08:00 Fri 22 Jun 2018
Victoria Oil & Gas - Preliminary Results for the year ended 31 Dec 2017
("VOG", "Company" or the "Group")
Preliminary Results for the year ended
The Company is pleased to announce the financial information for the year ended
Operational Highlights
· 3.3% increase in gas sales: 3,684mmscf gross gas sold (2016: 3,566mmscf)
· 10.98mmscf/d average gas production (2016: 10.23mmscf/d)
· Completion of two well drilling programme
· The addition of two prospective areas at Matanda
Audited Financial Highlights
·
·
·
·
·
Corporate Highlights
·
Post Period
· Significant increase in reserves and resources
· Successful debt restructuring
"Despite the grid power supply issue, I believe that the Company will grow stronger and create a more diverse product base. We have built a company recognised by our peers as an outstanding entrepreneurial example of creating cash from stranded gas deposits. For the first time in our 14 year history we have considerable gas reserves to secure long term supply contracts."
"The Company's management is working hard to increase revenue, particularly in more profitable business lines, whilst at the same time driving hard to contract with the large off-take IPP's in
"The Group's operational performance for the year ended
Chairman's Letter
Dear Shareholders
In this year's letter I will address the important challenges that we faced and overcame in 2017, discuss those challenges that remain and outline the strategy for the next couple of years. As both a shareholder and director I have reflected in some depth on the assets we have, the business we have built and the challenges that keep us awake at night.
Our Company was listed on AIM 14 years ago and has operated in the FSU and
In
We all have invested in VOG shares because we believe in the future of the Company. It is my and our management's primary objective to deliver the real value of the Company to our shareholders. As Chairman, I am also very aware of the extreme patience that our shareholder base has and their resilience in sharing these challenges with us. Thank you.
Our Assets
As a natural resources veteran, I always look at the resource base that nature has provided us and how we have managed to extract those resources and build something of value. On Logbaba, we finished drilling two production wells in 2017, albeit painfully over budget and behind schedule, but these gas discoveries have added significantly to our reserves and resources.
Earlier this month, we announced a material reserves upgrade for the Logbaba Field, reporting a significant 73% increase in gross 1P gas reserves to 69bcf and a 52% increase in gross 2P reserves to 309bcf. Importantly, the latest reported 2P reserves base at Logbaba would support a 90mmscf/d production rate for ten years, providing the volumes necessary to facilitate a significant expansion in VOG's business in the growing
We also estimate over 3.7tcf of P50 Prospective Resources at North Matanda, which we could develop as soon as Government approval is received.
Let us not forget West Medvezhye ("West Med") in
Our "hard" assets at Logbaba are the gas processing facilities and the 50km of gas pipeline that we laid under the city of
Companies often speak of their staff and employees as their most valuable asset, but I believe in some cases they don't really mean it. Building the Company as we have done needed dedicated and very skilled people who have performed way beyond the call of duty. I believe that shareholders are aware of the total focus and dedication that our Chief Executive Officer
Divine Mofa Diboto has been a key manager on our
In addition to Eric, Divine and Eckhard our entire teams in
Our Operations in
When I reflect on operations and activities in 2017, the drilling campaigns on La-107 and La-108 dominate. These wells were truly challenging with the costs overrunning the budget by more than 100% and the schedule approximately double what was originally planned. The prime cause of these difficulties was and will continue to be the truly unpredictable ground and well drilling conditions in the Cretaceous zones of the
In terms of gas production the annual gross production figure for 2017 was a record for the
However, in January this year, due to factors outside of our control, the
Despite the grid power supply issue, which will significantly impact our 2018 financial performance, I believe that the Company will grow stronger and create a more diverse product base in 2018 and we can continue to build the business we have created in
GDC is the single onshore gas supplier in
2017 Financial Performance
A cost recovery milestone was reached on Logbaba during 2016 after which revenues are shared in accordance with the participating interests ("Payout"). Whilst gross production increased to record levels on Logbaba in 2017, attributable revenue for the year was
With a relatively fixed cost base, the reduction in revenue flowed through to the underlying EBITDA which reduced by
Further details of our current financial position and uncertainties which may affect the Company's ability to continue operating as a going concern are to be found in the Financial Review below.
2018 Plans
Coming out of a difficult 2017, but with the drilling campaign behind us, we were aiming for continued production growth in 2018. Instead, we were faced with a seasonal drop in demand of nearly 70% and a proportional reduction in revenue and some truly challenging operational and financial hurdles.
Our Executive and Operational teams developed and implemented a plan for 2018, outlined in the CEO's Report, which includes expansion of revenues, with a more diverse customer base, embracing technologies such as CNG, completion of the Matanda approvals, reducing costs and preserving available cash reserves. In this respect the Board have decided that no bonuses will be awarded to Executive Directors for the year ended
The Board remain confident of the potential of the demand for gas in
VOG has set an ambitious business strategy to substantially increase gas sales by 2021. We still believe that this is achievable as the demand for gas within
Corporate
In
In relation to the
Our recent sluggish share price has largely been due to the non-renewal of the 50MW power contract. The Board shares the frustration felt by all in the unappreciated value of VOG's shares, especially when the Company had made such significant progress in recent years. We thank our shareholders for their continued support and patience.
At the Board level, after two and a half years of service to the Company
I would also like to thank, our partners, RSM for their ongoing support of the
Executive Chairman
Chief Executive Officer's Review of Operations
Chief Executive Officer's Review of Operations
I am pleased to report on the progress in 2017. The highlights were:
· 2017 gross gas sold was a record 3,684mmscf (3.3% increase on 2016)
· 2017 average daily gas production of 10.98mmscf/d was also a record (2016: 10.23mmscf/d)
· Drilling completed on Wells La-107 and La-108.
· Successful
Operations Review
Gas production continued its upward trend and 2017 gross gas sold of 3,684mmscf was a record, as was the 2017 average daily gas production of 10.98mmscf/d. Production was approaching the capacity of our Logbaba Gas Processing Facility (20-25mmscf/d) when the 50MW grid power was operating at its peak consumption in the dry season. GDC management took the decision to defer any plant or pipelines expansion until reserves were secured and Gas Sale Agreements were signed with large gas consumers.
Until GDC had increased reserves from the new wells, it was unable to commit to the long-term contract conditions required by large gas off-takers who specify minimum levels of reserves to commit to their large capital investments. Following the update of its reserves, Logbaba now has sufficient reserves to support production levels of 90mmscf/d for 10 years, which enables GDC to engage in earnest negotiations with prospective grid power customers.
As previously disclosed, ENEO ceased consuming GDC gas on
The disruption in the grid power supply by 50MW coming offline has led to customers seeking independent gas to power solutions. GDC has been working closely with various generator suppliers and is looking to provide an integrated solution to customers. One such example is a Combined Heat and Power (CHP) unit at our customer SCTB, a flour mill and pasta producer, who is consuming gas for power and recycling heat and steam from the generation for process heating. The overall energy efficiency for this CHP unit is significantly higher than the efficiency for power generation alone.
Financial Performance
Despite the growth in gross production during 2017, attributable revenue for 2017 was
The financial performance for 2017 was below expectations and with the loss of revenue from ENEO, the 2018 results are expected to be significantly impacted. Management is working hard to increase revenue, particularly in more profitable business lines, whilst at the same time driving hard to contract with the large off-take
The Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements. Further details of our current financial position and uncertainties which may affect the Company's ability to continue operating as a going concern are to be found in the Financial Review below and are disclosed in the Financial Statements.
Looking forward
Having secured gas reserves, the key strategic directions for the Company are as follows:
· Renew the gas supply contract for the current installed 50MW of power and add further grid power, including new contracts with other IPP's;
· Increase thermal gas sales to existing and new customers;
· Work with existing and new customers to create bespoke gas to power solutions with individual generator designs. These solutions will allow customers to be less dependent on grid power;
· Maximise return from our high-grade gas condensate. Studies have shown that our condensate is very high grade and close in composition to diesel. We currently sell condensate at near to crude oil prices, which is about half the price of diesel;
· Actively develop the CNG and Natural Gas Vehicle (NGV) markets. CNG would compete with diesel and LPG as a source of energy in the more remote regions, it offers considerable uplift on current margins and can be transported 250-300km;
· Sustain progress on the promising Matanda opportunity; and
· Review capital projects, operational and general and administrative ("G&A") expenditure rigorously to preserve cash.
Attainment of these objectives is paramount to the future success and profitability of the Company and the Management team is fully focused on delivering on these strategies.
Logbaba Drilling Programme
The drilling of wells La-107 and La-108 during 2016 and 2017 was very challenging and expensive, but we had success in booking significantly more reserves and two new production wells in the onshore Cameroon Logbaba Field. The new wells supplement the two original Logbaba production wells, La-105 and La-106, which were drilled in 2009/2010. The Logbaba wells were required to meet the growing market demand for gas in
Logbaba Reserves
|
|
|
|
Gross |
Net (57%) |
Proved (1P) |
|
Gas |
Bcf |
69 |
40 |
Proved + Probable (2P) |
|
Gas |
bcf |
309 |
176 |
Proved + Probably + Possible (3P) |
|
Gas |
bcf |
535 |
305 |
Prospective Resources |
|
Gas |
bcf |
1373 |
783 |
La-107 was a near vertical well that twinned the La-104 well drilled in 1957; this well has increased our 1P Logbaba reserves. The La-108 'step-out' well target was about 1,100m to the south- east of the Logbaba drilling pad and was drilled into an area that potentially allowed us to move some of our 2P reserves into the 1P category.
As of
La-107 Results
La-107 was drilled to the base of the Logbaba Formation, Target Depth (TD) at 3,180m Measured Depth (MD), 3,166m True Vertical Depth (TVD), where a 4½" liner was run and cemented. The well encountered 54m of net pay, as prognosed based on the original La-104 well that it twinned.
After completion, La-107 was flow tested to a maximum rate of 54mmscf/d on a 70/64ths inch choke, with a stabilized flowing wellhead pressure of 2,951psig. The multi-rate test results indicate that the well has an AOF (Absolute Open Flow) potential in excess of 160mmscf/d.
La-108 Results
La-108 was drilled to its TD of 2,865m MD, 2,463m TVD, where a 4½" liner was run and cemented. La-108 encountered 85m of net pay, about twice that prognosed in the pre-drill estimate. As La-108 was drilled into a previously
The completion was run and a flow test run on 19m of net sand in the lower part of the Logbaba Formation delivered flow rates of up to 15mmscfd on a 40/64ths inch choke with a flowing wellhead pressure of 2006 psi. During the testing operations, a spent perforating gun became stuck in the production tubing and remains in the well.
In Q2 2018, La-108 was made safe using wireline cutting equipment to cut the wireline cable as close as possible to the spent gun and the barriers securing the well at the surface were reinstated. Planning has been completed to recover the perforating gun and conduct further perforating and flow testing of La-108 later when production demands justify the additional expense.
Drilling Issues
Whilst the drilling programme was successful in its objective to secure more gas for our operations, it did not come without its challenges. As is well documented, these wells are deep, high pressure, high temperature wells. These challenges led to significant overspend on the project.
The La-107 and La-108 drilling campaign ran significantly over the pre-drill time and cost estimates. The overruns were dominated by:
· Time lost when La-108 lost circulation in the 8½" hole section, the well took a kick and well control operations were required.
· The time lost when an 8½" bit was lost in La-107 to perform fishing and side track operations.
· Time lost due to the electrical problems on the top drive and draw works that was incurred on La-108 ST2 during
· An attempt to log the La-108 8½" hole section and subsequent fishing operations to retrieve a wireline tool string.
· Difficulty in drilling the La-108 8½" hole, downhole motor problems, anomalously high pore pressures and shallow set of the 7" liner.
· The additional time required milling the window in La-108 for a second side-track out of the 9⅝" casing.
· Slower than anticipated drilling in the La-108 ST2 8½" hole.
· Additional time required to run the 4½" liner in La-107.
· Significant difficulties in obtaining wireline logs in the La-107 6" hole section.
· Slower than anticipated drilling in the La-107 6" hole section.
· Additional time required to run a 7" liner in La-107 and prepare to drill the 6" hole section.
Final costs incurred on the drilling programme were
Matanda
As previously announced VOG entered into an agreement for the assignment of 75% of the neighbouring 1,235km2 Matanda block from Glencore in 2016. We have negotiated with the Government some new terms for the PSC agreement in relation to the block which will clarify the work programme obligations going forward. We anticipate Government approval of the PSC changes shortly and thereafter the Presidential Decree to formally convey title to the Project.
In the meantime we have advanced certain geological and geophysical work on the block aimed at identifying one or more onshore well locations in the Tertiary and/or Cretaceous formations. Two prospective areas in the Matanda Block were initially identified; the Matanda-Bomono border/Missellele onshore area to the north (Area 1) and the onshore area between the Logbaba producing field and the offshore North Matanda field (Area 2).
Reprocessing of heritage 2D seismic was carried out on a 2010 seismic 2D survey in Area 1.
Alongside this,
As an outcome of this work, 20 prospects and 4 leads were identified in the Tertiary and Cretaceous formations in Area 1. Economics are currently being run on these prospects and plans are in place for further technical work during 2018 including the completion of reprocessing of vintage seismic and evaluation of the prospectivity of Area 2, quantitative AVO analysis and forward modelling before a well location will be identified.
The identified prospects are a mixture of stratigraphic and structural play types.
Bomono
During 2017 the Company announced that a farm-out agreement had been signed with Bowleven plc in relation to an assignment of an 80% participating interest in the neighbouring, 2,237km2 Bomono block production sharing contract. The conditions precedent in the farm-out agreement were not met, and as a result, with effect from
Safety
I am pleased to inform our shareholders that in a year of record gas production and over a long drilling programme, GDC was able to maintain its continued high safety track record with nil lost time injuries reported. The safety of our employees, suppliers and other stakeholders is taken seriously, and this is a record we are both proud of and work hard to defend. I would like to thank our safety officers and all of the GDC staff whose ongoing compliance to our policies and procedures have allowed us to report another year of safe operations.
CSR
We pride ourselves on being more than just investors into the Cameroonian market place. We are employers of 121 Cameroonians, providing healthcare to our employees and some 340 additional family members. We are large contributors to the local economy, contributing some
In addition to this we also support further community outreach programmes and activities. I am particularly pleased to report on our participation in the
Other
We reported the positive actions taken in evaluating the West Medvezhye subsurface potential for the purposes of seeking an investment partner or sale. We remain committed to making use of this asset and continue in our efforts to attract interest from potential investors.
I thank our shareholders for their ongoing support and continued faith in our Cameroonian stranded gas development story. The commitment and dedication of our management and employees during times such as these is admirable, and I thank them for their past and ongoing services.
Chief Executive Officer
Financial Review
The Group's operational performance for the year ended
|
2017 |
2016 |
Gas sales (mmscf) - Gross |
3,684 |
3,566 |
Gas sales (mmscf) - Attributable |
2,163 |
2,898 |
Condensate sales (bbls) - Attributable |
17,216 |
32,696 |
Revenue ($'000) - Gross |
40,613 |
40,554 |
Revenue ($'000) - Attributable |
23,471 |
32,751 |
Net royalties ($'000) |
2,609 |
3,779 |
Underlying EBITDA ($'000) |
4,593 |
13,063 |
Impairment of Oil and Gas assets, net ($'000) |
- |
22,747 |
Loss before tax ($'000) |
(10,724) |
(29,999) |
Loss after tax ($'000) |
(10,134) |
(31,145) |
Basic loss per share (cents) |
(8.86) |
(28.74) |
Operating cash flow before working capital ($'000) |
5,683 |
12,714 |
Cash working capital movement ($'000) |
(1,999) |
10,265 |
Capital invested ($'000) |
39,752 |
27,024 |
Net debt ($'000) |
(13,061) |
1,781 |
A cost recovery milestone was reached on Logbaba during the year ended
On
The completion of wells La-107 and La-108 in
The final cost of the drilling programme, excluding capitalised interest costs, was
The most significant reason for the increased drilling costs was the well control incident on La-108. Having obtained internal and external expert opinions in support of the chain of events, the Company has lodged an insurance claim with the Company's insurers to cover the substantial and material costs associated with this event and the consequential schedule and cost overruns. The gross amount of the claim submitted is
On
Statement of Comprehensive Income
At a gross level the gas sold for the year of 3,684mmscf is a 3.3% increase on the 3,566mmscf sold in the prior year. Attributable gas sold for the current year was 2,163mmscf (2016: 2,898mmscf). Attributable gas sold was 59% of gross gas (2016: 81%, owing to the timing of Payout).
Revenue from attributable gas and condensate sales was
Net royalties, being the royalties paid less the Group's share of profit from associate (which represents the Group's 35% interest in
Management continues to make efforts to reduce costs in the business. Administrative expenses, which were broadly in line with the prior year, were affected by a further
|
2017 |
2016 |
|
$'000 |
$'000 |
Operating loss |
(10,158) |
(28,413) |
Depreciation |
14,751 |
18,729 |
Impairment of Oil and Gas asset |
- |
22,747 |
Underlying EBITDA |
4,593 |
13,063 |
Depreciation for the current year was
Underlying EBITDA, which removes depreciation and impairment charges from the reported operating loss, of
The Group produced a loss before tax of
Statement of Financial Position
Intangible assets of
The increase in trade receivables to
Trade and other payables of
Cash and cash equivalents were
|
2017 |
2016 |
|
$'000 |
$'000 |
Cash and cash equivalents |
11,476 |
16,261 |
Borrowings: Current liabilities |
(3,174) |
(6,707) |
Borrowings: Non-current liabilities |
(21,363) |
(7,773) |
Net (debt) / cash |
(13,061) |
1,781 |
During 2017, the Company obtained shareholder and
Net debt and liquidity
Net debt of
The Company raised
Cash Flow Statement
Operating cash inflows, prior to the effects of working capital movements, were
Working capital increased
Capital investment of
At year-end the Group had cash and cash equivalents and debt headroom of
Commitments
The Logbaba Concession does not contain any work programme obligations.
The Group awaits the Presidential Decree to formalise its assignment of a 75% participation in the Matanda Block. GDC's share of the Matanda work programme, which the block will have two years to execute from the date of the Presidential Decree, is anticipated to be
Subsequent Events
With effect from
On
On
Going Concern
The Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements. There are a number of uncertainties that may affect the Company's ability to continue operating as a going concern, these are disclosed in the Financial Statements.
The Directors have reviewed operating and cash forecasts in respect of the operating activities and planned work programmes of the Group's assets. In the case that either ENEO does not resume consumption or a settlement of the insurance claim is not completed, additional finance will be required and, in this event, the Directors believe that they will be able to access additional financing in order to continue to meet obligations and develop operations for a period of at least twelve months from the date of approval of these Financial Statements.
On this basis the Directors have concluded that it is appropriate to prepare the Financial Statements on a going concern basis. Accordingly, these Financial Statements do not include any adjustments to the carrying amount and classification of assets and liabilities that may arise if the Group was unable to continue as a going concern.
Looking Ahead
The non-renewal of the ENEO contract will have a significant impact on the financial results of the Company in 2018.
Maintaining sufficient liquidity and meeting the Group's obligations as they fall due will enable the Group to remain in position to benefit from the considerable upside potential which exists in the Cameroonian energy market.
Finance Director
Consolidated Income Statement
For the year ended
|
|
2017 |
2016 |
|
|
$'000 |
$'000 |
Continuing operations |
|
|
|
Revenue |
|
23,471 |
32,751 |
Cost of sales |
|
(22,200) |
(26,365) |
Production royalties |
|
(3,699) |
(5,224) |
Other cost of sales |
|
(18,501) |
(21,141) |
Gross profit |
|
1,271 |
6,386 |
Sales and marketing expenses |
|
(79) |
(39) |
Administrative expenses |
|
(10,708) |
(12,816) |
Other losses |
|
(1,732) |
(642) |
Share of profit of associate |
|
1,090 |
1,445 |
Impairment of oil and gas asset |
|
- |
(22,747) |
Operating loss |
|
(10,158) |
(28,413) |
Finance costs |
|
(566) |
(1,586) |
Loss before tax |
|
(10,724) |
(29,999) |
Tax |
|
590 |
(1,146) |
Loss for the year - attributable to shareholders of the parent |
|
(10,134) |
(31,145) |
|
|
|
|
|
|
|
|
|
|
Cents |
Cents |
Loss per share - basic & diluted |
|
(8.86) |
(28.74) |
Consolidated Statement of Comprehensive Income
For the year ended
|
|
2017 |
2016 |
|
|
$'000 |
$'000 |
Loss for the year |
|
(10,134) |
(31,145) |
Items that may be reclassified subsequently to profit or loss |
|
|
|
Exchange differences on translation of foreign operations |
|
(27) |
36 |
Total comprehensive loss for the year - attributable to shareholders of the parent |
|
(10,161) |
(31,109) |
Consolidated Statement of Financial Position
At
|
|
31 December |
31 December |
|
|
2017 |
2016 |
|
|
$'000 |
$'000 |
Assets: |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
|
54,223 |
17,638 |
Property, plant and equipment |
|
70,911 |
81,434 |
Investment in associate |
|
5,429 |
5,386 |
|
|
130,563 |
104,458 |
Current assets |
|
|
|
Inventories |
|
24 |
11 |
Trade and other receivables |
|
13,545 |
8,838 |
Cash and cash equivalents |
|
11,476 |
16,261 |
Deferred tax assets |
|
916 |
850 |
|
|
25,961 |
25,960 |
Total assets |
|
156,524 |
130,418 |
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
|
14,330 |
9,943 |
Provisions |
|
1,855 |
1,442 |
Borrowings |
|
3,174 |
6,707 |
|
|
19,359 |
18,092 |
Net current assets |
|
6,602 |
7,868 |
|
|
|
|
Non-current liabilities |
|
|
|
Borrowings |
|
21,363 |
7,773 |
Deferred tax liabilities |
|
2,846 |
3,628 |
Provisions |
|
3,106 |
3,144 |
Other payables |
|
- |
2,814 |
|
|
27,315 |
17,359 |
Net assets |
|
109,850 |
94,967 |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
Called-up share capital |
|
1,095 |
34,251 |
Share premium |
|
24,218 |
230,436 |
|
|
(4) |
(843) |
Translation reserve |
|
(17,712) |
(17,685) |
Other reserves |
|
248 |
66 |
Retained earnings |
|
102,005 |
(151,258) |
Total equity |
|
109,850 |
94,967 |
The financial statements of
Executive Chairman Finance Director
Consolidated Statement of Changes in Equity
For the year ended
|
|
|
|
|
|
Retained |
|
|
Share |
Share |
|
Translation |
Other |
earnings |
|
|
capital |
premium |
reserve |
reserve |
reserves |
|
Total |
|
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
$'000 |
For the year ended |
|||||||
At |
34,246 |
230,194 |
(1,015) |
(17,721) |
315 |
(120,635) |
125,384 |
Shares issued |
5 |
242 |
- |
- |
- |
- |
247 |
Warrants expired |
- |
- |
- |
- |
(315) |
315 |
- |
Shares granted to ESOP members |
- |
- |
3 |
- |
- |
207 |
210 |
Effects of movement in foreign exchange |
- |
- |
169 |
- |
- |
- |
169 |
Warrants Issued |
- |
- |
- |
- |
66 |
- |
66 |
Total comprehensive loss for the year |
- |
- |
- |
36 |
- |
(31,145) |
(31,109) |
At |
34,251 |
230,436 |
(843) |
(17,685) |
66 |
(151,258) |
94,967 |
For the year ended |
|||||||
At |
34,251 |
230,436 |
(843) |
(17,685) |
66 |
(151,258) |
94,967 |
Shares issued |
228 |
24,417 |
- |
- |
- |
- |
24,645 |
Options issued |
- |
- |
- |
- |
228 |
- |
228 |
Shares granted to ESOP members |
- |
- |
2 |
- |
- |
249 |
251 |
Warrants expired |
- |
- |
- |
- |
(46) |
46 |
- |
Effects of movement in foreign exchange |
- |
- |
(80) |
- |
- |
- |
(80) |
Cancellation of share capital |
(33,384) |
(230,635) |
917 |
- |
- |
263,102 |
- |
Total comprehensive loss for the year |
- |
- |
- |
(27) |
- |
(10,134) |
(10,161) |
At |
1,095 |
24,218 |
(4) |
(17,712) |
248 |
102,005 |
109,850 |
Share premium reserve
The share premium reserve is comprised of the excess of monies received in respect of share capital over the nominal value of shares issued, less direct and incremental share issue costs.
Translation reserve
The translation reserve represents the foreign exchange gain/loss on translation of financial statements of foreign subsidiaries.
Other reserves
The other reserves consists of outstanding warrants and options granted to directors valued at
Retained earnings
Retained earnings comprises accumulated profits and losses in the current and prior years.
Deferred share cancellation
Transfers to retained earnings for the year ended
Consolidated Cash Flow Statement
For the year ended
|
|
2017 |
2016 |
|
|
$'000 |
$'000 |
Cash flows from operating activities |
|
|
|
Loss for the year |
|
(10,134) |
(31,145) |
Adjustments for non-cash and other items: |
|
|
|
Tax |
|
(590) |
1,146 |
Share of profit in associate |
|
(1,090) |
(1,445) |
Finance costs |
|
566 |
1,586 |
Depreciation and amortisation |
|
14,751 |
18,729 |
Other losses |
|
1,732 |
642 |
Impairment of oil and gas asset |
|
- |
22,747 |
Shares vested by ESOP Trust |
|
249 |
207 |
Share-based payments |
|
199 |
247 |
|
|
5,683 |
12,714 |
Movements in working capital |
|
|
|
(Increase)/Decrease in trade and other receivables |
|
(4,263) |
5,326 |
Increase in inventories |
|
(14) |
(6) |
Increase in trade and other payables and provisions |
|
2,278 |
4,945 |
Net movements in working capital |
|
(1,999) |
10,265 |
Tax paid |
|
(258) |
(762) |
Interest paid |
|
(1,668) |
- |
Net cash generated from operating activities |
|
1,758 |
22,217 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Payments for intangible assets |
|
(34,710) |
(16,281) |
Payments for property, plant and equipment |
|
(5,042) |
(10,743) |
Proceeds from disposal of property, plant and equipment |
|
882 |
- |
Loan repayments received |
|
94 |
91 |
Dividends received from associate |
|
1,047 |
1,548 |
Net cash used in investing activities |
|
(37,729) |
(25,385) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from borrowings |
|
15,153 |
10,000 |
Repayment of borrowings |
|
(7,763) |
(2,680) |
Finance cost paid |
|
(606) |
(287) |
Net cash generated from equity raise |
|
23,728 |
- |
Net cash generated by financing activities |
|
30,512 |
7,033 |
Net (decrease)/increase in cash and cash equivalents |
|
(5,459) |
3,865 |
|
|
|
|
Cash and cash equivalents - beginning of year |
|
16,261 |
13,230 |
Effects of exchange rate changes on the balance of cash held in foreign currencies |
|
674 |
(834) |
Cash and cash equivalents - end of year |
|
11,476 |
16,261 |
Notes
1. Publication of non-statutory accounts
The financial information, for the year ended
· Realisation of intangible assets;
· Realisation of property, plant and equipment; and
· Realisation of investments in subsidiaries and associate and recoverability of amounts due from subsidiaries in the Parent Company Financial Statements.
2. Basis of preparation
The financial information, for the year ended 31 December 2017, set out in this preliminary announcement, has been:
· computed in accordance with International Financial Reporting Standards ("IFRSs"), however this preliminary announcement does not contain sufficient information to comply with IFRSs. The IFRS compliant Consolidated Financial Statements will be published in the Report and Accounts for the year ended 31 December 2017;
· prepared on the going concern basis, however the Directors have highlighted a number of uncertainties which may affect the Company's ability to continue operating as a going concern; and
· prepared on the basis of the accounting policies as stated in the Report and Accounts for the year ended 31 December 2016, with the exception of those changes required in the application of new and revised IFRSs, none of which has a material impact on the Group.
3. Annual General Meeting and Report and Accounts
The Annual General Meeting of the Company will be held on 28 June 2018 at the Coin Street Neighbourhood Centre, South
Owing to the delay in publishing the Annual Report and Accounts, these will not be received at the AGM. A separate General Meeting will be convened to consider the Annual Report and Accounts. The Annual Report and Accounts and the Notice of a General Meeting to consider these accounts will be available on the Company's website at www.victoriaoilandgas.com in due course. These documents will also be posted to those shareholders that requested it.
This announcement contains inside information.
For further information, please visit www.victoriaoilandgas.com or contact:
Strand Hanson Limited (Nominated and Financial Adviser)
Rory Murphy / Angela Hallett / Ritchie Balmer Tel: +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited (Joint Broker)
Mark Percy / Toby Gibbs (corporate finance) Tel: +44 (0) 20 7408 4090
Jerry Keen (corporate broking)
FirstEnergy Capital LLP (Joint Broker)
Jonathan Wright / David van Erp Tel: +44 (0) 20 7448 0200
Camarco (Financial PR)
Billy Clegg Tel: +44 (0) 20 3757 4983
Nick Hennis Tel: +44 (0) 20 3781 8330
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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