Interim Results

Africa Oilfield Logistics Limited / Ticker: AOL / Index: AIM / Sector: Support Services

31 March 2014

Africa Oilfield Logistics Limited ('Africa Oilfield' or the 'Company')

Interim Results

Africa Oilfield Logistics Ltd, the AIM listed African focused support services and logistics company, announces its interim results for the six month period ended 31 December 2013.

Highlights:

· Targeted growth strategy to provide comprehensive support services offering to the natural resource industry in sub-Saharan Africa

· Active investment policy strategy - 49% interest in Ardan Risk & Support Services ('Ardan'), a provider of turn-key support services and logistics solutions to international corporate companies operating on the African continent

· Proven and experienced management team - appointed Carl Esprey as CEO to steward development

· Raised £11.0 million (US$17.5 million) over the last 12 months, with supportive cash and receivable balances of US$9.9million as at 31 December 2013

· Providing assistance in the Ardan restructuring to capitalise on its existing platform and improve operational efficiency to support growth

Africa Oilfield CEO Carl Esprey said, "This is a time of great opportunities for Africa Oilfield as we look to establish ourselves as a dynamic company, providing full turn-key support services and logistics solutions to international oil, gas and mining companies operating on the African continent. The region provides an excellent growth opportunity due to the resource boom currently underway and I believe we have the necessary skill set and experience to capitalise upon this. 

"As an active investor we have already made significant progress in assisting Ardan to take steps to improve its service offering, which includes engaging highly experienced operational personnel that can take the existing platform and develop it into one of Africa's leading and fastest growing multi-divisional natural resource focussed support services companies."

CHAIRMAN'S STATEMENT

Africa Oilfield's strategy remains centred on building a business focussed on providing a comprehensive support services offering to the natural resource industry in sub-Saharan Africa. The resource boom currently underway on the continent, particularly in oil and gas, translates into a heightened demand for companies that have inherent knowledge and experience of operating on the African continent, qualities that Africa Oilfield has in abundance.

The support services and logistics requirements of natural resource companies are crucial to the success of their projects both in terms of asset development and budget. Through its experience, including bringing resource exploration projects into production, the Board understands the key operational components and capital expenditure requirements to ensure the successful development of such projects. It understands the requirements of companies in this regard and the critical importance to them of benefitting from top quality support services and logistics, be it in the context of engineering and infrastructure development, workforce accommodation, facilities management, medical services, procurement or risk management. Accordingly the Company has taken an active investment approach to ensure that it can take full advantage of these insights and develop into a Company with potential to be a leader in this field.

On the basis set out above, the Company made its first investment in August 2013, acquiring a 49% interest in Ardan, a provider of turn-key support services and logistics solutions to international corporate companies operating on the African continent. Head quartered in Nairobi and currently operating in Kenya, Ethiopia and Mauritius, with a roster of significant international clients, Ardan provided Africa Oilfield with a platform from which to utilise its key strengths, balance sheet and access to the international capital markets, in order to achieve both management teams' objectives of developing into a leading support services and logistics business. 

Since this initial investment both management teams have worked together to make significant progress. Having conducted a full strategic review of operations, it was agreed that the Ardan business required, and would benefit from, a corporate and contractual restructuring programme to rationalise operational management and implementation. Indeed both parties believe a successfully restructured Ardan business has the potential to become the premier support services and logistics company in the East African region. Key personnel have already been identified and are joining at regular intervals to develop a structure that can implement the restructuring and support the anticipated growth. Supply chains have been evaluated and equipment upgrades implemented to ensure that its international clients receive a continuous level of service that can supply all their support services requirements. Additional jurisdictions are also being evaluated in order to enhance the reach of the business and its broad base offering.

As part of the review, and as announced on 28 March 2014, the principals of Ardan have established Ardan Logistics Kenya Limited ("ALK"), a separate and new 'shell' company in Kenya within which it will implement a new divisional structure through which the Ardan business will be operated going forwards. As part of this process, the management of Ardan will seek to novate certain existing contracts to ALK. In addition, Africa Oilfield has been granted a 3-year conditional call option which provides the right, but not the obligation, to acquire 100% of the issued share capital of ALK (the 'Option'). The Board do not intend to exercise the Option unless and until the corporate and contractual restructuring has been completed to its satisfaction. 

On a corporate level Carl Esprey was recently appointed as CEO to steward the Company's rapid growth strategy. Carl is a highly qualified and experienced corporate and resource industry professional, and has spent significant time at both BHP Billiton and GLG Partners.

The key to the success of a business is ensuring it is adequately capitalised. Accordingly the Board has raised £11.0 million (US$17.5 million) over the last 12 months. The opportunity in support services in Africa has been recognised by the Company's broad investor base and with the listing on the London Stock Exchange, further capital is available for on ground investment.

Financials

Africa Oilfield is reporting for the period ended 31 December 2013 a pre-tax loss on continuing activities of US$0.6million. The Company has an adequate treasury and as at 31 December 2013 cash and receivable balances were US$9.9million.

Outlook

Africa Oilfield is rapidly developing its business and fulfilling its strategy of becoming the support services and logistics company of choice servicing the sub-Saharan African resource sector. Resource development is critical to Africa's success and is being actively encouraged politically, creating a huge opportunity to expand the business both in terms of client numbers and geographically. Africa Oilfield with its first mover advantage, high calibre management team, quality projects with international blue chip clients both underway and in the pipeline, and a defined development strategy, is well placed to effect significant growth in the oilfield and resource services sector, in one of the world's leading resource development regions.

P Edmonds

Chairman

For further information please visit www.africaoilfieldlogistics.com or contact:

Further Information

Ardan's divisional structure for a full spectrum of products and services is currently based on six key, distinct and focussed divisions, which are listed below.

· Engineering and Infrastructure Development, whose services range from well site, road and airstrip construction, to water treatment installation;

· Workforce Accommodation, which rents and sells remote workforce housing and modular workspace solutions and associated services;

· Facilities Management, which provides full turnkey lodging solutions including premium catering services, communication installation and environmental waste management;

· Medical Services, which provides a full range of internationally accredited advanced life support and general medical services including medi-vac, onsite medical facilities, and medical training;

· Procurement & Logistics, whose services range from procurement and warehousing, to transportation of industrial equipment and machinery to general logistical supply solutions; and

· Risk Management, which offers, full risk assessment programmes, and tailored security solutions and protocols

Africa Oilfield believes that the key to building a successful business is the experience of operating in Africa, the ability to attract the right people and a defined operational structure that enables a quality service provision. 

It is this multi-divisional structure that enables the servicing of multiple sectors and provides an internationally accredited and tailored service to meet the requirements of clients operating in all environments. An aggressive growth strategy is being implemented to expand the client base and build a highly scalable business offering.

FINANCIAL STATEMENTS

Unaudited Comprehensive Income Statement

For the period to 31 December 2013

Unaudited Balance Sheet

As at 31 December 2013

Unaudited Statement of Changes in Equity

Unaudited Statement of Cash Flows

Notes to the Unaudited Interim Financial Statements

Africa Oilfield Logistics Limited ('AOL' or the 'Company') is incorporated and domiciled in Guernsey. The nature of the Company's operations and its principal activities are set out in the Chairman's Statement above. The address of its registered office is Richmond House, St Julians Avenue, St Peter Port, Guernsey GY1 1GZ.

The Company is listed on the AIM Market of London Stock Exchange plc.

The unaudited interim financial statements for the 6 months ended 31 December 2013 were approved for issue by the board on 28 March 2014.

The interim financial statements for the 6 months ended 31 December 2013 are unaudited and do not constitute full accounts. The comparative figures for the period ended 30 June are extracts from the annual report and do not constitute statutory accounts.

The unaudited interim financial statements have been prepared in US Dollars as this is the currency of the primary economic environment in which the Company operates.

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the period ended 30 June 2013 have been applied in the preparation of these unaudited interim financial statements. These have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and with those of the Standing Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the International Accounting Standards Board (IASB). References to 'IFRS' hereafter should be construed as references to IFRSs as adopted by the EU

Basis of accounting

The unaudited interim financial statements have been prepared on the historical cost basis except for financial instruments measured at fair value. The principal accounting policies adopted are consistent with those of the financial statements for the period ended 30 June 2013.

The directors consider that the Company operates in one geographical segment, Africa.

The calculation of basic and diluted earnings per share is based on the following data:

The Company has one class of ordinary share which carries no right to fixed income.

Between incorporation and 25 February 2013, 22 million Ordinary Shares were issued for cash at a price of 0.1p per Ordinary Share.

Between 9 May 2013 and 6 June 2013, 115,621,596 Ordinary Shares were issued for cash at a price between 1.8p and 2p per Ordinary Share.

On 25 June 2013, 85,172,415 Ordinary Shares were issued for cash at a price of 5p per Ordinary Share.

On 8 August 2013, 32,979,355 Ordinary Shares were issued at a price of 8p per Ordinary Share.

On 18 December 2013, 60,000,000 Ordinary Shares were issued at a price of 7.5p per Ordinary Share.

Share capital issued during the prior period is stated net of share issue costs of $456,000. Share capital issued during the period is stated net of share issue costs of $360,000. No share options or warrants were issued during the period.

**ENDS**