Source - RNS
RNS Number : 2731L
San Leon Energy PLC
30 September 2016
 

30 September 2016

 

San Leon Energy Plc

("San Leon" or "the Company")

 

Interim Results and Nigerian Operational Update

 

San Leon Energy, the AIM listed company focused on oil and gas development and appraisal in Africa and Europe, today announces its interim results for the six months ended 30 June 2016, and provides an update on its interest in the OML 18 block, onshore Nigeria.

 

Highlights:

 

Operational

·     Current OML 18 gross production rates are 54,000 bopd of oil and 55 mmscf/d of gas;

·     Considerable on-ground resources deployed by Eroton to carry out the stated development activities to increase production of OML 18;

·     Drilled and tested a second successful gas well, Rawicz-15, on the Rawicz field, onshore Poland; and

·     Continued asset optimisation and cost reduction strategy, resulting in relinquishing certain non-core Polish licences, and six Spanish licence applications.

 

 

Corporate

·     OML 18 Production Agreement scheduled to complete today, following shareholder approval of the Acquisition and Placing of  378,400,000 Ordinary Shares at 45 pence to raise £170.3 million on 20 September 2016;

·     The Company announced a capital distribution policy, whereby 50% of free cash flow from Nigeria will be returned to shareholders via either share buybacks or dividends for five years;

·     On 21 September 2016, the Board was restructured in view of the OML 18 Production Agreement  with Mutiu Sunmonu, former Managing Director of Shell Nigeria, appointed Non-Executive Chairman, Oisin Fanning assuming the role of Chief Executive Officer, Joel Price and Alan Campbell appointed Executive Directors, Ewen Ainsworth appointed Finance Director and Nick Butler and Mark Phillips appointed as Non-Executive Directors; 

·     Paul Sullivan and Daniel Martin resigned from the Board effective on 21 September 2016, and Piotr Rozwadowski resigned on 5 May 2016; and

·     SP Angel was appointed as Nominated Advisor and joint broker, and Whitman Howard was appointed as joint broker.

 

 

Financial

·     Equity placing to raise approximately £170.3 million (gross), completed after the reporting period, to fund the OML 18 transaction, pay creditors, and provide working capital;

·     Loss for the period was €6.23m (2015: loss of €8.26m);

·     Cash and cash equivalents as at 30 June 2016 of €0.7m (30 June 2015: €0.75m);

 

 

Chief Executive Officer, Oisin Fanning, commented:

 

"The Company has succeeded in finding, funding and executing what we believe is an exceptional deal for shareholders, despite a challenging sector environment.  We expect the OML 18 transaction to underpin the future cash flow of the Company with significant returns to shareholders, redeveloping a world-class producing asset in a country where the oil and gas industry benefits from transactions being in US Dollars and there being no restrictions to repatriation of funds.

 

San Leon is partnering closely with Eroton to execute the redevelopment of OML 18.  The operational activity listed in this report demonstrates the strong breadth and depth of the technical work being carried out and planned. We look forward to reporting the results of the Nigerian work programme in due course."

 

 

Enquiries:

 

San Leon Energy plc
Oisin Fanning, Executive Chairman

 

+353 1291 6292

Brandon Hill Capital Limited
Joint Broker

Oliver Stansfield
Jonathan Evans

 

+44 (0) 20 3463 5000

SP Angel Corporate Finance LLP
Nominated Adviser and Joint Broker

Ewan Leggat
Richard Morrison

 

+44 (0) 20 3470 0470

Whitman Howard Limited
Joint Broker

Nick Lovering
Francis North

 

+44 (0) 20 7659 1234

Vigo Communications
Financial Public Relations

Chris McMahon
Alexandra Roper

 

+44 (0) 20 7830 9700

Plunkett Public Relations
Sharon Plunkett

 

+353 (0) 1 280 7873

 

www.sanleonenergy.com 

 

Glossary

 

Bcf

billion cubic feet

bopd

barrels of oil per day

boepd

barrels of oil equivalent per day

gross

production at the well head (prior to deduction of pipeline losses)

mmbbls

million barrels of oil

mmscf/d

million standard cubic feet per day

slickline spread

a low-cost wireline unit, tools, and crew used to perform in-well work

 

 

 

 

Chairman's Statement

 

It gives me great pleasure to provide my first statement as Non-Executive Chairman of San Leon at such a pivotal moment in the Company's life, following my appointment on 21 September 2016. In one move, the Company has become a very different entity: stronger, more focused, and with several cash flow streams expected.

 

 

Corporate

 

The year to date has been dominated by the OML 18 transaction, and the associated $220 million fund raising. The ability for the Company to effect such a deal is testament to the quality of the OML 18 asset, the deal structure, the support of shareholders and to the operational capability of the Company. The details of the transaction are best understood by referring to the Admission Document.

 

Your Company now has a new Board, fit-for-purpose for what is a refocused entity.

 

 

Nigerian Operational Update

 

The Company is taking an active role as a partner in the OML 18 asset - an asset I know very well from my time at Shell. Eroton, as Operator, continues to progress redevelopment of the fields, and a summary of the main areas of operational focus over the coming months is provided below.

 

Considerable on-the-ground resources have been, and continue to be, deployed to carry out the activities described in the Competent Persons Report prepared by PetroVision Energy Services Limited, and to realise the early and sustainable production increases described therein. A contract for two electric line crews has been signed, and the crews are being mobilised. This will enable water saturation logs to be obtained, allowing selection, perforation and production of new intervals in existing wells. A slickline spread is operating at each of the Alakiri and Cawthorne Channel fields, conducting producibility tests and gathering pressure data, and a wellhead maintenance crew is assigned to each such spread. Coiled tubing work is being performed on selected maintenance and production kick-off well candidates, while a well fishing crew will be mobilized imminently to rehabilitate wells requiring their services.

 

Additional fields, and parts of fields, are also a priority to bring onstream. Light workover activity on wells in the Krakama field is nearing completion, with the aim of bringing the Krakama field into production by early November 2016. The Orubiri field is now being produced through bulk lines tied back to the Alakiri flowstation, and scoping work for an Early Production Facility ("EPF") is being carried out for the Buguma field to bring it online.

 

Success is not just about production rates, but also in ensuring competitive costs and a flow of opportunities to add to reserves. To that end, in-field dehydration units are being planned, to reduce the operational cost of transporting water in the export pipelines. Additionally, an Exploration Manager has been appointed at Eroton, with a remit to convert the considerable exploration upside on the block (471 mmbbls of oil & 1,572 Bcf of gas on a risked basis, only considering the top 20 current prospects) to production.

 

The current OML 18 gross oil production rate is approximately 54,000 bopd, and gas production is approximately 55 mmscf/d; a gross production total of around 63,000 boepd.

 

Eroton continues to accrue cash from OML 18 operations into the Debt Service Reserves Account ("DSRA") attached to the existing Reserves Based Lending ("RBL") facility. Cash flow to San Leon will begin once sufficient funds have accrued in that account, whereupon the Company will initiate its policy of returning 50% of Nigerian free cash flow to shareholders. The Company is well-advanced in reviewing the steps required to effect a capital reorganization which is required to allow such distributions.

 

 

Other Operations

 

Palomar, operator of the Rawicz field, onshore Poland, continues to progress the development of the field.  We anticipate updating the market further in the near-term.

 

With the focus of operations shifting to Nigeria and away from historical international activities focused on exploration, the Company has taken the prudent steps to exit a number of peripheral assets to reduce costs and allow concentration of effort in the right place.

 

 

Financial Review

 

Revenue for the six months to 30 June 2016 was €0.2m compared with €Nil for the six months to 30 June 2015. San Leon generated a loss before tax of €6.23m for the six months to 30 June 2016, compared with loss before tax of €8.26m in the six months to 30 June 2015. Administration costs increased for the 6 month period to €5.7m (2015 H1: €4.4m). Loss per share for the period is 14.78 cent per share (2015 H1: loss per share of 32.6 cent per share).

 

Cash and cash equivalents including restricted cash at 30 June 2016 amounted to €2m (30 June 2015: €2.2m and 31 December 2015: €2.3m).

 

 

Outlook

 

San Leon is well-positioned to generate significant cash flow through three Nigerian revenue streams (loan principal and interest repayment on $173 million, dividends from San Leon's indirect shareholding in OML 18, and from the provision of various workover, drilling and facilities services). The Nigerian asset is world-class, we have a strong deal structure for San Leon, and we are partnering with proven and successful businesses. Operational activity in non-core assets has been minimized in order to preserve capital, in accordance with the Company stated strategy. I look forward to being able to update shareholders on progress as plans are executed in Nigeria.



 

 

The following financial information on San Leon Energy Plc represents the Group's interim results for the 6 months ended 30 June 2016.

 

 

Consolidated income statement  

For the six months ended 30 June 2016

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000






Revenue


187

1

145

Cost of sales                 


-

(1)

(1)

Gross profit


187

-

       144






Administrative expenses


(5,663)

(4,365)

(17,049)

Impairment of exploration and evaluation assets


-

-

(123,659)

Impairment of equity accounted investments


-

-

(43,245)

Decommissioning of wells


-

-

(4,291)

Arbitration award


-

-

(20,561)

Loss from operating activities


(5,746)

(4,365)

(208,661)






Finance expense


(754)

(3,885)

(9,379)

Finance income


1

-

4

Share of loss of equity-accounted investments


(2)

(6)

(18)






Loss before income tax


(6,231)

(8,256)

(218,054)






Income tax expense


1

-

4,688






Loss for the period attributable to equity holders of the Group


 

(6,230)

 

(8,256)

 

(213,366)

 

 

 




Loss per share (cent)





Basic loss per share


(14.78)

(32.60)

(506.40)

Diluted loss per share


(14.78)

(32.60)

(506.40)






 

Adjusted to reflect the share consolidation in July 2015.

 

 

 

 

 

 

 

 

Consolidated statement of other comprehensive income 

for the six months ended 30 June 2016

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

Loss for the period


(6,230)

(8,256)

(213,366)






Items that may be reclassified subsequently to the income statement





Foreign currency translation

differences - foreign operations


633

1,403

(3,320)

Fair value movements in available-for-sale financial assets


4,658

3,498

4,658    

Deferred tax on fair value movements in available-

for-sale financial assets


(1,615)

-

(1,615)    

Total comprehensive loss for the period


(2,554)

(3,355)

                 (213,643)







Consolidated statement of changes in equity

For the period ended 30 June 2016

 


 

 

Share

capital

reserve

 

Share

premium

reserve

 

Currency translation

Reserve

Share based payment

reserve

 

 

Fair

value reserve

 

 

Retained earnings

 

 

 

Attributable to equity holders

 

 

 

Non-controlling interest

 

 

Total


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2016

127,145

205,126

(3,891)

 

 

12,049

2,966

 

 

(266,332)

 

 

77,063

 

 

-

77,063

Total comprehensive income for period









 

Other comprehensive income










Foreign currency translation differences - foreign operations

-

-

634

-

 

-

-

634

-

634

Fair value movements in available-for-sale financial assets

-

-

-

-

 

 

(1,050)

-

(1,050)

-

(1,050)

Deferred tax on fair value movements in available-for-sale financial assets

-

-

-

-

 

 

314

-

314

-

314

Total comprehensive income for period

-

-

634

-

 

 

(736)

(6,230)

(6,332)

-

(6,332)



 

 








Transactions with owners recognised directly in equity








 

Contributions by and distributions to owners







 

Issue of shares for cash

-

-

-

-

-

-

-

-

-

Issue of advisor shares

-

-

-

-

-

-

-

-

-

Share based payment

-

-

-

458

-

-

458

-

458

Effect of share options cancelled

-

-

-

-



-

-

-

Change in ownership interests

Shares issued to Realm shareholders on conversion of exchangeable shares

-

-

-

-

 

 

 

-

-

-

-

-

Total transactions with owners

-

-

-

458

 

-

-

458

-

458

Balance at 30 June 2016

127,145

205,126

(3,257)

12,507

2,230

(272,562)

71,189

-

71,189

 

 

 

 

 

 










 

 

Consolidated statement of changes in equity

For the period ended 30 June 2016

 





 


 

 

Share

capital

reserve

 

Share

premium

reserve

 

Currency translation

In Group

Share based payment

reserve

 

 

Fair

value reserve

 

 

Retained earnings

 

 

 

Attributable to equity holders

 

 

 

Non-controlling interest

 

 

Total


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2015

126,779

164,100

(571)

11,425

 

(77)

(50,869)

 

250,787

 

2

250,789

Total comprehensive income for period









 

Profit for the period

-

-

-

-

-

(8,256)

(8,256)

-

(8,256)

Other comprehensive income










Foreign currency translation differences - foreign operations

-

-

1,403

-

 

-

-

1,403

-

1,403

Fair value movements in available-for-sale financial assets

-

-

-

-

 

3,498

-

3,498

-

3,498

Total comprehensive income for period

-

-

1,403

-

 

 

3,498

(8,256)

(3,355)

-

(3,355)










 

Transactions with owners recognised directly in equity









 

Contributions by and distributions to owners

 







 

Share based payment

-

-

-

412

-

-

412

-

412

Effect of share options forfeit

-

-

-

-

-

-

-

-

-

Shares issued to Realm shareholders on conversion of exchangeable shares

1

1

-

-

-

-

2

(2)

-

Total transactions with owners

1

1

-

412

-

-

414

(2)

412

Balance at 30 June 2015

126,780

164,101

832

11,837

 

3,421

(59,125)

247,846

-

247,846

   

 

 

 

 

 

Consolidated statement of changes in equity

For the period ended 30 June 2016


 

 

Share

capital

reserve

 

Share

premium

reserve

 

Currency translation

In Group

Share based payment

reserve

 

 

 

 

Fair

value reserve

 

 

Retained earnings

 

 

 

 

Attributable to equity holders

 

 

 

 

Non-controlling interest

 

 

Total


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2015

126,779

164,100

(571)

11,425

 

 

(77)

(50,869)

 

 

250,787

 

 

2

250,789

Total comprehensive income for year









 

Loss for the year

-

-

-

-

-

(213,366)

 

(213,366)

-

(213,366)

Other comprehensive income










Foreign currency translation differences - foreign operations

-

-


(3,320)

-

 

-

-

 

(3,320)

 

-

(3,320)

Fair value movements in available-for-sale financial assets

-

-

-

-

 

4,658

-

 

4,658

 

-

4,658

Deferred tax on fair value movements in available-for-sale financial assets

-

-

-

-

 

(1,615)

-

 

(1,615)

 

-

(1,615)

Total comprehensive income for year

-

-

(3,320)

-

 

3,043

(213,366)

 

(213,643)

 

-

(213,643)

Transactions with owners recognised directly in equity









 

Contributions by and distributions to owners

 







 

Issue of shares for cash

363

40,801

-

-

 

-

(6,015)

 

35,149

 

-

 

35,149

Issue of advisor shares

2

224

-

-

-

-

226

-

Share based payment

-

-

-

4,542

-

-

4,542

-

4,542

Effect of share options cancelled

-

-

-

(3,918)

-

3,918

-

-

-

Change in ownership interests










Shares issued to Realm shareholders on conversion of exchangeable shares

1

1

-

-

-

-

2

(2)

-

Total transactions with owners

366

41,026

-

624

 

-

(2,097)

39,919

(2)

39,917

Balance at 31 December 2015

127,145

205,126

(3,891)

 

 

12,049

2,966

 

 

(266,332)

 

 

77,063

 

 

-

77,063

                   


Consolidated statement of financial position

As at 30 June 2015

 


Notes

Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000

Assets





Non-current assets





Exploration and evaluation assets

2

47,761

168,476

47,532

Equity accounted investments

3

11,417

44,602

11,375

Property, plant and equipment

4

9,825

10,484

10,266

Other non-current assets


277

833

833

Financial assets

5

51,503

51,392

52,553



120,783

275,787

122,559

 

Current assets





Inventory


315

333

329

Trade and other receivables

6

6,379

9,903

6,546

Other financial assets

7

1,261

1,434

1,370

Cash and cash equivalents

8

729

746

913



8,684

12,416

9,158

 

Total assets


129,467

288,203

 

131,717

 

Equity and liabilities





Equity





Called up share capital

12

127,145

126,779

127,145

Share premium account

12

205,126

164,101

205,126

Share based payments reserve


12,507

11,837

12,049

Currency translation reserve


(3,257)

832

(3,891)

Fair value reserve


2,230

3,421

2,966

Retained earnings


(272,562)

(59,125)

(266,332)

Attributable to equity holders of the Group


71,189

247,845

77,063

Non-controlling interest


-

-

-

Total equity


71,189

247,845

77,063






Non-current liabilities





Provisions

11

24,437

-

24,437

Deferred tax liabilities


8,772

12,199

9,086



33,209

12,199

33,523






Current liabilities





Trade and other payables

9

16,481

14,975

14,583

Drawdown facility

10

6,748

11,703

4,778

Provisions

11

1,840

1,481

1,770



25,069

28,159

21,131






Total liabilities


58,278

40,358

54,654

 

Total equity and liabilities


129,467

288,203

 

        131,717

 

 

Consolidated statement of cash flows

For the six months ended 30 June 2015

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000

Cash flows from operating activities





Loss before tax - Continuing operations


(6,230)

(8,256)

(213,366)

Adjustments for:





Depletion and depreciation


418

463

1,005

Finance expense


754

3,885

9,379

Finance income


(2)

-

(4)

Share based payments charge


459

-

4,278

Foreign exchange


1,080

1,013

(591)

Income tax


(1)

-

(4,688)

Impairment of exploration and evaluation assets - continuing operations


-

-

123,659

Impairment of equity accounted assets - continuing operations


-

-

43,245

Arbitration award


-

-

20,561

Decommissioning of wells


-

-

4,291

(Increase) in inventory


13

(13)

(8)

Non-current assets


556

-

-

Decrease in trade and other receivables


142

441

3,988

Increase in trade and other payables


2,079

4,010

3,490

Share of loss of equity-accounted investments


2

6

18

Tax repaid/(paid)


-

1

(112)

 

Net cash flows in operating activities


(730)

1,550

 

(4,855)

 

Cash flows from investing activities





Expenditure on exploration and evaluation assets


(716)

(3,685)

(20,473)

Purchases of property, plant and equipment


(21)

(73)

(434)

Interest received


2

(4)

-

Decrease in restricted cash


83

-

99

Advances to equity accounted investments


(45)

(110)

(2,115)

Proceeds of farm-out arrangement


-

-

2,000

 

Net cash (used)/generated from investing activities


(697)

(3,872)

(20,923)

 

Cash flows from financing activities





Proceeds of issue of shares


-

-

41,390

Cost of issue of shares


-

-

(6,015)

Proceeds from drawdown of other loans


1,851

4,672

6,106

Repayment of other loans


-

(3,132)

(7,805)

Movement in director loan


151

-

202

Interest and arrangement fees paid


(754)

(18)

(9,116)

Net cash generated/(used) in financing activities


1,248

1,522

24,762

 

Net increase in cash and cash equivalents


(179)

(800)

 

(1,016)

Effect of foreign exchange fluctuation on cash and cash equivalents


(5)

(263)

120

Cash and cash equivalents at start of period


913

1,809

1,809

 

Cash and cash equivalents at end of period


729

746

913

 

 

Notes to the Interim Financial Information

 

1.    Basis of preparation and accounting policies

 

The Group interim financial information has been prepared in accordance with International Financial Reporting Standards and the accounting policies adopted are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2015. The interim financial information was approved by the Board of Directors on 30 September 2016.

 

The interim consolidated financial statements do not constitute statutory financial statements and therefore do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2015 which are available on the Group's website www.sanleonenergy.com.

 

The interim consolidated financial statements are presented in Euro ("€").

 

 

2.    Exploration and evaluation assets

 

Cost and net book value


 

Un-audited




30/06/16




€'000






At 1 January 2015


163,375


Additions


20,473


Currency translation adjustment


(2,632)


Impairment of exploration assets


(123,659)


Proceeds from farm out arrangement


(2,000)


Transfer to equity accounted investments


(8,025)


At 31 December 2015


47,532


Additions


717


Exchange rate adjustment


(488)


 

At 30 June 2016


47,761


 

An analysis of exploration assets by geographical area is set out below:

 



30/06/2016

€'000






Poland


12,372


Morocco


27,184


Spain


8,205


Total


47,761


 

 

 

The Directors have considered the licence, exploration and appraisal costs capitalised in respect of its exploration and evaluation assets, which are carried at historical cost. Those assets have been assessed for impairment and in particular with regard to remaining licence terms, likelihood of licence renewal, likelihood of further expenditures and on-going appraisals for each year. The directors are satisfied that there are no current indications of impairment, but recognise that the future realisation of these exploration and evaluation assets is dependent on future successful exploration and appraisal activities and the subsequent economic production of oil and gas reserves.

 

 

3.    Equity accounted investments 

 


Un-audited

Un-audited

Audited


30/06/16

30/06/15

31/12/15


€'000

€'000

€'000

 

Opening balance  

 

11,375

 

44,483

 

44,483

Transfer from exploration and evaluation assets

-

-

8,025

Impairment of equity accounted investments

-

-

(43,245)

Exchange rate adjustment

-

-

2,115

Net advances to equity accounted investments

44

125

(18)

Share of loss of equity accounted investments

            (2)

(6)

15





Closing balance

11,417

44,602

11,375

 

 

 

4.    Property, plant and equipment 

 


Plant & equipment

€'000

Assets under construction

€'000

Office equipment

€'000

Motor vehicles

€'000

Total

€'000

Cost

At 1 January 2015

5,340

8,506

1,126

467

15,439

Additions

-

514

-

-

514

Currency translation adjustment

12

-

-

-

12

Disposals

-

-

(40)

(39)

(79)

 

At 31 December 2015

5,352

9,020

1,086

428

15,886

Additions






Exchange rate adjustment

(207)

29

(34)

(38)

(250)

 

At 30 June 2016

5,145

9,049

1,052

390

15,636







Depreciation






At 1 January 2015

3,445

-

837

325

4,607

Currency translation adjustment

8

-

-

-

8

Charge for year

839

-

118

48

1,005

 

At 31 December 2015

4,292

-

955

373

5,620

Exchange rate adjustment

(167)

-

(7)

(15)

(189)

Charge for period

357

-

23

-

380

 

At 30 June 2016

4,482

-

971

358

5,811







Net book value






At 30 June 2016

663

9,049

81

32

9,825

 

At 31 Dec 2015

1,060

9,020

131

55

10,266

 

 

Asset under construction relates to the Company's Oil Shale Project in Morocco.

 

 

 

5.    Financial assets 

 




 

 

Barryroe 4.5%

net profit

interest (i)

€'000

 

 

 

Quoted

shares (ii)

€'000

 

 

Unquoted

shares

(iii)

€'000

 

 

 

Total

 

€'000

Cost

At 1 January 2015



 

42,123

 

412

 

5,360

 

47,895

Fair value movement



4,895

(237)

-

4,658

At 31 December 2015



47,018

175

5,360

52,553

Fair value movement



              

(953)

 

(97)

 

-

 

(1,050)

 

At 30 June 2016



 

46,065

 

78

 

5,360

 

51,503








At 30 June 2015



45,707

325

5,360

51,392

 

(i)         Barryroe - 4.5% net profit interest

 

In December 2011, San Leon Energy assigned its 30% working interest in Standard Exploration Licence 1/11 ("Licence" or "Barryroe") in the Celtic Sea, Ireland to Providence Resources Plc ("Providence") in exchange for a 4.5% Net profit interest ("NPI") in the full field. Under the terms of the arrangement, San Leon Energy will not pay any further appraisal or development costs on the Licence. The Directors have estimated the fair value of this NPI by reference to a third party evaluation report of contingent resources and cash flows prepared by Netherland Sewell & Associates Inc. (NSAI) in July 2013 for Providence.

 

NSAI reported that the Basal Wealden oil reservoir has an estimated 2C in-place gross on-block volume of 761 MMBO with recoverable resources of 261 MMBO and 187 BCF of associated gas, based on a 35% oil recovery factor. In July 2013, NSAI also provided an estimate of the cash flows attributable to Providence's net interest from the Basal Wealden oil reservoir only. It estimated Providence's net present value at USD 2.63 billion in the 2C case (estimated recoverable resources of 266 MMBO and 187 BCF of associated gas) at a 10% discount rate.

 

Further details are available on the Providence website. Further information has also been made available by Providence and other sources regarding a revised development plan or development costs which are key inputs into the valuation model.

 

As San Leon is not the operator of this licence, the Group does not have the ability to commission an independent technical evaluation of the licence area. Therefore, the directors believe that the NSAI report, when coupled with other information released by Providence and adapted for certain changes in the market, gives the basis for the best estimate of fair value at year end.

 

The fair value movement relates to currency adjustments.

 

(ii)        Amedeo Resources plc

 

In 2014, the Company purchased 71,225,000 ordinary shares in Amedeo Resources plc, a company listed on

the Alternative Investment Market in London, for a total consideration of €1,329,349. The market value of the shares at 30 June 2016 was €77,593.

 

(iii)       Ardilaun Energy Limited

 

As part of the consideration for the sale of Island Oil & Gas Limited to Ardilaun Energy Limited ("Ardilaun"). Ardilaun agreed to issue shares equivalent to 15% of the issued share capital of Ardilaun.

 

 

6.    Trade and other receivables



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000

Amounts falling due within one year:

Trade receivables from joint operating partners


 

75

 

137

 

196

VAT and other taxes refundable


711

 989

927

Other debtors


5,412

8,167

5,151

Prepayments and accrued income


181

611

272



6,379

9,904

6,546

 

 

 

7.    Other financial assets



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000






Restricted cash at bank


1,261

1,434

1,370



1,261

1,434

1,370

 

Restricted cash at bank also includes deposit accounts held in support of bank guarantees required under the Moroccan exploration licences, Zag and Tarfaya held by the Group.

 

 

8.            Cash and cash equivalents

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000






Cash and cash equivalents


729

746

913



729

746

913

 

 

9.    Trade and other payables

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000

Current





Trade payables


11,478

8,312

10,618

PAYE / PRSI


644

796

306

Other creditors


2,374

3,971

1,437

Accruals


1,985

1,896

2,020

Directors Loan


-

-

202



16,481

14,975

14,583

 

 

10.  Drawdown facility

 



Un-audited

Un-audited

Audited



30/06/16

30/06/15

31/12/15



€'000

€'000

€'000

Current





Drawdown facility


6,748

11,703

4,778



6,748

11,703

4,778

 

 

11.  Provisions

 




 

 

 

Decommissioning

€'000

 

 

 

Arbitration

€'000

 

 

 

Other

€'000

 

 

 

Total

€'000

Cost

At 1 January 2015



 

-

 

-

 

1,457

 

1,457

Provision during the year



4,291

20,561

-

24,852

Exchange rate adjustment



-

-

(102)

(102)

At 31 December 2015



4,291

20,561

1,355

26,207

Exchange rate adjustment



               -

-

70

70

At 30 June 2016



4,291

20,561

1,425

26,277








At 30 June 2015



-

-

1,481

1,481








Current



415

-

1,425

1,840

Non-current



3,876

20,561

1,425

24,437















 

 

Decommissioning

The provision for decommissioning costs is recorded at the value of the expenditures expected to be required to settle the Group's future obligations on the decommissioning of previously drilled wells.

 

Arbitration

Aurelian Oil & Gas Limited ("Aurelian") and a number of other subsidiaries (the 'subsidiaries') have been unsuccessful in their appeal against the findings of the International Court of Arbitration of the International Chamber of Commerce ("ICC"), in relation to an award dated 21 May 2015 in an arbitration between the subsidiaries and Avobone N.V. and Avobone Poland B.V. The subsidiaries appealed to the UK Commercial Court in October 2015 to set aside the ICC's findings and award. The findings of the Commercial Court, received by the Company on 4 February 2016 but not conclusive until 11 February 2016 were that the subsidiaries' appeal was dismissed. Accordingly, the award has been provided for in full.

 

Other

Certain Realm Energy International Corporation shareholders exercised rights of dissent under Canadian law not to accept the terms of acquisition in 2011. Under Canadian law, these dissenting shareholders are eligible to receive a cash payment equal to the fair value of their shareholding at acquisition. The provision represents the Directors' estimate of the cash consideration to be paid to those shareholders taking account of the market price of the Realm shares at acquisition.

 

 

12.  Share capital

 


 

Number of New Ordinary shares

€0.01 each

Number of Deferred shares

€0.0001 each

'm

 

 

Number of Ordinary shares

€0.05 each

 

 

Authorised equity

'000

Authorised equiry





At 1 January 2015

-

-

3,100,000,000

155,000

Consolidation and subdivision

15,500,000,000

1,265,259

(3,100,000,000)

-

At 31December 2015

15,500,000,000

1,265,259

-

155,000

2016 Transactions

-

-

-

-

At 30 June 2016

15,500,000,000

1,265,259

-

155,000
















 

                                                                                                                                

Issued share capital

 

 

Number of new Ordinary Shares

€0.01 each

 

Number of Deferred Ordinary Shares

€0.0001 each 'm

 

 

 

 

No. Ordinary Shares

€0.05 each

 

 

 

 

Share  capital

€'000

 

 

 

 

Share   premium

€'000







At 1 Jan 2015

-

-

2,535,572,680

126,779

164,100

Issue of shares

-

-

17,295

1

1

Consolidation and subdivision

25,355,899

1,265,259

(2,535,589,975)

-

-

Issue of shares to non-controlling interest

-

-

-

-

-

Issue of shares on placing

36,250,000

-

-

363

40,801

Issue of advisor shares on placing

203,153

-

-

2

224

At 31 December 2015

61,809,052

1,265,259

-

127,145

205,126

2016 transactions

-

-

-

-

-

At 30 June 2016

61,809,052

1,265,259

-

127,145

205,126

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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