TIDMDPL
RNS Number : 2251L
Dominion Petroleum Limited
04 May 2010
?
4 MAY 2010
Dominion Petroleum Limited
("Dominion" or "the Company")
AUDITED Results for year ended 31 December 2009
Dominion Petroleum is an independent oil and gas exploration company operating
in Africa. Over the last two years, Dominion has assembled a portfolio of assets
covering highly prospective acreage in Tanzania, Uganda and the Democratic
Republic of Congo. Having put in place the necessary finance, Dominion is now
engaged in an active exploration programme, with focus on the emerging deepwater
play of the East Africa Margin offshore Tanzania and on the Lake Edward basin on
the Albertine Rift in Uganda.
KEY POINTS
* Management team strengthened:
- Appointment of Andrew Cochran as Chief Executive;
- Appointment of Atul Gupta as Non-Executive Director.
* New funding:
- US$10m of equity funding in August 2009, with restructuring of
convertible loan notes;
- US$50m of equity fund raising in March 2010.
* Progress on Uganda Exploration Area Block 4B:
- Independent audit of reserves estimates mean unrisked oil-in-place of
1,715 million barrels of oil;
- 2 year extension of Exploration Licence to July 2011;
- Securing of rig for drilling Ngaji-1 well;
- Drilling permit issued by Government of Uganda;
- Drilling expected June 2010, first ever well to be drilled in Lake
Edward basin.
* Block 7 Offshore Tanzania:
- Completion of interpretation of > 4,000 km 2-D seismic data;
- Initial prospects mapped and areas high-graded;
- Vessel contracted for > 500 km2 3-D seismic survey.
Roger Cagle, Chairman of Dominion Petroleum, commented:
"There was a transformation of Dominion Petroleum from the beginning of 2009 to
the end. Under our new Chief Executive's leadership, a great deal of work has
been done in a short time: the Company's portfolio of exploration assets has
been sensibly managed, the balance sheet has been strengthened, our financial
commitments have been reduced, yet significant upside exposure remains. We are
extremely optimistic about the coming 12 months, during which time the Company
will be drilling in a highly prospective area with the potential to deliver
significant value to its investors."
ENQUIRIES:
Dominion Petroleum Limited
Andrew Cochran, Chief Executive Officer Tel:
+44 (0) 207 811 5300
Rob Shepherd, Finance Director
Pelham Bell Pottinger Public Relations
Archie Berens Tel: +44 (0) 207 337
1509 / +44 (0) 7802 442 486
Seymour Pierce Limited, NOMAD
Nandita Sahgal
Tel: +44 (0) 207 107 8000
Canaccord Adams Limited, Joint Broker
Jeffrey Auld, Elijah Colby Tel: +44 (0) 207 050
6500
Mirabaud Securities LLP, Joint Broker
Peter Krens
Tel: +44 (0) 207 321 2508
Dominion Petroleum Limited
CHAiRMAN'S AND CHIEF EXECUTIVE's STATEMENT
for the year ended 31 december 2009
Introduction
Dominion Petroleum Limited ("Dominion" or the "Company") has undergone a
significant transformation since the beginning of 2009. This included the
strengthening of the management team, the US$ 10 million equity raising and
associated restructuring of our existing Series A and Series B convertible loan
notes (the "Notes"), bolstering the Non-Executive team with additional industry
expertise and the equity placing that was finalised during 2010.
Results
As a pure exploration Group, Dominion did not receive any revenues in the year
ended 31 December 2009 (2008: US$ nil), although US$ 0.04 million was earned in
interest from cash on deposit (2008: US$ 0.03 million). The loss before tax was
US$ 10.5 million (2008: US$ 20.7 million). The loss per share in 2009 was US
Cents 1.77 (2008: US Cents 4.85).
The Group's cash position at 31 December 2009 was US$ 4.7 million (31 December
2008: US$ 4.5 million).
Review of operations
Uganda
Exploration Area 4B ("EA4B") in Uganda, which is held 100% under a PSA by
Dominion Uganda Limited (Dominion interest 95%), is located in south-western
Uganda in the Lake Edward and Lake George segment of the Albertine Graben. To
the north, the Lake Albert basins, (Southern, Northern Lake Albert, and
Pakwach), have been the sites of several major oil discoveries in the last three
years, including those in the Kingfisher, Warthog and Buffalo-Giraffe prospects.
Dominion has identified a portfolio of four prospects, all of which can be
drilled from onshore locations using a land rig, as well as 11 leads which
require further seismic. The largest prospect identified to date has a closure
of approximately 40 square kilometres ("km2"), an area comparable to that of the
Buffalo-Giraffe discovery in Exploration Area 1 reported to contain around 400
million barrels ("MMbbl") of recoverable oil. Geochemical analyses of oil
samples collected on land in EA4B and on the surface of Lake Edward indicate
that the basin contains mature source rocks that have generated petroleum. In
light of the seismic interpretation, Dominion is considering an accelerated and
more extensive drilling programme.
On 17 June 2009, we received the results of an independent reserves audit of
EA4B in Uganda by Energy Resources Consultants Limited ("ERC"), prepared in
accordance with the March 2007 SPE/WPC/AAPG/SPEE Petroleum Resources Management
System.
ERC's estimates are as follows:
· Mean unrisked oil-in-place in the four prospects of 1,715 MMbbl.
· Mean unrisked gross recoverable resource of 378 MMbbl (net 359 MMbbl to
Dominion), compared with Dominion's own estimate of 355 MMbbl.
· Largest prospect contains mean unrisked oil-in-place of 482 MMbbl and 127
MMbbl mean unrisked gross recoverable oil resource.
· 45% chance of a working hydrocarbon system (play risk) in the area,
leading to a 15% to 22% overall chance of success for the prospects.
On 6 August 2009, the Minister of Energy and Mineral Development in Uganda
granted an extension of two years to July 2011 of the EA4B Exploration Licence.
As part of the extension, and in line with the terms of the PSA, the Company has
relinquished 50% of the acreage under EA4B, although the retained acreage (1,013
km2) covers all of the identified prospects and most of the leads described
earlier.
The Company has identified drilling site locations for the first two prospects
and has carried out environmental impact assessments in respect thereof, ahead
of commencing drilling activities in mid 2010.
Democratic Republic of Congo
Block 5 in the Democratic Republic of Congo ("DRC") incorporates 7,105 km2 of
land and lake areas. It lies to the west of and includes part of Lake Edward and
adjoins EA4B in Uganda where Dominion has carried out exploration activity as
operator since July 2007. Both blocks are part of the Albertine Rift system
referred to in relation to Uganda above. During the five year first phase of
the PSA, Dominion and partners are committed to acquire at least 300 km of
seismic data and drill two exploration wells. The PSA is renewable for two
further five-year terms.
The PSA, signed in December 2007 and subject to ratification by the President of
the DRC, gives the three companies exclusive rights to explore for petroleum.
Dominion as operator holds a 46.75% participating interest through its
subsidiary Dominion Petroleum Congo SPRL, with SOCO International plc ("SOCO")
subsidiary SOCO Exploration and Production DRC SPRL holding 38.25% and State Oil
Company Congolaise des Hydrocarbures ("COHYDRO") with the remaining 15% of the
participating interest.
During the period, Dominion continued to work with the relevant authorities in
Kinshasa to ensure that the Presidential Decree, the final step in the
concession award of Block 5, is granted.
Tanzania Offshore
In Block 7, Dominion has concluded the first phase of interpretation of
approximately 4,350 km of 2D seismic acquired in late 2007 and early 2008. The
interpretation shows several large structural closures ('prospects and leads')
in water depths that are well within the capabilities of drill ships and
semi-submersible rigs.
Tanzania Onshore
On 6 March 2009, Dominion announced that the Mihambia-1 exploration well in
Tanzania was plugged and abandoned at a total depth of 2,508 metres. The
potential reservoir rocks in the targeted Middle Jurassic Mihambia formation
were poorly developed and water-bearing. Oil shows were noted from the deeper
Nondwa Formation claystones, a predicted hydrocarbon source rock in the area.
Mihambia-1 is the first of a series of at least four onshore Tanzania
exploration wells in which Dominion is committed to participate. A second well
is planned in the Mandawa PSA area in 2010. In the Kisangire PSA area, Dominion
will participate in two wells to be drilled in the future by partner and
operator Heritage.
On 18 May 2009, the Minister for Energy and Minerals in Tanzania granted
extensions of 18 months to the Initial Exploration Periods for both the Mandawa
and Kisangire licences, extending the periods to December 2010.
Other
On 18 August 2009, Dominion announced an agreement with BlueGold Capital Limited
("BlueGold") to provide the Company with US$ 10 million in new equity funds in
return for:
· Twenty per cent of the Company's then issued share capital, with
anti-dilution protection in the form of warrants;
· Settlement of the then prevailing default under the Notes; and
· Certain amendments to the Notes, including:
o conversion of 50% of the outstanding principal amounts of both series into
common equity of the Company;
o deferral of the maturity of the remaining outstanding principal from October
2010 to October 2012; and
o introduction of a Payment In Kind option for future coupon payments.
On 3 November 2009, Dominion announced that Andrew Cochran had been appointed as
Chief Executive Officer ("CEO"). He was previously Business Development
Director at Salamander Energy PLC, a FTSE 250 oil and gas company, of which he
was a founder. Prior to that, he has held roles as New Ventures Manager at
Endeavour International Corporation and Exploration Advisor at Anadarko
Petroleum. At the same time, Dominion announced that Justin Dibb had stepped
down as a Director and acting CEO.
On 24 December 2009, Dominion announced that Atul Gupta had become a
non-executive director of the Company. Mr. Gupta has worked for 25 years in the
international upstream oil and gas business successively with Charterhouse
Petroleum, Petrofina, Monument and Burren Energy. Mr. Gupta joined Burren in
1999 as Chief Operating Officer and served as its Chief Executive Officer from
2006 until the company was sold to ENI in 2008.
At the same time, Dominion announced that Ken Ambrecht, a non-executive
director, had stepped down from the Board with immediate effect.
Current trading and outlook
On 15 February 2010, Dominion announced that agreement in principle has been
signed with Les Etablissements Maurel & Prom ("M & P") to farm in to the Mandawa
and Kisangire PSAs subject to execution of final agreements. Parts of the
agreements are subject to certain conditions precedent, including approval by
the Tanzanian Ministry of Energy and Minerals and the Tanzanian Petroleum
Development Corporation.
Under the final agreements, M & P will acquire:
· a 40% interest in the Mandawa PSA onshore Tanzania, resulting in M & P
owning 90% of the Mandawa licence and Dominion's interest being reduced to 10%;
and
· a 35% carried interest in the Kisangire PSA onshore Tanzania (operated by
Heritage Oil Tanzania Ltd., ("Heritage") who have a 55% interest), reducing
Dominion's interest to 10%.
In return for these additional interests being acquired by M & P, Dominion's
funding requirement in respect of the Kianika-1 well on the Mandawa licence will
be reduced from 100% to 20% of the drilling costs and to 10% of associated
expenses. M & P's interest in the Mandawa licence will rise to 100% upon the
Government of Tanzania agreeing a modification of certain license terms. At this
point, all of Dominion's costs relating to the Kianika-1 well on the Mandawa
licence will also be reimbursed. Consequently, Dominion will retain a 10%
interest in all profits earned from the Mandawa licence.
In addition to approval by the Tanzanian Government, the agreement is also
subject to certain other conditions, including the assumption by M & P of the
operatorship of the Mandawa licence, confirmation by the operator of the
upcoming exploration program, operator's approval of M&P entering into the
Kisangire PSA, and approval by holders of the Notes.
On 1 March 2010, Dominion announced that it has raised GBP32.7m (approximately
US$ 50m) through a placing of new ordinary shares, which was approved at a
Special General Meeting on 25 March 2010, with a broad range of established
institutional investors ("the Placing").
As a result of the Placing, 654,880,000 new ordinary shares were issued to new
and existing shareholders at a price of 5p per share.
The money raised from the Placing is being applied towards funding Dominion's
drilling programme in Uganda as well as acquiring 3D seismic in Block 7.
On 22 March 2010, Dominion announced an update of its operations as follows:
· Uganda: Dominion Uganda has signed a letter of intent with Oil and Gas
Exploration Cracow (OGEC), subject to government approval, for a rig to drill
Ngaji-1 on EA4B, Dominion's first exploration well in Uganda.
It is anticipated that the rig (which is owned by John Energy) will be mobilised
in May 2010, with drilling to commence in June 2010 on the Ngaji (Silverback
Gorilla) prospect (unrisked recoverable reserves of over 100 MMbbl). Ngaji is a
tilted-fault block structural closure, chosen as the best location to test the
geology of the Ugandan side of the Lake Edward Basin. Site preparation is
already under way. An Environmental and Social Impact Assessment for a
contingent seismic programme has been initiated for any subsequent appraisal
work on the acreage later in the year.
The Ngaji-1 well is the first exploration well ever to be drilled in the Lake
Edward basin of the Albertine Rift. It is located in an area comparable to that
of the Buffalo-Giraffe discovery referred to in the review of operations above.
The results of the well will not only assess the prospect, but primarily serve
to evaluate the whole of the basin's hydrocarbon potential. Success will lead to
a rapid expansion of exploration & appraisal activity in EA4B and potentially
the neighbouring Block 5 in the DRC.
·Tanzania Offshore: The 3D seismic programme of approximately 1,000 km2 is
anticipated to commence in June 2010. Fugro Geoteam AS is being awarded the
contract, subject to government approval, to conduct the seismic
acquisition. The vessel is currently operating in neighbouring blocks to the
south of Dominion's
acreage.
The Block 7 3D survey will focus on Pre-Tertiary structural and
stratigraphic prospects already identified from the existing 2D seismic. The
survey has been specifically designed to support further Amplitude Variations
with Offset ("AVO") studies for Direct Hydrocarbon Indicator analyses. Positive
AVO responses on the 2D data have been used to identify the prospects.
The Anadarko Windjammer gas discovery, offshore deepwater northern Mozambique,
has been encouraging in that it demonstrates the presence of source rock capable
of generating significant volumes of hydrocarbons in this region, which was the
predominant risk associated with the offshore East African Margin prior to the
discovery.
· Tanzania Onshore: In Mandawa, Dominion and its partner, Maurel & Prom,
are progressing operations for the upcoming Kianika-1 well. Well site and
road construction have already begun in anticipation of the
commencement of drilling in June 2010. Kianika-1 is targeting recoverable
resources of 77
MMbbl in a structural closure. The well is
onshore and 200 km south of Dar es Salaam.
On 25 March 2010, Dominion confirmed that all resolutions required for the issue
of 561,480,000 new common shares were passed at the Company's Special General
Meeting held on that day. As a result, all conditions required for the placing
to raise GBP32.7m (approximately US$ 50m) having been satisfied, the new funds
were received on 29 March 2010.
The new Dominion has successfully responded to the challenges it faced. We are
extremely optimistic about the coming 12 months, during which time the Company
will be drilling in a highly prospective area with the potential to deliver
significant value to its investors.
Roger Cagle
Andrew
Cochran
Chairman
Chief Executive
Dominion Petroleum Limited
conSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 december 2009
+-----------------------------------------+------+----------+----------+
| | | 2009 | 2008 |
+-----------------------------------------+------+----------+----------+
| | | $'000 | $'000 |
+-----------------------------------------+------+----------+----------+
| Administrative expenses | | | |
+-----------------------------------------+------+----------+----------+
| Share-based payments | | (2,122) | (3,193) |
+-----------------------------------------+------+----------+----------+
| Litigation costs | | - | (7,738) |
+-----------------------------------------+------+----------+----------+
| Other administrative expenses | | (8,180) | (9,038) |
+-----------------------------------------+------+----------+----------+
| Total administrative expenses | | (10,302) | (19,969) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| LOSS FROM OPERATIONS | | (10,302) | (19,969) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| Finance costs | | (193) | (723) |
+-----------------------------------------+------+----------+----------+
| Finance income | | 40 | 25 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| LOSS BEFORE TAXATION | | (10,455) | (20,667) |
+-----------------------------------------+------+----------+----------+
| Income tax expense | | (51) | (96) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| LOSS FOR THE YEAR | | (10,506) | (20,763) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| OTHER COMPREHENSIVE INCOME: | | (41) | (116) |
+-----------------------------------------+------+----------+----------+
| Foreign exchange on retranslation of | | | |
| foreign operations | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR | | (10,547) | (20,879) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| LOSS FOR THE YEAR ATTRIBUTABLE TO: | | | |
+-----------------------------------------+------+----------+----------+
| Owners of the parent | | (10,446) | (20,712) |
| | | (60) | (51) |
+-----------------------------------------+------+ + +
| Non-controlling interest | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE | | | |
| TO: | | | |
+-----------------------------------------+------+----------+----------+
| Owners of the parent | | (10,487) | (20,828) |
| | | (60) | (51) |
+-----------------------------------------+------+ + +
| Non-controlling interest | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| LOSS PER SHARE | | | |
+-----------------------------------------+------+----------+----------+
| Basic and diluted (US Cent) | | (1.77) | (4.85) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| All amounts relate to continuing | | | |
| activities. | | | |
+-----------------------------------------+------+----------+----------+
Dominion Petroleum Limited
conSOLIDATED STATEMENT OF financial position
for the year ended 31 december 2009
+-----------------------------------------+------+----------+----------+
| | | 2009 | 2008 |
+-----------------------------------------+------+----------+----------+
| ASSETS | | | $'000 |
| | | $'000 | |
+-----------------------------------------+------+----------+----------+
| NON-CURRENT ASSETS | | | |
+-----------------------------------------+------+----------+----------+
| Property, plant and equipment | | 474 | 665 |
+-----------------------------------------+------+----------+----------+
| Oil and gas exploration expenditure | | 65,839 | 55,503 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | 66,313 | 56,168 |
+-----------------------------------------+------+----------+----------+
| CURRENT ASSETS | | | |
+-----------------------------------------+------+----------+----------+
| Receivables | | 971 | 3,647 |
+-----------------------------------------+------+----------+----------+
| Inventory | | 255 | - |
+-----------------------------------------+------+----------+----------+
| Cash and cash equivalents | | 4,706 | 4,497 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | 5,932 | 8,144 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| TOTAL ASSETS | | 72,245 | 64,312 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| EQUITY AND LIABILITIES | | | |
+-----------------------------------------+------+----------+----------+
| Equity attributable to equity holders | | | |
| of the parent | | | |
+-----------------------------------------+------+----------+----------+
| Share capital | | 37 | 17 |
+-----------------------------------------+------+----------+----------+
| Convertible debt option reserve | | 8,909 | 16,884 |
+-----------------------------------------+------+----------+----------+
| Share premium | | 63,203 | 22,590 |
+-----------------------------------------+------+----------+----------+
| Share-based payments reserve | | 22,613 | 20,514 |
+-----------------------------------------+------+----------+----------+
| Currency translation reserve | | (180) | (139) |
+-----------------------------------------+------+----------+----------+
| Retained earnings | | (52,955) | (50,951) |
+-----------------------------------------+------+----------+----------+
| Equity attributable to the equity | | 41,627 | 8,915 |
| holders of the parent | | | |
+-----------------------------------------+------+----------+----------+
| Minority interests | | (120) | (60) |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| Total equity | | 41,507 | 8,885 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| NON-CURRENT LIABILITIES | | | |
+-----------------------------------------+------+----------+----------+
| Convertible loan notes | | 27,110 | - |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | 27,110 | - |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| CURRENT LIABILITIES | | | |
+-----------------------------------------+------+----------+----------+
| Convertible loan notes | | - | 50,049 |
+-----------------------------------------+------+----------+----------+
| Trade and other payables | | 3,564 | 5,345 |
+-----------------------------------------+------+----------+----------+
| Current tax payable | | 64 | 63 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| | | 3,628 | 55,457 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| TOTAL LIABLITIES | | 30,738 | 55,457 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
| TOTAL EQUITY AND LIABILITIES | | 72,245 | 64,312 |
+-----------------------------------------+------+----------+----------+
| | | | |
+-----------------------------------------+------+----------+----------+
The financial statements were approved by the Board of Directors and authorised
for issue on 30 April 2010 and are signed on its behalf by:
+----------------------+----------------------+----------------------+
| Roland Wessel | | Rob Shepherd |
| Director | | Director |
+----------------------+----------------------+----------------------+
DOMINION PETROLEUM LIMITED
Consolidated cash flow statement
for the year ended 31 december 2009
+---------------------------------------------+----------+----------+
| | 2009 | 2008 |
+---------------------------------------------+----------+----------+
| | $'000 | $'000 |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| CASH FLOWS FROM OPERATING ACTIVITIES | | |
+---------------------------------------------+----------+----------+
| Loss for the year | (10,506) | (20,763) |
+---------------------------------------------+----------+----------+
| (Increase) in inventory | (255) | - |
+---------------------------------------------+----------+----------+
| Decrease/(increase) in other receivables | 1,457 | (1,744) |
+---------------------------------------------+----------+----------+
| Increase)/(decrease) in other payables | 815 | (645) |
+---------------------------------------------+----------+----------+
| Income tax expense | 51 | 96 |
+---------------------------------------------+----------+----------+
| Foreign exchange movement | 29 | (37) |
+---------------------------------------------+----------+----------+
| Depreciation | 175 | 201 |
+---------------------------------------------+----------+----------+
| Loss on disposal of property, plant and | 8 | 92 |
| equipment | | |
+---------------------------------------------+----------+----------+
| Share-based payment expense | 2,122 | 4,009 |
+---------------------------------------------+----------+----------+
| Finance income | (40) | (25) |
+---------------------------------------------+----------+----------+
| CASH USED IN OPERATIONS | (6,144) | (18,816) |
| Income taxes paid | (50) | (66) |
+---------------------------------------------+----------+----------+
| NET CASH FROM OPERATING ACTIVITIES | (6,194) | (18,882) |
| | | |
+---------------------------------------------+----------+----------+
| INVESTING ACTIVITIES | | |
+---------------------------------------------+----------+----------+
| Interest received | 40 | 25 |
+---------------------------------------------+----------+----------+
| Oil and gas exploration expenditure | (3,581) | (20,728) |
+---------------------------------------------+----------+----------+
| Reimbursement of past exploration costs | 1,219 | 4,342 |
+---------------------------------------------+----------+----------+
| Proceeds from disposal of plant and | 35 | - |
| equipment | | |
+---------------------------------------------+----------+----------+
| Acquisition of property, plant and | (27) | (488) |
| equipment | | |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| CASH USED IN INVESTING ACTIVITIES | (2,314) | (16,849) |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| FINANCING ACTIVITIES | | |
+---------------------------------------------+----------+----------+
| Costs of re-financed convertible loan notes | (830) | - |
+---------------------------------------------+----------+----------+
| Issue of ordinary share capital (net of | 9,617 | 800 |
| issue costs) | | |
+---------------------------------------------+----------+----------+
| Payment made for forfeit of options | - | (199) |
+---------------------------------------------+----------+----------+
| CASH FLOW FROM FINANCING ACTIVITIES | 8,787 | 601 |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| Increase/(decrease) in cash and cash | 279 | (35,130) |
| equivalents | | |
+---------------------------------------------+----------+----------+
| Cash and cash equivalents at beginning of | 4,497 | 39,718 |
| period | (70) | (91) |
| Exchange gains/losses on cash and cash | | |
| equivalents | | |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 4,706 | 4,497 |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
| | | |
+---------------------------------------------+----------+----------+
Dominion Petroleum Limited
Consolidated STATEMENT OF CHANGES IN EQUITY
for the year ended 31 december 2009
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | Equity | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | Share- | | | attributable | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | Convertible | | based | Currency | | to | Non- | |
| | | | | | | | owners | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | Share | Debt | Share | payments | translation | Retained | | controlling | Total |
| | | option | | | | | of | | |
| | | | | | | | the | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | Capital | reserve | premium | reserve | reserve | earnings | parent | Interests | equity |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| At 1 January 2008 | 17 | 16,884 | 16,026 | 16,704 | (23) | (30,239) | 19,369 | (9) | 19,360 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Total comprehensive income | - | - | - | - | (116) | (20,712) | (20,828) | (51) | (20,879) |
| for the year | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Issue of share capital (net | - | - | 6,564 | - | - | - | 6,564 | - | 6,564 |
| of issue costs) | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Share-based payments | - | - | - | 4,009 | - | - | 4,009 | - | 4,009 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Cash-settled options | | | | (199) | | | (199) | | (199) |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| At 31 December 2008 | 17 | 16,884 | 22,590 | 20,514 | (139) | (50,951) | 8,915 | (60) | 8,855 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| At 1 January 2009 | 17 | 16,884 | 22,590 | 20,514 | (139) | (50,951) | 8,915 | (60) | 8,855 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Total comprehensive income | - | - | - | - | (41) | (10,446) | (10,487) | (60) | (10,547) |
| for the year | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Issue of share capital (net | 20 | - | 40,613 | 505 | - | - | 41,138 | - | 41,138 |
| of issue costs) | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Share-based payments (note | - | - | - | 1,594 | - | - | 1,594 | - | 1,594 |
| 17) | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| Equity portion of convertible | - | (7,975) | - | - | - | 8,442 | 467 | - | 467 |
| loan note | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| | | | | | | | | | |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
| At 31 December 2009 | 37 | 8,909 | 63,203 | 22,613 | (180) | (52,955) | 41,627 | (120) | 41,507 |
+-------------------------------+---------+-------------+---------+----------+-------------+----------+--------------+-------------+----------+
Dominion Petroleum Limited
ABRIDGED NOTES
for the year ended 31 december 2009
1 Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to all
the years presented, unless otherwise stated.
These financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by the European Union ("adopted IFRSs"), and
are in accordance with IFRS as issued by the IASB.
The consolidated financial statements have been prepared on the historical cost
basis, as modified by the revaluation of property, plant and equipment,
available for sale financial assets, and financial assets and liabilities,
including derivative financial instruments, at fair value through profit or
loss.
The preparation of financial statements in compliance with IFRS requires the use
of certain critical accounting estimates. It also requires Group management to
exercise judgment in the most appropriate application in applying the Group's
accounting policies. The areas where significant judgments and estimates have
been made in preparing the financial statements and their effect are disclosed
in note 2.
Going concern
On 1 March 2010 the Company announced that it had raised GBP32.7m (approximately
US$ 50m) through a planned placing of new ordinary shares with a broad range of
established institutional investors. The money raised from the placing will be
applied towards funding Dominion Petroleum's drilling programme in Exploration
Area 4B in Uganda as well as acquiring seismic in the emerging East African
margin play of Offshore Tanzania's Block 7.
As a result of the placing, the Group currently has sufficient working capital
to fund its planned work programme for at least the next twelve months, and the
directors have concluded that the going concern basis of preparing the accounts
is appropriate.
Changes in accounting policies
(a) New standards, amendments to published standards and interpretations to
existing standards effective in 2009 adopted by the Group.
Amendments to IAS 1 Presentation of Financial Statements: A Revised
Presentation: As a result of the application of this Amendment the Group has
elected to present a single statement of comprehensive income; previously it
presented an income statement and a statement of change in equity. The Amendment
does not change the recognition or measurement of transactions and balances in
the financial statements.
IFRS 8 Operating Segments:IFRS 8 requires an entity to adopt a 'management
approach' in the identification of its operating segments and its reporting on
their financial performance. Generally, the information to be reported would be
what management uses internally for evaluating segment performance and deciding
how to allocate resources to operating segments. Such information may be
different from that used to prepare the income statement and balance sheet. The
Standard also requires an explanation of the basis on which the segment
information is prepared and reconciliations to the amounts recognised in the
income statement and balance sheet. The adoption of IFRS 8 has not resulted in a
change to the Group's reportable segments.
Amendment to IAS 23 Borrowing Costs: This Amendment removes the option to
immediately recognise as an expense borrowing costs that relate to the
construction of qualifying assets (assets that take a substantial period of time
to get ready for use or sale). Instead, an entity will be required to capitalise
borrowing costs whenever the conditions for capitalisation are met. The
provisions of this Amendment are applicable to borrowing costs relating to
qualifying assets for which the commencement date for capitalisation is on or
after the effective date of the Amendment. The adoption of this amendment has
not resulted in a change to the Group's accounting treatment of borrowing costs.
The Group has historically adopted a policy of capitalising borrowing costs.
(b) The following new standards, interpretations and amendments, also effective
for the first time from 1 January 2009, have not had a material effect on the
financial statements:
· Amendment to IFRS 2 Share-based Payment: Vesting Conditions and
Cancellations - 1 January 2009
· Amendments to IAS 32 and IAS 1 Puttable Financial Instruments and
Obligations Arising on Liquidation - 1 January 2009
· Amendments to IFRS 1 and IAS 27 Cost of an Investment in a subsidiary,
jointly-controlled entity or associate - 1 January 2009
· Improving Disclosures about Financial Instruments (Amendments to IFRS 7)
- 1 January 2009
· Improvements to IFRSs (2008) - 1 January 2009
· IFRIC 15 Agreements for the Construction of Real Estate - 1 January 2009
· Embedded Derivatives (Amendments to IFRIC 9 and IAS 39)- 30 June 2009
· Revised IFRS 3 Business Combinations - 1 July 2009
· Amendments to IAS 27 Consolidated and Separate Financial Statements - 1
July 2009
· Amendment to IAS 39 Financial Instruments: Recognition and Measurement:
Eligible Hedged Items Statements - 1 July 2009
· IFRIC 17 Distributions of Non-cash Assets to Owners - 1 July 2009
· Revised IFRS 1 First-time Adoption of international Financial Reporting
Standards - 1 July 2009
· IFRIC 18 Transfer of Assets from Customers - 1 July 2009
· Revised IFRS 1 First-time Adoption of international Financial Reporting
Standards - 1 July 2009
(c) New standards, interpretations and amendments not yet effective
· Improvements to IFRSs (2009) - 1 January 2010
· Group Cash-settled Share-based Payment Transactions (Amendments to IFRS
2) - 1 January 2010
· Additional Exemptions for First-time Adopters (Amendments to IFRS 1)- 1
January 2010
· Classification of Rights Issues (Amendment to IAS 32) - 1 February 2010
· IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments - 1
April 2010
· Amendment to IFRS 1 First-time Adoption of International Financial
Reporting Standards - 1 July 2010
· Revised IAS 24 Related Party Disclosures - 1 January 2011
· Amendments to IFRIC 14 IAS 19 - Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction - 1 January 2011
· Amendment to IFRS 1 First-time Adoption of International Financial
Reporting Standards - 1 July 2010
Revenue recognition
Future sales revenues will represent the sales value, net of VAT and overriding
royalties, of the sales of oil/gas. Revenue will be recognized when goods are
delivered and title has passed.
Basis of consolidation
The consolidated financial information incorporates the results of the Group as
at 31 December 2009.
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The consolidated
financial statements present the results of the Company and its subsidiaries
("the Group") as if they formed a single entity. Intercompany transactions and
balances between Group companies are therefore eliminated in full.
Business combinations
The consolidated financial statements incorporate the results of business
combinations using the purchase method of accounting. In the consolidated
balance sheet, the acquiree's identifiable assets, liabilities and contingent
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.
Impairment of non-financial assets (excluding inventories)
Impairment tests on intangible assets with indefinite useful economic lives are
undertaken annually at the financial year end. Other non-financial assets are
subject to impairment tests whenever events or changes in circumstances indicate
that their carrying amount may not be recoverable. Where the carrying value of
an asset exceeds its recoverable amount (i.e. the higher of value in use and
fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the asset's cash-generating unit
(i.e. the lowest Group of assets in which the asset belongs for which there are
separately identifiable cash flows).
Impairment charges are included in the administrative expenses line item in the
consolidated income statement, except to the extent they reverse gains
previously recognised directly in equity. An impairment loss recognised for
goodwill is not reversed.
Foreign currency
The functional and presentational currency of Group companies is US dollars,
except for Dominion Petroleum Administrative Services Limited, whose functional
currency is UK Sterling. Transactions entered into by Group entities in a
currency other than the currency of the primary economic environment in which
they operate (their "functional currency") are recorded at the rates ruling when
the transactions occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the balance sheet date. Exchange differences
arising on the retranslation of unsettled monetary assets and liabilities are
recognised immediately in the consolidated income statement.
On consolidation, the results of overseas operations are translated into US
dollars at rates approximating to those ruling when the transactions took place.
All assets and liabilities of overseas operations, including goodwill arising on
the acquisition of those operations, are translated at the rate ruling at the
balance sheet date. Exchange differences arising on translating the opening net
assets at opening rate and the results of overseas operations at actual rate are
recognised directly in equity (the "currency translation reserve").
Segment reporting
For management purposes the Group is organised into operating segments.
Management review the Group's performance by reviewing the results of the
exploration activities by geographic location in each African licence area, and
reviewing the corporate administrative and finance activity of the head office
function in London.
Segment results and total assets include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly head office assets and expenses and
capitalised borrowing costs.
Financial assets
The Group's loans and receivables comprise other receivables and cash and cash
equivalents in the balance sheet. Cash and cash equivalents include cash in
hand and deposits held on call with banks. Any interest earned is accrued
monthly and classified as interest. Other receivables are stated at cost less
any impairment losses.
Financial liabilities
The Group classifies its financial liabilities into one of two categories,
depending on the purpose for which the liability arose.
· Trade payables and other short-term monetary liabilities, which are
initially recognised at fair value and subsequently recognised at amortised cost
using the effective interest rate method.
· Convertible loan notes are regarded as compound instruments, consisting
of a liability component and an equity component. At the date of issue, the fair
value of the liability component is estimated using the prevailing market
interest rate for similar non-convertible debt. The difference between the
proceeds from issue of the convertible loan notes and the fair value attributed
to the liability component, representing the embedded option to convert the
liability into equity of the Group, is included in equity (Convertible debt
option reserve). The financial liability component is subsequently carried at
amortised cost using the effective interest rate method and is accreted up to
the redemption amount each year.
Share capital
Financial instruments issued by the Group are treated as equity only to the
extent that they do not meet the definition of a financial liability. The
Company's Common Shares are classified as equity instruments. These are recorded
at the proceeds received net of direct issue costs.
Borrowing costs
Interest incurred on the convertible loan notes used to fund the Group's
exploration expenditure is capitalised as part of its oil and gas exploration
assets. The Group does not incur any other interest costs that qualify for
capitalisation under IAS 23 'Borrowing costs'.
The renegotiation of terms of the Series A & B Loan Notes, following the
re-financing on 13 August 2009, required adjustment of the financial liability
to take account of the change in the present value of future cash flows. The
change of terms did not result in a substantial modification of terms of an
existing financial liability (as defined by IAS 39 para 40). The carrying value
of the remaining liability is being amortised over the revised remaining term of
the Loan Notes, the charge being included in borrowing costs capitalised (see
note 12).
Share-based payments
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the consolidated income statement
over the vesting period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each balance
sheet date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest. Market
vesting conditions are factored into the fair value of the options granted. As
long as all other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and after
the modification, is also charged to the consolidated income statement over the
remaining vesting period.
Warrants
Warrants issued as part of share subscriptions are treated as equity
instruments. The initial proceeds from the share subscriptions (units
consisting of share and warrants) are allocated to share capital, share premium
and warrant reserve in accordance to their relative fair values.
The warrants issued to BlueGold as part on the refinancing of 13 August 2009
have been valued using the Black-Scholes option pricing model.
Oil and gas assets - exploration and evaluation
In respect of all exploration expenditure the Group has adopted the full cost
method of accounting. Pending determination of commercial reserves all
expenditure relating to the acquisition, exploration and appraisal of oil and
gas interests is capitalized as an intangible asset. On determination of
commercial reserves the expenditure will be transferred to appropriate cost
pools and amortised over the estimated life of the commercial reserves on a unit
of production basis. Where costs associated with a licence have been capitalized
and the licence is subsequently relinquished, the project is abandoned or is
considered to be of no further commercial value to the Group, the relevant costs
will be written off.
Asset disposals
Proceeds from the full or partial disposal of a property where commercial
reserves have not been established are credited to the relevant cost centre.
Only if there is a surplus in the cost centre are any of the proceeds credited
to income.
A gain or loss on disposal of an interest in a field where commercial reserves
have been established is recognised to the extent that the net proceeds exceed
or are less than the appropriate portion of the net capitalised costs of the
field or property.
Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of
an asset or liability in the balance sheet differs from its tax base, except for
differences arising on:
· the initial recognition of goodwill;
· the initial recognition of an asset or liability in a transaction which
is not a business combination and at the time of the transaction affects neither
accounting or taxable profit; and
· investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and it is
probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the balance sheet date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the deferred
tax assets and liabilities relate to taxes levied by the same tax authority on
either:
· the same taxable group company; or
· different Group entities which intend either to settle current tax assets
and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well
as the purchase price, cost includes directly attributable costs and the
estimated present value of any future unavoidable costs of dismantling and
removing items. The corresponding liability is recognised within provisions. All
items of property, plant and equipment are carried at depreciated cost.
Freehold land is not depreciated. Depreciation is provided on all other items of
property, plant and equipment is to write off the carrying value of items over
their expected useful economic lives. It is applied at the following rates:
Buildings
2% per annum straight line
Computer/telecoms 25%
per annum straight line
Motor vehicles
25% per annum straight line
Office equipment 25%
per annum straight line
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present
location and condition.
Provisions
Provisions are recognised for liabilities of uncertain timing or amount that
have arisen as a result of past transactions and are discounted at a pre-tax
rate reflecting current market assessments of the time value of money and the
risks specific to the liability.
2 SEGMENTAL REPORTING
Segmental analysis of administrative and finance expenses, total assets and
capital expenditures for the Group's main areas of activity are set out below.
Administrative expenses and expensed finance costs comprise the segmental
results at the Group's stage of operations.
+----------------------------+---------+---------+--------+--------+
| | Administrative | Finance |
| | Expenses | Costs |
+----------------------------+-------------------+-----------------+
| | |
+----------------------------+-------------------------------------+
| | 2009 | 2008 | 2009 | 2008 |
+----------------------------+---------+---------+--------+--------+
| | $'000 | $'000 | $'000 | $'000 |
+----------------------------+---------+---------+--------+--------+
| Tanzania | 1,055 | 578 | 36 | 40 |
+----------------------------+---------+---------+--------+--------+
| Uganda | 668 | 474 | 180 | - |
+----------------------------+---------+---------+--------+--------+
| Democratic Republic of | 409 | 507 | 5 | 20 |
| Congo | | | | |
+----------------------------+---------+---------+--------+--------+
| Group/corporate | 8,170 | 18,410 | (28) | 663 |
+----------------------------+---------+---------+--------+--------+
| | | | | |
+----------------------------+---------+---------+--------+--------+
| | 10,302 | 19,969 | 193 | 723 |
+----------------------------+---------+---------+--------+--------+
+----------------------------+---------+---------+--------+--------+
| | Total Assets by | Capital |
| | Location | Expenditure by |
| | | Location |
+----------------------------+-------------------+-----------------+
| | |
+----------------------------+-------------------------------------+
| | 2009 | 2008 | 2009 | 2008 |
+----------------------------+---------+---------+--------+--------+
| | $'000 | $'000 | $'000 | $'000 |
+----------------------------+---------+---------+--------+--------+
| Tanzania | 23,525 | 25,459 | 624 | 7,058 |
+----------------------------+---------+---------+--------+--------+
| Uganda | 13,067 | 13,857 | 374 | 11,312 |
+----------------------------+---------+---------+--------+--------+
| Democratic Republic of | 1,617 | 1,959 | 3 | 1,540 |
| Congo | | | | |
+----------------------------+---------+---------+--------+--------+
| Group/corporate | 34,036 | 23,037 | 9,374 | 14,880 |
+----------------------------+---------+---------+--------+--------+
| | | | | |
+----------------------------+---------+---------+--------+--------+
| | 72,245 | 64,312 | 10,375 | 34,790 |
+----------------------------+---------+---------+--------+--------+
During 2009 the Group operated predominantly in one business segment being the
exploration of oil and gas in East and Central Africa.
Group/corporate assets relate to working capital in the Group's Bermudan and UK
entities and borrowing costs capitalised in line with the Group's accounting
policies.
+--------------------------------------------------+-------------+-------------+
| 3 EARNINGS PER SHARE | 2009 | 2008 |
+--------------------------------------------------+-------------+-------------+
| | $'000 | $'000 |
+--------------------------------------------------+-------------+-------------+
| Numerator | | |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| Loss for the year attributable to the equity | (10,446) | (20,712) |
| holders of the parent | | |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| Denominator | | |
+--------------------------------------------------+-------------+-------------+
| | | |
+--------------------------------------------------+-------------+-------------+
| Number of shares | 591,504,120 | 427,332,738 |
+--------------------------------------------------+-------------+-------------+
| Weighted average number of shares used in basic | | |
| EPS | | |
+--------------------------------------------------+-------------+-------------+
The potential Common Shares are not dilutive. The number of potential shares
excluded on the grounds that they are non-dilutive is 402,631,172 (2008:
54,582,083).
4 OIL AND GAS EXPLORATION EXPENDITURE
+---------------------------------------------------------+-------------+
| | Oil and |
| | gas |
+---------------------------------------------------------+-------------+
| | exploration |
+---------------------------------------------------------+-------------+
| | expenditure |
| | |
+---------------------------------------------------------+-------------+
| Cost | $'000 |
+---------------------------------------------------------+-------------+
| At 1 January 2008 | 26,762 |
+---------------------------------------------------------+-------------+
| Additions | 34,302 |
+---------------------------------------------------------+-------------+
| Disposals | (5,561) |
+---------------------------------------------------------+-------------+
| | |
+---------------------------------------------------------+-------------+
| At 1 January 2009 | 55,503 |
+---------------------------------------------------------+-------------+
| Additions | 10,336 |
+---------------------------------------------------------+-------------+
| Reimbursement of past exploration costs | - |
+---------------------------------------------------------+-------------+
| | |
+---------------------------------------------------------+-------------+
| At 31 December 2009 | 65,839 |
+---------------------------------------------------------+-------------+
| | |
+---------------------------------------------------------+-------------+
| | |
+---------------------------------------------------------+-------------+
| Net book value | |
+---------------------------------------------------------+-------------+
| At 31 December 2009 | 65,839 |
+---------------------------------------------------------+-------------+
| | |
+---------------------------------------------------------+-------------+
| At 31 December 2008 | 55,503 |
+---------------------------------------------------------+-------------+
| |
| Additions for the year include capitalised borrowing costs |
| totalling US$ 9.3m (2008: US$ 9.6m) as shown in note 18. |
+---------------------------------------------------------+-------------+
An analysis of the carrying value of oil and gas exploration expenditure by main
area of operation is set out below.
+---------------------------------------------+----------+---------+
| | 2009 | 2008 |
+---------------------------------------------+----------+---------+
| | $'000 | $'000 |
+---------------------------------------------+----------+---------+
| Tanzania | 22,613 | 21,992 |
+---------------------------------------------+----------+---------+
| Uganda | 12,098 | 11,729 |
+---------------------------------------------+----------+---------+
| Democratic Republic of Congo | 1,472 | 1,469 |
+---------------------------------------------+----------+---------+
| Capitalised finance costs (note 7) | 29,656 | 20,313 |
+---------------------------------------------+----------+---------+
| | | |
+---------------------------------------------+----------+---------+
| | 65,839 | 55,503 |
+---------------------------------------------+----------+---------+
5 Post balance sheet events
On 15 February 2010, the Company announced that agreement had been reached with
Les Etablissements Maurel et Prom (M&P) to farm in to the Mandawa and Kisangire
PSAs. Subject to certain conditions precedent, including approval by the
Tanzanian government, M&P will acquire a 40% interest in the Mandawa PSA onshore
Tanzania, resulting in M & P owning 90% of the Mandawa licence and Dominion's
interest being reduced to 10%; and a 35% carried interest in the Kisangire PSA
onshore Tanzania (operated by Heritage Oil, who own a 55% interest), reducing
Dominion's interest to 10%.
In return for these additional interests being acquired by M & P, Dominion's
funding requirement in respect of the Kianika-1 well on the Mandawa licence will
be reduced from 100% to 20% of the drilling costs and to 10% of associated
expenses. Dominion will retain a 10% interest in all profits earned from the
Mandawa licence.
In addition, M & P's interest in the Mandawa licence will rise to 100% upon the
Government of Tanzania agreeing that exploration expenses incurred on other
licences can be carried over to the Mandawa licence. At this point, all of
Dominion's costs relating to the Kianika-1 well on the Mandawa licence will also
be reimbursed.
On 1 March 2010 the Company announced that it had raised GBP32.7m (approximately
US$ 50m) through a planned placing of new ordinary shares with a broad range of
established institutional investors. As a result of the placing, 654,880,000 new
ordinary shares were issued to new and existing shareholders at a price of 5p
per share.
The money raised from the Placing will be applied towards funding Dominion
Petroleum's drilling programme in Exploration Area 4B in Uganda as well as
acquiring seismic in the emerging East African margin play of Offshore
Tanzania's Block 7.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LXLLBBEFFBBF
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