TIDMAEX
RNS Number : 0826O
Aminex PLC
29 September 2023
29 September 2023
2023 HALF-YEARLY FINANCIAL REPORT
Aminex PLC ("Aminex" or "the Group" or "the Company") announces
its unaudited half-yearly report for the six months ended 30 June
2023.
REPORTING PERIOD HIGHLIGHTS
-- Substantial progress on all aspects of Ruvuma operations,
including 3D seismic processing and interpretation, Gas Sales
Agreement ("GSA"), Development Licence, a revised Competent
Person's Report ("CPR") and arrival of long lead items.
-- Loss for the period of US$0.96 million (30 June 2022: loss of
US$1.28 million, as restated), a decrease of 25% on the same period
last year.
POST PERIOD
-- PanAfrican Energy Tanzania's 3D seismic acquisition programme
over their Songo Songo field, which includes an incursion into the
Kiliwani North Development Licence ("KNDL"), commenced in August
2023 and is expected to be completed by November 2023.
Interpretation of the 3D seismic data over a portion of the KNDL is
forecast to be available by late Spring 2024 .
Charles Santos, Executive Chairman of Aminex commented:
"We are pleased to report that all activities on Ruvuma continue
to progress under the efforts of the operator, ARA Petroleum
Tanzania Limited. We look forward to receiving a revised CPR based
on the high-quality data achieved from the acquisition of the
Ruvuma 3D seismic survey that will permit a complete revision of
gas reserve and resource potential; a GSA and Development Licence;
and Ntorya-2 well test soon. We also look forward to a rig contract
for the drilling of the Chikumbi-1 well and the well workover of
Ntorya-1 in the coming months. We support and encourage the efforts
of the Tanzanian authorities to expedite the construction of a gas
pipeline from Ntorya to the Madimba gas plant, which is crucial in
bringing much needed gas from Ruvuma to the people of Tanzania.
Finally, we look forward to completion of the 3D seismic
acquisition programme by PanAfrican Energy Tanzania over the core
area of the KNDL this year, which will provide valuable data to the
Company and enable a better understanding of KNDL
prospectivity."
For further information:
Aminex PLC +44 203 355 9909
Charles Santos, Executive
Chairman
Davy +353 1 679 6363
Brian Garrahy
Shard Capital +44 20 7186 9952
Damon Heath
INTERIM MANAGEMENT REPORT
Executive Chairman's Review
Aminex PLC's results for the six months ended 30 June 2023 are
set out below.
The Company reports a loss for the period of US$0.96 million (30
June 2022: US$1.28 million, as restated). Further information is
provided in the Financial Review.
Considerable macro and local developments are converging during
the remainder of this year that should provide significant
additional value for our shareholders.
Globally, higher energy prices and shortages underscore the
importance of fossil fuels, particularly natural gas, as an
essential energy source for global economic development in the
coming decades. Moreover, the macro-political uncertainty,
reorientation of energy markets, and significant demand for energy
in the developing world will, we believe, translate into a
continued growing demand for gas globally.
Locally, the Government of Tanzania, committed to natural gas
development, has stated that it seeks to accelerate natural gas
production from Ruvuma to address short- and medium-term gas
requirements. It is planning and constructing various facilities
along existing gas delivery infrastructure directly connected to or
near our Tanzanian assets, potentially increasing local gas demand
in the short to medium term. In addition, discussions have been
reported between Tanzanian Government officials and their
counterparts in neighbouring countries exploring the possibility of
securing a long-term gas supply from Tanzania, which will
contribute to future gas demand in the East African region.
Non-Operating Strategy
Our non-operating strategy has de-risked and anchored
shareholder value, establishing a foundation that will improve
returns. One way we accomplished this was to shift operational risk
on our most valuable asset, Ruvuma, to ARA Petroleum Tanzania
Limited ("APT"), a highly competent, capable, and well-funded
operator. The planned use of existing wells in Ruvuma to accelerate
gas production has shifted the operational narrative of Ruvuma from
a dependence on the spudding and outcome of the Chikumbi-1 well
("CH-1") to a broader development effort. Moreover, we have
significantly reduced our operating expenses and overhead to
protect the Company while the project is still not generating cash.
Finally, we have acquired the necessary funds via our equity
placing in April 2022 to ensure our running costs are covered
(before one-offs and exceptional items) until the projected receipt
of Ruvuma gas revenues.
Ruvuma PSA
The farm-out completed with APT in October 2020 carries the
Company to material levels of production and revenue without the
need to return to shareholders for additional funding for the
development of the Ntorya field. This revenue is now projected
sooner, given the acceleration of production agreed upon between
the operator and the Tanzania Petroleum Development Corporation.
The Company holds a 25% interest in the Ruvuma PSA with a US$35
million carry of its share of costs. The carry, equivalent to
US$140 million of gross field expenditure, is expected to see the
Company through to potentially significant gas production volumes
with commensurate revenues.
As reported to Aminex, significant recent developments
include:
-- Using the 3D seismic to choose a new optimal target location for CH-1.
-- The entire 3D seismic data processed interpretation will be
completed in Q4 2023, permitting a total revision of the gas
reserve and resource potential for the field. Moreover, RPS Energy
Consultants Ltd has been contracted to produce an updated CPR
before the end of this year.
-- A well-workover of the Ntorya-1 well ("NT-1") to enable rapid
tie-in to the gas production facilities and bring the well into
early production requires using a drilling rig and remains
scheduled to run after the drilling of CH-1.
-- The Gas Sales Agreement ("GSA"), approved by all parties, is
with the Attorney General of Tanzania for final review. It is
expected to be signed in the coming month.
-- The Field Development Plan ("FDP") for developing the Ntorya
Area is approved by all parties.
-- The relevant Tanzanian Authorities have approved the
Development Licence for the Ntorya Area and, as required by law, it
is with the Cabinet of Ministers for final approval. The issuance
of the Development Licence significantly de-risks the project,
locking in the development of Ruvuma for twenty-five years.
-- APT recently received the second shipment of long lead items
with the third shipment enroute and expected in approximately three
weeks. The shipments, among other things, include tubulars, casing
and crossover joints for the spudding of CH-1 and the workover of
NT-1.
-- The two-week well-testing programme on the Ntorya-2 well
("NT-2"), designed to provide additional information required for
the design of in-field processing facilities, is expected to run in
the coming months.
-- It is expected that a drilling rig contract for CH-1 and NT-1
will be finalised in the coming months. Further announcements will
be made in due course.
Kiliwani North and Kiliwani South - Kiliwani North Development
Licence ("KNDL")
Orca Energy, via its subsidiary PanAfrican Energy Tanzania
("PAET"), is expected to complete its acquisition of 3D seismic
over its Songo Songo licence area by November 2023. The new 3D
seismic data includes an incursion of 12.5 km(2) over part of the
KNDL that borders the Songo Songo field to the west as part of
their full-field survey. The data, at no cost to the KNDL partners,
will be valuable in identifying fault trends, improving reservoir
definition, and understanding the Kiliwani North and South
structures. We expect to have the necessary data package and our
subsequent interpretation available by late Spring 2024. The data
will allow Aminex to re-evaluate the prospectivity of KNDL and
opportunities for further infill drilling and development. It will
enable in the future a more robust discussion with potential
partners to operate the asset and secure additional funding through
a farm-out. We have continued to impair the Kiliwani North and
Kiliwani South assets during the year. We will update shareholders
with progress in due course.
Nyuni Area PSA
In April of 2022, we commenced a process with the relevant
authorities in Tanzania to return the licence, given our belief
that although the Nyuni Area acreage offers upside exploration
potential to complement the development projects at Ntorya and
Kiliwani North, the significant risks of exploration and the lack
of a farm-out partner was far too much risk for a company of our
size. At the request of the Tanzanian authorities, we continue
efforts to secure a farm-in partner.
Cost Control
We continued to maintain strict control of costs, having reduced
gross General and Administrative expenses ("G&A"), before
one-off costs and exceptional items, to US$1.46 million in 2022, a
72% reduction from 2018 levels. G&A expenses for the period
were US$0.78 million (30 June 2022: US$0.70 million), an increase
of US$0.08 million, US$0.05 million of which relates to the
increase in the non-cash share options charge. Th rough these
cost-saving initiatives, the Company has established an appropriate
structure of capabilities and competencies that match the current
requirements of the business with a more flexible approach that
de-risks our business and can help create or attract strategic
opportunities.
Outlook and Funding
We expect the remainder of 2023 to see significant information
flow regarding the multiple workstreams mentioned above. Moreover,
we have the funds to see the Company through to the anticipated
commencement of cash flow receipts from sales of Ruvuma gas. These
developments offer the opportunity for real value growth in the
coming twelve months.
Charles Santos
Executive Chairman
29 September 2023
Financial Review
Restatement of 30 June 2022 Half-Yearly Financial Report
The comparative numbers shown for 30 June 2022 in this report
have been amended to reflect the correct treatment for the April
2022 share placing, as used in the 2022 full year Financial
Statements. The amounts involved have been recalculated using a
different exchange rate, the increase in capital has now been
allocated to Share Premium as well as Issued Capital and issue
costs have been taken directly to Retained Earnings instead of
Administrative Expenses.
Revenue Producing Operations
Revenues from continuing operations amounted to US$0.08 million
(30 June 2022: US$0.03 million). Group revenues during the first
six months of 2023 are derived from the provision of technical and
administrative services to joint venture operations.
Cost of sales was US$0.11 million (30 June 2022: US$0.13
million). The cost of sales for Kiliwani North operations amounted
to US$0.08 million (30 June 2022: US$0.09 million) and included
general licence related maintenance costs. There was no depletion
charge for Kiliwani North as the period saw no production (30 June
2022: US$ nil). The balance of the cost of sales amounting to
US$0.03 million (30 June 2022: US$0.04 million) related to the
oilfield services operations and minor non-operated costs related
to the Group's interest in the Ruvuma PSA. Accordingly, there was a
gross loss of US$0.03 million for the period compared with a gross
loss of US$0.10 million for the comparative period.
Group administrative expenses, excluding depreciation and net of
costs capitalised against projects, were US$0.78 million (30 June
2022: US$0.70 million), an increase of US$0.08 million. The
increase in expenses during the period was due mainly to increases
in consulting fees (US$0.08 million), non-cash share options charge
(US$0.05 million), directors' fees (US$0.04 million) and audit fees
(US$0.02 million), partially offset by reductions in property costs
(US$0.07 million) and payroll costs (US$ 0.06 million). Management
continues to maintain strict expenditure controls in order to
consolidate the cost-saving gains achieved over the previous five
years whereby gross General and Administrative expenses
("G&A"), before one-off costs and exceptional items, were
reduced to US$1.46 million in 2022, a 72% reduction from 2018
levels.
The Group recognised an impairment during the six-month period
against exploration and evaluation assets. The impairment
recognised against exploration and evaluation assets of US$196,000
(30 June 2022: US$215,000) comprises expenditure incurred on
Kiliwani South Area of US$15,000 (30 June 2022: US$17,000) and
US$181,000 (30 June 2022: US$198,000) of expenditure incurred on
the Nyuni Area PSA, and relates mainly to own costs for geological,
geophysical and administrative work and licence maintenance costs,
along with training and licence fees. All expenditure on the Nyuni
Licence Area and the Kiliwani South Area continues to be impaired
immediately to the income statement upon recognition following the
full impairment in 2018 and 2021 respectively. The Group's
resulting net loss from operating activities was US$0.98 million
(30 June 2022: loss of US$1.01 million).
Finance income of US$108,000 is a result of foreign exchange
gains (30 June 2022: US$nil).
Finance costs amounted to US$80,000 (30 June 2022: US$262,000)
and relates solely to the decommissioning interest charge (30 June
2022: US$53,000). The remainder of 30 June 2022 finance costs
related to foreign exchange losses on monetary assets of US$190,000
and loan interest expense of US$19,000 for the advance loan
facility from ARA (repaid in April 2022).
The Group's net loss for the period amounted to US$0.96 million
(30 June 2022: loss of US$1.28 million).
Balance Sheet
The Group's investment in exploration and evaluation assets
decreased slightly from US$38.05 million at 31 December 2022 to
US$38.03 million at 30 June 2023. This was due to a decrease in
estimated decommissioning costs for the Ruvuma PSA CGU as a result
of changes to inflation and discount rates. As noted above, all
expenditure on the Nyuni Licence Area and the Kiliwani South Area
continues to be impaired immediately to the income statement upon
recognition as both are fully impaired. In accordance with the
Group's accounting policy, the Group does not record expenditure
for its share of costs that are carried by APT in relation to the
Ruvuma PSA asset. The Group is carried for a total of US$35.0
million of development expenditure on the Ruvuma PSA, with
expenditure in the period related to processing and interpretation
of 3D seismic and development activities.
The carrying value of property, plant and equipment ("PP&E")
has decreased from US$7,000 at 31 December 2022 to US$5,000 at 30
June 2023. This is a result of depreciation for the period and no
purchases of new equipment. The costs for the Kiliwani North CGU
are included in PP&E but are fully impaired (see Note 9).
Current assets amounted to US$6.60 million (31 December 2022:
US$7.13 million) with trade and other receivables of US$1.56
million (31 December 2022: US$1.32 million), which as operator
includes joint operations partner's interests in gas revenues, and
cash and cash equivalents of US$5.04 million (31 December 2022:
US$5.81 million). The decrease in current assets of US$0.53 million
predominantly related to the reduction in cash due to expenditures
on G&A.
Current liabilities amounted to US$10.21 million compared with
US$9.92 million at 31 December 2022. This balance included amounts
payable to joint venture partners for their profit shares from
invoiced gas sales, related VAT and excise tax payable on the gas
receivables invoices and provisions and accruals for taxes. The
increase relates predominantly to US$0.20 million in accrued
training and licence fee invoices from the Petroleum Upstream
Regulatory Authority in Tanzania. Non-current liabilities are
US$1.92 million (31 December 2022: US$1.88 million) being the
decommissioning provision which increased during the period as the
net result of the unwind of the discount during the period of
US$0.08 million less US$0.04 million for a decrease in estimated
costs due to changes in inflation and discount rates.
Total equity has decreased by US$0.87 million between 31
December 2022 and 30 June 2023 to US$32.51 million (31 December
2022: US$33.38 million). This is due mainly to the increase in the
retained deficit of US$0.96 million arising from the loss for the
period offset by increases in the share option reserve of US$0.06
million and foreign currency translation reserve of US$0.03
million.
Cash Flows
Net cash outflows from operating activities were US$0.71 million
during the period (30 June 2022: cash outflow of US$1.23 million),
being mainly G&A expenditures. Net cash outflows from investing
activities amounted to US$0.17 million (30 June 2022: cash outflow
of US$0.37 million) being expenditure on the Group's exploration
and evaluation assets, relating mostly to payments for general
licence maintenance of the Nyuni Area and Kiliwani South gas
assets. There were no cash inflows from financing activities during
the period compared with a net cash inflow of US$3.49 million for
the six months to 30 June 2022 from share issue proceeds of US$3.96
million offset by US$0.47 million relating to the repayment of the
ARA facility loan. Net cash and cash equivalents for the six months
ended 30 June 2023 therefore decreased by US$0.88 million compared
with an increase of US$1.90 million for the comparative half-year
period. The balance of net cash and cash equivalents at 30 June
2023 was US$5.04 million (30 June 2022: US$6.39 million).
Related party transactions
There have been no material changes in the related party
transactions affecting the financial position or the performance of
the Group in the period since publication of the 2022 Annual Report
other than those disclosed in Note 15 to the condensed consolidated
financial statements.
Going Concern
The financial statements of the Group are prepared on a going
concern basis.
The Directors have given careful consideration to the Group's
ability to continue as a going concern through review of cash flow
forecasts prepared by management for the period to 30 September
2024, review of the key assumptions on which these forecasts are
based and the sensitivity analysis. The forecasts reflect the
Group's best estimate of expenditures and receipts for the period.
The forecasts are regularly updated to enable continuous monitoring
and management of the Group's cash flow and liquidity risk. The
forecasts indicate that with current cash resources and expected
expenditures, and subject to the principal assumptions noted below,
the Group and Company would have adequate resources to continue as
a going concern for the foreseeable future, that is a period of not
less than 12 months from the date of approval of the consolidated
financial statements.
As part of its analysis in making the going concern assumption,
the Directors have considered the range of risks facing the
business on an ongoing basis, as set out in the risk section of the
2022 Annual Report that remain applicable to the Group. The
principal assumptions made in relation to the going concern
assessment relate to the capital commitments on its operated assets
in Tanzania, the reservation of rights made by the TPDC in respect
of certain claims that the Directors consider are without merit and
the ongoing objections to the tax assessments in Tanzania (see Note
14).
As disclosed in Note 14, the Group received tax assessments from
the Tanzania Revenue Authority ("TRA") of (a) US$2.2 million in
relation to a tax audit covering the period from 2013 to 2015; (b)
US$1.6 million in relation to a tax audit covering the period from
2016 to 2018; and (c) US$3.3 million in relation to a corporate
income tax audit covering the period from 2016 to 2018, all of
which are excluded from the cash forecast as any cash outflow
during the going concern period is considered unlikely based on
legal advice and the timeframes for tax cases in Tanzania. Also as
disclosed in Note 14, the Group received tax assessments from the
TRA of US$3.3 million in relation to a tax audit covering the
period from 2019 to 2020, for which appropriate amounts have
already been included in the cash forecast and provided for in the
financial statements. Additionally, development of the Group's
other assets in Tanzania is excluded from the cash forecast and
consequently any capital expenditure in the period is unlikely to
arise. However, a risk exists that the Group loses its objections
to the tax assessments or is unable to renegotiate or defer
commitments on its operated licence interests during the period.
Additional funding would be required to meet these potential
liabilities. There remains significant uncertainty as regards the
ability of Aminex to raise funds, if required. This may result in
the Company having to raise funds at whatever terms are available
at the time.
These circumstances indicate that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
to apply the going concern basis of accounting. As a result of
their review, and despite the aforementioned material uncertainty,
the Directors have confidence in the Group's forecasts and have a
reasonable expectation that the Group will continue in operational
existence for the going concern assessment period and have
therefore used the going concern basis in preparing these
consolidated financial statements.
Principal Risks and Uncertainties
The Group's strategic objectives for its principal activities,
being the production and development of and the exploration for oil
and gas reserves, are only achievable if certain risks are managed
effectively. The Board has overall accountability for determining
the type and level of risk it is prepared to take. The Board is
assisted by the Audit and Risk Committee, which oversees the
process for review and monitoring of risks, and the implementation
of mitigation actions, by management. The Audit and Risk Committee
reviews management's findings regularly and reports to the Board
accordingly. Assessment of risks is made under four categories:
Strategic Risks, Operational Risks, Compliance Risks and Financial
Risks.
Aminex has reviewed and assessed the principal risks and
uncertainties at 30 June 2023 and concluded that the principal
risks identified at 31 December 2022 and disclosed on pages 24 to
25 of the 2022 Annual Report are still appropriate. The following
are considered to be the key principal risks facing the Group over
the next six months although there are other risks which may impact
the Group's performance:
-- Ability to meet licence work commitments
-- Lack of exploration, appraisal and development drilling success
-- Adverse and unexpected tax assessments in Tanzania
-- Ability to secure other financing for Group operations
-- Political and fiscal uncertainties
Forward Looking Statements
Certain statements made in this half-yearly financial report are
forward-looking statements. Such statements are based on current
expectations and are subject to a number of risks and uncertainties
that could cause actual events or results to differ materially from
the expected future events or results referred to in these
forward-looking statements.
Statement of Directors' Responsibilities
In respect of the Half-Yearly Financial Report
Each of the Directors who held office at the date of this
report, confirm their responsibility for preparing the half-yearly
financial report in accordance with the Transparency (Directive
2004/109/EC) Regulations 2007 (as amended) and IAS 34 Interim
Financial Reporting, as adopted by the EU and to the best of each
person's knowledge and belief:
-- The condensed consolidated financial statements comprising
the condensed consolidated income statement, the condensed
consolidated statement of comprehensive income, the condensed
consolidated balance sheet, the condensed consolidated statement of
changes in equity, the condensed consolidated statement of
cashflows and the related explanatory notes have been prepared in
accordance with IAS 34 Financial Reporting as adopted by the
EU.
-- The Interim Management Report includes a fair review of the information required by:
(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have
occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
do so.
On behalf of the Board
Charles Santos
Executive Chairman/Director
29 September 2023
Aminex PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023
Notes Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2022 2022
2023 US$'000 US$'000
US$'000
Continuing operations
Revenue 2 81 26 64
Cost of sales (114) (129) (284)
Gross loss (33) (103) (220)
Administrative expenses (776) (696) (2,964)
Impairment against exploration
and evaluation assets 8 (196) (215) (413)
Impairment against property,
plant and equipment
assets 9 21 - (101)
Loss from operating
activities (984) (1,014) (3,698)
Finance income 4 108 - -
Finance costs 5 (80) (262) (361)
---------- -------------- -------------
Loss before tax (956) (1,276) (4,059)
Income tax expense 6 - - -
Loss for the period 2 (956) (1,276) (4,059)
---------- -------------- -------------
Loss per share
Basic and diluted (US
cents) 7 (0.02) (0.03) (0.10)
---------- -------------- -------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2023
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 2023 30 June 2022 2022
US$'000 US$'000 US$'000
Loss for the period (956) (1,276) (4,059)
Other comprehensive income
Items that are or may be
reclassified subsequently
to profit or loss:
Currency translation differences 29 (110) (113)
Total comprehensive expense
for the period attributable
to the equity holders of
the Company (927) (1,386) (4,172)
-------------- -------------- -------------
Note: Some amounts from the 2022 Half-Yearly Financial Report have
been restated. See the Financial Review for details.
Aminex PLC
CONDENSED CONSOLIDATED BALANCE SHEET
At 30 June 2023
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Assets
Non-current assets
Exploration and evaluation assets 8 38,032 38,275 38,048
Property, plant and equipment 9 5 13 7
Total non-current assets 38,037 38,288 38,055
Current assets
Trade and other receivables 10 1,562 1,438 1,322
Cash and cash equivalents 11 5,036 6,394 5,805
--------- ------------- ------------
Total current assets 6,598 7,832 7,127
--------- ------------- ------------
TOTAL ASSETS 44,635 46,120 45,182
--------- ------------- ------------
Equity
Issued capital 69,695 69,669 69,695
Share premium 128,340 128,135 128,340
Other undenominated capital 234 234 234
Share option reserve 1,290 781 1,231
Foreign currency translation
reserve (2,275) (2,301) (2,304)
Retained deficit (164,771) (161,177) (163,815)
--------- ------------- ------------
Total equity 32,513 35,341 33,381
--------- ------------- ------------
Liabilities
Non-current liabilities
Decommissioning provision 1,916 1,668 1,884
Total non-current liabilities 1,916 1,668 1,884
--------- ------------- ------------
Current liabilities
Trade and other payables 12 10,206 9,111 9,917
Borrowings 13 - - -
Total current liabilities 10,206 9,111 9,917
--------- ------------- ------------
Total liabilities 12,122 10,779 11,801
--------- ------------- ------------
TOTAL EQUITY AND LIABILITIES 44,635 46,120 45,182
--------- ------------- ------------
Note: Some amounts from the 2022 Half-Yearly Financial Report
have been restated. See the Financial Review for details.
Aminex PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
Attributable to equity shareholders of the Company
Foreign
Share currency
Share Share Other undenominated option translation Retained Total
capital premium capital reserve reserve deficit equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2022 69,206 124,481 234 769 (2,191) (159,748) 32,751
Comprehensive
income
Loss for the
period - - - - - (1,276) (1,276)
Currency translation
differences - - - - (110) - (110)
Transactions
with shareholders
of the Company
recognised directly
in equity
Shares issued 463 3,654 - - - (153) 3,964
Share based payment
charge - - - 12 - - 12
At 30 June 2022 69,669 128,135 234 781 (2,301) (161,177) 35,341
Comprehensive
income
Loss for the
period - - - - - (2,783) (2,783)
Currency translation
differences - - - - (3) - (3)
Transactions
with shareholders
of the Company
recognised directly
in equity
Shares issued 26 205 - - - - 231
Share-based payment
charge - - - 595 - - 595
Share option
reserve transfer - - - (145) - 145 -
At 31 December
2022 as previously
reported 69,695 128,340 234 1,231 (2,304) (163,815) 33,381
Comprehensive
income
Loss for the
period - - - - - (956) (956)
Currency translation
differences - - - - 29 - 29
Transactions
with shareholders
of the Company
recognised directly
in equity
Share based payment
charge - - - 59 - - 59
At 30 June 2023
(unaudited) 69,695 128,340 234 1,290 (2,275) (164,771) 32,513
---------- ---------- -------------------- --------- ------------- ------------ ---------
Note: Some amounts from the 2022 Half-Yearly Financial Report have
been restated. See the Financial Review for details.
Aminex PLC
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
for the six months ended 30 June 2023
Unaudited Audited
6 months Unaudited Year ended
ended 6 months 31 December
30 June ended 2022
2023 30 June 2022 US$'000
US$'000 US$'000
Operating activities
Loss for the financial period (956) (1,276) (4,059)
Depreciation and depletion 1 22 32
Equity-settled share-based payments 59 12 607
Finance income (108) - -
Finance costs 80 262 361
Impairment of exploration and evaluation
assets 196 215 413
Impairment of property, plant and
equipment (21) - 101
Trade Receivables write-off - - 128
(Increase) / decrease in trade
and other receivables (240) (73) 43
(Decrease) / increase in trade
and other payables 280 (392) 485
--------- ------------- ------------
Net cash (used in) / generated
by operating activities (709) (1,230) (1,889)
--------- ------------- ------------
Tax paid - - -
Net cash (outflows) / inflows
from operating activities (709) (1,230) (1,889)
Investing activities
Acquisition of property, plant
and equipment - (1) (5)
Expenditure on exploration and
evaluation assets (168) (365) (477)
Net cash (outflows) / inflows
from investing activities (168) (366) (482)
--------- ------------- ------------
Financing activities
Proceeds from the issue of share
capital - - 4,117 4,348
Payment of transaction costs on
issue of share capital - (153) (153)
Payment of borrowings - (450) (450)
Payment of interest on borrowings - (19) (19)
Net cash inflows / (outflows)
from financing activities - 3,495 3,726
--------- ------------- ------------
Net increase / (decrease) in cash
and cash equivalents (877) 1,899 1,355
Cash and cash equivalents at 1
January 5,805 4,685 4,685
Foreign exchange (loss) / gain 108 (190) (235)
--------- ------------- ------------
Cash and cash equivalents at end
of the financial period 5,036 6,394 5,805
--------- ------------- ------------
Note: Some amounts from the 2022 Half-Yearly Financial Report
have been restated. See the Financial Review for details.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
1. Basis of preparation
The condensed consolidated financial statements included in this
Half-Yearly Financial Report have been prepared in accordance with
IAS 34 "Interim Financial Reporting" as adopted by the European
Union. They do not include all of the information required for full
annual statutory financial statements and should be read in
conjunction with the audited consolidated financial statements of
Aminex PLC as at and for the year ended 31 December 2022. The
financial information contained in the condensed financial
statements has been prepared in accordance with the accounting
policies set out in the 2022 Annual Report and Accounts.
The financial information presented herein does not amount to
statutory financial statements that are required by Part 6 of
Chapter 4 of the Companies Act 2014 to be annexed to the annual
return of the Company. The statutory financial statements for the
financial year ended 31 December 2022 were annexed to the annual
return and filed with the Registrar of Companies. The audit report
on those statutory financial statements was unqualified and
included an emphasis of matter paragraph relating to going
concern.
The financial statements have been prepared on the historical
cost basis, as modified for the measurement of certain financial
instruments at fair value through profit or loss. These financial
statements are presented in US Dollars ("USD") which is the
currency of the primary economic environment in which the Group
operates and are rounded to the nearest thousand, unless otherwise
stated. The preparation of the Half-Yearly Financial Report
requires the Directors to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of certain assets, liabilities, revenues and expenses
together with disclosure of assets and liabilities. Estimates and
underlying assumptions relevant to these financial statements are
the same as those described in the last annual financial
statements. Terms used in this condensed set of consolidated
financial statements are defined in the Glossary on page 68 in the
2022 Annual Report and Accounts.
These condensed consolidated financial statements were
authorised for issue by the Board of Directors on 29 September
2023.
The Interim Report has not been audited or formally reviewed by
the Company's Auditor in accordance with the
International Standards on Auditing (ISAs) (Ireland) or
International Standards on Review Engagements (ISREs).
(i) Going concern
The financial statements of the Group are prepared on a going
concern basis.
The Directors have given careful consideration to the Group's
ability to continue as a going concern through review of cash flow
forecasts prepared by management for the period to 30 September
2024, review of the key assumptions on which these forecasts are
based and the sensitivity analysis. The forecasts reflect the
Group's best estimate of expenditures and receipts for the period.
The forecasts are regularly updated to enable continuous monitoring
and management of the Group's cash flow and liquidity risk. The
forecasts indicate that, subject to the principal assumptions noted
below, the Group and Company would have adequate resources to
continue as a going concern for the foreseeable future, that is a
period of not less than 12 months from the date of approval of the
consolidated financial statements.
As part of its analysis in making the going concern assumption,
the Directors have considered the range of risks facing the
business on an ongoing basis, as set out in the risk section of the
2022 Annual Report that remain applicable to the Group. The
principal assumptions made in relation to the going concern
assessment relate to the capital commitments on its operated assets
in Tanzania, the reservation of rights made by the TPDC in respect
of certain claims that the Directors consider are without merit and
the ongoing objections to the tax assessments in Tanzania (see Note
14).
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
1. Basis of preparation (continued)
(i) Going concern (continued)
As disclosed in Note 14, the Group received tax assessments from
the TRA of (a) US$2.2 million in relation to a tax audit covering
the period from 2013 to 2015; (b) US$1.6 million in relation to a
tax audit covering the period from 2016 to 2018; and (c) US$3.3
million in relation to a corporate income tax audit covering the
period from 2016 to 2018, all of which are excluded from the cash
forecast as any cash outflow during the going concern period is
considered unlikely based on legal advice and the timeframes for
tax cases in Tanzania. Also as disclosed in Note 14, the Group
received tax assessments from the TRA of US$3.3 million in relation
to a tax audit covering the period from 2019 to 2020, for which
appropriate amounts have already been included in the cash forecast
and provided for in the financial statements. Additionally,
development of the Group's other assets in Tanzania is excluded
from the cash forecast and consequently any capital expenditure in
the period is unlikely to arise. However, a risk exists that the
Group loses its objections to the tax assessments or is unable to
renegotiate or defer commitments on its operated licence interests
during the period. Additional funding would be required to meet
these potential liabilities. There remains significant uncertainty
as regards the ability of Aminex to raise funds, if required. This
may result in the Company having to raise funds at whatever terms
are available at the time.
These circumstances indicate that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
to apply the going concern basis of accounting. As a result of
their review, and despite the aforementioned material uncertainty,
the Directors have confidence in the Group's forecasts and have a
reasonable expectation that the Group will continue in operational
existence for the going concern assessment period and have
therefore used the going concern basis in preparing these
consolidated financial statements.
(ii) Use of judgements and estimates
The preparation of the condensed consolidated financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the 2022 Annual
Report and Accounts.
(iii) New and amended standards adopted by the Group
A number of amended standards became effective for the financial
year beginning on 1 January 2023; however, the Group did not have
to change its accounting policies or make retrospective adjustments
as a result of adopting these amended standards.
(iv) Impact of standards issued but not yet adopted by the Group
There are no standards issued but not yet adopted by the
Group.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
2. Segmental disclosure - continuing operations
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components.
The Group considers that its operating segments consist of (i)
Producing Oil and Gas Properties, (ii) Exploration Activities and
(iii) Oilfield Services. These segments are those that are reviewed
regularly by the Chief Operating Decision Maker (Executive
Chairman) to make decisions about resources to be allocated to the
segment and assess its performance and for which discrete financial
information is available. However, the Group further analyses these
by region for information purposes. Segment results include items
directly attributable to the segment as well as those that can be
allocated on a reasonable basis. Unallocated Aminex Group items
comprise mainly head office expenses, cash balances and certain
other items.
The Group's revenue is derived from contracts with customers.
The timing of revenue streams depends on the following for products
and services:
Producing oil and gas assets
The Group satisfies its performance obligation by transferring a
nominated volume of gas to its customer. The title to gas transfers
to a customer when the customer takes physical possession of the
gas at the contracted delivery point. The gas needs to meet certain
agreed specifications. The Group generated no revenue for the
period under this segment (30 June 2022: US$nil).
Oilfield services
Revenue for services is recognised as services are rendered to
the customer. All services rendered by the Group relate to jointly
controlled operations to which the Group is a party and the terms
of the services provided are subject to service contracts.
The IFRS 8 operating segments as follows (i) Producing Oil and
Gas Properties, (ii) Exploration Activities and (iii) Oilfield
Services are the disaggregation of revenue from customers as
required by IFRS 15.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
2. Segmental disclosure - continuing operations (continued)
Operating segment results - 30 June 2023 (unaudited)
US$'000 Tanzania Tanzania UK Unallocated
Producing Corporate
oil and Exploration Oilfield Aminex
gas properties activities services Group Total
30 June 30 June 30 June 30 June 30 June
2023 2023 2023 2023 2023
Revenue - - 81 - 81
Cost of sales (27) (6) (81) - (114)
Gross loss (27) (6) - - (33)
Depreciation - - - (1) (1)
Administrative
expenses (113) - (97) (565) (775)
Impairment
against
PP&E assets 21 - - - 21
Impairment
against
exploration and
evaluation
assets - (196) - - (196)
---------------- -------------- ----------- ------------ ---------
Loss from
operating
activities (119) (202) (97) (566) (984)
Finance costs (19) (60) - (1) (80)
Finance income - - - - -
Foreign exchange
gains - - - 108 108
---------------- -------------- ----------- ------------ ---------
Loss before tax (138) (262) (97) (459) (956)
Taxation - - - - -
---------------- -------------- ----------- ------------ ---------
Loss for the
period (138) (262) (97) (459) (956)
Segment assets 2,388 38,143 - 4,104 44,635
Segment
liabilities (3,846) (3,492) - (4,784) (12,122)
Capital
expenditure
additions (21) 180 - - 159
---------------- -------------- ----------- ------------ ---------
Other material
non-cash
items
Share based
payments
(Note 3) - - - (59) (59)
Unwinding of
discount
on
decommissioning
provision (Note
5) (20) (60) - - (80)
---------------- -------------- ----------- ------------ ---------
Operating segment results - 30 June 2022 (unaudited)
US$'000 Tanzania Tanzania UK Unallocated
Producing Corporate
oil and Exploration Oilfield Aminex
gas properties activities services Group Total
30 June 30 June 30 June 30 June 30 June
2022 2022 2022 2022 2022
Revenue - - 26 - 26
Cost of sales (97) (6) (26) - (129)
Gross loss (97) (6) - - (103)
Depreciation - - - (22) (22)
Administrative expenses (84) - (97) (493) (674)
Impairment against
exploration and evaluation
assets - (215) - - (215)
Loss from operating
activities (181) (221) (97) (515) (1,014)
Finance costs (10) (43) - (19) (72)
Finance income - - - - -
Foreign exchange gains - - - (190) (190)
---------------- -------------- ----------- ------------ ---------
Loss before tax (191) (264) (97) (724) (1,276)
Taxation - - - - -
---------------- -------------- ----------- ------------ ---------
Loss for the period (191) (264) (97) (724) (1,276)
---------------- -------------- ----------- ------------ ---------
Segment assets 2,137 38,394 - 5,606 46,137
Segment liabilities (3,827) (3,480) - (3,472) (10,779)
Capital expenditure
additions - 365 - 1 366
---------------- -------------- ----------- ------------ ---------
Other material non-cash
items
Share based payments
(Note 3) - - - (12) (12)
Unwinding of discount
on decommissioning
provision (Note 5) (10) (43) - - (53)
---------------- -------------- ----------- ------------ ---------
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
3. Share based payments
Aminex PLC operates or operated the following share option
schemes:
-- Executive Share Option Scheme ("ESOS"). Under the terms of
the ESOS, certain Directors and employees of Aminex PLC, and its
subsidiary companies, were entitled to subscribe for Ordinary
Shares in Aminex PLC at the market value on the date of the
granting of the options. Options are granted at market price, in
accordance with the ESOS rules, with reference to the average
closing price for the fourteen days prior to the grant of options.
Options granted in February and June 2019, and February 2020 vest
immediately, and the options granted in November 2019 and January
2020 vest in tranches subject to the achievement of certain market
and non-market performance conditions. The options granted in 2019
and 2020 will expire at a date either 5, 7 or 10 years after their
date of grant. The ESOS expired on 10 May 2020 and therefore no
further share options will be granted pursuant to the ESOS.
-- New Restricted Share Plan ("New RSP"). The New RSP was
adopted by the Board on 1 July 2020 and approved by shareholders of
the Company at its AGM on 29 July 2020.
On 1 June 2023, the Company granted 42 million share options to
Directors. Charles Santos was awarded 12 million options over
Ordinary shares and 10 million options were awarded to each of Tom
Mackay, Sultan Al-Ghaithi and James Lansdell. The exercise price is
Stg1.00p and options will vest upon the average closing price of
the ordinary shares of the Company being no lower than Stg2.00p for
five consecutive trading days. The exercise period shall not exceed
five years from date of grant.
The fair value at the grant date is measured using a recognised
valuation methodology for the pricing of financial instruments i.e.
the Black-Scholes method. The following expenses have been
recognised in the income statement arising on share-based payments
and included within administrative expenses:
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 US$'000
US$'000 US$'000
Share-based payment charge 59 12 607
The fair value of options granted under the New RSP for
Directors and staff in the period were calculated using the
following inputs into the Black-Scholes method (previously the fair
value of options was estimated using the binomial option-pricing
model):
Date of grant 1 June 2023
Contractual life 5 years
Exercise price Stg 1.0 pence
Number of options granted 42,000,000
Expected volatility 87.2%
Vesting conditions Market
Fair value per option Stg 0.8 pence
Expected dividend yield -
Risk-free rate 2.4%
--------------
On 30 June 2023, there were options granted under the ESOS and
the New RSP outstanding over 186,111,000 (31 December 2022:
127,611,000) Ordinary Shares which are exercisable at prices
ranging from Stg 0.60 pence to Stg 1.56 pence per share and which
expire at various dates up to 2029. The weighted average remaining
contractual life of the options outstanding is 3.61 years (31
December 2022: 2.29 years). The average share price for the six
months ended 30 June 2023 was Stg1.14pence / EUR0.0122 (year ended
31 December 2022: Stg0.92pence / EUR0.01085).
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
4. Finance income
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 US$'000
US$'000 US$'000
Foreign exchange gain 108 - -
---------- ---------- -------------
108 - -
---------- ---------- -------------
5. Finance costs
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 US$'000
US$'000 US$'000
Interest expense - 19 19
Other finance costs - decommissioning
provision interest charge
Foreign exchange loss 80 53 107
- 190 235
80 262 361
---------- ---------- -------------
6. Tax
The Group has not provided any tax charge for the six-month
periods ended 30 June 2023 and 30 June 2022. The Group's operating
divisions have accumulated losses which are expected to exceed
profits earned by operating entities for the foreseeable
future.
7. Loss per share from continuing activities
The profit or loss per Ordinary Share is calculated using a
numerator of the profit or loss for the financial period and a
denominator of the weighted average number of Ordinary Shares in
issue for the financial period. The diluted profit per Ordinary
Share is calculated using a numerator of the profit for the
financial period and a denominator of the weighted average number
of Ordinary Shares outstanding and adjusted for the effect of all
potentially dilutive shares, including share options and share
warrants, assuming that they have been converted.
The calculations for the basic and diluted earnings per share of
the financial periods ended 30 June 2023, 30 June 2022 (restated)
and the year ended 31 December 2022 are as follows:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Numerator for basic and diluted
earnings per share:
Loss for the financial period
(US$'000) (956) (1,276) (4,059)
---------- ---------- -------------
Weighted average number of shares:
Weighted average number of ordinary
shares ('000) 4,211,167 3,948,338 4,080,833
---------- ---------- -------------
Basic and diluted loss per share
(US cents) (0.02) (0.03) (0.10)
---------- ---------- -------------
There is no difference between the basic loss per Ordinary Share
and the diluted loss per Ordinary Share for the financial periods
ended 30 June 2023, 30 June 2022 and the year ended 31 December
2022 as all potentially dilutive Ordinary Shares outstanding were
anti-dilutive. There were 209,611,000 share options in issue at 30
June 2023, 178,611,000 share options in issue at 30 June 2022 and
167,611,000 share options in issue at 31 December 2022.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
8. Exploration and evaluation assets
US$'000
Cost
At 1 January 2023 104,600
Additions 180
---------
At 30 June 2023 104,780
---------
Provisions for impairment
At 1 January 2023 66,552
Increase in impairment provision 196
---------
At 30 June 2023 66,748
---------
Net book value
At 30 June 2023 38,032
---------
At 31 December 2022 38,048
---------
The Group does not hold any property, plant and equipment within
exploration and evaluation assets.
The additions to exploration and evaluation assets during the
period relate mainly to own costs capitalised for geological,
geophysical and administrative ("GG&A") work and licence
maintenance costs, along with training and licence fees under the
respective PSAs, less a decrease in estimates for decommissioning
costs.
The amount for exploration and evaluation assets represents
active exploration projects. These will ultimately be written off
to the Income Statement as exploration costs if commercial reserves
are not established but are carried forward in the Balance Sheet
whilst the determination process is not yet completed and there are
no indications of impairment having regard to the indicators in
IFRS 6.
In accordance with its accounting policies each CGU is evaluated
annually for impairment, with an impairment test required when a
change in facts and circumstances, in particular with regard to the
remaining licence terms, likelihood of renewal, likelihood of
further expenditures and ongoing acquired data for each area,
result in an indication of impairment.
Ruvuma PSA
The Ruvuma PSA comprised two exploration licences; Mtwara and
Lindi. On 22 October 2020, the Group completed the Ruvuma Farm-Out.
On completion, the Group, through its wholly owned subsidiary,
Ndovu Resources Limited, transferred a 50% interest in, and
operatorship of, the Ruvuma PSA to ARA Petroleum Tanzania Limited
("APT"), a related party of the Group. The Group now holds a 25%
interest in the Ruvuma PSA with a US$35.0 million carry through to
potentially significant volumes of production.
A two-year licence extension, effective from 15 August 2021, was
received over the Mtwara Licence in respect to the Ntorya Location.
Although the extension is over the smaller Ntorya Location area,
this is not considered an indicator of impairment as the area
corresponds to the identified Ntorya asset development programme.
During the two-year extension period the operator is committed to
undertake acquiring 200 km(2) of 3D seismic (minimum expenditure of
US$7.0 million), drill the Chikumbi-1 exploration well (minimum
expenditure of US$15.0 million), complete the negotiation of the
Gas Terms for the Ruvuma PSA with the TPDC and, using the data
gathered from the Chikumbi-1 exploration and appraisal well and
seismic acquisition, prepare and submit an application for a
Development Licence for the Ntorya Location area.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
8. Exploration and evaluation assets (continued)
The Farm-Out secured funding for the next phase of development
for the Ruvuma PSA CGU, for which the Group will be carried for its
share up to US$35.0 million, equivalent to US$140.0 million gross
field expenditure. The Carry balance as at 30 June 2023 was US$30.1
million (30 June 2022: US$33.6 million). There is a clear
development plan for the asset outlined by the operator APT, with
the support of the JV partners. During 2022, a 338 km(2) 3D seismic
survey was completed and data processing and interpretation
expected to be completed before the end of 2023. In March 2023,
plans were announced to accelerate commencement of gas production,
the Field Development Plan ("FDP") was approved and the Development
Licence for the Ntorya Area is currently with the Cabinet of
Ministers for final approval.
Nyuni Area PSA
Aminex fully provided for the Nyuni Area PSA exploration asset
in 2018 following confirmation from the Tanzanian authorities that
the Nyuni Licence period ended in October 2019, coupled with the
communication from the Tanzania Ministry of Energy to withhold all
work on the licence, pending a review of the Nyuni Area PSA. The
Company was unable to progress the work programme and, therefore,
the Directors concluded that the carrying cost of the Nyuni asset
should be fully impaired. In April 2022 the Group commenced the
process to hand back the licence to the Ministry. Subsequently, it
was agreed with the Tanzanian authorities that we will continue our
attempts to attract industry partners to participate in the
licence. The likely outcome of these attempts however remains
uncertain and consequently the Directors maintained their position
of a full impairment over the Nyuni Area PSA CGU. Expenditure
during the year is capitalised and then immediately impaired to the
income statement as impairment against exploration and evaluation
assets.
Kiliwani South
The Kiliwani South CGU, located within the Kiliwani North
Development Licence acreage, was previously identified as a
potential lead. The Kiliwani South prospect was estimated by
management to contain a mean 57 BCF un-risked GIIP and the prospect
has been reviewed by RPS in their February 2018 CPR.
During 2021, the Group proposed no work programme and allocated
no budget towards the future development of the Kiliwani South CGU.
This was due to no agreement reached with the Ministry of Energy on
the work commitments over the Nyuni Area PSA and the delay to
agreeing commercial terms on the Kiliwani North Development
Licence. The Group previously considered any future drilling on the
Licence would be dependent upon improved seismic resolution of the
target structures that would result from the acquisition and
interpretation of a 3D seismic survey, which would only be economic
if conducted over both the KNDL and immediately adjacent areas
within the Nyuni Area PSA. In line with the requirements of IFRS 6
this is an indicator of impairment. The Directors concluded in 2021
that the carrying value of the Kiliwani South asset should be fully
impaired. Although a budget has been approved for 2023, this is for
licence maintenance and support only, and the Directors concluded
that full impairment should continue in 2022 and 2023. Therefore,
expenditure during the period has been capitalised and then
immediately impaired to the income statement as impairment against
exploration and evaluation assets. Any reversal of the impairment
would be dependent on an established development programme for the
area, including a seismic and drilling programme where an
assessment of the carrying value of the CGU would be reviewed.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
9. Property, plant and equipment
Development
property Right of
- Tanzania use assets Other assets Total
US$'000 US$'000 US$'000 US$'000
Cost
At 1 January 2023 8,350 - 83 8,433
Additions in the period (21) - - (21)
Disposals - - - -
Exchange rate adjustment - - 5 5
At 30 June 2023 8,329 - 88 8,417
------------ ------------- --------------- --------
Depreciation and
depletion
At 1 January 2023 8,350 - 76 8,426
Charge for the period - - 1 1
Decrease in impairment
provision (21) - - (21)
Disposals - - - -
Exchange rate adjustment - - 6 6
At 30 June 2023 8,329 - 83 8,412
------------ ------------- --------------- --------
Net book value
At 30 June 2023 - - 5 5
------------ ------------- --------------- --------
At 31 December 2022 - - 7 7
------------ ------------- --------------- --------
Development property - Tanzania
Following the award of the Kiliwani North Development Licence
("KNDL") by the Tanzanian Government in April 2011, the carrying
cost relating to the development licence was reclassified as a
development asset under property, plant and equipment, in line with
accounting standards and the Group's accounting policies.
Production from the Kiliwani North-1 well ("KN-1") commenced on 4
April 2016 and depletion was calculated with reference to the
remaining reserves of 1.94 BCF, which were ascribed to the field as
at 1 January 2018 in an independent reserves and resources report
prepared by RPS in February 2018. The report also identified a
contingent resource of 30.8 BCF in addition to the reserves. The
well has produced approximately 6.4 BCF of gas to date. However,
production from KN-1 in 2018 was intermittent and there has been no
commercial production from the well since March 2018.
During 2021, although the Group and TPDC reached agreement on
the settlement of past outstanding gas sales and related amounts
due to the TPDC, certain rights were reserved by both parties over
areas that remain unresolved related to commercial terms over
production from the area (see Note 14). Any development of the KNDL
requires prior agreement on commercial terms. During 2021, the KN-1
well remained idle, no progress was made with the TPDC on
remediation of the well as discussions continued to focus on
commercial terms over the Licence, and the Group proposed no work
programme and allocated no budget over the KNDL for 2022. The
Directors concluded in 2021 that these all indicated the asset was
impaired.
In accordance with IAS 36, the Group conducted an impairment
test as at 31 December 2021 on a value-in-use basis. The
cash-generating unit for the purpose of impairment testing is the
KN-1 well. The Company uses a financial model of the forecast
discounted cash flow to calculate the assets value-in-use. However,
as key judgements for the 2021 impairment test concluded no
production, the value in use calculation was US$nil.
Consequently, the Directors concluded that the Kiliwani North
CGU was fully impaired as at 31 December 2021. These conditions and
assessments have continued and therefore expenditures incurred
during the financial period were capitalised and immediately
impaired.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
9. Property, plant and equipment (continued)
Right of use asset
All right of use assets related to leases the Group had entered
into in respect of various office properties. As at 31 December
2022, all these leases had expired and the properties vacated. All
leases are accounted for by recognising a right-of-use asset and a
lease liability except for:
-- Leases of low value assets; and
-- Leases with a duration of 12 months or less.
10. Trade and other receivables
Trade and other receivables amounted to US$1.56 million at the
period end (31 December 2022: US$1.32 million). The increase is
comprised mainly of increases in amounts due from joint operations
partners (US$0.07 million), trade debtors (US$0.06 million) and
prepayments (US$0.06 million).
11. Cash and cash equivalents
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 31 December
30 June 30 June 2022
2023 2022 US$'000
US$'000 US$'000
Cash at bank and in hand 5,036 6,394 5,805
Included in cash and cash equivalents is an amount of
US$1,023,000 (31 December 2022: US$1,157,000) held on behalf of
partners in jointly controlled operations.
12. Trade and other payables
Trade and other payables amounted to US$10.21 million at the
period end (31 December 2022: US$9.92 million). The increase
relates predominantly to US$0.20 million in accrued training and
licence fee invoices from the Petroleum Upstream Regulatory
Authority in Tanzania. Included in trade and other payables for the
Group are amounts due to partners in joint operations, VAT payable
and amounts arising on gas sales.
The Directors consider that the carrying amounts of trade
payables approximate their fair value.
13. Borrowings
At 30 June 2023, the Group had no outstanding borrowings (31
December 2022: US$ nil; 30 June 2022: US$ nil).
On 14 December 2021, the Company signed a US$1.7 million carry
advance loan facility, bearing interest at 13.77% per annum, with
ARA Petroleum LLC ("the Loan"), which, through its associated
company, Eclipse Investments LLC, is a significant shareholder in
Aminex PLC. On 29 December 2021, US$450,000 was drawn down against
the Loan. On 20 April 2022, US$450,000 and interest of US$19,278
was repaid to ARA from the April 2022 share placement proceeds.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
14. Commitments, guarantees and contingent liabilities
Commitments
In accordance with the relevant PSAs, Aminex has a commitment to
contribute its share of the following outstanding work
programmes:
(a) Following the grant of the first extension to the Nyuni Area
PSA, Tanzania, the terms of the licence require the acquisition of
700 kilometres of 3D seismic over the deep-water sector of the
licence, and the drilling of four wells, on the continental shelf
or in the deep-water, by October 2019. The Group commenced
discussions in 2022 with the Tanzanian authorities to hand back the
Nyuni Area licence which resulted in Aminex being requested to
market the licence in 2023 in an attempt to find a third-party
partner willing to pursue and fund a mutually agreed renegotiated
work programme. It is acknowledged that only part of the seismic
acquisition commitment and none of the drilling commitment under
the licence has been undertaken.
(b) The Ruvuma PSA, Tanzania, originally comprised two licences.
Two wells are required to be drilled on the Mtwara Licence, one of
which is expected to be the Chikumbi-1 well. The Mtwara Licence in
respect of the Ntorya Location was extended in August 2021 for two
years. Pursuant to that extension, the joint operations parties are
required to acquire 200 km(2) of 3D seismic over the location area,
drill the Chikumbi-1 well and conclude negotiations of the Gas
Terms for the Ruvuma PSA. The 3D seismic acquisition programme was
completed on 9 October 2022 and the Addendum to the Ruvuma PSA,
setting out the fiscal terms for the production of gas, was signed
by all parties on 25 November 2022.
Guarantees and contingent liabilities
(a) Under the terms of the Addendum to the Ruvuma PSA, Ndovu
Resources Limited, a subsidiary company of Aminex PLC, has provided
security to the TPDC for up to 15% of the profit share of the
Kiliwani North Development Licence to guarantee the amended
four-well drilling commitment under the Ruvuma PSA. For each well
drilled the security interest will be reduced by 3% for the first
well and 4% thereafter.
(b) The Company guarantees certain liabilities and commitments
of subsidiary companies from time to time, including the
commitments of Ndovu Resources Limited under the Nyuni Area PSA.
These are considered to be insurance arrangements and are accounted
for as such i.e. they are treated as a contingent liability until
such time as it becomes probable that the Company will be required
to make payment under the guarantee in which case a liability is
recognised.
(c) On 11 April 2018, Ndovu Resources Limited received formal
notification from the TPDC of certain claims amounting to US$5.97
million against the Kiliwani North Development Licence with regard
to unpaid royalties and amounts due under profit share
arrangements. The agreed amounts claimed were offset as part of the
settlement agreement signed in October 2021 between the Group and
the TPDC. As part of the settlement agreement, both parties
reserved certain rights including the TPDC reserving its rights in
relation to unpaid royalties and profit share arrangements. Aminex
has advised the TPDC that it does not accept the balance of the
claims, which TPDC estimates to be US$4.18 million (Aminex's net
share is equal to US$2.74 million). The Group has received legal
advice in country that supports its position, and this has been
provided to the TPDC. The Directors believe these claims are
without merit and do not consider it appropriate at this stage to
provide for these claims.
(d) In 2022, as part of the share placement agreement with its
broker, Shard Capital Partners LLP ("Shard"), the Company agreed to
grant 5,320,666 warrants over new Ordinary Shares to Shard at an
exercise price of Stg1.125pence per Ordinary Share ("Warrants"). It
was agreed between the Company and Shard that the Warrants would
not be issued until requested by Shard. No such request has been
received by the Company to date and so the Warrants have not yet
been granted to Shard.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
14. Commitments, guarantees and contingent liabilities (continued)
Tanzanian Tax Assessments
On 28 February 2020, following the conclusion of the TRA audit
of Ndovu Resources Limited ("NRL"), the Group's Tanzanian wholly
owned subsidiary, for taxation years 2013 to 2015, the TRA issued a
tax assessment in respect of these taxation years. The following
matters were raised in the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Withholding tax on payments
made to non-residents for
Withholding services performed outside
tax of Tanzania 242 182 424
VAT Output VAT on imported services 191 156 347
Withholding Withholding tax on deemed
tax interest 797 664 1,461
1,230 1,002 2,232
---------- --------- --------
On 3 June 2022, following the conclusion of the TRA audit of NRL
for taxation years 2016 to 2018, the TRA issued a tax assessment in
respect of these taxation years. The following material matters
were raised in the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
VAT VAT on Ruvuma Farm-Out 1,221 233 1,454
Pay As You Earn PAYE on Director's
(PAYE) fees 92 45 137
1,313 278 1,591
---------- --------- --------
On 28 June 2022, following the conclusion of the TRA corporate
income tax audit of NRL for taxation years 2016 to 2018, the TRA
issued a tax assessment in respect of these taxation years. The
following matters were raised in the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Corporate Under declaration of revenue
tax for 2016 365 145 510
Corporate Under declaration of revenue
tax for 2017 1,438 394 1,832
Corporate Under declaration of revenue
tax for 2018 772 143 915
2,575 682 3,257
---------- --------- --------
On 20 June 2023, following the conclusion of the TRA audit of
NRL for taxation years 2019 to 2020, the TRA issued a tax
assessment in respect of these taxation years. The majority of
these amounts have already been provided for or accrued in the
financial statements. The following material matters were raised in
the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Withholding
tax WHT accrued but not paid 1,071 183 1,254
Withholding
tax WHT on foreign services 358 58 416
VAT VAT accrued but not paid 359 - 359
Gas sales
settlement VAT accrued but not paid 924 - 924
Excise duty accrued but
agreement not paid 298 - 298
3,010 241 3,251
---------- --------- --------
NRL considers all of the above claims, except those noted as
accrued but not paid, to be without technical merit in tax law and,
with the assistance of an in-country tax advisor, has submitted
objections to the TRA findings. At this stage it is unclear whether
NRL will be successful in its objections and therefore the amount
or timing of potential cash outflow remains uncertain. Provision
has been made for amounts NRL has ceded or where management
determine the likelihood of success through the objection or
appeals process is unlikely.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the six months ended 30 June 2023
15. Related party transactions
On 1 June 2023, the Company granted 42 million share options to
Directors. Charles Santos was awarded 12 million options over
Ordinary shares and 10 million options were awarded to each of Tom
Mackay, Sultan Al-Ghaithi and James Lansdell. Sultan Al-Ghaithi is
Chief Executive Officer of Eclipse Investments LLC ("Eclipse") and
ARA Petroleum LLC. James Lansdell is Deputy General Counsel at The
Zubair Corporation and, at the date of grant of options, was an
Eclipse representative. Eclipse is a related party. The exercise
price is Stg1.00p and options will vest upon the average closing
price of the ordinary shares of the Company being no lower than
Stg2.00p for five consecutive trading days. The exercise period
shall not exceed five years from date of grant.
16. Post balance sheet events
On 7 July and 22 July 2023 respectively, NRL submitted deposit
waiver requests and objection letters relating to the majority of
the TRA assessments issued in June 2023 for the years 2019 to 2020
(see Note 14). On 28 August 2023 a letter was received from the TRA
demanding full payment of the assessments. Discussions continued in
August and September 2023 with the TRA regarding the validity of
NRL's deposit waiver requests and objection letters and the TRA's
payment demand. These discussions are ongoing.
17. Statutory information
The financial information to 30 June 2023 and 30 June 2022 is
unaudited and does not constitute statutory financial information.
The information given for the year ended 31 December 2022 does not
constitute the statutory accounts within the meaning of Part 6,
Chapter 4 of the Companies Act 2014. The statutory accounts for the
year ended 31 December 2022 have been filed with the Companies
Registration Office in Ireland. This announcement will be made
available at the Company's registered office at Paramount Court,
Corrig Road, Sandyford Business Park, Dublin 18 and at the office
of Aminex's UK subsidiary company, Aminex Petroleum Services Ltd.,
at 20-22 Wenlock Road, London, N1 7GU.
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END
IR SELESAEDSEFU
(END) Dow Jones Newswires
September 29, 2023 02:00 ET (06:00 GMT)
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