TIDMJUB
RNS Number : 9533H
Jubilant Energy N.V.
27 June 2013
27 June 2013
Jubilant Energy NV
("Jubilant" or "the Company")
Results for the Year Ended 31 March 2013
Jubilant Energy N.V, an upstream oil and gas company with assets
in major proven and prolific hydrocarbon basins, primarily in India
and Myanmar, is pleased to announce its results for the year ended
31 March 2013.
FINANCIAL AND CORPORATE OVERVIEW
-- Achieved a gross sales volume of 699,310 barrels of oil
during 2012-13 (Net to Jubilant 174,828 barrels of oil), up 7.5%
from 2011-12.
-- Operating revenues of USD 17.8 million on net entitlement
interest basis, an increase of 2%, despite lower international oil
prices.
-- Average oil price realised USD 112.5 per barrel (Previous Year USD 115.6 per barrel).
-- Capital expenditure of over USD 90 million during the year,
compared to USD 66 million in the previous financial year.
-- Signed a Rupee Loan Agreement for a term loan equivalent of
approximately USD 247 million to fund the appraisal and development
of the DDW in KG Block, including the refinancing of the existing
term loan facility of USD 120 million.
-- Raised USD 22 million unsecured loan from Jubilant Bhartia
Group companies to fund operating activities and general capital of
the Company in 2012-13. Raised a further USD 20 million in the
current financial year from the Jubilant Bhartia Group.
-- Net debt of USD 410 million as of 31 March 2013. Undrawn
facilities for the KG Block of USD 66 million and cash balance of
USD 22.6 million available to the Company.
-- Appointed Mr Radhey Shyam Sharma (Ex-ONGC, CMD), as a Non
Executive Non Independent Director.
-- Positive outlook on the gas pricing scenario in India. The
high-powered Rangarajan Committee report suggested a gas pricing
formula and eventual gas-on-gas competition in 5 years as a desired
objective. The gas pricing based on the suggested formula results
in a gas price of approximately USD 8.5 per mmBtu.
-- GSPC's auction achieved a price of USD 14.20 per mmBtu for
DDW gas as per PSC provisions; the same is under the Government
approval process.
OPERATIONAL OVERVIEW
Production and near term production upside - Kharsang Field (WI
- 25%)
-- Average gross production higher by 9% at 1,968 bopd in
2012-13, up from 1806 bopd in 2011-12 as a result of the successful
Phase-III and ongoing Phase-III Extension development drilling
programme.
-- Cumulative production from the field was 10.84 MMbbls as at 31 March 2013.
-- Six of the seven wells of the Phase III development drilling
programme tested oil and put on production, initially contributed
approximately 700 bopd. One well tested for gas and has been kept
shut for future gas utilization, as it is commercially viable.
-- Six wells Phase III Extension development drilling programme
in progress; three wells under production, one being tested and one
currently being drilled.
-- Piloting of production enhancement schemes has commenced.
-- A very challenging, high fold 3D seismic survey successfully
completed and data processing initiated.
-- Significant upgrade in reserves and resources by Gaffney,
Cline & Associates, as of 31(st) December 2011.
Krishna Godavari Block (WI - 10%) - Development and appraisal
activities
-- Development of KG remains on track for first gas in Q4 2013
and status as of end May 2013 is:
o Most onshore and offshore facilities are 90-100% complete,
o The Well Head Platform is set and currently being used for
drilling development wells,
o Production and Living Quarter Platform ("PLQP") is 96.9%
complete,
o Onshore Gas Terminal ("OGT") is 92.5% complete,
o Gas Turbine Generator ("GTG") was 100% complete by April
2013,
o The pipeline is 62% complete and is expected to be completed
soon,
o Seven wells under development drilling of which two wells
drilled to targeted depth.
-- Implementation of hydrofraccing in DDW development wells
aimed for increasing production. Contracted Blade for hydrofraccing
strategy; Halliburton to commence hydrofraccing from July 2013
onwards.
-- The Government has approved the extension of the existing DDW
development area of the block by 20.5 square kilometres, increasing
the total mining lease to 37.5 square kilometres. The extension
area has increased gross 2C Contingent Resources by 1.1 tcf of gas
and 22.2 MMbbls of condensate.
-- Reserves and resources update by GCA as of 31 May 2012, post
the approval of the DDW Extension area and the drilling of the
appraisal wells in the DDE area. Upward revision in the Gross
Contingent Resources (2C) in the Deen Dayal Structural complex by
approximately 11% for gas and 10.2% for condensate over the earlier
estimates of June 2010.
-- Integrated DOC proposal submitted to DGH for DDE, DDW-DT,
DDN, and DDNE-BRU in February 2013. DGH approval awaited and the
preparation of FDP commenced. The DOC approval will take one step
closure to convert the 2C resources to 2P reserves category.
Exploration and Appraisal Upside
Tripura (WI - 20%)
-- Declaration of Commerciality ("DOC") proposal for the
Kathalchari discovery submitted in December 2012. Await DGH
approval of the DOC proposal.
-- The first deeper exploratory well, Matabari-1 under the
Phase-II programme, spudded in May 2012 and drilled to 3,287 metres
against a target of 4,060 metres due to drilling complications. The
well tested gas through a mini DST which has open flow potential of
4.2 MMscfd from Middle Bhuban sand. Side tracking of the well and
detailed testing is scheduled this year.
-- The second deeper exploratory well, North Atharamura-1 in
Atharamura anticline, spudded in February 2013. Two gas discoveries
of potential commercial interest notified to DGH. The middle Bhuban
shallow sand tested gas at the rate of 1.7 MMscfd through 24/64"
choke size. The North Atharamura is the first well on the
Atharamura anticline, which has an aerial extent of more than 560
kilometres.
-- Completed the 2D seismic survey of 125 lkms under the Phase-II programme in Atharamura.
-- The consortium has applied for a 12 month extension of the
Phase-II exploration programme as per the extension policy of DGH
in view of the discovery in North Atharamura.
Manipur Blocks 1 & 2 (WI - 100%)
-- Acquisition, processing and interpretation of 210 lkms of 2D
seismic data completed in both the blocks.
-- The Airborne Gradiometric data was acquired over the two
blocks. The processed and interpreted data has been integrated with
the existing geological model.
-- The geochemical analysis indicates that the area could also be oil prone.
-- Six drilling locations based on prospect and logistics
feasibility shortlisted in the two blocks.
-- Significant upward revision in Prospective Resources by GCA;
Best Estimate Unrisked Prospective Resources at 7,088 bcf as at 31
March 2012 up from 4,770 bcf.
Myanmar (WI -77.5%)
-- Strategic entry into Myanmar achieved with the acquisition of
the PSC-I block. PSC signed in May 2012.
-- Commenced operations activities and successfully completed
reconnaissance survey in August 2012.
-- Environmental impact assessment and social impact assessment studies completed.
-- Sub-surface technical work underway. Completed archiving of
subsurface and seismic data collected from MOGE.
-- Contract awarded for the acquisition of 700 lkm 2D seismic, work has been initiated.
-- Branch Office Registration Certificate received from DICA in October 2012
-- Based on the review of initial data, management estimate
unrisked prospective resources at 2,186 bcf of gas and 108 mmbbls
of oil/ condensate, net to Jubilant.
The Annual General Meeting is convened to be held on 30 August,
2013 in Amsterdam. The full version of the annual report for the
year ended 31 March 2013 and the notice of the AGM will be posted
to the shareholders and will be available on the Company's website
at www.jubilantenergy.com on or around 1 August 2013.
Mr.Shyam Bhartia, Chairman and Mr. Hari Bhartia, Co-Chairman of
Jubilant Group commented:
"Jubilant has made significant progress across all aspects of
its portfolio as the Company continues to deliver on its strategy.
Jubilant has a clear and focused strategy with a strong portfolio
of assets, the expertise and also the funding to deliver this. Both
India and Myanmar have exceptional opportunities for oil and gas
companies and Jubilant is uniquely and ideally positioned to take
advantage of these.
Under the six wells Phase III Extension development drilling
programme, Kharsang is offering an increased daily production rate.
The KG basin continues to be the Company's most important asset and
remains on course for first gas in Q4 2013. Our exploration
programmes in Manipur and Tripura continue and we are particularly
excited about commencing work on our recently awarded block in
Myanmar.
The Company has an excellent portfolio with considerable
opportunities ahead. This is an exciting time for the Company as it
embarks upon the next stages of its work programmes with a view to
proving up the inherent value that the Company believe is across
its portfolio."
Enquiries:
Jubilant Energy Vipul Agarwal +91 120 402 5700
Panmure Gordon Callum Stewart, Adam James +44 20 7886 2500
College Hill David Simonson, Alexandra Roper +44 20 7457 2020
Competent Person's - Consent for Release
Mr. Ramesh Bhatia - Chief Operating Officer, holds a Master's of
Science degree in Applied Petroleum Geology and has over 20 years
of experience in the Oil and Gas Exploration, Development and
Production industry. He has reviewed and approved the technical
information contained in this announcement pursuant to the AIM
guidance note for mining and oil and gas companies.
Glossary of abbreviations
APM Administered Price Mechanism
Bbl Barrel
------------------------------------------
Bcf Billion cubic feet
------------------------------------------
Bopd Barrels oil per day
------------------------------------------
bscfd Billion standard cubic feet of gas per
day
------------------------------------------
CAGR Compound annual growth rate
------------------------------------------
DDE Deen Dayal East
------------------------------------------
DDW Deen Dayal West
------------------------------------------
DST Drill Stem Test
------------------------------------------
DOC Declaration of Commerciality
------------------------------------------
DGH Directorate General of Hydrocarbons
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FDP Field Development Plan
------------------------------------------
Gaffney, Cline & Associates (Consultants)
GCA Pte Ltd
------------------------------------------
GCoS Geological Chance of Success
------------------------------------------
Lkm Line kilometre
------------------------------------------
LNG Liquefied Natural Gas
------------------------------------------
MC Management Committee
------------------------------------------
MD Measured Depth
------------------------------------------
MMbbl Millions of barrels
------------------------------------------
Mmboe Million barrels of oil equivalent
------------------------------------------
MMBTU Millions of British Thermal Units
------------------------------------------
Mscf Metric standard cubic feet
------------------------------------------
NELP New Exploration Licensing Policy
------------------------------------------
OGT Onshore Gas Terminal
------------------------------------------
PLQP Pipeline Living Quarters Platform
------------------------------------------
PML Petroleum Mining Licence
------------------------------------------
Tcf Trillion cubic feet
------------------------------------------
TVD True Vertical Depth
------------------------------------------
TVDss True Vertical Depth Subsea
------------------------------------------
WHP Well Head Platform
------------------------------------------
Chairman and Co-Chairman's Statement
Introduction
Last year we saw Jubilant Energy continue to build on its
strategic objective of building and exploiting its diverse
portfolio of exploration, development and producing oil and gas
assets in major proven and prolific hydrocarbon basins in India and
Myanmar. Jubilant remains well positioned to benefit from the
growth potential of the Indian market where energy demand is
constantly increasing with indigenous supplies falling well short
of this demand.
Considerable progress has been made in the last year across all
aspects of the Company's exciting and diverse portfolio. Kharsang
achieved its highest ever production, DDW in KG is nearing its
first gas production schedule, as well as further progress in the
KG, Tripura and Manipur exploration and appraisal programmes. The
period also saw us make a strategic entry into Myanmar with the
acquisition of PSC-I block. All of these demonstrate very
significant achievements across our entire portfolio.
These achievements are a testament to the exceptional team that
we have at Jubilant; a team that is dedicated to driving the
Company forward, playing to its strengths as we look to continue to
create sustainable shareholder value by maximizing the
opportunities.
India macro environment
India continues to be among the world's largest and fastest
growing economies with an estimated GDP of USD 4.5 trillion in 2012
(on a Purchasing Power Parity basis), which makes it the third
largest economy in the world. Despite a slowdown in the economy,
the India story, in general, and India's energy story, in
particular, remains intact. India's economic growth has led to
primary energy consumption growth at a CAGR of 6% from 2007 to
2012. Crude oil and natural gas contributed approximately 39% of
India's total energy consumption in 2012, which is low compared to
global standards where oil and gas contributed approximately 57% of
the total energy consumption. India's natural gas demand is
projected to increase at a CAGR of 14.0% from 6.8 bscfd in 2012 to
reach approximately 21.4 bscfd in 2022 against domestic production
growth of 7.8% over the same period to reach approximately 8.6
bscfd in 2022.
The increasing demand-supply imbalance indicates that over the
short and long term, India's LNG import requirements are expected
to increase and LNG forming a significant share of total gas
supply. India began importing LNG in 2004 and in 2012 it imported
around 1.3 bscfd of LNG, mainly from Qatar, making it the sixth
largest importer of LNG in the world.
The primary energy consumption reached 563 mmtoe per year in
2012 and the long term prospects for energy consumption in India
are very positive. With India expected to have the world's second
highest rate of GDP CAGR from 2010-2016, just behind that of China,
India's primary energy consumption is expected to continue to
increase substantially over the coming decades. A large population
of 1.2 billion and favorable demographics certainly point towards a
continuation of India's energy growth story.
Historically, gas has provided a relatively small proportion of
India's primary energy consumption though that is changing with
natural gas consumption as a percentage of total domestic energy
consumption is expected to grow from 8.7% in 2012 to around 20% by
2025. Given the cleaner characteristics of gas, its consumption is
expected to grow due to heightened environmental concerns and
India's commitment to reduce its carbon emissions per unit of GDP
by 2020 through policy interventions. Natural gas is therefore
expected to take a higher proportion of a markedly increasing
demand for energy in India, leading to a dramatic increase in the
demand for gas. Despite recent increases in production, the
consumption of natural gas has outstripped supply and the resultant
demand-supply imbalance has meant that India has been a net
importer of natural gas and LNG since 2004 and this imbalance is
expected to worsen.
The increasing demand-supply imbalance means that over both the
short and long term, India's LNG import requirements are expected
to increase. This will have profound implications on the structure
of the gas market and gas pricing and will create a very favorable
market for new uncontracted domestic sources of gas supply. The
Government of India constituted a high powered committee headed by
Dr. Rangarajan which had in its mandate a review of the gas pricing
in India and suggest a pricing formula. The committee, in its
recommendation, has suggested a pricing formula. Based on the
pricing formula an initial gas price of approximately USD 8.5 per
mmbtu is arrived. The gas pricing formula proposed by the committee
can be viewed as a constructive step taken by the Government
towards formulating a natural gas pricing policy. Given Jubilant's
substantial gas reserves and resources and notable prospect and
lead inventory in gas prone areas, the Company is well placed to
benefit from these favorable macroeconomic trends which look set to
continue for many years to come.
Year under review
From an operational point of view, the period under review was
extremely significant for Jubilant. Good progress was made across
all the key assets where our operations are focused on, the KG Deen
Dayal structural complex, Kharsang, Tripura and the two Manipur
blocks. The major development from a portfolio perspective was the
strategic entry into the Republic of The Union of Myanmar through
the acquisition of block PSC-I awarded under the Myanmar Onshore
Blocks Bidding Round in 2011. The Company's entry into Myanmar
fulfills its strategic objectives of further expanding its
portfolio in proven and prolific hydrocarbon basins especially
given Jubilant's expertise as operator of its four existing
exploration blocks located in the North Eastern part of India, in
close proximity to the Myanmar border.
Gaffney, Cline & Associates prepared Reserves and Resources
Estimations for Kharsang, KG and Manipur significantly revising the
reserves and resources upward. These revisions are proof of the
considerable progress the Company has made in achieving the work
programme in these assets and its overall strategic initiative. The
review of resources in Tripura and Myanmar has been initiated.
Jubilant's only producing block in Kharsang witnessed a 9%
increase from 1,806 bopd in the previous financial year to 1,968
bopd in the year under review. This was mainly due to a highly
successful seven well Phase-III development programme and the
workover in the older wells. Six of the seven wells under the
Phase-III development programme tested for oil and were put into
production, initially contributing to approximately 700 bopd. One
of the wells tested gas and has been kept shut for future gas
utilization, as it is commercially viable. The field is at present
producing around 2,000 bopd, achieving its highest ever recorded
production of 2,253 barrels of oil on 23 October 2012, beating the
previous high of 2,227 achieved in December 2009. The six well
phase III Extension development drilling campaign commenced in
February 2013 and the fourth well is currently being tested and the
fifth is being drilled. The first three wells have been put on
production. Enhanced oil recovery projects were piloted during the
year and more are planned in 2013-14.
The development of the Deen Dayal West Field in KG is also
progressing on schedule to deliver first gas in Q4 2013. The
setting up of onshore and offshore facilities is on target with
most of the facilities between 90-100% complete. The drilling of
the development wells is on target with two of the four wells,
scheduled to be drilled before first gas, already drilled. The
consortium has also contracted a well known international
organization to undertake hydrofraccing of the development wells to
achieve a significantly higher hydrocarbon recovery. An integrated
DOC proposal was submitted to the DGH for DDE, DDN, DDNE-BRU and
DDDT in February 2013 and the consortium is preparing the FDP for
filing with DGH.
On the exploration and appraisal side, Jubilant has made
significant progress in its key blocks in the North East of India.
In the Tripura block, two wells were drilled as an appraisal well
to the Kathalchari-1 discovery, with the primary objective of
evaluating the Middle Bhuban reservoir sands. Post the successful
drilling and testing of the Kathalchari NE appraisal well, the
consortium filed a DOC proposal in December 2012. We are awaiting
the Government approval of the DOC proposal following which we will
file an FDP. The preliminary work on this has already been
initiated. The consortium entered the Phase-II exploration
programme in Tripura with the spudding of the Matabari-1 well in
May 2012. The second well under the programme, North Atharamura was
spud in February 2013. The Company filed two Notices of Discovery
documents with the DGH in May 2013 post the successful conventional
testing in the Middle Bhuban and Lower Bhuban formations. An
exploration seismic of 125 lkm, a part of the Phase II programme,
has also been successfully completed.
In two Manipur blocks, despite the difficult terrain and
logistical challenges, we have acquired approximately 210 lkm of
seismic data. The processing and interpretation of the data has
resulted in identifying six prospects.
The year also saw Jubilant acquire block PSC-I awarded under the
Myanmar Onshore Blocks Bidding Round in 2011, complementing its
already existing portfolio in the nearby North Eastern India.
Contract for acquiring a 2D seismic data for the block has been
awarded recently and the survey work has commenced.
Finance overview
In the year under review, the Company's operating revenue grew
approximately 2.0% over the previous year to USD 17.8 million on
the back of higher production despite lower international oil
prices.
Jubilant is funded to carry out its immediate work programme in
the coming year with available cash and undrawn facilities. The
Company is also working on a range of strategic options to fund its
medium and long term funding needs.
Corporate
We would like to take this opportunity to thank our exceptional
Board who have continued to work with the Company's executive team
providing invaluable support and guidance throughout the last
year.
The Company's Board of Directors was further strengthened with
the appointment of Mr R S Sharma as Non-Executive Non-Independent
Director at its EGM held on 21 March 2013. Mr Sharma brings with
him over 40 years of rich and varied business and management
experience. A well-known name in the Oil & Gas industry, he
retired as the Chairman and Managing Director of ONGC. We welcome
Mr Sharma to the Board and look forward to his association with the
Company.
Ajay Khandelwal resigned as the Company's Chief Executive
Officer and left the Board by mutual agreement on 7th February
2013. The Company has initiated the process for appointing a new
CEO and, in the interim, a Committee has been set up comprising
Ramesh Bhatia, COO and Vipul Agarwal, CFO, for the day to day
running of the Company.
We would again like to take the opportunity to thank all the
people involved in making 2012-13 a memorable year for Jubilant -
their time, energy, patience and hard work has been greatly
appreciated and we cannot thank them enough.
Outlook
Jubilant has a clear and focused strategy; we have a strong
portfolio of assets, the expertise and also the funding to deliver
this. India has exceptional opportunities for oil and gas companies
and Jubilant is uniquely and ideally positioned to take advantage
of these opportunities. We are also hopeful that the gas pricing
scenario in India will become clearer given the momentum it has
achieved in the past year. Next year promises to be an exciting one
for the Company as we look forward to the first gas from our
largest asset in KG, exploring our Manipur and Tripura assets as
well as in our Myanmar block. We also look forward to the next
round of bidding in Myanmar where we are keen to look for further
opportunities.
Shyam S Bhartia Hari S Bhartia
Chairman Co-Chairman
From the CEO Committee
Jubilant has delivered a strong performance during the year
under review, reinforcing the Company as one of India's key
emerging oil and gas businesses. The Company remains committed to
deliver its strategy of exploring opportunities across the E&P
value chain. The Company's continued focus has been on the early
monetization of its key assets as it looks to continue its ethos of
creating sustainable shareholder value by building and exploiting
its diverse portfolio of exploration cum appraisal, development and
producing oil and gas assets..
The development of the KG block remains on track with the first
gas expected in Q4 2013 and Kharsang has continued to move forward
increasing the daily production rate. Our exploration programmes at
Manipur and Tripura have further advanced during the year and the
Company is also particularly excited about commencing our work on
our newly awarded block, PSC-I, in Myanmar. Our progress in the
work programme we set out to achieve was also amply reflected in
the significant upgrade to our Reserves and Resources during the
year.
This is a very exciting time for the Company with considerable
opportunities ahead. The Company has an extensive programme across
its assets for 2013-14 as Jubilant look to maximise the
opportunities of its portfolio.
India Energy Story
India's economic growth since the economic liberalization of the
early 1990s has resulted in it being one of the largest and fastest
growing economies. This growth has also led to a huge surge in its
demand for energy and its primary energy consumption grew, year on
year, at a CAGR of 6% from 2007 to 2012. India is the world's
fourth largest consumer of energy, behind the United States, China
and Russia. Primary energy consumption reached 563 mmtoe per year
in 2012. However, India's per capita energy consumption of 3.4 boe
per year is still considerably less than the world's per capita
energy consumption of 13 boe per year. To put it into perspective,
China's energy consumption per capita is four times that of
India's.
In the energy mix, crude oil and natural gas contributed
approximately 39% of India's total energy consumption in 2012,
while globally oil and gas contributed approximately 57% of the
total energy mix. The natural gas demand in India is set for a
four-fold increase from 6.8 bscfd in 2012 to 21.4 bscfd in 2022, of
which the domestic production of natural gas is expected to
contribute approximately 8.6 bscfd in 2022. Imported LNG is
expected to fill this increasing gap between demand and supply and
would continue to contribute a significant share of total gas
supply.
India's current LNG re-gasification capacity is 18.6 MMTPA and
expected to increase to 50 MMTPA by the end of the 12th Five-Year
Plan (2012-17).
LNG imports in India are primarily on a firm contract basis.
However, with the ongoing improvement in LNG infrastructure and the
increasing flexibility in tenure, the share of spot LNG contracts
is expected to increase. There has been an increased involvement by
Government backed Indian companies to tie-up LNG contracts. Over
the last 6 to 12 months, there has been significant involvement by
Indian companies to tie-up long term LNG contracts. These include
various Memoranda of Understanding signed by Indian companies for a
period ranging between 20 to 25 years.
Currently, gas is sold in India at different prices and there is
a wide gap between the price of administered gas supplies and the
prevailing market rate. Based on the source of gas and
end-consumer, the gas price varies accordingly. The existing and
projected demand-supply imbalance for gas is expected to provide an
upward pressure on both LNG and the domestic gas prices. With the
LNG share of India's total natural gas consumption increasing, it
is expected that domestic gas prices would increase to market
determined pricing with an increased pegging to imported LNG
prices, which are referenced to rising crude prices.
The past year has seen considerable debate on gas pricing in
India, and policy initiatives and announcements of the Government
have suggested a positive intent in opening up the pricing regime.
Some of the key events and initiatives are:
-- Urea Investment Policy: The Group of Ministers approved a New
Urea Investment Policy based on a delivered gas price band of
between USD 6.5 / mmBtu and USD 14 / mmBtu. The Urea Investment
Policy committee subsequently indicated that if the delivered gas
price exceeds the limit of USD 14/mmBtu, GoI would compensate the
fertilizer manufacturers.
-- Reliance Industries Limited invited bids for gas from its CBM
blocks. It opts for an open auction price indexed to the price of
imported LNG
-- RIL approached the Oil Ministry, to seek an upward revision
on the gas pricing formula and proposed to price natural gas it
produces from the KG basin at a rate equivalent to LNG import
price. In response to Reliance Industry's request, the Prime
Minister's Office indicated that Reliance can negotiate with the
Oil Ministry regarding the pricing of gas from the KG basin
-- The Planning Commission of India's Deputy Chairman, indicated
that domestic gas prices should be aligned with international
rates.
-- A committee ("Rangarajan Committee") was constituted under
the Chairmanship of Dr C Rangarajan (Chairman, the Prime Minister's
Economic Advisory Council & Former Reserve Bank of India
Governor) to suggest changes in existing oil & gas exploration
contracts. The Rangarajan Committee report has suggested a gas
pricing formula. Based on the pricing formula, the initial gas
price arrived is approximately USD 8.5 per mmbtu. Additionally, the
Rangarajan Committee has also suggested that the suggested price
arrangement be made applicable only for a 5 year period post which
efforts should be made to introduce gas on gas competition.
-- The consortium partner, GSPC's DDW price discovery process
for 5.24 mmscmd of natural gas witnessed a clearing price of USD
14.2 per mmBtu. 37 companies took part in the price discovery
process, 53 bids were made for a volume of 75 mmscmd of natural
gas
All these suggest a very positive outlook on the gas pricing
front and the Government's willingness to eventually move towards a
market determined pricing regime.
Operational Overview of Key Assets
The Company's portfolio consists of five key oil and gas assets
at various stages of exploration, appraisal, development and
production in India and the one newly acquired block in Myanmar.
During the last year, Jubilant has continued to focus on the key
blocks in its portfolio. These are the assets that the Company
believes offer the most upside and most immediate growth prospects
for the group as well as delivering future shareholder value.
Production and near term production upside- Kharsang Field (WI -
25%)
The Kharsang block, located in the Upper Assam basin in the
north-eastern region of India, is the Company's oldest block and
has been in production since 1983. Jubilant has a 25 per cent
interest in the block and is operated by Geo Enpro Petroleum
Ltd.
The average gross production from the field during the financial
year totalled 1,968 bopd, up by 9% compared to the preceding year.
This was mainly due to a successful seven wells Phase III
development drilling programme. Six of the seven wells tested for
oil and have been put into production, initially contributing to
approximately 700 bopd. The remaining well tested for gas and has
been kept shut for future gas utilization, as it is commercially
viable. The field achieved its highest ever recorded production of
2,253 barrels of oil on 23 October 2012, beating the previous high
of 2,227 achieved in December 2009.
In line with the Company's strategy to maximise the potential of
its producing assets, a Phase III Extension Development drilling
plan comprising six in-fill wells commenced with the spudding of
the first well in February 2013, aimed at further adding to the
production profile of the Kharsang field. Currently, the fourth
well is being tested and the fifth is being drilled, while the
first three wells are already on production having successfully
tested for oil. On the back of the successful development drilling
programmes, the field is at present producing around 2,000
bopd.
The average realised oil price per barrel, which is linked to
Bonny Light and Qua Ibo, during the financial year, was USD 112.5
as compared to USD 115.6 for 2011-12 reflecting the general
softening of international crude prices during the period. This
price realised has premium to Brent.
The consortium is also piloting various other projects in order
to increase the production from the Kharsang field, which include
Sand Control, Wax Inhibition, Multi-Zone Single String and Dual
String Completion and Gas Lifting Using CNG.
A very challenging, high foldage 3D seismic survey over the
field has been completed and currently being processed. This will
provide better subsurface imaging and understanding of potential
hydrocarbon zones in the Kharsang field, including deeper regional
proven plays in the Tipam and Barail formations.
The Reserves and Resources Estimation was prepared by GCA as of
31 December 2011, updating its earlier estimate as of June 30,
2010. The highlights of the reserves and resources update are:
o Gross reserves increased by 9.5% to 4.4 MMbBls, adjusted for
production as at 31 March 2013.
o Gross Contingent gas resources ranges from 15.9 bcf to 43.5
bcf, with 2C gas resources at 27.7 bcf, increase of 45%.
o Gross Contintent Oil resources range from 2.47 MMbbls to 3.85
MMbbls, with a 2C Oil resource of 3.13 MMBBls, an increase of
286%.
o Significant exploration upside- Best Estimate Gross Unrisked
Prospective Resources:
Ø Namsang Oil Prospects: 2.6 MMBbls with GCoS of 75%
Ø Lower Girujan Oil Prospects: 9.9 MMBbls with GCoS of 50% .
Ø Lower Girujan Gas Prospect: 102 Bscf with GCoS of 50%
Ø Tipam Gas Prospect: 296 Bscf with GCoS of 50%.
Krishna Godavari Block (WI - 10%) - Development and appraisal
activities
The KG basin in the south-east coast of India, continues to be
the most significant asset in the Jubilant portfolio. The operator
is Gujarat State Petroleum Corporation ("GSPC"), promoted by the
State Government of Gujarat, and the Company actively participates
with the operator in technical evaluations.
The development of the KG DDW is on track for first gas in Q4
2013. Most of the onshore and offshore facilities are at an
advanced stage of completion. The Well Head Platform was set up in
May 2011 and the batch drilling of four development wells commenced
in September 2011. The first development well was spud using a
jack-up rig in September 2011. Subsequently, from end March 2012, a
more cost efficient modular rig replaced the jack up rig, which was
moved to DD East to drill the second appraisal well. The status for
the four development wells as at the end of May 2013 are given
below:
-- DDW-D1 5459 m MD (up to TD)
-- DDW-D2 5546 m MD (in 8 1/2" hole section)
-- DDW-D3 5272 m MD (up to TD)
-- DDW-D4 4200 m MD (up to 12 1/4")
Given the tight gas reservoir, the consortium has decided to
hydrofrac the development wells for improved well productivity and
ultimate recoverable volumes. Blade Energy has been appointed as a
consultant for the hydrofraccing strategy and Halliburton has been
contracted to implement the hydrofraccing. The first well is
expected to be hydrofracced in July 2013.
Drilling operation in the reservoir section was temporarily
suspended due to installation of PLQP and drilling operation was
initiated for the non-reservoir section for three new wells i.e.
DDW-D5, D6 and D7 in batch drilling mode. The drilling status of
these wells are-
-- DDW-D5: 194 metres MD,
-- DDW-D6: 726 metres MD
-- DDW-D7: 715 metres MD
The Onshore Gas Terminal was 92.5% complete by the end of May
2013 and is expected to be commissioned in time for first gas. The
Onshore Gas Terminal (OGT) is being developed to process the
multiphase dehydrated fluid being received from the offshore
process platform (PLQP) to meet the specifications of gas sales.
The OGT facility is being setup over a 69 hectare plot, located
approximately 3.5 kilometres west of the shore line in Mallavaram
village, near RIL's Onshore Terminal of the KG D6 development.
Plant facilities are spread over 48.7 hectares and a green belt
development is to be taken-up over 20.3 hectares. By the end of May
2013 the PLQP was 96.9% complete while the Gas Turbine Generator
was 100% complete and the submarine pipeline is 62% complete.
The Ministry of Petroleum and Natural Gas of the Government of
India ("MoPNG"), had approved an extension of 20.5 square
kilometres to the existing contract area for the Krishna Godavari
Block (KG-OSN-2001/3) in January 2012. As a result of the
extension, the approved development cum Mining Lease area for Deen
Dayal West (DDW) has increased from 17 square kilometres to a total
of 37.5 square kilometres.
Gaffney Cline & Associates ("GCA") prepared a Reserves &
Resources Update for the Deen Dayal Structural complex as of 31 May
2012 post the approval of the DDW Extension area and the drilling
of the appraisal wells in the DDE area. The Gross Contingent
Resources (2C) for the block has been revised upwards by
approximately 11% for gas and 10.2% for condensate over the
estimates of 30 June 2010.
In February 2013, the consortium submitted an integrated DOC
proposal for the six natural gas discoveries within the block,
namely, KG-16 in the DDE area, KG-22 in the DDN area, KG-21 &
KG-31 in the DDW-DT area, KG-19 and KG-20SS in the DDNE-BRU area to
the Directorate General of Hydrocarbons, India. This submission has
been supported by all necessary technical and economic data,
evaluation, interpretation and analysis of data and feasibility
studies relating to the discoveries and other relevant information.
The confirmation from the MC of the said DOC will take us one step
closer to converting the 2C Resources to 2P Reserves.
Exploration and Appraisal Upside
Tripura (WI -20%)
Jubilant is the operator on this block with a 20 per cent
participating interest.
The Company submitted a DOC proposal for the Kathalchari-1
discovery on 28(th) December 2012, after incorporating the results
of the wells drilled in the Tulamura anticline. We await the
approval of DGH for the DOC proposal and the preliminary work on
the FDP has commenced.
Jubilant drilled the first exploratory well, Matabari-1 in the
Tulamura anticline, under the Phase-II programme. Matabari-1 well
was spudded in May 2012 to explore the hydrocarbon potential of the
Lower Miocene Lower Bhuban and Late Oligocene Renji sands as
primary objectives and the Middle Bhuban sands as a secondary
objective. This was the first exploratory well in the Block
targeting deeper objectives beyond the Middle Bhuban. The well was
drilled to 3,287 metres against a target of 4,060 metres due to
drilling complications. In the Middle Bhuban formation, gas bearing
sands were encountered of which one sand interval was tested with a
mini DST having a AOFP at 4.2 mmscfd of gas. Side tracking of the
well and detailed testing is scheduled for the current year.
A second deeper exploration well to complete the Phase-II
Minimum Work Programme, North Atharamura-1 on the Atharamura
Anticline, was spudded in February 2013 with a targeted depth of
4,000 metres MD. North Atharamura is the first well on the
Atharamura anticline which has an aerial extent of more than 560
kilometres on the block. Based on the available information from
drilling, mud logs and wire-line open-hole and cased-hole data, two
Objects were selected for conventional testing to establish the
presence of producible Non Associated Natural Gas. The consortium
recently submitted Notice of Discovery to DGH for the two Objects,
in the Middle Bhuban and Lower Bhuban formations, respectively. The
gross Middle Bhuban sand package in the 610-635 metres MD interval
(Object-II: perforated zone - 610-625 metres) appeared promising on
the logging-while-drilling logs and the presence of hydrocarbons
was further validated by wire-line logs. Object-II flowed gas at a
measured rate of 1.7 million standard cubic feet per day at 24/64"
choke size. The multi-bean Study for flow rate and the Reservoir
Limit Tests are currently being conducted.
The seismic programme for acquiring 125 lkm of 2D data over the
North Atharamura, North Ambasa and Khushiram area was taken up as a
part of the Phase-II programme and has been completed.
The consortium has applied for a 12 month extension of the
Phase-II exploration programme as per the extension policy of DGH
in view of the discovery in North Atharamura.
Manipur Blocks (100%)
The two Manipur Blocks, AA-ONN-2009/1 & 2, are located in
the eastern extension of the Burma-Assam-Arakan fold thrust belt
which covers almost 4,000 sq kms. Best estimate prospective
resources earlier assessed totalled 4.77 tcf on an unrisked basis,
have now been revised to 7.08 tcf by GCA, representing a
significant upgrade.
Jubilant embarked upon a 2D seismic acquisition programme of 540
lkms in the two Manipur blocks and, despite the rough terrain and
logistical challenges, recording of over 210 lkms have been
completed to date. Stratigraphic and structural understanding of
the block has been reasonably well established from recently
conducted surface geologic mapping, gradiometry / magnetic / survey
and seismic-structural modeling.
Jubilant undertook a 5,273 lkm airborne full tensor gradiometer
survey over the Manipur Blocks. The survey was conducted in
November 2011. The processing and interpretation of acquired data
has also been completed.
Recent technical work has led to the identification of three
prospects which will be targeted for the initial drilling based on
remote sensing data, geological field work and 2D seismic. The
company has submitted six well proposals to DGH which are under
review. For three targeted prospects, surface locations have been
defined, the geological prognosis has been finalised, and pore
pressure studies completed. Environmental clearance and detailed
well planning are underway and the Company will drill the first
prospect subject to the statutory clearances.
Myanmar (WI - 77.5%)
Jubilant acquired block PSC-I awarded under the Myanmar Onshore
Blocks Bidding Round in 2011, complementing its already existing
portfolio in the nearby North Eastern India. The Central Burma
basin of Myanmar is rich in oil and gas resources with discoveries
and production dating back to 1887 and the early 1990's. Jubilant
will utilise its in-house expertise as operator of Tripura, Manipur
and the Assam blocks, which are geological and tectonically similar
in setup to this block.
The Production Sharing Contract (PSC) for the block was executed
in May 2012 between Jubilant, Parami Energy Development Company
Limited (Parami) and Myanma Oil & Gas Enterprise (MOGE), an
enterprise formed by the Government of the Republic of the Union of
Myanmar. Jubilant is the operator of the block with 77.5%
participating interest and Parami holds remaining 22.5%
participating interest in this block.
The block covers an area of approximately 3,600 sq km and is
located about 125 kilometres North West of Yangon City. The block
falls in the Irrawaddy Delta Sub-basin and partly in the Pyay
Embayment Sub-basin of the Central Burma Basin, which is believed
to be the most prolific sedimentary basin in Myanmar, where giant
fields such as Chauk-Lanywa and Yenangyaung are located. The
awarded block is also located adjacent to the Myanaung and
Shwepyitha producing fields. The Commencement of Operations Date
(COD) was announced to MOGE on 23 August 2012.
A reconnaissance survey of the block was successfully completed
by the Jubilant team in collaboration with MOGE and Parami
representatives in early July 2012. With the objective to
understand the topography, terrain, logistics, availability of
infrastructure / facilities etc, the team also located and scouted
the well sites for the four existing wells to evaluate the option
for re-entry.
Based on the data collected from MOGE, initial interpretation
work completed; prospects and leads identified and seismic
acquisition program finalized. The contract for 700 lkm 2D seismic
acquisition has been awarded and the survey work initiated.
Based on the review of initial data received from MOGE, the
gross unrisked prospective resources have been have been estimated
by Jubilant at 2,821 bcf of gas and 140 mmbbls of oil/condensate
(Net to Jubilant - 2,186 bcf of gas and 108 mmbbls of oil/
condensate).
Jubilant has also received the Branch Office registration
Certificate from DICA in October 2012. The necessary bank accounts
have also been opened and are now operational.
Sanand Miroli (WI- 20%)
The MC of the Block in which Jubilant holds a 20% non-operated
interest, has approved the FDP of Miroli Part B (M1-M6) discovery
in November 2012 and the field development is under commissioning.
First oil is expected in Q4 2013-14.
An Integrated FDP of Sanand Part A oil discoveries (5
discoveries i.e. 2 are in shallower Kalol Formation (SE8 and SE10)
and 3 were in deeper Intra-Cambay Formation (SE-2, SE-4 and SE-5))
was submitted to DGH in May 2013.
Australia
Subsequent to year-end, in respect of T-47/P permit in
Australia, the National Offshore Petroleum Titles Administrator has
given its consent to the title holders to the Block to enter into a
Good Standing Agreement ("GSA") before 31 May 2013 in relation to
the unfinished 3rd year work program. The Group has decided not to
enter into a Goods Standing Agreement with National Offshore
Petroleum Titles Administrator. This has no financial
implication.
Health & Safety
Jubilant is committed to achieve excellent health, safety and
environment standards, to reduce accidents and ill health within
the workplace and to minimise the impact of the Company's
operations on the environment.
The Company insists that all contractors should maintain the
same high standards. Jubilant liaises closely with government
departments, partners and other interest groups to comply with
local laws and regulations and to minimise any disruption to the
environment.
Jubilant seek to continuously improve the ways in which the
Company contribute directly or indirectly to the economy and the
well-being of the communities where Jubilant operates.
Understanding and respecting local communities is essential to
ensure the Company's continued presence in the locations where it
works. The Company maintains a continual dialogue with local
communities and authorities through its local staff and senior
management when visiting the operational locations.
Outlook
Jubilant is well positioned and the year ahead promises to be
another exciting one as the Company looks to build on what has been
achieved during this period. The year will witness a push towards
monetization from increased production and an upgradate in
significant 2C Resources to 2P Reserves. The Company is looking
forward to first gas from KG DDW in Q4 2013 and with the Phase III
Extension drilling on Kharsang nearing completion, the Company will
soon be entering the very exciting stages of the Tripura and
Manipur programmes. Jubilant looks forward to updating our
shareholders as we progress over the year.
Our focus remains on North East India and our entry into Myanmar
is a further extension of this strategy as the Company looks to
build upon its core strengths and in-house expertise that are
already in place for this region. Myanmar is a prolific hydrocarbon
region and is an exciting move for us. The Company looks forward to
working with our partners in exploring these assets further.
The Company has an excellent portfolio of potentially world
class assets, a team with the expertise to exploit them fully and
an extensive work programme across them all. This is an exciting
time for the Company as it embarks upon the next stages of its work
programmes with a view to proving up the inherent value that the
Company believes is across its portfolio.
Ramesh Bhatia Vipul Agarwal
Chief Operating Officer Chief Financial Officer
Ramesh Bhatia, COO and Vipul Agrawal, CFO are part of the
Committee constituted by the Board of Directors for day to day
running of the company consequent to the resignation of the Chief
Executive Officer in February 2013.
CFO's Statement
Overview
2012-13 has proved to be a year where Jubilant has continued to
maximise opportunities in an exciting energy market, moving ahead
on its journey as an independent organization with a portfolio of
high quality assets.
Production and Revenues
The gross sales volume during the year was 699,310 barrels and
net to Jubilant 174,828 barrels from the Company's only producing
field in Kharsang. In the previous year, gross sales volume was
650,724 and net to Jubilant was 162,681. The 7.5% increase in the
current year owes, largely, to additional volumes contributed by
the successful Phase-III Development drilling programme in
Kharsang. Six of the seven wells under the programme tested oil and
have been put on production. The net operating revenue of USD 17.8
million, on an entitlement interest basis, represents an increase
of 2% against the previous year, on the back of increased sales
volumes, despite a softening in the international crude prices. The
average oil price realised was USD 112.5/Bbl (premium to Brent) and
for the previous year it was USD 115.6/Bbl, a decrease of 2.7%.
Income statement
During the year ended 31 March 2013, the Group incurred a loss
of USD 9.7 million as compared to a loss of USD 12.8 million in the
previous year mainly due to (a) reversal of share based payment
expense of USD 2.5 million, as against charge of USD 4.1 million in
previous year due to certain employees leaving the company (b)
lower depletion charge by USD 995 thousand, due to increase in
reserves (c) higher net finance cost of USD 3 million due to
additional withdrawal of loans (d) and the impairment of past costs
in the Golahgat block due to uncertain future exploration program
on account of non-approval of forest diversion from the
Government.
Cash flow
Closing cash (including short term investments) was USD 22.6
million (March 2012: USD 81.2 million). During the year, the
Company had cash inflows of USD 7.7 million (2012: inflows of USD
6.5 million) from operating activities and outflows of USD 65.5
million (2012: USD 82.1 million) from investing activities, which
were mainly funded by additional loans, available cash and internal
accruals. The inflows from operating activities were primarily on
account of revenues from the producing Kharsang block (USD 17.8
million). The outflows on investing activities encompass the
investment in exploration and tangible assets totaling to USD 85.6
million.
The Group has aggressive plans for investment in exploration and
development activities for the next financial year with a budgeted
capex spend around USD 75 million. The investment will be funded by
available cash, undrawn debt facilities and the promoter's
funding.
Financing
Jubilant has during the year signed a Rupee Loan Agreement for a
term loan facility of INR 13,400 million (equivalent to
approximately USD 247 million) with a consortium of banks for
refinancing its existing term loan facility of INR 6,500 million
(equivalent to approximately USD 120 million) and for capital
expenditure for development of DDW in KG Block.
In addition to above, Jubilant also entered into a funding
agreement (unsecured loans) with two Jubilant Bhartia Group
companies of USD 22 million in aggregate, for a period of three
years to fund operating activities and capital expenditure of the
Company. In the current financial year, Jubilant further entered
into a funding agreement of USD 20 million on above lines. Total
drawdown to date is USD 39 million from the above Group
funding.
As at 31 March 2013, Jubilant had a net debt of USD 410 million.
The Company had a cash balance of USD 22.6 million, available
drawdown of USD 66 million from the KG debt facility and existing
promoter's funding. The Company is working on a range of strategic
options for its medium to long term funding.
Financial Strategy & Outlook
Jubilant is looking at a multi-pronged strategy of improving
cash flows through increased revenues from Kharsang and forthcoming
revenues from KG, reducing finance costs and achieving operational
efficiencies. With its immediate cash requirements tied up, the
Company is focused on its medium to long term funding needs. The
other focus of the Group this year is to rationalize and simplify
the corporate structure to achieve overall operational and
administrative efficiencies.
Consolidated Statement of Comprehensive Income
(in thousands of US Dollars) For the year For the year
ended ended
31 March 2013 31 March 2012
------------------------------------------- -------------- --------------
Oil and natural gas revenue 17,764 17,372
Other income 1,044 1,691
18,808 19,063
------------------------------------------- -------------- --------------
Production and operating expenses 3,171 2,370
Personnel costs 2,663 3,599
Share-based payment expense/(reversal) (2,486) 4,140
Depletion, depreciation and amortisation 2,291 3,286
Impairment loss on intangible exploration 1,647 -
assets
Other expenses 4,636 4,848
11,922 18,243
------------------------------------------- -------------- --------------
Results from operating activities 6,886 820
Finance income 3,023 2,400
Finance expenses 13,301 9,662
Net finance expense (10,278) (7,262)
------------------------------------------- -------------- --------------
Loss before income taxes (3,392) (6,442)
Income tax expense (6,312) (6,354)
Loss for the year attributable to
the Owners of the company (9,704) (12,796)
------------------------------------------- -------------- --------------
Other comprehensive income
Foreign currency translation difference
for foreign operations (2,444) (6,672)
Income tax on other comprehensive - -
income
------------------------------------------- -------------- --------------
Other comprehensive income for the
year,
net of income tax (2,444) (6,672)
Total comprehensive income for the
year attributable to the Owners of
the company (12,148) (19,468)
------------------------------------------- -------------- --------------
Basic and diluted loss per share (USD) (0.023) (0.031)
Consolidated Statement of Financial Position
(in thousands of US Dollars) As at As at
31 March 2013 31 March
2012
-------------------------------------- -------------- ----------
Current Assets
Inventories 969 898
Short-term investments - 24,857
Current tax assets 1,719 1,834
Trade and other receivables 30,380 26,852
Other current assets 922 847
Cash and cash equivalents 22,607 56,287
Total Current Assets 56,597 111,575
-------------------------------------- -------------- ----------
Non Current Assets
Property, plant and equipment 195,971 117,694
Intangible exploration and other
intangible assets 224,064 193,153
Trade and other receivables 1,057 970
Other non-current assets 1,683 1,889
Total Non-Current Assets 422,775 313,706
-------------------------------------- -------------- ----------
Total Assets 479,372 425,281
-------------------------------------- -------------- ----------
Equity
Issued and paid-up share capital 5,581 5,581
Share premium 105,047 105,047
Retained earnings (111,807) (105,909)
Stock options outstanding reserve 6,066 12,358
Foreign currency translation reserve (17,323) (14,879)
Total Equity (12,436) 2,198
-------------------------------------- -------------- ----------
Current Liabilities
Loans and borrowings 48,440 16,051
Trade and other payables 21,557 23,058
Current tax liabilities 513 536
Other current liabilities 809 1,094
Total Current Liabilities 71,319 40,739
-------------------------------------- -------------- ----------
Non Current Liabilities
Loans and borrowings 393,945 360,695
Trade and other payables - 254
Employee benefits 673 604
Provisions 2,972 1,332
Deferred tax liabilities 22,765 19,321
Other non-current liabilities 134 138
Total Non Current liabilities 420,489 382,344
-------------------------------------- -------------- ----------
Total liabilities 491,808 423,083
-------------------------------------- -------------- ----------
Total equity and liabilities 479,372 425,281
-------------------------------------- -------------- ----------
Consolidated Statement of Cash Flows
(in thousands of US Dollars) For the year For the year
ended ended
31 March 2013 31 March 2012
------------------------------------------------- -------------- --------------
Cash flows from operating activities
Loss after tax for the year (9,704) (12,796)
Adjustments for:
Depletion and depreciation 2,095 3,150
Amortisation of other intangible assets 196 136
Impairment losses on intangible exploration
and other intangible assets (net) 1,647 -
Net finance expenses 9,640 6,890
Equity-settled share-based payment expense (2,486) 4,162
Income tax expense 1,771 1,139
Deferred tax expense 4,541 5,215
Loss on sale/disposal of property, plant
and equipment 90 7
Change in working capital 174 (610)
------------------------------------------------- -------------- --------------
Cash generated from operating activities 7,964 7,293
Income tax paid (net) (244) (820)
Net cash generated from operating activities 7,720 6,473
------------------------------------------------- -------------- --------------
Cash flows from investing activities
Interest received 1,880 1,241
Acquisition of property, plant and equipment,
intangible exploration assets and other
intangible assets (85,568) (56,066)
Proceeds from disposal of property, plant
and equipment 11 1
Loans given - (580)
Change in advances to co-venturers (4,411) (3,058)
Investment in non-trade investments (mutual
funds) (50,451) (87,526)
Proceeds from disposal of non-trade investments
(mutual funds) 75,515 62,665
Investment in term deposits and restricted
cash (3,840) (766)
Proceeds from disposal of term deposits
and restricted cash 2,881 2,342
Tax paid on interest income (1,480) (389)
Net cash used in investing activities (65,463) (82,136)
------------------------------------------------- -------------- --------------
Consolidated Statement of Cash Flows (contd.)
(in thousands of US Dollars) For the year ended For the year
ended
March 31 2013 March 31 2012
----------------------------- ------------------- --------------
Cash flows from financing activities
Proceeds from loans and borrowings 199,431 140,760
Payment of debt transaction cost (2,353) (300)
Repayment of loans and borrowings (125,965) (571)
Interest paid (45,309) (34,564)
Net cash generated from financing activities 25,804 105,325
---------------------------------------------- ---------- ---------
Net (decrease) / increase in cash and cash
equivalents (31,939) 29,662
CASH AND CASH EQUIVALENTS
Opening cash and cash equivalents 56,287 32,175
Effect of exchange rate fluctuations (1,741) (5,550)
Closing cash and cash equivalents 22,607 56,287
---------------------------------------------- ---------- ---------
Consolidated Statement of Changes in Equity for the year ended
31 March 2012
(in thousands of Share Share premium Retained Stock options Foreign Total
US Dollars) capital earnings outstanding currency equity
reserve translation
reserve
--------------------------- --------- -------------- ---------- --------------- ------------- ---------
Balance as at 1
April 2011 5,581 105,047 (93,113) 8,196 (8,207) 17,504
Total comprehensive
income for the year
Loss for the year - - (12,796) - - (12,796)
Other comprehensive
income:
Foreign currency
translation reserve - - - - (6,672) (6,672)
Total other comprehensive
income - - - - (6,672) (6,672)
--------------------------- --------- -------------- ---------- --------------- ------------- ---------
Total comprehensive
income for the year - - (12,796) - (6,672) (19,468)
--------------------------- --------- -------------- ---------- --------------- ------------- ---------
Transactions with
owners recorded
directly in equity:
Contribution by/to
owners of Equity
Share-based payment
transactions - - - 4,162 - 4,162
- - - 4,162 - 4,162
--------------------------- --------- -------------- ---------- --------------- ------------- ---------
Balance as at 31
March 2012 5,581 105,047 (105,909) 12,358 (14,879) 2,198
--------------------------- --------- -------------- ---------- --------------- ------------- ---------
Consolidated Statement of Changes in Equity for the year ended
31 March 2013
(in thousands of Share Share Retained Stock Foreign Total
US Dollars) capital premium earnings options currency equity
outstanding translation
reserve reserve
--------------------------- ---------- --------- ----------- -------------- -------------- ---------
Balance as at 1 April
2012 5,581 105,047 (105,909) 12,358 (14,879) 2,198
Total comprehensive
income for the year
Loss for the year - - (9,704) - - (9,704)
Other comprehensive
income:
Foreign currency
translation reserve - - - - (2,444) (2,444)
Total other comprehensive
income - - - (2,444) (2,444)
--------------------------- ---------- --------- ----------- -------------- -------------- ---------
Total comprehensive
income for the year - - (9,704) - (2,444) (12,148)
--------------------------- ---------- --------- ----------- -------------- -------------- ---------
Transactions with
owners recorded directly
in equity:
Contribution by/to
owners of Equity
Share-based payment
transactions
- Transfer to retained
earnings for vested
share options forefeited
during the year - - 3,806 (3,806) - -
- Share-based payment
expense/(reversal)
for the year (net) - - - (2,486) - (2,486)
- - 3,806 (6,292) - (2,486)
--------------------------- ---------- --------- ----------- -------------- -------------- ---------
Balance as at 31
March 2013 5,581 105,047 (111,807) 6,066 (17,323) (12,436)
--------------------------- ---------- --------- ----------- -------------- -------------- ---------
Notes to the accounts
1. General and principal activities
Jubilant Energy N.V. ('the Company' or 'JENV') was incorporated
on 12 June 2007, in Amsterdam, the Netherlands, as a company with
limited liability. The registered office of the Company is
Orlyplein 10, Floor 24, 1043 DP Amsterdam, the Netherlands. The
Company is a subsidiary of Jubilant Energy (Holdings) B.V. (JEHBV),
a Netherlands company, which in turn is a wholly-owned subsidiary
of Jubilant Enpro Private Limited ('Jubilant Enpro'), a company
incorporated under the laws of India. On 24 November 2010, the
Company commenced trading on Alternative Investment Market (AIM),
London.
The abbreviated consolidated financial information as at and for
the year ended 31 March 2013 comprises the Company and its
subsidiaries (together referred to as the 'Group' and individually
as 'Group entity') and the Group's proportionate interest in
jointly controlled assets in unincorporated joint ventures.
The Group is engaged in the exploration for and development and
production of oil and natural gas. It conducts many of its
activities jointly with others. The abbreviated consolidated
financial information reflects only the Group's proportionate
interest in such activities.
2. Summary of significant accounting policies
The abbreviated consolidated financial information has been
derived from the Company's Consolidated Financial Statements for
the year ended 31 March 2013 and the Company's Consolidated
Financial Statements for the year ended 31 March 2012 which has
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU. These standards have been
consistently applied throughout the Group and in previous year. The
Company's Consolidated Financial Statements for the year ended 31
March 2013 and the Company's Consolidated Financial Statements for
the year ended 31 March 2012 were authorised for issue by the Board
of Directors on 26 June 2013 and on 29 June 2012 respectively.
Basis of preparation
The abbreviated consolidated financial information, which
comprise the abbreviated statement of financial position as at 31
March 2013, the abbreviated statement of comprehensive income,
statement of changes in equity and cash flow statement for the year
then ended, and related notes, have been derived from the Company's
Consolidated Financial Statements for the year ended 31 March 2013,
and the Company's Consolidated Financial Statements for the year
ended 31 March 2012, on which the Company's audit firm KPMG
Accountants N.V. ("KPMG") provided an unqualified audit opinion
dated 26 June 2013 and on 29 June 2012 respectively.
For a better understanding of the Company's financial position
and results, we emphasize that the abbreviated consolidated
financial information should be read in conjunction with the
Company's Consolidated Financial Statements as of 31 March 2013 and
for the year then ended and the Company's Consolidated Financial
Statements as of and for the year ended 31 March 2012, from which
the abbreviated consolidated financial information was derived.
Preparation of Consolidated Financial Statements on a
going-concern basis
The Group has negative equity and a negative working capital as
at 31 March 2013. The ultimate parent company - Jubilant Enpro
Private Ltd - has given assurance for financial support for
continued operations of JENV upto June 2014, should this be
required. Considering the financial support from parent company and
other additional factors such as internal accruals from producing
block, expected cash flows from KG block in near future and other
funding options, the Group has assessed that going concern
assumption is appropriate and has thus prepared the financial
statements on a going concern basis.
3. Trade and other receivables - current
(in thousands of US Dollars) As at As at
31 March 2013 31 March 2012
-------------------------------- --------------- ---------------
Trade receivables 1,893 1,744
Due from related parties 11,415 12,584
Recoverable from co-venturers
(refer to Footnote a and b) 12,075 8,352
Term deposits 152 97
Interest accrued but not due
on deposits 148 77
Security deposit 30 62
Restricted cash - margin money
(refer to Footnote c) 4,667 3,936
30,380 26,852
-------------------------------- --------------- ---------------
Footnotes:
a) Represents amounts due from co-venturers on account of
non-payment of cash calls raised by the Group in respect of
operated blocks and /or advance payments made by the Group in
respect of non-operated blocks.
b) The recoverable from co-venturers includes USD 8,383 thousand
from a joint venture partner, on which partner has raised certain
issues, management is in active discussion with partner and feels
that amount is fully recoverable and no provision is required in
this respect.
c) Restricted cash - margin money represents margin money
against guarantees and letters of credit. Restrictions on margin
money deposits are released on the expiry of the terms of
guarantees and letters of credit.
4. Loans and borrowings (including accrued interest)
(in thousands of US Dollars) As at 31 March 2013
Current Non-current Total
-------------------------------- --------- ------------- --------
Financial liabilities at
amortised cost
Secured foreign currency
term loan 39,973 49,838 89,811
Secured term loans from banks 8,209 296,609 304,818
Unsecured inter corporate
deposits from related parties 251 19,255 19,506
12% Redeemable preference
shares - 28,240 28,240
Other 7 3 10
48,440 393,945 442,385
-------------------------------- --------- ------------- --------
(in thousands of US Dollars) As at 31 March 2012
Current Non-current Total
-------------------------------- --------- ------------- --------
Financial liabilities at
amortised cost
Secured foreign currency
term loan 1,531 85,292 86,823
Secured term loans from banks 14,495 249,018 263,513
12% Redeemable preference
shares - 26,374 26,374
Other 25 11 36
16,051 360,695 376,746
-------------------------------- --------- ------------- --------
5. Share capital
Issued and paid-up share capital
(in thousands of US Dollars) As at As at
31 March 2013 31 March 2012
-------------------------------- --------------- ---------------
Opening balance as at 1 April 5,581 5,581
Closing balance as at 31 March 5,581 5,581
-------------------------------- --------------- ---------------
Share premium
(in thousands of US Dollars) As at As at
31 March 2013 31 March 2012
-------------------------------- --------------- ---------------
Opening balance as at 1 April 105,047 105,047
Closing balance as at 31 March 105,047 105,047
-------------------------------- --------------- ---------------
Footnotes:
1) Authorised share capital
The authorised share capital of JENV as at 31 March 2013 is
874,200,000 shares of USD 12,145 thousand equivalent to EUR 8,742
thousand (31 March 2012: USD 12,145 thousand equivalent to EUR
8,742 thousand), having the par value of EUR 0.01 (31 March 2012
EUR 0.01) per share.
2) Issued share capital
The issued share capital of JENV as at 31 March 2013 is
416,306,787 shares (31 March 2012: 416,306,787 shares).
There is no change in the issued share capital of JENV during
the year ended 31 March 2013 and 31 March 2012.
All issued shares are fully paid up. The holders of ordinary
shares are entitled to receive dividend as declared from time to
time and are entitled to one vote per share at the meetings of the
Group.
3) Share premium
There is no change in the share premium of JENV during the year
ended 31 March 2013.
4) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
currency differences arising from the translation of the financial
statements of foreign operations.
5) Stock options outstanding reserve
The stock options outstanding reserve comprises the amounts
recognised in respect of the equity-settled share-based payments to
certain employees and others providing similar services.
6. Impairment
During previous years, Group has recognised impairment loss for
carrying value of exploration and evaluation assets for Mehsana,
Cauvery and Australia blocks. During the current year, in view of
the uncertain future exploration program on account of non approval
of forest diversion, the management has decided to recognise
impairment loss in respect of the expenditure incurred till 31
March 2013 amounting to USD 1,560 thousand on Golaghat Block.
7. Earnings per share
The following is the reconciliation of the loss attributable to
ordinary shareholders and weighted average number of ordinary
shares used in the computation of basic and diluted earnings per
share:
For the year ended For the year ended
31 March 2013 31 March 2012
--------------------------------------- ------------------- -------------------
Loss
Loss attributable to ordinary
shareholders
(in thousands of US Dollars) (9,704) (12,796)
Ordinary shares
Weighted average number of ordinary
shares outstanding used in computing
EPS (Nos.) 416,306,787 416,306,787
Basic and diluted EPS (USD per
share) (0.023) (0.031)
--------------------------------------- ------------------- -------------------
The Group has issued options to its employees during the year
ended 31 March 2013 and 31 March 2012. Since the Group does not
have profits during the current and in the previous year, the
options issued are considered to have an anti-dilutive effect.
Therefore, the basic and diluted EPS are the same.
8. Related Parties
(a) Related parties and nature of relationships where control exists
Relationship Name of related parties
Ultimate holding company Jubilant Enpro Private
Limited
Holding company Jubilant Energy Holding
BV
(b) Related parties and nature of relationships where
transactions have taken place during the year
Relationship Name of related parties
Fellow subsidiary 1) Western Drilling Contractors Private
Limited
2) Enpro Oil Private Limited
Enterprises that are directly 1) Jubilant Securities Private Limited
or indirectly under the control 2) Jubilant Capital Private Limited
or significant influence 3) Jubilant Life Sciences Limited
of key management personnel
Joint Venture of Ultimate Geo Enpro Petroleum Limited
holding company
Key Management Personnel 1) Shyam S Bhartia (Promoter and Director)
2) Hari S Bhartia (Promoter and Director)
3) Sir Robert Paul Reid
4) Arun Kumar Duggal
5) Dr. Andrew William Wood
6) Shahzaad S Dalal
7) Radhey Shyam Sharma (appointed w.e.f.
21 March 2013)
8) Ajay Khandelwal (resigned w.e.f. 7
February 2013)
9) Vipul Agarwal
10) Ramesh Bhatia
11) Apoorva Ranjan (resigned w.e.f. 12
October 2012)
12) Premanand Mishra (appointed w.e.f.
12 October 2012)
13) Anil Mathur (appointed w.e.f. 17
December 2012)
14) Sandeep Budhiraja (appointed w.e.f.
7 February 2013)
(c) Related party transactions
Ultimate Holding Holding Company Joint Venture
Company of the Ultimate
(in thousands of US Dollars) Holding company
For the year ended For the year ended For the year
ended
31 March 31 March 31 March 31 March 31 March 31 March
2013 2012 2013 2012 2013 2012
------ ----------------------------- ---------- --------- ---------- --------- --------- ---------
(i) Transactions:
Loans taken 5,148 - 13,000 - - -
Share of Joint operative
expenditure paid - - - - 8,183 11,941
Expenses incurred
by the Group on their
behalf - - - - 650 1,205
Bank charges and
guarantee commission 500 241 - - - -
Interest expense
on inter corporate
deposits 175 - 71 - - -
Expenses incurred
on behalf of the
Group 18 - - - 8,186 12,028
Interest on redeemable
preference shares 3,023 3,233 - - - -
Repayment to creditors - 26 - - - -
Joint Venture
Ultimate Holding of the Ultimate
(in thousands of US Dollars) Company Holding Company Holding company
As at As at As at
--------------------- --------------------- --------------------
31 March 31 March 31 March 31 March 31 March 31 March
2013 2012 2013 2012 2013 2012
------ ----------------------------- ---------- --------- ---------- --------- --------- ---------
(ii) Balances outstanding
Trade and other receivables
(loans and advances
recoverable) - 705 - - 313 266
Loans and borrowings
(unsecured intercorporate
deposits) 5,309 - 13,071 - - -
Trade and other payables 511 241 332 432 - -
Redeemable preference
shares 28,240 26,374 - - - -
------------------------------------ ---------- --------- ---------- --------- --------- ---------
(in thousands of US Dollars) Fellow Subsidiary Enterprises that are
directly or indirectly
under the control or
significant influence
of key management personnel
For the year ended For the year ended
------------------------------------------------------------ -----------------------------------------------------------------
31 March 31 March 31 March 31 March
2013 2012 2013 2012
------ --------------------- ---------------------------- ------------------------------ -------------------------------- -------------------------------
(i) Transactions:
Loans taken 1,103 - - -
Loans and advances given - - - 580
Expenses incurred by - - 5 -
the
Group on their
behalf
Expenses incurred on behalf
of the Group - - 81 24
Interest expense on 24 - - -
inter
corporate deposits
(in thousands of US Dollars) Fellow Subsidiary Enterprises that are
directly or indirectly
under the control or
significant influence
of key management personnel
As at As at
------------------------------------------------------------ -----------------------------------------------------------------
31 March 31 March 31 March 31 March
2013 2012 2013 2012
------ --------------------- ---------------------------- ------------------------------ -------------------------------- -------------------------------
(ii) Balances outstanding
Trade and other receivables
(loans and advances
recoverable) 2 2 11,100 11,611
Loans and borrowings 1,126 - - -
(unsecured
intercorporate deposits)
---------------------------- ---------------------------- ------------------------------ -------------------------------- -------------------------------
(d) Guarantees given by ultimate holding company
i. Secured foreign currency term loans taken by JENV from EXIM:
Corporate guarantees in respect of these loans have been given by
Jubilant Enpro.
ii. Secured term loans taken by JEKPL from banks: These loans
are secured by primary charge on all present and future receivables
of Jubilant Enpro relating to Kharsang field.
iii. Non-fund based limit taken by JOGPL, JODPL and JEKPL to
furnish bank guarantee: Corporate guarantee in respect of this
non-fund based facility has been given by Jubilant Enpro.
(e) As at 31 March 2013, performance guarantee amounting to USD
2,885 thousand (31 March 2012: USD 904 thousand) given on behalf of
Jubilant Securities Private Limited against a lien on the term
deposits of JENVPL in respect of Golaghat block.
(f) As at 31 March 2013, performance guarantee amounting to USD
1,823 thousand (31 March 2012: USD 1,907 thousand) given on behalf
of Jubilant Capital Private Limited against a lien on the term
deposits of JEKPL in respect of Ankleshwar block.
(g) As at 31 March 2013, performance guarantee amounting to USD
856 thousand (31 March 2012: USD 895 thousand) given on behalf of
Jubilant Capital Private Limited against a lien on the term
deposits of JENVPL in respect of Ankleshwar block.
(h) Pledge of 51% of promoters' shareholding in JEKPL in respect
of term loan facility from banks.
(i) Non-disposal undertaking along with power of attorney in
respect of 51% of the total issued and paid-up shares of JODPL held
by JOGIL.
(j) BG limit of USD 3,680 thousand (31 March 2012: USD 3,849
thousand) is available for JCPL and JSPL within the overall limit
of USD 13,982 thousand (31 March 2012: USD 14,625 thousand) of
JOGPL and negative lien on participating interest of JCPL and JSPL
in the blocks.
9. Contingencies
Contingent liabilities in respect of matters currently in
dispute comprise:
S Entity Dispute With Description Status
No
1 Jubilant Service tax Alleged for non-payment Appeal pending
Oil and Gas authorities of service tax on advisory with Customs,
Private Limited and assisting services Excise and Service
(JOGPL) provided to various foreign Tax Appellate
entities for their operations Tribunal
in India. The amount involved
is USD 170 thousand.
----------------- ------------------ ---------------------------------- ---------------------
2 Jubilant Dewanchand JOGPL alleged DRIPL for Appeal pending
Oil and Gas Ramsaran delays in mobilising a with High Court
Private Limited Industries rig. JOGPL has invoked of Gauhati,
(JOGPL) Private Limited the performance bank guarantee. Agartala Bench
('DRIPL') DRIPL has claimed the amount
of bank guarantee encashed
by JOGPL along with interest.
The amount involved is
USD 69 thousand.
----------------- ------------------ ---------------------------------- ---------------------
3 Jubilant Excise department Interest and penalty on Custom Excise
Energy Kharsang short payment of oil cess, & Service Tax
Private Limited the amount involved is Appellate Tribunal,
(JEKPL) USD 13 thousand. Kolkatta and
the Commissioner,
Central Excise
(Appeals) Guwahati
----------------- ------------------ ---------------------------------- ---------------------
4 Jubilant Geophysical Non-performance of 3D seismic Appeal pending
Energy Kharsang Institute project by GII in accordance with Delhi High
Private Limited of Israel with Contract provisions. Court
(JEKPL) (GII) The amount involved is
USD 355 thousand, against
which Operator has filed
a counter claim of USD
613 thousand. (JEKPL's
share)
----------------- ------------------ ---------------------------------- ---------------------
5 Jubilant C.A.T. Geodata Non-performance of 3D seismic Matter is pending
Energy Kharsang GmbH (CAT) project by CAT in accordance in arbitration
Private Limited with Contract provisions.
(JEKPL) The amount involved is
USD 763 thousand, against
which Operator has filed
a counter claim of USD
313 thousand. (JEKPL's
share)
----------------- ------------------ ---------------------------------- ---------------------
6 Jubilant Service tax Service tax on the off-shore Matter pending
Offshore authorities services received by the with Commissioner
Drilling Block, The amount involved Central Excise,
Private Limited is USD 343 thousand. (JODPL's Ahmedabad
(JODPL) share)
----------------- ------------------ ---------------------------------- ---------------------
7 Jubilant Tuff Drilling Claim due to the loss caused Matter is pending
Offshore Private Limited by illegal termination in arbitration
Drilling of contract. The amount
Private Limited involved is USD 13,234
(JODPL) thousand, against which
operator has filed a counter
claim of USD 9,487 thousand.
(JODPL's share)
----------------- ------------------ ---------------------------------- ---------------------
8 Jubilant Saipem (Portugal) Claim related to billing Matter is pending
Offshore Comercio of higher contract day in arbitration
Drilling Maritimo rate. The amount involved
Private Limited Su Lda is USD 15,428 thousand,
(JODPL) against which operator
has filed a counter claim
of USD 3,691 thousand.
(JODPL's share)
----------------- ------------------ ---------------------------------- ---------------------
9 Jubilant Atwood Oceanics Service tax on drilling, Appeal pending
Offshore Pacific Ltd completing or abandoning with CESTAT
Drilling ("AOPL") the wells identified by
Private Limited GSPC drilling program from
(JODPL) July 2007 to July 2009.
The amount involved is
USD 806 thousand. Matter is pending
with arbitration
Interest on delayed payment
of invoices is USD 153
thousand
----------------- ------------------ ---------------------------------- ---------------------
Considering the facts and current status of the cases listed
above, management is confident that there shall not be any
liability devolving on the Group in this matter.
10. Events occurring after the balance sheet date
Subsequent to year-end, in respect of T-47/P permit in
Australia, the National Offshore Petroleum Titles Administrator has
given its consent to the title holders to the Block to enter into a
Good Standing Agreement ("GSA") before 31 May 2013 in relation to
the unfinished 3rd year work program. The Group has decided not to
enter into a Goods Standing Agreement with National Offshore
Petroleum Titles Administrator. This has no financial
implication.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEIFMMFDSEFM
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