REG - Ascent Resources PLC - Audited Final Results <Origin Href="QuoteRef">ASCR.L</Origin> - Part 2
24/04/2017 07:06
- Part 2: For the preceding part double click ID:nRSX0561Da
Increase in share based payments 188 146
Exchange differences 1 36
Finance income (159) (745)
Finance cost 1,453 2,501
Net cash used in operating activities (1,416) (1,892)
Cash flows from investing activities
Interest received 1 1
Payments for fixed assets (1) -
Payments for investing in exploration (677) (661)
Net cash used in investing activities (677) (660)
Cash flows from financing activities
Interest paid and other finance fees (73) (18)
Proceeds from loans 1,400 950
Repayment of loan (800) -
Proceeds from issue of shares 4,999 1,252
Share issue costs (311) (56)
Net cash generated from financing activities 5,215 2,128
Net increase in cash and cash equivalents for the year 3,122 (424)
Effect of foreign exchange differences (1) -
Cash and cash equivalents at beginning of the year 32 456
Cash and cash equivalents at end of the year 3,153 32
Company Cash Flow Statement
For the year ended 31 December 2017
Year ended 31 December 2016 Year ended 31 December 2015
£ '000s £ '000s
Cash flows from in operations
Profit/(loss) after tax for the year 1,774 (4,306)
Depreciation charge - -
(Increase) / Decrease in receivables 34 (324)
Increase / (Decrease) in payables (251) (94)
Increase in share based payments reserve 188 146
Foreign exchange (3,921) 1,424
Finance income (154) (745)
Finance cost 1,441 2,501
Net cash generated from / (used in) operating activities (889) (1,398)
Cash flows from investing activities
Interest received - 4
Payments for fixed assets (1) -
Advances to subsidiaries (1,211) (1,158)
Net cash flows used in investing activities (1,212) (1,154)
Cash flows from financing activities
Interest paid (73) (5)
Proceeds from loans 1,400 951
Repayment of loan (800) -
Cash proceeds from issue of shares 4,999 1,252
Share issue costs (311) (56)
Net cash generated from financing activities 5,215 2,142
Net increase in cash and cash equivalents 3,114 (410)
Cash and cash equivalents at beginning of the year 28 439
Effects of foreign exchange differences 1 (1)
Cash and cash equivalents at end of the year 3,143 28
Notes to the accounts
1 Accounting policies
Reporting entity
Ascent Resources plc ('the Company' or 'Ascent') is a company domiciled and
incorporated in England. The address of the Company's registered office is 5
New Street Square, London EC4A 3TW. The consolidated financial statements of
the Company for the year ended 31 December 2016 comprise the Company and its
subsidiaries (together referred to as the 'Group') and the Group's interest in
associates and joint ventures. The Parent Company financial statements
present information about the Company as a separate entity and not about its
Group.
The Company is admitted to AIM, a market of the London Stock Exchange.
The consolidated financial statements of the Group for the year ended 31
December 2016 are available from the Company's website at
www.ascentresources.co.uk.
Statement of compliance
The Group's and Company's financial statements for the year ended 31 December
2016 were approved and authorised for issue by the Board of Directors on 21
April 2017 and the Statements of Financial Position were signed on behalf of
the Board by Clive Carver.
Both the Parent Company financial statements and the Group financial
statements give a true and fair view and have been prepared and approved by
the Directors in accordance with International Financial Reporting Standards
as adopted by the EU ('IFRSs').
Basis of preparation
In publishing the Parent Company financial statements here together with the
Group financial statements, the Company is taking advantage of the exemption
in section 408 of the Companies Act 2006 not to present its individual income
statement and related notes that form a part of these approved financial
statements. The Company loss for the year was £2.0 million.
Measurement Convention
The financial statements have been prepared under the historical cost
convention. The financial statements are presented in sterling and have been
rounded to the nearest thousand (£'000s) except where otherwise indicated.
The principal accounting policies set out below have been consistently applied
to all periods presented.
Going Concern
The Financial Statements of the Group are prepared on a going concern basis.
Following the placings, loan note subscriptions and extension of the maturity
of existing loan notes in 2016 the directors consider the Company has
sufficient cash to fund its current obligations for the next 12 months.
New and amended Standards effective for 31 December 2016 year-end adopted by
the Group:
i. The following new standards and amendments to standards are mandatory for
the first time for the Group for the financial year beginning 1 January 2016.
The adoption of these standards and amendments has had no material effect on
the Group's accounting policies.
Standard Description Effective date
IAS 19 Defined Benefit Plans: Employee Contributions 1 February 2016
IFRS 11 Accounting for Acquisitions of Interests in Joint Operation 1 January 2016
IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016
ii. Standards, amendments and interpretations, which are effective for
reporting periods beginning after the date of these financial statements which
have not been adopted early:
Standard Description Effective date
IFRS 9 Financial instruments 1 January 2018
IFRS15 Revenue from Contracts with Customers 1 January 2018
IFRS 16* Leases 1 January 2019
IAS 12 Recognition of deferred tax assets for unrealised losses 1 January 2017
* not yet adopted by the European Union
IFRS 15 is intended to introduce a single framework for revenue recognition
and clarify principles of revenue recognition. This standard modifies the
determination of when to recognise revenue and how much revenue to recognise.
The core principle is that an entity recognises revenue to depict the transfer
of promised goods and services to the customer of an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those
goods or services.
IFRS 16 introduces a single lease accounting model. This standard requires
lessees to account for all leases under a single on-balance sheet model. Under
the new standard, a lessee is required to recognise all lease assets and
liabilities on the balance sheet; recognise amortisation of leased assets and
interest on lease liabilities over the lease term; and separately present the
principal amount of cash paid and interest in the cash flow statement.
IFRS 9 introduces significant changes to the classification and measurement
requirements for financial instruments. It replaces the guidance in IAS 39
that relates to the classification and measurement of financial instruments.
IFRS 9 retains but simplifies the mixed measurement model and establishes
three primary measurement categories for financial assets: amortized cost,
fair value through other comprehensive income (OCI) and fair value through
profit or loss. For financial liabilities there were no changes to
classification and measurement except for the recognition of changes in credit
risk in other comprehensive income, for liabilities designated at fair value
through profit or loss.
The Group is currently assessing the impact of these standards and based on
the Group's current operations do not expect them to have a material impact on
the financial statements.
Critical accounting estimates and assumptions and critical judgements in
applying the Group's accounting policies
The preparation of the consolidated financial statements in conformity with
IFRSs requires management to make estimates and assumptions that affect the
application of policies and reported amounts of assets, liabilities, income,
expenses and related disclosures. The estimates and underlying assumptions
are based on practical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form the basis
for making the judgments about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Changes in accounting estimates may be necessary if there are changes in the
circumstances on which the estimate was based or as a result of new
information. Such changes are recorded in the period in which the estimate is
revised.
The application of the Group's accounting policies may require management to
make judgements, apart from those involving estimates, which can have a
significant effect on the amounts amortised in the financial statements.
Management judgement is particularly required when assessing the substance of
transactions that have a complicated structure or legal form.
The key areas where management judgement has needed to be applied are:
(a) Exploration and evaluation assets - exploration and evaluation costs are
initially classified and held as intangible fixed assets rather than being
expensed. The carrying value of intangible exploration and evaluation assets
are then determined. Management considers these assets for indicators of
impairment at least annually based on an estimation of the recoverability of
the cost pool from future development and production of the related oil and
gas reserves. This assessment requires estimates of gas reserves, production,
gas prices, operating and capital costs associated with the field and discount
rates (see Note 8);
(b) Decommissioning provision - the cost of decommissioning is estimated by
reference to operators and internal specialist staff and requires estimates
regarding the cost of decommissioning, inflation, discount rates and the
timing of works (see Note 14);
(c) New CLNs and modification to existing CLNs - the Group has entered into
a series of significant modifications to the maturity on its CLNs and
subscribed to a new convertible loan note. These transactions required
judgment in terms of the appropriate accounting treatment. In addition,
judgment and estimation was required in determining the fair value of
liability and equity components of the loan notes (see Note 13);
(d) Commercial reserves - Commercial reserves are proven and probable oil
and gas reserves calculated on an entitlement basis and are integral to the
assessment of the carrying value of the exploration and evaluation assets.
Estimates of commercial reserves include estimates of the amount of oil and
gas in place, assumptions about reservoir performance over the life of the
field and assumptions about commercial factors which, in turn, will be
affected by the future oil and gas price;
(e) The accounting treatment of the Trameta acquisition which, as it
possessed land and pipeline rights but no employees or active business
processes was accounted for as an asset acquisition. Estimates were required
in determining the fair value of consideration (see Note 22).
Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these elements of
control.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between Group companies are therefore eliminated in full.
The results of undertakings acquired or disposed of are consolidated from or
to the date when control passes to or from the Group. The results of
subsidiaries acquired or disposed of during the period are included in the
Consolidated Income Statement from the date that control commences until the
date that control ceases.
Where necessary, adjustments are made to the results of subsidiaries to bring
the accounting policies they use into line with those used by the Group.
Business combinations
On acquisition, the assets, liabilities and contingent liabilities of
subsidiaries are measured at their fair values at the date of acquisition.
Any excess of cost of acquisition over net fair values of the identifiable
assets, liabilities and contingent liabilities acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the net fair values
of the identifiable assets, liabilities and contingent liabilities acquired
(i.e. discount on acquisition) is credited to profit and loss in the period of
acquisition.
Joint arrangements
The Group is party to a joint arrangement when there is a contractual
arrangement that confers joint control over the relevant activities of the
arrangement to the Group and at least one other party. Joint control is
assessed under the same principles as control over subsidiaries.
The Group classifies its interests in joint arrangements as either joint
ventures, where the Group has rights to only the net assets of the joint
arrangement, or joint operations where the Group has both the rights to assets
and obligations for the liabilities of the joint arrangement.
All of the Group's joint arrangements are classified as joint operations. The
Group accounts for its interests in joint operations by recognising its
assets, liabilities, revenues and expenses in accordance with its
contractually conferred rights and obligations.
Oil and Gas Exploration Assets
All licence/project acquisitions, exploration and appraisal costs incurred or
acquired on the acquisition of a subsidiary, are accumulated in respect of
each identifiable project area. These costs, which are classified as
intangible fixed assets are only carried forward to the extent that they are
expected to be recovered through the successful development of the area or
where activities in the area have not yet reached a stage which permits
reasonable assessment of the existence of economically recoverable reserves.
Pre-licence/project costs are written off immediately. Other costs are also
written off unless commercial reserves have been established or the
determination process has not been completed. Thus, accumulated cost in
relation to an abandoned area are written off in full to the statement of
comprehensive income in the year in which the decision to abandon the area is
made.
When production commences the accumulated costs for the relevant area of
interest are transferred from intangible fixed assets to Property, Plant and
Equipment as 'Developed oil and gas assets'.
Impairment of oil and gas exploration assets
Exploration/appraisal assets are reviewed regularly for indicators of
impairment following the guidance in IFRS 6 'Exploration for and Evaluation of
Mineral Resources' and tested for impairment where such indicators exist.
In accordance with IFRS 6 the Group considers the following facts and
circumstances in their assessment of whether the Group's oil and gas
exploration assets may be impaired:
· whether the period for which the Group has the right to explore in a
specific area has expired during the period or will expire in the near future,
and is not expected to be renewed;
· whether substantive expenditure on further exploration for and
evaluation of mineral resources in a specific area is neither budgeted nor
planned;
· whether exploration for and evaluation of oil and gas reserves in a
specific area have not led to the discovery of commercially viable quantities
of oil and gas and the Group has decided to discontinue such activities in the
specific area; and
· whether sufficient data exists to indicate that although a development
in a specific area is likely to proceed, the carrying amount of the
exploration and evaluation assets is unlikely to be recovered in full from
successful development or by sale.
If any such facts or circumstances are noted, the Group, as a next step,
perform an impairment test in accordance with the provisions of IAS 36. In
such circumstances the aggregate carrying value of the oil and gas exploration
and assets is compared against the expected recoverable amount of the cash
generating unit. The recoverable amount is the higher of value in use and the
fair value less costs to sell.
The Group has identified one cash generating unit, the Petišovci project in
Slovenia. Any impairment arising is recognised in the Income Statement for
the year.
Where there has been a charge for impairment in an earlier period that charge
will be reversed in a later period where there has been a change in
circumstances to the extent that the discounted future net cash flows are
higher than the net book value at the time. In reversing impairment losses,
the carrying amount of the asset will be increased to the lower of its
original carrying values or the carrying value that would have been determined
(net of depletion) had no impairment loss been recognised in prior periods.
Decommissioning costs
Where a material obligation for the removal of wells and production facilities
and site restoration at the end of the field life exists, a provision for
decommissioning is recognised. The amount recognised is the net present value
of estimated future expenditure determined in accordance with local conditions
and requirements. An asset of an amount equivalent to the provision is also
added to oil and gas exploration assets and depreciated on a unit of
production basis once production begins. Changes in estimates are recognised
prospectively, with corresponding adjustments to the provision and the
associated asset.
Foreign currency
The Group's strategy is focussed on developing oil and gas projects across
Europe funded by shareholder equity and other financial assets which are
principally denominated in sterling. The functional currency of the Company
is sterling.
Transactions in foreign currency are translated to the respective functional
currency of the Group entity at the rates of exchange prevailing on the dates
of the transactions. At each reporting date, monetary assets and liabilities
that are denominated in foreign currencies are retranslated to the functional
currency at the rates prevailing on the reporting date. Exchange gains and
losses on short-term foreign currency borrowings and deposits are included
with net interest payable.
The assets and liabilities of foreign operations are translated to sterling at
foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated to sterling at the average rate
ruling during the period. Foreign exchange differences arising on
retranslation are recognised directly in a separate component of equity.
Foreign exchange differences arising on inter-company loans considered to be
permanent as equity are recorded in equity. The exchange rate from euro to
sterling at 31 December 2016 was £1: E1.1722 (2015: £1: E1.3558).
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to
the date of disposal are transferred to the consolidated income statement as
part of the profit or loss on disposal.
Exchange differences on all other transactions, except intercompany foreign
currency loans, are taken to operating loss.
Taxation
The tax expense represents the sum of the tax currently payable and any
deferred tax.
The tax currently payable is based on the estimated taxable profit for the
period. Taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated using the
expected tax rate applicable to annual earnings.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the corresponding tax bases used in the computation of taxable
profit. It is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Equity-settled share-based payments
The cost of providing share-based payments to employees is charged to the
income statement over the vesting period of the related share options or share
allocations. The cost is based on the fair values of the options and shares
allocated determined using the binomial method. The value of the charge is
adjusted to reflect expected and actual levels of vesting. Charges are not
adjusted for market related conditions which are not achieved. Where equity
instruments are granted to persons other than directors or employees the
Consolidated Income Statement is charged with the fair value of any goods or
services received.
Grants of options in relation to acquiring exploration assets in licence areas
are treated as additions to Slovenian exploration costs at Group level and
increases in investments at Company level.
Provisions
A provision is recognised in the Statement of Financial Position when the
Group has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and the
risks specific to the liability.
Convertible loan notes
Upon issue of a new convertible loan, where the convertible option is at a
fixed rate, the net proceeds received from the issue of CLNs are split between
a liability element and an equity component at the date of issue. The fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds of issue of the CLNs and the fair value assigned to the liability
component, representing the embedded option to convert the liability into
equity of the Group, is included in equity and is not re-measured.
Subsequent to the initial recognition the liability component is measured at
amortised cost using the effective interest method.
When there are amendments to the contractual loan note terms these terms are
assessed to determine whether the amendment represents an inducement to the
loan note holders to convert. If this is considered to be the case the
estimate of fair value adjusted as appropriate and any loss arising is
recorded in the income statement.
Where there are amendments to the contractual loan note terms that are
considered to represent a significant modification to the loan note, without
representing an inducement to convert, the Group treats the transaction as an
extinguishment of the existing convertible loan note and replaces the
instrument with a new convertible loan note. The fair value of the liability
component is estimated using the prevailing market interest rate for similar
non-convertible debt. The fair value of the conversion right is recorded as
an increase in equity. The previous equity reserve is reclassified to
accumulated loss. Any gain or loss arising on the extinguishment of the
instrument is recorded in the income statement, unless the transaction is with
a counterparty considered to be acting in their capacity as a shareholder
whereby the gain or loss is recorded in equity.
Non-derivative financial instruments
Non-derivative financial instruments comprise of investments in equity and
debt securities, trade and other receivables, cash and cash equivalents, loans
and borrowings and trade and other payables.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Trade and other receivables are measured at initial recognition at fair value
and are subsequently measured at amortised cost using the effective interest
method. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any
provision is recognised in the income statement.
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less.
Trade and other payables are initially measured at fair value and are
subsequently measured at amortised cost using the effective interest rate
method.
Financial liabilities and equity instruments issued by the Group are
classified in accordance with the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity
instrument. Where a financial liability is extinguished and replaced by a
convertible loan note and the counterparty is acting in their capacity as a
debt holder, the liability is derecognised and replaced with a new convertible
loan note (see above). Any gain or loss arising on the extinguishment is
recorded in the income statement.
Equity
Equity instruments issued by the Company are recorded at the proceeds
received, net of any direct issue costs.
Investments and loans
Shares and loans in subsidiary undertakings are shown at cost. Provisions are
made for any permanent diminution in value when the fair value of the assets
is assessed as less than the carrying amount of the asset. Intercompany loans
are repayable on demand but are included as non-current as the realisation is
not expected in the short term.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the Chief Executive Officer ('CEO').
2 Segmental Analysis
The Group has two reportable segments, an operating segment and a head office
segment, as described below. The operations and day to day running of the
business are carried out on a local level and therefore managed separately.
The operating segment reports to the UK head office which evaluates
performance, decide how to allocate resources and make other operating
decisions such as the purchase of material capital assets and services.
Internal reports are generated and submitted to the Group's CEO for review on
a monthly basis.
The operations of the Group as a whole are the exploration for, development
and production of oil and gas reserves.
The two geographic reporting segments are made up as follows:
Slovenia - exploration and development
UK - head office
The costs of exploration and development works are carried out under shared
licences with joint ventures and subsidiaries which are co-ordinated by the UK
head office. Segment revenue, segment expense and segment results include
transfers between segments. Those transfers are eliminated on consolidation.
Information regarding the current and prior year's results for each reportable
segment is included below. Initial performance is measured by the results
that arise from the exploration and development works carried out. Once
producing, other production performance measures are based on the production
revenues achieved. This is reported to the Group's CEO by the level of
capitalised exploration costs and the results from studies carried out at the
individual locations of the wells. The CEO uses these measures to evaluate
project viability within each operating segment. There is no revenue in the
current year from continuing operations.
2016 UK Slovenia eliminations Total
£ '000s £ '000s £ '000s £ '000s
Intercompany sales 160 (160) -
Total revenue 160 - (160) -
Administrative expenses (870) (665) 153 (1,382)
Material non-cash items
Net finance costs (1,296) (5) 7 (1,294)
Reportable segment loss before tax (2,006) (670) - (2,676)
Taxation - - - -
Reportable segment loss after taxation (2,006) (670) - (2,676)
Reportable segment assets
Opening carrying value of exploration assets - 32,711 - 32,711
Additions to exploration assets - 1,779 - 1,779
Effects of exchange rate movements - 3,051 - 3,051
Total plant and equipment 2 2 - 4
Total non-current assets 2 37,543 - 37,545
Other assets 27,382 31 (24,228) 3,185
Consolidated total assets 27,384 37,574 (24,228) 40,730
Reportable segmental liabilities
Trade payables (84) (64) - (148)
External loan balances (6,162) - - (6,162)
Inter-group borrowings - (27,382) 27,382 -
Other liabilities (81) (472) - (553)
Consolidated total liabilities (6,327) (27,918) 27,382 (6,863)
2015 UK Slovenia elims Total
£ '000s £ '000s £ '000s £ '000s
Intercompany sales 276 - (276) -
Total revenue 276 - (276) -
Administrative expenses (1,466) (698) 276 (1,888)
Material non-cash items
Net finance costs (1,741) (15) - (1,756)
Reportable segment loss before tax (2,931) (713) - (3,644)
Taxation - - - -
Reportable segment loss after taxation (4,482) (1,116) (25) (3,644)
Reportable segment assets
Carrying value of exploration assets - 33,166 - 33,166
Additions to exploration assets - 661 - 661
Effects of exchange rate movements - (1,116) - (1,116)
Total plant and equipment 1 2 - 3
Total non-current assets 1 32,713 - 32,714
Other assets 19,180 368 (19,455) 93
Consolidated total assets 19,181 33,081 (19,455) 32,807
Reportable segmental liabilities
Trade payables (418) (90) - (508)
External loan balances (11,239) - - (11,239)
Inter-group borrowings - (20,662) 20,662 -
Other liabilities - (386) - (386)
Consolidated total liabilities (11,657) (21,138) 20,662 (12,133)
3 Operating loss is stated after charging:
Year ended 31 December 2016 Year ended31 December 2015
£ '000s £ '000s
Employee costs (see Note 4) 560 702
Termination payments - 279
Share based payment charge 188 147
Foreign Exchange differences - 3
Included within Admin Expenses
Audit Fees 60 59
Fees payable to the company's auditor other services 2 3
62 62
4 Employees and directors
a. Employees
The average number of persons employed by the Company and Group, including
Executive Directors, was:
Year ended31 December 2016 Year ended31 December 2015
Management and technical 6 7
b. Directors and key management remuneration
Year ended31 December2016 Year ended31 December2015
Employees & Executive Directors £ '000s £ '000s
Wages and salaries 439 550
Termination payments - 279
Social security costs 81 113
Pension costs 37 36
Share-based payments 188 147
Taxable benefits 2 3
747 1,128
c. Directors remuneration
2016 Salary/fees Pension contributions 2016 Total
£ £ £
Executive Directors
C Hutchinson 154,500 16 154,516
Non-executive Directors
C Carver 60,000 - 60,000
C Davies 30,000 - 30,000
N Moore 30,000 - 30,000
Total 274,500 16 274,516
2015 Salary/fees Termination payments paid in the year Termination payments accrued in the year 2015 Total
£ £ £
Executive Directors
L Reece * 146,667 127,318 151,828 425,813
C Hutchinson 137,500 - - 137,500
Non-executive Directors -
C Carver 60,000 - - 60,000
C Davies 30,000 - - 30,000
N Moore 30,000 - - 30,000
Total 404,167 127,318 151,828 683,313
*Len Reece resigned on 14 August 2015
The highest paid Director in the year ended 31 December 2016 was Colin
Hutchinson earning £154,516 (2015: L Reece earning £146,667 excluding
termination payments). Colin Hutchinson (2015: Nil) is a member of the
defined contribution pension scheme which commenced in December 2016.
d. Directors' incentive share options
2016 As at Granted/ As at Date Share Price Exercise Exercise Period
01-Jan-16 (Lapsed) 31-Dec-16 Granted at Grant* Price* Start End
C Carver 1,328,443 - 1,328,443 30-Apr-13 16.40p 20p 30-Apr-16 30-Apr-23
C Carver - 13,985,884 13,985,884 05-May-16 1.58p 1.58p 05-May-19 06-May-26
C Hutchinson 265,688 - 265,688 23-May-13 13.00p 20p 23-May-16 30-Apr-23
C Hutchinson - 34,964,709 34,964,709 05-May-16 1.58p 1.58p 05-May-19 06-May-26
N Moore - 6,992,942 6,992,942 05-May-16 1.58p 1.58p 05-May-19 06-May-26
C Davies - 6,992,942 6,992,942 05-May-16 1.58p 1.58p 05-May-19 06-May-26
2015 As at Impact of capital Granted/ As at Date Share Price Exercise Exercise Period
01-Jan-15 reorganisation (Lapsed) 31-Dec-15 Granted at Grant Price Start End
L Reece 69,079,066 (65,625,113) - 3,453,953 30-Apr-13 16.40p 20p 30-Apr-16 30-Apr-23
C Carver 26,568,871 (25,240,428) - 1,328,443 30-Apr-13 16.40p 20p 30-Apr-16 30-Apr-23
C Hutchinson 5,313,774 (5,048,086) - 265,688 23-May-13 13.00p 20p 23-May-16 23-May-23
N Moore 500,000 - (500,000) - 17-Nov-10 5.25p 7.313p 17-Nov-11 17-Nov-15
N Moore 500,000 - (500,000) - 17-Nov-10 5.25p 15p 17-Nov-11 17-Nov-15
C Davies 500,000 - (500,000) - 17-Nov-10 5.25p 7.313p 17-Nov-11 17-Nov-15
C Davies 500,000 - (500,000) - 17-Nov-10 5.25p 15p 17-Nov-11 17-Nov-15
* Post share consolidation. Refer to Note 18.
5 Finance income and costs recognised in the year
Year ended 31 December 2016 Year ended 31 December 2015
£ '000s £ '000s
Finance income
Income on bank deposits - 1
Foreign exchange movements realised 6 3
Other income 153 -
Gain on EnQuest liability restructuring - 741
159 745
Finance cost
Interest payable on borrowings (51) (11)
Accretion charge on convertible loan notes (1,380) (1,440)
Loan fees (16) (4)
Bank Charges (6) (1)
Unwinding of EnQuest liability - (186)
Foreign exchange movements realised - (3)
Loss on extinguishment of convertible loan notes - (856)
(1,453) (2,501)
Please refer to Note 13 for a description of financing activity during the
year.
6 Income tax expense
Year ended31 December 2016 Year ended31 December 2015
£ '000s £ '000s
Current tax expense - -
Deferred tax expense - -
Total tax expense for the year - -
The difference between the total tax expense shown above and the amount
calculated by applying the standard rate of UK corporation tax to the loss
before tax is as follows:
Year ended31 December 2016 Year ended31 December 2015
£ '000s £ '000s
Loss for the year (2,676) (3,644)
Income tax using the Company's domestic tax rate at 20% (2015: 20%) (535) (729)
Effects of:
Net increase in unrecognised losses c/f 666 782
Change in unrecognised temporary differences - -
Effect of tax rates in foreign jurisdictions 20 29
Other non-taxable items (195) (186)
Other non-deductible expenses 44 104
Total tax expense for the year - -
7 Loss per share
31 December 2016 31 December 2015
£ '000s £ '000s
Result for the year
Total loss for the year attributable to equity shareholders 2,676 3,644
Weighted average number of ordinary shares Number Number
For basic earnings per share 544,270,848 88,160,768
Loss per share (pence) (0.49) (4.13)
As the result for the year was a loss no diluted EPS is disclosed. At 31
December 2016, potentially dilutive instruments in issue were 973,469,828
(2015: 1,362,874,079). Dilutive shares arise from share options and CLNs
issued by the Company and from the deferred consideration on the Trameta
transaction.
8 Exploration and evaluation costs - Group
Exploration Costs - Group Slovenia Total
Cost
At 1 January 2015 33,166 33,166
Additions 661 661
Effects of exchange rate movements (1,116) (1,116)
At 31 December 2015 32,711 32,711
At 1 January 2016 32,711 32,711
Additions 1,779 1,779
Effects of exchange rate movements 3,051 3,051
At 31 December 2016 37,541 37,541
Carrying value
At 31 December 2016 37,541 37,541
At 31 December 2015 32,711 32,711
At 1 January 2015 33,166 33,166
For the purposes of impairment testing the intangible oil and gas assets are
allocated to the Group's cash-generating unit, which represent the lowest
level within the Group at which the intangible oil and gas assets are measured
for internal management purposes, which is not higher than the Group's
operating segments as reported in Note 2.
In the year, the Company has accounted for the Trameta transaction as the
acquisition of land and pipeline rights. relating to the exploration project.
This acquisition has been valued at £1.1 million, see Note 22.
The amounts for intangible exploration assets represent costs incurred on
active exploration projects. Amounts capitalised are assessed for impairment
indicators under IFRS 6 at each period end as detailed in the Group's
accounting policy. In addition, the Group routinely reviews the economic
model and reasonably possible sensitivities and considers whether there are
indicators of impairment. As at 31 December 2016 and 2015 the net present
value significantly exceeded the carrying value of the assets. The key
estimates associated with the economic model net present value are detailed in
Note 1. The outcome of ongoing exploration, and therefore whether the
carrying value of intangible exploration assets will ultimately be recovered,
is inherently uncertain.
9 Investment in subsidiaries - Company
£ 000s
At 1 January & 31 December 2015 14,340
At 1 January 2016 14,340
Acquisition of Trameta 1,103
At 31 December 2016 15,443
Name of company Principal activity Country of incorporation % of share capital held 2016 % of share capital held 2015
Ascent Slovenia LimitedArias Fabrega & Fabrega Trust Co. BVI LimitedLevel 1, Palm Grove HouseWickham's Cay 1, Road TownTortola, British Virgin Islands Oil and Gas exploration British Virgin Islands 100% 100%
Ascent Resources dooGlavna ulica 79220 Lendava-LendvaSlovenia Oil and Gas exploration Slovenia 100% 100%
Trameta dooGlavna ulica 79220 Lendava-LendvaSlovenia Infrastructure owner Slovenia 100% -
Ascent Resources Netherlands BVc/o Ascent Resources plcc/o Taylor Wessing LLP5 New Street SquareLondon EC4A 3TW Oil and Gas exploration Netherlands 100% 100%
All subsidiary companies are held directly by Ascent Resources plc.
10 Trade and other receivables - Group
2016 2015
£ '000s £ '000s
VAT recoverable 26 31
Other receivables - 15
Prepayments & accrued income 6 15
32 61
11 Trade and other receivables - Company
2016 2015
£ '000s £ '000s
VAT recoverable 4 14
Other receivables - 15
Prepayments & accrued income 6 15
10 44
12 Deferred tax - Group & Company
2016 2015
£ '000s £ '000s
Group
Total tax losses (31,203) (27,896)
Unrecorded deferred tax asset at 17% (2015: 20%) (5,305) (5,858)
Company
Total tax losses (10,322) (9,834)
Unrecorded deferred tax asset at 17% (2015: 20%) (1,755) (1,967)
No deferred tax asset has been recognised in respect of the tax losses carried
forward as the recoverability of this benefit is dependent on the future
profitability of the Company, the timing of which cannot reasonably be
foreseen.
13 Borrowings - Group & Company
2016 2015
Group £ '000s £ '000s
Current
Short-term loan facility - 461
Convertible loan notes - 10,778
- 11,239
Company
Current
Short-term loan facility - 461
Convertible loan notes - 10,778
- 11,239
Group & Company
Non-current
Convertible loan notes 6,162 -
6,162 -
Convertible Loan Note 2016 2015
£ '000s £ '000s
Liability brought forward 10,778 9,624
Interest expense 1,380 1,346
Modification to existing notes - de-recognition November 2016 (viii) (8,140) -
Modification to existing notes - recognition of amended note - November 2016 (viii) 5,352
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