TIDMTRAP
RNS Number : 0614L
Trap Oil Group plc
23 April 2015
Trap Oil Group plc
("Trapoil" or the "Company" and, together with its subsidiaries,
the "Group")
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
Trapoil (AIM: TRAP), the independent oil and gas exploration,
appraisal and production company focused on the UK Continental
Shelf ("UKCS") region of the North Sea, announces its audited
results for the year ended 31 December 2014.
Highlights
-- GBP3.0m paid to fund the drilling of a well on Licence
P.1889, Blocks 12/26b and 27 ("Niobe"), planned for June 2015
-- Continued assessment of the possibility that Licence P.1610,
Block 13/23a ("Magnolia") may contain an extension of the adjacent
Liberator discovery well
-- Awarded Licence P.2170, Block 20/5b ("Cortina") in the
Department of Energy & Climate Change's ("DECC's) 28(th)
Seaward Licensing Round
-- Relinquishment of various licence interests considered to be
uneconomic, resulting in impairment charges of approximately
GBP12.5m
-- Significant losses incurred on Licence P.1293, Block 14/18b
("Athena"), resulting in an impairment charge of GBP15.1m
-- Contract with the Athena FPSO provider renegotiated,
resulting in a cost reduction but requirement for a payment of
US$3.0m by the Company in July 2015
-- Reduction of the Company's overhead base down to GBP1.3m per
annum from GBP5.1m 2 years ago (2014: GBP3.5m)
-- Loss (before and after tax) for the year of GBP44.4m (2013:
GBP10.3m)
Outlook
-- Although we look forward to the drilling of Niobe and despite
the overhead reductions achieved, in the absence of additional
funding the Group has insufficient resources to continue operating
beyond the short term
-- The Board, in conjunction with its advisers, is urgently
assessing a number of potential funding alternatives and/or asset
sales
-- In the absence of a viable funding solution, the Board
considers that it is highly likely that the Company will become
insolvent, and appropriate insolvency proceedings, such as
administration or liquidation, will consequently need to be
commenced
Enquiries:
Trap Oil Group Scott Richardson Brown, Tel: 020 3691 2015
plc Finance Director www.trapoil.com
Strand Hanson James Harris Tel: 020 7409 3494
Limited Matthew Chandler
James Spinney
FirstEnergy Capital Hugh Sanderson Tel: 020 7448 0200
LLP David van Erp
Cardew Group Shan Shan Willenbrock Tel: 020 7930 0777
Tom Horsman trapoil@cardewgroup.com
Chairman's Statement
Introduction
The year ended 31 December 2014 was one of great change for the
Company. In the latter part of the year, further to reviewing a
number of strategic options with our major shareholders, we
announced that operating costs would be reduced to a minimum in
order to maintain the Group's existing assets whilst seeking to
maximise returns from such assets for our stakeholders. As part of
the implementation of this strategy, on 12 August 2014, Simon Bragg
stood down as Chairman and I agreed to assume the role of
Non-Executive Chairman to oversee the Group's transitioning. In
addition, Mark Groves Gidney (Chief Executive Officer) and Paul
Collins (Chief Operating Officer) both resigned from the Board with
effect from 31 October 2014.
In the subsequent months, we significantly cut the Group's
overheads from approximately GBP3.5m in 2014 to a currently
anticipated level of approximately GBP1.3m for 2015. We also
relinquished a number of our exploration licence interests as they
reached the end of their scheduled terms, which has accordingly
resulted in a significant impairment charge being recognised in our
final results for 2014.
We are actively seeking to advance the remainder of the Group's
attractive exploration portfolio, which includes a well expected to
be drilled on the Niobe prospect during the second quarter of 2015.
As set out below, however, such activities have been overshadowed
by the significant cash outflows currently being incurred in
respect of our interest in the producing Athena oil field,
principally a reflection of the depressed oil price.
Financial Results
Our results for the year show revenue of GBP13.4m (2013:
GBP30.3m) and a loss before tax of GBP44.4m (2013: GBP10.3m),
principally reflecting the adverse weather conditions experienced
on Athena in the first half of the year, downtime to complete the
requisite workover in the fourth quarter, a depressed Brent oil
price and the abovementioned significant impairment of certain of
our licence interests. As at 31 December 2014, total cash reserves
(excluding restricted cash) were approximately GBP7.1m (2013:
GBP16.1m). As at 31 March 2015, the Company's net unrestricted cash
reserves amounted to approximately GBP3.2m. Further details of the
changes in our financial position in 2014, and subsequent
developments in 2015 to the date of this report, are set out below
and in the Finance Director's Report.
Licence Interests
In the fourth quarter of 2014, the Company, alongside the other
relevant licence holders, fully funded the expected drilling costs
(GBP10.7m gross; GBP3.0m net to Trapoil) in relation to a planned
well on Licence P.1889, Blocks 12/26b & 27 (the "Niobe
prospect"), in respect of which we are currently anticipating a
spud date in or around June 2015. We hold a 28 per cent. equity
interest (25.5 per cent. paying interest and a 2.5 per cent.
carried interest) in this licence.
We continue to assess the possibility that Licence P.1610, Block
13/23a ("Magnolia"), in which we hold a 10 per cent. carried
interest, may contain an extension of the Liberator discovery (well
13/23d-8) drilled by Dana Petroleum (E&P) Limited in its
adjacent block (Licence P.1987, Block 13/23d). Our P.1610 licence
group is currently awaiting delivery of recently acquired
speculative seismic data in order to undertake an evaluation of the
potential Liberator discovery extension into Block 13/23a before
formulating plans for potential appraisal drilling. In the event a
decision is made to drill an appraisal well we currently anticipate
that such drilling would take place in 2016.
In May 2014, the Company agreed revised terms with Suncor Energy
UK Limited ("Suncor") in respect of the Romeo discovery (Licence
P.1666, Block 30/11c) ("Romeo"), whereby the Company assumed a
majority ownership position in the licence in return for the
extinguishment of Suncor's 5.5 per cent. share of Trapoil's
existing carried interest in the Niobe prospect. Trapoil therefore
acquired Suncor's entire 50.625 per cent. equity interest in Romeo
resulting in a total interest of 73.125 per cent. (including a
2.143 per cent. carried interest). We continue to actively explore
means to potentially secure value for our sizeable interest in this
licence.
In December 2014, further to our participation in the Department
of Energy and Climate Changes' ("DECC's")28th Seaward Licensing
Round, we were awarded Licence P.2170, Blocks 20/5b and 21/1d
("Cortina") alongside our consortium partner, CIECO Exploration and
Production Limited, with each party holding a 50 per cent. paying
interest (Trapoil 60 per cent. working interest of which 10 per
cent. is carried). As required under the terms of the licence
award, we are currently evaluating recently obtained, reprocessed
seismic data over these blocks.
Licence P.1989, Blocks 14/11, 12 & 16 ("Homer") was awarded
in October 2012 in DECC's 27th Seaward Licensing Round and Trapoil
holds a 50 per cent. working interest of which 5 per cent. is
carried. We have recently taken delivery of new 3D seismic data
which fulfils our work obligations. The licence has a four year
"drill or drop" commitment.
Licence Relinquishments
A number of licence interests in our portfolio reached the end
of their term during the reporting period and despite rigorous
attempts to farm such licences out, we were obliged to relinquish
them in accordance with DECC's licencing terms. The relinquishments
included Licence P.1267, Blocks 12/25a & 13/21b ("Surprise
& Nutmeg"), Licence P.2026, Block 16/18c ("Savannah"), Licence
P.2032, Blocks 21/8c, 9c, 10c, 14a & 15b ("Valleys"), Licence
P.1938, Blocks 3/2c, 4c, 7d, 9c, 13b, 14h, 14j, 16/12b, 17c,
211/22b, 27d, 28b & 29e ("Unconventional"). Shortly following
the year-end, both Licence P.1768, Blocks 14/14b, 18c & 19c
("Bordeaux/Brule") and Licence P.1556, Block 29/1c ("Orchid") were
also relinquished, as again no farm-outs had been secured, and in
order to save on licence fees going forward. The total impairment
expense associated with such relinquishments amounted to GBP12.5m
(2013: GBP3.2m).
Athena Oilfield
Our sole producing asset is our 15 per cent. equity interest in
the Athena oil field (Licence P.1293, Block 14/18b) ("Athena"). As
reported previously, during the first half of the year production
from the field was adversely affected by bad weather, which
restricted the lifting of crude from the FPSO vessel, and also by
pump failures in the P2 production well. In the fourth quarter, a
workover was completed on the P4 well, in addition to certain
intervention work on the P1 and P3 wells, which resulted in the
payment of an additional GBP2.25m for Trapoil's share of the costs
over and above the amount that had originally been budgeted.
Following completion of these works, stabilised production flow
rates of approximately 4,800 barrels of oil per day ("bopd") (720
bopd net to Trapoil) were established in January 2015. In light of
this lower flow rate, the significant drop in global oil prices and
the fixed nature of certain of the field's key operating costs, at
the then prevailing Brent oil price of approximately US$58/barrel,
the field was significantly loss making and incurring a cash
outflow of approximately GBP380,000 per month net to Trapoil.
Accordingly, on 31 March 2015, the Company announced that the
Athena partnership group (the "Athena Consortium") had entered into
an agreement to amend the terms of its existing contract with BW
Offshore (UK) Limited ("BW Offshore"), the provider and operator of
the Athena FPSO vessel. Under the terms of the amended contract the
Athena Consortium will make a payment of a demobilisation fee
(US$3m net to Trapoil) in July 2015 and from June 2015 will share
net cashflow from the field with BW Offshore. Both parties have the
right to terminate on a 60 day notice period. Whilst the amended
contract reduces the Athena Consortium's overall loss exposure and
currently anticipated cash outflows going forward to the scheduled
expiry of the existing contract's term in June 2016, it
necessitates a larger cash outflow in the near term than under the
previous contract. Most importantly, at the currently prevailing
depressed Brent oil price, the Company's on-going monthly
liabilities in respect of Athena will be reduced as a consequence
of the amended contract. During March 2015 flow rates were on
average approximately 4,600 bopd (690 bopd net to Trapoil) and we
continue to work closely with the other consortium members to
minimise costs as far as possible going forward.
Overhead Reductions
As part of the abovementioned cost cutting process, we have
significantly reduced the number of full time employees and those
working on a contracted basis. In February 2015, we also assigned
the remaining four year term of our lease at 35 King Street to a
third party and moved to alternative, smaller office premises on a
lower cost 12 month rental term.
Outlook
Although we look forward to the results from the forthcoming
drilling of the Niobe prospect, scheduled for the second quarter of
2015, the Directors consider that despite the significant overhead
reductions achieved, the Group is currently under capitalised due
to the depressed Brent oil price and consequently significant
losses incurred in respect of its 15 per cent. equity interest in
Athena representing its sole producing asset. As a result of such
losses and the abovementioned demobilisation fee payable to BW
Offshore in July 2015, and as set out in more detail in the Finance
Director's report, the Group has insufficient financial resources
to continue in operation other than in the short term in the
absence of additional funding.
The Directors, in conjunction with the Company's advisers, are
therefore continuing to urgently assess a number of potential
funding sources, including the potential disposal of certain of the
Group's licence interests. The Directors believe that the Company
currently only has adequate working capital to support its
activities until around July 2015 but are comfortable with
preparing the financial statements on the going concern basis as
there is a reasonable prospect that drilling of Niobe may be
successful and, that asset sales may be undertaken, in addition to
which the Directors are actively holding conversations to seek
additional shareholder support to secure further funding.
The Directors are taking appropriate advice as to the options
available to the Company and are cognisant of their obligations to
all stakeholders. However, in the event that further funding is not
secured in the short term, the Board believes that it is highly
likely that the Company will become insolvent, and appropriate
insolvency proceedings, such as administration or liquidation, will
consequently need to be commenced. A further announcement will be
made in due course as appropriate.
M J Stanton
Non-Executive Chairman
23 April 2015
FINANCE DIRECTOR'S REPORT
Cash Resources and Short-Term Investments
We ended 2014 in a very poor financial position having endured
what can only be described as a disastrous year for the Company and
its shareholders. As at 31 December 2014 we had just over GBP7m of
cash in the bank having sold our entire holding of IGas Energy plc
shares during the year. The Group, however, has a significant drain
on its remaining cash reserves as Athena is currently expected to
incur further operating losses in 2015, which without an injection
of new capital the Group will have insufficient cash to cover,
along with extra abandonment liabilities of GBP4.2m, as well as the
Group's annual running costs of approximately GBP1.3m.
Statement of Comprehensive Loss
2014 saw a significant reduction in our revenues to GBP13.4m
from GBP30.3m in 2013. Our revenue was largely derived via
production from the Athena oil field (Licence P.1293, Block 14/18b)
which continued to decline naturally but also suffered from having
to be shut in due to poor weather early in the year and experienced
a pump failure in the P2 well. Operating costs for the Athena field
amounted to GBP12.9m but we have also had to incur a significant
number of impairments in 2014, firstly writing down our investment
in Athena at the mid year stage to GBP2m and then subsequently to
zero at the year end, resulting in a total impairment expense of
GBP15.1m. The relinquishment of certain of our exploration and
evaluation assets led to additional impairment expenses of GBP12.5m
and, with depreciation and other costs, the Group posted an overall
loss of GBP44.4m for the year compared to a loss of GBP10.3m in
2013.
Financing & Disposal of Investments
In 2014, we terminated a US$20m senior secured debt facility
taken out in January 2013 with G E Capital. Although cancellation
fees of US$0.3m were incurred, it was more cost effective to cancel
the facility than to pay the on-going facility fees for a facility
that had little remaining purpose and restricted ability to
actually be drawn upon. The Group also cancelled a swap position
taken out with Britannic Trading Limited, a subsidiary of BP
International Limited, a requirement of the G E Capital facility
under which the Group had entered into certain oil price swap
arrangements for a significant proportion of our production from
January 2013 through to January 2016.
During 2014 the Group also disposed of all of its shares held as
an investment in IGas Energy plc which were all sold at a
significant multiple to their current trading value, which resulted
in additional cash of GBP4.1m for the Group. We sold these shares
at various prices ranging from just over 70p up to 130p per share
at a book loss of GBP0.2m.
Administrative Expenses
We have undertaken multiple cost cutting exercises since late
2013 to constantly seek to realign our cost base to the future
prospects of the Company. We now have a "G&A" cost base of
around GBP1.3m and only two full time employees, a reduction of
more than GBP3.8m in only 18 months. Part of these cost savings
arose from moving from a long term lease on our offices in King
Street to significantly smaller premises in Gresham Street, which
is on a short one year contract. We were able to exit our lease in
King Street at a minimal cost to shareholders.
Assets
Our asset portfolio at the year end has seen substantial
relinquishments as we have been unsuccessful in farming out any of
our assets during the year, despite rigorous attempts to do so. We
are now seeking to achieve value from our remaining five
non-producing assets being:
1) Licence P.1989, Blocks 14/11, 12 & 16 ("Homer")
2) Licence P.2170, Blocks 20/5b and 21/1d ("Cortina")
3) Licence P.1889, Blocks 12/26b & 27 ("Niobe prospect')
4) Licence P.1610 Block 13/23a ("Magnolia")
5) Licence P.1666, Block 30/11c ("Romeo discovery")
The carrying values of these remaining licences are only
supportable if the Group is able to improve its current trading
position. Based upon our cash flow forecasts, the Group is
currently expected to run out of cash in July 2015 and
consequently, the licences could be subject to future impairments,
as the Group cannot currently afford to fulfil the operational
plans for the various licences. There can be no certainty that we
will have any success with farming out or disposing of the
remaining portfolio but we are actively reviewing all of our
options.
Exceptional Items
During the year there were GBP15.1m of impairments incurred in
respect of our Athena asset as a result of lower performance levels
and the substantial reduction in the Brent oil price. We have also
had to make a provision of GBP6.5m relating to our interest in the
Athena oil field, which continues to make a loss under the terms of
the long term contract currently in place.
The sale of our holding of IGas Energy plc shares resulted in a
loss of GBP0.2m.
Outlook
The Directors consider that the Group remains under capitalised
due to the recent collapse in the Brent oil price and the
significant losses that are being incurred in respect of our Athena
asset. Having significantly reduced the Company's cost base and
relinquished assets where it was believed there was little ability
to generate value for shareholders, we remain hopeful that our
remaining assets might offer near term upside. The work commitments
of the Group remain minimal, with only one well at Niobe remaining,
being an obligation to DECC, and we have pre-funded our share of
approximately GBP3m for the estimated dry hole costs of this
well.
Despite these measures, the Group currently has insufficient
financial resources to continue in operation other than in the
short term without further capital, by virtue of our remaining cash
reserves being quickly eroded through losses in respect of our
producing field, Athena, and also further costs associated with the
abandonment of the field due in mid 2015. Abandonment costs for the
Athena oil field increased significantly in the year after the
Athena consortium reviewed and revised the previous estimates,
which saw the costs rise from GBP36m to GBP60m. The sharp fall in
the oil price and resulting reduction in demand for oil service
companies services leads us to believe that there is a high
likelihood that the total abandonment costs could, in fact, be
lower than this estimate should abandonment take place in the
current oil price environment. In the fourth quarter of 2014 we put
GBP3.9m in trust to cover our share of the majority of the net
after tax cost of abandonment. In 2015, we currently expect to have
to fund a final instalment of around GBP1.3m.
At present with oil prices in the low US$60 range for Brent the
Group will need to rely on its remaining assets in order to be able
to satisfy its expected liabilities as they fall due, which may
well not provide sufficient value to cover all of our liabilities.
As such, the Directors are striving to ensure that we maximise the
asset value of the Group and seek to achieve fair value for our
remaining assets. The Directors are assessing means of potentially
realising value from our existing asset base through the potential
sale or farm-out of such assets as well as seeking to mitigate the
continued losses from the Athena oil field.
The Niobe exploration prospect, although high risk, with a 20%
chance of success, does have the potential to be very valuable to
the Group with estimated oil reserves of 20-25 mmbbl. In addition,
discussions are being had with a number of parties regarding
possible additional funding for the Group.
S J Richardson Brown
Finance Director
23 April 2015
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE YEAR ENDED 31 DECEMBER 2014
2014 2013
Note GBP GBP
Revenue 3 13,416,062 30,309,304
Cost of sales (31,560,021) (25,688,613)
------------ ------------
GROSS (LOSS)/PROFIT (18,143,959) 4,620,691
Other operating (expense)/income (1,173,133) 75,120
Exceptional items 6 (21,784,400) (9,367,378)
Administrative expenses (3,082,943) (4,520,274)
------------ ------------
OPERATING LOSS (44,184,435) (9,191,841)
Finance costs 7 (240,567) (1,100,664)
Finance income 7 19,029 31,667
------------ ------------
LOSS BEFORE TAX 8 (44,405,973) (10,260,838)
Tax 9 - -
------------ ------------
LOSS FOR THE YEAR (44,405,973) (10,260,838)
OTHER COMPREHENSIVE LOSS
Items that will be reclassified
subsequently to profit or loss
Change in value of available for
sale financial asset 14 - (279,597)
------------ ------------
TOTAL COMPREHENSIVE LOSS FOR THE
YEAR (44,405,973) (10,540,435)
Total comprehensive loss for the
year attributable to:
Owners of the parent (44,405,973) (10,540,435)
============ ============
Loss per share expressed in pence
per share:
Basic and diluted 10 (19.55) (4.65)
No separate statement of comprehensive loss has been presented
as all such gains and losses have been dealt with in the
Consolidated Statement of Comprehensive Loss.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2014 2013
Note GBP GBP
NON-CURRENT ASSETS
Intangible assets - Exploration
costs 11 1,370,799 12,256,350
Intangible assets - Data licence
costs 11 833,332 1,333,332
Property, plant and equipment 12 125,223 14,295,852
2,329,354 27,885,534
------------ ------------
CURRENT ASSETS
Available for sale investment 14 - 4,410,934
Inventories 15 858,060 1,249,599
Trade and other receivables 16 10,026,706 5,456,723
Cash and cash equivalents (including
restricted cash) 17 7,424,282 16,438,908
------------ ------------
18,309,048 27,556,164
------------ ------------
TOTAL ASSETS 20,638,402 55,441,698
============ ============
EQUITY
Called up share capital 18 2,271,693 2,271,693
Share premium account 68,321,083 68,321,083
Share options reserve 21 1,786,425 2,575,472
Accumulated losses (70,945,734) (27,107,644)
Reorganisation reserve (382,543) (382,543)
Available for sale investment reserve 14 - (279,597)
TOTAL EQUITY 1,050,924 45,398,464
------------ ------------
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 19 1,218,845 1,676,078
Provisions for liabilities and charges 20 14,206,831 4,662,912
15,425,676 6,338,990
------------ ------------
CURRENT LIABILITIES
Trade and other payables 19 4,161,802 3,704,244
4,161,802 3,704,244
TOTAL LIABILITIES 19,587,478 10,043,234
------------ ------------
TOTAL EQUITY AND LIABILITIES 20,638,402 55,441,698
============ ============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014
Available
Called for sale
up Share Share
share premium options Accumulated Reorganisation investment Total
capital account reserve losses reserve reserve equity
GBP GBP GBP GBP GBP GBP GBP
At 1 January
2013 2,259,104 68,101,922 2,341,644 (16,985,796) (382,543) - 55,334,331
Loss and total
comprehensive
loss for the
year - - - (10,260,838) - (279,597) (10,540,435)
Issue of share
capital 12,589 219,161 (219,161) - - 12,589
Lapsed share
options - - (138,990) 138,990 - - -
Transactions
with
owners - share
based
payments - - 591,979 - - - 591,979
At 31 December
2013 2,271,693 68,321,083 2,575,472 (27,107,644) (382,543) (279,597) 45,398,464
Total
comprehensive
loss for the
year - - - (44,405,973) - - (44,405,973)
Transfer on sale
of
assets held for
investment - - - (279,597) - 279,597 -
Lapsed share
options
(note 21) - - (847,480) 847,480 - - -
Transactions
with
owners - share
based
payments (note
21) - - 58,433 - - - 58,433
At 31 December
2014 2,271,693 68,321,083 1,786,425 (70,945,734) (382,543) - 1,050,924
========= ========== ========= ============ ============== ========== ============
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2014
2014 2013
Note GBP GBP
Cash flows from operating activities
Cash (used in)/generated from operations 26 (972,043) 8,604,958
Prefunding for Athena's abandonment
costs 16 (3,710,000) -
Deposit for Niobe exploration well 16 (2,846,494) -
Net interest received 29,896 (30,737)
Net cash (used in)/generated from
operating activities (7,498,641) 8,574,221
----------- -----------
Cash flows from investing activities
Purchase of intangible assets 11 (1,648,607) (4,189,222)
Purchase of property, plant and
equipment 12 (3,590,239) (302,783)
Refund on purchase of Production
interest 12 - 4,214,508
Athena insurance refund 12 - 441,081
Sale of IGas Energy plc shares 14 4,195,588 -
Net cash (used in)/generated from
investing activities (1,043,258) 163,584
----------- -----------
Cash flows from financing activities
CGG Services (UK) Limited repaid 19 (472,727) (1,118,000)
G E Capital (fees for US$20m facility) - (819,028)
Proceeds from share issue 18 - 12,589
----------- -----------
Net cash used in financing activities (472,727) (1,924,439)
----------- -----------
(Decrease)/Increase in cash and
cash equivalents 27 (9,014,626) 6,813,366
Cash and cash equivalents at beginning
of year 27 16,088,908 9,275,542
----------- -----------
Cash and cash equivalents at end
of year 27 7,074,282 16,088,908
----------- -----------
TRAP OIL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. GENERAL INFORMATION
Trap Oil Group plc ("the Company") and its subsidiaries
(together, "the Group") are involved in the exploration,
development and production of oil and gas reserves from the UK
Continental Shelf.
The Company is a public limited company, which is quoted on AIM,
a market operated by the London Stock Exchange and incorporated and
domiciled in the United Kingdom. The address of its registered
office is 10 The Triangle, ng2 Business Park, Nottingham, NG2
1AE.
2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the periods
presented, unless otherwise stated.
Basis of Accounting
These financial statements have been prepared under the historic
cost convention modified for fair values, in accordance with
International Financial Reporting Standards and IFRSIC
interpretations as adopted by the European Union ("IFRSs") and with
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
Going Concern
The Directors recognise that the Group has insufficient
financial resources to continue in operation beyond the short term
in the absence of additional funding. The Directors, in conjunction
with the Company's advisers, are therefore continuing to urgently
assess a number of potential funding sources, including the
potential disposal of certain of the Group's licence interests. The
Directors believe that the Company currently only has adequate
working capital to support its activities until around July 2015.
However, they have prepared the financial statements on the going
concern basis because, as explained in the outlook section of the
Chairman's and Financial Director's Report, they believe that there
is a reasonable future prospect for the Group that drilling on the
Niobe prospect will be successful. In addition, the Directors are
actively holding conversations to seek additional shareholder
support to secure further funding. However, there is uncertainty
both as to the commercial viability of the Niobe prospect and the
ability to secure further funding. These conditions indicate the
existence of a material uncertainty that may cast significant doubt
about the Group's ability to continue as a going concern. The
financial statements do not include the adjustments that would be
necessary if the Group was unable to continue as a going
concern.
In the event that further funding is not secured in the short
term, the Board believes that it is highly likely that the Company
will become insolvent, and appropriate insolvency proceedings, such
as administration or liquidation, will consequently need to be
commenced.
Changes in Accounting Policy and Disclosures
(a) New and amended standards adopted by the Company
The following standards came into effect during 2014: Financial
Instruments (IAS32), Impairment of Assets (IAS36), Financial
Instruments: recognition and measurement (IAS39). Each of the new
standards is effective for annual periods beginning on or after 1
January 2014. There has been no material impact from the adoption
of the new and amended standards on the Corporation's financial
statements.
(b) New standards, amendments and interpretations issued but not
effective for this accounting year and not early adopted
There are no IFRSs or IFRS IC interpretations that are not yet
effective that would be expected to have a material impact on the
Company.
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management
to make estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities at the date of the
financial statements. If in future such estimates and assumptions,
which are based on management's best judgement at the date of the
financial statements, deviate from the actual circumstances, the
original estimates and assumptions will be modified as appropriate
in the period in which the circumstances change. The Group's
accounting policies make use of accounting estimates and judgements
in the following areas:
-- amortisation (note 11),
-- impairment (note 11),
-- depreciation (note 12),
-- decommissioning (note 20), and
-- the estimation of share based payment costs (note 21).
These are described in more detail in the relevant accounting
policies.
Basis of Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which the Group has the power
to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. The Group also
assesses existence of control where it does not have more than 50
per cent. of the voting power but is able to govern the financial
and operating policies by virtue of de-facto control. De-facto
control may arise in circumstances where the size of the Group's
voting rights relative to the size and dispersion of holdings of
other shareholders give the Group the power to govern the financial
and operating policies.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from
the date the Group ceases to have control.
The Group applies the acquisition method of accounting to
account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of the acquiree's identifiable net
assets.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the
acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is
accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of
the consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognised
in profit or loss.
Inter-company transactions, balances, income and expenses on
transactions between Group companies are eliminated. Profits and
losses resulting from inter-company transactions that are
recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(b) Changes in ownership interests in subsidiaries without
change of control
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions - that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in
the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in
profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
(d) Associates
Associates are all entities over which the Group has significant
influence but not control, generally accompanying a shareholding of
between 20 per cent. and 50 per cent. of the voting rights.
Investments in associates are accounted for using the equity method
of accounting. Under the equity method, the investment is initially
recognised at cost, and the carrying amount is increased or
decreased to recognise the investor's share of the profit or loss
of the investee after the date of acquisition. The Group's
investment in associates includes goodwill identified on
acquisition.
If the ownership interest in an associate is reduced but
significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is
reclassified to profit or loss where appropriate.
The Group's share of post-acquisition profits or losses is
recognised in the Consolidated Statement of Comprehensive Loss, and
its share of post-acquisition movements in other comprehensive
income is recognised in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds
its interest in the associate, including any other unsecured
receivables, the Group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on
behalf of the associate.
Profits and losses resulting from upstream and downstream
transactions between the Group and its associates are recognised in
the Group's financial statements only to the extent of unrelated
investor's interests in the associates. Unrealised losses are
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Dilution gains and losses arising in investments in associates
are recognised in the Consolidated Statement of Comprehensive
Loss.
Acquisitions, Asset Purchases and Disposals
Acquisitions of oil and gas properties are accounted for under
the purchase method where the business meets the definition of a
business combination.
Transactions involving the purchase of an individual field
interest, farm-ins, farm-outs, or acquisitions of exploration and
evaluation licences for which a development decision has not yet
been made that do not qualify as a business combination, are
treated as asset purchases. Accordingly, no goodwill or deferred
tax arises. Consideration from farm-ins/farm-outs are adequately
credited from, or debited to, the asset. The purchase consideration
is allocated to the assets and liabilities purchased on an
appropriate basis. Proceeds on disposal are applied to the carrying
amount of the specific intangible asset or development and
production assets disposed of and any surplus is recorded as a gain
on disposal in the Consolidated Statement of Comprehensive
Loss.
Revenue Recognition
Revenue is recognised to the extent that it is probable that
economic benefits will flow to the Group and the revenue can be
reliably measured. It is measured at the fair value of
consideration received or receivable for the sale of goods.
Revenue derived from the production of hydrocarbons in which the
Group has an interest with joint venture partners is recognised on
the basis of the Group's working interest in those properties. It
is recognised when the significant risks and rewards of ownership
have been passed to the buyer.
Revenue from strategic partners on the identification of
opportunities for application for a licence to explore further is
recognised in the period in which the services are provided or the
date a trigger event occurs if this is later.
The Group also receives revenue from the production of
hydrocarbons from licences held by the Group that is recognised at
the end of each month based upon the quantity and price of oil and
gas delivered to the customer.
Exploration and Evaluation Costs
The Group accounts for oil and gas and exploration and
evaluation costs using IFRS 6 "Exploration for and Evaluation of
Mineral Resources". Such costs are initially capitalised as
Intangible Assets and include payments to acquire the legal right
to explore, together with the directly related costs of technical
services and studies, seismic acquisition, exploratory drilling and
testing.
Exploration costs are not amortised prior to the conclusion of
appraisal activities.
Exploration costs included in Intangible Assets relating to
exploration licences and prospects are carried forward until the
existence (or otherwise) of commercial reserves have been
determined subject to certain limitations including review for
indications of impairment on an individual licence basis. If
commercial reserves are discovered, the carrying value, after any
impairment loss of the relevant assets, is then reclassified as
Property, plant and equipment under Production interests and fields
under development. If, however, commercial reserves are not found,
the capitalised costs are charged to the Consolidated Statement of
Comprehensive Loss. If there are indications of impairment prior to
the conclusion of exploration activities, an impairment test is
carried out.
Data Licence
Acquired data licences are capitalised on the basis of the costs
incurred to acquire and bring to use the specific licence. These
costs are amortised over the life of the licence of eight
years.
Property, Plant and Equipment
Production Interests and Fields Under Development
Such assets are accumulated generally on a field by field basis
and represent the cost of developing the commercial reserves
discovered and bringing them into production, together with the
exploration costs incurred in finding commercial reserves
transferred from Intangible Assets.
The costs also include the acquisition and purchase of such
assets, directly attributable overheads and the cost of recognising
provisions for future restoration and decommissioning.
Amortisation, Depletion and Impairment of Oil and Gas Assets
All expenditure carried within each field is amortised from the
commencement of production on a unit of production basis, which is
the ratio of oil and gas production in the period to the estimated
quantities of proven and probable reserves at the end of the period
plus the production in the period, on a field by field basis. Costs
used in the unit of production calculation comprise the net book
value of capitalised costs plus the estimated future field
development costs to access the related commercial reserves.
Changes in the estimates of commercial reserves or future field
development costs are dealt with prospectively.
Where there has been a change in economic conditions that
indicate a possible impairment in an oil and gas asset, the
recoverability of the net book value relating to that field is
assessed by comparison with the estimated discounted future cash
flows based on management's expectations of future oil and gas
prices and future costs. Any impairment identified is charged to
the Consolidated Statement of Comprehensive Loss as an exceptional
item. Where conditions giving rise to impairment subsequently
reverse, the effect of the impairment charge is also reversed as a
credit to the Consolidated Statement of Comprehensive Loss, net of
any depreciation that would have been charged since the
impairment.
Property, plant and equipment is stated at historic purchase
cost less accumulated depreciation. Asset lives and residual
amounts are reassessed each year. Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use.
Depreciation on these assets is calculated on a straight line
basis as follows:
Computer & office - 3 years
equipment
Decommissioning and Site Restoration
Provision for decommissioning and site restoration is recognised
in full when the related facilities are installed and the field
commences production. A corresponding amount equivalent to the
provision is also recognised as part of the cost of the related
Production Interest. The amount recognised is the estimated cost of
decommissioning and site restoration, discounted to its net present
value and is reassessed each year in accordance with existing
conditions and requirements. Changes in the estimated timing of
cost estimates are dealt with as an adjustment to the provision and
a corresponding adjustment to the Production interest. The
unwinding of the discount on the decommissioning provision is
included as a finance cost.
Inventories
Inventory of materials and product inventory supplies are stated
at the lower of cost and net realisable value. Cost is determined
on the first in, first out method. Inventories of hydrocarbons are
stated at the lower of cost and net realisable value.
Joint Ventures
The Group participates in several joint venture agreements with
strategic partners, where revenue is derived from annual retainers
and success fees in a combination of cash and carried interests.
The Group accounts for its share of assets, liabilities, income and
expenditure of these joint venture agreements and discloses the
details in the appropriate Statement of Financial Position and
Statement of Comprehensive Loss headings in the proportion that
relates to the Group per the joint venture agreement.
Investments
Fixed asset investments in subsidiaries are stated at cost less
accumulated impairment in the Company only Statement of Financial
Position and reviewed for impairment if there are any indications
that the carrying value may not be recoverable.
Financial Instruments
Financial assets and financial liabilities are recognised in the
Group's Statement of Financial Position when the Group becomes
party to the contractual provisions of the instrument. The Group
does not have any derivative financial instruments.
Cash and cash equivalents include cash in hand and deposits held
on call with banks with a maturing of three months or less.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. A provision for
impairment of trade receivables is established when there is
objective evidence that the Group will not be able to collect all
amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that
the debtor will enter bankruptcy or financial reorganisation, and
default or delinquency in payments (more than 30 days overdue) are
considered indicators that the trade receivable is impaired. The
amount of the provision is the difference between the asset's
carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. The
carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss will be recognised in
the Consolidated Statement of Comprehensive Loss within selling and
marketing costs. When a trade receivable is uncollectible, it will
be written off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are
credited against selling and marketing costs in the Consolidated
Statement of Comprehensive Loss.
Trade payables are stated initially at fair value and
subsequently measured at amortised cost.
Loan notes are stated initially at fair value and subsequently
measured at amortised cost of the investment as agreed in the loan
instrument.
Available for Sale Investment
Non-derivative financial assets not included in the above
categories are classified as available for sale and comprise the
Company's investment in entities not qualifying as subsidiaries,
associates or jointly controlled entities. They are carried at fair
value with changes in fair value recognised directly in a separate
component of equity (available for sale reserve). Where there is
significant or prolonged decline in the fair value of an available
for sale financial asset (which constitutes objective impairment),
the full amount of the impairment, including any amount previously
charged to equity, is recognised in the Statement of Comprehensive
Loss. Purchases and sales of available for sale financial assets
are recognised on settlement date with any change in fair value
between trade date and settlement date being recognised in the
Statement of Comprehensive Loss. On sale, the amount held in the
available for sale reserve associated with that asset is removed
from equity and recognised in the Statement of Comprehensive
Loss.
Onerous Contracts
The group has recognised provisions for liabilities of uncertain
onerous contracts. Present obligations arising under onerous
contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract
under which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received
from the contract.
Exceptional Items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the group. They are
material items of income or expense that have been shown separately
due to the significance of their nature or amount.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred taxation liabilities
are provided, using the liability method, on all taxable temporary
differences at the reporting date. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profits will be available against
which the temporary differences can be utilised. The carrying
amount of deferred tax assets is reviewed at each reporting
date.
Foreign Currencies
Monetary assets and liabilities in foreign currencies are
translated into sterling at the rates of exchange ruling at the
reporting date. Transactions in foreign currencies are translated
into sterling at the rate of exchange ruling at the date of
transaction. Gains and losses arising on retranslation are
recognised in the Consolidated Statement of Comprehensive Loss for
the year.
Employee Benefit Costs
The Group operates a defined contribution pension scheme.
Matching contributions are made by the employer and employees up to
10% each of salary and also as part of and in addition to a
personal salary sacrifice scheme. Contributions payable are charged
to the Statement of Comprehensive Loss in the period to which they
relate. No further obligations remain once contributions have been
paid.
Share Based Payments
Equity settled share based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. The total amount to be
expensed is determined by reference to the fair value of the
options granted:
-- including any market performance conditions (for example, an entity's share price);
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
The fair value determined at the grant date of the equity
settled share based payments is expensed on a straight line basis
over the vesting period, based on the Group's estimate of equity
instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected
to vest. The impact of the revision of the original estimates, if
any, is recognised in profit or loss such that the cumulative
expense reflects the revised estimate, with a corresponding
adjustment to the equity settled employee benefits reserve.
Equity settled share based payment transactions with parties
other than employees are measured at the fair value of the goods or
services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the
equity instruments granted, measured at the date the entity obtains
the goods or the counterparty renders the service.
Exercise proceeds net of directly attributable costs are
credited to share capital and share premium.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Where any Group company purchases the Company's equity share
capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of taxes) is deducted
from equity attributable to the Company's equity holders until the
shares are cancelled or reissued. Where such ordinary shares are
subsequently reissued, any consideration received, net of any
directly attributable incremental transaction costs and the related
tax effects, is included in equity attributable to the Company's
equity holders.
Segmental Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board of Directors.
3. SEGMENTAL REPORTING
The Directors consider that the Group operates in a single
segment, that of oil and gas exploration, appraisal, development
and production, in a single geographical location, the North Sea of
the United Kingdom and do not consider it appropriate to
disaggregate data further from that disclosed.
Revenue from one major customer exceeded 10%, and amounted to
GBP13.4m. In 2013 revenue from one major customer exceeded 10%, and
amounted to GBP30.3m.
4. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to financial risks and its
overall risk management programme focuses on minimising potential
adverse effects on the financial performance of the Group. The
Company's activities are also exposed to risks through its
investments in subsidiaries and is accordingly exposed to similar
financial and capital risks as the Group.
Risk management is carried out by the Directors and they
identify, evaluate and address financial risks in close
co-operation with the Group's management. The Board provides
written principles for overall risk management, as well as written
policies covering specific areas, such as mitigating foreign
exchange risks and investing excess liquidity.
Credit Risk
The Group's credit risk primarily relates to its trade
receivables. Responsibility for managing credit risks lies with the
Group's management.
A customer evaluation is typically obtained from an appropriate
credit rating agency. Where required, appropriate trade finance
instruments such as letters of credit, bonds, guarantees and credit
insurance will be used to manage credit risk.
The Group's major customers are typically blue chip companies
which have strong credit ratings assigned by international credit
rating agencies. Where a customer does not have sufficiently strong
credit ratings, alternative forms of security such as the trade
finance instruments referred to above may be obtained.
Management review trade receivables across the Group based on
receivable days calculations to assess performance. There is
significant management focus on receivables that are overdue. Trade
receivable days for the Group for the year ended 31 December 2014
were 42 days (2013: 23 days), based on the ratio of Group trade
receivables at the end of the year to the amount invoiced during
the year to trade receivables.
The Group also has a number of joint venture arrangements where
partners have made commitments to fund certain expenditure.
Management evaluate the credit risk associated with each contract
at the time of signing and continually monitor the credit
worthiness of our partners.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they become due. The Group
manages its liquidity through continuous monitoring of cash flows
from operating activities, review of actual capital expenditure
programmes, and managing maturity profiles of financial assets and
financial liabilities. These activities ensure that the Group has
sufficient funds to meet its financial obligations as they become
due.
Capital Risk Management
The Group seeks to maintain an optimal capital structure. The
Group considers its capital to comprise both equity and net
debt.
The Group monitors its capital structure on the basis of its net
debt to equity ratio. Net debt to equity ratio is calculated as net
debt divided by total equity. Net debt is calculated as borrowing
less cash and cash equivalents. Total equity comprises all
components of equity.
The ratio of net debt to equity as at 31 December 2014 is Nil
(2013: Nil).
Maturity analysis of financial assets and liabilities
Financial Assets
2014 2013
GBP GBP
Up to 3 months 1,816,894 3,966,911
3 to 6 months 4,134,739 664,519
Over 6 months 4,075,073 5,703,917
---------- ----------
10,026,706 10,335,347
========== ==========
Financial Liabilities
2014 2013
GBP GBP
Up to 3 months 1,306,606 529,670
3 to 6 months 2,855,196 3,031,207
Over 6 months 1,218,845 1,676,079
--------- ---------
5,380,647 5,236,956
========= =========
Fair value estimation
Below are analyses of financial instruments carried at fair
value, by valuation method. The different levels have been defined
as follows;
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
-- Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (Level
2)
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (Level 3)
Financial Assets
Available for sale investment
2014 2013
GBP GBP
Level 1 (note 14) - 4,410,934
Level 2 - -
Level 3 - -
---- ---------
- 4,410,934
==== =========
Financial instruments in Level 1 are measured at fair value. The
fair value of financial instruments traded in active markets is
based on quoted market prices at the balance sheet date.
5. EMPLOYEES AND DIRECTORS
2014 2013
GBP GBP
Wages and salaries 1,367,272 1,977,782
Social security costs 181,653 273,147
Redundancy costs 699,812 -
Share based payments (note 21) 58,433 591,979
Other pensions costs 315,193 375,571
--------- ---------
2,622,363 3,218,479
========= =========
Post-employment benefits include employee and Company
contributions to money purchase pension schemes
5. EMPLOYEES AND DIRECTORS - continued
The average monthly number of employees during the year was as
follows:
2014 2013
Directors 6 8
Employees 7 8
13 16
========= =============
2014 2013
GBP GBP
Directors' remuneration 662,277 1,244,832
Compensation for loss of office 477,593 -
Directors' pension contributions to money purchase
scheme 224,725 188,740
1,364,595 1,433,572
========= =============
The average number of Directors to whom retirement benefits
were accruing was as follows:
2014 2013
Money purchase schemes 3 4
========= =============
Information regarding the highest paid Director 2014 2013
is as follows:
GBP GBP
Emoluments 145,833 310,000
Compensation for loss of office 156,338 -
------- -------
302,171 310,000
======= =======
Pension contributions 83,067 25,000
======= =======
The director did not exercise any share options
during the year.
Key management compensation
Key management includes Directors (Executive and Non-Executive)
and the Company Secretary. The compensation paid or payable to key
management for employee services is shown below;
2014 2013
GBP GBP
Wages and short-term employee benefits 841,972 1,424,328
Compensation for loss of office 592,643 -
Share based payments (note 21) 77,889 508,460
Post-employment benefits 243,924 210,520
--------- ---------
1,756,428 2,143,308
========= =========
6. EXCEPTIONAL ITEMS
2014 2013
GBP GBP
Loss on disposal of Lybster (note 12) - (9,367,378)
Impairment charge on production asset at 30/06/14
(note 13) (4,704,352) -
Impairment charge on production asset at 31/12/14
(note 13) (10,372,431) -
Provision of onerous contract on production asset
(note 13) (6,492,271) -
Loss on disposal of iGas shares (215,346) -
(21,784,400) (9,367,378)
============ ===========
The loss on disposal of Lybster in 2013 relates to the disposal
of the Lybster asset to Caithness Petroleum Limited. This
transaction was outside the normal course of business. In 2014 the
Group disposed of all 4,084,198 iGas shares.
7. NET FINANCE COSTS
2014 2013
GBP GBP
Finance income:
Interest received 19,029 31,667
Finance costs:
CGG Services (UK) Limited interest (note 19) 15,493 30,852
Unwinding of discount on the decommissioning
liability (note 20) 251,435 186,516
Joint venture finance charge 1,776 1,864
G E Capital facility fees (28,137) 819,028
Loan interest - 62,404
240,567 1,100,664
--------- -----------
Net finance costs (221,538) (1,068,997)
========= ===========
8. LOSS BEFORE TAX
The loss before tax is stated after charging/(crediting):
2014 2013
GBP GBP
Cost of sales recognised as expense (excluding
amortisation and impairments) ** 13,004,107 13,498,920
Depreciation 86,895 35,198
Depletion of oil assets ** (note 12) 5,397,403 8,584,883
Impairment of oil assets (note 13) 15,076,783 -
Intangible asset amortisation ** (note 11) 500,000 500,000
Impairment of intangible assets ** (note 11) 12,534,158 3,190,671
Loss on disposal of intangible assets (note 11) - 9,367,378
Onerous contract provision 6,492,271 -
Auditors' remuneration - audit of parent company
and consolidation 27,500 27,500
Auditors' remuneration - audit of subsidiaries 28,500 28,500
Foreign exchange (gain) / loss (711,862) 911,615
Directors' remuneration (note 5) 1,364,595 1,433,572
Employee costs (note 5) 1,257,768 1,192,928
Share based payments (notes 5 & 21) 58,433 591,979
** These items are included within Cost of Sales in the
Consolidated Statement of Comprehensive Loss
9. TAX
Factors affecting the tax charge
Trap Oil Group plc is a trading group but no liability to UK
corporation tax arose on the ordinary activities for the year ended
31 December 2014 or for the year ended 31 December 2013 due to the
losses incurred.
Reconciliation of tax charge
2014 2013
GBP GBP
Loss before tax (44,405,973) (10,260,838)
Tax at the domestic rate of 20% (2013: 20%) (8,881,195) (2,052,167)
Expenses not deductible for tax purposes and
non-taxable income 7,867,214 3,782,285
Deferred tax asset not recognised 1,013,981 65,695
Utilisation of prior year trading losses - (1,795,813)
Total tax expense reported in the Consolidated - -
Statement of Comprehensive Loss
============ ============
The tax rate used is the small Company rate on the basis that
when the losses are relieved it would be at this rate first.
However the effect of the supplementary charge on ring fence
profits can increase the effective rate of corporation tax to
62%.
The deferred tax asset has not been recognised in the Statement
of Financial Position as it is currently not possible with any
degree of certainty to calculate the value of this asset and the
time scale over which the asset would be recovered. The Group has
corporation tax retained losses at 31 December 2014 of GBP16m
(2013: GBP9m).
10. LOSS PER SHARE
Basic loss per share is calculated by dividing the losses
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted loss per share is calculated using the weighted average
number of shares adjusted to assume the conversion of all dilutive
potential ordinary shares. As a loss was recorded for the current
and prior year, the issue of potential ordinary shares would have
been anti dilutive (see note 21 for share options in place at the
end of the year).
Loss Weighted
attributable average
to ordinary number Per share
shareholders of amount
GBP shares pence
Year ended 31 December 2014
Basic and Diluted EPS
Loss attributable to ordinary shareholders (44,405,973) 227,169,331 (19.55)
============== ============ ==========
Year ended 31 December 2013
Basic and Diluted EPS
Loss attributable to ordinary shareholders (10,540,435) 226,629,262 (4.65)
============== ============ ==========
11. INTANGIBLE ASSETS
Exploration Data licence
costs costs Total
GBP GBP GBP
COST
At 1 January 2013 31,999,277 4,000,000 35,999,277
Additions 4,189,222 - 4,189,222
Disposals (23,930,082) - (23,930,082)
At 31 December 2013 12,258,417 4,000,000 16,258,417
------------- ------------- -------------
Additions 1,648,607 - 1,648,607
At 31 December 2014 13,907,024 4,000,000 17,907,024
------------- ------------- -------------
ACCUMULATED AMORTISATION
At 1 January 2013 6,806,097 2,166,668 8,972,765
Charge for the year - 500,000 500,000
Impairments 3,190,671 - 3,190,671
Loss on disposal (note 6) 9,367,378 - 9,367,378
Disposal (19,362,079) - (19,362,079)
------------- ------------- -------------
At 31 December 2013 2,067 2,666,668 2,668,735
------------- ------------- -------------
Charge for the year - 500,000 500,000
Impairments* 12,534,158 - 12,534,158
At 31 December 2014 12,536,225 3,166,668 15,702,893
------------- ------------- -------------
NET BOOK VALUE
At 31 December 2014 1,370,799 833,332 2,204,131
============= ============= =============
At 31 December 2013 12,256,350 1,333,332 13,589,682
============= ============= =============
At 1 January 2013 25,193,180 1,833,332 27,026,512
============= ============= =============
Assets and liabilities related to the exploration and evaluation
of mineral resources other than those presented above are as
follows:
2014 2013
GBP GBP
Receivables from joint venture partners 73,670 300,437
Payable to subcontractors and operators 1,870,695 697,606
Cash payments of GBP1,648,607 (2013: GBP4,189,222) have been
incurred relating to exploration and evaluation activities.
Following completion of geotechnical evaluation activities,
certain North Sea licences were declared unsuccessful and certain
prospects were declared non-commercial. This resulted in the
carrying value of these licences being fully written off to nil
with GBP12.5m being expensed as Cost of Sale in the year to 31
December 2014. An economic assessment of all remaining assets was
carried out at 31 December 2014 using Expected Monetary Value
models to determine the fair values. Assumptions used in these
models are summarised in note 13.
* Impairments relate to the following licences included in Cost
of sales in the Consolidated Statement of Comprehensive Loss:
GBP
Licence P1267 3,269,415
Licence P1293 60,132
Licence P1556 5,785,954
Licence P1610 1,458
Licence P1650 224
Licence P1768 2,193,257
Licence P1938 1,029,568
Licence P2026 26,671
Licence P2032 122,280
Onshore exploration 45,200
12,534,159
==========
12. PROPERTY, PLANT AND EQUIPMENT
Production
interests Computer
and fields and office
under development equipment Total
GBP GBP GBP
COST
At 1 January 2013 28,965,772 106,509 29,072,281
Additions 174,243 128,540 302,783
Lybster reduction in site restoration
obligations (593,425) - (593,425)
Refund on purchase of Production
interest (4,214,508) - (4,214,508)
Athena insurance refund (441,081) - (441,081)
Disposals (925,453) - (925,453)
At 31 December 2013 22,965,548 235,049 23,200,597
------------------- ------------ ------------
Additions 6,339,479 50,973 6,390,452
At 31 December 2014 29,305,027 286,022 29,591,049
------------------- ------------ ------------
AMORTISATION, DEPLETION & DEPRECIATION
At 1 January 2013 940,027 38,706 978,733
Charge for the year 8,584,883 35,198 8,620,081
Disposal (694,069) - (694,069)
At 31 December 2013 8,830,841 73,904 8,904,745
------------------- ------------ ------------
Charge for the year 5,397,403 86,895 5,484,298
Impairment charge for the year 15,076,783 - 15,076,783
At 31 December 2014 29,305,027 160,799 29,465,826
------------------- ------------ ------------
NET BOOK VALUE
At 31 December 2014 - 125,223 125,223
=================== ============ ============
At 31 December 2013 14,134,707 161,145 14,295,852
=================== ============ ============
At 1 January 2013 28,025,745 67,803 28,093,548
=================== ============ ============
The Refund on purchase of Production interest is an adjustment
recognised on the completion of the acquisition of the Group's
interest in the Athena field.
For amortisation, depletion and depreciation, the charge for
Production interests & fields under development is included
within Cost of sales in the Consolidated Statement of Comprehensive
Loss and the charge for Computer and office equipment is included
in Administrative expenses.
There are numerous uncertainties inherent in estimating reserves
and assumptions that, whilst valid at the time of estimation, may
change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates,
production costs or recovery rates may change the economic status
of reserves and may, ultimately, result in the reserves being
restated. Such changes in reserves could impact on depreciation
rates, asset carrying values, and provisions for close down,
restoration and environmental clean-up costs.
13. IMPAIRMENTS
2014 2013
GBP GBP
Production asset 15,076,783 -
Exploration assets 12,534,158 3,190,671
Provision for onerous contract on production
asset 6,492,271 -
34,103,212 3,190,671
========== =========
During 2014 the Group recorded an impairment charge of GBP15.1m
on the Athena production licence which is included within
Exceptional items in the consolidated statement of Comprehensive
income. This impairment was driven mainly by the lower oil price
leading to a decrease in the asset value.
For the impairment of property, plant and equipment and
intangible oil and gas assets, fair value less costs of disposal
are determined by discounting the post tax cash flows expected to
be generated form oil and gas production net of selling costs
taking into account assumptions that market participant would
typically use in estimating fair value.
The Company provides for future losses on long-term contracts
where it is considered that the contract costs are likely to exceed
revenues in future periods. Onerous contract provisions totalling
GBP6.5m have therefore been made for the fully written down Athena
production asset.
The following assumptions were used in developing the cash flow
model and applied over the expected life of the respective
fields.
Discount Oil Price Exchange
Rate Rate
Production asset 7% $60/bbl $1.47/GBP1
Exploration assets 10% $65/bbl $1.5/GBP1
The recoverable amount of the exploration licences is
GBP26.3m
14. AVAILABLE FOR SALE INVESTMENT
2014 2013
GBP GBP
At 1 January 4,410,934 -
Additions - 4,690,531
Disposals (4,410,934) -
Change in value of available for sale investment - (279,597)
At 31 December - 4,410,934
=========== =========
The available for sale investment represented the Company's
holding of shares in iGas Energy plc which were acquired in
exchange for the Company's interest in a number of exploration
licences and the production licences in 2013 and disposed of during
the year.
During the year the following transactions occurred.
Number
Date sold Cost Net Proceeds Gain/(loss)
GBP GBP GBP
07/05/14 1,800,000 2,067,225 2,334,149 266,924
22/09/14 200,000 229,692 188,028 (41,664)
06/10/14 719,288 826,072 633,901 (192,171)
17/10/14 887,040 1,018,728 672,376 (346,353)
22/10/14 477,870 548,814 367,134 (181,679)
4,084,198 4,690,531 4,195,588 (494,943)
Transferred from Available
for sale reserve 279,597
Net loss recognised in current
year exceptional items (215,346)
============
15. INVENTORIES
2014 2013
GBP GBP
Oil inventories held for resale 858,060 1,249,599
======= =========
16. TRADE AND OTHER RECEIVABLES
2014 2013
GBP GBP
Current:
Trade receivables (net) 1,546,111 1,889,804
Other receivables 1,549,085 2,951,438
Deposits 6,556,494 -
Value added tax 87,093 188,535
Prepayments 287,923 426,946
10,026,706 5,456,723
========== =========
The Directors consider that the carrying amount of Trade and
other receivables approximates their fair value.
Included within Deposits is GBP3,710,000 for the expected
decommissioning and site restoration costs of the Athena field and
GBP2,846,494 in relation to the drillings costs of the Niobe
prospect which is due to be drilled in Q2 2015.
17. CASH AND CASH EQUIVALENTS
2014 2013
GBP GBP
Unrestricted cash in bank accounts 7,074,282 16,088,908
Restricted cash in escrow bank accounts (note
22) 350,000 350,000
7,424,282 16,438,908
========= ==========
The restricted cash relates to amounts held in escrow as
security for possible future liabilities to third parties.
18. CALLED UP SHARE CAPITAL
Issued and fully paid:
Number: Class Nominal 2014 2013
value GBP GBP
227,169,331 Ordinary 1p 2,271,693 2,271,693
========= =========
(2013: 227,169,331)
19. TRADE AND OTHER PAYABLES
2014 2013
GBP GBP
Current:
Trade payables 1,306,606 401,078
Accrued expenses 679,332 261,057
Other payables 2,175,864 2,779,655
Taxation and Social Security - 262,454
4,161,802 3,704,244
========= =========
Non-current:
Other payables 1,218,845 1,676,078
Aggregate amounts 5,380,647 5,380,322
Included in Non-current: Other payables is GBP827,273 (2013:
GBP1,300,000) and capitalised interest of GBP391,571 (2013:
GBP374,426) which relates to the consideration for the data licence
obtained from CGG Services (UK) Limited, capitalised under
Intangible Assets. The term of the licence is eight years and the
final liability is due on expiry of the licence in August 2016. On
the first two success fees that were obtained from using the data
from the licence, GBP350,000 each has been paid as part of the
consideration. In 2014 the Group repaid GBP472,727 (2013 -
GBP1,118,000) of the loan. The outstanding balance is payable in
equal quarterly instalments during the licence term and will
attract interest at LIBOR plus 1 per cent. per annum. The accrued
interest will be paid at the end of the licence term
The Directors consider that the carrying amount of Trade and
other payables approximates their fair value.
20. PROVISIONS FOR LIABILITIES AND CHARGES
Onerous Decommissioning
Contracts and site
(Athena) restoration Total
GBP GBP GBP
At 1 January 2013 5,176,396 5,176,396
Lybster site restoration obligation
adjustment - (593,425) (593,425)
Disposal of Lybster (note 25) - (106,575) (106,575)
Unwinding of discount - 186,516 186,516
----------- ---------------- -----------
At 1 January 2014 - 4,662,912 4,662,912
Increase in Athena provision - 2,800,213 2,800,213
Unwinding of discount - 251,435 251,435
New provision for Onerous Contract
(note 13) 6,492,271 - 6,492,271
6,492,271 7,714,560 14,206,831
----------- ---------------- -----------
The Group recognises decommissioning and site restoration
provisions in relation to Production interests. The provisions are
based on the discounted net present value of the assessment of the
obligation to decommission assets in place at the reporting date,
discounted at 4 per cent. The provision has increased by
GBP2,800,213 in the year following a review of the expected
decommissioning costs. The provision will increase as additional
infrastructure is installed, as needed, and will be settled on the
actual decommissioning of fields. The closing provision relates to
the Athena producing asset. It is expected that the decommissioning
work will start after production has ceased. Production is expected
to cease within 2016. During the year GBP3.5m of the expected
liability has been paid to Athena with another GBP1.3m coming due
during 2015.
21. SHARE BASED PAYMENTS
The Group operates a number of share option schemes. Options are
exercisable at the prices set out in the table below. Options are
forfeited if the employee leaves the Group through resignation or
dismissal before the options vest.
Equity settled share based payments are measured at fair value
at the date of grant. The fair value determined at the date of
grant of equity settled share based payments is expensed on a
straight line basis over the vesting period, based upon the Group's
estimate of shares that will eventually vest.
The total expense included within the operating results in
respect of equity based share based payments was GBP58,433 (2013:
GBP591,979).
The Group share option schemes are for Directors, Officers and
employees and details of outstanding options are set out in the
table below:
No. of No. of
shares shares
for which for which
options Options Options options
outstanding granted lapsed outstanding
Date Of Exercise Vesting Expiry at 1 Jan during during at 31 Dec
Grant price pence date date 2014 the year the year 2014
Pre IPO Options
March 2011 1.00 Vested Mar 2021 2,413,836 - - 2,413,836
Under the Trap Oil Group plc Unapproved Share Option Plan
2011 and Individual Option Agreements
Mar 2011 43.00 Vested Mar 2021 2,505,813 - (1,183,605) 1,322,208
Mar 2011 43.00 Mar 2013 Mar 2021 1,168,605 - (488,373) 680,232
Mar 2011 43.00 Mar 2014 Mar 2021 1,744,186 - (1,063,954) 680,232
Jul 2011 43.00 Jul 2011 Jul 2021 139,535 - (139,535) -
Jul 2011 43.00 Jul 2012 Jul 2021 155,038 - (155,038) -
Jul 2011 43.00 Jul 2013 Jul 2021 155,039 - (155,039) -
Jul 2011 43.00 Jul 2014 Jul 2021 155,039 - (155,039) -
Dec 2011 27.12 Dec 2012 Dec 2021 122,166 - 42,834 165,000
Dec 2011 27.12 Dec 2013 Dec 2021 1,056,667 - (891,667) 165,000
Dec 2011 27.12 Dec 2014 Dec 2021 1,056,667 - (756,667) 300,000
May 2013 15.00 May 2013 May 2023 2,183,336 - (1,100,003) 1,083,333
May 2013 15.00 May 2014 May 2023 2,183,333 - (1,100,000) 1,083,333
May 2013 15.00 May 2015 May 2023 2,183,331 - (1,099,997) 1,083,334
Total 8,976,508
During the year no options were exercised or granted.
Out of the 8,976,508 outstanding options (2013: 17,222,591),
7,893,174 (2013: 9,048,329) were exercisable. The weighted average
fair value of options granted during the year determined using the
Black-Scholes valuation model was 6.35p per option. The significant
inputs into the model were the mid market share price on the day of
grant or 1p exercise price as shown above and an annual risk-free
interest rate of 1.1 per cent. The volatility measured at the
standard deviation of continuously compounded share returns is
based on a statistical analysis of daily share prices from the date
of admission to AIM to the date of grant on an annualised
basis.
22. GUARANTEES
In connection with the acquisition of an interest in the Athena
oil field in 2012, Trap Oil Group plc entered into Parent Company
Guarantees in favour of:
BW Offshore (UK) Limited - a guarantee for the purpose of
providing security to BW Offshore (UK) Limited in relation to the
obligations of Trap Oil Limited in respect of a Contract for the
Provision and Operation of a Floating Production, Storage and
Offloading Vessel for the Athena Field Development dated 8
September 2010 with Ithaca Energy (UK) Limited.
EWE Vertrieb GmbH - an undertaking for the purpose of providing
security to EWE Vertrieb GmbH in relation to the obligations of
Trap Oil Limited in respect of the Joint Operating Agreement and
certain other agreements related to the Athena Oil Field dated 12
February 2007.
In addition, a letter of credit was established on 20 December
2012 for GBP350,000 in favour of Ithaca Energy (UK) Limited as
security for anticipated obligations under the Athena field Joint
Operating Agreement. In 2013, the letter of credit was replaced by
funds placed in Escrow (note 17).
During the year the group assigned its lease of 35 King Street
to a third party. However, the group is still acting as Authorised
Guarantor for all liabilities of the assignee in relation to the
lease agreement.
23. COMMITMENTS
Capital Commitments Operating leases
2014 2013 2014 2013
GBP GBP GBP GBP
No later than 1 year 4,600,000 3,700,000 - -
Later than 1 year and no
later than 5 years - 1,790,000 82,500 631,632
Later than 5 years - - - -
---------- --------- -------- --------
4,600,000 5,490,000 82,500 631,632
---------- --------- ======== ========
The Group has an expected commitment to the decommissioning and
site restoration costs relating to the Athena field. The latest
estimates of the Group's share of these costs is GBP8.2m in 2016.
The present value of this commitment is GBP7.7m (note 20). During
the year the group paid GBP3.7m towards this liability which is
shown within Trade and Other Receivables (note 16). The Group is
committed to pay a further GBP1.3m during 2015.
GBP2.0m of the current capital commitments relate to a Trap's
share of the $20m one off payment due to BW Offshore for the
revision of the initial FPSO agreement. This will be payable in
July 2015.
The Group leases an office under a non-cancellable operating
lease agreement. The lease term is 12 months and is renewable at
the end of the lease period at market rate.
24. RELATED PARTY DISCLOSURES AND ULTIMATE CONTROLLING PARTY
During the year Trap Oil Group plc made loans available to
wholly owned subsidiaries. The balances outstanding at the end of
the year are Predator Oil Limited GBP7,595 (2013: GBP7,524), Trap
Oil Limited GBP36,403,124 (2013: GBP34,744,528), Trap Oil & Gas
Limited GBP85,743 (2013: GBP85,671), Trap Petroleum Limited
GBP149,254 (2013: GBP149,183) and Trap Exploration (UK) Limited
GBP16,274 (2013: GBP16,202), however given the doubt over the
ability of the subsidiaries to continue as going concerns, the
intercompany receivable balances have been impaired to nil at the
year end. During the year the Company also made sales to Trap Oil
Limited amounting to GBP4,059,439 (2013: GBP4,189,746).
The Group and Company do not have an ultimate controlling party,
or parent Company.
At the end of the year GBP519,638 was owed to a number of
directors and is included in Trade and other payables.
25. CAITHNESS OIL LIMITED
On 9 September 2013, the Company announced that it had entered
into binding heads of agreement with Caithness Oil Limited, its
parent Company, Caithness Petroleum Limited and IGas Energy plc,
the effect of which was to dispose of its interests in the
Knockinnon and Lybster prospects and certain other assets to
Caithness Oil Limited. The legal agreements were conditional on,
inter alia, IGas Energy plc completing its proposed conditional
acquisition of the entire issued share capital of Caithness Oil
Limited from Caithness Petroleum Limited.
The total consideration payable by Caithness Petroleum Limited
to the Group on completion of the acquisition was US$7.5m to be
satisfied via the allotment or transfer of 4,177,011 fully paid
ordinary shares of 10p each in the capital of IGas Energy plc. The
initial share price was derived from the weighted average quoted
price on the 30 days prior to 6 September 2013 as per the sale and
purchase agreement. The shares were been treated as an Available
for sale investment and were revalued at the year end to their
market price. This has resulted in an impairment charge of
GBP279,597 which has been charged to the Available for sale
investment reserve within the Statement of Changes in Equity.
The Group agreed not to dispose of US$4m of the shares for a
period of three months from the date of allotment or transfer and
in the three month period thereafter only in accordance with the
reasonable requirements of IGas Energy plc and its broker. The
balance of the shares could be sold by the Group following
completion in accordance with certain orderly market
provisions.
The Group's licence interests that were sold were:
-- A 70 per cent. interest in LicenceP.1270 Block 11/24 Knockinnon Sub Area
-- A 35 per cent. interest in LicenceP.1270 Block 11/24 Lybster Sub Area
-- A 35 per cent. interest in LicencePEDL 158 Blocks ND/1a, 2a, 12, 13a, 23a and 33a
In addition, the Group will also released Caithness Oil Limited
from certain obligations due to Trap Oil Limited in respect of
Licence P.1270, Block 11/24 Forse Sub Area.
The gross consideration was reduced by 98,784 fully paid
ordinary shares of 10p each in the capital of IGas Energy plc. to
cover outstanding Lybster field costs prior to 31 July 2013 of
GBP108,855 owed by Trap to Caithness. This resulted in a final
consideration of 4,084,198 fully paid ordinary shares of 10p each
in the capital of IGas Energy plc.
Financial impact
The carrying values of the assets relevant to this transaction
are included in note 11, Exploration costs are: Licence P.1270
Block 11/24 Knockinnon GBP13.8m and Licence PEDL158 ND/1a, 2a, 12,
13a, 23a and 33a GBP0.1m. The carrying value of the asset relevant
to this transaction is included in note 12, Production interests
and fields under development for Licence P.1270 Block 11/24 Lybster
is GBP0.1m (note 20).
Completion of the proposed disposal resulted in a net loss on
disposal for the Group in respect of the licence interests of
GBP9m, reflecting aggregate carrying value of approximately GBP14m
less US$7.5m (approximately GBP5m) in IGas Energy plc shares (at
the prevailing USD/GBP exchange rate). The loss on disposal has
been disclosed as an exceptional item within the Statement of
Comprehensive Loss (note 6).
26. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
RECONCILIATION OF LOSS BEFORE TAX TO CASH USED IN OPERATIONS
2014 2013
GBP GBP
Loss for the year before tax (44,405,973) (10,260,838)
Adjusted for:
Amortisation, impairments, depletion and depreciation 33,595,239 21,571,555
Onerous contract provision 6,492,271 -
Loss on disposal of available for sale assets 215,346 -
Share based payments (net) 58,433 591,979
Finance costs 240,567 1,067,948
Finance income (19,029) (31,667)
Other payables - -
(3,823,146) 12,938,977
Decrease/(Increase) in inventories 391,539 (1,249,598)
Decrease/(Increase) in trade and other receivables 1,986,512 (4,181,412)
Increase in trade and other payables 473,052 1,096,991
------------ ------------
Cash (used in)/generated from operations (972,043) 8,604,958
27. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect
of Cash and cash equivalents are in respect of these statements of
financial position amounts:
Year ended 2014
31 Dec 1 Jan 2014
2014
GBP GBP
Cash and cash equivalents 7,074,282 16,088,908
Year ended 2013
31 Dec 2013 1 Jan 2013
GBP GBP
Cash and cash equivalents 16,088,908 9,275,542
Analysis of net cash
At 1 cash At 31
Jan 2014 flow Dec 2014
GBP GBP GBP
Cash and cash equivalents 16,088,908 (9,014,626) 7,074,282
-------------- -------------- -----------
Net cash 16,088,908 (9,014,626) 7,074,282
============== ============== ===========
28. AVAILABILITY OF THE ANNUAL REPORT 2014
A copy of these results will be made available for inspection at
the Company's registered office during normal business hours on any
weekday. The Company's registered office is at 10 The Triangle, ng2
Business Park, Nottingham NG2 1AE. A copy can also be downloaded
from the Company's website at www.trapoil.com. Trap Oil Group plc
is registered in England and Wales with registration number
7503957.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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