REG - Petro Matad Ltd - Interim results <Origin Href="QuoteRef">MATD.L</Origin>

Petro MatadAnnouncement

26/08/2016 07:07

RNS Number : 2208I
Petro Matad Limited
26 August 2016
Petro Matad Limited
('Petro Matad' or the 'Company')
Interim results for the six months ended 30 June 2016
LONDON, 26 August 2016: Petro Matad Limited, the AIM quoted Mongolian oil explorer, is pleased to announce its unaudited interim results for the six months ended 30 June 2016.
Financial Summary
The Group posted a profit of USD 0.1 million for the six-month period ended 30 June 2016, which compares to a loss of USD 1.74 million for the comparable period in 2015. The profit recorded reflects cash calls received in 2016 from BG Group (Shell) to fund operations under the farm-out agreement prior to receipt of BG Group's exit notice. The Company's cash balance at 30 June 2016 was $0.49 million, which compares to a cash balance of $2.51 million on 30 June 2015. 
As reported in the announcement of 11 August 2016, $10,005,303 has been received from Shell's affiliate, BG Mongolian Holdings Limited (BGMH) and a further $5 million is payable upon Mongolian Government approval of the reassignment of BGMH's interest in Blocks IV and V to Petro Matad. Following receipt of these funds the Company will be in a position to execute its exploration program for the next twelve months. 
Operational Update
As announced on 29 April 2016, BGMH issued an Exit Notice to the Company which formally advised of their intention to relinquish their interests in Blocks IV and V. Upon receipt, the Company commenced discussions with Shell/BGMH which ultimately resulted in an agreement on exit payments to be made by BGMH, as summarized in the above Financial Summary. With the exit payments provided by BGMH the Company will be able to continue with the previously planned Block IV and V exploration programs.
Following the Company's acquisition of 1085 kms of 2D seismic in Block IV in the fourth quarter of 2015, seismic operations were suspended for the winter. In May 2016, seismic operations recommenced in Block IV with the acquisition of 174 kms of 2D "infill" seismic. These lines were acquired to better define leads identified during the acquisition program in Block IV in late 2015. The combined seismic acquisition from Block IV has been processed and is currently being interpreted. The Company is encouraged by results to date, and has already identified a series of leads. The Company is confident that a number of drill-ready prospects will emerge.
Following completion of the Block IV program, a 2D seismic acquisition program commenced in early June 2016 in Block V consisting of 402 km, of which 245 km have now been acquired. Due to dynamite quality issues the program was suspended in early July. The seismic contractor is in process of acquiring new dynamite charges and the remainder of the program is expected to be acquired during September and October 2016. The remaining seismic program is aimed at de-risking leads and defining a potential drill location in Block V. Processing of data acquired to date is underway and interpretation and prospect generation is progressing. 
The leads inventory of both Blocks IV and V will be peer reviewed and qualified prospects will be high-graded to drill-ready status prior to exploration drilling, expected in mid-2017. Further details on the planned exploration program will be announced once specific drill locations have been chosen.
Scouting information suggests that there are several rigs within Mongolia that are capable of drilling exploration wells to the depths that the Company will be targeting. Well engineering and preparation of the rig tender documentation are in process and the Company expects to issue its drilling tender before the end of 2016.
Further operational updates will be provided in due course.
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
Ridvan Karpuz, CEO Stockdale Securities Limited 
+976 70141099 / +976 75751099 Richard Johnson / David Coaten
 +44 (0)20 7601 6100
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2016
 Consolidated
30 Jun 2016
30 Jun 2015
$'000
$'000
Continuing Operations
Revenue
Interest Income
30
14
Other Income
4,841
1
4,871
15
Expenditure
Consultancy fees
29
445
Depreciation and amortisation
92
50
Employee benefits expenses
1,803
645
Exploration expenditure
2,171
160
Other expenses
683
431
Profit/(Loss) from continuing operations before income tax
93
(1,716)
Income tax expense
-
-
Profit/(Loss) from continuing operations after income tax
93
(1,716)
Net Profit/(Loss)
93
(1,716)
Other comprehensive profit/(loss)
Exchange rate differences on translating foreign operations
16
(19)
Other comprehensive income, net of income tax
16
(19)
Total comprehensive profit/(loss)
109
(1,735)
Profit/(Loss) attributable to owners of the parent
93
(1,716)
Total comprehensive profit/(loss) attributable to owners of the parent
109
(1,735)
Earnings/(loss) per share (cents per share)
- Basic and diluted earnings/(loss) per share
0.03
(0.61)
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
 Consolidated
30 Jun 2016
31 Dec 2015
30 Jun 2015
$'000
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
492
5,339
2,506
Trade and other receivables
668
822
227
Prepayments and other assets
496
812
378
Total Current Assets
1,656
6,973
3,111
Non-Current Assets
Trade and other receivables
536
536
-
Exploration and evaluation
15,275
15,275
15,275
Property, plant and equipment
1,031
502
382
Total Non-Current assets
16,842
16,313
15,657
TOTAL ASSETS 
18,498
23,286
18,768
LIABILITIES
Current liabilities
Trade and other payables
2,453
7,436
1,695
Total Current Liabilities
2,453
7,436
1,695
TOTAL LIABILITIES
2,453
7,436
1,695
NET ASSETS
16,045
15,850
17,073
EQUITY
Issued capital
106,150
106,150
105,929
Farmout Proceeds
-
-
2,750
Reserves
4,094
4,010
4,232
Accumulated losses 
(94,199)
(94,310)
(95,838)
TOTAL EQUITY
16,045
15,850
17,073
CONDENSED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 30 JUNE 2016
Consolidated
30 Jun 2016
30 Jun 2015
$'000
$'000
Cash flows from operating activities
Payments to suppliers and employees 
(4,261)
(1,228)
Interest received
30
14
Net cash flows from/(used in) operating activities
(4,231)
(1,214)
Cash flows from operating activities
Purchase of property, plant and equipment
(667)
(2)
Proceeds from the disposal of plant and equipment
35
-
Net cash flows from/(used in) investing activities
(632)
(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
(4,863)
1,627
Net foreign exchange differences
16
(16)
Cash and cash equivalents at beginning of period
5,339
895
Cash and cash equivalents at end of period
492
2,506
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 30 JUNE 2016
 
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 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
Share based payments
558
-
191
(645)
104
As at 30 June 2015
105,929
2,750
(95,838)
4,232
17,073
As at 1 January 2016
106,150
-
(94,310)
4,010
15,850
Profit/(Loss) for the period
-
-
93
-
93
Other comprehensive income
-
-
-
16
16
Total comprehensive income 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
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. 
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 2015. 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 2015.
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 2016.
(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 2016
 31 Dec 2015
$'000
 $'000
Ordinary shares (i)
287,494,775 shares issued and fully paid
(31 Dec 2015: 287,494,775)
106,150
106,150
106,150
106,150
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to dividends.
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
$'000
As at 1 July 2015
831
4,431
(1,030)
4,232
Currency translation differences
-
-
(22)
(22)
Share based payments
-
(200)
-
(200)
As at 31 December 2015
831
4,231
(1,052)
4,010
Currency translation differences
-
-
16
16
Share based payments
-
68
-
68
As at 30 June 2016
831
4,299
(1,036)
4,094
5. EARNINGS/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:
CONSOLIDATED
30 Jun 
2016
30 Jun
2015
Basic earnings/(loss) per share
Total basic earnings/(loss) per share (US$ cents per share) (note a)
0.03
(0.61)
Diluted earnings/(loss) per share
Total diluted earnings/(loss) per share (US$ cents per share) (note b)
0.03
(0.61)
(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$'000)
93
(1,716)
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
287,495
281,680
(b) Diluted earnings/(loss) per share 
The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000)
93
1,716
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
287,495
281,680
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 1 August 2016, the Company announced that agreement had been reached with Shell regarding the amount of exit payment to be paid to CapCorp. Under the terms of the agreement, Shell's affiliate (BGMH) was to pay an initial exit amount of $10,005,303 as stipulated by the Farmout Agreement and would pay a further $5,000,000 upon completion of requisite government approvals in relation to the reassignment of BGMH's 78% working interest to CapCorp. This further amount of $5,000,000 is refundable to BGMH, should CapCorp secure a partner for any of the two Blocks during the exploration period or any extension of exploration period. Any farmout entered into by CapCorp with a third-party company will be at Capcorp's discretion. 
On 11 August 2016, the Company announced that the initial exit payment of $10,005,303 was received from BGMH. 

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