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Replacement - Andes Interim Report

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By LSE RNS

RNS Number : 2200S
Phoenix Global Resources PLC
29 September 2017
 

 

 

This announcement replaces the announcement at 7.01 a.m. today issued under RNS 1705S. The EBITDA in the "Period Highlights" has been corrected as negative US$0.4 million as opposed to positive US$2.4 million as previously stated. The full text of the correct announcement is set out below.

 

 

Phoenix Global Resources plc

("Phoenix" or the "Company" or with its subsidiaries the "Group")

 

UNAUDITED INTERIM RESULTS FOR "ANDES"

FOR THE PERIOD TO 30 JUNE 2017

 

Phoenix (AIM: PGR; BCBA: PGR), the independent Argentina-focused oil and gas exploration and production company, announces its unaudited interim results for Andes Energia plc ("Andes") for the six month period ending 30 June 2017 prior to the combination with Trefoil Holdings B.V..

 

Operational review

 

Period highlights

 

·           Average oil production during the period of 2,369 bpd in Argentina; average net price of approximately US$51.95/bbl

·           Average oil production during the period of 583 bpd in Colombia; average net price of approximately US$49.36/bbl

·           Average gas production during the period of 383 boepd in Colombia; average net price of US$2.90/mbtu

·           41 development wells drilled on the Chachahuén licence in Argentina, in partnership with YPF, all successfully brought into production

·           An oil discovery was made in the exploration well Vikingo-1 in LLA-47 in Colombia in the sandstone of the Carbonera C5 formation

·           Commenced a workover campaign on the La Paloma and Cerro Alquitrán blocks to extend the working life of the assets

·           Further to changes in the corporate structure through which the Company holds its 26.01% interest in Interoil Exploration & Production ASA ("Interoil") and changes in the composition of the board and senior management, with effect from 8 June 2017 Interoil has no longer been consolidated in the results of the Group

·           Negative EBITDA* of US$ 0.4 million compared to positive US$7.7 million for the comparable period last year

·           At the period end the net debt position was US$76.4 million

 

Post period highlights

 

·           The Vega Grande exploitation licence has been extended for a further period of one year commencing on the 28 July 2017

·           The workover performed in LP5 well on La Paloma license was successful with the well self-flowing at more than 120 bopd from Hutrin formation, while the Company continues to evaluate the main target in Grupo Neuquén

·           A second exploratory period of one year has been awarded for the Laguna El Loro licence

·           On 10 August the Company completed the combination with Trefoil Holdings B.V., the holding company that indirectly owns over 99.99% of Petrolera El Trébol S.A. ("PETSA"), the operating company for the oil and gas exploration and production business of Mercuria Energy Group Limited ("Mercuria EG") in Argentina and changed its name to Phoenix Global Resources plc

·           On completion the Company drew down US$87 million of a new US$160 million bridging and working capital facility from Mecuria Energy Trading S.A. and has since repaid all Company loans outstanding at the date of completion

·           Proposed demerger of Colombian interests held through the Company's holding in Interoil and the Board intends to convene another general meeting in due course to propose new resolutions to effect the demerger

·           Pursuant to the acceptance by the Province of a new exploitation plan presented by the operator of the Chañares Herrados ("CH") and Puesto Pozo Cercado ("PPC") blocks in Mendoza in which the Group has a 78% interest, the joint venture partners will relinquish 100% of the PPC block

·           The Company drew down US$45 million of the remaining US$73 million of the US$160 million bridging and working capital facility provided by Mercuria Energy Trading S.A.

 

*Before gain of US$13.6 million recognised on the deconsolidation of Interoil

 

Enquiries:

 

Phoenix Global Resources plc

Anuj Sharma, CEO

Philip Wolfe, CFO

T: +54 11 5258 7500

T: +44 (0) 207 839 4974

 

Stockdale Securities

 

Antonio Bossi

David Coaten

 

T: +44 (0) 207 601 6100

 

Panmure Gordon

 

Adam James

Atholl Tweedie

 

T: +44 (0) 207 886 2500

 

Camarco

 

Billy Clegg

Gordon Poole

James Crothers

 

T: +44 (0) 203 757 4980

 

Qualified Person Review



Chief Executive Officer's Review

 

Introduction

Oil and Gas Interests

Argentina

Chachahuén

 

Development drilling

 

Enhanced Oil Recovery -Water Flood project

Oil production

 

Exploratory activity

 

 

Puesto Pozo Cercado and Chañares Herrados blocks - Mendoza

Vega Grande - Mendoza

 

La Brea (Puesto Muñoz) - Mendoza

 

El Manzano West (Agrio formation) - Mendoza

La Paloma & Cerro Alquitran - Mendoza

 

 
Colombia

 

Financial Review

 

Period ended 30 June

2017

2016


US$MM

US$MM

29.9

34.2

1.2

1.5

(0.4)

7.7

2.4

13.6

* Before gain of US$13.6 million recognised in other income on the deconsolidation of the Company's interest in Interoil

 

Events after the balance sheet date

On 28 July 2017 the Vega Grande exploitation licence was extended for a further period of one year commencing on 28 July 2017. The licence has been renewed subject to a work programme which includes reprocessing of 150 km of 2D seismic line, geochemical survey of 700 samples and a workover in the VGa-6 well. During the remainder of this year we expect to be able to reach agreement to extend the licence for a 10 year period include the extension of 1 year already granted.

 

The workover performed in the La Paloma 5 well on the La Paloma licence was successful with the well self-flowing at more than 120 boepd from the Huitrin formation. The Company continues to evaluate the main target, Grupo Neuquén and is in the process of installing production on a field that previously was not producing.

 

On 12 July 2017 a second exploratory period of one year was granted in Laguna El Loro with commitments to reprocess existing 3D and 2D seismic (553 km and 185 km respectively), conduct a geochemical survey of 4,500 samples and drill a well targeting unconventional horizons.

 

On 10 August 2017 the Company announced the completion of its combination with Trefoil Holdings, the holding company that indirectly owns over 99.99% of PETSA, the operating company for the oil and gas exploration and production business of Mercuria in Argentina. The combination was effected through the acquisition of the entire issued share capital of Trefoil Holdings in consideration for the issue of 1,899,106,385 consideration ordinary shares. The consideration shares issued to Upstream Capital represented 75.38% of the enlarged share capital on completion with existing Andes shareholders holding 24.62%. The resulting ownership of Mercuria EG in the enlarged group on completion was approximately 78%. A copy of the admission document can be found on the Company's website.

 

The Board believes that it is in the interests of the Company's shareholders for the Company to focus on oil and gas exploration and production in Argentina only. Outside of Argentina, the Company has interests in Colombia, through its interest in the Interoil shares and interests in certain licences in the Llanos Basin and the Valle Magdalena Medio Basin. In line with this strategy, the Board is in the process of demerging the Interoil shares, which are currently held by the Company's wholly-owned subsidiary, Andes Interoil Limited ("AIL"), to be effected by way of a transfer of shares to US shareholders and a distribution in specie to non US shareholders on record pre- completion. Further to the announcement of 5 September 2017, the Board intends to convene another general meeting in due course to propose new resolutions to effect the demerger.

 

On 22 August 2017 the Company drew down US$45 million of the remaining US$73 million of the US$160 million bridging and working capital facility provided by Mercuria Energy Trading S.A..

 

29 September 2017



Unaudited Group income statement for the period ended 30 June 2017

 


30-Jun-17

30-Jun-16

31 -Dec-16


 US$'000

 US$'000

 US$'000

Revenue

29,934

34,195

67,768

Production cost

(26,023)

(26,008)

(50,945)

Gross profit

3,911

8,187

16,823

Exploration cost

(1,034)

-

(2,317)

Other operating income

13,738

347

1,491

Impairment charge

(2,591)

-

(7,065)

Distribution costs

(1,499)

(1,310)

(3,471)

Administrative expenses

(11,333)

(5,770)

(12,961)

Operating profit/(loss)

1,192

1,454

(7,500)

Finance income

5,479

*2,496

6,887

Finance costs

(10,883)

*(13,486)

(27,803)

Loss before taxation

(4,212)

(9,536)

(28,416)

Taxation

927

331

2,140

Loss for the year

(3,285)

(9,205)

(26,276)





Loss attributable to:




Equity holders of the parent

(1,435)

(8,878)

(22,766)

Non-controlling interests

(1,850)

(327)

(3,510)


(3,285)

(9,205)

(26,276)





Loss per ordinary share

 Cents

 Cents

 Cents

Basic and diluted loss per share

(0.24)

(1.47)

(3.76)

*After reclassification of exchange gains/losses

 

The accompanying notes are an integral part of these financial statements.

 



Unaudited consolidated statement of comprehensive income for the period ended 30 June 2017

 


30-Jun-17

30-Jun-16

31-Dec-16


US$'000

US$'000

US$'000

Loss for the year

(3,285)

(9,205)

(26,276)

Translation differences

(6,122)

(10,570)

(12,567)

Total comprehensive loss for the year

(9,407)

(19,775)

(38,843)





Total comprehensive loss attributable to:




Equity holders of the parent

(7,557)

(19,448)

(35,333)

Non-controlling interests

(1,850)

(327)

(3,510)


(9,407)

(19,775)

(38,843)

 

The loss on exchange results primarily from the revaluation of intangible assets and property, plant and equipment that are carried in Argentine pesos. This resulted in a drop in the carrying value of these intangible assets and property, plant and equipment but is not indicative of an impairment in value.

 

The accompanying notes are an integral part of these financial statements.

Unaudited consolidated statement of financial position as at 30 June 2017

 


30-Jun-17

30-Jun-16

31 -Dec-16


 US$'000

US$'000

US$'000

Non-current assets




Intangible assets

91,831

96,112

94,829

Property, plant and equipment

49,956

92,595

82,474

Available for sale financial assets

5,614

5,604

5,655

Trade and other receivables

14,542

9,828

8,945

Deferred income tax assets

4,099

1,111

3,072

Total non-current assets

166,042

205,250

194,975





Current assets




Inventories

405

1,113

945

Investments in associates

12,672

-

-

Available for sale financial assets

2,619

1,223

2,316

Trade and other receivables

10,095

16,583

16,837

Restricted cash

5,442

9,087

9,070

Cash and cash equivalents

5,090

10,030

12,630

Total current assets

36,323

38,036

41,798





Current liabilities




Trade and other payables

45,288

30,990

37,757

Financial liabilities

38,199

18,373

27,157

Provisions

409

691

409

Total current liabilities

83,896

50,054

65,323





Non-current liabilities




Trade and other payables

11,968

17,123

16,092

Financial liabilities

43,322

77,534

78,840

Deferred income tax liabilities

22,512

31,099

27,782

Provisions

2,555

3,888

4,076

Total non-current liabilities

80,357

129,644

126,790





Net assets

38,112

63,588

44,660





Capital and reserves




Called up share capital

98,421

98,414

98,414

Share premium account

52,478

52,467

52,467

Other reserves

(110,714)

(102,595)

(104,592)

Retained earnings

(2,073)

12,962

(786)

Equity attributable to equity holders of the parent

38,112

61,248

45,503

Non-controlling interests

-

2,340

(843)

Total equity

38,112

63,588

44,660

 

Non current available for sale financial assets include time deposits of US$5.6 million that are charged as security for stand by letters of credit relating to licences held by the Company in Colombia.

 

The accompanying notes are an integral part of these financial statements.



Unaudited consolidated statement of changes in equity for the period ended 30 June 2017

 

Equity

Share

*Share

Retained

Other

Attributable

Non

Total


capital

premium

earnings

reserves

to equity holders

controlling







of the parent

interests



US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

At 1 January 2016

98,414

52,467

21,685

(92,025)

80,541

2,667

83,208

Loss for the period

-

-

(8,878)

-

(8,878)

(327)

(9,205)

Translation differences

-

-

-

(10,570)

(10,570)

-

(10,570)

Total comprehensive loss for the period

-

-

(8,878)

(10,570)

(19,448)

(327)

(19,775)

Fair value of share based payments

-

-

155

-

155

-

155

At 30 June 2016

98,414

52,467

12,962

(102,595)

61,248

2,340

63,588

Loss for the period

-

-

(13,888)

-

(13,888)

(3,183)

(17,071)

Translation differences

-

-

-

(1,997)

(1,997)

-

(1,997)

Total comprehensive loss for the period

-

-

(13,888)

(1,997)

(15,885)

(3,183)

(19,068)

Fair value of share based payments

-

-

140

-

140

-

140

At 31 December 2016

98,414

52,467

(786)

(104,592)

45,503

(843)

44,660

Loss for the period

-

-

(1,435)

-

(1,435)

(1,850)

(3,285)

Translation differences

-

-

-

(6,122)

(6,122)

-

(6,122)

Total comprehensive loss for the period

-

-

(1,435)

(6,122)

(7,557)

(1,850)

(9,407)

Issue of ordinary shares

7

11

-

-

18

-

18

Fair value of share based payments

-

-

148

-

148

-

148

Deconsolidation of subsidiary

-

-

-

-

-

2,693

2,693

At 30 June 2017

98,421

52,478

(2,073)

(110,714)

38,112

-

38,112

























Other reserves


*Merger

Warrant

Reverse

Translation

Deferred

Total



reserve

reserve

acquisition

reserve

consideration

other





reserve


reserve

reserves



US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

At 1 January 2016


89,885

2,105

-

(190,041)

6,026

(92,025)

Translation differences


-

-

-

(10,570)

-

(10,570)

Total comprehensive loss for the period


-

-

-

(10,570)

-

(10,570)

At 30 June 2016


89,885

2,105

-

(200,611)

6,026

(102,595)

Translation differences


-

-

-

(1,997)

-

(1,997)

Total comprehensive loss for the period


-

-

-

(1,997)

-

(1,997)

At 31 December 2016


89,885

2,105

-

(202,608)

6,026

(104,592)

Translation differences


-

-

-

(6,122)

-

(6,122)

Total comprehensive loss for the period


-

-

-

(6,122)

-

(6,122)

At 30 June 2017


89,885

2,105

-

(208,730)

6,026

(110,714)

 

* After restatement

 

The accompanying notes are an integral part of these financial statements.

 



Unaudited consolidated cash flow statement for the period ended 30 June 2017

 


30-Jun-17

30-Jun-16

30-Dec-16


US$'000

US$'000

US$'000

Cash generated from operations (see note 15)

2,427

13,941

25,761

Tax paid

-

(380)

(705)

Net cash flows generated from operating activities

2,427

13,561

25,056

Cash flows from investing activities




Purchase of property, plant and equipment (see note 9)

(13,547)

(11,852)

(20,374)

Proceeds from sale of property, plant and equipment

-

6

-

Purchase of exploration assets (see note 8)

(1,880)

(846)

(7,739)

Purchase of financial assets

(615)

(738)

(1,178)

Net cash used in investing activities

(16,042)

(13,430)

(29,291)





Cash flows from financing activities




Repayments of borrowings

(8,897)

(14,250)

(18,967)

Funds from borrowings

19,509

7,588

21,013

Interest paid

(624)

(872)

(1,673)

Interest received

44

1

204

Proceeds from issue of shares

18

-

-

Net cash generated from/(used in) financing activities

10,050

(7,533)

577





Exchange gains/(losses) on cash and cash equivalents

558

(777)

(1,937)





Net decrease in cash and cash equivalents

(3,007)

(8,179)

(5,595)

Deconsolidation of subsidiary

(8,161)

-

-

Cash and cash equivalents at the beginning of the period

21,700

27,296

27,295

Cash and cash equivalents at the end of the period

10,532

19,117

21,700

 

The accompanying notes are an integral part of these financial statements.

 

 

 

 



Notes

 

1.        Basis of preparation

 

The Group consolidates the financial statements of the Company and its subsidiary undertakings. The consolidated interim financial information for the 6 months ended 30 June 2017 has been prepared in accordance with IAS 34, "Interim financial reporting" as adopted by the European Union. The financial information has been prepared under the historical cost convention in accordance with International Financial Reporting Standards (IFRSs).

 

The financial information set out in this half-yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The same accounting policies, presentation and methods of computation are followed in this unaudited interim condensed consolidated report as were applied in the Group's annual financial statements for the year ended 31 December 2016. The auditors' report on those financial statements was unqualified and did not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006. The Group's annual financial statements for the year ended 31 December 2016 have been filed at Companies House.

 

2.        Going concern

 

The directors consider that the Company and Group has sufficient resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis of accounting in preparing the financial statements.

 

3.        Segment reporting

 



2017





2018




Argentina

Colombia

Unallocated

Total


Argentina

Colombia

Unallocated

Total

Analysis of revenue and profit:



Corporate





Corporate



US$'000

US$'000

US$'000

US$'000


US$'000

US$'000

US$'000

US$'000

Revenue

23,780

6,154

-

29,934


26,268

7,927

-

34,195











Operating profit/(loss)

8,204

(618)

(6,394)

1,192


2,430

554

(1,530)

1,454

Finance income

1,396

178

3,905

5,479


2,276

-

220

2,496

Finance costs

(5,579)

(613)

(4,691)

(10,883)


(4,352)

(586)

(8,548)

(13,486)

Loss before tax

4,021

(1,053)

(7,180)

(4,212)


354

(32)

(9,858)

(9,536)

Taxation

1,534

(607)

-

927


(1,339)

1,670

-

331

Loss for the year

5,555

(1,660)

(7,180)

(3,285)


(985)

1,638

(9,858)

(9,205)

Add: Depreciation and amortisation

6,459

2,990

-

9,449


3,655

2,611

-

6,266

Add: Impairment charges

2,591

-

-

2,591


-

-

-

-

Less: Finance income

(1,396)

(178)

(3,905)

(5,479)


(2,276)

-

(220)

(2,496)

Add: Finance costs

5,579

613

4,691

10,883


4,352

586

8,548

13,486

Add: Tax

(1,534)

607

-

(927)


1,339

(1,670)

-

(331)

EBITDA

17,254

2,372

(6,394)

13,232


6,085

3,165

(1,530)

7,720





















Non-current assets










Intangible assets

90,733

1,098

-

91,831


96,112

-

-

96,112

Property, plant and equipment

49,956

-

-

49,956


54,795

37,800

-

92,595

Available for sale financial assets

5,614

-

-

5,614


5,604

-

-

5,604

Trade and other receivables

14,542

-

-

14,542


9,828

-

-

9,828

Deferred income tax assets

4,099

-

-

4,099


831

280

-

1,111

Total non-current assets

164,944

1,098

-

166,042


167,170

38,080

-

205,250





















Current assets










Inventories

405

-

-

405


507

606

-

1,113

Investments in associates

-

-

12,672

12,672


-

-

-

-

Available for sale financial assets

2,513

-

106

2,619


1,129

-

94

1,223

Trade and other receivables

2,248

305

7,542

10,095


9,107

3,657

3,819

16,583

Restricted cash

-

-

5,442

5,442


-

3,628

5,459

9,087

Cash and cash equivalents

84

60

4,946

5,090


73

9,852

105

10,030

Total current assets

5,250

365

30,708

36,323


10,816

17,743

9,477

38,036





















Current liabilities










Trade and other payables

(40,549)

(933)

(3,806)

(45,288)


(26,707)

(2,913)

(1,370)

(30,990)

Financial liabilities

(12,453)

-

(25,746)

(38,199)


(2,784)

(8,236)

(7,353)

(18,373)

Provisions

(409)

-

-

(409)


-

(691)

-

(691)

Total current liabilities

(53,411)

(933)

(29,552)

(83,896)


(29,491)

(11,840)

(8,723)

(50,054)





















Non-current liabilities










Trade and other payables

(10,559)

-

(1,409)

(11,968)


(15,471)

(242)

(1,410)

(17,123)

Financial liabilities

-

-

(43,322)

(43,322)


(5,097)

(33,501)

(38,936)

(77,534)

Deferred income tax liabilities

(22,512)

-

-

(22,512)


(27,147)

(3,952)

-

(31,099)

Provisions

(2,555)

-

-

(2,555)


(2,393)

(1,495)

-

(3,888)

Total non-current liabilities

(35,626)

-

(44,731)

(80,357)


(50,108)

(39,190)

(40,346)

(129,644)





















Net Assets

81,157

530

(43,575)

38,112


98,387

4,793

(39,592)

63,588

 

The income statement includes the results of Interoil for the period up to 8 June 2017.

 

4.        Interoil

 

In May, the Company announced a restructure of its holding AIL, which holds a 51% interest in Interoil. The Company has a 51% interest in AIL and Canacol Energy Ltd "Canacol") the remaining 49%. Further to an agreement with Canacol, Canacol transferred all its shares in AIL to the Company in exchange for the Company transferring to Canacol 16,172,052 shares in Interoil currently held through AIL. Following these transactions, the Company's economic interest in Interoil will remain unchanged at 26.01% of the total share capital and votes of Interoil held through its wholly owned subsidiary AIL. Furthermore, on 8 June 2017 following changes to the composition of the board and senior management of Interoil, it has been determined that the Company will no longer be deemed to control Interoil. Therefore, with effect from 8 June 2017, Interoil is no longer fully consolidated and with effect from this date Andes's 26% share of the results and net assets of Interoil is equity accounted, in the consolidated results of the Group. The effect of this deconsolidation resulted in gain of US$13.6 million being recognised in the income statement of the period.

 

5.        Finance costs

 

Only US$0.6 million of the finance costs were paid in cash during the period (2016: US$0.3 million). The other finance costs were not due to be paid and relate primarily to convertible loans.

 

6.        Taxation

 


30-Jun-17

30-Jun-16

31 -Dec-16


US$'000

US$'000

US$'000





Current tax

(1,120)

(2,309)

(4,548)

Deferred taxation

2,047

2,640

6,688

Tax credit

927

331

2,140




Loss on ordinary activities before tax

(4,212)

(9,536)

(28,416)





Tax credit on loss at standard rate of 35%

1,475

3,337

9,946





Effects of:








Expenses not deductible for tax purposes

(2,052)

(1,569)

(4,934)

Effect of items not taxable

4,568

27

28

Temporary differences due to the effect of exchange rate movements

(235)

2,399

3,031

Tax losses for which no deferred tax asset is recognised

(2,829)

(3,863)

(5,931)

Current tax credit

927

331

2,140

 

7.        Loss per share

 

Basic earnings/(loss) per share is calculated by dividing the net loss for the period attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. The basic and diluted earnings/(loss) per share are the same as there are no instruments that have a dilutive effect on earnings. Adjusted basic and diluted earnings/(loss) per share are presented after adjustment of exceptional items.

 


30-Jun-17

30-Jun-16

31 -Dec-16


Cents

Cents

Cents





Basic and diluted loss per share

(0.24)

(1.47)

(3.76)

Adjusted basic and diluted loss per share

(0.23)

(1.47)

(3.76)










US$'000

US$'000

US$'000

Loss for the year attributable to equity holders

(1,435)

(8,878)

(22,766)










No.'000

No.'000

No.'000

Weighted average number of shares

605,520

605,505

605,505

Effect of dilutive warrants

7,645

-

-

Diluted weighted average number of shares

613,615

605,505

605,505










No.'000

No.'000

No.'000

Potential number of dilutive warrants

59,186

59,240

59,240

 

8.        Intangible assets

 

GROUP


Goodwill

Exploration

Total








US$'000

US$'000

US$'000

Cost





At 1 January 2016


20,732

103,318

124,050

Additions


-

846

846

Foreign exchange movements


(2,626)

(13,117)

(15,743)

At 30 June 2016


18,106

91,047

109,153

Additions


-

6,893

6,893

Exploration costs charged to income statement


-

(1,718)

(1,718)

Foreign exchange movements


(1,025)

(5,598)

(6,623)

At 31 December 2016


17,081

90,624

107,705

Additions


-

1,880

1,880

Disposals


-

(631)

(631)

Foreign exchange movements


(720)

(3,895)

(4,615)

At 30 June 2017


16,361

87,978

104,339











Accumulated amortisation and impairment





At 1 January 2016


-

(14,792)

(14,792)

Charge for the period


-

(129)

(129)

Foreign exchange movements


-

1,880

1,880

At 30 June 2016


-

(13,041)

(13,041)

Impairment


-

(578)

(578)

Charge for the period


-

(130)

(130)

Foreign exchange movements


-

873

873

At 31 December 2016


-

(12,876)

(12,876)

Charge for the period


-

(239)

(239)

Foreign exchange movements


-

607

607

At 30 June 2017


-

(12,508)

(12,508)











Net Book Value





At 30 June 2017


16,361

75,470

91,831






At 31 December 2016


17,081

77,748

94,829






At 30 June 2016


18,106

78,006

96,112

 

9.        Property, plant and equipment

 

GROUP

Buildings

Machinery

Oil

Work in

Total


and land

and

Production

progress and




equipment


other assets



US$'000

US$'000

US$'000

US$'000

US$'000

Cost






At 1 January 2016

469

2,299

198,926

980

202,674

Additions

11

92

12,005

(256)

11,852

Foreign exchange movements

(60)

(341)

(8,216)

(8)

(8,625)

At 30 June 2016

420

2,050

202,715

716

205,901

Transfers

-

-

801

(1,756)

(955)

Additions

167

143

6,946

1,266

8,522

Foreign exchange movements

(35)

(144)

(3,768)

(4)

(3,951)

At 31 December 2016

552

2,049

206,694

222

209,517

Additions

-

75

12,815

657

13,547

Impairment

-

-

(4,556)

-

(4,556)

Deconsolidation of subsidiary

-

-

(140,178)

(815)

(140,993)

Foreign exchange movements

(23)

(104)

(3,222)

(2)

(3,351)

At 30 June 2017

529

2,020

71,553

62

74,164







Accumulated depreciation






At 1 January 2016

(185)

(67)

(108,246)

(31)

(108,529)

Charge for the period

(81)

(51)

(6,003)

(2)

(6,137)

Foreign exchange movements

27

56

1,274

3

1,360

At 30 June 2016

(239)

(62)

(112,975)

(30)

(113,306)

Charge for the period

(40)

(68)

(8,497)

(1)

(8,606)

Impairment

-

-

(6,487)

-

(6,487)

Foreign exchange movements

14

27

1,314

1

1,356

At 31 December 2016

(265)

(103)

(126,645)

(30)

(127,043)

Charge for the period

-

(331)

(8,879)

-

(9,210)

Impairment

-

-

1,965

-

1,965

Deconsolidation of subsidiary

-

-

108,963

-

108,963

Foreign exchange movements

11

35

1,070

1

1,117

At 30 June 2017

(254)

(399)

(23,526)

(29)

(24,208)












Net Book Value






At 30 June 2017

275

1,621

48,027

33

49,956







At 31 December 2016

287

1,946

80,049

192

82,474







At 30 June 2016

181

1,988

89,740

686

92,595

 

As a result of the relinquishment of the Puesta Pozo Cercado licence area after the period end, management has recognised an impairment of US$ 2.6 million, which has been charged to the income statement

 

10.      Financial liabilities

 



The Group



30-Jun-17

30-Jun-16

31 -Dec-16



US$'000

US$'000

US$'000

Current





Bank borrowings


56

8,250

5,264

Other borrowings


35,706

9,201

20,315

Accrued financial interest


2,437

922

1,578



38,199

18,373

27,157








The Group



30-Jun-17

30-Jun-16

31 -Dec-16



US$'000

US$'000

US$'000

Non-current





Bonds


-

33,501

34,719

Other borrowings


31,697

34,984

33,345

Accrued financial interest


11,625

9,049

10,776



43,322

77,534

78,840






Total financial liabilities


81,521

95,907

105,997

 


The Group


30-Jun-17

30-Jun-16

31 -Dec-16


US$'000

US$'000

US$'000

Maturity profile




Within 1 year

38,481

18,849

27,597

Between 1 and 5 years

17,374

55,971

63,668

After 5 years

68,696

70,138

68,696


124,551

144,958

159,961

Interest payments

(43,030)

(49,051)

(53,964)


81,521

95,907

105,997

 

11.      Deferred tax

 

Deferred tax asset

Notional

Provision

Other

Carry

Total


income tax

charges

 

forward






losses



US$'000

US$'000

US$'000

US$'000

US$'000







At 1 January 2016

6

1,055

201

285

1,547

Charged to the income statement

(5)

(320)

42

(45)

(328)

Foreign exchange movement

-

(46)

(28)

(34)

(108)

At 30 June 2016

1

689

215

206

1,111

Credited to the income statement

-

1,367

9

728

2,104

Foreign exchange movement

(1)

(66)

(11)

(65)

(143)

At 31 December 2016

-

1,990

213

869

3,072

Credited to the income statement

-

(445)

123

2,536

2,214

Deconsolidation of subsidiary

-

(987)

-

-

(987)

Foreign exchange movement

-

(20)

(15)

(165)

(200)

At 30 June 2017

-

538

321

3,240

4,099

























Deferred tax liability



Fair value

Acquisitions

Total




of PP&E






US$'000

US$'000

US$'000







At 1 January 2016



6,920

31,085

38,005

Credited to the income statement



(2,968)

-

(2,968)

Foreign exchange movement



-

(3,938)

(3,938)

At 30 June 2016



3,952

27,147

31,099

Credited to the income statement



327

(2,271)

(1,944)

Foreign exchange movement



-

(1,373)

(1,373)

At 31 December 2016



4,279

23,503

27,782

Charged to the income statement



167

-

167

Deconsolidation of subsidiary



(4,446)

-

(4,446)

Foreign exchange movement



-

(991)

(991)

At 30 June 2017



-

22,512

22,512

 

12.      EBITDA

 


30-Jun-17

30-Jun-16

31 -Dec-16


US$'000

US$'000

US$'000

Loss for the year from continuing operations

(3,285)

(9,205)

(26,276)

Add: Depreciation and amortisation

9,449

6,266

15,002

Add: Impairment write downs

2,591

-

7,065

Less: Finance income

(5,479)

(2,496)

(6,887)

Add: Finance costs

10,883

13,486

27,803

Add: Tax

(927)

(331)

(2,140)

EBITDA

13,232

7,720

14,567

 

 

13.      Comprehensive income

 

The translation loss primarily arises as a result of the devaluation of the AR$ against the US$ during the period. The carrying value of intangibles assets, other assets and liabilities in Argentina are held in AR$ and on consolidation translated to US$, the presentation currency. The resulting exchange gains and losses are classified as equity and transferred to the Group's translation reserve. This is not indicative of an impairment in the carrying value of these assets.

 

14.      Events after the balance sheet date

 

On 28 July 2017 the Vega Grande exploitation licence was extended for a further period of one year commencing on the 28 July 2017. The licence has been renewed subject to a work programme, which includes, reprocessing of 150 km of 2D seismic line, geochemical survey of 700 samples and a workover in the VGa-6 well. During the remainder of this year we expect to be able to reach agreement to extend the licence for a 10 year period include the extension of 1 year already granted.

 

The workover performed in the La Paloma 5 well on the La Paloma licence was successful with the well self-flowing at more than 120 boepd from the Huitrin formation. The Company continues to evaluate the main target, Grupo Neuquén and is in the process of installing production on a field that previously was not producing.

 

On 12 July 2017 a second exploratory period in Laguna El Loro of one year was granted with commitments to reprocess existing 3D and 2D seismic (553 km and 185 km respectively), conduct a geochemical survey of 4,500 samples and drill a well targeting unconventional horizons.

 

On 10 August 2017 the Company announced the completion of its combination with Trefoil Holdings, the holding company that indirectly owns over 99.99% of PETSA, the operating company for the oil and gas exploration and production business of Mercuria EG in Argentina. The combination was effected through the acquisition of the entire issued share capital of Trefoil Holdings in consideration for the issue of 1,899,106,385 consideration ordinary shares. The consideration shares issued to Upstream Capital represented 75.38% of the enlarged share capital on completion with existing Andes shareholders holding 24.62%. The resulting ownership of Mercuria EG in the enlarged group on completion was approximately 78%. A copy of the admission document can be found on the Company's website.

 

The Board believes that it is in the interests of the Company's shareholders for the Company to focus on oil and gas exploration and production in Argentina only. Outside of Argentina, the Company has interests in Colombia, through its interest in the Interoil shares and interests in certain licences in the Llanos Basin and the Valle Magdalena Medio Basin. In line with this strategy, the Board is in the process of demerging the Interoil shares, which are currently held by the Company's wholly-owned subsidiary, AIL, to be effected by way of a transfer of shares to US shareholders and a distribution in specie to non US shareholders on record pre- completion.

 

On 21 August 2017 the Company announced that subsequent to CHSA, the concessioner and operator of the CH and PPC blocks, presenting to the Director of Hydrocarbons a new exploitation plan for the areas, CHSA has been notified  of the Province of Mendoza's acceptance of the 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 Andes 331 bpd) 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 4 year period. Andes's level of participation in the new work programme for the CH block, if any, has not yet been agreed with the operator.

 

On 22 August 2017 the Company drew down US$45 million of the remaining US$73 million of the US$160 million bridging and working capital facility provided by Mercuria Energy Trading S.A..

 

15.      Cash generated from operations

 


Group


30-Jun-17

30-Jun-16

31 -Dec-16


US$'000

US$'000

US$'000





Loss for the year before taxation

(4,212)

(9,536)

(28,416)





Adjustments from operating activities




Depreciation and amortisation

9,449

6,266

15,002

Exchange movements

291

116

78

Revaluation of investments

(13,618)

-

-

(Increase)/decrease in inventories

(98)

773

920

Increase in trade and other receivables

(4,099)

(4,718)

(6,121)

Increase in creditors and other payables

6,178

10,748

15,702

Finance costs

10,883

13,486

27,803

Finance income

(5,479)

(2,496)

(6,887)

Impairment charges

2,591

-

7,065

Movement in provisions

(235)

(853)

(1,398)

Loss on disposal of fixed assets

628

-

-

Exploration costs written off

-

-

1,718

Share based payments

148

155

295

Net cash generated from operating activities

2,427

13,941

25,761

16.       Other

 

A copy of the interim report will be made available on Phoenix's website at www.phoenixglobalresources.com

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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