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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bowleven Plc | LSE:BLVN | London | Ordinary Share | GB00B04PYL99 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.20 | 0.15 | 0.25 | 0.20 | 0.1725 | 0.20 | 195,543 | 08:00:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Oil And Gas Field Expl Svcs | 0 | -2.02M | -0.0062 | -0.32 | 654.93k |
From Apr 2019 to Apr 2024
TIDMBLVN
RNS Number : 1145F
BowLeven Plc
10 November 2015
10 November 2015
Bowleven plc ('Bowleven' or 'the Company')
Preliminary Results Announcement
Bowleven, the Africa focused oil and gas exploration group traded on AIM, today announces its preliminary results for the year ended 30 June 2015.
PRELIMINARY RESULTS HIGHLIGHTS
Etinde Farm-Out Transaction Completed
-- Aggregate total consideration from LUKOIL/NewAge of approximately $250 million, with $170 million cash proceeds received and up to a further $80 million consideration to follow, comprising:
o Up to $40 million (net) carry for two Etinde appraisal wells, including testing;
o $15 million cash to be received on completion of appraisal drilling (or end September 2016 at latest); and
o $25 million cash contingent upon, and to be received at, Etinde development project final investment decision (FID).
-- Operatorship of Etinde transferred to NewAge; Bowleven retains a 20% non-operated interest in the Etinde development, including upside potential being targeted by carried appraisal drilling.
Operational
Etinde, offshore Cameroon
-- Exploitation Authorisation (EA) award gives exploitation and development rights for an initial period of 20 years.
-- Locations for two appraisal wells targeting substantial additional volumes in the Intra Isongo reservoirs agreed by joint venture; drilling anticipated during 2016, with Bowleven carried for $40 million of net costs.
-- Operator-led review of additional gas offtake solutions underway to ensure optimised development scheme post appraisal drilling.
Bomono, onshore Cameroon
-- Hydrocarbon discoveries made with both Zingana and Moambe exploration wells. -- Extended well test programme underway at Moambe, with Zingana expected to follow.
-- Memorandum of Understanding (MOU) signed with Actis/Eneo for potential gas-to-power development scheme in event of successful testing.
Other exploration
-- Evaluation of early-phase exploration activities in Kenya and Zambia ongoing.
Corporate
-- Group cash balance at end June 2015 $145.3 million (post farm-out completion and $9 million payment to Petrofac); no debt.
-- Adjustments to resources and carrying values as previously reported in the Interim Results:
o Group's P50 net contingent resources 58 mmboe (2014:244 mmboe); following farm-out of two-thirds of Etinde equity interest and the relinquishment of blocks MLHP-5 and MLHP-6.
o $76 million impairment to reflect revised commodity price and planning assumptions for Etinde development.
-- G&A cost reduction programme implemented and continuing.
OUTLOOK
Key objectives for next 12 months focusing on existing asset base:
-- Work alongside expanded Etinde joint venture to:
o commence drilling as soon as possible to further appraise the significant potential of the Intra Isongo reservoirs; and
o evaluate additional offtake opportunities and progress development plans including finalisation of gas sales agreements.
-- Planning for success and first production at Bomono by:
o Completing the Extended Well Testing (EWT) programme to determine well deliverability.
o Progressing development plans with Actis/Eneo to enable targeted near-term first production in event of testing success.
o Submitting Exploitation Authorisation Application (EAA) to Cameroon authorities in November 2015.
-- Protect balance sheet strength, with a disciplined approach to the consideration of further investment opportunities.
Kevin Hart, Chief Executive of Bowleven plc, said:
"Following completion of the Etinde farm-out we are well positioned with a strong financial foundation to deliver on our strategic objectives.
Our recent exploration drilling at Bomono, onshore Cameroon, resulted in hydrocarbon discoveries at both Zingana and Moambe. A positive outcome from the extended well testing programme could deliver a home grown revenue stream for the Group in the near-term. Consequently, alongside testing activities, we are continuing to progress plans with Actis/Eneo for a gas-to-power development scheme at Bomono.
The priority focus on Etinde is the drilling of the two appraisal wells, targeting the significant potential upside identified in the Intra Isongo reservoir interval. Bowleven is funded for its anticipated share of the drilling and testing of these wells via a $40 million (net) carry obtained under the Etinde farm-out agreement. With well locations agreed we are looking forward to the operator drilling these wells as soon as practicable in 2016.
The sustained low oil price has created a challenging environment for E&P companies and we have taken the time to examine our current cost base to ensure that it is right-sized for current plan, and our strategic objectives. However, for those with balance sheet strength there are opportunities. We will evaluate this new business potential against a background of capital discipline and operational capability while continuing to drive forward progress on our existing assets."
ENQUIRIES
For further information please contact:
Bowleven plc
Kevin Hart, Chief Executive 00 44 131 524 5678
Kerry Crawford, Finance Director
Brunswick Group LLP
Patrick Handley 00 44 207 404 5959
Simon Maine
Macquarie Capital (Europe) Limited (Nomad)
Jon Fitzpatrick 00 44 203 037 2000
Ken Fleming
Nick Stamp
A presentation to analysts is scheduled for 9.30am GMT today.
The presentation will be recorded and an audio version will be available on the Bowleven website from the afternoon of 10 November 2015. www.bowleven.com
A copy of the presentation materials and this announcement will also be available.
This announcement may include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "projects", "expects", "intends", "may", "will", "seeks" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company's intentions, beliefs or current expectations concerning, amongst other things, the results of operations, financial conditions, liquidity, prospects, growth and strategies of the Company and its direct and indirect subsidiaries (the "Group") and the industry in which the Group operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, may differ materially from those suggested by the forward-looking statements contained in the announcement. In addition, even if the Group's results of operations, financial conditions and liquidity, and the development of the industry in which the Group operates, are consistent with the forward-looking statements contained in the announcement, those results or developments may not be indicative of results or developments in subsequent periods. In light of those risks, uncertainties and assumptions, the events described in the forward-looking statements in the announcement may not occur. Other than in accordance with the Company's obligations under the AIM Rules for Companies, the Company undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements attributable to the Company or to persons acting on the Company's behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in the announcement.
Notes to Editors:
Bowleven is an African focused oil and gas exploration group, based in Edinburgh and traded on AIM. Bowleven's strategy is focused on creating and realising material value through exploration led organic growth. Bowleven holds equity interests in two Permits in Cameroon, with one located offshore in shallow water (operated by NewAge) and the other onshore (operated by Bowleven).
Bowleven also holds an equity interest in an onshore block in Kenya, operated by Adamantine Energy, and has been awarded three blocks in Zambia, with applications on two blocks pending.
Notes to Announcement:
(1) The technical information in this release has been reviewed by Ed Willett and David Clarkson, both qualified persons for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Ed Willett, Exploration Director of Bowleven plc, is a geologist and geophysicist, a Fellow of the Geological Society (FGS) and a member of the Petroleum Exploration Society of Great Britain (PESGB) with over 28 years' experience in oil and gas exploration and production. David Clarkson, Operations Director of Bowleven plc, is a Chartered Engineer and Fellow of the Institution of Mechanical Engineers with extensive oil and gas industry experience.
(2) The information in this release reflects the views and opinions of Bowleven and has not been reviewed in advance by its joint venture partners.
CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW
Over the last 12 months Bowleven has been striving to deliver on its overriding objectives which were described in this year's Interim Results, namely:
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:01 ET (07:01 GMT)
1) Assisting the recently strengthened Etinde joint venture to convert existing resources into reserves in Cameroon and to target substantial hydrocarbon volume additions through further appraisal drilling earmarked for the exciting Intra Isongo formations.
2) Creating additional value through exploration on our Bomono acreage with a view to bringing any commercial finds into production in an expedient and cost-efficient manner.
In respect of both of these goals we have made significant progress, as demonstrated by the key highlights achieved during the period:
-- Etinde farm-out transaction completed; $170 million cash received with access to up to a further $80 million via $40 million (net) drilling/testing carry and $40 million in staged cash proceeds.
-- Two Etinde appraisal well locations agreed by joint venture and drilling planning initiated.
-- G&A reductions following the Etinde transfer of operatorship and other cost reduction initiatives.
-- Bomono exploration well drilling success; both wells encountered hydrocarbons.
-- Bomono extended well test programme and success planning initiated; testing underway and gas offtake Memorandum of Understanding (MOU) signed with Actis/Eneo.
Looking ahead the challenge continues to be to deliver on these objectives. Consistent with this our forthcoming activities now encompass:
-- Etinde Appraisal Drilling
Part of the consideration receivable from NewAge and LUKOIL comprises a net appraisal carry of up to $40 million to be spent on the drilling and testing of two Etinde appraisal wells. The primary target for these wells will be the Intra Isongo reservoirs which have the potential to contain significant additional volumes of both gas and condensate. Bowleven together with its partners have now identified suitable appraisal locations and the joint venture budget prepared by the operator contains a schedule targeting drilling commencing as soon as practicable in 2016. The locations of the wells have been selected to prove up to an additional one to two tcf of wet gas-in-place together with considerable associated liquids. The successful drilling of these wells and anticipated volume additions form a key piece of the Etinde development and monetisation jigsaw.
-- Etinde Development Progression
With the advent of the Etinde development operator role passing to NewAge, the introduction of both LUKOIL and SNH to the joint venture and the rapid change in the cost landscape, a thorough operator-led joint venture review of the alternative development plans is ongoing.
The number of competing users for gas in Cameroon is expanding and includes fertiliser, power and LNG projects. Whilst at present sufficient gas exists to meet the demand from one of these offtake schemes it is hoped that the forthcoming appraisal drilling will add additional volumes which are sufficient to enable a multiple offtake development solution. Whatever the final development scheme selected by the joint venture, it is a common goal of all concerned to progress towards a commercially robust Final Investment Decision (FID) with first hydrocarbon sales as expediently as possible. The priority focus for Etinde meantime is on getting the appraisal wells drilled so that the additional hydrocarbon volumes available for development can be determined.
-- Bomono and testing
Following recent exploration drilling and logging activity, an extended well test programme on the Moambe and Zingana wells has been initiated. These tests are designed to provide the confidence level required to enter into a gas sales agreement with Actis/Eneo whereby the gas supplied will be used for domestic power generation. As a result, the ongoing testing programme is targeted at providing productivity and connectivity information on the shallower gas-prone sands which it is intended will be used for the initial feedstock.
In addition to evaluating the shallow reservoirs, the team will also be focusing on determining the potential of the deeper sands that were targeted and encountered with both wells.
-- Bomono success case planning
In the event of successful test results, it is the intention to bring production onstream as soon as possible. Bowleven has signed a Memorandum of Understanding (MOU) with Actis/Eneo and is working closely with them in order to try and achieve near-term first gas sales.
In parallel, an Exploitation Authorisation Application (EAA) will be submitted to the Government of Cameroon for its approval. Under the staged development approach envisaged, the gas will initially be earmarked for power generation using in-situ gas powered electricity generating engines, with any associated liquids separated out and trucked to the local refinery at Limbe.
If sufficient volumes are ultimately confirmed on the acreage, it is possible that the initial development will evolve to a larger power generation project utilising gas turbines.
-- Kenya and Zambia progression evaluation
We continue to review early stage exploration plans for both Kenya and Zambia.
OPERATIONS
Etinde Exploitation, Offshore Cameroon
In July 2014, Bowleven and its joint venture partners were awarded an Exploitation Authorisation (EA) from the Cameroon State, which grants title over the Etinde development area for an initial period of 20 years. Subsequent to the award, the State, represented by SNH, exercised its rights to back-in to 20% of the Etinde development. Following the completion of the Etinde farm-out to LUKOIL and NewAge on 16 March 2015, revised participating interests in Etinde are as follows:
NewAge (Operator): 30% LUKOIL: 30% Bowleven: 20% SNH: 20%
The joint venture plans to drill two appraisal wells on the Intra Isongo. The Intra Isongo reservoir interval encountered at IM-5 highlighted the significant upside potential on the Etinde Permit. The appraisal programme will both target additional resources and help further define the shape of the full-field development plans. If successful, the appraisal drilling has the potential to create significant additional value from Etinde.
Bowleven maintains exposure to this upside potential via its retained 20% interest and is funded via the carry for its anticipated share of drilling and testing of the planned two well programme. The partners have agreed the locations for the wells with drilling planned during 2016.
Potential offtake solutions for Etinde gas include fertiliser, power and LNG. With a new operator and expanded joint venture, development optimisation and commercialisation remains at the forefront. With discovered gas sufficient to supply one of the offtake opportunities e.g. the Ferrostaal-led fertiliser scheme, the Etinde joint venture is focused on drilling the two appraisal wells as priority to determine the extent of gas available and consequently scope for multiple offtake solutions.
Bomono, Onshore Cameroon
In December 2014, the Cameroon authorities granted a one-year extension to the Bomono exploration licence to enabling the drilling of two exploration wells on the Permit.
A two well exploration drilling programme was undertaken on Bomono in 2015, fulfilling the remaining work programme obligations on the licence. Operations were impacted by the non-performance of contractors during both the preparation and operational phases of the programme, and discussions around various remedial options are ongoing with these service providers.
The Zingana and Moambe wells both encountered hydrocarbons in multiple targeted reservoir intervals and an extended well testing programme in the shallower horizons has been initiated. The programme, designed to test the productivity and the connectivity of the wells, is underway at Moambe, with testing at Zingana expected to follow. With the wells both completed as producers, the ability to move to production in event of testing success is facilitated.
We are in advanced discussions with Actis and Eneo regarding a gas-to-power scheme to supply the nearby Cameroon national grid in the event of a successful outcome to testing. It is intended that any associated liquids produced would be trucked for sale at the local refinery at Limbe.
Alongside, the preparation of the EAA for Bomono is well underway, with submission to the Cameroon Authorities scheduled prior to the expiry of the exploration phase of the licence on 12 December 2015 to enable commencement of the development phase. In addition to the near-term focus on gas delivery under a gas-to-power solution targeted, the team will also continue to evaluate the potential of the deeper reservoir intervals.
Bowleven, operator of the Permit, retains a 100% interest as the conditional farm-out of 20% to Fortesa lapsed in the period.
Volumetrics Update
As announced in the Interim Results, the Group's P50 net contingent resource numbers have decreased to 58 mmboe, compared to the year end estimate of 244 mmboe. This reflects a reduction in equity interest in Etinde from 60% to 20% following completion of the Etinde farm-out on 16 March 2015, coupled with the removal of resources associated with blocks MLHP-5 and MLHP-6 following the expiry of the Etinde exploration PSC in December 2014. Although an application for a new exploration PSC over these blocks was submitted to the Cameroon authorities, alignment could not be reached on the appropriate level of work programme obligations.
The Group does not currently include any contingent resource volumes for the Bomono Permit where two exploration wells have been recently drilled and an extended well testing programme is currently underway. Updates for Bomono and Etinde, the latter following completion of the Etinde appraisal drilling programme, are expected in 2016.
Block 11B, Onshore Kenya
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November 10, 2015 02:01 ET (07:01 GMT)
A 2D seismic programme was expected to follow the acquisition of an FTG survey. Logistical issues, including security concerns, delayed the commencement of seismic activities and the operator was unable to acquire this prior to the expiry of the first exploration phase of the licence on 26 May 2015. A one-year extension to the initial exploration phase was awarded to allow for this activity to be undertaken and thus enable a decision regarding the second exploration phase of the licence. The joint venture has already met the financial obligations for this phase of the licence, and the Group is considering the forward plan in the context of its wider opportunities.
As disclosed in the notes to the financials, Bowleven (Kenya) Limited (owned by First Oil and Bowleven) is currently in dispute with the operator over continued title to the Bowleven Kenya interest. Bowleven Kenya has taken legal advice which strongly supports the Group's view that there is no legal basis for such a challenge.
Zambia
In June 2013, Bowleven submitted an application for acreage as part of the Zambian licensing round and was subsequently awarded three exploration blocks out of a five block application. Applications for the remaining two blocks are pending. The initial four-year exploration period includes a minimum committed work programme estimated at approximately $0.5 million for all five blocks sought under the original application.
FINANCE
The Group has reported a loss of $90.0 million (includes $76.0 million impairment charge) for the year ended 30 June 2015 (2014: loss $13.6 million).
As previously announced in the Interim Results, an impairment charge of $76.0 million has been recognised following a review of the Etinde intangible exploration asset. Given the current market backdrop, the Group has reviewed the key commodity price and planning assumptions used in calculating impairment (further detail provided in notes to financials). The review has conservatively considered the discounted cashflows of the fertiliser offtake solution only.
The results for the year also include administrative expenses of $11.9 million (2014: $12.0 million). Finance costs comprise mainly of losses of $2.4 million arising from foreign exchange movements on US cash balances under IFRS due to the parent Company's functional currency being GB pounds. (2014: loss of $1.7 million).
The Group's current G&A charge (gross) is estimated at around $1 million per month (previously $1.5 million). Managing and reducing G&A costs continues to be a priority for the Group and further cost saving initiatives are being implemented.
On completion of the Etinde farm-out transaction in March 2015, the Group received $165 million in cash and a subsequent $5 million cash for working capital. $9 million was paid to Petrofac for the termination of the previously announced Strategic Alliance Agreement intended to facilitate the development and funding of Etinde on a stand-alone basis.
Capital expenditure cashflows during the period were $35.1 million (2014: $18.0 million). This relates mainly to expenditure incurred preparing for and drilling two exploration wells on the Bomono Permit, as well as activity on Etinde and on block 11B, Kenya (which is primarily covered by First Oil funding). As outlined in the Bomono update, operations were impacted by contractor non-performance, both prior to and during the drilling programme, and discussions are ongoing with the service providers regarding the recovery of a proportion of additional expenditure incurred.
At 30 June 2015, Bowleven had $145.3 million of cash and bank deposits and no debt (2014: $25.5 million and no debt).
The Group has no remaining work programme obligations following the completion of the two well exploration commitment on Bomono.
The Group had a cash balance of circa $120 million at 31October 2015 and no debt. Under the terms of the Etinde farm-out transaction, Bowleven will also receive a $40 million net drilling and testing carry for two appraisal wells on Etinde (or cash alternative in 2020) and $40 million in staged cash proceeds ($15 million receivable on completion of drilling/end September 2016 at latest and $25 million at FID).
With a substantial cash balance, the deferred consideration structure, no debt or outstanding work programme commitments, the Group is well placed financially to progress its existing asset base through the exploration/appraisal phase and on to development. The Group will continue to review all available financing options to achieve the optimum funding mix for its future activities. The Company will also continue to focus on challenging costs within the business and exerting capital discipline in the choice and timing of future capital spending.
BOARD CHANGES
The Etinde farm-out completion and associated transfer of operatorship, combined with the challenging nature of the current economic environment, has rightly been accompanied by a review of the Group's managerial and Board structure.
In May 2015, following completion of the Etinde farm-out and associated transfer of operatorship, it was announced that Chief Tabetando (Chairman of EurOil) and Peter Wilson (General Counsel) both stepped down from the Board with immediate effect.
Going forward, the Board will consist of four Executive Directors and four Non-Executives. Within this framework the roles of David Clarkson (as Chief Operating Officer) and Ed Willet (Exploration Director) have been reinforced. Operational delivery and accountability is vested in the COO, who ensures effective governance controls through an asset-based approach to technical, commercial and financial coordination. Alongside Operations, the Exploration Director leads the New Ventures group which scrutinises opportunities for business development.
The Group's Head of Legal and Commercial, Brian Cassidy, was appointed Company Secretary to the Board on 31 October 2015.
As announced in October, immediately following the Annual General Meeting (AGM) both Ronnie Hanna and Caroline Cook will step down from the Board each having served nine years on the Board as Chairman and Chairman of the Audit Committee respectively. Ronnie and Caroline have provided excellent stewardship and contribution to Bowleven over the years and their presence will be greatly missed by all within the Company.
As part of Board succession planning, John Martin and Billy Allan were appointed Non-Executive Directors in May 2015 and October 2015 respectively. It is intended that Billy Allan will succeed Ronnie as Chairman of the Board and that John Martin will take over responsibility for chairing the Audit Committee following the AGM in December 2015.
OUTLOOK
Looking ahead the next 12 months promises to be a continuing period of significant operational activity for Bowleven. The ongoing testing programme at Bomono will hopefully confirm the levels of deliverability and connectivity required to justify sanctioning an initially modest gas-to-power development. This would provide Bowleven with its first home-grown cashflow - a major milestone for the Company. In addition, next year we should learn whether the Etinde acreage and specifically the Intra Isongo formation will yield the potentially substantial additional volumes hinted at by the IM-5 well. The outcome of the two well appraisal programme, which we are carried for up to a $40 million net contribution, will help finally define the shape and size of the development of Etinde. With fertiliser, power and LNG projects all vying for the existing gas any additional volumes are likely to find a good home.
The rapid fall in the oil price has undoubtedly resulted in the entire sector re-evaluating their respective business models and adapting in order to survive whilst confronting the challenge of offering a viable investment proposition. The consummation of the deal with LUKOIL and NewAge has helped ensure that Bowleven is well positioned to ride out the storm and move forward with its assets. Although the transaction has significantly strengthened the Company's balance sheet, now more than ever, the focus needs to be on ensuring every dollar spent is an attractive investment proposition for stakeholders. These are undoubtedly difficult times for the industry however such an environment can also create opportunities. We are alive to this but will continue to exert capital discipline when assessing potential opportunities as we move forward.
Ronnie Hanna, Chairman
Kevin Hart, Chief Executive
9 November 2015
Group Income Statement
for the year ended 30 June 2015
Hot Features
Premium
2015 2014
$'000 $'000
----------------------------------- ---- ---------- ----------
Revenue - -
----------------------------------- ---- ---------- ----------
Administrative expenses (11,868) (12,025)
----------------------------------------- ---------- ----------
Impairment Charge (75,959) -
----------------------------------- ---- ---------- ----------
Operating loss before financing
costs (87,827) (12,025)
----------------------------------------- ---------- ----------
Finance income 188 160
----------------------------------------- ---------- ----------
Finance costs (2,380) (1,737)
----------------------------------------- ---------- ----------
Loss from continuing operations
before taxation (90,019) (13,602)
----------------------------------------- ---------- ----------
Taxation - -
----------------------------------- ---- ---------- ----------
Loss for the Year from Continuing
Operations (90,019) (13,602)
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November 10, 2015 02:01 ET (07:01 GMT)
----------------------------------------- ---------- ---------- Loss attributable to: ----------------------------------- ---- ---------- ---------- Owners of the parent undertaking (89,859) (13,500) ----------------------------------------- ---------- ---------- Non-controlling interest (160) (102) ----------------------------------------- ---------- ---------- Basic and diluted loss per share ($/share) from continuing operations (0.28) (0.04) ----------------------------------------- ---------- ----------
Statements of Comprehensive Income
for the year ended 30 June 2015
2015 2014
Group $'000 $'000
---------------------------------- ---- --------- ---------
Loss for the year (90,019) (13,602)
---------------------------------------- --------- ---------
Other Comprehensive Income:
---------------------------------- ---- --------- ---------
Items that will be reclassified
to profit and loss:
---------------------------------- ---- --------- ---------
Currency translation differences 1,854 3,401
---------------------------------------- --------- ---------
Total Comprehensive Income for
the Year (88,165) (10,201)
---------------------------------------- --------- ---------
Attributable to:
---------------------------------- ---- --------- ---------
Owners of the parent undertaking (88,005) (10,099)
---------------------------------------- --------- ---------
Non-controlling interest (160) (102)
---------------------------------------- --------- ---------
2015 2014
Company $'000 $'000
---------------------------------------- --------- ---------- ---------
Loss for the year (93,687) (11,809)
--------------------------------------------------- ---------- ---------
Other Comprehensive Income:
--------------------------------------- ---------- ---------- ---------
Items that will be reclassified to
profit and loss:
--------------------------------------- ---------- ---------- ---------
Currency translation differences (43,992) 65,419
--------------------------------------------------- ---------- ---------
Total Comprehensive (Loss)/Income for
the Year Attributable to Owners of
the Parent Undertaking (137,679) 53,610
---------------------------------------- --------- ---------- ---------
Group Balance Sheet
30 June 2015
2015 2014
$'000 $'000
---------------------------------- ---- --------- ----------
Non-current Assets
---------------------------------- ---- --------- ----------
Intangible exploration assets 304,662 550,745
---------------------------------------- --------- ----------
Property, plant and equipment 1,896 701
---------------------------------------- --------- ----------
306,558 551,446
--------------------------------------- --------- ----------
Current Assets
---------------------------------- ---- --------- ----------
Inventory 5,370 10,404
---------------------------------------- --------- ----------
Trade and other receivables 6,431 6,493
---------------------------------------- --------- ----------
Deferred consideration 54,977 -
---------------------------------- ---- --------- ----------
Bank deposits 500 5,000
---------------------------------------- --------- ----------
Cash and cash equivalents 144,751 20,454
---------------------------------------- --------- ----------
212,029 42,351
--------------------------------------- --------- ----------
Total Assets 518,587 593,797
---------------------------------------- --------- ----------
Current Liabilities
---------------------------------- ---- --------- ----------
Trade and other payables (12,695) (6,274)
---------------------------------------- --------- ----------
Total Liabilities (12,695) (6,274)
---------------------------------------- --------- ----------
Net Assets 505,892 587,523
---------------------------------------- --------- ----------
Equity
---------------------------------- ---- --------- ----------
Called-up share capital 55,060 55,038
---------------------------------------- --------- ----------
Share premium - 746,477
---------------------------------------- --------- ----------
Foreign exchange reserve (52,866) (54,720)
---------------------------------------- --------- ----------
Shares held by Employee
Benefit Trust (105) (489)
---------------------------------------- --------- ----------
Other reserves 15,414 14,644
---------------------------------------- --------- ----------
Retained earnings / (deficit) 485,949 (174,730)
---------------------------------------- --------- ----------
Total Equity 503,452 586,220
---------------------------------------- --------- ----------
Attributable to:
---------------------------------- ---- --------- ----------
Owners of the parent undertaking 503,452 586,220
---------------------------------------- --------- ----------
Non-controlling interest 2,440 1,303
---------------------------------------- --------- ----------
Total Equity 505,892 587,523
---------------------------------------- --------- ----------
Company Balance Sheet
30 June 2015
2015 2014
$'000 $'000
------------------------------- ---- --------- ----------
Non-current Assets
------------------------------- ---- --------- ----------
Property, plant and equipment 314 575
------------------------------------- --------- ----------
Investments 351,408 604,102
------------------------------------- --------- ----------
351,722 604,677
------------------------------------ --------- ----------
Current Assets
------------------------------- ---- --------- ----------
Trade and other receivables 2,116 2,415
------------------------------------- --------- ----------
Bank deposits 500 5,000
------------------------------------- --------- ----------
Cash and cash equivalents 141,575 20,277
------------------------------------- --------- ----------
144,191 27,692
------------------------------------ --------- ----------
Total Assets 495,913 632,369
------------------------------------- --------- ----------
Current Liabilities
------------------------------- ---- --------- ----------
Trade and other payables (1,688) (2,292)
------------------------------------- --------- ----------
Total Liabilities (1,688) (2,292)
------------------------------------- --------- ----------
Net Assets 494,225 630,077
------------------------------------- --------- ----------
Equity
------------------------------- ---- --------- ----------
Called-up share capital 55,060 55,038
------------------------------------- --------- ----------
Share premium - 746,477
------------------------------------- --------- ----------
Foreign exchange reserve (70,690) (26,698)
------------------------------------- --------- ----------
Other reserves 9,993 9,223
------------------------------------- --------- ----------
Retained earnings/(deficit) 499,862 (153,963)
------------------------------------- --------- ----------
Total Equity 494,225 630,077
------------------------------------- --------- ----------
Group Cash Flow Statement
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for the year ended 30 June 2015
2015 2014
$'000 $'000
------------------------------------- ---- --------- ---------
Cash Flows from Operating
Activities
------------------------------------- ---- --------- ---------
Loss before tax (90,019) (13,602)
------------------------------------------- --------- ---------
Adjustments to reconcile Group loss before tax
to net cash used in operating activities:
-----------------------------------------------------------------
Depreciation of property,
plant and equipment 397 421
------------------------------------------- --------- ---------
Impairment of intangible
exploration assets 75,959 -
------------------------------------- ---- --------- ---------
Finance income (188) (160)
------------------------------------------- --------- ---------
Finance costs 2,380 1,737
------------------------------------------- --------- ---------
Equity-settled share based
payment transactions 1,949 2,299
------------------------------------------- --------- ---------
Gain on sale of property,
plant and equipment - (3)
------------------------------------------- --------- ---------
Adjusted loss before tax
prior to changes in working
capital (9,522) (9,308)
------------------------------------------- --------- ---------
Decrease in inventory 316 619
------------------------------------------- --------- ---------
Increase in trade and other
receivables (1,429) (524)
------------------------------------------- --------- ---------
Increase in trade and other
payables 604 716
------------------------------------------- --------- ---------
Exchange differences (407) (79)
------------------------------------------- --------- ---------
Net Cash used in Operating
Activities (10,438) (8,576)
------------------------------------------- --------- ---------
Cash Flows from/(used in)
Investing Activities
------------------------------------- ---- --------- ---------
Proceeds from sale of intangible
exploration assets 165,000 -
------------------------------------- ---- --------- ---------
Costs of sale of intangible
exploration assets (9,395) -
------------------------------------- ---- --------- ---------
Net proceeds from sale of
intangible exploration assets 155,605 -
------------------------------------- ---- --------- ---------
Receipts from working capital
adjustment on sale of intangible
exploration assets 5,083 -
------------------------------------- ---- --------- ---------
Purchases of property, plant
and equipment (1,641) (193)
------------------------------------------- --------- ---------
Purchases of intangible exploration
assets (33,500) (17,849)
------------------------------------------- --------- ---------
Release funds on bank deposit 5,000 -
------------------------------------- ---- --------- ---------
Reclassification of funds
to bank deposit (500) -
------------------------------------- ---- --------- ---------
Receipts from sale of property,
plant and equipment - 5
------------------------------------------- --------- ---------
Receipts from sale of inventory 193 -
------------------------------------- ---- --------- ---------
Interest received 139 177
------------------------------------------- --------- ---------
Net Cash from/(used in) Investing
Activities 130,379 (17,860)
------------------------------------------- --------- ---------
Cash Flows from Financing
Activities
------------------------------------- ---- --------- ---------
Proceeds from issue of share
capital 71 21,353
------------------------------------------- --------- ---------
Costs of issue of share capital - (429)
------------------------------------------- --------- ---------
Net proceeds from issue of
ordinary shares 71 20,924
------------------------------------------- --------- ---------
Funding from non-controlling
interests 4,323 4,482
------------------------------------------- --------- ---------
Net Cash Flows from Financing
Activities 4,394 25,406
------------------------------------------- --------- ---------
Net Increase/(Decrease) in
Cash and Cash Equivalents 124,335 (1,030)
------------------------------------------- --------- ---------
Effect of exchange rates
on cash and cash equivalents (38) 1,742
------------------------------------------- --------- ---------
Cash and cash equivalents
at the beginning of the year 20,454 19,742
------------------------------------------- --------- ---------
Cash and Cash Equivalents
at the Year End 144,751 20,454
------------------------------------------- --------- ---------
Company Cash Flow Statement
for the year ended 30 June 2015
2015 2014
$'000 $'000
----------------------------------- ---- ---------- ---------
Cash Flows from Operating
Activities
----------------------------------- ---- ---------- ---------
Loss before tax (93,687) (11,809)
----------------------------------------- ---------- ---------
Adjustments to reconcile Company loss before
tax to net cash used in operating activities:
----------------------------------------------------------------
Depreciation of property,
plant and equipment 234 288
----------------------------------------- ---------- ---------
Impairment of investment 246,000 -
----------------------------------- ---- ---------- ---------
Finance income (164) (160)
----------------------------------------- ---------- ---------
Finance costs 1,930 1,581
----------------------------------------- ---------- ---------
Equity-settled share based
payment transactions 1,949 1,894
----------------------------------------- ---------- ---------
Dividend received (164,472) -
----------------------------------- ---- ---------- ---------
Adjusted loss before tax
prior to changes in working
capital (8,210) (8,206)
----------------------------------------- ---------- ---------
(Increase)/Decrease in trade
and other receivables (130) 2,199
----------------------------------------- ---------- ---------
(Decrease)/Increase in trade
and other payables (604) 620
----------------------------------------- ---------- ---------
Exchange differences (6) 73
----------------------------------------- ---------- ---------
Net Cash used in Operating
Activities (8,950) (5,314)
----------------------------------------- ---------- ---------
Cash Flows from/(used in)
Investing Activities
----------------------------------- ---- ---------- ---------
Dividend received from subsidiary
undertaking 164,472 -
----------------------------------- ---- ---------- ---------
Funding to subsidiaries (38,866) (16,711)
----------------------------------------- ---------- ---------
Purchases of property, plant
and equipment (14) (117)
----------------------------------------- ---------- ---------
Release funds on bank deposit 5,000 -
----------------------------------- ---- ---------- ---------
Reclassification of funds
on bank deposit (500) -
----------------------------------- ---- ---------- ---------
Interest received 116 177
----------------------------------------- ---------- ---------
Net Cash from/(used in)
Investing Activities 130,208 (16,651)
----------------------------------------- ---------- ---------
Cash Flows from Financing
Activities
----------------------------------- ---- ---------- ---------
Proceeds from issue of share
capital 71 21,353
----------------------------------------- ---------- ---------
Costs of issue of share
capital - (429)
----------------------------------------- ---------- ---------
Net proceeds from issue
of ordinary shares 71 20,924
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:01 ET (07:01 GMT)
----------------------------------------- ---------- --------- Net Cash Flows from Financing Activities 71 20,924 ----------------------------------------- ---------- --------- Net Increase/(Decrease) in Cash and Cash Equivalents 121,329 (1,041) ----------------------------------------- ---------- --------- Effect of exchange rates on cash and cash equivalents (31) 1,746 ----------------------------------------- ---------- --------- Cash and cash equivalents at the beginning of the year 20,277 19,572 ----------------------------------------- ---------- --------- Cash and Cash Equivalents at the Year End 141,575 20,277 ----------------------------------------- ---------- ---------
Group Statement of Changes in Equity
for the year ended 30 June 2015
Attributable
to owners
of parent
company
Retained $'000 Non-controlling
earnings Interests
Shares Other / Total
Equity Foreign held $'000
share exchange in
capital* reserve trust reserves (deficit) equity
$'000 $'000 $'000 $'000 $'000 $'000
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
At 1 July 2013 780,591 (58,121) (489) 13,932 (165,894) 570,019 - 570,019
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Loss for the
year - - - - (13,500) (13,500) (102) (13,602)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Other
comprehensive
income for the
year - 3,401 - - - 3,401 - 3,401
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Total
comprehensive
income for the
year - 3,401 - - (13,500) (10,099) (102) (10,201)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Proceeds from
issue
of share
capital 21,353 - - - - 21,353 - 21,353
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Cost of issue of
share capital (429) - - - - (429) - (429)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Share based
payments - - - 2,299 - 2,299 - 2,299
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Funding from
non-controlling
interests - - - - 3,077 3,077 1,405 4,482
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Transfer between
reserves - - - (1,587) 1,587 - - -
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
At 30 June 2014 801,515 (54,720) (489) 14,644 (174,730) 586,220 1,303 587,523
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Loss for the
year - - - - (89,859) (89,859) (160) (90,019)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Other
comprehensive
income for the
year - 1,854 - - - 1,854 - 1,854
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Total
comprehensive
income for the
year - 1,854 - - (89,859) (88,005) (160) (88,165)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Proceeds from
issue
of share
capital 71 - - - - 71 - 71
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Share based
payments - - - 1,949 - 1,949 - 1,949
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Funding from
non-controlling
interests - - - - 3,026 3,026 1,297 4,323
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Transfer between
reserves (746,526) - 478 (1,464) 747,512 - - -
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Exchange arising
on transfer of
EBT - - 32 - - 32 - 32
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Shares purchased
by employee
benefit
trust - - (126) - - (126) - (126)
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
Grant of
warrants - - - 285 - 285 - 285
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
At 30 June 2015 55,060 (52,866) (105) 15,414 485,949 503,452 2,440 505,892
----------------- ---------- --------- ------- ---------- ------------ ------------- ----------------- ---------
*Includes both share capital and share premium
Company Statement of Changes in Equity
for the year ended 30 June 2015
Attributable to Owners
of Parent Company
Other Total
Equity Foreign
share exchange
capital* reserve reserves Retained earnings / (deficit) Equity
$'000 $'000 $'000 $'000 $'000
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
At 1 July 2013 780,591 (92,117) 8,511 (143,741) 553,244
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
Loss for the year - - - (11,809) (11,809)
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
Other comprehensive
income for the year - 65,419 - - 65,419
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
Total comprehensive
income for the year - 65,419 - (11,809) 53,610
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
Proceeds from issue
of share capital 21,353 - - - 21,353
------------------------ ---------- ----------------- ---------- ------------------------------- ----------
Cost of issue of
share capital (429) - - - (429)
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:01 ET (07:01 GMT)
------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Share based payments - - 2,299 - 2,299 ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Transfer between reserves - - (1,587) 1,587 - ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- At 30 June 2014 801,515 (26,698) 9,223 (153,963) 630,077 ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Loss for the year - - - (93,687) (93,687) ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Other comprehensive income for the year - (43,992) - - (43,992) ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Total comprehensive income for the year - (43,992) - (93,687) (137,679) ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Proceeds from issue of share capital 71 - - - 71 ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Share based payments - - 1,949 - 1,949 ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Transfer between reserves (746,526) - (1,464) 747,990 - ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Transfer from Employee Benefit Trust - - - (478) (478) ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- Grant of warrants - - 285 - 285 ------------------------ ---------- ----------------- ---------- ------------------------------- ---------- At 30 June 2015 55,060 (70,690) 9,993 499,862 494,225 ------------------------ ---------- ----------------- ---------- ------------------------------- ----------
*Includes both share capital and share premium
NOTES TO THE PRELIMINARY FINANCIAL STATEMENTS
For the year ended 30 June 2015
(1) Accounting Policies
Basis of Preparation
The financial information in the preliminary financial statements has been extracted from the statutory accounts which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities (including derivative instruments). The preliminary announcement has been prepared on a basis consistent with the accounting policies applied to the statutory accounts for the year ended 30 June 2015.
Bowleven plc as a company operates using a functional currency of Great Britain Pounds. These financial statements are presented in United States Dollars, the Group's presentation currency, rounded to the nearest $'000.
The disclosed figures are not statutory accounts in terms of section 434 of the Companies Act 2006. The statutory accounts give full disclosure of the Group accounting policies and are scheduled to be posted to shareholders on 23 November 2015 and will be filed with the Registrar of Companies in due course. On the statutory accounts for the year ended 30 June 2015 and 30 June 2014, the auditor gave an unqualified opinion that did not contain an emphasis of matter and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 30 June 2014 have been filed with the Registrar of Companies.
Going concern
After making enquiries, the Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis as the Directors are of the opinion that the Group has sufficient funds, considering the completion of the Etinde farm-out (and receipt of associated cash consideration) in the year, to meet the ongoing working capital and committed capital expenditure requirements. In making this assessment, the Directors considered the Group budgets, the cash flow forecasts and associated risks
(2) Other Notes
a) The loss attributable to ordinary shares and the number of ordinary shares for the purpose of calculating the diluted earnings per share are identical to those used in the basic earnings per share. The exercise of share options or warrants would have the effect of reducing the loss per share and consequently is not taken into account. In the prior year, the loss attributable to ordinary shares and the number of ordinary shares for the purpose of calculating the diluted earnings per share were identical to those used in the basic earnings per share.
b) Directors have not recommended a dividend (2014: nil).
c) An impairment charge of $76.0 million has been recognised following a review of the book value of the Etinde intangible exploration asset following the expiry of the Etinde exploration PSC on 22 December 2014 and considering the current economic environment. Given the market backdrop, the Group has reviewed the key commodity price and planning assumptions used in calculating impairment. The review has been based on a conservative development case, considering only an initial fertiliser-led development.
d) On 16 March 2015 the Etinde farm-out transaction with LUKOIL/NewAge completed. On completion, the Group retained a 20% equity interest in the Etinde Exploitation area (previously 60%) and operatorship transferred to NewAge. Initial cash proceeds of $165 million were received on completion. A deferred consideration of $55.0 million is recognised as a current asset on the Group balance sheet at 30 June 2015 and is expected to be received during 2016. This comprises a $40 million net carry for the drilling and testing of two appraisal wells planned on Etinde in 2016 (or cash alternative in 2020 on non-utilisation of carry) and $15 million in cash receivable due on drilling completion or by end September 2016 at the latest. One of the conditions of the Etinde farm-out agreement was the cancellation of the previously announced Petrofac strategic alliance which has been treated as a directly attributable cost of the transaction. On completion of the Etinde farm-out, $9 million was paid to Petrofac as full and final settlement, to terminate the strategic alliance. As a result of the above net proceeds of $211 million are recognised as a credit to intangible exploration assets in the year. A further $5 million was received as a working capital adjustment on completion of the transaction and has been recognised in the year.
e) As at 30 June 2015 a contingent asset of $25 million is disclosed for the FID consideration relating to the Etinde farm-out and will be credited to intangible exploration assets once further clarity around Etinde project sanction/FID is obtained.
f) Approval was given by shareholders at the AGM on 18 December 2014 to cancel the Bowleven plc share premium account by way of capital reduction. The capital reduction was confirmed by the Court of Session in Edinburgh on 20 March 2015 and the entire share premium account of Bowleven plc (GBP422 million) cancelled with a corresponding adjustment to retained deficit/earnings in the year to 30 June 2015. The Court imposed a short term restriction on the use of the distributable reserves created in Bowleven plc by the cancellation of the share premium account. Up to 16 March 2016 the consent of the Court is required for any distribution to shareholders other than the reduction of share capital by purchases in the market as approved at the 2014 AGM.
g) 30% of the shares in Bowleven (Kenya) Limited are held by First Oil. Bowleven Kenya is included in the group accounts as a subsidiary with the 30% First Oil shareholding recognised as a non-controlling interest. Bowleven (Kenya) Limited is involved in legal proceedings with the operator of Kenya block 11B, Adamantine, who are seeking to force the assignment of Bowleven Kenya's 50% interest in the block to them. Bowleven Kenya has taken legal advice which strongly supports the Group's view there is no legal basis for this action. The Group holds $11.8m in intangible fixed assets for block 11B ($8.8m of which was funded by First Oil).
h) In the Company balance sheet, an impairment charge of $246 million has been recognised against the investment in Bowleven Resources Limited. The net assets of the subsidiary group have reduced following the payment of dividend from Bowleven Resources Limited to Bowleven plc (following cancellation of Bowleven Resources Limited share premium account in the year and subsequent completion of Etinde farm-out) and impairment loss on the Etinde asset as noted above. This adjustment does not impact the Group results.
(3) 2015 Annual Report and Accounts
(MORE TO FOLLOW) Dow Jones Newswires
November 10, 2015 02:01 ET (07:01 GMT)
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