UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to
_______________
Commission File Number: 333-107002
MNP PETROLEUM
CORPORATION
(Exact name of registrant as specified in its
charter)
Nevada |
91-1918324 |
(State or other jurisdiction of incorporation or
organization) |
(I.R.S. Employer Identification No.)
|
Bahnhofstrasse 9, 6341 Baar, Switzerland
(Address of principal executive offices) (Zip Code)
41 (44) 718 10 30
(Registrants
telephone number, including area code)
N/A
(Former name, former address and
former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X]
Yes [ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] |
Accelerated
filer [
] |
Non-accelerated filer [ ]
(Do not check if a smaller
reporting company) |
Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
[ ]
Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
166,112,792 shares of common stock as of May 20, 2014.
2
TABLE OF CONTENTS
3
PART I. FINANCIAL INFORMATION
Item 1. Financial
Statements.
MNP PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited) |
|
|
|
|
|
|
03.31.2015 |
|
|
12.31.2014 |
|
|
|
USD |
|
|
USD |
|
ASSETS |
|
|
|
|
|
|
Cash
and cash equivalents |
|
607,914 |
|
|
1,369,778 |
|
Restricted cash |
|
98,489 |
|
|
208,621 |
|
Accounts receivable |
|
12,283 |
|
|
14,359 |
|
Investment in associate (Petromanas) |
|
19,770 |
|
|
206,382 |
|
Prepaid expenses and other current assets |
|
202,194 |
|
|
184,506 |
|
Total current assets |
|
940,650 |
|
|
1,983,646 |
|
|
|
|
|
|
|
|
Tangible fixed assets |
|
77,347 |
|
|
83,254 |
|
Investment |
|
12,000,000 |
|
|
- |
|
Oil and gas properties (unproved) |
|
1,006,253 |
|
|
687,645 |
|
Receivable due from related party |
|
44,832 |
|
|
- |
|
Other non-current assets |
|
529,250 |
|
|
586,697 |
|
Transaction prepayment |
|
- |
|
|
12,000,000 |
|
Total non-current assets |
|
13,657,682 |
|
|
13,357,596 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
14,598,332 |
|
|
15,341,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Accounts payable |
|
1,468,572 |
|
|
1,165,472 |
|
Other accrued expenses |
|
154,800 |
|
|
146,825 |
|
Total current liabilities |
|
1,623,372 |
|
|
1,312,297 |
|
|
|
|
|
|
|
|
Pension liabilities |
|
340,349 |
|
|
340,349 |
|
Total non-current liabilities |
|
340,349 |
|
|
340,349 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
1,963,721 |
|
|
1,652,646 |
|
|
|
|
|
|
|
|
Common Stock (600,000,000 shares authorized as of March 31,
2015 and December 31, 2014, USD 0.001 par value, 172,592,292 shares
issued, 166,112,792 shares outstanding) |
|
172,592 |
|
|
172,592 |
|
Additional paid-in capital |
|
78,646,245 |
|
|
78,622,945 |
|
Treasury stock |
|
(551,018 |
) |
|
(551,018 |
) |
Accumulated deficit |
|
(65,684,209 |
) |
|
(64,606,924 |
) |
Currency translation adjustment |
|
51,001 |
|
|
51,001 |
|
TOTAL SHAREHOLDERS' EQUITY |
|
12,634,611 |
|
|
13,688,596 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
14,598,332 |
|
|
15,341,242 |
|
4
MNP PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS -
UNAUDITED
|
|
For the
three months ended |
|
|
|
03.31.2015 |
|
|
03.31.2014 |
|
|
|
USD |
|
|
USD |
|
OPERATING REVENUES |
|
|
|
|
|
|
Revenues |
|
- |
|
|
- |
|
Total revenues |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
Personnel costs |
|
(430,855 |
) |
|
(399,660 |
) |
Exploration costs |
|
(139,000 |
) |
|
(292,428 |
) |
Depreciation |
|
(9,486 |
) |
|
(12,150 |
) |
Consulting fees |
|
(238,867 |
) |
|
(331,396 |
) |
Administrative costs |
|
(294,572 |
) |
|
(310,561 |
) |
Total operating expenses |
|
(1,112,780 |
) |
|
(1,346,195 |
) |
|
|
|
|
|
|
|
NON-OPERATING INCOME / (EXPENSES) |
|
|
|
|
|
|
Exchange differences |
|
54,040 |
|
|
(26,479 |
) |
Change in fair value of investment in associate |
|
(18,572 |
) |
|
1,619,803 |
|
Interest income |
|
36 |
|
|
- |
|
Interest expense |
|
(9 |
) |
|
(68 |
) |
Total non-operating income |
|
35,495 |
|
|
1,593,256 |
|
|
|
|
|
|
|
|
Income/(Loss) before taxes |
|
(1,077,285 |
) |
|
247,061 |
|
|
|
|
|
|
|
|
Income taxes |
|
- |
|
|
(2,739 |
) |
Net income/(loss) |
|
(1,077,285 |
) |
|
244,322 |
|
|
|
|
|
|
|
|
Net comprehensive income/(loss) |
|
(1,077,285 |
) |
|
244,322 |
|
|
|
|
|
|
|
|
Weighted average number of outstanding shares (basic) |
|
166,112,792 |
|
|
172,592,292 |
|
Weighted average number of outstanding shares (diluted) |
|
166,112,792 |
|
|
172,592,292 |
|
|
|
|
|
|
|
|
Basic earnings/(loss) per share |
|
(0.01 |
) |
|
0.00 |
|
Diluted earnings/(loss) per share |
|
(0.01 |
) |
|
0.00 |
|
5
MNP PETROLEUM CORPORATION
CONSOLIDATED CASH FLOW STATEMENTS - UNAUDITED
|
|
For the
three months ended |
|
|
|
03.31.2015 |
|
|
03.31.2014 |
|
|
|
USD |
|
|
USD |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
Net income/(loss) |
|
(1,077,285 |
) |
|
244,322 |
|
|
|
|
|
|
|
|
To reconcile net loss to net cash used in operating
activities |
|
|
|
|
|
|
Change in fair value of investment in associate |
|
18,572 |
|
|
(1,619,803 |
) |
Depreciation |
|
9,486 |
|
|
12,150 |
|
Exchange differences |
|
(54,040 |
) |
|
26,479 |
|
Stock-based compensation |
|
23,300 |
|
|
21,147 |
|
Increase in receivables and prepaid expenses |
|
(15,612 |
) |
|
(212,060 |
) |
Increase in accounts payable |
|
44,994 |
|
|
287,687 |
|
(Decrease) / increase in accrued expenses |
|
7,975 |
|
|
(248,180 |
) |
Cash flow used in operating activities |
|
(1,042,610 |
) |
|
(1,488,258 |
) |
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
Capitalized oil and gas properties |
|
(3,055 |
) |
|
(106,735 |
) |
Purchase of tangible fixed assets and software |
|
(3,579 |
) |
|
(11,740 |
) |
Proceeds from sale of investment |
|
162,857 |
|
|
7,570,842 |
|
Receivable due from related party |
|
(44,832 |
) |
|
- |
|
Decrease / (increase) restricted cash |
|
110,132 |
|
|
(56,962 |
) |
Cash flow from investing activities |
|
221,523 |
|
|
7,395,405 |
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
Cash flow from financing activities |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
(821,087 |
) |
|
5,907,147 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
|
1,369,778 |
|
|
3,063,947 |
|
Currency translation effect on cash and cash equivalents |
|
59,223 |
|
|
22,265 |
|
Cash and cash equivalents at the end of the period
|
|
607,914 |
|
|
8,993,359 |
|
|
|
|
|
|
|
|
Supplement schedule of non-cash investing and financing
activities: |
|
|
|
|
|
|
Offset of impairment of oil and gas properties and
renegotiation of accrued expenses |
|
- |
|
|
312,000 |
|
Completion of EPA acquisition, reclass of transaction
prepayment to investment |
|
12,000,000 |
|
|
- |
|
Additions in non-current assets not yet paid (accounts payable)
|
|
258,106 |
|
|
- |
|
6
MNP PETROLEUM CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY -
UNAUDITED
SHAREHOLDERS' EQUITY |
|
Number of
shares |
|
|
Share
capital |
|
|
Additional
paid-in capital |
|
|
Treasury
stock |
|
|
Deficit
accumulated |
|
|
Accumulated
other comprehensive income |
|
|
Total share-
holders' deficit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 1, 2015 |
|
172,592,292 |
|
|
172,592 |
|
|
78,622,945 |
|
|
(551,018) |
|
|
(64,606,924) |
|
|
51,001 |
|
|
13,688,596 |
Stock-based compensation |
|
- |
|
|
- |
|
|
23,300 |
|
|
- |
|
|
- |
|
|
- |
|
|
23,300 |
Net loss for the year |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(1,077,285) |
|
|
- |
|
|
(1,077,285) |
Balance March 31, 2015 |
|
172,592,292 |
|
|
172,592 |
|
|
78,646,245 |
|
|
(551,018) |
|
|
(65,684,209) |
|
|
51,001 |
|
|
12,634,611
|
7
The financial statements presented in this Form 10-Q comprise
MNP Petroleum Corporation (MNP or the Company) and its subsidiaries
(collectively, the Group). The unaudited interim Consolidated Financial
Statements included in this Form 10-Q have been prepared in accordance with
accounting principles generally accepted in the United States of America (US
GAAP) and present our financial position, results of operations, cash flows and
changes in stockholders equity. These financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto,
included in the Companys Annual Report on Form 10-K for the year ended December
31, 2014.
The Company is in the business of exploring for oil and gas,
primarily in Central and East Asia. If the Company discovers sufficient reserves
of oil or gas, it intends to exploit them. The Company has not commenced planned
principal operations and therefore has not realized any revenues to date. The
Company carries out its operations both directly and through participation in
ventures with other oil and gas companies. It is actively involved in
exploration projects in Tajikistan and Mongolia. In addition, the Company
recently purchased a stake in producing oilfields in Tajikistan. As the Company
currently depends upon funding from various sources to continue operations and
to implement its growth strategy, the Companys activities are subject to
significant risks and uncertainties, including failing to secure additional
funding to operationalize the Companys licenses.
The Company, formerly known as Express Systems Corporation, was
incorporated in the State of Nevada on July 9, 1998.
On April 10, 2007, the Company completed the Exchange
Transaction whereby it acquired its then sole subsidiary DWM Petroleum AG, Baar
(DWM Petroleum) pursuant to an exchange agreement signed in November 2006
whereby 100% of the shares of DWM Petroleum were exchanged for 80,000,000 common
shares of the Company. As part of the closing of this exchange transaction, the
Company issued 800,000 shares as finders fees at the closing price of USD 3.20.
The acquisition of DWM Petroleum was accounted for as a merger
of a private operating company into a non-operating public shell. Consequently,
the Company is the continuing legal registrant for regulatory purposes and DWM
Petroleum is treated as the continuing accounting acquirer for accounting and
reporting purposes. The assets and liabilities of DWM Petroleum remained at
historic cost. Under accounting principles generally accepted in the United
States of America, in transactions involving the merger of a private operating
company into a non-operating public shell, the transaction is equivalent to the
issuance of stock by DWM Petroleum for the net monetary assets of the Company,
accompanied by a recapitalization. The accounting is identical to a reverse
acquisition, except that no goodwill or other intangibles are recorded.
The Company has a focused strategy on exploration and
developing oil and gas resources in Central Asia and East Asia (Tajikistan and
Mongolia).
The condensed consolidated financial statements have been
prepared on the assumption that the Group will continue as a going concern. The
Group has no operating income and therefore will remain dependent upon continued
funding from its shareholders or other sources. Our cash balance as of March 31,
2015 was USD 706,403, of which USD 98,489 has been restricted leaving a balance
of USD 607,914. Additionally, the Group has 500,000 shares in PMI valuing the
investment at USD 19,770.
These matters raise substantial doubt about the Groups ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Based on our expected monthly burn rate of USD 354,335 on basic
operational activities we estimate that we have sufficient working capital to
fund operations for two months.
8
In order to continue to fund operations for the next twelve
months and implement the geological work program for our projects in Central
Asia as well as to finance continuing operations, the Group will require further
funds. We are currently in negotiations to receive funds through additional
equity and/or debt financing through either the Stichting VB Vagobel transaction
disclosed to the market on September 9, 2014 or through the US-Dubai consortium
outlined in a press release dated April 1, 2015. Furthermore, the Company is in
negotiations with a third party on a bridge facility. As of May 20, 2015 Vagobel
was in material breach of the contract. The Company has informed Stichting VB
Vagobel of this material breach of the contract and since Vagobel has not cured
the breach, the Company is evaluating the next steps with its Dutch counsel. If
we are not able to raise the required funds, we would consider farming-out
projects in order to reduce our financial commitments. If the Company is unable
to obtain such funding, or complete farming-out projects, the Company will not
be able to continue its business. Any additional equity financing may be
dilutive to shareholders, and debt financing, if available, will increase
expenses and may involve restrictive covenants. The Company will be required to
raise additional capital on terms which are uncertain, especially under the
current capital market conditions. Under these circumstances, if the Company is
unable to obtain capital or is required to raise it on undesirable terms, it may
have a material adverse effect on the Company's financial condition.
The accompanying financial data as of March 31, 2015 and
December 31, 2014 and for the three month periods ended March 31, 2015 and 2014,
has been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC).
The complete accounting policies followed by the Group are set
forth in Note 3 to the audited consolidated financial statements contained in
the Group's Annual Report on Form 10-K for the year ended December 31, 2014.
The preparation of financial statements in conformity with US
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities and disclosures, if any, of contingent
assets and liabilities at the date of the financial statements. Actual results
could differ from these estimates.
In the opinion of management, all adjustments (which include
normal recurring adjustments, except as disclosed herein) necessary to present a
fair statement of financial position as of March 31, 2015 and December 31, 2014,
results of operations for the three month periods ended March 31, 2015 and 2014,
cash flows for the three month periods ended March 31, 2015 and 2014 and
statement of shareholders equity/(deficit) for the period from January 1, 2015
to March 31, 2015, as applicable, have been made. The result of operations for
the three month periods ended March 31, 2015 is not necessarily indicative of
the operating results for the full fiscal year or any future periods.
On January 15, 2015, MNP Petroleum Corporation acquired a 65%
equity interest in EPA.at Beteiligungs-gesellschaft mbH (EPA) shown in note 7.
Due to this acquisition, the Group has updated its accounting policies as
follows.
Investments
Investments in the common stock of entities in which the
company owns a minority interest and is unable to exercise significant influence
are accounted for using the cost method. If the Company is unable to obtain
consolidated financial statements on a timely basis, it accounts for its
investments using the cost method.
The fair value of our cost method investment is not estimated
as there have been no identified events or changes in circumstances that may
have a significant adverse effect on the fair value of the investment and we
have determined that it is not practicable to estimate the fair value of the
investment. Any earnings distributed by the investee are presented as dividend
income on the statements of comprehensive income/loss.
9
Reclassifications
In the prior period balance sheet an amount of USD 586,697 was
reclassified from Prepaid expenses and other current assets to Other
non-current assets to conform to the current period presentation since this
amount constitutes prepayments for Oil and gas properties (unproved) and
therefore is non-current in nature.
4. |
RECENT ACCOUNTING
PRONOUNCEMENTS |
There have been no new accounting pronouncements in the first
quarter of 2015.
5. |
CASH AND CASH
EQUIVALENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USD |
|
|
USD |
|
|
USD |
|
|
(held in other |
|
|
USD Total
|
|
|
USD Total
|
|
|
|
(held in USD) |
|
|
(held in EUR) |
|
|
(held in CHF) |
|
|
currencies) |
|
|
Mar 31, 2015 |
|
|
Dec 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
376,148 |
|
|
64,247 |
|
|
160,208 |
|
|
7,311 |
|
|
607,914 |
|
|
1,369,778 |
|
Cash and cash equivalents are available to the Group without
restriction or limitation on withdrawal and/or use of these funds. The Groups
cash equivalents are placed with high credit rated financial institutions. The
carrying amount of these assets approximates their fair value.
2015 (in USD) |
|
Office
equipment & furniture |
|
|
Vehicles |
|
|
Leasehold
improvements |
|
|
Total |
|
Cost at Jan 1, 2015
|
|
53,770
|
|
|
115,773
|
|
|
7,269 |
|
|
176,812
|
|
Additions |
|
3,579 |
|
|
- |
|
|
- |
|
|
3,579 |
|
Disposals |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Cost at Mar 31, 2015 |
|
57,349 |
|
|
115,773 |
|
|
7,269 |
|
|
180,391 |
|
Accumulated depreciation
at Jan 1, 2015 |
|
(29,655 |
) |
|
(62,958 |
) |
|
(945 |
) |
|
(93,558 |
) |
Depreciation |
|
(3,334 |
) |
|
(5,789 |
) |
|
(363 |
) |
|
(9,486 |
) |
Disposals |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Accumulated depreciation at Mar 31, 2015 |
|
(32,989 |
) |
|
(68,747 |
) |
|
(1,308 |
) |
|
(103,044 |
) |
Net book value at Jan 1,
2015 |
|
24,115
|
|
|
52,815
|
|
|
6,324 |
|
|
83,254
|
|
Net book value at Mar 31, 2015 |
|
24,360 |
|
|
47,026 |
|
|
5,961 |
|
|
77,347 |
|
Depreciation expense for the three month periods ended March
31, 2015 and 2014 was USD 9,486 and USD 12,150 respectively.
On January 15, 2015, MNP Petroleum Corporation acquired a 65%
interest in EPA.at Beteiligungs-gesellschaft mbH (EPA) for the purpose of
diversifying its portfolio of oil and gas exploration and production assets.
Total consideration paid was USD 12,000,000.
EPA, a company registered in Vienna, Austria, holds a 57.42%
interest in the company Petroleum Sugd LLC (PSL), which owns 10 producing oil
and gas fields in the north of Tajikistan. Through its investment, EPA
participates in the profits from the sale of oil and gas.
The acquisition of EPA was accounted for using the cost method
as although the Company owns a 65% equity interest, under ASC 810, EPA is
considered to be a variable interest entity and the other EPA shareholder has
veto rights which limit the power of the Company to make significant decisions.
In addition, as Petroleum Sugd LLC operates in the Republic of Tajikistan it is
not subject to such stringent reporting deadlines as in the US. The difference
between the financial reporting dates of the investee and the Company is over
the allowed period in accordance with ASC 323, and as such the investment may
not be presented under the equity method.
Investments at cost (in USD) |
|
Mar 31, 2015 |
|
|
Dec 31, 2014 |
|
EPA
|
|
12,000,000 |
|
|
- |
|
Total
investments at cost |
|
12,000,000 |
|
|
- |
|
10
During the three month period ended March 31, 2015, the
investment balance has not been evaluated for impairment.
8. |
OIL AND GAS PROPERTIES |
Capitalized exploration costs |
|
Mar 31, 2015 |
|
|
Dec 31, 2014 |
|
Unproved, not subject to
depletion |
|
1,006,253 |
|
|
687,645 |
|
Proved subject to depletion |
|
- |
|
|
- |
|
Accumulated depletion |
|
- |
|
|
- |
|
Total capitalized exploration costs |
|
1,006,253 |
|
|
687,645 |
|
On May 28, 2014, the Company wrote to the Petroleum Authority
of Mongolia requesting the moratorium be extended an additional year. As at
March 31, 2015, the Company has not received any response to its request. If the
moratorium is extended, the Company plans to begin drilling activities once the
full evaluation of the new area is completed and drillable economic structures
are available to fulfill outstanding commitments.
During the year ended December 31, 2014, the Companys
capitalized balance of USD 687,645 consisted of the following. Well site
preparation costs of Kayrakkum B in the Republic of Tajikistan in the amount of
USD 514,368 and one well design and drilling equipment in Mongolia in the amount
USD 173,277.
Additionally, as of March 31, 2015, the Company has reclassed
USD 315,553 from prepaid expenses to oil and gas properties for casings and well
heads that have been received and USD 3,055 relating to the storage of this well
site equipment in the Republic of Tajikistan has been capitalized.
9. |
STOCK COMPENSATION PROGRAM |
Amended 2011 Stock Option Plan
The Amended 2011 Stock Option Plan, which was approved at
Annual Shareholders Meeting dated February 20, 2014, authorizes the Company to
issue options to purchase such number of the Companys common shares as is equal
to on aggregate, together with options issued under any prior plan, of up to
34,500,000 shares of the Companys common stock (it is the type of stock option
plan referred to as a fixed stock option plan).
If all or any portion of any stock option granted under the
2011 Stock Option Plan expires or terminates without having been exercised in
full, the unexercised balance will be returned to the pool of stock available
for grant under the 2011 Stock Option Plan.
Recognition of Stock-based Compensation Costs
Stock-based compensation costs are recognized in earnings using
the fair-value based method for all awards granted. For employees fair value is
estimated at the grant date and for non-employees fair value is re-measured at
each reporting date. Compensation costs for unvested stock options and unvested
share grants are expensed over the requisite service period on a straight-line
basis.
Grants
The Company calculates the fair value of options granted by
applying the Black-Scholes option pricing model. Expected volatility is based on
the Companys own historical share price volatility. The Companys share price
data can be traced back to April 2, 2007, and the Company believes that this set
of data is sufficient to determine expected volatility as input for the
Black-Scholes option pricing model.
During the three month periods ended March 31, 2015 and 2014
the Company did not grant any options.
11
The following table shows the Company's outstanding and
exercisable stock options as of March 31, 2015:
Outstanding
Options 2015 |
|
Shares under option
|
|
|
Weighted-average
exercise price |
|
|
Weighted-average
remaining contractual term (years) |
|
Outstanding at December 31,
2014 |
|
12,300,000 |
|
|
USD 0.24 |
|
|
6.21 |
|
Granted |
|
- |
|
|
- |
|
|
- |
|
Exercised |
|
- |
|
|
- |
|
|
- |
|
Forfeited, canceled or expired
|
|
- |
|
|
- |
|
|
- |
|
Outstanding at Mar 31, 2015 |
|
12,300,000 |
|
|
USD 0.24 |
|
|
5.97 |
|
Exercisable at Mar 31, 2015 |
|
11,887,500 |
|
|
USD 0.24 |
|
|
5.97 |
|
The following table depicts the Companys non-vested options as
of March 31, 2015 and changes during the period:
Non-vested
options |
|
Shares under option
|
|
|
Weighted-average
grant date fair value |
|
Non-vested at December 31,
2014 |
|
1,043,750 |
|
|
USD 0.06 |
|
Non-vested granted |
|
- |
|
|
- |
|
Vested |
|
(631,250 |
) |
|
USD 0.06 |
|
Non-vested, forfeited or
canceled |
|
- |
|
|
- |
|
Non-vested at Mar 31, 2015 |
|
412,500 |
|
|
USD 0.06 |
|
As of March 31, 2015, the expected total of unrecognized
compensation costs related to unvested stock-option grants was USD 21,988. The
Company expects to recognize this amount over a weighted average period of 0.79
years.
|
9.2. |
Summary of Stock-based Compensation
Expenses |
A summary of stock-based compensation expense for the
respective reporting periods is presented in the following table:
Stock based
compensation |
|
Three month period ended |
|
expenses |
|
Mar 31, 2015 |
|
|
Mar 31, 2014 |
|
Option grants |
|
23,300 |
|
|
21,147 |
|
Total |
|
23,300 |
|
|
21,147 |
|
Recorded under Personnel |
|
5,042 |
|
|
8,375 |
|
Recorded under
Consulting fees |
|
18,258 |
|
|
12,772 |
|
Share repurchase program
On May 13, 2014, MNP Petroleum Corp. announced that, subject to
regulatory approval, it intends to repurchase up to 8,296,614 of its common
shares, or up to five percent of the 172,592,292 common shares that are
currently issued, in a normal course issuer bid to be conducted by Jennings
Capital Inc. All purchases of common shares under the bid will be effected on
the TSX Venture Exchange or the OTCQB in the United States (or such other stock
exchange or quotation system upon which the companys shares may then be listed
or quoted) and, in any event, in accordance with the rules and policies of the
TSX Venture Exchange and applicable securities laws. The shares are being
purchased because MNP believes that its common shares currently trade in a price
range that does not adequately reflect their underlying value, based on its
business prospects, assets and financial position. The Company repurchased
shares of its common stock in the open market, which were booked as treasury
shares upon repurchase. Under the normal course issuer bid, MNP will not
repurchase any securities when it is in possession of undisclosed material
information or during any blackout periods imposed by its Insider Trading
Policy. The program will expire May 18, 2015.
12
During the three month period ended March 31, 2015, the Company
did not repurchase any shares of common stock.
11. |
RELATED PARTY DISCLOSURE |
The consolidated financial statements include the financial
statements of MNP Petroleum Corporation and the entities listed in the following
table:
Company |
Country |
Equity share Mar 31,
2015 |
Equity share Dec 31,
2014 |
DWM
Petroleum AG, Baar (1) |
Switzerland |
100% |
100% |
DWM
Energy AG Baar (2) |
Switzerland |
100% |
100% |
Petromanas Energy Inc., Calgary (3) |
Canada |
0.07% |
0.6% |
CJSC
Somon Oil Company, Dushanbe (4) |
Republic of Tajikistan |
90% |
90% |
Manas Management Services Ltd., Nassau (5) |
Bahamas |
100% |
100% |
Manas Chile Energia Limitada, Santiago (6) |
Chile |
100% |
100% |
Gobi
Energy Partners LLC, Ulaan Baator (7) |
Mongolia |
74% |
74% |
Gobi
Energy Partners GmbH (8) |
Switzerland |
74% |
74% |
TF
Petroleum AG (9) |
Switzerland |
100% |
100% |
EPA.at Beteiligungsgesellschaft mbH (10) |
Austria |
65% |
- |
Petroleum Sugd LLC (11) |
Tajikistan |
37.3% |
- |
|
(1) |
Included Branch in Albania that was sold in February
2010. |
|
(2) |
Founded in 2007. |
|
(3) |
Petromanas Energy Inc. participation resulted from
partial sale of Manas Adriatic GmbH; fair value method applied. |
|
(4) |
CJSC Somon Oil Company was founded by DWM Petroleum AG.
As CJSC Somon Oil has been in a loss position since its inception its
inception and MNP is legally required to fund the losses, no
no-controlling interest has been recorded. |
|
(5) |
Founded in 2008. |
|
(6) |
Manas Chile Energia Limitada was founded by Manas
Management Services Ltd.; founded in 2008. |
|
(7) |
Gobi Energy Partners LLC was founded in 2009 by DWM
Petroleum AG (formerly Manas Gobi LLC). Gobi Energy Partners GmbH holds
record title to 100% of Gobi Energy Partners LLC. |
|
(8) |
Gobi Energy Partners GmbH was founded in 2010. DWM
Petroleum AG holds 74% of Gobi Energy Partners GmbH. The Company
determined that no value needs to be ascribed to the non-controlling
interest due to the fact that the non-controlling parties do not carry any
costs. |
|
(9) |
TF Petroleum was founded in 2012 Pursuant to the
Supplement Agreement dated March 31, 2014; DWM Petroleum AG acquired 100%
for a purchase price of CHF 1.00 (USD 1.13) pursuant to a Share Purchase
Agreement signed on April 4, 2014. |
|
(10) |
EPA, founded in 2003, is registered in Vienna, Austria
and holds a 57.42% interest in the company Petroleum Sugd LLC; TF
Petroleum acquired 65% for a purchase price of USD 12,000,000 on January
15, 2015; EPA is accounted for under the cost method. |
|
(11) |
Founded in 2000, registered in the Republic of
Tajikistan. |
The following table provides the total amount of transactions,
which have been entered into with related parties for the specified period:
Related parties
transactions |
|
Three month period ended |
|
|
Mar 31, 2015 |
|
|
Mar 31, 2014 |
|
Affiliates |
|
|
|
|
|
|
Management services performed to Petromanas*
|
|
- |
|
|
(278 |
) |
Receivable due from EPA |
|
44,832 |
|
|
- |
|
Board of directors |
|
|
|
|
|
|
Payments to directors for office rent |
|
6,446 |
|
|
18,490 |
|
Payments to related companies controlled by
|
|
|
|
|
|
|
directors for rendered consulting services |
|
58,581 |
|
|
74,159 |
|
* Services invoiced or accrued are recorded as contra-expense
in personnel cost and administrative cost.
13
12. |
COMMITMENTS & CONTINGENT
LIABILITIES |
Legal actions and claims (Kyrgyz Republic, Republic of
Tajikistan, Mongolia and Chile)
In the ordinary course of business, members of the Group doing
business in Mongolia, Republic of Tajikistan, the Kyrgyz Republic, and Chile may
be subject to legal actions and complaints. Management believes that the
ultimate liability, if any, arising from such actions or complaints will not
have a material adverse effect on the financial condition, the results of future
operations or cash flows of the associates/subsidiaries in Mongolia, Republic of
Tajikistan, the Kyrgyz Republic and Chile.
Management believes that the members of the Group are in
substantial compliance with the tax laws affecting their respective operations
in the Kyrgyz Republic, Republic of Tajikistan and Mongolia. However, the risk
remains that relevant authorities could take differing positions with regards to
interpretative issues.
Work program and social responsibility project
On June 10, 2014, the governor of the Farkhor district of
Tajikistan decreed that the Petroleum Sugd has a two year funding obligation
related to a social responsibility project concerning the construction of a
secondary school in this district. Additionally, in the fourth quarter of 2014,
Petroleum Sugd LLC completed its 2015 work program budget. EPA, as a 57.42%
owner of Petroleum Sugd has a funding obligation that amounts to USD 14.9
million relating to its portion of this 2015 work program for Petroleum Sugd in
Tajikistan. The Company agreed to fulfill these commitments on EPAs behalf.
13. |
PERSONNEL COSTS AND EMPLOYEE BENEFIT
PLANS |
Defined benefit plan
The Company maintains Swiss defined benefit plans for eight of
its employees. These plans are part of independent collective funds providing
pensions combined with life and disability insurance. The assets of the funded
plans are held independently of the Companys assets in a legally distinct and
independent collective trust fund which serves various unrelated employers. The
funds benefit obligations are fully reinsured by AXA Winterthur Insurance
Company. The plans are valued by independent actuaries using the projected unit
credit method. The liabilities correspond to the projected benefit obligations
of which the discounted net present value is calculated based on years of
employment, expected salary increases, and pension adjustments.
Pension expense |
Three month period ended |
Mar 31, 2015 |
Mar 31, 2014 |
Net service cost
|
20,519 |
4,106 |
Interest cost |
3,033 |
5,404 |
Expected return on
assets |
(2,197) |
(4,417) |
Amortization of
loss |
10,559 |
5,812 |
Net periodic pension cost |
31,913 |
10,906 |
During the three month periods ended March 31, 2015 and 2014,
the Company made cash contributions of USD 128,121 and USD 112,364,
respectively, to its defined benefit pension plan. The Company does not expect
to make any additional cash contributions to its defined benefit pension plans
during the remainder of 2015.
14. |
FAIR VALUE MEASUREMENT |
14.1. Fair Value
Measurements
ASC 820 establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These tiers include: Level
1, defined as observable inputs such as quoted prices in active markets; Level
2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market
data exists, therefore requiring an entity to develop its own assumptions.
Financial assets carried at fair value are classified in one of the three
categories as follows. Financial assets and liabilities carried at fair value as
of March 31, 2015:
14
Financial assets 2015 (in USD) |
Level 1 |
Level 2 |
Level 3 |
Investment in
associate (Petromanas) |
19,770 |
- |
-
|
Total |
19,770 |
- |
- |
Financial assets and liabilities carried at fair value as of
December 31, 2014:
Financial assets 2014 (in USD) |
Level 1 |
Level 2 |
Level 3 |
Investment in
associate (Petromanas) |
206,382 |
- |
-
|
Total |
206,382 |
- |
- |
14.2. Fair Value of
Financial Instruments
In addition to the methods and assumptions the Company uses to
record the fair value of financial instruments as discussed in the Fair Value
Measurements section above, the Company used the following methods and
assumptions to estimate the fair value of its financial instruments.
|
|
Cash and cash equivalents carrying
amount approximated fair value. |
|
|
Restricted cash carrying amount
approximated fair value. |
|
|
Accounts receivable carrying amount
approximated fair value. |
|
|
Investment in Petromanas the fair
value was calculated based on quoted market prices. |
|
|
Accounts Payable carrying amount
approximated fair value. |
The fair value of the Companys financial instruments is
presented in the table below (in USD):
|
|
Mar 31, 2015 |
|
|
Dec 31, 2014 |
|
|
|
|
|
|
|
|
|
Carrying |
|
|
Fair Value |
|
|
Carrying |
|
|
Fair Value |
|
|
Fair Value |
|
|
Reference |
|
|
|
Amount |
|
|
|
|
|
Amount |
|
|
|
|
|
Levels |
|
|
|
|
Cash and cash equivalents |
|
607,914 |
|
|
607,914 |
|
|
1,369,778 |
|
|
1,369,778 |
|
|
1 |
|
|
Note 5 |
|
Restricted cash |
|
98,489 |
|
|
98,489 |
|
|
208,621 |
|
|
208,621 |
|
|
1 |
|
|
|
|
Accounts receivable |
|
12,283 |
|
|
12,283 |
|
|
14,359 |
|
|
14,359 |
|
|
1 |
|
|
|
|
Investment in Petromanas |
|
19,770 |
|
|
19,770 |
|
|
206,382 |
|
|
206,382 |
|
|
1 |
|
|
|
|
Accounts Payable
|
|
1,468,572 |
|
|
1,468,572 |
|
|
1,165,472 |
|
|
1,165,472 |
|
|
1 |
|
|
|
|
Basic earnings per share result by dividing the Companys net
income (or net loss) by the weighted average number of shares outstanding for
the contemplated period. Diluted earnings per share are calculated applying the
treasury stock method. When there is a net income, dilutive effects of all
stock-based compensation awards or participating financial instruments are
considered. When the Company posts a loss, basic loss per share equals diluted
loss per share.
15
The following table depicts how the denominator for the
calculation of basic and diluted earnings per share was determined under the
treasury stock method:
|
|
Three month period ended |
|
|
|
Mar 31, 2015 |
|
|
Mar 31, 2014 |
|
Company posted |
|
Net loss |
|
|
Net income |
|
Basic weighted average shares outstanding |
|
166,112,792 |
|
|
172,592,292 |
|
Dilutive effect of common stock equivalents: |
|
|
|
|
|
|
- stock options and non-vested
stock under employee compensation plans |
|
- |
|
|
- |
|
Diluted
weighted average shares outstanding |
|
166,112,792 |
|
|
172,592,292 |
|
The following table shows the total number of stock equivalents
that was excluded from the computation of diluted earnings per share for the
respective period because the effect would have been anti-dilutive:
|
|
Three month period ended |
|
Stock
equivalent |
|
Mar 31, 2015 |
|
|
Mar 31, 2014 |
|
Options |
|
12,300,000 |
|
|
12,100,000 |
|
Warrants |
|
- |
|
|
44,450,500 |
|
Total |
|
12,300,000 |
|
|
56,550,500 |
|
N/A
16
Managements Discussion and Analysis of Financial Condition
and Results of Operations.
Forward-Looking Statements
This quarterly report contains forward-looking statements.
Forward-looking statements are statements that relate to future events or future
financial performance. In some cases, you can identify forward-looking
statements by the use of terminology such as may, should, intend,
expect, plan, anticipate, believe, estimate, project, predict,
potential, or continue or the negative of these terms or other comparable
terminology. These statements speak only as of the date of this quarterly
report. Examples of forward-looking statements made in this quarterly report
include statements pertaining to, among other things:
|
managements assessment that our company is a
going concern; |
|
our plans to rehabilitate a producing asset in
Tajikistan; |
|
our plans to form a new consortium to pursue
Somon Oils project in Tajikistan; |
|
the quantity of potential natural gas and crude
oil resources; |
|
potential natural gas and crude oil production
levels; |
|
capital expenditure programs; |
|
projections of market prices and costs; |
|
supply and demand for natural gas and crude
oil; |
|
our need for, and our ability to raise,
capital; and |
|
treatment under governmental regulatory regimes
and tax laws. |
The material assumptions supporting these forward-looking
statements include, among other things:
|
our monthly burn rate of approximately USD 354,335
(corporate USD 239,671, ventures USD 114,664) for our operating costs
excluding exploration expenses; |
|
our ability to obtain necessary financing on
acceptable terms; |
|
timing and amount of capital expenditures;
|
|
our ability to obtain necessary drilling and
related equipment in a timely and cost-effective manner to carry out
exploration activities; |
|
our venture partners successful and timely
performance of their obligations with respect to the exploration programs
in which we are involved; |
|
retention of skilled personnel; |
|
the timely receipt of required regulatory
approvals; |
|
continuation of current tax and regulatory
regimes; |
|
current exchange rates and interest rates; and
|
|
general economic and financial market
conditions. |
Although management considers these assumptions to be
reasonable based on information currently available to it, they may prove to be
incorrect. These forward-looking statements are only predictions and involve
known and unknown risks, uncertainties and other factors, including:
|
our ability to establish or find resources or
reserves; |
|
our need for, and our ability to raise,
capital; |
|
our need for, and our ability to obtain,
regulatory and stock exchange approval for our proposed acquisition in
Tajikistan; |
|
volatility in market prices for natural gas and
crude oil; |
|
liabilities inherent in natural gas and crude
oil operations; |
|
uncertainties associated with estimating
natural gas and crude oil resources or reserves; |
|
competition for, among other things, capital,
resources, undeveloped lands and skilled personnel; |
|
political instability or changes of law in the
countries we operate and the risk of terrorist attacks; |
|
assessments of the acquisitions; |
|
geological, technical, drilling and processing
problems; and |
|
other factors discussed under the section
entitled Risk Factors in our annual report on Form 10-K filed on March
31, 2015. |
17
These risks, as well as risks that we cannot currently
anticipate, could cause our companys or our industrys actual results, levels
of activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance; except as required by applicable law,
including the securities laws of the United States and Canada, and we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
As used in this quarterly report, the terms we, us, and
our refer to MNP Petroleum Corporation, its wholly-owned subsidiaries DWM
Petroleum AG, a Swiss company, DWM Energy AG (formerly Manas Petroleum AG), a
Swiss company, Manas Management Services Ltd., a Bahamian company, and TF
Petroleum AG, a Swiss company, and its partially owned subsidiaries CJSC Somon
Oil Company, a Tajikistan company, Gobi Energy Partners GmbH, a Swiss company,
and Gobi Energy Partners LLC, a Mongolian company, its 65% interest in Energy
Partners Austria Beteiligungsgesellschaft mbH, an Austria registered company and
its 57.42% equity interest in Petroleum Sugd LLC, a Tajik company, held by EPA,
as the context may require.
The following discussion and analysis provides a narrative
about our financial performance and condition that should be read in conjunction
with the unaudited consolidated financial statements and related notes thereto
included in this quarterly report.
Overview of Business Operations
We are in the business of exploring for and producing oil and
gas, primarily in Central and East Asia. If we discover sufficient reserves of
oil or gas, we intend to exploit them. Although we are currently focused
primarily on projects located in certain geographic regions, we remain open to
attractive opportunities in other areas. Since the acquisition of 65% of the
equity in EPA, we have a 37.32% working interest in ten oil fields located in
the Fergana basin in Tajikistan.
We carry out our operations both directly and through
participation in ventures with other oil and gas companies. We are actively
involved in projects in Mongolia and Tajikistan.
We have no operating income to date, however, we are eligible
to any profit or loss from our investment in EPA. Therefore, we depend upon
funding from various sources to continue operations and to implement our
established work program.
Results of Operations (the three month period ended March
31, 2015 compared to the three month period ended March 31, 2014)
Net income/net loss
Net loss for the three month period ended March 31, 2015 was
USD 1,077,285 compared to net income of USD 244,322 for the same period in 2014.
This decrease of USD 1,321,607 was primarily due to a change in fair value of
our investment in Petromanas.
Operating expenses
Operating expenses for the three month period ended March 31,
2015, decreased to USD 1,112,780 from USD 1,346,195 reported for the same period
in 2014. This is a decrease of 17% in our total operating expenses and is mainly
due to reduction in exploration costs and consulting fees.
18
Personnel costs
For the three month period ended March 31, 2015, personnel
costs increased to USD 430,855 from USD 399,660 for the same period in 2014.
This increase of 8% is attributable to higher costs related to our operations in
Tajikistan.
Exploration costs
For the three month period ended March 31, 2015, we incurred
exploration costs of USD 139,000 as compared to USD 292,428 for the same period
in 2014. This is a decrease of 52% and is due to decreased exploration activity
at our project in Tajikistan and Mongolia.
Consulting fees
For the three month period ended March 31, 2015, we incurred
consulting fees of USD 238,867 as compared to consulting fees of USD 331,396 for
the same period in 2014. This is a decrease of 28% and is primarily attributable
to a reduction in consulting costs related to regulatory and legal services.
Administrative costs
For the three month period ended March 31, 2015, we recorded
administrative costs of USD 294,572 compared to USD 310,561 for the same period
in 2014. This decrease of 5% is mainly attributable to a reduction in travel
costs and bank charges.
Non-operating income/expense
For the three month period ended March 31, 2015, we recorded a
non-operating income of USD 35,495 compared to a non-operating income of USD
1,593,256 for the same period in 2014. This is a decrease of USD 1,557,761 and
is mainly attributable to a change in the value of our investment in
Petromanas.
For the three month period ended March 31, 2015, we recorded a
decrease in fair value of investment in associate (Petromanas) of USD 18,572
compared to an increase in fair value of investment in associate of USD
1,619,803 for the same period in 2014.
Liquidity and Capital Resources
Our cash balance as of March 31, 2015 was USD 607,914.
Shareholders equity as of March 31, 2015 was USD 12,634,611. As of March 31,
2015, total current assets were USD 940,650 and total current liabilities were
USD 1,623,372, resulting in net working capital of USD (682,722). Of our cash
balance at March 31, 2015, USD 607,914 was on bank accounts of MNP Petroleum
Corp. and its subsidiaries. Since our company considers foreign subsidiaries to
be permanently invested, taxes will be due in the event of repatriation.
We initially owned 200,000,000 shares of Petromanas Energy.
Since July 6, 2012, we sold 100,000,000 of these shares to various purchasers.
After the sale of a further 4,000,000 Petromanas shares on October 25, 2013,
46,000,000 Petromanas shares on November 5, 2013, 42,000,000 between February
26, 2014 and March 6, 2014 respectively and a further 7,500,000 between March
16, 2015 and March 27, 2015, we hold 500,000 common shares of Petromanas.
Cash Flows (in USD)
|
|
Three month period
ended |
|
|
|
Mar 31, 2015 |
|
|
Mar 31, 2014 |
|
Net Cash used in Operating Activities |
|
(1,042,610 |
) |
|
(1,488,258 |
) |
Net Cash from Investing Activities |
|
221,523 |
|
|
7,395,405 |
|
Net Cash used in
Financing Activities |
|
- |
|
|
- |
|
Change in Cash and Cash Equivalents during the
period |
|
(821,087 |
) |
|
5,907,147 |
|
19
Operating Activities
Net cash used in operating activities of USD 1,042,610 for the
three month period ended March 31, 2015 changed from net cash used in operating
activities of USD 1,488,258 for the same period in 2014. This decrease in net
cash used in operating activities of USD 445,684 is mainly due to a reduction in
operating activities and a change in fair value of investment
Investing Activities
Net cash from investing activities of USD 221,523 for the three
month period ended March 31, 2015 changed from net cash from investing
activities of USD 7,395,405 for the same period in 2014. This decrease of USD
7,173,882 in cash from investing activities is mainly attributable to a
reduction in proceeds from the sale of investment.
Financing Activities
During the three month period ended March 31, 2015 and 2014
there were no cash flows from or used in financing activities.
Cash Requirements
The following table outlines the estimated cash requirements
for our operations for the next 12 months (in USD):
Expenses |
|
Amount in USD |
|
Corporate |
|
2,876,052 1 |
|
Kyrgyzstan |
|
28,800 1 |
|
Mongolia |
|
71,791 2 |
|
Tajikistan - Exploration |
|
1,053,538 3 |
|
Tajikistan - Rehabilitation |
|
101,834 4 |
|
Business Development |
|
120,000 |
|
Total |
|
4,252,015 |
|
|
(1) |
The information presented in the table above includes the
costs related to our normal operational activities only. |
|
(2) |
The information presented in the table above includes the
costs related to our normal operational activities. It does not include
financial commitments as we are subject to certain expenditures and
commitments in order to maintain our licenses which are currently pending
re-negotiations. |
|
(3) |
The information presented in the table above includes the
costs related to our normal operational activities but does not include
any drilling activity. |
|
(4) |
The information presented in the table above includes the
costs related to our normal operational activities but does not include
any drilling activity. |
Our monthly burn rate (excluding exploration, drilling
equipment) amounts to approximately USD 354,335 (corporate USD 239,671, ventures
USD 114,664). Considering our net working capital and our shares in Petromanas
Energy Inc., we believe that we are able to fund our planned operations for the
next two months.
These matters raise substantial doubt about the Groups ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In order to continue to fund operations for the next twelve
months and implement the geological work program for our projects in Central
Asia as well as to finance continuing operations, the Group will require further
funds. We are currently in negotiations to receive funds through additional
equity and/or debt financing through either the Stichting VB Vagobel transaction
disclosed to the market on September 9, 2014 or through the US-Dubai consortium
outlined in a press release dated April 1, 2015. Furthermore, the Company is in
negotiations with a third party on a bridge facility. As of May 20, 2015 Vagobel
was in material breach of the contract. The Company has informed Stichting VB
Vagobel of this material breach of the contract and since Vagobel has not cured
the breach, the Company is evaluating the next steps with its Dutch counsel. If
we are not able to raise the required funds, we would consider farming-out
projects in order to reduce our financial commitments. If the Company is unable
to obtain such funding, or complete farming-out projects, the Company will not
be able to continue its business. Any additional equity financing may be dilutive to
shareholders, and debt financing, if available, will increase expenses and may
involve restrictive covenants. The Company will be required to raise additional
capital on terms which are uncertain, especially under the current capital
market conditions. Under these circumstances, if the Company is unable to obtain
capital or is required to raise it on undesirable terms, it may have a material
adverse effect on the Company's financial condition.
20
EPA.at Beteiligungsgesellschaft mbH
On January 15, 2015, MNP Petroleum Corporation (the Company)
acquired a 65% equity interest in EPA for the purpose of diversifying its
portfolio of oil and gas exploration and production assets. Total consideration
paid was USD 12,000,000. The purchase price was partially funded through
available cash resources as well as from the proceeds from the sale of a
separate investment.
EPA, a company registered in Vienna, Austria, holds a 57.42%
interest in the company Petroleum Sugd LLC, which owns 10 producing oil and gas
fields in the north of Tajikistan. Through its equity investment, EPA
participates directly in the profits from the sale of oil and gas.
A field development program for the first five years has been
developed. This program consists of light work overs (such as changing pumps,
tubing, pumping units and clean ups), heavy work overs (plug backs,
reperforations, stimulations, fishing and casing repairs) and new wells mainly
in the shallow fields. The program will also include replacing the gathering
lines, the pumping units and setting up the necessary operating facilities.
The focus will be initially on the low risk shallow fields and
then gradually moving to the deeper fields.
Tajikistan
The Production Sharing Contract for the Western and
Northwestern Licenses was ratified in May 2012. Before the ratification, the
company acquired 1,310 Km of onshore and offshore 2D seismic. It included
regional as well as prospect related 2D seismic. The survey was very complex due
to the different landscapes which had to be covered. It consisted of
vibro-seismic, dynamite seismic and offshore seismic on Lake Kayrakkum.
Our interest in the Somon Oil project was fully carried by
Santos International Ventures Pty Ltd pursuant to a 2007 Option Agreement but,
on December 21, 2012, Santos International informed us that it had decided not
to pursue its option. Santos International continued to fund Somon Oils
operations through January, 2013. During 2013 Santos transferred all data to DWM
Petroleum and Somon Oil. Reprocessing and reinterpretation resulted in a new
sequence of drilling candidates. Based on its review of the data, Somon Oil
continues to be confident in the projects high exploration potential and we are
actively working on establishing a new consortium. There are no liquidated
damages in case of failure. On January 16, 2014, Somon Oil entered into a
contract with JSC Sugdnaftugaz for the construction of the drilling location and
the access road for the Kayrakkum B exploration well. The work at the Kayrakkum
B well site was completed without incident in June 2014. On March 20, 2014,
Somon Oil entered into a purchase agreement for the wellhead and the first two
casing sections for Kayrakkum B, with Dongying Qihai Petroleum Engineering Co.,
Ltd, based in the PR of China. After the manufacturing, all materials will be
delivered to Mahram Base for storage, close to the Kayrakkum B location. On June
24 and 26, both casing sections were delivered and unloaded at Mahram Base. The
ordered wellhead sections were completed in June and arrived in July at Mahram
Base. Upon the extension of the Western License in February 2015, for three
years (until July 25, 2017), we continued with the second contract for casings,
to be supplied during Q2 of 2015. The third contract for the supply of the
remaining casings was entered into on February 27, 2015.
Mongolia
Early in 2012, Gobi Energy Partners LLC focused on the
integration and interpretation of seismic data acquired in 2011. From April to
May 2012, it conducted a passive seismic campaign using low-frequency
spectroscopy to support the seismic. From June to August, 2012, Gobi Energy also
conducted a 2D seismic acquisition (vibroseis) program covering 335 kilometers
over both blocks.
21
Gobi Energy spudded its first well, Ger Chuluu A1, on August
23, 2012. It stopped drilling at a depth of 1098 meters without having
encountered any seal. The initially planned second well East Sainshand A1 was
located in another sub-basin 170 kilometers away. In order to have a conclusive
evaluation of the Ger Chuluu sub-basin, Gobi Energy decided to drill a second
well before moving to East Sainshand. Ger Chuluu D1, the second well in the Ger
Chuluu sub-basin, was spudded on September 21, 2012. Drilling was stopped after
reaching 600 meters without any hydrocarbon shows. After logging, the well was
plugged and abandoned.
Gobi Energy had originally focused on six sub-basins in
Mongolia; after drilling in the Ger Chuluu sub basin and conducting additional
studies, Gobi Energy is now focusing on two sub basins, East and West Sainshand.
In order to enlarge the area to define more prospects to drill the outstanding
commitments, Gobi Energy signed a moratorium with the government of Mongolia for
the duration of one year ending in May 2014. During this period Gobi Energy
expected the government to be awarded with relinquished areas from adjacent
blocks. The government of Mongolia has not taken a decision on Gobi Energy's
application to expand its exploration acreage before the end of the moratorium.
Consequently, Gobi Energy has applied for an extension of the moratorium for one
additional year.
Item 2. Quantitative
and Qualitative Disclosures about Market Risk.
Not applicable.
Item 3. Controls and
Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as that term
is defined in Rule 13a-15(e), promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our companys reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions
rules and forms, and that such information is accumulated and communicated to
our management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.
As required by paragraph (b) of Rules 13a-15 under the
Securities Exchange Act of 1934, our management, with the participation of our
principal executive officer and our principal financial officer, evaluated our
companys disclosure controls and procedures as of the end of the period covered
by this quarterly report. Based on this evaluation, our principal executive
officer and our principal financial officer concluded that as of the end of the
period covered by this quarterly report, our disclosure controls and procedures
were effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial
reporting during the fiscal quarter ended March 31, 2015, that have materially
affected, or are reasonably likely to materially affect our internal control
over financial reporting.
22
PART II. OTHER INFORMATION
Item 1. Legal
Proceedings
There are no pending legal proceedings to which our company or
any of our subsidiaries is a party or of which any of our properties, or the
properties of any of our subsidiaries, is the subject. In addition, we do not
know of any such proceedings contemplated by any governmental authorities.
Item 1A. Risk Factors
Information regarding risk factors appears in Item 1A of the
Companys Annual Report on Form 10-K for the year ended December 31, 2014. There
have been no material changes for the three month period ended March 31, 2015
from the risk factors disclosed in the 2014 Annual Report on Form 10-K.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Purchase of equity securities by the issuer and
affiliated purchasers
None.
Item 3. Defaults upon
Senior Securities
None.
Item 4. Mine Safety
Disclosures.
Not applicable.
Item 5. Other
Information
None.
Item 6. Exhibits
EXHIBIT
Number |
Description |
(3) |
Articles of Incorporation
and Bylaws |
3.1 |
Articles of Incorporation (incorporated by reference to
an exhibit to our Registration Statement on Form SB-2 filed on July 14,
2003) |
3.2 |
Certificate of Amendment to Articles of Incorporation of
Express Systems Corporation filed on April 2, 2007 (changing name to Manas
Petroleum Corporation) (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on April 17, 2007) |
3.3 |
Certificate of Amendment to Articles of Incorporation
filed on April 22, 2013 (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q filed on May 20, 2013) |
3.4 |
Certificate of Amendment dated effective January 20, 2014
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on January 14, 2014) |
23
Number |
Description |
3.5 |
Amended and Restated Bylaws (incorporated by reference to
an exhibit to our Current Report on Form 8- K filed on November 1, 2011)
|
(4) |
Instruments Defining the Rights of Security Holders,
including Indentures |
4.1 |
Warrant Indenture dated May 6, 2011 with Equity Financial
Trust Company (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on May 9, 2011) |
(10) |
Material Contracts |
10.1 |
Share Exchange Agreement, dated November 23, 2006
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on April 17, 2007) |
10.2 |
Farm-In Agreement, dated October 4, 2006 (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on April
17, 2007) |
10.3 |
Letter Agreement Phase 2 Work Period with Santos
International Operations Pty. Ltd, dated July 28, 2008 (incorporated by
reference to an exhibit to our Annual Report on Form 10-K filed on April
15, 2009) |
10.4 |
Side Letter Agreement Phase 1 Completion and Cash
Instead of Shares with Santos International Holdings Pty Ltd., dated
November 24, 2008 (incorporated by reference to an exhibit to our Annual
Report on Form 10-K filed on April 15, 2009) |
10.5 |
2007 Revised Omnibus Plan (incorporated by reference to
an exhibit to our Annual Report on Form 10-K filed on April 15, 2009)
|
10.6 |
Production Sharing Contract for Contract Area Tsagaan
Els-13 between the Petroleum Authority of Mongolia and DWM Petroleum
(incorporated by reference to an exhibit to our Quarterly Report on Form
10-Q/A filed on July 24, 2009) |
10.7 |
Production Sharing Contract for Contract Area
Zuunbayan-14 between the Mineral Resources and Petroleum Authority of
Mongolia and DWM Petroleum (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q/A filed on July 24, 2009) |
10.8 |
Letter from AKBN regarding Production Sharing Contracts
for Blocks A-B and D-E dated May 5, 2009 (incorporated by reference to an
exhibit to our Quarterly Report on Form 10-Q/A filed on July 24, 2009)
|
10.9 |
Employment Agreement between Ari Muljana and MNP
Petroleum Corporation dated April 1, 2009 (incorporated by reference to an
exhibit to our Registration Statement on Form S-1 filed on July 30, 2009)
|
10.10 |
Consultancy Agreement dated November 21, 2008 with Dr.
Richard Schenz (incorporated by reference to an exhibit to our Current
Report on Form 8-K filed on August 13, 2009) |
10.11 |
Share Purchase Agreement dated February 12, 2010 between
Petromanas Energy Inc. (formerly WWI Resources Ltd.), DWM Petroleum AG and
Petromanas Albania GmbH (formerly Manas Adriatic GmbH) (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on
February 25, 2010) |
10.12 |
Form of Stock Option Agreement (Investor Relations)
(incorporated by reference to an exhibit to our Annual Report on Form 10-K
filed on March 18, 2010) |
10.13 |
Form of Stock Option Agreement (Non-Investor Relations)
(incorporated by reference to an exhibit to our Annual Report on Form 10-K
filed on March 18, 2010) |
10.14 |
Agreement dated January 29, 2010 relating to the
assignment of the interest in the Chilean project (incorporated by
reference to an exhibit to our Annual Report on Form 10-K filed on March
18, 2010) |
10.15 |
Agreement between Gobi Energy Partners LLC and DQE
International Tamsag (Mongol) LLC (incorporated by reference to an exhibit
to our Current Report on Form 8-K filed on September 7, 2010) |
10.16 |
Appointment as Director dated September 16, 2010 by Dr.
Werner Ladwein (incorporated by reference to an exhibit to our Quarterly
Report on Form 10-Q filed on November 15, 2010) |
10.17 |
Employment and Non-Competition Agreement dated October 1,
2010 with Peter-Mark Vogel (incorporated by reference to an exhibit to our
Quarterly Report on Form 10-Q filed on November 15, 2010) |
10.18 |
Cooperation Agreement dated November 5, 2010 with
Shunkhlai Group LLC (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on December 2, 2010) |
10.19 |
Form of Lock-Up Agreement with Raymond James Ltd. and
executive officers and directors (incorporated by reference to an exhibit
to our Registration Statement on Form S-1/A filed on April 28, 2011)
|
24
Number |
Description |
10.20 |
Escrow Agreement dated May 3,
2011 with Equity Financial Trust Company and our officers and directors
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on May 9, 2011) |
10.21 |
Share Purchase Agreement dated December 31,
2012 (incorporated by reference to an exhibit to our Current Report on
Form 8-K filed on January 15, 2015) |
10.22 |
Amendment 1 to Share Purchase
Agreement effective December 31, 2012 (incorporated by reference to an
exhibit to our Current Report on Form 8-K filed on January 15, 2015)
|
10.23 |
Amendment 2 to Share Purchase Agreement
effective April 30, 2013 (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on January 15, 2015) |
10.24 |
Amendment 3 to Share Purchase
Agreement effective April 30, 2013 (incorporated by reference to an
exhibit to our Current Report on Form 8-K filed on January 15, 2015)
|
10.25 |
Form of Amendment to IR Consulting Agreement
dated February 1, 2013 with General Research GmbH (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on
February 28, 2013) |
10.26 |
Form of Stock Option Agreement
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on February 28, 2013) |
10.27 |
Form of Stock Option Cancellation Agreement
(incorporated by reference to an exhibit to our Current Report on Form 8-K
filed on February 28, 2013) |
10.28 |
Consulting agreement dated June
18, 2013 with Undiscovered Equities Inc. (incorporated by reference to an
exhibit to our Current Report on Form 8-K filed on July 11, 2013) |
10.29 |
Form of Stock Option Agreement (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on July
11, 2013) |
10.30 |
Loan Agreement dated August 8,
2013 between DWM Petroleum AG and Tulip Fund NV (incorporated by reference
to an exhibit to our Quarterly Report on Form 10-Q filed on August 19,
2013) |
10.31 |
Supplement Agreement to Share Purchase
Agreement effective September 27, 2013 (incorporated by reference to an
exhibit to our Annual Report on Form 10-K filed on March 31, 2014) |
10.32 |
Private Placement Agreement
dated November 29, 2014 with Stichting VB Vagobel (incorporated by
reference to an exhibit to our Current Report on Form 8-K filed on
December 1, 2014) |
10.33 |
Broker Agreement dated September 26, 2014 with
Sidewinder Investment AG (incorporated by reference to an exhibit to our
Current Report on Form 8-K filed on December 1, 2014) |
(14) |
Code of Ethics |
14.1 |
Code of Ethics, adopted May 1, 2007
(incorporated by reference to an exhibit to our Registration Statement on
Form SB-2 filed on November 21, 2007) |
(31) |
Rule 13a-14
Certifications |
31.1* |
Section 302 Certification of Chief Executive
Officer |
31.2* |
Section 302 Certification of
Chief Financial Officer |
(32) |
Section 1350 Certifications |
32.1* |
Section 906 Certification of
Chief Executive Officer |
32.2* |
Section 906 Certification of Chief Financial
Officer |
(99) |
Additional Exhibits
|
99.1 |
Audit Committee Charter (incorporated by
reference to an exhibit to our Registration Statement on Form S-1 filed on
February 2, 2011) |
(101) |
XBRL |
101.INS* |
XBRL INSTANCE DOCUMENT |
101.SCH* |
XBRL TAXONOMY EXTENSION SCHEMA
|
101.CAL* |
XBRL TAXONOMY EXTENSION
CALCULATION LINKBASE |
101.DEF* |
XBRL TAXONOMY EXTENSION
DEFINITION LINKBASE |
101.LAB* |
XBRL TAXONOMY EXTENSION LABEL
LINKBASE |
101.PRE* |
XBRL TAXONOMY EXTENSION
PRESENTATION LINKBASE |
* Filed herewith.
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MNP PETROLEUM CORPORATION |
|
By |
/s/ Dr. Werner Ladwein |
Dr. Werner Ladwein |
Chief Executive Officer, President and Director |
(Principal Executive Officer) |
Date: May 20, 2015 |
|
By |
/s/ Peter-Mark Vogel |
Peter-Mark Vogel |
Chief Financial Officer, Treasurer and Secretary |
(Principal Financial Officer and Principal Accounting
Officer) |
|
Date: May 20, 2015 |
Exhibit 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Dr. Werner Ladwein, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of MNP
Petroleum Corporation; |
|
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a15(f) and 15d15(f)) for the registrant and have: |
|
|
|
|
(a) |
designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
|
|
|
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
|
|
|
(a) |
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
May 20, 2015
/s/ Dr. Werner
Ladwein
Dr. Werner Ladwein
Chief Executive Officer, President and
Director
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I, Peter-Mark Vogel, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of MNP
Petroleum Corporation; |
|
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a15(f) and 15d15(f)) for the registrant and have: |
|
|
|
|
(a) |
designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
(b) |
designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
(c) |
evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
(d) |
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
|
|
|
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
|
|
|
(a) |
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
|
|
|
(b) |
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
May 20, 2015
/s/ Peter-Mark
Vogel
Peter-Mark Vogel
Chief Financial Officer, Treasurer and
Secretary
(Principal Financial Officer and Principal Accounting Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The undersigned, Dr. Werner Ladwein, hereby certifies, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
(a) |
the quarterly report on Form 10-Q of MNP Petroleum
Corporation for the period ended March 31, 2015 fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
|
|
(b) |
information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of MNP Petroleum Corporation. |
Date: May 20, 2015
/s/ Dr. Werner
Ladwein
Dr. Werner Ladwein
Chief Executive Officer, President and
Director
(Principal Executive Officer)
Exhibit 32.2
CERTIFICATION PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
The undersigned, Peter-Mark Vogel, hereby certifies, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
(a) |
the quarterly report on Form 10-Q of MNP Petroleum
Corporation for the period ended March 31, 2015 fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and |
|
|
|
|
(b) |
information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of MNP Petroleum Corporation. |
Date: May 20, 2015
/s/ Peter-Mark
Vogel
Peter-Mark Vogel
Chief Financial Officer, Treasurer and
Secretary
(Principal Financial Officer and Principal Accounting Officer)
MNP Petroleum (CE) (USOTC:MNAP)
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