TIDMSAVP
RNS Number : 2546C
Savannah Petroleum PLC
28 September 2018
28 September 2018
Savannah Petroleum PLC
("Savannah" or "the Company")
2018 Half Year Results
Savannah Petroleum PLC, the British independent company focused
around oil and gas activities in Niger and Nigeria, together with
its subsidiaries (the "Group"), is today pleased to announce its
unaudited interim results for the six-month period ended 30 June
2018.
First Half Summary
-- Successful delivery of drilling campaign in South East Niger,
with two oil discoveries (Bushiya and Amdigh) made from two wells
on the R3 East portion of the R3/R4 Production Sharing Contract
("PSC") during the period under review;
-- Consistently safe operations, with no lost time incidents and
wells drilled within budgeted time;
-- One-year extension to the R1/R2 PSC received, providing the
Company with greater flexibility to plan follow-on drilling
activities, unconstrained by PSC timing issues;
-- Strengthening of the executive management team with the
appointment of David Clarkson as Chief Operating Officer;
-- Strong progress on the acquisition of certain oil and gas
assets in South East Nigeria from Seven Energy International
Limited (the "Transaction"), with the successful completion of a
US$125m equity placing to fund, inter alia, the Transaction and of
an exchange offer to acquire Seven's 10.25% Senior Secured
Notes;
-- Cash position as at 30 June of US$11.7m;
-- H1 cash operating costs (excluding Transaction costs) of
US$7.3m, consistent with market expectations for pro-forma Enlarged
Group cash operating costs (excluding Transaction costs) of
c.US$17.5 - 20m for FY 2018.
Post Period Summary
-- Continued drilling success in South East Niger, with two
further oil discoveries (Kunama and Eridal) delivered safely, with
no lost time incidents, and within budgeted time;
-- Announcement of agreement with the Government of Niger to
implement a domestic-focused Early Production Scheme ("EPS"),
utilising crude oil resources associated with the Company's
discoveries on R3 East;
-- Continued positive developments in relation to Agadem Rift
Basin ("ARB") crude export solution, with the signature of an MOU
between the Governments of the Republic of Niger and the Federal
Republic of Nigeria envisaging the construction of an export
pipeline from the ARB to a refinery in Northern Nigeria;
-- Updates to the Seven Energy Transaction announced, increasing
the reserves and resources being acquired by 25.1 mmboe (+19%) and
affording Savannah increased operational control across the gas
value chain in South East Nigeria;
-- Commencement of work by Accugas on the Calabar Gas
Distribution Project, expected to represent a material new revenue
and cash flow stream for the Enlarged Group from H1 2020;
-- Cancellation of share premium account confirmed, creating
distributable reserves in order to provide the Directors with
maximum flexibility to, if appropriate, pay dividends to
shareholders, buyback the Company's shares or make other
distributions to shareholders;
-- Agreement of a term sheet with a leading Geneva-based oil
trading firm for a new US$50m debt facility.
Outlook
-- Results of Zomo-1, the fifth well in the Company's ongoing
Niger drilling campaign, expected to be announced shortly;
-- Four further well options available under the Company's rig
contract with Great Wall Drilling Company Niger SARL, each of which
can be exercised individually at Savannah's discretion;
-- Production test expected to be performed on Savannah's
Amdigh-1 discovery well during Q4 2018;
-- Seven Energy Transaction expected to be completed during Q4
2018, with the Implementation Agreement anticipated to be signed by
end October 2018.
Andrew Knott, CEO of Savannah Petroleum, said:
"I am very pleased with what Savannah has achieved during a very
busy first half of 2018. The Company saw considerable drilling
success in Niger, with two oil discoveries made during H1 and a
further two discoveries post period end. In recent months we have
also announced a commitment, alongside the Government of Niger, to
install an EPS on R3 East, which will see initial production from
our discoveries sold into the domestic market. We continue to see
significant resource potential on our wider Niger acreage, and in
addition to the upcoming Zomo-1 results we expect to update the
market on our plans for further drilling in the coming months.
We continue to advance the Seven Energy Transaction, which is
now expected to complete during the fourth quarter of 2018. Earlier
this month we announced two additional value accretive deals in
relation to the broader Transaction, which will see Savannah
increase its anticipated interests in two key assets, via an MOU
with Frontier Oil at the Uquo field and the expected buy-out of
minority shareholders at Stubb Creek. These transactions are value
accretive and afford Savannah increased operational control across
the gas value chain.
We strengthened our executive management team with the
appointment of David Clarkson to Chief Operating Officer, and have
also put in place the ability to return capital to shareholders, if
appropriate. I would like to thank all of our stakeholders for
their ongoing support, and we look forward to providing further
updates on our Niger and Nigeria businesses in the coming weeks and
months at what is an exciting time for our Company."
Unless otherwise defined, capitalised terms are as per the
Company's Admission Document dated 22 December 2017.
For further information contact:
Savannah Petroleum +44 (0) 20 3817 9844
Andrew Knott, CEO
Isatou Semega-Janneh, CFO
Jessica Ross, VP Corporate Affairs
Strand Hanson (Nominated Adviser) +44 (0) 20 7409 3494
Rory Murphy
James Spinney
Ritchie Balmer
Mirabaud (Joint Broker) +44 (0) 20 7878 3362
Peter Krens
Ed Haig-Thomas
Hannam & Partners (Joint Broker) +44 (0) 20 7907 8500
Neil Passmore
Alejandro Demichelis
Hamish Clegg
Celicourt Communications +44 (0) 20 7520 9266
Mark Antelme
Jimmy Lea
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No.596/2014, and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
Notes to Editors:
About Savannah Petroleum
Savannah Petroleum PLC is an AIM listed oil and gas company with
exploration and production assets in Niger and Nigeria. Savannah's
flagship assets include the R1/R2 and R3/R4 PSCs, which cover c.50%
of the highly prospective Agadem Rift Basin ("ARB") of South East
Niger, acquired in 2014/15. The Company is also in the process of
acquiring interests in the cash flow generative Uquo and Stubb
Creek oil and gas fields and a 20% interest in the Accugas
midstream business in South East Nigeria from Seven Energy.
Further information on Savannah Petroleum PLC can be found on
the Company's website:
http://www.savannah-petroleum.com/en/index.php
SAVANNAH PETROLEUM PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIODED 30 JUNE 2018
6 months ended Year
6 months ended ended
30 June 30 June 31 December
2018 2017 2017
US$'000 US$'000 US$'000
Note Unaudited Unaudited Audited
--------------------------------------- ----- --------------- --------------- -------------
#
Operating expenses 3 (19,250) (5,944) (27,091)
Operating loss (19,250) (5,944) (27,091)
Finance income 345 174 283
Finance costs (895) (35) (561)
Fair value adjustment (warrants) 8 2,223 - -
Loss before tax (17,577) (5,805) (27,369)
Income tax (5) (7) (13)
--------------------------------------- ----- --------------- --------------- -------------
Net loss and total comprehensive
loss (17,582) (5,812) (27,382)
--------------------------------------- ----- --------------- --------------- -------------
Total comprehensive loss attributable
to:
Owners of the parent (17,554) (5,810) (27,350)
Non-controlling interests (28) (2) (32)
--------------------------------------- ----- --------------- --------------- -------------
(17,582) (5,812) (27,382)
--------------------------------------- ----- --------------- --------------- -------------
Loss per share
Basic and diluted (US$) 4 (0.03) (0.02) (0.10)
--------------------------------------- ----- --------------- --------------- -------------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
30 June 30 June 31 December
2018 2017 2017
US$'000 US$'000 US$'000
Note Unaudited Unaudited Audited
----------------------------------- ----- ---------- ---------- ------------
Assets
Non-Current Assets
Property, plant and equipment 5,343 2,537 2,933
Exploration and evaluation
assets 5 125,876 108,068 111,733
Long term loan receivables 6 88,956 - -
Total non-current assets 220,175 110,605 114,666
----------------------------------- ----- ---------- ---------- ------------
Current Assets
Other receivables and prepayments 29,185 857 3,999
Cash and cash equivalents 11,719 8,409 14,904
----------------------------------- ----- ---------- ---------- ------------
Total current assets 40,904 9,266 18,903
----------------------------------- ----- ---------- ---------- ------------
Total Assets 261,079 119,871 133,569
----------------------------------- ----- ---------- ---------- ------------
Equity and Liabilities
Capital and reserves
Share capital 7 1,240 483 520
Share premium 7 - 146,892 157,188
Other reserve 7 (4,989) - -
Capital contribution 7 458 458 458
Share based payment reserve 7 5,198 3,727 4,551
Accumulated surplus/(deficit) 232,644 (37,777) (59,317)
Equity attributable to owners
of the Group 234,551 113,783 103,400
Non-controlling interests (425) (367) (397)
----------------------------------- ----- ---------- ---------- ------------
Total Equity 234,126 113,416 103,003
----------------------------------- ----- ---------- ---------- ------------
Current Liabilities
Trade and other payables 12,056 6,455 17,888
Borrowings 12,131 - 12,678
Financial liability (Warrants) 8 2,766 - -
Total current liabilities 26,953 6,455 30,566
----------------------------------- ----- ---------- ---------- ------------
Total Equity and Liabilities 261,079 119,871 133,569
----------------------------------- ----- ---------- ---------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODED 30 JUNE 2018
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2018 2017 2017
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
------------------------------------------- ---------- ---------- -------------
Cash flows from operating activities:
Loss for the period before tax (17,577) (5,805) (27,369)
Depreciation and amortisation 174 108 274
Share option charge 647 789 1,613
Unrealised finance costs 72 34 559
Fair value adjustments (warrants) (2,223) - -
Operating cash flows before movements
in working capital (18,907) (4,874) (24,923)
(Increase) / decrease in other
receivables and
prepayments (18,808) 193 (2,560)
(Decrease) / increase in trade
and other payables (12,000) 435 12,604
Income tax paid (5) (7) (798)
Net cash used in operating activities (49,720) (4,253) (15,677)
Cash flows from investing activities:
Payments for property, plant and
equipment (2,226) (1,691) (2,253)
Exploration and evaluation costs
paid (8,332) (13,698) (17,313)
Acquisition of long term loan receivable
(SSN's) (40,911) - -
Net cash used in investing activities (51,469) (15,389) (19,566)
Cash flows from financing activities:
Finance income/(charges) 21 (34) (221)
Proceeds from issues of shares,
net of issue
costs 98,937 5,024 14,966
Drawdown of borrowings 876 - 12,341
Repayment of borrowings (1,830) - -
Net cash provided by financing
activities 98,004 4,990 27,086
------------------------------------------- ---------- ---------- -------------
Net decrease in cash and cash equivalents (3,185) (14,652) (8,157)
Cash and cash equivalents at beginning
of period 14,904 23,061 23,061
Cash and cash equivalents at end
of period 11,719 8,409 14,904
------------------------------------------- ---------- ---------- -------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 JUNE 2018
Share (Accumulated Non-
Share Share Capital Other based deficit)/ controlling
capital premium contribution reserve payment Retained Total interest Total
reserve earnings
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------- -------- ---------- ------------- -------- -------- ------------- --------- ------------ ---------
Balance at 31
December 2016
(Audited) 483 146,892 458 - 2,938 (31,967) 118,804 (365) 118,439
Equity settled
share based
payments - - - - 789 - 789 - 789
Loss for the
period
and total
comprehensive
loss - - - - - (5,810) (5,810) (2) (5,812)
--------------- -------- ---------- ------------- -------- -------- ------------- --------- ------------ ---------
Balance at 30
June 2017
(Unaudited) 483 146,892 458 - 3,727 (37,777) 113,783 (367) 113,416
Issue of
ordinary
shares to
shareholders,
net of issue
costs 37 10,296 - - - - 10,333 - 10,333
Equity settled
share based
payment - - - - 824 - 824 - 824
Loss for the
period
and total
comprehensive
loss - - - - - (21,540) (21,540) (30) (21,570)
Balance at 31
December 2017
(Audited) 520 157,188 458 - 4,551 (59,317) 103,400 (397) 103,003
Issue of
ordinary
shares to
shareholders,
net of issue
costs 720 152,385 - - - (58) 153,047 - 153,047
Equity settled
share based
payment - - - - 647 - 647 - 647
Warrants issue - - - (4,989) - - (4,989) - (4,989)
Share premium
cancellation - (309,573) - - - 309,573 - - -
Loss for the
period
and total
comprehensive
loss - - - - - (17,554) (17,554) (28) (17,582)
Balance at 30
June 2018
(Unaudited) 1,240 - 458 (4,989) 5,198 232,644 234,551 (425) 234,126
--------------- -------- ---------- ------------- -------- -------- ------------- --------- ------------ ---------
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. General information
Savannah was incorporated in the United Kingdom on 3 July 2014.
Savannah's principal activity is the management of its investment
in Savannah Petroleum 1 Limited ("SP1"). SP1 was incorporated in
Scotland on 3 July 2013. SP1's principal activity is the management
of its investment in Savannah Petroleum 2 Limited ("SP2"), and the
provision of services to other companies within the Group. SP2 has
a 95% interest in Savannah Petroleum Niger R1/R2 S.A. ("Savannah
Niger") whose principal activity is the exploration of hydrocarbons
in the Republic of Niger.
2. Accounting policies
Basis of Preparation
The condensed consolidated financial statements have been
prepared using the same accounting policies that applied to the
Group's latest annual audited financial statements. The provisions
of IAS 34 'Interim Financial Reporting' have not been applied.
The condensed consolidated financial statements do not include
all disclosures that would otherwise be required in a complete set
of financial statements and should be read in conjunction with the
2017 Annual Report. The financial information for the six months
ended 30 June 2018 does not constitute statutory accounts within
the meaning of Section 434(3) of the Companies Act 2006 and is
unaudited.
The annual financial statements of Savannah Petroleum PLC are
prepared in accordance with IFRSs as adopted by the European Union.
The Independent Auditors' Report on that Annual Report and
financial statements for 2017 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
The Group's statutory financial statements for the year ended 31
December 2017 have been filed with the Registrar of Companies.
All amounts have been prepared in US dollars, this being the
Group's functional currency and its presentational currency.
Going concern
The Directors have reviewed the budgets and forecasts as well as
the funding requirements of the business for the next 12 months.
Having conducted this review, the Directors have a reasonable and
strong expectation that the Group has adequate resources to
continue operating for the foreseeable future. The planned
acquisition of certain assets from Seven Energy is expected to see
the Company acquire interests in two free cash flow generative oil
and gas fields and receive incremental cash funds on close
associated with the US$20m proceeds from the SSN equity issuance.
This transaction is currently anticipated to complete in the fourth
quarter of 2018, following the satisfaction of relevant conditions
precedent which include, inter alia, the Implementation Agreement
being entered into, the Accugas Transaction and the Accugas Waiver
becoming effective, the Frontier Agreements being entered into and
becoming effective, Ministerial Consent and NSEC Consent.
Upon completion of the transaction the Group is therefore
expected to benefit from a significant positive liquidity/working
capital inflow. Were the transaction to be materially delayed from
the currently anticipated fourth quarter completion schedule, which
the Directors recognise as a potential risk, the Group would likely
be required to access incremental debt facilities. The Directors
have a reasonable and strong expectation that the Group would be
able to achieve this. On this basis the Directors continue to adopt
the going concern basis in preparing the half-yearly results.
Accounting policies (continued)
Intangible exploration and evaluation assets
Intangible assets relate to exploration, evaluation and
development expenditure and are accounted for under the 'successful
efforts' method of accounting per IFRS 6 'Exploration for an
Evaluation of Mineral Resources'. The successful efforts method
means that only costs which relate directly to the discovery and
development of specific oil and gas reserves are capitalised.
Exploration and evaluation costs are valued at cost less
accumulated impairment losses and capitalised within intangible
assets. Development expenditure on producing assets is accounted
for in accordance with IAS 16, 'Property, plant and equipment'.
Costs incurred prior to obtaining legal rights to explore are
expensed immediately to the income statement.
Financial assets
During the period to 30 June 2018, the Group completed the
exchange offer in respect of the 10.25% SSN's issued by Seven
Energy Finance Ltd, representing 96.04% of the outstanding 10.25%
SSN's.
The acquisition of the SSN's were recognised at a fair value of
US$89m and recorded as Long-term loan receivables, it is expected
to form part of the purchase consideration for Seven Energy upon
completion of the transaction.
Management assessed whether the acquisition of the SSN's, which
will later form part of the purchase consideration could attribute
to Savannah, control over Seven Energy. Management concluded that
the acquisition did not grant Savannah 'control' (as defined in
IFRS 10) over Seven Energy, as the Group does not have access to
the variable return from the SSN's nor does it have the ability to
direct the relevant activities of Seven Energy.
Warrants
Savannah granted to each participant in the two-tranche equity
placing (the first and second tranches having taken place in
December 2017 and February 2018 respectively) one warrant to
subscribe for ordinary shares for every two placing shares
subscribed. The shares are denominated in Sterling, however the
reporting currency of the Group is the US Dollar. The 'fixed for
fixed' test therefore does not pass and the warrants are treated as
a financial liability through profit and loss.
The warrants are exercisable twelve months post second tranche
equity placing, at an exercise price of GBP0.35.
Segmental analysis
In the opinion of the directors, the Group is primarily
organised into a single operating segment. This is consistent with
the Group's internal reporting to the chief operating decision
maker. Separate segmental disclosures have therefore not been
included.
3. Operating loss
Operating loss has been arrived at after charging:
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
---------------------------------------------- --------- --------- ------------------
US$'000 US$'000 US$'000
Depreciation of property, plant and equipment 174 108 274
Staff costs 5,035 3,293 5,097
Operating lease rental 133 61 189
During the period an amount of US$12,000,000 (HY 2017:
US$1,400,000, FY 2017: US$18,500,000) related to costs associated
with the proposed acquisition of the Seven Assets from Seven and
Seven Energy Creditor Group, and was included within operating
loss.
4. Loss per share
Basic loss per share amounts are calculated by dividing the loss
for the period attributable to ordinary equity holders by the
weighted average number of ordinary shares outstanding during the
period.
Diluted loss per share amounts are calculated by dividing the
loss for the periods attributable to ordinary holders by the
weighted average number of ordinary shares outstanding during the
period, plus the weighted average number of shares that would be
issued on the conversion of dilutive potential ordinary shares into
ordinary shares. The effect of share options and warrants are
anti-dilutive and are therefore excluded from the calculation of
diluted loss per share.
Details of share capital movements are given in note 7.
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
---------------------------------------------- ----------- ----------- -----------
US$'000 US$'000 US$'000
Net loss attributable to owners of the parent 17,554 5,810 27,350
Number of Number of Number of
shares shares shares
Basic and diluted weighted average number
of shares 657,332,395 274,621,447 274,922,400
US$ US$ US$
Basic and diluted loss per share 0.03 0.02 0.10
5. Exploration and evaluation assets
Exploration and evaluation assets consist of acquisition costs
relating to the acquisition of exploration licenses and other costs
associated directly with the discovery and development of specific
oil and gas reserves in the R1/R2 and R3/R4 license areas.
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
---------------------------------- --------- --------- ------------------
US$'000 US$'000 US$'000
Exploration and evaluation assets 125,876 108,068 111,733
The amounts for exploration and evaluation assets represent
active exploration projects. These will ultimately be written off
to the statement of comprehensive income as exploration costs if
commercial reserves are not established, but are carried forward in
the statement of financial position whilst the determination
process is ongoing. There are no indications of impairment having
regard to the indicators in IFRS 6.
Exploration and evaluation costs of US$14,143,000 incurred in
the six-month period to 30 June 2018 are mainly related to drilling
campaign costs in the R3/R4 license area. As at 30 June 2018, the
Group had realised oil discoveries in both wells drilled to this
date (Bushiya and Amdigh). The third well, Kunama, spudded shortly
before 30 June 2018.
In May 2018, the Group received a one-year extension to its
R1/R2 Production Sharing Contract ("PSC") with the Government of
Niger. The extension is the first phase of Savannah's Exclusive
Exploration Authorisation under the PSC.
6. Long term loan receivable
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
----------------------------- --------- --------- -----------
US$'000 US$'000 US$'000
10.25% Senior Secured Notes
* Cash consideration 40,910 - -
* Equity consideration 48,046 - -
88,956 - -
----------------------------- --------- --------- -----------
On 7 February 2018 the Group completed the exchange offer on the
10.25% Senior Secured Notes (SSN's) and Savannah had received valid
exchange instructions in respect of US$305,623,123 in principal
amount of outstanding 10.25% SSN's, representing 96.04 per cent of
the outstanding 10.25% SSN's.
The SSN's acquired were recognised at their fair value of
$88,956,000, having been obtained at a material discount to their
principal amount. The SSN's are expected to form part of the
purchase consideration for Seven Energy upon Deal Completion.
7. Share capital
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
--------------------------------------------- ----------- ----------- -----------
Fully paid ordinary shares in issue (number) 794,489,081 274,621,447 301,793,177
Called up ordinary shares in issue (number) 22,480,346 - 290,270
Par value per share in GBP 0.001 0.001 0.001
--------------------------------------------- ----------- ----------- -----------
Number of Shares Share Capital Share Premium Total
------------------------------ ---------------- ------------- ------------- ---------
US$'000 US$'000 US$'000
At 30 June 2017 (Unaudited) 274,621,447 483 146,892 147,375
Shares issued 27,462,000 37 10,296 10,333
At 31 December 2017 (Audited) 302,083,447 520 157,188 157,708
------------------------------ ---------------- ------------- ------------- ---------
Shares issued 514,885,980 720 152,385 153,105
Share premium cancellation - - (309,573) (309,573)
------------------------------ ---------------- ------------- ------------- ---------
At 30 June 2018 (Unaudited) 816,969,427 1,240 - 1,240
------------------------------ ---------------- ------------- ------------- ---------
Other capital reserves
Share based
Capital contribution Other reserve payment reserve Total
------------------------------ -------------------- --------------- ---------------- -------
US$'000 US$'000 US$'000 US$'000
At 30 June 2017 (Unaudited) 458 - 3,727 4,185
Share based payments expense
during the year - - 824 824
------------------------------ -------------------- --------------- ---------------- -------
At 31 December 2017 (Audited) 458 - 4,551 5,009
Share based payments expense
during the period - - 647 647
Warrants issued at fair value - (4,989) - (4,989)
------------------------------ -------------------- --------------- ---------------- -------
At 30 June 2018 (Unaudited) 458 (4,989) 5,198 667
------------------------------ -------------------- --------------- ---------------- -------
Nature and purpose of reserves
Capital contribution reserve
On 1 August 2014 a capital contribution of US$458,000 was made
by shareholders of the Group as part of the loan note
conversion.
Share based payment reserve
The share based payment reserve is used to recognise the value
of equity-settled share-based payments provided to employees,
including key management personnel, as part of their
remuneration.
Other reserve
The other reserve figure represents the reclassification of the
fair value of warrants granted from equity to a financial
liability, at initial grant date. See note 8 for further
information.
8. Warrant liability
The Company issued warrants along with the share issued during
the placings in December 2017 and February 2018, being one warrant
for every two ordinary shares placed. The warrants are exercisable
at a price equal to the placing price of the Company's shares on
the date of grant. There is no vesting period. If the warrants
remain unexercised after a period of one year from the date of the
second grant, the warrants expire.
30 June 30 June 31 December
2018 2017 2017
Unaudited Unaudited Audited
--------------------------------------------- --------- --------- -----------
US$'000 US$'000 US$'000
Warrants
* Fair value recognition at issue date 4,989 - -
* Fair value through profit and loss (2,223) - -
As at period end 2,766 - -
--------------------------------------------- --------- --------- -----------
Details of the warrants outstanding during the period are as
follows:
30 June 2018 30 June 2017 31 December 2017
Number Weighted Number Weighted Number Weighted
of warrants average of warrants average of warrants average
exercise exercise exercise
price price price
Outstanding at the beginning
of period 13,090,817 35p - - - -
Issued during the period 119,500,000 35p - - 13,731,000 35p
Forfeited during the period - - - - (640,183) 35p
Exercised during the period - - - - - -
Expired during the period - - - - - -
Outstanding at the end of the
period 132,590,817 35p - - 13,090,817 35p
------------------------------- ------------- ---------- ------------- ---------- ------------- ----------
The warrants outstanding at 30 June 2018 had a weighted average
exercise price of 35p, and a weighted average remaining contractual
life of 7 months. In 2018, warrants were issued on 9 February 2018.
The aggregate of the estimated fair values of the warrants issued
on those dates is US$2.5 million. In 2017, warrants were issued on
22 December 2017. The aggregate of the estimated fair values of the
warrants issued on those dates is US$0.3 million. The inputs into
the Black-Scholes model are as follows:
30 June 2018 30 June 2017 31 December 2017
------------ ------------ -----------------
Weighted average share price USD cents 38.50 - 38.50
Weighted average exercise price USD cents 46.22 - 46.22
Expected volatility 38.02% - 38.02%
Expected life 7 months - 13 months
Risk-free rate 0.61% - 0.61%
Expected volatility was determined by calculating the historical
volatility of the group's share price and the currency fluctuation
between the USD and GBP over the previous 3 years. The expected
life used in the model has been adjusted, based on contractual
terms.
The fair value of the warrants at 31 December 2017 was US$0.3m.
This was not recognised in the 2017 Annual Report due to its
immaterial value.
9. Capital commitments
At 30 June 2018, capital commitments related to drilling
amounted to US$8.8m (HY 2017: US$0, FY 2017: US$0).
INDEPENT REVIEW REPORT TO SAVANNAH PETROLEUM PLC
Introduction
We have been engaged by the company to review the financial
information in the half-yearly financial report for the six months
ended 30 June 2018 which comprises the Condensed Consolidated
Statement of Comprehensive Income, the Condensed Consolidated
Statement of Financial Position, the Condensed Consolidated
Statement of Cash Flows and the Condensed Consolidated Statement of
Changes in Equity. We have read the other information contained in
the half yearly financial report which comprises only the Notes to
the Condensed Consolidated Interim Financial Statements and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the company those matters we are required to state
to it in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules of the London
Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly financial report are consistent with those which will
be adopted in the annual accounts having regard to the accounting
standards applicable for such accounts.
As disclosed in Note 2 the annual financial statements of
Savannah Petroleum PLC are prepared in accordance with IFRSs as
adopted by the European Union. The financial information in the
half-yearly financial report has been prepared in accordance with
the basis of preparation in Note 2.
Our responsibility
Our responsibility is to express to the company a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 June 2018
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Glasgow
27 September 2018
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FDLLLVKFLBBL
(END) Dow Jones Newswires
September 28, 2018 02:03 ET (06:03 GMT)
Savannah Energy (LSE:SAVE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Savannah Energy (LSE:SAVE)
Historical Stock Chart
From Jul 2023 to Jul 2024
