TIDMBPC
RNS Number : 9518D
Bahamas Petroleum Company PLC
31 March 2011
31 March 2011
Bahamas Petroleum Company plc
("Bahamas Petroleum" or the "Company")
Preliminary Results for the year ended 31 December 2010
Bahamas Petroleum, the oil and gas exploration company with
licences in The Commonwealth of the Bahamas, is pleased to announce
its preliminary results for the year ended 31 December 2010.
Highlights:
-- 2010 was a busy and successful year for the Company;
-- successfully shot the first modern seismic survey in the area
since 1987, producing some encouraging results that indicate large
structures containing hydrocarbon indicators;
-- applied for two additional licences that cover approximately
6,210 square kilometres (1,534,600 acres);
-- strong balance sheet at the period end, which has been
further strengthened by equity placing post year end, raising
GBP20.6 million before expenses with a further GBP25 million before
expenses to follow conditional on shareholder approval;
-- completed re-domicile of the Company to the Isle of Man;
-- change of the Company's name to Bahamas Petroleum Company
plc, to properly reflect the Company's focus; and
-- remain on track to drill our first well in the first half of
2012.
Alan Burns, Non-Executive Chairman of Bahamas Petroleum,
commented:
"We made good progress during 2010 and this has continued into
2011 with our successful equity placing firmly raising GBP20.6
million and conditionally raising GBP25 million before expenses in
March. The Company is now well funded with a strong balance sheet
and a clear strategy to develop its assets in the Bahamas. We are
in negotiations with CGGVeritas to undertake a 3D seismic survey,
which we hope to finalise after the EGM, and we look forward to
reviewing the results in due course.
"2011 looks to be another strong year for Bahamas Petroleum and
the Board continues to look to the future with confidence."
- Ends -
Enquiries:
Bahamas Petroleum Company PLC Tel: +44 (0) 1624 641194
Dr Paul Crevello, Chief Executive Officer
Strand Hanson Limited - Nominated Advisor Tel: +44 (0) 20 7409
Rory Murphy / Liam Buswell 3494
Financial Dynamics - Public Relations Tel: +44 (0) 20 7831
Billy Clegg / Ed Westropp / Alex Beagley 3113
Canaccord Genuity Limited - Joint broker Tel: +44 (0) 20 7050
Charles Berkeley / Henry Fitzgerald-O'Connor 6500
FirstEnergy Capital LLP - Joint broker Tel: +44 (0) 20 7448
Hugh Sanderson / Derek Smith 0200
Novus Capital Markets Ltd - Joint broker Tel: +44 (0) 20 7107
Charles Goodfellow 1881
Bahamas Petroleum Company plc
31 December 2010
Chairman's report
Dear Shareholder,
2010 was a busy year for Bahamas Petroleum and this success has
continued into 2011 with our successful equity placing in March
firmly raising GBP20.6 million and conditionally raising GBP25
million before expenses.
The oil business is one of the largest industries in the world
and nations are divided into those that have oil and those that do
not. Whilst there are strong geophysical indications of oil in our
licence areas the only proof that there are deposits is to drill to
find out. Noting that The Bahamas has been drilled in the past,
there is also considerable drilling scheduled for this year in
Cuban waters next to four of our licence areas, which gives us
great encouragement. As we would expect, following the BP Macondo
oil spill in April 2010, there has been a drive to update laws and
regulations. We welcome this and understand the process is
underway. We would only consider a drilling campaign under accepted
international standards and procedures. In order to prepare, we
have already taken the initiative and are undertaking an
environmental impact assessment of our Cay Sal licence application
area.
We believe there is great incentive for drilling, both in terms
of the requirement for oil products locally and for the oil
revenues that the successful development of any oil find would
bring for The Bahamas. For instance, The Bahamas Government has
recently revealed that the half-year Budget recurrent revenue
estimates were down by a sum greater than 1 per cent. of gross
domestic product (GDP). The Commonwealth of The Bahamas is
particularly susceptible to oil pricing and imported supply as it
is an archipelago with a dispersed population all relying on oil to
provide their connection to the wider world. The Islands are also
highly dependent on tourism as a source of employment, which itself
would not be possible without the supply of oil and gas for
powering hotels, restaurants and other key tourist-related
infrastructure. Furthermore, The Bahamas has been directly engaged
in the oil trade for decades, with the major storage terminals on
Grand Bahama providing significant revenues for the country so
exploration activity can be viewed as an extension of its
participation in the oil industry.
We are pleased that we have found very promising structures in
southern Bahamas waters remote from any Bahamian population and
near the maritime border with Cuba. Cuba has announced that it will
be drilling a number of wells in its waters adjacent to our
licences and we are planning to drill our first well in the first
half of 2012. While we have the right, we also have an obligation
to drill our first well and are fortunate that the Commonwealth of
The Bahamas is a nation with a well respected legal system, with
our licences having been approved by two successive governments and
signed into existence by both the Minister and the Governor
General. Of course, post the Macondo blowout we would expect some
improved drilling and environmental regulations to be in place
prior to drilling commencing next year.
Although the probable target is as good as I have ever seen in
40 years in the oil business we cannot be certain of anything until
it is drilled. If it becomes a discovery, the Bahamas economy will
be changed rapidly, bringing enormous benefits to every Bahamian.
We are very enthusiastic about drilling and I thank you all for
your support over the years with the many delays this extraordinary
project has suffered.
On 17 December, we announced that Paul Crevello would take over
my role as Chief Executive and that I would move to the role of
Non-Executive Chairman. This has been planned for sometime but was
brought forward due to me being diagnosed with a medical condition
which required surgery followed by a period of rehabilitation. I am
pleased to note that we already had a succession plan in place.
Paul had already been enlarging his team in the Bahamas and I had
been enlarging the engineering team, readying the Company for the
drilling programme. Accordingly the Company has not suffered from
my illness. In addition, Mike Proffitt is taking a more active role
as Finance Director.
We have been extremely fortunate in recruiting some fine young
Bahamians and I feel certain they will greatly help to take the
Company and project forwards into the future.
2011 is set to be a strong year for the Company and we look
forward to updating you on our progress in due course.
In closing, I would like to thank shareholders for their support
during the year and for the many best wishes I have received. I
also appreciate the cooperation of the Government of The Bahamas
over the years and wish all Bahamians the very best for the
future.
Yours sincerely,
Alan Burns,
Non Executive Chairman and Founder.
Bahamas Petroleum Company plc
31 December 2010
Chief Executive Officer's report
Dear Shareholder,
I am writing to you for the first time as Chief Executive of
Bahamas Petroleum Company Plc. and have the good fortune to tell
our shareholders that the past year has seen significant advances
in our exploration programme.
Highlights
-- The Company has experienced significant growth in shareholder
value in the last quarter of 2010 based, we believe, on the
positive results of our seismic programmes and the investors belief
in a sound exploration programme with very significant upside
potential.
-- The Company has undertaken the first modern seismic survey in
the southern Bahamas since 1987. Results of our 2D seismic surveys
reveal giant structures up to 70 kilometres long, with four-way
vertical closure from 100 metres to substantially over a kilometre
which, in the view of the Board of the Company, are very exciting
prospects.
-- Based on the success of the 2D seismic, the Company has
applied for two additional licences that cover an approximate total
of 6,210 square kilometres or 1,534,600 acres. These applications
are currently under review by the Bahamian Government.
-- The Company is in negotiations with CGGVeritas to initiate a
3D seismic survey over the southern licences to further de-risk
these prospects.
-- In March 2011 the Company completed a firm placing of GBP20.6
million and conditional placing of GBP25 million before expenses
which has put the Company in a strong financial position, with the
necessary financing now in place to accelerate its exploration
programme. This raise enabled the Company to expand its shareholder
base with new institutions, whilst also receiving strong support
from existing shareholders.
-- The joint venture with Statoil is progressing well and the
companies have initiated an environmental impact assessment over
Cay Sal Bank as requested by the Bahamian Government in moving
forward the licence application process.
-- We are holding discussions with potential additional farm-in
partners.
-- We remain on track to drill our first well in the first half
of 2012.
The Company advanced its exploration programme in 2010 and the
first quarter of 2011 by acquiring the first 2D seismic survey in
the southern region of The Bahamas in over 25 years. The Company
engaged Spectrum ASA to acquire an initial test survey of 194
kilometres of 2D data designed to demonstrate the advances in
modern seismic acquisition and technology over the vintage (1987
and older) seismic data. The vintage data was used by the Company
to define the prospective 500 million barrel leads reported in the
Competent Persons Report published in 2007.
The 2D seismic survey twinned selected vintage lines providing
direct comparison of the new versus old seismic data. The test
survey was unique in that we employed a 10 kilometre long seismic
cable versus the industry standard of 6 to 8 kilometres. Previous
vintage 1987 data was acquired using a short 4 kilometre recording
streamer. The longer cable and associated recording parameters were
used because of the large size of the prospects, the broad
curvature of the folds and because of the necessity to image deeper
subsalt objectives. The Company took advantage of a seismic vessel
transiting the region, resulting in significant cost savings.
The fully processed, Pre-Stack Time Migrated (PSTM) 2010 seismic
data suggests that hydrocarbons are present in the southern area,
indicated by what industry calls direct hydrocarbon indicators
(DHI's). DHI's are interpreted indirectly by dim zones above the
crest of structures, phase/polarity changes at the crest of
structures, or by open sea floor vents, i.e. natural sea floor
seeps, which are commonly associated with oil fields. The DHI's,
especially the vents, indicate an actively generating petroleum
system.
Following the success of the June 2010 survey, the Company
engaged SeaBird Exploration (Osprey Explorer Vessel) in January
2011 and acquired a comprehensive, closely spaced 2D seismic survey
in the southern fold belt. This survey was another first for the
Company and The Bahamas in that it was the only closely spaced mid
water depth (i.e. 500 metres deep) survey to be undertaken in the
southern Bahamas designed to map prospects. The survey (5km to 10km
grid) focused on mapping the large fold belt prospects in our
southern licences. The results are significant in that they define
at least six major prospects that range in aerial size from 33
square kilometres (8,150 acres) to 465 square kilometres (114,900
acres). Vertical 4-way closure, which is the maximum possible
height for hydrocarbons to fill the structure, range from 100
metres to as much as 1.5 kilometres or more, depending on rock
velocity properties. The seismic lines and associated maps clearly
demonstrate the giant size and extent of the newly mapped
prospects. This data is undergoing full processing through PSTM and
will be passed on to Ryder Scott Consultants who will complete a
resource evaluation of the prospects by the end of summer 2011.
The Company is in negotiations with CGGVeritas to initiate a 3D
seismic survey over the southern fold belt, which the Company will
use to de-risk and prioritise the prospect portfolio. The Company
intends to undertake a 2D survey over its northern licence where
oil shows and a gas condensate reservoir were encountered in the
Great Isaac #1 well.
The joint venture licence application with Statoil over Cay Sal
Bank is continuing to progress. The Government of The Bahamas has
requested that we undertake an Environmental Impact Assessment
(EIA) over the bank as part of the steps of moving the licences
forward to the review and approval stage and these licences were
gazetted on 22 April 2010 as part of this process. The 2010 BP
Macondo oil spill created a global shock wave across the industry
and caused governments to reassess their drilling policies and
procedures. The Government of The Bahamas requested that the EIA
evaluate the potential risks of our exploration area/programme as a
prerequisite to awarding the licences. We expect to have
clarification on the awarding of these licences upon completion of
the EIA evaluation.
At the year end, the Company had US$6.1 million in cash and has
firmly raised an additional US$31.4million (GBP20.6 million) before
expenses in March 2011, with a further US$37.9 million (GBP25
million) before expenses to follow conditional on shareholder
approval at an Extraordinary General Meeting scheduled for 11 April
2011. The proceeds will go towards the acquisition of 3D seismic
and 2D shallow seismic (US$35.2 million), Geochemical
sniffer/multibeam (US$6.4 million) and the remainder (US$27.7
million) on working capital and other exploration costs.
All in all, 2010 was an extremely positive year for the Company
and 2011 has already got off to a very strong start with the new 2D
seismic, share placing and initiation of the 3D seismic survey.
Outlook
I anticipate that 2011 will see significant growth in the
Company, with the potential completion of further farm-ins to best
position the Company, such that we enter 2012 ready to drill our
first of these giant-size prospects. The Board continues to look to
the future with confidence.
Yours sincerely,
Paul Crevello,
Chief Executive Officer.
Bahamas Petroleum Company plc
31 December 2010
Consolidated statement of comprehensive income
for the year ended 31 December
2010
2010 2009
Group Group
Continuing operations US$ US$
Employee benefit expense (2,006,305) (924,056)
Depreciation and amortisation
expense (38,779) (92,056)
Loss on disposal of property,
plant and equipment - (13,147)
Other expenses (3,335,161) (1,400,188)
Operating loss (5,380,245) (2,429,447)
Finance income - 4,026
Loss before income tax (5,380,245) (2,425,421)
Income tax credit 61,787 -
Loss for the year (5,318,458) (2,425,421)
Other comprehensive income:
Currency translation differences 106,615 (231,913)
Other comprehensive income for
the year, net of tax 106,615 (231,913)
Total comprehensive income for
the year (5,211,843) (2,657,334)
Loss per share for loss attributable
to equity holders of the Company:
Basic and diluted loss per share
(note 2) (expressed in cents per
share) (0.61) (0.31)
Bahamas Petroleum Company plc
31 December 2010
Consolidated balance sheet
as at 31 December 2010
2010 2009
Group Group
US$ US$
ASSETS
Non--current assets
Cash not available for use 325,046 119,555
Property, plant and equipment 189,779 18,706
Exploration and evaluation assets 5,024,331 4,063,824
5,539,156 4,202,085
Current assets
Cash and cash equivalents 6,068,558 1,337,885
Other receivables 896,246 469,677
6,964,804 1,807,562
Total assets 12,503,960 6,009,647
LIABILITIES
Current liabilities
Trade and other payables 364,980 271,817
Total liabilities 364,980 271,817
EQUITY
Ordinary shares 29,359 23,242
Share premium reserve 8,037,595 -
Merger reserve 77,130,684 73,639,708
Reverse acquisition reserve (53,846,526) (53,846,526)
Share based payments reserve 425,666 347,361
Other reserves - (106,615)
Retained earnings (19,637,798) (14,319,340)
Total equity 12,138,980 5,737,830
Total equity and liabilities 12,503,960 6,009,647
Bahamas Petroleum Company plc
31 December 2010
Consolidated statement of changes in equity
for the year ended 31 December 2010
Share
Reverse based
Share Share Merger acquisition payment Other Retained Total
capital premium reserve reserve reserve reserves earnings equity
US$ US $ US $ US $ US $ US $ US $ US $
At 1 January
2009 - as
previously
reported 28,764 73,634,186 - (53,846,526) 300,139 125,298 (11,893,919) 8,347,942
Reorganisation
- Scheme
of arrangement (5,522) (73,634,186) 73,639,708 - - - - -
-------- ------------- ----------- ------------- -------- ---------- ------------- ------------
At 1 January
2009 - after
reorganisation 23,242 - 73,639,708 (53,846,526) 300,139 125,298 (11,893,919) 8,347,942
Total
comprehensive
income for the
year - - - - - (231,913) (2,425,421) (2,657,334)
Share options
- value of
services - - - - 47,222 - - 47,222
-------- ------------- ----------- ------------- -------- ---------- ------------- ------------
Balance at
31 December
2009 - after
reorganisation 23,242 - 73,639,708 (53,846,526) 347,361 (106,615) (14,319,340) 5,737,830
-------- ------------- ----------- ------------- -------- ---------- ------------- ------------
Balance at
1 January
2010 - after
reorganisation 23,242 - 73,639,708 (53,846,526) 347,361 (106,615) (14,319,340) 5,737,830
Total
comprehensive
income for the
year - - - - - 106,615 (5,318,458) (5,211,843)
Share options
- value of
services - - - - 78,305 - - 78,305
Issue of
ordinary
shares 6,117 8,037,595 3,490,976 - - - - 11,534,688
-------- ------------- ----------- ------------- -------- ---------- ------------- ------------
Balance at
31 December
2010 - after
reorganisation 29,359 8,037,595 77,130,684 (53,846,526) 425,666 - (19,637,798) 12,138,980
-------- ------------- ----------- ------------- -------- ---------- ------------- ------------
Bahamas Petroleum Company plc
31 December 2010
Consolidated statement of cash
for the year ended 31 December 2010
2010 2009
Group Group
US $ US$
Cash flows from operating activities
Payments to suppliers and employees (5,422,619) (2,823,096)
Net cash used in operating activities (5,422,619) (2,823,096)
Cash flows from investing activities
Purchase of property, plant and equipment (209,852) -
Proceeds from sale of property, plant
and equipment - 4,619
Payments for exploration and evaluation
assets (960,507) (8,237)
Deposit (payments)/repayments for bank
guarantees (205,491) 1,085,061
Interest received - 4,026
Net cash (used in)/generated by investing
activities (1,375,850) 1,085,469
Cash flows from financing activities
Proceeds from issuance of ordinary
shares 11,534,688 -
Net cash generated from financing activities 11,534,688 -
Net increase/(decrease) in cash and
cash equivalents 4,736,219 (1,737,627)
Cash and cash equivalents at the beginning
of the year 1,337,885 3,004,451
Exchange (losses)/gains on cash and
cash equivalents (5,546) 71,031
Cash and cash equivalents at end of
year 6,068,558 1,337,855
1 Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these preliminary financial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated.
1.1 Basis of preparation
The preliminary financial statements of Bahamas Petroleum Company
plc reflect the results and financial position of the Group for the
12 month period to 31 December 2010.
These preliminary financial statements of Bahamas
Petroleum Company plc have been prepared in accordance
with International Financial Reporting Standards as
adopted by the European Union (IFRS) and have been
prepared under the historical cost convention. On 15 June
2010, the Group underwent a Scheme of Arrangement which
resulted in the redomicile of the Group from the Falkland
Islands to the Isle of Man. The Scheme of Arrangement is
explained in greater detail in note 3. The Scheme of
Arrangement falls outside the scope of IFRS 3 "Business
Combinations". Accordingly, following the guidance
regarding the selection of appropriate accounting policy
provided by IAS 8 "Accounting policies, changes in
accounting estimates and errors", the Scheme of
Arrangement has been accounted for in these preliminary
financial statements using the principles of merger
accounting. This policy reflects the economic substance
of the Scheme of Arrangement. Although the Scheme of
Arrangement did not become effective until 15 June 2010,
the consolidated preliminary financial statements of
Bahamas Petroleum Company plc for the year ended 31
December 2010 are presented as if the Scheme of
Arrangement had been effective on 1 January 2009. In
accordance with the requirements of merger accounting,
the comparative information in these consolidated
preliminary financial statements has been extracted from
the BPC Limited consolidated financial statements for the
year ended 31 December 2009. Those financial statements
incorporated the results of BPC Limited and its
subsidiary undertakings for the financial year then
ended. Earnings per share are unaffected by the Scheme of
Arrangement. The preparation of financial statements in
conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to
exercise its judgment in the process of applying the
Group's accounting policies. Going concern These
preliminary financial statements have been prepared on a
going concern basis, which assumes that the Group will be
able to meet its liabilities as and when they fall due
for the foreseeable future. The Directors have prepared
cash flow forecasts that indicate that the Group will be
able to meet its financial obligations through to the end
of 2012 from its existing liquid cash resources and post
year end placements of ordinary shares. Additional cash
resources may become available to the Group following the
granting of three new exploration licences in the
Bahamas, resulting in the completion of the farm-in
agreement with Statoil and receipt of consideration funds
thereof. However, the Group's ability to continue as a
going concern and meet its obligations beyond 2012 is
dependent on either further fund raising, completion of
the Statoil farm-in agreement, or the agreement of
further farm-in arrangements of the Group's licences. a)
Standards, amendments and interpretations relevant to the
Group which became effective in 2010
-- IAS 36 (amendment), 'Impairment of assets',
effective 1 January 2010. The amendment clarifies that
the largest cash-generating unit (or group of units)
to which goodwill should be allocated for the purposes
of impairment testing is an operating segment, as
defined by paragraph 5 of IFRS 8, 'Operating segments'
(that is, before the aggregation of segments with
similar economic characteristics). -- IFRS 2
(amendments), 'Group cash-settled share- based payment
transactions'. Effective from 1 January 2010. In
addition to incorporating IFRIC 8, 'Scope of IFRS 2',
and IFRIC 11, 'IFRS 2 - Group and treasury share
transactions', the amendments expand on the guidance
in IFRIC 11 to address the classification of group
arrangements that were not covered by that
interpretation. b) Standards, amendments and
interpretations to existing standards that are
relevant to the Group but not yet effective and have
not been early adopted -- IFRS 9,'Financial
instruments', issued in November 2009. This standard
is the first step in the process to replace IAS 39,
'financial instruments: recognition and measurement'.
IFRS 9 introduces new requirements for classifying and
measuring financial assets and is likely to affect the
Group's accounting for its financial assets. The
standard is not applicable until 1 January 2013 but is
available for early adoption. However, the standard
has not yet been endorsed by the EU. -- Revised IAS 24
(revised), 'Related party disclosures', issued in
November 2009.This supersedes IAS 24, 'Related party
disclosures', issued in 2003. IAS 24 (revised) is
mandatory for periods beginning on or after 1 January
2011. Earlier application, in whole or in part, is
permitted. However, the standard has not yet been
endorsed by the EU.
1.2 Basis of consolidation
The consolidated preliminary financial statements incorporate the
financial statements of the Company and entities (including special
purpose entities) controlled by the Company (its subsidiaries) made
up to 31 December each year. Control is achieved where the Company
has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities. The
results of subsidiaries acquired or disposed of during the year are
included in the consolidated statement of comprehensive income from
the effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to
the financial statements of subsidiaries to bring the accounting
policies used in line with those used by the Group. All intra-group
transactions, balances, income and expenses (including unrealised
gains and losses on transactions between group companies) are
eliminated on consolidation. Changes in the Group's interest in a
subsidiary that do not result in a loss of control are accounted
for as equity transactions. Any difference between the amount by
which the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognised directly in
equity and attributed to the Group. The preliminary financial
statements consolidate the results, cash flows and assets and
liabilities of the Company and its wholly owned subsidiary
undertakings by the method of merger accounting. On consolidation,
the difference between the nominal value of the shares issued by
the Company during the Scheme of Arrangement and the cancellation
of the share capital and share premium of BPC (Falklands) Limited
has been debited to a merger reserve.
1.3 Segment reporting
All the Group's business activities relate to oil and gas
exploration activities in The Bahamas. Therefore the business is
managed as one business segment by the chief operating decision
maker ("CODM"), who has been identified as the Chief Executive
Officer ("the CEO"). The CODM receives reports at a consolidated
level and uses those reports to assess business performance. It is
not possible to assess performance properly using the financial
information collected at the subsidiary level.
1.4 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's
entities are measured using the currency of the primary economic
environment in which the entity operates ('the functional
currency'). The consolidated preliminary financial statements are
presented in United States Dollars, which is Bahamas Petroleum
Company plc's functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of
comprehensive income.
(iii) Group companies
The results and financial position of all the Group entities (none of
which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are
translated into the presentation currency as follows: -- assets and
liabilities for each balance sheet presented are translated at the closing
rate at the date of that balance sheet; -- income and expenses for each
income statement are translated at average exchange rates (unless this is
not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions.
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities and of borrowings and
other currency instruments designated as hedges of such
investments, are taken to shareholders' equity. When a foreign
operation is partially disposed of or sold, exchange differences
are recognised in the statement of comprehensive income as part of
the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign
entities and translated at the closing rate.
1.5 Property, plant and equipment
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the statement of
comprehensive income during the reporting period in which they are
incurred.
Depreciation on assets is calculated using the straight--line
method to allocate their cost, net of their residual values, over
their estimated useful lives, as follows:
-- Computer hardware 3 years
-- Computer software 3 years
-- Furniture, fittings and 4 years
equipment
- Motor vehicles 5 years
-- Leasehold improvements Over the life of the lease
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount (note 1.9).
Gains and losses on disposals are determined by comparing proceeds
with carrying amount and are recognised within 'Loss on disposal of
fixed assets' in the statement of comprehensive income.
1.6 Impairment of assets
Intangible assets are not subject to amortisation and are tested
annually for impairment or more frequently if events or changes in
circumstances indicate that they might be impaired. Assets that are
subject to amortisation are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying value exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at each reporting date.
1.7 Exploration and evaluation assets
Exploration and evaluation expenditure incurred which relates to
more than one area of interest is allocated across the various
areas of interest to which it relates on a proportionate basis.
Exploration and evaluation expenditure incurred by or on behalf of
the Group is accumulated separately for each area of interest. The
area of interest adopted by the Group is defined as a petroleum
title.
Expenditure in the area of interest comprises net direct costs and
an appropriate portion of related overhead expenditure, but does
not include the general overheads or administrative expenditure not
having a specific nexus with a particular area of interest.
Exploration expenditure for each area of interest, other than that
acquired from the purchase of another entity, is carried forward as an
asset provided that one of the following conditions is met: -- The costs
are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively by its sale; and --
Exploration and/or evaluation activities in the area of interest have not,
at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable
reserves and active and significant operations in, or in relation to, the
area of interest are continuing.
Exploration expenditure which fails to meet at least one of the
conditions outlined above is written off. Costs incurred in
drilling exploration wells that fail to encounter significant
hydrocarbons are written off in the year incurred.
Exploration assets acquired are reassessed on a regular basis and
related costs are carried forward provided that at least one of the
conditions outlined above is met.
Expenditure is not carried forward in respect of any area of
interest unless the Group's right of tenure to that area of
interest is current.
1.8 Financial assets
Other receivables
Other receivables are non--derivative financial assets with fixed
or determinable payments that are not quoted in an active market.
They are included in current assets, except for those with
maturities greater than 12 months after the balance sheet date
which are classified as non--current assets. Other receivables are
included in the balance sheet.
1.9 Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash
equivalents includes cash on hand, deposits held at call with
financial institutions, other short--term and highly liquid
investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
1.10 Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
1.11 Trade and other payables
These amounts represent liabilities for goods and services provided
to the Group prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days of
recognition. Trade payables are recognised initially at fair value
and subsequently measured at amortised cost using the effective
interest method.
1.12 Employee benefits
(i) Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non--monetary
benefits, expected to be settled within 12 months of the reporting
date are recognised in other payables in respect of employees'
services up to the reporting date and are measured at the amounts
expected to be paid when the liabilities are settled.
(ii) Share--based compensation
The Group operates a share-based compensation plan. The fair value
of the employee services received in exchange for the grant of the
options is recognised as an expense. The total amount to be
expensed over the vesting period is determined by reference to the
fair value of the options granted, excluding the impact of any
non-market vesting conditions (for example, profitability and sales
growth targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest.
At each balance sheet date the entity revises its estimates of the
number of options that are expected to vest. It recognises the
impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
ii) Bonuses
The Group recognises a liability and an expense for bonuses.
Bonuses are approved by the board and a number of factors are taken
into consideration when determining the amount of any bonus
payable, including the recipient's existing salary, length of
service and merit. The Group recognises a provision where
contractually obliged or where there is a past practice that has
created a constructive obligation.
1.13 Revenue recognition
Interest Income
Interest income is recognised on a time proportion basis using the
effective interest method.
1.14 Leases
Leases in which a significant portion of the risks and rewards of
ownership are not transferred to the Group as lessee are classified
as operating leases. Payments made under operating leases (net of
any incentives received from the lessor) are charged to the
statement of comprehensive income on a straight--line basis over
the period of the lease.
2 Basic and diluted loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
2010 Group 2009
Group
Loss attributable to equity
holders of the Company US$(5,318,458) US$(2,425,421)
Weighted average number of
ordinary shares in issue 876,109,553 789,639,838
Basic loss per share (US Cents
per share) (0.61) (0.31)
(b) Diluted
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. The Company has one
category of dilutive potential ordinary shares: share options. For
these share options, a calculation is performed to determine the
number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share
options.
2010 Group 2009
Group
Total Share Options in Issue - 7,896,398
The effect of all the above share options granted is
anti-dilutive; as a result they have been omitted from the
calculation of diluted loss per share.
3 Scheme of Arrangement
On 15 June 2010 Bahamas Petroleum Company plc (formerly BPC plc)
("BPC plc"), a company incorporated in the Isle of Man, became the
ultimate holding company of BPC Falklands Limited (formerly BPC
Limited) pursuant to a Scheme of Arrangement approved by the Chief
Justice of the Falkland Islands and the shareholders of BPC
Falklands Limited, the then AIM listed holding company of the BPC
Group (the "Scheme of Arrangement"). Pursuant to the Scheme of
Arrangement, ordinary shares, each having a nominal value of
GBP0.00002, of BPC Limited ("BPC Limited Ordinary Shares") were
exchanged, on a one for one basis, for ordinary shares, each having
a nominal value of GBP0.00002, of BPC plc ("BPC plc Ordinary
Shares").
As a result of the Scheme of Arrangement, BPC Falklands Limited
is now a wholly owned subsidiary of BPC plc. The BPC plc Ordinary
Shares carry substantially the same rights as did the BPC Limited
Ordinary Shares. The Scheme of Arrangement did not involve any cash
payment for the BPC plc Ordinary Shares. Immediately after the
Scheme of Arrangement became effective BPC plc had the same Board
of Directors, management and corporate governance arrangements as
BPC Limited had immediately prior thereto. The consolidated assets
and liabilities of BPC plc immediately after the effective time of
the Scheme of Arrangement are the same as the consolidated assets
and liabilities of BPC Falklands Limited immediately prior
thereto.
BPC plc was incorporated on 25 August 2009. Prior to 15 June
2010 BPC plc was held in trust for the Group. The Group at the time
maintained full control over the economic decisions of the
company.
All BPC Limited share options that were in existence immediately
prior to the Scheme of Arrangement were exchanged on a one for one
basis for share options in BPC plc with no change in terms or
conditions.
On 29 December 2010, the directors and shareholders of BPC
Falklands Limited authorised a dividend in specie to be paid to the
parent company, Bahamas Petroleum Company plc. As consideration for
the dividend BPC Falklands Limited transferred all of its net
assets to Bahamas Petroleum Company plc, including its 100% holding
in BPC Jersey Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASDEDDXFEFF
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