TIDMOPHR
RNS Number : 6947Q
Ophir Energy Plc
14 September 2017
14 September 2017
Ophir Energy plc
Half Year Results for the six months ended 30 June 2017
Commenting on the first half results, Nick Cooper, Chief
Executive of Ophir Energy said:
"A comprehensive Board review in 1H 2017 identified that in a
'lower for longer' commodity cycle, Ophir's competitive advantages
were its material discovered resources and its healthy balance
sheet. The careful use of this balance sheet to monetise our four
resource plays offer a differentiated proposition of lower risk and
quicker returns to Ophir's shareholders.
The Board has prioritised this monetisation of our resource
plays and since May we have streamlined the organisation, further
reduced our overhead costs and concentrated our exploration
activities on to a smaller number of high quality plays that can be
paced in a way that matches our financial capacity.
"Our priorities in 2017 are achieving the Fortuna FLNG Project
FID and realising incremental value across our operated production
base. Fortuna has made significant progress in the first half of
2017 and now has one primary milestone outstanding: namely the
project financing. Once this is achieved, we will seek shareholder
approval and the formal decree from the President of Equatorial
Guinea."
2017 Half-year Results Summary
-- Strategic actions
o Established clear priority of unlocking value from Ophir's 1
Bnboe discovered resource base
o Implemented additional G&A cost reductions that will
deliver further savings of $10-12 million per annum
o Rationalised our exploration portfolio to a reduced number of
quality options in proven, world class producing basins. These
include Block 5 in Mexico, which was signed during the period
-- Fortuna FLNG Project progressing to FID
o Signed Umbrella Agreement with the government of Equatorial
Guinea
o Announced Gunvor as the nominated buyer for the LNG (post
period end)
-- Resource monetisation across our operated production base
o Approved Bualuang Phase IV investment to monetise a further
9.2 MMbo of the field
o Commenced a 3D seismic programme at Kerendan to enable
expansion of the gas field
-- Healthy financial position
o Revenue of $88 million, post-tax loss of $85 million
(including exploration write offs of $77 million partially offset
by an impairment write back of $24million), post-tax operating cash
flow of $47 million
o Gross cash on balance sheet at period end of $237 million, net
cash of $130 million
o Refinanced our Reserve Based Lending Facility at $250 million.
This is presently undrawn at $178 million but contributes to a
total liquidity (cash and undrawn debt facility) of $415
million
A presentation for analysts will be held at 9.30am this morning.
This will be webcast live through the link on the Company website:
www.ophir-energy.com/investors.
For further enquiries
please contact:
Ophir Energy plc
Nick Cooper, CEO
Tony Rouse, CFO
Geoff Callow, Head of
Investor Relations +44 (0)20 7811 2400
Brunswick Group
Patrick Handley
Wendel Verbeek +44 (0)20 7404 5959
DELIVERING VALUE FROM OPHIR'S RESOURCE PLAYS
Our capital is allocated to projects that offer the best risk
weighted return on capital. Therefore, whilst the low commodity
prices continue, Ophir will be focused on monetising its net 1
Bnboe of discovered resources. The Board is confident that
following this path for the next 2-3 years can deliver material
returns to shareholders in the current environment. We are
concentrating our exploration efforts on a smaller number of high
quality opportunities that can be paced in a way that matches our
financial capacity and strategic priorities.
Ophir has sizeable resource plays in four core countries:
Equatorial Guinea, Tanzania, Thailand and Indonesia. Three of these
are Ophir-operated and, with low unit development and production
costs, are capable of delivering attractive returns without
requiring higher commodity prices.
Fortuna FLNG Project, Equatorial Guinea
Significant steps were accomplished in the first half of 2017
towards the FID of the Fortuna FLNG Project. Given that the
remaining milestones are dependent on multiple stakeholders, it has
proven difficult to precisely forecast FID timing. However, with
the strong progress seen in the first half of 2017 and the current
intensive effort from all parties, we presently still expect FID of
the Fortuna Project to be achieved in 4Q 2017.
During the first half of 2017 the project partners signed an
Umbrella Agreement that established the full legal and fiscal
framework for the Fortuna FLNG project. Subsequent to the period
end it was announced that the partners have nominated Gunvor Group
as their preferred LNG buyer for the offtake from the Fortuna
project. A final Sale and Purchase Agreement for the offtake is
expected to be signed ahead of the Final Investment Decision. The
midstream EPC construction contract was awarded to Keppel and Black
& Veatch in May.
The key milestone outstanding prior to FID is the completion of
the project funding. This is expected to be concluded ahead of an
FID decision during 4Q 2017. Once the project funding has been
finalised, the Board of Ophir will be in the position to take the
FID, which will also be subject to approval by Ophir's shareholders
after which the approval of the President of Equatorial Guinea will
be sought.
The Hilli Espiseyo FLNG vessel, which is Golar's first FLNG
conversion and the sister ship to the Gandria, is expected to leave
the yard around the end of 3Q/early 4Q 2017 and be in the field in
Cameroon ready to commence operations in November. This is an
important event in the de-risking of the Fortuna midstream FLNG
solution.
Bualuang, Thailand
In May 2017, the Company took the investment decision to
commence the fourth development phase of the Bualuang oil field.
The capital cost of Phase IV is expected to be $145 million. The
investment will convert approximately 9.2 MMbo of contingent
resource into proved and probable reserves and will deliver rapid
payback.
Kerendan, Indonesia
At the Kerendan gas field the focus is on monetising further gas
from the asset beyond the first contracted amount of 120 Bcf. An
onshore 3D seismic survey in the Bangkanai and West Bangkanai PSCs
commenced early in 2017 and is expected to complete during 4Q 2017.
These new seismic data, in combination with the data from the West
Kerendan-1 ("WK-1") well and the WK-1 drill stem test, will provide
assurance to SKK Migas (the State regulator) for approval of the
next tranche of gas sales from the 457 Bcf of discovered, but
uncontracted, 2C gross resource associated with the Kerendan
field.
BUSINESS REVIEW
Sources and Uses of Funds Summary
Units 1H 2017 1H 2016 FY 2016
----------------------------------------- -------- -------- --------
Net Sources of
Funds:
------------------------------------------ -------- -------- --------
Revenue $'millions 88.3 52.1 107.2
--------------------------- ------------- -------- -------- --------
Accrued Kerendan
Take-or-Pay Revenue $'millions 2.0 (1) 8.2 16.5
--------------------------- ------------- -------- -------- --------
Cost of production
(2) $'millions (36.0) (20.4) (42.7)
--------------------------- ------------- -------- -------- --------
Investment Income $'millions 2.6 2.8 4.4
--------------------------- ------------- -------- -------- --------
Income Tax Charge $'millions (17.0) (9.7) (23.6)
--------------------------- ------------- -------- -------- --------
Total net sources
of funds from
production $ 'millions 39.9 33.0 61.8
--------------------------- ------------- -------- -------- --------
Net Uses of Funds:
------------------------------------------ -------- -------- --------
Capital Expenditure
(including pre-licence
expenditure)
(3) $'millions 45.4 86.6 155.6
--------------------------- ------------- -------- -------- --------
Net administration
cost $'millions 5.8 9.3 13.4
--------------------------- ------------- -------- -------- --------
Net interest
cost $'millions 7.0 7.5 14.3
--------------------------- ------------- -------- -------- --------
Total net uses
of funds $'millions 58.2 103.4 183.3
--------------------------- ------------- -------- -------- --------
Financing:
------------------------------------------ -------- -------- --------
Closing net cash $'millions 129.9 206.8 160.1
--------------------------- ------------- -------- -------- --------
Closing debt $'millions 106.6 200.4 200.3
--------------------------- ------------- -------- -------- --------
Closing cash
and cash equivalents $'millions 236.5 407.2 360.4
--------------------------- ------------- -------- -------- --------
1. Additional accrued Take-or-Pay revenue in 1H2017, payable in 1H2018
2. Includes operating expenses, royalty payments and movement in inventories of oil.
3. Adjusted to eliminate non-cash movements for decommissioning
for 1H17 of $0.5m (FY16: -$19.2m. 1H16: $1.2m) and capitalised
interest for 1H17 of $nil (FY16: $8.7m. 1H16: $8.7m).
Production
Production during the first half of 2017 averaged 11.3 Mboepd.
This was 1.6 Mboepd below budget due to lower than expected
production from our two gas assets. The Kerendan gas field started
production in the second half of 2016 but took longer than forecast
to ramp up to the full contracted volumes in 2017. Kerendan
averaged 12.3 MMscfd in the period and is now producing at the full
daily contract quantity of 19.2 MMscfd.
Production at the Bualuang oil field averaged 8.1 Mbopd in the
period. An infill-drilling programme on the field commenced in May
and will deliver increased production in the second half of 2017.
With the new wells now coming online, the field is presently
producing 8.9 Mbopd.
The Sinphuhorm gas field produced at 95.4 MMscfd for the first
half, versus budget of 126.6 MMscfd. Common with gas fields in
Thailand, the cause of under-performance appears to be spot LNG
purchases replacing domestic sources of gas supply. Full year
production from this field is now expected to average 98
MMscfd.
Forecast production for the full year 2017 remains as previously
guided at approximately 12 Mboepd.
Net Sources of Funds
Oil and gas revenues in first half 2017 totalled $88 million, up
$36 million or 69% on the same period in 2016.
The first half of 2017 reflected, for the first time, a
significant contribution from the Kerendan field. Kerendan
generated revenue of $8 million at an average gas realisation price
of $5.23 per Mscf. An additional amount of $2 million arose in
relation to the take-or-pay gas received from the offtaker. Overall
the Kerendan field delivered underlying cash flow(1) of $4 million
or $13 per boe.
Revenues from Bualuang averaged $50 per bbl for the period
compared to $34 per bbl for the same period last year. The
increased average realised oil price arose from both a higher Dubai
price, and a reduction in the contracted Dubai discount from $3.50
per bbl to $1.65 per bbl. The Company further secured a lower Dubai
discount in 2H 2017 of $1.23 per bbl with the signing of a new
one-year term contract. The Bualuang field generated underlying
cash flow(1) in the period of $39 million or $26 per bbl.
Operating cash flow from production for the full year 2017
remains as previously guided at approximately $85 million or $20
per boe.
Net Uses of Funds
The Group continued to reduce capital expenditure which totalled
$45 million in the first half, down by 48% on the same period in
2016. The primary investments during 1H 2017 comprised:
-- Resource monetisation ($27 million)
o Fortuna: $8 million
o Bualuang infill drilling: $19 million
-- Exploration ($18 million)
o CDI: $13 million
o New business, pre-licence and other: $5 million
1 The definition of underlying cash flow is consistent with the
definition of net sources of funds from production as defined in
the table on page 4 of this report
Write-off of exploration expenditure totalled $77 million in the
period, and was predominantly in Cote d'Ivoire ($33 million) and
Gabon ($31 million), with smaller amounts related to new business
and pre-licence expenditure.
As a consequence of the comprehensive Board review earlier in
2017, further cost reductions were implemented in 1H 2017. With the
management prioritising the monetisation of existing discovered
resource, and shifting the focus of exploration to a more
concentrated portfolio, reductions were made to headcount. These
reductions were principally in corporate headquarter costs in
London and in expatriate positions. These actions will achieve
savings of between $10 and $12 million per year and once affected,
will form part of an overall administration cost saving of 60% over
a three-year period.
Full year 2017 capital expenditure forecast remains as
previously guided at approximately $160 million.
Going forward capital will be allocated to existing
opportunities in Indonesia and Thailand that increase short-term
cash flow. Beyond that, the monetisation of contingent resource in
Equatorial Guinea and Thailand is priority for the Company with
funds allocated to deliver those projects. Remaining capital will
be allocated either to exploration (if the opportunities offer
sufficiently attractive risk weighted IRR's) or to capital
returns.
Financing
During the first half, the Company signed a new $250 million
Reserve Based Lending Facility ("RBL") with seven banks, secured
against the Company's producing assets in South East Asia. In
addition to the committed $250 million, a further $100 million is
available on an uncommitted "accordion" basis. The RBL has a
seven-year term and matures on 30 June 2024. The RBL replaced the
existing RBL facility that would have matured in December 2019. The
new RBL facility was undrawn at the end of the period with an
amount available of $178 million.
Net Interest charges in the period of $7 million arose on the
Groups RBL and the outstanding Norwegian Bond. With the new RBL
currently undrawn, net interest charges are expected to be $3
million less than originally forecast for the second half of the
year.
The Group ended the period with a cash balance of $237 million
after fully repaying down existing RBL facility amount of $94
million. With the undrawn RBL facility, total liquidity available
to the Company at 30 June 2017 totalled $415 million (1H 2016: $407
million).
Forecast net cash at year-end 2017 remains as previously guided
at approximately $85 million and total liquidity (cash and undrawn
debt facility) at approximately $390 million.
EXPLORATION
Ophir has previously run a portfolio of four core operating
countries and up to eight exploration countries. This exploration
portfolio has now been reduced to concentrate our efforts and
better drive value. Accordingly, during the first half of 2017
Ophir exited, or decided to exit, licences in Gabon, Malaysia and
Indonesia. We are concentrating on our exploration options in our
four core operating countries (Thailand, Indonesia, Equatorial
Guinea and Tanzania) and for the present we will limit our
'exploration only' footprints to three additional countries which
include Myanmar and Mexico. Preferably we will build a balanced
portfolio across these countries in deepwater, shallow water and
onshore acreage can deliver compelling risked IRRs at commodity
prices of below $50 per bbl.
To this end, during the period we added new acreage in both
Equatorial Guinea and Mexico. We formally signed the PSC for Block
5 in Mexico, which was awarded in 2016. This block is located c. 30
km north of, and in the same basin as, Block 7 where the Zama oil
discovery occurred in July 2017. We are interpreting the 3D data on
this block ahead of expected drilling in 2019. Separately, we also
agreed terms for Block EG-24 in Equatorial Guinea and expect to
sign this licence in 2017.
During the first half of 2017 Ophir drilled the Ayame-1X
exploration well in Cote d'Ivoire. Oil shows were recorded but no
moveable hydrocarbons were encountered and therefore the well was
plugged and abandoned as a dry hole at an estimated gross cost of
$19 million.
OUTLOOK
The Fortuna project continues to make progress towards an
expected FID in 4Q 2017. Management's current expectation is that
investment in Fortuna will deliver an IRR of 25-35%. Similarly, the
next phase of investment in the Bualuang field will deliver an
expected IRR of approximately 40%. Beyond these actions we have
plans to further monetise our contingent resources in Indonesia,
Equatorial Guinea and Tanzania.
Ophir's exploration activities are concentrated in emerging,
world class basins. Our recently acquired Mexico and Myanmar
acreage positions are promising and offer attractive drilling
options for 2018 and 2019.
RISK MANAGEMENT
The Group's Executive Directors constantly monitor the group's
risk exposures and report to the Audit, Corporate Responsibility
and Technical Advisory Committees on a six monthly basis. Risks
that have the potential to have a high impact on the Company are
each reviewed, together with the controls the Company has put in
place, with the Board on at least an annual cycle. The Audit
Committee provides oversight on risk whilst ultimate authority for
risk management remains with the Group's Board. The Corporate
Responsibility Committee provides oversight on surface risk,
particularly in the areas of Health, Safety and the Environment.
The Technical Advisory Committee provides oversight on subsurface
risk and uncertainty for exploration and development
activities.
The principal risks for the Group remain as previously detailed
on pages 14 to 19 of the 2016 Annual Report and Accounts. The
principal risks can be summarised as follows:
-- External Risks: Low commodity price and adverse market
sentiment towards the E&P sector, global economic volatility,
capital constraints, legal compliance regulatory or litigation
risk, stakeholder sentiment, political risk.
-- Strategic Risks: Investment decisions, inadequate resource and reliance on key personnel.
-- Operational Risks: HSE and security incident, drilling
operations risk, discovery risk and success rate, IT risk.
-- Financial Risks: Inability to fund exploration work
programmes, counterparty credit risk, cost and capital spending,
interest rate and foreign exchange risk.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
a) the condensed set of financial statements has been prepared
in accordance with IAS 34 "Interim Financial Reporting";
b) the half year report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year);
c) the half year report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
The Directors of Ophir Energy plc are as listed in the Company
Information section at the back of this report.
By order of the Board
Nick Cooper
Chief Executive Officer
13 September 2017
Independent Review Report to Ophir Energy plc
Introduction
We have been engaged by Ophir Energy plc ('the Group') to review
the condensed consolidated financial statements in the half-yearly
financial report for the six months ended 30 June 2017 which
comprises the condensed consolidated income statement and statement
of comprehensive income, the condensed consolidated statement of
financial position, the condensed consolidated statement of changes
in equity, the condensed consolidated statement of cash flows and
the related explanatory notes that have been reviewed. We have read
the other information contained in the half yearly financial report
and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed
consolidated financial statements.
This report is made solely to the Group in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Group, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed consolidated financial statements
included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Group a conclusion on
the condensed consolidated financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated financial
statements in the half-yearly financial report for the six months
ended 30 June 2017 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
13 September 2017
Condensed consolidated income statement and statement of
comprehensive income
Six months ended 30 June 2017
6 Months 6 Months
Ended Ended
30 June 30 June Year ended
2017 2016
31 December
(Unaudited) (Unaudited) 2016
Notes $'000 $'000 $'000
Consolidated income
statement
Continuing operations
Revenue 4 88,293 52,097 107,178
Cost of sales 5a (69,386) (54,676) (95,443)
------------- ------------- --------------
Gross profit/(loss) 18,907 (2,579) 11,735
Share of profit of
investments accounted
for using the equity
method 18 2,560 2,818 4,417
Impairment reversal
of oil and gas properties 23,681 - 84,100
Exploration expenses 5b (77,126) (68,731) (135,252)
General & administration
expenses 5c (5,839) (9,332) (13,428)
Other operating (expenses)/income 5d (1,361) 8,580 19,945
Operating loss (39,178) (69,244) (28,483)
Net finance expense 6 (6,463) (380) (21,595)
Loss from continuing
operations before taxation (45,641) (69,624) (50,078)
Taxation (expense)/benefit 7 (38,977) 21,177 (27,368)
============= ============= ==============
Loss from continuing
operations for the
period attributable
to: (84,618) (48,447) (77,446)
============= ============= ==============
Equity holders of the
Company (84,618) (48,447) (77,446)
Non-controlling interest - - -
------------- ------------- --------------
(84,618) (48,447) (77,446)
------------- ------------- --------------
Earnings per share
Basic - Loss for the
period attributable
to equity holders of (12.0) (6.9)
the Company cents cents (11.0) cents
Diluted - Loss for
the period attributable
to equity holders of (12.0) (6.9)
the Company cents cents (11.0) cents
Condensed consolidated income statement and statement of
comprehensive income
Six months ended 30 June 2017 (continued)
6 Months 6 Months
Ended ended
30 June 30 June Year ended
2017 2016
31 December
(Unaudited) (Unaudited) 2016
Notes $'000 $'000 $'000
Consolidated statement of
comprehensive income
Loss from continuing operations
for the period (84,618) (48,447) (77,446)
Other comprehensive (loss)/income
Other comprehensive (loss)/income
to be reclassified to profit
or loss in subsequent periods:
Exchange differences on
retranslation of foreign
operations net of tax - 31 31
============= ============= ==============
Other comprehensive income/(loss)
for the period, net of tax - 31 31
============= ============= ==============
Total comprehensive loss
for the period, net of tax
attributable to:
Equity holders of the
Company (84,618) (48,416) (77,415)
Non-controlling interest - - -
------------- ------------- --------------
(84,618) (48,416) (77,415)
============= ============= ==============
Condensed consolidated statement of financial position
As at 30 June 2017
As at As at As at
30 June 30 June
2017 2016 31 December
(unaudited) (unaudited) 2016
Notes $'000 $'000 $'000
Non-current assets
Exploration and
evaluation assets 9 240,462 892,261 310,229
Oil and gas properties 10 719,350 643,307 699,000
Other property,
plant and equipment 2,811 4,724 3,706
Financial assets 22,541 25,970 21,103
Investments accounted
for using the
equity method 18 130,388 133,786 130,736
------------- ------------- -------------
1,115,552 1,700,048 1,164,774
------------- ------------- -------------
Current assets
Assets classified
as held for sale 8 596,999 - 588,770
Inventory 11 40,718 58,158 46,738
Trade and other
receivables 39,821 44,024 32,319
Taxation receivable 9,124 22,322 15,178
Cash and cash
equivalents 12 236,523 407,226 360,424
923,185 531,730 1,043,429
------------- ------------- -------------
Total assets 2,038,737 2,231,778 2,208,203
------------- ------------- -------------
Current liabilities
Trade and other
payables 13 (73,304) (100,149) (93,398)
Interest-bearing
bank borrowings
due within one
year 14 - (5,389) (9,741)
Taxation payable (19,016) (11,779) (13,226)
Provisions 16 (10,017) (36,350) (15,833)
============= ============= =============
(102,337) (153,667) (132,198)
============= ============= =============
Non-current liabilities
Other Payables 13 (15,866) - (10,285)
Interest-bearing
bank borrowings 14 - (88,267) (83,915)
Bonds payable 15 (106,651) (106,650) (106,651)
Deferred tax liability 7d (271,575) (214,874) (249,527)
Provisions 16 (51,725) (68,594) (50,550)
(445,817) (478,385) (500,928)
------------- ------------- -------------
Total liabilities (548,154) (632,052) (633,126)
------------- ------------- -------------
Net assets 1,490,583 1,599,726 1,575,077
============= ============= =============
Condensed consolidated statement of financial position
As at 30 June 2017 (continued)
As at As at As at
30 June 30 June
2017 2016 31 December
(unaudited) (unaudited) 2016
Notes $'000 $'000 $'000
Capital and reserves
Called up share
capital 17 3,061 3,061 3,061
Reserves 19 1,487,802 1,596,945 1,572,296
========== ========== ==========
Equity attributable
to equity shareholders
of the Company 1,490,863 1,600,006 1,575,357
Non-controlling
interest (280) (280) (280)
Total equity 1,490,583 1,599,726 1,575,077
========== ========== ==========
Approved by the Board on 13(th) September 2017
Nick Cooper Tony Rouse
Chief Executive Officer Chief Financial Officer
Condensed consolidated statement of changes in equity
Six months ended 30 June 2017
Called Other Non-controlling
up share Treasury reserves interest Total
capital shares (1) equity
$'000 $'000 $'000 $'000 $'000
=======================
As at 1 January
2016 3,061 (155) 1,646,878 (280) 1,649,504
Loss for the period,
net of tax - - (48,447) - (48,447)
Other comprehensive
income, net of tax - - 31 - 31
========== ========= ========== ================= ==========
Total comprehensive
loss, net of tax - - (48,416) - (48,416)
Exercise of options - 2 - - 2
Share-based payment - - (1,364) - (1,364)
========== ========= ========== ================= ==========
As at 30 June 2016
(Unaudited) 3,061 (153) 1,597,098 (280) 1,599,726
Loss for the period,
net of tax - - (28,999) - (28,999)
Other comprehensive -
income, net of tax - - - -
========== ========= ========== ================= ==========
Total comprehensive
loss, net of tax - - (28,999) - (28,999)
Exercise of options - - - - -
Share-based payment - - 4,350 - 4,350
========== ========= ========== ================= ==========
As at 1 January
2017 3,061 (153) 1,572,449 (280) 1,575,077
Loss for the period,
net of tax - - (84,618) - (84,618)
Other comprehensive
income, net of tax - - - - -
========== ========= ========== ================= ==========
Total comprehensive
loss, net of tax - - (84,618) - (84,618)
Exercise of options - - - - -
Share-based payment - - 124 - 124
========== ========= ========== ================= ==========
As at 30 June 2017
(Unaudited) 3,061 (153) 1,487,955 (280) 1,490,583
---------- --------- ---------- ----------------- ----------
(1) Refer to note
20 - Other reserves
Condensed consolidated statement of cash flows
Six months ended 30 June 2017
6 Months 6 Months Year ended
Ended ended
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) $'000
Notes $'000 $'000
Operating activities
Loss before taxation (45,641) (69,624) (50,078)
Adjustments to reconcile
loss before taxation to
net cash provided by operating
activities
Exploration expenses 5b 77,126 60,069 135,252
Depreciation and amortisation 34,508 35,578 55,238
Impairment on oil and gas
assets and loss/(gain)
on disposal of fixed assets (23,607) 14 (84,100)
Share of profits from joint
ventures 18 (2,560) (2,818) (4,417)
Net charge for interest 6 7,649 7,486 8,172
Net foreign currency losses/(gains) 6 (1,062) 1,513 13,424
Share-based payment (release)/expense 5c 124 (1,364) 2,986
(Decrease)/increase in
provisions 4,590 - (19,322)
--------------------------------------- ------ ------------- ------------- -------------
Cash flow from operation
before working capital
adjustments 51,127 30,854 57,155
--------------------------------------- ------ ------------- ------------- -------------
(Decrease)/increase in
inventories 4,331 (7,943) (9,584)
(Decrease)/increase in
other current and non-current
payables 3,241 (3,477) (2,212)
(Increase)/decrease in
other current and non-current
assets (7,177) (10,665) 5,502
Interest received 983 1,044 1,959
Income taxes paid (5,147) (35,972) (41,360)
--------------------------------------- ------ ------------- ------------- -----------------
Net cash (used in)/generated
by operating activities 47,358 (26,159) 11,460
--------------------------------------- ------ ------------- ------------- -----------------
Investing activities
Additions to Exploration
and Evaluation assets (52,347) (97,084) (175,453)
Additions to property,
plant and equipment (20,250) (15,365) (18,585)
Dividends received from
joint ventures 3,126 408 5,164
Funding provided to joint
ventures (218) (1,176) (1,283)
Net cash used in investing
activities (69,689) (113,217) (190,157)
----------------------------------------------- ------------- ------------- -----------------
Financing activities
Interest paid (7,908) (8,530) (16,275)
Repayment of debt (93,656) (59,352) (59,352)
Net issue/(repurchase)
of shares - 2 2
Net cash used in financing
activities (101,564) (67,880) (75,625)
----------------------------------------------- ------------- ------------- -----------------
Currency translation differences
relating to cash and cash equivalents (6) (87) 177
----------------------------------------------- ------------- ------------- -----------------
Decrease in cash and cash equivalents (123,901) (207,343) (254,145)
----------------------------------------------- ------------- ------------- -----------------
Cash and cash equivalents at
beginning of period 360,424 614,569 614,569
Cash and cash equivalents at
end of period 236,523 407,226 360,424
----------------------------------------------- ------------- ------------- -----------------
Notes to the condensed interim financial statements
1 Corporate information
Ophir Energy plc (the 'Company' and ultimate parent of the
Group) is a public limited company domiciled and incorporated in
England and Wales. The Company's registered offices are located at
123 Victoria Street, London SW1E 6DE.
The principal activity of the Group is the development of
offshore and deepwater oil and gas exploration assets. The Company
has an extensive and diverse portfolio of exploration interests
across Africa and Southeast Asia.
The Income Statement and Statement of Comprehensive Income,
Statement of Financial Position, Statement of Changes in Equity,
Statement of Cash Flows and associated Notes to the Financial
Statements for the financial year ended 31 December 2016 included
in the 30 June 2017 half yearly financial report do not constitute
the Group's statutory accounts, as defined under section 435 of the
Companies Act 2006. The Group's statutory financial statements for
the financial year ended 31 December 2016 have been audited by the
Group's external auditor and lodged with the United Kingdom
Companies House. The auditor's opinion on these accounts was
unqualified and did not contain a statement under either Section
498(2) or 498(3) of the Companies Act 2006.
The Group's condensed consolidated interim financial statements
are unaudited but have been reviewed by the auditors and their
report to the Company is included on page [x]. These condensed
consolidated interim financial statements of the Group for the six
months ended 30 June 2017 were approved and authorised for issue by
the Board of the Directors on 13(th) September 2017.
2 Basis of preparation and significant accounting policies
2.1 Basis of preparation
The unaudited condensed consolidated interim financial
statements for the six months ended 30 June 2017 included in this
interim report has been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting', as adopted by
the European Union, and have been prepared on the basis of the
accounting policies set out in the Group's Annual Report for year
ended 31 December 2016.
The unaudited condensed consolidated interim financial
statements are prepared on a going concern basis as the Directors,
having considered available relevant information, have a reasonable
expectation that the Group has adequate resources to continue to
operate for the foreseeable future.
The consolidated financial statements have been prepared on a
historical cost basis and are presented in US Dollars rounded to
the nearest thousand dollars ($'000) except as otherwise
indicated.
Comparative figures for the period to 31 December 2016 are for
the year ended on that date.
The interim financial statements do not include all the
information and disclosures required in the annual financial
statements, and should be read in conjunction with the consolidated
financial statements in the Ophir Energy plc Annual Report and
Accounts for the year ended 31 December 2016. The accounting
policies adopted in the preparation of the interim financial
statements, the significant judgements made by management in
applying these policies, and key sources of estimation uncertainty
are consistent with those followed in the preparation of the
Group's financial statements for the year ended 31 December 2016,
except for the adoption of the following standards and
amendments:
New and amended accounting standards and interpretations
The following amendments to existing standards with an effective
date of 1 January 2017 are still subject to EU endorsement and are
therefore not applied in the interim accounts for the period ended
30 June 2017:
-- Amendment to IAS 7: Disclosure Initiative
-- Amendment to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses
Notes to the condensed interim financial statements
(continued)
Basis of preparation and significant accounting policies
(continued)
-- Annual Improvements to IFRSs 2014-2016 Cycle
These new and amended standards and interpretations are not
expected to have a material effect on the Group's financial
statements once adopted.
Standards and interpretations issued, but not yet effective
The following standards and interpretations, relevant to the
Group, have been issued by the IASB, but are not effective for the
financial year beginning 1 January 2017 and have not been early
adopted by the Group:
Effective date
for periods
beginning on
or after
---------------------------------------- ---------------
IFRS 16 'Leases'(1) 1 January 2019
IFRS 9 'Financial Instruments'(1) 1 January 2018
IFRS 15 'Revenue from Contracts'(1) 1 January 2018
IFRIC 22 'Foreign currency transactions
and advanced considertaions'(1) 1 January 2018
Clarifications to IFRS 15: 'Revenue
from contracts with customers'(1) 1 January 2018
Amendment to IFRS 2: 'Classification
and measurement of share based payment
transactions'(1) 1 January 2018
---------------------------------------- ---------------
(1These standards amendments and improvements have not yet been
endorsed by the European Union.)
The Group does not currently expect any of these changes to have
a material impact on the results, except as outlined below.
-- IFRS 9 'Financial Instruments' will supersede IAS 39
'Financial Instruments: Recognition and Measurement' and is
effective for annual periods beginning on or after 1 January 2018.
IFRS 9 covers classification and measurement of financial assets
and financial liabilities, impairment of financial assets and hedge
accounting.
-- IFRS 15 'Revenue from Contracts with Customers' provides a
single model for accounting for revenue arising from contracts with
customers, focusing on the identification and satisfaction of
performance obligations, and is effective for annual periods
beginning on or after 1 January 2018. IFRS 15 will supersede IAS 18
'Revenue'.
-- Ophir expects to adopt IFRS 9 and IFRS 15 on 1 January 2018.
The group's evaluation of the effect of adoption of these standards
is ongoing but it is not currently anticipated that either IFRS 9
or IFRS 15 will have a material effect on the financial
statements.
-- IFRS 16 'Leases' provides a new model for lessee accounting
in which all leases, other than short-term and small-ticket-item
leases, will be accounted for by the recognition on the balance
sheet of a right-to-use asset and a lease liability, and the
subsequent amortization of the right-to-use asset over the lease
term. IFRS 16 will be effective for annual periods beginning on or
after 1 January 2019.
-- Ophir expects to adopt IFRS 16 on 1 January 2019 using the
modified retrospective approach to transition permitted by the
standard in which the cumulative effect of initially applying the
standard is recognized in opening retained earnings at the date of
initial application. The group's evaluation of the effect of
adoption of the standard is ongoing but it is expected that it will
have a material effect on the group's financial statements,
significantly increasing the group's recognized assets and
liabilities. It is expected that the presentation and timing of
recognition of charges in the income statement will also change as
the operating lease expense currently reported under IAS 17,
typically on a straight-line basis, will be replaced by
depreciation of the right-to-use asset and interest on the lease
liability.
Notes to the condensed interim financial statements
(continued)
3 Segmental analysis
The Group's reportable and geographical segments are Africa, Asia and Other. Other relate
substantially to activities in the UK.
Segment revenues and results
The following is an analysis of the Group's revenue and assets by reportable segment:
Six months ended 30 June 2017
Africa Asia Other Total
$'000 $'000 $'000 $'000
Revenue (external) - 88,293 - 88,293
Operating profit/(loss) (58,071) 35,848 (16,955) (39,178)
------------------- ----------- ---------------- ----------
Net finance (expense)/income 120 (302) (6,281) (6,463)
Profit/(loss) before tax (57,951) 35,546 (23,236) (45,641)
Taxation 4,891 (43,865) (3) (38,977)
------------------- ----------- ---------------- ----------
Profit/(loss) after tax (53,060) (8,319) (23,239) (84,618)
Total assets 725,279 1,128,047 185,411 2,038,737
------------------- ----------- ---------------- ----------
Six months ended 30 June 2016
Africa Asia Other Total
$'000 $'000 $'000 $'000
Revenue (external) - 52,097 - 52,097
Operating profit/(loss) 9,054 (60,141) (18,157) (69,244)
------------------- ----------- ---------------- ----------
Net finance (expense)/income (257) (470) 347 (380)
Profit/(loss) before tax 8,797 (60,611) (17,810) (69,624)
Taxation (2,614) 23,791 - 21,177
------------------- ----------- ---------------- ----------
Profit/(loss) after tax 6,183 (36,820) (17,810) (48,447)
Total assets 766,227 1,135,867 329,684 2,231,778
------------------- ----------- ---------------- ----------
year ended 31 December 2016
Africa Asia Other Total
$'000 $'000 $'000 $'000
Revenue (external) - 107,178 - 107,178
Operating profit/(loss) 12,404 (5,864) (35,023) (28,483)
-------- ---------- --------- ----------
Net finance (expense)/income (462) (21,960) 827 (21,595)
Profit/(loss) before
tax 11,942 (27,824) (34,196) (50,078)
Taxation (9,944) (17,384) (40) (27,368)
-------- ---------- --------- ----------
Profit/(loss) after
tax 1,998 (45,208) (34,236) (77,446)
Total assets 778,065 1,148,674 281,464 2,208,203
-------- ---------- --------- ----------
NOTES to the condensed interim financial statements
(continued)
6 Months 6 Months Year ended
ended ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
4 Revenue
Sales of crude oil 80,753 52,097 105,731
Sales of gas 7,540 - 1,447
88,293 52,097 107,178
============= ============= ==============
5 Operating profit/(loss)
before taxation
The Group operating profit/(loss) from continuing
operations before taxation is stated after charging/(crediting):
(a) Cost of sales:
- Operating costs 24,418 23,241 43,188
- Royalty payable 7,189 4,087 9,135
* Depreciation and amortisation of oil and gas
properties 33,445 34,235 52,703
- Movement in inventories
of oil 4,334 (6,887) (9,583)
------------- ------------- --------------
69,386 54,676 95,443
============= ============= ==============
(b) Exploration expenses:
* Pre licence exploration costs 7,909 8,662 20,476
* Exploration expenditure written off (note 9) 69,217 60,069 100,140
* Exploration inventory written off - - 14,636
============= ============= ==============
77,126 68,731 135,252
============= ============= ==============
(c) General & administration
expenses include:
* Operating lease payments - minimum lease payments 1,602 1,504 3,069
* Share-based payment/(release) 124 (1,364) 2,986
============= ============= ==============
1,726 140 6,055
============= ============= ==============
(d) Other operating
(income)/expenses:
* (Gain)/loss on disposal of assets 74 14 -
* Depreciation of other property plant and
equipment 167 1,343 434
- (Release)/provision
for exiting contract(1) - (10,000) (10,000)
- Release of litigation
provisions - - (10,516)
- Other (4) 63 137
-Restructuring Costs 1,124 - -
1,361 (8,580) (19,945)
============= ============= ==============
(1) The release of the provision relates to the reduction in the
settlement costs, from $20m to $10m, agreed for the exit from the
PSC in Kenya.
Notes to the condensed interim financial statements
(continued)
6 Months 6 Months Year ended
ended ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
6 Net finance (expense)/income
Interest income on short-term
bank deposits 1,107 1,044 1,959
Interest expense on long-term
borrowings (7,909) (8,530) (16,275)
Unwinding of discount
(note 16) (723) (92) (2,568)
Less: Interest capitalised - 8,711 8,711
Net foreign currency exchange
(losses)/gains 1,062 (1,513) (13,422)
---------------- ------------- ----------------
(6,463) (380) (21,595)
================ ============= ================
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
7 Taxation
(a) Taxation charge
Current income tax:
Foreign tax:
Special remuneratory
benefit 5,855 3,305 1,861
Other foreign tax 6,138 2,048 8,952
Special remuneratory
benefit - adjustment
in respect of prior
periods - - 1,180
Foreign tax - adjustment
in respect of prior
periods 4,997 4,342 11,681
Total current income
tax charge 16,990 9,695 23,674
------------- ------------- -------------
Deferred tax:
Special remuneratory
benefit 31,094 (4,724) 9,693
Other foreign tax (9,107) (26,148) (5,999)
Total deferred tax (credit)/charge 21,987 (30,872) 3,694
------------- ------------- -------------
Total tax (credit)/charge
in the income statement 38,977 (21,177) 27,368
============= ============= =============
Special Remuneratory Benefit (SRB) is a tax that
arises on one of the Group's assets, Bualuang
in Thailand at rates that vary from zero to 75%
of annual petroleum profit depending on the level
of annual revenue per cumulative metre drilled.
The current rate for SRB for 2017 was 16% (30
June 2016: 10%, 31 December 2016: 4%). Petroleum
profit for the purpose of SRB is calculated as
revenue less a number of deductions including
operating costs, royalty, capital expenditures,
special reduction (an uplift of certain capital
expenditures) and losses brought forward.
Notes to the condensed interim financial statements
(continued)
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
Taxation (continued)
(b) Reconciliation of
the total tax charge
The tax (credit)/charge recognised in the income
statement is reconciled to the Group's weighted
average tax rate of 49% (30 June 2016: 39%, 31
December 2016: 25%). The differences are reconciled
below:
Loss from operations
before taxation (45,641) (69,624) (50,078)
============= ============= =============
Loss from operations
before taxation multiplied
by the Group's applicable
weighted average tax
rate of 49%(1) (30 June
2016: 39% , 31 December
2016: 25%) (22,140) (26,876) (12,502)
Tax effect of SRB 18,475 (710) 6,367
Tax effect of share
of profit of investments
accounted for using
the equity method (1,280) (1,409) (2,208)
Non-deductible (income)/expenditure 20,498 (1,667) 25,662
Effect of different 20,868 - -
tax rates on loss making
jurisdictions
Unrecognised deferred
tax assets 1,964 821 (3,115)
Prior year adjustments (5,581) 5,522 12,860
Other adjustments 6,173 3,142 304
Total tax (credit)/charge
in the income statement 38,977 (21,177) 27,368
============= ============= =============
(1) Loss making jurisdictions have been disregarded in the
calculation of weighted average tax rate
The taxation charge for SRB for the year can be reconciled to
the loss from operations before tax per the consolidated income
statement and statement of comprehensive income as follows:
(c) Reconciliation of special remuneratory benefit
charge to loss from operations before taxation
The taxation charge for special remuneratory benefit
for the year can be reconciled to the loss from
operations before tax per the Income Statement
as follows:
Loss from operations
before taxation (45,641) (69,624) (50,078)
Add back losses from
operations before taxation
for activities outside
of Thailand 93,686 13,039 91,687
--------- --------- ---------
(Loss)/ profit from
operations before taxation
for activities in Thailand 48,045 (56,585) 41,609
Deduct share of profit
from investments accounted
for using the equity
method (2,560) (2,818) (4,417)
--------- --------- ---------
Profit before taxation
for activities in Thailand 45,485 (59,403) 37,192
Applicable rate of special
remuneratory benefit 16% 10% 4%
Tax at the applicable
rate of special remuneratory
benefit 7,277 (5,940) 1,488
Change in special remuneratory
benefit average deferred
tax rate 19,136 (1,710) 15,397
Change in special remuneratory
benefit rate compared
to current special remuneratory
benefit rate 886 3,585 (3,207)
Prior year adjustment 7,190 1,180 1,179
Other non - deductible
costs 2,460 1,466 (2,124)
--------- --------- ---------
Total current special
remuneratory benefit
charge/(credit) 36,949 (1,419) 12,733
--------- --------- ---------
notes to the condensed interim financial statements
(continued)
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
Taxation (continued)
(d) Deferred income tax
Deferred tax balances
relate to the following:
Corporate tax on fixed
asset timing differences (241,684) (207,741) (235,183)
SRB tax on fixed asset
timing differences (29,891) (7,133) (14,344)
(271,575) (214,874) (249,527)
------------- ------------- -------------
As at As at Year ended
30-Jun-17 30-Jun-16 31-Dec
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
8 Non-current assets
held for sale
Assets
Exploration and evaluation
assets 596,999 - 588,770
------------ ------------ -----------
Assets classified as
held for sale 596,999 - 588,770
============ ============ ===========
On 10 November 2016 Ophir and OneLNG, a joint venture between
subsidiaries of Golar LNG Limited and Schlumberger, announced that
they had signed a binding Shareholders' Agreement to establish a
Joint Venture ("JV") to develop the Fortuna project, in Block R,
offshore Equatorial Guinea utilising Golar's FLNG technology.
OneLNG and Ophir will have 66.2% and 33.8% ownership of the JV
respectively. The JV will facilitate the financing, construction,
development and operation of the integrated Fortuna project and,
from FID, will own Ophir's share of the Block R licence. Management
has classified the Fortuna asset as held for sale as the asset is
available for immediate sale in its present condition and the sale
is highly probable. The appropriate levels of management have
approved the plan, a buyer has been found and the sale is expected
within 12 months.
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
9 Exploration and evaluation
assets
Cost
Balance at the beginning
of the period 310,229 879,914 879,914
Additions (1) 18,286 72,416 119,225
Transfers to PPE (10,608)
Reclassified as assets
held for sale (8,229) - (588,770)
Expenditure written-off
(2) (69,216) (60,069) (100,140)
Balance at the end
of the period 240,462 892,261 310,229
------------- ------------- -------------
(1) Additions for the 6 months ended 30 June 2017
include exploration activities in: Equatorial
Guinea - Block R ($8.2 million subsequently reclassified
as asset held for sale), Bangkanai ($1.4 million),
Myanmar ($1.7 million) and West Papua IV ($1.8
million). Additions for the year ended 31 December
2016 include exploration activities in: Equatorial
Guinea - Block R ($41.5 million), Côte d'Ivoire
- 513 ($19.6 million), Tanzania - Blocks 1 & 4
($22.7 million), Myanmar - Block AD03 ($8.7 million)
and Malaysia -Block 2A ($7.7 million).
Notes to the condensed interim financial statements
(continued)
Exploration and evaluation assets (continued)
(2) Expenditure write off for the period ended
30 June 2017 was $69 million mainly attributable
to Cote d'Ivoire ($32 million) and Gabon ($31
million).
Expenditure write off for the year ended 31 December
2016 was $100 million (30 June 2016: $60.1 million).
The most significant write off was in respect
of Thailand - G4/50: loss of $57.6 million. The
cash generating unit ('CGU') applied for the purpose
of the impairment assessment is the Block. The
recoverable amount for the Block was nil. This
was based on management's estimate of value in
use. The trigger for expenditure write off was
management's assessment that no further expenditure
on exploration and evaluation of hydrocarbons
in the Blocks was budgeted or planned within the
current licences terms.
The Group generally estimates value in use using
a discounted cash flow model. Future cash flows
are discounted to their present values using a
pre-tax discount rate of 15% (2016:15%). Adjustments
to cash flows are made to reflect the risks specific
to the CGU.
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
10 Oil and gas properties
Cost
Balance at the beginning
of the period 875,278 869,852 869,852
Acquisition of subsidiary - - -
Additions(1) 19,506 15,365 5,426
Transfer from E&E 10,608 - -
Balance at the end
of the period 905,392 885,217 875,278
------------- ------------- -------------
Depreciation and amortisation
Balance at the beginning
of the period (176,278) (207,675) (207,675)
Charge for the period (33,445) (34,235) (52,703)
Reversal of impairment(2) 23,681 - 84,100
------------- ------------- -------------
Balance at the end
of the period (186,042) (241,910) (176,278)
------------- ------------- -------------
Net book value
Balance at the beginning
of the period 699,000 662,177 662,177
------------- ------------- -------------
Balance at the end
of the period 719,350 643,307 699,000
============= ============= =============
(1) Additions for the year ended 31 December 2016
are stated net of a $19.5 million decommissioning
remeasurement.
(2) The 2017 Impairment reversal was due to increased
reserves related to the Bualuang oil field in
Thailand which had a recoverable amount of $456m
based on management's estimate of value in use.
The discount rate used was 15% (pre-tax).
The 2016 Impairment reversal was due to increased
reserves related to the Bualuang oil field in
Thailand which had a recoverable amount of $410.7m
based on management's estimate of value in use.
The discount rate used was 15% (pre-tax).
Notes to the condensed interim financial statements
(continued)
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
11 Inventory
Oil and condensates 6,780 8,414 11,111
Materials and consumables 33,938 49,744 35,627
40,718 58,158 46,738
============= ============= =============
The inventory valuation is stated net of a provision of $14.6
million (31 December 2016: 14.6 million) to write inventories down
to their net realisable value
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
12 Cash and cash
equivalents
Cash 82,398 116,114 130,677
Cash equivalents 154,125 291,112 229,747
---------------- --------------- ---------------
236,523 407,226 360,424
================ =============== ===============
Cash and cash equivalents comprise cash in
hand, deposits and other short-term money
market deposit accounts that are readily convertible
into known amounts of cash. The fair value
of cash and cash equivalents is $236.6 million
(30 June 2016: $407.2 million and 31 December
2016: $360.4 million).
As at As at Year ended
30 June 2017 30 June 2016 31 December
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
113
Trade and other payables -
Current
Trade and other payables 13,161 17,589 7,658
Accruals and deferred income 53,556 72,863 71,196
Payables owed to joint operation
partners 6,587 9,697 14,544
------------- ------------- ------------
73,304 100,149 93,398
============= ============= ============
Trade and other payables -
Non-current
Accruals and deferred income 15,866 - 10,285
------------- ------------- ------------
15,866 - 10,285
============= ============= ============
Notes to the condensed interim financial statements
(continued)
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
14 Interest-bearing
bank borrowings
Long term balance
at the beginning
of the period 83,915 115,949 115,949
Short term balance
at the beginning
of the period 9,741 37,059 37,059
Acquisition of
subsidiary - - -
Less: amounts
repaid during
the period (93,656) (59,352) (59,352)
Less: amounts
due within one
year - (5,389) (9,741)
------------------------- ------------- -------------
Total borrowings
due after 1 year - 88,267 83,915
========================= ============= =============
During the period, Ophir repaid it's outstanding
debt on the 2012 reserves based lending (RBL) facility.
Ophir has replaced this facility with a new $250
million RBL facility secured against the group's
producing assets in Southeast Asia. The RBL has a
seven year term and matures on 30 June 2024. In addition
to the committed $250 million, a further $100 million
is available on an uncommitted "accordion" basis.
Interest will accrue at a rate of between 4% and
4.5% plus LIBOR depending on the maturity of the
facility. The new RBL facility is currently undrawn,
with an available facility as at 30/06/2017 of $178
million. Transaction costs of $4.8 million in relation
to the new facility have been deferred as a prepayment
within 'trade and other receivables' on the balance
sheet and will be amortised over the term of the
facility.
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
15 Bonds payable
Balance at the
beginning of
the period 106,651 106,651 106,651
Coupon interest
charged 5,109 5,109 10,218
Interest paid (5,109) (5,110) (10,218)
------------- ------------- -------------
106,651 106,650 106,651
============= ============= =============
The unsecured callable bonds were issued by Salamander
Energy plc in December 2013 at an issue price of
$150 million. The bonds have a term of six years
and one month and will be repaid in full at maturity.
The bonds carry a coupon of 9.75% and were issued
at par.
Notes to the condensed interim financial statements
(continued)
Decommissioning
and restoration
of oil Litigation Total
and gas and other Other $'000
assets claims provisions
$'000 $'000 $'000
16 Provisions
As at 30 June
2016
(Unaudited) 68,594 26,350 10,000 104,944
---------------- ------------- ----------- ---------------------
Utilised/paid (1,312) - (10,000) (11,312)
Unwinding of
discount
(note 6) 2,476 - - 2,476
Amounts
released - (10,517) - (10,517)
Remeasurement (19,208) - - (19,208)
As at 1
January
2017 50,550 15,833 - 66,383
---------------- ------------- ----------- ---------------------
Arising during
the period - - 5,342 5,342
Utilised/paid - (9,683) - (9,683)
Unwinding of
discount
(note 6) 723 - - 723
Amounts
released - (1,475) - (1,475)
Additions 452 - - 452
As at 30 June
2017
(Unaudited) 51,725 4,675 5,342 61,742
---------------- ------------- ----------- ---------------------
As at 30 June
2017
(Unaudited)
Current - 4,675 5,342 10,017
Non-current 51,725 - - 51,725
---------------- ------------- ----------- ---------------------
51,725 4,675 5,342 61,742
---------------- ------------- ----------- ---------------------
Decommissioning and restoration of oil and gas assets
The provision outstanding at 30 June 2017 is expected
to fall due from 2035 onwards.
Litigation and Other Claims
Litigation and other claims consist of claims arising
from trading activities, which have been settled
by July 2017.
Other provisions
Amounts provided at 30 June 2017 comprise $5.3 million
provision representing the organisational changes
as part of the Ophir Board's strategy to reduce
the company's underlying cost base in recognition
of limited signs of an oil price recovery, and of
lower exploration activity.
Notes to the condensed interim financial statements
(continued)
===============================================================================================================================
Year
As at As at ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
17 Share capital
(a) Authorised
2,000,000,000 ordinary shares
of 0.25p each 7,963 7,963 7,963
(b) Called up, allotted and
fully paid
746,019,407 ordinary shares
of 0.25p in issue at the
beginning
of the period (30 June and
31 December 2016:
746,019,407) 3,061 3,061 3,061
Nil ordinary shares issued
0.25p each during the period
(30 June and 31 December
2016:
Nil) - - -
746,019,407 ordinary shares
of 0.25p each
(30 June and 31 December
2016:
746,019,407) 3,061 3,061 3,061
============= ============= =============
The balances classified as called up; allotted
and fully paid share capital represents the
nominal value of the total number of issued
shares of the Company of 0.25p each.
Fully paid shares carry one vote per share
and carry the right to dividends.
Of the 746,019,407, 39,778,765 relates to
treasury shares (31 December 2016: 39,918,385,
30 June
2016: 39,926,190).
Notes to the condensed interim financial statements
(continued)
As at As at As at
30 June 30 June 31 December
2017 2016 2017
(Unaudited) (Unaudited) (Unaudited)
Percentage Percentage Percentage
Holding Holding Holding
18 Investments accounted
for using the equity
method
Company
APICO LLC 27.18% 27.18% 27.18%
APICO (Khorat) Holdings
LLC 27.18% 27.18% 27.18%
APICO (Khorat) Limited 27.18% 27.18% 27.18%
The investments in the jointly controlled entities
have been classified as joint ventures under IFRS
11 and therefore the equity method of accounting has
been used in the consolidated financial statements.
The table below shows the movement in investments
in the jointly controlled entities:
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
Balance at the beginning
of the period 130,736 130,200 130,200
Share of profit of
investments 2,560 2,818 4,417
Dividends received (3,126) (408) (5,164)
Additions 218 1,176 1,283
============= ============= =============
130,388 133,786 130,736
============= ============= =============
As at As at Year ended
30 June 30 June 31 December
2017 2016
(Unaudited) (Unaudited) 2016
$'000 $'000 $'000
19 Reserves
Treasury shares (153) (153) (153)
Other reserves (note
20) 1,487,955 1,597,098 1,572,449
------------- ------------- -------------
1,487,802 1,596,945 1,572,296
Non-controlling interest
(1) (280) (280) (280)
------------- ------------- -------------
1,487,522 1,596,665 1,572,016
============= ============= =============
(1) The non-controlling interest relates to Dominion Uganda
Limited, where the Group acquired a 95% shareholding during
2012.
Notes to the condensed interim financial statements
(continued)
Foreign
(7) currency
translation
reserve
$'000 Accumulated Total
Capital Merger Equity
Share redemption Options (5) (6) component
premium (2) premium Consolidation reserve on convertible profits other
(1) reserve (3) reserve (4) reserve bond / (losses) reserves
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
=============== ======== =========== ============ ============== ========= =============== ============== ============ ==========
20 Other
reserves
As at 1
January
2016 807,427 160 54,808 (500) 667,337 669 5,538 111,439 1,646,878
Loss for the
period, net
of tax - - - - - - - (48,447) (48,447)
Other
comprehensive
loss, net of
tax - - - - - - 31 - 31
======== =========== ============ ============== ========= =============== ============== ============ ==========
Total
comprehensive
loss, net of
tax - - - - - - 31 (48,447) (48,416)
Share-based
payments - - (1,364) - - - - - (1,364)
======== =========== ============ ============== ========= =============== ============== ============ ==========
As at 30 June
2016
(Unaudited) 807,427 160 53,444 (500) 667,337 669 5,569 62,992 1,597,098
Loss for the
period, net
of tax - - - - - - - (28,999) (28,999)
======== =========== ============ ============== ========= =============== ============== ============ ==========
Total
comprehensive
loss, net of
tax - - - - - - - - (28,999)
Share-based
payments - - 4,350 - - - - - 4,350
-------- ----------- ------------ -------------- --------- --------------- -------------- ------------ ----------
As at 1
January
2017 807,427 160 57,794 (500) 667,337 669 5,569 33,993 1,572,449
-------- ----------- ------------ -------------- --------- --------------- -------------- ------------ ----------
Loss for the
period, net
of tax - - - - - - - (84,618) (84,618)
Total
comprehensive
loss, net of
tax - - - - - - - - (84,618)
Share-based
payments - - 124 - - - - - 124
As at 30 June
2017
(Unaudited) 807,427 160 57,918 (500) 667,337 669 5,569 (50,625) 1,487,955
======== =========== ============ ============== ========= =============== ============== ============ ==========
Notes to the condensed interim financial statements
(continued)
Other reserves (continued)
(1) The share premium account represents the total net proceeds
on issue of the Company's shares in excess of their nominal value
of 0.25p per share less amounts transferred to any other
reserves.
(2) The capital redemption reserve represents the nominal value
of shares transferred following the Company's purchase of them.
(3) The option premium reserve represents the cost of
share-based payments to Directors, employees and third parties.
(4) The consolidation reserve represents a premium on
acquisition of a minority interest in a controlled entity.
(5) In the current year the provisions of the Companies Act 2006
relating to Merger Relief (s612 and s613) were applied to the
Salamander Energy plc acquisition. The non-statutory premium
arising on shares issued by Ophir as consideration has been
recognised in the Merger reserve, by virtue of Ophir acquiring in
excess of 90% of all classes of the acquiree's issued share
capital.
In the prior year the provisions of the Companies Act 2006
relating to Merger Relief (s612 and s613) were applied to the March
2013 share placement and rights issue raising performed through a
cash box structure. The 'cash box' method of affecting an issue of
shares for cash is commonplace and enabled the Company to issue
shares without giving rise to a share premium. The premium on
shares issued, net of applicable transaction costs of $34.5
million, as part of the 'cash box' arrangement is instead
recognised in the Merger Reserve. Following on from the completion
of the Group's farm out of 20% of its interest in Tanzania Blocks
1, 3 & 4 in March 2014 Ophir Ventures (Jersey) Limited and
Ophir Ventures (Jersey) No.2 Limited, which are wholly owned
subsidiaries of the Company, redeemed the preference shares that
had been acquired by the Company as part of the 'cash box'
arrangement. This has allowed the Company to realise $876.4 million
of the Merger Reserve to accumulated profits / (losses) as the
redemption of the preference shares was considered to be performed
with qualifying consideration in the form of free cash and a
readily recoverable receivable from Ophir Holdings Limited, a 100%
owned subsidiary of the Company and beneficial holder of the
Group's interest in Tanzania Blocks 1, 3 & 4.
(6) This balance represents the equity component of the
convertible bond, net of costs and tax as a result of the
separation of the instrument into its debt and equity components.
The bond was converted into 21,661,476 ordinary shares of 0.25p
each on 21 May 2008.
(7) The foreign currency translation reserve is used to record
unrealised exchange differences arising from the translation of the
financial statements of entities within the Group that have a
functional currency other than US Dollars.
notes to the condensed interim financial statements
(continued)
21 Capital commitments
In acquiring its oil and gas interests, the Group
has pledged that various work programmes will be
undertaken on each permit/interest. The exploration
commitments in the following table are an estimate
of the net cost to the Group of performing these
work programmes:
year
ended
as at As at
30 June 30 June 31 december
2017 2016 2016
(Unaudited) (Unaudited) (Unaudited)
$'000 $'000 $'000
Due within one (1) year 37,502 45,128 46,870
Due later than one (1)
year but within two (2)
years 31,340 26,180 31,805
Due later than two (2)
years but within five (5)
years 545 21,480 1,240
-------------- ------------- --------------
69,387 92,788 79,915
-------------- ------------- --------------
22 Contingent liabilities
An individual has commenced claims against the Group relating to
the evaluation and subsequent disposal of an interest that was held
in exploration blocks within the portfolio. Preliminary court
hearings for applications relating to the claims have been held,
and, to date, no material rulings have been made. The Group is
awaiting the schedule for the full trials and it is not practicable
to state whether any payment obligation may arise. The Group has
taken the view that the actions are without merit and accordingly
has estimated that no liability will arise as a result of
proceedings and therefore no provision for any liability has been
made in these financial statements.
23 Events after the reporting period
There are no events after the reporting period.
Company Information
Registered Office and Head Office
Fourth Floor
123 Victoria Street
London SW1E 6DE
Telephone: +44 (0)20 7811 2400
Website: www.ophir-energy.com
Directors
Chairman (Non-Executive) Independent Non-Executive
Directors
William (Bill) Schrade
Ronald Blakely (resigned
Executive Directors 31 March 2017)
Dr Carol Bell
Dr Nicholas (Nick) Cooper Alan Booth
- Chief Executive Officer Vivien Gibney
Dr William (Bill) Higgs David Davies (Appointed
- Chief Operating Officer 23 August 2016)
(resigned 7 August 2017) Dr Carl Trowell (Appointed
Anthony (Tony) Rouse 23 August 2016)
- Chief Financial Officer
Company Secretary
Philip Laing
Registrars
The Company has appointed Equiniti Limited to maintain its
register of members. Shareholders should contact Equiniti using the
details below in relation to all general enquiries concerning their
shareholding:
Equiniti Limited*
Aspect House
Spencer Road
Lancing, West Sussex BN99 6DA
Telephone: 0871 384 2030**
International dialling: +44 121 415 7047
* Equiniti Limited and Equiniti Financial Services Limited are
part of the Equiniti group of companies. Company share
registration, employee scheme and pension administration services
are provided through Equiniti Limited, which is registered in
England & Wales with No. 6226088. Investment and general
insurance services are provided through Equiniti Financial Services
Limited, which is registered in England & Wales with No.
6208699 and is authorised and regulated by the UK Financial Conduct
Authority.
** Lines are open Monday - Friday from 9.00am - 5.30pm (UK
time), excluding UK bank holidays.
Company Information (Continued)
Auditors: Solicitors:
Ernst & Young LLP Linklaters
One More London Place One Silk Street
London SE1 2AF London EC2Y 8HQ
United Kingdom United Kingdom
Bankers: Corporate Brokers:
HSBC Bank plc Bank of America Merrill
70 Pall Mall Lynch
London SW1 5EY 2 King Edward Street
United Kingdom London EC1A 1HQ
United Kingdom
Financial PR Advisors:
Brunswick Group LLP Morgan Stanley
16 Lincoln's Inn Fields 20 Bank Street
London WC2A 3ED Canary Wharf
United Kingdom London E14 4AD
United Kingdom
------------------------- -------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKNDQKBKBOCD
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September 14, 2017 02:01 ET (06:01 GMT)
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