REG - Sterling Energy PLC - Annual Financial Report <Origin Href="QuoteRef">SEY.L</Origin> - Part 2

AfentraAnnouncement

14/03/2016 07:00

- Part 2: For the preceding part double click  ID:nRSN9179Ra 

and position are set out in the Operations
Review. The financial position of the Group, its cash flows and liquidity
position are described in the Financial Review. 
 
The Group has sufficient cash resources for its working capital needs and its
committed capital expenditure programme at least for the next 12 months. As a
consequence, the Directors believe that the Group is well placed to manage its
business risks successfully despite the current uncertain economic outlook. 
 
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Thus they continue to adopt the going concern basis of accounting in preparing
the annual financial statements. 
 
3.       Operating segments 
 
                                                                              Middle East                  
                                                    Africa    (Discontinued)  Total        
                                                    2015      2014            2015         2014  2015      2014      
                                                    $000      $000            $000         $000  $000      $000      
                                                                                                                     
 Statement of comprehensive income                                                                                   
 Revenue                                            5,031     15,991          -            -     5,031     15,991    
 Cost of sales                                      (6,028)   (11,873)        -            -     (6,028)   (11,873)  
 Gross (loss)/profit                                (997)     4,118           -            -     (997)     4,118     
 Impairment of E&E assets                   Note 4  (8,183)   (1,863)         -            -     (8,183)   (1,863)   
 Impairment of royalty assets                       -         (2,061)         -            -     -         (2,061)   
 Impairment of D&P assets                   Note 5  -         (3,979)         -            -     -         (3,979)   
 Accruals release                                   -         -               5            5     5         5         
 Pre-licence costs                                  (2,212)   (2,196)         -            -     (2,212)   (2,196)   
 Chinguetti cessation costs                         2,159     -               -            -     2,159     -         
 Onerous contract                                   (3,700)   (3,390)         -            -     (3,700)   (3,390)   
 Segment result                                     (12,933)  (9,371)         5            5     (12,928)  (9,366)   
 Unallocated corporate expenses                                                                  (2,310)   (2,074)   
 Loss from operations                                                                            (15,238)  (11,440)  
 Finance income                                                                                  356       398       
 Finance expense                                                                                 (1,068)   (1,276)   
 Loss before tax                                                                                 (15,950)  (12,318)  
 Tax                                                                                             -         -         
                                                                                                                     
 Loss attributable to owners of the parent                                                       (15,950)  (12,318)  
                                                                                                                     
                                                                                                                       
 
 
4.         Intangible Exploration and Evaluation ("E&E") assets 
 
                                                  
                                         Group    
                                         $000     
 Net book value at 1 January 2014        13,187   
 Additions during the year               17,102   
 Impairment for the year                 (1,863)  
 Net book value at 31 December 2014      28,426   
 Additions during the year               4,831    
 Impairment for the year                 (8,183)  
 Net book value at 31 December 2015      25,074   
                                                  
 
 
Impairment for the 2015 refers to the full impairment of the Ntem asset (2014:
Ampasindava). 
 
5.         Property, plant and equipment 
 
                                                              Computer                         
                                          Oil and Gas assets  and office equipment  Total      
 Group                                    $000                $000                  $000       
                                                                                               
 Cost                                                                                          
 At 1 January 2014                        185,802             143                   185,945    
 Additions during the year                -                   32                    32         
 At 31 December 2014                      185,802             175                   185,977    
 Additions during the year                -                   16                    16         
 At 31 December 2015                      185,802             191                   185,993    
                                                                                               
 Accumulated depreciation and impairment                                                       
 At 1 January 2014                        (180,256)           (45)                  (180,301)  
 Charge for the year                      (1,567)             (58)                  (1,625)    
 Impairment reversal for the year         (3,979)             -                     (3,979)    
 At 31 December 2014                      (185,802)           (103)                 (185,905)  
 Charge for the year                      -                   (54)                  (54)       
 Impairment for the year                  -                   -                     -          
 At 31 December 2015                      (185,802)           (157)                 (185,959)  
                                                                                               
 Net book value at 31 December 2015       -                   34                    34         
 Net book value at 31 December 2014       -                   72                    72         
 Net book value at 31 December 2013       5,546               98                    5,644      
                                                                                               
 
 
6.         Subsequent event 
 
Mauritania - Withdrawal from block C-3 
 
On 29 January 2016 it was announced that it's wholly owned subsidiary SEML had
submitted a notice of withdrawal to its joint venture partners in relation to
block C-3, offshore Mauritania. As part of the withdrawal, SEML will assign
its entire 40.5% participating interest in the production sharing contract for
block C-3, located offshore in the Islamic Republic of Mauritania to Tullow
Oil at no cost to Tullow Oil. The minimum work obligations for block C-3 have
been completed. As a result, SEML will have no additional costs associated
with the withdrawal. 
 
DEFINITIONS AND GLOSSARY OF TERMS 
 
$                                                       US dollars 
 
2006 Act                                            the Companies Act 2006, as
amended 
 
2007 LTIP                                          the 2007 Long Term
Incentive Plan 
 
1P                                                     proven reserves (both
proved developed reserves + proved undeveloped reserves). 
 
2D                                                     two dimensional 
 
2P                                                     1P (proven reserves) +
probable reserves, hence "proved AND probable." 
 
3D                                                     three dimensional 
 
3P                                                    the sum of 2P (proven
reserves + probable reserves) + possible reserves, all 3Ps "proven AND
probable AND possible." 
 
AIM                                                   AIM, a market of the
London Stock Exchange 
 
All Staff LTIP                                      the All Staff Long-Term
Incentive Plan adopted in 2009 
 
AGM                                                 Annual General Meeting 
 
Articles                                              the Articles of
Association of the Company 
 
bbl                                                    barrel, equivalent to
42 US gallons of fluid 
 
bopd                                                  barrel of oil per day 
 
boe                                                   barrel of oil
equivalent, a measure of the gas component converted into its equivalence in
barrels of oil 
 
Board                                                the Board of Directors of
the Company 
 
Combined Code or Code                     UK Corporate Governance Code 
 
Companies Act                                  the Companies Act (as amended
2006) 
 
Company                                           Sterling Energy plc 
 
CSOP                                                Company Share Option Plan
(HMRC approved share option scheme) 
 
Directors                                            the Directors of the
Company 
 
E&P                                                  exploration and
production 
 
Adjusted EBITDAX                             earnings before interest,
taxation, depreciation, depletion and amortisation, impairment, share-based
payments, provisions, and pre-licence expenditure 
 
EITI                                                    Extractive Industries
Transparency Initiative 
 
EUR                                                  the total amount of
hydrocarbons expected to be produced from the hydrocarbon accumulation over
the life of the project.  Estimated ultimate recovery is synonymous with
recoverable resource and the terms are used interchangeably. 
 
Farm-in & Farm-out                           a transaction under which one
party (farm-out party) transfers part of its interest to a contract to another
party (farm-in party) in exchange for a consideration which may comprise the
obligation to pay for some of the farm-out party costs relating to the
contract and a cash sum for past costs incurred by the farm-out party 
 
FA                                                     Funding Agreement 
 
FCA                                                  Financial Conduct
Authority 
 
FPSO                                                Floating, Production,
Storage and Offloading vessel 
 
G&G                                                  geological and
geophysical 
 
GBP                                                  pounds sterling 
 
Genel Energy                                     Genel Energy Somaliland
Limited 
 
Group                                                the Company and its
subsidiary undertakings 
 
HMRC                                               Her Majesty's Revenue and
Customs 
 
HMRC Approved Sub-Plan or               The HMRC approved sub-plan of the All
Staff LTIP 
 
HMRC Sub-Plan 
 
HSSE                                                Health, Safety, Security
and Environment 
 
hydrocarbons                                     organic compounds of carbon
and hydrogen 
 
IFRS                                                 International Financial
Reporting Standards 
 
Index                                                 FTSE 350 Index 
 
JV                                                     joint venture 
 
K                                                      thousands 
 
km                                                    kilometre(s) 
 
km2                                                   square kilometre(s) 
 
lead                                                   indication of a
potential exploration prospect 
 
London Stock Exchange or LSE          London Stock Exchange Plc 
 
m                                                      metre(s) 
 
mcf                                                    thousand cubic feet 
 
Murphy                                              Murphy Cameroon Ntem Oil
Co. Ltd 
 
NED LTIP                                           non-executive Director Long
Term Incentive Plan adopted in 2009 
 
OECD                                                Organisation for Economic
Cooperation and Development 
 
OPU                                                  Oil Protection Unit 
 
Ordinary Shares                                  ordinary shares of 40 pence
each 
 
P90                                                   the value on a
probabilistic distribution which is exceeded by 90% of the outcomes. 
 
P50                                                   the value on a
probabilistic distribution which is exceeded by 50% of the outcomes. The P50
is also the median value of the distribution. 
 
P10                                                   the value on a
probabilistic distribution which is exceeded by 10% of the outcomes. 
 
Pmean                                              the average of the values
in the probabilistic distribution between defined 'boundary conditions'.
Universally regarded as the best single value to quote or communicate for any
uncertain distribution of outcomes involved in repeated trial investigations. 
 
Panel or Takeover Panel                      the Panel on Takeovers and
Mergers 
 
Petroleum                                          oil, gas, condensate and
natural gas liquids 
 
Petroleum system                              geologic components and
processes necessary to generate and store hydrocarbons, including a mature
source rock, migration pathway, reservoir rock, trap and seal. 
 
Petronas                                            PC Mauritania 1 PTY LTD 
 
Petrosoma                                         Petrosoma Limited (joint
venture partner in Somaliland) 
 
Premier                                             Premier Oil 
 
Pre Stack Depth Migration                  process by which seismic events are
geometrically re-located  in space and depth to the location the event
occurred in the subsurface 
 
Prospect                                            an area of exploration in
which hydrocarbons have been predicted to exist in economic quantity. A group
of prospects of a similar nature constitutes a play. 
 
PSA                                                  production sharing
agreement 
 
PSC                                                  production sharing
contract 
 
Pura Vida                                          Pura Vida Mauritius 
 
RA                                                    Royalty Agreement 
 
Reserves                                           reserves are those
quantities of petroleum anticipated to be commercially recoverable by
application of development projects to known accumulations from a given date
forward under defined conditions. Reserves must satisfy four criteria; they
must be discovered, recoverable, commercial and remaining based on the
development projects applied. Reserves are further categorised in accordance
with the level of certainty associated with the estimates and may be
sub-classified based on project maturity and/or characterised by development
and production status 
 
Reservoir                                           a porous and permeable
rock capable of containing fluids 
 
Seismic                                             data, obtained using a
sound source and receiver, that is processed to provide a representation of a
vertical cross-section through the subsurface layers 
 
SESP                                                Sterling Energy plc share
price 
 
Shares                                              40p ordinary shares 
 
Shareholders                                      ordinary shareholders of 40p
each in the Company 
 
SMHPM                                            Société Mauritanienne Des
Hydrocarbures et de Patrimoine Minier 
 
Subsidiary                                         a subsidiary undertaking as
defined in the 2006 Act 
 
Tcf                                                     Trillion cubic feet 
 
TSR                                                  total shareholder return
(End Share Price - Opening Share Price/Opening Share Price) plus (Sum of
Dividends per Share/Opening Share Price) 
 
United Kingdom or UK                        the United Kingdom of Great
Britain and Northern Ireland 
 
UK Corporate Governance Code           Formerly the Combined Code, sets out
standards of good     practice in relation to Board leadership and
effectiveness, remuneration, accountability and relations with shareholders 
 
United States or US                            the United States of America 
 
Working Interest or WI                        a Company's equity interest in a
project before reduction for royalties or production share owed to others
under the applicable fiscal terms 
 
This information is provided by RNS
The company news service from the London Stock Exchange