TIDMPGR
RNS Number : 1706S
Phoenix Global Resources PLC
29 September 2017
29 September 2017
Phoenix Global Resources plc
("Phoenix")
UNAUDITED INTERIM RESULTS FOR TREFOIL HOLDINGS B.V.
FOR THE SIX MONTH PERIOD TO 30 JUNE 2017
Phoenix Global Resources plc (AIM: PGR; BCBA: PGR), the
independent Argentina-focused oil and gas exploration and
production company, announces the unaudited interim results for the
six month period ending 30 June 2017 in respect of Trefoil Holdings
B.V. ("Trefoil", the "Company" or, together with its subsidiaries,
the "Group"). Trefoil represents the Mercuria Oil and Gas Business
in Argentina that combined with Andes Energia Plc on 10 August 2017
immediately prior to the enlarged group being renamed Phoenix
Global Resources plc. Petrolera El Trebol S.A. ("PETSA") is an
Argentina registered company and is the sole operating company of
the Trefoil Holdings B.V. Group.
Operational review
Period highlights
-- The Group continued its appraisal work on the Vaca Muerta
shale formation in the Puesto Rojas block and made an application
to the Province of Mendoza for an unconventional exploitation
concession for the area
-- Three wells were drilled during the period in the Puesto
Rojas block, two of which also reached Vaca Muerta in addition to
the conventional horizons
-- During the period one conventional well (CP1014 ST) was
completed in the Puesto Rojas area with initial production of 785
bopd (30 day average) on a working interest basis, from the Chachao
formation
-- Two development wells were drilled in the Santa Cruz Sur area
-- Two exploration wells were drilled on the Angostura and Rio
Cullen concessions in Tierra del Fuego
-- Average realised oil price of US$49.57 per bbl, a decrease of
US$8.27 per bbl or 14% compared to H1 2016 as the de-regulation of
the Argentina domestic oil price brings closer parity to
international benchmarks
-- Average realised gas price of US$3.87 per mmbtu, an increase
of US$1.05 or 37% compared to H1 2016
-- EBITDA of US$15.0 million, a 43.8% reduction compared to H1
2016 as a result of lower oil prices and, as previously indicated,
the re-phasing of the development and production programme for
Puesto Rojas to 2H 2017 as the Group focused on Vaca Muerta
evaluation in H1 2017
-- At the period end net debt was US$16.1 million
Post period highlights
-- On 10 August 2017, the combination with Andes Energia Plc,
the AIM-listed Argentina exploration and production company,
created a scaled pure play Argentina oil and gas company with
significant Vaca Muerta and other unconventional acreage together
with access to public markets
-- Five further wells were drilled in the Puesto Rojas area,
three of which have appraised unconventional potential. One further
well was drilled in the Santa Cruz Sur area. Appraisal and testing
of these wells is ongoing
-- The Company recompleted a well at Cerro Del Medio which was
previously producing 40 bopd and is producing post recompletion
more than 300 bopd, which provides good initial indications of
expanding our existing Agrio play with significant development
potential, including with horizontal wells, in this prolific
horizon.
-- The Company has agreed with its JV partners that it will
assume operatorship of the Rio Atuel exploration block from
Tecpetrol effective from 1 October 2017. In addition, the Company
has agreed to acquire Tecpetrol's 33.34% stake in the area, which
will increase the Company's stake to 66.67% and add approximately
82,000 working interest acres
-- Average monthly oil production from the blocks in the
Malargüe region has increased to approximately 2,750 working
interest bopd during the second half of September compared to an
average of 2,326 working interest bopd in H1 2017
-- Average monthly total production, as of 24 September 2017 is
8,751 working interest boepd, of which oil production is 5,371
working interest bopd and gas production is 3,380 working interest
boepd
For further information, please contact:
Phoenix Global Resources Anuj Sharma, T: +54 11 5258
plc CEO 7500
Philip Wolfe, T: +44 20 7839
CFO 4974
Stockdale Securities Antonio Bossi T: +44 20 7601
David Coaten 6100
Panmure Gordon Adam James T: +44 20 7886
Atholl Tweedie 2500
Camarco Billy Clegg T: +44 20 3757
Gordon Poole 4980
James Crothers
Qualified Person Review
In accordance with AIM guidance for mining, oil and gas
companies, Mr. Javier Vallesi and Mr. Greg Easley have reviewed the
information contained in this announcement. Mr. Vallesi, Chief
Operating Officer of the Group, is a petroleum engineer with over
22 years of experience in the oil and gas industry and is a member
of the Argentinian Institute of Oil and Gas. Mr. Easley, Senior
Manager Reservoir and Engineering, is a petroleum engineer with
over 10 years of experience in the oil and gas industry, is a
licenced Professional Engineer in the State of Texas and is a
member of the Society of Petroleum Engineers.
About Phoenix:
Phoenix Global Resources is a London Stock Exchange (AIM: PGR)
and Buenos Aires Stock Exchange (BCBA: PGR) listed independent
Argentina-focused oil and gas exploration and production company.
The Company has over 6.3 million licensed working interest acres in
Argentina (of which over 5 million are operated), 61.7 million boe
of working interest 2P reserves and average production of
approximately 11,300 working interest boepd in 2016. Phoenix has
significant exposure to the unconventional opportunity in Argentina
through its 400,000 working interest acres of Vaca Muerta
potential.
Phoenix's website is www.phoenixglobalresources.com
Chief Executive Officer's Review
NORTH ARGENTINA SEGMENT
Puesto Rojas - Cerro Mollar - Cerro Mollar Oeste - Cerro Mollar
Norte
Appraisal activity
In H1 2017 the Company launched a three-well drilling campaign
on the Puesto Rojas block. The campaign included two appraisal
wells that reached the Vaca Muerta shale formation that lies
beneath the existing conventional production horizons in the Puesto
Rojas area allowing for further data acquisition for future
unconventional appraisal programmes.
While the appraisal and testing of these wells is at an early
stage, the initial results from the 2017 drilling campaign has
shown that the Vaca Muerta formation is prevalent within the Puesto
Rojas area and that it represents a potentially prolific
development prospect for the Company.
The drilling activity undertaken to date in the Vaca Muerta
formation represents an initial test programme to confirm the
overall prospectivity of the formation. Based on the encouraging
results of the initial programme and in order to expand the
appraisal programme the Company has applied to the Province of
Mendoza for an unconventional exploitation concession for the
Puesto Rojas block.
The term of the unconventional exploitation concession is 35
years which includes a pilot phase of between three to five years.
If successful in its application, the Company plans to expedite and
conclude the pilot programme within three years. Following the
conclusion of the agreed pilot phase the Company will be able to
progress the full development of the unconventional resource in
Vaca Muerta.
While the results of the test programme have been encouraging,
the Company is unable at this time to determine conclusively the
prospectivity of the Vaca Muerta formation on Puesto Rojas and will
provide further updates as both the administrative and physical
activities continue.
The Vaca Muerta shale formation represents a significant
exploration and development opportunity for the Group and the
formation has been the subject of significant interest and
investment from the international oil and gas community. The Vaca
Muerta shale formation has the potential to be a significant asset
for Argentina in terms of inward investment, job creation and
energy security.
The Company recompleted a well at Cerro Del Medio which was
previously producing 40 bopd and is producing post recompletion
more than 300 bopd, which provides good initial indications of
expanding our existing Agrio play with significant development
potential, including with horizontal wells, in this prolific
horizon.
Majors including ExxonMobil and Chevron have been active in Vaca
Muerta with YPF historically. In 2017 there have been a number of
further new joint ventures announced by YPF and others including
those by Shell, BP, Total/Pan American Energy, Wintershall,
Schlumberger and Statoil.
The level of investments made and activity undertaken further
underscores the potential of the Vaca Muerta opportunity.
Development drilling
In the period, the Company has continued the Cerro Pencal
development programme commenced in 2013. At 30 June 2017 nine wells
were on stream in the Cerro Pencal Field and producing over 2,500
working interest bopd. A number of the wells represent drilling
success in new discoveries that are producing with low water cut
and relatively high daily production rates.
Cerro Mollar Oeste and Cerro Mollar Norte are small concessions
located west of the Cerro Mollar field that are operated by the
Company with 100% working interest. The net revenue interest on
these areas is 84.32% and 88.0% respectively. Together Cerro Mollar
Oeste and Cerro Mollar Norte currently produce a little over 200
bopd of working interest production from six wells, with no
gas.
Oil production
Oil production decreased 17% during the period, from 2,808
working interest bopd during the first half of 2016 to 2,326
working interest bopd in the same period in 2017. The production
programme for the Puesto Rojas - Cerro Mollar area was rephased to
the second half of the year as the priority objective for the Group
in H1 2017 was the initial appraisal and evaluation activity on the
Vaca Muerta shale formation.
Refugio Tupungato - Mendoza
The Company has operated the Tupungato area since October 2006,
holding a 100% working interest that translates to a 80.52% net
revenue interest. The area produces primarily crude oil. Oil
production remained stable in the period with average daily
production in H1 of 2017 of 1,000 working interest bopd to the
Company as compared to 1,051 working interst bopd during the
equivalent period in 2016. Production is derived from 38 active
wells of which 24 are in the Tupungato field and 14 in the
Refugio-Tupungato field. Any gas produced from the area is consumed
in operations.
SOUTH ARGENTINA SEGMENT
Santa Cruz-Sur
In the year to date three development wells were drilled in
Santa Cruz-Sur. Of the three wells, one well was conventionally
completed and produced gas in H1 2017 and as of August was
producing 1459 gross mcf per day. The remaining two wells are
currently undergoing fracture stimulation and are expected to be
onstream in H2 2017.
Rio Cullen
The Rio Cullen block is located in Tierra Del Fuego and is also
operated by Roch. One exploration well, RC.x-1002, was drilled
during the period. The well also targeted the Tobifera and
Springhill formations. The well was completed in June 2017 through
hydraulic fracture stimulation and as of August 2017 was producing
at a rate of 876 mcf per day with minimal water production.
Both the well at Angostura and that at Rio Cullen were drilled
as part of the exploration commitments entered under the ten-year
extension to the concession agreement.
Production
Production by area is summarised as follows:
H1 2016 H2 2016 H1 2017
--------------------- --------------- --------------------- --------------------- ---------------------
Area Oil Gas Oil Gas Oil Gas
Operator bbl/day mscf/day bbl/day mscf/day bbl/day mscf/day
--------------------- --------------- --------- ---------- --------- ---------- --------- ----------
Atamasqui Roch 2 - 1 - 1 -
Angostura PETSA 349 0 351 - 333 -
Cajón
de las
Caballos Roch 158 94 150 39 165 41
Cajón YPF
Oriental S.A. _- - - - - -
Campo Bremen Roch 61 3,174 63 3,371 60 3,170
Cerro Mollar
Norte PETSA 74 - - - 100 -
Cerro Mollar
Oeste PETSA 102 - 95 - 93 -
Chañares
Herrados Chañares 306 71 252 54 200 49
Chorillos Roch 592 9,585 574 9,451 534 9,296
Las Violetas Roch 102 3,860 95 3,763 90 3,466
Moy Aike Roch 89 101 73 111 90 128
Océano Roch 29 2,424 33 2,473 31 2,240
Palermo
Aike Roch - - - - - -
Puesto
Pozo Cercado Chañares 121 28 133 24 122 24
Puesto
Rojac Cerro-Mollar PETSA 2,631 253 2,407 339 2,133 774
Refugio
Tupungato PETSA 1,051 140 1,059 142 1,000 139
Rio Atuel Tecpetrol 24 21 5 3 - -
Rio Cullen Roch 5 112 5 109 4 100
Sur Rio
Deseado
Oeste Roch 8 - 8 - 8 -
--------------------- --------------- --------- ---------- --------- ---------- --------- ----------
Totals 5,704 19,863 5,304 19,879 4,964 19,427
Financial review
Six-months ended 30 2017 2016
June
US$MM US$MM
------------------------- ------ ------
Revenue 58.0 68.2
Operating (loss)/profit (5.1) 11.6
EBITDA 15.0 27.1
Net cash flows from
operating activities 5.5 25.7
-------------------------- ------ ------
Revenue decreased by US$10.2 million to US$58.0 million as
compared to the equivalent period in the prior year due to lower
oil prices achieved and lower oil production.
The Argentina domestic oil price has declined as the Government
continues to allow the regulated domestic price to move towards
parity with international benchmark prices. The average price
achieved per bbl sold fell from US$57.84 in H1 2016 to US$49.57 in
H1 2017. The fall in the domestic price resulted in a decline in
revenue of US$8.6 million as compared to H1 2016. In addition, oil
sales volumes were lower in H1 2017 than in H1 2016 with 940,394
bbls sold in H1 2017, down 94,631 period on period. The decline in
sales volumes resulted in US$4.7 million less revenue in H1 2017 as
compared to the same period in the previous year.
Offsetting the decline in oil revenues, the average gas price
achieved in the period was $1.05 per mmbtu higher at US$3.87 per
mmbtu as compared to US$2.82 in H1 2016. The increase in gas prices
period on period resulted in an increase in revenue in H1 2017 of
US$3.1 million compared to H1 2016. Gas volumes remained largely
consistent period on period.
The Group recorded an operating loss of US$5.1 million in H1
2017 as compared to a gain of US$12.1 million on H2 2016. The
decrease in operating profit is due principally to the decline in
revenues of US$10.2 million together with the net impairment loss
of US$5.7 million related to the relinquishment of the Puesto Pozo
Cercado licence area. The gross impairment loss amounted to US$7.9
million representing the net investment in PP&E related to the
block. This was offset by a tax credit recognised of US$2.2 million
(35%).
EBITDA decreased by US$12.1 million to US$15.0 million compared
to H1 2016 and driven primarily by the fall in sales revenue.
The net loss for the Group increased by US$6.8 million from
US$0.2 million in H1 2016 to US$7.0 million in H1 2017. This was
again driven by the decline in revenues in H1 2017 as compared to
the same period in the previous period and the impairment loss of
US$7.9 million in the current period offset by a lower tax charge
in H1 2017 as compared to H1 2016. The tax charge in H1 2017 was
US$8.9 million lower than in H1 2016 due to less revenue earned and
the tax credit recognised in 2017 related to the impairment of
Puesto Pozo Cercado.
The Group's total assets are consistent period on period, after
taking account of both additions and depreciation for the period,
at US$249 million at 30 June 2017 compared to US$246 million at 30
June 2016. Property plant and equipment has increased by US$19.7
million reflecting the appraisal work programme undertaken on the
Vaca Muerta formation in Puesto Rojas in the period. This is offset
by a reduction in the level of trade receivables by US$16.5 million
at 30 June 2017 compared to 30 June 2016. The reduction in trade
receivables is partly as a result of lower oil prices resulting in
lower invoiced revenue and a focus on working capital in the
period.
The Group's net assets have increased by US$26.8 million as
compared to 30 June 2016 primarily as a result of the issuance of
new ordinary shares with an aggregate value of US$30.7 million to
Upstream Capital Partners as part of the group restructuring
undertaken in contemplation of the combination with Andes Energia
Plc (now Phoenix Global Resources plc) that completed on 10 August
2017.
At 30 June 2017 the Group had cash on hand of US$7.1 million. In
addition, borrowings were US$24.0 million lower at 30 June 2017 at
US$23.2 million compared to US$45.0 million at 30 June 2016, again
as a result of corporate restructuring undertaken in contemplation
of the combination with Andes Energia Plc.
At the period end net debt, calculated as total financial
liabilities less available cash and cash equivalents, was US$16.1
million and is approximately US$27.0 million at the date of this
announcement.
Anuj Sharma
Chief Executive Officer
29 September 2017
Unaudited Consolidated Income statement
Note Six months Six months Year to
to 30 June to 30 June 31 December
2017 2016 2016
US$'000 US$'000 US$'000
------------------------- ----- ------------ ------------ -------------
Revenue 2 58,041 68,239 129,264
Government incentives 121 305 713
Cost of sales 3 (47,045) (48,475) (96,233)
------------------------- ----- ------------ ------------ -------------
Gross profit 11,117 20,069 33,744
Selling expenses (2,758) (2,510) (5,452)
Administrative
expenses (5,582) (5,487) (7,581)
Impairment of
property, plant 8,
and equipment 10 (7,887) - -
Exploration expenses 5 (56) (102) (151)
Other operating
(expense)/income,
net 57 99 (326)
------------------------- ----- ------------ ------------ -------------
Operating (Loss)/profit (5,109) 12,069 20,234
Finance income 9 2,134 2,281
Finance costs (1,125) (4,771) (6,284)
Other finance
results, net (806) 140 1,639
------------------------- ----- ------------ ------------ -------------
(Loss)/profit
before taxation (7,031) 9,572 17,870
Income tax 6 43 (9,453) (13,291)
(Loss)/profit
for the year (6,988) 119 4,579
(Loss)/profit
attributable
to:
------------------------- ----- ------------ ------------ -------------
Equity holders
of the parent (6,988) 119 4,579
Non-controlling
interests - - -
------------------------- ----- ------------ ------------ -------------
(6,988) 119 4,579
------------------------- ----- ------------ ------------ -------------
The accompanying notes are an integral part of these
consolidated interim financial statements.
Unaudited Consolidated Statement of Financial Position
30 June 30 June 31 December
2017 2016 2016
Note US$'000 US$'000 US$'000
------------------------- ----- --------- -------- ------------
Non-current assets
Property, plant
and equipment 8 192,981 173,322 186,084
Intangible assets 7,942 9,494 8,610
Trade and other
receivables 4,485 4,117 4,750
------------------------- ----- --------- -------- ------------
Total non-current
assets 205,408 186,933 199,444
------------------------- ----- --------- -------- ------------
Current assets
Inventories 9,615 11,955 9,270
Trade and other
receivables 26,561 43,615 25,410
Cash and cash
equivalents 7,168 3,169 5,243
------------------------- ----- --------- -------- ------------
Total current
assets 43,344 58,739 39,923
------------------------- ----- --------- -------- ------------
Current liabilities
Trade and other
payables 32,945 32,623 22,562
Financial liabilities 9 13,094 41,561 43,933
Provisions 375 393 385
------------------------- ----- --------- -------- ------------
Total current
liabilities 46,414 74,577 66,880
------------------------- ----- --------- -------- ------------
Non-current liabilities
Financial liabilities 9 10,150 1,033 1,101
Deferred income
tax liabilities 7 34,847 39,324 38,008
Provisions 7,899 8,095 7,834
------------------------- ----- --------- -------- ------------
Total non-current
liabilities 52,896 48,452 46,943
------------------------- ----- --------- -------- ------------
Net assets 149,442 122,643 125,544
------------------------- ----- --------- -------- ------------
Capital and reserves
Called up share
capital 113,718 113,696 113,696
Share premium
account 30,675 - -
Other reserves 15,753 15,224 15,224
Retained earnings (10,704) (6,277) (3,376)
------------------------- ----- --------- -------- ------------
Equity attributable
to the equity
holders of the
parent 149,442 122,643 125,544
Non-controlling
interests - - -
------------------------- ----- --------- -------- ------------
Total equity 149,442 122,643 125,544
------------------------- ----- --------- -------- ------------
The accompanying notes are an integral part of these
consolidated financial statements.
Unaudited Consolidated Statement of Changes in Equity
Attributable
to:
--------------------- --------- --------- ---------- ---------- --------------------------- --------
Called Share Other Retained Equity Non-controlling Total
up premium reserves earnings holders interests equity
share account of the
capital parent
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
At 1 January
2016 113,696 - 15,224 (7,500) 121,420 1,220 122,640
Profit/(loss)
for the
period - - - 119 119 - 119
Acquisition
of non-controlling
interest - - - 764 764 (1,220) (456)
[Translation
differences] - - 340 340 - 340
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
Total comprehensive
profit/(loss)
for the
period 113,696 - 15,564 (6,617) 122,643 - 122,643
Issue of
ordinary
shares - - - - - - -
At 30 June
2016 113,696 - 15,564 (6,617) 122,643 - 122,643
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
At 1 January
2017 113,696 - 15,564 (3,716) 125,544 - 125,544
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
Profit/(loss)
for the
period - - - (6,988) (6,988) - (6,988)
[Translation
differences] - - 166 - 166 - 166
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
Total comprehensive
profit/(loss)
for the
period 113,696 - 15,730 (10,704) 118,722 - 118,722
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
Transactions
with owners:
Loan forgiveness - - 31,094 - 31,094 - 31,094
Issue of
ordinary
shares 22 30,675 (30,697) - - - -
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
Translation
differences - - (374) - (374)
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
At 30 June
2017 113,718 30,675 15,753 (10,704) 149,442 - 149,442
--------------------- --------- --------- ---------- ---------- --------- ---------------- --------
The accompanying notes are an integral part of these
consolidated financial statements.
Unaudited Consolidated Statement of Cash Flows
Note Six months to 30 June Six months to 30 June 2016 Year to 31 December 2016
2017
US$'000 US$'000 US$'000
--------------------------- ----- -------------------------- --------------------------- -------------------------
Cash generated from
operations 10 5,455 26,162 32,646
Net cash flows generated
from operating activities 5,455 26,162 32,646
--------------------------- -----
Cash flows from investing
activities
Purchase of property plant
and equipment (11,428) (3,984) (24,977)
Proceeds from disposal of
working interest - - 18,322
Net cash used in investing
activities (11,428) (3,984) (6,555)
--------------------------- ----- -------------------------- --------------------------- -------------------------
Cash flows from financing
activities
Repayment of borrowings (2,948) (21,657) (29,224)
Proceeds from borrowings 11,280 4,479 12,430
Interest paid (765) (4,141) (5,989)
Acquisition of
non-controlling interest - (1,676) (1,676)
--------------------------- ----- -------------------------- --------------------------- -------------------------
Net cash generated
from/(used in) financing
activities 7,567 (22,995) (24,459)
--------------------------- ----- -------------------------- --------------------------- -------------------------
Net increase/ (decrease)
in cash and cash
equivalents 1,594 (817) 1,632
Cash and cash equivalents
at the beginning of the
period 5,243 4,200 4,200
Finance results, net, on
cash and cash equivalents 331 (214) (589)
--------------------------- ----- -------------------------- --------------------------- -------------------------
Cash and cash equivalents
at the end of the period 7,168 3,169 5,243
--------------------------- ----- -------------------------- --------------------------- -------------------------
The accompanying notes are an integral part of these
consolidated financial statements.
Notes to the interim financial information
1. Basis of preparation
This condensed consolidated interim financial information for
the six months ended 30 June 2017 has been prepared in accordance
with IAS 34, "Interim financial reporting" as adopted by the
European Union. The interim financial information has been prepared
for Trefoil Holdings B.V., the parent company of the Mercuria Oil
and Gas Business in Argentina that was combined with the former
Andes Energia Plc on 10 August 2017 by way of a reverse
acquisition. Immediately following the combination the enlarged
Group was renamed Phoenix Global Resources PLC (AIM: PGR.L)
("Phoenix") and was readmitted to AIM following the approval of the
Admission Document. The condensed consolidated interim financial
information should be read in conjunction with the historical
financial information for the three years ended 31 December 2016
that was prepared in accordance with International Financial
Reporting Standards as adopted by the European Union for the
purposes of the Admission Document. The historical financial
information for the three years ended 31 December 2016 was prepared
under the provisions of Standard for Investment Reporting 2000. The
historical financial information is included in the AIM Admission
Document that was prepared as part of the reverse acquisition of
Andes Energia PLC which is available on the website of the enlarged
group (www.phoenixglobalresources.com) or from the Phoenix Global
Resources plc registered office.
The accounting policies applied in these interim financial
statements are consistent with those applied in preparing the
historical financial information and included in the Admission
Document dated 24 July 2017 with the exception of certain recharges
explained within the historical financial information.
The Group's business activities, together with factors likely to
affect its future development, performance and position are set out
in the operational and financial review sections of this report.
The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the financial
review section.
2. Segment reporting
IFRS 8, "Operating Segments", requires operating segments to be
identified on the basis of internal reports that are regularly
reviewed by the chief operating decision maker, which in the case
of the Trefoil Holdings B.V. is considered to be the Mercuria
Energy Group Limited's management, which is located in Geneva,
Switzerland. Management considers and reviews operating segments by
reference to geographic location. There are two reportable
segments, "North Argentina Blocks" and "South Argentina Blocks".
Segment performance is evaluated based on geographical
operations.
The blocks included in each reportable segment are shown
below:
Segment Basin Block Operator Working
interest
%
----------------- ----------- ------------------ ----------- ----------
North Argentina
blocks Cuyana Atamisqui PETSA 100
----------------- -----------
Tupungato PETSA *100
----------------- -----------
Chañares
Herrados
- Puesto
Pozo Cercado CH S.A. 28.08
------------------ ----------------------------------------- ----------
Puesto Rojas
- Cerro
Neuquina Mollar Oeste PETSA 100
-----------
Cerro Mollar PETSA **100
Norte
-----------
Rio Atuel Tecpetrol 33.33
Cajón
de los Caballos Roch S.A 37.5
Cajón
de los Caballos
-Sector
Oriental Roch S.A 15
Llancanelo **10
----------------- ----------- ------------------ ----------- ----------
South Argentina Austral Chorrillos, Roch S.A ***70
blocks Campo Bremen,
Moy Aike,
Oceano &
Palermo
Aike
----------------- -----------
Río
Cullen -
Las Violetas
- La Angostura Roch S.A 12.62
------------------ ----------------------------------------- ----------
Golfo San Sur Río
Jorge Deseado Roch S.A. 24.92
----------- ------------------ ----------------------------- ----------
Petrolera El Trebol S.A. ("PETSA") is an Argentina registered
company and is the sole operating Company of the Trefoil Holdings
B.V. Group.
(*) Due to agreements in place on the acquisition of the block
between the former owners and YPF S.A., the Mercuria Oil and Gas
Business assumes an overriding royalty at a maximum of 6% of
production on Tupungato, to be paid in oil on a monthly basis to
YPF S.A.
(**) On 10 May 2016, the Mercuria Oil and Gas Business agreed
with YPF a swap of interests on the blocks Llancanelo and Cerro
Mollar Norte, in Mendoza. The Mercuria Oil and Gas Business
transferred to YPF its 10% participation in Llancanelo and received
their 100% participation of Cerro Mollar Norte.
(***) Due to agreements in place on the acquisition of the
working interest in the blocks between the former owners and Burns
International Inc., the Mercuria Oil and Gas Business assumes an
overriding royalty at 5% of production on Campo Bremen, Moy Aike
and Oceano, to be paid in cash on a monthly basis to Burns
International Inc.
Below is detailed the information on each business segment
considered by the Mercuria Oil and Gas Business' Management:
First half 2017 North South Unallocated/ Total
Unaudited Argentina Argentina Corporate
Blocks Blocks
US$'000 US$'000 US$'000 US$'000
----------------------------- ----------- ----------- ------------- -----------
Revenue 36,456 21,585 - 58,041
----------------------------- ----------- ----------- ------------- -----------
Profit/(loss) for
the year 3,200 (2,019) (8,169) (6,988)
----------------------------- ----------- ----------- ------------- -----------
Add: Depreciation,
depletion and amortisation 7,923 4,312 12 12,247
Add: Impairment of
property, plant and
equipment 7,887 - - 7,887
Less: Finance income - - (9) (9)
Add: Finance costs - - 1,125 1,125
Add: Other finance
results (241) 385 661 805
Add: Taxation (2,157) - 2,114 (43)
----------------------------- ----------- ----------- ------------- -----------
EBITDA 16,612 2,678 (4,266) 15,024
----------------------------- ----------- ----------- ------------- -----------
Oil revenues 36,435 10,185 - 46,620
Bbls sold 745,645 194,749 - 940,394
Realised price US$/bbl 48.86 52.30 - 49.57
Gas revenues 21 11,400 - 11,421
Mm(3) 126,097 79,788,138 - 79,914,235
Realised price US$/mmbtu 4.58 3.87 - 3.87
Capex 22,860 6,928 - 29,788
----------------------------- ----------- ----------- ------------- -----------
First half 2016 North South Unallocated/ Total
Unaudited Argentina Argentina Corporate
Blocks Blocks
US$'000 US$'000 US$'000 US$'000
----------------------------- ----------- ----------- ------------- -----------
Revenue 49,966 18,273 - 68,239
----------------------------- ----------- ----------- ------------- -----------
Profit/(loss) for
the year 16,243 5,735 (21,859) 119
----------------------------- ----------- ----------- ------------- -----------
Add: Depreciation,
depletion and amortisation 10,202 4,548 7 14,757
Less: Finance income (1,766) - (370) (2,135)
Add: Finance costs 4,771 4,771
Add: Other finance
results (2,616) 113 2,643 140
Add: Taxation - - 9,453 9,453
----------------------------- ----------- ----------- ------------- -----------
EBITDA 22,063 10,396 (5,355) 27,105
----------------------------- ----------- ----------- ------------- -----------
Oil revenues 49,945 9,922 - 59,867
Bbls sold 875,405 159,621 - 1,035,025
Realised price US$/bbl 57.05 62.16 - 57.84
Gas revenues 21 8,350 - 8,372
Mm(3) 146,848 80,201,479 - 80,348,327
Realised price US$/mmbtu 3.89 2.82 - 2.82
Capex 7,966 2,281 45 10,292
----------------------------- ----------- ----------- ------------- -----------
3. Cost of sales
Unaudited Note Six Six months Year to
months to 30 31 December
to 30 June 2016
June 2016
2017
US$'000 US$'000 US$'000
--------------------- ----- -------- ----------- -------------
Opening inventory -
crude oil 3,904 2,035 2,035
Production costs 4 44,655 49,180 98,102
Closing inventory -
crude oil (1,514) (2,740) (3,904)
--------------------- ----- -------- ----------- -------------
Cost of sales 47,045 48,475 96,233
--------------------- ----- -------- ----------- -------------
4. Production costs
Unaudited Six Six months Year to
months to 30 31 December
to 30 June 2016
June 2016
2017
US$'000 US$'000 US$'000
-------------------------- -------- ----------- -------------
Depreciation, depletion
and amortisation 12,247 14,757 26,646
Wages and salaries 2,554 2,251 6,067
Social security charges 443 360 1,068
Other personnel expenses 485 334 792
Materials and supplies 2,734 3,624 6,988
Wells and facilities
maintenance 12,468 12,711 26,350
Transportation costs 3,162 3,377 7,178
Royalties 7,799 9,322 18,217
Landowners' easement
and canon 1,471 1,211 2,239
Fuel gas and electricity 672 663 1,368
Insurance 427 369 863
Other 193 201 326
--------------------------- -------- ----------- -------------
Production costs 44,655 49,180 98,102
--------------------------- -------- ----------- -------------
5. Exploration expenses
Unaudited Six months Six months Year to
to 30 to 30 31 December
June June 2016
2017 2016
US$'000 US$'000 US$'000
---------------------------- ----------- ----------- -------------
Geological and geophysical
expenses 56 102 151
Exploration expenses 56 102 151
----------------------------- ----------- ----------- -------------
6. Income tax
Unaudited Six Six months Year to
months to 30 31 December
to 30 June 2016
June 2016
2017
US$'000 US$'000 US$'000
----------------------------------- -------- ----------- -------------
Current tax expense 3,165 661 5,816
Deferred tax expense (3,208) 8,792 7,475
------------------------------------ -------- ----------- -------------
Total income tax (Credit)/expense (43) 9,453 13,291
------------------------------------ -------- ----------- -------------
(Loss)/profit on ordinary
activities before tax (7,031) 9,572 17,870
Income tax calculated
at statutory rate (Argentina,
35%) 2,461 (3,350) (6,255)
--------------------------------- -------- -------- ---------
Currency translation
on the tax values for
property plant and equipment (2,563) (3,409) (5,877)
Currency translation
on the tax values for
other assets and liabilities - 505 778
Exchange differences
- functional currency (195) 109 278
Exchange differences
- local currency 484 (2,346) 311
Expiration of tax loss
carry-forward - - -
Non-deductible expenses (234) (860) (1,207)
Permanent differences (11) (13) -
Deferred tax assets
not recognised (268) (358) (672)
Fiscal assessments 158 577 -
Others 211 (308) (647)
--------------------------------- -------- -------- ---------
Total income tax expense 43 (9,453) (13,291)
--------------------------------- -------- -------- ---------
7. Deferred tax
Unaudited 30 June 30 June 31 December
2017 2016 2016
US$'000 US$'000 US$'000
------------------------------ --------- --------- ------------
Deferred tax asset
Losses carried forward - - -
Inventories 327 36 1,352
Other 220 - -
------------------------------ --------- --------- ------------
Total deferred tax asset 547 36 1,352
------------------------------- --------- --------- ------------
Deferred tax liability
Property, plant and
equipment (31,949) (35,430) (35,372)
Fiscal assessments (3,400) (3,759) (3,558)
Other (46) (170) (230)
------------------------------- --------- --------- ------------
Total deferred tax liability (35,395) (39,359) (39,360)
------------------------------- --------- --------- ------------
Net deferred tax liability (34,848) (39,323) (38,008)
------------------------------- --------- --------- ------------
Deferred income tax assets are recognised for tax loss
carry-forwards to the extent that it is probable that the tax loss
carry-forward can be used to offset current taxes payable in the
future.
8. Property, plant and equipment
Unaudited Producing Work Exploration Fixtures, Total
and development in progress and evaluation fittings,
assets assets equipment
and vehicles
US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ----------------- ------------- ---------------- -------------- ----------
Cost
At 1 January
2017 369,143 18,057 6,804 4,420 398,424
Additions - 29,777 - 12 29,788
Transfers 18,578 (18,800) - 222 -
Disposals (24,897) (3,425) - - (28,321)
------------------ ----------------- ------------- ---------------- -------------- ----------
At 30 June 2017 362,824 25,609 6,804 4,654 399,891
Accumulated
depreciation
At 1 January
2017 (207,984) - - (4,356) (212,340)
On disposals 17,010 - - - 17,010
Charge for the
period (11,510) - - (68) (11,579)
------------------ ----------------- ------------- ---------------- -------------- ----------
At 30 June 2017 (202,484) - - (4,424) (206,908)
------------------ ----------------- ------------- ---------------- -------------- ----------
Net book value
at 30 June 2017 160,338 25,610 6,804 230 (192,981)
------------------ ----------------- ------------- ---------------- -------------- ----------
Unaudited Producing Work Exploration Fixtures, Total
and development in progress and evaluation fittings,
assets assets equipment
and vehicles
US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ----------------- ------------- ---------------- -------------- ----------
Cost
At 1 January
2016 349,269 13,065 3,334 4,402 370,070
Additions 4,124 6,129 - 39 10,292
Transfers 661 (661) - - -
Disposals (5,938) - - - (5,938)
------------------ ----------------- ------------- ---------------- -------------- ----------
At 30 June 2016 348,116 18,533 3,334 4,441 374,424
------------------ ----------------- ------------- ---------------- -------------- ----------
Accumulated
depreciation
At 1 January
2016 (186,484) - - (4,123) (190,607)
On disposals 1,804 - - - 1,804
Charge for the
period (12,203) - - (96) (12,299)
------------------ ----------------- ------------- ---------------- -------------- ----------
At 30 June 2016 (196,883) - - (4,219) (201,102)
------------------ ----------------- ------------- ---------------- -------------- ----------
Net book value
at 30 June 2016 151,233 18,533 3,334 222 173,322
------------------ ----------------- ------------- ---------------- -------------- ----------
9. Financial liabilities
Unaudited 30 June 30 June 31 December
2017 2016 2016
US$'000 US$'000 US$'000
------------------------- -------- -------- ------------
Financial liabilities 10,150 1,033 1,101
-------------------------- -------- -------- ------------
Non-current liabilities 10,150 1,033 1,101
-------------------------- -------- -------- ------------
Financial liabilities 12,952 40,593 12,099
Accrued interest 142 968 120
-------------------------- -------- -------- ------------
Current liabilities 13,094 41,561 12,219
-------------------------- -------- -------- ------------
During the first half of 2017, financial liabilities include
bank loans denominated in Argentina Pesos and repayable in
accordance with the maturity profile summarised below at (i) fixed
rates within a range of 15.25 percent to 25 percent, and (ii)
variable rates within 'Badlar corregida' plus 2 per cent. Financial
liabilities also include bank loans denominated in US Dollar, at
fixed rates within a range of 2.5 per cent to 4.25 per cent.
Approximately 53 per cent of these loans were collateralised by
Stand-by Letters Issued by European banks on behalf of the Mercuria
Group.
During the first half of 2016, financial liabilities include
bank loans denominated in Argentina Pesos and repayable in
accordance with the maturity profile summarised below at (i) fixed
rates within a range of 15.25 percent to 39 percent, and (ii)
variable rates within a range of 'Badlar corregida' plus 1.5 and
5.75 per cent. Financial liabilities also include bank loans
denominated in US Dollar, at fixed rates at 4.25 per cent.
Approximately 62 per cent of these loans were collateralised by
Stand-by Letters Issued by European banks on behalf of the Mercuria
Group
Unaudited 30 June 30 June 31 December
2017 2016 2016
US$'000 US$'000 US$'000
-------------- -------- -------- ------------
Maturity
profile
Within
1 year 13,094 41,561 12,970
Between
1 and 5
years 10,555 3,810 1,182
--------------- -------- -------- ------------
23,649 45,371 14,152
Future
interest
charges (405) (2,777) (832)
--------------- -------- -------- ------------
Financial
liabilities 23,244 42,594 13,320
--------------- -------- -------- ------------
10. Cash generated from operations
Note Six months to 30 June Six months to 30 June Year to 31 December 2016
2017 2016
--------------------------- ------ -------------------------- -------------------------- -------------------------
(Loss)/profit for the year (6,988) 119 4,579
Adjustments for:
Income tax charge (43) 9,453 13,291
Interest income (9) (2,134) (2,281)
Interest expense 1,126 4,771 6,284
Accretion of discount on asset
retirement obligations 274 241 493
Exchange differences 375 333 (783)
Impaired receivables - - 689
Depreciation, depletion and
amortisation 12,247 14,757 26,879
Disposal of property, plant and
equipment - - 170
Amounts written off
property, plant and
equipment 7,887 - -
Working capital
adjustments:
(Increase)/decrease in trade and
other receivables (6,298) (4,000) (7,409)
(Increase)/decrease in inventory (344) (2,381) 301
(Decrease)/increase in trade and
other payables (2,552) 10,604 2,179
(Decrease)/increase in provisions (220) (1,103) (1,816)
Income tax paid - (4,498) (9,930)
----------------------------------- -------------------------- -------------------------- -------------------------
Net cash flow from operations 5,455 26,162 32,646
----------------------------------- -------------------------- -------------------------- -------------------------
11. Events after the balance sheet date
Combination with the former Andes Energia Plc
On 10 August 2017 Andes Energia plc ("Andes") announced the
completion of the combination with the Company. The combination was
effected through the acquisition of the entire issued share capital
of the Company in consideration for the issue of 1,899,106,385
consideration ordinary shares to the former shareholders of the
Company by Andes. Immediately following the combination the
enlarged Group was renamed Phoenix Global Resources plc (AIM:
PGR.L; BCBS: PGR)) ("Phoenix") and was readmitted to AIM following
the approval of the Admission Document. The Admission document that
discusses the organisation of the enlarged Group and its activities
in Argentina can be found on the Company's website
(www.phoenixglobalresources.com).
The consideration Shares issued to Upstream Capital Partners
represented 75.38% of the enlarged share capital on completion with
the Andes shareholders holding 24.62%. The resulting ownership of
Mercuria EG in the enlarged group on completion was approximately
78%.
Chañares Herrados and Puesto Pozo Cercado
On 21 August Phoenix Global Resources announced that it had been
informed that Chañares Herrados S.A. ('CHSA'), the concessionaire
and operator of the Chañares Herrados ("CH") and Puesto Pozo
Cercado ("PPC") blocks, had presented to the Director of
Hydrocarbons a new exploitation plan for the areas. CHSA was
subsequently notified by the Province of Mendoza of its acceptance
of the new plan.
Pursuant to this plan CHSA and the joint venture partners will
relinquish 100% of the PPC block, which has production of
approximately gross 423 bopd (net to Phoenix 331 bopd) and covers
approximately 42,000 gross acres, and implement a work programme in
the CH block with a gross investment commitment of approximately
US$94 million over a four year period.
Phoenix's level of participation in the new work programme for
the CH block, if any, has not yet been agreed with the
operator.
Glossary
Bbl Barrel
boepd Barrels of oil
equivalent per
day
bopd Barrels of oil
per day
Mm(3) Thousand cubic
metres
mmbtu Million British
Thermal Units
mmscf Million standard
square feet
PETSA Petrolera Es
Trebol S.A.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EANNPASEXEFF
(END) Dow Jones Newswires
September 29, 2017 02:03 ET (06:03 GMT)
Phoenix Global Resources (LSE:PGR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Phoenix Global Resources (LSE:PGR)
Historical Stock Chart
From Jul 2023 to Jul 2024
