REG - Petroneft Resources - Half Yearly Report <Origin Href="QuoteRef">PTR.I</Origin> - Part 2
29/10/2014 14:41
- Part 2: For the preceding part double click ID:nRSZ6742Sa
- (155,183) - (155,183)
Transferred to exploration and evaluation assets (864,783) - - (864,783)
Translation adjustment (5,332,793) (2,010,516) (1,159,067) (8,502,376)
73,199,847 27,020,914 15,299,564 115,520,325
Transferred to assets held for sale (73,199,847) (27,020,914) (15,299,564) (115,520,325)
At 31 December 2013 - - - -
Depreciation
At 1 January 2013 12,679,952 1,913,201 240,270 14,833,423
Charge for the year 4,352,641 1,088,078 115,257 5,555,976
Transferred to property plant and equipment - (78,673) - (78,673)
Translation adjustment (654,101) (139,846) (20,250) (814,197)
16,378,492 2,782,760 335,277 19,496,529
Transferred to assets held for sale (16,378,492) (2,782,760) (335,277) (19,496,529)
At 31 December 2013 - - - -
Net book values
At 30 June 2014 - - - -
At 31 December 2013 - - - -
9. Property, Plant and Equipment
Buildings &
leasehold Plant and Motor
improvements machinery vehicles Total
US$ US$ US$ US$
Cost
At 1 January 2013 1,102,684 1,854,724 123,995 3,081,403
Additions - 14,551 68,335 82,886
Transferred from oil and gas properties - 108,427 46,756 155,183
Disposals - (39,380) - (39,380)
Translation adjustment (77,679) (129,353) (12,148) (219,180)
1,025,005 1,808,969 226,938 3,060,912
Transferred to assets held for sale (1,025,005) (335,997) (226,938) (1,587,940)
At 1 January 2014 - 1,472,972 - 1,472,972
Additions - - - -
Translation adjustment - (37,738) - (37,738)
At 30 June 2014 - 1,435,234 - 1,435,234
Depreciation
At 1 January 2013 218,464 1,082,298 84,015 1,384,777
Charge for the year 61,563 227,083 40,357 329,003
Transferred from oil and gas properties - 52,512 26,161 78,673
Disposals - (27,112) - (27,112)
Translation adjustment (17,311) (81,280) (7,898) (106,489)
262,716 1,253,501 142,635 1,658,852
Transferred to assets held for sale (262,716) (247,589) (142,635) (652,940)
At 1 January 2014 - 1,005,912 - 1,005,912
Charge for the period - 77,076 - 77,076
Translation adjustment - (21,903) - (21,903)
At 30 June 2014 - 1,061,085 - 1,061,085
Net book values
At 30 June 2014 - 374,149 - 374,149
At 31 December 2013 - 467,060 - 467,060
10. Exploration and evaluation assets
Group Exploration & Evaluation Expenditure
US$
Cost
At 1 January 2013 28,294,677
Additions 69,449
Transferred from oil and gas properties 864,783
Translation adjustment (1,993,455)
27,235,454
Transferred to assets held for sale (27,235,454)
At 31 December 2013 -
Net book values
At 30 June 2014 -
At 31 December 2013 28,294,677
11. Equity-accounted investment in Joint Venture
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 2013 3,819,142
Retained loss for the year (235,060)
Translation adjustment (252,238)
At 1 January 2014 3,331,844
Retained loss for the period (121,442)
Translation adjustment (94,778)
At 30 June 2014 3,115,624
Summarised financial statement information prepared in accordance with IFRS of the equity-accounted joint venture entity is
disclosed below:
Summarised Interim Financial statements of equity-accounted joint venture (50% share)
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Sales and other operating revenues - - -
Operating expenses (78,188) (35,545) (114,563)
Exchange loss 961 (65,450) (65,784)
Finance revenue 522 86 184
Finance costs (44,737) (21,377) (45,134)
Loss before taxation (121,442) (122,286) (225,297)
Taxation - (4,982) (9,763)
Loss for the period (121,442) (127,268) (235,060)
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Current assets 419,899 108,627 164,066
Non-current assets 6,669,409 4,273,484 4,774,180
Total assets 7,089,308 4,382,111 4,938,246
Current liabilities (2,023,500) (51,643) (376,128)
Non-current liabilities (1,950,184) (892,185) (1,230,274)
Total liabilities (3,973,684) (943,828) (1,606,402)
12. Inventories
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Oil stock - 1,662,932 -
Materials 27,480 148,224 30,523
27,480 1,811,156 30,523
13. Trade and other receivables
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Russian VAT - 16,729 -
Russian profit tax receivable - 6,610 -
Other receivables 57,545 156,180 14,544
Receivable from jointly controlled entity 689,830 721,092 717,190
Advances to and receivables from related parties - 7,035 -
Advances to contractors - 11,965 -
Prepayments 51,673 58,792 59,130
799,048 978,403 790,864
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Other receivables are non-interest-bearing and are normally settled on 60-day terms.
Amounts owed by subsidiary undertakings are interest-bearing. Interest is charged at rates ranging from 0% to 10%.
14. Cash and Cash Equivalents and Restricted Cash
Group
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Cash at bank and in hand 82,923 130,720 116,831
Restricted cash 4,000,000 4,000,000 2,054,947
4,082,923 4,130,720 2,171,778
At 30 June 2014 restricted cash amounting to US$4 million is being held in a Macquarie Debt Service Reserve Account
("DSRA"). This account is part of the security package held by Macquarie and may be offset against the loan in the event of
a default on the loan or by agreement between the parties. These funds were used to part repay the Macquarie debt facility
when the loan was repaid in full on 3 July 2014.
Bank deposits earn interest at floating rates based on daily deposit rates. Short-term deposits are made for varying
periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at
the respective short-term deposit rates.
15. Trade and other payables
Unaudited Audited
6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
US$ US$ US$
Trade payables 1,112,674 1,545,374 813,476
Trade payables to jointly controlled entity - 182,945 -
Trade payables to related parties - 2,011,715 -
Corporation tax 64,300 66,878 63,292
Oil taxes, VAT and employee taxes 84,502 4,936,089 87,004
Other payables 62,829 186,958 22,745
Payments received in advance - 387,595 -
Accruals 1,264,108 784,759 820,215
2,588,413 10,102,313 1,806,732
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.
16. Loans and borrowings
Group and Company Effective interest rate Contractual maturitydate Unaudited Audited
% 6 months ended 30 June 2014 6 months ended 30 June 2013 Year ended 31 December 2013
Interest bearing US$ US$ US$
Current liabilities
Macquarie Bank - US$75,000,000 loan facility 9.79% 7-July-14 12,400,000 18,816,604 15,000,000
Belgrave Naftogaz - US$16,500,000 loan 7.38% 30-May-15 16,500,000 - 15,000,000
Total current liabilities 28,900,000 18,816,604 30,000,000
Non-current liabilities
Arawak - US$15,000,000 loan 7.16% 30-May-15 14,682,383 -
Total non-current liabilities - 14,682,383 -
Total loans and borrowings 28,900,000 33,498,987 30,000,000
Contractual undiscounted liability 28,900,000 33,900,000 30,000,000
Macquarie loan facility
During the period, Macquarie agreed to extend the maturity date of their loan to 7 July 2014 in order to allow the
completion of the transaction with Oil India Limited for a fee of US$400,000. On 3 July 2014 the loan was repaid in full
from the proceeds of the Oil India transaction.
Certain oil and gas properties (wells, central processing facility, pipeline) together with shares in WorldAce Investments
Ltd, shares in Stimul-T, certain bank accounts and inventories were pledged as a security for the Macquarie loan facility
agreement. All of this security was released once the loan was repaid.
Arawak Energy loan facility
The loan was secured on PetroNeft's 50% interest in Russian BD Holdings B.V. In July 2013, pursuant to an internal
re-organisation, Arawak Energy Russia B.V. assigned the loan to its sister company Belgrave Naftogas B.V. On 3 July 2014
the loan was repaid in full from the proceeds of the Oil India transaction and the security was released.
17. Share Capital
Allotted, called up and fully paid equity Number of Ordinary Shares Called up share capital US$
At 1 January 2013 644,920,275 8,561,499
Issued in the year - -
At 1 January 2014 644,920,275 8,561,499
Issued in the period 62,325,631 867,683
At 30 June 2014 707,245,906 9,429,182
The Company issued 62,325,631 new shares for consideration of US$5.18 million during the period. The net proceeds of this
share issue of US$5.02 million were used to repay debt, finance expenditure on oil and gas properties, exploration and
evaluation costs and corporate overhead.
18. Related party disclosures
Transactions between PetroNeft Resources plc and its subsidiaries have been eliminated on consolidation. Details of
transactions between the Group and other related parties are disclosed below.
Vakha Sobraliev, a Director of PetroNeft, is the principal of LLC Tomskburneftegaz ("TBNG") which has drilled production
and exploration wells for the Group. Various contracts for drilling have been awarded to TBNG in recent years following
competitive tendering processes. All drilling contracts with TBNG are "turnkey" contracts whereby TBNG assumes
substantially all liabilities in relation to the health and safety, environmental and other risks associated with drilling
operation. As part of this relationship PetroNeft Group companies also occasionally sell sundry goods and services to TBNG.
Other companies related to TBNG also provide some services to the Group such as transportation, power management and
repairs.
The following is a summary of the transactions:
30 June 2014 31 December 2013
TBNG Other companies TBNG Other companies
US$ US$ US$ US$
Period ended
Maximum value of new contracts awarded during the period 1,849,042 - - -
Paid during the period for drilling and related services 142,980 - 1,527,850 -
Paid during the period for other services - - - 128,416
Amount due to TBNG and related companies at period-end 1,758,546 134 1,962,797 138
Received during the period for sundry goods and services - - 49,445 -
Amount due from TBNG and related companies at period end 6,611 3,189 6,839 3,283
GLOSSARY
Arawak Arawak Energy Russia B.V.
bbl Barrel.
Belgrave Naftogas Belgrave Naftogas B.V., a member of the Arawak group of companies
bopd Barrels of oil per day.
Company PetroNeft Resources plc.
CPF Central Processing Facility.
Group The Company and its subsidiary undertakings.
IAS International Accounting Standard.
IFRS International Financial Reporting Standard.
km Kilometres.
km2/ sq km Square kilometres.
Licence 61 The Group's Exploration and Production Licence in the Tomsk Oblast, Russia. 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 which,
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 acting as operator
Licence 67 The Group's Exploration and Production Licence in the Tomsk Oblast, Russia. It
contains two oil fields, Ledovoye and Cheremshanskoye and several potential prospects.
Lineynoye Limited Liability Company Lineynoye, a wholly owned subsidiary of Russian BD
Holdings B.V., registered in the Russian Federation.
Macquarie Macquarie Bank Limited.
OIL/ Oil India Oil India Limited
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.
Spud To commence drilling a well.
Stimul-T Limited Liability Company Stimul-T, a wholly owned subsidiary of WorldAce,
based in the Russian Federation.
WorldAce WorldAce Investments Limited, a company owned 50% by PetroNeft and registered
in Cyprus.
This information is provided by RNS
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