TIDMAEX
RNS Number : 0842X
Aminex PLC
26 August 2015
2015 HALF-YEARLY REPORT
The Board of Aminex PLC ("Aminex" or "the Group" or "the
Company") announces today its half-yearly report for the six months
ended 30 June 2015.
HIGHLIGHTS:
FINANCIAL
-- $2.45 million (net of expenses) equity issue successfully completed
-- Completion of sale of 6.5% interest in Kiliwani North
Development Licence for $3.5 million to Solo Oil plc
-- Corporate loan facility extended until 31 January 2016
-- Loss for period $606,000 (2014: $4.74 million)
-- Ongoing discussions with financial institution for provision
of development capital for Ruvuma and restructuring current debt
facility
OPERATIONAL
-- Competent Persons Report assigns 98 BCF gross (70 BCF net)
Contingent Resources to Kiliwani North-1 and Ntorya-1
-- Gas Sales Agreement expected to be signed with first gas from Kiliwani North in Q3 2015
-- Ongoing planning for Ntorya-2 and Ntorya-3 appraisal drilling to deliver near term revenues
-- Nyuni Area PSA work programme varied and deferral of drilling
obligations approved by Ministry of Energy and Mines
-- Sale of Egyptian interest into a royalty position in August 2015
Aminex CEO Jay Bhattacherjee commented:
"Aminex is looking forward to first gas production from Kiliwani
North within the current quarter in line with the timetable issued
by the Tanzanian authorities following the commencement of
production into the new main gas pipeline in the south of the
country. The signing of the Kiliwani North Gas Sales Agreement,
expected in the near future, should also assist the acceleration of
the Company's other activities, particularly appraisal drilling at
Ntorya. Your Board believes that the steps we are taking will be
significant for the growth of the Company and underline its
strategy to focus on key assets in Tanzania, ever seeking new
production and development opportunities. We are grateful for the
continuing support of our shareholders and we look forward to
providing positive updates in due course."
For further information:
Aminex PLC +44 20 7291 3100
Jay Bhattacherjee, Chief
Executive Officer
Max Williams, Chief
Financial Officer
Corporate Brokers
Shore Capital Stockbrokers-Jerry
Keen +44 20 7408 4090
Davy Corporate Finance-Brian
Garrahy +35 3 1679 7788
GMP Securities Europe
LLP-Rob Collins +44 20 7647 2816
Yellow Jersey PR (Financial
PR)
Dominic Barretto
Kelsey Traynor +44 77 9900 3220
Glossary of terms used
PSA Production Sharing Agreement
BCF Billions of cubic feet
of natural gas
TCF Trillions of cubic feet
of natural gas
MMcfd Millions of cubic feet
per day of natural gas
Km Kilometres
TPDC Tanzania Petroleum Development
Corporation
GSA Gas Sales Agreement
------ -------------------------------
Dear Shareholder,
Below please find Aminex PLC's Interim Results for the six
months ended 30 June 2015.
During the period under review, the loss for the period was
$0.61 million compared with $4.74 million for the six month period
ended 30 June 2014. A commentary on the results is provided in the
Financial Review section below.
The Company commissioned a Competent Persons Report ("CPR") from
LR Senergy for its Tanzanian assets and this was completed in May.
The Kiliwani North Development Licence ("KNDL") and the Ntorya
appraisal area were attributed 98 BCF of gross (70 BCF net)
Contingent Resources. Based on the interpreted 2014 2D seismic and
this CPR, Aminex has identified an additional appraisal prospect at
Ntorya. To assess it, a new vertical well is now planned, rather
than a side-track from Ntorya-1 as previously reported. This should
greatly increase the chances of successfully appraising the
existing discovery, up-dip of the Ntorya-1 location, and
potentially bringing on stream both the Ntorya-1 and Ntorya-2 wells
earlier than previously anticipated.
Aminex has operated in Tanzania for over 13 years now and
continues to work closely with the Tanzanian authorities. The
immediate priority for both parties remains the start of gas
production from the Kiliwani North Field through the new regional
pipeline to Dar es Salaam. The Tanzanian authorities have advised
that production should start within Q3 2015, now that the main
pipeline has been pressure tested. The completion of a Gas Sales
Agreement ("GSA") is subject to finalising satisfactory payment
protection guarantees and, following the recent start of production
into the pipeline in the south of the country, we believe that a
GSA should be signed in time to achieve the near-term production
timetable advised by the Tanzania Petroleum Development Corporation
("TPDC"). As a result of the share placing in June 2015, the
Company has sufficient funding for the current level of
operations.
In the Nyuni Area, Aminex has received confirmation from the
TPDC that the deferral of the current obligation to drill two
exploration wells has been approved by the Ministry of Energy and
Mines. Taken in conjunction with the previously granted approval to
convert outstanding 2D seismic commitments to 3D seismic in the
deep water sector, exploration of potentially sizeable offshore
leads in deep water will now be viable. A re-tendering process is
underway for the proposed new 3D seismic and tenders submitted will
be subject to technical review. The deferral means that the joint
venture will have until October 2019 to meet the work commitments
of the First Extension Period. Aminex is seeking to retain a
balance of deep and shallow water blocks for the subsequent work
period.
Since the reporting date, Aminex has entered into an agreement
to sell its carried interest in the West Esh el Mallaha-2 licence
in Egypt, on which the South Malak-2 gas discovery was made earlier
this year. In order to optimise the Company's commercial interest
in the discovery, over which it has no operational control, Aminex
has agreed to sell its shareholding in Aminex Petroleum Egypt
Limited, together with its indirect carried interest, to a fellow
shareholder in return for a 1% gross overriding royalty on all
sales revenues from the discovery well in excess of $2.5
million.
In June the Company completed an equity fundraising, securing
$2.45 million net of transaction expenses. In conjunction with this
placing, the repayment date of an $8 million corporate loan was
extended to January 2016, by which time the Company is expected to
be in production at the Kiliwani North gas field. This fundraising
will allow the Company to progress well engineering for the
Ntorya-2 and Ntorya-3 appraisal wells prior to the availability of
production revenues from Kiliwani North.
In February, the Company completed the sale of a 6.5% interest
in the Kiliwani North Development Licence to Solo Oil plc ("Solo")
for a consideration of $3.5 million. This reduced Aminex's interest
in the licence to 58.5% but enabled it to reduce corporate debt by
$3.28 million. Under the terms of an Asset Sale Agreement, Solo has
an option to acquire a further 6.5% interest in the field for $3.5
million within 30 days of a Gas Sales Agreement being signed.
Approval from the Tanzanian authorities for this second sale was
obtained in conjunction with the first sale.
With the Company financed through to first Tanzanian production
and in the final stages of planning for a new well to appraise the
Ntorya-1 discovery, Aminex is prioritising the repayment of its
remaining corporate debt, which will be accelerated in the event
that Solo exercises its option to acquire a further interest in
Kiliwani North. As previously reported, the Company is in
discussions with a major financial institution to arrange longer
term funding for its Tanzanian work programme.
Your Board believes that the steps that it is taking will be
significant for the growth of the Company and underline its
strategy to focus on key assets in Tanzania as well as seeking new
production and development opportunities. We are grateful for the
continuing support of our shareholders and we look forward to
providing positive updates in due course.
Yours sincerely,
JAY BHATTACHERJEE
Chief Executive
OPERATIONS REPORT
TANZANIA - KILIWANI NORTH & GAS COMMERCIALISATION
The Kiliwani North-1 gas well, which tested at 40 MMcfd, has
been completed and is ready to produce. Initial gas production will
enable the pipeline operator to pressure-test the short spur line
between the wellhead and the new gas plant with revenue gas-flow
expected in Q3 2015. Following an engineering review, it is
anticipated that a sustained production rate of up to 30 MMcfd,
higher than previously planned, will optimise the economics and the
life of the reservoir. A Gas Sales Agreement ("GSA") is effectively
complete but awaiting the finalisation of payment protection
clauses and guarantees prior to final signature by all joint
venture partners. First commercial gas from Kiliwani North will be
delivered into a 36" regional pipeline system, the construction and
pressure testing of which is now complete. First production into
this new pipeline system has now commenced in the south of the
country. Gas from Kiliwani North will result in Aminex's first
commercial production in Africa. The pipeline operator has
constructed a sales pipeline from Kiliwani North to the nearby
processing plant at its own cost with the Company responsible for
supplying and installing a gas metering unit. The Company will
therefore sell its production at the wellhead, greatly simplifying
commercial and management issues and allowing for low operating and
production costs.
Participants in the Kiliwani North Development Licence are:
Ndovu Resources Ltd (Aminex) 58.5% (operator), RAK Gas LLC 25%,
Solo Oil plc 6.5% and Bounty Oil & Gas NL 10%.
TANZANIA - RUVUMA PSA
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The Ruvuma PSA provides Aminex with a combination of exploration
and appraisal activity. The key to unlocking the commercial
potential for these opportunities is the new, common-user gas
pipeline which runs from the south of Tanzania to Dar es Salaam.
The pipeline and associated facilities are likely to become
operational during Q3 2015 and will provide a means of marketing
any further gas discoveries at Ruvuma through a gas sales agreement
with the TDPC.
In 2012 the Ntorya-1 discovery well in the Ruvuma PSA tested 20
MMcfd together with 139 barrels of associated condensate. In May
2014 the Company completed a 2D seismic programme to appraise the
Ntorya-1 discovery and to generate drill-ready prospects. The 2014
seismic data has now been processed. The data that the Company
acquired in 2007 utilised the 2014 seismic processing flow to
improve the data significantly in reprocessing. Interpretation,
mapping, and resource estimates were updated and new drill
locations have now been identified based on the results of the new
and reprocessed data. An updated resource report by LR Senergy,
completed in May 2015, has assigned 70 BCF best estimate contingent
resources or 153 BCF Pmean resources to the Ntorya-1 gas discovery.
The up-dip part of Ntorya, in addition to the gas discovery, has
been ascribed a further 945 Pmean BCF gas in-place for a total of
1.1 TCF Pmean gas in-place for the greater Ntorya gas field.
Several well locations have been identified from the new
mapping, including the two key Ntorya-2 and Ntorya-3 appraisal
wells and the Likonde-2 and Namisange-1 exploration wells. Aminex
has contracted North Sea Well Engineering Ltd. ("Norwell") to
manage the Ntorya-2 and Ntorya-3 well planning, which is currently
ongoing. Following completion of the LR Senergy report, Aminex has
identified a target close to the existing Ntorya-1 discovery which
was assessed as a potential side-track well to the Ntorya-1 well.
After review with Norwell, the location will now be drilled as a
vertical well from a different surface location so as to reduce
drilling risk. Ntorya-2, located just west and up-dip of Ntorya-1,
is expected to be spudded in Q1 2016. The newly-designated Ntorya-3
well will be drilled in the main channel. Both the Ntorya-2 and
Ntorya-3 wells are expected to test additional exploration targets
in addition to appraising the priority Cretaceous gas sand
discovery. The Company continues to work on financing solutions for
its drilling programme in Ruvuma and the new data and well planning
are assisting this process.
Participants in the Ruvuma PSA are: Ndovu Resources Ltd (Aminex)
75% (operator) and Solo Oil plc 25%.
TANZANIA - NYUNI AREA PSA
Aminex and partners are now focusing their efforts on the deep
water sector of the Nyuni Area PSA. The Company has agreed a
variation to the Nyuni Area work programme for the shallow water
seismic obligation with the Tanzanian authorities, by converting it
to deep water 3D seismic in the outboard sector of the PSA area,
off the continental shelf. In addition, in August 2015 Aminex
received confirmation from the TPDC that the Ministry of Energy and
Mines has agreed to vary the Initial Exploration Period by
deferring the two exploration well drilling commitment into the
four year First Extension Period which commences in October 2015.
Aminex has already submitted a relinquishment plan which should
maintain optionality through the retention of substantially all the
deep water blocks while retaining key blocks on the continental
shelf, including Nyuni and Fanjove Islands. The relinquishment plan
is subject to TPDC approval.
Aminex has identified a large potential lead (Pande West) in the
deep water part of the Nyuni Area PSA. This lead is analogous to
some of the recent major deep water discoveries in the vicinity.
The drilling success rate achieved by other operators, based on 3D
seismic in the main fairway east of Nyuni Area, is over 90% and
this has been the primary driver for the new deep water focus in
the Nyuni Area PSA.
The Environmental Impact Assessment ("EIA") for the 3D seismic
programme has now been completed. A re-tender process is currently
ongoing to select a seismic contractor capable of acquiring high
resolution 3D seismic over the key Pande West lead and to identify
other potential prospects with a view to bringing them to
drill-ready status. Aminex initiated the re-tender process as 3D
seismic rates have substantially reduced over the last twelve
months due to the lower oil price and resultant slow-down in global
exploration activity. Although the Company is unlikely to be in a
position to drill an expensive deep water well in the Nyuni Area
without introducing a larger company as a farm-in partner, the
possibility of drilling wells on the shelf more economically
remains an option.
Participants in the Nyuni Area PSA are: Ndovu Resources Ltd.
(Aminex) 70% (operator), RAK Gas LLC 25% and Bounty Oil & Gas
NL 5%.
FINANCIAL REVIEW
Financing and Future Operations
In February 2015 Aminex completed the partial disposal of a 6.5%
interest in the Kiliwani North Development Licence to Solo Oil plc
for a consideration of $3.5 million. In June it raised $2.45
million (net of expenses) through a placing of new shares for cash
under authority granted by shareholders at the 2015 Annual General
Meeting. The combined funding has enabled the Company to repay
$3.28 million of its corporate debt and has provided working
capital to enable well planning for two appraisal wells at Ntorya
in the Ruvuma PSA. In conjunction with the placing, Aminex
negotiated and agreed a six-month extension to the repayment date
of the corporate loan to 31 January 2016.
As previously reported, the Company is in discussions with a
major financial institution to arrange longer term funding options
for its Tanzanian work programme. Aminex continues to review
alternative financing options to enable the repayment or
refinancing of the corporate loan. Solo Oil plc retains the option
to acquire another 6.5% interest in Kiliwani North for $3.5 million
within thirty days of the Kiliwani North Gas Sales Agreement being
signed.
Revenue Producing Operations
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 $0.17 million (2014:
$0.32 million). Cost of sales was $0.17 million (2014: $0.29
million). The gross profit for the period was therefore nil
compared with $27,000 for the previous period.
Group administrative expenses, net of costs capitalised against
projects, were $0.76 million (2014: $1.94 million). The reduction
in costs was due primarily to reduced payroll costs as a result of
fewer employees and some 'one-off' payroll costs in 2014. In
addition, consultancy costs were significantly reduced in 2015 and
the Group benefited from foreign exchange movements with the
strengthening of the dollar against sterling. The management has
successfully reduced overhead costs over the course of the last 18
months and continuously monitors overheads closely. The partial
disposal of the Group's interest in the Kiliwani North Development
Licence gave rise to a gain of $1.77 million. Impairment provisions
of $0.38 million, $0.43 million and $25,000 have been made against
the fair value of production payments receivable from the US,
assets held for sale in non-core activities in Moldova and the
interest in listed investments respectively. The Group's resulting
net profit from operating activities was $0.18 million (2014: loss
of $2.54 million).
Finance costs reflect an interest charge of $0.79 million (2014:
$1.43 million). Of this, a charge of $0.78 million (2014: $1.42
million) relates to the corporate loan, while the unwinding of the
discount on the decommissioning provision was $11,000 (2014:
$10,000). Finance income in the period comprised deposit interest
of $1,000 (2014: $7,000).
In 2014, the Group disposed of interests in US operations for
which a loss on discontinued operations for the prior period was
$775,000.
The Group's net loss for the period amounted to $0.61 million
(2014: $4.74 million).
Balance Sheet
The Group's investment in exploration and evaluation assets
increased from $78.7 million at 31 December 2014 to $79.3 million
at 30 June 2015. The increase reflected ongoing seismic processing
and interpretation and well planning for two Ntorya appraisal
wells, as well as licence expenses for the Ruvuma PSA and the Nyuni
Area PSA. After review, the Directors have concluded that there is
no impairment to these assets, which include the cost of the
Ntorya-1 gas discovery. The carrying value of property, plant and
equipment has decreased from $13.5 million at 31 December 2014 to
$12.3 million at 30 June 2015, representing the carrying value of
the Kiliwani North field after a disposal of 10% of Aminex's 65%
interest in the field in February 2015. Non-current trade and other
receivables relate to the non-current element of the fair value of
production payments due from the US, which has reduced by $0.38
million during the period. Current assets include assets held for
sale at the fair value of $0.425 million for the Moldova assets:
this is after an impairment provision of $0.425 million made in the
period to recognise current market conditions. Other current assets
comprise trade and other receivables of $0.97 million and cash and
cash equivalents of $3.51 million.
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Under current liabilities, loans and borrowings of $7.70 million
relate to the corporate loan (see commentary under Going Concern
below) which was reduced from $10.22 million after payments of
$3.30 million offset by loan charges of $0.78 million in the
period. Trade payables amount to $3.07 million. The non-current
decommissioning provision decreased from $0.43 million at 31
December 2014 to $0.42 million, the net reduction arising on the
release of $19,000 on the partial disposal of the interest in
Kiliwani North being offset by the unwind discount charge of
$11,000 for the period. Total equity has increased by $1.40 million
between 31 December 2014 and 30 June 2015 to $87.88 million. The
movement comprises the net increase in issued capital and share
premium of $2.45 million as a result of the fundraising in June, an
increase in the share warrant reserve of $16,000 offset by the net
loss of $0.46 million in the foreign currency translation reserve
and the net loss of $0.61 million for the period under review.
Cash Flows
The net increase in cash and cash equivalents for the six months
ended 30 June 2015 was $1.74 million compared with $5.27 million
for the comparative period. The increase reflected the net proceeds
of $2.45 million received on the issue of new equity in June 2015.
During the period, the Group also received $3.33 million net
consideration for the disposal of 6.5% of the Kiliwani North
Development Licence. Net cash outflows from operating activities
amounted to $1.77 million (2014: $1.90 million) after interest and
redemption premium payments of $1.56 million (2014: interest $1.18
million). Expenditure on exploration and evaluation assets in the
current period amounted to $418,000, relating to the ongoing
seismic acquisition on the Ruvuma PSA acreage and continuing
licence costs. Expenditure on property, plant and equipment was
$126,000 for ongoing licence costs on the Kiliwani North licence.
The cash balance at 30 June 2015 was $3.51 million (31 December
2014: $1.77 million).
Related Party Transactions
There were no related party transactions during the six-month
period to 30 June 2015 that have materially affected the financial
position or performance of the Group. In addition, there were no
changes in the related parties set out in Note 30 to the Financial
Statements contained in the 2014 Annual Report that could have had
a material effect on the financial position or performance of the
Group during the six-month period.
Going Concern
The Directors have given careful consideration to the Group's
ability to continue as a going concern. During the period ended 30
June 2015, the Group reached agreement with Argo Capital Management
(Cyprus) Limited, representing the provider of an $8 million loan
facility (the "Argo Loan"), to extend the scheduled repayment date
of this loan to the end of January 2016. 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 $8.3 million
including interest and redemption premium, in full on the due date
or meet its planned operational and capital expenditure 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
KNDL, 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 January 2016 and therefore being able to
pay down an amount of approximately $3.3 million from net proceeds
of the second sale. In addition, Aminex raised $2.45 million net of
expenses through a placing in June 2015 to assist with meeting well
planning and working capital commitments through to first
production from Kiliwani North. The Directors are also in
discussions with third parties to seek a re-financing of the Argo
Loan. In addition 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 will be able either to extend further the repayment
period of or to re-finance the Argo Loan and 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.
Principal Risks and Uncertainties
Aminex's Group activities are currently carried out in East
Africa. The Directors carry out periodic reviews to identify risk
factors which might affect the business and financial performance.
Although the summary set out below is not exhaustive as it is not
possible to identify every risk that could affect the Group's
business, the following risks have been identified as the principal
risks and uncertainties facing the business over the next six
months:
Exploration risk - exploration and development activities may be
delayed or adversely affected by factors outside the Group's
control, in particular: climatic and oceanographic conditions;
performance of joint venture partners; performance of suppliers and
exposure to rapid cost increases; availability, delays or failures
in installing and commissioning plant and equipment; unknown
geological conditions resulting in dry or uneconomic wells;
remoteness of location; actions of host governments or other
regulatory authorities (relating to, inter alia, the grant,
maintenance, changes or renewal of any required authorisations,
environmental regulations - in particular in relation to plugging
and abandonment of wells, or changes in law).
Production risks - operational activities may be delayed or
adversely affected by factors outside the Group's control, in
particular: blowouts; unusual or unexpected geological conditions;
performance of joint venture partners on non-operated and operated
properties; seepages or leaks resulting in substantial
environmental pollution; increased drilling and operational costs;
uncertainty of oil and gas resource estimates; production,
marketing and transportation conditions; and actions of host
governments or other regulatory authorities.
Commodity prices - the demand for, and price of, oil and gas is
dependent on global and local supply and demand, weather
conditions, availability of alternative fuels, actions of
governments or cartels and general global economic and political
developments.
Currency risk - although the Group's reporting currency is the
US dollar, which is the currency most commonly used in the pricing
of petroleum commodities and for significant exploration and
production costs, other expenditures (in particular for the Group's
central administrative costs) are made in local currencies (as was
the Company's recent equity funding), thus creating currency
exposure.
Political risks - as a consequence of the Group's activities in
different parts of the world, Aminex may be subject to political,
economic and other uncertainties, including but not limited to
terrorism, military repression, war or other unrest,
nationalisation or expropriation of property, changes in national
laws and energy policies and exposure to less developed legal
systems.
Finance risks - arising from uncertain factors detailed in the
basis of preparation note (Note 1) relating to the Group as a going
concern.
A more detailed listing of risks and uncertainties facing the
Group's business is set out on page 8 of the 2014 Aminex PLC Annual
Report and Accounts (available on the Aminex website
www.aminex-plc.com).
Forward Looking Statements
Certain statements made in this half-yearly financial report are
forward-looking statements. Such statements are based on current
expectations and are subject to a number of risks and uncertainties
that could cause actual events or results to differ materially from
the expected future events or results referred to in these
forward-looking statements.
Statement of the Directors in respect of the Half-Yearly
Financial Report
Each of the directors whose names and functions are listed on
page 13 of the most recent annual report, confirm their
responsibility for preparing the half year financial report in
accordance with the Transparency (Directive 2004/109/EC)
Regulations 2007, the Transparency Rules of the Central Bank of
Ireland and the Disclosure and Transparency Rules of the UK
Financial Conduct Authority and with IAS 34 Interim Financial
Reporting, as adopted by the EU and to the best of each person's
knowledge and belief:
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-- the condensed consolidated interim financial statements
comprising the condensed consolidated interim income statement, the
condensed consolidated statement of comprehensive income, the
condensed consolidated interim balance sheet, the condensed
consolidated statement of changes in equity, the condensed
consolidated interim statement of cashflows and the related
explanatory notes have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the EU.
-- the interim management report includes a fair review of the information required by:
(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
J.C. BHATTACHERJEE M.V. WILLIAMS
Chief Executive Officer Chief Financial Officer/Company Secretary
26 August 2015
Independent Review Report to Aminex PLC
Introduction
We have been engaged by the Company to review the condensed set
of consolidated financial statements in the half-yearly financial
report for the six months ended 30 June 2015 which comprises the
condensed consolidated interim income statement, condensed
consolidated statement of comprehensive income, condensed
consolidated interim balance sheet, condensed consolidated
statement of changes in equity, condensed consolidated interim
statement of cashflows and the related explanatory notes. We have
read the other information contained in the half-yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of consolidated financial statements.
This report is made solely to the Company in accordance with the
terms of our engagement to assist the Company in meeting the
requirements of the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended ("the TD Regulations"), the
Transparency Rules of the Central Bank of Ireland and the
Disclosure and Transparency Rules of the UK Financial Conduct
Authority ("the UK FCA"). Our review has been undertaken so that we
might state to the Company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the TD Regulations, the Transparency Rules of the Central Bank of
Ireland and the Disclosure and Transparency Rules of the UK
FCA.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the EU.
The Directors are responsible for ensuring that the condensed set
of financial statements included in this half-yearly financial
report has been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of consolidated financial statements in the
half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with the Financial
Reporting Council's International Standard on Review Engagements
(UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of consolidated
financial statements in the half-yearly report for the six months
ended 30 June 2015 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU, the TD Regulations,
the Transparency Rules of the Central Bank of Ireland and the
Disclosure and Transparency Rules of the UK FCA.
Going concern
In forming our review conclusion, we have considered the
adequacy of the disclosures made in Note 1 to the condensed
consolidated financial statements concerning the Group's ability to
continue as a going concern having regard to its debt repayment
obligations and ongoing capital commitments which are significant.
Our conclusion is not qualified in respect of these matters.
Eamonn Russell
For and behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
26 August 2015
1 Stokes Place, St. Stephen's Green, Dublin 2
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
for the six months ended 30 June 2015
Notes Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
Continuing operations
Revenue 2 166 321 444
Cost of sales (166) (294) (412)
Gross profit - 27 32
Administrative expenses (756) (1,938) (2,795)
Depreciation of
other assets (7) (7) (9)
---------- ---------- --------------------------
Total administrative
expenses (763) (1,945) (2,804)
---------- ---------- --------------------------
Loss from operating
activities before
other items (763) (1,918) (2,772)
Gain on part disposal
of development asset 6 1,772 - -
Reduction in fair
value of other receivables 7 (379) - -
Impairment provision
against assets held
for sale 12 (425) (622) (622)
Impairment loss
on available for
sale assets 11 (25) - (243)
Profit/(loss) from
operating activities 180 (2,540) (3,637)
Finance income 3 1 7 11
Finance costs 4 (787) (1,432) (2,239)
---------- ---------- --------------------------
Loss before income
tax (606) (3,965) (5,865)
Income tax expense 5 - - -
Loss from continuing
operations 2 (606) (3,965) (5,865)
Discontinued operation
Loss from discontinued
operation 7 - (775) (1,143)
---------- ---------- --------------------------
Loss for the period
attributable
to equity holders
of the Company (606) (4,740) (7,008)
---------- ---------- --------------------------
Basic and diluted
loss per share (cents) 8 (0.03) (0.31) (0.41)
---------- ---------- --------------------------
Basic and diluted
loss per share (cents)
- continuing operations 8 (0.03) (0.26) (0.34)
---------- ---------- --------------------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(MORE TO FOLLOW) Dow Jones Newswires
August 26, 2015 02:00 ET (06:00 GMT)
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
Loss for the period (606) (4,740) (7,008)
Other comprehensive
income
Items that are or maybe
reclassified to profit
or loss:
Currency translation
differences (456) 88 (19)
Total comprehensive
income for the period
attributable to the
equity holders of the
Company (1,062) (4,652) (7,027)
---------- ---------- -------------
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
At 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Notes US$'000 US$'000 US$'000
ASSETS
Exploration and
evaluation assets 9 79,261 77,738 78,734
Property, plant
and equipment 10 12,275 13,372 13,510
Available for sale
assets 11 82 - 107
Trade and other
receivables 7 2,544 - 2,800
Total non-current
assets 94,162 91,110 95,151
Current assets
Assets held for
sale 12 425 6,345 850
Trade and other
receivables 966 723 1,217
Cash and cash equivalents 13 3,506 5,436 1,765
--------- ------------- ------------
Total current assets 4,897 12,504 3,832
--------- ------------- ------------
Total assets 99,059 103,614 98,983
--------- ------------- ------------
LIABILITIES
Current liabilities
Loans and borrowings 15 (7,698) (9,442) (10,218)
Trade and other
payables (3,067) (3,495) (1,863)
Liabilities for
assets held for
sale - (2,056) -
Total current liabilities (10,765) (14,993) (12,081)
--------- ------------- ------------
Non-current liabilities
Decommissioning
provision (416) (396) (425)
Total non-current
liabilities (416) (396) (425)
--------- ------------- ------------
Total liabilities (11,181) (15,389) (12,506)
--------- ------------- ------------
NET ASSETS 87,878 88,225 86,477
--------- ------------- ------------
EQUITY
Issued capital 14 67,192 67,042 67,094
Share premium 14 95,854 92,719 93,505
Capital conversion
reserve fund 234 234 234
Share option reserve 3,891 3,891 3,891
Share warrant reserve 15 3,047 3,242 3,031
Foreign currency
translation reserve (1,622) (1,059) (1,166)
Retained earnings (80,718) (77,844) (80,112)
--------- ------------- ------------
TOTAL EQUITY 87,878 88,225 86,477
--------- ------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2015
Unaudited
Attributable to equity shareholders of the Company
Foreign
Capital currency
conversion Share Share translation
Share Share reserve option warrant reserve Retained Total
capital premium fund reserve reserve fund earnings equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at
1 January 2014 65,629 79,431 234 3,891 2,535 (1,147) (73,104) 77,469
Comprehensive
income
Loss for the
period - - - - - - (4,740) (4,740)
Currency
translation
differences - - - - - 88 - 88
Transactions
with shareholders
of the Company
recognised
directly in
equity
Shares issued 1,413 13,288 - - - - - 14,701
Share warrants
granted - - - - 707 - - 707
Balance at
1 July 2014 67,042 92,719 234 3,891 3,242 (1,059) (77,844) 88,225
Comprehensive
income
Loss for the
period - - - - - (2,268) (2,268)
Currency
translation
differences - - - - - (107) - (107)
Transactions
with shareholders
of the Company
recognised
directly in
equity
Shares issued 52 786 - - (211) - - 627
Balance at
1 January 2015 67,094 93,505 234 3,891 3,031 (1,166) (80,112) 86,477
Comprehensive
income
Loss for the
period - - - - - - (606) (606)
Currency
translation
differences - - - - - (456) - (456)
Transactions
with shareholders
of the Company
recognised
directly in
equity
Shares issued 98 2,349 - - - - - 2,447
Share warrants
granted - - - - 16 - - 16
---------- --------- ------------ --------- --------- ------------- ----------- ---------
Balance at
30 June 2015
(unaudited) 67,192 95,854 234 3,891 3,047 (1,622) (80,718) 87,878
---------- --------- ------------ --------- --------- ------------- ----------- ---------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
Operating activities
Loss for the financial
period (606) (4,740) (7,008)
Depletion, depreciation
and decommissioning 7 90 92
Impairment provision
against producing assets - 872 872
Finance income (1) (7) (11)
Finance costs 787 1,488 2,295
Gain on disposal of interest
in jointly controlled
operations (1,772) - -
Reduction in fair value
of trade receivables 379 - -
Impairment of available
for sale assets 25 - 243
Impairment provision
against assets held for
sale 425 - -
Loss on disposal of subsidiary
undertaking - - 368
Decrease in trade and
other receivables 126 1,713 1,507
Decrease/(increase) in
trade and other payables 423 (137) (625)
--------- --------- ------------
Net cash used in operations (207) (721) (2,267)
Interest paid (1,563) (1,177) (1,179)
--------- --------- ------------
Net cash outflows from
operating activities (1,770) (1,898) (3,446)
--------- --------- ------------
Investing activities
Proceeds from sale of
property, plant and equipment 3,325 - -
Acquisition of property,
plant and equipment (126) (132) (234)
Expenditure on exploration
and evaluation assets (418) (4,942) (7,053)
Cost of disposal of subsidiary
(MORE TO FOLLOW) Dow Jones Newswires
August 26, 2015 02:00 ET (06:00 GMT)
undertaking - - (368)
Interest received 1 7 11
--------- --------- ------------
Net cash from/(used in)
investing activities 2,782 (5,067) (7,644)
--------- --------- ------------
Financing activities
Proceeds from the issue
of share capital 2,644 - 14,425 14,907
Payment of transaction
costs on issue of capital (197) (2,186) (2,205)
Loans repaid (1,718) (4) (13)
Net cash from financing
activities 729 12,235 12,689
--------- --------- ------------
Net increase in cash
and cash equivalents 1,741 5,270 1,599
Cash and cash equivalents
at 1 January 1,765 166 166
--------- --------- ------------
Cash and cash equivalents
at end of the financial
period 3,506 5,436 1,765
--------- --------- ------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
1. Basis of preparation
The condensed consolidated interim financial statements for the
six months ended 30 June 2015 are unaudited but have been reviewed
by the auditor. The financial information presented herein does not
amount to statutory financial statements that are required by Part
6 of Chapter 4 of the Companies Act, 2014 to be annexed to the
annual return of the Company. The statutory financial statements
for the financial year ended 31 December 2014 were annexed to the
annual return and filed with the Registrar of Companies. The audit
report on those statutory financial statements was unqualified. The
auditor drew attention to the Group's disclosures made in the Basis
of Preparation paragraph in the Statement of Accounting Policies
included in the 2014 Annual Report concerning the Group's ability
to continue as a going concern but the auditor's opinion was not
modified in this respect.
The condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the EU.
The financial information contained in the condensed interim
financial statements has been prepared in accordance with the
accounting policies set out in the 2014 Annual Report except as
outlined below.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 26 August 2015.
(i) Going concern
The Directors have given careful consideration to the Group's
ability to continue as a going concern. During the period ended 30
June 2015, the Group reached agreement with Argo Capital Management
(Cyprus) Limited, representing the provider of an US$8 million loan
facility (the "Argo Loan"), to extend the scheduled repayment date
of this loan to the end of January 2016. 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 US$8.3 million
including interest and redemption premium, in full on the due date
or meet its planned operational and capital expenditure 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
KNDL, selling 6.5% for US$3.5 million, of which Aminex applied net
proceeds of US$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 US$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 January 2016 and therefore being
able to pay down an amount of approximately US$3.3 million from net
proceeds of the second sale. In addition, Aminex raised US$2.45
million net of expenses through a placing in June 2015 to assist
with meeting well planning and working capital commitments through
to first production from Kiliwani North. 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 will be able either to extend further the repayment
period of or to re-finance the Argo Loan and 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.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
1. Basis of preparation (continued)
(ii) Use of judgments and estimates
The preparation of the interim financial statements requires
management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
The Directors believe that the Group's critical judgments, which
are those that require management's most subjective and complex
judgments, are those described below. These critical accounting
judgments and other uncertainties affecting application of the
Group's accounting policies and the sensitivity of reported results
to changes in conditions and assumptions, are factors to be
considered in reviewing the interim financial statements.
The Directors consider the critical judgments in applying
accounting policies to be related to the ability of the Group to
continue as a going concern, valuation of exploration and
evaluation assets and the depletion and decommissioning costs of
property, plant and equipment. The Directors are required to
estimate the expected remaining useful life of the oil and gas
producing assets, the future capital expenditure required to
recover oil and gas reserves and the future prices of oil and gas
in assessing these balances. Future revisions to these estimates
and their underlying assumptions could arise from results of
drilling activity, movements in oil and gas prices and cost
inflation in the industry. Further details are set out in Notes 9
and 10 to these financial statements. The Directors are required to
consider the Group's ability to continue as a going concern.
Further details are set out in the going concern paragraph
above.
Measurement of fair values
Management use the fair value hierarchy, levels 1, 2 and 3 (as
set out on page 52 of the 2014 Annual Report), for determining and
disclosing the fair values of financial instruments by valuation
technique. Assets and liabilities for assets held for sale, and
production payments receivable are carried at fair value and
management has determined this to be a Level 3 fair value while the
fair value of available for sale assets has been determined to be a
Level 1 fair value given the assets are quoted on an active stock
market. The carrying value of the Group's remaining financial
instruments are considered by management to reflect fair value
given the short term nature of these.
(ii) New accounting standards and interpretations adopted
Below is a list of standards and interpretations that were
required to be applied in the period ended 30 June 2015. There was
no material impact to the financial statements in the period from
the application of this.
-- Annual improvements to IFRSs 2011 - 2013 Cycle - effective 1 January 2015.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
2. Segmental disclosure - continuing operations
(MORE TO FOLLOW) Dow Jones Newswires
August 26, 2015 02:00 ET (06:00 GMT)
The Group considers that its continuing operating segments
consist of (i) Producing Oil and Gas Properties, (ii) Exploration
Activities and (iii) Oilfield Goods and Services. These segments
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 of head office expenses, cash
balances, borrowings and certain other items. The exploration
activities in Africa do not give rise to any revenue at
present.
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
Segmental revenue
Provision of oilfield
goods and services 166 321 444
Total revenue 166 321 444
---------- ----------------------- -------------
Country of destination
- provision of oilfield
goods and services
Africa 166 321 444
Total revenue 166 321 444
---------- ----------------------- -------------
Segmental profit/(loss)
for the financial
period
Africa - exploration
assets 1,629 (65) (253)
Europe - oilfield
goods and services - 27 (53)
Europe - Group costs
(1) (2,235) (3,927) (5,559)
Discontinued operations - (775) (1,143)
Group loss for the
period (606) (4,740) (7,008)
---------- ----------------------- -------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
2. Segmental disclosure (continued)
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
Segmental assets
Europe - producing assets
held for sale (2) 425 850 850
Africa - producing assets 12,258 13,367 13,488
Africa - exploration
assets 80,831 80,608 80,043
Europe - oilfield goods
and services - 102 56
Europe - Group assets
(3) 5,545 3,192 4,546
USA - producing assets - 5,495 -
held for sale
Total assets 99,059 103,614 98,983
---------- ---------- -------------
Segmental liabilities
Africa - exploration
assets (2,882) (2,935) (1,961)
Europe - oilfield goods - (11) -
and services
Europe - Group liabilities
(4) (8,299) (10,387) (10,545)
USA - producing liabilities - (2,056) -
for assets held for
sale
Total liabilities (11,181) (15,389) (12,506)
---------- ---------- -------------
(1) Group costs primarily
comprise salary and
related costs
(2) Group assets held
for sale consist of non-core
assets in Moldova
(3) Group assets primarily
comprise cash and working
capital
(4) Group liabilities comprise
loans and borrowings and
trade payables and related
costs
Capital expenditure
Africa - producing assets 122 75 196
Africa - exploration
assets 527 2,688 3,684
Europe - producing assets - - 1,092
Europe - Group assets 2 5 28
USA - producing oil
and gas properties (discontinued) - 11 11
Total capital expenditure 651 2,779 5,011
---------- ---------- -------------
Non-cash items
Europe: depreciation
- Group assets 7 7 9
Reduction in fair value
of other receivables 379 - -
Impairment loss on available
for sale assets 25 - 243
Impairment loss on assets
held for sale 425 - -
Interest expense on
financial liabilities
measured at amortised
cost 776 1,422 2,198
Europe: impairment provision
against assets held
for sale - 622 622
USA: impairment provision
against producing assets - 250 -
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
3. Finance income
Audited
Unaudited Unaudited year ended
6 months 6 months 31 December
ended ended 2014
30 June 30 June US$'000
2015 2014
US$'000 US$'000
Deposit interest income 1 7 11
1 7 11
------------ ------------ -------------
4. Finance costs
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
Bank charges - - 2
Decommissioning provision
interest charge 11 10 39
Interest expense on
financial liabilities
measured at amortised
cost 776 1,422 2,198
787 1,432 2,239
---------- ---------- -------------
Included in finance costs for the period is an interest charge
of US$776,000 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 25 June 2015, which
was the extension of the loan repayment. 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$16,000, which will be charged on an effective
interest rate basis from the date of modification to the repayment
date of 31 January 2016.
5. Tax
The Group has not provided any tax charge for the six month
periods ended 30 June 2015 and 30 June 2014 or for the year ended
31 December 2014. The Group's operating divisions have accumulated
losses which are expected to exceed profits earned by operating
entities for the foreseeable future.
6. Part disposal of property, plant and equipment
On 25 February 2015, the Company completed the disposal of 6.5%
of its interest in the Kiliwani North Development Licence to Solo
Oil plc for a consideration of US$3.5 million giving rise to a
profit on disposal of US$1.77 million as follows:
Unaudited
6 months
ended
30 June
2015
US$'000
Consideration received 3,500
Disposal of property, plant and equipment (1,352)
Finance costs - reversal of decommissioning
provision 19
Costs of disposal (65)
Capital gains tax arising on disposal (330)
Gain on disposal 1,772
----------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
(MORE TO FOLLOW) Dow Jones Newswires
August 26, 2015 02:00 ET (06:00 GMT)
for the six months ended 30 June 2015
7. Discontinued operation
During the prior 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 were 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$2.7 million included in non-current and current assets
represents the fair value of future expected production payments
resulting in the recognition of a reduction of US$379,000 in fair
value from 31 December 2014. The shares held in Northcote at 30
June 2015 are classified as available for sale assets on the
balance sheet (see Note 11).
The results from the US operation were presented as a
discontinued operation in the prior year as the entity disposed of
represented a separate geographical area of operation.
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
(a) Results of discontinued
operation
Revenue - 165 165
Cost of sales - (384) (384)
Depreciation - (83) (83)
Gross loss (302) (302)
Administrative expenses - (167) (167)
Finance costs - decommissioning
provision interest
charge - (56) (56)
Results from operating
activities (525) (525)
Income tax - - -
----------- ---------- -------------
Result from operating
activities, net of
tax (525) (525)
Cost of disposal of
discontinued operation - - (368)
Impairment provision
against discontinued
operation - (250) (250)
Loss for the period
attributable to
equity holders of
the Company - (775) (1,143)
------------ ---------- -------------
Basic and diluted
loss per share (cents)
- discontinued operation - (0.05) (0.07)
------------ ---------- -------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
7. Discontinued operation (continued)
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
(b) Cash flows from/(used
in) discontinued operations
Net cash (used in)/from
operating activities - (5) 6
Net cash from/(used
in) investing activities - 3,439 (11)
Net cash flow for
the period - 3,434 (5)
------------ ---------- -------------
(c) Effect of discontinued
operation on the financial
position of the Group
Property, plant and
equipment - (5,418) (5,418)
Trade and other receivables - (62) (62)
Cash and cash equivalents - (15) (15)
Trade and other payables - 46 46
Decommissioning provision - 2,010 2,010
---- -------- --------
Net assets and liabilities - (3,439) (3,439)
---- -------- --------
Consideration received - - 350
Consideration to be
received - 3,439 3,089
---- -------- --------
Total consideration - 3,439 3,439
---- -------- --------
8. Loss per share
The basic loss per Ordinary Share is calculated using a
numerator of the loss for the financial period and a denominator of
the weighted average number of Ordinary Shares in issue for the
financial period. The diluted loss per Ordinary Share is calculated
using a numerator of the loss for the financial period and a
denominator of the weighted average number of Ordinary Shares
outstanding and adjusted for the effect of all potentially dilutive
shares, including the share options and share warrants, assuming
that they have been converted.
The calculations for the basic loss per share of the financial
periods ended 30 June 2015, 30 June 2014 and the year ended 31
December 2014 are as follows:
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014
Numerator for basic
and diluted loss per
share:
Loss for the financial
period (US$'000) (606) (4,740) (7,008)
------------ ------------ -------------
Weighted average number
of shares:
Weighted average number
of ordinary shares
('000) 1,889,652 1,535,631 1,704,114
------------ ------------ -------------
Basic and diluted
loss per share (US
cents) (0.03) (0.31) (0.41)
------------ ------------ -------------
Continuing operations (0.03) (0.26) (0.34)
------------ ------------ -------------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
8. Loss per share (continued)
There is no difference between the basic loss per Ordinary Share
and the diluted loss per Ordinary Share for the financial periods
ended 30 June 2015, 30 June 2014 and the year ended 31 December
2014 as all potentially dilutive Ordinary Shares outstanding are
anti-dilutive. There were 21,115,000 anti-dilutive share options
(30 June 2014: 26,615,000 and 31 December 2014: 21,115,000) and
92,576,455 anti-dilutive share warrants in issue as at 30 June 2015
(30 June 2014: 118,463,955 and 31 December 2014: 88,176,455).
9. Exploration and evaluation assets
US$'000
At 1 January 2015 83,462
Additions 527
---------
At 30 June 2015 83,989
---------
Provisions for impairment
At 31 December 2014 and
30 June 2015 4,728
Net book value
At 30 June 2015 79,261
---------
At 31 December 2014 78,734
---------
The Directors have considered the licence, exploration and
appraisal costs incurred in respect of its exploration and
evaluation assets, which are, with the exception of the partial
write down of the Nyuni-1 well in Tanzania, carried at historical
cost. These assets have been assessed for impairment and in
particular with regard to remaining licence terms, likelihood of
renewal, likelihood of further expenditures and ongoing acquired
data for each area, as more fully described in the Operations
Report. During the year the Tanzanian authorities agreed to the
deferral of a two well commitment on the Nyuni Area PSA, which was
due to be completed by the end of October 2015, into the four-year
first extension which expires in October 2019. The Directors are
satisfied that there are no further indicators of impairment but
recognise that future realisation of these oil and gas assets is
dependent on further successful exploration and appraisal
activities and the subsequent economic production of hydrocarbon
reserves.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
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for the six months ended 30 June 2015
10. Property, plant and equipment
Development
property Other
- Tanzania assets Total
US$'000 US$'000 US$'000
Cost
At 1 January 2015 13,488 468 13,956
Additions in the
period 122 2 124
Released by disposal (1,352) - (1,352)
Exchange rate adjustment - (9) (9)
At 30 June 2015 12,258 461 12,719
------------ --------- --------
Depreciation and
depletion
At 1 January 2015 - 446 446
Charge for the period - 7 7
Exchange rate adjustment - (9) (9)
At 30 June 2015 - 444 444
------------ --------- --------
Net book value
At 30 June 2015 12,258 17 12,275
------------ --------- --------
At 31 December 2014 13,488 22 13,510
------------ --------- --------
Property, plant and equipment shown above include assets held
under finance leases as follows:
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 US$'000
US$'000 US$'000
Net carrying - - -
value
----------- ---------- -------------
Depreciation
charge - 3 1
------------ ---------- -------------
During the year, the Company disposed of 10% of its 65% interest
in the Kiliwani North Development Licence (see Note 6).
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 30 June
2015 based on estimated discounted future cashflows and are
satisfied that no impairment has occurred.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
11. Available for sale assets
As part of the disposal proceeds in the prior year 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 7). The
fair value of this investment has decreased and this decrease in
value is considered by the Directors to constitute an impairment of
the assets at 30 June 2015. Accordingly the impairment has been
expensed in the income statement
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
At beginning 107 - -
of period
Additions - - 350
Impairment
loss charged
to income statement (25) - (243)
At end of period 82 - 107
---------- ---------- -------------
12. Assets held for sale
In the prior year, the Company acquired the entire share capital
of Canyon Oil and Gas Ltd. ('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 Valixchimp
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 2015, 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$425,000 to a carrying value
of US$425,000 to reflect current market conditions. The Directors
are satisfied that no further impairment is considered to have
occurred.
13. Cash and cash equivalents
Included in cash and cash equivalents is an amount of US$212,000
held on behalf of partners in joint operations.
14. Issued capital
On 25 June 2015, the Group issued 88,000,000 Ordinary Shares for
cash, increasing share capital by US$0.10 million. The premium
arising on the issue, after share issue costs, amounted to US$2.35
million.
15. Loans and borrowings
In June 2015, the Company agreed with the lender, a fund managed
by Argo Capital Management (Cyprus) Ltd, for an extension of the
repayment period from 30 July 2015 to 31 January 2016. 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.
The Group made repayments of interest and capital amounting to
US$3.28 million during the period with the balance due at 30 June
2015 amounting to US$7.7 million.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
15. Loans and borrowings (continued)
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.
An amount of US$0.78 million (June 2014: US$1.42 million) has been
charged to the Group Income Statement in respect of this (see Note
4).
16. Financial instruments
a. Carrying amounts and fair values
The following table shows the carrying amounts and fair values
of financial assets and financial liabilities, including their
levels in the fair value hierarchy for financial instruments
measured at fair value. It does not include fair value information
for financial assets and liabilities not measured at fair value if
the carrying amount is a reasonable approximation of fair
value.
Carrying amount Fair value
Non-current Current
trade trade
and other and other Level Level
receivables receivables Total 1 3 Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
30 June 2015
Other receivables 2,544 15 2,559 - 2,559 2,559
Available for
sale assets - 82 82 82 - 82
2,544 97 2,641 82 2,559 2,641
------------- ------------- -------- -------- -------- --------
31 December
2014
Other receivables 2,800 139 2,939 2,939 2,939
Available for
sale assets 107 - 107 107 - 107
2,907 139 3,046 107 2,939 3,046
------------- ------------- -------- -------- -------- --------
b. Measurement of fair values
Where the market value of other investments is available, the
fair values are determined using the bid market price without
deduction of any transaction costs.
The fair value of production payments receivable is determined
based on the expected future cash flows where the significant
unobservable inputs are the discount rate of 10% and the expected
timing of production. The estimated fair value would decrease if
the expected timing of production is delayed.
Level 3 fair values
The decrease in the current fair value of US$0.38 million from
US$2.94 million at 1 January 2015 to US$2.56 million is consequent
on a change in expected timing of production.
Sensitivity analysis
An increase/decrease in the discount rate of 1%
decreases/increases the fair value of production payments
receivable. The resulting impact on the loss for the period is an
increase/decreases of US$135,305/US$144,624 respectively.
A delay in production of one year decreases the fair value of
production payments receivable and increases the loss for the
period by US$233,000.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2015
17. Commitments - exploration activity
In accordance with the relevant Production Sharing Agreements
("PSA"), Aminex has a commitment to contribute its share of the
following outstanding work programmes:
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