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29 Jun 2016 17:34
29 June 2016
San Leon Energy Plc
("San Leon" or "the Company")
Final Results
San Leon Energy Plc ("San Leon" or "the Company"), the AIM listed oil and gas exploration and production company focused on Africa and Europe, today announces its audited final results for the year ended 31 December 2015.
Highlights:
Post Year End Transaction
· San Leon announced on 22 January 2016 its proposed entry into Nigerian onshore oil and gas production · The transformational transaction will result in the Company securing an initial 9.72% indirect economic interest in the world class OML 18 block, subject to shareholder approval · The acquisition constitutes a reverse takeover under the AIM Rules. San Leon is required to publish an AIM readmission document and to reapply for the Company's ordinary shares to be readmitted to trading on AIM · As a result of the proposed Nigerian transaction, San Leon will implement a shareholder distribution policy, returning 50 per cent. of free cash flow from the Nigerian asset to shareholders over the five years starting with first Nigerian cash flow. To allow this, asset write-offs of €166.9m have been recorded at 31 December 2015, and an application to reduce share capital/share premium will be made to the Irish courts |
Operational
· NovaSeis, the Company's 100%-owned subsidiary, signed a Memorandum of Understanding with Northbridge Energy Ltd setting out a Joint Venture to provide seismic acquisition and interpretation services in Nigeria · Rawicz-12 well declared as a gas discovery and is expected to be the largest gas development in Poland for 20 years · Spud Rawicz-15 development well and post year end, announced an average flow rate in excess of 3.6 mmscfd (million cubic feet per day) · Competent Person Report by Ryder Scott Company for Palomar Natural Resources, the operator, stated that the Rawicz gas field contains over 50 Bcf of 2P reserves · Oil shale bench testing results at the Timahdit oil shale licence proved the Enefit process to be applicable and being used to assess the efficiency of the Chevron Lummus upgrading technology on the shale oil · Laayoune-4 well on the Tarfaya conventional licence, onshore Morocco, was drilled and suspended with gas shows, pending further seismic work · Initiated asset optimisation and cost reduction strategy, resulting in relinquishing certain licences |
Corporate
· Announced £29 million (gross) fundraising, through a placing of new ordinary shares, together with a share capital reorganisation in the middle of 2015 · With effect from 1 January 2015, Oisin Fanning, Executive Chairman, has drawn only 20% of his salary in cash with the balance accruing in San Leon shares · Jeremy Boak, Non-Executive Director of the Company, accepted a position at The University of Oklahoma, and as a result resigned from the board of San Leon · Piotr Rozwadowski, Non-Executive Director of the Company, resigned from the board of San Leon on 5th May, after the reporting period |
Financial
· Total comprehensive loss for the year of €213.6m (2014: loss of €34.4m) · Total assets decreased to €132m at 31 December 2015 (2014: €281m) · At year end the Group had cash and cash equivalents of €0.9m (2014: €1.8m) |
Outlook
· The onshore Nigerian production transaction is expected to be transformational, repositioning San Leon as a producing company with significant yet low risk upside, and attractive hedges already in place · Rawicz field development continues to progress, with a full development plan to be submitted to the Polish government for approval. It is envisaged that at least three wells, including Rawicz-12 and Rawicz-15, will be available for first production in early 2017 |
Enquiries:
San Leon Energy plc Oisin Fanning, Executive Chairman
| +353 1291 6292 |
SP Angel Corporate Finance LLP Nominated Adviser and Joint Broker Ewan Leggat Richard Morrison Richard Hail
| +44 (0) 20 3470 0470
|
Whitman Howard Limited Joint Broker Nick Lovering Francis North
| +44 (0) 20 7659 1234
|
Brandon Hill Capital Limited Joint Broker Oliver StansfieldJonathan Evans | +44 (0) 20 3463 5000
|
Vigo CommunicationsFinancial Public RelationsChris McMahon Alexandra Roper
| +44 (0) 20 7830 9700 |
Plunkett Public RelationsSharon Plunkett | +353 (0) 1 280 7873 |
www.sanleonenergy.com
Chairman's statement
We took advantage of the crisis that brought down the price of oil and gas assets to move aggressively. We put together a deal with Eroton and Midwestern, two major Nigerian players, to acquire a 9.72% indirect economic interest in the world-class onshore OML 18 block in Nigeria.
We structured and marketed a proposed equity raise to complete the deal, which will be voted on by shareholders in the near future.
Last year we promised shareholders that we would focus on appraisal and production assets, and in particular production. The proposed OML 18 deal is expected to achieve this in a highly material fashion, subject to shareholder approval. Full details of the announced deal structure will be provided in the AIM re-admission document, and highlights are given below:
· Expected transformational cash flow impact on the Company will enable 50% of free cash flow to be returned to shareholders via dividend and/or share buyback |
· San Leon's investment is to be made through a $173 million loan instrument which will be repaid, with 17% per annum interest, over four years |
· Three sources of cash flow to San Leon from the deal: |
1. Loan repayments (principal plus interest) |
2. Dividends from indirect economic interest in OML 18 |
3. Right to provide workover and drilling rig services to the operator |
· Acquisition to be funded through a minimum $200 million equity placing |
· OML 18 is producing ~50,000 bopd, with a low risk development plan to reach 100,000 bopd |
· Hedge at $95 per barrel of oil with Shell for around 35% of expected 2P production until the end of 2017 |
· Significantly reduced theft or supply disruption through engagement with local community and indigenous operating partners |
· Former Head of Shell Nigeria joining the San Leon Board as Non-Executive Chairman, with other Board changes appropriate to the post-deal Company. |
Poland
Rawicz, expected to be the largest gas development in Poland for 20 years, continues to succeed. The second appraisal/development well on the structure was drilled in 2015 and tested in 2016, and first gas from an initial well stock of at least 3 wells is expected in early 2017.
Other operational activity in Poland has been limited, in response to low commodity prices and a difficult transaction environment for exploration and appraisal assets. Various non-core assets, particularly those which were early-stage exploration and which therefore no longer fit with the Company's focus on cash flow, have been fully or partly relinquished.
Morocco
The Laayoune-4 well on the onshore Tarfaya licence, targeting the conventional Tertiary sandstone, was drilled in summer 2015 and encountered gas shows. ONHYM and the Company now intend to apply for a long licence, which may include 3D seismic over the broader structure (including the existing well), and the well may also be re-entered.
Elsewhere in Morocco activity has been limited to technical analysis. Our interest in the offshore Sidi Moussa licence is available for farm out, and the operator (Genel Energy) is focussing its offshore efforts there. Spending on the Tarfaya oil shale licence has been restricted, pending a recovery in the oil price.
CORPORATE
Once again the Company recorded no Lost Time Incidents (LTIs) for the year, reflecting the priority placed by all staff and contractors on HSEQ.
The major step for your Company comes with the proposed Nigerian deal announced after the reporting period in January 2016, and the proposed placing at a significant premium to the price at suspension. The expected fiscal strength of the Company as a result of a completed Nigerian deal has encouraged the Company to put in place a policy for returning 50% of Plc free cash flow to investors for the next 5 years.
San Leon raised £29 million via a placing, in the middle of 2015. These funds enabled the drilling of the Tarfaya conventional well, the retention of the Barryroe NPI, provided working capital, and - as foreseen in the Placing documentation - positioned the Company for the proposed Nigerian production deal. As part of that move towards a production focus, and also reflecting the downturn in the industry, the Company announced various licence exits (particularly on early-stage exploration) to reduce overheads and avoid distraction of effort, and that portfolio optimisation continues. As a result, €166.9m of assets were impaired during 2015, resulting in a loss for the year after providing for depreciation and taxation of €213.4m. As at 31 December 2015, cash and cash equivalents was €0.9m, and the Company has access to several sources of funding which satisfies the Directors that the Company continues as a going concern.
Other items reflected in the accounts are firstly that short-term financing was required during 2015, as detailed in finance expenses. Secondly, various Company subsidiaries (the "Subsidiaries") have been unsuccessful in their appeal against the findings of the International Court of Arbitration of the International Chamber of Commerce, in relation to the arbitration between the Subsidiaries and Avobone N.V. and Avobone Poland B.V..
The Subsidiaries appealed the ICC findings to the UK Commercial Court in October 2015. The findings of the Court, received by the Company on 4 February 2016 but not conclusive until 11 February, were that the Subsidiaries' leave to appeal was dismissed. Accordingly, the Company has provided for the award.
For several months around the end of 2015 the Company was in a formal offer period, having received an approach. That approach was subsequently withdrawn.
The Company's wholly-owned subsidiary, NovaSeis, signed a Memorandum of Understanding with Northbridge, an indigenous Nigerian technical company, with the aim of developing a seismic acquisition, processing and interpretation business in Nigeria. NovaSeis performed a considerable amount of such European and North African work since 2011 both internally to San Leon and to third parties.
OUTLOOK
In the current industry climate, securing cash flow is key. Subject to shareholder approval, the Nigeria deal is expected to provide exactly that. The Directors believe your Company will become one of the largest E&P companies on AIM, and one of very few paying dividends and/or undertaking share buybacks.
"2015 was the year to plan to acquire assets, with the whole energy industry depressed. The Nigerian OML 18 deal proposed in 2016 certainly was not easy to achieve, but it was worth it: a new world opens up to San Leon and its shareholders."
Oisín Fanning
Executive Chairman
Chief Operating Officer's statement
"Our proposed OML 18 project has all the essential components of success: a proven ability to increase production, quality of operatorship, good community relationships, a supportive and reliable partner and several material cash flow streams."
Joel Price
Chief Operating Officer
MOROCCO
Oil shale development
The 36 km2 Timahdit oil shale block onshore Morocco is an asset being kept for the future, when oil prices recover and an update to the existing pre-feasibility study for developing the asset is warranted.
FRANCE
Shale gas licences
In France, San Leon continues to apply for over 2.4 million acres (c9,000 km2) of licences - licence applications which have been made at very low cost.
ALBANIA
Offshore
The Company is in discussions with the Ministry regarding the next stages on its offshore Albania Durresi block. A large suite of data, including modern 3D seismic, defines the large oil and gas target (near to the A4-1X discovery well) in relatively deep water. San Leon continues to seek a partner to drill the structure.
MOROCCO
Offshore
The Genel-operated Sidi Moussa block (San Leon net 10.0% interest) is the subject of farm out activity by the operator, with the prospect of further well activity.
Onshore (Zag)
Zag is a large licence on which technical works continues to evaluate its potential.
POLAND
Baltic Basin
2014 saw testing on the Company's 100%-owned Lewino-1G2 shale gas well, on the Gdansk W concession, providing the best single frac on a vertical gas well in Europe. The concession requires a follow-up horizontal well with multiple fractures (much of the planning for which is complete), and a partner is being sought to perform that work to enable a proper evaluation of the level of commerciality of the 220,000 acres.
The Sczcawno concession, further to the south in a region with dry gas, has a vertical well already drilled into its shale target, and awaits fraccing and testing. Siekierki, in the Permian Basin, is a tight gas field on which the Company has an agreement for Palomar Natural Resources ("Palomar"; the operator, with 65% equity) to perform workovers on three existing wells.
IRELAND
Offshore
San Leon's 4.5% Net Profit Interest (NPI) on the Barryroe oil field provides access to future revenue streams with no additional capital required. A CPR was produced by the operator in 2013, and the operator continues efforts to farm out the asset to enable the next wells to be drilled.
MOROCCO
Onshore
Laayoune-4 was drilled as a commitment well targeting Tertiary channel sands on the onshore Tarfaya licence. It is in an excellent location for gas marketing, and believed to be part of a larger structure. The well encountered gas shows and has been suspended pending possible re-entry. In the meantime, the Company intends to apply in conjunction with ONHYM for a long licence extension on Tarfaya, which may include a significant 3D seismic programme over the broader structure, including the Laayoune-4 well.
POLAND
Rawicz-15, the second appraisal/development well on the onshore Poland Rawicz gas field, was drilled during 2015 by the operator, Palomar. It was subsequently tested in early 2016 and produced 3.6 mmscf/d, confirming the producibility of the reservoir on the western side of the structure and providing further evidence of volumes. Palomar is finalising a full development plan to be submitted to the Polish Government for approval. The operator's development plan envisages at least three wells available for first production (including Rawicz-12 and Rawicz-15), now expected in early 2017, which would bring onstream the largest gas development in Poland for 20 years.
The following financial information on San Leon Energy Plc represents the Group's audited final results for the year ended 31 December 2015.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2015
|
| 2015 €'000 | 2014 €'000 |
Continuing operations |
|
|
|
Revenue |
| 145 | 3 |
Cost of sales |
| (1) | (1) |
Gross profit |
| 144 | 2 |
|
|
|
|
Administrative expenses |
| (17,049) | (16,877) |
Impairment of exploration and evaluation assets |
| (123,659) | (9,150) |
Impairment of equity accounted investments |
| (43,245) | (3,346) |
Decommissioning of wells |
| (4,291) | - |
Arbitration award |
| (20,561) | - |
Loss on disposal of subsidiaries |
| - | (6,429) |
Loss from operating activities |
| (208,661) | (35,800) |
|
|
|
|
Finance expense |
| (9,379) | (1,797) |
Finance income |
| 4 | 231 |
Share of loss of equity accounted investments |
| (18) | (54) |
Loss before income tax |
| (218,054) | (37,420) |
|
|
|
|
Income tax |
| 4,688 | (875) |
Loss from continuing operations |
| (213,366) | (38,295) |
|
|
|
|
Discontinued operations |
|
|
|
Profit from discontinued operations (net of income tax) |
| - | 30 |
Loss for the year attributable to equity holders of the Group |
| (213,366) | (38,265) |
|
|
|
|
Loss per share (cent) - continuing operations |
|
|
|
Basic loss per share |
| (506.40) | (151.05) |
Diluted loss per share |
| (506.40) | (151.05) |
|
|
|
|
Earnings per share (cent) - discontinued operations |
|
|
|
Basic earnings per share |
| - | 0.12 |
Diluted earnings per share |
| - | 0.12 |
|
|
|
|
Loss per share (cent) - total |
|
|
|
Basic loss per share |
| (506.40) | (150.93) |
Diluted loss per share |
| (506.40) | (150.93) |
On behalf of the board
Oisín Fanning Raymond King
Director Director
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2015
|
| 2015 €'000 | 2014 €'000 |
Loss for the year |
| (213,366) | (38,265) |
Items that may be reclassified subsequently to the income statement |
|
|
|
Foreign currency translation differences - foreign operations |
| (3,320) | 818 |
Fair value movements in available-for-sale financial assets |
| 4,658 | 5,102 |
Deferred tax on fair value movements in available-for-sale financial assets |
| (1,615) | (2,084) |
Total comprehensive loss for the year |
| (213,643) | (34,429) |
On behalf of the board
Oisín Fanning Raymond King
Director Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
| Share capital reserve €'000 | Share premium reserve €'000 | Currency translation reserve €'000 | Share based payment reserve €'000 | Fair value reserve €'000 | Retained earnings €'000 | Attributable to equity holders in Group €'000 | Non-controlling interest €'000 | Total €'000 |
2014 |
|
|
|
|
|
|
|
|
|
Balance at 1 January 2014 | 126,561 | 164,233 | (1,389) | 10,213 | (3,095) | (12,604) | 283,919 | 528 | 284,447 |
Total comprehensive income for year |
|
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | - | - | (38,265) | (38,265) | - | (38,265) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences - foreign operations | - | - | 818 | - | - | - | 818 | - | 818 |
Fair value movements in available-for-sale financial assets | - | - | - | - | 5,102 | - | 5,102 | - | 5,102 |
Deferred tax on fair value movements in available-for-sale financial assets | - | - | - | - | (2,084) | - | (2,084) | - | (2,084) |
Total comprehensive income for year | - | - | 818 | - | 3,018 | (38,265) | (34,429) | - | (34,429) |
Transactions with owners recognised directly in equity |
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
Cost of issue of shares for cash in 2013 | - | (474) | - | - | - | - | (474) | - | (474) |
Share based payment | - | - | - | 1,212 | - | - | 1,212 | - | 1,212 |
Effect of share options exercised | 27 | 6 | - | - | - | - | 33 | - | 33 |
Shares issued to Realm Shareholderson conversion of exchangeable shares | 191 | 335 | - | - | - | - | 526 | (526) | - |
Total transactions with owners | 218 | (133) | - | 1,212 | - | - | 1,297 | (526) | 771 |
Balance at 31 December 2014 | 126,779 | 164,100 | (571) | 11,425 | (77) | (50,869) | 250,787 | 2 | 250,789 |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Balance at 1 January 2015 | 126,779 | 164,100 | (571) | 11,425 | (77) | (50,869) | 250,787 | 2 | 250,789 |
Total comprehensive income for year |
|
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | - | - | (213,366) | (213,366) | - | (213,366) |
Other comprehensive income |
|
|
|
|
|
|
|
|
|
Foreign currency translation differences - foreign operations | - | - | (3,320) | - | - | - | (3,320) | - | (3,320) |
Fair value movements in available-for-sale financial assets | - | - | - | - | 4,658 | - | 4,658 | - | 4,658 |
Deferred tax on fair value movements in available-for-sale financial assets | - | - | - | - | (1,615) | - | (1,615) | - | (1,615) |
Total comprehensive income for year | - | - | (3,320) | - | 3,043 | (213,366) | (213,643) | - | (213,643) |
Transactions with owners recognised directly in equity |
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
Issue of shares for cash | 363 | 40,801 | - | - | - | (6,015) | 35,149 | - | 35,149 |
Issue of advisor shares | 2 | 224 | - | - | - | - | 226 | - | 226 |
Share based payment | - | - | - | 4,542 | - | - | 4,542 | - | 4,542 |
Effect of share options cancelled | - | - | - | (3,918) | - | 3,918 | - | - | - |
Change in ownership interests |
|
|
|
|
|
|
|
|
|
Shares issued to Realm Shareholderson conversion of exchangeable shares | 1 | 1 | - | - | - | - | 2 | (2) | - |
Total transactions with owners | 366 | 41,026 | - | 624 | - | (2,097) | 39,919 | (2) | 39,917 |
Balance at 31 December 2015 | 127,145 | 205,126 | (3,891) | 12,049 | 2,966 | (266,332) | 77,063 | - | 77,063 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
| Share capital €'000 | Share premium €'000 | Shares to be issued €'000 | Share based payment reserve €'000 | Fair value reserve €'000 | Retained earnings €'000 | Total equity €'000 |
2014 |
|
|
|
|
|
|
|
Balance at 1 January 2014 | 126,561 | 164,233 | 528 | 10,213 | (981) | (29,652) | 270,902 |
Total comprehensive income |
|
|
|
|
|
|
|
Loss for the year | - | - | - | - | - | (42,397) | (42,397) |
Fair value movement in available for sale financial asset | - | - | - | - | 63 | - | 63 |
Total comprehensive income for the year | - | - | - | - | 63 | (42,397) | (42,334) |
Transactions with owners recognised directly in equity |
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
Cost of issue of shares for cash in 2013 | - | (474) | - | - | - | - | (474) |
Share based payment | - | - | - | 1,212 | - | - | 1,212 |
Effect of share options exercised | 27 | 6 | - | - | - | - | 33 |
Shares issued to Realm Shareholders on conversion of exchangeable shares | 191 | 335 | (526) | - | - | - | - |
Total transactions with owners | 218 | (133) | (526) | 1,212 | - | - | 771 |
Balance at 31 December 2014 | 126,779 | 164,100 | 2 | 11,425 | (918) | (72,049) | 229,339 |
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
Balance at 1 January 2015 | 126,779 | 164,100 | 2 | 11,425 | (918) | (72,049) | 229,339 |
Total comprehensive income |
|
|
|
|
|
|
|
Loss for the year | - | - | - | - | - | (200,269) | (200,269) |
Fair value movements in available-for-sale financial assets | - | - | - | - | 7,583 | - | 7,583 |
Total comprehensive income for the year | - | - | - | - | 7,583 | (200,269) | (192,686) |
Transactions with owners recognised directly in equity |
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
Issue of shares for cash | 363 | 40,801 | - | - | - | (6,015) | 35,149 |
Issue of advisor shares | 2 | 224 | - | - | - | - | 226 |
Share based payment | - | - | - | 4,542 | - | - | 4,542 |
Effect of share options cancelled | - | - | - | (3,918) | - | 3,918 | - |
Shares issued to Realm Shareholders on conversion of exchangeable shares | 1 | 1 | (2) | - | - | - | - |
Total transactions with owners | 366 | 41,026 | (2) | 624 | - | (2,097) | 39,917 |
Balance at 31 December 2015 | 127,145 | 205,126 | - | 12,049 | 6,665 | (274,415) | 76,570 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
|
| 2015 €'000 | 2014 €'000 |
Assets |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
| 47,532 | 163,375 |
Equity accounted investments |
| 11,375 | 44,483 |
Property, plant and equipment |
| 10,266 | 10,832 |
Other non-current assets |
| 833 | 833 |
Financial assets |
| 52,553 | 47,895 |
|
| 122,559 | 267,418 |
Current assets |
|
|
|
Inventory |
| 329 | 321 |
Trade and other receivables |
| 6,546 | 10,344 |
Other financial assets |
| 1,370 | 1,335 |
Cash and cash equivalents |
| 913 | 1,809 |
|
| 9,158 | 13,809 |
Total assets |
| 131,717 | 281,227 |
|
|
|
|
Equity and liabilities |
|
|
|
Equity |
|
|
|
Called up share capital |
| 127,145 | 126,779 |
Share premium account |
| 205,126 | 164,100 |
Share based payments reserve |
| 12,049 | 11,425 |
Currency translation reserve |
| (3,891) | (571) |
Fair value reserve |
| 2,966 | (77) |
Retained earnings |
| (266,332) | (50,869) |
Attributable to equity holders of the Group |
| 77,063 | 250,787 |
Non-controlling interest |
| - | 2 |
Total equity |
| 77,063 | 250,789 |
|
|
|
|
Non-current liabilities |
|
|
|
Provisions |
| 24,437 | - |
Derivative |
| - | 4 |
Deferred tax liabilities |
| 9,086 | 12,199 |
|
| 33,523 | 12,203 |
Current liabilities |
|
|
|
Trade and other payables |
| 14,583 | 10,964 |
Loans and borrowings |
| 4,778 | 5,814 |
Provisions |
| 1,770 | 1,457 |
|
| 21,131 | 18,235 |
Total liabilities |
| 54,654 | 30,438 |
Total equity and liabilities |
| 131,717 | 281,227 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
|
| 2015 €'000 | 2014 €'000 |
Assets |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
| 9,057 | 8,630 |
Financial assets - investment in subsidiaries |
| 48,122 | 146,386 |
Financial assets |
| 52,553 | 5,772 |
|
| 109,732 | 160,788 |
Current assets |
|
|
|
Trade and other receivables |
| 4,108 | 106,703 |
Other financial assets |
| 84 | 182 |
Cash and cash equivalents |
| 572 | 1,439 |
|
| 4,764 | 108,324 |
Total assets |
| 114,496 | 269,112 |
|
|
|
|
Equity and liabilities |
|
|
|
Equity |
|
|
|
Called up share capital |
| 127,145 | 126,779 |
Share premium account |
| 205,126 | 164,100 |
Shares to be issued |
| - | 2 |
Share based payments reserve |
| 12,049 | 11,425 |
Fair value reserve |
| 6,665 | (918) |
Retained earnings |
| (274,415) | (72,049) |
Total equity attributable to equity shareholders |
| 76,570 | 229,339 |
|
|
|
|
Non-current liabilities |
|
|
|
Derivative |
| - | 4 |
Current liabilities |
|
|
|
Trade and other payables |
| 33,148 | 33,955 |
Loans and borrowings |
| 4,778 | 5,814 |
|
| 37,926 | 39,769 |
Total liabilities |
| 37,926 | 39,773 |
Total equity and liabilities |
| 114,496 | 269,112 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31st December 2015
|
| 2015 €'000 | 2014 €'000 |
Cash flows from operating activities |
|
|
|
Loss for the year - continuing operations |
| (213,366) | (38,295) |
Profit for the year - discontinued operations |
| - | 30 |
Adjustments for: |
|
|
|
Depletion and depreciation |
| 1,005 | 102 |
Finance expense |
| 9,379 | 1,797 |
Finance income |
| (4) | (231) |
Share based payments charge |
| 4,278 | 249 |
Foreign exchange |
| (591) | (1,740) |
Income tax |
| (4,688) | 875 |
Impairment of exploration and evaluation assets - continuing operations |
| 123,659 | 9,150 |
Impairment of equity accounted assets - continuing operations |
| 43,245 | 3,346 |
Arbitration award |
| 20,561 | - |
Decommissioning of wells |
| 4,291 | - |
Loss on disposal of subsidiaries |
| - | 6,429 |
(Increase) in inventory |
| (8) | (90) |
Decrease in trade and other receivables |
| 3,988 | 2,399 |
Increase in trade and other payables |
| 3,490 | 5,483 |
Movement in non-current assets |
| - | 2,575 |
Share of loss of equity-accounted investments |
| 18 | 54 |
Tax paid |
| (112) | (21) |
Net cash outflow from operating activities |
| (4,855) | (7,888) |
Cash flows from investing activities |
|
|
|
Expenditure on exploration and evaluation assets |
| (20,473) | (19,909) |
Joint venture partner share of exploration costs |
| - | 363 |
Purchase of property, plant and equipment |
| (434) | (1,701) |
Interest received |
| - | 4 |
Decrease in restricted cash |
| 99 | 325 |
Advances to equity accounted investments |
| (2,115) | (1,055) |
Proceeds of farm-out arrangement |
| 2,000 | 14,807 |
Net cash outflow from investing activities |
| (20,923) | (7,166) |
Cash flows from financing activities |
|
|
|
Proceeds from issue of shares |
| 41,390 | - |
Cost of issue of shares |
| (6,015) | (474) |
Proceeds from drawdown of other loans |
| 6,106 | 8,415 |
Repayment of other loans |
| (7,805) | (3,071) |
Movement in director loan |
| 202 | 2,201 |
Interest and arrangement fees paid |
| (9,116) | (1,641) |
Net cash inflow from financing activities |
| 24,762 | 5,430 |
|
|
|
|
Net (decrease) in cash and cash equivalents |
| (1,016) | (9,624) |
Effect of foreign exchange fluctuation on cash and cash equivalents |
| 120 | 12 |
Cash and cash equivalents at start of year |
| 1,809 | 11,421 |
Cash and cash equivalents at end of year |
| 913 | 1,809 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31st December 2015
|
| 2015 €'000 | 2014 €'000 |
Cash flows from operating activities |
|
|
|
Loss for the year |
| (200,269) | (42,397) |
Adjustments for: |
|
|
|
Depletion and depreciation |
| 87 | 101 |
Non cash dividend on transfer of asset |
| (27,360) | - |
Finance income |
| (187) | (710) |
Finance expense |
| 9,316 | 155 |
Share based payments charge |
| 3,286 | 200 |
Impairment of investment in subsidiariesand amounts due from group undertakings |
| 206,501 | 30,983 |
Foreign exchange |
| 488 | 90 |
Income tax |
| 9 | 10 |
Decrease / (increase) in trade and other receivables |
| 3,837 | (2,368) |
(Decrease) / increase in trade and other payables |
| (1,131) | 4,281 |
Taxation |
| 1 | - |
Net cash outflow from operating activities |
| (5,422) | (9,655) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
| (514) | (1,807) |
Interest paid |
| - | (179) |
Advances to subsidiary companies |
| (19,840) | (1,002) |
Decrease / (increase) in restricted cash |
| 99 | (182) |
Net cash outflow from investing activities |
| (20,255) | (3,170) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issue of shares |
| 41,390 | - |
Cost of issue of shares |
| (6,015) | (474) |
Proceeds from drawdown of other loans |
| 6,106 | 8,415 |
Repayment of other loans |
| (7,805) | (3,071) |
Movement in director loan |
| 202 | 1,259 |
Net interest and arrangement fees paid |
| (9,053) | 126 |
Net cash inflow from financing activities |
| 24,825 | 6,255 |
|
|
|
|
Net (decrease) in cash and cash equivalents |
| (852) | (6,570) |
Effect of foreign exchange fluctuation on cash and cash equivalents |
| (15) | 220 |
Cash and cash equivalents at start of year |
| 1,439 | 7,789 |
Cash and cash equivalents at end of year |
| 572 | 1,439 |
On behalf of the board
Oisín Fanning Raymond King
Director Director
Notes
1. General
San Leon Energy plc ("the Company") is a company incorporated in Ireland. The Group financial statements consolidate those of the Company with those of its subsidiaries (together referred to as "the Group").
The financial information presented in this report has been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as adopted by the European Union and as set out in the Group's annual financial statements in respect of the year ended 31 December 2014. The financial information herein does not include all the information and disclosures required in the annual financial statements, however the full financial statements are included within the Annual Report which are being distributed to shareholders and which are available on the Company's website www.sanleonenergy.com. It will also be filed with the Company's Annual Return in the Companies Registration Office. The financial information herein for the prior year ended 31 December 2015 represents an abbreviated version of the Group's statutory financial statements and the financial statements for the year ended 31 December 2015 have been filed with the Companies Registration Office.
2. Extract from KPMG's Independent Auditor's Report: Opinions and conclusions, and emphasis of matter - going concern
Our opinion on the financial statements is unmodified.
In our opinion:
· the Group financial statements give a true and fair view of the assets, liabilities and financial position of the Group as at 31 December 2015 and of its loss for the year then ended;
· the Company Statement of Financial Position gives a true and fair view of the assets, liabilities and financial position of the Company as at 31 December 2015;
· the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;
· the Company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2014; and
· the Group financial statements and Company financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014.
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in Note 1 to the financial statements concerning the Group and Company's ability to continue as a going concern. The ability of the Group and Company to continue as a going concern is dependent on a number of key assumptions as set out in Note 1 including the approval by the shareholders of the Company of a share placing and of the acquisition by the Company of a 9.72% indirect economic interest in the OML 18 block, onshore Nigeria, at an Extraordinary General Meeting in July 2016. These assumptions, along with the other matters explained in Note 1 to the financial statements, indicate the existence of material uncertainties which may cast significant doubt about the Group and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as going concerns.
3. Earnings per share
Basic loss per share is calculated by dividing the loss attributed to ordinary shareholders of €213,366,000 (2014: €38,264,356 loss) by the weighted average number of shares of 42,134,338 (2014: 25,352,990) in issue during the year. The diluted earnings per share calculation is identical to that used for basic loss per share as warrants are "out of the money" and not considered dilutive.
4. Annual Report and Accounts
Copies of the Annual Report and Accounts, together with a notice of the annual general meeting, are being posted to shareholders on 30 June 2016 and are available within the Investor Relations section of the Company's website www.sanleonenergy.com today.
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