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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Hague Ldn | LSE:HNL | London | Ordinary Share | GB00BSNM2916 | ORD 4P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.125 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
Overall, non cash items were GBP5,848,276 (2013: GBP2,501,309) of which our share of the operating loss attributed to our indirect interest in the Guyane Maritime Joint Venture (JV) was GBP5,023,059 (2013: GBP1,626,446). This included full impairment of costs related to GM-ES-2, GM-ES-4 and GM-ES-5 and rig decommissioning costs; GM-ES-3 having been impaired in full as at 30 June 2013. The booked share of losses in joint ventures has been reduced by GBP265,813 from the provision of GBP5,288,872 made for the first half of the year. This is due to well and decommissioning costs coming in below the level of cash advances called against Shell's original budget.
In the consolidated balance sheet, for which Wessex follows a Successful Efforts accounting policy, Wessex is now carrying the Guyane investment at GBP3,467,422 (2013: GBP6,991,574) and Total Equity is GBP5,337,215 (2013: GBP11,976,250). As shareholders will be aware, Northpet follows a Full Cost accounting policy, and in the past, the Parent Company Balance Sheet has incorporated the Company's pro rata share of its equity investment in Northpet at that Company's book value.
This year, the board has decided, that it would be prudent to impair the value of the equity investment to our share of Northpet's net assets as they would have been presented in that Company's accounts, had Northpet adopted a Successful Efforts policy. This adjustment has no impact on cash nor on the consolidated balance sheet.
During the four months from October 2013, Wessex opted out of GBP1.29m of funding requests in respect of operations in Guyane and thereby reduced its ownership in Northpet from 50.00% to 44.11%. Payments were recommenced February 2014 at the new pro-rata rate of 44.11% of Northpet, an effective interest in the Guyane Maritime JV of 1.103%. It is the board's intention to maintain this effective interest in Guyane in the foreseeable future.
At the end of June 2014, cash resources stood at GBP1.9m (2013: GBP4.4m). Project spend was GBP1.67m in the year, 90% of it committed in Guyane (GBP1.5m). Looking forward, our project commitments for calendar year 2015 are minimal. As of the balance sheet date, Wessex was holding 63% (2013: 55%) of its cash resources in US$ .
Cash administration costs, at GBP729,331, were down 29% overall in the year, with H1 2014 costs falling 44% over H1 2013 and H2 2014 down 7% compared with H2 2013. If the requisitioned General Meeting costs (GBP54k paid in the financial year) are excluded then the H2 2014 costs are down by almost 20% and overall costs for the year are 34% lower.
The rise in expensed project costs reflects the fact that all of our historic projects, save Guyane, have now been fully impaired, so any further expenditure incurred is expensed.
Non cash items included GBP233,954 of share option expense and an impairment charge of GBP591,263 (GBP214,752 on P1928; GBP374,153 on PEDL239; and GBP2,358 on SADR).
Breakdown of Administrative Expenses (2013 and 2014)
Year to 30 June 2014 2014 2014 2013 2013 2013 Expenses H1 H2 FY H1 H2 FY Cash (GBP) (GBP) (GBP) (GBP) (GBP) (GBP) Administration 341,156 388,175 729,331 608,720 416,720 1,025,440 Expensed Project 43,821 98,634 142,455 45,268 (4,169) 41,099 Forex 120,747 38,494 159,241 30,546 (94,226) (63,680) Non-Cash Share Options 201,432 32,522 233,954 156,455 203,786 360,241 Impairment 214,752 376,511 591,263 72,557 442,065 514,622 Total 921,908 934,336 1,856,244 913,546 964,176 1,877,722
Project Review
Guyane
INTEREST HOLDING
Wessex holds a 44.11% interest in Northpet Investments Limited (Northpet), giving it a 1.103% beneficial interest in the Guyane Maritime Permit. The remaining interest in Northpet is owned by Northern Petroleum plc. Northpet holds a 2.5% interest in this Permit in partnership with Shell (operator, 45%), Tullow (27.5%) and Total SA (25%).
In December 2013, it was announced that GM-ES-5 had been unsuccessful. This was the final well to be drilled under the Shell-operated four-well drilling campaign which commenced in July 2012, and was designed partly to test the down-dip limit of the accumulation in the initial Zaedyus (GM-ES-1) discovery. The Stena Icemax drill ship was released from contract on 5 December 2013 and much of the decommissioning activity on the associated infrastructure was completed by the turn of the calendar year.
There have now been five wells drilled by the partnership in 2012 and 2013, the successful Zaedyus exploration well in September 2011, followed by 2 unsuccessful appraisal wells to Zaedyus and 2 unsuccessful exploration wells on the Eastern Slope.
Since last December, the partners have largely completed the evaluation and interpretation of the valuable body of information derived from drilling and from the new Central Area 3D seismic that was delivered from processing in August 2013. A new portfolio of leads and prospects has now been defined in the, so far untested, Central Area. Discussion amongst partners on applying for a new drilling permit (AOT), a prerequisite to drilling a further well, is ongoing. However, given the long lead-time in determining an AOT and subsequently securing a deep-water rig, it is unlikely that any further drilling could occur before the end 2015. Any further well would have to be drilled before the expiry of the exploration phase of the Guyane Maritime Permit in June 2016, unless it can be extended.
United Kingdom
INTEREST HOLDING
Wessex, as administrator of Promote Licence blocks 98/7b, 98/8a and 98/12 (northern part), holds a 35% interest through its wholly-owned subsidiary Wessex Hydrocarbons Limited. Its partner, NWE Mirrabooka (UK) Pty. Ltd (a wholly-owned subsidiary of ASX listed, Norwest Energy NL) has a 65% interest.
During the year, all three of our South of England licences were relinquished, offshore P1928 in December 2013 and onshore PEDL 238 and PEDL 239 in April 2014. These licences were all due to expire between February and July 2014 and the Norwest-operated group was not in a position to make the drilling commitments necessary to extend their lives. The group therefore adopted a strategy of early relinquishment, after consultation with the UK's Department of Energy & Climate Change (DECC), in order to allow the areas to be included in the forthcoming 2014 Licensing Rounds.
Subsequent to the year end, the Company's subsidiary, Wessex Hydrocarbons Limited, was awarded blocks 98/7b, 98/8a and 98/12 (northern part) in the 28th Seaward Round. However, it was decided not to apply for new licences under the 14th Landward Round.
Subject to completion of licence documentation, the award will allow Wessex and NWE to explore the Blocks for an initial period of two years, during which existing 3D seismic data will be reprocessed to pre-stack depth migration. At the end of this initial period, the group must either commit to drill a well in the remaining two years of the licence or relinquish it in full.
Juan de Nova
INTEREST HOLDING
Wessex will have the right to hold a 50% interest in a renewed permit, under an agreement with its partner and operator, Jupiter Petroleum Juan de Nova Limited (a wholly-owned subsidiary of Global Petroleum Limited), which holds the remaining 50%.
The current Juan de Nova Permit expired on 30 December 2013 and is suspended pending determination by the French Authorities of the renewal application. Ahead of the renewal, a new Joint Venture agreement was signed with Global granting it the operatorship and giving Wessex the right to apply to take legal title to a 50% working interest in the event that a renewal is successful.
The renewal acreage includes the northernmost and southernmost parts of the original permit, which are considered to be the most prospective. If successful, the initial work programme is expected to be the acquisition of a grid of 2D seismic over the retained areas. We anticipate news on the renewal during the first half of 2015.
Western Sahara (SADR)
INTEREST HOLDING
Maghreb Exploration Limited (a wholly-owned subsidiary of Wessex Exploration PLC) and Comet Petroleum (SADR) Limited (a wholly-owned subsidiary of Tower Resources plc) each hold a 50% interest in three licence blocks under Assurance Agreements in the SADR - Bojador, Guelta and Imlili.
The Assurance Agreements are valid for periods of up to ten years and confer the right to convert to Production Sharing Agreements upon the meeting of certain external conditions, including the recognition of SADR sovereignty and formulation of comprehensive tax laws. Agreement was reached with the SADR authorities to renew the Imlili block for a period of 3 years in October 2014. The Bojador and Guelta blocks also expire in the relatively near future, and we have recently made a proposal to the authorities to align the end dates and extend all three Assurance Agreements to a uniform date in December 2020.
The areas covered by our licence blocks lie almost completely in the zone controlled by Morocco since 1975 and there is currently no possibility of access. However, exploration activity is reaching the drilling stage in the licences awarded by Morocco over SADR waters, with Kosmos expected to spud a well in Q4 2014 close to the Company's Imlili and Guelta blocks. The Company hopes that success will encourage the progress of diplomatic efforts to settle the long-standing territorial dispute which has hampered exploration progress in the past. We continue to believe holding these blocks offers excellent prospectivity for oil and gas at minimal cost.
Philippines
INTEREST HOLDING
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