REG - Chariot Oil & Gas Ld - Full Year Results 2016 <Origin Href="QuoteRef">CHARC.L</Origin> - Part 2
15/03/2017 07:07
- Part 2: For the preceding part double click ID:nRSO4891Za
4,779 338,348 796 4,514 (1,241) (185,145) 162,051
Loss and total comprehensive loss for the year - - - - - (14,904) (14,904)
Share based payments - - - 1,104 - - 1,104
Transfer of reserves due to issue of share awards 32 1,306 - (1,338) - - -
As at 31 December 2015 4,811 339,654 796 4,280 (1,241) (200,049) 148,251
Loss and total comprehensive loss for the year - - - - - (6,832) (6,832)
Share based payments - - - 787 - - 787
Transfer of reserves due to issue of share awards 63 979 - (1,042) - - -
Transfer of reserves due to lapsed share options - - - (311) - 311 -
As at 31 December 2016 4,874 340,633 796 3,714 (1,241) (206,570) 142,206
The following describes the nature and purpose of each reserve within owners'
equity.
Share capital Amount subscribed for share
capital at nominal value.
Share premium Amount subscribed for share capital
in excess of nominal value.
Contributed equity Amount representing equity
contributed by the shareholders.
Share based payments reserve Amount representing the cumulative charge
recognised under IFRS2 in respect of share option, LTIP and RSU schemes.
Foreign exchange reserve Foreign exchange differences arising on
translating into the reporting
currency.
Retained deficit Cumulative net gains and losses
recognised in the financial statements.
The notes form part of these financial statements.
Consolidated Statement of Financial Position as at 31 December 2016
31 December 2016 31 December 2015
Notes US$000 US$000
Non-current assets
Exploration and appraisal costs 11 119,730 108,438
Property, plant and equipment 12 36 62
Total non-current assets 119,766 108,500
Current assets
Trade and other receivables 13 2,123 1,306
Inventory 14 938 938
Cash and cash equivalents 15 25,021 39,713
Total current assets 28,082 41,957
Total assets 147,848 150,457
Current liabilities
Trade and other payables 16 5,642 2,206
Total current liabilities 5,642 2,206
Total liabilities 5,642 2,206
Net assets 142,206 148,251
Capital and reserves attributable to equity holders of the parent
Share capital 17 4,874 4,811
Share premium 340,633 339,654
Contributed equity 796 796
Share based payment reserve 3,714 4,280
Foreign exchange reserve (1,241) (1,241)
Retained deficit (206,570) (200,049)
Total equity 142,206 148,251
The notes form part of these financial statements.
The financial statements were approved by the Board of Directors and
authorised for issue on 14 March 2017.
George Canjar
Chairman
Consolidated Cash Flow Statement for the Year Ended 31 December 2016
Year ended 31 December 2016 Year ended 31 December 2015
US$000 US$000
Operating activities
Loss for the year before taxation (6,673) (14,660)
Adjustments for:
Finance income (2,831) (1,303)
Finance expense - 3,943
Depreciation 39 301
Share based payments 787 1,104
Provision against inventory - 6,559
Impairment of exploration asset 5,173 -
Net cash outflow from operating activities before changes in working capital (3,505) (4,056)
Increase in trade and other receivables (854) (20)
Increase / (decrease) in trade and other payables 604 (705)
Increase in inventories - (70)
Cash outflow from operating activities (3,755) (4,851)
Tax payment (161) (276)
Net cash outflow from operating activities (3,916) (5,127)
Investing activities
Finance income 1,205 1,306
Payments in respect of property, plant and equipment (13) (21)
Farm-in proceeds - 1,866
Payments in respect of intangible assets (13,596) (7,850)
Net cash outflow used in investing activities (12,404) (4,699)
Net decrease in cash and cash equivalents in the year (16,320) (9,826)
Cash and cash equivalents at start of the year 39,713 53,482
Effect of foreign exchange rate changes on cash and cash equivalent 1,628 (3,943)
Cash and cash equivalents at end of the year 25,021 39,713
The notes form part of these financial statements.
Notes forming part of the financial statements for the year ended 31 December
2016
1 General information
Chariot Oil & Gas Limited is a company incorporated in Guernsey with
registration number 47532. The address of the registered office is Regency
Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3RH. The nature of the
Company's operations and its principal activities are set out in the Report of
the Directors and in the Exploration Manager's Review of Operations.
2 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and IFRIC interpretations, as issued by
the International Accounting Standards Board (IASB), as adopted by the
European Union.
In accordance with the provisions of section 244 of the Companies (Guernsey)
Law 2008, the Group has chosen to only report the Group's consolidated
position, hence separate Company only financial statements are not presented.
The financial statements are prepared under the historical cost accounting
convention on a going concern basis.
Going concern
The Directors are of the opinion that the Group has adequate financial
resources to enable it to undertake its planned programme of exploration and
appraisal activities for a period of at least 12 months.
New Accounting Standards
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
implementation of these standards and amendments to standards has had no
material effect on the Group's accounting policies.
Standard Effective year commencing on or after
IAS 1 - Presentation of Financial Statements (Amendments) 1 January 2016
IAS 16 and IAS 38 - Acceptable Methods of Depreciation and Amortisation (Amendments) 1 January 2016
IAS 27 - Separate Financial Statements 1 January 2016
IFRS 11 - Joint Arrangements (Amendments) 1 January 2016
Annual Improvements to IFRSs - (2012-2014 Cycle) 1 January 2016
Certain new standards and amendments to standards have been published that are
mandatory for the Group's accounting periods beginning after 1 January 2017 or
later years to which the Group has decided not to adopt early when early
adoption is available. The implementation of these standards and amendments is
expected to have no material effect on the Group's accounting policies. These
are:
Standard Effective year commencing on or after
IAS 7 - Statement of Cash Flows (Amendments) 1 January 2017*
IAS 12 - Income Taxes (Amendments) 1 January 2017*
IFRS 9 - Financial Instruments 1 January 2018*
IFRS 15 - Revenue from Contract with Customers 1 January 2018*
IFRS 16 - Leases 1 January 2019*
IFRS 2 - Share Based Payments (Amendments) 1 January 2018*
Annual Improvements to IFRSs - (2014-2016 Cycle) 1 January 2017* & 1 January 2018*
* Not yet endorsed by the EU.
Exploration and appraisal costs
All expenditure relating to the acquisition, exploration, appraisal and
development of oil and gas interests, including an appropriate share of
directly attributable overheads, is capitalised within cost pools.
The Board regularly reviews the carrying values of each cost pool and writes
down capitalised expenditure to levels it considers to be recoverable. Cost
pools are determined on the basis of geographic principles. The Group
currently has five cost pools being Central and Southern Blocks in Namibia,
Mauritania, Morocco and Brazil. In addition where exploration wells have been
drilled, consideration of the drilling results is made for the purposes of
impairment of the specific well costs. If the results sufficiently enhance the
understanding of the reservoir and its characteristics it may be carried
forward when there is an intention to continue exploration and drill further
wells on that target.
Where farm-in transactions occur which include elements of cash consideration
for, amongst other things, the reimbursement of past costs, this cash
consideration is credited to the relevant accounts within the cost pools where
the farm-in assets were located. Any amounts of farm-in cash consideration in
excess of the value of the historic costs in the cost pools is treated as a
credit to the Consolidated Statement of Comprehensive Income.
Any Capital Gains Tax payable in respect of a farm-in transaction is
recognised in the Consolidated Statement of Comprehensive Income.
Inventories
The Group's share of any material and equipment inventories is accounted for
at the lower of cost and net realisable value. The cost of inventories
comprises all costs of purchase, costs of conversion and other costs incurred
in bringing the inventories to their present location and condition.
Taxation
Income tax expense represents the sum of the current tax and deferred tax
charge for the year.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases, and 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.
Deferred tax is calculated at the tax rates that have been enacted or
substantively enacted and are expected to apply in the year when the liability
is settled or the asset realised. Deferred tax is charged or credited to the
Consolidated Statement of Comprehensive Income, except when it relates to
items charged or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Foreign currencies
Transactions in foreign currencies are translated into US Dollars at the
exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated into US Dollars
at the closing rates at the reporting date and the exchange differences are
included in the Consolidated Statement of Comprehensive Income. The functional
and presentational currency of the parent and all Group companies is the US
Dollar.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or fair value on acquisition
less depreciation and impairment. Depreciation is provided on a straight line
basis at rates calculated to write off the cost less the estimated residual
value of each asset over its expected useful economic life. The residual value
is the estimated amount that would currently be obtained from disposal of the
asset if the asset were already of the age and in the condition expected at
the end of its useful life.
Property, plant and equipment are depreciated using the straight line method
over their estimated useful lives over a range of 2.5 - 5 years.
The carrying value of property, plant and equipment is assessed annually and
any impairment charge is charged to the Consolidated Statement of
Comprehensive Income.
Operating leases
Rent paid on operating leases is charged to the Consolidated Statement of
Comprehensive Income on a straight line basis over the term of the lease.
Share based payments
Where equity settled share awards are awarded to employees or Directors, the
fair value of the awards at the date of grant is charged to the Consolidated
Statement of Comprehensive Income over the vesting period. Non-market vesting
conditions are taken into account by adjusting the number of equity
instruments expected to vest at each balance sheet date so that, ultimately,
the cumulative amount recognised over the vesting period is based on the
number of awards that eventually vest. Market vesting conditions are factored
into the fair value of the awards granted. As long as all other vesting
conditions are satisfied, a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense is not adjusted for
failure to achieve a market vesting condition.
Where the terms and conditions of awards are modified before they vest, the
increase in the fair value of the awards, measured immediately before and
after the modification, is also charged to the Consolidated Statement of
Comprehensive Income over the remaining vesting period.
Where shares already in existence have been given to employees by
shareholders, the fair value of the shares transferred is charged to the
Consolidated Statement of Comprehensive Income and recognised in reserves as
Contributed Equity.
Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if it has power over the investee
and it is exposed to variable returns from the investee and it has the ability
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 ("the Group") as if they formed a
single entity. Intercompany transactions and balances between the Group
companies are therefore eliminated in full.
Financial instruments
The Group's financial assets consist of a bank current account or short term
deposits at variable interest rates and other receivables. Any interest earned
is accrued and classified as finance income. Trade and other receivables are
stated initially at fair value and subsequently at amortised cost.
The Group's financial liabilities consist of trade and other payables. The
trade and other payables are stated initially at fair value and subsequently
at amortised cost.
Joint operations
Joint operations are those in which the Group has certain contractual
agreements with other participants to engage in joint activities that do not
create an entity carrying on a trade or business on its own. The Group
includes its share of assets, liabilities and cash flows in joint
arrangements, measured in accordance with the terms of each arrangement, which
is usually pro rata to the Group's interest in the joint operations. The Group
conducts its exploration, development and production activities jointly with
other companies in this way.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future. Estimates and
judgements are continually evaluated based on historical experiences and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may
deviate from these estimates and assumptions. If these estimates and
assumptions are significantly over or under stated, this could cause a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year. The areas where this could impact the Group are:
a) Areas of judgement
i. Recoverability of intangible assets
Expenditure is capitalised as an intangible asset by reference to appropriate
cost pools and is assessed for impairment when circumstances suggest that the
carrying amount may exceed its recoverable value. This assessment involves
judgement as to: (i) the likely future commerciality of the asset and when
such commerciality should be determined; (ii) future revenues and costs
pertaining to any asset based on proved plus probable, prospective and
contingent resources; and (iii) the discount rate to be applied to such
revenues and costs for the purpose of deriving a recoverable value.
ii. Treatment of farm-in transactions
All farm-in transactions are reflected in these financial statements in line
with the accounting policy on Exploration and Appraisal Costs. Farm-in
transactions are recognised in the financial statements if they are legally
complete during the year under review or, if all key commercial terms are
agreed and legal completion is only subject to administrative approvals which
are obtained within the post balance sheet period or are expected to be
obtained within a reasonable timeframe thereafter.
b) Areas of estimation
i. Share based payments
In order to calculate the charge for share based compensation as required by
IFRS 2, the Group makes estimates principally relating to the assumptions used
in its pricing model as set out in note 20.
ii. Inventory provision
The Group assesses whether a provision is required for inventory by comparing
the cost to the net realisable value, which is estimated based on available
market prices. If the net realisable value is lower than the cost the
difference is charged to the Consolidated Statement of Comprehensive Income.
3 Segmental analysis
The Group has two reportable segments being exploration for oil and gas and
corporate costs. The operating results of each of these segments are regularly
reviewed by the Board of Directors in order to make decisions about the
allocation of resources and assess their performance.
31 December 2016
Exploration forOil and Gas Corporate Total
US$000 US$000 US$000
Share based payment - (787) (787)
Administrative expenses (467) (3,077) (3,544)
Impairment of exploration asset (5,173) - (5,173)
Finance income - 2,831 2,831
Tax expense - (159) (159)
Loss after taxation (5,640) (1,192) (6,832)
Additions to non-current assets 16,465 13 16,478
Total assets 120,668 27,180 147,848
Total liabilities (4,515) (1,127) (5,642)
Net assets 116,153 26,053 142,206
31 December 2015
Exploration forOil and Gas Corporate Total
US$000 US$000 US$000
Share based payment - (1,104) (1,104)
Administrative expenses (547) (3,810) (4,357)
Provision against inventory (6,559) - (6,559)
Finance income - 1,303 1,303
Finance expense - (3,943) (3,943)
Tax expense - (244) (244)
Loss after taxation (7,106) (7,798) (14,904)
Additions to non-current assets 8,627 26 8,653
Total assets 109,426 41,031 150,457
Total liabilities (1,680) (526) (2,206)
Net assets 107,746 40,505 148,251
4 Loss from operations
31 December 2016 31 December 2015
US$000 US$000
Loss from operations is stated after charging:
Impairment of exploration asset 5,173 -
Provision against inventory - 6,559
Operating lease - office rental 490 580
Depreciation 39 301
Share based payments - Long Term Incentive Scheme 734 978
Share based payments - Restricted Share Unit Scheme 53 126
Auditors' remuneration:
Fees payable to the Company's Auditors for the audit of the Company's annual accounts 59 60
Audit of the Company's subsidiaries pursuant to legislation 14 13
Fees payable to the Company's Auditors for the review of the Company's interim accounts 10 12
Total payable 83 85
5 Leases commitments
31 December 2016 31 December 2015
US$000 US$000
Not later than one year 359 497
Later than one year and not later than five years 7 485
Total 366 982
The leases are operating leases in relation to the offices in the UK and
overseas.
6 Employment costs
Employees 31 December 2016 31 December 2015
US$000 US$000
Wages and salaries 1,914 2,397
Payment in lieu of notice / compromise payment 243 -
Pension costs 102 122
Share based payments 532 804
Sub-total 2,791 3,323
Capitalised to exploration costs (1,397) (1,597)
Total 1,394 1,726
Key management personnel 31 December 2016 31 December 2015
US$000 US$000
Wages and salaries 431 1,256
Payment in lieu of notice / compromise payment 236 210
Pension costs 3 18
Share based payments 255 300
Sub-total 925 1,784
Capitalised to exploration costs (188) (508)
Total 737 1,276
The Directors are the key management personnel of the Group. Details of the
Directors' emoluments and interest in shares are shown in the Directors'
Remuneration Report.
7 Finance income and expense
Finance income 31 December 2016 31 December 2015
US$000 US$000
Bank interest receivable 1,203 1,303
Foreign exchange gain 1,628 -
Total 2,831 1,303
Finance expense 31 December 2016 31 December 2015
US$000 US$000
Foreign exchange loss - 3,943
Total - 3,943
8 Investments
The Company's wholly owned subsidiary undertakings at 31 December 2016 and 31
December 2015, excluding dormant entities, were:
Subsidiary undertaking Principal activity Country of incorporation
Chariot Oil & Gas Investments (Namibia) Limited Holding company Guernsey
Chariot Oil & Gas Investments (Mauritania) Limited Oil and gas exploration Guernsey
Chariot Oil & Gas Investments (Morocco) Limited Oil and gas exploration Guernsey
Chariot Oil and Gas Statistics Limited Service company UK
Enigma Oil & Gas Exploration (Proprietary) Limited1 Oil and gas exploration Namibia
Chariot Oil & Gas Investments (Brazil) Limited Holding company Guernsey
Chariot Brasil Petroleo e Gas Ltda Oil and gas exploration Brazil
Chariot Oil & Gas Finance (Brazil) Limited1 Service company Guernsey
1Indirect shareholding of the
Company.
9 Taxation
The Company is tax resident in the UK, however no tax charge arises due to
taxable losses for the year (31 December 2015: US$Nil).
No taxation charge arises in Namibia, Morocco, Mauritania or the UK
subsidiaries as they have recorded taxable losses for the year (31 December
2015: US$Nil).
In Brazil, there were taxable profits due to interest received on cash
balances resulting in a tax charge payable of US$159,000 (31 December 2015:
US$244,000). There was no deferred tax charge or credit in either period
presented.
Factors affecting the tax charge for the current year
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax in the UK applied to losses for the year
are as follows:
31 December 2016 31 December 2015
US$000 US$000
Tax reconciliation
Loss on ordinary activities for the year before tax (6,673) (14,660)
Loss on ordinary activities at the standard rate of corporation tax in the UK of 20% (31 December 2015: 20.25%) (1,335) (2,969)
Non-deductible expenses 1,200 1,613
Difference in tax rates in other jurisdictions 127 125
Deferred tax effect not recognised 167 1,475
Total taxation charge 159 244
The Company had tax losses carried forward on which no deferred tax asset is
recognised. Deferred tax not recognised in respect of losses carried forward
total US$5.4 million (31 December 2015: US$5.2 million). Deferred tax assets
were not recognised as there is uncertainty regarding the timing of future
profits against which these assets could be utilised.
10 Loss per share
The calculation of basic loss per Ordinary share is based on a loss of
US$6,832,000 (31 December 2015: loss of US$14,904,000) and on 266,296,528
Ordinary shares (31 December 2015: 263,131,736) being the weighted average
number of Ordinary shares in issue during the year. Potentially dilutive share
awards are detailed in note 20, however these do not have any dilutive impact
as the Group reported a loss for the year, consequently a separate diluted
loss per share has not been presented.
11 Exploration and appraisal costs
31 December 2016 31 December 2015
US$000 US$000
Net book value brought forward 108,438 101,251
Additions 16,465 8,627
Farm-in proceeds - (1,440)
Impairment (5,173) -
Net book value carried forward 119,730 108,438
As at 31 December 2016 the net book values of the five cost pools are Central
Blocks offshore Namibia US$49.8 million (31 December 2015: US$44.5 million),
Southern Blocks offshore Namibia US$51.0 million (31 December 2015: US$50.1
million), Mauritania US$Nil (31 December 2015: US$4.9 million), Morocco US$5.0
million (31 December 2015: US$4.1 million) and Brazil US$13.9 million (31
December 2015: US$4.8 million).
Farm-in proceeds in 2015 are in relation to the farm-out of 25% of the Rabat
Deep Offshore permits I-VI, Morocco, to a wholly owned subsidiary of Woodside
Petroleum Limited, which completed on 23 December 2014.
As announced on 16 June 2016 the Company has elected not to enter into the
First Renewal Phase of the C-19 licence in Mauritania causing an impairment of
US$5.2 million.
12 Property, plant and equipment
Fixtures, fittings and equipment Fixtures, fittingsand equipment
31 December 2016 31 December 2015
US$000 US$000
Cost
Brought forward 1,622 1,649
Additions 13 26
Disposals - (53)
Carried forward 1,635 1,622
Depreciation
Brought forward 1,560 1,307
Charge 39 301
Disposals - (48)
Carried forward 1,599 1,560
Net book value brought forward 62 342
Net book value carried forward 36 62
13 Trade and other receivables
31 December 2016 31 December 2015
US$000 US$000
Other receivables and prepayments 2,123 1,306
The fair value of trade and other receivables is equal to their book value.
14 Inventory
31 December 2016 31 December 2015
US$000 US$000
Wellheads and casing 938 938
In 2015 the Group assessed the carrying value of its inventory and provided
for a write-down of US$6.6 million to net realisable value.
15 Cash and cash equivalents
31 December 2016 31 December 2015
Analysis by currency US$000 US$000
US Dollar 21,184 31,403
Brazilian Real 3,383 7,823
Sterling 430 450
Namibian Dollar 23 23
Mauritanian Ouguiya 1 14
25,021 39,713
As at 31 December 2016 and 31 December 2015 the US Dollar and Sterling cash is
held in UK and Guernsey bank accounts. All other cash balances are held in the
relevant country of operation.
As at 31 December 2016, the cash balance of US$25.0 million (31 December 2015:
US$39.7 million) contains the following cash deposits that are secured against
bank guarantees given in respect of exploration work to be carried out:
31 December 2016 31 December 2015
US$000 US$000
Brazilian licences 103 7,216
Mauritanian licence - 611
Moroccan licences 5,750 2,900
Namibian 2714B licence 300 300
6,153 11,027
The funds are freely transferrable but alternative collateral would need to be
put in place to replace the cash security.
16 Trade and other payables
31 December 2016 31 December 2015
US$000 US$000
Trade payables 1,926 1,600
Accruals 3,708 596
Tax Payable 8 10
5,642 2,206
The fair value of trade and other payables is equal to their book value.
17 Share capital
Authorised
31 December 2016 31 December 2016 31 December 2015 31 December 2015
Number US$000 Number US$000
Ordinary shares of 1p each* 400,000,000 7,980 400,000,000 7,980
Allotted, called up and fully paid
31 December 2016 31 December 2016 31 December 2015 31 December 2015
Number US$000 Number US$000
Ordinary shares of 1p each* 268,352,392 4,874 264,274,904 4,811
* The authorised and initially allotted and issued share capital on admission
(19 May 2008) has been translated at the historic rate of US$:GBP of 1.995.
The shares issued since admission have been translated at the date of issue,
or, in the case of share awards, the date of grant and not subsequently
retranslated.
Details of the Ordinary shares issued are in the table below:
Date Description Price US$ No of shares
31 December 2014 Opening Balance 262,294,113
17 July 2015 Issue of share award 3.11 210,000
17 July 2015 Issue of share award 0.50 813,008
17 July 2015 Issue of share award 0.39 103,222
17 July 2015 Issue of share award 0.10 396,478
17 July 2015 Issue of share award 2.95 12,768
17 July 2015 Issue of share award 0.33 154,168
17 July 2015 Issue of share award 0.09 52,120
19 August 2015 Issue of share award 1.36 15,000
19 August 2015 Issue of share award 0.50 30,000
19 August 2015 Issue of share award 0.08 17,642
24 November 2015 Issue of share award 0.50 134,417
24 November 2015 Issue of share award 0.06 41,968
31 December 2015 264,274,904
7 June 2016 Issue of share award 0.34 337,663
7 June 2016 Issue of share award 0.14 778,475
7 June 2016 Issue of share award 0.26 695,653
7 June 2016 Issue of share award 0.33 41,666
7 June 2016 Issue of share award 1.25 13,334
7 June 2016 Issue of share award 0.50 35,772
7 June 2016 Issue of share award 0.13 50,542
7 June 2016 Issue of share award 0.24 127,876
21 June 2016 Issue of share award 0.50 114,904
21 June 2016 Issue of share award 0.33 133,333
21 June 2016 Issue of share award 0.14 109,375
21 June 2016 Issue of share award 0.11 186,254
21 June 2016 Issue of share award 0.18 231,885
21 June 2016 Issue of share award 0.20 80,000
21 June 2016 Issue of share award 0.12 35,555
26 July 2016 Issue of share award 4.38 7,000
26 July 2016 Issue of share award 0.50 325,203
26 July 2016 Issue of share award 0.39 243,229
26 July 2016 Issue of share award 0.15 165,156
26 July 2016 Issue of share award 0.08 260,717
3 October 2016 Issue of share award 0.20 80,000
3 October 2016 Issue of share award 0.12 23,896
31 December 2016 268,352,392
18 Related party transactions
- Key management personnel comprises the Directors and details of their
remuneration are set out in note 6 and the Directors' Remuneration Report.
- Westward Investments Limited ("Westward") is a company where Robert
Sinclair is a Director of the Corporate Director and which is owned by a
discretionary trust of which Adonis Pouroulis is one of a number of
beneficiaries. During the year ended 31 December 2016, Westward received
administrative services from an employee of Chariot for which Westward
incurred fees payable to Chariot of US$Nil (31 December 2015: US$13,365). The
amount outstanding as at 31 December 2016 was US$Nil (31 December 2015:
US$Nil).
- Pella Resources Limited ("Pella") is a company where Robert Sinclair and
Adonis Pouroulis are Directors. During the year ended 31 December 2016, Pella
received administrative services from employees of Chariot for which it
incurred fees payable to Chariot of US$Nil (31 December 2015: US$37,818). The
amount outstanding as at 31 December 2016 was US$Nil (31 December 2015:
US$Nil).
- Alufer Mining Limited ("Alufer") is a company where Robert Sinclair was a
Director until 20 December 2016 and Adonis Pouroulis is a Director. During the
year ended 31 December 2016, Alufer received administrative services from an
employee of Chariot for which it incurred fees payable to Chariot of US$75,384
(31 December 2015: US$6,902). The amount outstanding as at 31 December 2016
was US$11,357 (31 December 2015: US$6,902) which was received post year end.
19 Financial instruments
The Board of Directors determine, as required, the degree to which it is
appropriate to use financial instruments or other hedging contracts or
techniques to mitigate risk. Throughout the year ending 31 December 2016, no
trading in financial instruments was undertaken (31 December 2015: US$Nil).
There is no material difference between the book value and fair value of the
Group cash balances, short term receivables and payables.
Market risk
Market risk arises from the Group's use of interest bearing and foreign
currency financial instruments. It is the risk that future cash flows of a
financial instrument will fluctuate because of changes in interest rates
(interest rate risk) and foreign exchange rates (currency risk). Throughout
the year, the Group has held surplus funds on deposit, principally with its
main relationship banks Barclays and BNP Paribas, on fixed short term
deposits. The credit ratings of the main relationship banks the Group holds
cash with does not fall below A or equivalent. The Group does not undertake
any form of speculation on long term interest rates or currency movements,
therefore it manages market risk by maintaining a short term investment
horizon and placing funds on deposit to optimise short term yields where
possible but, moreover, to ensure that it always has sufficient cash resources
to meet payables and other working capital requirements when necessary. As
such, market risk is not viewed as a significant risk to the Group. The
Directors have not disclosed the impact of interest rate sensitivity analysis
on the Group's financial assets and liabilities at the year-end as the risk is
not deemed to be material.
This transactional risk is managed by the Group holding the majority of its
funds in US Dollars to recognise that US Dollars is the trading currency of
the industry, with an appropriate balance maintained in Brazilian Real,
Sterling, Namibian Dollars and Mauritanian Ouguiya to meet other non-US Dollar
industry costs and on-going corporate and overhead commitments.
At the year end, the Group had cash balances of US$25.0 million (31 December
2015: US$39.7 million) as detailed in note 15.
Other than the non-US Dollar cash balances described in note 15, no other
material financial instrument is denominated in a currency other than US
Dollars. A 10% adverse movement in exchange rates would lead to a foreign
exchange loss of US$384,000 and a 10% favourable movement in exchange rates
would lead to a corresponding gain; the effect on net assets would be the same
as the effect on profits (31 December 2015: US$831,000).
Capital
In managing its capital, the Group's primary objective is to maintain a
sufficient funding base to enable it to meet its working capital and strategic
investment needs. The Group currently holds sufficient capital to meet its
on-going needs for at least the next 12 months.
Liquidity risk
The Group's practice is to regularly review cash needs and to place excess
funds on fixed term deposits. This process enables the Group to optimise the
yield on its cash resources whilst ensuring that it always has sufficient
liquidity to meet payables and other working capital requirements when these
become due.
The Group has sufficient funds to continue operations for the forthcoming year
and has no perceived liquidity risk.
Credit risk
The Group's policy is to perform appropriate due diligence on any party with
whom it intends to enter into a contractual arrangement. Where this involves
credit risk, the Company will put in place measures that it has assessed as
prudent to mitigate the risk of default by the other party. This would consist
of instruments such as bank guarantees and letters of credit or charges over
assets.
At the year-end the Group acts as Operator in two non-carried joint venture
relationships on two of the Group's licences and therefore from time to time
is owed money from its joint venture partners. The joint venture partner which
has a 20% interest in the Central Blocks in Namibia is an entity which is part
owned by one of the world's largest seismic and geoscience companies. The
joint venture partner which has a 25% interest in the Rabat Deep Offshore
permits I-VI, Morocco, is an entity which is wholly owned by Australia's
largest oil company.
As such, the Group has not put in place any particular credit risk measures in
this instance as the Directors view the risk of default on any payments due
from the joint venture partner as being very low.
20 Share based payments
Share Option Scheme
During the year, the Company operated the Chariot Oil & Gas Share Option
Scheme ("Share Option Scheme"). The Company recognised total expenses of
US$Nil (31 December 2015: US$Nil) related to equity settled share based
payment transactions under the plan.
The options expire if they remain unexercised after the exercise period has
lapsed. For options valued using the Black-Scholes model, there are no market
performance conditions or other vesting conditions attributed to the options.
The following table sets out details of all outstanding options granted under
the Share Option Scheme:
31 December 2016 31 December 2015
Number of Options Number of Options
Outstanding at beginning of the year 4,000,000 4,000,000
Lapsed during the year (1,000,000) -
Outstanding at the end of the year 3,000,000 4,000,000
Exercisable at the end of the year 3,000,000 4,000,000
The range of the exercise price of share options exercisable at the year-end
falls between US$0.33 (27p) - US$1.54 (125p) (31 December 2015: US$0.37 (25p)
- US$1.85 (125p)).
The estimated fair values of options which fall under IFRS 2 and the inputs
used in the Black-Scholes model to calculate those fair values are as
follows:
Date of grant Estimated fair value Share price Exercise price Expected volatility Expected life Risk free rate Expected dividend
1 September 2011 £0.87 £1.29 £1.25 80% 5 years 4.3% 0%
22 April 2013 £0.11 £0.186 £0.273 80% 5 years 1.5% 0%
Expected volatility was determined by calculating the annualised standard
deviation of the daily changes in the share price.
Long Term Incentive Scheme ("LTIP")
The plan provides for the awarding of shares to employees and Directors for
nil consideration. The award will lapse if an employee or Director leaves
employment.
Shares granted when an individual is an employee will vest in equal
instalments over a three year period from the grant date and shares granted
when an individual is a Director or otherwise specified will vest three years
from the end of the year that the award relates.
The Group recognised a charge under the plan for the year to 31 December 2016
of US$734,000 (31 December 2015: US$978,000).
The following table sets out details of all outstanding share awards under the
LTIP:
31 December 2016 31 December 2015
Number of awards Number of awards
Outstanding at beginning of the year 10,348,522 7,953,614
Granted during the year 8,133,661 4,597,143
Shares issued for no consideration during the year (3,905,162) (1,980,791)
Lapsed during the year (229,743) (221,444)
Outstanding at the end of the year 14,347,278 10,348,522
Exercisable at the end of the year 4,074,236 3,920,950
Non-Executive Directors' Restricted Share Unit Scheme ("RSU")
The plan provides for the awarding of shares to Non-Executive Directors for
nil consideration. An award can be Standalone or Matching.
Standalone share awards are one-off awards to Non-Executive Directors which
will vest in equal instalments over a three year period and will lapse if not
exercised within a fixed period on stepping down from the Board.
Matching share awards will be granted equal to the number of existing Chariot
shares purchased by the Non-Executive Director in each calendar year capped at
the value of their gross annual fees for that year. The shares will vest in
equal instalments over a three year period and will lapse if not exercised
prior to stepping down from the Board or if the original purchased shares are
sold prior to the vesting of the relevant Matching award. Any potential
Matching awards not granted in a calendar year shall be forfeited and shall
not roll over to subsequent years.
The Group recognised a charge under the plan for the year to 31 December 2016
of US$53,000 (31 December 2015: US$126,000).
The following table sets out details of all outstanding share awards under the
RSU:
31 December 2016 31 December 2015
Number of awards Number of awards
Outstanding at beginning of the year 1,421,267 1,259,191
Granted during the year 463,767 208,408
Shares issued for no consideration during the year (172,326) -
Lapsed during the year (152,835)
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