REG - Petroneft Resources - Final Results <Origin Href="QuoteRef">PTR.I</Origin> - Part 2
30/06/2017 07:06
- Part 2: For the preceding part double click ID:nRSd6684Ja
57,039 39,459
After one year but not more than five years 219,319 150,274
More than five years 414,738 326,079
691,096 515,812
The above capital commitments in the joint venture are incurred jointly with
Oil India International B.V. The Group has a 50% share of these commitments.
7. Equity-accounted Investment in Joint Venture - Russian BD Holdings
B.V.
PetroNeft Resources plc has a 50% interest in Russian BD Holdings B.V., a
jointly controlled entity which holds 100% of LLC Lineynoye, an entity
involved in oil and gas exploration and the registered holder of Licence 67.
The interest in this joint venture is accounted for using the equity
accounting method. Russian BD Holdings B.V. is incorporated in the Netherlands
and carries out its activities in Russia.
Share of net assets
US$
At 1 January 2015 365,178
Retained loss (314,859)
Translation adjustment (887,109)
Credited against loans receivable from Russian BD Holdings BV (Note 8) 836,790
At 1 January 2016 -
Retained loss (288,198)
Translation adjustment 592,300
Debited to loans receivable from Russian BD Holdings BV (Note 8) (304,102)
At 31 December 2016 -
The balance sheet position of Russian BD Holdings B.V. shows net liabilities
of US$1,065,376 following a loss in the year of US$576,396 together with a
positive currency translation of US$1,184,600. PetroNeft's 50% share is
included above and results in a negative carrying value of US$532,688.
Therefore, the share of net assets is reduced to Nil and, in accordance with
IAS 28 Investments in Associates and Joint Ventures, the amount of US$532,688
is deducted from other assets associated with the joint venture on the Balance
Sheet which are the loans receivable from Russian BD Holdings B.V. (Note 8).
7. Equity-accounted Investment in Joint Venture - Russian BD Holdings
B.V. (continued)
Additional financial information in respect of PetroNeft's 50% interest in the
equity-accounted joint venture entity is disclosed below:
2016 2015
US$ US$
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (66,718) (106,224)
Operating loss (66,718) (106,224)
Finance revenue 294 434
Finance costs (239,079) (209,069)
Loss for the year for continuing operations before taxation (305,503) (314,859)
Taxation 17,305 -
Loss for the year (288,198) (314,859)
Loss for the year (288,198) (314,859)
Other comprehensive income to be reclassified to profit or loss in subsequent years:
Currency translation adjustments 592,300 (887,109)
Total comprehensive profit/(loss) for the year 304,102 (1,201,968)
2016 2015
US$ US$
Non-current assets 4,069,104 3,327,327
Current assets 198,788 71,104
Total assets 4,267,892 3,398,431
Non-current liabilities (4,512,667) (4,034,780)
Current liabilities (287,913) (200,441)
Total liabilities (4,800,580) (4,235,221)
Net Liabilities (532,688) (836,790)
7. Equity-accounted Investment in Joint Venture - Russian BD
Holdings B.V. (continued)
Future minimum rentals payable under non-cancellable operating leases at the balance sheet date are as follows:
2016 2015
US$ US$
Within one year 2,524 2,091
After one year but not more than five years 7,898 6,706
More than five years 25,751 22,010
36,173 30,807
There were no capital commitments as at 31 December 2016 or 31 December 2015.
8. Financial assets - loans and receivables
2016 2015
US$ US$
Loans to WorldAce Investments Limited (Note 14) 52,235,829 49,224,805
Less: share of WorldAce Investments Limited loss (Note 6) (8,246,586) (9,516,618)
43,989,243 39,708,187
Loans to Russian BD Holdings B.V. (Note 14) 4,256,866 4,012,464
Less: share of Russian BD Holdings B.V. loss (Note 7) (532,688) (836,790)
3,724,178 3,175,674
47,713,421 42,883,861
The Company has granted a loan facility to its joint venture undertaking
WorldAce Investments Limited of up to US$45 million. This loan facility is US$
denominated and unsecured. Interest currently accrues on the loan at USD LIBOR
plus 6.0% but the Company has agreed not to seek payment of interest until
2018 at the earliest. The loan is set to mature on 31 December 2022. As at 31
December 2016 the loan was fully drawn down. The loan from the Company to
Russian BD Holdings is repayable on demand. Interest currently accrues on the
loan at USD LIBOR plus 5.0% per annum.
9. Inventories
2016 2015
US$ US$
Materials 28,973 54,302
28,973 54,302
10. Trade and other receivables
2016 2015
US$ US$
Other receivables 155,651 147,641
Receivable from jointly controlled entities (Note 14) 920,390 1,628,667
Advances to contractors 8,047 3,708
Prepayments 59,816 62,112
1,143,904 1,842,128
Other receivables are non-interest-bearing and are normally settled on 60-day
terms.
11. Cash and Cash Equivalents
2016 2015
US$ US$
Cash at bank and in hand 319,618 1,284,212
319,618 1,284,212
Bank deposits earn interest at floating rates based on daily deposit rates.
Short-term deposits are made for varying periods of between one day and one
month depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates.
12. Trade and other payables
2016 2015
US$ US$
Trade payables 337,208 238,570
Trade payables to jointly controlled entity (Note 14) 108,338 239,228
Corporation tax 55,750 59,087
Oil taxes, VAT and employee taxes 56,165 78,293
Other payables 318,074 212,141
Accruals 206,546 317,827
1,082,081 1,145,146
The Directors consider that the carrying amount of trade and other payables
approximates their fair value.
Trade and other payables are non-interest-bearing and are normally settled on
60-day terms.
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs.
13. Share capital - Group and Company 2016 2015
E E
Authorised
1,000,000,000 (2015: 1,000,000,000) Ordinary Shares of E0.01 each 10,000,000 10,000,000
10,000,000 10,000,000
Allotted, called up and fully paid equity Number of Ordinary Shares Called up share capital US$
At 1 January 2015 707,245,906 9,429,182
At 1 January 2016 707,245,906 9,429,182
At 31 December 2016 707,245,906 9,429,182
14. Related party disclosures
Transactions with joint ventures
PetroNeft Resources plc had the following transactions with its joint ventures
during the years ended 31 December 2016 and 2015:
Russian BD Holdings BV Group WorldAce Investments Limited Group
US$ US$
Receivable by PetroNeft Group at 1 January 2015 3,882,578 47,341,766
Transactions during the year 183,333 2,670,250
Interest accrued in the year 205,189 2,826,303
Payments for services made during the year (29,781) (2,483,727)
Share of joint venture's translation adjustment (836,790) (9,516,618)
Translation adjustment (14,821) 45,618
At 1 January 2016 3,389,708 40,883,592
Advanced during the year 10,000 -
Transactions during the year 159,260 2,622,188
Interest accrued in the year 234,402 3,011,025
Payment for services made during the year (10,821) (3,426,007)
Share of joint venture's translation adjustment 304,102 1,270,032
Translation adjustment (5,769) 83,761
At 31 December 2016 4,080,882 44,444,591
Balance at 31 December 2015 comprised of:
Loan facility advanced 3,175,674 39,708,187
Trade and other receivables 214,034 1,414,633
Trade Payables - (239,228)
3,389,708 40,883,592
Balance at 31 December 2016 comprised of:
Loans receivable 3,724,178 43,989,243
Trade and other receivables 356,704 563,686
Trade and other payables - (108,338)
4,080,882 44,444,591
14. Related party disclosures (continued)
Remuneration of key management
Key management comprise the Directors of the Company, the Vice Presidents of
Business Development and Operations, the General Director and the Executive
Director of the Russian subsidiary LLC Dolomite, along with both the Chief
Geologist and Chief Engineer of LLC Dolomite. Their remuneration during the
year was as follows:
Remuneration of key management
2016 2015
US$ US$
Compensation of key management 1,923,326 1,715,340
Contributions to defined contribution pension plan 69,308 89,917
Share-based payment expense - 15,401
1,992,634 1,820,658
The total amount of unpaid fees and expenses due to Directors as at 31
December 2016 was US$54,021 (2015: US$143,536).
Details of transactions between the Group and other related parties are
disclosed below.
Transactions with HGR Consulting Limited
Paul Dowling, Secretary and Chief Financial Officer of PetroNeft, provides his
services through HGR Consulting Limited ("HGR") from May 2016. Services
provided by HGR during 2016 amounted to US$199,035. An amount of US$116,031
was owed to HGR at 31 December 2016.
Transactions with TBNG Group
Vakha Sobraliev, Director of PetroNeft until his resignation on 18 September
2015, is the principal of LLC Tomskburneftegaz ("TBNG"), a company which has
drilled production and exploration wells for the Group. Various contracts for
drilling have been awarded to TBNG in recent years. All drilling contracts
with TBNG are "turnkey" contracts whereby TBNG assumes substantially all
liabilities in relation to the health and safety, environmental and other
risks associated with drilling operation. As part of this arrangement WorldAce
Group companies also occasionally sell sundry goods and services to TBNG.
Other companies related to TBNG also provide some services to the Group such
as transportation, power management and repairs. The following is a summary of
the transactions:
TBNG Group
From 1 January to 18 September 2015
US$
Maximum value of new contracts awarded during the period 1,778,324
Paid during the period for drilling and related services 5,379,260
Paid during the period for other services 2,023
Amount due to TBNG and related companies at period end -
Received during the period for sundry goods and services 98,789
Amount due from TBNG and related companies at period end -
14. Related party disclosures (continued)
Other PetroNeft Group companies provided various services to TBNG Group during
the period from 1 January to 18 September 2015 amounting to US$536. An amount
of US$Nil was outstanding from TBNG Group at 18 September 2015.
The Group has an indirect 50% interest in Lineynoye which in turn is 100%
owned by the jointly controlled entity Russian BD Holdings B.V. Lineynoye also
entered into some transactions with TBNG and related companies as follows:
TBNG Group
From 1 January to 18 September 2015
US$
Maximum value of new contracts awarded during the period -
Paid during the period for drilling and related services -
Paid during the period for other services -
Amount due to TBNG and related companies at period end -
Received during the period for sundry goods and services 4,114
Amount due from TBNG and related companies at period end -
15. Important Events after the Balance Sheet Date
In March 2017, Oil India agreed to provide 100% funding for the agreed Licence
61 work programme in 2017. A loan of US$4 million was agreed with the joint
venture company, WorldAce Investments Limited, to fund the 2017 programme. The
loan is unsecured and capital repayments commence in October 2019. Should
there be a significant change in the management of PetroNeft while the loan is
outstanding then Oil India may seek early repayment in full. In such
circumstances PetroNeft would need to provide its 50% share of the amount
outstanding.
16. Board approval
This announcement was approved by the Board of Directors of PetroNeft
Resources plc on 27 June 2017.
Glossary
1P Proved reserves according
to SPE standards.
2P Proved and probable
reserves according to SPE standards.
3P Proved, probable and
possible reserves according to SPE standards.
AGM Annual General Meeting.
AIM Alternative Investment Market
of the London Stock Exchange.
AMI Area of Mutual Interest.
Arawak Arawak Energy Russia B.V.
bbl Barrel.
Belgrave Naftogas Belgrave Naftogas B.V., a member of the
Arawak group of companies
bfpd Barrels of fluid per day.
boe Barrel of oil equivalent.
bopd Barrels of oil per day.
Company PetroNeft Resources plc.
CPF Central Processing
Facility.
CSR Corporate and Social
Responsibility.
Custody Transfer Point Facility/location at which custody of oil
transfers to another operator.
Dolomite LLC Dolomite, a 100% subsidiary
of PetroNeft registered in the Russian Federation
DST Drill stem test.
ESM Enterprise Securities Market
of the Irish Stock Exchange.
ESP Electric Submersible Pump
Exploration resources An undrilled prospect in an area of known
hydrocarbons with unequivocal four-way dip closure at the reservoir horizon.
Granite Construction LLC Granite Construction, a 100% subsidiary
of PetroNeft registered in the Russian Federation
Group The Company and its joint
ventures and subsidiary undertakings.
HSE Health, Safety and
Environment.
IAS International Accounting
Standard.
IFRIC IFRS Interpretations
Committee.
IFRS International Financial
Reporting Standard.
km Kilometres.
km2/ sq km Square
kilometres.
KPI Key Performance Indicator.
Licence 61 The Exploration and Production
Licence in the Tomsk Oblast, Russia owned by the joint venture company
WorldAce Investments Limited. It contains seven known oil fields, Lineynoye,
Tungolskoye, West Lineynoye, Arbuzovskoye, Kondrashevskoye, Sibkrayevskoye and
North Varyakhskoye and 27 Prospects and Leads that are currently being
explored.
Licence 61 Farmout An agreement whereby Oil India Limited
subscribed for shares in WorldAce, the holding company for Stimul-T, the
entity which holds Licence 61 and all related assets and liabilities, and
following, PetroNeft and Oil India Limited both hold 50% of the voting shares,
and through the shareholders agreement, both parties have joint control of
WorldAce with PetroNeft as operator
Licence 67 The Exploration and Production
Licence in the Tomsk Oblast, Russia owned by the joint venture company Russian
BD Holdings B.V. It contains two oil fields, Ledovoye and Cheremshanskoye and
several potential prospects.
Glossary (continued)
Lineynoye Limited Liability Company
Lineynoye, a wholly owned subsidiary of Russian BD Holdings B.V., registered
in the Russian Federation.
m Metres.
mmbbls Million barrels.
mmbo Million barrels of oil.
Natlata Natlata Partners Limited, a
significant shareholder of PetroNeft.
Oil pay A formation containing
producible hydrocarbons.
P1 Proved reserves according
to SPE standards.
P2 Probable reserves according
to SPE standards.
P3 Possible reserves according
to SPE standards.
PetroNeft PetroNeft Resources plc.
Russian BD Holdings B.V. Russian BD Holdings B.V., a company owned 50%
by PetroNeft and registered in the Netherlands.
SPE Society of Petroleum
Engineers.
Spud To commence drilling a well.
Stimul-T Limited Liability Company
Stimul-T, a wholly owned subsidiary of WorldAce, based in the Russian
Federation.
TSR Total Shareholder Return.
VAT Value Added Tax.
WAEP Weighted Average Exercise
Price.
WorldAce WorldAce Investments Limited, a
company owned 50% by PetroNeft, registered in Cyprus.
WorldAce Group WorldAce Investments Limited and its
100% subsidiary LLC Stimul-T
This information is provided by RNS
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