16th Apr 2014 10:01
ANNUAL FINANCIAL REPORT
London, 16 April 2014: As required by DTR 6.3.5(3), Ophir Energy plc ("Ophir" or the "Company") announces that its Annual Report, Notice of Annual General Meeting ("AGM") and Form of Proxy for the 2014 AGM have been published and (excepting the Form of Proxy) are now available on the Ophir website: www.ophir-energy.com. This follows the release on 20 March 2014 of the Preliminary Results Announcement for the year ended 31 December 2013 (the "Preliminary Announcement").
In compliance with 9.6.1 of the Listing Rules, the Company has today submitted copies of the following document to the National Storage Mechanism and these will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM:
· Annual Report and Accounts for the year ended 31 December 2013
· Notice of 2014 AGM
· Form of Proxy for the 2014 AGM
The Ophir Annual Report will be delivered to the Registrar of Companies in due course. Copies of the Annual Report and Notice of AGM may also be obtained from:
The Company Secretary
Ophir Energy plc
Level 4
123 Victoria Street
London
SW1E 6DE
Tel:+44 (0) 20 7811 2400
The AGM will take place on 21 May 2014. The total of the votes cast by shareholders for or against or withheld on each resolution to be put to the meeting will be released to the market and published on www.ophir-energy.com as soon as practicable after the conclusion of the AGM.
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 20 March 2014 included a set of condensed, unaudited financial statements and management commentary. The audited financial statements are contained in the Ophir Annual Report. The independent audit reports of the Group and Company are contained on pages 95 and 133.
B: Principal Risks and Uncertainties
The Oil and Gas business environment is complex. Ophir has an established framework to review the various potential external and internal risks to which it is exposed. Risk management is a fundamental part of all Company activities.
Identified risks are recorded and the risk register is reviewed by the Audit Committee and by the Board of Directors, who are ultimately responsible for Ophir's risk management and supporting internal control systems. The elementary summary of Ophir's risk management processes is:
1. Identification
2. Evaluation
3. Response
4. Reporting
5. Monitor
The principal risks that have been identified within the Company are summarised as follows:
Type | Risk | Mitigants |
Strategic
| Political risk | · Ophir maintains a balanced asset portfolio across different jurisdictions in a region where it is most accustomed to operating · Ophir monitors and seeks to understand changes taking place in political and regulatory environments in which it operates · Ophir continually reviews country risks and the potential for political shocks to update recommendations to the Board · New ventures are assessed with regard to political risk · Ophir strives to maintain positive relationships in all host countries where it operates. Ophir aims to work to the highest industry standards with all regulators, and closely monitors compliance with the Company's licence and PSC obligations |
Inadequate resource and reliance on key personnel | · Ophir relies on the excellence of a 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 Plan (LTIP) for executives and a Deferred Share Plan for staff | |
Investment decisions
| · The Company and its advisors are experienced within the industry, and complete a proper review of the Company's strategy and investment criteria. Full due diligence is undertaken on all potential new entries. The current portfolio is closely monitored and new market opportunities frequently reviewed | |
Operational
| HSE incident risk
| · Maintenance of a comprehensive system of HSE procedures that should always be followed, and the undertaking of pre-project risk assessments. The systems are overseen by management and the HSE Committee which meets regularly to review and monitor compliance · Comprehensive Environmental Impact Assessments are performed. Oil spill and emergency response plans are in place. Provision of equipment and regular training in the procedures occurs with specialist service providers |
Security | · Thorough risk assessments to develop robust mitigation and response measures · Clear in-country control measures | |
Drilling operations risk | · Maintenance of clearly defined operational procedures whereby compliance is always expected · The contracting and procurement process ensures suitably qualified contractors are employed and trained in Ophir's best practices · Regular training and continued monitoring of staff adherence to HSE practices · Continual review of project management techniques | |
Discovery risk and success rate
| · The Company has technically and regionally experienced management and geoscience teams which have a proven 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 | |
IT risk | · Regular review of vulnerabilities to breaches of information security · Systems are in place to manage unscheduled power loss, virus outbreaks, network disruptions and thereby minimise downtime to operations and corporate offices | |
Availability of rigs and services | · Regular market review of services and rig availability occurs. Engagement of experienced advisors to ensure a rapid response to opportunities and an ability to close binding agreements quickly · A dedicated drilling project manager and Contracts and Procurement (C&P) Manager ensure a clear contracting strategy and project plan are produced early in the procurement planning stage | |
Financial | Inability to fund exploration work programmes | · Regular review of cash flow, working capital and funding options and prudent approach to budgeting and planning to ensure sufficient capital to meet commitments |
Counterparty credit risk | · Close monitoring of all trade debtors which are subject to internal credit review | |
Cost and capital spending | · A formalised annual budget process and ongoing monthly reviews of actuals to budget analysis. Delegation of authority, approval processes and C&P procedures. Board approval of Annual Work Programme | |
Interest rate and foreign exchange risk
| · Cash balances are primarily held in US Dollars to provide a natural hedge to reflect that the majority of the Company's business is managed and conducted using US Dollars. Small balances are retained in other currencies for operating and administrative needs · Cash balances are held in current or short-term deposits · Further details on principal financial risks are addressed in Note 21 on page 120 in the Company's consolidated financial statements | |
External | Sovereign and country risk
| · Regular monitoring for changes within all jurisdictions in which Ophir operates. Management maintains close relationships and continually focuses on working with each jurisdiction's governments and relevant local authorities |
Legal, regulatory or litigation risk
| · Activities are subject to various different jurisdictional laws, customs, fiscal and administrative regulations. The Company employs suitably experienced and qualified staff and, when required, external advisors to ensure full compliance · Ongoing training given to all staff on policies implemented · Key policies and procedures consider the requirements of the UK Bribery Act · Legal risk assessment and due diligence (where appropriate) is undertaken for all counterparties the Company deals with · Maintenance and monitoring of a Business Code of Conduct and Anti-corruption policies. Ongoing training takes place with all employees on policies implemented | |
Investor and stakeholder sentiment
| · The Company fosters strong relations with the local communities and host country governments in the jurisdictions in which it operates. It pro-actively interacts with all relevant stakeholders · Maintaining regular dialogue and provision of information to all key shareholders. Internal Investor Relations and advisors ensure all material information is released to the market on a timely basis and in accordance with all applicable regulations · Continual monitoring of economic shifts · Monitoring of public sentiment towards the Company and its operations · Implementation of CSR policies and development of sustainable local engagement strategies |
C: Statement of Directors' Responsibilities in relation to Group Financial Statements
The Directors are responsible for preparing the Annual Report and the Group financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare Group financial statements for each financial year. Under that law, the Directors are required to prepare Group financial statements under IFRSs as adopted by the European Union.
Under Company Law the Directors must not approve the Group financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing the Group financial statements the Directors are required to:
- present fairly the financial position, financial performance and cash flows of the Group;
- 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;
- make judgements that are reasonable;
- provide additional disclosures when compliance with the specific requirements in IFRSs as adopted by the European Union is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance; and
- state whether the Group financial statements have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Group financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for preparing the Strategic Report, Directors' Report, the Directors' Remuneration Report and the Corporate Governance Statement in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure and Transparency Rules.
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 their knowledge:
• 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
• The Directors' Report and the Group Operating and Financial Review include 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.
Directors' statement under the UK Corporate Governance Code
The Board considers that the Annual Report and Accounts taken as a whole, is fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Approved by the Board and signed on their behalf
Nick Cooper
Chief Executive Officer
19 March 2014
FOR FURTHER ENQUIRIES PLEASE CONTACT:
Ophir Energy plc +44 (0) 20 7811 2400
Nick Cooper, CEO
Richard Rose, Corporate Communications and Strategy
Brunswick Group +44 (0)20 7404 5959
Patrick Handley
Elizabeth Adams
Notes to Editors
Ophir Energy (OPHR.LN) is an African focused, upstream oil and gas exploration company which is listed on the London Stock Exchange (FTSE 250). Ophir has an extensive deepwater acreage position in West and East Africa acquired since its foundation in 2004.
The Group's headquarters are located in London (England), with operational offices in Perth (Australia), Dar es Salaam and Mtwara (Tanzania), Malabo (Equatorial Guinea), Libreville (Gabon) and Nairobi (Kenya).
For further information on Ophir, please refer to www.ophir-energy.com
Related Shares:
OPHR.L