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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Amerisur Resources Plc | LSE:AMER | London | Ordinary Share | GB0032087826 | 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% | 19.18 | 19.18 | 19.20 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMAMER
RNS Number : 0223Z
Amerisur Resources PLC
07 January 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
7 January 2020
RECOMMED CASH ACQUISITION
of
AMERISUR RESOURCES PLC ("AMERISUR")
by
GEOPARK COLOMBIA S.A.S ("GEOPARK COLOMBIA")
(a wholly owned subsidiary of GeoPark Limited ("GeoPark"))
Q3 RESULTS AND RECOMMED OFFER UPDATE
On 15 November 2019, the boards of Amerisur and GeoPark announced that they had reached agreement on the terms of a recommended cash acquisition pursuant to which GeoPark Colombia, a wholly owned subsidiary of GeoPark, will acquire the entire issued and to be issued ordinary share capital of Amerisur (the "Transaction"). The Transaction is being implemented by means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme") which requires the approval of the Scheme Shareholders and the sanction of the Court. On 19 December 2019, Amerisur and GeoPark announced that the Scheme was approved by the requisite majorities of Scheme Shareholders at the Court Meeting and the requisite majority of Amerisur Shareholders voted at the Amerisur General Meeting to pass the Special Resolution to implement the Scheme.
The boards of Amerisur and GeoPark wish to update Amerisur Shareholders on certain aspects of the Transaction:
Bond financing
-- GeoPark today announced that it intends to offer senior notes (the "Notes") in a private placement to qualified institutional buyers in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes will be fully and unconditionally guaranteed jointly and severally by GeoPark Chile S.p.A. and GeoPark Colombia S.L.U..
-- GeoPark intends to use the net proceeds of the Notes offering to finance the cash consideration payable by GeoPark Colombia to Scheme Shareholders.
-- Following receipt of the net proceeds of the Notes offering, GeoPark Colombia's commitments under its existing Interim Facility Agreement will be terminated.
-- A copy of the reports containing the launch press release, the periodic operational update and, extracted from the preliminary offering memorandum relating to the Notes offering, the pro forma consolidated financial information, the management discussion and analysis and the fourth quarter preliminary results of GeoPark on Form 6-K, filed with the Securities Exchange Commission (the "SEC") on 7 January 2020, are available on the SEC's website at www.sec.gov.
-- GeoPark Colombia has also entered into a forward contract with Citibank N.A. for delivery of sterling in the amount of GBP242 million. The forward contract will enable GeoPark Colombia to convert its US dollar borrowings under the proceeds of the Notes offering into the sterling funds required to fund the cash consideration payable to Scheme Shareholders under the terms of the Scheme.
The preliminary offering memorandum relating to the Notes offering includes financial information relating to Amerisur for the period ended 30 September 2019 (the "Q3 Financial Information"). The full text of the Q3 Financial Information is set out below and is available to view on Amerisur's website here: https://www.amerisurresources.com/investor-centre/reports-and-presentations.
Effective Date and Timetable
Completion of the Transaction remains subject to the satisfaction or waiver of the remaining Conditions set out in the Scheme Document, including the Court sanctioning the Scheme at the Court Hearing which is scheduled for 14 January 2020.
Subject to the Scheme receiving the sanction of the Court on that date and the delivery of the Court Order to the Registrar of Companies, the Scheme is expected to become Effective on 16 January 2020.
It is also expected that dealings in Amerisur Shares will be suspended with effect from 7.30 a.m. on 16 January 2020. The last day of dealing in, and for registration of transfers of, Amerisur Shares will therefore be 15 January 2020. If the Court sanctions the Scheme on 14 January 2020, the London Stock Exchange will be requested to cancel trading of Amerisur Shares on AIM. Such cancellation is expected to take effect from 7.00 a.m. on 17 January 2020.
The expected timetable of principal events for the implementation of the Scheme remains as set out on page 9 of the Scheme Document. If any of the dates and/or times in the expected timetable change, the revised dates and/or times will be notified by announcement through a Regulatory Information Service.
General
Defined terms used but not defined in this announcement have the meaning given to them in the Scheme Document, a copy of which is available on Amerisur's website at https://www.amerisurresources.com/investor-centre.
All references in this announcement to times are to times in London (unless otherwise stated).
Enquiries:
Hot Features
Premium
Amerisur Tel: +44 (0)330
Nathan Piper, Head of Business Development and 333 8273
Comms
BMO Capital Markets (Lead Financial Adviser Tel: +44 (0)207
and Rule 3 Adviser to Amerisur) 236 1010
Jeremy Low
Tom Hughes
Gary Mattan
Neil Elliot
Stifel (Nomad, Joint Broker and Joint Financial Tel: +44 (0)207
Adviser to Amerisur) 710 7600
Callum Stewart
Jason Grossman
Ashton Clanfield
Investec (Joint Broker to Amerisur) Tel: +44 (0)207
Chris Sim 597 4000
Tejas Padalkar
Arden Partners plc (Joint Broker to Amerisur) Tel: +44 (0)207
Paul Shackleton 614 5900
Dan Gee-Summons
Camarco (PR Adviser to Amerisur) Tel: +44 (0)203
Billy Clegg 757 4983
Ollie Head
GeoPark and GeoPark Colombia Tel: +54 11 4312
Andrés Ocampo, Chief Financial Officer 9400
Stacy Steimel, Shareholder Value Director Tel: +562 2242
9600
Rothschild & Co (Financial Adviser to GeoPark) Tel: +44 (0)20
Roger Ader 7280 5000
James McEwen
Important Notices
BMO Capital Markets Limited ("BMO"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Amerisur and no one else in connection with the above and will not be responsible to anyone other than Amerisur for providing the protections offered to clients of BMO nor for providing advice in relation to the subject matter of this announcement or any other matters referred to in this announcement.
Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Amerisur and no one else in connection with the above and will not be responsible to anyone other than Amerisur for providing the protections offered to clients of Stifel nor for providing advice in relation to the subject matter of this announcement or any other matters referred to in this announcement.
Arden Partners plc ("Arden"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Amerisur and no one else in connection with the above and will not be responsible to anyone other than Amerisur for providing the protections offered to clients of Arden nor for providing advice in relation to the subject matter of this announcement or any other matters referred to in this announcement.
Investec Bank plc ("Investec"), which is authorised by the Prudential Regulation Authority and is regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Amerisur and no one else in connection with the Transaction and any other arrangements referred to in this announcement. Investec will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the Transaction and the other arrangements referred to in this announcement and will not be responsible to anyone other than Amerisur for providing the protections offered to clients of Investec nor for providing advice in relation to the subject matter of this announcement or any other matters referred to in this announcement.
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for GeoPark and no one else in connection with the Transaction and will not be responsible to anyone other than GeoPark for providing the protections offered to clients of Rothschild & Co nor for providing advice in relation to the subject matter of this announcement or any other matters referred to in this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed on BMO, Stifel, Arden, Investec and Rothschild & Co by the FSMA or the regulatory regime established thereunder, each of BMO, Stifel, Arden, Investec and Rothschild & Co does not make any representation express or implied in relation to, nor accepts any responsibility whatsoever for, the contents of this announcement, or any other statement made or purported to be made by it or on its behalf in connection with Amerisur, the Transaction or the other arrangements referred to in this announcement. Each of BMO, Stifel, Arden, Investec and Rothschild & Co (and their respective subsidiaries, branches and affiliates) accordingly, to the fullest extent permissible by law, disclaims all and any responsibility or liability (save for any statutory liability) whether arising in tort, contract or otherwise which it might have in respect of the contents of this announcement or any other statement made or purported to be made by it or on its behalf in connection with Amerisur or the Transaction or the other arrangements referred to in this announcement. Ashurst LLP and Rosenblatt Limited are retained as legal advisers to Amerisur. Norton Rose Fulbright LLP is retained as legal adviser to GeoPark and GeoPark Colombia.
Publication on a website
A copy of this announcement, any document incorporated by reference herein and, in the case of Amerisur only, the documents required to be published by Rule 26 of the Takeover Code and pursuant to Rule 26 of the AIM Rules for Companies will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on GeoPark's website at https://www.geo-park.com/en/index/ and Amerisur's website at www.amerisurresources.com/investor-centre by no later than 12 noon (London time) on the Business Day following the date of this announcement. For the avoidance of doubt, the content those websites are not incorporated into and do not form part of this document.
Request for Hard Copy
Amerisur Shareholders may request a hard copy of this announcement by contacting Link Asset Services on 0371 664 0321 or by submitting a request in writing to The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU or to shareholderenquiries@linkgroup.co.uk. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. - 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. You may also request that all future documents, announcements and information to be sent to you in relation to the Transaction should be sent in hard copy form.
Important Information
If you are in any doubt about the Transaction or the contents of this announcement or what action you should take, you are recommended to seek your own personal financial, tax and legal advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent adviser in the relevant jurisdiction.
This announcement does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor will there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state or jurisdiction. The Notes have not been registered under the Securities Act, or any applicable U.S. state securities laws, and will be offered only to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act. Unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and any applicable U.S. state securities laws.
CONDENSED CONSOLIDATED INCOME STATEMENTS
For the For the For the For the
3 months 3 months 9 months 9 months
to to to to
30 September 30 September 30 September 30 September
2019 2018 2019 2018
Unaudited Unaudited $'000 Note Unaudited Unaudited
30,559 28,343 Revenue 3 84,309 96,259
(18,474) (19,986) Cost of sales (56,675) (66,979)
----------------- --------------- --------------------------------------- ------- -------------- --------------
12,085 8,357 Gross profit 27,634 29,280
(4,960) (3,705) Administrative expenses (14,534) (11,873)
(627) (1,253) Impairment charges 6 (627) (1,253)
6,498 3,399 Operating profit 12,473 16,154
(249) (274) Net foreign exchange losses (818) (535)
(881) (308) Finance and similar charges (2,379) (486)
147 163 Finance income 649 371
----------------- --------------- --------------------------------------- ------- -------------- --------------
5,515 2,980 Profit before taxation 9,925 15,504
(724) (3,415) Taxation (6,069) (5,129)
----------------- --------------- --------------------------------------- ------- -------------- --------------
Profit/(loss) attributable
to equity holders of the
4,791 (435) parent 3,856 10,375
----------------- --------------- --------------------------------------- ------- -------------- --------------
Earnings/(loss) per share
0.4 (0.03) Basic (cents per share) 5 0.32 0.86
0.4 (0.03) Diluted (cents per share) 5 0.32 0.85
----------------- --------------- --------------------------------------- ------- -------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMES
For the For the For the For the
3 months 3 months 9 months 9 months
to to to to
30 September 30 September 30 September 30 September
2019 2018 2019 2018
Unaudited Unaudited $'000 Unaudited Unaudited
Profit/(loss) attributable
to equity holders of the
4,791 (435) parent 3,856 10,375
Other comprehensive income
Items that may be subsequently
reclassified to profit or
loss:
- (81) Foreign exchange differences (5) 83
----------------- --------------- ----------------------------------------- ----- -------------- --------------
Total comprehensive income/(expense)
attributable to equity holders
4,791 (516) of the parent 3,851 10,458
----------------- --------------- ----------------------------------------- ----- -------------- --------------
All amounts relate to continuing operations
CONDENSED CONSOLIDATED BALANCE SHEETS
30 September 31 December
2019 2018
$'000 Unaudited Audited
------------------------------------- -------------- ------------
ASSETS
Non-current assets
Exploration and evaluation assets 31,840 27,624
Development and production assets 123,673 122,328
Right-of-use assets 19,518 -
Other property, plant and equipment 37,013 39,209
Deferred tax asset 463 3,971
Restricted cash 1,684 1,746
-------------------------------------- -------------- ------------
214,191 194,878
Current assets
Cash and cash equivalents 36,633 34,883
Trade and other receivables 47,238 29,705
Inventories 3,330 10,667
Restricted cash 590 7,512
87,791 82,767
------------------------------------- -------------- ------------
Total assets 301,982 277,645
-------------------------------------- -------------- ------------
LIABILITIES
Non-current liabilities
Other payables 2,605 2,827
Lease liabilities 12,251 -
Provisions 6,640 6,923
Deferred tax liabilities 19,111 17,940
40,607 27,690
Current liabilities
Trade and other payables 37,648 37,238
Lease liabilities 6,570 -
Provisions - 698
44,218 37,936
------------------------------------- -------------- ------------
Total liabilities 84,825 65,626
-------------------------------------- -------------- ------------
Net assets 217,157 212,019
-------------------------------------- -------------- ------------
EQUITY
Share capital 1,764 1,761
Share premium 144,941 144,941
Reserves 36,813 37,751
Retained earnings 33,639 27,566
-------------------------------------- -------------- ------------
Total equity 217,157 212,019
-------------------------------------- -------------- ------------
.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Reserves
---------------------------------------
Share-based
payment Foreign
Share Share Merger reserves exchange Retained Total
$'000 capital premium reserve reserve earnings equity
At 1 January 2018 1,761 144,941 13,532 12,892 9,258 25,983 208,367
Profit for the period - - - - - 10,375 10,375
Other comprehensive
income, net of tax - - - - 83 - 83
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Total comprehensive
income - - - - 83 10,375 10,458
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Transactions with
owners:
Share based payments - - - 1,141 - - 1,141
At 30 September 2018
(unaudited) 1,761 144,941 13,532 14,033 9,341 36,358 219,966
Loss for the period - - - - - (8,792) (8,792)
Other comprehensive
income, net of tax - - - - 717 - 717
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Total comprehensive
income/(loss) - - - - 717 (8,792) (8,075)
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Transactions with
owners:
Share based payments - - - 128 - - 128
At 1 January 2019 1,761 144,941 13,532 14,161 10,058 27,566 212,019
Profit for the period - - - - - 3,856 3,856
Other comprehensive
loss, net of tax - - - - (5) - (5)
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Total comprehensive
loss - - - - (5) 3,856 3,851
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
Transactions with
owners:
Share options exercised 3 - - (2,217) - 2,217 3
Share based payments - - - 1,284 - - 1,284
At 30 September 2019
(unaudited) 1,764 144,941 13,532 13,228 10,053 33,639 217,157
------------------------- ---------- ---------- ---------- -------------- ----------- ----------- ---------
CONDENSED CONSOLIDATED CASHFLOW STATEMENT
9 months 9 months
to to
30 September 30 September
2019 2018
$'000 Unaudited Unaudited
-------------------------------------------------- --- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit for the period 3,856 10,375
Adjustments for:
Finance income (649) (371)
Finance charges 2,175 416
Movement in hedging instruments 204 70
Taxation 6,069 5,129
Depreciation and amortisation (including
right of use assets) 19,461 15,339
Impairment charges (note 6) 627 1,253
Share based payment charge 1,284 1,141
Foreign currency differences (818) (535)
Decrease/(increase) in inventory 7,337 (766)
(Increase) in trade and other receivables (14,172) (38,519)
Increase in trade and other payables 805 10,905
(Decrease)/increase in other non-current
payables (222) 177
Movement in provisions 8 (25)
-------------------------------------------------- --- -------------- --------------
Net cash generated by operations 25,965 4,589
Taxes paid (5,025) (3,096)
-------------------------------------------------- --- -------------- --------------
Net cash generated by operating activities 20,940 1,493
-------------------------------------------------- --- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 649 371
Decrease in restricted cash 6,984 304
Payments for property, plant and equipment
(including D&P assets) (14,084) (8,872)
Payments for exploration and evaluation
assets (4,691) (3,030)
Payments to acquire exploration and evaluation
assets (18,623) -
Fenix decommissioning cost (627) -
Proceeds from the sale of exploration
and evaluation assets 19,100 -
Net cash used in investing activities (11,292) (11,227)
-------------------------------------------------- --- -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares 3 - Principal elements of lease payments (5,518) - Interest paid on lease liabilities (1,252) - Premium payable on commodity hedging instruments (204) (70) Finance charges (927) (416) -------------------------------------------------- --- -------------- -------------- Net cash used in financing activities (7,898) (486) -------------------------------------------------- --- -------------- -------------- Net increase/(decrease) in cash and cash equivalents 1,750 (10,220) Cash and cash equivalents at the start of the period 34,883 29,930 ------------------------------------------------------- -------------- -------------- Cash and cash equivalents at the end of the period 36,633 19,710 ------------------------------------------------- ---- -------------- --------------
1. The Company
Amerisur Resources Plc ("the Company") is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is Amerisur Resources Plc, Lakeside, St. Mellons, Cardiff, CF3 0FB. The primary activity of the Group is the exploration for and production of oil and gas in Colombia, South America.
The Company has its listing on the Alternative Investment Market ("AIM") of the London Stock Exchange.
On 15 November 2019, the boards of the Company and GeoPark Limited announced that they had reached agreement on the terms of a recommended cash acquisition for the entire issued and to be issued ordinary share capital of the Company at a price of 19.21 pence per share. The Transaction is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 and is expected to become effective in January 2020. Geopark Limited is an independent oil and natural gas exploration and production ("E&P") company with operations in Latin America.
2. Basis of preparation
These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim financial reporting' for the three and nine months ended 30 September 2019 and 2018. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2018, which were prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU").
The condensed consolidated interim financial statements have been prepared under the historical cost convention except for certain fair value adjustments required by certain standards. The Group's presentation currency is the US Dollar and amounts are rounded to the nearest thousand dollars ($'000) except as otherwise indicated.
These condensed consolidated interim financial statements have been prepared in accordance with accounting policies consistent with those set out in the Group's financial statements for the year ended 31 December 2018, except for the adoption of new standards as described further below. These statements do not constitute statutory accounts under s434 of the Companies Act 2006 (the "Act"). The statutory accounts for 31 December 2018 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information contained in this report is unaudited. The condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the nine months to 30 September 2019 and 30 September 2018, and the consolidated balance sheet as at 30 September 2019 and related notes, have been reviewed by the auditors, BDO LLP, and their report to the Company is attached.
Adoption of IFRS 16 'Leases'
The new IFRS standard on leases came into effect on 1 January 2019. The new standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model.
The Group adopted IFRS 16 from 1 January 2019 using the modified retrospective approach and accordingly the information presented for 2018 is not restated. It remains as previously reported under IAS 17 and related interpretations. On initial application, the Group elected to record right-of-use assets based on the corresponding lease liability. A right-of-use asset and lease obligations of $23.7m were recorded as of 1 January 2019, with no net impact on retained earnings. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').
The key financial impact at the start and end of the period is shown below:
$ million As at 1 January 2019 As at 30 September
2019
Balance sheet
--------------------- -------------------
Property, plant and equipment 23.7 19.5
--------------------- -------------------
Lease liabilities (23.7) (18.8)
--------------------- -------------------
-
--------------------- -------------------
Income statement
--------------------- -------------------
Cost of sales
--------------------- -------------------
Operating lease costs no longer
incurred - (6.8)
--------------------- -------------------
Additional depreciation incurred - 4.8
--------------------- -------------------
Finance charges
--------------------- -------------------
Interest - 1.2
--------------------- -------------------
Cash flow statement
--------------------- -------------------
Operating cashflow - 5.5
--------------------- -------------------
Lease payments (within financing) - (5.5)
--------------------- -------------------
Impact on free cashflow - Nil
--------------------- -------------------
On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 8.7%.
Straight-line operating lease expense recognition in cost of sales is replaced with a depreciation charge for the right-of-use assets and an interest expense on the recognised lease liabilities (included in finance charges). In the earlier periods of the lease, the expenses associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS 17.
For classification within the cash flow statement, previously operating lease payments were presented as operating cash flows. These lease payments are now disclosed in financing activities with the interest portion included within in operating cash flows.
Other new standards issued and amendments made under IFRS, effective for periods beginning on 1 January 2019, did not have a material impact on the Group's financial statements for the period ended 30 September 2019. There are no other standards that are not yet effective and that would be expected to have a material impact on the Group in the current or future reporting periods based on reasonable foreseeable future transactions.
Accounting policies
The accounting policies adopted are consistent with those of the previous financial year except those changed as a result of adopting the new standard IFRS 16 'Leases', as set out below.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the reasonably certain lease term. The lease payments include fixed payments less any lease incentives receivable, and variable lease payments that depend on an index or a rate. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the adoption date if the interest rate implicit in the lease is not readily determinable. After the adoption date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities will be remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (less than $5,000). Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Use of estimates and judgements
There have been no material revisions to the nature and amount of estimates of amounts reported in prior periods except where the implementation of IFRS 16 discussed above requires a different approach to the accounting previously applied. Significant estimates and judgements that have been required for the implementation of these new standard are:
-- The determination of whether an arrangement contains a lease;
-- The determination of lease term for some lease contracts in which the Group is a lessee that include renewal options and termination options, and the determination whether the Group is reasonably certain to exercise such options; and
-- The determination of the incremental borrowing rate used to measure lease liabilities.
-- 3. SEGMENTAL REPORTING
Identification of reportable operating segments
Operating segments are reported on a legal entity basis. These operating
segments are the same as those reported in internal reports that are reviewed
and used by the Board of Directors (which is identified as the Chief Operating
Decision Maker ("CODM")) in assessing performance and in determining the
allocation of resources.
The UK is primarily considered to be an administrative extension of the
operations in Colombia and Paraguay.
All business segments are responsible initially for the exploration and
evaluation of oil reserves and then the development and production of oil
wells. As permitted by IFRS 8, these business segments are deemed to have
similar economic characteristics and are similar, if not the same, in all
of the following as they:
- are both involved in E&P, whose economics are heavily influenced by the
international O&G market
- are subject a similar regulatory environment.
The business segments have been aggregated into a single reportable operating
segment, namely oil exploration, evaluation, development and production.
Each month the CODM is presented with financial information prepared in
accordance with IFRS as adopted in the EU and the accounting policies set
out in these financial statements. As such, information regarding this operating
segment is already disclosed in the financial statements.
The following customers contributed to the majority of revenue:
3 months 3 months 9 months 9 months to
to to to 30 September
30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- ----------- -------------- --------------
21,956 24,273 Customer A 61,034 74,363
8,603 4,070 Customer B 23,253 11,473
- - Customer C 22 44
- - Customer D - 10,379
30,559 28,343 84,309 96,259
-------------- -------------- ----------- -------------- --------------
Geographical information
Sales to external customers
3 months 3 months 9 months 9 months to
to to to 30 September
30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- --------- -------------- --------------
29,689 28,343 Colombia 82,885 96,259
870 - UK 1,424 -
30,559 28,343 84,309 96,259
-------------- -------------- --------- -------------- --------------
Geographical non-current assets (excluding deferred tax) As at As at
30 September 31 December
$'000 2019 2018
---------- -------------- -------------
Colombia 212,253 190,645
Paraguay 254 262
212,507 190,907
---------- -------------- -------------
Revenue is split based on origin of supply.
Disaggregation of revenue
3 months 3 months 9 months 9 months to
to to to 30 September
30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- --------------------- -------------- --------------
29,689 28,343 Colombia 82,885 96,259
870 - UK (third party oil) 1,424 -
30,559 28,343 84,309 96,259
-------------- -------------- --------------------- -------------- --------------
All revenue is generated from one reportable segment and arises from one
geographical region therefore, revenue cannot be further disaggregated.
4. INCOME TAX
Income tax expense is recognised based on management's best estimate of
the weighted average effective annual income tax rate expected for the full
financial year.
3 months 3 months 9 months 9 months to
to to to 30 September
30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- ------------- -------------- --------------
738 427 Current tax 2,644 1,428
(14) 2,988 Deferred tax 3,425 3,701
724 3,415 6,069 5,129
-------------- -------------- ------------- -------------- --------------
The tax charge for the nine month period ended 30 September 2019 includes
an amount of $903k relating to a change in the methodology applied for the
calculation of 2018 tax base for crude oil inventory.
For the same period the deferred tax charge also includes a $1m credit in
relation to the recognition of previously unrecognised tax losses from 2014
in PDSA.
5. EARNINGS/LOSS per share
3 months 3 months 9 months to 9 months
to to 30 September to
30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- -------------------------------- -------------- --------------
Profit / (loss) for the
period attributable to
equity shareholders of
4,791 (435) the parent 3,856 10,375
Earnings / (loss) per share
0.4 (0.03) Basic (cents per share) 0.32 0.86
0.4 (0.03) Diluted (cents per share) 0.32 0.85
-------------- -------------- -------------------------------- -------------- --------------
Shares Shares Shares Shares
Issued ordinary shares
1,215,151,708 1,213,205,768 in issue 1,215,151,708 1,213,205,768
-------------- -------------- -------------------------------- -------------- --------------
Weighted average number
of shares in issue for
1,215,151,708 1,213,205,768 the period 1,215,151,708 1,213,205,768
Dilutive effect of options
3,309,086 5,433,507 in issue 3,309,086 5,433,507
-------------- -------------- -------------------------------- -------------- --------------
Weighted average number
of shares for diluted earnings
1,218,460,794 1,218,639,275 per share 1,218,460,794 1,218,639,275
-------------- -------------- -------------------------------- -------------- --------------
6. SIGNIFICANT EVENTS AND TRANSACTIONS
Fenix decommissioning
On 18 September 2019, the ANH approved the completion of the decommissioning of the Fenix block, originally relinquished in August 2017. An impairment charge of $627k has been recognised in the period in relation to the write down of additional decommissioning capitalised costs incurred. The restricted cash in relation to the decommissioning of the block, recognised as a current asset at the period end, has been released post period end in October 2019 following the ANH approval.
PUT-8 Acquisition and disposal
On 26 March 2019, Amerisur Exploración Colombia Limited ('AEC') entered into a sale and purchase agreement ('SPA') with Vetra to acquire the remaining 50% share and operatorship in their jointly shared asset, PUT-8, through the exercise of its Right Of First Refusal ('ROFR') as set out in the Joint Operating Agreement between the two parties, originally entered in to in April 2012. Prior to this on 18 March 2019, AEC entered into a SPA with Occidental Andina LLC ('Occidental') to set out the terms of the disposal of the acquired 50% share, on a non-operated participating interest basis, from Vetra, conditional upon the ROFR being exercised.
The gross consideration for both the sale to Occidental and purchase from Vetra was $19.1 million. Beneficial ownership, when responsibility for all the risks, rights and obligations of the block is transferred, occurred on 3 and 4 April 2019 respectively. This is considered the effective date for the recognition of the acquisition and the disposal. ANH approval was granted for the acquisition on 11 September 2019 but approval remains outstanding for the disposal to Occidental.
As set out in the SPA, in the event that the ANH does not approve the PUT-8 disposal, Amerisur will be required to repay the $19.1m received from Occidental.
7. RELATED PARTY TRANSACTIONS
The following transactions occurred with related parties:
3 months 3 months 9 months 9 months
to to to to
30 September 30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- ------------------------ -------------- --------------
Sale of goods and
services:
Sale of services to
commonly
- 3 controlled entities - 3
Payment for goods and
services:
Payments for services
to Westleigh
Investment Holdings
Limited
and its subsidiaries,
in which
Giles Clarke and Nick
Harrison
39 40 have an interest. 124 127
Payment for consultancy
services:
Fees paid to Tracarta
Limited,
a company in which John
Wardle
212 212 has an interest. 1,062 1,385
Other transactions:
Share based payment
charges
relating to outstanding
share
options issued for
consultancy
services to Tracarta
Limited,
a company in which John
Wardle
71 70 has an interest. 238 232
- - -- Receivables from and - -
payable
to related parties:
-- There are no current
receivables
to or current payables
from
related parties
-------------- -------------- ------------------------ -------------- --------------
Key management personnel compensation
3 months 3 months 9 months 9 months
to to to to
30 September 30 September 30 September 30 September
2019 2018 $'000 2019 2018
-------------- -------------- ------------------------ -------------- --------------
Short term employee
559 575 benefits 2,333 2,257
Post-employment
42 49 benefits 92 69
118 119 Share based payments 367 375
719 743 2,792 2,701
-------------- -------------- ------------------------ -------------- --------------
The key management personnel are the Board of Directors plus senior management employees who have the authority to directly plan and control business operations.
8. POST REPORTING DATE eventS
Formal sale process
On 19 July 2019, following receipt of interest in the Company and its assets from other industry participants and in order to maximise value for shareholders, the Company announced its decision to conduct a strategic review, including a formal sale process ('FSP') as set out by The City Code on Takeovers and Mergers.
On 15 November 2019, the boards of the Company and GeoPark Limited announced that they had reached agreement on the terms of a recommended cash acquisition for the entire issued and to be issued ordinary share capital of the Company at a price of 19.21 pence per share. The Transaction is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 which is expected to become effective on 16 January 2020.
On 19 December 2019, the shareholders of the Company approved the transaction at a General Meeting. The transaction is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 and is expected to become effective on 16 January 2020.
Exercise of share options
Post period end on 20 December 2019, Giles Clarke (Chairman), Tracarta Limited (a company in which John Wardle has an interest) and Nick Harrison (Chief Financial Officer) have exercised options over Ordinary Shares (which, aggregated, amount to options over a total of 9,000,000 Ordinary Shares). Giles Clarke's and Nick Harrison's options have an exercise price of 15 pence per share and Tracarta Limited's options have an exercise price per share of 11.05 pence. It is anticipated that the aggregate 9,000,000 Ordinary Shares will be issued and allotted after the Court sanction of the scheme of arrangement.
Put-36 Acquisition
In November 2019, Amerisur announced that as part of the 'Proceso Permanente de Asignacion de Areas 2019' round, it was awarded 100% working interest in Block PUT-36. The work commitments in the first phase (over 36 months) include acquisition of 3D seismic and two exploration wells with a minimum spend of $26m.
9. GLOSSARY
Amerisur Amerisur Resources Plc and its subsidiaries
ANH Agencia Nacional de Hidrocarburos
BOPD Barrels of Oil Per Day
Company Amerisur Resources Plc
E&E Exploration and Evaluation
D&P Development and Production
Group Amerisur Resources Plc and its subsidiaries
IFRS International Financial Reporting Standards as
adopted by the European Union
JOA Joint Operating Agreement
OBA pipeline Oleoducto Binacional Amerisur pipeline
Occidental Occidental Andina LLC
"Proven Reserves" Those quantities of petroleum, which, by analysis
or "1P" of geoscience and engineering data, can be estimated
with reasonable certainty to be commercially recoverable,
from a given date forward, from known reservoirs
and under defined economic conditions, operating
methods, and government regulations. If deterministic
methods are used, the term reasonable certainty
is intended to express a high degree of confidence
that the quantities will be recovered. If probabilistic
methods are used, there should be at least a 90%
probability that the quantities actually recovered
will equal or exceed the estimate
ROFR Right of First Refusal
SPA Sale and Purchase Agreement
Vetra Vetra Exploración y Producción Colombia
S.A.S
WI Working Interest
INDEPENDENT REVIEW REPORT TO AMERISUR RESOURCES PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements for the nine month periods ended 30 September 2019 and 30 September 2018 which comprise the condensed consolidated Income Statements, condensed consolidated Statements of Comprehensive Income, condensed consolidated Statement of Changes in Equity, the condensed consolidated Cash Flow Statements and the condensed consolidated Balance Sheets as at 30 September 2019 and 31 December 2018.
We have read the other information contained in the nine month period financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with International Accounting Standard IAS 34 'Interim financial reporting'.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the nine month period financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements for the nine month periods ended 30 September 2019 and 30 September 2018 are not prepared, in all material respects, in accordance with International Accounting Standard IAS 34.
Use of our report
Our report has been prepared in accordance with the terms of our engagement dated 17 December 2019. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants
London
6 January 2020
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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