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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Andes Energia | LSE:AEN | London | Ordinary Share | GB00B7LHJ340 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 49.00 | 48.00 | 50.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAEN
RNS Number : 9053S
Andes Energia PLC
30 September 2014
30 September 2014
ANDES ENERGIA PLC
("Andes" or the "Company" or with its subsidiaries the "Group")
UNAUDITED INTERIM RESULTS TO 30 JUNE 2014
Andes (AIM: AEN; BCBA: AEN), the Latin American E&P group, announces its unaudited interim results for the six month period ending 30 June 2014.
Operational and financial highlights
-- A 66% increase in average daily production from 910 bpd in the year 2013 to 1,510 bpd in the first six months of 2014, reaching 1,590 bpd in June 2014
-- Shale oil discovery in Vaca Muerta from the Las Varillas x-1 well in the El Manzano West block in Argentina
-- 11 development wells drilled on the Chachahuen license in Argentina, in partnership with YPF, all successfully brought into production
-- 4 operated workovers on the Vega Grande, La Brea and El Manzano licenses in Argentina to maintain production
-- Acquisition of a workover/pulling rig to work in Argentina
-- Continuing to progress the community and environmental programs for the Colombia licenses as well as ongoing technical analysis and prospect generation
-- Within the next 15 months; ambitious drilling plan for Chachahuen; drill and have production from Vaca Muerta; and initiate drilling in Colombia
-- Revenues of US$20.4 million for the six months ending 30 June 2014 compared to US$4.3 million for the corresponding period last year; an increase of 374%
-- EBITDA of US$4.3 million for the six months ending 30 June 2014 compared to US$1.3 million for the 12 months ending 31 December 2013
-- Cash position of US$8 million as at 30 June 2014 (same level as at 31 December 2013)
Alejandro Jotayan, CEO, commented:
"We have made significant progress in the first half of 2014 increasing production and therefore revenue and EBITDA and making a discovery in Vaca Muerta in a region where we have 80% of our acreage in the shale play.
The Vaca Muerta shale has also seen increasing activity and industry interest. It is the only shale outside of the US to be producing and is attracting investment and commitment from majors and international oil companies as well as investors. Andes is the only AIM company with exposure to this world class oil and gas play.
The Board looks to the future with expectation and confidence."
Enquiries:
Hot Features
Premium
Andes Energia plc Nicolas Mallo Huergo, Chairman T: +54 11 4110 5150
Alejandro Jotayan, CEO
Billy Clegg, Head of Communications T: +44 20 3757 4983
Westhouse Securities Antonio Bossi T: +44 20 7601 6100
David Coaten
GMP Europe LLP Rob Collins T: +44 20 7647 2800
Liz Williamson
Emily Morris
Camarco Georgia Mann T: +44 20 3757 4986
Buchanan Ben Romney T: +44 20 7466 5000
Note to Editors:
Andes Energia is an oil and gas company focussed on onshore South America with a market capitalisation of circa GBP214 million. The Company has operations in Argentina and Colombia, with additional acreage in Brazil and Paraguay, representing three of the largest economies and three of the four largest oil producing nations in South America.
The Company has 20 million bbls of conventional 2P reserves in Argentina and certified resources of 659 million boe, primarily in the Vaca Muerta unconventional formation in Argentina and 7.5 million acres across South America.
The Company has approximately 2 million net acres in unconventional plays including 250,000 net acres in the Vaca Muerta formation, which is the second largest shale oil deposit in the world and the only producing shale oil deposit outside of North America. Over 250 wells have already been drilled and fracked in the Vaca Muerta formation.
Andes is the only AIM company on the London Stock Exchange with exposure to Vaca Muerta.
The Company currently produces 1,590 bbls per day in Argentina from 6 conventional fields, generating positive cash flows.
Chief Executive Officer's Review
Oil and Gas interests
Introduction
The first half of 2014 was an important period for Andes as we consolidated and increased our production, had a discovery in the Vaca Muerta shale with the Las Varillas x-1 well (our third discovery in Vaca Muerta), continued to develop our main conventional field, Chachahuen, almost doubled our average monthly revenues compared to the year 2013 whilst maintaining our monthly general and administrative expenses at the same level. This enabled us to achieve an EBITDA of US$4.3 million for the six month period compared to US$1.3 m for the 12 month period ending 31 December 2013. The Argentine domestic oil price continues to increase and for Andes the well head price was on average US$74/bbl. The total investment in the period was US$3.9 million, mainly in producing assets The period end cash position was US$8 million (US$5.9 million restricted) (H1 2013: US$10 million). The restricted cash is charged as security for stand by letters of credit issued for the Colombian licences and for a bank overdraft facility.
During the first half of 2014 the Vaca Muerta shale has begun to be developed on a broader scale in Argentina, with drilling and fracking campaigns being carried out by different companies with total production reaching 25,000 boepd in one year, from a base of zero. With its size and evolution, Vaca Muerta has the attributes to transform itself, within the western world, into a light oil and gas play with the greatest growth potential. Andes is in a unique position as the only AIM listed Company in London with exposure to Vaca Muerta with 250,000 net acres.
Strategy
Andes has net 2P reserves of 20 million bbls and certified resources of 659 million boe mostly in the Vaca Muerta shale, where Andes holds 250,000 net acres in the oil window. We are making considerable progress in line with our stated strategy, which is to develop our 2P reserve base to increase production, strengthen cash flows and the financial position of the company such that capital can be deployed to convert resources into cash generating reserves and continue developing our acreage in Vaca Muerta.
Argentina
El Manzano West
Las Varillas x-1
The well "Las Varillas x-1" was vertically drilled reaching a total depth of 7,851 feet (2,393 metres) and encountered 410 feet (125 metres) of gross pay in the unconventional Vaca Muerta formation, the primary target.
The drilling was characterised by the persistent presence of oil and gas shows through most of the Vaca Muerta interval. Comprehensive studies of the data collected were performed to design the completion, fracking and production testing to be carried out and we are awaiting a workover rig and hydraulic fracturing equipment availability.
Andes was fully carried on the drilling of this well, as part of the farm-in agreement with YPF under which Andes has a 100% working interest in all production from the Agrio formation, which overlays the Vaca Muerta formation and a 40% carried interest in the Vaca Muerta and other formations. This discovery is crucial in the context that 80% of Andes's net acreage in Vaca Muerta lies in this region (the Vega Grande, La Brea, El Manzano and Malargue blocks).
Mirador del Valle x-1
A workover was carried out to perform a build-up test, with the main objective to measure well productivity and reservoir pressure and define a development program. The results are expected to be available in October 2014.
Oil production in Chachahuen
At the end of June 2014 a total of 47 wells were on stream, producing 2,580 bpd; 516 bpd net to Andes (Andes holds a 20% working interest). An increase of more than 400% year over year. A total of 11 producing wells were drilled, completed and came on stream during the first half of 2014.
In the next 15 months we have an ambitious drilling plan to develop the Chachahuen 2P reserves and a 2D and 3D seismic program in unexplored areas of the block. Wells are to be drilled to a depth of more than 1000 metres at a net cost of approximately US$$1.2 million each. The production profile of each well includes a recovery of approximately 100,000 bbl per well, with 30% in the first year with an initial productivity of 110 bbl/d. Each well is paid back within a year and production from the field is anticipated to continue to increase significantly.
Ñirihuau block
An additional 500 soil gas samples were collected bringing the total number of samples collected to 3,000. As part of our work commitment the reprocessing of 160 km of 2D seismic was awarded to WesternGeco.
Other Operational Development
In March 2014 the Company acquired for a cost of US$200,000 a workover/pulling unit rig, which will facilitate the intervention on several wells in a more timely and economic way to maintain and enhance oil production in mature fields. The average equivalent cost to use a third party rig is US$150,000 per workover (compared to a cost of US$50,000 in the case the rig is owned and operated by Andes). A successful campaign of well interventions was carried out on four wells during April to June 2014 in Vega Grande, La Brea and El Manzano blocks, which allowed us to maintain production on those licenses.
Colombia
We continue to progress the community and environmental programs for our Colombia licenses, as well as ongoing technical analysis and prospect generation. A local exploration manager, with previous experience in Ecopetrol and Schlumberger and a Masters in Geosciences from Texas University, has been hired to focus exclusively on our activities in Colombia.
In August 2014, three new blocks with conventional oil discoveries were awarded to Andes by the regulator (ANH) in the Llanos basin: YD LLA 2, YD LLA 5 and YD LLA 8. Some of these blocks may have potential for unconventional exploitation. We expect to reprocess the existing seismic data during 2015 and complete workovers on the existing wells in each block during 2016 and 2017.
Paraguay
Repatriación block
The commitments of the prospecting permit were fulfilled by the completion of a geochemical soil survey and the reprocessing of 168 km of 2D seismic, which allows us to gain a better understanding of the play. We have requested from the regulatory authority access to a second period for further exploration.
Outlook
We will maintain our focus on creating value by strengthening our production base, cash flow and financial position in order to continue developing our discoveries in Vaca Muerta and de-risking the acreage where we don't yet have discoveries, to increase their value. We have entered the second half of the year with determination and a busy work program for the next 15 months, with an ambitious drilling plan for Chachahuen, the objective to drill and have production from Vaca Muerta in our 100% operated blocks and to drill in Colombia.
Your Board looks to the future with confidence.
Alejandro Jotayan
Chief Executive Officer
30 September 2014
Group income statement for the period ended 30 June 2014
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
Continuing Operations US$'000 US$'000 US$'000
Revenue 20,357 4,322 22,456
Cost of sales (13,084) (3,024) (14,224)
Gross profit 7,273 1,298 8,232
Other operating income/(expense) 24 1,126 (1,066)
Exceptional items - - 6,211
--------------------------------------------------- ------------ ------------ ------------
Total other operating income 24 1,126 5,145
--------------------------------------------------- ------------ ------------ ------------
Distribution costs (1,732) (278) (1,711)
Administrative expenses before exceptional items (2,866) (2,774) (5,656)
------------ ------------ ------------
Operating profit/(loss) 2,699 (628) 6,010
Finance income 721 216 2,369
Finance costs (see note 3) (3,581) (2,726) (8,473)
Loss before taxation (161) (3,138) (94)
Taxation (see note 6) (2,561) 73 (334)
------------
Loss for the period (2,722) (3,065) (428)
------------ ------------ ------------
Loss per ordinary share (see note 4) Cents Cents Cents
Adjusted basic and diluted loss per ordinary share (0.53) (0.94) (1.58)
Basic and diluted loss per ordinary share (0.53) (0.94) (0.10)
Consolidated statement of comprehensive income for the period ended 30 June 2014
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Loss for the period (2,722) (3,065) (428)
Translation differences (see note 7) (41,503) (18,406) (68,058)
Total comprehensive loss for the period (44,225) (21,471) (68,486)
------------ ------------ ------------
The loss on exchange results primarily from the revaluation of intangible assets that are carried in Argentine peso. This is the main reason for the drop in the carrying value of the intangible assets and is not indicative of an impairment in value.
Consolidated statement of financial position as at 30 June 2014
30-Jun-14 30-Jun-13 31-Dec-13
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Non-current assets
Intangible assets 227,220 343,951 279,617
Property, plant and equipment 1,194 1,277 1,025
Available for sale financial assets 1,636 - 1,634
Trade and other receivables 10,561 8,022 10,725
Deferred income tax assets 523 1,272 1,490
Total non-current assets 241,134 354,522 294,491
--------- --------- ---------
Current assets
Inventories 678 361 540
Available for sale financial assets 2,866 515 3,680
Trade and other receivables 11,597 10,390 12,151
Restricted cash 5,944 - 3,561
Cash and cash equivalents (excluding bank overdrafts) 2,051 10,216 4,617
Total current assets 23,136 21,482 24,549
--------- --------- ---------
Current liabilities
Trade and other payables 14,131 16,736 17,436
Financial liabilities 10,072 16,974 7,957
Current tax liabilities - 46 -
Total current liabilities 24,203 33,756 25,393
--------- --------- ---------
Non-current liabilities
Trade and other payables 7,733 23,896 8,854
Financial liabilities 52,390 36,004 48,018
Deferred income tax liabilities 53,503 77,760 66,405
Provisions 476 - 454
Total non-current liabilities 114,102 137,660 123,731
--------- --------- ---------
Net assets 125,965 204,588 169,916
--------- --------- ---------
Capital and reserves
Called up share capital 84,222 82,894 84,216
Share premium account 58,308 57,110 58,281
Retained earnings 42,691 42,328 45,172
Other reserves (59,256) 22,256 (17,753)
Total equity 125,965 204,588 169,916
--------- --------- ---------
Unaudited consolidated statement of changes in equity for the period ended 30 June 2014
Capital and reserves Share Share Retained Other Total
capital premium earnings reserves
US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2013 34,814 1,111 45,192 40,662 121,779
------- ----------- ----------- ------------- --------
Loss for the period - - (3,065) - (3,065)
Translation differences - - - (18,406) (18,406)
Total comprehensive loss
for the period - - (3,065) (18,406) (21,471)
------- ----------- ----------- ------------- --------
Issue of ordinary shares 48,080 55,999 - - 104,079
Fair value of share based
payments - - 201 - 201
At 30 June 2013 82,894 57,110 42,328 22,256 204,588
------- ----------- ----------- ------------- --------
Profit for the period - - 2,637 - 2,637
Translation differences - - - (49,652) (49,652)
Total comprehensive loss
for the period - - 2,637 (49,652) (47,015)
------- ----------- ----------- ------------- --------
Issue of ordinary shares 1,322 1,171 - - 2,493
Deferred contingent consideration
shares - - - 9,355 9,355
Fair value of share based
payments - - 207 - 207
Issue of warrants - - - 288 288
At 31 December 2013 84,216 58,281 45,172 (17,753) 169,916
------- ----------- ----------- ------------- --------
Loss for the period - - (2,722) - (2,722)
Translation differences - - - (41,503) (41,503)
Total comprehensive loss
for the period - - (2,722) (41,503) (44,225)
------- ----------- ----------- ------------- --------
Issue of ordinary shares 6 27 - - 33
Fair value of share based
payments - - 241 - 241
At 30 June 2014 84,222 58,308 42,691 (59,256) 125,965
------- ----------- ----------- ------------- --------
Other reserves Merger Warrant Reverse Translation Deferred Total
reserve reserve acquisition reserve consideration other
reserve reserves
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2013 55,487 1,817 - (16,642) - 40,662
------- ------- ----------- ----------- ------------- --------
Translation differences - - - (18,406) - (18,406)
Total comprehensive loss
for the period - - - (18,406) - (18,406)
------- ------- ----------- ----------- ------------- --------
At 30 June 2013 55,487 1,817 - (35,048) - 22,256
------- ------- ----------- ----------- ------------- --------
Translation differences - - - (49,652) - (49,652)
Total comprehensive loss
for the period - - - (49,652) - (49,652)
------- ------- ----------- ----------- ------------- --------
Deferred contingent consideration
shares - - - 204 9,151 9,355
Issue of warrants - 288 - - - 288
At 31 December 2013 55,487 2,105 - (84,496) 9,151 (17,753)
------- ------- ----------- ----------- ------------- --------
Translation differences - - - (41,503) - (41,503)
Total comprehensive loss
for the period - - - (41,503) - (41,503)
------- ------- ----------- ----------- ------------- --------
At 30 June 2014 55,487 2,105 - (125,999) 9,151 (59,256)
------- ------- ----------- ----------- ------------- --------
Consolidated cash flow statement for the period ended 30 June 2014
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Cash generated from operations (see note 8) 3,537 180 3,431
Tax paid - (3) (59)
Cash flows generated from operating activities 3,537 177 3,372
------------ ------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (499) (209) (547)
Investment in development and production assets (3,372) - (2,906)
Purchase of financial assets (76) - (2,525)
Acquisition of subsidiaries - - 23
Net cash used in investing activities (3,947) (209) (5,955)
------------ ------------ ------------
Cash flows from financing activities
Repayments of borrowings - - 10,386
Funds from borrowing - 10,132 -
Interest received - - 11
Proceeds from issue of shares 33 86 359
Net cash generated from financing activities 33 10,218 10,756
------------ ------------ ------------
Exchange gains/(losses) on cash and cash equivalents 194 (149) (174)
Net (decrease)/increase in cash and cash equivalents (183) 10,037 7,999
Cash and cash equivalents at the beginning of the period 8,178 179 179
Cash and cash equivalents at the end of the period 7,995 10,216 8,178
------------ ------------ ------------
Notes
1. Basis of preparation
The Group consolidates the financial statements of the Company and its subsidiary undertakings.
The financial information has been prepared under the historical cost convention in accordance with International Financial Reporting Standards (IFRSs). The financial information set out in this half-yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The same accounting policies, presentation and methods of computation are followed in this interim condensed consolidated report as were applied in the Group's annual financial statements for the year ended 31 December 2013. The auditor's report on those financial statements was unqualified and did not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006.
2. Segmental analysis
In the opinion of the Board the operations of Andes comprise one class of business, oil and gas exploration, development and production and the sale of hydrocarbons and related activities. An operating segment is a component of an entity that engages in business activities from which it may earn revenue and incur expenses and whose results are regularly reviewed by the Board. The Board considers and reviews operating segments by reference to geographic location. Whilst the Group now holds interests in licences in Argentina, Colombia, Brazil and Paraguay, during the period under review the primary reportable geographic segment was Argentina and the results and the assets of the other segments (including unallocated items) are immaterial.
3. Finance costs
The finance costs for the period were not paid in cash and were not due to be paid and relate primarily to convertible loans.
4. Loss per share
Basic loss per share is calculated by dividing the net loss for the period attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. The basic and diluted loss per share are the same as there are no instruments that have a dilutive effect on earnings. Adjusted basic and diluted loss per share are presented after adjustment of exceptional items.
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
Cents Cents Cents
Basic and diluted loss per share (0.53) (0.94) (0.10)
Adjusted basic and diluted loss per share (0.53) (0.94) (1.58)
US$'000 US$'000 US$'000
Loss for the financial period attributable to equity holders (2,722) (3,065) (428)
Exceptional items - - (6,211)
Adjusted loss for the financial period attributable to equity holders (2,722) (3,065) (6,639)
------------ ------------ ------------
No.'000 No.'000 No.'000
Weighted average number of shares 514,781 324,983 419,224
Effect of dilutive warrants - - -
Diluted weighted average number of shares 514,781 324,983 419,224
------------ ------------ ------------
5. EBITDA
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Loss for the period from continuing operations (2,722) (3,065) (428)
Less: Exceptional items - - (6,211)
Add: Depreciation and amortisation 1,570 319 1,521
Less: Finance income (721) (216) (2,369)
Add: Finance costs 3,581 2,726 8,473
Add/(less): Tax 2,561 (73) 334
EBITDA/(LBITDA) 4,269 (309) 1,320
------------ ------------ ------------
6. Taxation
The tax charge for the period is unusually high due to the fact in Argentina company losses can not be transferred and offset against profits generated by companies in the same group. Furthermore, tax losses can only be carried forward 5 years.
7. Comprehensive income
The translation loss primarily arises as a result of the 24% devaluation of the AR$ against the US$ during the period. The carrying value of intangibles assets, other assets and liabilities in Argentina are held in AR$ and on consolidation translated to US$, the presentation currency. The resulting exchange gains and losses are classified as equity and transferred to the Group's translation reserve. This is not indicative of an impairment in the carrying value of the assets.
8. Cash generated from operations
Six months Six months Year
to 30-Jun-14 to 30-Jun-13 to 31-Dec-13
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Continuing operations
Loss for the period before taxation (161) (3,138) (94)
Exceptional items - - (6,211)
------------
Loss for the period before taxation and exceptional items (161) (3,138) (6,305)
Adjustments from operating activities
Depreciation and amortization 1,570 319 1,521
Exchange movements (2,257) - (3,832)
Revaluation of investments (9) 33 1,866
Increase in inventories (251) (45) (300)
Increase in trade and other receivables (2,486) (6,978) (8,336)
Increase in creditors and other payables 3,916 7,268 10,410
Finance costs 3,581 2,726 8,473
Finance income (721) (216) (2,369)
Movement in provisions 114 (140) (615)
Acquisition fees - 150 2,510
Share based payments 241 201 408
Net cash generated from operating activities 3,537 180 3,431
------------ ------------ ------------
9. Other
A copy of the interim report will be made available on Andes's website at www.andesenergiaplc.com.ar
This information is provided by RNS
The company news service from the London Stock Exchange
END
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