REG - Sterling Energy PLC - Results for the six months ending 30 June 2017 <Origin Href="QuoteRef">SEY.L</Origin>

AfentraAnnouncement

28/07/2017 07:06

RNS Number : 3661M
Sterling Energy PLC
28 July 2017
28 July 2017
SterlingEnergyplc
Resultsforthesixmonthsending30June2017
SterlingEnergyplc('Sterling'or the'Company'), togetherwith its subsidiary undertakings (the'Group'), an upstreamoilandgascompanylistedontheAIMmarketoftheLondonStockExchange(TickerSymbol:SEY)today announcesitsresultsforthesixmonthperiodending30June2017.
Sterlingis an experienced operator of international exploration and production licences, with a primary geographic focus on Africa and the Middle East. The Group has high potential exploration projects in Mauritania and Somaliland together with a production and royalty interest in Mauritania. The Company has an active strategy to deliver shareholder value through disciplined, material exploration and production projects; leveraging the Company's African and Middle Eastern experience, with a primary emphasis on securing near term cash flow generative opportunities.
Financialsummary
 Cash net to Group,asat30June2017of$83.5million(30June2016: $92.4million),nodebt.
 Groupturnoverof$2.2million(1H2016:$1.3million).
 Lossaftertaxof$2.2million(1H2016:loss$8.2million).
 AveragenetGroupentitlementtoproductionof 320 barrels of oil per day ('bopd')(1H2016:214bopd).
 AdjustedEBITDAXlossof$1.6million(1H2016:loss$1.7million).
Operationssummary
 Production performance for the Chinguetti field, offshore Mauritania has been consistent with the operator's projected 2017 forecast.The depressed oil price continues to have an onerous impact on the Chinguetti project and future joint venture economics. The joint venture continues to move towards cessation of production at year end 2017, followed by Abandonment and Decommissioning ('A&D') of the field.
 In early April, Sterling agreed to revised Farmout Agreement terms for the Odewayne block, Somaliland; reducing the amounts due by Sterling to Petrosoma Limited ('Petrosoma') and reducing Sterling's interest in the block by 6% to 34%.
 The Odewayne Somaliland 2D seismic campaign commenced early June 2017, with final data due in-house Q4 2017.
 The Mauritania C-10 joint venture ('JV') continues to negotiate with the Ministry of Petroleum, Energy and Mines) on an extension to the current period, to allow for a drill-worthy prospect to be matured.
Corporatesummary
 Non-executive Directors appointed 19 January 2017.
 Completion of Capital restructuring 14 June 2017.
 Continued strategic mandate to execute M&A driven transformational growth.
 Continued focus on capital discipline with move to new office in Q4 2017 at a cost saving of approximately 55% on current premises.
Forfurtherinformationcontact:
SterlingEnergyplc+44(0)2074054133
Eskil Jersing, Chief Executive Officer
Michael Kroupeev, Chairman
www.sterlingenergyplc.com
PeelHuntLLP+44(0)2074188900
RichardCrichton 
RossAllister
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

CEOStatement
As of January 2017, the refreshed Sterling Board has worked diligently at ensuring the Company's strategic focus is on minimising our Chinguetti project liability exposure, maintaining our fiscal discipline, proactively managing our exploration assets, continuing to reduce our overheads and pursuing an aggressive mandate to bring a transformational M&A led opportunity into the Company.
On the Chinguetti oil field, we continue to persevere with SMHPM and key stakeholders to safely and effectively implement the A&D project, subject to Government of Mauritania approval. 
Chinguetti is due to cease production in late 2017, with decommissioning operations commencing shortly thereafter. At this point, the A&D project quantum, schedule, dependencies and contingencies continue to be fine-tuned amongst the joint venture partners. As soon as the overall A&D project and associated Environmental planare sanctioned by the Government of Mauritania (expected to be in Q4 2017), Sterling will update the market of the anticipated cost exposure to Sterling of the decommissioning and abandonment phase.
We have continued with our portfolio re-alignment efforts in April on the Somaliland Odewayne block by reducing from $8 million to $3.5 million our exposure to a deferred consideration payment to Petrosoma. In return, Sterling's participating interest will (subject to Government consent) reduce from 40% to a still material stake at 34%. 
In addition, a 2D seismic campaign commenced over the Odewayne block in early June 2017. This seismic data will be the first ever acquired over this frontier basin. We expect to have the first ca.500kms of fast track Post Stack Time Migrated ('PSTM') in house in early Q4 2017 for interpretation. To date, we have viewed two early brute stack 2D seismic lines and are highly encouraged with regards to signal penetration, reflectivity, structuring and depth of sedimentary fill.
With regards our Mauritania C-10 exploration asset, the operator Tullow Oil continues to negotiate with the Ministry of Petroleum, Energy and Mines on seeking a fair and equable licence extension, in order to allow the joint venture a suitable period of time, beyond November 2017, to mature a drill-worthy prospect on the block. In parallel we await with interest the results of the forthcoming Kosmos phase two well campaign, due to drill the ca.2-3 billion boe (gross un-risked) Lamantin prospect in Q3 2017, in block C-6/C-12 just outboard and northwest of C-10.
The primary focus of the Company has been to continue to originate, conduct full due diligence and ultimately execute transformative growth driven M&A projects. Over the last six months the technical and commercial team have focused solely on those few jurisdictions which offer palatable above ground risk exposure, along with robust and material subsurface potential. Sterling has always taken a disciplined capital allocation view to investing only in those opportunities with capex flexibility and favourable fiscal and commercial terms. In this prolonged oil price down cycle, it is critical that we leverage our robust cash position appropriately to benefit not only on a discounted entry proposition, but also over the lifecycle of any asset that we seek to bring into the portfolio. We continue to focus the majority of our manpower and efforts on this mandate and hope to be able to bring suitable revenue generating assets into the Company in the near term.
In June 2017, we completed our capital restructuring, with our nominal ordinary share value reducing from 40 pence to 10 pence and the cancellation of the share premium, creating a distributable reserve for Sterling. This has given us enhanced flexibility to make returns of capital to shareholders (should the Company determine that this is appropriate), the ability to issue new capital and allowed us to eliminate our retained deficit which was ca.$449 million as at 31 December 2016.
The Company continues its efforts to reduce the Group's administrative expenses in reaction to external market conditions. As part of this initiative we will move into a smaller office in Q4 2017, with the aim of further reducing our office costs by approximately 55%.
As of late June, Matthew Bowyer, our Exploration Manager, and Tony Hawkins, our Head of Legal and Commercial, have decided to pursue new opportunities. On behalf of the Company, I truly wish them well and thank them for their numerous material contributions over the last five years with Sterling.
More recently, we welcomed Anish Airi to the team as our new Reservoir Engineering and Subsurface Manager. Anish is a Chemical Engineer by training and has over 19 years of varied international upstream experience working with Shell, Nexen and more latterly as Technical Director Europe Middle East and Africa (EMEA) at Macquarie bank. 
In addition, Simon Compton will be joining us as Head of Commercial and Legal in August 2017. Simon has over 29 years of international upstream experience, specialising in investment appraisal, economics and business development. Simon has worked with BHP, Enterprise Oil, Hess, Premier Oil, Gulf Keystone and more latterly at BMO Capital.
Looking forward, with a refreshed board and leadership team; we continue with efforts to limit our liability exposure on Chinguetti, deliver on our portfolio and focus on executing a transformative M&A project, for the Company. I look forward to updating our shareholders with our progress.
EskilJersing CEO
28July2017

OperationsReview
Mauritania
PSCC-10(WI13.5%)Explorationblock
Block C-10 covers an area of approximately 8,025km and lies in water depths of 50 to 2,400m within the Nouakchott sub-basin, offshore Mauritania, and wholly surrounds the Chinguetti field. The C-10 production sharing contract ('PSC') is held by the Company's wholly owned subsidiary Sterling Energy Mauritania Limited ('SEML') (13.5% working interest), Tullow Oil (76.5% working interest and operator) and SMHPM (10% working interest). SMHPM is carried by SEML and Tullow Oil, pro-rata to their working interests, during the exploration phases. The PSC is in the second phase of the exploration period, which is due to expire on 30 November 2017 and has a minimum work obligation of one exploration well.
Following entry into the C-10 block in mid-2015, Sterling and its JV partners have been actively maturing and ranking the technical description of the play, prospect and lead portfolio on the 3D seismic dataset. 
Since 2014, Kosmos Energy has discovered and appraised in deep water block C-8, immediately outboard of C-10, several world class LNG scale gas discoveries of Albian to Cenomanian age, with the Tortue West (Ahmeyim) structure alone reported to have Pmean gas resources of ca.15 Tcf. In 2017, Kosmos and new partner BP have continued exploration within the Cenomanian/Albian play with a focus on proving an oil fairway adjacent to the northwestern boundary of the C-10 block, intending to drill the ca.2-3Bn boe (gross un-risked) Lamantin prospect in Q3 2017 in block C-6/C-12 just outboard and northwest of C-10. 
Tullow Oil and the JV continue in discussions with SMHPM and the Ministry with regards to the appropriate future path on the C-10 block, with a view to securing an extension for one year and recognising that a well will not be drilled prior to the current Phase 2 expiry in November 2017.
Should the JV not fulfil the minimum work obligations the gross liability owing to the Mauritanian government would be $7.5 million ($1.1 million net to SEML). Following the completion of Phase 2 the JV may elect to enter into Phase 3 (with a 3 year term) with a minimum work obligation of a further two exploration wells.
Chinguettioilfield(ca.9.5% of cumulative production through the Funding Agreement and a 6% royalty)
The Company has an economic interest in the Chinguetti field via a Funding Agreement with SMHPM and a Royalty Agreement with Premier Oil ('Premier'). The average production during 1H 2017 was 4,271 bopd gross (320 bopd net entitlement to Sterling). 
Production from the Chinguetti field is stored on location in the Berge Helene floating, production storage and offloading vessel ('FPSO'), with economic rights being transferred to the seller on the completion of each cargo lifting; of which one cargo was sold in the period (March 2017) totaling 41,950 bbls net to Sterling.
The Chinguetti JV (Petronas, Tullow Oil, SMHPM, Premier, Kufpec) are converging on the optimal solution to the current end of field life challenges. Discussions continue to be held with the Government of Mauritania and relevant stakeholders on how best to both manage current operations and agree on a plan for a safe, cost-effective and technically robust decommissioning and abandonment phase commencing end 2017.
Somaliland
Odewayne(WI34%)Explorationblock
This large, unexplored frontier block comprises an area of 22,840km2. Extensive legacy geological field data provides strong encouragement for a deep sedimentary basin and has additionally highlighted the presence of oil seeps at surface, suggesting that a working hydrocarbon system exists.
The Odewayne production sharing agreement ('PSA') was awarded in 2005. It is in the Third Period with an outstanding minimum work obligation of 500km of 2D seismic. The Third Period was recently extended in 2016 by two years to 2 November 2018. The minimum work obligation during the optional Fourth Period of the PSA (also extended by 2 years to May 2020) is for 1,000km of 2D seismic and one exploration well. 
As of the 3 April 2017, the Petrosoma Farmout Agreement has been amended such that the parties will cancel the $8 million contingent consideration in return for (i) a payment by Sterling Energy (East Africa) Limited ('SE(EA)L') to Petrosoma of $3.5 million; and (ii) a transfer from SE(EA)L to Petrosoma of a 6% interest in the PSA. Approval for the transfer of the participating interest was granted in July 2017 by the Government of Somaliland. SE(EA)L will retain a 34% interest in the Odewayne Block, fully carried by Genel Energy for its share of the costs of all exploration activities during the Third and Fourth Periods of the PSA.
From 2016, the Somaliland Ministry of Energy and Minerals ('MOEM') has progressed a directed speculative survey to allow the acquisition of 2D seismic data. The project is led by the Ministry who in Q4 2016 signed a contract with BGP (a Chinese geophysical and drilling contractor) to acquire seismic data over a number of blocks, including Odewayne. 
The seismic acquisition program on the Odewayne block, commenced early June 2017. The program is intended to fulfil (at least) the minimum work obligation for the current phase and is the first seismic data ever acquired on the block. As of 30 June 2017, ca.870km of line clearance had been undertaken and two seismic lines acquired. The seismic acquisition program continues to progress smoothly, with MOEM intending to release data in 500km tranches to the joint venture partners, with a view to a fast track post stack time migration over the Odewayne block being in-house early Q4 and a final product in-house towards the end of 2017.
M&A led Growth
Since mid-2015, Sterlinghas actively transitionedtheportfolio out of long cycle exploration assets requiring third party funding and continues to actively searchfornear to mid-termvaluecreationandtransformativegrowth / monetisationoptions in both Africa and the Middle East.
Aprudent,selectiveandpersistentM&Aledeffortisdirectedtowardsshortercyclerevenuegeneratingprojectsthatwilldeliverina
sustainedloweroilpricelandscape, in progressive jurisdictions.
The CompanymaintainsadisciplinedapproachtoallM&Aefforts at a corporate and asset level,onlypursuingand executingthosegrowthoptionsthattheCompanybelievestohavethebestopportunitytoultimatelydelivervalue forshareholders.
Qualifiedperson
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Eskil Jersing, CEO of the Company, who has been involved in the oil industry for over 31 years, is the qualified person that has reviewed the technical information set out above.
FinancialReview
Selectedfinancialdata

1H 2017
1H 2016
FY 2016
Net entitlement from production (bopd)
320
214
279
Net cargo liftings (bbls) / # liftings
41,950 / 1
42,812 / 2
121,031 / 4
Sales revenues (including royalty) ($m)
2.2
1.3
4.8
Average realised oil price ($/bbl) 
48.7
29.2
39.8
G&A cash expenditures ($m)
1.9
2.4
4.6
Adjusted EBITDAX 1 ($m)
(1.6)
(1.7)
(3.1)
Loss after tax ($m)
(2.2)
(8.2)
(8.5)
Cash and cash equivalents net to Group ($m)
83.5
92.4
88.1
Debt ($m)
 - 
 - 
 - 
Share price (at period end) (GBP pence)
15
15
15
1 AdjustedEBITDAXiscalculatedasearningsbeforeinterest, taxation, depreciation, amortisation,impairment, pre-licenceexpenditure, provisionsandshare-basedpayments.
Revenuesandcostofsales
Net entitlement from Chinguetti field production for the period was 320 bopd (including royalty barrels), an increase of 49% from the 214 bopd in 1H 2016. Production in Q1 2016 was unusually low due to technical difficulties, hence the improvement compared to 1H 2017.
During the period, there was one lifting from Chinguetti resulting in (net to the Company) 41,950 bbls sold (1H 2016: 42,812 bbls sold, from two liftings). Group turnover increased by 68% to $2.2 million (1H 2016 $1.3 million) due to the improved oil price realised in 1H 2017.
Total cost of sales increased to $2.7 million (1H 2016: $424k). In 1H 2016 cost of sales included the onerous provision release of $2.1 million; like for like cost of sales is therefore $2.5 million.
Lossfromoperations
Theloss fromoperationsfor1H2017was$2.5million(1H 2016:loss$8.1 million).The improvement in net lossis in maindueto the 1H 2016impairmentstotalling$7.4million (Ambilobe and C-3 evaluationassets).
During the period, net administrative expenditure increased to $2.0 million (1H 2016: $1.6 million) and includes pre-licence costs of $1.0 million (1H 2016: $1.1 million). The increase in net administrative expenditure is, in part, a result of a reduction in recharges during the period.
Cash G&A expenses decreased by 23% in the period to $1.9 million (1H 2016: $2.4 million) as the Group continues to focus on such expenditures in reaction to external market conditions.
A summary of the G&A movements is provided below.

1H 2017
1H 2016
2016

$ million
$ million
$ million




Other administrative expenses per accounts
(1.0)
(0.5)
(2.0)




Add back recharges



Costs capitalised
 - 
(0.7)
(0.8)
Costs recharged to JV partners
 - 
(0.1)
(0.1)
Pre-licence expenditure
(0.8)
(1.0)
(1.8)

(0.8)
(1.8)
(2.7)
Add back share based payment expense
(0.1)
 - 
0.1 
Add back other non-cash items
 - 
(0.1)
 - 
Group cash G&A expenses
(1.9)
(2.4)
(4.6)




AdjustedEBITDAXandlossaftertax
AdjustedEBITDAXtotalledalossof$1.6million(1H2016:loss$1.7million).
The lossaftertaxtotalled$2.2million(1H2016:loss$8.2million).Basiclosspersharewas 0.99US per share (1H 2016:3.74USlosspershare).
Finance income of $522k (1H 2016: $294k) represents interest received on cash held by the Group. Foreign exchange gains of $74k on GBP denominated cash balances, reported in US Dollars (1H 2016: loss $186k). Finance costs totalled $264k (1H 2016: $436k).
Nodividendisproposedtobepaidforthesixmonthsto30June2017(1H2016:nil).
Cashflow
Netcashoutflowfromoperatingactivities (pre-workingcapitalmovements)totalled $2.6 million(1H2016:outflow $778k).Afterworkingcapital,netcashoutflowfromoperatingactivitiestotalled$1.4million(1H2016:outflow $5.1 million).
Net cash investments in oil and gas assets totalled $3.6 million in the period (1H 2016: $1.1 million), relating to exploration and evaluation expenditure on Odewayne ($3.5 million) and C-10 ($100k) assets. 
Statementoffinancialposition
At 30 June 2017, Sterling held $83.5 million cash and cash equivalents available for its own use (30 June 2016: $92.4 million).
Group net assets at 30 June 2017 were $76.1 million (30 June 2016: $78.6 million). Non-current assets totalled $22.5 million (30 June 2016: $18.8 million) with net current assets reducing to $78.1 million (30 June 2016: $92.3 million).
The Group's Chinguetti decommissioning provision (current and non-current) at 30 June 2017 was $31.6 million (30 June 2016: $32.4 million) reflecting the Group's current estimate of gross abandonment and decommissioning cost.
On 14 June 2017, the reduction of capital was approved by the High Court of Justice of England and Wales has been registered with the Registrar of Companies and accordingly has now become effective. The nominal value of each ordinary share has been reduced from 40 pence to 10 pence. The Company's share premium account has also been cancelled and along with the reduction of capital has created a distributable reserve for Sterling.
GoingConcern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the CEO Statement and in the Operations Review. The financial position of the Group is described in the Financial Review.
The Company has sufficient cash resources for its working capital needs and its committed capital expenditure programme for at least 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 2017.

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
A&D
Abandonment and Decommissioning
bbl
barrel(s) of oil
boe
barrels of oil equivalent, a measure of the gas component converted into its equivalence in barrel of oil
bopd
barrels of oil per day
Adjusted EBITDAX
earnings before interest, taxation, depreciation, amortisation, impairment, pre-
licence expenditure, provisions and share based payments
FPSO
Floating, production, storage and offloading vessel
JV
joint venture
km
kilometre
m
metre
PSTM
Post Stack Time Migrated
PSA
production sharing agreement
PSC
production sharing contract
km2
square kilometre
US
US$ cents
Tcf
Trillion cubic feet
WI
working interest

Condensedconsolidatedincomestatementforthesixmonthsto30June2017


Six months to

Six months to

Year ended


30th June 2017

30th June 2016

31st December 2016


$000

$000

$000


(unaudited)

(unaudited)

(audited)







Revenue

2,217 

1,320 

4,815 
Cost of sales

(2,704)

(424)

(2,262)







Gross (loss)/profit

(487)

896 

2,553 







Other administrative expenses 

(1,047)

(508)

(2,045)
Impairment of oil and gas assets

- 

(7,403)

(7,375)
Pre-licence costs

(977)

(1,077)

(1,951)
Total administrative expenses

(2,024)

(8,988)

(11,371)







Loss from operations

(2,511)

(8,092)

(8,818)







Finance income

596 

294 

683 
Finance expense

(264)

(436)

(394)







Loss before tax

(2,179)

(8,234)

(8,529)







Tax

 - 

 - 

- 







Loss for the period attributable to the owners of the parent
(2,179)

(8,234)

(8,529)







Other comprehensive (expense)/income - items to be






reclassified to the income statement in subsequent periods












Currency translation adjustments

(2)

(1)

50 
Total comprehensive (expense)/income for the period

(2)

(1)

50 







Total comprehensive expense for the period attributable to the owners of the parent

(2,181)

(8,235)

(8,479)







Basic loss per share (USc)

(0.99)

(3.74)

(3.88)







Diluted loss per share (USc)

(0.99)

(3.74)

(3.88)







Condensedconsolidatedstatementoffinancialpositionasat30June2017


As at 

As at 

As at 

Note
30th June 2017
30th June 2016

31st December 2016


$000
$000

$000


(unaudited)
(unaudited)

(audited)






Non-current assets






Intangible exploration and evaluation assets
3
22,483 

18,739 

18,846 
Property, plant and equipment

13 

28 

17 


22,496 

18,767 

18,863 







Current assets






Inventories

2,501 

2,126 

1,948 
Trade and other receivables

707 

636 

6,540 
Cash and cash equivalents

83,493 

92,540 

88,058 


86,701 

95,302 

96,546 







Total assets

109,197 

114,069 

115,409 







Equity






Share capital

28,143 

149,014 

149,014 
Share premium 

- 

378,863 

378,863 
Currency translation reserve

(171)

(220)

(169)
Retained earnings

48,161 

(449,050)

(449,318)
Total equity

76,133 

78,607 

78,390 







Non-current liabilities






Long-term provisions

24,456 

32,414 

14,472 


24,456 

32,414 

14,472 







Current liabilities






Trade and other payables

1,463 

1,456 

1,363 
Short-term provisions

7,145 

1,592 

21,184 


8,608 

3,048 

22,547 







Total liabilities

33,064 

35,462 

37,019 







Total equity and liabilities

109,197 

114,069 

115,409 







Condensedconsolidatedstatementofchangesinequity forthesixmonthsended30June2017



Currency



Share
Share
translation
Retained


capital
premium
reserve
earnings*
Total

$000
$000
$000
$000
$000






At 1 January 2016 (audited)
149,014 
378,863 
(219)
(440,862)
86,796 
Total comprehensive expense for the period attributable to the owners of the parent
 - 
 - 
(1)
(8,234)
(8,235)
Share option charge for the period
 - 
 - 
 - 
 46 
 46 
At 30 June 2016 (unaudited)
149,014 
378,863 
(220)
(449,050)
78,607 
Total comprehensive expense for the period attributable to the owners of the parent
 - 
 - 
51 
(295)
(244)
Share option charge for the period
 - 
 - 
 - 
 27 
27 
At 31 December 2016 (audited)
149,014 
378,863 
(169)
(449,318)
78,390 
Total comprehensive expense for the period attributable to the owners of the parent
 - 
 - 
(2)
(2,179)
(2,181)
Share option charge for the period
 - 
 - 
 - 
(76)
(76)
Share capital reduction 
(120,871)
(378,863)
 - 
499,734 
 - 
At 30 June 2017 (unaudited)
28,143 
 - 
(171)
48,161 
76,133 






*Theshareoption reserve hasbeen includedwithinthe retainedearningsreserve.

Condensedconsolidatedstatementofcashflowsforthesixmonthsended30June2017


Six months to

Six months to

Year ended

Note
30th June 2017

30th June 2016

31st December 2016


$000
$000

$000


(unaudited)
(unaudited)

(audited)






Operating activities:













Loss before tax

(2,179)

(8,234)

(8,529)
Finance income and gains

(596)

(294)

(683)
Finance expense and losses

257 

427 

380 
Depletion and amortisation

5 

20 

32 
Impairment expense
3
- 

7,403 

7,375 
Share-based payment charge

(76)

46 

75 
Onerous provision

- 

- 

(3,700)
Gain on disposal of subsidiary

- 

(146)

- 
Operating cash outflow prior to working capital movements

(2,589)

(778)

(5,050)
Increase in inventories

(553)

(807)

(628)
Decrease/(increase) in trade and other receivables

5,833 

(86)

(5,990)
Increase/(decrease) in trade and other payables

100 

(1,283)

(1,377)
(Decrease)/increase in provisions

(4,200)

(2,108)

4,200 
Net cash outflow from operating activities

(1,409)

(5,062)

(8,845)







Investing activities






Interest received

522 

294 

683 
Purchase of property, plant and equipment

(1)

(15)

(15)
Exploration and evaluation costs
3
(3,637)

(1,068)

(1,147)
Decommissioning costs

(125)

- 

(1,088)
Net cash used in investing activities

(3,241)

(789)

(1,567)






.
Net decrease in cash and cash equivalents

(4,650)

(5,851)

(10,412)







Cash and cash equivalents at beginning of period

88,058 

98,653 

98,653 







Effect of foreign exchange rate changes

85 

(262)

(183)







Cash and cash equivalents at end of period

83,493 

92,540 

88,058 







Notestotheconsolidatedresultsforthesixmonthsended30June2017
1. Basis of preparation
The financial information contained in this announcement does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006.
The financial information for the six months ended 30 June 2017 is unaudited. In the opinion of the Directors, the financial information for this period fairly represents the financial position of the Group. Results of operations and cash flows for the period are in compliance with International Financial Reporting Standards as adopted by the EU ('EUIFRS'). The accounting policies, estimates and judgements applied are consistent with those disclosed in the annual financial statements for the year ended 31 December 2016. These financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016.
AllfinancialinformationispresentedinUSD,unlessotherwisedisclosed.
An unqualified audit opinion was expressed for the year ended 31 December 2016, as delivered to the Registrar. 
The Directors of the Company approved the financial information included in the results on 28 July 2017.
2. Results & dividends
TheGrouphasaretainedearningsattheendoftheperiodof$48.2million(30June2016:$449.1million retaineddeficit)tobe carriedforward.TheDirectorsdonotrecommendthepaymentofadividend(1H2016:nil).
3. Intangible exploration and evaluation (E&E) assets






Total






$000






(unaudited)







Net book value at 1 January 2016





25,074 
Additions during the period





1,068 
Impairment for the period





(7,403)
Net book value at 30 June 2016





18,739 
Additions during the period





79 
Impairment reversal for the period





28 
Net book value at 31 December 2016





18,846 
Additions during the period





3,637 
Net book value at 30 June 2017





22,483 







The amount for intangible exploration and evaluation assets represents investments in respect of exploration licences. E&E assets are reviewed for impairment when circumstances arise which indicate that the carrying value of an E&E asset exceeds the recoverable amount.


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