29th Apr 2013 07:00
For Immediate Release
29 April 2013
LENI GAS AND OIL PLC
("LGO" or the "Company")
Annual Report and Accounts 2012
Leni Gas and Oil is pleased to announce that the Company's audited Annual Report and Accounts for the year ended 31 December 2012 will be posted to Shareholders and will be available from the Company's website, www.lenigasandoil.co.uk.
Highlights
For 12 month Period ending 31 December 2012
OPERATIONS
·; Company-wide production, net to LGO's interest, totalled 58,450 barrels oil equivalent (boe) (2011: 64,650 boe). The year on year reduction is due almost exclusively to performance in the Gulf of Mexico and the subsequent sale of the Company's producing properties in the USA.
·; LGO acquired the Goudron Field Incremental Production Contract (IPSC) with Petrotrin in south eastern Trinidad on 19 October 2012.
·; Well reactivations and light work-overs were conducted at Goudron, immediately raising production by over 100%. At year end Goudron was already producing over 100 bopd.
·; An independent Competent Person's Report for Goudron was issued which estimated 7.2 million barrels of proven and probable (2P) reserves and 30.5 million barrels of proven, probable and possible (3P) reserves and a STOIIP of 350 million barrels.
·; Substantial contingent resources of over 60 million barrels were identified at Goudron associated with a potential future water-flood project of secondary recovery.
·; During the reporting period Spanish production from the Ayoluengo Field totalled 47,430 barrels of oil and 14.4 million cubic feet of gas, a total of 49,827 boe (2011: 50,472 boe), broadly flat year on year.
·; The Spanish business was offered for sale and received several bids and expressions of interest. Fees were collected from buyers for exclusive periods to conduct due diligence, however, at year end the envisaged transaction had not closed.
·; LGO sold various leases in the Gulf of Mexico during the year and consequently exited 2012 with no further interests in the USA.
·; Gulf of Mexico production averaged 19 barrels of oil equivalent per day up until the sale of the producing properties. Net proceeds from the sale of all leases totalled US$ 2 million.
·; LGO took a strategic decision, based on information provided by the operator, to divest its 10% interest in the Area 4 PSC in offshore Malta. The interest was sold to operator Mediterranean Oil and Gas plc (MOG), although a subsequent dispute has arisen which has become the subject of a High Court action being brought against MOG by the Company.
CORPORATE
·; The Company closed the Equity Line Facility with First Columbus and Dutchess Capital in November 2012 having drawn down a total of £326,000 of the £5 million available under the facility which was announced in late 2011.
·; LGO raised £2.4 million in new share equity in September through the issue of 600 million ordinary shares to support the purchase of the Goudron Field IPSC.
·; Old Park Lane Capital plc was appointed as joint broker to the Company in February 2012.
FINANCIALS
·; Gross profit of £1.09 million (2011: £1.06 million).
·; Pre-tax group loss of £7.71 million (2011: £3.91 million), mainly attributable to the loss on disposal of the Gulf of Mexico (£4.7m) and the Malta (£1.8m) assets.
TARGETS FOR 2013
·; Continue to rapidly develop the proven reserves in the Goudron Field through well reactivations and selective well recompletions
·; Drill at least the first two new wells at Goudron.
·; Progress the remainder of the Trinidad portfolio to ensure medium-term growth is maintained and long-term value is created.
·; Manage Spain for value; through sale or partnership, or as a revenue source for Trinidad.
NOTES
·; All figures are net LGO unless otherwise stated.
Chairman's Statement
As expected 2012 was a transformational year for LGO with a planned major shift in emphasis on to growth in production and future value in Trinidad. The year also presented a number of major challenges as some of the expected M&A transactions failed to materialise and market support was poor. Nevertheless the Board and I are delighted with the position we have now managed to obtain in the onshore Trinidad oil belt and we see this, supported by our position in Spain, as an exciting future for the Company.
Our acquisition of the Goudron IPSC was concluded successfully in October and we immediately mobilised equipment to the field which resulted in over a 100% improvement in oil production within 60 days. Further improvements were made in early 2013 and the field is now producing over 200 bopd which represents a 500% increase on the production rate at acquisition. This production trend is set to continue through 2013 and beyond. Many wells remain to be reactivated and there are numerous opportunities to recomplete existing wells in new reservoir intervals. The drilling of at least two new wells; the first for over 20 years, is also planned for later in 2013 when all the required environmental consents are in place. The presence of over 7 mmbbls of proven and probable reserves that can be quickly accessed provides a sound foundation for immediate production growth. Longer-term, a water-flood project is envisaged that could raise the recovery factor from less than 5% to over 20%, resulting in the addition of over 60 mmbbls of oil reserves.
Goudron alone is a company-making asset; however, we have also established a significant portfolio of medium term opportunities in Trinidad. At Moruga North there are wells and facilities to reactivate and once we re-establish production at the field we have plans to step out and drill new development and exploration wells in an under explored zone in the heart of the proven Herrera Sandstone fairway. The Icacos Field and surrounding private petroleum leases in the Cedros peninsula have additional production potential and also hold a deep Herrera Sandstone trend that has never been explored in that part of Trinidad but is known to be oil bearing elsewhere.
The expansion of our footprint will continue in 2013 and we have already added an option to acquire a 50% interest in the South Erin Block which contains the producing, but underdeveloped Jasmin Field. An onshore bid round for new Herrera plays and some joint ventures and other new acquisitions are also potential targets in the near term.
In Spain the year was dominated by an on-going sales process. A full electronic dataroom was opened in early January and offers were received initially in April. Several buyers emerged and commercial negotiations with a number of parties continued throughout the remainder of the year and into 2013. One party paid for periods of exclusivity; however, no party was able to close the acquisition successfully due to their financing arrangements. During the sales process the Company elected not to invest in new capital projects, concentrating solely on care and maintenance. Annual average production of 136 boepd reflects this decision; although it is worth noting that peak production of 200 bopd was achieved in October.
In 2011 the Board announced that it would increase its focus on Trinidad and as a consequence the assets in the USA and Malta were considered non-core. These assets were divested during the year freeing up valuable capital to invest in Trinidad. The Gulf of Mexico assets were sold for a total of US$2 million. The sale of the Malta asset has however led to a dispute with the operator, Mediterranean Oil and Gas plc, which is now before the High Court in England.
I am extremely pleased with the financial health and the overall direction of the Company as we enter 2013. The focus on Trinidad is already showing good results and as we broaden and deepen our exposure to that market I expect this trend to be maintained for the foreseeable future. I would also like to thank the management, staff and shareholders for their support during this transition period. With the bulk of the changes behind us 2013 is set to be an exciting and rewarding year.
David Lenigas
Executive Chairman
26 April 2013
Enquiries:
Leni Gas & Oil plc
David Lenigas Neil Ritson | +44 (0)20 7440 0645 |
Beaumont Cornish Limited
Nomad and Joint Broker Rosalind Hill Abrahams Roland Cornish | +44(0) 20 7628 3396 |
Old Park Lane Capital Plc
Joint Broker Michael Parnes | +44(0) 20 7493 8188 |
Shore Capital
Joint Broker +44 (0) 20 7408 4090
Pascal Keane
Jerry Keen (Corporate Broking)
Pelham Bell Pottinger
Financial PR Mark Antelme | +44 (0) 20 7861 3232 |
Henry Lerwill |
Chief Executive's Review
Leni Gas and Oil plc has the strategy of identifying and acquiring development assets within the oil and gas sector which are seen to have an opportunity to unlocked significant value through a combination of financial, commercial, and technical expertise.
The Company operates a low risk portfolio of production assets in Spain and Trinidad with significant production and reserves upside using similar operating approaches and proven production enhancement techniques. LGO has specifically targeted assets with near term production upside and follow-on exploitation potential. The Company manages its portfolio to ensure all its assets have accelerated incremental reserves and production enhancement programs.
A summary of activity in all countries of operation during the reporting period follows:
Spain
LGO holds 100% ownership through its wholly owned subsidiary, Compañia Petrolifera de Sedano (CPS), in one production concession, La Lora (which contains the Ayoluengo producing oilfield), and three exploration permits; Basconcillos-H, Huermeces and Valderredible, in Northern Spain. Ayoluengo is the largest onshore oilfield in Spain and has been in continuous production since its discovery by a Chevron subsidiary in the mid-1960's and was granted a 50 year production concession in 1967 which can be renewed for additional periods of 10 years whilst the field remains in economic production. The Company's permits are centrally located in the proven Basque-Cantabrian petroleum basin and cover an overall area of over 550 square kilometres, with an oil processing facility which is designed to handle up to 10,000 barrels per day located at the producing Ayoluengo oilfield.
Following the Board's strategic decision to focus the Company's growth strategy on assets in Trinidad it was decided to seek a partner to share further investment in Spain. Potential partners were invited to make expressions of interest and an electronic dataroom was opened on 4 January 2012. Following an initial period of 3 months during which there was considerable interest which resulted in 18 companies signing confidentiality agreements and accessing the data, a call for bids was announced in March. As a resulted a number of commercial proposals were received to either acquire or farm-in to the Company's Spanish assets.
After further analysis, a Canadian bidder was given a period of exclusivity in order to finalise due diligence and make a binding offer. After the agreed period definitive documentation was not concluded and LGO rejected that company's proposal in favour of a bid from the Spanish company Ravi Corporate Sociedad Limitada (Ravi). That proposal, announced on 18 July 2012, was accompanied with a cash payment for exclusivity and was subject to certain conditions and receipt of financing by Ravi. On the 30 July the conditions precedent associated with the sale and purchase agreement (SPA) were satisfied and it only remained for Ravi to complete financing.
Due to delays with Ravi completing their financial arrangements an extension to the exclusivity period was granted and a further cash payment made to maintain exclusivity. During this period Ravi also accepted late payment penalties which were added to the originally agreed purchase price such that completion required the payment of a total of €9.3 million. On 21 Septemberthe SPA with Ravi automatically terminated, and whilst discussions continued on a non-exclusive basis these did not reach a satisfactory conclusion. In early 2013 an offer was received from a new Spanish corporate buyer and at the time of this report due diligence by that company is still on-going, but no definitive agreement has been reached.
During the reporting period there was a personnel related accident at the field. The employee sustained injuries to their lower leg when equipment fell from a vehicle during loading operations. An incident investigation concluded that the accident was caused by the employee's own actions, which were in contravention of standing safety procedures. Work to improve the environmental standards of the field, especially the production well sites and well storage tanks, continued in line with the environmental standards agreed in the 2010 Environmental Permit. Where hydrocarbons were found in surface soils these were removed from the well site and treated by bacterial land farming techniques. Environmental compliance at all LGO's facilities in Spain is up to date and is continually maintained to a high standard.
Oil sales during the year were made exclusively to Saint-Gobain Vicasa SA under the contract signed in May 2011 and renewed in 2012. Saint-Gobain uses the Ayoluengo crude oil as fuel oil in their factories within Northern Spain. Under the terms of the contract CPS receives a price linked to Brent with discounts to adjust for the fuel oil grade and various impurities.
In the Huermeces licence, the Company's application for the conversion of the Exploration Licence to a Production Concession remained under consideration with the Spanish authorities. This application was filed with the Ministry of Industry in February 2011 following successful flow tests of the Hontomin-2 well. The application has subsequently received environmental clearance from the Ministry of Environment; however, pending receipt of a Production Concession no additional work has been conducted on the Hontomin field.
The Company and Ciudad de la Energia (CIUDEN) renewed their agreement to collaborate on the potential use of the Hontomin Field for a pilot carbon storage project. At the end of 2012 discussions on well re-entries and other potential work were continuing with a view to further drilling in the future.
There has been no work undertaken in the Basconcillos-H licence area where the Tozo-1 gas well is located. This project is dormant pending further studies of potential uses of the gas discovered in Tozo. A licence extension has been applied for in order to continue the necessary studies which may include the re-entry of Tozo-1 for further testing. A licence extension in the Valderredible licence is also pending approval. It has so far proved difficult to operate in a large part of the licences due to environmental restrictions within the National Park which covers much of the area.
In late 2012 it was decided to purchase and install larger down-hole pumps for several large fluid producers in the Ayoluengo Field. In early 2013 work commenced on installing the first of those pumps in well Ayo-46 and at the time of writing commissioning and testing is on-going. A second pump has been trialled in well Ayo-37 with mixed results, due it is believed to the currently high levels of gas being encountered in that well. Pending some modifications to the gas handling associated with the new pump the original pump has been successfully re-installed and production restarted. It is envisaged that further tests and well maintenance work will be undertaken on the field during the balance of the year.
During the reporting period Spanish production totalled 47,430 barrels oil and 14.4 million cubic feet of gas, a total of 49,827 boe (2011: 50,472 boe) exclusively from the Ayoluengo Field. This is broadly flat year on year and is consistent with the strategy of limiting investment during the on-going asset sales process.
Trinidad
In October 2011 LGO acquired a Trinidad and Tobago company, Goudron E&P Limited (GEPL), which held an exclusive option to acquire the Incremental Production Service Contract (IPSC) for the Goudron Field in the Eastern Fields Area in south eastern onshore Trinidad. In order to exercise the option various permissions, including the Petroleum Company of Trinidad Limited (Petrotrin) and the Ministry of Energy and Energy Affairs (Ministry), were required to the assignment of the contract. These permissions were obtained over a period of about a year leading to GEPL exercising its option on the 19 October 2012.
Prior to taking over control of the field as operator LGO had agreed to carry out various work in support of the existing contract operator, Cameron Oil and Gas Limited, including the mobilising of a light work-over rig in May 2012. This rig was used to perform work-overs on 5 wells in order to return production to the minimum contract volume required by Petrotrin of approximately 42 bopd. This work was successful and the field production in mid-July reached over 75 bopd and the rig was demobilised.
On taking over the fulltime operation of the contract in October GEPL immediately commenced a series of well work-overs and reactivations. This program was hampered slightly by poor weather; however, over an initial period of some 60 days field production was raised to over 100 bopd. It is estimated that from the original 154 wells drilled on the field between 90 and 100 wells remain suitable for further production. By end January 2013 GEPL was operating a total of 30 wells and had ordered an additional 20 beam pumps in order to increase the well count progressively. Further pumps will be ordered as necessary throughout 2013. In addition to the simple reactivation of old wells, GEPL will plans to recomplete existing wells with new down-hole perforations and in some cases envisages perforating new reservoir intervals that have not previously been produced. A medium term plan has also been developed for the drilling of at least 30 new wells and in order to proceed with that work an environmental permit has been applied for. Once that permit is granted GEPL expect to drill at least two new production wells in 2013. Funding for the drilling of these wells is expected to be required from LGO and is not anticipated that this funding will be generated from current operations. LGO has the ability through the sale of assets, or through debt or equity to provide these funds as necessary.
Oil produced at Goudron is stored in sales tanks before being metered and pumped into the Petrotrin owned pipeline adjacent to the field which carries the oil directly to the Pointe-au-Pierre refinery in western Trinidad. Oil sales are normally made 3 days per week, or as necessary, to export all the oil production. Payment for the oil produced under the IPSC is made by Petrotrin net of fees and charges on a monthly basis.
In September LGO released an independent reserves assessment (CPR) of the Goudron Field performed by Challenge Energy Limited (Challenge) in the UK. Challenge reported proven and probable (2P) reserves of 7.2 million barrels (mmbbls) and proven, probable and possible reserves (3P) of 30.4 mmbbls. All these reserves are associated with natural depletion alone and result from a program of work-overs, recompletions, new wells and well side-tracks to be carried out over the economic life of the field.
No secondary recovery, such as water-flooding, has been assumed in these reserves estimates, although analogous fields in Trinidad have had successful water-flood projects. Overall recovery without water-flooding is estimated to be just 10% of the oil-in-place which has been computed to be up to 350 mmbbls in the 3P case. Challenge recognizes a further 63.2 mmbbls of contingent resources associated with a future water injection project. If such a project was undertaken it is believed that the overall recovery factor would rise to about 28%.
Goudron Reserves Data:
mmbbls at 1/07/2012 | 1P | 2P | 3P |
Reserves to November 2019 | 0.7 | 3.5 | 9.3 |
Reserves produced after November 2019 | 0 | 3.7 | 21.1 |
Total Reserves | 0.7 | 7.2 | 30.4 |
Goudron Contingent Resources Data:
mmbbls at 1/07/2012 | 1C | 2C | 3C |
Total Goudron Sand | 1.9 | 7.0 | 18.5 |
Total Cruse Sand | 4.3 | 8.9 | 44.7 |
Total Contingent Resources | 6.2 | 15.9 | 63.2 |
Source: Challenge Energy Limited
Elsewhere in Trinidad, through its local subsidiary Leni Trinidad Limited (LTL), LGO holds a 50% interest in the producing Icacos Field in the Cedros Peninsula, operated by Territorial Services Group. Icacos continues to produce from three wells, IC-001, -002 and -009 with resulting production averaging around 30 to 32 bopd (gross). Only care and maintenance activities were carried out in 2012, however, it is hoped that additional work, including the drilling of new state-of-the-art wells, can be undertaken in the next 12 months.
In the wider Cedros Peninsular LTL holds a number of private petroleum leases totalling about 1,750 acres and is in the process of obtaining a private petroleum licence from the Ministry in order to carry out a number of field surveys with a view to eventually drilling exploration wells, including to deeper Herrera Sandstone and possible Cretaceous targets have so far been underexplored in this part of Trinidad. LTL is also negotiating further leases with private owners in the area and expects to commence field work by late 2013.
In late November LGO confirmed that the definitive documentation associated with the farm-in to the Advance Oil Company (Trinidad) Limited (Advance) North Moruga area leases had been signed. LGO plans to work-over the existing producible wells as soon as practical and will drill up to ten new wells on the leases over a 3 year period. LTL will be assigned a 49% working interest in the private petroleum leases and Petrotrin sub-leases and will become the operator. Initially LTL will receive a 33% interest in production revenues, which will increase to a maximum of 49% as LGO completes the drilling of the planned new wells. Work on the reactivation of existing wells will commence when equipment is available and the final arrangements to prepare the crude oil for sale have been made.
The Moruga North leases cover an area of approximately 1,220 acres and lie between the West Moruga Field which has produced 25 million barrels of oil (mmbbls) and the Innis, Antilles and Trinity Fields which have produced approximately 15 mmbbls of oil. Moruga North is approximately 35 kilometres west of the existing LGO operations at Goudron. New wells in the Moruga area will be drilled to the Herrera Formation at depths of between 1,500 to 2,500 feet and are estimated to cost of between US$300,000 and US$500,000 per well. The first new well will be drilled as soon as practical after the assignment of the petroleum licence.
Petrotrin have granted their approval to the assignment of their sub-lease, however, the assignment of the petroleum licence requires further approval from the Ministry, which at the time of this report is still being sought.
In 2013 the Company continues to pursue its strategy of increasing its footprint in Trinidad and has signed a heads of agreement with Maxim Resources Inc. (Maxim) to collaborate on oil field developments in the South Erin Block. LGO has agreed, subject to due diligence, to provide CDN$2.5 million in shares or cash to fund Maxim's activities and will gain up to 49.99% of the issued share capital in Maxim as a result. Should Maxim be successful in acquiring control of the South Erin Block LGO will invest up to US$5 million in further developing drilling in the producing Jasmin Field and will become field operator and hold at least a 50% working interest.
The Company is also pleased that the Ministry has announced that it will open approximately 157,500 acres of State lands in the prolific Herrera Sandstone fairway for competitive bidding in 2013. At the time of writing we are awaiting release of the data package and bidding documents. LGO anticipates playing an active role in the bidding round, alone or in partnership, and has already completed regional geological studies of the relevant area in order to assist in the selection and assessment of the offered lease blocks.
US Gulf of Mexico
During late 2011 and the first quarter of 2012 the operational focus in the Gulf of Mexico was on the side-tracking of wells in the producing Eugene Island Field (EI-84) where LGO held a 7.25% working interest.
The A2ST01 well was targeted at a downthrown fault block, known as the Cranberry Creek prospect, believed to have hydrocarbon reservoir potential in both the Tex-X2 and X3 formations. A jack-up rig, Ocean Columbia, was mobilised to EI-184 in mid-February and the A2 well was successfully side-tracked from a depth of 7,607 feet and drilled to a total depth of 13,496 feet. The intersection with the Tex-X2 sandstone was found high to prognosis and the reservoir was found to be water saturated. A thin hydrocarbon bearing zone (approximately 5 feet thick) below the Tex-X2 reservoir was assessed to be sub-commercial and the well was plugged back without testing. Due to time constraints associated with the contract for the Ocean Columbia the rig was released and the second of the two planned side-tracks could not proceed.
This disappointing result lead to a further strategic review of LGO's position in the USA and the decision was made to divest the Company's interests in the Gulf of Mexico in order to focus available capital on projects in Trinidad and Spain.
In August the Company announced that it has sold its 20% working interest in two of its undeveloped leases, South Marsh Island-6 and Ship Shoal-180, to Byron Energy Inc. (Byron). Byron, who operated these leases, paid LGO US$400,000 in a transaction that was completed following approval from the US authorities to the assignment of the interest.
The Company subsequently received an offer from Northstar Offshore Group LLC (Northstar) for the balance of its Gulf of Mexico leases, including the Eugene Island producing property. That offer was formally accepted in August and after due diligence by Northstar a definitive SPA was signed on 5 November covering the Company's interests in seven leases for a total purchase price of US$1.625 million. The transaction was successfully closed and the resulting proceeds of US$1.714 million, after closing adjustments, were received on the 9 November 2012.
Malta
At the outset of 2012 LGO was awaiting receipt of newly acquired long-offset 3D seismic data over the Area 4 Petroleum Sharing Contact (PSC), offshore Malta, where the Company owned a 10% interest. The data was shot by Fugro-Geoteam Pty Ltd vessel R/V Geo Barents in November and December 2011 and had been commissioned on behalf of the participants in the PSC by the operator; Mediterranean Oil and Gas plc (MOG), in order to better image the prospective leads within the PSC prior to drilling of a commitment well.
Following the decision to concentrate on Trinidad the Malta asset was seen to be non-core and various parties, including MOG, were approached with a view to LGO selling its 10% interest in the asset. Expressions of interest were received from various parties and one potential buyer was given a short period of exclusivity, and was formally introduced to MOG as a potential new joint venture partner.
Due to delays in the receipt of the processed 3D seismic data and the absence of a farm-in partner being sought by MOG to fund their share of the well, MOG was obliged to seek a further extension of the drilling commitment from the Maltese Resources Agency. In the presence of the uncertainty created by a pending application for an extension and since LGO had been unable to obtain the processed and interpreted 3D seismic from MOG in order to share with interested parties, LGO's potential buyers were unable to proceed.
Subsequently LGO agreed to sell its 10% interest in the Area 4 PSC to Phoenicia Energy Company Limited (PECL) a wholly owned subsidiary of MOG for a nominal sum. This sale has, however, led to a legal dispute with MOG, which has resulted in LGO lodging a claim against MOG for misrepresentation at the time of the agreed sale. This claim, for rescission of the interest and/or damages, is now before the High Court in England.
Pending resolution of the claim the Company has made a charge of £1.9 million against its Balance Sheet to reflect the write-off of the carried value of the PSC at the time of the sale to PECL; however, LGO is seeking to recover this through its court action.
Conclusion
The past year has been another challenging one during which the Company has moved aggressively to change its strategic focus to onshore oil developments in Trinidad. The success of this program has depended on acquisition and divestment during a period of considerable market instability and uncertainty, especially in the Euro-zone where the Company's Spanish assets are located. A great deal has been accomplished during the year and the Company is now set to see sustained growth in both production and revenue over the foreseeable future.
I would like to thank our staff in London, Spain and Trinidad for their dedication and hard work during the period of transition.
Neil Ritson
Chief Executive Officer
26 April 2013
Competent Person's statement:
The information contained in this document has been reviewed and approved by Neil Ritson, Executive Director for Leni Gas & Oil Plc. Mr Ritson is a member of the Society of Petroleum Engineers, a Fellow of the Geological Society and an Active Member of the American Association of Petroleum Geologists. Mr Ritson has over 35 years of relevant experience in the oil industry.
Finance Review
Economic environment
The performance of the Company is influenced by global economic conditions, and in particular, the conditions prevailing in the United Kingdom, Spain, USA and Trinidad. The economies in these regions have all been subject to recessionary pressures during the period, with the global economy experiencing continued difficulties during 2012. The Company continues to monitor all of these markets particularly in relation to the Company's future project and operational development plans.
Results for the period
2012 continued to mark the turning point in the evolution of Leni Gas and Oil plc, highlighted by the current operating performance and the growth of our Trinidadian business. The financial statements presented herein do not as yet represent fully this real shift in direction, but the immediate years ahead should reflect this.
LGO is primarily a development business with programs in place to monetise the Company's interests in various oil and gas operations. Expectations are for a significant increase in production volumes and therefore revenue in the next few years. The results for the year reflect the beginning of this transformation. The Group recorded a gross profit of £1.09 million (2011: £1.06 million) and an operating loss after tax of £7.78 million (2011: £4.1 million) for the period ended 31 December 2012 mainly attributable to the loss on disposal from selling the US business (£4.7m) and the Maltese business (£1.8m).
Revenue in the period of £3.35 million (2011: £3.42 million), which includes an increase in revenues from Trinidad.
Cash flow
Cash outflow from operating activities after movements in working capital amounted to £1.278 million (2011: outflow £0.57 million). Net cash inflow from financing activities was £2.29 million (2011: £2.42 million). Net cash outflow from investing activities was £1.96 million (2011: £4.62 million) of which £2.7 million (2011: £4.0 million) was as a result of asset acquisitions.
Net cash position
Net cash at 31 December 2012 was £0.22 million (2011: £1.06 million).
Key performance indicators
The current business of the Company continues to be in development and initial stage production, with the focus on the successful delivery of investment to enable the Company to progress to substantial oil and gas sales and a larger operational business. The Company has devised strategies to monetise the majority of its oil and gas assets primarily by means of various production enhancement, development expansion and commercial consolidation programs as outlined in the Operations Review. The Board and management are incentivised to deliver shareholder value in line with these plans. The Company intends to provide detailed analysis and comparison of production; cash flows from operations; operating costs per boe; and realised oil and gas prices per barrel and mscf in future Annual Reports.
Asset Revaluations
An independent CPR (Competent Persons Report) was commissioned to evaluate the Goudron IPSC asset. The report, produced by Challenge Energy Ltd in July 2012 considered the value of not only the subsidiary whom had the rights to acquire the IPSC, but the value of the IPSC itself which was acquired. Using the output of the CPR and an audited financial model, the asset was re-valued to £9.9m. This is reflected as £3.1m of Goodwill in LGO plc and £6.8m of tangible assets in the Trinidad subsidiary.
Management consider this to be a prudent valuation when the financial model for the Goudron field is indicating a higher NPV over the remaining period of the IPSC to November 2019.
Outlook
Having divested of non-core assets and added the Goudron asset to the portfolio, LGO's financial future is very promising. With the prospect of generating significantly increased operational cash flow in the foreseeable future, the real monetisation of our assets and delivery of their potential has already started.
GLOSSARY & NOTES
2D = two-dimensional
3D = three-dimensional
AIM = London Stock Exchange Alternative Investment Market
bcf = billion cubic feet
boe = barrels of oil equivalent calculated on the basis of six thousand cubic feet of gas equals one barrel of oil
boepd = boe per day
bbls = barrels of oil
bopd = barrels of oil per day
CO2 = carbon dioxide
EOR = enhanced oil recovery
m = thousand
mm = million
mscf = thousand standard cubic feet of gas
mmscf = million standard cubic feet of gas
mmscfd = million standard cubic feet of gas per day
PSC = Production Sharing Contract
contingent resources
| those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there
are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality
|
oil-in-place
| the volume of oil estimated to have been initially in place
|
possible reserves
| those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high estimate scenario
|
probable reserves
| those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves
|
proven reserves
| those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations
|
All figures are net LGO unless otherwise stated
The estimates provide in this report 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.
Financial Statements
GROUP STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 DECEMBER 2012
Year ended | Year ended | ||
31 December 2012 | 31 December 2011 | ||
Note | £ 000's | £ 000's | |
Revenue | 2 | 3,345 | 3,417 |
Cost of sales | (2,259) | (2,356) | |
Gross profit | 1,086 | 1,061 | |
Administrative expenses | 3 | (1,963) | (2,279) |
Amortisation and depreciation | 3 | (317) | (565) |
Share based payments | 21 | (103) | (421) |
(Loss) from operations | (1,297) | (2,204) | |
Loss on disposal | 13 | (6,543) | - |
Impairment charge | - | (1,685) | |
Finance charges | 18 | (71) | (30) |
Finance revenue | 10 | 1 | 8 |
Other income | 8 | 204 | - |
(Loss) before taxation | (7,706) | (3,911) | |
Income tax expense | 5 | (75) | (155) |
(Loss) for the year attributable to equity holders of the parent | (7,781) | (4,066) | |
Other comprehensive income | |||
Revaluation surplus on oil & gas properties | 4,332 | - | |
Exchange differences on translation of foreign operations | (108) | (196) | |
Other comprehensive income for the year net of taxation | 4,224 | (196) | |
Total comprehensive income for the year attributable to equity holders of the parent | (3,557) | (4,262) | |
Loss per share (pence) | |||
Basic | 9 | (0.54) | (0.43) |
Diluted | 9 | (0.54) | (0.43) |
All of the operations are considered to be continuing. |
GROUP STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012
As at 31 December 2012 | As at 31 December 2011 | ||
Note | £ 000's | £ 000's | |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 12 | 264 | 244 |
Oil and gas properties
| 12 | 6,804 | - |
Intangible assets | 11 | 8,833 | 16,876 |
Goodwill | 11 | 3,083 | 3,083 |
Total non-current assets | 18,984 | 20,203 | |
Current assets | |||
Inventories | 16 | 244 | 233 |
Trade and other receivables | 15 | 572 | 1,162 |
Cash and cash equivalents | 220 | 1,056 | |
Total current assets | 1,036 | 2,451 | |
Total assets | 20,020 | 22,654 | |
Liabilities | |||
Current liabilities | |||
Trade and other payables | 17 | (1,259) | (2,155) |
Borrowings | 18 | (631) | - |
Deferred consideration | 17 | (120) | (737) |
Taxation | 17 | (48) | (57) |
Total current liabilities | (2,058) | (2,949) | |
Non-current liabilities | |||
Deferred consideration | 17 | (1,850) | (1,850) |
Borrowings | 18 | - | (718) |
Provisions | 19 | (780) | (799) |
Total non-current liabilities | (2,630) | (3,367) | |
Total liabilities | (4,688) | (6,316) | |
Net assets | 15,332 | 16,338 | |
Shareholders' equity | |||
Called-up share capital | 20 | 939 | 630 |
Share premium | 33,890 | 31,751 | |
Share based payments reserve | 21 | 1,187 | 1,251 |
Retained earnings | (24,942) | (17,328) | |
Revaluation Surplus | 4,332 | - | |
Foreign exchange reserve | (74) | 34 | |
Total equity attributable to equity holders of the parent | 15,332 | 16,338 | |
These financial statements were approved by the Board of Directors on 26 April 2013 and signed on its behalf by: | |||
David Lenigas | Neil Ritson | ||
Executive Chairman | Chief Executive Officer | ||
COMPANY STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012
As at 31 December 2012 | As at 31 December 2011 | ||
Note | £ 000's | £ 000's | |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 12 | 5 | 7 |
Investment in subsidiaries | 14 | 3,085 | 3,085 |
Trade and other receivables | 15 | 9,387 | 24,467 |
Total non-current assets | 12,477 | 27,559 | |
Current assets | |||
Trade and other receivables | 15 | 3,521 | 3,105 |
Cash and cash equivalents | 37 | 484 | |
Total current assets | 3,558 | 3,589 | |
Total assets | 16,035 | 31,148 | |
Liabilities | |||
Current liabilities | |||
Trade and other payables | 17 | (782) | (706) |
Deferred consideration | 17 | (120) | (737) |
Borrowings | 18 | (631) | - |
Total liabilities | (1,533) | (1,443) | |
Non-current liabilities | |||
Deferred consideration | 17 | (1,850) | (1,850) |
Borrowings | 18 | - | (718) |
Total non-current liabilities | (1,850) | (2,568) | |
Total liabilities | (3,383) | (4,011) | |
Net assets | 12,652 | 27,137 | |
Shareholders' equity | |||
Called-up share capital | 20 | 939 | 630 |
Share premium | 33,890 | 31,751 | |
Share based payments reserve | 21 | 1,187 | 1,251 |
Retained earnings | 26 | (23,364) | (6,495) |
Total equity attributable to equity holders of the parent | 12,652 | 27,137 | |
These financial statements were approved by the Board of Directors on 26 April 2013 and signed on its behalf by: | |||
David Lenigas | Neil Ritson | ||
Executive Chairman | Chief Executive Officer | ||
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2012
Year ended | Year ended | |
31 December 2012 | 31 December 2011 | |
£ 000's | £ 000's | |
Cash outflow from operating activities | ||
Operating (loss) | (1,297) | (2,204) |
Decrease/(increase) in trade and other receivables | 590 | (716) |
(Decrease)/increase in trade and other payables | (896) | 1,600 |
(Increase)/decrease in inventories | (11) | (137) |
Depreciation | 142 | 69 |
Amortisation | 175 | 496 |
Share based payments | 103 | 421 |
Income tax (paid) | (84) | (98) |
Net cash (outflow) from operating activities | (1,278) | (569) |
Cash flows from investing activities | ||
Interest received | 1 | 8 |
Other income | 204 | - |
Payments to acquire subsidiaries | (617) | (617) |
Payments to acquire intangible assets | (126) | (3,997) |
Payments to acquire tangible assets | (2,694) | (15) |
Proceeds from asset disposals | 1,273 | - |
Net cash outflow from investing activities | (1,959) | (4,621) |
Cash flows from financing activities | ||
Issue of ordinary share capital | 2,550 | 1,812 |
Share issue costs | (102) | (83) |
Finance interest paid | (1) | - |
Repayment of borrowings | (877) | - |
Proceeds of borrowings | 721 | 688 |
Net cash inflow from financing activities | 2,291 | 2,417 |
Net (decrease) in cash and cash equivalents | (946) | (2,773) |
Foreign exchange differences on translation | 110 | (23) |
Cash and cash equivalents at beginning of period | 1,056 | 3,852 |
Cash and cash equivalents at end of period | 220 | 1,056 |
COMPANY STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2012
Year ended | Year ended | |
31 December 2012 | 31 December 2011 | |
£ 000's | £ 000's | |
Cash outflow from operating activities | ||
Operating (loss) | (1,108) | (1,267) |
(Increase) in trade and other receivables | (416) | (1,098) |
Increase/(decrease) in trade and other payables | 76 | 409 |
Share based payments expensed | 103 | 421 |
Depreciation | 2 | 2 |
Other non-cash adjustments | (3) | 1 |
Net cash outflow from operating activities | (1,346) | (1,532) |
Cash flows from investing activities | ||
Interest received | 1 | 4 |
Loans granted to subsidiaries | (776) | (3,523) |
Payments to acquire subsidiaries | (617) | (617) |
Payments to acquire tangible assets | - | (9) |
Net cash outflow from investing activities | (1,392) | (4,145) |
Cash flows from financing activities | ||
Issue of ordinary share capital | 2,550 | 1,812 |
Share issue costs | (102) | (83) |
Finance Interest (paid) | (1) | - |
(Repayments) of borrowings | (877) | - |
Proceeds of borrowings | 721 | 688 |
Net cash inflow from financing activities | 2,291 | 2,417 |
Net (decrease) in cash and cash equivalents | (447) | (3,260) |
Cash and cash equivalents at beginning of period | 484 | 3,744 |
Cash and cash equivalents at end of period | 37 | 484 |
STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2012
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 2010 | 460 | 30,192 | 830 | (13,262) | 230 | - | 18,450 |
Loss for the year | - | - | - | (4,066) | - | - | (4,066) |
Currency translation differences | - | - | - | - | (196) | - | (196) |
Total comprehensive income | - | - | - | (4,066) | (196) | - | (4,262) |
Share capital issued | 170 | 1,642 | - | - | - | - | 1,812 |
Cost of share issue | - | (83) | - | - | - | - | (83) |
Share based payments | - | - | 421 | - | - | - | 421 |
Total contributions by and distributions to owners of the Company | 170 | 1,559 | 421 | - | - | - | 2,150 |
As at 31 December 2011 | 630 | 31,751 | 1,251 | (17,328) | 34 | - | 16,338 |
Loss for the year | - | - | - | (7,781) | - | - | (7,781) |
Revaluation of Oil & Gas Properties | - | - | - | - | - | 4,332 | 4,332 |
Currency translation differences | - | - | - | - | (108) | - | (108) |
Total comprehensive income | - | - | - | (7,781) | (108) | 4,332 | (3,557) |
Share capital issued | 309 | 2,241 | - | - | - | - | 2,550 |
Cost of share issue | - | (102) | - | - | - | - | (102) |
Expiration of Options | - | - | (167) | 167 | - | - | - |
Share based payments | - | - | 103 | - | - | - | 103 |
Total contributions by and distributions to owners of the Company | 309 | 2,139 | (64) | 167 | - | - | 2,551 |
As at 31 December 2012 | 939 | 33,890 | 1,187 | (24,942) | (74) | 4,332 | 15,332 |
Company | |||||||
As at 31 December 2010 | 460 | 30,192 | 830 | (5,202) | - | - | 26,280 |
Loss for the year | - | - | - | (1,293) | - | - | (1,293) |
Total comprehensive income | - | - | - | (1,293) | - | - | (1,293) |
Share capital issued | 170 | 1,642 | - | - | - | - | 1,812 |
Cost of share issue | - | (83) | - | - | - | - | (83) |
Share based payments | - | - | 421 | - | - | - | 421 |
Total contributions by and distributions to owners of the Company | 170 | 1,559 | 421 | - | - | - | 2,150 |
As at 31 December 2011 | 630 | 31,751 | 1,251 | (6,495) | - | - | 27,137 |
Loss for the year | - | - | - | (17,036) | - | - | (17,036) |
Total comprehensive income | - | - | - | (17,036) | - | - | (17,036) |
Share capital issued | 309 | 2,241 | - | - | - | - | 2,550 |
Cost of share issue | - | (102) | - | - | - | - | (102) |
Expiration of Options | - | - | (167) | 167 | - | - | - |
Share based payments | - | - | 103 | - | - | - | 103 |
Total contributions by and distributions to owners of the Company | 309 | 2,139 | (64) | 167 | - | - | 2,551 |
As at 31 December 2012 | 939 | 33,890 | 1,187 | (23,364) | - | - | 12,652 |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012
1 | Summary of significant accounting policies | |||||||
1.01 | General information and authorisation of financial statements | |||||||
Leni Gas and Oil plc is a public limited company registered in the United Kingdom under the Companies Act 2006. The address of its registered office is Suite 3B, Princes House, 38 Jermyn Street, London, SW1Y 6DN. The Company's Ordinary shares are traded on the AIM Market operated by the London Stock Exchange. The Group financial statements of Leni Gas & Oil plc for the period ended 31 December 2012 were authorised for issue by the Board on 26 April 2013 and the balance sheets signed on the Board's behalf by Mr. David Lenigas and Mr. Neil Ritson | ||||||||
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 standards and interpretations not applied | ||||||||
IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements:
| ||||||||
New/Revised International Financial Reporting Standards (IAS/IFRS) | Effective date (accounting periods commencing on or after) | |||||||
IAS 27 Consolidated and Separate Financial Statements - Reissued as IAS 27 Separate Financial Statements (as amended in May 2011) | 1 January 2013 | |||||||
IAS 28 Investments in Associates - Reissued as IAS 28 Investments in Associates and Joint Ventures (as amended in May 2011) | 1 January 2013 | |||||||
IFRS 9 Financial Instruments - Classification and Measurement | 1 January 2013 | |||||||
IFRS 10 Consolidated Financial Statements* | 1 January 2013 | |||||||
IFRS 11 Joint Arrangements* | 1 January 2013 | |||||||
IFRS 12 Disclosure of Interests in Other Entities* | 1 January 2013 | |||||||
IFRS 13 Fair Value Measurement* | 1 January 2013 | |||||||
* Original issue May 2011 | ||||||||
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 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. | ||||||||
1.05 | Goodwill and intangible assets | |||||||
Intangible assets are recorded at cost less eventual amortisation and provision for impairment in value. Goodwill on consolidation is capitalised and shown within non-current assets. Positive goodwill is subject to an annual impairment review, and negative goodwill is immediately written-off to the income statement when it arises. | ||||||||
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 three and eight years. | ||||||||
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 Group does not currently utilise derivative financial instruments. | ||||||||
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. | ||||||||
(v) | Equity investments | |||||||
Equity instruments issued by the Company and the Group are recorded at the proceeds received, net of direct issue costs. | ||||||||
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. | ||||||||
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 or 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 | Business combinations | |||||||
Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. The group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the group's voting rights relative to the size and dispersion of holdings of other shareholders give the group the power to govern the financial and operating policies, etc.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquiree on an acquisition- by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group | ||||||||
1.23 | 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 Leni Gas & Oil Plc (market conditions) if applicable. | ||||||||
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 period). | ||||||||
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. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. 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. | ||||||||
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. | ||||||||
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. | ||||||||
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. | ||||||||
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share. | ||||||||
1.24 | 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 Group has a single business segment: oil and gas exploration, development and production. The business segment can be split into five geographical segments: Spain, USA, Trinidad & Tobago, Cyprus and UK. | ||||||||
1.25 | Share issue expenses and share premium account | |||||||
Costs of share issues are written off against the premium arising on the issues of share capital. | ||||||||
1.26 | 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. | ||||||||
1.27 | Revaluation Surplus Reserve | |||||||
This reserve is used to record the increase on revaluation of assets, in particular of oil and gas properties. | ||||||||
1.28 | 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 asset. 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) | Significant accounting estimates and assumptions | |||||||
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: | ||||||||
(iv) | 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. | ||||||||
1.29 | 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 after 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. | |||||||
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 business segment: oil and gas exploration, development and production. The business segment can be further split into five geographical segments: Spain, USA, Trinidad & Tobago, Cyprus and UK.
Spain, USA, and Trinidad, have been reported as the group's direct oil and gas producing entities, these are the group's only revenue generating operations. The UK is the Group's parent and administrative entity and is reported on accordingly.
The board considers the following external reporting to be appropriate to the current development of its strategic investment in Malta, this being combined with the Cypriot administration costs as one reported geographical segment of Cyprus, as the subsidiaries which hold these investments are incorporated therein. Further breakdown of each of these relative country investments is not seen to be informative at this time as a result of their current development stages, and are thus combined and reported under their investment entity.
| ||||||||
Corporate | Holding | Operating | Operating | Operating | Total | |||
Year ended 31 December 2012 | UK | Cyprus | Spain | Trinidad | US | |||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |||
Operating profit/(loss) by geographical area | ||||||||
Revenue (*) | - | 2,760 | 429 | 156 | 3,345 | |||
Operating profit/(loss) | (1,108) | (19) | 454 | (320) | (304) | (1,297) | ||
Loss on disposal | - | (1,846) | - | - | (4,697) | (6,543) | ||
Other income | - | 204 | - | - | - | 204 | ||
Finance Interest | (71) | - | - | - | - | (71) | ||
Finance revenue | 1 | - | - | - | - | 1 | ||
Profit/(loss) before taxation | (1,178) | (1,661) | 454 | (320) | (5,001) | (7,706) | ||
Other information | ||||||||
Depreciation and amortisation | (2) | - | (98) | (84) | (133) | (317) | ||
Capital additions | - | - | 173 | 2,647 | - | 2,820 | ||
Segment assets | 3,088 | - | 8,866 | 7,030 | - | 18,984 | ||
Financial assets | 155 | - | 279 | 138 | - | 572 | ||
Inventory | - | - | 233 | 11 | - | 244 | ||
Cash | 37 | - | 67 | 93 | 23 | 220 | ||
Consolidated total assets | 3,280 | - | 9,445 | 7,272 | 23 | 20,020 | ||
Segment liabilities | ||||||||
Trade and other payables | (782) | (2) | (301) | (124) | (50) | (1,259) | ||
Taxation | - | (32) | - | (16) | - | (48) | ||
Borrowings | (631) | - | - | - | - | (631) | ||
Deferred Consideration | (1,970) | - | - | - | - | (1,970) | ||
Provisions | - | - | (780) | - | - | (780) | ||
Consolidated total liabilities | (3,383) | (34) | (1,081) | (140) | (50) | (4,688) | ||
(*) Revenues are derived from a single customer/partner within each of these operating countries.
2 | Turnover and segmental analysis (continued) | ||||||
Corporate | Holding | Operating | Operating | Operating | Total | ||
Year ended 31 December 2011 | UK | Cyprus | Spain | Trinidad | US | ||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
Operating profit/(loss) by geographical area | |||||||
Revenue (*) | - | - | 2,659 | 375 | 383 | 3,417 | |
Operating profit/(loss) | (1,267) | (35) | (675) | 197 | (424) | (2,204) | |
Impairment charge | - | - | (1,685) | - | - | (1,685) | |
Finance charges | (30) | - | - | - | - | (30) | |
Finance revenue | 4 | - | 4 | - | - | 8 | |
Profit/(loss) before taxation | (1,293) | (35) | (2,356) | 197 | (424) | (3,911) | |
Other information | |||||||
Depreciation and amortisation | (2) | - | (138) | (9) | (416) | (565) | |
Capital additions (including goodwill) | 3,092 | 348 | 3,547 | 200 | 28 | 7,215 | |
Segment assets | 3,090 | 1,846 | 9,288 | 199 | 5,780 | 20,203 | |
Financial assets | 341 | - | 648 | 62 | 111 | 1,162 | |
Inventory | - | - | 233 | - | - | 233 | |
Cash | 484 | - | 282 | 146 | 144 | 1,056 | |
Consolidated total assets | 3,915 | 1,846 | 10,451 | 407 | 6,035 | 22,654 | |
Segment liabilities | |||||||
Trade and other payables | (706) | (6) | (1,411) | (16) | (16) | (2,155) | |
Taxation | - | (13) | - | (44) | - | (57) | |
Borrowings | (718) | - | - | - | - | (718) | |
Deferred Consideration | (2,587) | - | - | - | - | (2,587) | |
Provisions | - | - | (799) | - | - | (799) | |
Consolidated total liabilities | (4,011) | (19) | (2,210) | (60) | (16) | (6,316) | |
(*) Revenues are derived from a single customer/partner within each of these operating countries.
3 | Operating loss | 2012 | 2011 |
£ 000's | £ 000's | ||
Operating loss is arrived at after charging: | |||
Auditors' remuneration: | |||
-Audit-related assurance services - Current year | 25 | 34 | |
-Auditors' remuneration payable to subsidiary auditors | 5 | 6 | |
Directors' emoluments - fees and salaries | 445 | 788 | |
Directors' emoluments - share based payments and options | - | 136 | |
Depreciation | 142 | 69 | |
Amortisation | 175 | 496 | |
4 | Employee information (excluding directors') | 2012 | 2011 |
Staff costs comprised: | £ 000's | £ 000's | |
Wages and salaries | 934 | 1,105 | |
Social security contributions | 184 | 243 | |
Total staff costs | 1,118 | 1,348 | |
The average number of employees on a full time equivalent basis during the year was as follows: | |||
Number | Number | ||
Administration | 4 | 4 | |
Operations | 22 | 20 | |
Total | 26 | 24 | |
5 | Taxation | 2012 | 2011 |
Analysis of charge in period | £ 000's | £ 000's | |
Tax on ordinary activities | 75 | 155 | |
Factors affecting the tax charge for the period: | |||
Loss on ordinary activities before tax | (7,706) | (3,911) | |
Standard rate of corporation tax in the UK | 24%/26% | 26%/28% | |
Loss on ordinary activities multiplied by the standard rate of corporation tax | (1,888) | (1,037) | |
Effects of: | |||
Non deductible expenses | 26 | 95 | |
Withholding tax on overseas interest | - | - | |
Overseas tax on profits | (75) | (155) | |
Future tax benefit not brought to account | 2,012 | 1,252 | |
Current tax charge for period | 75 | 155 | |
No deferred tax asset has been recognised because there is uncertainty of the timing of suitable future profits against which they can be recovered.
There are approximately £4,991,667 (2011: £3,837,667) of tax losses yet to be utilised by a subsidiary company in Spain. The Spanish tax rate applicable is currently 35%. | |||
6 | Dividends | ||
No dividends were paid or proposed by the Directors (2011: nil). | |||
7 | Directors' emoluments | |||||
2012 | 2011 | |||||
£ 000's | £ 000's | |||||
Directors' remuneration | 445 | 924 | ||||
Directors Fees | Consultancy Fees | Share based payments | Total | |||
2012 | £000's | £000's | £000's | £000's | ||
Executive Directors | ||||||
David Lenigas | 12 | 240 | - | 252 | ||
Neil Ritson | 160 | - | - | 160 | ||
Non-Executive Directors | ||||||
Steve Horton | 12 | 21 | - | 33 | ||
184 | 261 | - | 445 | |||
2011 | £000's | £000's | £000's | £000's | ||
Executive Directors | ||||||
David Lenigas | 12 | 240 | - | 252 | ||
Neil Ritson | 160 | - | - | 160 | ||
(**) | Fraser Pritchard | 6 | 149 | 61 | 216 | |
(***) | Donald Strang | 12 | 156 | - | 168 | |
Non-Executive Directors | ||||||
(*) | Steve Horton | 11 | 42 | 75 | 128 | |
201 | 587 | 136 | 924 | |||
No pension benefits are provided for any Director. | ||||||
(*) | Steve Horton was appointed to the Board on 3 February 2011 | |||||
(**) | Fraser Pritchard stepped down from the Board on 30 June 2011 | |||||
(***) | Donald Strang stepped down from the Board on 16 December 2011. | |||||
In Q3 2011 it was decided that Executive Directors would defer their cash salary. As a result the CEO was not paid between the 30th September 2011 and 30 June 2012, his salary has been accrued for that period within the financial statements.
As at the 31 December 2012 LGO continues to accrue the unpaid remuneration. | ||||||
8 | Other income | 2012 | 2011 |
£ 000's | £ 000's | ||
Non-refundable deposit re: Spanish divestment | 204 | - | |
204 | - |
9 | Loss per share | ||
The calculation of loss per share is based on the loss after taxation divided by the weighted average number of share in issue during the period: | |||
2012 | 2011 | ||
Net loss after taxation (£000's) | (7,781) | (4,066) | |
Weighted average number of ordinary shares used in calculating basic loss per share (millions) | 1,434.2 | 950.1 | |
Weighted average number of ordinary shares used in calculating diluted loss per share (millions) | 1,807.4 | 1,131.3 | |
Basic loss per share (expressed in pence) | (0.54) | (0.43) | |
Diluted loss per share (expressed in pence) | (0.54) | (0.43) | |
As inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be anti-dilutive, as such, a diluted earnings per share is not included. | |||
10 | Finance revenue | 2012 | 2011 |
£ 000's | £ 000's | ||
Bank interest receivable | 1 | 8 | |
1 | 8 |
11 | Intangible assets | 2012 | ||||
Oil and gas properties | Deferred exploration expenditure | Decommissioning costs | Goodwill | Total | ||
Group | £000's | £000's | £000's | £000's | £000's | |
Cost | ||||||
As at 1 January 2012 | 25,035 | 1,846 | 799 | 3,083 | 30,763 | |
Additions | 126 | - | - | - | 126 | |
Disposal | (14,752) | (1,846) | - | - | (16,598) | |
Foreign exchange difference on translation | (580) | - | (19) | - | (599) | |
As at 31 December 2012 | 9,829 | - | 780 | 3,083 | 13,692 | |
Amortisation and Impairment | ||||||
As at 1 January 2012 | 10,793 | - | 11 | - | 10,804 | |
Amortisation | 173 | - | 2 | - | 175 | |
Disposal | (8,673) | - | - | - | (8,673) | |
Foreign exchange difference on translation | (530) | - | - | - | (530) | |
As at 31 December 2012 | 1,763 | - | 13 | - | 1,776 | |
Net book value | ||||||
As at 31 December 2012 | 8,066 | - | 767 | 3,083 | 11,916 | |
As at 31 December 2011 | 14,242 | 1,846 | 788 | 3,083 | 19,959 | |
| ||||||
Impairment review | ||||||
At 31 December 2012, the Directors carried out an impairment review and have confirmed that no provision is currently required. | ||||||
11 | Intangible assets (continued) | 2011 | ||||
Oil and gas properties | Deferred exploration expenditure | Decommissioning costs | Goodwill | Total | ||
Group | £000's | £000's | £000's | £000's | £000's | |
Cost | ||||||
As at 1 January 2011 | 21,470 | 1,498 | 817 | - | 23,785 | |
Additions | 3,769 | 348 | - | 3,083 | 7,200 | |
Foreign exchange difference on translation | (204) | - | (18) | - | (222) | |
As at 31 December 2011 | 25,035 | 1,846 | 799 | 3,083 | 30,763 | |
Amortisation and Impairment | ||||||
As at 1 January 2011 | 8,652 | - | 8 | - | 8,660 | |
Amortisation | 493 | - | 3 | - | 496 | |
Impairment charge | 1,685 | - | - | - | 1,685 | |
Foreign exchange difference on translation | (37) | - | - | - | (37) | |
As at 31 December 2011 | 10,793 | - | 11 | - | 10,804 | |
Net book value | ||||||
As at 31 December 2011 | 14,242 | 1,846 | 788 | 3,083 | 19,959 | |
As at 31 December 2010 | 12,818 | 1,498 | 809 | - | 15,125 |
12 | Property, plant and equipment | 2012 | 2012 | ||||
Group | Company | ||||||
Oil and gas properties | Property, plant and equipment | Total | Property, plant and equipment | Total | |||
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |||
Cost or Valuation | |||||||
As at 1 January 2012 | - | 541 | 541 | 9 | 9 | ||
Additions | 2,598 | 96 | 2,694 | - | - | ||
Revaluation surplus | 4,332 | - | 4,332 | - | - | ||
Foreign exchange difference on translation | (55) | (13) | (68) | - | - | ||
As at 31 December 2012 | 6,875 | 624 | 7,449 | 9 | 9 | ||
- | - | ||||||
Depreciation | - | - | |||||
As at 1 January 2012 | - | 297 | 297 | 2 | 2 | ||
Depreciation | 72 | 70 | 142 | 2 | 2 | ||
Foreign exchange difference on translation | (1) | (7) | (8) | - | - | ||
As at 31 December 2012 | 71 | 360 | 431 | 4 | 4 | ||
- | - | ||||||
Net book value | - | - | |||||
As at 31 December 2012 | 6,804 | 264 | 7,068 | 5 | 5 | ||
As at 31 December 2011 | - | 244 | 244 | 7 | 7 |
Impairment review | |
At 31 December 2012, the Directors have carried out an impairment review and confirmed that no write down is currently required. |
12 | Property, plant and equipment (continued) | 2011 | 2011 | ||||
Group | Company | ||||||
Oil and gas properties | Property, plant and equipment | Total | Property, plant and equipment | Total | |||
£ 000's | £ 000's | £ 000's | £ 000's | £ 000's | |||
Cost | |||||||
As at 1 January 2011 | - | 538 | 538 | - | - | ||
Additions | - | 15 | 15 | 9 | 9 | ||
Foreign exchange difference on translation | - | (12) | (12) | - | - | ||
As at 31 December 2011 | - | 541 | 541 | 9 | 9 | ||
Depreciation | |||||||
As at 1 January 2011 | - | 235 | 235 | - | - | ||
Depreciation | - | 69 | 69 | 2 | 2 | ||
Foreign exchange difference on translation | - | (7) | (7) | - | - | ||
As at 31 December 2011 | - | 297 | 297 | 2 | 2 | ||
Net book value | |||||||
As at 31 December 2011 | - | 244 | 244 | 7 | 7 | ||
As at 31 December 2010 | - | 303 | 303 | - | - |
Revaluation of Oil and Gas Properties
Management reviews the asset valuations on an ongoing basis, in particular those relating to oil and gas properties on "purchase/acquisition", an assessment is made of the true value to the business, and as such the most appropriate valuation method, that of cost or valuation. In respect of the addition of the IPSC (Incremental Production Service Contract) in October 2012, the true value is over the initial period of the contract.
Management have with the benefit of the CPR (Competent Persons Report) on the Goudron Field Onshore Trinidad, independently produced by Challenge Energy Ltd in July 2012 considered the value of not only the subsidiary whom had the rights to acquire the IPSC, but the value of the IPSC itself which was acquired for £2,544,000 (US$4million), and chosen to adopt the revaluation method in respect of this asset.
Using the CPR and a financial model in respect of the field and forecast production, future well drilling costs, etc revalued the asset to £6.8million (US$11million). Management consider this to be a prudent valuation when the financial model for the Goudron field is indicating a higher NPV over the remaining period of the IPSC to November 2019. The most significant inputs into this valuation approach are future oil prices, timing of drilling new wells, and production levels.
The revaluation surplus was credited to other comprehensive income and is shown in revaluation surplus in shareholders equity. The asset will be depreciated over the life of the IPSC on the unit of production basis. As such this valuation and further extensions will be continuously monitored over the life of the project.
13 | Loss on disposal | 2012 | ||
Oil and gas properties (US-Gulf of Mexico) | Deferred exploration expenditure (Malta) | Total | ||
£ 000's | £ 000's | £ 000's | ||
Disposal Proceeds - cash received | 1,273 | - | 1,273 | |
Less | ||||
Intangible assets - at cost | 14,959 | 1,846 | 16,805 | |
Accumulated amortization | (8,989) | - | (8,989) | |
Net book value at disposal | 5,970 | 1,846 | 7,816 | |
Loss on disposal | (4,697) | (1,846) | (6,543) |
During the year to 31 December 2012, the Group disposed of the above assets as two separate transactions. The resultant losses on disposals are illustrated above. Each disposal is detailed below;
Sale of Oil and gas properties - US Gulf of Mexico
On 21 August 2012, Leni Gas and Oil US Inc, sold its interest in 2 exploration leases to Byron Energy Inc for US$400,000, these 2 interest areas were held at cost of US$225,742, and resulted in a profit US$174,258 on disposal of these 2 leases.
On 5 November 2012, Leni Gas and Oil US Inc, sold all of its remaining minority interest in the US Gulf of Mexico for a cash consideration of $1.625million to a USA Group. These assets had previously been written down in 2010 by £6.9million.
As a result, the total loss on disposal on sale in relation to all of the US assets was £4.697million.
Sale of Malta, Area 4 Petroleum Sharing Contract (PSC)
On 1 August 2012, on the basis of information provided by its 90% partner and Operator, Mediterranean Oil and Gas PLc (MOG), the Group agreed to sell its 10% interest in the PSC to MOG for consideration of US$1 and the assumption of the Group's outstanding liabilities. Following the completion of the sale MOG holds the entire interest in the PSC.
As a result the entire investment in Malta and the PSC has been effectively written off with a loss on disposal for the investment value of £1,846,000.
Following completion of the sale, on 24 August 2012 MOG announced its intention to farmout 75% of the PSC for a cash consideration of US$10million. LGO immediately asked for an explanation from MOG and sought legal advice regarding MOG's farmout of the PSC. MOG did not provide satisfactory answers and LGO was obliged to seek to resolve the issues through lawyers. On 3 January 2013 issued legal proceedings against MOG in the High Court (England and Wales).
LGO is seeking rescission of the transaction and damages, as well as its costs in bringing the action.
14 | Investment in subsidiaries | 2012 | ||||
Shares in Group undertaking | £ 000's | |||||
Company | ||||||
Cost | ||||||
As at 1 January 2012 | 3,085 | |||||
Additions | - | |||||
As at 31 December 2012 | 3,085 | |||||
The parent company of the Group holds more than 20% of the share capital of the following companies:
| ||||||
Company | Country of Registration | Proportion held | Nature of business | |||
Direct | ||||||
Leni Gas & Oil Holdings Ltd | Cyprus | 100% | Holding Company | |||
Leni Trinidad Ltd | Trinidad & Tobago | 100% | Oil and Gas Production and Exploration Company | |||
Goudron E&P Ltd | Trinidad & Tobago | 100% | Investment Company | |||
Indirect | ||||||
Via Leni Gas & Oil Holdings Ltd | ||||||
Leni Gas & Oil Investments Ltd | Cyprus | 100% | Investment Company | |||
Leni Investments Cps Ltd | Cyprus | 100% | Investment Company | |||
Leni Investments Byron Ltd | Cyprus | 100% | Investment Company | |||
Leni Investments Trinidad Ltd | Cyprus | 100% | Investment Company | |||
Via Leni Investments Cps Ltd | ||||||
Compañia Petrolifera de Sedano S.L. | Spain | 100% | Oil and Gas Production and Exploration Company | |||
Via Leni Investments Byron Ltd | ||||||
Leni Gas and Oil US Inc. | United States | 100% | Oil and Gas Production and Exploration Company | |||
15 | Trade and other receivables | 2012 | 2011 | ||
Group | Company | Group | Company | ||
£ 000's | £ 000's | £ 000's | £ 000's | ||
Current trade and other receivables | |||||
Trade receivables | 332 | 3,366 | 636 | 2,764 | |
Taxation receivable | 142 | 68 | 76 | 34 | |
Other receivables | 22 | 12 | 372 | 240 | |
Prepayments | 76 | 75 | 78 | 67 | |
Total | 572 | 3,521 | 1,162 | 3,105 | |
Non-current trade and other receivables | |||||
Loans due from subsidiaries | - | 9,387 | - | 24,467 | |
Total | - | 9,387 | - | 24,467 | |
The loans due from subsidiaries are interest free and have no fixed repayment date. |
16 | Inventories | 2012 | 2011 | ||
Group | Company | Group | Company | ||
£ 000's | £ 000's | £ 000's | £ 000's | ||
Inventories - Crude Oil | 244 | - | 233 | - | |
17 | Trade and other payables | 2012 | 2011 | ||
Group | Company | Group | Company | ||
£ 000's | £ 000's | £ 000's | £ 000's | ||
Current trade and other payables | |||||
Trade Payables | 573 | 316 | 1,512 | 376 | |
Deferred consideration | 120 | 120 | 737 | 737 | |
Taxation | 48 | - | 57 | - | |
Accruals | 686 | 466 | 643 | 330 | |
Total | 1,427 | 902 | 2,949 | 1,443 | |
Non-current trade and other payables | |||||
Deferred consideration | 1,850 | 1,850 | 1,850 | 1,850 | |
Total | 1,850 | 1,850 | 1,850 | 1,850 | |
18 | Borrowings | 2012 | 2011 | ||
Group | Company | Group | Company | ||
£ 000's | £ 000's | £ 000's | £ 000's | ||
Current | |||||
Loans - other (unsecured) 1 | 221 | 221 | - | - | |
Loans - other (unsecured) 2 | 310 | 310 | - | - | |
Interest payable on borrowings | 100 | 100 | - | - | |
Non-current | |||||
Loans - other (unsecured) 1 | - | - | 688 | 688 | |
Interest payable on borrowings | - | - | 30 | 30 | |
631 | 631 | 718 | 718 | ||
1. The loans due to other parties carried an interest charge of 10% and a repayment date of the 29 June 2013.The carrying amounts of short-term borrowings approximate their fair value, and are all denominated in pounds sterling.
| |||||
2. The loans due to other parties carried an interest charge of 2% plus LIBOR and a repayment date of the 30 June 2013.The carrying amounts of short-term borrowings approximate their fair value, and are all denominated in pounds sterling. | |||||
Equity Line Facility
On the 12 November 2012, the Company announced that it had terminated its three year £5 million Equity Line Facility with Dutchess Opportunity Cayman Fund Ltd ("Dutchess") by mutual agreement. The Company no longer believes that this type of facility is required in the Company's forward funding plans. The facility was terminated at no cost to either party.
| |||||
19 | Provisions | 2012 | 2011 | ||
Provision for decommissioning costs | Group | Company | Group | Company | |
£ 000's | £ 000's | £ 000's | £ 000's | ||
At 1 January | 799 | - | 817 | - | |
Foreign exchange difference on translation | (19) | - | (18) | - | |
At 31 December | 780 | - | 799 | - | |
These costs relate to the estimated liability for removal of Spanish production facilities and site restoration at the end of the production life of the facilities. | |||||
20 | Share capital | |||
Called up, allotted, issued and fully paid | Number of shares | Nominal value | ||
£ 000's | ||||
As at 1 January 2011 | 919,254,965 | 460 | ||
29 November 2011 cash at 1.19p per share | 4,200,000 | 2 | ||
29 November 2011 cash at 0.93p per share | 19,000,000 | 10 | ||
6 December 2011 cash at 0.50p per share | 302,000,000 | 151 | ||
6 December 2011 cash at 0.50p per share | 15,000,000 | 7 | ||
As at 31 December 2011 | 1,259,454,965 | 630 | ||
3 August 2012 cash at 0.82p per share | 18,292,636 | 9 | ||
20 September 2012 cash at 0.40p per share | 600,000,000 | 300 | ||
As at 31 December 2012 | 1,877,747,601 | 939 | ||
During the year 618 million shares were issued (2011: 340 million). | ||||
Total share options in issue | ||||
During the year 10 million options were issued (2011: 32.5 million). | ||||
As at 31 December 2012 the options in issue were: | ||||
Exercise Price | Expiry Date | Options in Issue | ||
3p | 31 January 2013 | 10,000,000 | ||
4p | 31 January 2013 | 2,500,000 | ||
2.5p | 09 June 2013 | 16,300,000 | ||
3p | 18 November 2013 | 10,000,000 | ||
4p | 18 November 2013 | 5,000,000 | ||
5p | 18 November 2013 | 5,000,000 | ||
6p | 18 November 2013 | 5,000,000 | ||
5p | 31 January 2014 | 5,000,000 | ||
3p | 03 May 2014 | 5,000,000 | ||
4p | 03 May 2014 | 3,500,000 | ||
5p | 03 May 2014 | 3,500,000 | ||
6p | 03 May 2014 | 3,000,000 | ||
1p | 27 February 2015 | 1,000,000 | ||
2p | 27 February 2015 | 1,000,000 | ||
3p | 27 February 2015 | 2,000,000 | ||
4p | 27 February 2015 | 3,000,000 | ||
5p | 27 February 2015 | 3,000,000 | ||
As at 31 December 2012 | 83,800,000 | |||
16 million options lapsed during the year (2011: nil). No options were cancelled or exercised during the period. | ||||
Total warrants in issue | ||||
During the year, no warrants were issued (2011: nil) | ||||
As at 31 December 2012 the warrants in issue were; | ||||
Exercise Price | Expiry Date | Warrants in Issue 31 December 2012 | ||
8p | 26 June 2013 | 78,362,500 | ||
8p | 1 July 2013 | 9,426,406 | ||
8p | 28 July 2013 | 15,875,000 | ||
As at 31 December 2012 | 103,663,906 | |||
No warrants lapsed, were cancelled or exercised during the period. (2011: nil) | ||||
21 | Share based payment arrangements | ||||||||
Share options | |||||||||
The Company has an established an employee share option plan to enable the issue of options as part of remuneration of key management personnel and Directors to enable the purchase of shares in the entity. Options were granted under the plan for no consideration. Options were granted for a three or five year period. There are vesting conditions associated with the options. Options granted under the plan carry no dividend or voting rights.
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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.
Details of the current unexpired share options at the date of this report are as shown in the table below: | |||||||||
Name | Date Granted | Vesting Date | Number | Exercise Price (pence) | Expiry Date | Fair Value at Grant Date (pence) | Fair Value after discount (pence) | ||
Jeremy Edelman | 9 June 2008 | 9 June 2009 | 1,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Jeremy Edelman | 9 June 2008 | 9 June 2010 | 1,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Donald Strang | 9 June 2008 | 9 June 2009 | 3,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Donald Strang | 9 June 2008 | 9 June 2010 | 3,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Fraser Pritchard | 9 June 2008 | 9 June 2009 | 1,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Fraser Pritchard | 9 June 2008 | 9 June 2010 | 1,000,000 | 2.5 | 9 June 2013 | 2.39 | 2.39 | ||
Staff | 9 June 2008 | 9 June 2009 | 3,150,000 | 2.5 | 9 June 2013 | 2.39 | 1.91 | ||
Staff | 9 June 2008 | 9 June 2010 | 3,150,000 | 2.5 | 9 June 2013 | 2.39 | 1.91 | ||
Neil Ritson | 19 November 2010 | 19 November 2010 | 10,000,000 | 3 | 18 November 2013 | 1.57 | 1.57 | ||
Neil Ritson | 19 November 2010 | 19 November 2010 | 5,000,000 | 4 | 18 November 2013 | 1.32 | 1.32 | ||
Neil Ritson | 19 November 2010 | 19 November 2010 | 5,000,000 | 5 | 18 November 2013 | 1.13 | 1.13 | ||
Neil Ritson | 19 November 2010 | 19 November 2010 | 5,000,000 | 6 | 18 November 2013 | 0.98 | 0.98 | ||
Steve Horton | 3 February 2011 | 3 February 2011 | 5,000,000 | 5 | 31 January 2014 | 1.82 | 1.82 | ||
Garry Stoker | 3 May 2011 | 3 May 2011 | 5,000,000 | 3 | 3 May 2014 | 2.10 | 2.10 | ||
Garry Stoker | 3 May 2011 | 3 May 2011 | 3,500,000 | 4 | 3 May 2014 | 1.92 | 1.92 | ||
Garry Stoker | 3 May 2011 | 3 May 2011 | 3,500,000 | 5 | 3 May 2014 | 1.78 | 1.78 | ||
Garry Stoker | 3 May 2011 | 3 May 2011 | 3,000,000 | 6 | 3 May 2014 | 1.66 | 1.66 | ||
Fergus Jenkins | 1 March 2012 | 1 March 2012 | 1,000,000 | 1 | 27 February 2015 | 1.65 | 1.65 | ||
Fergus Jenkins | 1 March 2012 | 1 March 2012 | 1,000,000 | 2 | 27 February 2015 | 1.65 | 1.65 | ||
Fergus Jenkins | 1 March 2012 | 1 March 2012 | 2,000,000 | 3 | 27 February 2015 | 1.65 | 1.65 | ||
Fergus Jenkins | 1 March 2012 | 1 March 2012 | 3,000,000 | 4 | 27 February 2015 | 1.65 | 1.65 | ||
Fergus Jenkins | 1 March 2012 | 1 March 2012 | 3,000,000 | 5 | 27 February 2015 | 1.65 | 1.65 | ||
Totals | 71,300,000 | ||||||||
The fair value of the options vested during the period was £0.1 million (2011: £0.42 million). Also 16million options lapsed during the year, and the fair value of these lapsed options was £0.167 million, transferred through equity to retained earnings. The assessed fair value at grant date is determined using the Black-Scholes Model that 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.
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The following table lists the inputs to the model used for the period ended 31 December 2012:
| |||||||||
1 March 2012 | |||||||||
Dividend Yield (%) | - | ||||||||
Expected Volatility (%) | 124.6 | ||||||||
Risk-free interest rate (%) | 2.0 | ||||||||
Share price at grant date (pence) | 1.65 | ||||||||
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may, not necessarily be the actual outcome.
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22 | 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 predominantly held in Sterling. 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 and therefore takes market rates in respect of foreign exchange 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 to finance operations. 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:
| |||||||
Cash and short term deposits | 2012 | 2011 | |||||
£ 000's | £ 000's | ||||||
Sterling | 37 | 484 | |||||
Euros | 67 | 282 | |||||
US Dollars | 23 | 144 | |||||
Trinidad Dollars | 93 | 146 | |||||
220 | 1,056 | ||||||
The financial assets comprise cash balances in interest earning bank accounts at call. The financial assets in Sterling currently earn interest at the base rate set by the Bank of England less 0.15%
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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 period end for a 10% change in foreign currency rates. The following table 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 | 48 | (59) | (192) | 235 | |||
US Dollar | (43) | 52 | (3) | 3 | |||
Trinidad Dollar | (33) | 40 | (14) | 18 | |||
(28) | 33 | (209) | 256 | ||||
Rates of exchange to £1 used in the financial statements were as follows: | |||||||
As at 31 December 2012 | Average for the relevant consolidated period to 31 December 2012 | As at 31 December 2011 | Average for the relevant consolidated period to 31 December 2011 | ||||
Euro | 1.223 | 1.232 | 1.194 | 1.152 | |||
US Dollar | 1.616 | 1.584 | 1.546 | 1.604 | |||
Trinidad Dollar | 10.341 | 10.124 | 9.874 | 10.232 | |||
23 | Commitments and contingencies |
As at 31 December 2012, the Company had the following material commitments: | |
Exploration commitments | |
Ongoing exploration expenditure is required to maintain title to the Group's mineral exploration permits. No provision has been made in the financial statements for these amounts as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.
As announced in an RNS on 29 January 2013, the Group is committing to drill 2 new wells in the Goudron field, Trinidad, at an estimated cost of US$400,000 each, in the later end of 2013.
| |
Contingencies | |
Leni Gas and Oil Plc has incurred £131,000 to date on legal fees relating the case against MOG. It is estimated that an additional £175,000 will be incurred during the remainder of 2013.
|
24 | 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 discussed below. | ||||
During the period, the Company accrued the following consultancy fees to the Company's directors for work performed in relation to an overseas subsidiary. These fees have been recharged to this subsidiary as follows : | ||||
(i) | £240,000 to David Lenigas (2011: £240,000), | |||
(ii) | £33,000 to Stephen Horton (2011: £42.000). | |||
(iii) | Total consultancy fees accrued to directors £325,000 (2011:£200,500). | |||
Remuneration of Key Management Personnel | ||||
The remuneration of the Directors and other key management personnel of the Group is set out below in aggregate for each of the categories specified in IAS24 Related party Disclosures. | ||||
2012 | 2011 | |||
£ 000's | £ 000's | |||
Short-term employee benefits | 610 | 733 | ||
Share-based payments | 103 | 421 | ||
713 | 1,154 | |||
25 | Events after the reporting period
|
On 3 January 2013, the Group announced it had issued legal proceedings against Mediterranean Oil and Gas Plc (MOG), in the High Court of England and Wales, in regards to the Group's sale of its 10% interest in Malta Area 4 PSC to MOG.
On 14 March 2013, the Group announced the signing of a non-binding Heads of Agreement with Maxim Resources Inc., regarding oilfield development opportunities in Trinidad and Tobago. On signature of the Heads of Agreement, the Group will make an initial refundable deposit payment of CDN$75,000 to Maxim. Subject to due diligence, further payments of up to CDN$2.425million can be made based on project milestones in return for 30million shares in Maxim (approximately 49.99% of Maxim's issued share capital).
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26 | 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 period was £ 17.036 million (2011: £1.293 million). |
Note to the announcement:
The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31 December 2012 or 2011. The financial information for the year ended 31 December 2011 is derived from the statutory accounts for that year. The audit of statutory accounts for the year ended 31 December 2012 is complete. The auditors reported on those accounts, their report was unqualified and did not include references to any matters to which the auditors drew attention to by way of emphasis without qualifying their report.
Related Shares:
CERP.L