RNS Number:3187G
Sodra Petroleum AB
28 February 2000
Sodra Petroleum AB
Report for the financial year 1 January 1999-31 December 1999
RESULT AND CASH FLOW
The Group
Sodra reports a group net result for year ended 31 December 1999 of TSEK 4,054
(TSEK -201,030 as at December 1998) corresponding to SEK 0.05 per share (SEK
-2.48). Sodra incurred administration expenses of TSEK 4,557 (TSEK 3,255)
during the year. Net financial income and expenses were TSEK 8,611 (TSEK
12,086). Included was interest received of TSEK 8,261 (TSEK 7,744) and net
currency exchange loss of TSEK 32 (profit of TSEK 10,061).
Parent Company
The parent company reported a net result for the year ended 31 December 1999
of TSEK -1,324 (TSEK -213,682). The loss was the result of service income of
TSEK 2,847 (TSEK nil) offset by net financial income of TSEK -49 (TSEK
-210,555) and administration costs of TSEK 4,122 (TSEK 3,127). 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. Sodra
in its turn is more than 50% owned by Lundin Oil AB.
The Sodra Group does not have any employees. Ongoing management and
administration is carried out by Lundin Oil AB according to a management
agreement.
FINANCING AND LIQUIDITY
Liquid assets at 31 December 1999 amounted to TSEK 7,946 (TSEK 68,916).
Sodra has entered into a loan agreement with its associated company Lundin Oil
AB (Lundin Oil) 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,
MUSD 10.8 were outstanding at the year end.
Parent Company
Liquid assets at 31 December 1999 amounted to TSEK 1,749 (TSEK 33,850).
INVESTMENTS
During the period, investment in oil and gas assets have been made to an
amount of TSEK 19,505 (TSEK 209,861). 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 19.7 has been
capitalised against the Falkland Islands concession during 1999. The Robertson
Research report has been completed and management believes that further write-
offs in the Falklands are not currently warranted.
Parent Company
Shares in subsidiaries at 31 December 1999 amounted to TSEK 106,013 (TSEK
106,013).
OPERATIONS
Sodra holds an 87.5% interest in six exploration and production licences
covering an area known as Tranche F in Falkland Island territorial waters. The
remaining 12.5% interest in these licences 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 continued during the year.
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.
The North Falkland Basin Study was completed in Q4 of 1999. The results of the
study indicate that a source rock is present in the North Falkland Basin. In
Tranche F, this source rock is generally not buried deep enough to have
expelled any substantial quantities of hydrocarbons. This is not true of other
Tranches (A, B, C and D) where the source rock is buried deeper than in
Tranche F. The problem remains that no reservoir rocks are known to be present
in the area around the deeper parts of the basin to trap this oil. A meeting
with the Falkland Islands Government has been set for March 2000 in Stanley to
discuss Sodra's work programme and exploration strategy for 2000.
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. On February 3, 2000 the company said that it continues to evaluate the
Falkland concession as well as other business opportunities.
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 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 just above 50% of the share capital.
Sodra's second largest shareholder is its Chairman Adolf H. Lundin holding
10,214,834 convertible shares, corresponding to 12.6% of the share capital.
BOARD OF DIRECTORS
At the Annual General meeting all the directors were reelected.
DIVIDEND
The Directors propose that no dividend be declared for the year.
KEY FINANCIAL RATIOS
1 Jan 15 Dec 1 Jan 15 Dec
1999 - 1997 - 1999 - 1997 -
31 Dec 31 Dec 31 Dec 31 Dec
1999 1998 1999 1998
Group Group Parent Parent
Company Company
Equity ratio, % 1 95.59 72.31 97.69 76.20
Shareholders' equity SEK per 1.44 1.32 1.30 1.32
share 2
Earnings SEK per share 3 0.05 (2.48) (0.02) (2.64)
Number of shares at the
period end 81,012,976 81,012,976 81,012,976 81,012,976
Weighted average number of
shares for the period 4 81,012,976 81,012,976 81,012,976 81,012,976
Definitions
1. Equity ratio is defined as the shareholders' equity in relation to total
assets.
2. Shareholders' equity SEK per share is defined as the shareholders' equity
divided by the number of shares at the period end.
3. Earnings SEK per share is defined as the net result divided by the weighted
average number of shares for the period of operations.
4. Weighted average number of shares for the period is defined as the number
of shares at the beginning of the period, with new issues of shares
weighted for the proportion of the period they are in issue and with regard
to the period of operations.
INCOME STATEMENT
Group and Parent Company Income Statement in summary
1 Jan 15 Dec 1 Jan 15 Dec
1999 - 1997-31 1999 - 1997-31
31 Dec Dec 31 Dec Dec
1999 1998 1999 1998
TSEK Group Group Parent Parent
Company Company
Service income - - 2,847 -
Write off of exploration - (209,861) - -
expenditure
Administration expenses (4,557) (3,255) (4,122) (3,127)
--------------------------------------
Operating loss (4,557) (213,116) (1,275) (3,127)
Financial income and
expenses, net 8,611 12,086 (49) (210,555)
--------------------------------------
NET RESULT 4,054 (201,030) (1,324) (213,682)
BALANCE SHEET
Group and Parent Company Balance Sheet in summary
31 Dec 31 Dec 31 Dec 31 Dec
1999 1998 1999 1998
TSEK Group Group Parent Parent
Company Company
ASSETS
Tangible fixed assets
Oil and gas properties 19,725 - - -
Financial fixed assets
Shares in subsidiaries - - 106,013 106,013
Current assets
Loan to associated company 92,185 75,456 - -
Other current assets 2,379 3,040 - 29
Cash and bank 7,946 68,916 1,749 33,850
---------------------------------
102,510 147,412 1,749 33,879
---------------------------------
Total assets 122,235 147,412 107,762 139,892
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity including 116,848 106,597 105,273 106,597
net result for the year
Current liabilities 5,387 40,815 2,489 33,295
---------------------------------
Total shareholders' equity and 122,235 147,412 107,762 139,892
liabilities
Pledged assets 250,190 None 250,190 None
Contingent liabilities None None None None
STATEMENT OF CASH FLOW
Group and Parent Company Statement of Cash Flow in summary
1 Jan 15 Dec 1 Jan 15 Dec
1999- 1997- 1999- 1997-
31 Dec 31 Dec 31 Dec 31 Dec
1999 1998 1999 1998
TSEK Group Group Parent Parent
Company Company
Cash flow from operations
Net result 4,054 (201,030) (1,324) (213,682)
Adjustments for non cash related - 209,861 - 209,169
items
Share issue costs - ( 11,418) - -
Changes in working capital (36,473) 36,085 (30,777) 33,266
--------------------------------------
Total cash flow from operations (32,419) 33,498 (32,101) 28,753
Cash flow used for investments
Investment in oil and gas (19,505) (209,861) - -
expenditure
Change in loan to associated (10,725) (75,456) - -
companies
Investments in subsidiaries - - - (315,182)
Total cash flow used for (30,230) (285,317) - (315,182)
investments
Cash flow from financing
Proceeds from share issues - 320,279 - 320,279
---------------------------------------
Total cash flow from financing - 320,279 - 320,279
Change in cash and bank (62,649) 68,460 (32,101) 33,850
Cash and bank at the beginning 68,916 - 33,850 -
of the period
Currency exchange difference in 1,679 456 - -
cash and bank ---------------------------------------
Cash and bank at the end of the 7,946 68,916 1,749 33,850
period
The result for the first quarter 2000 will be published on May 25, 2000
The Annual Meeting of Shareholders will be in Stockholm on May 3, 2000
The Annual Report will be mailed to shareholders in April 2000
Stockholm, 28 February 2000
Magnus Nordin
Managing Director
For further information, please contact:
Magnus Nordin
Tel: +46 8 440 5450
Simon Rothschild/Judith Parry
Millham Communications
Tel: 0171 256 5756
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
FR BDGDDUUDGGGI
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