RNS Number : 4673L
Sound Oil PLC
28 April 2015
 

 28 April 2015

 

Sound Oil plc

("Sound Oil" or the "Company")

 

Preliminary Results for the year ended 31 December 2014

 

Sound Oil (SOU.LN), the European / Mediterranean focused upstream oil and gas company, is pleased to announce its unaudited preliminary results for the year ended 31 December 2014.

 

Production Highlights

 

•    First full calendar year of production from Rapagnano with volumes ahead of Company expectations at 3.82 MMScm (135 MMScf)

 

•    First gas production from Casa Tiberi on 28 July 2014 with production of 0.62 MMScm (21.9 MMScf)

 

•    Total revenues in the year largely covering the Italian cost base

 

Exploration Highlights

 

•    Badile Environmental Impact Assessment approved in March 2015 marking a significant milestone towards drilling of the exploration well with mid-case prospective resource of 178Bscf and NPV10 of €486m

 

•    Ongoing negotiations to farmout the Badile permit

 

Appraisal and Development Highlights

 

•    Spudding of second Nervesa well to address the southern limb of the field on 23 April 2015 and test results expected early June 2015

 

•    Final approval of the Environmental Impact Assessment for the Nervesa gas discovery production concession. The award of the Nervesa field production concession from the Italian Ministry of Economic Development is expected to follow shortly. First commercial gas expected in 2015

 

•    Permit for the Laura gas discovery received and ongoing negotiations to farmout the permit

 

Financial Highlights

 

·     Unaudited cash balance of £12.6 million as at 31 December 2014

 

Strategy and Outlook

 

The Company's ambition is to build a mid cap Mediterranean oil and gas business  The Company's initial strategic focus has been our onshore gas portfolio in Italy, which is a healthy blend of high upside exploration, low risk appraisal / development assets and some solid, cost covering, production.

 

The Company is currently working on various transformational transactions, including:

 

·     Advanced discussions on a strategic partnership with a major oil and gas company to fund and technically de-risk a selection of Sound Oil's assets

 

·     Farming in to a Southern Mediterranean onshore gas discovery with very significant estimated reserves and exploration upside

 

·     Consolidation in Italy, including the acquisition of various onshore exploration, development and production assets

 

 

 

 

For further information please contact:

 

Vigo Communications - PR Adviser

Patrick d'Ancona

Chris McMahon

 

Tel: 44 (0)20 7016 9573

Sound Oil

James Parsons, Chief Executive Officer

 

j.parsons@soundoil.co.uk

 

Smith & Williamson - Nominated Adviser

Azhic Basirov

David Jones

Ben Jeynes

 

Tel: 44 (0)20 7131 4000

Peel Hunt - Broker

Richard Crichton

Charles Batten

 

Tel: 44 (0)20 7418 8900

 

NPV10 refers to a net present value at a discount rate of 10%; MMScm means million standard cubic metres of gas; MMScf means million standard cubic feet of gas; and. Bscf means billion standard cubic feet of gas.

 

 

 

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2014

 



Notes





Revenue

2

983

482

Operating costs


(658)

(265)

Impairment of Producing Assets


(723)

-

Exploration costs


(74)

(4,038)

Gross profit/(loss)


Administrative expenses


(2,773)

(2,616)

Group operating loss from continuing operations


Finance revenue


7

9

Foreign exchange gain/(loss)


(661)

(304)

External interest costs


(1,022)

(132)

Loss for period before and after taxation


Other comprehensive income(loss)




   Foreign currency translation income/(loss)


127

557

Total comprehensive loss for the period

 2





Loss for the period attributable to:




   Owners of the company


(4,921)

(6,864)

  Non-controlling interests


- 

- 







Loss per share and diluted for the period


(1.40)

(2.40)

Attributable to the equity holders of the parent (pence)


(1.40)

(2.40)

 

 

 

Consolidated Balance Sheet

as at 31 December 2014

 



Notes

Non-current assets




Property, plant and equipment


13,200

1,476

Land and buildings


1,433

-  

Intangible assets


          8,888

        19,500



23,521

20,976

Current assets




Other debtors

3

2,173

1,978

Prepayments


157

185

Cash and short term deposits

4

12,608

543



14,938

2,705

Total assets


38,459

23,681

 

Current Liabilities




Trade and other payables


2,194

2,797

Loans repayable in under one year

6

131

229



2,325

3,026

Non-current liabilities




Deferred tax liabilities


2,099

2,165

Loans due in over one year

6

13,437

1,947

Provisions


1,164

1,226



16,700

5,338

Total liabilities


19,025

8,364

Net Assets


19,434

15,317

Capital and Reserves




Equity share capital


71,298

63,085

Warrant Reserve


369

- 

Foreign currency reserve


1,388

1,261

Accumulated deficit


(53,621)

(49,029)

Total Equity


19,434

15,317

 

 

 

Condensed Consolidated Statement of Changes in Equity

for the year ended 31 December 2014

 

 


 

At 1 January 2014

 

Total Loss for the period

- 

-

(4,921)

-

-

(4,921)

 

Other comprehensive income

- 

-

-

-

127

127 

 

Total comprehensive income/(loss)

(4,794)

 

Issue of share capital

1,277

7,442

-

-

-

8,719

 

Fair value of warrants

 -

-

-

369

-

369

 

Transaction costs

 -

(506)

-

-

-

(506)

 

Share based payments

 -

- 

329

-

-

329

 

at 31 December 2014

 

 

 

 








 


 

At 1 January 2013

 

Total Loss for the period

-

-

(6,864)

-

(6,864)

 

Other comprehensive income

-

-

-

557

557

 

Total comprehensive income/(loss)

 

Issue of share capital

6

43

-

-

49

 

Transaction costs

-

(47)

-

-

(47)

 

Share based payments

-

-

108

-

108

 

at 31 December 2013

 

 

 

 





 

 

 

Consolidated Cash Flow Statement

for the year ended 31 December 2014




Cash flow from operating activities



Cash flow from operations

(3,327)

(2,645)

Interest received

7

9

Net cash flow from operating activities

(3,320)

(2,636)




Cash flow from investing activities



Capital expenditure and disposals

(2,258)

(706)

Exploration and development expenditure

(1,089)

(6,482)

Net cash inflow on disposal of subsidiary

- 

-

Net cash flow from investing activities

(3,347)

(7,188)




Proceeds from CSTI funding contract

(242)

1,664

Net proceeds from debt

11,398

-

Net Proceeds from equity issue

8,213

1,576

Interest payments

(280)

-

Net cash flow from financing activities

19,089

3,240

Net increase/(decrease) in cash and cash equivalents

12,420

(6,584)

Net foreign exchange difference

(355)

218

Cash and cash equivalents at the beginning of the period

543

6,909

Cash and cash equivalents at the end of the period

12,608

543

 

 

 

Notes to the Financial Statements

 

 

1.            Accounting policies

 

Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.

 

Sound Oil plc is a public limited company registered and domiciled in England and Wales under the Companies Act 2006.

 

The financial statements of the Group and its parent are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (IFRSs, as adopted by the European Union), IFRIC Interpretations; and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

Full details of the Company's accounting policies will be included in its annual report and accounts for the year ended 31 December 2014.

 

 

2.            Segment Information

 

The Group categorises its operations into three business segments based on corporate, exploration and appraisal and development and production.

 

In the year ended 31 December 2014 the Group's exploration and appraisal activities were carried out solely in Italy The Group's reportable segments are based on internal reports about components of the Group which are regularly reviewed and used by the board of directors, being the Chief Operating Decision Maker ("CODM"), for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance.

 

Details regarding each of the operations of each reportable segment is included in the following tables.

 

Segment results for the period ended 31 December 2014


Sales and other operating revenues

-

983

-

983

Operating costs

-

(656)

-

(656)

Impairment of production assets

-

(723)

-

(723)

Exploration costs

-

-

(74)

(74)

Administration expenses

(2,773)

-

-

(2,773)

Operating loss segment result

(2,773)

(398)

(74)

(3,245)

Interest receivable

7

-

-

7

Finance costs

(1,552)

(131)

-

(1,683)

Loss for the period before taxation

(4,288)

(529)

(74)

(4,921)

 

The segments assets and liabilities at 31 December 2014 are as follows:

 


Capital expenditure

-

13,112

10,409

23,521

Other assets

14,938

-

-

14,938

Total liabilities

(2,099)

(1,557)

(15,369)

(19,025)

 

The geographical split of non-current assets is as follows:

 


Development and production assets

-


13,112

Fixtures, fittings and office equipment

42


46

Land and buildings

-


1,433

Goodwill

-


             2,099

Exploration and evaluation assets

-


             6,789



 

Segment results for the period ended 31 December 2013

 


Sales and other operating revenues

-

482

-

482

Operating costs

-

(265)

-

(265)

Impairment of exploration and evaluation assets

-

-

(4,038)

(4,038)

Administration expenses

(2,616)

-

-

(2,616)

Operating loss segment result

(2,616)

217

(4,038)

(6,437)

Interest receivable

9

-

-

9

Finance costs

(436)

-

-

(436)

Loss for the period before taxation

(3,043)

217

(4,038)

(6,864)

 

The segments assets and liabilities at 31 December 2013 were as follows:

 


Capital expenditure

88

1,388

19,500

20,976

Other assets

2,705

-

-

2,705

Total liabilities

(2,165)

(578)

(5,621)

(8,364)

 

The geographical split of non-current assets were as follows:

 


Development and production assets

-


482

Fixtures, fittings and office equipment

6


82

Goodwill

-


2,167

Exploration and evaluation assets

-


17,333



 

 

 

3.            Other Debtors

 








Italian VAT




    1,975

     1,923

UK VAT




24

10

Other receivables




174

45











Currency Analysis

 




US Dollar




-

11

Euro




2,117

1,955

GBP Sterling




56

12





 

 












4.            Cash and Cash Equivalents

 








Cash at bank and in hand



1,558

211

Cash equivalents:





Short term deposits



 11,051  

  332

Carrying amount 31 December


being










in US Dollar



1

 23

In Euros



11,205

187

In Sterling



1,402

333




 

 

5.            Trade & Other Payables

 




Trade Payable




       1,016

      2,317

Payroll taxes and social security




        88

      79

Accruals




      1,090

    401











Currency Analysis






Euro




    747

   2,397

Sterling




     1,447

 400

Total
















6.            Loans and Borrowings

 




Current Liabilities






Other loans




131

229

Non-current liabilities

Other loans




13,437

1,947

 

 

7.            Financial Information

 

The financial information set out above does not constitute the Company's financial statements for the years ended 31 December 2013 or 31 December 2014. The financial information for 2013 is derived from the financial statements for 2013 which have been delivered to the Registrar of Companies. The auditors have reported on the 2013 statements; their report was unqualified.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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