REG - Independent Oil &Gas - Final Results <Origin Href="QuoteRef">IOG.L</Origin> - Part 3

IogAnnouncement

16/07/2015 13:12

- Part 3: For the preceding part double click  ID:nRSd5642Rb 

interest rate risk 
 
As cash is non-interest bearing, and loans and creditors are subject to only
fixed interest rates, variations in commercial interest rates would have had
have no impact upon the Group's and Company's result for the year ended 31st
December 2014. 
 
Foreign exchange risk 
 
All of the Group's and Company's monetary assets and liabilities are
denominated in Pounds Sterling, the functional currency of the Group and each
of its subsidiaries, other than US$2,116,000  (£1,362,000) of non-current
liabilities held by the Group in one of its subsidiaries. These exposures give
rise to the net currency gains and losses recognised in profit or loss.  A 10%
fluctuation in the Pound sterling rate compared to the US dollar would give
rise to a £124,000 gain or loss in the profit and loss. 
 
The Group carried limited exposure to foreign exchange risk during the period
to 31st December 2014.  Its costs are incurred almost entirely in Pounds
Sterling and it has no current revenues.  The Group and the Company's cash
balances are maintained in Pounds Sterling which is the functional and
reporting currency of each Group company.  Consequently no formal policies
have been put in place in order to hedge the Group and Company's activities to
the exposure to currency risk.  It is the Group's policy to ensure that
individual Group entities enter into transactions in their functional currency
wherever possible.  The Group considers this minimises any foreign exchange
exposure. 
 
Management regularly monitor the currency profile and obtain informal advice
to ensure that the cash balances are held in currencies which minimise the
impact on the results and position of the Group and the Company from foreign
exchange movements. 
 
Consequently Management do not consider that a foreign exchange sensitivity
analysis is material to the results of the Group and the Company. 
 
Capital 
 
The objective of the directors is to maximise shareholder returns and minimise
risks by keeping a reasonable balance between debt and equity.  To date the
Group has been principally equity financed, reflecting the early stage and
consequent relatively high risk of its activities.  During 2014, the Group
raised £450,000 through the issue of ordinary shares at £0.11 (2013 -
£2,000,000) and issued a further 5,625,000 ordinary shares at £0.25 in return
for notes issued by Darwin Securities. In 2013 the Company raised £172,000 in
interest bearing loan notes which were then converted into ordinary shares
upon AIM listing. 
 
In managing its capital, comprising equity, as described in the Statement of
Changes in Equity, and loan notes, as disclosed in Note 12, the Group and
Company's primary objective is to ensure its ability to provide a sufficient
return for its equity shareholders, principally though capital growth.  In
order to achieve and seek to maximise this return objective the Group and
Company will in the future seek to maintain a gearing ratio that balances
risks and returns at an acceptable level while also maintaining a sufficient
funding base to enable the Group and Company to meet its working capital and
strategic investment needs.  In making decisions to adjust its capital
structure to achieve these aims, either through new share issues, increases or
reductions in debt, or altering a dividend or share buyback policies, the
Group considers not only its short term position but also its medium and
longer term operational and strategic objectives. 
 
Borrowing facilities 
 
The Group and Company had borrowings totalling £461,000 outstanding at 31st
December 2014. 
 
Hedges 
 
The Group did not hold any hedge instruments at the reporting date. 
 
 18  Financial commitments  
 
 
The Group has authorised and committed to capital expenditure in the current
period as part of the exploration and development work programme for the
licences in which it participates: 
 
                                  2014       2013       
                                  £000       £000       
                                                        
   Authorised but not contracted  3,750      781        
   Contracts                      682        690        
                                  _________  _________  
                                                        
                                  4,432      1,471      
                                  _________  _________  
 
 
All capital commitments derive from the Group's participation in its joint
venture operations and entities. 
 
 19  Related party transactions  
 
 
Details of directors' remuneration are provided in note 4. 
 
Acura Oil & Gas Limited, of which Michael Jordan is a director, acquired
181,818 shares for £20,000 during the year (2013 - disposed of 2,252,321
shares).  Acura subscribed for £30,000 in loan notes during 2013 and these
plus accumulated interest were converted into 165,284 ordinary shares upon the
Company's admission to AIM.  This brought Acura's total holding to 6,957,560
(2013 - 6,775,742) shares being 10.05% of the total issued share capital. 
 
Mark Routh acquired 181,821 shares for £20,000 during the year (2013 - 462,427
shares).  He also subscribed for £40,000 in loan notes during 2013 and his
total loan notes, plus accumulated interest, were converted into 1,373,246
ordinary shares upon the Company's admission to AIM.  This brought his total
holding to 4,303,010 (2013 - 4,121,189) shares being 6.21% of the total issued
share capital. 
 
Peter Young subscribed for 181,818 shares for £20,000 (2013 - 6,996,539 shares
bringing his total holding to 13,726,638 (2013 - 13,544,820) being19.82% of
the total issued share capital. 
 
Clayton Consulting Partners Limited , of which Marie Louise Clayton is a
director acquired 181,818 shares for £20,000 during the year (2013 - 90,600)
bringing her total holding, including shares held directly by her, to
2,732,591 (2013 - 2,550,770) being 3.95% of the total issued share capital. 
 
Paul Murray acquired 181,818 shares during the year for £20,000 (2013 -
769,602 shares) bringing his total to 951,420 shares (2013 - 769,602 shares)
being 1.37% of the total issued share capital. 
 
 20  Subsequent events  
 
 
The key events subsequent to the year are as follows.  Details of these events
are provided in the Chief Executive's Review. 
 
·      Interim loan funding was agreed in June 2014 with Darwin Strategic. 
Post year end the loan has been partially repaid with £358,000 now outstanding
and the term has been extended to early September 2015 when it is expected to
be repaid in full. 
 
·      On 3rd June 2015 the Company announced the acquisition of the remaining
50% of licence P1609 containing the Skipper discovery from Alpha Petroleum
Resources Limited.  Upon completion IOG will become operator and will hold
100% of Skipper. 
 
·      A further investment of £145,000 was committed in June 2015 through the
issue of 609,500 new ordinary shares in the capital of IOG at 23.79p per
share. 
 
·      Long term financing discussions on the funding of Skipper, Cronx,
Elgood and Blythe through to production are progressing well with an
internationally listed group with a multi-billion dollar market capitalisation
and all parties continue to work towards a completion date by 15th August
2015. 
 
·      IOG was also awarded a revised and increased area in licence P2260,
block 48/22c which now includes the Hambleton discovery to the south of
Elgood. 
 
·      The Group announced three phases of 3D seismic remapping and an MOU has
been agreed with Baker Hughes for the provision of oilfield services. 
 
This information is provided by RNS
The company news service from the London Stock Exchange