Share Name Share Symbol Market Type Share ISIN Share Description
Oilexco LSE:OIL London Ordinary Share CA6779091033 COM SHS NPV (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 6.90p 0.00p 0.00p - - - 0 06:37:40
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 174.0 59.2 -18.1 - 15.44

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chart trader2000: The North Sea Is Suddenly, Surprisingly, an Oil Hot Spot By Sarah Kent LONDON -- For over a decade, the North Sea's once-booming oil sector was mired in decline. Against the odds, it has emerged as an unlikely bright spot in today's stormy global energy industry. Investors have sunk more than $16 billion so far this year into European deals for assets mostly located in the North Sea, a flurry that far outstrips energy deal activity in all but American shale country and Canada's oil sands, according to Edinburgh-based energy consulting firm Wood Mackenzie. The biggest deal came last month, with Total SA's $5 billion purchase of A.P. Moeller-Maersk's North Sea-focused oil-and-gas business. The deal was a sign major oil companies are still willing to invest significant amounts in the region. Many are refocusing on relatively new areas where they can grow, as private-equity funds buy up aging assets and infrastructure that key players have been looking to shed. Royal Dutch Shell PLC is planning on spending $600 million to $1 billion a year in the North Sea in the coming years, while BP PLC expects to double its production there by 2020. Norway's Statoil ASA has greenlighted production from a new North Sea field that, at its peak, could pump more oil than the entire nation of Ecuador, a member of the Organization of the Petroleum Exporting Countries. "We see the North Sea turning things around," BP Chief Executive Bob Dudley recently told an oil conference in Aberdeen, Scotland, the center of the British oil industry. The whirl of activity marks a new chapter for the vast oil-producing region in the waters separating Great Britain from Northern Europe. Just last year, the U.K.'s North Sea energy industry was described as "at the edge of a chasm" by trade association Oil & Gas UK, as low oil prices hammered investment in a region full of aging, depleted fields. At its peak around 2000, the North Sea produced similar amounts of oil to Saudi Arabia, but output has fallen by around 34% since then, a trajectory that only recently began to reverse. The region still faces significant challenges. Despite all the M&A activity, only a handful of new developments have been approved this year. And a record number of proposals to dismantle existing infrastructure was submitted in the first half of this year, according to Wood Mackenzie. But the stabilization in oil prices, some new oil and gas discoveries and the emergence of private-equity money have helped create a sense of optimism across the North Sea industry not seen since prices crashed in 2014. Private-equity funds have built up war chests totaling $15 billion for North Sea acquisitions, Wood Mackenzie said. Companies backed by funds including EIG Global Energy Partners, Carlyle Group and CVC Capital Partners have already bought sizable asset packages in the region. Among the largest, after Total, was the $3.8 billion deal made in January by Chrysaor Holdings Ltd., the EIG-backed oil company, for a chunk of Shell's North Sea assets. Shell is now focused on maintaining its North Sea output at around 150,000 barrels a day into the late 2020s. "The North Sea is in a window of opportunity," Linda Cook, chairman of Chrysaor and chief executive of EIG's investment vehicle, Harbour Energy, said in an interview. "We intend for this to be the first of many acquisitions in the region." BP has also approached potential buyers about its North Sea oil assets -- although, like Shell, it says it remains committed to the region. In fact, BP and other major oil players say they are looking at growth in the North Sea, especially in an area west of the Shetland Islands that was once considered too difficult to develop. Chevron Corp. is sitting on one of the region's largest undeveloped fields, which the company says it is working to advance this year. Total's deal last month is evidence that big oil companies continue to see value in the region. It marked the biggest North Sea-weighted deal in more than a decade, according to Wood Mackenzie, and was Total's largest purchase since the oil-and-gas megamergers at the turn of the century. The oil-price downturn over the past three years has forced oil producers to make deep cost cuts and driven down prices for contractors and services. Those changes are starting to show results. BP has slashed its average production costs in the North Sea from a peak of more than $30 a barrel in 2014 to less than $15 a barrel at present. By the end of the decade, the company expects that to come down to below $12 a barrel, Mr. Dudley said last week. Shell's costs have fallen by 60% -- a reduction matched at competitors, said Steve Phimister, the company's U.K. production director. "The thing that has differentiated the North Sea is that we've been using that downturn to right the ship," said Mr. Phimister.
chart trader2000: By Sarah Kent LONDON-- Royal Dutch Shell PLC on Thursday said second-quarter net profit rose to $1.9 billion as cash generation increased sharply in the quarter, indicating the company is continuing to adapt to lower oil prices. The Anglo-Dutch oil giant's quarterly profit on a current cost-of-supplies basis--a number similar to the net income that U.S. oil companies report--rose to $1.9 billion from $239 million in the same period last year. Earnings were buoyed by a fragile recovery in the price of oil, though impairments related to divestments in the period dampened overall profit. Cash flow from operations--a crucial metric for investors and analysts anxious about dividends since oil prices started falling in 2013--soared to $11.3 billion. Shell said it has generated $38 billion of cash from its business over the last 12 months, enough to cover dividend payments and bring down debt levels. The company said it intends to maintain tight capital discipline going forward as the oil price outlook remains volatile.
chart trader2000: By Jon Sindreu and Biman Mukherji Crude prices fell Thursday after major oil producers extended output cuts by less than some investors had hoped. The Organization of the Petroleum Exporting Countries on Thursday renewed an agreement to withhold some crude-oil supplies into March 2018, people familiar with the matter said, doubling down on its bet that it can raise prices despite soaring output from American shale producers. Brent crude, the global benchmark, fell more than 1.4% to $53.19 a barrel for June delivery, while West Texas Intermediate dropped around 1.9% to trade at $50.41 a barrel. Thursday's agreement will extend by nine months a deal made at the end of last year to cut oil production. Speculation of how OPEC and other major producers might extend that deal, and whether they would promise deeper cuts, has moved markets throughout the year. The oil price is likely to remain volatile through Thursday, with non-OPEC producers, including Russia, slated to meet with the cartel to decide on their own output levels later in the day. Oil prices had already edged down earlier, reversing gains in Asian trading hours, when Saudi energy minister Khalid al-Falih's said it was "highly likely" this would be the decision of OPEC, which is meeting in Vienna. The Iranian oil minister said earlier that crude priced between $55 and $60 a barrel is right for both OPEC and Iran. But some analysts said that deeper cuts are needed, given the continued glut in oil supply. Michael Poulsen, oil risk manager at Denmark-based Global Risk Management, said that bringing down oil stockpiles to their five-year average would probably require being "a bit more aggressive" in freezing production. However, "if they can keep prices in this range until demand picks up, and not suffer too much, maybe they can push prices to $70 and even $80 in a few years," he added. OM Financial's Stuart Ive said that oil is likely to trade from $50 to $60 a barrel near-term because of the extension. Consultancy Wood Mackenzie said that such a deal leaves its 2017 price forecast of $55 unchanged. Major oil producers, namely Saudi Arabia, have been under pressure from a reduction of oil revenues since prices plummeted in 2014. Crude has traded between $48 and $57 since December of last year, kept in range by concerns about mounting stockpiles but also greater optimism regarding global demand. While oil producers are eager to push prices up by freezing output, staunch competition from U.S. shale producers, which are leaner and faster operations, tends to push prices back down whenever they go above a certain level. Stockpiles have mounted above historical averages.
chart trader2000: By Sarah Kent LONDON-- BP PLC was the latest big oil company to report a sharp increase in profit Tuesday, adding to optimism that the sector may have passed the worst following the dramatic slump in energy prices. The British oil giant said it swung to profit in the first quarter, benefiting from a roughly 60% increase in prices since the first quarter of 2016 and higher production volumes. The results were the latest in a flurry of upbeat earnings from the world's biggest oil companies, several of which have enjoyed their most successful quarter in more than a year. The improvement has left investors hopeful that the sector may be recovering following the tumble in oil prices after the summer of 2014. Last week, Exxon Mobil Corp. reported its best quarter since 2015. Chevron Corp. posted a profit of $2.7 billion, after reporting a loss for 2016 and France's Total SA said its profit surged 77% in the first three months of 2017. Royal Dutch Shell PLC is due to report later this week. BP said Tuesday its replacement cost profit--a number analogous to the net income that U.S. oil companies report--was $1.4 billion in the first quarter, compared with a loss of $485 million in the comparable period a year earlier. The results were some of the company's strongest since it announced a massive $20 billion deal to settle outstanding claims relating to its Gulf of Mexico blowout. The company's share price jumped 2.4% in early London trading as investors reacted positively to the results. The pretax bill for the 2010 disaster that killed 11 workers and spilled millions of barrels of oil into the sea has reached nearly $63 billion, BP said. The payments relating to the spill are expected to total between $4.5 billion and $5.5 billion in 2017, before falling to around $2 billion in 2018. The company reported robust operating cash flow in the first quarter, which is expected to continue to improve. Excluding payments related to the oil spill, the company's cash flow from operations improved to $4.4 billion in the first quarter, helping it maintain a dividend of 10 cents a share. This will reassure investors, who received a jolt in February when the company said it needed oil prices to rise to $60 a barrel to break even. That number is expected to drift closer to $55 a barrel in 2017. Cash flow is also seen strengthening as part of BP's plan to bring on seven new projects this year. The company sees oil trading at $50-$55 a barrel in 2017, likely capped by stronger shale production in the U.S., Chief Financial Officer Brian Gilvary said, despite efforts by the Organization of the Petroleum Exporting Countries to curb output and boost prices.
fangorn2: Why the Market for Fossil Fuels Is All Burnt Out Here is an early section of this interesting article by Jillian Ambrose for The Telegraph: If Helm is to be believed the oil market downturn is only getting started. The latest collapse is the harbinger of a global energy revolution which could spell the end-game for fossil fuels. These theories were laughable less than a decade ago when oil prices grazed highs of more than $140 a barrel. But the burn out of the oil industry is approaching quicker than was first thought, and the most senior leaders within the industry are beginning to take note. In the past, the International Energy Agency (IEA) has faced down criticism that its global energy market forecasts have overestimated the role of oil and underplayed the boom in renewable energy sources. But last month the tone changed. The agency warned oil and gas companies that failing to adapt to the climate policy shift away from fossil fuels and towards cleaner energy would leave a total of $1 trillion in oil assets and $300bn in natural gas assets stranded. For oil companies who heed Helm’s advice, the route ahead is a ruthless harvest-and-exit strategy. This would mean an aggressive slashing of capital expenditure, pumping of remaining oil reserves while keeping costs to the floor and paying out very high dividends. “They’d never do it because no company board would contemplate running a smaller company tomorrow than today. It’s not in the zeitgeist of the corporate world we’re in, but that’s what they should do,” Helm says. BP and Royal Dutch Shell are slowly shifting from oil to gas and making even more tentative steps in the direction of low-carbon energy. But Helm is not entirely convinced that oil companies have grasped the speed with which the industry is undergoing irrevocable change. “As the oil price fell, at each point, oil executives said that the price would go back up again,” says Helm. “What the oil companies did was borrow to pay their dividends on the assumption that this is a temporary problem. It’s my view that it is permanent,” he adds. For a start, there is scant precedent for the price highs of recent decades. Between 1900 to the late Sixties oil prices fluctuated in a range between $15 a barrel to just above $30 a barrel – even through two world wars, population growth and a revolution in transport and industry. It was geopolitical events which caused oil prices to surge by more than $100 a barrel following the Middle East oil embargoes of the late sixties and early seventies. They collapsed back to $20 by the Eighties. So, what drove oil prices to the heady levels of $140 a barrel just less than 10 years ago? “China,” says Helm, barely missing a beat. “If you look at both the rapid growth in emissions and the rapid growth of oil, fossil fuel and all commodity prices, it was while China was doubling its economy every seven years. This is a phenomenal rate. David Fuller's view Oil prices spiked above $140 a barrel in 2008 because of supply reductions from OPEC countries, not least due to regional wars. This has never been fully recognised as a huge factor in what is generally remembered as the credit crisis recession which followed. In 2009 OPEC lowered production once again, leading to a move back above $120 a barrel two years later. By 2014 subsidised renewables were gradually eroding the market for crude oil. However, the really big change was the US development of fracking technology, leading to a surge in the production of crude oil and natural gas. We should always remember these two adages, particularly with commodities: 1) the cure for high prices is high prices. These lower demand somewhat but the bigger overall influence is an increase in supply. Conversely, the cure for low prices is low prices. Demand increases somewhat when prices are lower but more importantly, supply is eventually reduced. How have these adages influenced commodity prices in recent years and what can we expect over the lengthy medium term?
fangorn2: Race to Bottom on Costs May Cause Oil to Choke on Supplies Here is the opening of this topical article by Bloomberg: Houston hosted two events this week: the nation’s largest energy conference and the town’s famous rodeo. They have more in common than you’d think. In both cases, the key for top performers is how efficiently they perform. For cowboys, it means tightly controlling every muscle to stick on a bucking bronco. For energy executives, it means controlling every cost to lower the break-even price and survive what’s been a wild ride on the oil market. When companies can lower the price at which they break-even, it means they can approve more projects and produce more oil, keeping dividends safe and investors happy. The risk: By drilling up their share price, they can also end up drilling down the price of oil. Welcome to 2017, the year after a two-year market rout made companies more efficient. At the CERAWeek by IHS Markit conference this week, fears of too much supply were palpable. "Everyone is driving break-even prices down," Deborah Byers, head of U.S. oil and gas at consultants Ernst & Young LLP in Houston, said in an interview at the meeting, the largest annual gathering of industry executives in the world. "It isn’t just shale companies; it’s everyone, from deep-water to conventional." As the conference was ongoing, those fears took physical form as West Texas Intermediate, the U.S. crude benchmark, plunged 9.1 percent this week, closing below the key $50-a-barrel level for the first time this year. It settled at $48.49 on Friday. The slump came as Scott Sheffield, chairman of Pioneer Natural Resources Co., said prices could fall to $40 if OPEC doesn’t extend its existing agreement to cut production. Shale billionaire Harold Hamm, the CEO of Continental Resources Inc., warned undisciplined growth could "kill" the oil market. The buzzword was efficiency. In panel discussions and keynote speeches, executive after executive tried to outdo rivals in announcing their low break-even prices. Eldar Saetre, head of the Norwegian oil giant Statoil ASA, told delegates that break even for his company’s next generation of projects had fallen from $70-plus to "well below" $30 a barrel. David Fuller's view Analysis of the international oil market today is simple, albeit very different from what the industry has experienced in earlier decades. Thanks to technology, oil companies around the world can now produce more crude at $50 a barrel than the global economy can consume. Furthermore, the average cost of production is still declining and is likely to be considerably lower ten to twenty years from now. The world will never run out of oil, even when the global economy is booming with the help of cheaper energy prices. This is not because the supply of oil in the ground is infinite, which it is not. Instead, the world is approaching peak oil demand within the next decade, because other forms of energy continue to become more competitive, thanks to technology, and they cause less pollution. The only way oil prices can move considerably higher than today’s levels for both Brent and WTI crude, is if production is sharply curtailed, for one reason or another. While theoretically possible, this is unlikely beyond the short term, if at all.
chart trader2000: By Sarah Kent LONDON -- In June, oil giant BP PLC announced what it deemed an "important" new discovery in Egypt. It turned out to be a modest natural-gas find that didn't even rank in the top 50 discoveries since 2012. The fact that BP and its partner Eni Spa hailed it as a major success is a sign of the times for the oil industry. For years, big oil and gas companies poured ballooning sums into seeking mammoth reserves in difficult locations. But their recent record was spotty, and a dearth of major finds was followed by the oil-price slump that began in 2014. It prompted companies to cut costs and shift away from expensive, high-risk exploration. World-wide, oil-exploration spending last year was the lowest since 2007. There's been less conventional oil and gas (as opposed to resources contained in shale or oil sands) discovered in the past 2 1/2 years than in 2012 alone, according to Edinburgh-based consultancy Wood Mackenzie. And oil companies will likely show continued pressure on exploration budgets when they report their third-quarter earnings over the coming week, say analysts. Some in the industry say the decline in exploration spending will eventually contribute to an oil drought -- and spiking crude prices. Saudi Arabia's energy minister Khalid al-Falih told an oil conference in London this month that the underinvestment caused by weak oil prices over the past two years will result in "a period of shortage of supply." Others say it is the new normal, in which giants like BP and Royal Dutch Shell PLC will increasingly focus their exploration on less risky and more easily accessible reserves -- and spend some of the money they used to use for exploration to buy already-discovered resources from smaller companies. Today's frugal period comes after oil companies boosted exploration spending in the 2000s amid high prices and rising Asian demand. Drilling tested fresh ocean depths and under Arctic ice in a search for new barrels, as output from easy-to-reach fields declined. But as spending increased, success didn't. Leaving aside unconventional resources, annual volumes of oil and gas discovered have declined successively since 2010, according to data from Wood Mackenzie. While big companies were drilling dry holes, small companies pumped increasing amounts of shale oil, which helped spark the 2014 oil-price crash. Big companies responded with big cuts. BP, Eni and their peers cut exploration spending by 35% in 2015 compared with 2013, Wood Mackenzie's data show. Many projects now focus on lower-risk, lower-reward prospects as companies hope for incremental gains near existing infrastructure that they can bring online quickly and cheaply. "We have pared back exploration and are focusing our efforts on adding barrels with short-cycle time," BP's head of exploration and production Bernard Looney said in a presentation earlier this year published on the company's website. BP has cut exploration spending from $3.5 billion in 2013 to around $1 billion this year. And Eni -- one of the past decade's most successful big explorers -- has a target to discover 1.6 billion barrels between 2016 and 2019 at a cost of $2.30 a barrel. That comes after Eni found 11.9 billion barrels at a unit cost of $1.20 per barrel over the past eight years. It is a major shift for big oil companies that designed their exploration strategies to find enough conventional oil and gas to replace all the barrels they pump every year, says Andrew Latham, Wood Mackenzie's vice president of exploration research. Now, their conventional exploration seems "designed to add about 50%" of what they produce, forcing them to rely on unconventional resources like shale and acquisitions of other companies' resources to maintain output, Mr. Latham said. Shell, for example, bought BG Group for roughly $50 billion earlier this year, refilling its reserves. It also cut its exploration budget in half this year, retreating from Alaska's Arctic after drilling one of the most expensive dry holes of 2015. Now "we rely less on exploration," Shell's Chief Financial Officer Simon Henry said in June. There have been isolated big finds in recent years. Eni last year discovered giant gas reserves off Egypt and Exxon found oil off Guyana. But the big companies have increasingly opted for smaller projects. Wood Mackenzie says that despite the big cost cuts, the number of exploration wells completed last year fell by only 11% compared with the average of the last four years. That is because companies are drilling more efficient wells aimed at more modest, low-risk gains, rather than big, risky ones in new provinces, Wood Mackenzie says. Shell's exploration chief, Ceri Powell, said the company has lowered the average time it takes to start production from a new discovery near existing infrastructure from 18 months two years ago to less than 12 months now. "Some frontier exploration near infrastructure is acceptable, but really big, long-term infrastructure, deep water frontier is probably not on the cards for us," BP CEO Bob Dudley said last week. Earlier this month, BP walked away from a major exploration prospect offshore Australia following pushback from environmental activists. The company cited budget constraints.
chart trader2000: By Sarah Kent and Kevin Baxter LONDON -- The prospect of rising oil prices has the global energy industry considering a strategy that has been unthinkable for much of a two-year-long market slump: Making new investments. Big oil companies are moving ahead with new spending again, says BP PLC Chief Executive Bob Dudley on the sidelines of the Oil and Money conference here. The British oil company he heads has taken final investment decisions on a handful of projects this year and is expected to approve more in 2017, he said. "Investments are back," Mr. Dudley said. "But it's only going to be the very best." Mr. Dudley's comments highlight a pervasive sentiment among oil-industry executives and government officials that there is light at the end of the tunnel, as they grope through one of the industry's darkest moments. For the past two years, the industry has been roiled by oil prices that collapsed to less than $50 a barrel from 2014 highs of $114 a barrel, and never recovering to those previous highs. Now, with the Organization of the Petroleum Exporting Countries promising a modest output cut and prices generally on the rise, executives and industry leaders say they have a sense of guarded hope as oil prices hover around $50 to $52 a barrel. Mr. Dudley predicted an oil price of between $50 and $60 a barrel in 2017, compared with prices that have ranged between $28 a barrel and $53 this year. Ali Moshiri, president of African and Latin America Exploration and Production at Chevron Corp., said U.S. shale producers would invest again if prices rise to $60 a barrel. "The phenomenon of shale oil is real and when prices rise to $60 a barrel you will see the level of active rigs rise. This is inevitable," Mr. Moshiri said during a panel discussion. A rising oil price would allow the energy industry to make needed investments, restore some of the tens of thousands of jobs cut in the past two years and stem some of the economic pain rippling through oil-dependent economies from Venezuela to Saudi Arabia. Cuts by OPEC, the 14-nation cartel that controls more than a third of the world's crude production, would amount to about 1% to 2% of its 33.2 million barrels a day of production and help draw down the vast oversupply of oil that has flooded world markets. But OPEC and other oil producers must be careful, said Fatih Birol, the executive director of the International Energy Agency, in an interview here. Pushing prices too high would boost U.S. oil output, stop rapid declines in production in countries like China and Colombia and put a brake on fragile oil demand, he said. Oil-industry investment declined in 2015 and 2016 and is likely to fall again in 2017 unless there is a sea change -- the first time in recorded history that energy investment would decline for three straight years, Mr. Birol said. John B. Hess, chief executive of the New York-based oil company Hess Corp., warned that without new investments, the world's balance of supply and demand would turn quickly from a glut of oil today to a shortage of petroleum in the future. "We're not investing enough ensure that oil supply keeps up with demand, 2018, 2019, 2020," he said. ConocoPhillips Chief Executive Ryan Lance said the recent rise in prices wouldn't be enough for companies to start spending money again on massive long-term projects. "Prices are still pretty low to justify significant investments," Mr. Lance said. Ian Taylor, the chief executive of the world's largest independent oil trader, Switzerland-based Vitol Group, said the oil-market's supply and demand balance would remain out of whack for the next year. His price prediction for October 2017? $54.99, compared with about $52 in recent days. --Sarah McFarlane contributed to this article.
chart trader2000: Hello Share Swiggers. If you have shares in producing oil firms you might want to consider hanging onto them. And if you have spare cash you might research a few likely companies with a view to a bit more investment. The reason is that the price of Brent crude oil is going up again. It is tickling $50 a barrel as I write. It was there a few months ago when the price level caused some excitement. Quite a few oil companies nudged up on the news, including Shell (RDSA) and BP (BP.). A lot of rejoicing went on then in the Stacey household as I hold far too many shares in both companies. But then the oil price fell nearer to $40 dollars again - and Shell, BP and a lot of other big oilers began to suffer once more. But now oil share prices have been easing forward again. And in my view, this time the value of Brent crude will continue to put on weight. I am indebted to ADVFN for a few facts about Brent crude oil. Brent is a special kind of light oil used to make petrol, marine gas and diesel. Crude oil supplies 40% of the world’s needs. The biggest customer is the USA which gobbles up 20 million barrels a day. China is the second largest consumer of crude oil only taking 8 million barrels a day. And I bet you’ve always wanted to know this - a barrel of crude contains 42 gallons of the amber nectar. Oil shares have let us all down in the last few years. But they have been a big profit maker for share shifters like us before that. The big companies tend to pay juicy dividends too. And it looks to me as though the price of oil will go on rising now, as world surpluses begin to be mopped up. So I'm not selling any oil shares any time now. But you must make your own decision. Oil prices are never stable for long. - See more at: hxxp://
o1lman: Chairman´s Statement We are pleased to announce the Company's Results for the year ended 31 December 2015. 2015 was another busy year for the Company with significant cost reductions delivered early to help preserve the Company's cash position, a broadening of the Company's asset base through opportunistic low cost acquisitions, a focus on executing the OBA pipeline, a strategically important regional asset and ongoing capital discipline. Particular progress was made in 2015 with the OBA pipeline which is expected to be operational shortly. Early in 2015, in the face of the rapidly falling oil price, the Company revised its operating activity plan to fit the lower oil price environment and to ensure its healthy balance sheet and track record of excellent capital discipline was maintained. The Board took a conservative view (at the time) of oil prices, assuming WTI oil prices of $48 per barrel for the year. In that context the Board conducted a review of the 2015 plan, with the aim of minimising the use of high cost transportation until such time as the OBA pipeline to Ecuador was operational, and / or a return to a higher oil price, thus protecting the Company's balance sheet and highly valuable reserve base. In short, production from higher cost pads in the Platanillo field was stopped and more volume was sent through the lower cost Orito pipeline, with trucking to Rio Loro halted. Strategy The Company's strategy is to ensure the lowest cost profitable production from the Platanillo field, to increase 1P and 2P reserves and to diversify the Company's production base through both continuing exploration on current assets and pursuing opportunistic and attractive, low cost acquisitions. The objective is to broaden its drilling opportunities from solely Platanillo, leading to production from more than one oil field while creating attractive and extensive running room in a balanced and diversified portfolio. In line with this strategy, in June 2015 Petro Dorado South America SA ("PDSA"), a subsidiary of Petro Dorado Energy Ltd ("PDEL") was acquired. We paid a total of $8.4 million, compromising of $6 million of Amerisur stock and the replacement of $2.4 million of deposits to support cash guarantees. Post period end, the Company acquired Platino Energy (Barbados) Ltd ("Platino"), a private company, from COG Energy ("COG") for a total consideration of $7 million satisfied in shares. These recent acquisitions will help deliver a diversified production base and in turn allow us to reach our goal faster than we would have been able to without the oil price fall and associated consequential difficulties felt by over indebted oil companies operating in the Putumayo. In both cases much work has been done to de-risk the journey to diversified production. The OBA pipeline, now in the final stages of construction, will allow us to operate and produce oil at a vastly lower cost to rivals and is no doubt the key to unlocking the potential from the Putumayo. Whilst Amerisur produces solely from one oil field the Board is unlikely to recommend payment of a dividend and for the year ended 31st December 2015 no dividend payment will be made. Returns to shareholders however are discussed regularly by the Board and firmly remain a goal. I was pleased to note that despite the constraints of the Company's work programme in 2015 in the interests of capital discipline, the executive managed to increase reserves slightly during the period, a testament to their exceptional abilities and their knowledge of the Platanillo field. Board, Corporate Governance and People During the year all our staff, the vast majority of which are located in Bogota in Colombia, worked tirelessly to reduce costs, increase the efficiency of our existing assets, grow our asset base and deliver the OBA pipeline, a transformational project for the Company providing significantly improved economics. I would personally like to thank them for their hard work and dedication in challenging market conditions. The Company recognises the importance of good corporate governance and the Company's direction of travel in that regard is positive. In January 2015, Stephen Foss was appointed Senior Independent Non-Executive Director. Mr Foss has over 30 years of experience in the capital markets industry, having spent his career in Australia, Canada and the UK. He previously led the Royal Bank of Canada's International Equities business for Europe and Australasia, prior to joining its global investment banking division in February 2011 to concentrate on senior client coverage, Sovereign Wealth Funds and origination in the natural resources sector. After graduating with a Bachelor of Arts with Honours from the University of Western Ontario, Mr Foss began his career at the Sydney Stock Exchange and subsequently held a number of senior management positions with another global investment bank. Mr Foss chairs the Remuneration Committee and sits as a member of the Audit Committee. In addition, there have been a number of remuneration changes during the year. The Remuneration Committee is now fully independent. Following consultation with shareholders on its remuneration during the first half of 2015, the Committee appointed h2glenfern Remuneration Advisory to carry out a review of its board remuneration policies. This was followed, at the beginning of 2016, by further consultation with shareholders after which the Remuneration Committee made a number of changes to its remuneration policy. The key area where changes are to be made is in relation to long-term incentives and given the low oil price environment, executive pay levels have been largely frozen. During the year, Dr. Douglas Ellenor, Non-Executive Director of the Company, renounced all of his 300,000 options over new ordinary shares at 0.1p each which he held under the Company's 2013 LTIP scheme. As of 31 December 2015, Dr. Ellenor had zero LTIP share options in the Company. In addition, on 10 December 2015 Jade Oil & Gas Consulting, which Dr. Ellenor is a shareholder and a Director, terminated its Technical Consulting Services agreement with Amerisur Resources. As a result Dr. Ellenor is deemed an independent Director under the UK Corporate Governance Code of the Financial Reporting Council which sets out the best practice and as a result Amerisur Resources has a total of three independent Non-Executive Directors. The Company's achievements were recognized last year when Amerisur won "Best Oil & Gas PLC" at the 2015 UK Stock Market Awards. The awards, which celebrate the best of UK PLC and recognize companies which have created shareholder value, were held on Thursday 26 March 2015. The other nominees for the category of "Best Oil & Gas PLC" included; BP, Shell, Sound Oil and Premier Oil. Governments The Governments of both Colombia and Ecuador have shown great foresight in agreeing to the building and commissioning of the OBA pipeline. Bi-lateral infrastructure projects between two countries are extremely complicated as the building of the Channel Tunnel between the UK and France demonstrated. Both President Correa and President Santos have shown visionary leadership, and both governments have worked closely to create this major project. Amerisur is proud to play its part. Post balance sheet Post balance sheet, the Company raised $35 million of new equity capital following a roadshow to inform shareholders where the Company was with the OBA pipeline. It was clear from both shareholders and prospective investors that there was support for an acceleration of the 2016 activity programme to take advantage of lower drilling costs to increase reserves, and production to increase flows through the OBA pipeline which is expected to reduce cash opex per barrel from approximately $27 to $15. Due to the support from institutional investors, the Company was able to raise the capital we wanted to expand more rapidly. Outlook With the OBA pipeline now in the final stages of construction and due to be operating in May, the economics of the Company's production improve dramatically, with cash operating costs per barrel anticipated to reduce significantly over a period of time as production gradually ramps up. The lower opex costs will enable us to increase production from the Platanillo field despite the low oil price environment, which, following the advice received from Schlumberger in a report commissioned by Amerisur, will be done carefully and responsibly so as to preserve the long term integrity of the reservoir. The new capital raised in March has enabled us to accelerate the 2016 activity plan to increase reserves and production. We are proceeding with: social consultations and environmental licensing for a Long Term Test ("LTT") and further wells in Coati together with a 3D seismic programme on the Coati license to optimise drilling locations and further define the potential of the field; two step out wells drilled from Platanillo Pad 2N; a well on Put-8 from the Platanillo West pad; a development well on Coati; a Put-8 South N sand anomaly well and two further Platanillo infill wells.
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