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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Phoenix Global Resources Plc | LSE:PGR | London | Ordinary Share | GB00B7LHJ340 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.50 | 5.00 | 8.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMPGR
RNS Number : 1706S
Phoenix Global Resources PLC
29 September 2017
29 September 2017
Phoenix Global Resources plc
("Phoenix")
UNAUDITED INTERIM RESULTS FOR TREFOIL HOLDINGS B.V.
FOR THE SIX MONTH PERIOD TO 30 JUNE 2017
Phoenix Global Resources plc (AIM: PGR; BCBA: PGR), the independent Argentina-focused oil and gas exploration and production company, announces the unaudited interim results for the six month period ending 30 June 2017 in respect of Trefoil Holdings B.V. ("Trefoil", the "Company" or, together with its subsidiaries, the "Group"). Trefoil represents the Mercuria Oil and Gas Business in Argentina that combined with Andes Energia Plc on 10 August 2017 immediately prior to the enlarged group being renamed Phoenix Global Resources plc. Petrolera El Trebol S.A. ("PETSA") is an Argentina registered company and is the sole operating company of the Trefoil Holdings B.V. Group.
Operational review
Period highlights
-- The Group continued its appraisal work on the Vaca Muerta shale formation in the Puesto Rojas block and made an application to the Province of Mendoza for an unconventional exploitation concession for the area
-- Three wells were drilled during the period in the Puesto Rojas block, two of which also reached Vaca Muerta in addition to the conventional horizons
-- During the period one conventional well (CP1014 ST) was completed in the Puesto Rojas area with initial production of 785 bopd (30 day average) on a working interest basis, from the Chachao formation
-- Two development wells were drilled in the Santa Cruz Sur area
-- Two exploration wells were drilled on the Angostura and Rio Cullen concessions in Tierra del Fuego
-- Average realised oil price of US$49.57 per bbl, a decrease of US$8.27 per bbl or 14% compared to H1 2016 as the de-regulation of the Argentina domestic oil price brings closer parity to international benchmarks
-- Average realised gas price of US$3.87 per mmbtu, an increase of US$1.05 or 37% compared to H1 2016
-- EBITDA of US$15.0 million, a 43.8% reduction compared to H1 2016 as a result of lower oil prices and, as previously indicated, the re-phasing of the development and production programme for Puesto Rojas to 2H 2017 as the Group focused on Vaca Muerta evaluation in H1 2017
-- At the period end net debt was US$16.1 million
Post period highlights
-- On 10 August 2017, the combination with Andes Energia Plc, the AIM-listed Argentina exploration and production company, created a scaled pure play Argentina oil and gas company with significant Vaca Muerta and other unconventional acreage together with access to public markets
-- Five further wells were drilled in the Puesto Rojas area, three of which have appraised unconventional potential. One further well was drilled in the Santa Cruz Sur area. Appraisal and testing of these wells is ongoing
-- The Company recompleted a well at Cerro Del Medio which was previously producing 40 bopd and is producing post recompletion more than 300 bopd, which provides good initial indications of expanding our existing Agrio play with significant development potential, including with horizontal wells, in this prolific horizon.
-- The Company has agreed with its JV partners that it will assume operatorship of the Rio Atuel exploration block from Tecpetrol effective from 1 October 2017. In addition, the Company has agreed to acquire Tecpetrol's 33.34% stake in the area, which will increase the Company's stake to 66.67% and add approximately 82,000 working interest acres
-- Average monthly oil production from the blocks in the Malargüe region has increased to approximately 2,750 working interest bopd during the second half of September compared to an average of 2,326 working interest bopd in H1 2017
-- Average monthly total production, as of 24 September 2017 is 8,751 working interest boepd, of which oil production is 5,371 working interest bopd and gas production is 3,380 working interest boepd
For further information, please contact:
Phoenix Global Resources Anuj Sharma, T: +54 11 5258 plc CEO 7500 Philip Wolfe, T: +44 20 7839 CFO 4974 Stockdale Securities Antonio Bossi T: +44 20 7601 David Coaten 6100 Panmure Gordon Adam James T: +44 20 7886 Atholl Tweedie 2500 Camarco Billy Clegg T: +44 20 3757 Gordon Poole 4980 James Crothers
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas companies, Mr. Javier Vallesi and Mr. Greg Easley have reviewed the information contained in this announcement. Mr. Vallesi, Chief Operating Officer of the Group, is a petroleum engineer with over 22 years of experience in the oil and gas industry and is a member of the Argentinian Institute of Oil and Gas. Mr. Easley, Senior Manager Reservoir and Engineering, is a petroleum engineer with over 10 years of experience in the oil and gas industry, is a licenced Professional Engineer in the State of Texas and is a member of the Society of Petroleum Engineers.
About Phoenix:
Phoenix Global Resources is a London Stock Exchange (AIM: PGR) and Buenos Aires Stock Exchange (BCBA: PGR) listed independent Argentina-focused oil and gas exploration and production company. The Company has over 6.3 million licensed working interest acres in Argentina (of which over 5 million are operated), 61.7 million boe of working interest 2P reserves and average production of approximately 11,300 working interest boepd in 2016. Phoenix has significant exposure to the unconventional opportunity in Argentina through its 400,000 working interest acres of Vaca Muerta potential.
Phoenix's website is www.phoenixglobalresources.com
Chief Executive Officer's Review
NORTH ARGENTINA SEGMENT
Puesto Rojas - Cerro Mollar - Cerro Mollar Oeste - Cerro Mollar Norte
Appraisal activity
In H1 2017 the Company launched a three-well drilling campaign on the Puesto Rojas block. The campaign included two appraisal wells that reached the Vaca Muerta shale formation that lies beneath the existing conventional production horizons in the Puesto Rojas area allowing for further data acquisition for future unconventional appraisal programmes.
While the appraisal and testing of these wells is at an early stage, the initial results from the 2017 drilling campaign has shown that the Vaca Muerta formation is prevalent within the Puesto Rojas area and that it represents a potentially prolific development prospect for the Company.
The drilling activity undertaken to date in the Vaca Muerta formation represents an initial test programme to confirm the overall prospectivity of the formation. Based on the encouraging results of the initial programme and in order to expand the appraisal programme the Company has applied to the Province of Mendoza for an unconventional exploitation concession for the Puesto Rojas block.
The term of the unconventional exploitation concession is 35 years which includes a pilot phase of between three to five years. If successful in its application, the Company plans to expedite and conclude the pilot programme within three years. Following the conclusion of the agreed pilot phase the Company will be able to progress the full development of the unconventional resource in Vaca Muerta.
While the results of the test programme have been encouraging, the Company is unable at this time to determine conclusively the prospectivity of the Vaca Muerta formation on Puesto Rojas and will provide further updates as both the administrative and physical activities continue.
The Vaca Muerta shale formation represents a significant exploration and development opportunity for the Group and the formation has been the subject of significant interest and investment from the international oil and gas community. The Vaca Muerta shale formation has the potential to be a significant asset for Argentina in terms of inward investment, job creation and energy security.
The Company recompleted a well at Cerro Del Medio which was previously producing 40 bopd and is producing post recompletion more than 300 bopd, which provides good initial indications of expanding our existing Agrio play with significant development potential, including with horizontal wells, in this prolific horizon.
Majors including ExxonMobil and Chevron have been active in Vaca Muerta with YPF historically. In 2017 there have been a number of further new joint ventures announced by YPF and others including those by Shell, BP, Total/Pan American Energy, Wintershall, Schlumberger and Statoil.
The level of investments made and activity undertaken further underscores the potential of the Vaca Muerta opportunity.
Development drilling
In the period, the Company has continued the Cerro Pencal development programme commenced in 2013. At 30 June 2017 nine wells were on stream in the Cerro Pencal Field and producing over 2,500 working interest bopd. A number of the wells represent drilling success in new discoveries that are producing with low water cut and relatively high daily production rates.
Cerro Mollar Oeste and Cerro Mollar Norte are small concessions located west of the Cerro Mollar field that are operated by the Company with 100% working interest. The net revenue interest on these areas is 84.32% and 88.0% respectively. Together Cerro Mollar Oeste and Cerro Mollar Norte currently produce a little over 200 bopd of working interest production from six wells, with no gas.
Oil production
Oil production decreased 17% during the period, from 2,808 working interest bopd during the first half of 2016 to 2,326 working interest bopd in the same period in 2017. The production programme for the Puesto Rojas - Cerro Mollar area was rephased to the second half of the year as the priority objective for the Group in H1 2017 was the initial appraisal and evaluation activity on the Vaca Muerta shale formation.
Refugio Tupungato - Mendoza
The Company has operated the Tupungato area since October 2006, holding a 100% working interest that translates to a 80.52% net revenue interest. The area produces primarily crude oil. Oil production remained stable in the period with average daily production in H1 of 2017 of 1,000 working interest bopd to the Company as compared to 1,051 working interst bopd during the equivalent period in 2016. Production is derived from 38 active wells of which 24 are in the Tupungato field and 14 in the Refugio-Tupungato field. Any gas produced from the area is consumed in operations.
SOUTH ARGENTINA SEGMENT
Santa Cruz-Sur
In the year to date three development wells were drilled in Santa Cruz-Sur. Of the three wells, one well was conventionally completed and produced gas in H1 2017 and as of August was producing 1459 gross mcf per day. The remaining two wells are currently undergoing fracture stimulation and are expected to be onstream in H2 2017.
Rio Cullen
The Rio Cullen block is located in Tierra Del Fuego and is also operated by Roch. One exploration well, RC.x-1002, was drilled during the period. The well also targeted the Tobifera and Springhill formations. The well was completed in June 2017 through hydraulic fracture stimulation and as of August 2017 was producing at a rate of 876 mcf per day with minimal water production.
Both the well at Angostura and that at Rio Cullen were drilled as part of the exploration commitments entered under the ten-year extension to the concession agreement.
Production
Production by area is summarised as follows:
H1 2016 H2 2016 H1 2017 --------------------- --------------- --------------------- --------------------- --------------------- Area Oil Gas Oil Gas Oil Gas Operator bbl/day mscf/day bbl/day mscf/day bbl/day mscf/day --------------------- --------------- --------- ---------- --------- ---------- --------- ---------- Atamasqui Roch 2 - 1 - 1 - Angostura PETSA 349 0 351 - 333 - Cajón de las Caballos Roch 158 94 150 39 165 41 Cajón YPF Oriental S.A. _- - - - - - Campo Bremen Roch 61 3,174 63 3,371 60 3,170 Cerro Mollar Norte PETSA 74 - - - 100 - Cerro Mollar Oeste PETSA 102 - 95 - 93 - Chañares Herrados Chañares 306 71 252 54 200 49 Chorillos Roch 592 9,585 574 9,451 534 9,296 Las Violetas Roch 102 3,860 95 3,763 90 3,466 Moy Aike Roch 89 101 73 111 90 128 Océano Roch 29 2,424 33 2,473 31 2,240 Palermo Aike Roch - - - - - - Puesto Pozo Cercado Chañares 121 28 133 24 122 24 Puesto Rojac Cerro-Mollar PETSA 2,631 253 2,407 339 2,133 774 Refugio Tupungato PETSA 1,051 140 1,059 142 1,000 139 Rio Atuel Tecpetrol 24 21 5 3 - - Rio Cullen Roch 5 112 5 109 4 100 Sur Rio Deseado Oeste Roch 8 - 8 - 8 - --------------------- --------------- --------- ---------- --------- ---------- --------- ---------- Totals 5,704 19,863 5,304 19,879 4,964 19,427
Financial review
Six-months ended 30 2017 2016 June US$MM US$MM ------------------------- ------ ------ Revenue 58.0 68.2 Operating (loss)/profit (5.1) 11.6 EBITDA 15.0 27.1 Net cash flows from operating activities 5.5 25.7 -------------------------- ------ ------
Revenue decreased by US$10.2 million to US$58.0 million as compared to the equivalent period in the prior year due to lower oil prices achieved and lower oil production.
The Argentina domestic oil price has declined as the Government continues to allow the regulated domestic price to move towards parity with international benchmark prices. The average price achieved per bbl sold fell from US$57.84 in H1 2016 to US$49.57 in H1 2017. The fall in the domestic price resulted in a decline in revenue of US$8.6 million as compared to H1 2016. In addition, oil sales volumes were lower in H1 2017 than in H1 2016 with 940,394 bbls sold in H1 2017, down 94,631 period on period. The decline in sales volumes resulted in US$4.7 million less revenue in H1 2017 as compared to the same period in the previous year.
Offsetting the decline in oil revenues, the average gas price achieved in the period was $1.05 per mmbtu higher at US$3.87 per mmbtu as compared to US$2.82 in H1 2016. The increase in gas prices period on period resulted in an increase in revenue in H1 2017 of US$3.1 million compared to H1 2016. Gas volumes remained largely consistent period on period.
The Group recorded an operating loss of US$5.1 million in H1 2017 as compared to a gain of US$12.1 million on H2 2016. The decrease in operating profit is due principally to the decline in revenues of US$10.2 million together with the net impairment loss of US$5.7 million related to the relinquishment of the Puesto Pozo Cercado licence area. The gross impairment loss amounted to US$7.9 million representing the net investment in PP&E related to the block. This was offset by a tax credit recognised of US$2.2 million (35%).
EBITDA decreased by US$12.1 million to US$15.0 million compared to H1 2016 and driven primarily by the fall in sales revenue.
The net loss for the Group increased by US$6.8 million from US$0.2 million in H1 2016 to US$7.0 million in H1 2017. This was again driven by the decline in revenues in H1 2017 as compared to the same period in the previous period and the impairment loss of US$7.9 million in the current period offset by a lower tax charge in H1 2017 as compared to H1 2016. The tax charge in H1 2017 was US$8.9 million lower than in H1 2016 due to less revenue earned and the tax credit recognised in 2017 related to the impairment of Puesto Pozo Cercado.
The Group's total assets are consistent period on period, after taking account of both additions and depreciation for the period, at US$249 million at 30 June 2017 compared to US$246 million at 30 June 2016. Property plant and equipment has increased by US$19.7 million reflecting the appraisal work programme undertaken on the Vaca Muerta formation in Puesto Rojas in the period. This is offset by a reduction in the level of trade receivables by US$16.5 million at 30 June 2017 compared to 30 June 2016. The reduction in trade receivables is partly as a result of lower oil prices resulting in lower invoiced revenue and a focus on working capital in the period.
The Group's net assets have increased by US$26.8 million as compared to 30 June 2016 primarily as a result of the issuance of new ordinary shares with an aggregate value of US$30.7 million to Upstream Capital Partners as part of the group restructuring undertaken in contemplation of the combination with Andes Energia Plc (now Phoenix Global Resources plc) that completed on 10 August 2017.
At 30 June 2017 the Group had cash on hand of US$7.1 million. In addition, borrowings were US$24.0 million lower at 30 June 2017 at US$23.2 million compared to US$45.0 million at 30 June 2016, again as a result of corporate restructuring undertaken in contemplation of the combination with Andes Energia Plc.
At the period end net debt, calculated as total financial liabilities less available cash and cash equivalents, was US$16.1 million and is approximately US$27.0 million at the date of this announcement.
Anuj Sharma
Chief Executive Officer
29 September 2017
Unaudited Consolidated Income statement
Note Six months Six months Year to to 30 June to 30 June 31 December 2017 2016 2016 US$'000 US$'000 US$'000 ------------------------- ----- ------------ ------------ ------------- Revenue 2 58,041 68,239 129,264 Government incentives 121 305 713 Cost of sales 3 (47,045) (48,475) (96,233) ------------------------- ----- ------------ ------------ ------------- Gross profit 11,117 20,069 33,744 Selling expenses (2,758) (2,510) (5,452) Administrative expenses (5,582) (5,487) (7,581) Impairment of property, plant 8, and equipment 10 (7,887) - - Exploration expenses 5 (56) (102) (151) Other operating (expense)/income, net 57 99 (326) ------------------------- ----- ------------ ------------ ------------- Operating (Loss)/profit (5,109) 12,069 20,234 Finance income 9 2,134 2,281 Finance costs (1,125) (4,771) (6,284) Other finance results, net (806) 140 1,639 ------------------------- ----- ------------ ------------ ------------- (Loss)/profit before taxation (7,031) 9,572 17,870 Income tax 6 43 (9,453) (13,291) (Loss)/profit for the year (6,988) 119 4,579 (Loss)/profit attributable to: ------------------------- ----- ------------ ------------ ------------- Equity holders of the parent (6,988) 119 4,579 Non-controlling interests - - - ------------------------- ----- ------------ ------------ ------------- (6,988) 119 4,579 ------------------------- ----- ------------ ------------ -------------
The accompanying notes are an integral part of these consolidated interim financial statements.
Unaudited Consolidated Statement of Financial Position
30 June 30 June 31 December 2017 2016 2016 Note US$'000 US$'000 US$'000 ------------------------- ----- --------- -------- ------------ Non-current assets Property, plant and equipment 8 192,981 173,322 186,084 Intangible assets 7,942 9,494 8,610 Trade and other receivables 4,485 4,117 4,750 ------------------------- ----- --------- -------- ------------ Total non-current assets 205,408 186,933 199,444 ------------------------- ----- --------- -------- ------------ Current assets Inventories 9,615 11,955 9,270 Trade and other receivables 26,561 43,615 25,410 Cash and cash equivalents 7,168 3,169 5,243 ------------------------- ----- --------- -------- ------------ Total current assets 43,344 58,739 39,923 ------------------------- ----- --------- -------- ------------ Current liabilities Trade and other payables 32,945 32,623 22,562 Financial liabilities 9 13,094 41,561 43,933 Provisions 375 393 385 ------------------------- ----- --------- -------- ------------ Total current liabilities 46,414 74,577 66,880 ------------------------- ----- --------- -------- ------------ Non-current liabilities Financial liabilities 9 10,150 1,033 1,101 Deferred income tax liabilities 7 34,847 39,324 38,008 Provisions 7,899 8,095 7,834 ------------------------- ----- --------- -------- ------------ Total non-current liabilities 52,896 48,452 46,943 ------------------------- ----- --------- -------- ------------ Net assets 149,442 122,643 125,544 ------------------------- ----- --------- -------- ------------ Capital and reserves Called up share capital 113,718 113,696 113,696 Share premium account 30,675 - - Other reserves 15,753 15,224 15,224 Retained earnings (10,704) (6,277) (3,376) ------------------------- ----- --------- -------- ------------ Equity attributable to the equity holders of the parent 149,442 122,643 125,544 Non-controlling interests - - - ------------------------- ----- --------- -------- ------------ Total equity 149,442 122,643 125,544 ------------------------- ----- --------- -------- ------------
The accompanying notes are an integral part of these consolidated financial statements.
Unaudited Consolidated Statement of Changes in Equity
Attributable to: --------------------- --------- --------- ---------- ---------- --------------------------- -------- Called Share Other Retained Equity Non-controlling Total up premium reserves earnings holders interests equity share account of the capital parent US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- At 1 January 2016 113,696 - 15,224 (7,500) 121,420 1,220 122,640 Profit/(loss) for the period - - - 119 119 - 119 Acquisition of non-controlling interest - - - 764 764 (1,220) (456) [Translation differences] - - 340 340 - 340 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- Total comprehensive profit/(loss) for the period 113,696 - 15,564 (6,617) 122,643 - 122,643 Issue of ordinary shares - - - - - - - At 30 June 2016 113,696 - 15,564 (6,617) 122,643 - 122,643 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- At 1 January 2017 113,696 - 15,564 (3,716) 125,544 - 125,544 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- Profit/(loss) for the period - - - (6,988) (6,988) - (6,988) [Translation differences] - - 166 - 166 - 166 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- Total comprehensive profit/(loss) for the period 113,696 - 15,730 (10,704) 118,722 - 118,722 --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- Transactions with owners: Loan forgiveness - - 31,094 - 31,094 - 31,094 Issue of ordinary shares 22 30,675 (30,697) - - - - --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- Translation differences - - (374) - (374) --------------------- --------- --------- ---------- ---------- --------- ---------------- -------- At 30 June 2017 113,718 30,675 15,753 (10,704) 149,442 - 149,442 --------------------- --------- --------- ---------- ---------- --------- ---------------- --------
The accompanying notes are an integral part of these consolidated financial statements.
Unaudited Consolidated Statement of Cash Flows
Note Six months to 30 June Six months to 30 June 2016 Year to 31 December 2016 2017 US$'000 US$'000 US$'000 --------------------------- ----- -------------------------- --------------------------- ------------------------- Cash generated from operations 10 5,455 26,162 32,646 Net cash flows generated from operating activities 5,455 26,162 32,646 --------------------------- ----- Cash flows from investing activities Purchase of property plant and equipment (11,428) (3,984) (24,977) Proceeds from disposal of working interest - - 18,322 Net cash used in investing activities (11,428) (3,984) (6,555) --------------------------- ----- -------------------------- --------------------------- ------------------------- Cash flows from financing activities Repayment of borrowings (2,948) (21,657) (29,224) Proceeds from borrowings 11,280 4,479 12,430 Interest paid (765) (4,141) (5,989) Acquisition of non-controlling interest - (1,676) (1,676) --------------------------- ----- -------------------------- --------------------------- ------------------------- Net cash generated from/(used in) financing activities 7,567 (22,995) (24,459) --------------------------- ----- -------------------------- --------------------------- ------------------------- Net increase/ (decrease) in cash and cash equivalents 1,594 (817) 1,632 Cash and cash equivalents at the beginning of the period 5,243 4,200 4,200 Finance results, net, on cash and cash equivalents 331 (214) (589) --------------------------- ----- -------------------------- --------------------------- ------------------------- Cash and cash equivalents at the end of the period 7,168 3,169 5,243 --------------------------- ----- -------------------------- --------------------------- -------------------------
The accompanying notes are an integral part of these consolidated financial statements.
Notes to the interim financial information
1. Basis of preparation
This condensed consolidated interim financial information for the six months ended 30 June 2017 has been prepared in accordance with IAS 34, "Interim financial reporting" as adopted by the European Union. The interim financial information has been prepared for Trefoil Holdings B.V., the parent company of the Mercuria Oil and Gas Business in Argentina that was combined with the former Andes Energia Plc on 10 August 2017 by way of a reverse acquisition. Immediately following the combination the enlarged Group was renamed Phoenix Global Resources PLC (AIM: PGR.L) ("Phoenix") and was readmitted to AIM following the approval of the Admission Document. The condensed consolidated interim financial information should be read in conjunction with the historical financial information for the three years ended 31 December 2016 that was prepared in accordance with International Financial Reporting Standards as adopted by the European Union for the purposes of the Admission Document. The historical financial information for the three years ended 31 December 2016 was prepared under the provisions of Standard for Investment Reporting 2000. The historical financial information is included in the AIM Admission Document that was prepared as part of the reverse acquisition of Andes Energia PLC which is available on the website of the enlarged group (www.phoenixglobalresources.com) or from the Phoenix Global Resources plc registered office.
The accounting policies applied in these interim financial statements are consistent with those applied in preparing the historical financial information and included in the Admission Document dated 24 July 2017 with the exception of certain recharges explained within the historical financial information.
The Group's business activities, together with factors likely to affect its future development, performance and position are set out in the operational and financial review sections of this report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial review section.
2. Segment reporting
IFRS 8, "Operating Segments", requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the chief operating decision maker, which in the case of the Trefoil Holdings B.V. is considered to be the Mercuria Energy Group Limited's management, which is located in Geneva, Switzerland. Management considers and reviews operating segments by reference to geographic location. There are two reportable segments, "North Argentina Blocks" and "South Argentina Blocks". Segment performance is evaluated based on geographical operations.
The blocks included in each reportable segment are shown below:
Segment Basin Block Operator Working interest % ----------------- ----------- ------------------ ----------- ---------- North Argentina blocks Cuyana Atamisqui PETSA 100 ----------------- ----------- Tupungato PETSA *100 ----------------- ----------- Chañares Herrados - Puesto Pozo Cercado CH S.A. 28.08 ------------------ ----------------------------------------- ---------- Puesto Rojas - Cerro Neuquina Mollar Oeste PETSA 100 ----------- Cerro Mollar PETSA **100 Norte ----------- Rio Atuel Tecpetrol 33.33 Cajón de los Caballos Roch S.A 37.5 Cajón de los Caballos -Sector Oriental Roch S.A 15 Llancanelo **10 ----------------- ----------- ------------------ ----------- ---------- South Argentina Austral Chorrillos, Roch S.A ***70 blocks Campo Bremen, Moy Aike, Oceano & Palermo Aike ----------------- ----------- Río Cullen - Las Violetas - La Angostura Roch S.A 12.62 ------------------ ----------------------------------------- ---------- Golfo San Sur Río Jorge Deseado Roch S.A. 24.92 ----------- ------------------ ----------------------------- ----------
Petrolera El Trebol S.A. ("PETSA") is an Argentina registered company and is the sole operating Company of the Trefoil Holdings B.V. Group.
(*) Due to agreements in place on the acquisition of the block between the former owners and YPF S.A., the Mercuria Oil and Gas Business assumes an overriding royalty at a maximum of 6% of production on Tupungato, to be paid in oil on a monthly basis to YPF S.A.
(**) On 10 May 2016, the Mercuria Oil and Gas Business agreed with YPF a swap of interests on the blocks Llancanelo and Cerro Mollar Norte, in Mendoza. The Mercuria Oil and Gas Business transferred to YPF its 10% participation in Llancanelo and received their 100% participation of Cerro Mollar Norte.
(***) Due to agreements in place on the acquisition of the working interest in the blocks between the former owners and Burns International Inc., the Mercuria Oil and Gas Business assumes an overriding royalty at 5% of production on Campo Bremen, Moy Aike and Oceano, to be paid in cash on a monthly basis to Burns International Inc.
Below is detailed the information on each business segment considered by the Mercuria Oil and Gas Business' Management:
First half 2017 North South Unallocated/ Total Unaudited Argentina Argentina Corporate Blocks Blocks US$'000 US$'000 US$'000 US$'000 ----------------------------- ----------- ----------- ------------- ----------- Revenue 36,456 21,585 - 58,041 ----------------------------- ----------- ----------- ------------- ----------- Profit/(loss) for the year 3,200 (2,019) (8,169) (6,988) ----------------------------- ----------- ----------- ------------- ----------- Add: Depreciation, depletion and amortisation 7,923 4,312 12 12,247 Add: Impairment of property, plant and equipment 7,887 - - 7,887 Less: Finance income - - (9) (9) Add: Finance costs - - 1,125 1,125 Add: Other finance results (241) 385 661 805 Add: Taxation (2,157) - 2,114 (43) ----------------------------- ----------- ----------- ------------- ----------- EBITDA 16,612 2,678 (4,266) 15,024 ----------------------------- ----------- ----------- ------------- ----------- Oil revenues 36,435 10,185 - 46,620 Bbls sold 745,645 194,749 - 940,394 Realised price US$/bbl 48.86 52.30 - 49.57 Gas revenues 21 11,400 - 11,421 Mm(3) 126,097 79,788,138 - 79,914,235 Realised price US$/mmbtu 4.58 3.87 - 3.87 Capex 22,860 6,928 - 29,788 ----------------------------- ----------- ----------- ------------- ----------- First half 2016 North South Unallocated/ Total Unaudited Argentina Argentina Corporate Blocks Blocks US$'000 US$'000 US$'000 US$'000 ----------------------------- ----------- ----------- ------------- ----------- Revenue 49,966 18,273 - 68,239 ----------------------------- ----------- ----------- ------------- ----------- Profit/(loss) for the year 16,243 5,735 (21,859) 119 ----------------------------- ----------- ----------- ------------- ----------- Add: Depreciation, depletion and amortisation 10,202 4,548 7 14,757 Less: Finance income (1,766) - (370) (2,135) Add: Finance costs 4,771 4,771 Add: Other finance results (2,616) 113 2,643 140 Add: Taxation - - 9,453 9,453 ----------------------------- ----------- ----------- ------------- ----------- EBITDA 22,063 10,396 (5,355) 27,105 ----------------------------- ----------- ----------- ------------- ----------- Oil revenues 49,945 9,922 - 59,867 Bbls sold 875,405 159,621 - 1,035,025 Realised price US$/bbl 57.05 62.16 - 57.84 Gas revenues 21 8,350 - 8,372 Mm(3) 146,848 80,201,479 - 80,348,327 Realised price US$/mmbtu 3.89 2.82 - 2.82 Capex 7,966 2,281 45 10,292 ----------------------------- ----------- ----------- ------------- ----------- 3. Cost of sales Unaudited Note Six Six months Year to months to 30 31 December to 30 June 2016 June 2016 2017 US$'000 US$'000 US$'000 --------------------- ----- -------- ----------- ------------- Opening inventory - crude oil 3,904 2,035 2,035 Production costs 4 44,655 49,180 98,102 Closing inventory - crude oil (1,514) (2,740) (3,904) --------------------- ----- -------- ----------- ------------- Cost of sales 47,045 48,475 96,233 --------------------- ----- -------- ----------- ------------- 4. Production costs Unaudited Six Six months Year to months to 30 31 December to 30 June 2016 June 2016 2017 US$'000 US$'000 US$'000 -------------------------- -------- ----------- ------------- Depreciation, depletion and amortisation 12,247 14,757 26,646 Wages and salaries 2,554 2,251 6,067 Social security charges 443 360 1,068 Other personnel expenses 485 334 792 Materials and supplies 2,734 3,624 6,988 Wells and facilities maintenance 12,468 12,711 26,350 Transportation costs 3,162 3,377 7,178 Royalties 7,799 9,322 18,217 Landowners' easement and canon 1,471 1,211 2,239 Fuel gas and electricity 672 663 1,368 Insurance 427 369 863 Other 193 201 326 --------------------------- -------- ----------- ------------- Production costs 44,655 49,180 98,102 --------------------------- -------- ----------- ------------- 5. Exploration expenses Unaudited Six months Six months Year to to 30 to 30 31 December June June 2016 2017 2016 US$'000 US$'000 US$'000 ---------------------------- ----------- ----------- ------------- Geological and geophysical expenses 56 102 151 Exploration expenses 56 102 151 ----------------------------- ----------- ----------- ------------- 6. Income tax Unaudited Six Six months Year to months to 30 31 December to 30 June 2016 June 2016 2017 US$'000 US$'000 US$'000 ----------------------------------- -------- ----------- ------------- Current tax expense 3,165 661 5,816 Deferred tax expense (3,208) 8,792 7,475 ------------------------------------ -------- ----------- ------------- Total income tax (Credit)/expense (43) 9,453 13,291 ------------------------------------ -------- ----------- ------------- (Loss)/profit on ordinary activities before tax (7,031) 9,572 17,870 Income tax calculated at statutory rate (Argentina, 35%) 2,461 (3,350) (6,255) --------------------------------- -------- -------- --------- Currency translation on the tax values for property plant and equipment (2,563) (3,409) (5,877) Currency translation on the tax values for other assets and liabilities - 505 778 Exchange differences - functional currency (195) 109 278 Exchange differences - local currency 484 (2,346) 311 Expiration of tax loss carry-forward - - - Non-deductible expenses (234) (860) (1,207) Permanent differences (11) (13) - Deferred tax assets not recognised (268) (358) (672) Fiscal assessments 158 577 - Others 211 (308) (647) --------------------------------- -------- -------- --------- Total income tax expense 43 (9,453) (13,291) --------------------------------- -------- -------- --------- 7. Deferred tax Unaudited 30 June 30 June 31 December 2017 2016 2016 US$'000 US$'000 US$'000
------------------------------ --------- --------- ------------ Deferred tax asset Losses carried forward - - - Inventories 327 36 1,352 Other 220 - - ------------------------------ --------- --------- ------------ Total deferred tax asset 547 36 1,352 ------------------------------- --------- --------- ------------ Deferred tax liability Property, plant and equipment (31,949) (35,430) (35,372) Fiscal assessments (3,400) (3,759) (3,558) Other (46) (170) (230) ------------------------------- --------- --------- ------------ Total deferred tax liability (35,395) (39,359) (39,360) ------------------------------- --------- --------- ------------ Net deferred tax liability (34,848) (39,323) (38,008) ------------------------------- --------- --------- ------------
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that it is probable that the tax loss carry-forward can be used to offset current taxes payable in the future.
8. Property, plant and equipment Unaudited Producing Work Exploration Fixtures, Total and development in progress and evaluation fittings, assets assets equipment and vehicles US$'000 US$'000 US$'000 US$'000 US$'000 ------------------ ----------------- ------------- ---------------- -------------- ---------- Cost At 1 January 2017 369,143 18,057 6,804 4,420 398,424 Additions - 29,777 - 12 29,788 Transfers 18,578 (18,800) - 222 - Disposals (24,897) (3,425) - - (28,321) ------------------ ----------------- ------------- ---------------- -------------- ---------- At 30 June 2017 362,824 25,609 6,804 4,654 399,891 Accumulated depreciation At 1 January 2017 (207,984) - - (4,356) (212,340) On disposals 17,010 - - - 17,010 Charge for the period (11,510) - - (68) (11,579) ------------------ ----------------- ------------- ---------------- -------------- ---------- At 30 June 2017 (202,484) - - (4,424) (206,908) ------------------ ----------------- ------------- ---------------- -------------- ---------- Net book value at 30 June 2017 160,338 25,610 6,804 230 (192,981) ------------------ ----------------- ------------- ---------------- -------------- ---------- Unaudited Producing Work Exploration Fixtures, Total and development in progress and evaluation fittings, assets assets equipment and vehicles US$'000 US$'000 US$'000 US$'000 US$'000 ------------------ ----------------- ------------- ---------------- -------------- ---------- Cost At 1 January 2016 349,269 13,065 3,334 4,402 370,070 Additions 4,124 6,129 - 39 10,292 Transfers 661 (661) - - - Disposals (5,938) - - - (5,938) ------------------ ----------------- ------------- ---------------- -------------- ---------- At 30 June 2016 348,116 18,533 3,334 4,441 374,424 ------------------ ----------------- ------------- ---------------- -------------- ---------- Accumulated depreciation At 1 January 2016 (186,484) - - (4,123) (190,607) On disposals 1,804 - - - 1,804 Charge for the period (12,203) - - (96) (12,299) ------------------ ----------------- ------------- ---------------- -------------- ---------- At 30 June 2016 (196,883) - - (4,219) (201,102) ------------------ ----------------- ------------- ---------------- -------------- ---------- Net book value at 30 June 2016 151,233 18,533 3,334 222 173,322 ------------------ ----------------- ------------- ---------------- -------------- ---------- 9. Financial liabilities Unaudited 30 June 30 June 31 December 2017 2016 2016 US$'000 US$'000 US$'000 ------------------------- -------- -------- ------------ Financial liabilities 10,150 1,033 1,101 -------------------------- -------- -------- ------------ Non-current liabilities 10,150 1,033 1,101 -------------------------- -------- -------- ------------ Financial liabilities 12,952 40,593 12,099 Accrued interest 142 968 120 -------------------------- -------- -------- ------------ Current liabilities 13,094 41,561 12,219 -------------------------- -------- -------- ------------
During the first half of 2017, financial liabilities include bank loans denominated in Argentina Pesos and repayable in accordance with the maturity profile summarised below at (i) fixed rates within a range of 15.25 percent to 25 percent, and (ii) variable rates within 'Badlar corregida' plus 2 per cent. Financial liabilities also include bank loans denominated in US Dollar, at fixed rates within a range of 2.5 per cent to 4.25 per cent. Approximately 53 per cent of these loans were collateralised by Stand-by Letters Issued by European banks on behalf of the Mercuria Group.
During the first half of 2016, financial liabilities include bank loans denominated in Argentina Pesos and repayable in accordance with the maturity profile summarised below at (i) fixed rates within a range of 15.25 percent to 39 percent, and (ii) variable rates within a range of 'Badlar corregida' plus 1.5 and 5.75 per cent. Financial liabilities also include bank loans denominated in US Dollar, at fixed rates at 4.25 per cent. Approximately 62 per cent of these loans were collateralised by Stand-by Letters Issued by European banks on behalf of the Mercuria Group
Unaudited 30 June 30 June 31 December 2017 2016 2016 US$'000 US$'000 US$'000 -------------- -------- -------- ------------ Maturity profile Within 1 year 13,094 41,561 12,970 Between 1 and 5 years 10,555 3,810 1,182 --------------- -------- -------- ------------ 23,649 45,371 14,152 Future interest charges (405) (2,777) (832) --------------- -------- -------- ------------ Financial liabilities 23,244 42,594 13,320 --------------- -------- -------- ------------
10. Cash generated from operations
Note Six months to 30 June Six months to 30 June Year to 31 December 2016 2017 2016 --------------------------- ------ -------------------------- -------------------------- ------------------------- (Loss)/profit for the year (6,988) 119 4,579 Adjustments for: Income tax charge (43) 9,453 13,291 Interest income (9) (2,134) (2,281) Interest expense 1,126 4,771 6,284 Accretion of discount on asset retirement obligations 274 241 493 Exchange differences 375 333 (783) Impaired receivables - - 689 Depreciation, depletion and amortisation 12,247 14,757 26,879 Disposal of property, plant and equipment - - 170 Amounts written off property, plant and equipment 7,887 - - Working capital adjustments: (Increase)/decrease in trade and
other receivables (6,298) (4,000) (7,409) (Increase)/decrease in inventory (344) (2,381) 301 (Decrease)/increase in trade and other payables (2,552) 10,604 2,179 (Decrease)/increase in provisions (220) (1,103) (1,816) Income tax paid - (4,498) (9,930) ----------------------------------- -------------------------- -------------------------- ------------------------- Net cash flow from operations 5,455 26,162 32,646 ----------------------------------- -------------------------- -------------------------- -------------------------
11. Events after the balance sheet date
Combination with the former Andes Energia Plc
On 10 August 2017 Andes Energia plc ("Andes") announced the completion of the combination with the Company. The combination was effected through the acquisition of the entire issued share capital of the Company in consideration for the issue of 1,899,106,385 consideration ordinary shares to the former shareholders of the Company by Andes. Immediately following the combination the enlarged Group was renamed Phoenix Global Resources plc (AIM: PGR.L; BCBS: PGR)) ("Phoenix") and was readmitted to AIM following the approval of the Admission Document. The Admission document that discusses the organisation of the enlarged Group and its activities in Argentina can be found on the Company's website (www.phoenixglobalresources.com).
The consideration Shares issued to Upstream Capital Partners represented 75.38% of the enlarged share capital on completion with the Andes shareholders holding 24.62%. The resulting ownership of Mercuria EG in the enlarged group on completion was approximately 78%.
Chañares Herrados and Puesto Pozo Cercado
On 21 August Phoenix Global Resources announced that it had been informed that Chañares Herrados S.A. ('CHSA'), the concessionaire and operator of the Chañares Herrados ("CH") and Puesto Pozo Cercado ("PPC") blocks, had presented to the Director of Hydrocarbons a new exploitation plan for the areas. CHSA was subsequently notified by the Province of Mendoza of its acceptance of the new plan.
Pursuant to this plan CHSA and the joint venture partners will relinquish 100% of the PPC block, which has production of approximately gross 423 bopd (net to Phoenix 331 bopd) and covers approximately 42,000 gross acres, and implement a work programme in the CH block with a gross investment commitment of approximately US$94 million over a four year period.
Phoenix's level of participation in the new work programme for the CH block, if any, has not yet been agreed with the operator.
Glossary
Bbl Barrel boepd Barrels of oil equivalent per day bopd Barrels of oil per day Mm(3) Thousand cubic metres mmbtu Million British Thermal Units mmscf Million standard square feet PETSA Petrolera Es Trebol S.A.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EANNPASEXEFF
(END) Dow Jones Newswires
September 29, 2017 02:03 ET (06:03 GMT)
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