REG - Petro Matad Ltd - Half-year Report <Origin Href="QuoteRef">MATD.L</Origin>

Petro MatadAnnouncement

01/09/2017 08:55

RNS Number : 5514P
Petro Matad Limited
01 September 2017
Petro Matad Limited
('Petro Matad' or the 'Company')
Interim results for the six months ended 30 June 2017
LONDON, 01 September 2017: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2017.
Financial Summary
The Group posted a loss of USD 2.518 million for the six-month period ended 30 June 2017, which compares to a profit of USD 0.1 million for the comparable period in 2016. The Company's cash balance at 30 June 2017 was $10.92 million, which compares to a cash balance of $0.49 million on 30 June 2016.
As reported in the announcement of 8 May 2017, the Company entered into a financing agreement with Bergen Global Opportunity Fund, LP(Bergen), which agreement was amended and announced post period end on 15 August 2017. Under the provisions of the agreement the Company has obtained two tranches of $1.2 million eachand has issued a Convertible Note to Bergen for a further $1.5 million. Further tranches have been postponed until 15 October 2017, during which period the Company will continue to review its financing requirements.
Operations
On 5 July 2017, the Company announced its 2017 exploration drilling programme and initial drilling targets in Blocks IV and V, following the signing of a drilling rig contract with Sinopec International Petroleum Service Mongolia. Preparations for the commencement of drilling operations continue and the Company expects to issue a full operational announcement by mid-September 2017, which will include a full update on drilling rig preparations and expected spud date. 
For more information, please contact:
Petro Matad Limited 
Ridvan Karpuz, CEO +97 670 141 099 / +97 675 751 099
NOMAD and Broker
Stockdale Securities Limited 
Richard Johnson / David Coaten  +44 (0)20 7601 6100
Business Advisory Firm
FTI Consulting
Edward Westropp +44 (0)20 3727 1521 
About Petro Matad
Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds the sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,343 km in the far eastern part of the country, and Blocks IV and V have an area of 28,999 km2 and 21,150 km2, respectively, in the southwest part of the country. 
Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2017
 Consolidated
30 Jun 2017
30 Jun 2016
$'000
$'000
Continuing Operations
Revenue
Interest Income
9
30
Other Income
-
4,841
9
4,871
Expenditure
Consultancy fees
(26)
(29)
Depreciation and amortisation
(131)
(92)
Employee benefits expenses
(1,156)
(1,803)
Exploration expenditure
(378)
(2,171)
Other expenses
(836)
(683)
Profit/(Loss) from continuing operations before income tax
(2,518)
93
Income tax expense
-
-
Profit/(Loss) from continuing operations after income tax
(2,518)
93
Net Loss
(2,518)
93
Other comprehensive income/(loss)
Exchange rate differences on translating foreign operations
44
16
Other comprehensive income/(loss), net of income tax
44
16
Total comprehensive loss
(2,474)
109
Profit/(Loss) attributable to owners of the parent
(2,518)
93
Total comprehensive income/(loss) attributable to owners of the parent
(2,474)
109
Earnings/(loss) per share (cents per share)
- Basic and diluted earnings/(loss) per share
(0.87)
0.03
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
 Consolidated
30 Jun 2017
31 Dec 2016
30 Jun 2016
$'000
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
10,924
6,479
492
Trade and other receivables
168
5,155
668
Prepayments and other assets
472
523
496
Total Current Assets
11,564
12,157
1,656
Non-Current Assets
Trade and other receivables
-
-
536
Exploration and evaluation
15,275
15,275
15,275
Property, plant and equipment
720
783
1,031
Total Non-Current assets
15,995
16,058
16,842
TOTAL ASSETS 
27,559
28,215
18,498
LIABILITIES
Current liabilities
Trade and other payables
1,821
1,352
2,453
Total Current Liabilities
1,821
1,352
2,453
TOTAL LIABILITIES
1,821
1,352
2,453
NET ASSETS
25,738
26,863
16,045
EQUITY
Issued capital
107,476
106,150
106,150
Reserves
4,176
4,109
4,094
Accumulated losses 
(85,914)
(83,396)
(94,199)
TOTAL EQUITY
25,738
26,863
16,045
CONDENSED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2017
Consolidated
30 Jun 2017
30 Jun 2016
$'000
$'000
Cash flows from operating activities
Payments to suppliers and employees 
(3,041)
(4,261)
Interest received
9
30
Proceeds from Bergen (shares to be issued)
1,200
-
Farm-out proceeds
5,000
-
Net cash flows from/(used in) operating activities
3,168
(4,231)
Cash flows from operating activities
Purchase of property, plant and equipment
(41)
(667)
Proceeds from the disposal of plant and equipment
-
35
Net cash flows from/(used in) investing activities
(41)
(632)
Cash flows from financing activities
Proceeds from issue of shares 
1,921
-
Capital raising costs
(647)
-
Net cash flows from/(used in) financing activities
1,274
-
Net increase/(decrease) in cash and cash equivalents
4,401
(4,863)
Net foreign exchange differences
44
16
Cash and cash equivalents at beginning of period
6,479
5,339
Cash and cash equivalents at end of period
10,924
492
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2017
Consolidated
Attributable to equity holders of the parent
Issued Capital
$'000
Accumulated Losses
$'000
Other
Reserves $'000
Total
$'000
As at 1 January 2016
106,150
(94,310)
4,010
15,850
Income/(Loss) for the period
-
93
-
93
Other comprehensive income
-
-
16
16
Total comprehensive income/(loss) for the period
106,150
(94,217)
4,026
15,959
Transactions with owners in their capacity as owners
Issue of share capital
-
-
-
-
Changes in equity (Dissolved PMSL)
-
18
-
18
Share based payments
-
-
68
68
As at 30 June 2016
106,150
(94,199)
4,094
16,045
As at 1 January 2017
106,150
(83,396)
4,109
26,863
Income/(Loss) for the period
-
(2,518)
-
(2,518)
Other comprehensive income
-
-
44
44
Total comprehensive income/(loss) for the period
106,150
(85,914)
4,153
24,389
Transactions with owners in their capacity as owners
Issue of share capital
1,921
-
-
1,921
Cost of capital raising
(647)
-
-
(647)
Share based payments
52
-
23
75
As at 30 June 2017
107,476
(85,914)
4,176
25,738
1. CORPORATE INFORMATION
The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.
Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has four wholly owned subsidiaries, including Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited ("Capcorp") and Petromatad Invest Limited (both incorporated in the Cayman Islands). Its majority shareholder is Petrovis Matad Inc. Its majority shareholder is Petrovis Matad Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2016. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2016.
It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2017.
(a) Basis of Preparation
The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated. 
The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
3. CONTRIBUTED EQUITY
 CONSOLIDATED
30 Jun 2017
 31 Dec 2016
$'000
 $'000
Ordinary shares (i)
303,084,189 shares issued and fully paid
(31 Dec 2016: 287,494,775)
107,476
106,150
107,476
106,150
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to dividends.
Movement in ordinary shares on issue
Number of Shares
Issue Price$
$'000
At 1 January 2017
287,494,775
106,150
Issue of shares to employees and directors on 24 Mar 2017 on exercise of options 
197,500
$0.137
27
Issue of shares to employees and a director on 24 Mar 2017 on exercise of options 
16,000
$0.247
4
Issue of shares to a director on 24 Mar 2017 on exercise of options 
75,000
$0.098
7
Issue of shares to employees on 24 Mar 2017 on exercise of options
141,000
$0.111
16
Issue of shares to Bergen on 11 May 2017*
2,151,951
$0.294
632
Issue of shares to Bergen on 11 May 2017*
3,500,000
$0.010
35
Issue of shares to Bergen on 13 June 2017**
9,507,963
$0.126
1,200
Cost of capital raising
(647)
Share based payment
52
At 30 June 2017
303,084,189
107,476
* On 11 May 2017, the Company issued 5,651,951 commencement and collateral shares to Bergen as part of the initial closing under the Private Placement arrangement.
**On 13 June 2017, the Company issued 9,507,963 new ordinary shares to Bergen in relation to the first tranche payment. 
4. RESERVES
A detailed breakdown of the reserves of the Group is as follows:
Merger reserve
Equity benefits reserve
Foreign currency translation
Total
Consolidated
$'000
$'000
$'000
$'000
As at 1 July 2016
831
4,299
(1,036)
4,094
Currency translation differences
-
-
(109)
(109)
Share based payments
-
124
-
124
As at 31 December 2016
831
4,423
(1,145)
4,109
Currency translation differences
-
-
44
44
Share based payments
-
23
-
23
As at 30 June 2017
831
4,446
(1,101)
4,176
5. EARNINGS/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:
CONSOLIDATED
30 Jun 
2017
30 Jun
2016
Basic earnings/(loss) per share
Total basic earnings/(loss) per share (US$ cents per share) (note a)
(0.87)
0.03
Diluted earnings/(loss) per share
Total diluted earnings/(loss) per share (US$ cents per share) (note b)
(0.87)
0.03
(a) Basic earnings/(loss) per share
The profit/(loss) and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000)
(2,518)
93
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
290,268
287,495
(b) Diluted earnings/(loss) per share 
The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000)
(2,518)
93
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
290,268
287,495
Share Options and Conditional Share Awards could potentially dilute basic loss per share in the future, however they have been excluded from the calculation of diluted loss per share because they are anti-dilutive for both years presented.
6. EVENTS AFTER THE REPORTING DATE
On 18 July 2017, the Company issued 13,389,719 new ordinary shares to Bergen in relation to the second tranche payment. 
On 15 August 2017, the Company amended its financing agreement with Bergen Global Opportunity Fund, LP (Bergen), to enable the issuance of a Convertible Note to Bergen for $1.5 million. The amendment also postponed future tranches under the Bergen agreement until 15 October 2017.
On 16 August 2017, the Company received $1,500,000 from Bergen for the issue of a convertible note.

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