12th Jun 2018 07:00
Not for release until 7.00am, 12 June 2018
Columbus Energy Resources Plc
("Columbus", "CERP" or the "Company")
Annual Report and Accounts 2017 and Notice of Annual General Meeting
Columbus, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, is pleased to announce that the Company's audited Annual Report and Accounts (the "Accounts") for the year ended 31 December 2017 is being posted to shareholders and will be available on the Company's website, www.columbus-erp.com, later today. Extracts are set out below.
The Company also announces that the Annual General Meeting ("AGM") will take place on 13 July 2018 at 11.00 am and will be held at the offices of the Company's solicitors, Kerman & Co LLP, whose address is 200 Strand, London WC2R 1DJ. The documentation relating to the AGM, including the Notice of AGM and the Form of Proxy, is being sent to shareholders today along with the Accounts and the Notice of AGM will also be available on the Company's website.
Enquiries:
Columbus Energy Resources Plc | +44 (0) 203 428 5155 |
Leo Koot / Gordon Stein / Tony Hawkins |
|
|
|
Beaumont Cornish Limited | +44 (0) 20 7628 3396 |
Nomad and Joint Broker |
|
Roland Cornish / Rosalind Hill Abrahams |
|
|
|
VSA Capital | +44 (0) 20 3005 5000 |
Joint Broker |
|
Andrew Monk / Andrew Raca |
|
|
|
Camarco | +44 (0) 20 3757 4983 |
Public and Investor Relations Georgia Edmonds / James Crothers / Billy Clegg |
|
|
|
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014
Highlights
For the Year ended 31 December 2017
Corporate
• Refreshed and strengthened management team and Board with the appointment of Leo Koot as Executive Chairman, Gordon Stein as Chief Financial Officer, Stewart Ahmed as Managing Director - Trinidad and Tony Hawkins as Legal and M&A Director, creating a team with a track record of delivery
• Successful rebranding to Columbus Energy Resources, an oil and gas producer focussed on onshore Trinidad with the ambition to grow in South America
• Revised strategy for growth, focusing on creating shareholder return through optimisation of owned assets
Operational
• Materially improved operating efficiencies and strategy at the Goudron field, increasing production and accelerating the planned water injection work programme
• Successfully achieved production guidance, delivering over 550 bopd in late December 2017
• Materially improved contractual terms on the Company's acquisition of South West Peninsula acreage, consolidating the next stage of exceptional growth potential for the Company
• Post period end, the Company agreed in principle to acquire a further 50% interest in the Icacos field, increasing its 100% operational control over the SWP and taking a dominant position in that area of Trinidad
Financial
• Strengthened balance sheet with year-end cash position of £4.0m from £1.83m in 2016 and debt of £1.21m from £1.87m in 2016
• Successfully raised £4.1m in October 2017, £3.0m of which came from Schroders
• Successfully renegotiated the terms of its US$8.9m Convertible Security Funding Agreement with Lind Partners
• Achieved target of becoming cashflow positive from operations by year-end
Outlook
• Strong position for exceptional growth through the company's consolidated SWP acreage with an exploration programme planned and funded for its initial well campaign
• The Company aims to drill its first prospect in the SWP in H1 2019
• Further development planned for the Goudron field, with the Company aiming to materially increase production from the field to over 800 bopd by year-end 2018
• Fully funded for 2018 work programme and to pursue exploration opportunities in the South West Peninsula
• Focussed on entry into other geographies, the Company continues to evaluate further M&A opportunities
Executive Chairman's Review
Solid foundations established to deliver sustainable operations and revenue and transformational growth
New energy, vision, team and focus
We exited 2017 having established solid foundations on which Columbus Energy Resources plc can build an oil production-led South American exploration business of scale in 3 - 5 years' time.
I joined in May 2017 because of the high growth potential of the Company's core production and exploration asset base in Trinidad and was confident that a refreshed approach and focus would deliver significant value in the near and long term. We completed the strategic review and our successful rebranding to Columbus Energy Resources in June 2017. We outlined a clear operational plan capable of providing exciting growth opportunities, alongside a financial strategy of capital discipline, through the following stages: becoming cashflow positive by year-end 2017; increasing our low-cost production; funding exploration through free cash generated from operations; and transacting on value-accretive acquisition opportunities.
My confidence in the Company was not misplaced and in the second half of 2017 our asset base delivered a strong underlying performance and we became cashflow positive, a reflection of our strengthened executive and operational team's energy, focus and hard work.
Delivery of our multi-strand operational strategy, ahead of time and on budget
2017 was a year of two halves operationally and financially, with significant change delivered in the second half once the new team was fully up to speed with the assets. We delivered over 70% production growth between July and year-end at Goudron, with production levels reaching 561 bopd. This was primarily through refocussing our operations team towards optimising production from our main field with the acceleration of targeted initiatives, some nine months earlier than anticipated, primarily through a capital-efficient well stimulation campaign. Our production levels exceeded our initial targets, despite the team facing a number of legacy challenges including old infrastructure and inferior oilfield practices and equipment.
Disciplined approach to capital
Becoming cashflow positive from operations at the end of 2017 was a pivotal moment in our journey, as future exploration activities, capable of delivering transformational growth, will be fuelled by this. This approach to capital automatically creates a disciplined exploration and work programme, in turn creating an efficient business, aligning our capital investments to operational successes.
We took a number of actions across the business to manage our cost base, making our capital work harder, and successfully reduced our G&A costs by over 11% at year-end and additional G&A cost savings are being implemented in 2018. Alongside this, the senior leadership team, including me, the CFO, the Managing Director - Trinidad and our Legal and M&A Director, agreed to take 50% of our fees in shares instead of cash demonstrating our commitment to and alignment with shareholders.
Other notable successes financially included the renegotiation of our convertible security funding agreement with Lind Partners and a value-accretive capital raise of £4.1 million in October 2017. As part of this capital raise, we welcomed Schroders onto our share register (through a £3 million placing) and we are grateful to our shareholders for supporting us through the 3.2 times oversubscribed open offering which raised an additional £1.0 million as well as a further £0.1 million through subscriptions by management. Lastly, at the end of 2017 the Spanish Government confirmed it would close the La Lora Concession. This was formally completed in Q1 2018 reducing the operational costs to the Company on an annualised basis further.
All of this ensures the Company has sufficient headroom going forward and we remain committed that any future fundraising, to support any new business opportunities, will be seen to be accretive for all of the Company's shareholders.
Big field potential capable of delivering transformational growth
Columbus' assets in the South West Peninsula are near to, and geologically a part of, the prolific East Venezuelan Basin, offering significant exploration, development and production optionality and the assets have the potential to deliver transformational growth.
From an exploration perspective it ticks many of the boxes given its proximity to a proven oil play and is located in a well-established oil province with existing infrastructure in place. It offers, from an onshore location, large scale, exploration potential that would be typically seen offshore.
Much of our hard work in this area in the second half of 2017 was focussed on firstly restructuring the BOLT transaction on materially improved commercial terms. Secondly, we focussed on gaining operational control and long-term access to the whole of the South West Peninsula via the proposed Icacos transaction. Both transactions, funded from existing cash resources, came to fruition in Q1 2018 and we will shortly have 100% operational control over a large area (approximately 8,700 acres) in the South West Peninsula including multiple mapped prospects of 20-400 million barrels in place.
In 2018, alongside reactivating and maximising production from both the Bonasse and Icacos oilfields, we are beginning analysis of good quality 3D seismic and other data on the SWP with the aim of drilling an exploration well in the South West Peninsula in 2019.
Actively evaluating a number of acquisition opportunities
Alongside organic growth, the final pillar to our strategy is to deliver value-accretive acquisitions, leveraging our expertise, experience and the platform we have created here at Columbus to expand either in Trinidad or into other South American territories. We have identified a number of opportunities both at a corporate and asset level which meet our strict investment criteria of onshore, operatorship, easy export routes, mature oil provinces in the Caribbean or South America and close to infrastructure. We are confident of executing a value-accretive acquisition in 2018.
Strengthened Board, management and operational team
Key to our success is our strong Board and management team. The Company underwent a number of management and Board changes during 2017, with Steve Horton, Neil Ritson, James Thadchanamoorthy and Fergus Jenkins stepping down as Chairman, CEO, FD and COO respectively. A new leadership team was appointed with me as Executive Chairman, Gordon Stein, previously a Non-Executive Director, as CFO and Stewart Ahmed as Managing Director - Trinidad, who is based in-country to drive change at an operational level. These appointments were further complemented in December 2017 with the addition of Tony Hawkins as Legal and M&A Director.
Alongside this, since mid-2017 we have expanded our in-country operational team from 13 to 36, prioritising the hiring of high quality local people in line with our commitment to deliver positive social and economic benefits in the areas where we operate. Our in-country operational team has been reorganised to improve the efficiency of our operations and are adopting good international standard systems in order to address the legacy issues outlined above which were hampering our production growth and we have moved away from discharging produced water. Our next step is to make sure our values of safe and sustainable, stronger together, creative excellence, positive energy, totally trusted and personally responsible work for us at all levels of the business to drive growth.
I am confident that we now have in place a world-class team with the necessary skills and experience, capable of delivering our growth strategy.
Fully funded 2018 work programme
At the end of 2017 I outlined the good, the bad and the ugly and while the Company has faced challenges, none of these have been insurmountable and I am confident that 2018 will be a year of the good and the great. Our 2018 work programme, fully funded from cashflow, includes: the continued ramp-up of production at Goudron; the reactivation of the Bonasse oilfield; the optimisation of the Icacos oilfield; and the working up of our exploration programme at SWP, as we prepare to drill in 2019. Capex for the year is expected to be c. US$2.6 million with an additional US$1.2 million being spent on well optimisation activities.
We have the underlying assets with transformational growth potential, a team with the passion and capability to deliver this and the means by which to do this from our own cash. We have the ideal platform from which to grow.
Leo Koot, Executive Chairman, 11 June 2018
Qualified Person's statement:
The information contained in this document has been reviewed and approved by Stewart Ahmed, Managing Director (Trinidad) for Columbus Energy Resources plc. Mr Ahmed has a BSc in Mining and Petroleum Engineering and is a member of the Society of Petroleum Engineers. Mr Ahmed has over 32 years of relevant experience in the oil industry.
Finance Review
Results for the Year
Key highlights
• Sales revenues of £4.79 million achieved in 2017, an increase of 5.5% on the £4.54 million in 2016 and an increase of 24.2% in Trinidad (when the loss of revenues from Spain in 2017 are taken into account)
• Gross profit for period was a profit of £0.08 million (2016: loss of £0.15 million)
• Company became cashflow positive from operations in Q4 2017 with production peaking at 561 bopd during December 2017
• Pre-tax Group loss for period of £5.02 million (2016: loss of £11.89 million), partially reflecting various legacy costs in 2017 which will not recur in 2018
• Cash in hand of £4.0 million at year-end 2017 (2016: £1.83 million), Company fully funded for planned 2018 work programme
• Debt reduced to £1.21 million at year-end 2017 (2016: £1.87 million)
• Administrative costs reduced by 11.5% (after adjustment for extraordinary items)
• Employee numbers reduced across the Group from 37 in 2016 to 26 in 2017
• All members of new leadership team taking 50% of their first year's fees in shares and continuing with this approach as they start their second year of employment
• Some advisors and consultants also taking part of their fees in shares
• Headcount in London reduced from 9 to 6 people
• Company entered 2018 in a stronger financial position having addressed various legacy issues which were holding the Company back
Background
The Company entered 2017 in a better financial position than it had been in for a few years, with the Company having repaid the BNP Paribas debt and all historical trade creditors, resolving the 'financial crisis situation' which had held the Company back during most of 2015/16. That said, it was still clear in early 2017 that the Company required additional capital to be able to meet its financial obligations, address various legacy issues and deliver on its planned activities in 2017 and beyond. The Company also needed to make some material strategic and structural changes to allow it to unlock the real potential of its exciting asset base in Trinidad.
By the end of 2017 the Company's financial position was much stronger than at the start of the year with sufficient funds being in place to meet all planned Company activities in 2018, a lower debt position, a reduced corporate cost base and a cashflow positive position from our Trinidad operations arising from the steady growth in production during H2 2017. In addition to addressing various legacy issues, this provided an excellent platform for growth as the Company moved into 2018.
I joined the Company initially as a Non-Executive Director in early January 2017 when the Company was recommencing its infill drilling campaign at the Goudron field. With a planned campaign of up to 10 new wells, at a cost of around US$0.5 million per well, the Company only had the funds to undertake two of these wells in Q1 2017. These wells were successfully completed before the end of Q1 2017 when an equity raise was carried out, raising £2.5 million (before expenses) in late March 2017 at 2.2 pence per share.
The introduction of new leadership in May 2017 witnessed a major shift in strategy and business activities with the following financial objectives being pursued in H2 2017:
• Deliver cashflow positive position by optimising production in Trinidad and growing revenues: The planned infill well campaign at Goudron was not delivering the consistent production growth required so was terminated to focus on optimising production and sales revenues from our existing well-stock. This was targeted to deliver a cashflow positive position from operations before year-end, growing cashflow which would fund new investment in Goudron and other planned activities in 2018 and beyond
• Reduce corporate running costs: Minimise corporate costs in London and refocus resources more towards Trinidad and other value-adding opportunities. It was recognised this could result in some short-term legacy costs
• Reduce Company's debt position: Continue to pay down the Lind debt through monthly payments in cash and help strengthen the balance sheet
• Seek to minimise legacy costs in Spain: Ongoing costs in Spain to maintain the suspended Ayoluengo concession were a drain on the Company's cash resources and needed to be minimised - especially as there were no longer sales from production in Spain being received from Q1 2017 onwards
• Restructure the BOLT transaction to secure the SWP leases/licence on far more favourable terms and lower upfront costs: This acquisition had been in progress since 2013 under commercial terms which were no longer beneficial for the economics of the potentially transformational SWP opportunity. A new structure was required to allow the SWP opportunity to commence
• Restructure the Lind Conversion Facility: The conversion price within the facility of 3 pence per share, at Lind's option, was effectively providing a 'ceiling' to our share price which needed to be moved
• Raise new funds when the opportunity arose: This would allow further growth opportunities to be progressed but the new leadership confirmed this would only be undertaken in an accretive manner for our shareholders
• Share register: Attract top quality institutional investors with a medium to long-term investment horizon onto our share register, as the register in mid-2017 was heavily retail biased
• And subsequently… enter 2018 in a financially stronger position than at the beginning of 2017
Oil price environment
The international oil price sentiment in 2017 was mixed with WTI commencing the year at around US$56 per barrel and falling to US$47 by mid-year and then creeping back up to nearly US$58 by year-end. This compared to a WTI oil price of around US$45 in mid-2016 (and as low as US$26 in February 2016). Columbus, alongside other operators in Trinidad who sell their oil into the Pointe-a-Pierre refinery on the island, receives a monthly sales price from Petrotrin which is usually at a price lower than WTI. The range of discounts to WTI averaged 7.4% in 2017 with this discount ranging between 2.0%-13.6% over the course of 2017. As a result, the oil prices received by Columbus from Petrotrin in 2017 and in Q1 2018 were as below:
| Q1 17 | Q2 17 | Q3 17 | Q4 17 | Q1 18 |
WTI Average Price | US$ 54.22 | US$ 49.88 | US$ 49.53 | US$ 55.48 | US$ 62.29 |
Average Price achieved | US$ 47.60 | US$ 44.89 | US$ 46.86 | US$ 54.39 | US$ 58.43 |
Discount to WTI | US$ 6.62 | US$ 4.99 | US$ 2.67 | US$ 1.09 | US$ 3.86 |
Average % Discount | 12.2% | 10.0% | 5.4% | 2.0% | 6.2% |
In early 2018, the international oil price environment improved with WTI reaching over US$68 per barrel at certain points in late April. The discount from Petrotrin only averaged 3.9% during Q1 2018 and Columbus envisages receiving oil prices in 2018 of between US$55-US$60 per barrel as long as international market conditions remain as per late Q1 2018.
2017 results
Sales revenues
Sales revenues in 2017 showed an increase when compared to 2016, impacted by the loss of production and sales from the La Lora field in Spain in late January 2017. Production across the Company averaged 368 bopd in 2017, reaching a peak of 561 bopd in late December 2017. The table below shows sales revenues in Trinidad in 2017 increased by 24.2% when compared to 2016.
| 2017 | 2016 | Increase/(Decrease) | Increase/(Decrease) |
Country | £'000 | £'000 | £'000 | % |
Trinidad | 4,501 | 3,625 | 876 | 24.2% |
Spain | 293 | 920 | (627) | (68.2%) |
Total | 4,794 | 4,545 | 249 | 5.45% |
Production has continued to grow in Q1 2018 averaging 503 bopd and reaching a peak of 627 bopd during the quarter. Sales revenues are forecast to grow substantially in 2018 as production grows in Goudron and assuming the oil prices remain as they have in Q1 2018.
Administrative expenses
During 2017, action was taken to reduce corporate costs with a move to a smaller office in London (saving some 62% over a full year on the previous charges), a reduction in headcount (9 people down to 6 in London) and a reduction in other service support costs. Whilst the changes in leadership will result in real cashflow savings in 2018, this also resulted in some extraordinary costs being incurred in 2017 whilst the changes were implemented, including normal contractual commitment payments for previous management as their contracts run down.
In addition, because the Company no longer held the La Lora licence in Spain from 31 January 2017, all operational costs incurred in meeting day to day operational costs to maintain the field on a 'care and maintenance basis' since that date are posted under accounting policies to Administration Expenses, as opposed to Costs of Sales (where they were posted in prior years). This is also the case for costs of dismantling certain facilities on site at the field.
Taking account of the above extraordinary charges the comparable costs for Administrative expenses in 2016 and 2017 would be as follows:
Administrative Expenses | 2017 | 2016 | Increase/(Decrease) |
| £'000s | £'000s | £'000s |
Administrative Expenses as per Income Statement | 3,423 | 3,157 | 266 |
Less: Extraordinary Charges in 2017: |
|
|
|
Previous management costs | (282) | - | (282) |
Spain operational costs (re-classified) | (348) | - | (348) |
Revised Administrative Expenses | 2,793 | 3,157 | (364) (11.5%) |
Further savings are anticipated in 2018 as the new management continues to focus resources away from corporate activities and more towards Trinidad. This is likely to include the closure of the London office in late July 2018 to save further costs, with London staff working from other locations from that point onwards.
Costs in Spain are also expected to reduce following the Collective Dismissal Procedure ("CDP") which took place at the end of Q1 2018 which resulted in the redundancy of some 14 staff members who had been under legal suspension throughout most of 2017. The Company incurred costs of approximately €60,000 per month on meeting its obligations in Spain in 2017, this being a real drain on resources with little value being obtained other than 'keeping the lights on' whilst the Spanish authorities closed the old licence and retender the licence, a process which is expected to commence in Q3 2018. The CDP process cost the Company approximately €410,000 (plus associated taxes) but has reduced ongoing running costs to approximately €15,000 per month in Q2 2018 onwards. The Company's management will remain available for London based meetings with investors and others as required.
Corporate
Equity raises: The Company undertook two equity fundraises in 2017 via private placements and an open offer in the latter raise:
• Late March 2017 - raised £2.5 million (before expenses) at 2.2 pence per share in placing
• October 2017 - raised £4.1 million (before expenses) through a placement, subscription and open offer at 5.0 pence per share to enable the Company to accelerate its growth strategy. £3 million of the placing was taken up by Schroder Investment Management Limited ("Schroders"), £0.1 million was taken by the new management and Michael Douglas (Non-Executive Director) and £1 million by an open offer which was 3.2 times oversubscribed. The Company was delighted to introduce a new financial institution such as Schroders to our share register as part of our strategy to attract such investors who have a medium to long-term investment horizon and see the growth potential of the Company and its assets
• Lind Loan Facility: The Company's debt position with Lind reduced throughout 2017 through monthly cash payments, exercise of conversion rights by Lind and a payment in shares, in accordance with the terms of the loan facility. Debt on the balance sheet reduced to £1.21 million at year-end 2017 (2016: £1.87 million), despite Lind exercising its right to lend a further US$0.75 million to the Company in September 2017 at the same time as a restructure of the conversion price on the first tranche loan (taken out in December 2016) from 3.0 pence per share to 4.5 pence per share. This restructure, which had a very positive impact on the Company's share price, was settled by the issue of 17.99 million shares to the value of £0.54 million in 2017. The debt position had reduced to approximately £0.69 million at the end of March 2018 and the Company intends to continue making monthly repayments in cash throughout 2018
Cashflow
The stated objective of the new leadership was to refocus resources in Trinidad onto optimising production from the existing well-stock at the Goudron field. The capital and workover programme was geared towards achieving a cashflow positive position from operations in Q4 2017 with this being achieved once production exceeded 550 bopd in late December. The cashflow being generated from operations is being reinvested into further growth in 2018 and the increase in the oil price environment has helped increase revenues further, albeit offset to a degree by the imposition of Special Petroleum Tax ("SPT") once the oil price received from Petrotrin exceeds US$50 per barrel.
2017 was a year of change where the Company looked to establish a stronger platform for growth as it entered 2018. The Company's financial objectives were largely achieved during the year and as production grows in Trinidad the netbacks being achieved should also continue to improve as stable operating costs are spread across greater production volumes.
2017 was a good year for the Company financially and we will continue to work hard to generate greater cashflow from our operations to provide the funds to help us unlock the huge potential we see in the SWP. We have resolved most of the legacy issues which existed in 2017 and can look forward to the future with a greater focus on value-adding issues, rather than issues which hold back our business growth.
NOTES
All figures are net to CERP unless otherwise stated.
Gordon Stein, CFO, 11 June 2018
GLOSSARY & NOTES
1P 2P 3P AIM | Proved Reserves Proved plus probable reserves Proved plus probable plus possible reserves London Stock Exchange Alternative Investment Market |
barrel or bbl | 42 US gallons |
bbls | barrels of oil |
best estimate or P50 | the most likely estimate of a parameter based on all available data, also often termed the P50 (or the value of a probability distribution of outcomes at the 50% confidence level) |
|
|
BOLT | Beach Oilfield Limited |
bopd | barrels of oil per day |
C-sand | sandstone reservoirs below the pre-Mayaro unconformity and above the pre-Lower Cruse unconformity encompassing sandstones of equivalent age to both the Gros Morne and the Lower Cruse formations |
CESL | Columbus Energy Services Limited |
CPR | Competent Persons Report |
CPS | Compañia Petrolifera de Sedano |
EOR | enhanced oil recovery |
FTG | Full Tensor Gravity Gradiometry. Full tensor gradiometers measure the rate of change of the gravity vector in all three perpendicular directions |
GEPL | Goudron E&P Limited |
Goudron Sandstone | reservoir sands above the pre-Mayaro unconformity, also known as the Mayaro Sandstone |
IPSC | incremental production service contract |
La Lora | La Lora Production Concession in Spain |
Lind LTL | Lind Asset Management VII, LLC Leni Trinidad Limited |
Mayaro Sandstone | reservoir sands above the pre-Mayaro unconformity, also known as the Goudron Sandstone |
MEEI | Trinidad and Tobago Ministry of Energy and Energy Industries (formally the Ministry of Energy and Energy Affairs, MEEA) |
m | thousand |
mm | million |
mmbbls | million barrels of oil |
|
|
STOIIP or oil in place | stock tank oil initially in place, those quantities of oil that are estimated to be in known reservoirs prior to production commencing |
Petrotrin | The Petroleum Company of Trinidad and Tobago Limited |
PPL | private petroleum rights license |
sidetrack | an additional or replacement well bore created from an existing well bore at a depth below the surface casing |
WTI | West Texas Intermediate; oil price marker crude |
The estimates provided in this statement are based on the Petroleum Resources Management System ("PRMS") published by the Society of Petroleum Engineers ("SPE") and are reported consistent with the SPE's 2011 guidelines. All definitions used in the announcement have the meaning given to them in the PRMS.
Financial Statements
GROUP STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2017
|
|
| Year ended |
| Year ended |
|
|
| 31 December 2017 |
| 31 December 2016 |
| Note |
| £ 000's |
| £ 000's |
Sales revenue | 2 |
| 4,794 |
| 4,545 |
Cost of sales |
|
| (3,560) |
| (3,304) |
Depreciation of oil and gas assets | 3 |
| (1,156) |
| (1,389) |
Gross profit/(loss) |
|
| 78 |
| (148) |
|
|
|
|
|
|
Former Spanish production costs |
| (348) |
| - |
|
Previous Director contractual and termination costs | (352) |
| - |
| |
Other administrative expenses |
| (2,723) |
| (3,157) |
|
Total administrative expenses |
|
| (3,423) |
| (3,157) |
Amortisation and depreciation | 3 |
| (617) |
| (1,150) |
Share based payments |
|
| (234) |
| - |
Exceptional item |
|
| - |
| 466 |
Loss from operations |
|
| (4,196) |
| (3,989) |
|
|
|
|
|
|
Finance (charges)/income | 9 |
| (824) |
| 43 |
Impairment charge |
|
| - |
| (7,940) |
Loss before taxation |
|
| (5,020) |
| (11,886) |
|
|
|
|
|
|
Income tax expense | 5 |
| (12) |
| (33) |
Loss for the year attributable to equity holders of the parent |
|
| (5,032) |
| (11,919) |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Exchange differences on translation of foreign operations |
|
| (1,586) |
| 2,426 |
Other comprehensive income for the year net of taxation |
|
| (1,586) |
| 2,426 |
|
|
|
|
|
|
Total comprehensive income for the year attributable to equity holders of the parent |
|
| (6,618) |
| (9,493) |
|
|
|
|
|
|
Loss per share (pence) |
|
|
|
|
|
Basic and diluted | 8 |
| (0.94) |
| (4.26) |
|
|
|
|
|
|
All operations are considered to be continuing (see note 2).
The accompanying accounting policies and notes form an integral part of these financial statements.
GROUP STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017
|
| As at 31 December 2017 | As at 31 December 2016 |
| Note | £ 000's | £ 000's |
Assets |
|
|
|
Non-current assets |
|
|
|
Intangible evaluation assets | 10 | 4,327 | 4,998 |
Oil and gas assets | 11 | 13,865 | 14,958 |
Property, plant and equipment | 11 | 1,588 | 1,839 |
Investment in associate | 12 | 35 | 38 |
Total non-current assets |
| 19,815 | 21,833 |
|
|
|
|
Current assets |
|
|
|
Trade and other receivables | 13 | 1,459 | 1,076 |
Inventories | 14 | 192 | 457 |
Cash and cash equivalents | 20 | 4,002 | 1,827 |
Total current assets |
| 5,653 | 3,360 |
Total assets |
| 25,468 | 25,193 |
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade and other payables | 15 | (1,931) | (2,100) |
Borrowings | 16 | (837) | (725) |
Taxation | 5 | (12) | (23) |
Deferred consideration | 15 | (120) | (120) |
Total current liabilities |
| (2,900) | (2,968) |
|
|
|
|
Non-current liabilities |
|
|
|
Borrowings | 16 | (370) | (1,137) |
Provisions | 17 | (1,257) | (1,188) |
Total non-current liabilities |
| (1,627) | (2,325) |
Total liabilities |
| (4,527) | (5,293) |
Net assets |
| 20,941 | 19,900 |
|
|
|
|
Shareholders' equity |
|
|
|
Called-up share capital | 18 | 4,299 | 4,184 |
Share premium |
| 69,421 | 62,122 |
Share based payments reserve | 19 | 1,525 | 1,341 |
Retained earnings |
| (58,617) | (53,846) |
Revaluation surplus |
| 2,922 | 3,122 |
Foreign exchange reserve |
| 1,391 | 2,977 |
Total equity attributable to equity holders of the parent |
| 20,941 | 19,900 |
|
|
|
|
|
|
|
|
The accompanying accounting policies and notes form an integral part of these financial statements.
These financial statements were approved by the Board of Directors on 11 June 2018 and signed on its behalf by:
| |||
|
| ||
|
| ||
|
| ||
Leo Koot | Gordon Stein | ||
Executive Chairman | Chief Financial Officer | ||
COMPANY STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2017
|
| As at 31 December 2017 | As at 31 December 2016 | |
| Note | £ 000's | £ 000's | |
Assets |
|
|
| |
Non-current assets |
|
|
| |
Intangible assets | 10 | 49 | 82 | |
Property, plant and equipment | 11 | 6 | 61 | |
Investment in subsidiaries | 12 | 1 | 1 | |
Trade and other receivables | 13 | 39,849 | 38,151 | |
Total non-current assets |
| 39,905 | 38,295 | |
|
|
|
| |
Current assets |
|
|
| |
Trade and other receivables | 13 | 253 | 460 | |
Cash and cash equivalents | 20 | 3,820 | 600 | |
Total current assets |
| 4,073 | 1,060 | |
Total assets |
| 43,978 | 39,355 | |
|
|
|
| |
Liabilities |
|
|
| |
Current liabilities |
|
|
| |
Trade and other payables | 15 | (422) | (718) | |
Borrowings | 16 | (612) | (682) | |
Deferred consideration | 15 | (120) | (120) | |
Total current liabilities |
| (1,154) | (1,520) | |
|
|
|
| |
Non-current liabilities |
|
|
| |
Borrowings | 16 | (232) | (739) | |
Total non-current liabilities |
| (232) | (739) | |
Total liabilities |
| (1,386) | (2,259) | |
Net assets |
| 42,592 | 37,096 | |
|
|
|
| |
Shareholders' equity |
|
|
| |
Called-up share capital | 18 | 4,299 | 4,184 | |
Share premium |
| 69,421 | 62,122 | |
Share based payments reserve | 19 | 1,525 | 1,341 | |
Retained earnings | 24 | (32,653) | (30,551) | |
Total equity attributable to equity holders of the parent |
| 42,592 | 37,096 | |
|
|
|
| |
The accompanying accounting policies and notes form an integral part of these financial statements.
These financial statements were approved by the Board of Directors on 11 June 2018 and signed on its behalf by: | ||||
| ||||
Leo Koot | Gordon Stein | |||
Executive Chairman | Chief Financial Officer | |||
GROUP STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2017
| Year ended | Year ended |
| 31 December 2017 | 31 December 2016 |
| £ 000's | £ 000's |
Cash outflow from operating activities |
|
|
Operating loss | (4,196) | (3,989) |
(Increase)/decrease in trade and other receivables | (384) | 1,398 |
(Decrease) in trade and other payables | (108) | (4,070) |
Decrease/(increase) in inventories | 265 | (148) |
Depreciation | 1,504 | 2,119 |
Amortisation | 269 | 420 |
Share based payments | 234 | - |
Income tax paid | (12) | (20) |
Net cash (outflow) from operating activities | (2,428) | (4,290) |
|
|
|
Cash flows from investing activities |
|
|
Payments to acquire intangible assets | (21) | (1) |
Payments to acquire tangible assets | (1,355) | (309) |
Net cash outflow from investing activities | (1,376) | (310) |
|
|
|
Cash flows from financing activities |
|
|
Issue of ordinary share capital | 7,806 | 8,560 |
Share issue costs | (392) | (450) |
Finance income/(charges) paid | (626) | 86 |
Repayment of borrowings | (1,274) | (8,199) |
Proceeds of borrowings | 569 | 1,445 |
Net cash inflow from financing activities | 6,083 | 1,442 |
|
|
|
Net increase/(decrease) in cash and cash equivalents | 2,279 | (3,158) |
Foreign exchange differences on translation | (104) | 858 |
Cash and cash equivalents at beginning of year | 1,827 | 4,127 |
Cash and cash equivalents at end of year | 4,002 | 1,827 |
COMPANY STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2017
| Year ended | Year ended |
| 31 December 2017 | 31 December 2016 |
| £ 000's | £ 000's |
Cash outflow from operating activities |
|
|
Operating loss | (1,352) | (1,384) |
Decrease/(increase) in trade and other receivables | 207 | (23) |
(Decrease)/increase in trade and other payables | (296) | 269 |
Depreciation | 56 | 149 |
Amortisation | 33 | 33 |
Share based payments | 234 | - |
Net cash outflow from operating activities | (1,118) | (956) |
|
|
|
Cash flows from investing activities |
|
|
Loans granted to subsidiaries | (1,698) | (8,223) |
Payments to acquire intangible assets | - | - |
Payments to acquire tangible assets | (1) | - |
Net cash outflow from investing activities | (1,699) | (8,223) |
|
|
|
Cash flows from financing activities |
|
|
Issue of ordinary share capital | 7,806 | 8,560 |
Share issue costs | (392) | (450) |
Finance charges paid | (615) | (146) |
Repayments of borrowings | (1,235) | (75) |
Proceeds of borrowings | 569 | 1,445 |
Net cash inflow from financing activities | 6,133 | 9,334 |
|
|
|
Net increase/(decrease) in cash and cash equivalents | 3,316 | 155 |
Foreign exchange differences on borrowings | (96) | 39 |
Cash and cash equivalents at beginning of year | 600 | 406 |
Cash and cash equivalents at end of year | 3,820 | 600 |
STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2017
| Called up share capital | Share premium reserve | Share based payments reserve | Retained earnings | Foreign exchange reserve | Revaluation surplus | Total Equity |
| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's |
Group |
|
|
|
|
|
|
|
As at 31 December 2015 | 1,632 | 56,564 | 1,309 | (42,156) | 551 | 3,351 | 21,251 |
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | (11,919) | - | - | (11,919) |
Revaluation surplus amortisation | - | - | - | 229 | - | (229) | - |
Currency translation differences | - | - | - | - | 2,426 | - | 2,426 |
Total comprehensive income | - | - | - | (11,690) | 2,426 | (229) | (9,493) |
Share capital issued | 2,552 | 6,008 | - | - | - | - | 8,560 |
Cost of share issue | - | (450) | - | - | - | - | (450) |
Share based payments | - | - | 32 | - | - | - | 32 |
Total contributions by and distributions to owners of the Company | 2,552 | 5,558 | 32 | - | - | - | 8,142 |
As at 31 December 2016 | 4,184 | 62,122 | 1,341 | (53,846) | 2,977 | 3,122 | 19,900 |
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | (5,032) | - | - | (5,032) |
Revaluation surplus amortisation | - | - | - | 200 | - | (200) | - |
Lapsing of warrants | - | - | (61) | 61 | - | - | - |
Currency translation differences | - | - | - | - | (1,586) | - | (1,586) |
Total comprehensive income | - | - | (61) | (4,771) | (1,586) | (200) | (6,618) |
Share capital issued | 115 | 7,691 | - | - | - | - | 7,806 |
Cost of share issue | - | (392) | - | - | - | - | (392) |
Share based payments | - | - | 245 | - | - | - | 245 |
Total contributions by and distributions to owners of the Company | 115 | 7,299 | 245 | - | - | - | 7,659 |
As at 31 December 2017 | 4,299 | 69,421 | 1,525 | (58,617) | 1,391 | 2,922 | 20,941 |
Company |
|
|
|
|
|
|
|
As at 31 December 2015 | 1,632 | 56,564 | 1,309 | (28,978) | - | - | 30,527 |
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | (1,573) | - | - | (1,573) |
Total comprehensive income | - | - | - | (1,573) | - | - | (1,573) |
Share capital issued | 2,552 | 6,008 | - | - | - | - | 8,560 |
Cost of share issue | - | (450) | - | - | - | - | (450) |
Share based payments | - | - | 32 | - | - | - | 32 |
Total contributions by and distributions to owners of the Company | 2,552 | 5,558 | 32 | - | - | - | 8,142 |
As at 31 December 2016 | 4,184 | 62,122 | 1,341 | (30,551) | - | - | 37,096 |
|
|
|
|
|
|
|
|
Loss for the year | - | - | - | (2,163) | - | - | (2,163) |
Lapsing of warrants | - | - | (61) | 61 |
|
| - |
Total comprehensive income | - | - | (61) | (2,102) | - | - | (2,163) |
Share capital issued | 115 | 7,691 | - | - | - | - | 7,806 |
Cost of share issue | - | (392) | - | - | - | - | (392) |
Share based payments | - | - | 245 | - | - | - | 245 |
Total contributions by and distributions to owners of the Company | 115 | 7,299 | 245 | - | - | - | 7,659 |
As at 31 December 2017 | 4,299 | 69,421 | 1,525 | (32,653) | - | - | 42,592 |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017
1 | Summary of significant accounting policies |
|
|
1.01 | General information and authorisation of financial statements |
| Columbus Energy Resources Plc is a public limited company registered in the United Kingdom under the Companies Act 2006. The address of its registered office is Suite 206, Amadeus House, 27b Floral Street, London WC2E 9DP. The Company's Ordinary shares are traded on the AIM Market operated by the London Stock Exchange. The Group financial statements of Columbus Energy Resources Plc for the year ended 31 December 2017 were approved for issue by the Board on 11 June 2018 and the balance sheets signed on the Board's behalf by Mr. Leo Koot and Mr. Gordon Stein. |
|
|
1.02 | Statement of compliance with IFRS |
| The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The Company's financial statements have been prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted by the Group and Company are set out below.
|
| New and revised standards and interpretations not applied |
| At the date of authorisation of these Financial Statements, the following Standards and Interpretations were in issue but not yet effective (and in some cases had not yet been adopted by the EU):
IFRS 9 Financial Instruments (effective date 1 January 2018) IFRS 15 Revenue from Contracts with Customers (effective date 1 January 2018) IFRS 16 Leases (effective date 1 January 2019)
|
| |
| |
| |
| |
| The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods however, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed. |
|
|
1.03 | Basis of preparation |
| The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.
The Company's internal cashflow forecasts monitor both the short and long term timelines, factoring in the known risks and uncertainties. These forecasts are regularly updated and demonstrate that with the current cash reserves and forecasted future revenue, the Company is able to continue in operation for at least the next 12 months. The Group financial statements have therefore been prepared on a going concern basis.
|
| The financial report is presented in Pound Sterling (£) and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated. |
|
|
1.04 | Basis of consolidation |
| The consolidated financial information incorporates the results of the Company and its subsidiaries ("the Group") using the purchase method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained. Inter-company transactions and balances between Group companies are eliminated in full.
The investment in associate has been recorded at cost and has not been adjusted to reflect the Group's 25% share of the net profits/losses and assets/liabilities of the associate from the date of acquisition to the balance sheet date as it was deemed immaterial. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
1.05 | Intangible assets |
| Intangible assets are recorded at cost less eventual amortisation and provision for impairment in value. |
1.06 | Oil and gas exploration assets and development/producing assets |
| The Group applies the successful efforts method of accounting for oil and gas assets, having regard to the requirements of IFRS 6 'Exploration for and Evaluation of Mineral Resources'.
|
| All licence acquisition, exploration and evaluation costs are initially capitalised as intangible fixed assets in cost centres by field or by exploration area, as appropriate, pending determination of commerciality of the relevant property. Directly attributable administration costs are capitalised insofar as they relate to specific exploration activities, as are finance costs to the extent they are directly attributable to financing development projects. Pre-licence costs and general exploration costs not specific to any particular licence or prospect are expensed as incurred.
|
| If prospects are deemed to be impaired ('unsuccessful') on completion of the evaluation, the associated costs are charged to the income statement. If the field is determined to be commercially viable, the attributable costs are transferred to development/production assets within property, plant and equipment in single field cost centres.
|
| Subsequent expenditure is capitalised only where it either enhances the economic benefits of the development/producing asset or replaces part of the existing development/producing asset.
|
| Increases in the carrying amount arising on revaluation of oil and gas properties are credited to other comprehensive income and shown as revaluation surplus reserve in shareholders' equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited against revaluation surplus reserve directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement, and depreciation based on the asset's original cost is transferred from 'revaluation surplus reserve' to 'retained earnings'.
|
| Net proceeds from any disposal of an exploration asset are initially credited against the previously capitalised costs. Any surplus proceeds are credited to the income statement. Net proceeds from any disposal of development/producing assets are credited against the previously capitalised cost. A gain or loss on disposal of a development/producing asset is recognised in the income statement to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalised costs of the asset.
|
1.07 | Commercial reserves |
| Commercial reserves are proven and probable oil and gas reserves, which are defined as the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. There should be a 50 per cent statistical probability that the actual quantity of recoverable reserves will be more than the amount estimated as a proven and probable reserves and a 50 per cent statistical probability that it will be less. |
|
|
1.08 | Depletion and amortisation |
| All expenditure carried within each field is amortised from the commencement of production on a unit of production basis, which is the ratio of oil and gas production in the period to the estimated quantities of commercial reserves at the end of the period plus the production in the period, generally on a field by field basis. In certain circumstances, fields within a single development area may be combined for depletion purposes. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs necessary to bring the reserves into production. Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively. |
|
|
1.09 | Decommissioning |
| Where a material liability for the removal of production facilities and site restoration at the end of the productive life of a field exists, a provision for decommissioning is recognised. The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements. The cost of the relevant tangible fixed asset is increased with an amount equivalent to the provision and depreciated on a unit of production basis. Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated fixed asset. |
1.10 | Property, plant and equipment |
| Property, plant and equipment is stated in the Balance Sheet at cost less accumulated depreciation and any recognised impairment loss. Depreciation on property, plant and equipment other than exploration and production assets, is provided at rates calculated to write off the cost less estimated residual value of each asset on a straight-line basis over its expected useful economic life of between one and five years.
Leasehold improvements are classified as property, plant and equipment and are depreciated on a straight-line basis over the period of the lease. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
1.11 | Inventories |
| Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average cost formula, where cost is determined from the weighted average of the cost at the beginning of the period and the cost of purchases during the period. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. |
1.12 | Revenue recognition |
| Revenue represents amounts invoiced in respect of sales of oil and gas exclusive of indirect taxes and excise duties and is recognised on delivery of product. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount. |
|
|
1.13 | Foreign currencies |
| Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction. Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the balance sheet date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in the income statement. Non‑monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the date of the original transaction. |
|
|
| In the consolidated financial statements, the net assets of the Company are translated into its presentation currency at the rate of exchange at the balance sheet date. Income and expense items are translated at the average rates for the period. The resulting exchange differences are recognised in equity and included in the translation reserve. |
|
|
1.14 | Operating leases |
| The costs of all operating leases are charged against operating profit on a straight-line basis at existing rental levels. Incentives to sign operating leases are recognised in the income statement in equal instalments over the term of the lease. |
|
|
1.15 | Financial instruments |
| Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. |
|
|
| The particular recognition and measurement methods adopted are disclosed below: |
|
|
(i) | Cash and cash equivalents |
| Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. |
|
|
(ii) | Trade receivables |
| Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. |
|
|
(iii) | Trade payables |
| Trade payables are not interest-bearing and are stated at their nominal value. |
|
|
(iv) | Investments |
| Investments in subsidiaries are stated at cost and reviewed for impairment if there are indications that the carrying value may not be recoverable. The investment in associate has been recorded at cost and has not been adjusted to reflect the Group's 25% share of the net profits/losses and assets/liabilities of the associate from the date of acquisition to the balance sheet date as it was deemed immaterial. |
|
|
(v) | Equity instruments |
| Equity instruments issued by the Company and the Group are recorded at the proceeds received, net of direct issue costs. |
(vi) | Derivative instruments |
| Derivative instruments are recorded at cost, and adjusted for their market value as applicable. They are assessed for any equity and debt component which is subsequently accounted for in accordance with IFRS's. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
1.16 | Finance costs |
| Borrowing costs are recognised as an expense when incurred. |
1.17 | Borrowings |
| Borrowings are recognised initially at fair value, net of any applicable transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method (if applicable).
Interest on borrowings is accrued as applicable to that class of borrowing. |
|
|
1.18 | Provisions |
| Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. |
|
|
| When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. |
|
|
1.19 | Dividends |
| Dividends are reported as a movement in equity in the period in which they are approved by the shareholders. |
|
|
1.20 | Taxation |
| The tax expense represents the sum of the tax currently payable and deferred tax. |
|
|
| Current tax, including UK corporation and overseas tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. |
|
|
| Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. |
|
|
| Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. |
|
|
| The carrying amount of deferred tax assets is reviewed at each balance sheet date and adjusted to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. |
|
|
| Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. |
1.21 | Impairment of assets |
| At each balance sheet date, the Group assesses whether there is any indication that its property, plant and equipment and intangible assets have been impaired. Evaluation, pursuit and exploration assets are also tested for impairment when reclassified to oil and natural gas assets. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash‑generating unit to which the asset belongs is determined.
|
| The recoverable amount of an asset or a cash‑generating unit is the higher of its fair value less costs to sell and its value in use. The value in use is the present value of the future cash flows expected to be derived from an asset or cash‑generating unit. This present value is discounted using a pre‑tax rate that reflects current market assessments of the time value of money and of the risks specific to the asset, for which future cash flow estimates have not been adjusted. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is recognised as an impairment loss. |
|
|
| The Group's impairment policy is to recognise a loss relating to assets carried at cost less any accumulated depreciation or amortisation immediately in the income statement. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
| Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash‑generating units, or groups of cash‑generating units, that are expected to benefit from the synergies of the combination. Goodwill is tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. An impairment loss is recognised on cash‑generating units, if the recoverable amount of the unit is less than the carrying amount of the unit. The impairment loss is allocated to reduce the carrying amount of the assets of the unit by first reducing the carrying amount of any goodwill allocated to the cash‑generating unit, and then reducing the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit. |
|
|
| If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount but limited to the carrying amount that would have been determined had no impairment loss been recognised in prior years. A reversal of an impairment loss is recognised in the income statement. Impairment losses on goodwill are not subsequently reversed. |
|
|
1.22 | Share based payments |
| Equity settled transactions: |
| The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). |
|
|
| The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black-Scholes model. |
|
|
| In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Columbus Energy Resources Plc (market conditions) if applicable. The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group's best estimate of the number of equity instruments that will ultimately vest. The Income Statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. |
|
|
| The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting date). |
|
|
| No expense is ultimately recognised for awards that do not vest. |
|
|
| If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. |
|
|
| The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.
|
1.23 | Segmental reporting |
| Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
The Board has determined there is a single operating segment: oil and gas exploration, development and production however, there are six geographical segments: Trinidad & Tobago, Spain and Cyprus, St Lucia, the U.S.A. & the U.K., four of which are non-operating.
Spain and Trinidad & Tobago, have been reported as the Group's direct oil and gas producing entities and are the Group's only third party revenue generating operations. The UK is the Group's parent and management entity and is reported on as a separate segment. The entities in Cyprus, St Lucia and the U.S. are non-operating in that they either hold investments or are dormant. Their results are consolidated and reported on together as a single segment. |
1.24 | Share issue expenses and share premium account |
| Costs of share issues are written off against the premium arising on the issues of share capital. |
|
|
1.25 | Share based payments reserve |
| This reserve is used to record the value of equity benefits provided to employees and Directors as part of their remuneration and provided to consultants and advisors hired by the Group from time to time as part of the consideration paid. |
|
|
1.26 | Revaluation surplus Reserve |
| This reserve is used to record the increase on revaluation of assets, in particular of oil and gas properties. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
1.27 |
Critical accounting estimates and assumptions |
| The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. |
|
|
(i) | Recoverability of intangible oil and gas costs |
| Costs capitalised as intangible assets are assessed for impairment when circumstances suggest that the carrying value may exceed its recoverable value. This assessment involves judgement as to the likely commerciality of the asset, the future revenues and costs pertaining and the discount rate to be applied for the purposes of deriving a recoverable value. |
|
|
(ii) | Decommissioning |
| The Group has decommissioning obligations in respect of its Spanish and Trinidadian assets. The full extent to which the provision is required depends on the legal requirements at the time of decommissioning, the costs and timing of any decommissioning works and the discount rate applied to such costs. |
|
|
(iii) | Share-based payment transactions |
| The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model. |
|
|
1.28 | Earnings per share |
| Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. |
|
|
| Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for: |
|
|
(i) | Costs of servicing equity (other than dividends) and preference share dividends; |
|
|
(ii) | The post tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and |
|
|
(iii) | Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
2 | Turnover and segmental analysis
|
| Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.
The Board has determined there is a single operating segment: oil and gas exploration, development and production however, there are six geographical segments: Trinidad & Tobago, Spain and Cyprus, St Lucia, the U.S.A. & the U.K., four of which are non-operating.
Spain and Trinidad & Tobago, have been reported as the Group's direct oil and gas producing entities and are the Group's only third party revenue generating operations. The UK is the Group's parent and management entity and is reported on as a separate segment. The entities in Cyprus, St Lucia and the U.S.A. are non-operating in that they either hold investments or are dormant. Their results are consolidated and reported on together as a single segment.
Although the concession in Spain has expired and is formally closed, it is still classified as operating, due to the Company intending to participate in the re-tender process for a new concession.
|
|
| Year ended 31 December 2017 | Management | Operating | Operating | Non-operating | Total |
|
| UK (*) | Spain | Trinidad | Cyprus, St Lucia & USA |
| |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Operating profit/(loss) by geographical area |
|
|
|
|
| |
| Sales revenue (**) | - | 293 | 4,501 | - | 4,794 | |
|
|
|
|
|
|
| |
| Operating profit/(loss) | (1,352) | (766) | (2,053) | (25) | (4,196) | |
| Finance (charges)/income | (813) | - | (11) | - | (824) | |
| Profit/(loss) before taxation | (2,165) | (766) | (2,064) | (25) | (5,020) | |
|
|
|
|
|
|
| |
| Other information |
|
|
|
|
| |
| Depreciation and amortisation | (89) | (33) | (1,651) | - | (1,773) | |
| Capital additions | 1 | - | 1,375 | - | 1,376 | |
|
|
|
|
|
|
| |
| Segment assets |
|
|
|
|
| |
| Non-current assets | 56 | 136 | 19,623 | - | 19,815 | |
| Trade and other receivables | 253 | 19 | 1,187 | - | 1,459 | |
| Inventories | - | - | 192 | - | 192 | |
| Cash | 3,820 | 42 | 138 | 2 | 4,002 | |
| Consolidated total assets | 4,129 | 197 | 21,140 | 2 | 25,468 | |
|
|
|
|
|
|
| |
| Segment liabilities |
|
|
|
|
| |
| Trade and other payables | (422) | (36) | (1,458) | (15) | (1,931) | |
| Taxation | - | - | - | (12) | (12) | |
| Borrowings | (844) | - | (363) | - | (1,207) | |
| Deferred consideration | (120) | - | - | - | (120) | |
| Provisions | - | (847) | (410) | - | (1,257) | |
| Consolidated total liabilities | (1,386) | (883) | (2,231) | (27) | (4,527) | |
|
|
|
|
|
|
| |
| (*) Intercompany balances and transactions between Group entities have been eliminated. (**) Sales revenues were derived from a single customer within each of these operating countries.
| ||||||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
2 | Turnover and segmental analysis (continued) |
|
| Year ended 31 December 2016 | Management | Operating | Operating | Non-operating | Total |
|
| UK (*) | Spain | Trinidad | Cyprus, St Lucia & USA |
| |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Operating profit/(loss) by geographical area |
|
|
|
|
| |
| Revenue (**) | - | 920 | 3,625 | - | 4,545 | |
|
|
|
|
|
|
| |
| Operating profit/(loss) | (1,384) | (465) | (2,113) | (27) | (3,989) | |
| Asset impairment | - | (7,940) | - | - | (7,940) | |
| Finance (charges)/income | (189) | - | 232 | - | 43 | |
| Profit/(loss) before taxation | (1,573) | (8,405) | (1,881) | (27) | (11,886) | |
|
|
|
|
|
|
| |
| Other information |
|
|
|
|
| |
| Depreciation and amortisation | (183) | (204) | (2,152) | - | (2,539) | |
| Capital additions | - | 10 | 300 | - | 310 | |
|
|
|
|
|
|
| |
| Segment assets |
|
|
|
|
| |
| Non-current assets | 143 | 160 | 21,529 | - | 21,833 | |
| Trade and other receivables | 460 | 125 | 490 | 1 | 1,076 | |
| Inventories | - | 252 | 206 | - | 457 | |
| Cash | 600 | 14 | 1,210 | 3 | 1,827 | |
| Consolidated total assets | 1,203 | 551 | 23,435 | 4 | 25,193 | |
|
|
|
|
|
|
| |
| Segment liabilities |
|
|
|
|
| |
| Trade and other payables | (718) | (218) | (1,155) | (9) | (2,100) | |
| Taxation | - | - | - | (23) | (23) | |
| Borrowings | (1,421) | - | (442) | - | (1,862) | |
| Deferred consideration | (120) | - | - | - | (120) | |
| Provisions | - | (813) | (374) | - | (1,188) | |
| Consolidated total liabilities | (2,259) | (1,031) | (1,971) | (32) | (5,293) | |
|
|
|
|
|
|
| |
(*) Intercompany balances and transactions between Group entities have been eliminated.
(**) Sales revenues were derived from a single customer within each of these operating countries.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
3 | Operating loss | 2017 | 2016 |
|
| £ 000's | £ 000's |
| Operating loss is arrived at after charging: |
|
|
| Fees payable to the Company's auditor for: |
|
|
| -the audit of the Company and Group accounts | 37 | 39 |
| -audit related assurance services | 2 | 2 |
| Directors' emoluments - fees and benefits (*) | 1,152 | 803 |
| Depreciation (**) | 1,504 | 2,119 |
| Amortisation | 269 | 420 |
| Exceptional item | - | (466) |
|
(*) See note 7 for further details. (**) Depreciation of certain oil and gas assets of £1,156,000 (2016: £1,389,000) has been recognised within cost of sales.
| ||
4 | Employee information (excluding Directors') | 2017 | 2016 |
|
| £ 000's | £ 000's |
| Staff costs: |
|
|
| Wages and salaries | 1,173 | 1,554 |
| Employer NIC's | 254 | 236 |
| Total | 1,427 | 1,789 |
|
| ||
|
| Number | Number |
| The average number of employees working on a full time equivalent basis: |
|
|
| Administration | 8 | 13 |
| Operations | 18 | 24 |
| Total | 26 | 37 |
5 | Taxation | 2017 | 2016 |
|
| £ 000's | £ 000's |
| Analysis of tax charge in the year |
|
|
| Tax charge/(income) on ordinary activities | 12 | 33 |
|
|
|
|
| Factors affecting the tax charge for the year: |
|
|
| Loss on ordinary activities before tax | 5,020 | 11,886 |
| Standard rate of corporation tax in the UK | 20%/19% | 20% |
|
|
|
|
| Loss on ordinary activities multiplied by the standard rate of corporation tax | 966 | 2,377 |
| Effects of: |
|
|
| Non-deductible expenses | (50) | (8) |
| Overseas tax on profits | 12 | 33 |
| Overseas deferred tax expense | - | - |
| Future tax benefit not brought to account | (916) | (2,369) |
| Current tax charge/(income) for the year | 12 | 33 |
|
No deferred tax asset has been recognised in the Group because there is uncertainty in the timing of suitable future profits against which the accumulated losses can be offset.
| ||
6 | Dividends | ||
| During the year, no dividends were paid or proposed by the Directors (2016: nil). | ||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
7 | Directors' remuneration | ||||||
|
|
|
|
|
| 2017 | 2016 |
|
|
|
|
|
| £ 000's | £ 000's |
| Directors' remuneration |
|
|
| 1,152 | 803 | |
|
|
Directors fees |
Pension and medical benefits |
Employer NIC's | Contractual and termination benefits | Share-based payments |
Total | |
|
| £000's | £000's | £000's | £000's | £000's | £000's | |
| 2017 |
|
|
|
|
|
| |
| Executive Directors |
|
|
|
|
|
| |
| Leo Koot | 193 | 6 | 26 | - | 65 | 290 | |
| Gordon Stein | 104 | 3 | 14 | - | 65 | 186 | |
|
|
|
|
|
|
|
| |
| Neil Ritson | 75 | 4 | 21 | 131 | - | 231 | |
| Fergus Jenkins | 58 | 6 | 8 | 25 | - | 97 | |
| James Thadchanamoorthy | 69 | 8 | 20 | 141 | - | 238 | |
|
|
|
|
|
|
|
| |
| Non-Executive Directors |
|
|
|
|
|
| |
| Michael Douglas | 24 | - | 1 | - | 15 | 40 | |
| Gordon Stein | 10 | - | 1 | - | - | 11 | |
| Stephen Horton | - | - | 4 | 55 | - | 59 | |
|
| 533 | 27 | 95 | 352 | 145 | 1,152 | |
|
|
|
|
|
|
|
| |
Stephen Horton retired from the Board of Directors on 10 January 2017. Gordon Stein joined as a Non-Executive Director on 10 January 2017 then later was appointed Chief Financial Officer on 15 June 2017, replacing James Thadchanamoorthy. Leo Koot was appointed Executive Chairman on 10 May 2017, replacing Neil Ritson. Fergus Jenkins stepped down from the Board on 1 August 2017. One-off contractual and termination payments due to the previous Executive Directors, Neil Ritson, Fergus Jenkins and James Thadchanamoorthy, are shown separately above. | ||||||||
|
| |||||||
Following his departure as Chief Executive Officer on 10 May 2017, Mr Ritson was retained as a Senior Advisor to the Board until 9 May 2018 but, since that date, no longer has any contractual or advisory relationship with the Company.
The new Executive Directors being Leo Koot and Gordon Stein, and the new Executive Management Members being Stewart Ahmed and Anthony Hawkins, initially agreed to receive 50% of their fees for the first year of their employment in the Company's shares however, in May 2018, it was agreed that it would be more appropriate to issue share options instead. See the Directors' and Strategic Report for further details. The agreement to issue share based securities was to align director and management interests with shareholders and conserve cash resources. The figures above include accruals for the fees to be settled by the issue of share options following the first anniversary of their appointments. At the year-end, Leo Koot was owed £97,000 and Gordon Stein was owed £52,000 in fees. | ||||||||
|
|
Directors fees |
Pension and medical benefits |
Employer NIC's |
Contractual and termination benefits | Share-based payments |
Total | |
|
| £000's | £000's | £000's | £000's | £000's | £000's | |
| 2016 |
|
|
|
|
|
| |
| Executive Directors |
|
|
|
|
|
| |
| Neil Ritson | 240 | 10 | 33 | - | - | 283 | |
| Fergus Jenkins | 150 | 17 | 20 | - | - | 187 | |
| James Thadchanamoorthy | 150 | 17 | 20 | - | - | 187 | |
|
|
|
|
|
|
|
| |
| Non-Executive Directors |
|
|
|
|
|
| |
| Steve Horton | 80 | - | 10 | - | - | 90 | |
| Michael Douglas | 50 | - | 6 | - | - | 56 | |
|
| 670 | 44 | 89 | - | - | 803 | |
|
|
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
8 | Loss per share | ||
| The calculation of loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during the year: | ||
|
| 2017 | 2016 |
| Loss after taxation (£000's) | (5,032) | (11,919) |
|
|
|
|
| Weighted average number of ordinary shares used in calculating basic loss per share (millions) | 534 | 280 |
| Weighted average number of ordinary shares used in calculating diluted loss per share (millions) | 597 | 296 |
|
|
|
|
| Basic loss per share (expressed in pence) | (0.94) | (4.26) |
| Diluted loss per share (expressed in pence) | (0.94) | (4.26) |
|
| ||
| As the inclusion of potentially issuable ordinary shares would result in a decrease in the loss per share, they are considered to be anti-dilutive and as such, a diluted loss per share is not included.
In March 2017, the Company reorganised its share capital and reduced the number of ordinary shares in issue by a ratio of 20:1. The 2016 weighted average number of ordinary shares used in calculating the basic and diluted loss per share figures above have been restated as if they occurred post the capital reorganisation.
| ||
9 | Finance charges/(income) | 2017 | 2016 | |
|
| £ 000's | £ 000's | |
| Loan interest payable | 250 | 178 | |
| Loan facility fees | 574 | 174 | |
| Realised (gain)/loss on loan maturity | - | (395) | |
| Total | 824 | (43) | |
|
|
|
| |
| Loan facility fees include the fair value of the options issued in connection with the second convertible security from Lind Partners LLC (Lind) (see note 19) and the fair value of the shares issued in connection with the re-negotiation of the Convertible Security Funding Agreement with Lind, as announced by the Company on 11 September 2017. | |||
|
|
|
| |
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
10 | Intangible assets |
|
| 2017 |
|
| Intangible evaluation assets | Software | Total |
|
| £000's | £000's | £000's |
| Cost |
|
|
|
| As at 1 January 2017 | 16,302 | 133 | 16,435 |
| Additions | 21 | - | 21 |
| Foreign exchange difference on translation | (523) | - | (523) |
| As at 31 December 2017 | 15,800 | 133 | 15,933 |
|
|
|
|
|
| Amortisation and Impairment |
|
|
|
| As at 1 January 2017 | 11,386 | 51 | 11,437 |
| Amortisation | 236 | 33 | 269 |
| Foreign exchange difference on translation | (100) | - | (100) |
| As at 31 December 2017 | 11,522 | 84 | 11,606 |
|
|
|
|
|
| Net book value |
|
|
|
| As at 31 December 2017 | 4,278 | 49 | 4,327 |
| As at 31 December 2016 | 4,916 | 82 | 4,998 |
|
|
|
|
|
| Impairment review | |||
| The Directors carried out an impairment review of the intangible assets and concluded that a write-down was not required. | |||
10 | Intangible assets | 2017 |
|
| Company |
|
| Software |
|
| £000's |
| Cost |
|
| As at 1 January 2017 | 133 |
| Additions | - |
| Foreign exchange difference on translation | - |
| As at 31 December 2017 | 133 |
|
|
|
| Amortisation and Impairment |
|
| As at 1 January 2017 | 51 |
| Amortisation | 33 |
| Foreign exchange difference on translation | - |
| As at 31 December 2017 | 84 |
|
|
|
| Net book value |
|
| As at 31 December 2017 | 49 |
| As at 31 December 2016 | 82 |
|
|
|
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
| 10 | Intangible assets |
|
| 2016 | |||||
|
|
| Intangible evaluation assets | Software | Total | |||||
|
|
| £000's | £000's | £000's | |||||
|
| Cost |
|
|
| |||||
|
| As at 1 January 2016 | 14,423 | 133 | 14,556 | |||||
|
| Additions | 1 | - | 1 | |||||
|
| Foreign exchange difference on translation | 1,878 | - | 1,878 | |||||
|
| As at 31 December 2016 | 16,302 | 133 | 16,435 | |||||
|
|
|
|
|
| |||||
|
| Amortisation and Impairment |
|
|
| |||||
|
| As at 1 January 2016 | 3,061 | 18 | 3,079 | |||||
|
| Amortisation | 387 | 33 | 420 | |||||
|
| Impairment | 7,252 | - | 7,252 | |||||
|
| Foreign exchange difference on translation | 686 | - | 686 | |||||
|
| As at 31 December 2016 | 11,386 | 51 | 11,437 | |||||
|
|
|
|
|
| |||||
|
| Net book value |
|
|
| |||||
|
| As at 31 December 2016 | 4,916 | 82 | 4,998 | |||||
|
| As at 31 December 2015 | 11,362 | 115 | 11,477 | |||||
|
|
|
|
|
| |||||
|
| Impairment review | ||||||||
|
| Intangible evaluation assets in relation to the Group entity in Spain, were written down due to non-renewal of the operating licence. | ||||||||
|
|
|
|
|
| |||||
10 | Intangible assets | 2016 | ||||||||
|
| Company | ||||||||
|
| Software | ||||||||
|
| £000's | ||||||||
| Cost |
| ||||||||
| As at 1 January 2016 | 133 | ||||||||
| Additions | - | ||||||||
| Foreign exchange difference on translation | - | ||||||||
| As at 31 December 2016 | 133 | ||||||||
|
|
| ||||||||
| Amortisation and Impairment |
| ||||||||
| As at 1 January 2016 | 18 | ||||||||
| Amortisation | 33 | ||||||||
| Foreign exchange difference on translation | - | ||||||||
| As at 31 December 2016 | 51 | ||||||||
|
|
| ||||||||
| Net book value |
| ||||||||
| As at 31 December 2016 | 82 | ||||||||
| As at 31 December 2015 | 115 | ||||||||
|
|
| ||||||||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
11 | Tangible assets | 2017 | ||||||||
|
|
|
|
| Group | Company | ||||
|
| Oil and gas assets | Property, plant and equipment (*) | Decommissioning costs | Total | Property, plant and equipment (*) | ||||
|
| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | ||||
| Cost or Valuation |
|
|
|
|
| ||||
| As at 1 January 2017 | 22,597 | 3,594 | 1,134 | 27,325 | 258 | ||||
| Additions | 1,123 | 172 | 60 | 1,355 | 1 | ||||
| Disposals | - | (233) | - | (233) | (233) | ||||
| Foreign exchange difference on translation | (1,678) | (167) | (34) | (1,879) | - | ||||
| As at 31 December 2017 | 22,042 | 3,366 | 1,160 | 26,568 | 26 | ||||
|
|
|
|
|
|
| ||||
| Depreciation and Impairment |
|
|
|
|
| ||||
| As at 1 January 2017 | 7,639 | 2,064 | 825 | 10,528 | 197 | ||||
| Depreciation | 1,156 | 316 | 32 | 1,504 | 56 | ||||
| Disposals | - | (233) | - | (233) | (233) | ||||
| Foreign exchange difference on translation | (618) | (60) | (6) | (684) | - | ||||
| As at 31 December 2017 | 8,177 | 2,087 | 851 | 11,115 | 20 | ||||
|
|
|
|
|
|
| ||||
| Net book value |
|
|
|
|
| ||||
| As at 31 December 2017 | 13,865 | 1,279 | 309 | 15,453 | 6 | ||||
| As at 31 December 2016 | 14,958 | 1,530 | 309 | 16,797 | 61 | ||||
|
|
|
|
|
|
| ||||
| (*) Property, plant and equipment includes leasehold improvements. | |||||||||
| Impairment review |
| The Directors carried out an impairment review of the tangible assets and concluded that a write-down was not required with the exception of property, plant and equipment in relation to the London office lease, which were disposed on the surrender of the lease.
|
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
11 | Tangible assets | 2016 | ||||||||
|
|
|
|
| Group | Company | ||||
|
| Oil and gas assets | Property, plant and equipment (*) | Decommissioning costs | Total | Property, plant and equipment (*) | ||||
|
| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | ||||
| Cost or Valuation |
|
|
|
|
| ||||
| As at 1 January 2016 | 20,054 | 3,122 | 1,011 | 24,187 | 258 | ||||
| Additions | 287 | 22 |
| 309 | - | ||||
| Foreign exchange difference on translation | 2,256 | 450 | 123 | 2,829 | - | ||||
| As at 31 December 2016 | 22,597 | 3,594 | 1,134 | 27,325 | 258 | ||||
|
|
|
|
|
|
| ||||
| Depreciation and Impairment |
|
|
|
|
| ||||
| As at 1 January 2016 | 5,300 | 1,353 | 90 | 6,743 | 48 | ||||
| Depreciation | 1,619 | 464 | 36 | 2,119 | 149 | ||||
| Impairment | - | - | 688 | 688 | - | ||||
| Foreign exchange difference on translation | 720 | 247 | 11 | 978 | - | ||||
| As at 31 December 2016 | 7,639 | 2,064 | 825 | 10,528 | 197 | ||||
|
|
|
|
|
|
| ||||
| Net book value |
|
|
|
|
| ||||
| As at 31 December 2016 | 14,958 | 1,530 | 309 | 16,797 | 61 | ||||
| As at 31 December 2015 | 14,754 | 1,769 | 921 | 17,444 | 210 | ||||
|
|
|
|
|
|
| ||||
| (*) Property, plant and equipment includes leasehold improvements. | |||||||||
| Impairment review |
| Decommissioning assets in relation to the Group entity in Spain, were written down due to non-renewal of the operating licence.
|
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
12 | Investment in associate | 2017 | 2016 | |||
| Group | £ 000's | £ 000's | |||
| Cost |
|
| |||
| As at 1 January | 38 | 34 | |||
| Additions | - | - | |||
| Foreign exchange difference on translation | (3) | 4 | |||
| As at 31 December | 35 | 38 | |||
|
| |||||
| Columbus Energy Resources Plc, the parent company of the Group, holds 25% of the share capital of the following company:
| |||||
| Company | Country of registration | Proportion held | Nature of business | ||
| Indirect |
|
|
| ||
| Via Leni Trinidad Ltd |
|
|
| ||
| Beach Oilfield Limited | Trinidad & Tobago | 25% | Oil and Gas Production and Exploration Company | ||
12 | Investment in subsidiaries | 2017 | 2016 | ||||
| Company | £ 000's | £ 000's | ||||
| Cost |
|
| ||||
| As at 1 January | 1 | 1 | ||||
| Additions | - | - | ||||
| Disposals | - | - | ||||
| As at 31 December | 1 | 1 | ||||
|
| ||||||
| Columbus Energy Resources Plc, the parent company of the Group, holds 100% of the share capital of the following companies:
| ||||||
| Company | Country of registration | Proportion held | Nature of business | |||
| Direct |
|
|
| |||
| Columbus Energy Holdings Ltd | Cyprus | 100% | Holding Company | |||
|
|
|
|
| |||
| Indirect |
|
|
| |||
| Via Columbus Energy Holdings Ltd |
|
|
| |||
| Columbus Energy CPS (Cyprus) Ltd | Cyprus | 100% | Investment Company | |||
| Columbus Energy Byron Ltd | Cyprus | 100% | Investment Company | |||
| Columbus Energy (Cyprus) Ltd | Cyprus | 100% | Investment Company | |||
| Columbus Energy Investments Ltd | Cyprus | 100% | Investment Company | |||
|
|
|
|
| |||
| Via Columbus Energy CPS (Cyprus) Ltd |
|
|
| |||
| Compañia Petrolifera de Sedano S.L.U. | Spain | 100% | Oil and Gas Production and Exploration Company | |||
|
|
|
|
| |||
| Via Columbus Energy Byron Ltd |
|
|
| |||
| Leni Gas and Oil US Inc. | United States | 100% | Dormant Company | |||
|
|
|
|
| |||
| Via Columbus Energy (Cyprus) Ltd |
|
|
| |||
| Columbus Energy (St Lucia) Ltd | St Lucia | 100% | Investment Company | |||
|
|
|
|
| |||
| Via Columbus Energy (St Lucia) Ltd |
|
|
| |||
| Leni Trinidad Ltd | Trinidad & Tobago | 100% | Oil and Gas Production and Exploration Company | |||
| Columbus Energy Services Ltd | Trinidad & Tobago | 100% | Oil and Gas Services Company | |||
| Goudron E&P Ltd | Trinidad & Tobago | 100% | Oil and Gas Production and Exploration Company | |||
|
|
|
|
| |||
The names of the subsidiaries in Cyprus and St Lucia changed in 2018.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
13 | Trade and other receivables | 2017 | 2016 | |||
|
| Group | Company | Group | Company | |
|
| £ 000's | £ 000's | £ 000's | £ 000's | |
| Current trade and other receivables |
|
|
|
| |
| Trade receivables | 605 | - | 366 | - | |
| VAT receivable | 387 | 46 | 167 | 26 | |
| Taxation receivable | 62 | - | 68 | - | |
| Other receivables | 304 | 132 | 182 | 182 | |
| Prepayments | 101 | 75 | 292 | 252 | |
| Total | 1,459 | 253 | 1,076 | 460 | |
|
|
|
|
|
| |
| Non-current trade and other receivables |
|
|
|
| |
| Loans due from subsidiaries (*) | - | 39,849 | - | 38,151 | |
| Total | - | 39,849 | - | 38,151 | |
|
|
|
|
|
| |
| (*) The loans due from subsidiaries are interest free, have no fixed repayment date and are denominated in GBP. At the year-end, loans to the Group entity in Spain and to two non-operating entities, were impaired due to irrecoverability. | |||||
14 | Inventories | 2017 | 2016 | |||
|
| Group | Company | Group | Company | |
|
| £ 000's | £ 000's | £ 000's | £ 000's | |
| Crude Oil | 21 | - | 267 | - | |
| Consumables | 171 | - | 190 | - | |
| Total | 191 | - | 457 | - | |
|
|
|
|
|
| |
The crude oil inventory as at 31 December 2016 mainly related to the Company's Spanish subsidiary and was sold by February 2017. | ||||||
15 | Trade and other payables | 2017 | 2016 | ||||
|
| Group | Company | Group | Company | ||
|
| £ 000's | £ 000's | £ 000's | £ 000's | ||
| Current trade and other payables | ||||||
| Trade and other payables | 1,286 | 47 | 717 | 118 | ||
| Accruals | 645 | 375 | 1,383 | 600 | ||
| Sub total | 1,931 | 422 | 2,100 | 718 | ||
| Deferred consideration payable | 120 | 120 | 120 | 120 | ||
| Taxation payable | 12 | - | 23 | - | ||
| Total | 2,063 | 542 | 2,243 | 838 | ||
|
|
|
|
|
| ||
| Non-current trade and other payables | ||||||
| Deferred consideration payable | - | - | - | - | ||
| Deferred taxation | - | - | - | - | ||
| Total | - | - | - | - | ||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
16 | Borrowings | 2017 | 2016 | ||
|
| Group | Company | Group | Company |
|
| £ 000's | £ 000's | £ 000's | £ 000's |
| Current borrowings |
|
|
|
|
| Secured loan 1 | 334 | 334 | 682 | 682 |
| Secured loan 2 | 278 | 278 | - | - |
| Secured loan 3 | 39 | - | 43 | - |
| Unsecured loan 4 | 186 | - | - | - |
| Total | 837 | 612 | 725 | 682 |
|
|
|
|
|
|
| Non-current borrowings |
|
|
|
|
| Secured loan 1 | - | - | 739 | 739 |
| Secured loan 2 | 232 | 232 | - | - |
| Secured loan 3 | 138 | - | 195 | - |
| Unsecured loan 4 | - | - | 203 | - |
| Total | 370 | 232 | 1,137 | 739 |
|
|
|
|
|
|
| 1 In December 2016, the Company signed a US$8.6m Convertible Security Funding Agreement with Lind and drew down $1.825m in order to refinance and retire the outstanding BNP Paribas loan. Repayments are over 2 years with 24 monthly payments of $94,500. Lind are able to convert the outstanding balance at a conversion price of 4.5 pence, subject to restrictions. The loan is denominated in US Dollars. | ||||
|
| ||||
| 2 In October 2017, the Company drew down US$0.75m under the Convertible Security Funding Agreement. Repayments are over 2 years with 24 monthly payments of $38,719. Lind are able to convert the outstanding balance at a conversion price of 4.5 pence, subject to restrictions. The loan is denominated in US Dollars. | ||||
|
| ||||
| 3 The loan was issued by RBC Royal Bank Limited in April 2015. Repayments are over 7 years and the loan is denominated in Trinidad Dollars. | ||||
|
| ||||
| 4 The loan was issued by BNP Paribas in 2015. In December 2016, the outstanding balance of US$2.6m was refinanced and retired, and all security was removed, leaving a final unsecured payment of US$0.25m due in December 2019. The loan is denominated in US Dollars. | ||||
|
| ||||
| The carrying amounts of all the borrowings approximate to their fair value. | ||||
|
| ||||
17 | Provisions | 2017 | 2016 | ||
| Provisions for decommissioning costs | Group | Company | Group | Company |
|
| £ 000's | £ 000's | £ 000's | £ 000's |
| At 1 January | 1,188 | - | 1,011 | - |
| Additions | 72 | - | 22 | - |
| Foreign exchange difference on translation | (3) | - | 155 | - |
| At 31 December | 1,257 | - | 1,188 | - |
|
|
|
|
|
|
| The provisions relate to the estimated costs of the removal of the Spanish and Trinidadian production facilities and site restoration at the end of the production lives of the facilities. | ||||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
18 | Share capital | ||
| Called up, allotted, issued and fully paid ordinary shares of 0.05p each | Number of shares | Nominal value |
|
|
| £ 000's |
| As at 31 December 2015 | 3,264,999,958 | 1,632 |
| 22 January 2016 consideration at 0.23p per share | 28,848,519 | 14 |
| 16 March 2016 cash at 0.25p per share | 424,209,334 | 212 |
| 16 March 2016 consideration at 0.25p per share | 235,995,235 | 118 |
| 18 April 2016 cash at 0.25p per share | 120,000,000 | 60 |
| 4 May 2016 cash at 0.20p per share | 1,625,000,000 | 813 |
| 9 June 2016 consideration at 0.19p per share | 161,068,992 | 81 |
| 18 August 2016 consideration at 0.15p per share | 727,877,588 | 364 |
| 23 September 2016 consideration at 0.10p per share | 795,000,000 | 398 |
| 13 December 2016 consideration at 0.12p per share | 984,600,000 | 492 |
| As at 31 December 2016 - before capital reorganisation | 8,367,599,626 | 4,184 |
| As at 31 December 2016 - after capital reorganisation | 418,379,981 | 4,184 |
| 9 March 2017 consideration at 2.38p per share | 7,181,147 | 4 |
| 31 March 2017 cash at 2.20p per share | 113,636,374 | 57 |
| 19 September 2017 consideration at 3.00p per share | 20,300,000 | 10 |
| 9 October 2017 cash at 5.00p per share | 60,000,000 | 30 |
| 9 October 2017 cash at 5.00p per share | 2,000,000 | 1 |
| 10 October 2017 consideration at 4.50p per share | 2,512,333 | 1 |
| 2 November 2017 cash at 5.00p per share | 20,129,349 | 10 |
| 8 November 2017 consideration at 4.50p per share | 5,067,242 | 2 |
| As at 31 December 2017 | 649,206,426 | 4,299 |
|
|
|
|
During the year, 230.8 million shares were issued (2016: 5.1 billion). | |||
|
In March 2017, the Company reorganised its share capital and reduced the number of ordinary shares in issue by a ratio of 20:1. The nominal value of each ordinary share remains unchanged at 0.05p. At the end of the year, the number of shares in issue comprised 230.8 million ordinary shares and 418.4 million deferred shares. | ||
Total share options in issue | ||||
As at 31 December 2017 the options in issue were: | ||||
Exercise price | Vesting criteria | Expiry date | Options in issue |
|
20p | - | 31 Dec 2020 | 2,800,000 |
|
20p | 500 bopd | 31 Dec 2020 | 2,466,667 |
|
20p | 600 bopd | 31 Dec 2020 | 2,466,667 |
|
20p | 700 bopd | 31 Dec 2020 | 2,466,667 |
|
80p | 1250 bopd | 31 Dec 2020 | 812,500 |
|
80p | 1500 bopd | 31 Dec 2020 | 2,250,000 |
|
80p | 1750 bopd | 31 Dec 2020 | 812,500 |
|
3p | - | 8 Apr 2020 | 19,721,077 |
|
3p | - | 14 Jul 2020 | 4,163,231 |
|
8.7p | - | 22 Feb 2021 | 4,893,596 |
|
2.2-10.0p | 4.0-20.0p | 9 May 2022 | 15,000,000 |
|
2.2-10.0p | 4.0-20.0p | 14 Jun 2022 | 10,000,000 |
|
2.2-10.0p | 4.0-20.0p | 20 Aug 2022 | 22,000,000 |
|
As at 31 December 2017 |
|
| 89,852,904 |
|
During the year, 56.1 million options were issued (2016: 19.7 million). No options lapsed during the year (2016: nil), no options were cancelled in the year (2016: nil), and no options were exercised during the year (2016: nil). The number of share options in issue as at the date of the capital reorganisation were divided by 20 and the exercise prices were multiplied by 20. | ||||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
18 | Share capital (continued) | ||
| Total warrants in issue | ||
| As at 31 December 2017 the warrants in issue were: | ||
| Exercise price | Expiry date | Warrants in issue |
| 84p | 16 Jan 2018 | 245,754 |
| 50p | 23 Feb 2018 | 134,411 |
| 6.5p | 12 Oct 2020 | 2,460,000 |
| As at 31 December 2017 |
| 2,840,165 |
| During the year, 2.46 million warrants were issued (2016: nil). 0.51 million warrants lapsed during the year (2016: nil), no warrants were cancelled during the year (2016: nil), and no warrants were exercised during the year (2016: nil). The number of warrants in issue as at the date of the capital reorganisation were divided by 20 and the exercise prices were multiplied by 20. |
19 | Share based payments | |||||||
| Share options | |||||||
| The Company has established share option plans to enable the issue of options as part of remuneration of key management personnel and Directors. Options were granted under the plan for no consideration. Options were granted for between a 5 and 7.5 year period. There are vesting conditions associated with the options. Options granted under the plan carry no dividend or voting rights.
| |||||||
| Under IFRS 2 'Share Based Payments', the Company determines the fair value of options issued to Directors and Employees as remuneration and recognises the amount as an expense in the income statement with a corresponding increase in equity. As at 31 December 2017 the unexpired share options were: | |||||||
| Name | Date granted | Vesting date /criteria | Number (*) | Exercise price (pence) (*) | Expiry date | Share price at grant date (pence) (**) | Fair value after discount (pence) (**) |
| Neil Ritson | 1 Jul 2013 | 1 Jul 2013 | 1,250,000 | 20 | 31 Dec 2020 | 0.73 | 0.51 |
| Neil Ritson | 1 Jul 2013 | 31 Aug 2014 | 1,250,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Neil Ritson | 1 Jul 2013 | 31 Aug 2014 | 1,250,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Neil Ritson | 1 Jul 2013 | 30 Sep 2014 | 1,250,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Steve Horton | 1 Jul 2013 | 1 Jul 2013 | 250,000 | 20 | 31 Dec 2020 | 0.73 | 0.51 |
| Steve Horton | 1 Jul 2013 | 31 Aug 2014 | 166,667 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Steve Horton | 1 Jul 2013 | 31 Aug 2014 | 166,667 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Steve Horton | 1 Jul 2013 | 30 Sep 2014 | 166,667 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Fergus Jenkins | 1 Jul 2013 | 1 Jul 2013 | 500,000 | 20 | 31 Dec 2020 | 0.73 | 0.51 |
| Fergus Jenkins | 1 Jul 2013 | 31 Aug 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Fergus Jenkins | 1 Jul 2013 | 31 Aug 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Fergus Jenkins | 1 Jul 2013 | 30 Sep 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Management | 1 Jul 2013 | 1 Jul 2013 | 500,000 | 20 | 31 Dec 2020 | 0.73 | 0.51 |
| Management | 1 Jul 2013 | 31 Aug 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Management | 1 Jul 2013 | 31 Aug 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Management | 1 Jul 2013 | 30 Sep 2014 | 375,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Consultants | 1 Jul 2013 | 1 Jul 2013 | 300,000 | 20 | 31 Dec 2020 | 0.73 | 0.51 |
| Consultants | 1 Jul 2013 | 31 Aug 2014 | 300,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Consultants | 1 Jul 2013 | 31 Aug 2014 | 300,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Consultants | 1 Jul 2013 | 30 Sep 2014 | 300,000 | 20 | 31 Dec 2020 | 0.73 | 0.20 |
| Steve Horton | 1 Dec 2014 | 31 Dec 2014 | 750,000 | 80 | 31 Dec 2020 | 3.675 | 0.59 |
| Iain Patrick | 1 Dec 2014 | 31 Dec 2014 | 750,000 | 80 | 31 Dec 2020 | 3.675 | 0.59 |
| Michael Douglas | 1 Dec 2014 | 31 Dec 2014 | 750,000 | 80 | 31 Dec 2020 | 3.675 | 0.59 |
| James Thadchanamoorthy | 1 Dec 2014 | 31 Dec 2014 | 812,500 | 80 | 31 Dec 2020 | 3.675 | 1.79 |
| James Thadchanamoorthy | 1 Dec 2014 | 31 Dec 2014 | 812,500 | 80 | 31 Dec 2020 | 3.675 | 0.59 |
| Lind Partners LLC | 9 Dec 2016 | 9 Dec 2016 | 19,721,077 | 3 | 8 Apr 2020 | 0.13 | 0.13 |
| Lind Partners LLC | 15 Mar 2017 | 15 Mar 2017 | 4,163,231 | 3 | 14 Jul 2020 | 3.68 | 0.13 |
| Leo Koot | 21 Aug 2017 | 4p | 3,000,000 | 2.2 | 20 Aug 2022 | 2.28 | 1.52 |
| Leo Koot | 21 Aug 2017 | 8p | 3,000,000 | 4 | 20 Aug 2022 | 2.28 | 0.64 |
| Leo Koot | 21 Aug 2017 | 12p | 3,000,000 | 6 | 20 Aug 2022 | 2.28 | - |
| Leo Koot | 21 Aug 2017 | 16p | 3,000,000 | 8 | 20 Aug 2022 | 2.28 | - |
| Leo Koot | 21 Aug 2017 | 20p | 3,000,000 | 10 | 20 Aug 2022 | 2.28 | - |
| Gordon Stein | 21 Aug 2017 | 4p | 2,000,000 | 2.2 | 20 Aug 2022 | 2.28 | 2.29 |
| Gordon Stein | 21 Aug 2017 | 8p | 2,000,000 | 4 | 20 Aug 2022 | 2.28 | 1.00 |
| Gordon Stein | 21 Aug 2017 | 12p | 2,000,000 | 6 | 20 Aug 2022 | 2.28 | - |
| Gordon Stein | 21 Aug 2017 | 16p | 2,000,000 | 8 | 20 Aug 2022 | 2.28 | - |
| Gordon Stein | 21 Aug 2017 | 20p | 2,000,000 | 10 | 20 Aug 2022 | 2.28 | - |
| Michael Douglas | 21 Aug 2017 | 4p | 600,000 | 2.2 | 20 Aug 2022 | 2.28 | 1.64 |
| Michael Douglas | 21 Aug 2017 | 8p | 600,000 | 4 | 20 Aug 2022 | 2.28 | 0.71 |
| Michael Douglas | 21 Aug 2017 | 12p | 600,000 | 6 | 20 Aug 2022 | 2.28 | - |
| Michael Douglas | 21 Aug 2017 | 16p | 600,000 | 8 | 20 Aug 2022 | 2.28 | - |
| Michael Douglas | 21 Aug 2017 | 20p | 600,000 | 10 | 20 Aug 2022 | 2.28 | - |
| Management | 21 Aug 2017 | 4p | 3,800,000 | 2.2 | 20 Aug 2022 | 2.28 | 1.64 |
| Management | 21 Aug 2017 | 8p | 3,800,000 | 4 | 20 Aug 2022 | 2.28 | 0.71 |
| Management | 21 Aug 2017 | 12p | 3,800,000 | 6 | 20 Aug 2022 | 2.28 | - |
| Management | 21 Aug 2017 | 16p | 3,800,000 | 8 | 20 Aug 2022 | 2.28 | - |
| Management | 21 Aug 2017 | 20p | 3,800,000 | 10 | 20 Aug 2022 | 2.28 | - |
| Lind Partners LLC | 23 Oct 2017 | 23 Oct 2017 | 4,893,596 | 8.7 | 22 Feb 2021 | 6.00 | 0.23 |
|
|
|
|
|
|
|
|
|
| As at 31 December 2017 |
|
| 89,852,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) The number of share options in issue as at the date of the capital reorganisation were divided by 20 and the exercise prices were multiplied by 20. (**) The share prices at the grant dates and the fair value after discount figures prior to the capital reorganisation in March 2017 have not been restated. | ||||||||
19 | Share based payments (continued) |
| The fair value of the options vested during the year was £234,000 (2016: nil). The assessed fair value at grant date is determined using the Black-Scholes Model which, takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The fair value is then discounted for the probability of the options actually vesting. The expected price volatility reflects the assumption that the historical volatility is indicative of future trends which, may not necessarily be the actual outcome.
If options are issued in connection with loans, the assessed fair value at grant date is determined using the estimated cash equivalent value. The options issued on 15 March 2017 and 23 October 2017 were in connection with loans and therefore the related share based payment expense of £11,000 (2016: £32,000) has been recognised within finance charges (see note 9).
| ||||||||||||
|
| Warrants | |||||||||||
|
| As at 31 December 2016 the unexpired warrants were: | |||||||||||
|
| Date granted | Vesting date | Number | Exercise price (pence) | Expiry date | Share price at grant date (pence) | Fair value (pence) | |||||
|
| 16 Jan 2015 | 16 Jan 2015 | 245,754 | 84 | 16 Jan 2018 | 3.3 | 0.26 | |||||
|
| 24 Feb 2015 | 24 Feb 2015 | 134,411 | 50 | 23 Feb 2018 | 2.9 | - | |||||
|
| 12 Oct 2017 | 12 Oct 2017 | 2,460,000 | 6.5 | 12 Oct 2020 | 6.9 | - | |||||
| As at 31 December 2016 | 2,840,165 |
|
|
|
| |||||||
|
|
|
|
|
|
|
|
| |||||
|
| The charge for the fair value of the warrants that were granted and vested during the year was nil (2016: nil) because the warrants were issued in lieu of share issue costs. and lapsed during the year was £61,000 (2016: nil). The assessed fair value at grant date is determined using the Black Scholes model or the estimated cash equivalent value, if issued in connection with loans.
| |||||||||||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
20 | Financial instruments | ||||||||||||
| The Group uses financial instruments comprising cash, and debtors/creditors that arise from its operations. The Group holds cash as a liquid resource to fund the obligations of the Group. The Group's cash balances are held in various currencies. The Group's strategy for managing cash is to maximise interest income whilst ensuring its availability to match the profile of the Group's expenditure. This is achieved by regular monitoring of interest rates and monthly review of expenditure forecasts.
The Company has a policy of not hedging foreign exchange and therefore takes market rates in respect of currency risk; however it does review its currency exposures on an ad hoc basis. Currency exposures relating to monetary assets held by foreign operations are included within the foreign exchange reserve in the Group Balance Sheet.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
To date the Group has relied upon equity funding, short-term debt and sales revenue from operations to finance its business activities. The Directors are confident that adequate cash resources exist to finance operations to commercial exploitation but controls over expenditure are carefully managed.
The net fair value of financial assets and liabilities approximates the carrying values disclosed in the financial statements. The currency and interest rate profile of the financial assets is as follows:
The financial assets comprise cash balances in bank accounts at call.
| ||||||||||||
| Cash and short-term deposits | 2017 | 2016 | ||||||||||
|
| £ 000's | £ 000's | ||||||||||
| Sterling | 3,578 | 558 | ||||||||||
| Euros | 46 | 14 | ||||||||||
| US Dollars | 249 | 183 | ||||||||||
| Trinidad Dollars | 129 | 1,072 | ||||||||||
| Total | 4,002 | 1,827 | ||||||||||
|
| ||||||||||||
| Oil Price Risk |
|
|
| |||||||||
| The Group is exposed to commodity price risk regarding its sales of crude oil which is an internationally traded commodity. The Group sales prices are based on two benchmarks, West Texas Intermediate (WTI) for sales in Trinidad and Brent Crude (Brent) for sales in Spain. | ||||||||||||
| The spot prices per barrel of both benchmarks are shown below:
| ||||||||||||
| 2017 | 2016 |
| ||||||||||
| Low | Average | High | Low | Average | High |
| ||||||
| US$ | US$ | US$ | US$ | US$ | US$ |
| ||||||
WTI | 42.48 | 50.80 | 60.46 | 26.19 | 43.29 | 54.01 |
| ||||||
Brent | 43.98 | 54.12 | 66.80 | 26.01 | 43.67 | 54.96 |
| ||||||
|
The below shows the Group's 2017 revenue sensitivity to an average price that is up to 30% lower and up to 30% higher than the average price for that year: |
| Decrease | Current | Increase | ||||||
| 30% | 20% | 10% |
| 10% | 20% | 30% | ||
| £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | £ 000's | ||
Trinidad | 3,151 | 3,601 | 4,051 | 4,501 | 4,951 | 5,401 | 5,852 | ||
Spain | 205 | 234 | 263 | 293 | 322 | 351 | 380 | ||
Total | 3,356 | 3,835 | 4,314 | 4,794 | 5,273 | 5,753 | 6,232 | ||
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
20 | Financial instruments (continued) | ||||||||||
| Foreign currency risk | ||||||||||
| The following table details the Group's sensitivity to a 10% increase and decrease in the Pound Sterling against the relevant foreign currencies of Euro, US Dollar, and Trinidadian Dollar. 10% represents management's assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency denominated investments and other financial assets and liabilities and adjusts their translation at the year-end for a 10% change in foreign currency rates. The table below sets out the potential exposure, where the 10% increase or decrease refers to a strengthening or weakening of the Pound Sterling:
| ||||||||||
|
| Profit or loss sensitivity | Equity sensitivity | ||||||||
|
| 10% increase | 10% decrease | 10% increase | 10% decrease | ||||||
|
| £ 000's | £ 000's | £ 000's | £ 000's | ||||||
| Euro | 17 | (21) | 62 | (76) | ||||||
| US Dollar | - | - | - | - | ||||||
| Trinidad Dollar | 169 | (207) | (1,453) | 1,776 | ||||||
| Total | 186 | (228) | (1,391) | 1,700 | ||||||
|
Rates of exchange to £1 used in the financial statements were as follows: | ||||||||||
|
|
|
|
|
| ||||||
|
| As at 31 December 2017 | Average for the relevant consolidated year to 31 December 2017 | As at 31 December 2016 | Average for the relevant consolidated year to 31 December 2016 | ||||||
| Euro | 1.126 | 1.141 | 1.173 | 1.221 | ||||||
| US Dollar | 1.349 | 1.288 | 1.234 | 1.350 | ||||||
| Trinidad Dollar | 9.132 | 8.674 | 8.321 | 8.963 | ||||||
|
|
21 | Commitments and contingencies |
| As at 31 December 2017, the Company had the following material commitments:
In Goudron E&P Ltd, under the Incremental Production Service Contract, there are capital commitments relating to exploration activity to be completed by 2019, which are estimated to cost US$150,000.
As at 1 January 2018, the Company, acting through Leni Trinidad Limited, was party to a sale and purchase agreement to purchase the remaining 75% equity in Beach Oilfield Limited ("BOLT") that it did not own. As part of the commercial arrangements associated with the BOLT transaction, the Company agreed to pay for ongoing day to day costs associated with BOLT (namely lease payments, bank interest and the Bonasse oil field running costs) so that, should the sale and purchase agreement complete, BOLT and the assets it owned would be in good standing. Those obligations will cease once the BOLT transaction closes.
In Q2 2018, the Company, acting through Columbus Energy Bonasse Limited a new subsidiary set up in 2018, signed a sale and purchase agreement to purchase 50% of the Icacos oil field (it currently owns 50%). The transaction is expected to close in Q3 2018. |
|
|
|
|
|
|
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 (CONTINUED)
| 22 | Related party transactions | |||||
|
| Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between other related parties are outlined below. | |||||
|
|
| |||||
|
| Remuneration of Key Management Personnel | |||||
| The Directors of the Company are considered to be the Key Management Personnel. Details of the remuneration of the Directors of the Company are disclosed below, by each of the categories specified in IAS24 Related Party Disclosures. | ||||||
|
|
|
|
| |||
|
| 2017 | 2016 | ||||
|
| £ 000's | £ 000's | ||||
| Short-term employee benefits | 902 | 803 | ||||
| Termination benefits | 105 | - | ||||
| Share-based payments | 145 | - | ||||
| Total | 1,152 | 803 | ||||
|
|
|
| ||||
|
| See note 7 for further details of the Directors' remuneration and note 19 for details of the Directors' share-based payment benefits. | |||||
23 | Events after the reporting period |
|
On 22 February 2018, the Company announced that the removal and dismantling works at the Ayoluengo field in Spain, which would allow the Spanish authorities to formally close the expired concession, had been completed and, that it was intended that the Company participate in the re-tender process for a new concession. It was also announced that a Collective Dismissal Procedure would commence due to the uncertain timing of the re-tender and the significant costs of suspended operations until a new concession is awarded.
On 26 March 2018, the Company announced that the Collective Dismissal Procedure had been completed and the final cost was approximately €410,000. This amount will be reflected in the 2018 Group financial statements.
On 29 March 2018, the Company announced that it had received official notification from the Spanish authorities of the closure of the expired concession. The formal closure was a necessary precursor to the re-tender process for a new concession. It is the Company's intention to participate in the re-tender which is not anticipated to be awarded to the winning bidder until 2019 at the earliest. |
24 | Profit and loss account of the parent company |
| As permitted by section 408 of the Companies Act 2006, the profit and loss account of the parent company has not been separately presented in these accounts. The parent company loss for the year was £2,163,000 (2016: £1,573,000).
|
Note to the announcement
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2017 or 2016. The financial information for the year ended 31 December 2016 is derived from the statutory accounts for that year. The audit of statutory accounts for the year ended 31 December 2017 is complete.
Related Shares:
CERP.L