TIDMPELE
RNS Number : 6155S
Petrolatina Energy PLC
21 May 2009
Thursday 21 May 2009
PetroLatina Energy Plc
("PetroLatina" or "the Company")
Final Results for the year ended 31 December 2008
A period of restructuring to create the basis for future growth
PetroLatina (AIM: PELE), an independent oil and gas exploration, development and
production company focused on Latin America, announces its audited final results
for the year ended 31 December 2008.
Financial Highlights:
* Revenues increased by approximately 10% to $7.8 million (2007: $7.1 million)
* Gross profit increased significantly to $3.4 million (2007: $0.2 million)
* Loss after tax reduced by 51% to $3.9 million (2007: $8.0 million)
* Loss per share of $0.120 (2007: $0.345)
* $25 million equity investment secured at 86 pence per share
* Cash at year end of $2.7 million (2007: $3.5 million)
Operational Highlights:
* New operationally focused management team established
* First well in new six well minimum drilling programme spudded
* Awarded the Putumayo-4 block in the Colombian licence bidding round 'Mini-Ronda
2008'
Post Balance Sheet Events:
* Subsidiary of an existing substantial shareholder subscribed for $4.875 million
of secured convertible loan notes, with an option to subscribe for up to a
further $5 million
* First exploration well at La Paloma, Colon-1, proved successful. Production to
commence in mid-2009 at an expected rate of approximately 1,200 bopd gross
* Los Angeles-11 development well proved successful and commenced production at a
rate of approximately 220 bopd
* Los Angeles-12 development well drilled to 8,000ft (target depth 7,700ft) and
currently being evaluated
* RZA pipeline throughput rose significantly in the first quarter of 2009
averaging 4,041 bopd, a 33% increase over the prior year
Outlook:
* Ongoing drill programme expected to significantly increase production, cash flow
and reserves
* First commercial gas sales from Serafin gas field expected to commence in Q4
2009
* Anticipated continued increase in the RZA pipeline throughput
* Drilling of at least a further 3 wells expected to have commenced by the year
end bringing the total number of wells drilled in 2008-2009 campaign to 7.
Luc Gerard, Executive Chairman of PetroLatina, commented:
"PetroLatina's ongoing drill programme has met with initial success and we are
now firmly on track to deliver considerably increased production, cash flow and
reserves in the near future. Our cost saving initiatives introduced in the year
will have a material impact on future profitability and we are focused on
delivering significantly improved results to shareholders in 2009 and beyond."
Enquiries:
+-----------------------------------------------+---------------------------+
| PetroLatina Energy Plc | Tel: +57 1627 8435 |
| Juan Carlos Rodriguez, Chief Executive | |
| Officer | |
+-----------------------------------------------+---------------------------+
| Pawan Sharma, Executive Vice President - | Tel: +44 (0)20 7956 2821 |
| Corporate Affairs | |
+-----------------------------------------------+---------------------------+
| | |
+-----------------------------------------------+---------------------------+
| Strand Partners Limited | |
+-----------------------------------------------+---------------------------+
| Simon Raggett / Matthew Chandler | Tel: +44 (0)20 7409 3494 |
+-----------------------------------------------+---------------------------+
| | |
+-----------------------------------------------+---------------------------+
| Financial Dynamics | |
+-----------------------------------------------+---------------------------+
| Ben Brewerton / Susan Quigley | Tel: +44 (0)20 7831 3113 |
+-----------------------------------------------+---------------------------+
Additional Information on PetroLatina Energy Plc:
PetroLatina Energy Plc (AIM: PELE), formerly known as Taghmen Energy Plc, was
founded in 2004. The Company is presently focused on Colombia after the sale of
its assets in Guatemala in which it retains a 20% interest in the first three
wells and a 20% working interest in future wells. In Colombia, the Company
currently holds 45% and 20% interests in the Los Angeles and Santa Lucía fields
on the Tisquirama licence respectively, and a 100% interest in the Doña María
field. In November 2007 the Company secured the extension of the Tisquirama
licence for the economic life of the fields. In April 2006 the Group acquired an
interest in two exploration blocks with an 85% interest in Midas and an 80%
interest in La Paloma. PetroLatina also owns the Río Zulia-Ayacucho pipeline in
the prolific Catatumbo basin which transports crude oil. Present
exploration/exploitation activities in this area should increase the volume of
crude oil transported resulting in an increased cash flow. Further information
is available on the Company's website (www.petrolatinaenergy.com).
Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial Statements are expected
to be posted to shareholders shortly and, once posted, will also be made
available to download from the Company's website at www.petrolatinaenergy.com.
The Annual Report and Financial Statements will also be made available for
inspection at the Company's registered office during normal business hours on
any weekday. PetroLatina Energy Plc is registered in England and Wales with
registered number 05173588. The registered office is at Suite 219, No. 1,
Liverpool Street, London EC2M 7QD.
Annual General Meeting
The Company's next Annual General Meeting ("AGM") will be held at 11.00 a.m. on
23 June 2009 at the offices of Strand Partners Limited, 26 Mount Row, London W1K
3SQ and a formal Notice of AGM will accompany the Annual Report and Financial
Statements in due course.
Chairman's Statement
I am pleased to report on a year of considerable progress for the Company, which
has undergone a significant transformation. The restructured management team
appointed in the summer of 2008 has embarked on a strategy aimed at: rapidly
reducing central overheads costs; securing the long-term future of the Group's
operating licences; ensuring access to sufficient funding; and commencing a new
drill programme.
Revenues for the period increased by approximately 10% to $7.8 million (2007 -
$7.1 million) assisted by the higher oil price throughout much of the year.
Average net oil production of 244 barrels of oil per day ("bopd") (2007 - 314
bopd) was slightly lower than last year but in line with expectations due to the
Company's reduced working interest stemming from the licence extension terms
negotiated in May 2008. In return, PELE secured the Tisquirama licence for the
economic life of the fields.
Gross profits increased significantly to $3.4 million (2007 - $0.2 million) and
loss before tax was reduced by approximately 52% to circa $4 million (2007 -
$8.4 million), reflecting management's actions to reduce the Company's central
overhead and running costs. Furthermore, there were a number of largely one-off
costs including a $1,712,000 (2007 - $2,904,000) charge relating to share based
payments in respect of current and outgoing directors and a $946,000 charge upon
the surrender of the Gaita licence to Colombia's Agencia Nacional de
Hidrocarburos ("ANH"). The cost reduction measures and absence of such one-off
charges in future years should serve to enhance the Group's profitability
alongside an anticipated build-up in the level of production.
In July 2008, the Company was successfully refinanced by way of a significant
$25 million equity investment from Tribeca Oil & Gas Inc. ("TOGI"), a portfolio
investment company of Tribecapital Partners S.A. ("Tribeca"), a Colombian
private equity firm. This investment, at a significant premium to the then
prevailing market share price, served to secure the Company's future and enabled
us to fund the commencement of our planned work programme of exploration and
appraisal wells whilst also retiring all outstanding third party indebtedness.
The Group currently has access to sufficient financial resources to meet its
working capital requirements for the remainder of 2009, but it is expected that
additional funding will be required in due course in order to complete our
entire planned work programme. At the period end the Company had cash and cash
equivalents of $2.7 million (2007 - $3.5 million).
At the Annual General Meeting held in August 2008, we stated our intention to
commence our new drilling programme within 100 days and subsequently succeeded
in spudding our first exploratory well, Colon-1,on the La Paloma block in the
Middle Magdalena valley, Colombia in November 2008.
We are currently aiming to drill a minimum of six wells across our three
Colombian licence areas during 2009 and have made good progress in achieving
this objective. Our overall plan is to seek to considerably increase production
and cash flow, and further develop and commercialise the Company's reserves
through our ongoing drilling programme.
Average throughput in PELE's wholly owned RZA pipeline decreased by 8.9% to
2,696 bopd due to a fall in production at the Rio Zulia and Tibu fields, but has
risen significantly since the period end. Throughput for the first quarter of
2009 averaged 4,041 bopd, a 33% increase over the prior year.
In late December 2008, it was confirmed that the Company was the successful
bidder for the Putumayo-4 block in the Colombian licence bidding round
'Mini-Ronda 2008'. The Putumayo-4 block covers an area of 51,333 hectares
located in the Putumayo Basin of southern Colombia and has over 400km of
pre-existing 2D seismic data from which PELE has already identified promising
leads. The Putumayo Basin is considered by ANH to be one of the most promising
exploration areas in Colombia and is rapidly becoming a prolific hydrocarbon
producer. In January 2009, the Company announced that it had entered into a
memorandum of understanding for a proposed farm-out agreement for the project
with La Cortez Energy Inc. ("La Cortez"). The Company is in the process of
finalising the terms of this arrangement.
Initial commercial gas sales are now expected to commence from our Serafin gas
field in the fourth quarter of 2009, offering the prospect of strong short-term
cash flow and economic returns. PELE has a 25% interest in the project.
Developments post the period end
There have been a number of significant achievements since the period end, which
should have a positive impact on the current and future year's production
volumes and financial results.
In January 2009, a subsidiary of TOGI subscribed for $4.875 million of secured
convertible loan notes with an option to subscribe for up to a further $5
million,which has yet to be exercised. We were delighted with Tribeca's
continued support for the Company, against a challenging backdrop of
considerable global economic uncertainty, which enabled us to maintain momentum
on our work programme.
In February 2009, we announced successful preliminary test results for our
Colon-1 exploratory well at La Paloma where the Company retains an 80 per cent
working interest and is the operator. The Colon-1 well was drilled to a final
total measured depth of 9,125ft and is expected to be brought on to production
in mid-2009 at a rate of approximately 1,200 bopd gross. A total of
approximately 6,000 bbls had already been extracted as at April 2009.
In April 2009, further positive results were obtained from our Los Angeles-11
development well, the second well in our current drilling programme. Los
Angeles-11 was brought into production at an initial rate of approximately 220
bopd with log interpretation indicating 217ft of net oil pay in the primary
target, and is currently producing approximately 170 bopd. Oil was also tested
at a deeper secondary target which should ultimately serve to increase the
field's reported reserves. It was also announced in April that our third well,
Los Angeles-12, had already been drilled to 8,000ft (target depth of 7,700ft)
and was undergoing evaluation.
Outlook
The Board now has a greater operational focus and I strongly believe that PELE
is well placed to build on its early drilling success as it continues to pursue
its development programme in Colombia despite the current challenging global
macro-economic environment. Although the Group will need to secure additional
funds to complete its entire planned work programme, its work commitments for
the remainder of 2009 are funded and with a positive operating cash flow and
clear investment plan in place we believe that PELE is now firmly on track to
achieving both increased production and reserves. The benefits of our cost
saving initiatives, introduced in the first half of 2008, should be even more
evident in our results for the current financial year and should enhance the
group's future profitability.
I would like to thank our shareholders and employees for their patience and
support throughout the restructuring period and remain confident that their
loyalty will be rewarded as PELE begins to realise its true potential. The Board
looks forward to reporting further progress during the remainder of 2009.
Luc Gerard
Executive Chairman
20 May 2009
Chief Executive's Statement
Overview
What a difference a year makes; 2008 saw PELE transform itself from being
primarily a production company to being a far more balanced exploration and
production company. Twelve months ago the Company's development projects had
stalled, its licences were due to expire in the near term and production was
declining. The second half of 2008 was spent restructuring the Company to create
a strong foundation from which to grow and start to fully exploit the potential
of our assets. The Company also prepared for and commenced a six well plus
drilling programme. The first well in the programme, Colon-1, was spudded in
November - it was the first new well to be drilled by the Company since 2004 and
its success demonstrates the value of our exploration assets.
The Company is now focusing its resources and efforts on developing its
Colombian assets. In addition, in the second quarter of 2008 we confirmed our
intention to participate in 20 per cent. of a new well to be drilled in
Guatemala by our partner, Quetzal Energy Inc. ("Quetzal"), to whom we sold our
Guatemalan interests in July 2007. Analysis of the available data has given us a
measure of confidence that the new Atzam-3 well will deliver positive results.
The well is expected to be drilled by Quetzal by June 2009.
Review of Operations
Colombian Assets
During 2008, the Santa Lucia and Los Angeles fields (Tisquirama Licence) and the
Doña Maria field (Lebrija licence) produced 299,674 gross bbls at an average
daily production rate of 850 bopd. This represented a small decrease of 2.4% to
the production volumes achieved during 2007, within norms for the depletion of
reserves. The level of production significantly exceeded our budgeted
expectations primarily due to workovers and the optimisation of resources.
Average net oil production to the Company from the Tisquirama Licence and the
Lebrija licence in 2008 was approximately 244 bopd (2007 - 314 bopd). This
decrease resulted from the reduction of the Company's production share
participation from 50% to 45% at Los Angeles and 25% to 20% at Santa Lucia
respectively based on the new licence extension terms agreed in May 2008.
Once the Tisquirama licence terms had been extended to cover the economic life
of the fields, we were in a position to formulate a development plan. Important
reservoir studies in the Los Angeles field, including seismic reprocessing, core
analysis, and simulation study were started in late 2008 and will be completed
during 2009. At the Santa Lucia field, the acquisition of a minimum of 76 sq.
km. of 3D seismic was carried out at the end of 2008. The high quality
information obtained has been processed and is under interpretation and we
expect that, as a result at least 6 wells will be drilled during 2009. Most of
these will be infill wells, which the Company believes have a high probability
of success at the reasonable costs demonstrated by our recent drilling
experience.
At the Midas exploration block, 40 sq. km. of 3D seismic data was acquired, and
the Company is currently undertaking interpretation of this data to define a
prospect to be drilled at the end of the second quarter of 2009.
We expect that a minimum of 6 wells will be drilled during 2009 across the
company's Colombian licences. Most of these will be infill wells, which the
Company believes have a high probability of success at reasonable cost.
Production volumes are expected to increase steadily in future years through
both the development of producing fields and exploration drilling and we have
already seen progress in this area in the first months of 2009.
Since the period end, the Company has obtained successful results at its Colon-1
exploratory well in the La Paloma licence area, where the Company has an 80%
working interest. Production is expected to commence in mid-2009 at a rate of
approximately 1,200 bopd gross. The Company believes that the Colon-1 well will
result in a significant uplift in its existing production, and it represents an
important commercial oil discovery, which should lead to further success on the
Company's Middle Magdalena acreage in due course. This early drilling success
will not only greatly supplement the Company's existing production volumes but
will also allow for development of the La Paloma field which has several
additional promising drilling locations. The proximity of this well to our
existing and underutilised production facilities will allow us to monetise this
discovery in the short term.
In February 2009, the Group finalised and signed the previously announced
Putumayo-4 E&P contract with ANH. The Group is currently working on the
community relationship and environmental diagnostic for the block, and plans to
acquire 103km of 2D seismic by the end of 2009 to delineate a prospect, expected
to be drilled in 2010. Prior to finalising the contract with ANH, the Company
announced in January 2009 that it had entered into a memorandum of understanding
for a proposed farm-out agreement for the project with La Cortez. The Company is
in the process of finalising the terms of this arrangement.
The Company returned its Gaita E&P block to ANH in October 2008 as the 3D
seismic acquired there showed that no drillable prospect existed on this block.
RZA Pipeline
During 2008, 983,882 bbls (2,696 bopd) were transported through the Company's
Rio Zulia - Ayacucho pipeline representing a fall of 8.9% compared to throughput
in 2007, however this has risen significantly since the period end. Ecopetrol
S.A. has now commenced its workover programme focused on increasing production
at the Rio Zulia field and predicts an increased throughput from 2,696 bopd to
4,000 bopd from the middle of 2009. Throughput for the first quarter of 2009
averaged 4,041 bopd, a 33% increase over the prior year. PetroLatina receives
$1.60 per barrel transported from the Tibu field and $2.64 per barrel
transported through the Zulia Field.
Serafin Gas Development
During the second half of 2009, the Group should satisfy the necessary
conditions to bring the Serafin gas well into production. Initial commercial gas
sales are expected to commence in the fourth quarter of 2009 which will provide
valuable cash revenues to the Company to support the development of its
producing fields.
Recent increases in the domestic price of gas in Colombia (from $3.50 to $5.00
per thousand cubic feet) means that the project offers strong short term cash
flow and economic returns, with a projected pay back of less than three months.
There is also believed to be a high probability of further gas deposits on the
licence and PELE is currently conducting studies using its existing 3D seismic
coverage to identify further drillable prospects. PELE has a 25% interest in the
project.
Guatemalan Assets
Despite having sold our assets (Licence A7-2005 and A-6-93) in Guatemala to
Quetzal Energy Inc. in July 2007, PELE retained a 20 per cent. carried interest
in the first three wells to be worked over, and a 20 per cent. working interest
in future wells.
An evaluation of Quetzal's proposed new Atzam-3 well was completed during the
period, and we have expressed our interest in participating in this particular
well which is due to be drilled by June 2009.
Financial Review
During 2008 revenues totalled $7.8 million (2007 - $7.1 million) an increase of
only approximately 10% despite the higher oil price during the period. This was
the result of three main contributory factors:
* A decrease in the average throughput in PELE's wholly owned RZA pipeline by 8.9%
due to a fall in production at the Rio Zulia and Tibu fields.
* The Company's production share participation percentage decreased on average by
25% to reflect the new Tisquirama license extension terms; and
* A decrease in gross production due to the normal depletion of reserves.
A booked depletion, depreciation and amortisation ("DD&A") and impairment charge
totalling $2 million (2007 - $4.8 million); includes DD&A of approximately $1
million and an impairment charge of $946,000 reflecting the return of the Gaita
block to the ANH.
Cost of sales were $4.4 million (2007 - $6.9 million) and general and
administration costs and net finance costs were $7.4 million (2007 - $8.6
million) leading to a 51% reduction in after tax losses of $3.9 million (2007 -
$7.9 million).
Total assets for the Group at $53.3 million (2007 - $40.8 million) have
increased by approximately 31% principally due to the capitalisation of
exploration costs for the La Paloma and Midas blocks. Total liabilities of $13.7
million (2007 - $23.9 million) represent short term loans and other trade
payables. Total equity of $39.7 million (2007 ? $16.9 million) reflects the new
investment from TOGI secured during the year.
The Group currently has access to sufficient financial resources to meet its
working capital requirements for the remainder of 2009, but it is expected that
additional funding will be required in due course in order to complete our
entire planned work programme. At the period end, the Company had cash and cash
equivalents of $2.7 million (2007 - $3.5 million). Our plans include an
extensive drilling programme in the next twelve months, which should transform
some of the Group's oil reserves into producing reserves. We have, since the
balance sheet date secured a large part of the required funding and are in
negotiations with a number of major investment banks, at an advanced stage to
secure the remaining funds and this combined with the Group's current
production, exploration and near term production potential, as reflected in the
Company's recent announcements, will fully fund our forthcoming work programme.
The directors remain confident that the Group will, in due course, be able to
raise the required funds to finance its future working capital requirements.
Progress in 2009
The encouraging test results from the first two completed wells in our ongoing
drill programme, the likelihood of continued increases in throughput at the RZA
pipeline and the expected first commercial gas sales from our Serafin gas field
development; combined with our strategy of containing costs whilst progressing
our various exploration assets, provides us with confidence that we will
continue to make progress and to grow our reputation in Colombia's oil and gas
industry.
We continue to pursue our strategy of bringing the Company's previously under
exploited assets rapidly into full production. PELE will use its hard won
expertise to focus on delivering significantly improved results to its
shareholders in 2009 and beyond.
Juan Carlos Rodriguez
Chief Executive Officer
20 May 2009
Income Statement
+------------------------------------------------+-------+-------------+-------------+
| | Note | 2008 | 2007 |
| | | US$'000 | US$'000 |
+------------------------------------------------+-------+-------------+-------------+
| Revenue | 4 | 7,762 | 7,092 |
+------------------------------------------------+-------+-------------+-------------+
| Cost of sales | | 4,358 | 6,873 |
+------------------------------------------------+-------+-------------+-------------+
| | | _______ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| Gross profit | | 3,404 | 219 |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| General and administration costs | | 6,631 | 6,040 |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| Loss from operations | 5 | (3,227) | (5,821) |
+------------------------------------------------+-------+-------------+-------------+
| Finance income | 6 | 315 | 24 |
+------------------------------------------------+-------+-------------+-------------+
| Finance expense | 6 | (1,086) | (2,587) |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| Loss before tax | | (3,998) | (8,384) |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| Income tax credit | 7 | (85) | (433) |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| Loss from continuing operations | | (3,913) | (7,951) |
+------------------------------------------------+-------+-------------+-------------+
| Loss on discontinued operation, net of tax | | - | (4) |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| Loss for the period attributable to equity | 8 | (3,913) | (7,955) |
| shareholders of the parent | | | |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| | | 2008 | 2007 |
| | | US$ | US$ |
+------------------------------------------------+-------+-------------+-------------+
| Loss per share attributable to the equity | 8 | 0.12 | 0.345 |
| holders of the parent during the year (basic | | | |
| and diluted) (2007 adjusted for 1 for 5 share | | | |
| consolidation) | | | |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| | | | |
+------------------------------------------------+-------+-------------+-------------+
| Loss per share - Continuing operations (basic | 8 | 0.12 | 0.345 |
| and diluted) (2007 adjusted for 1 for 5 share | | | |
| consolidation) | | | |
+------------------------------------------------+-------+-------------+-------------+
| | | ________ | ________ |
+------------------------------------------------+-------+-------------+-------------+
Balance Sheet
+------------------------------------------------+-------+--------------+-------------+
| | Note | 2008 | 2007 |
| | | US$'000 | US$'000 |
+------------------------------------------------+-------+--------------+-------------+
| ASSETS | | | |
+------------------------------------------------+-------+--------------+-------------+
| Non-Current Assets | | | |
+------------------------------------------------+-------+--------------+-------------+
| Property, plant and equipment | 9 | 33,029 | 32,407 |
+------------------------------------------------+-------+--------------+-------------+
| Exploration and Evaluation Assets | 10 | | 4,328 |
| | | 13,336 | |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| | | 46,365 | 36,735 |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| Current Assets | | | |
+------------------------------------------------+-------+--------------+-------------+
| Inventories | 12 | 36 | 52 |
+------------------------------------------------+-------+--------------+-------------+
| Trade and other receivables | 13 | 4,218 | 425 |
+------------------------------------------------+-------+--------------+-------------+
| Cash and cash equivalents | 21 | | 3,542 |
| | | 2,706 | |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| | | | 4,019 |
| | | 6,960 | |
+------------------------------------------------+-------+--------------+-------------+
| Total Assets | | 53,325 | 40,754 |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| LIABILITIES | | | |
+------------------------------------------------+-------+--------------+-------------+
| Non-current liabilities | | | |
+------------------------------------------------+-------+--------------+-------------+
| Provisions | 17 | 1,205 | 556 |
+------------------------------------------------+-------+--------------+-------------+
| Deferred tax liability | 16 | 6,348 | 6,576 |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| | | 7,553 | 7,132 |
+------------------------------------------------+-------+--------------+-------------+
| Current liabilities | | | |
+------------------------------------------------+-------+--------------+-------------+
| Trade and other payables | 14 | 5,852 | 10,380 |
+------------------------------------------------+-------+--------------+-------------+
| Short term loans | 15 | | 6,388 |
| | | 267 | |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| | | 6,119 | 16,768 |
+------------------------------------------------+-------+--------------+-------------+
| Total Liabilities | | | 23,900 |
| | | 13,672 | |
+------------------------------------------------+-------+--------------+-------------+
| Total Net assets | | 39,653 | 16,854 |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
| EQUITY | | | |
+------------------------------------------------+-------+--------------+-------------+
| Share capital | 18 | 22,045 | 11,735 |
+------------------------------------------------+-------+--------------+-------------+
| Share premium | | 76,374 | 55,718 |
+------------------------------------------------+-------+--------------+-------------+
| Shares to be issued | | - | 4,560 |
+------------------------------------------------+-------+--------------+-------------+
| Warrant reserve | | 1,930 | 1,624 |
+------------------------------------------------+-------+--------------+-------------+
| Retained earnings | | | (56,783) |
| | | (60,696) | |
+------------------------------------------------+-------+--------------+-------------+
| Total equity | | 39,653 | 16,854 |
+------------------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------------------+-------+--------------+-------------+
Cash Flow Statement
+-------------------------------------------------+------+--------------+-------------+
| | Note | 2008 | 2007 |
| | | US$'000 | US$'000 |
+-------------------------------------------------+------+--------------+-------------+
| Cash flows from operating activities | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Loss for the year | | (3,913) | (7,955) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Share-based payments | | 902 | 1,094 |
+-------------------------------------------------+------+--------------+-------------+
| Depreciation of property, plant and equipment | | 1,294 | 5,503 |
+-------------------------------------------------+------+--------------+-------------+
| Impairment of intangible asset | | 946 | - |
+-------------------------------------------------+------+--------------+-------------+
| Loss on disposal of property, plant and | | - | 122 |
| equipment | | | |
+-------------------------------------------------+------+--------------+-------------+
| Loss on sale of discontinuing operations | | - | 4 |
+-------------------------------------------------+------+--------------+-------------+
| Finance income | | (315) | (24) |
+-------------------------------------------------+------+--------------+-------------+
| Finance expense | | 1,086 | 778 |
+-------------------------------------------------+------+--------------+-------------+
| Income tax expense | | (85) | (433) |
+-------------------------------------------------+------+--------------+-------------+
| | | _______ | _______ |
+-------------------------------------------------+------+--------------+-------------+
| Cash flows from operating activities before | | | |
+-------------------------------------------------+------+--------------+-------------+
| changes in working capital and provisions | | (85) | (911) |
+-------------------------------------------------+------+--------------+-------------+
| Decrease/(increase) in inventories | | 16 | (1) |
+-------------------------------------------------+------+--------------+-------------+
| (Increase)/ decrease in trade and other | | (524) | 788 |
| receivables | | | |
+-------------------------------------------------+------+--------------+-------------+
| Increase/ (decrease) in trade and other | | 47 | (36) |
| payables | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | _______ | _______ |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Cash generated from operations | | (546) | (160) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Income taxes paid | | (257) | (284) |
+-------------------------------------------------+------+--------------+-------------+
| | | _______ | _______ |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Net cash from operating activities | | (803) | (444) |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Investing activities | | | |
+-------------------------------------------------+------+--------------+-------------+
| Finance income | | 315 | 24 |
+-------------------------------------------------+------+--------------+-------------+
| Purchase of property, plant and equipment | | (1,267) | (298) |
+-------------------------------------------------+------+--------------+-------------+
| Payments for exploitation and exploration | | (10,684) | (3,760) |
+-------------------------------------------------+------+--------------+-------------+
| Deferred consideration paid | | (7,000) | - |
+-------------------------------------------------+------+--------------+-------------+
| Proceeds from sale of subsidiaries and other | | - | 3,992 |
| assets (net of cash disposed) | | | |
+-------------------------------------------------+------+--------------+-------------+
| Proceeds of sale of property, plant and | | - | 49 |
| equipment | | | |
+-------------------------------------------------+------+--------------+-------------+
| | | _______ | _______ |
+-------------------------------------------------+------+--------------+-------------+
| | | | |
+-------------------------------------------------+------+--------------+-------------+
| Net cash flows from investing activities | | (19,439) | 7 |
+-------------------------------------------------+------+--------------+-------------+
| | | _______ | _______ |
+-------------------------------------------------+------+--------------+-------------+
Notes forming part of the financial information
for the year ended 31 December 2008
1. Basis of Preparation
While the financial information included in this final results announcement has
been prepared in accordance with International Financial Reporting Standards,
International Accounting Standards and Interpretations (collectively IFRS)
issued by the International Accounting Standards Board (IASB) as adopted by the
European Union, this announcement does not itself contain sufficient information
to comply with IFRS.
The audited financial information set out above does not constitute the
Company's full financial statements for the year ended 31 December 2008 or 2007,
but is derived from those financial statements, approved by the board of
directors. The Auditors' Report on the 2008 accounts was unqualified, but did
include reference to an emphasis of matter without qualifying the report and did
not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The full audited financial statements for the year ended 31 December 2008 will
be delivered to the Registrar of Companies and filed at Companies House
following the Company's forthcoming annual general meeting.
The financial information has been prepared in accordance with the going concern
basis of accounting taking into consideration the Group's current and forecast
financing position.
2. Segment reporting
In the opinion of the directors, the operations of the Group companies comprise
the exploration and production of oil and gas reserves and the provision of oil
pipeline services. The ongoing Group operations in one geographic area being
Colombia.
+------------------------------+--------------+----------+-----------+---------------+
| 2008 | Exploration | Pipeline | Corporate | Total |
| | and | services | US$´000 | US$´000 |
| | production | US$´000 | | |
| | of | | | |
| | oil and gas | | | |
| | US$´000 | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Revenue | 6,042 | 1,720 | - | 7,762 |
+------------------------------+--------------+----------+-----------+---------------+
| Profit/(loss) before | 1,013 | 494 | (5,505) | (3,998) |
| taxation | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Total assets | 36,708 | 12,957 | 3,660 | 53,325 |
+------------------------------+--------------+----------+-----------+---------------+
| Total liabilities | (7,553) | - | (6,119) | (13,672) |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Capital expenditure | 1,744 | 172 | 9,954 | 11,870 |
+------------------------------+--------------+----------+-----------+---------------+
| Depreciation, depletion and | 630 | 664 | - | 1,294 |
| amortisation | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| 2007 | Exploration | Pipeline | Corporate | Total |
| | and | services | US$´000 | US$´000 |
| | production | US$´000 | | |
| | of | | | |
| | oil and gas | | | |
| | | | | |
| | US$´000 | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Revenue | 5,420 | 1,672 | - | 7,092 |
+------------------------------+--------------+----------+-----------+---------------+
| Profit/(loss) before | (1,714) | 589 | (7,259) | (8,384) |
| taxation (excluding loss on | | | | |
| discontinued operations) | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Total assets | 25,203 | 9,229 | 6,322 | 40,754 |
+------------------------------+--------------+----------+-----------+---------------+
| Total liabilities | (14,459) | - | (9,441) | (23,900) |
+------------------------------+--------------+----------+-----------+---------------+
| | | | | |
+------------------------------+--------------+----------+-----------+---------------+
| Capital expenditure | 298 | - | 3,758 | 4,056 |
+------------------------------+--------------+----------+-----------+---------------+
| Depreciation, depletion and | 4,286 | 500 | - | 4,786 |
| amortisation | | | | |
+------------------------------+--------------+----------+-----------+---------------+
3. Loss per share
Loss per ordinary share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted number of shares in issue during the
relevant financial periods. The weighted average number of equity shares in
issue for the period is 32,995,191 (2007 - 22,959,246 (adjusted for 1 for 5
share consolidation)).
Losses for the Group attributable to the equity holders of the Company for the
year are $3,913,000 (2007 - $7,955,000). The effect of the warrants in issue is
anti-dilutive, therefore a diluted loss per share is not presented.
Losses for the Group attributable to continuing operations of the Group for the
year are $3,913,000 (2007 - $7,951,000).
4. Post balance sheet events
On 21 January 2009, the Company executed an instrument constituting secured 12
per cent convertible loan notes due 2011 in the aggregate amount of US$9.875
million (the "Notes"). TOGF, a subsidiary of existing shareholder TOGI, agreed
to subscribe for US$4.875 million in aggregate of the Notes. TOGF has an option
(but is not obliged) to subscribe for up to a further US$5 million in aggregate
of the Notes. As at the date of the accounts the option has not yet been
exercised.
The first tranche of the Notes subscribed for by TOGF, if not repaid or
converted earlier, mature on 21 January 2011. The Notes accrue interest at a
rate of 12 per cent. per annum, payable at intervals of six months from the date
of issue, and at the Company's option can be redeemed in whole or in part prior
to maturity, without penalty, on any of the interest payment dates. Unless
converted, the Notes are redeemable immediately prior to any sale or de-listing
of the Company and repayable in the event of any default. At TOGF's option, the
Notes are convertible in whole into new ordinary shares in the Company
("Ordinary Shares") on any of the interest payment dates, in the event of early
redemption (in respect of the amount specified to be redeemed), on maturity or
on any instance of default, sale or de-listing of the Company.
In the event of conversion, the number of new Ordinary Shares to be issued to
the noteholder will be determined by dividing the principal amount of the
relevant Notes by the initial conversion price per Ordinary Share of 20.9375
pence (the "Initial Conversion Price").
The Company has the option to request that TOGF subscribes in cash at par for
the whole or part of the second tranche of US$5 million Notes (the "Option").
The Option may be exercised by the Company on one occasion only during the
option period, being a period of 6 months from the date of the loan note
instrument. If not repaid earlier, the second tranche Notes will mature in 2011
on their second anniversary. Following exercise of the Option, TOGF is not
obligated to subscribe for the second tranche. If subscribed, the second tranche
of Notes will accrue interest at a rate of 12 per cent. per annum, payable at
intervals of six months from the date of issue, and at the Company's option can
be redeemed in whole or in part prior to maturity, without penalty, on any of
the interest payment dates. Unless converted, the Notes are redeemable
immediately prior to any sale or de-listing of the Company and repayable in the
event of any default. At TOGF's option, the second tranche Notes are convertible
in whole into Ordinary Shares on any of the interest payment dates, in the event
of early redemption (in respect of the amount specified to be redeemed), on
maturity or on any instance of default, sale or de-listing of the Company. In
the event of conversion, the number of new Ordinary Shares to be issued to the
noteholder will be determined by dividing the principal amount of the relevant
Notes by the second tranche conversion price to be calculated as the higher of
(i) the average middle-market closing price of an Ordinary Share over the ten
business days of trading immediately prior to the date of conversion plus a
premium of 25 per cent. thereon, as converted from pounds sterling to US dollars
at the exchange rate prevailing on the business day prior to conversion and (ii)
the then prevailing nominal value of an Ordinary Share.
At its discretion, the Company is entitled to pay interest accruing on both
tranches of the Notes in the form of either cash or by the issue of new Ordinary
Shares. If interest is paid in the form of shares, the number of new Ordinary
Shares to be issued and allotted (credited as fully paid) to the noteholder will
be determined by dividing the amount of interest payable by the closing
middle-market price of an Ordinary Share on the business day immediately prior
to the relevant interest payment date converted from pounds sterling to US
dollars at the then prevailing exchange rate.
If at any time a takeover offer is made to all ordinary shareholders, the
Company will use its reasonable endeavours to procure a comparable offer to be
extended to the noteholder. If no such offer is extended the noteholder shall be
entitled to exercise their conversion rights or seek repayment of their Notes in
whole or in part at a 5 per cent. premium to their principal amount.
The Initial Conversion Price referred to above is less than the current nominal
value of an Ordinary Share of US$0.50 (approximately 35 pence at the then
prevailing pounds sterling to US dollars exchange rate). Accordingly, since
English company law prevents the Company from issuing new shares at a price
below the prevailing nominal value of its Ordinary Shares, the Company has
undertaken to implement a capital reorganisation prior to the first interest
payment date in order to ensure that the nominal value of each Ordinary Share is
reduced to an amount sufficiently below the Initial Conversion Price, which may
include (but shall not be limited to) the sub-division of the existing issued
Ordinary Shares into new ordinary shares of a lower nominal amount and a new
class of non-voting deferred shares of a lower nominal amount. A further
announcement in respect of the Company's proposed capital reorganisation will be
made in due course and an appropriate circular will also be issued to
shareholders to provide more details and convene a general meeting to obtain the
requisite shareholder approvals. By way of security in respect of the Company's
obligations under the loan note instrument, PetroLatina (CA) Limited, a wholly
owned subsidiary of the Company, has granted to TOGF a pledge over its entire
shareholding in RL Petroleum Corporation (a Panamanian Company). This security
will be automatically released by TOGF on the earlier of (i) conversion or
redemption of all outstanding Notes and (ii) the aforementioned proposed capital
reorganisation becoming effective.
The Company has agreed to pay TOGF an arrangement fee of US$300,000 in
consideration for the subscription of the Notes. In addition, the Company
granted TOGF a warrant over Ordinary Shares exercisable in whole or in part at
an aggregate exercise price of US$300,000 on any number of occasions throughout
the term of the loan note instrument (the "Warrant"). The exercise price payable
by TOGF to the Company in respect of the Warrant will be set off against the
arrangement fee owing by the Company to TOGF pursuant to the Notes. In the event
of exercise, the number of new Ordinary Shares to be issued to the warrantholder
will be determined by dividing the exercise price by the higher of (i) the
middle market closing price of an Ordinary Share on the date of the Warrant, as
converted from pounds sterling to US dollars at the then prevailing exchange
rate, and (ii) the prevailing nominal value of one Ordinary Share at the time of
exercise of the Warrant. The Warrant will lapse on such date as all of the Notes
have either been converted or redeemed or are no longer capable of issue in
accordance with the provisions of the loan note instrument.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URRURKSRVUUR
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