30th Apr 2012 10:12
Ophir Energy plc
ANNUAL FINANCIAL REPORT
London, 30 April 2012: As required by DTR 6.3.5 (3), Ophir Energy plc ("Ophir" or the "Company") announces that its Annual Report has been published and is available on the Ophir website: www.ophir-energy.com. This follows the release on 21 March 2012 of the Preliminary Results Announcement for the year ended 31 December 2011(the "Preliminary Announcement").
In compliance with 9.6.1 of the Listing Rules, the Company has today submitted a copy of the following document to the National Storage Mechanism, which will shortly be available for inspection at www.Hemscott.com/nsm.do:
Ophir Annual Report
The Ophir Annual Report will be delivered to the Registrar of Companies in due course. Copies of the document can also be obtained from:
The Company Secretary
Ophir Energy plc
55 Grosvenor Street
London W1K 3HY
Tel: +44 (0) 20 7290 5800
The Disclosure and Transparency Rules ("DTR") require an announcement of the publication of certain information in full unedited text in compliance with DTR 6.3.5(2). As such the following disclosures are made below, referencing page numbers to notes in the accounts in the Company's Annual Report.
A: Audit Reports
The Preliminary Announcement on 21 March 2012 included a set of condensed, unaudited financial statements. The audited financial statements are contained in the Ophir Annual Report. The Independent audit report of the Group and Company are contained on pages 54 and 55.
B: Statement of Directors' Responsibilities in relation to Group and Parent Company Financial Statements
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards ("IFRS") adopted by the European Union.
The Directors are required to prepare financial statements for each financial year which present a true and fair view of the financial position of the Company and of the Group and the financial performance and cash flows of the Company and of the Group for that period. In preparing those financial statements, the Directors are required to:
- select suitable accounting policies in accordance with IAS 8: "Accounting Policies, Changes in Accounting Estimates and Errors" and then apply them consistently;
- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
- provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company and of the Group's financial position and financial performance;
- state that the Company and the Group has complied with IFRS, subject to any material departures disclosed and explained in the financial statements; and
- prepare the accounts on a going concern basis unless, having assessed the ability of the Company and the Group to continue as a going concern, management either intends to liquidate the entity or to cease trading, or have no realistic alternative but to do so.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and of the Group and enable them to ensure that the financial statements comply with the Companies Acts 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable UK law and regulations the Directors are responsible for the preparation of a Directors' Report, Directors' Remuneration Report and Corporate Governance Report that comply with that law and regulations. In addition the Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Neither the Company nor the Directors accept any liability to any person in relation to the annual financial report except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with Section 90A and Schedule 10A of the Financial Services and Markets Act 2000.
Responsibility Statement of the Directors in respect of the Annual Report and Accounts
I confirm on behalf of the Board that to the best of my knowledge:
a) the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and
b) the management report (encompassed within the sections of this Annual Report headed "Chairman's and Chief Executive Officer's Review"; "Review of Operations"; "Financial Review"; "Corporate Social Responsibility Report"; "Principal Risks and Uncertainties"; "Directors' Report"; "Corporate Governance Report"; and "Directors' Remuneration Report") includes a fair review of the development and performance of the business, and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
For and on behalf of the Board
Dr Nick Cooper
Chief Executive Officer
19 April 2012
C: PRINCIPAL RISKS AND UNCERTAINTY
Ophir operates in the inherently risky upstream oil and gas sector and effective risk management is an essential process for the Group to deliver its strategic and operational objectives.
Ophir is committed to maintaining a balanced portfolio and to managing risks in a proactive and effective manner. The key elements Ophir risk management processes are:
·; Risk Assessment
·; Risk analysis and evaluation
·; Risk mitigations
·; Risk monitoring and reviewing
·; Communication and consultation
Responsibility for identifying and managing risks lies with Ophir's Executive Directors, Senior Management Team and Country Managers. The Executive Directors continually monitor the Group's risk exposures and report to the Audit Committee and Board of Directors on a 6 monthly basis, or more frequently as required.
The principal risks of the Group are summarised as follows:
Type | Risk | Mitigants |
Strategic
| Political risk
Reliance on key personnel
Investment decisions
| ·; The Group maintains a balanced asset portfolio across different jurisdictions in a region where the Group is most accustomed to operating. ·; The Group strives continually to maintain positive relationships in all host countries that it operates. Ophir aims to work to the highest industry standards with all regulators and compliance with the Company's licence and PSC obligations is closely monitored
·; Ophir is reliant on a small team of experienced oil and gas professionals for its operational success. In order to retain, motivate and recruit suitably qualified employees it ensures its remuneration packages are competitive. It has established a long- term incentive programme for executives and deferred share plan for staff.
·; The Group and its advisors are experienced within the industry in which it operates and complete a proper review against the Group's strategy and investment criteria. Full due diligence is undertaken upon all potential new entries. The current portfolio is closely monitored. |
Operational
| Drilling operations risk
HSE incident risk
Discovery risk and success rate
Insurable risks
Availability of rigs and services
| ·; The Group maintains clearly defined operational procedures that should always be followed. ·; The contracting and procurement process ensures suitably qualified contractors are employed. ·; Regular training in the processes and continual monitoring of adherence are undertaken.
·; The Group maintains a comprehensive system of HSE procedures that should always be followed. The systems are overseen by the HSE committee which regularly meets to review and monitor compliance. ·; Comprehensive Environmental Impact Assessments are performed. Oil spill and emergency response plans are in place, regular training in the procedures occurs.
·; The Group has a technically and regionally experienced management and geoscience team who have a proven track record of success. To reduce risk, substantial technical analysis is undertaken to evaluate and manage opportunities. ·; All exploration and appraisal programmes are consistently reviewed and monitored before being recommended to the Board for approval.
·; Comprehensive insurance programmes are maintained in accordance with industry standards.
·; Regular market review of services and rig availability occurs. Experienced advisors are used to ensure a rapid response to opportunities and an ability to close binding agreements quickly. ·; A dedicated drilling project manager and C&P manager ensure a clear contracting strategy and project plan are produced early in the procurement planning stage. |
Financial
| Counterparty credit risk
Liquidity risk
Interest rate and foreign exchange risk
| ·; The Group closely monitors all trade debtors which are subject to internal credit review.
·; The Group has a formal annual budget process and regularly forecasts cash requirements to ensure underlying liquidity requirements are met. Actual vs budget analysis reporting occurs monthly and is monitored by senior management and reported to the Board.
·; The Group reports and manages its business in US Dollars. Cash balances are primarily held in US Dollars to provide a natural hedge. Small balances are retained in other currencies for operating and administrative needs. ·; The Group holds cash balances in short- term deposits; there were no hedges in 2011. |
External
| Sovereign risk
Legal, regulatory or litigation risk
Investor and stakeholder sentiment
| ·; The Group recognise that there is an inherent political risk associated with the countries in which it operates. The Group regularly monitors and reviews all jurisdictions in which it operates. The Group's personnel are experienced within the industry and maintain close relations on the ground within each jurisdiction.
·; Ophir's activities are subject to various different jurisdictional laws, tax regimes and regulations. The Group employs suitably experienced and qualified staff and advisors who can assess, and where necessary respond to external risks. ·; The Group's key policies and procedures have considered requirements of the UK Bribery act. ·; The Group maintains a Business Code of Conduct and ensures proper training for employees occurs.
·; The Group fosters strong relations with the local communities and host country governments in jurisdictions that it operates. It continually interacts with all relevant stakeholders. ·; The Company maintains regular dialogue with all key shareholders. The Company has established investor relations and a corporate affair function during 2012 and ensures all material information is released to the market on a timely basis. |
Ends
For Further Enquiries please contact:
Ophir Energy plc +44 (0)20 7290 5800
Nick Cooper, CEO
Stephanie Prior, Commercial Manager
FTI Consulting (PR Advisor to Ophir) +44 (0)20 7269 7157
Billy Clegg/Edward Westropp
Disclaimer
This results announcement contains certain forward‐looking statements that are subject to the risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Ophir Energy plc and its group of companies believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to a variety of factors including specific factors identified in this statement and other factors outlined in the Group's 2011 Annual Report.
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