowings 14 (10,218) (9,706)
Trade and other payables (1,863) (7,236)
Decommissioning provision 9 - (287)
---------- ----------
Total current liabilities (12,081) (17,229)
---------- ----------
Non-current liabilities
Loans and borrowings - (19)
Decommissioning provision 9 (425) (2,053)
---------- ----------
Total non-current liabilities (425) (2,072)
---------- ----------
Total liabilities (12,506) (19,301)
---------- ----------
NET ASSETS 86,477 77,469
========== ==========
EQUITY
Issued capital 13 67,094 65,629
Share premium 93,505 79,431
Capital conversion
reserve fund 234 234
Share option reserve 3,891 3,891
Share warrant reserve 3,031 2,535
Foreign currency translation
reserve (1,166) (1,147)
Retained earnings (80,112) (73,104)
---------- ----------
TOTAL EQUITY 86,477 77,469
========== ==========
Group Statement of Changes in Equity
for the year ended 31 December 2014
Share Share Capital Share Share Foreign Retained Total
capital premium conversion option warrant currency earnings equity
reserve reserve reserve translation
fund reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2013 65,629 79,431 234 3,883 - (913) (55,827) 92,437
Transactions
with shareholders
recognised
directly
in equity
Share based
payment
charge - - - 8 - - - 8
Share warrants
granted - - - - 2,535 - - 2,535
Comprehensive
income:
Currency
translation
differences - - - - - (234) - (234)
Loss for
the
financial
year - - - - - - (17,277) (17,277)
--------- --------- ------------ --------- --------- ------------- ----------- -----------
At 1 January
2014 65,629 79,431 234 3,891 2,535 (1,147) (73,104) 77,469
Transactions
with shareholders
recognised
directly
in equity
Shares
issued 1,465 14,074 - - (211) - - 15,328
Share warrants
granted - - - - 707 - - 707
Comprehensive
income:
Currency
translation
differences - - - - - (19) - (19)
Loss for
the financial
year - - - - - - (7,008) (7,008)
--------- --------- ------------ ---------
At 31 December
2014 67,094 93,505 234 3,891 3,031 (1,166) (80,112) 86,477
--------- --------- ------------ --------- --------- ------------- ----------- -----------
Group Statement of Cashflows
for the year ended 31 December 2014
2014 2013
US$'000 US$'000
Operating activities
Loss for the financial year (7,008) (17,277)
Depletion, depreciation and decommissioning 92 950
Impairment provision against
assets held for sale 872 9,304
Finance income (11) -
Finance costs 2,295 4,577
Loss on disposal of subsidiary
undertaking 368 -
Impairment of available for sale
assets 243 -
Loss on disposal of quoted financial
investment - 108
Gain on disposal of producing
asset - (5)
Equity-settled share-based payment
charge - 8
Decrease in trade and other receivables 1,505 2,132
(Decrease)/ increase in trade
and other payables (625) 1,252
----------- --------
Net cash (absorbed by)/generated
by operations (2,267) 1,049
Cost of decommissioning - (25)
Interest paid (1,179) (198)
Net cash (outflows)/inflows from
operating activities (3,446) 826
----------- --------
Investing activities
Acquisition of property, plant
and equipment (234) (641)
Expenditure on exploration and
evaluation assets (7,053) (8,831)
Proceeds from sale of producing
asset - 150
Cost of disposal of subsidiary
undertaking (368) -
Proceeds from disposal of quoted
financial investment - 189
Interest received 11 -
----------- --------
Net cash outflows from investing
activities (7,644) (9,133)
----------- --------
Financing activities
Proceeds from the issue of share
capital 14,907 -
Payment of transaction costs
on the issue of share capital (2,205) -
Advances on new loans - 8,000
Loans repaid (13) (22)
----------- --------
Net cash inflows from financing
activities 12,689 7,978
----------- --------
Net increase/(decrease) in cash
and cash equivalents 1,599 (329)
Cash and cash equivalents at
1 January 166 495
----------- --------
Cash and cash equivalents at
31 December 1,765 166
=========== ========
Notes to the Financial Information
for the year ended 31 December 2014
1 Statement of accounting policies
The financial information has been prepared in accordance with
International Financial Reporting Standards as adopted by the EU
('EU IFRSs').
Basis of preparation
At the date of issue of this announcement the Group's statutory
financial statements for the year ended 31 December 2014, and
therefore the result showing in the announcement, are unaudited. In
the opinion of the Directors, the announcement includes all
adjustments necessary for a fair presentation of the results for
the periods presented.
The accounting policies used are consistent with those set out
in the audited Annual Report for the year ended 31 December 2014,
which will be available shortly on the Company's website,
www.aminex-plc.com, except as noted below.
i) New accounting standards and interpretations adopted
Below is a list of standards and interpretations that were
required to be applied in the year ended 31 December 2014. There
was no material impact to the financial statements in the current
year from these standards set out below:
-- IFRS 10 Consolidated Financial Statements
-- IFRS 11 Joint Arrangements
-- IFRS 12 Disclosure of Interests in Other Entities
-- IAS 27 Separate Financial Statements (2011) (Amended)
-- IAS 28 Investments in Associates and Joint Ventures (2011)
-- IAS 32 Financial Instruments: Presentation (Amended)
-- Investment entities (amendment to IFRS 10) - effective 1 January 2014
-- IFRIC 21: Levies - effective 1 January 2014
-- Novation of derivatives and continuation of hedge accounting
(amendments to IAS 39) - effective 1 January 2014
ii) New standards and interpretations not adopted
Standards that are not yet required to be applied but can be
early adopted are set out below. None of these standards have been
applied in the current period. There would not have been a material
impact on the financial statements if these standards had been
applied in the current accounting period. These will be applied as
required on a prospective basis.
-- Annual improvements to IFRSs 2010-2012 Cycle and Annual
Improvements to IFRSs 2011-2013 Cycle - effective 1 February 2015
(see below)
As part of its annual improvements process, the IASB has
published non-urgent but necessary amendments to IFRS. Together,
the two cycles cover a total of nine standards, with consequential
amendments to other standards. The amendments apply prospectively
for annual periods beginning on or after 1 February 2015 and are
available for early adoption. The topics covered in these revisions
are listed below.
1 Statement of accounting policies (continued)
Annual Improvements to IFRSs 2010-2012 Cycle
-- IFRS 2 Share-based Payment: definition of a vesting condition
-- IFRS 3 Business Combinations: accounting for contingent
consideration in a business combination
-- IFRS 8 Operating segments: (i) aggregation of operating
segments and (ii) reconciliation of the total of the reportable
segments' assets to the entity's assets
-- IFRS 13 Fair Value Measurements: short-term receivables and payables
-- IAS 16 Property, Plant and Equipment: revaluation method -
proportionate restatement of accumulated depreciation
-- IAS 24 Related Party Disclosures: key management personnel services
-- IAS 38 Intangible Assets: revaluation method; proportionate
restatement of accumulated amortisation
Annual Improvements to IFRSs 2011-2013 Cycle
-- IFRS 1 First-time adoption of IFRS: meaning of 'effective IFRSs'
-- IFRS 3 Business Combinations: scope exceptions for joint ventures
-- IFRS 13 Fair Value Measurement: scope of paragraph 52 (portfolio exception)
-- IAS 40 Investment Property: clarifying the interrelationship
between IFRS 3 and IAS 40 when classifying property as investment
or owner-occupied property
2 Segmental information
The Group considers that its operating segments consist of (i)
Producing Oil and Gas Properties, (ii) Exploration Activities and
(iii) Oilfield Services and Supplies. These segments represent are
those that are reviewed regularly by the Chief Executive Officer
(Chief Operating Decision Maker) to make decisions about resources
to be allocated to the segment and assess its performance and for
which discrete financial information is available. However it
further analyses these by region for information purposes. Segment
results include items directly attributable to the segment as well
as those that can be allocated on a reasonable basis. Unallocated
items comprise mainly head office expenses, cash balances and
certain other items.
Segmental revenue - continuing operations 2014 2013
US$'000 US$'000
(restated)
Region of destination
Provision of oilfield services and
supplies
Africa 444 719
Europe - 5
--------- ------------
Revenue 444 724
========= ============
Segment loss for the financial year
Africa - exploration assets (253) (171)
Europe - oilfield goods and services (53) (179)
Europe - groups costs (1) (5,559) (6,573)
Discontinued operations (1,143) (10,354)
-------- -----------
Total group loss for the financial year (7,008) (17,277)
======== ===========
2013
2014 US$'000
2 Segmental information (continued) US$'000 (restated)
Segment assets
Africa - producing oil and gas properties 13,488 13,292
Africa - exploration assets 80,043 77,345
Europe - oilfield goods and services 56 47
Europe - group assets (2) 4,546 256
Europe - assets held for sale (3) 850 -
US - producing oil and gas properties
(discontinued) - 5,830
-------- -----------
Total assets 98,983 96,770
======== ===========
Segment liabilities
Africa - exploration assets (1,961) (5,425)
Europe - oilfield goods and services - (8)
Europe - group liabilities (4) (10,545) (11,488)
US - producing oil and gas properties
(discontinued) - (2,380)
-------- -----------
Total liabilities (12,506) (19,301)
======== ===========
(1) Group costs primarily comprise interest
expense on financial liabilities and
salary and related costs.
(2) Group assets primarily comprise cash
and working capital.
(3) Group assets held for sale consist
of non-core assets in Moldova.
(4) Group liabilities primarily comprise
loans and borrowings and trade payables
and related costs.
Capital expenditure
Africa - exploration assets 3,684 1,960
Africa - producing assets 196 195
Europe - group assets 28 9
Europe - producing assets 1,092 -
US - producing oil and gas properties
(discontinued) 11 245
-------- -----------
Total capital expenditure 5,011 2,409
======== ===========
Non-cash items: continuing operations
Europe: depreciation - Group assets 9 11
Share-based payment charge - 8
Gain on disposal of producing assets - (5)
Loss on disposal of quoted financial
investment - 108
Interest expense on financial liabilities
measured at amortised cost 2,198 4,420
Impairment provision against assets held
for sale 622 -
Impairment provision against quoted financial
investment 243 -
======== ===========
3 Finance income
2013
2014 US$'000
US$'000 (restated)
Deposit interest income 11 -
========= ============
4 Finance costs
2013
2014 US$'000
US$'000 (restated)
Interest expense on financial
liabilities measured at amortised
cost 2,198 4,420
Other finance costs - decommissioning
provision interest charges 39 3
Other finance charges 2 -
--------- ------------
2,239 4,423
========= ============
Included in finance costs for the period is an interest charge
of US$2.2 million in respect of the US$8 million corporate loan.
The charge for the current period comprises the remaining charge
due on the loan prior to modifications effective on 24 February
2014, which were the extension of the loan repayment date and the
re-pricing of the warrants granted to the lender from EUR0.06 per
warrant to GBP0.01 per warrant. In compliance with IFRS 2, the
modifications of the loan terms and the warrant pricing have given
rise to an additional finance charge, including a further warrant
charge of US$496,000, which will be charged on an effective
interest rate basis from the date of modification to the repayment
date of 31 July 2015.
5 Discontinued operations
During the year, the Company disposed of its wholly-owned
subsidiary Aminex USA, Inc., for which shareholder approval was
received on 22 August 2014. The total consideration for the
disposal amounted to US$5 million and comprised (i) 24,850,012
shares in Northcote Energy Ltd, ('Northcote') an AIM listed oil and
gas company, with a fair market value of US$350,000 on the date of
completion (22 August 2014), (ii) cash consideration of US$150,000,
and (iii) a production payment of US$10 per barrel until a total of
US$4,500,000 has been recovered. The first payments are to be based
on production from 1 January 2015. The Directors have reviewed the
timing of anticipated production payments and are satisfied that
the net present value, using a discount factor of 10%, of US$2.9
million included in non-current and current assets represents the
fair value of future expected production payments. The shares held
in Northcote at 31 December 2014 are classified as available for
sale assets on the balance sheet.
The results from the US operation have been presented as a
discontinued operation as the entity disposed of represents a
separate geographical area of operation. The income statement for
the prior year has been restated to show the discontinued
operations separately from continuing operations.
5 Discontinued operations (continued)
2013
2014 US$'000
(a) Results of discontinued operation US$'000 (restated)
Revenue 165 1,552
Cost of sales (384) (932)
Depletion, depreciation and decommissioning
of oil and gas interests (83) (939)
-------- -----------
Gross loss (302) (319)
Administrative losses (167) (605)
Finance costs - decommissioning
provision interest charge (56) (148)
Other finance charges - (6)
Results from operating activities (525) (1,078)
Income tax - -
-------- -----------
Results from operating activities,
net of tax (525) (1,078)
Cost of disposal of discontinued
operation (368) -
Impairment provision against discontinued
operation (250) -
Gain on disposal of fixed asset - 28
Impairment provision against producing
asset - (9,304)
-------- -----------
Loss for the period attributable
to equity holders of the Company (1,143) (10,354)
======== ===========
Basic and diluted loss per share
(cents) - discontinued operation (0.07) (1.26)
-------- -----------
(a) Cash flow from/(used in) discontinued
operations
Net cash from operating activities 6 185
Net cash used in investing activities (11) (245)
-------- -----------
Net cash outflow for the period (5) (60)
======== ===========
(b) Effect of discontinued operations
on the financial position of the 2014
Group US$'000
Property, plant and equipment (5,418)
Trade and other receivables (62)
Cash and cash equivalents (15)
Trade and other payables 46
Decommissioning provision 2,010
Net assets and liabilities (3,439)
===========
Consideration received 350
Consideration to be received 3,089
Total consideration 3,439
===========
6 Loss per Ordinary Share
The basic loss per Ordinary Share is calculated using a
numerator of the loss for the financial year and a denominator of
the weighted average number of Ordinary Shares in issue for the
financial year. The diluted loss per Ordinary Share is calculated
using a numerator of the loss for the financial year and a
denominator of the weighted average number of Ordinary Shares
outstanding and adjusting for the effect of all potentially
dilutive shares, including share options, assuming that they had
been converted.
The calculations for the basic loss per Ordinary Share for the
years ended 31 December 2014 and 2013 are as follows:
2014 2013
Loss for the financial year
(US$'000) (7,008) (17,277)
========== =========
Weighted average number of
Ordinary Shares ('000) 1,704,114 818,658
========== =========
Basic and diluted loss per
Ordinary Share (US cents) (0.41) (2.11)
========== =========
Continuing operations (US
cents) (0.34) (0.85)
========== =========
There is no difference between the basic loss per Ordinary Share
and the diluted loss per Ordinary Share for the years ended 31
December 2014 and 2013 as all potentially dilutive Ordinary Shares
outstanding are anti-dilutive. There were 21,115,000 (2013:
26,615,000) anti-dilutive share options in issue as at 31 December
2014 and 88,176,455 (2013: 40,932,916) warrants in issue at 31
December 2014.
7 Exploration and evaluation assets
US$'000
Cost
At 1 January 2013 77,636
Additions 1,674
Employment costs capitalised 286
Increase in decommissioning
provision 182
---------
At 1 January 2014 79,778
Additions 3,207
Employment costs capitalised 477
At 31 December 2014 83,462
=========
Provisions for impairment
At 1 January and 31 December
2014 4,728
=========
Net book value
At 31 December 2014 78,734
=========
At 31 December 2013 75,050
=========
The Group does not hold any property, plant or equipment within
exploration and evaluation assets.
The Directors have considered the licence, exploration and
appraisal costs incurred in respect of its exploration and
evaluation assets, which are, with the exception of the partial
write down on the Nyuni-1 well in Tanzania, carried at historical
cost. These assets have been assessed for impairment and in
particular with regard to remaining licence terms, likelihood of
renewal, likelihood of further expenditures and ongoing acquired
data for each area, as more fully described in the Operations
Report. The Directors are satisfied that there are no further
indicators of impairment but recognise that future realisation of
these oil and gas assets is dependent on further successful
exploration and appraisal activities and the subsequent economic
production of hydrocarbon reserves.
8 Property, plant and equipment
Developed
and producing
oil
Development and gas
property properties Other
- Tanzania - USA assets Total
US$'000 US$'000 US$'000 US$'000
Cost
At 1 January 2013 12,926 24,396 453 37,775
Additions in the year 195 245 9 449
Reclassified as held
for sale ** - (3,177) - (3,177)
Increase/(decrease)
in decommissioning
provision 171 (177) - (6)
Written off in period - (153) - (153)
Disposed of during
the year - (62) - (62)
Exchange rate adjustment - - 3 3
-------------- --------------- --------- ---------
At 1 January 2014 13,292 21,072 465 34,829
Additions in the year 196 11 28 235
Acquisition of subsidiary
* - - 1,092 1,092
Reclassified as held
for sale * - - (1,104) (1,104)
Disposed of during
the year - (21,083) (4) (21,087)
Exchange rate adjustment - - (9) (9)
-------------- --------------- --------- ---------
At 31 December 2014 13,488 - 468 13,956
============== =============== ========= =========
Depreciation and impairment
At 1 January 2013 - 7,993 445 8,438
Charge for the year - 939 11 950
Impairment - 9,304 - 9,304
Reclassified as held
for sale ** - (2,739) - (2,739)
Written off in period - (124) - (124)
Eliminated on disposal - (42) - (42)
Exchange rate adjustment - - 3 3
-------------- --------------- --------- ---------
At 1 January 2014 - 15,331 459 15,790
Charge for the year - 83 9 92
Reclassified as held
for sale - - (254) (254)
Impairment provision - (15,415) 254 (15,161)
Eliminated on disposal - 1 (3) (2)
Exchange rate adjustment - - (19) (19)
-------------- --------------- --------- ---------
At 31 December 2014 - - 446 446
============== =============== ========= =========
Net book value
At 31 December 2014 13,488 - 22 13,510
============== =============== ========= =========
At 31 December 2013 13,292 5,741 6 19,039
============== =============== ========= =========
* "Other assets" include the additions for Moldova assets
subsequently reclassified to assets held for sale.
**In the prior year, the South Weslaco field was reclassified as
held for sale and this asset was subsequently disposed of in
October 2013.
8 Property, plant and equipment (continued)
Property, plant and equipment shown above includes assets held
under finance leases as follows:
2014 2013
US$'000 US$'000
Net carrying value - 31
--------- ---------
Depreciation charge 1 32
--------- ---------
During the year, the Company disposed of its wholly-owned
subsidiary Aminex USA Inc., including its portfolio of assets which
largely consisted of producing oil and gas properties at Shoats
Creek and Alta Loma (see Note 5).
Following the award of the Kiliwani North Development Licence by
the Tanzanian Government in April 2011, the carrying cost relating
to the development licence was reclassified as a development asset
under property, plant and equipment, in line with accounting
standards and the Group's accounting policies. Depletion will be
charged once the field commences commercial production. The
Directors have reviewed the carrying value of the asset at 31
December 2014 based on estimated discounted future cashflows and
are satisfied that no impairment has occurred.
9 Decommissioning provision
US$'000
At January 2013 2,057
Discount unwound in the year - continuing
operations 3
Discount unwound in the year - discontinued
operations 148
Increase in decommissioning provision
- exploration and evaluation assets 182
Decrease in decommissioning provision
- property, plant and equipment (6)
Release from decommissioning provision
on disposal of property, plant and
equipment (19)
Payments made in the year (25)
---------
At 1 January 2014 2,340
Discount unwound in the year - continuing
operations 39
Discount unwound in the year - discontinued
operations 56
Release from decommissioning provision
on disposal of property, plant and
equipment (2,010)
---------
At 31 December 2014 425
=========
2014 2013
US$'000 US$'000
Current - 287
Non-current 425 2,053
Total decommissioning provision 425 2,340
========= =========
10 Available for sale assets
2014 2013
US$'000 US$'000
At 1 January - -
Additions 350 297
Disposals - (297)
Impairment loss charged to
income statement (243) -
-------- --------
At 31 December 107 -
======== ========
As part of the disposal proceeds for the Company's wholly-owned
subsidiary Aminex USA, Inc., the Company was granted shares with a
fair market value of US$350,000 in Northcote Energy Limited, an AIM
listed oil and gas company (see Note 5). The fair value of this
investment has decreased significantly and this decrease in value
is considered by the Directors to constitute an impairment of the
assets at 31 December 2014. Accordingly the impairment has been
expensed in the income statement.
In the prior year, the Company completed its disposal to
Northcote of its interest in the oil and gas leases in South
Weslaco for a consideration of US$447,000 which consisted of a cash
payment of US$150,000 and 12,348,372 ordinary shares in Northcote,
resulting in a gain on disposal of US$5,000. The Company sold its
shareholding in Northcote during the prior year for a net
consideration of US$189,000, resulting in a loss on disposal of
US$108,000.
11 Assets held for sale
On 24 February 2014, the Company acquired the entire share
capital of Canyon Oil and Gas Limited ('Canyon') for a
consideration of 80,000,000 Ordinary Shares with a value of US$1.33
million at that date. Upon acquisition of Canyon, the Company
became the beneficial owner of the partnership agreement between
Canyon and Valiexchimp SRL, the operator of the Victorovca and
Valeni licenses in the Republic of Moldova. The Directors do not
consider the assets in Moldova to be core to the business of the
Group and have no plans to drill any new wells under the agreement
and have reached a provisional agreement to sell these assets. The
Directors are satisfied that it is appropriate to classify the
Moldova assets as an asset held for sale within current assets as a
sale is highly probable within twelve months of the date of issue
of this report. At 30 June 2014, the Directors reviewed the
carrying value of the Victorovca and Valeni licenses for indicators
of impairment and the net assets held for sale were considered to
be impaired and their carrying value written down by US$622,000 to
a carrying value of US$850,000. At 31 December 2014, the Directors
again reviewed the carrying value of the Victorovca and Valeni
licenses for indicators of impairment. The Directors are satisfied
that no further impairment is considered to have occurred.
12 Trade and other receivables - non-current
Non-current trade and other receivables that fall due after one
year relate to part of the consideration from disposal of Aminex
USA, Inc. and comprise a production payment of US$10 per barrel
until a total of US$4.5 million has been recovered. The first
payments are to commence based on production from 1 January 2015
(see note 5 for further details). The Directors have reviewed the
timing of anticipated production payments and are satisfied that
the net present value of US$2,938,000, using a discount factor of
10%, represents the fair value of future expected production
payments. An amount of US$138,000 is receivable within one year and
US$2.8 million is receivable after one year.
13 Issued capital
At an Extraordinary General Meeting, held on 24 February 2014,
the Group renominalised its ordinary shares, reducing the nominal
value of each Ordinary Share from EUR0.06 to EUR0.001. At the
Extraordinary General Meeting each Ordinary Share was subdivided
into one new Ordinary Share of EUR0.001 and one new Deferred Share
of EUR0.059.
On 24 February 2014, the Group issued 957,791,100 Ordinary
Shares for a combination of cash, a reduction of debt in exchange
for equity, and as consideration for the acquisition of Canyon Oil
and Gas Limited increasing share capital by US$15.3 million. The
premium arising on the issue amounted to US$12.4 million, after
share issue costs of US$2.2 million. On 4 March 2014, the Group
issued 67,079,689 Ordinary Shares for cash in respect of an open
offer to shareholders increasing share capital by US$0.09 million.
The premium arising on the issue, after share issue costs, amounted
to US$1.0 million. On 22 May 2014, the Group issued 3,750,000
Ordinary Shares for the settlement of third party service provider
fees increasing share capital by US$0.005 million. The premium
arising on the issue amounted to $0.04 million. On 15 September
2014, the Group issued 10,638,770 Ordinary Shares for the
settlement of third party service provider fees increasing share
capital by US$0.01 million together with a premium arising on the
issue amounted to $0.14 million. On 23 September 2014, the Group
issued 30,287,500 Ordinary Shares as a result of the exercise of
warrants by a warrant holder. The increase in share capital
amounted to US$0.04 million together with a premium of $0.45
million.
Allotted called up and fully Number EUR US$
paid
Ordinary shares of EUR0.06
each:
At 31 December 2013 818,658,421 49,119,505 65,629,490
============== =========== ===========
Renominalisation of share
capital
Ordinary shares 818,658,421 818,658 1,093,825
Deferred shares 818,658,421 48,300,847 64,535,665
New ordinary shares issued
during 2014 post renominalisation 1,069,547,059 1,069,547 1,464,096
-------------- ----------- -----------
At 31 December 2014 2,706,863,901 50,189,052 67,093,586
============== =========== ===========
Comprised of:
Ordinary shares of EUR0.001 1,888,205,480
Deferred shares of EUR0.059 818,658,421
--------------
2,706,863,901
==============
The increase in Ordinary Shares of EUR0.001 each during the year
in the issued Ordinary Share capital and share premium (net of
issue costs) of the Company related to the following:
Share
Details Date of Number Issued premium Total
issue capital US$'000 US$'000
US$'000
24 February
Placing 2014 957,791,100 1,314,760 12,416,209 13,730,969
4 March
Open offer 2014 67,079,689 92,181 1,026,239 1,118,420
Placing 22 May 2014 3,750,000 5,121 44,024 49,145
15 September
Placing 2014 10,638,770 13,514 140,347 153,861
23 September
Placing 2014 30,287,500 38,520 447,726 486,246
-------------- ---------- ----------- -----------
1,069,547,059 1,464,096 14,074,545 15,538,641
============== ========== =========== ===========
14 Loans and borrowings
In February 2014, the Company agreed with the lender, a fund
managed by Argo Capital Management (Cyprus) Ltd, for an extension
of the repayment period to 31 July 2015. The loan facility,
originally agreed in January 2013, initially carried a 12.5% coupon
for the period which increased to 15% from 1 July 2013 and a
repayment premium which is 20% of the loan. The loan is secured by
fixed charges over certain of the Group's subsidiary companies and
a floating charge over the Group's assets.
At an Extraordinary General Meeting held on 24 February 2014,
the exercise price of warrants originally granted to the lender was
re-priced from EUR0.06 per share to StgGBP0.01 per share and the
new exercise price applied to new warrants granted to the lender as
a result of the fund raising completed in February 2014. The cost
of these warrants falls within the scope of IFRS 2 Share-based
Payment and is recognised over the term of the facility. All
warrants are exercisable until 30 June 2017. The warrants are
subject to anti-dilution rights at the same exercise price. The
Company has recalculated the fair value of the warrants at the date
of grant using the Black Scholes model and an additional US$496,000
has been included in a share warrant reserve in the Group Statement
of Changes in Equity at 31 December 2014, with a corresponding
amount offset against the initial value of the loan to reflect the
modification of the terms of the loan. The key assumptions used to
value the warrants include a volatility rate of 60% and a risk free
rate of 0.33%.
Following the extension of the repayment period of the Argo loan
and the revaluation of the warrants, US$2.20 million has been
charged to the Group Income Statement as Finance Costs (December
2013: US$4.42 million) (see Note 4). Finance Costs have been
calculated using the effective interest rate method, based on
management's best estimate of expected cash flows arising from the
interest, redemption premium and principal repayments in addition
to the charge associated with the warrants.
15 Acquisition of a subsidiary
During the year the Group acquired 100% of the shares in Canyon
Oil and Gas Limited ('Canyon'). In the period from acquisition to
31 December 2014, Canyon contributed a loss of US$51,000. Prior to
acquisition Canyon had accumulated retained losses of
US$350,000.
Consideration comprised 80 million Ordinary Shares in Aminex PLC
and was valued at US$1.33 million based on the price at which the
shares were issued as part of the placing on 24 February 2014.
Costs of US$138,000 were incurred in respect of legal and
professional fees.
The identifiable assets acquired and liabilities assumed were as
follows:
US$'000
Property, plant and equipment 1,092
Cash 93
Loans and borrowings (222)
Total identifiable assets 963
========
The Directors considered the carrying value of the net assets
acquired at the acquisition date and determined this equated to
fair value. Goodwill arising on the acquisition, amounting to
US$368,000, has been included in the impairment charge of
US$622,000. The Group intends to dispose of the Canyon producing
asset in the near term and at 31 December 2014 has classified it as
held for sale (see Note 11 for further details).
16 Capital Commitments - exploration activity
In accordance with the relevant Production Sharing Agreements,
Aminex has a commitment to contribute its share of the following
outstanding work programmes:
(a) On the Nyuni Area PSA, Tanzania: to acquire 800 kilometres
of 2D seismic, 200 kilometres of which shall be acquired in the
transition zone and to drill two wells by the end of the initial
work period ending October 2015. 147 km of the transition
commitment was acquired in 2012. In February 2015 the Tanzanian
authorities agreed to the deferral of the two well drilling
commitment into the four-year First Extension Period which will
expire in October 2019. The deferral is conditional on an
Environmental Impact Assessment, which has already commenced, and
the eventual acquisition of 3D seismic in the deep water sector of
the licence, which will be subject to the completion of a tendering
process.
(b) On the Ruvuma PSA, Tanzania: the PSA has entered the second
and final extension period. In January 2014, a Variation Addendum
to the PSA was signed so that the commitment to drill two
exploration wells in the previous period could be incorporated into
the current work period. Four exploration wells are required to be
drilled by the December 2016. In addition to the exploration wells,
an appraisal well is planned to be drilled in late 2015 as part of
the appraisal work programme for the Ntorya Prospect.
17 Related party transactions
During the course of the year, the Group entered into the
following related party transactions: (a) consultancy fees were
paid to Blixtra Limited, a company connected with Mr. J.C.
Bhattacherjee amounting to US$54,000 (2013: US$ nil), (b) fees were
paid to Storm Petroleum Limited, a company connected with Mr. D.S.
Hooker, amounting to US$26,000 (2013: US$31,000), (c) fees
amounting to US$11,000 (2013: US$ nil) were paid to Upstream
Solutions Limited, a company connected with Mr. T. Mackay, (d)
Corporate advisory fees of US$205,000 (2013: US$ nil) were paid to
Edmond de Rothschild Securities (UK) Limited, of which Mr. A.N.J.
Hay is a director, (e) consultancy fees were paid to Mr. W.A.P.
Thompson amounting to US$74,000 (2013: US$ nil).
18 Post balance sheet events
In February 2015, Aminex completed the sale of 6.5% of the
Kiliwani North Development Licence to Solo Oil plc ('Solo') for
US$3.5 million. Under the Asset Sale Agreement, Solo has an option
to acquire a further 6.5% interest on the same terms within thirty
days of the Kiliwani North Gas Sales Agreement being signed.
In March 2015, Aminex received confirmation that the Tanzanian
authorities had agreed to the deferral of a two well drilling
commitment on the Nyuni Area PSA, which was due to be completed by
the end of October 2015, into the four-year First Extension Period
which expires in October 2019. The deferral is conditional on an
Environmental Impact Assessment, which has already commenced, and
eventually acquiring 3D seismic in the deep water which will be
subject to completion of a tendering process.
19 2014 Annual Report and financial statements
The 2014 Annual Report and financial statements will be posted
to shareholders shortly.
20 Statutory information
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 December 2014 or
2013 within the meaning of the Companies (Amendment) Act, 1986. The
statutory accounts for 2014 will be finalised on the basis of the
financial information presented by the Directors in the preliminary
announcement and together with the independent auditor's report
thereon will be delivered to the Registrar of Companies following
the Company's Annual General Meeting. The statutory accounts for
2013, including an unqualified audit report thereon, were filed
with the Registrar of Companies.
21 Estimates, key risks and uncertainties
The preparation of financial statements requires management to
make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates. Key estimates and judgments related to
the preparation of these financial statements relate to notes 7
(Exploration and evaluation assets), and 8 (Property, plant and
equipment) and these were the same as those applied in the most
recent published financial statements for the Group. Principal
risks and uncertainties affecting the Group relate to exploration
and production risk, commodity and currency prices, finance risk
relating to uncertain factors detailed in the basis of preparation
relating to the Company as a going concern and other political
risks particular to the countries in which we operate, as more
fully described in the operations report, and in our most recent
published financial statements.
22 Board approval
The Board of Directors approved the preliminary financial
statements for the year ended 31 December 2014 on 14 April
2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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