REG - Petro Matad Ltd - Interim results for 6 months ended 30 June 2015 <Origin Href="QuoteRef">MATD.L</Origin>

Petro MatadAnnouncement

29/09/2015 07:00

RNS Number : 4443A
Petro Matad Limited
29 September 2015
Petro Matad Limited
('Petro Matad' or the 'Company')
Interim results for the six months ended 30 June 2015
LONDON, 29 September 2015: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2015
Financial Summary
The Group posted a loss of USD 1.74 million for the six-month period ended 30 June 2015, which compares to a loss of USD 2.00 million for the comparable period in 2014. The reduced loss in 2015 mainly reflects reduced staff numbers compared to 2014. Significant increases in staff to meet the needs of the ongoing work programme only commenced late in the six-month period. The Company's cash balance at 30 June 2015 was $2.51 million, which compares to a cash balance of $1.88 million on 30 June 2014. The 30 June 2015 cash balance largely arises from the receipt of proceeds from BG Group, which is the result of the previously announced farmout (also referenced below).
Operational Update
As previously announced on 7 April 2015, the Company has successfully concluded a farmout of its Block IV and V PSCs with BG Group. The farmout became unconditional on 22 June 2015 and was announced on the same date. 
The main activity during the first six months of 2015 focused on completing the farmout with BG Group. In anticipation of the successful conclusion of the farmout, the Company also issued tenders for three major work programmes: Airborne Full Tensor Gradiometer (FTG) and High Resolution Aeromagnetics; 2D Seismic Acquisition Programme; and Core Hole Drilling. Contract awards for FTG and 2D seismic acquisition were announced on 7 August 2015 and 13 August 2015, respectively. The core hole drilling tender was suspended as the technical rationale for drilling the core holes is under review. 
The FTG programme is nearing successful completion, after which data will be processed and tied to existing and new seismic. The 2D seismic acquisition programme will continue over a number of months, after which the raw data will be processed. The Company expects that the subsequent interpretation of the newly acquired and processed seismic, in combination with FTG and existing seismic data, will be more than sufficient to develop a number of viable drilling prospects. The Company therefore remains on track for exploration drilling in 2016.
About Petro Matad Limited
Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production, in Mongolia. The Group holds sole operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,340km in the far eastern part of the country. Blocks IV and V are located in central Mongolia. Block IV covers approximately 29,000km and Block V approximately 21,150km.
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.
Further Information: 
Petro Matad Limited NOMAD and Broker
John Henriksen, CFO Westhouse Securities Limited
+976 11 331099 Alastair Stratton / Robert Finlay
 +44 (0)20 7601 6100
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2015
 Consolidated
 30 Jun 2015
 30 Jun 2014
 $'000
 $'000
Continuing Operations
Revenue
Interest Income
14
48
Other Income
1
1
15
49
Expenditure
Consultancy fees
445
25
Depreciation and amortisation
50
72
Employee benefits expenses
645
1,482
Exploration expenditure
160
34
Other expenses
431
355
Loss from continuing operations before income tax
(1,716)
(1,919)
Income tax expense
-
-
Loss from continuing operations after income tax
(1,716)
(1,919)
Net Loss
(1,716)
(1,919)
Other comprehensive loss
Exchange rate differences on translating foreign operations
(19)
(81)
Other comprehensive income, net of income tax
(19)
(81)
Total comprehensive loss
(1,735)
(2,000)
Loss attributable to owners of the parent
(1,716)
(1,919)
Total comprehensive loss attributable to owners of the parent
(1,735)
(2,000)
Loss per share (cents per share)
- Basic and diluted loss per share
0.61
0.69
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
 Consolidated
30 Jun 2015
31 Dec 2014
30 Jun 2014
$'000
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
2,506
895
1,884
Trade and other receivables
227
241
289
Prepayments and other assets
378
364
458
Total Current Assets
3,111
1,500
2,631
Non-Current Assets
Exploration and evaluation
15,275
15,275
15,275
Property, plant and equipment
382
439
511
Total Non-Current assets
15,657
15,714
15,786
TOTAL ASSETS 
18,768
17,214
18,417
LIABILITIES
Current liabilities
Trade and other payables
1,695
1,353
478
Total Current Liabilities
1,695
1,353
478
TOTAL LIABILITIES
1,695
1,353
478
NET ASSETS
17,073
15,861
17,939
EQUITY
Issued capital
105,929
105,278
105,097
Farmout Proceeds
2,750
-
-
Reserves
4,232
4,896
5,312
Accumulated losses 
(95,838)
(94,313)
(92,470)
TOTAL EQUITY
17,073
15,861
17,939
CONDENSED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 30 JUNE 2015
Consolidated
 30 Jun 2015
 30 Jun 2014
 $'000
 $'000
Cash flows from operating activities
Payments to suppliers and employees 
(1,228)
(1,383)
Interest received
14
48
Net cash flows from/(used in) operating activities
(1,214)
(1,335)
Cash flows from operating activities
Purchase of property, plant and equipment
(2)
(2)
Proceeds from the disposal of plant and equipment
-
-
Net cash flows from/(used in) investing activities
(2)
(2)
Cash flows from financing activities
Proceeds from issue of shares 
93
-
Farmout Proceeds
2,750
-
Capital raising costs
-
-
Net cash flows from/(used in) financing activities
2,843
-
Net increase/(decrease) in cash and cash equivalents
1,627
(1,337)
Net foreign exchange differences
(16)
(87)
Cash and cash equivalents at beginning of period
895
3,308
Cash and cash equivalents at end of period
2,506
1,884
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 30 JUNE 2015
 
Consolidated
Attributable to equity holders of the parent
Issued Capital
$'000
Farmout Proceeds
$'000
Accumulated Losses $'000
Other
Reserves $'000
Total
$'000
As at 1 January 2014
105,097
-
(90,556)
4,736
19,277
Loss for the period
-
-
(1,919)
-
(1,919)
Other comprehensive income
-
-
-
(81)
(81)
Total comprehensive income for the period
105,097
-
(92,475)
4,655
17,277
Transactions with owners in their capacity as owners
Issue of share capital
-
-
-
-
-
Cost of capital raising
-
-
-
-
-
Share based payments
-
-
5
657
662
As at 30 June 2014
105,097
-
(92,470)
5,312
17,939
As at 1 January 2015
105,278
-
(94,313)
4,896
15,861
Loss for the period
-
-
(1,716)
-
(1,716)
Other comprehensive income
-
-
-
(19)
(19)
Total comprehensive income for the period
105,278
-
(96,029)
4,877
14,126
Transactions with owners in their capacity as owners
Issue of share capital
93
-
-
-
93
Farmout Proceeds
-
2,750
-
-
2,750
Cost of capital raising
-
-
-
-
-
Share based payments
558
-
191
(645)
104
As at 30 June 2015
105,929
2,750
(95,838)
4,232
17,073
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 five 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), and Petro Matad Services Limited (incorporated in the Isle of Man). 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 2014. 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 2014.
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 2015.
(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 2015
31 Dec 2014
 $'000
$'000
Ordinary shares (i)
285,238,225 shares paid up (31 Dec 2014: 279,487,279)
105,929
105,278
105,929
105,278
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to dividends.
Movement in ordinary shares on issue
Number of Shares
Issue Price$
$'000
At 1 January 2015
279,487,279
105,278
*Exercise of Conditional Share Awards on 23 April 2014
5,750,946
$0.01
93
Share based payment
558
At 30 June 2015
285,238,225
105,929
*As announced on 17 April 2015 and pursuant to the Group's Plan, 5,750,946 shares were awarded upon exercise of Conditional Share Awards with an exercise price per share of $0.01. Of the 5,750,946 Conditional Share Awards shares issued, 5,229,255 of the Conditional Share Awards shares relate to the Conditional Share Awards programme. The other 521,691 Conditional Share Awards shares are pursuant to the Group's Plan. 
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
$'000
As at 1 July 2014
831
5,458
(977)
5,312
Currency translation differences
-
-
(34)
(34)
Share based payments
-
(382)
-
(382)
As at 31 December 2014
831
5,076
(1,011)
4,896
Currency translation differences
-
-
(19)
(19)
Share based payments
-
(645)
-
(645)
As at 30 June 2015
831
4,431
(1,030)
4,232
5. LOSS PER SHARE
The following reflects the loss and share data used in the total operations basic and diluted loss per share computations:
 CONSOLIDATED
 30 Jun 
 2015
 30 Jun
 2014
Basic loss per share
Total basic loss per share (US$ cents per share) (note a)
(0.61)
(0.69)
Diluted loss per share
Total diluted loss per share (US$ cents per share) (note b)
(0.61)
(0.69)
(a) Basic loss per share
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Net loss attributable to ordinary shareholders (US$'000)
1,716
1,919
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
281,680
279,341
(b) Diluted loss per share 
The loss and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:
Net loss attributable to ordinary shareholders (US$'000)
1,716
1,919
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
281,680
279,341
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
The Directors of the Company again agreed that the non-executive Directors for the six month period 1 October 2014 to 31 March 2015, when the Company was significantly cash constrained, would continue to forego their usual cash director fees and receive Conditional Share Awards under the Company's existing long term equity plan. The Conditional Share Awards were issued on 20 July 2015. The delay in award of the conditional share awards was as a result of the Company being in successive close periods since October 2014. Following completion of the Company's farm-out to BG Group, the non-executive directors have received their directors' fees in cash from 1 April 2015 onwards. 
The Conditional Share Awards vested immediately upon award and participants have until 31 March 2016 to exercise these awards at an exercise price of US$0.01 per Petro Matad ordinary share. An aggregate of 1,993,520 conditional share awards were awarded to the non-executive directors of the Company on 20 July 2015, as set out below.
Director
Number of Conditional Share Awards awarded in lieu of fees
Oyungerel Janchiv
498,380
Enkhmaa Davaanyam
498,380
Philip Vingoe
498,380
Ridvan Karpuz
498,380
On 27 July 2015, pursuant to the Group's Plan, 2,256,550 shares were awarded upon exercise of Conditional Share Awards with an exercise price per share of $0.01. Of the 2,256,550 Conditional Share Awards shares issued, 1,993,520 of the Conditional Share Awards shares relate to the Conditional Share Awards awarded to non-executive Directors in lieu of fees. The other 263,030 Conditional Share Awards shares are pursuant to the Group's Plan. 

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