TIDMORCP
RNS Number : 7371E
Oracle Coalfields PLC
10 May 2017
10 May 2017
Oracle Coalfields PLC
("Oracle", the "Company" or the "Group")
Results for the Year Ended 31 December 2016
Oracle Coalfields PLC (AIM:ORCP), the UK energy developer of a
combined lignite mineral resource and mine mouth power plant
located in the Thar desert in the south-east of Sindh Province,
Pakistan, today announces its audited results for the year ended 31
December 2016.
2016/17 Highlights:
-- Determination by the Thar Coal and Energy Board of Oracle's
coal price, based on its feasibility study, at US$60.23/tonne;
-- Board changes, Adrian Loader and Roderick Stead leaving the board and Yves Mordacq joining;
-- Status in the China-Pakistan Economic Corridor raised from
the "active" to the "Priority" list;
-- Progress in critical areas to bring the project to financial
close, including water access, power evacuation with the National
Grid and power purchase with the Central Power Purchasing
Agency.
Planned Work Programme for 2017
In 2017 Oracle will concentrate on formalising agreements and
contracts to bring the project to full implementation along with
working to secure all project financing arrangements, including its
future project equity funding share.
Chairman's Statement
I am pleased to present the results for Oracle Coalfields PLC
(the "Company" or "Oracle") for the year ended 31 December
2016.
It has been a year of detailed work with potential Chinese
partners, support from the governments of China and Pakistan,
manifested through our elevation from the "Active" list to the
"Priority" list of the China-Pakistan Economic Corridor, has been
affirmed. We have been in discussions with several Chinese groups
and shareholders will be kept informed with progress in this
respect.
Meanwhile, we have made good progress in all the critical areas
needed to bring the Thar Block VI project to financial close. We
have updated our registration to the Private Power Investment Board
to reflect the full size of our eventual power plant, 1,320MW.
Water supply has been confirmed by the Energy Department of the
Government of Sindh, at 38 cusecs; a detailed water agreement
should follow. The National Grid (the National Transmission and
Despatch Company) who are constructing power evacuation lines to
link Thar electricity output to the national grid has confirmed
that our power generated will be evacuated. As the first step in
the resettlement of people who will be displaced by the project, we
have carried out a detailed census of the affected population as
part of the resettlement process. The power plant Environmental and
Social Impact Assessment ("ESIA") has been submitted to the Sindh
Environmental Protection Agency; the mine ESIA, originally
completed in 2013, has also been updated. The coal price regulator,
(the Thar Coal and Energy Board) has made an initial price
determination, at US$60.23MT. Also, it has been encouraging that
the part Government owned neighbouring Block II have reached
financial close during 2016 and are making good progress in opening
up their mine and in the construction of a 660MW power plant; their
work to date demonstrates the validity of the Thar feasibility
studies.
The world environment for mining and for coal has improved, with
increases now in internationally traded metallurgical and thermal
coal prices. Our project remains a purely Pakistan play, the only
integrated mine and power project in Pakistan on the London Stock
Exchange. Whilst Pakistan still presents investors with challenges,
there is a growing atmosphere of stability in the country. Its
economic growth is drawing widespread plaudits, notably from the
IMF and the World Bank. There has been an improving degree of
political stability. There are still security incidents, but a
greater sense of unity is now apparent between the people, army and
politicians in addressing security matters. Oracle's team regularly
visits Pakistan, and we feel the commentary of Christine Lagarde,
Managing Director of the IMF, hits the mark; "I congratulate
Pakistan on having successfully completed its IMF-supported
economic reform program. Improved macroeconomic stability as well
as strengthened external buffers and public finances will provide a
solid foundation for the economy".
Our project plays a vital role in contributing to Pakistan's
economic improvement. The acute shortage of electricity in Pakistan
continues, and, in our view, the development of Thar will go a
substantial way to address this shortage. At present 40% of
Pakistan's electricity is generated from imported fuel and the use
of indigenous fuel will substantially reduce this onerous call on
foreign exchange. More than this, economic growth has been stifled
by the lack of power in recent years; removing this constraint
should lead to growth rates of 6% or more in the near term, as
forecast by the World Bank.
Oracle is looking into diversifying its portfolio of activity
and we are seeking wider opportunities in Pakistan and
internationally.
We are most grateful to the Pakistani Authorities at both
Federal and Provincial levels for the constructive way in which
they have supported and continue to support our project.
I would like to thank my Board and management colleagues for
their hard work in 2016, which resulted in the considerable
progress described above. There have been some changes to the Board
during 2016. May I first pay tribute to the two members of the
Board who have left during the year, Adrian Loader and Roderick
Stead. Both have contributed highly valued expertise to the
Company. I thank them and wish them both well for the future. I
welcome Yves Mordacq to our Board. He brings extensive experience
in international capital markets and asset management, with
particular emphasis in the natural resources sector.
Above all I wish to thank our shareholders for their continued
confidence, patience and support, enabling us to bring the project
forward.
Anthony Scutt
Chairman
Chief Executive's Statement
The economic growth and overall development of Pakistan
continues to be restricted because of electricity supply shortfalls
throughout the country. In its State of Industry Report 2015 The
National Electricity Pricing and Regulatory Authority ("NEPRA")
projects that in order to meet peak demand that some 8,000MW needs
to be added today to the existing system and that there is 17,200MW
of new capacity anticipated in the coming years. To accommodate
this increase a significant improvement in the grid distribution
network will also have to be constructed. The Government is
committed to eradicating the shortfall and to supporting the
development of indigenous fuel supplies for electricity
generation.
In December 2014, the Government of Sindh enacted the Thar Coal
Tariff Determination Rules which set out how the Thar Coal and
Energy Board ("TCEB") will review and agree a coal tariff for
developers in Thar incorporating the fiscal incentives for project
developments. The Company submitted its Tariff application in July
2015 and the Tariff was determined by TCEB in June 2016 at $60.23
per tonne. Further Tariff Petitions are expected to be submitted
prior to financial close and the Government has adopted a cost plus
mechanism for tariff determination with a review process over time
as the projects proceed.
The Block VI integrated project has been elevated to the list of
Priority Projects of the China Pakistan Economic Corridor ("CPEC").
CPEC is a bilateral arrangement between China and Pakistan which
has been set up to fast track Chinese financing of energy and
infrastructure projects across Pakistan. The inclusion of our
project in the CPEC should assist in progressing the various
approvals required both at Federal and Provincial level in Pakistan
and also with the Chinese financial institutions. Progress with
potential Chinese partners is taking longer than we might have
hoped, but detailed discussions are at present underway with
several State-owned Enterprises, as financing partners and as EPC
contractors.
Thar Electricity (Private) Limited ("TEPL") has registered the
Thar Block VI Power Plant with the Private Power and Infrastructure
Board ("PPIB") for a plant up to 1,320MW capacity and has made the
application to construct initially a 660MW plant at the site.
The PPIB is the division of the Ministry of Water and Power,
Government of Pakistan which regulates Independent Power Producers
("IPP") and approves applications to build, own and operate private
power plants in Pakistan. The process entails agreeing an
electricity tariff with NEPRA and a Power Purchase Agreement
("PPA") with the Central Power Purchasing Authority ("CPPA"), a
division of the National Transmission and Despatch Company ("NTDC")
which owns and operates the high voltage transmission lines
throughout the country. In addition to agreeing a PPA, an
Implementation Agreement ("IA")," which guarantees payments under
the PPA, is to be entered into with the Government of Pakistan.
The Central Power Purchasing Agency issued a "Letter of No
Objection" for the 660MW power plant in November 2015 and NTDC also
confirmed that power from the project will be accommodated within
the planned high voltage transmission line.
The next stage of the process is for PPIB to issue a Letter of
Intent ("LOI") for the project which then requires the PPA
application to be made along with the electricity tariff
application and a generation licence application. Work is
continuing to complete the Environmental Impact Assessment ("EIA")
for the Power Plant as part of the application process.
In addition, on site preparation work is underway for
development in particular to establish land ownership so that land
acquisition and resettlement can be undertaken in accordance with
the Resettlement Policy Framework published by the Sindh Coal
Authority Energy Department in May 2015 which has been written to
conform to international best practice. In March 2017, we conducted
a census of the six villages in Block VI to establish population
and livestock numbers. In addition we are working to implement a
Corporate Social Responsibility Programme ("CSR") to provide early
benefits to the local community in terms of water, basic
healthcare, education and veterinary support.
Our work in 2017 will concentrate on formalising agreements and
contracts to bring the project to full implementation, in line with
the fiscal incentives including the continuing project Internal
Rate of Return, along with securing all the financing
arrangements.
I am most grateful to both the Provincial Government of Sindh
and the Federal Government of Pakistan for their continuing support
for developments in the Thar Coalfield and our Block VI project in
particular which will be a major contributor to alleviating the
electricity shortfall in the country. The Company again extends its
thanks to the shareholders for their continued patience and
support.
Shahrukh Khan
Chief Executive Officer
Consolidated income Statement
for the year ended 31 December 2016
2016 2015
GBP GBP
CONTINUING OPERATIONS
Revenue - -
Other operating income - 768
Administrative expenses (919,190) (980,819)
OPERATING LOSS (919,190) (980,051)
Finance income 5,726 7,275
LOSS BEFORE INCOME TAX (913,464) (972,776)
Income tax - -
LOSS FOR THE YEAR (913,464) (972,776)
Loss attributable to:
Owners of the parent (913,258) (972,190)
Non-controlling interests (206) (586)
(913,464) (972,776)
Earnings per share expressed
in pence per share:
Basic (0.10) (0.12)
Diluted (0.10) (0.12)
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2015
2016 2015
GBP GBP
LOSS FOR THE YEAR (913,464) (972,776)
OTHER COMPREHENSIVE INCOME
Exchange difference on consolidation 278,662 11,572
Income tax relating to components - -
of other comprehensive income
OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME
TAX 278,662 11,572
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR (634,802) (961,204)
Total comprehensive income
attributable to:
Owners of the parent (624,574) (960,618)
Non-controlling interests (10,228) (586)
(634,802) (961,204)
Consolidated Statement of Financial Position
31 December 2016
2016 2015
GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 4,779,496 4,170,073
Property, plant and equipment 23,790 23,532
Loans and other financial assets 405,446 338,676
5,208,732 4,532,281
CURRENT ASSETS
Trade and other receivables 98,851 87,604
Cash and cash equivalents 505,904 1,860,662
604,755 1,948,266
TOTAL ASSETS 5,813,487 6,480,547
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 911,783 911,783
Share premium 10,900,723 10,900,723
Translation reserve 143,326 (132,534)
Share scheme reserve 109,588 149,782
Retained earnings (6,417,391) (5,534,399)
5,648,029 6,295,355
Non-controlling interests 17,667 5,143
TOTAL EQUITY 5,665,696 6,300,498
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 147,791 180,049
TOTAL LIABILITIES 147,791 180,049
TOTAL EQUITY AND LIABILITIES 5,813,487 6,480,547
Consolidated Statement of Changes in Equity
for the year ended 31 December 2016
Called
up
share Retained Share Translation
capital earnings premium Reserve
GBP GBP GBP GBP
Balance at 1 January
2015 389,009 (4,562,209) 8,346,733 (144,106)
Issue of share capital 522,774 - 2,640,702 -
Loss for the year - (972,190) - -
Equity-settled share-based
payment transactions - - (86,712) -
Other comprehensive
income - - - 11,572
Balance at 1 January
2016 911,783 (5,534,399) 10,900,723 (132,534)
Loss for the year - (913,258) - -
Other comprehensive
income - - - 288,684
Increased investment
in subsidiary - (9,928) - (12,824)
Share options expired - 40,194 - -
Balance at 31 December
2016 911,783 (6,417,391) 10,900,723 143,326
Share
Scheme Non-controlling Total
Reserve Total interests Equity
GBP GBP GBP GBP
Balance at 1 January
2015 63,070 4,092,497 5,729 4,098,226
Issue of share capital - 3,163,476 - 3,163,476
Loss for the year - (972,190) (586) (972,776)
Equity-settled share-based
payment transactions 86,712 - - -
Other comprehensive
income - 11,572 - 11,572
Balance at 1 January
2016 149,782 6,295,355 5,143 6,300,498
Loss for the year - (913,258) (206) (913,464)
Other comprehensive
income 288,684 (10,022) 278,662
Increased investment
in subsidiary (22,752) 22,752 -
Share options expired (40,194) - - -
Balance at 31 December
2016 109,588 5,648,029 17,667 5,665,696
Consolidated Statement of Cash Flows
for the year ended 31 December 2016
2016 2015
GBP GBP
Cash flows from operating
activities
Cash generated from operations (1,028,337) (958,952)
Net cash from operating activities (1,028,337) (958,952)
Cash flows from investing
activities
Purchase of intangible fixed
assets (334,044) (351,000)
Purchase of tangible fixed
assets (1,663) (22,975)
Purchase of financial assets - (332,116)
Interest received 5,726 7,275
Net cash from investing activities (329,981) (698,816)
Cash flows from financing
activities
Proceeds of share issue - 3,369,500
Cost of share issue - (234,553)
Net cash from financing activities - 3,134,947
Increase/((Decrease) in cash
and cash equivalents (1,358,318) 1,477,179
Cash and cash equivalents
at beginning of year 1,860,662 383,063
Effect of exchange rate changes 3,560 420
Cash and cash equivalents
at end of year 505,904 1,860,662
The financial information set out above does not constitute
statutory accounts as defined in section 434 of the Companies Act
2006.
The consolidated statement of financial position at 31 December
2016, the consolidated statement of profit or loss, the
consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the
Company's statutory financial statements upon which the auditor's
opinion is unqualified, includes an emphasis of matter paragraph,
and does not include any statement under Section 498 (2) or (3) of
the Companies Act 2006. The emphasis of matter concerns the raising
of finance for the opening up of the mine and construction of the
power plant.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRS), as adopted by the European Union (EU), this
announcement does not in itself contain sufficient information to
comply with IFRSs.
The statutory accounts for the year ended 31 December 2016 will
be delivered to the Registrar of Companies following the Annual
General Meeting. The statutory accounts, Notice of Annual General
Meeting and Proxy Forms will be posted to shareholders shortly and
will be available for download on the Company's website at
www.oraclecoalfields.com.
For further information:
Oracle Coalfields PLC +44 (0) 203
Shahrukh Khan 102 4807
Brandon Hill Capital Limited +44 (0)203
Oliver Stansfield 463 5000
Peterhouse Corporate Finance +44 (0)20 7220
Charles Goodfellow 9791
Grant Thornton UK LLP (Nominated
Adviser)
Salmaan Khawaja, Richard Tonthat, +44 (0) 207
Daniel Bush 373 5100
Blytheweigh
Tim Blythe, Camilla Horsfall, +44 (0) 207
Megan Ray 138 3204
Fortbridge +44 (0)7966
Matt Beale, Bill Kemmery 389196
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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