REG - Sterling Energy PLC - Results for the six months ending 30 June 2014 <Origin Href="QuoteRef">SEY.L</Origin> - Part 1
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RNS Number : 6735M
Sterling Energy PLC
18 July 2014
18 July 2014
STERLING ENERGY PLC
Results for the six months ending 30 June 2014
Sterling Energy Plc ("Sterling", the "Company" or the "Group"), (Ticker
Symbol: SEY), the AIM listed upstream oil and gas company with interests in
Africa today announces its results for the six month period ending 30 June
2014.
Summary
§ Cash as at 30 June 2014 of $110.9 million ($109.8 million net of partner
funds), no debt.
§ Group turnover of $9.1 million (H1 2013: $10.6 million).
§ Profit after tax of $1.7 million (H1 2013: $1.8 million).
§ Average net Group production of 436 bopd (H1 2013: 534 bopd).
§ EBITDA of $4.7 million (H1 2013: $5.3 million).
§ In the Ntem concession, a large deep water block offshore Cameroon, the
Bamboo-1 exploration well was spudded on 9 February 2014. The well reached a
total drilled depth of 4,747 m, however no commercial hydrocarbons were found
and the well has been plugged and abandoned. The data from the well will be
used to assess the remaining prospectivity of this large deep-water block
which covers some 2,319 km2. The current phase of the Ntem concession runs to
April 2015 with no outstanding work commitments; there is an option to extend
the exploration term by a further two years.
§ In Somaliland, Sterling's interest in the large onshore block is carried by
Genel Energy Somaliland Limited ("Genel") for the costs of all exploration
activities during the Third and Fourth Periods of the Odewayne Production
Sharing Contract ("PSC"). The Third Period expires in November 2016, with an
outstanding minimum work obligation of 500 km of 2D seismic, while the Fourth
Period expires in May 2018, with a minimum work obligation of 1,000 km of 2D
seismic and one exploration well. Operations in Somaliland have been delayed
while the Government of the Republic of Somaliland establishes a trained and
equipped Oilfield Protection Unit ("OPU") that can provide the level of
security required by the in-country operators so that future seismic and
drilling operations can be conducted safely. The Third Period of the PSC was
recently extended by two years in order to allow time for the OPU to be
established. The OPU is expected to be operational in 2015.
§ In Madagascar, Sterling is proceeding with a 3D seismic programme on the
Ambilobe block, which is expected to commence late 2014. The costs of the 3D
seismic campaign, up to a maximum of $15 million, are carried by our joint
venture partner Pura Vida Mauritius ("Pura Vida"). The Ambilobe PSC, awarded
in 2004, is in Phase 2 of the Exploration Period; Phase 2 was recently
extended to September 2015. With respect to the Ampasindava block, the Company
expects the large Sifaka prospect to be drilled in 2015 or 2016. The
Ampasindava PSC, awarded in 2004, is in Phase 3 of the Exploration Period;
Phase 3 was recently extended to September 2015.
§ In the Chinguetti field, offshore Mauritania, production performance was
consistent with the recently observed lower decline rate.
For further information contact:
Sterling Energy plc (+44 20 7405 4133)
Alastair Beardsall, Chairman
Peel Hunt LLP (+44 20 7418 8900)
Andy Crossley
Richard Crichton
Ross Allister
Chairman's Statement
In January 2014 the joint venture partners lifted force majeure for the Ntem
concession and shortly afterwards Sterling announced the spud of the Bamboo-1
exploration well. The well was designed to test the prospectivity of the
Bamboo structure estimated by Sterling to potentially contain some 450 million
barrels of oil equivalent. The well was drilled, safely, to a total depth of
4,747 metres but failed to identify any commercial hydrocarbons within the
well-developed sands penetrated by the well. The well was subsequently plugged
and abandoned. Sterling is working with Murphy Cameroon Ntem Oil Co. Ltd
("Murphy"), our joint venture partner,to interpret the new sub-surface data
acquired from the Bamboo-1 well to define the remaining potential of the large
Ntem offshore block.
In December 2013 Sterling completed the acquisition of an initial 10% interest
in the PSC for the Odewayne block, located onshore Somaliland, and has
subsequently completed two further transactions, in January and May 2014, to
acquire an additional 30%. Sterling now holds a 40% carried interest in the
Odewayne PSC, with the cost of the exploration work programme for Periods 3
and 4 under the Odewayne PSC paid by Genel Energy Somaliland Limited. Field
activity on the Odewayne block has been delayed while the Government of
Somaliland establishes its Oilfield Protection Unit to provide the security
required for operations to be undertaken safely. The Government has recognised
this delay and granted a two year extension to the work periods under the
PSC.
During the period to 30 June 2014, the Chinguetti field, offshore Mauritania,
produced oil at an average rate of 436 barrels per day, net to Sterling. The
positive cash flow from Sterling's share of production exceeds the Company's
general and administration costs and the surplus adds to our working capital.
Sterling benefits from a strong balance sheet, with $110.9 million of cash,
and no debt. The addition of new ventures remains a high priority and the
recent acquisition of the 40% carried interest in the Odewayne PSC is evidence
that patience is one of the many key skills required in sourcing potentially
value accretive projects at a competitive cost.
Alastair Beardsall
Chairman
18 July 2014
Operations Review
Cameroon - Ntem
The Ntem concession area is a large, deep water block in the prospective
southern Douala/Rio Muni Basin, offshore Cameroon, and is well placed with
respect to both Tertiary and Upper Cretaceous plays.
The Company holds a 50% non-operated working interest in the Ntem concession,
following the introduction in 2011 of Murphy, a wholly-owned subsidiary of
Murphy Oil Corporation, as a 50% working interest partner and operator. As
consideration, Murphy paid a contribution towards Sterling's past costs and is
fully funding joint operations in relation to the current phase of
exploration.
The Ntem concession was put under force majeure in June 2005 as a result of
overlapping maritime border claims by the Republic of Cameroon and the
Republic of Equatorial Guinea.
The border claims remain unresolved but Sterling and Murphy agreed, together
with Société Nationale des Hydrocarbures ("SNH"), the national oil company of
Cameroon, to lift the declaration of force majeure on 22 January 2014 in order
to allow the Bamboo-1 exploration well to be drilled earlier this year.
Bamboo-1 failed to find commercial hydrocarbons but the well has provided
significant new geological information in a lightly explored area. The data
from the well continues to be analysed and the results are being used to
assess the remaining prospectivity of this large deep-water block which covers
some 2,319 km2. The current phase of the Ntem concession runs to April 2015
with no outstanding work commitments; there is an option to extend the
exploration term by a further two years.
Somaliland - Odewayne
The Odewayne PSC, awarded in 2005, is in the Third Period and covers block SL6
and part of blocks SL7 and SL10, comprising an area of 22,840 km2, onshore
Somaliland. During 2013, an aero-magnetic and gravity survey confirmed the
geometry of a broad basin over the Odewayne block believed to be of Jurassic
to Cretaceous origin, analogous to productive basins in Yemen. Fieldwork in
the block has highlighted the presence of numerous seeps giving encouragement
that a working hydrocarbon system is present in this undrilled basin.
Sterling's wholly owned subsidiary, Sterling Energy (East Africa) Limited,
holds a 40% interest in the PSC. Sterling acquired 10% from Petrosoma Limited
("Petrosoma") in November 2013, 15% from Jacka Resources Somaliland Limited
("Jacka") in January 2014 and further 15% from Jacka in May 2014. In
aggregate, as consideration, Sterling has paid $17 million to date and a
further $8 million is to be paid to Petrosoma when certain operational
milestones are reached. Sterling's joint venture partners in the Odewayne PSC
are Genel (50% interest, operator) and Petrosoma (10%).
Sterling's 40% interest will be carried by Genel for the costs of all
exploration activities during the Third and Fourth Periods of the PSC. The
Government of Somaliland has recently granted a 2 year extension to the PSC
with the Third Period now expiring in November 2016, with an outstanding
minimum work obligation of 500 km of 2D seismic. The Fourth Period of the PSC,
expiring May 2018, has a minimum work obligation of 1,000 km of 2D seismic and
one exploration well. Operations in Somaliland have been delayed while the
Government of the Republic of Somaliland establishes a trained and equipped
Oilfield Protection Unit ("OPU") that can provide the level of security
required by the in-country operators so that future seismic and drilling
operations can be conducted safely. The OPU is expected to be operational in
2015.
Madagascar - Ampasindava and Ambilobe
Sterling holds interests in a large acreage position in northwest Madagascar
in the Ampasindava and Ambilobe Blocks. These blocks are located in one of the
largest, undrilled, deep water provinces offshore East Africa, spanning the
Majunga and Ambilobe basins. Exploration activities on both blocks were
suspended in 2009 due to an uncertain political situation in Madagascar;
however democratic elections in December 2013 resulted in the election of Hery
Rajaonarimampianina as the new President and his government is now in place.
In the Ambilobe Block all minimum work commitments for the current exploration
phase have been completed. In December 2013 Sterling's wholly owned
subsidiary, Sterling Energy (UK) Limited, signed a Farmout Agreement with Pura
Vida under which all costs associated with the acquisition of a 3D seismic
programme, up to a maximum of $15 million, are carried by Pura Vida. Sterling
and Pura Vida each hold a 50% interest in the Ambilobe Block with Sterling as
operator.
The Ambilobe PSC, awarded in 2004, is in Phase 2 of the Exploration Period;
Phase 2 was recently extended to September 2015. The PSC covers approximately
17,650 km2 of the Ambilobe Basin, a large under-explored area where both
Cretaceous and Tertiary leads have been identified. There are no outstanding
work commitments in Phase 2, but Sterling and Pura Vida are planning a
discretionary 3D seismic programme that is expected to be acquired in Q4 2014.
The seismic programme aims to mature the best leads to one or more drill ready
prospects prior to the expiry of Phase 2 as Phase 3, if entered, has a
commitment to drill an exploration well.
Sterling also holds a 30% non-operated working interest in the Ampasindava
licence which contains the Sifaka prospect, independently assessed to
potentially hold, gross best estimate prospective resources of 1.2 billion
barrels but is considered to be a very high-risk target. As a result of the
farm-in to the Ampasindava Block by ExxonMobil Exploration and Production
(Northern Madagascar) Limited ("ExxonMobil") in 2005 (70% working interest and
operator), Sterling's costs in this block are carried up to a fixed gross
amount. The cost to drill the Sifaka prospect would exceed the remaining gross
carry and Sterling has engaged in a farm-out process to introduce an
additional partner to fund its share of the drilling costs.
Processing of the new seismic data acquired over part of the Ampasindava block
in 2013 is in progress and drilling is being planned for 2015 or 2016. The
PSC, awarded in 2004, is in Phase 3 of the Exploration Period; Phase 3 was
recently extended to September 2015.
Mauritania - Chinguetti field
Sterling has an economic interest in production from the Chinguetti field in
Mauritania via a Funding Agreement with Société Mauritanienne des
Hydrocarbures et de Patrimoine Minier, equivalent to approximately 8% of
production from the field.
The average daily production during the period was approximately 5,479 bopd
gross, and 436 bopd net to Sterling. Production in the period was reduced by
one planned shutdown of 10 days for a subsurface intervention campaign and to
do maintenance work on the floating production storage and offloading vessel
("FPSO").
Production is stored on location in the FPSO until a suitable volume is
accumulated which is then sold and transported away by sea tanker. Two cargoes
were sold in the period, with loading taking place in March and May 2014.
Currently, there are no approved plans for further development of the
Chinguetti field.
New Ventures
Sterling remains focused on expanding its existing exploration portfolio. The
Company's technical and commercial team has, in the period, completed a
preliminary screening of a number of opportunities and evaluated a smaller
number in more detail. The projects evaluated were not sufficiently attractive
to meet the value accretive hurdle the Company is seeking to deliver and were
therefore not progressed further. Sterling continues to identify and screen
potential opportunities.
Qualified person
In accordance with the guidelines of the AIM Market of the London Stock
Exchange, Dr Philip Frank, Ph.D. Geology (1977), Exploration Director of
Sterling Energy Plc, who has been involved in the oil industry for over 30
years, is the qualified person that has reviewed the technical information set
out above.
Financial Review
Selected financial data
H1 2014 H1 2013 Year 2013
Production bopd 436 534 527
Revenue $ million 9.1 10.6 18.4
Cash $ million 110.9 119.3 120.8
Debt $ million - - -
EBITDA 1 $ million 4.7 5.3 9.1
Profit after tax $ million 1.7 1.8 8.3
Share price (at period end) pence 29 35 43
1 EBITDA is calculated as earnings before interest, taxation, depreciation,
amortisation, impairment, pre-licence expenditure and share-based payments.
Revenues
Net Chinguetti field production for the first half of the year was 436 bopd,
including royalty barrels, a decrease of 18% from the 534 bopd in H1 2013. The
reduction in field production is due to natural field decline and a scheduled
10 day maintenance intervention programme in January 2014.
Group turnover for the period decreased by 14% to $9.1 million (H1 2013 $10.6
million). During the period, there were 2 liftings from Chinguetti resulting
in a net 81,988 barrels sold (H1 2013: 99,228 barrels sold, from 2 liftings).
Cost of sales decreased to $5.1 million (H1 2013: $5.8 million) primarily due
to the reduced lifting volumes.
Profit from operations
The profit from operations for H1 2014 was $2.0 million (H1 2013: profit $2.7
million). This decrease is primarily due to the reduced lifting volumes from
Chinguetti outlined above.
During the period, administrative expenditure decreased by $213k to $2.0
million (H1 2013: $2.2 million) and includes pre-licence costs of $1.2 million
(H1 2013: $1.1 million).
EBITDA and profit after tax
EBITDA totalled $4.7 million (H1 2013: $5.3 million).
The profit after tax totalled $1.7 million (H1 2013: $1.8 million). Basic
profit per share was 0.76 US¢ per share (H1 2013: 0.81 US¢ profit per share).
Finance income totalled $188k (H1 2013: $193k) and represents interest
received during the period on cash held by the Group. Finance costs totalled
$470k (H1 2013: $1.1 million) and comprise foreign exchange gains of $71k on
sterling cash balances which are reported in US Dollars (H1 2013: loss $547k),
bank and other charges of $12k (H1 2013: $6k) and Chinguetti decommissioning
provision movements of $529k (H1 2013: $524k).
No dividend is proposed to be paid for the six months to 30 June 2014.
Cash flow
Net cash flow from operating activities pre-working capital movements totalled
$3.5 million (H1 2013: $4.3 million). After working capital, net cash flow
from operating activities totalled $3.2 million (H1 2013: $371k).
Statement of financial position
At 30 June 2014, Sterling held $110.9 million cash and cash equivalents. Of
the $110.9 million (H1 2013: $119.3 million) $1.1 million is held on behalf of
partners (H1 2013: $1.3 million), leaving a cash balance of $109.8 million
available for Sterling's own use (H1 2013: $118.0 million). Group net assets
at 30 June 2014 were $116.1 million (H1 2013: $106.8 million).
Net investments in oil and gas assets in the first half of 2014 totalled $16.3
million (H1 2013: $975k) and comprise $15.3 million for Odewayne (Somaliland),
$450k for Ntem (Cameroon), $387k for Ambilobe (Madagascar) and $118k for
Ampasindava (Madagascar).
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman's
Statement, and in the Operations Review above.
The Company 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 the Company is well placed to manage
its business risks. The Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the results for the six months ended 30 June
2014.
Disclaimer
This document contains certain forward-looking statements that are subject to
the usual risk factors and uncertainties associated with the oil and gas
exploration and production business. Whilst the Group believes the expectation
reflected herein to be reasonable in light of the information available to it
at this time, the actual outcome may be materially different owing to factors
either beyond the Group's control or otherwise within the Group's control but
where, for example, the Group decides on a change of plan or strategy.
Accordingly, no reliance may be placed on the figures contained in such
forward-looking statements.
Definitions
$ US Dollars
2D two dimensional
3D three dimensional
bbl barrel (s) of oil
bopd barrels of oil per day
EBITDA earnings before interest, taxation, depreciation, amortisation, impairment, pre-licence expenditure and share based payments
km kilometre
m metre
mmbbl millions of barrels
PSC production sharing contract
RI royalty interest
km2 square kilometre
US¢ US$ cents
WI working interest
Sterling Energy Plc - Condensed consolidated income statement for the six
months to 30 June 2014
Note Six months to Six months to Year ended
30th June 2014 30th June 2013 31st December 2013
$000 $000 $000
(unaudited) (unaudited) (audited)
Revenue 9,104 10,645 18,370
Cost of sales (5,130) (5,761) (9,766)
Gross profit 3,974 4,884 8,604
Other administrative expenses (816) (1,170) (3,177)
Reversal of impairment of oil and gas assets - - 4,359
Pre-licence costs (1,198) (1,057) (2,226)
Total administrative expenses (2,014) (2,227) (1,044)
Profit from operations 1,960 2,657 7,560
Finance income 188 193 892
Finance costs and exchange losses (470) (1,077) (1,143)
Profit before tax 1,678 1,773 7,309
Tax 4 - - -
Profit for the period from continuing operations 1,678 1,773 7,309
Profit for the period from discontinued operations - - 1,025
Profit for the period attributable to the owners of the parent 1,678 1,773 8,334
Other comprehensive income/(expense)
Currency translation adjustments 4 (8) (39)
Total comprehensive income/(expense) for the period 4 (8) (39)
Total comprehensive income for the year attributable to the owners of the parent 1,682 1,765 8,295
Basic profit per share (USc) 5
From continuing operations 0.76 0.81 3.32
From continuing and discontinued operations 0.76 0.81 3.79
Diluted profit per share (USc) 5
From continuing operations 0.76 0.81 3.32
From continuing and discontinued operations 0.76 0.81 3.78
Sterling Energy Plc - Condensed consolidated statement of financial position
as at 30 June 2014
As at As at As at
Note 30th June 2014 30th June 2013 31st December 2013
$000 $000 $000
(unaudited) (unaudited) (audited)
Non-current assets
Intangible royalty assets 6 2,449 2,030 2,794
Intangible exploration and evaluation assets 7 29,464 11,220 13,187
Property, plant and equipment 8 4,866 3,225 5,644
36,779 16,475 21,625
Current assets
Inventories 3,600 1,727 2,746
Trade and other receivables 883 5,799 5,935
Cash and cash equivalents 110,882 119,282 120,755
115,365 126,808 129,436
Total assets 152,144 143,283 151,061
Equity
Share capital 10 149,014 149,014 149,014
Share premium 378,863 378,863 378,863
Currency translation reserve (245) (218) (249)
Retained deficit (411,512) (420,899) (413,550)
Total equity 116,120 106,760 114,078
Non-current liabilities
Long-term provisions 22,116 21,728 21,651
22,116 21,728 21,651
Current liabilities
Trade and other payables 13,908 14,795 15,332
13,908 14,795 15,332
Total liabilities 36,024 36,523 36,983
Total equity and liabilities 152,144 143,283 151,061
Sterling Energy Plc - Condensed consolidated statement of changes in equity
for the six months ended 30 June 2014 (unaudited)
Share Share Currency
capital premium translation Retained
reserve deficit1 Total
$000 $000 $000 $000 $000
At 1 January 2013 149,014 378,863 (210) (423,050) 104,617
Total comprehensive income for the period attributable to the owners of the parent - - (8) 1,773 1,765
Share option charge for the period - - - 378 378
At 30 June 2013 149,014 378,863 (218) (420,899) 106,760
Total comprehensive income for the period attributable to the owners of the parent - - (31) 6,561 6,530
Share option charge for the period - - - 788 788
At 31 December 2013 149,014 378,863 (249) (413,550) 114,078
Total comprehensive income for the period attributable to the owners of the parent - - 4 1,678 1,682
Share option charge for the period - - - 360 360
At 30 June 2014 149,014 378,863 (245) (411,512) 116,120
1 The share option reserve has been included within the retained deficit reserve.
Sterling Energy Plc - Condensed consolidated statement of cash flow statement
for the six months ended 30 June 2014
Six months to Six months to Year ended
Note 30th June 2014 30th June 2013 31st December 2013
$000 $000 $000
(unaudited) (unaudited) (audited)
Operating activities
Cash generated from operations 9 3,185 371 6,269
Net cash flow from operating activities 3,185 371 6,269
Investing activities
Interest received 188 193 268
Purchase of property, plant and equipment (37) (24) (85)
Exploration and evaluation costs (13,277) (975) (5,942)
Net cash used in investing activities (13,126) (806) (5,759)
Net (decrease)/increase in cash and cash equivalents (9,941) (435) 510
Cash and cash equivalents at beginning of period 120,755 120,348 120,348
Effect of foreign exchange rate changes 68 (631) (103)
Cash and cash equivalents at end of period 110,882 119,282 120,755
Sterling Energy Plc - Notes to the results for the six months ended 30 June
2014
1. General information
This consolidated results for the six months ended 30 June 2014 have not been
audited or reviewed by the Company's auditors. The Directors of the Company
approved the financial information included in the results on 18 July 2014.
2. Accounting policies
This condensed consolidated financial information for the half-year ended 30
June 2014 has been prepared in accordance with IAS 34, 'Interim financial
reporting'. The condensed consolidated financial information should be read in
conjunction with the annual financial statements for the year ended 31
December 2013, which have been prepared in accordance with IFRSs.
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power to govern the financial and
operating policies of an invested entity so as to obtain benefits from its
activities. The results of subsidiaries acquired or disposed are included in
the consolidated income statement from the effective date of acquisition or up
to the effective date of disposal, as appropriate.
The accounting policies, estimates and judgements applied are consistent with
those of the annual financial statements for the year ended 31 December 2013
and those envisaged for the year ended 31 December 2014 financial statements,
except as described below.
(i) New and amended standards adopted by the Group: The following new
standards and amendments to standards are mandatory for the first time for the
Group for financial year beginning 1 January 2014. Except as noted, the
implementation of these standards is not expected to have a material effect on
the Group.
· IFRS 10: Consolidated Financial Statements. Effective date 1 January
2014 (endorsed by EU 1 January 2013).
· IFRS 10, 11 and 12: Consolidated Financial Statements. Joint
Arrangements and Disclosure of Interests in Other Entities (Amendments).
Effective date 1 January 2014 (endorsed 8 April 2013).
· IFRS 11: Joint Arrangements. Effective date 1 January 2014 (endorsed 1
January 2013).
· IFRS 12: Disclosure of Interests in Other Entities. Effective date 1
January 2014 (endorsed 1 January 2013).
· IAS 27: Separate Financial Statements. Effective date 1 January 2014
(endorsed 1 January 2013).
· IAS 28: Investments in Associates and Joint Ventures. Effective date 1
January 2014 (endorsed 1 January 2013).
· IAS 32: Offsetting Financial Assets and Financial Liabilities
(Amendments). Effective date 1 January 2014 (endorsed 1 January 2013).
· IAS 36: Recoverable Amounts (Amendments). Effective date 1 January 2014
(endorsed 23 December 2013).
Other standards effective for periods beginning 1 July 2014 or after have not
been adopted early and are not expected to have any material effect on the
Group. These include IAS 19 and Annual Improvements to IFRSs where the
mandatory effective date of the EU endorsed version is 1 July 2014.
(ii) Standards, amendments and interpretations to existing standards effective
in 2014 but not relevant to the Group:
· IFRS 10, 12 and IAS 27: Investment Entities (Amendments). Effective
date 1 January 2014 (endorsed 24 November 2013).
· IAS 39: Novation of Derivatives (Amendments). Effective date 1 January
2014 (endorsed 23 December 2013).
· IFRIC 21: Levies. Effective date 1 January 2014 (endorsed 17 June
2013).
The information for the year ended 31 December 2013 does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was unqualified, did not
include any references to any matters to which the auditors drew attention by
way of emphasis and did not contain a statement under section 498(2)-(3) of
the Companies Act 2006.
3. Operating segments
The Group's two operating segments are its Africa and Middle East
(discontinued) segments. The UK corporate office is a technical and
administrative cost centre. The operating results of each of these segments
are regularly reviewed by the Group's executive Directors and senior
management in order to make decisions about the allocation of resources and to
assess their performance.
The following tables present revenue, profit and certain asset and liability
information regarding the Group's business segments for the six months ended
30 June 2014, for the year ended 31 December 2013, and for the six months
ended 30 June 2013.
Middle East
Africa (Discontinued) Total
H1 2014 H1 2013 FY 2013 H1 2014 H1 2013 FY 2013 H1 2014 H1 2013 FY 2013
$000 $000 $000 $000 $000 $000 $000 $000 $000
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
Income statement
Revenue 1 9,104 10,645 18,370 - - - 9,104 10,645 18,370
Cost of sales (5,130) (5,761) (9,766) - - - (5,130) (5,761) (9,766)
Gross profit 3,974 4,884 8,604 - - - 3,974 4,884 8,604
Impairment reversal - - 4,359 - - - - - 4,359
Accruals release - - - - - 1,025 - - 1,025
Pre-licence costs (1,198) (1,057) (2,226) - - - (1,198) (1,057) (2,226)
Segment result 2,776 3,827 10,737 - - 1,025 2,776 3,827 11,762
Unallocated corporate expenses (816) (1,170) (3,177)
Profit from operations 1,960 2,657 8,585
Finance income 188 193 892
Finance costs and exchange losses (470) (1,077) (1,143)
Profit before tax 1,678 1,773 8,334
Tax - - -
Profit attributable to owners of the parent 1,678 1,773 8,334
Profit from continuing operations 1,678 1,773 7,309
Profit from discontinued operations - - 1,025
1,678 1,773 8,334
Middle East
Corporate Africa (Discontinued) Total
H1 2014 H1 2013 FY 2013 H1 2014 H1 2013 FY 2013 H1 2014 H1 2013 FY 2013 H1 2014 H1 2013 FY 2013
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
(unaudited) (audited) (unaudited) (audited) (unaudited) (audited) (unaudited) (audited)
Other segment information
Capital additions
Property, plant and equipment 37 24 85 - - - - - - 37 24 85
Exploration and evaluation - - - 16,277 975 2,942 - - - 16,277 975 2,942
Depreciation & amortisation (29) (34) (69) (1,131) (1,218) (2,420) - - - (1,160) (1,252) (2,489)
Impairment reversal - - - - - 4,359 - - - - - 4,359
Statement of financial position
Non-current assets 2 106 72 97 36,673 16,403 21,528 - - - 36,779 16,475 21,625
Segment assets 3 110,081 118,465 119,146 5,225 6,915 9,210 59 1,428 1,080 115,365 126,808 129,436
Segment liabilities 4 (595) (750) (1,298) (35,399) (33,928) (35,179) (30) (1,845) (506) (36,024) (36,523) (36,983)
1 Revenue from continuing operations includes amounts of $8.5 million from one single customer (2013: $17.1 million, H1 2013: $10.0 million). (100% external).
2 Segment non-current assets include $7.7 million in Cameroon (2013: $7.3 million, H1 2013: $6.8 million), $7.2 million in Mauritania (2013: $8.3 million, H1 2013: $5.2 million),
$4.4 million in Madagascar (2013: $3.9 million, H1 2013: $4.4 million) and $17.4 million in Somaliland (2013: $2.1 million, H1 2013: nil).
3 Carrying amounts of segment assets exclude investments in subsidiaries.
4 Carrying amounts of segment liabilities exclude intra-group financing.
4. Taxation
The tax charge is calculated by applying the applicable standard rate of tax
as follows:
Six months to Six months to Year ended
30th June 2014 30th June 2013 31st December 2013
$000 $000 $000
(unaudited) (unaudited) (audited)
Profit before tax 1,678 1,773 8,334
Tax on profit on ordinary activities at standard
UK corporation tax rate of 22.00% (2013: 23.25%, H1 2013: 23.50%) 369 417 1,938
Effects of:
Expenses not deductible for tax purposes 242 266 27
Capital allowances in excess of depreciation (382) (576) (1,891)
Adjustment for tax losses (229) (106) (74)
Tax charge for the year - - -
5. Earnings per share
Basic Diluted
Six months to Six months to Year ended Six months to Six months to Year ended
30th June 2014 30th June 2013 31st December 2013 30th June 2014 30th June 2013 31st December 2013
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
$000 $000 $000 $000 $000 $000
Profit for the year (continuing operations) 1,678 1,773 7,309 1,678 1,773 7,309
Profit for the year (discontinuing operations) - - 1,025 - - 1,025
Weighted average number of ordinary shares in issue during the year 220,053,520 220,053,520 220,053,520 220,053,520 220,053,520 220,053,520
Dilutive effect of share options outstanding - - - - - 367,069
Fully diluted average number of ordinary shares during the year 220,053,520 220,053,520 220,053,520 220,053,520 220,053,520 220,420,589
EPS (continuing operations) 0.76 0.81 3.32 0.76 0.81 3.32
EPS (discontinuing operations) - - 0.47 - - 0.46
6. Intangible royalty assets
Total
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