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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Petroneft Resources Plc | LSE:PTR | London | Ordinary Share | IE00B0Q82B24 | ORD EUR0.01 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.085 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPTR
RNS Number : 1698S
Petroneft Resources PLC
29 September 2017
29 September 2017
2017 Interim Results
PetroNeft (AIM: PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67 is pleased to report its results for the 6 months ended 30 June 2017.
Highlights
-- Gross production from Licence 61 in H1 2017 was 2,347 bopd (1,174 bopd net to PetroNeft). -- Testing of S-375s well continuing
o Inflow rate of 15 m3/day (94 bopd) achieved
o Testing will continue for several weeks
o Electric submersible pump to be installed
David Golder, Chairman of PetroNeft Resources plc, commented:
"The first part of the year has seen encouraging results so far from the S-375s well and testing is continuing.
We are also actively looking at business development opportunities and are in detailed discussions in relation to same. We will update shareholders on this at the appropriate time."
For further information, contact:
Dennis Francis, CEO, PetroNeft Resources plc +1 713 988 2500 --------------------------------------------------------------------- ----------------- Paul Dowling, CFO, PetroNeft Resources plc +353 1 647 0280 --------------------------------------------------------------------- ----------------- John Frain/Brian Garrahy, Davy (NOMAD and Joint Broker) +353 1 679 6363 --------------------------------------------------------------------- ----------------- Henry Fitzgerald-O'Connor, Canaccord Genuity Limited (Joint Broker) +44 207 523 8000 --------------------------------------------------------------------- ----------------- Joe Heron / Douglas Keatinge, Murray Consultants +353 1 498 0300 --------------------------------------------------------------------- -----------------
The information contained in this announcement has been reviewed and verified by Mr. Dennis Francis, Director and Chief Executive Officer of PetroNeft, for the purposes of the Guidance Note for Mining and Oil & Gas Companies issued by the London Stock Exchange in June 2009. Mr. Francis holds a B.S. Degree in Geophysical Engineering and a M.S. Degree in Geology from the Colorado School of Mines. He has also graduated from the Harvard University Program for Management Development. He is a member of the American Association of Petroleum Geologists and the Society of Exploration Geophysicists. He has over 40 years' experience in oil and gas exploration and development.
Forward Looking Statements
This report contains forward-looking statements. These statements relate to the Group's future prospects, developments and business strategies. Forward-looking statements are identified by their use of terms and phrases such as 'believe', 'could', 'envisage', 'potential', 'estimate', 'expect', 'may', 'will' or the negative of those, variations or comparable expressions, including references to assumptions.
The forward-looking statements in this report are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of these financial statements.
Chairman's Statement
Dear Shareholder,
I am pleased to report on the activities of the Group for the six months to 30 June 2017 and provide an update on recent progress. 2017 to date has seen the drilling of the S-375 and S-375s delineation well at the Sibkrayevskoye oil field. While the result at the initial location was below expectations we are very satisfied with the result from the sidetracked location.
Production and Sales
Gross production at Licence 61 in the six months to 30 June 2017 averaged 2,347 bopd, a small decrease compared to the same period in 2016 (2,366 bopd). We sold 430,421 (gross) barrels of oil in the six months to 30 June 2017 (H1 2016: 421,714 bbls) and achieved an average Russian Domestic oil price of $32.07 (H1 2016: $20.56). The rise in price was partly offset by higher taxes and a stronger Rouble but did lead to additional operating cashflows for the Licence 61 joint venture.
Licence 61 Gross H1 2017 Q2-2017 Q1-2017 H1 2016 Production ------------------------ -------- -------- -------- -------- Total gross production 424,812 200,208 224,604 430,693 ------------------------ -------- -------- -------- -------- Gross bopd 2,347 2,200 2,496 2,366 ------------------------ -------- -------- -------- -------- PetroNeft 50% share bopd 1,174 1,100 1,248 1,183 ------------------------ -------- -------- -------- --------
Sibkrayevskoye
In 2016 we sought to ascertain the full potential of Sibkrayevskoye through the drilling of a 10 km step out well, S-374. The well, which was a significant step out from the existing discovery, was drilled in July and August 2016 but unfortunately did not encounter commercial oil and was plugged and abandoned. The result led to the decision to drill an additional delineation well, S-375, in 2017.
The objective of the S-375 well was to determine the sand distribution and confirm the oil water contact at the southern edge of the field. The well was drilled as a deviated well from the Pad 2 surface position to a targeted location 1.5 km to the south. The wireline logs indicated there is about 4.8 m of net oil pay in the well with the top of the Jurassic J1 interval located at -2,346 m tvdss, which was on prognosis, and the oil-down-to confirmed at -2,357 m tvdss.
The well was then sidetracked (S-375s) from the surface casing to a location about 400 m north of the Pad 2 surface position. The log and core evaluation of the primary Jurassic J1 reservoir indicates there is about 14.8 m of net oil pay and the top of the J1 interval is located at -2,334 m tvdss which is about 3 m high to prognosis. The net pay is thicker than encountered at other wells drilled at the northern part of Sibkrayevskoye, which typically had about 10 m of net oil pay. This increased reservoir thickness is encouraging.
The S-375s well has been cased and cemented and testing is continuing. So far, we have achieved an inflow rate of 15 m3/day (94 bopd) of clean oil which is similar in character to the oil produced by the S-373 well. It is expected that testing will continue for several weeks and will also include the installation of an electric submersible pump to assess the full potential of the well.
The reserve estimate and Development Plan for the field will be updated with the S-375 and S-375s drilling results in the coming months in conjunction with our joint venture partner Oil India. This data will help to shape our plans for drilling Sibkrayevskoye in 2018 and beyond.
Review of PetroNeft loss for the period
The loss for the period was US$1.6m (H1 2016: US$2.3m). The loss includes PetroNeft's share of the losses on the joint ventures relating to Licences 61 and 67 of US$2.2m and US$0.2m respectively (H1 2016: US$2.4m and US$0.2m). The loss relating to the Licence 61 joint venture is discussed in more detail below. Finance revenue of US$1.7m (H1 2016: US$1.6m) relates primarily to interest receivable on loans to the joint ventures.
Hot Features
Premium
PetroNeft Key Financial Metrics Unaudited Audited
======================== -------------
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
US$'000 US$'000 US$'000
Continuing operations
Revenue 1,008 1,362 2,280
Cost of sales (938) (1,235) (2,038)
=========== ===========
Gross profit 70 127 242
Administrative expenses (580) (1,073) (2,155)
Exchange gain on intra-Group loans 32 23 77
Operating loss (478) (923) (1,836)
Share of joint venture's net loss
- WorldAce Investments Limited (2,219) (2,408) (5,721)
Share of joint venture's net loss
- Russian BD Holdings B.V. (184) (173) (288)
Finance revenue 1,710 1,596 3,248
Loss for the period for continuing
operations before taxation (1,171) (1,908) (4,597)
Income tax expense (437) (410) (830)
Loss for the period (1,608) (2,318) (5,427)
=========== =========== =============
Licence 61 joint venture - WorldAce Group
The metrics below are an extraction from the financial statements of the WorldAce Group which demonstrate the performance of Licence 61:
PetroNeft's PetroNeft'share PetroNeft's
share share
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
US$'000 US$'000 US$'000
Continuing operations
Revenue 6,903 4,339 11,604
Cost of sales (6,373) (4,259) (11,200)
============ ================
Gross profit 530 80 404
Administrative expenses (847) (917) (1,614)
Operating loss (317) (837) (1,210)
Loss on disposal of oil and gas
properties - - (438)
Write-off of exploration and evaluation
assets (13) - (710)
Finance revenue 11 4 10
Finance costs (1,900) (1,575) (3,373)
============ ================
Loss for the period for continuing
operations before taxation (2,219) (2,408) (5,721)
Income tax - - -
============ ================
Loss for the period for continuing
operations before taxation (2,219) (2,408) (5,721)
============ ================ =============
WorldAce Analysis (PetroNeft's 50% of WorldAce
share)
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
US$'000 US$'000
Revenue
Oil sales 6,897 4,335 11,594
Other sales 6 4 10
=========== =========== -------------
Total revenue 6,903 4,339 11,604
=========== =========== -------------
Cost of Sales
Mineral Extraction Tax 3,333 2,047 5,570
Pipeline tariff 872 820 1,948
Staff costs 494 402 818
Depreciation and amortisation 772 600 1,708
Other cost of sales 902 390 1,156
=========== =========== -------------
Total cost of sales 6,373 4,259 11,200
=========== =========== -------------
The detailed Income Statement and Balance Sheet of WorldAce Investments Limited is disclosed at note 8 to these condensed financial statements. Improved oil prices in H1 2017 have strengthened the margin in 2017 as compared to the same period last year.
In March 2017 Oil India agreed to provide 100% of the funding required to carry out the agreed work programme at Licence 61 in 2017 by way of a US$4 million shareholder loan to WorldAce.
Licence 67
We continue to consider all options in relation to this Licence with our joint venture partner Belgrave Naftogas (Arawak Energy). During 2015, we agreed an exploration programme for Licence 67 for the five years to 2020 with the Russian authorities; based on this, the first significant expenditure required will be in 2018. We view Licence 67 as having considerable long-term potential particularly at the Cheremshanskaya oil field.
Finance
As reported at our recent AGM and previously, due to the delay in the development of Sibkrayevskoye, Company finances are significantly constrained. Management have developed a number of potential solutions, which include potential farm down of Licence 67, debt finance or the acquisition of producing and non-producing assets in share for share type transactions. We are currently in detailed discussions with counterparties in this regard and will update shareholders as appropriate. Further information is provided at Note 2.
Outlook
The first half of 2017 has yielded positive results from the S-375s well at Sibkrayevskoye and some improvement in oil price. We will now work with our partner Oil India to update reserves and the Development Plan and confirm the route forward. We are in detailed discussions regarding growing the company through acquisitions and will update shareholders when appropriate to do so.
David Golder
Non-Executive Chairman
Interim Condensed Consolidated Income Statement
For the 6 months ended 30 June 2017
Unaudited Audited
========================== -------------
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
Note US$ US$ US$
Continuing operations
Revenue 1,007,929 1,362,158 2,279,585
Cost of sales (937,686) (1,234,712) (2,038,209)
============ ============
Gross profit 70,243 127,446 241,376
Administrative expenses (579,892) (1,073,236) (2,154,699)
Exchange gain on intra-Group
loans 31,901 22,522 77,458
Operating loss (477,748) (923,268) (1,835,865)
Share of joint venture's net
loss - WorldAce Investments
Limited 8 (2,218,754) (2,407,781) (5,721,232)
Share of joint venture's net
loss - Russian BD Holdings
B.V. 9 (184,674) (172,677) (288,198)
Finance revenue 5 1,710,060 1,595,944 3,247,876
Loss for the period for continuing
operations before taxation (1,171,116) (1,907,782) (4,597,419)
Income tax expense 6 (436,788) (409,925) (830,241)
Loss for the period attributable
to equity holders of the Parent (1,607,904) (2,317,707) (5,427,660)
============ ============ =============
Loss per share attributable
to ordinary equity holders
of the Parent
Basic and diluted - US dollar
cent (0.23) (0.33) (0.77)
Interim Condensed Consolidated Statement of Comprehensive Income
For the 6 months ended 30 June 2017
Unaudited Audited
============================= -------------
6 months Year ended
ended 30 6 months ended 31 December
June 2017 30 June 2016 2016
US$ US$
Loss for the period attributable
to equity holders of the Parent (1,607,904) (2,317,707) (5,427,660)
Other comprehensive income
to be reclassified to profit
or loss in subsequent years:
Currency translation adjustments
- subsidiaries (19,620) 61,935 25,298
Share of joint ventures' other
comprehensive income - foreign
exchange translation differences 1,405,547 5,467,539 7,741,440
Total comprehensive (loss)/profit
for the period attributable
to equity holders of the Parent (221,977) 3,211,767 2,339,078
============ =============== =============
Interim Condensed Consolidated Balance Sheet
As at 30 June 2017
Unaudited Audited
============= -------------
30 June 31 December
2017 2016
Note US$ US$
Assets
Non-current Assets
Property, plant and equipment 7 116,717 143,466
Equity-accounted investment in joint
ventures - WorldAce Investments Limited 8 - -
Equity-accounted investment in joint
ventures - Russian BD Holdings B.V. 9 - -
Financial assets - loans and receivables 10 48,407,536 47,713,421
-------------
48,524,253 47,856,887
============= -------------
Current Assets
Inventories 11 19,679 28,973
Trade and other receivables 12 825,267 1,143,904
Cash and cash equivalents 13 152,130 319,618
-------------
997,076 1,492,495
============= -------------
Total Assets 49,521,329 49,349,382
============= =============
Equity and Liabilities
Capital and Reserves
Called up share capital 9,429,182 9,429,182
Share premium account 140,912,898 140,912,898
Share-based payments reserve 6,796,540 6,796,540
Retained loss (81,810,354) (80,202,450)
Currency translation reserve (29,732,483) (31,118,410)
Other reserves 336,000 336,000
-------------
Equity attributable to equity holders of
the Parent 45,931,783 46,153,760
============= -------------
Non-current Liabilities
Deferred tax liability 2,545,004 2,113,541
-------------
2,545,004 2,113,541
============= -------------
Current Liabilities
Trade and other payables 14 1,044,542 1,082,081
-------------
1,044,542 1,082,081
============= -------------
Total Liabilities 3,589,546 3,195,622
-------------
Total Equity and Liabilities 49,521,329 49,349,382
============= =============
Interim Condensed Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2017
Share-based
Called Share payment Currency
up share premium and other translation Retained
capital account reserves reserve loss Total
US$ US$ US$ US$ US$ US$
At 1 January 2016 9,429,182 140,912,898 7,132,540 (38,885,148) (74,774,790) 43,814,682
---------- ------------ ------------ ------------- ------------- ------------
Loss for the year - - - - (5,427,660) (5,427,660)
Currency translation
adjustments -
subsidiaries - - - 25,298 - 25,298
Share of joint
ventures' other
comprehensive
income - foreign
exchange translation
differences - - - 7,741,440 - 7,741,440
---------- ------------ ------------ ------------- ------------- ------------
Total comprehensive
profit for the year - - - 7,766,738 (5,427,660) 2,339,078
At 31 December 2016 9,429,182 140,912,898 7,132,540 (31,118,410) (80,202,450) 46,153,760
========== ============ ============ ============= ============= ============
At 1 January 2017 9,429,182 140,912,898 7,132,540 (31,118,410) (80,202,450) 46,153,760
========== ============ ============ ============= ============= ============
Loss for the period - - - - (1,607,904) (1,607,904)
Currency translation
adjustments -
subsidiaries - - - (19,620) - (19,620)
Share of joint
ventures' other
comprehensive
income - foreign
exchange translation
differences - - - 1,405,547 - 1,405,547
========== ============ ============ ============= ============= ============
Total comprehensive
loss for the period - - - 1,385,927 (1,607,904) (221,977)
At 30 June 2017 9,429,182 140,912,898 7,132,540 (29,732,483) (81,810,354) 45,931,783
========== ============ ============ ============= ============= ============
Interim Condensed Consolidated Cash Flow Statement
For the 6 months ended 30 June 2017
Unaudited Audited
========================== -------------
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
US$ US$
Operating activities
Loss before taxation (1,171,116) (1,907,782) (4,597,419)
Adjustment to reconcile loss
before tax to net cash flows
Non-cash
Depreciation 31,899 36,970 68,568
Share of loss in joint ventures 2,403,428 2,580,458 6,009,430
Finance revenue 5 (1,710,060) (1,595,944) (3,247,876)
Working capital adjustments
Decrease/(increase) in trade and
other receivables 352,199 (322,891) 860,444
Decrease in inventories 9,295 24,626 25,330
(Decrease)/increase in trade and
other payables (83,173) 292,234 (59,474)
Income tax paid (6,980) (12,771) (16,650)
Net cash flows used in operating
activities (174,508) (905,100) (957,647)
-------------
Investing activities
Loan facilities advanced to
joint venture undertakings - - (10,000)
Interest received 532 1,480 2,449
Net cash received from/(used
in) investing activities 532 1,480 (7,551)
============ ============ -------------
Net decrease in cash and
cash equivalents (173,976) (903,620) (965,198)
Translation adjustment 6,488 1,954 604
Cash and cash equivalents
at the beginning of the period 319,618 1,284,212 1,284,212
Cash and cash equivalents
at the end of the period 13 152,130 382,546 319,618
============ ============ =============
Notes to the Interim Condensed Consolidated Financial Statements
For the 6 months ended 30 June 2017
1. Corporate Information
The interim condensed consolidated financial statements of the Group for the six months ended 30 June 2017 were authorised for issue in accordance with a resolution of the Directors on 28 September 2017.
PetroNeft Resources plc ('the Company', or together with its subsidiaries, 'the Group') is a Company incorporated in Ireland. The Company is listed on the Alternative Investment Market ('AIM') of the London Stock Exchange and the Enterprise Securities Market ('ESM') of the Irish Stock Exchange. The address of the registered office and the business address in Ireland is 20 Holles Street, Dublin 2. The Company is domiciled in the Republic of Ireland.
The principal activities of the Group are oil and gas exploration, development and production.
2. Going Concern
As described in the 2016 Annual Report PetroNeft is facing a potential funding shortfall in 2018 due to the delay in the commencement of the Sibkrayevskoye oil field development. The effect of this delay is to also delay the commencement of payments to PetroNeft of interest due to it under shareholder loan agreements with WorldAce. The effect of this is that PetroNeft will require additional funding to meet its operating costs during the next 12 months.
The Group has analysed its cash flow requirements through to 31 December 2018 in detail. The cash flow includes estimates for a number of key variables including timing of cash flows of expenditure and management of working capital, and the Directors believe that the Group's cash flow forecasts represent the best estimate of the actual cash flows over the forecast period at the date of approval of the financial statements. The cash flow is stress tested to assess the adverse effect arising from reasonable changes in circumstance. The cash flow projections for the period to 31 December 2018 indicate a potential shortfall of funds by the end of quarter one in 2018.
The Company is currently in detailed confidential discussions pursuing several options in order to meet this potential shortfall. These include the potential sale or farmout of Licence 67, short term debt financing from a related corporate entity and the acquisition of producing and non-producing assets in share for share type transactions. The Board believe that the first two options can be completed in a short timeframe. In relation to the latter option, the Company has signed non-disclosure agreements and opened data rooms. The Board is also putting in place cost cutting measures, including significant salary cuts for the Board and management to minimise the potential shortfall. As there are delaying factors, including regulatory requirements, around transferring licences and in a share for share type transaction, the timeframe to close such a successful transaction could be at least six months following binding agreement between the parties. The Board is confident that one of these options will bring a solution.
The successful development of S-375 and the potential shortfall in funds represent material uncertainties that may cast significant doubt upon the Group and the Company's ability to continue as a going concern. Nevertheless, after making enquiries, and considering the uncertainties described above, the Directors are confident that the Group and the Company will have adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
Accordingly, these financial statements do not include any adjustments to the carrying amount or classification of assets and liabilities that would result if the Group or Company was unable to continue as a going concern.
3. Accounting Policies
3.1 Basis of Preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2017 have been prepared in accordance with IAS 34 Interim Financial Reporting.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2016 which are available on the Group's website - www.petroneft.com.
The interim condensed consolidated financial statements are presented in US dollars ("US$").
3.2 Significant Accounting Policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2016.
4. Segment information
At present the Group has one reportable operating segment, which is oil exploration and production through its joint venture undertakings. As a result, there are no further disclosures required in respect of the Group's reporting segment.
The risk and returns of the Group's operations are primarily determined by the nature of the activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group's organisational structure and the Group's internal financial reporting systems.
Management monitors and evaluates the operating results for the purpose of making decisions consistently with how it determines operating profit or loss in the consolidated financial statements.
Geographical segments
Although the joint venture undertakings WorldAce Investments Limited and Russian BD Holdings B.V. are domiciled in Cyprus and the Netherlands, the underlying businesses and assets are in Russia. Substantially all of the Group's sales and capital expenditures are in Russia.
Assets are allocated based on where the assets are located:
Unaudited Audited
======================= -----------------------
30 June 31 December
2017 2016
Non-current assets US$ US$
Russia 48,522,473 47,854,604
Ireland 1,780 2,283
-----------------------
48,524,253 47,856,887
======================= =======================
5. Finance revenue Unaudited Audited
======================== -------------
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
US$ US$ US$
Bank interest receivable 532 1,480 2,449
Interest receivable on loans
to Joint Ventures 1,709,528 1,594,464 3,245,427
1,710,060 1,595,944 3,247,876
=========== =========== =============
6. Income tax
Unaudited Audited
===================================== -------------
Year ended
6 months ended 6 months ended 31 December
30 June 2017 30 June 2016 2016
US$ US$ US$
Current income tax
Current income tax charge 5,398 2,968 3,078
Total current income tax 5,398 2,968 3,078
-------------
Deferred tax
Relating to origination and
reversal of temporary differences 431,390 406,957 827,163
Total deferred tax 431,390 406,957 827,163
================= ================= -------------
Income tax expense reported
in the Consolidated Income
Statement 436,788 409,925 830,241
============== ============= ===============
7. Property, Plant and Equipment
Plant and
Group machinery
US$
Cost
At 1 January 2016 800,400
Translation adjustment 145,468
-----------
At 1 January 2017 945,868
Translation adjustment 26,556
At 30 June 2017 972,424
Depreciation
At 1 January 2016 618,697
Charge for the year 68,568
Translation adjustment 115,137
===========
At 1 January 2017 802,402
Charge for the period 31,899
Translation adjustment 21,406
At 30 June 2017 855,707
Net book values
At 30 June 2017 116,717
===========
At 31 December 2016 143,466
===========
8. Equity-accounted Investment in Joint Venture - WorldAce Investments Limited
PetroNeft Resources plc has a 50% interest in WorldAce Investments Limited, a jointly controlled entity which holds 100% of LLC Stimul-T, an entity involved in oil and gas exploration and the registered holder of Licence 61. The interest in this joint venture is accounted for using the equity accounting method. WorldAce Investments Limited is incorporated in Cyprus and carries out its activities, through LLC Stimul-T, in Russia.
Share
of net
assets
US$
At 1 January 2016 -
Elimination of unrealised profit on intra-Group
transactions (157,876)
Retained loss (5,721,232)
Translation adjustment 7,149,140
Debited to loans receivable from WorldAce Investments
Limited (Note 10) (1,270,032)
------------
At 1 January 2017 -
Elimination of unrealised loss on intra-Group
transactions (17,532)
Retained loss (2,218,754)
Translation adjustment 1,296,301
Credited against loans receivable from WorldAce
Investments Limited (Note 10) 939,985
At 30 June 2017 -
============
8. Equity-accounted Investment in Joint Venture - WorldAce Investments Limited (continued)
The balance sheet position of WorldAce Investments Limited shows net liabilities of US$27,759,908 following a loss in the period of US$4,437,507 together with a positive currency translation adjustment of US$2,592,601. PetroNeft's 50% share is included above and results in a negative carrying value of US$9,186,571. Therefore, the share of net assets is reduced to Nil and, in accordance with IAS 28 Investments in Associates and Joint Ventures, the amount of US$9,186,571 is deducted from other assets associated with the joint venture on the Balance Sheet which are the loans receivable from WorldAce Investments (see Note 10).
Additional financial information in respect of PetroNeft's 50% interest in the equity-accounted joint venture entity is disclosed below:
Unaudited Audited
================================ -------------
Year ended
6 months ended 6 months ended 31 December
30 June 2017 30 June 2016 2016
US$ US$ US$
Continuing operations
Revenue 6,903,472 4,339,111 11,604,182
Cost of sales (6,373,066) (4,259,206) (11,199,845)
=============== =============== -------------
Gross profit 530,406 79,905 404,337
Administrative expenses (847,477) (916,886) (1,614,435)
Impairment of oil and
gas properties - - -
=============== =============== -------------
Operating loss (317,071) (836,981) (1,210,098)
Loss on disposal of oil
and gas properties - - (438,034)
Write-off of exploration
and evaluation assets (13,051) - (710,047)
Finance revenue 11,142 3,475 9,421
Finance costs (1,899,774) (1,574,275) (3,372,474)
=============== =============== -------------
Loss for the period for
continuing operations
before taxation (2,218,754) (2,407,781) (5,721,232)
Income tax expense - - -
=============== ===============
Loss for the period (2,218,754) (2,407,781) (5,721,232)
=============== =============== =============
Loss for the period (2,218,754) (2,407,781) (5,721,232)
Other comprehensive income
to be reclassified to
profit or loss in subsequent
years:
Currency translation adjustments 1,296,301 5,042,837 7,149,140
=============== ===============
Total comprehensive (loss)/profit
for the period (922,453) 2,635,056 1,427,908
=============== =============== =============
The currency translation adjustment results from the revaluation of the Russian Rouble during the period. All Russian Rouble carrying values in Stimul-T, the 100% subsidiary of WorldAce are converted to US Dollars at each period end. The resulting gain or loss is recognised through other comprehensive income and transferred to the currency translation reserve. The Russian Rouble appreciated slightly against the US Dollar during the period from RUB61.00:US$1 at 31 December 2016 to RUB59.74:US$1 at 30 June 2017.
8. Equity-accounted Investment in Joint Venture - WorldAce Investments Limited (continued)
Unaudited Audited
============= -------------
31 December
30 June 2017 2016
US$ US$
Non-current Assets
Oil and gas properties 38,872,902 37,945,273
Property, plant and equipment 193,258 199,338
Exploration and evaluation assets 7,906,187 7,556,920
Assets under construction 1,344,426 932,631
48,316,773 46,634,162
============= -------------
Current Assets
Inventories 455,405 536,685
Trade and other receivables 275,942 176,318
Cash and cash equivalents 132,292 40,415
863,639 753,418
============= -------------
Total Assets 49,180,412 47,387,580
============= =============
Non-current Liabilities
Provisions (485,039) (433,573)
Interest-bearing loans and borrowings (60,147,497) (56,686,519)
(60,632,536) (57,120,092)
============= -------------
Current Liabilities
Trade and other payables (2,427,830) (3,224,989)
(2,427,830) (3,224,989)
============= -------------
Total Liabilities (63,060,366) (60,345,081)
============= =============
Net liabilities (13,879,954) (12,957,501)
============= =============
9. Equity-accounted Investment in Joint Venture - Russian BD Holdings B.V.
PetroNeft Resources plc has a 50% interest in Russian BD Holdings B.V., a jointly controlled entity which holds 100% of LLC Lineynoye, an entity involved in oil and gas exploration and the registered holder of Licence 67. The interest in this joint venture is accounted for using the equity accounting method. Russian BD Holdings B.V. is incorporated in the Netherlands and carries out its activities, through LLC Lineynoye, in Russia.
Share of
net assets
US$
At 1 January 2016 -
Retained loss (288,198)
Translation adjustment 592,300
Debited against loans receivable from Russian
BD Holdings BV (Note 10) (304,102)
------------
At 1 January 2017 -
Retained loss (184,674)
Translation adjustment 109,246
Credited against loans receivable from Russian
BD Holdings BV (Note 10) 75,428
At 30 June 2017 -
============
The balance sheet position of Russian BD Holdings B.V. shows net liabilities of US$1,216,232 following a loss in the year of US$369,348 together with a currency translation adjustment (gain) of US$218,492. PetroNeft's 50% share is included above and results in a negative carrying value of US$608,116. Therefore, the share of net assets is reduced to Nil and, in accordance with IAS 28 Investments in Associates and Joint Ventures, the amount of US$608,116 is deducted from other assets associated with the joint venture on the Balance Sheet which are the loans receivable from Russian BD Holdings B.V. (Note 10).
9. Equity-accounted Investment in Joint Venture - Russian BD Holdings B.V. (continued)
Additional financial information in respect of PetroNeft's 50% interest in the equity-accounted joint venture entity is disclosed below:
Unaudited Audited
================================ -------------
Year ended
6 months ended 6 months ended 31 December
30 June 2017 30 June 2016 2016
US$ US$ US$
Revenue - - -
Cost of sales - - -
Gross profit - - -
Administrative expenses (45,987) (56,435) (66,718)
Operating loss (45,987) (56,435) (66,718)
Finance revenue 228 204 294
Finance costs (138,915) (116,446) (239,079)
Loss for the period for continuing
operations before taxation (184,674) (172,677) (305,503)
Taxation - - 17,305
Loss for the period (184,674) (172,677) (288,198)
=============== =============== =============
Loss for the period (184,674) (172,677) (288,198)
Other comprehensive income to
be reclassified to profit or
loss in subsequent years:
Currency translation adjustments 109,246 424,702 592,300
Total comprehensive (loss)/
profit for the period (75,428) 252,025 304,102
=============== =============== =============
Unaudited Audited
============= ------------
31 December
30 June 2017 2016
US$ US$
Non-current assets 4,230,634 4,069,104
Current assets 15,462 198,788
Total assets 4,246,096 4,267,892
============= ------------
Non-current liabilities (4,651,703) (4,512,667)
Current liabilities (202,509) (287,913)
Total liabilities (4,854,212) (4,800,580)
============= ------------
Net liabilities (608,116) (532,688)
============= ============
Financial assets - loans and
10. receivables
Unaudited Audited
============= ------------
31 December
Group 30 June 2017 2016
US$ US$
Loans to WorldAce Investments Limited
(Note 15) 53,814,552 52,235,829
Less: share of WorldAce Investments
Limited loss (Note 8) (9,186,571) (8,246,586)
44,627,981 43,989,243
------------
Loans to Russian BD Holdings B.V.
(Note 15) 4,387,671 4,256,866
Less: share of Russian BD Holdings
B.V. loss (Note 9) (608,116) (532,688)
3,779,555 3,724,178
============= ------------
48,407,536 47,713,421
============= ============
The Company has granted a loan facility to its joint venture undertaking WorldAce Investments Limited of up to US$45 million. This loan facility is US$ denominated and unsecured. Interest currently accrues on the loan at USD LIBOR plus 6.0% but the Company has agreed not to seek payment of interest until 2018 at the earliest. The loan is set to mature on 31 December 2022. As at 30 June 2017 the loan was fully drawn down. The loan from the Company to Russian BD Holdings is repayable on demand. Interest currently accrues on the loan at LIBOR plus 5.0% per annum.
11. Inventories Unaudited Audited
=========================== ---------------------------
31 December
30 June 2017 2016
US$ US$
Materials 19,679 28,973
19,679 28,973
=========================== ===========================
12. Trade and other receivables Unaudited Audited
=========================== ----------------------------
31 December
30 June 2017 2016
US$ US$
Other receivables 25,232 155,651
Receivable from jointly controlled
entity (Note 15) 745,539 920,390
Advances to contractors 2,437 8,047
Prepayments 52,059 59,816
825,267 1,143,904
=========================== ============================
Other receivables are non-interest-bearing and are normally settled on 60-day terms.
13. Cash and Cash Equivalents
Unaudited Audited
========================== --------------------------
31 December
Group 30 June 2017 2016
US$ US$
Cash at bank and in hand 152,130 319,618
152,130 319,618
========================== ==========================
Bank deposits earn interest at floating rates based on daily deposit rates. Short-term deposits are made for varying periods of between one day and one month depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
14. Trade and other payables
Unaudited Audited
========================== ---------------------------
31 December
30 June 2017 2016
US$ US$
Trade payables 292,269 337,208
Trade payables to jointly controlled
entity (Note 15) 231,078 108,338
Corporation tax 55,816 55,750
Oil taxes, VAT and employee
taxes 58,602 56,165
Other payables 116,293 318,074
Accruals 290,484 206,546
1,044,542 1,082,081
========================== ===========================
The Directors consider that the carrying amount of trade and other payables approximates their fair value.
Trade and other payables are non-interest-bearing and are normally settled on 60-day terms.
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
15. Related party disclosures
Transactions with subsidiaries
Transactions between the Group and its subsidiaries, Granite and Dolomite, have been eliminated on consolidation.
Transactions with joint ventures
PetroNeft Resources plc had the following transactions with its joint ventures during the six months ended 30 June 2017 and year ended 31 December 2016:
Russian BD
Holdings BV WorldAce Investments
Group Group Limited Group
US$ US$
Receivable by PetroNeft Group at 1
January 2016 3,389,708 40,883,592
Advanced during the year 10,000 -
Transactions during the year 159,260 2,622,188
Interest accrued in the year 234,402 3,011,025
Payments for services made during the
year (10,821) (3,426,007)
Share of joint venture's translation
adjustment 304,102 1,270,032
Translation adjustment (5,769) 83,761
------------------------- -----------------------
At 1 January 2017 4,080,882 44,444,591
Advanced during the period - -
Transactions during the period 66,883 1,073,548
Interest accrued in the period 130,805 1,578,723
Payment for services made during the
period (160,472) (1,300,206)
Share of joint venture's translation
adjustment (75,428) (939,985)
Translation adjustment 18,392 4,269
At 30 June 2017 4,061,062 44,860,940
========================= =======================
Balance at 31 December 2016 comprised
of:
Loan facility advanced 3,724,178 43,989,243
Trade and other receivables 356,704 563,686
Trade Payables - (108,338)
4,080,882 44,444,591
========================= =======================
Balance at 30 June 2017 comprised of:
Loans receivable 3,779,555 44,627,981
Trade and other receivables 281,502 464,037
Trade and other payables - (231,078)
4,061,057 44,860,940
========================= =======================
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KVLFLDKFFBBL
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September 29, 2017 02:01 ET (06:01 GMT)
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