RNS Number:1310B
Sodra Petroleum AB
19 November 1999
Sodra Petroleum AB (publ)
Report for the period 1 January 1999-30 September 1999
RESULT AND CASH FLOW
The Group
Sodra Petroleum AB (Sodra) reports a group net profit of TSEK 2,494 (period to
30 September 1998 TSEK 247) corresponding to SEK 0.03 (SEK 0.0).
Sodra incurred administration expenses of TSEK 3,515 during the period (TSEK
2,079).
Net financial income and expenses were TSEK 6,009 (TSEK 2,326). Included was
interest received of TSEK 5,972 (TSEK 4,102) and net currency exchange profit
of TSEK 37 (TSEK 4,101). Currency exchange movements arose primarily as a
result of translating loans receivable from USD to SEK.
Parent Company
The parent company reported a net loss for the period ended 30 September 1999
of TSEK 482 (loss for the period of TSEK 8,974). The loss was the result of
service income of TSEK 2,819 (TSEK nil) offset by net financial income of TSEK
-157 (TSEK -7,011) and administration costs of TSEK 3,144 (TSEK 1,963).
Service income is the fee charged to operated joint ventures based on the
levels of expenditure within the joint venture in accordance with the
production sharing agreements to offset corporate expenditure.
GROUP STRUCTURE
Sodra is the parent company of the group also consisting of Sodra's 100%-owned
subsidiary Sodra Petroleum BV, a company registered in the Netherlands and IPC
Falklands Ltd, a Bermudan registered company. Sodra in its turn is an
approximately 50% owned subsidiary of Lundin Oil AB.
FINANCING AND LIQUIDITY
The Group
Liquid assets at 30 September 1999 amounted to TSEK 6,590 (TSEK 188,411).
Sodra has entered into a loan agreement with its parent company Lundin Oil AB
under which Lundin Oil can borrow up to MUSD 12 from Sodra. The loan is
callable with a two week notice period. Under the terms of the loan agreement
Lundin Oil is prohibited from securing assets not currently secured under its
existing MUSD 125 bank facility. Under the loan agreement, TSEK 89,248 were
outstanding at the period end.
Parent Company
Liquid assets at 30 September 1999 amounted to TSEK 5,301 (TSEK 176,790).
INVESTMENTS
The Group
During the period, investment in oil and gas assets have been made to an
amount of TSEK 17,155 (TSEK 168,530). This represented Sodra's share of
ongoing exploration/appraisal expenditure offshore the Falkland Islands.
Whilst the Group records exploration expenditure under the full cost method of
accounting whereby exploration costs would only be written-off when an area is
relinquished, management decided to write-off the costs incurred offshore the
Falkland Islands during 1998 given the disappointing drilling result and the
high level of costs incurred to that date. Expenditure of MSEK 17.2 has been
capitalised against the Falkland Islands concession during 1999. Management
will assess whether a further write-off will be required after the Robertson
Research report, as mentioned below under operations, has been completed.
Parent Company
Shares in subsidiaries at 30 September 1999 amounted to TSEK 106,013 (TSEK 96)
OPERATIONS
Sodra holds an 87.5% interest in six exploration and production licenses
covering an area known as Tranche F in Falkland Island territorial waters. The
remaining 12.5% interest in these licenses is held by Sodra's joint venture
partner Desire Petroleum plc, a company quoted on the Alternative Investment
Market (AIM) of the London Stock Exchange. Sodra is the operator of Tranche F
which is held through Sodra's Dutch subsidiary Sodra Petroleum BV.
On the drilling operations, demobilisation of the Borgny Dolphin and the
reconciliation of the operations contract has carried through into the third
quarter. Analyses of geological data from the completed 14/24-1 well were
completed and final reports were received and sent to partners.
A study of the North Falkland Basin was commissioned to Robertson Research in
the first quarter of 1999. This study attempts to analyse all the existing
data acquired through our own study and through trade with adjoining operators
to assess the hydrocarbon potential of Tranche F and the rest of the Basin. By
the end of september 1999 all data for the Roberston study had been compiled
and initial analyses completed. Presentations will be made to Sodra Petroleum
in the fourth quarter of 1999. The final report on the North Falkland Basin
study is expected to be delivered in mid-December 1999.
Sodra has one commitment well outstanding which must be completed by October
2001. Sodra's Annual General Meeting of shareholders on May 20, 1999 changed
the bylaws of the company to enable Sodra to look for oil in any part of the
world. When the Robertson report has been completed, Sodra will assess its
options for the future.
SHARE DATA AND OWNERSHIP
The total number of shares in Sodra amount to 81,012,976 divided into two
classes of shares, ordinary shares and convertible shares. There are
40,506,500 ordinary shares outstanding and 40,506,476 convertible shares
outstanding. The convertible shares can be exchanged for shares in the parent
company Lundin Oil AB (Lundin Oil) according to the ratio 12 convertible
shares of Sodra for one new B share of Lundin Oil at the nominal price of SEK
0.50. The exchange may take place in November 2001. All ordinary shares are
owned by Lundin Oil, corresponding to 50.01% of the share capital.
Sodra's second largest shareholder is its Chairman Adolf H. Lundin holding
10,214,834 convertible shares, corresponding to approximately 12.6% of the
share capital.
BOARD OF DIRECTORS
At the Annual General meeting all the directors were reelected.
GROUP KEY FINANCIAL RATIOS
1 Jan 1999- 15 Dec 1997- 1 Oct 1997-
30 Sep 1999 30 Sep 1998 31 Dec 1998
Key Financial Ratios
Equity ratio , %1 96.13 85.1 72.31
Shareholders' equity SEK 1.37 3.84 1.32
per share2
Earnings SEK per share3 0.03 0.0 (2.48)
Number of shares at the 81,012,976 81,012,976 81,012,976
period end
Definitions
1 Equity ratio is defined as the Group's shareholders' equity in relation
to total assets.
2 Shareholders' equity SEK per share is defined as the Group's
shareholders' equity divided by the number of shares at the period end.
3 Earnings SEK per share is defined as the Group's net result divided by
the weighted average number of shares for the period.
GROUP INCOME STATEMENT IN SUMMARY
1 Jan 1999- 15 Dec 1997- 15 Dec 1997-
Expressed in TSEK 30 Sep 1999 30 Sep 1998 31 Dec 1998
Write off of exploration - - (209,861)
expenditure
Administration expenses (3,515) (2,079) (3,255)
Operating loss (3,515) (2,079) (213,116)
Financial income and 6,009 2,326 12,086
expenses, net
Net result 2,494 247 (201,030)
GROUP BALANCE SHEET IN SUMMARY
Expressed in TSEK 30 Sept 1999 30 Sept 1998 31 Dec 1998
ASSETS
Tangible fixed assets
Oil and gas properties 17,155 168,530 -
17,155 168,530 -
Current Assets
Loans to associated 89,248 - 75,456
companies
Other current assets 2,317 8,635 3,040
Cash and bank 6,590 188,411 68,916
Total current assets 98,155 197,046 147,412
Total assets 115,310 365,576 147,412
SHAREHOLDERS' EQUITY
AND LIABILITIES
Shareholders' equity 110,848 310,984 106,597
including net result for
the financial period
Current liabilities 4,462 54,592 40,815
Total shareholders' equity 115,310 365,576 147,412
and liabilities
Contingent liabilities 250 - -
GROUP STATEMENTS OF CASH FLOWS
Expressed in TSEK 1 Jan 1999- 15 Dec 1997- 15 Dec 1997-
30 Sep 1999 30 Sep 1998 31 Dec 1998
Cash flow from operations:
Net result 2,494 247 (201,030)
Adjustments for non-cash - - 198,443
related items
Change in working capital (49,421) 45,957 (38,915)
Total cash flow from (46,927) 46,204 (41,502)
operations
Cashflow used for investments:
Investment in oil and gas (17,155) (168,530) (209,861)
expenditure
Total cash flow used for (17,155) (168,530) (209,861)
investments
Cash flow from financing
Proceeds from share issues - 310,737 320,279
Total cash flow from financing - 310,737 320,279
Currency translation 1,756 - -
adjustment
Change in cash at bank and (62,326) 188,411 68,916
in hand
PARENT COMPANY INCOME STATEMENT IN SUMMARY
1 Jan 1999- 15 Dec 1997- 15 Dec 1997-
Expressed in TSEK 30 Sep 1999 30 Sep 1998 31 Dec 1998
Service income 2,819 - -
Administration expenses (3,144) (1,963) (3,127)
Operating profit / loss (325) (1,963) (3,127)
Financial income and (157) (7,011) (210,555)
expenses, net
Net result (482) (8,974) (213,682)
PARENT COMPANY STATEMENTS OF CASH FLOWS
Expressed in TSEK 1 Jan 1999- 15 Dec 1997- 15 Dec 1997-
30 Sep 1999 31 Sep 1998 31 Dec 1998
Cash flow from operations:
Net result (482) (8,974) (213,682)
Adjustments for non-cash - - 209,169
related items
Change in working capital (28,067) (134,302) 33,266
Total cash flow from (28,549) (143,276) 28,753
operations
Cashflow used for investments:
Investments in subsidiaries - (96) (315,182)
Total cash flow used for investments - (96) (315,182)
Cash flow from financing
Proceeds from share issues - 320,162 320,279
Total cash flow from financing - 320,162 320,279
Change in cash at bank and (28,549) 176,790 33,850
in hand
This report has not been subject to audit by the Company's auditors.
Stockholm, 19 November 1999
Magnus Nordin
Managing Director
For further information, please contact:
Magnus Nordin
Tel: +46 8 440 5450
Sodra Petroleum AB is quoted on the New Market (Nya Marknaden) of the
Stockholm Stock Exchange and on the Alternative Investment Market (AIM) of the
London Stock Exchange.
END
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