TIDMAEN
RNS Number : 6287A
Andes Energia PLC
30 September 2015
30 September 2015
ANDES ENERGIA PLC
("Andes" or the "Company" or with its subsidiaries the
"Group")
UNAUDITED INTERIM RESULTS TO 30 JUNE 2015
Andes (AIM: AEN; BCBA: AEN), the Latin American E&P group,
announces its unaudited interim results for the six month period
ending 30 June 2015.
Operational Review
Period highlights
-- A 90% increase in average daily production from 1,700 boepd
in 2014 to 3,226* boepd in the first six months of 2015
-- Average oil production of 1,816 bpd in Argentina; average net
price received US$68.3/bbl
-- Average oil production of 930 bpd in Colombia; average net
price received US$52.1/bbl
-- Average gas production of 480 boepd in Colombia; average price received US$18.6 peb
-- 20 development wells drilled on the Chachahuen licence in
Argentina, in partnership with YPF, all successfully brought into
production
-- 2 operated workovers on the El Manzano licence in Argentina to maintain production
-- Successful multi stage fracture and production test on the
"Las Varillas x-1" exploratory well
-- Acquisition of 51% interest in Interoil and immediate
organisational and financial restructure
-- New US$5.0 million debt facility with an affiliate of
Mercuria Energy Asset Management BV, a shareholder of the
Company
-- Revenues of US$32.5 million for the six months ending 30 June
2015 compared to US$20.4 million for the corresponding period last
year; an increase of 59%
-- EBITDA of US$9.5 million for the six months ending 30 June
2015 compared to US$4.3 million for the corresponding period last
year; an increase of 121%
-- Cash position of US$21.7 million as at 30 June 2015 compared
to US$8.0 million as at 30 June 2014
Post period highlights
-- Successful US$9.0 million fund raise and US$10.0 million
cancellation of part of an existing bond satisfied by the issue of
shares
-- A further 15 development wells drilled on the Chachahuen licence
Alejandro Jotayan, CEO, commented:
"Andes continued growing through the development of its assets
and acquisitions, taking advantage of market uncertainties. Our
financial position and capital structure has improved and our short
term prospects look encouraging with a planned 78 well program in
Argentina over the next 12 months. This will allow us to increase
significantly our production. Furthermore, the upcoming Argentinean
Presidential elections could act as a catalyst for new and
increased investment in the country, which will no doubt help drive
value from our 250,000 net acres in the Vaca Muerta. "
*Includes 100% of Interoil's net production in which Andes holds
a 51% interest
Enquiries:
Andes Energia Nicolas Mallo Huergo, T: +54 11 4110
plc Chairman 5150
Alejandro Jotayan,
CEO T: +44 20 3757
Billy Clegg, Head 4983
of Communications
Joint brokers;
Westhouse Securities Antonio Bossi T: +44 20 7601
David Coaten 6100
GMP Europe LLP Rob Collins T: +44 20 7647
Emily Morris 2800
Macquarie Capital Jon Fitzpatrick T: +44 20 3037
(Europe) Ltd Fergus Marcroft 2000
Guy de Freitas
Corporate communications: Georgia Mann
Camarco T: +44 20 3757
4986
Note to Editors:
Andes Energia plc is an oil and gas exploration and production
company focused on onshore assets in South America with a market
capitalisation of circa GBP139m. The Company has its main
operations in Argentina and Colombia.
The Company has approximately 25* MMbbls of conventional 2P
reserves, and it also has certified prospective resources of 640
MMboe, primarily in the Vaca Muerta unconventional development in
Argentina and over 7.5 million acres across South America.
The Company has approximately 250,000 net acres in the Vaca
Muerta formation, which is the second largest shale oil deposit in
the world and the only producing shale oil deposit outside of the
USA, currently producing 45,000 boepd. Over 300 wells have already
been drilled and fracked in the Vaca Muerta formation.
Andes is the only AIM quoted company on the London Stock
Exchange with exposure to the Vaca Muerta shale.
The Company currently produces approximately 3,226* boepd in
Argentina and Colombia from 6 conventional fields in Argentina and
2 in Colombia, with positive cash flows generated.
*Includes 100% of Interoil's net reserves and production in
which Andes holds a 51% interest
Chief Executive Officer's Review
Financial Highlights
Period ended 30 June 2015 2014
------------------------------ ----- -----
US$m US$m
------------------------------ ----- -----
Revenue 32.5 20.4
------------------------------ ----- -----
Operating profit *3.2 2.7
------------------------------ ----- -----
EBITDA (see note 5) *9.5 4.3
------------------------------ ----- -----
Net operating cash generated
from operations 5.8 3.5
------------------------------ ----- -----
* Before exceptional items of US$1.3 million
Revenue has increased to US$32.5 million for the first 6 month
period of 2015 compared to US$20.4 million in the same period last
year, including US$9.8 million from Interoil. This increase of 59%
results primarily from the acquisition of the 51% interest in
Interoil and an increase in production from Chachahuen. Operating
profit before exceptional items increased to US$3.2 million for the
first 6 month period of 2015, compared to US$2.7 million in the
same period last year.
The Group's total assets have increased to US$318 million, at 30
June 2015, from US$264 million at 30 June 2014, reflecting the
acquisition of Interoil offset by the impact of the devaluation of
the Argentine Peso. The devaluation of the Argentine Peso resulted
in US$11.5 million of exchange losses being recognised in the
comprehensive loss for the period (comparable 6 month period of
2014: US$41.5 million loss).
At the period end, the Group had cash resources of US$21.7
million compared to US$8.0 million at 30 June 2014, of which
US$10.7 million is restricted as security for stand by letters of
credit to support guarantees in Colombia (US$5.4 million restricted
at the Andes level). Whilst borrowings increased to US$109.9
million, at 30 June 2015, from US$62.5 million at 30 June 2014,
US$44.4 million of the borrowings at the period end relate to
Interoil, which is ring fenced from the rest of the Group and
US$10.0 million of Andes's borrowings were cancelled after the
period end in consideration for shares. Net current liabilities
increased to US$8.9 million, at 30 June 2015, from US$1.1 million
at 30 June 2014. However, this should be considered in the context
of the successful fund raise of US$9.0 million after the period end
and Mercuria's intention, subject to certain conditions, to extend
the US$5.0 million debt facility for a further 12 months, to
February 2017.
Oil and Gas Interests
Production
Andes now produces from 2 countries, from 8 oil fields from 150
wells. Production in the period increased by 90% with average net
daily production increasing from 1,700 boepd in 2014 to 3,226 boepd
in the first half of 2015. Argentina oil production averaged 1,816
bpd, with average net prices of US$68.3/bbl; Colombia oil
production averaged 930 boepd, with average net prices of
US$52.1/bbl; and Colombia gas production averaged 480 boepd, with
average prices of US$18.6 peb.
Strategy
Andes has net 2P reserves of 25* MMbbls and certified resources
of 640 MMboe mostly in the Vaca Muerta shale, where Andes holds
250,000 net acres in the oil window. We are making considerable
progress in line with our stated strategy to develop our 2P reserve
base to increase production, strengthen cash flows and the
financial position of the company such that capital can be deployed
to convert resources into cash generating reserves and continue
developing our acreage in Vaca Muerta.
*Includes 100% of Interoil's net reserves in which Andes holds a
51% interest
Argentina
Chachahuen
Development drilling
As part of our on-going development drilling program (2015-16),
20 development and appraisal wells were drilled and completed
successfully during the first 6 months of 2015. These new wells
have been brought online at an average daily rate of 60 bpd, giving
the Company confidence that the current drilling program can
increase production at Chachahuen by circa 27% over the next 12
months.
We plan to drill a total of 78 wells during the next 12 months.
To fulfil the program, 3 drilling and 3 workovers rigs are
operating currently. 15 successful development wells have been
drilled in Chachahuen since June 2015.
Enhanced Oil Recovery -Water Flood project
According to the first stage of our plan, an average rate of
1,800 bpd was injected up to the end of June.
During 2015 we plan to convert 10 producing wells into injector
wells and continue with the extension of the network of brine
injection.
Each water flood pattern comprises 4 producing wells surrounding
an injection well (an inverted five spot pattern).
Oil production
At the end of June 2015 a total of 71 wells were on stream,
producing approximately 4,520 bpd (Andes has a 20% working interest
equivalent to 904 bpd).
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:01 ET (06:01 GMT)
In all wells, a progressing cavity pump artificial lift system
was installed, which best suits the conditions of the wells and has
long been proven to be efficient.
3D Seismic Survey
In June we commenced the shooting of a 550 km(2) 3D seismic
survey to delineate further targets in the Chachahuen area. Andes's
JV partner, YPF, has entered into a contract with Wellfield
Services to carry out the 3D seismic program.
The program is expected to take approximately 6 months to
complete.
Puesto Pozo Cercado and Chañares Herrados blocks - Mendoza
Interventions on wells CHH1014 and CHH1031 were performed to
replace the sucker rod systems with electrical submersible pumps
(ESPs) and as a result oil production increased on average by 22
bpd. Andes has a 49.92% working interest in these blocks.
El Manzano West - Mendoza
As part of the well reactivation program the Company
successfully re-entered and tested wells "EM x-1" and "EM-3", which
are expected to enter into production after extended tests are
performed and sucker rod pumps are installed. These wells will use
existing facilities and infrastructure to evacuate the oil.
Andes anticipates that a further 2 existing abandoned wells
could further add to oil production during 2015.
Workover operations were conducted, with the main target to test
the Agrio formation.
Vega Grande - Mendoza
Well VG x-1 came on stream in December 2014, producing from an
unfracked well under natural flow from the Vaca Muerta formation,
with production stabilizing at an average rate of 26 bpd of gross
production, with an associated water cut of 11% (net 23 bpd).
Average production from Vega Grande for the first 6 months of
2015 was 58 bpd.
Ñirihuau block - Chubut
A total of 160 km of 2D seismic was reprocessed and
reinterpreted, which gave us an increased understanding of the
structure of the block. As part of our commitments and to gain a
better understanding of the static model, we plan to shoot 50 km of
additional 2D seismic.
Colombia
On 20 January 2015 Andes acquired a 51% interest in Interoil
Exploration and Production ASA ("Interoil"). Interoil operates
production and exploration oil and gas licences in Colombia and has
9 years of operating experience in the country. At the time of the
acquisition, the Colombian licences produced 1,571 boepd (1,040 bpd
oil and 531 boepd gas), and have approximately 5.6 MM boe of net 2P
reserves (3.4 MM bbls of oil and 12.4 BCF of gas). In addition
Andes has 11 exploration licences, mainly in the Llanos basin.
Interoil - Puli field
Enhanced Oil Recovery -Water flood project
A comprehensive study was performed to gain a better
understanding of the reservoir distribution, reservoir continuity
and also the complexity of faults in order to design a water flood
project.
After completing the static model, conceptual simulation will be
conducted in order to provide a better understanding of the fluid
behaviour to define the optimal water injection pattern in the
pilot project.
Workovers campaign
As a result of a comprehensive review of petrophysical
properties, new unperforated/behind-pipe oil-bearing intervals were
identified in the prolific Chicoral formation.
A tender is in progress to workover 4 existing wells.
Andes - Exploration licences
Andes is currently conducting regional geological studies,
petrophysical interpretation and reprocessing of existing seismic
data on its exploration licences in Colombia.
Paraguay and Brazil
Whilst the Board's focus is, understandably, on the development
of its operations in Colombia and Argentina, it is still pursuing
analysis and exploration activities in Paraguay. In Paraguay, a
geology field trip was performed and valuable data was gathered. As
part of our commitments we plan to perform a geochemical survey
during November.
We have previously indicated that Andes is considering its
options with regards to its interests in Brazil.
Interoil acquisition
On 20 January 2015 Andes acquired a 51% interest in Interoil
through a NOK 36.3 million (US$4.95 million) private placement.
Under the conditions of the placement, bondholders of Interoil
accepted a restructure of its NOK 310 million (US$42.2 million)
corporate bond and the US$6.2 million debt due to a third party,
Proseis AG. This debt was replaced with a new US$32.0 million bond
issued by Interoil (the "New Bond"), denominated in US$ with a
coupon of 6% per annum maturing in 2020 with the option to satisfy
coupon payments in the first 2 years by issuing additional New
Bonds to the equivalent value.
An analysis and review of Interoil's organisational and cost
structure was carried out, which resulted in cost savings of over
30%.
Post period end
On 28 August 2015 the Company raised US$9.0 million
(approximately GBP5.8 million) (gross) through the issue of
23,047,376 new ordinary shares, pursuant to a fundraising, at a
placing price of 25 pence per share with existing and new
investors. In connection with the fundraise, the Company issued a
total of 6,584,960 warrants ("Warrants") each giving the right to
subscribe for one share at 26 pence per ordinary share, over a term
of four years, vesting immediately. Full exercise of the Warrants
would raise an additional US$2.7 million for the Company.
The holders of an existing US$25 million bond, which with
accrued interest totalled US$31 million, agreed to cancel US$10
million of the liabilities outstanding under the bond in
consideration for the issue of 25,608,196 shares at a price of 25
pence per share. Warrants were not issued in connection with the
shares to be issued as a result of the conversion.
Outlook
We have a solid, profitable and growing production base across 8
fields in 2 countries, with high oil prices in Argentina, and 78
new wells planned in the Chachahuen field over the next 12 months.
Our financial position has improved and we can look forward to
Presidential elections in the next few weeks, which could be a
catalyst for a new investment wave in the country, which will no
doubt help drive value from our 250,000 net acres in the Vaca
Muerta. Your Board looks to the future with excitement and
confidence.
Alejandro Jotayan
Chief Executive Officer
30 September 2015
Group income statement for the period ended 30 June 2015
30-Jun-15 30-Jun-14 31-Dec-14
US$'000 US$'000 US$'000
Revenue 32,488 20,357 48,229
Production cost (22,608) (13,084) (30,630)
Gross profit 9,880 7,273 17,599
Other operating income 4,674 24 996
Exceptional items (see note 3) 1,309 - -
--------------------------------------- ---------- ---------- ----------
Total other operating income 5,983 24 996
--------------------------------------- ---------- ---------- ----------
Impairment charge - - (3,796)
Distribution costs (2,218) (1,732) (3,115)
Administrative expenses (9,162) (2,866) (9,977)
---------- ---------- ----------
Operating profit 4,483 2,699 1,707
Finance income 3,765 721 3,783
Finance costs (see note 2) (7,763) (3,581) (13,397)
Profit/(loss) before taxation 485 (161) (7,907)
Taxation (see note 6) (3,979) (2,561) (3,012)
----------
Loss for the period from continuing
operations (3,494) (2,722) (10,919)
---------- ---------- ----------
Total comprehensive loss attributable
to:
Equity holders of the parent (3,232) (2,722) (10,919)
Non-controlling interests (262) - -
(3,494) (2,722) (10,919)
========== ========== ==========
Loss per ordinary share from
continuing operations (see note
4) Cents Cents Cents
Adjusted basic and diluted loss
per share (0.59) (0.53) (2.11)
Basic and diluted loss per share (0.82) (0.53) (2.11)
Consolidated statement of comprehensive income for the period
ended 30 June 2015
30-Jun-15 30-Jun-14 31-Dec-14
US$'000 US$'000 US$'000
Loss for the period (3,494) (2,722) (10,919)
Translation differences (11,493) (41,503) (48,760)
Total comprehensive loss for
the period (14,987) (44,225) (59,679)
---------- ---------- ----------
Total comprehensive loss attributable
to:
Equity holders of the parent (14,725) (44,225) (59,679)
Non-controlling interests (262) - -
(14,987) (44,225) (59,679)
========== ========== ==========
The loss on exchange results primarily from the revaluation of
intangible assets that are carried in Argentine pesos. This
resulted in a drop in the carrying value of these intangible assets
but is not indicative of an impairment in value.
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Consolidated statement of financial position as at 30 June
2015
30-Jun-15 30-Jun-14 31-Dec-14
US$'000 US$'000 US$'000
Non-current assets
Intangible assets 154,659 227,220 165,104
Property, plant and equipment 103,665 1,194 61,185
Available for sale financial
assets 1,667 1,636 1,646
Trade and other receivables 10,932 10,561 10,592
Deferred income tax assets 1,041 523 464
Total non-current assets 271,964 241,134 238,991
---------- ---------- ----------
Current assets
Inventories 1,813 678 618
Available for sale financial
assets 3,782 2,866 2,644
Trade and other receivables 18,312 11,597 12,339
Restricted cash 10,713 5,944 5,944
Cash and cash equivalents 11,017 2,051 4,700
Total current assets 45,637 23,136 26,245
---------- ---------- ----------
Current liabilities
Trade and other payables 27,591 14,131 20,348
Financial liabilities 25,726 10,072 7,870
Provisions 1,260 - -
----------
Total current liabilities 54,577 24,203 28,218
---------- ---------- ----------
Non-current liabilities
Trade and other payables 8,434 7,733 9,326
Financial liabilities 84,120 52,390 49,793
Deferred income tax liabilities 44,553 53,503 47,614
Provisions 6,013 476 1,727
----------
Total non-current liabilities 143,120 114,102 108,460
---------- ---------- ----------
Net assets 119,904 125,965 128,558
---------- ---------- ----------
Capital and reserves
Called up share capital 90,225 84,222 90,164
Share premium account 73,449 58,308 73,248
Other reserves (81,047) (59,256) (69,554)
Retained earnings 31,633 42,691 34,700
Equity attributable to equity
holders of the parent 114,260 125,965 128,558
Non-controlling interests 5,644 - -
Total equity 119,904 125,965 128,558
========== ========== ==========
Unaudited consolidated statement of changes in equity for the
period ended 30 June 2015
Capital and reserves Share Share Retained Other Attributable Non Total
reserves to equity
capital premium earnings holders controlling
of the
parent interests
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2014 84,216 58,281 45,172 (17,753) 169,916 - 169,916
-------- -------- --------- --------- ------------- -------------- ---------
Loss for the
period - - (2,722) - (2,722) - (2,722)
Translation differences - - - (41,503) (41,503) - (41,503)
Total comprehensive
loss for the
period - - (2,722) (41,503) (44,225) - (44,225)
-------- -------- --------- --------- ------------- -------------- ---------
Issue of ordinary
shares 6 27 - - 33 - 33
Fair value of
share based payments - - 241 - 241 - 241
At 30 June 2014 84,222 58,308 42,691 (59,256) 125,965 - 125,965
-------- -------- --------- --------- ------------- -------------- ---------
Loss for the
period - - (8,197) - (8,197) - (8,197)
Translation differences - - - (7,257) (7,257) - (7,257)
Total comprehensive
loss for the
period - - (8,197) (7,257) (15,454) - (15,454)
-------- -------- --------- --------- ------------- -------------- ---------
Issue of ordinary
shares 5,942 14,940 - - 20,882 - 20,882
Deferred contingent
consideration
shares - - - (3,041) (3,041) - (3,041)
Fair value of
share based payments - - 206 - 206 - 206
At 31 December
2014 90,164 73,248 34,700 (69,554) 128,558 - 128,558
-------- -------- --------- --------- ------------- -------------- ---------
Loss for the
period - - (3,232) - (3,232) (262) (3,494)
Translation differences - - - (11,493) (11,493) - (11,493)
Total comprehensive
loss for the
period - - (3,232) (11,493) (14,725) (262) (14,987)
-------- -------- --------- --------- ------------- -------------- ---------
Issue of ordinary
shares 61 201 - - 262 - 262
Fair value of
share based payments - - 165 - 165 - 165
Acquisition - - - - - 5,906 5,906
At 30 June 2015 90,225 73,449 31,633 (81,047) 114,260 5,644 119,904
-------- -------- --------- --------- ------------- -------------- ---------
Other reserves Merger Warrant Translation Deferred Total
reserve reserve Reserve consideration other
reserve reserves
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2014 55,487 2,105 (84,496) 9,151 (17,753)
--------- --------- ------------- -------------- ---------
Translation differences - - (41,503) - (41,503)
Total comprehensive
loss for the
period - - (41,503) - (41,503)
--------- --------- ------------- -------------- ---------
At 30 June 2014 55,487 2,105 (125,999) 9,151 (59,256)
--------- --------- ------------- -------------- ---------
Translation differences - - (7,257) - (7,257)
Total comprehensive
loss for the
period - - (7,257) - (7,257)
--------- --------- ------------- -------------- ---------
Deferred contingent
consideration
shares - - 84 (3,125) (3,041)
At 31 December
2014 55,487 2,105 (133,172) 6,026 (69,554)
--------- --------- ------------- -------------- ---------
Translation differences - - (11,493) - (11,493)
Total comprehensive
loss for the
year - - (11,493) - (11,493)
--------- --------- ------------- -------------- ---------
At 30 June 2015 55,487 2,105 (144,665) 6,026 (81,047)
--------- --------- ------------- -------------- ---------
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September 30, 2015 02:01 ET (06:01 GMT)
Consolidated cash flow statement for the period ended 30 June
2015
30-Jun-15 30-Jun-14 31-Dec-14
US$'000 US$'000 US$'000
Cash generated from operations
(see note 8) 5,779 3,537 14,640
Tax paid (502) - -
Cash flows generated from operating
activities 5,277 3,537 14,640
---------- ---------- ----------
Cash flows from investing activities
Purchase of property, plant and
equipment (8,595) (499) (18,234)
Purchase of exploration assets (425) (3,372) (1,785)
Purchase of financial assets (2,318) (76) (84)
Acquisition of subsidiaries 16,863 - -
Other - - -
Net cash generated from/(used
in) investing activities 5,525 (3,947) (20,103)
---------- ---------- ----------
Cash flows from financing activities
Repayments of borrowings (3,350) - -
Funds from borrowing 5,335 - 8,601
Interest paid (1,943) - -
Interest received 17 - -
Proceeds from issue of shares 262 33 33
Net cash generated from financing
activities 321 33 8,634
---------- ---------- ----------
Exchange (losses)/gains on cash
and cash equivalents (37) 194 (705)
Net increase/(decrease) in cash
and cash equivalents 11,086 (183) 2,466
Cash and cash equivalents at the
beginning of the period 10,644 8,178 8,178
Cash and cash equivalents at the
end of the period 21,730 7,995 10,644
---------- ---------- ----------
Notes
1. Basis of preparation
The Group consolidates the financial statements of the Company
and its subsidiary undertakings.
The financial information has been prepared under the historical
cost convention in accordance with International Financial
Reporting Standards (IFRSs). The financial information set out in
this half-yearly report does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The same
accounting policies, presentation and methods of computation are
followed in this interim condensed consolidated report as were
applied in the Group's annual financial statements for the year
ended 31 December 2014. The auditor's report on those financial
statements was unqualified and did not contain any statements under
section 498(2) or section 498(3) of the Companies Act 2006.
2. Finance costs
Only US$1.9 million of the finance costs were paid in cash
during the period. The other finance costs were not due to be paid
and relate primarily to convertible loans.
3. Exceptional items
As a result of the acquisition of the interest in Interoil the
Group recognised an exceptional gain of US$1.3 million arising from
the difference between the consideration paid and the fair value of
the net assets acquired following the restructure of the Interoil
debt (see note 9).
4. Loss per share
Basic loss per share is calculated by dividing the net loss for
the period attributable to ordinary shareholders of the Group by
the weighted average number of ordinary shares outstanding during
the period. The basic and diluted loss per share are the same as
there are no instruments that have a dilutive effect on earnings.
Adjusted basic and diluted loss per share are presented after
adjustment of exceptional items.
30-Jun-15 30-Jun-14 31-Dec-14
Cents Cents Cents
Basic and diluted loss per
share (0.59) (0.53) (2.11)
Adjusted basic and diluted
loss per share (0.82) (0.53) (2.11)
US$'000 US$'000 US$'000
Loss for the period attributable
to equity holders (3,232) (2,722) (10,919)
Exceptional items (1,309) - -
Adjusted loss for the period
attributable to equity holders (4,541) (2,722) (10,919)
---------- ---------- ----------
No.'000 No.'000 No.'000
Weighted average number of
shares 551,975 514,781 516,786
Effect of dilutive warrants - - -
Diluted weighted average number
of shares 551,975 514,781 516,786
---------- ---------- ----------
No.'000 No.'000 No.'000
Potential number of dilutive
warrants 45,656 38,656 38,656
---------- ---------- ----------
5. EBITDA
30-Jun-15 30-Jun-15 31-Dec-14
US$'000 US$'000 US$'000
Loss for the period from continuing
operations (3,494) (2,722) (10,919)
Less: Exceptional items (1,309) - -
Add: Depreciation and amortisation 6,328 1,570 3,252
Add: Impairment write downs - - 3,796
Less: Finance income (3,765) (721) (3,783)
Add: Finance costs 7,763 3,581 13,397
Add: Tax 3,979 2,561 3,012
EBITDA 9,502 4,269 8,755
---------- ---------- ----------
6. Taxation
The tax charge for the period is unusually high due to the fact,
that in Argentina, company losses can not be transferred and offset
against profits generated by companies in the same group.
Furthermore, tax losses can only be carried forward 5 years.
7. Comprehensive income
The translation loss primarily arises as a result of the 7%
devaluation of the AR$ against the US$ during the period. The
carrying value of intangibles assets, other assets and liabilities
in Argentina are held in AR$ and on consolidation translated to
US$, the presentation currency. The resulting exchange gains and
losses are classified as equity and transferred to the Group's
translation reserve. This is not indicative of an impairment in the
carrying value of these assets.
8. Cash generated from operations
Group
----------------------------------
30-Jun-15 30-Jun-14 31-Dec-14
US$'000 US$'000 US$'000
Profit/(loss) for the period before
taxation 485 (161) (7,907)
Exceptional items (1,309) - -
---------- ----------
Loss for the period before taxation
and exceptional items (824) (161) (7,907)
Adjustments from operating activities
Depreciation and amortization 6,328 1,570 3,252
Exchange movements 8 (2,257) 434
Revaluation of investments 450 (9) (64)
Increase in inventories (663) (251) (218)
Increase in trade and other receivables (3,447) (2,486) (4,022)
Decrease/(increase) in creditors
and other payables (172) 3,916 7,916
Finance costs 7,763 3,581 13,397
Finance income (3,765) (721) (3,783)
Impairment write downs - - 3,796
Movement in provisions (64) 114 1,392
Share based payments 165 241 447
Net cash generated from operating
activities 5,779 3,537 14,640
---------- ---------- ----------
9. Acquisition
On 20 January 2015 the Company acquired a 51% interest in
Interoil. Interoil has an interest in two producing fields and two
exploration fields in Colombia. The acquisition of Interoil
increases the Group's reserves and production with producing assets
in Colombia.
The interest was acquired through a NOK 36.3 million (US$4.95
million) private placement.
The acquisition costs were approximately US$1.6 million.
The results of Interoil are included in the consolidated income
statement from the date of acquisition. Interoil's identifiable
assets and liabilities are recognised in the consolidated statement
of financial position at their fair value at the date of
acquisition.
A profit of US$0.5 million in relation to the acquired
activities has been recognised in the income statement for the
period. Revenue for the Group for the period includes US$9.8
million of revenue from Interoil's operations.
10. Other
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