Final Results

RNS Number : 0899K

Aminex PLC

14 April 2015

 

Aminex plc

("Aminex" or "the Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

Aminex PLC  ("Aminex" or "the Group" or "the Company"), the oil and gas company listed on the London and Irish Stock Exchanges, today announces its preliminary results for the year ended 31 December 2014.

HIGHLIGHTS                           

During the year:

·     $15 million equity raised (before expenses)

·     New seismic in the Ruvuma Basin which high graded drill targets

·     Regional gas pipeline completed with sales line to Kiliwani North being connected

·     Part sale of Kiliwani North reduces corporate debt

·     US assets divested

·     Nyuni Area deep water potential reassessed

·     Provisional agreement to sell Moldova interest

·     Technical team strengthened

·     Ongoing restructuring and cost monitoring

Looking ahead:

·     2015 will be the year when Aminex begins to reap rewards after a decade of exploration and development in Tanzania

·     In a difficult market favourable opportunities may present themselves and the Company is actively engaged in looking for production and development led opportunities

Aminex Chief Executive Officer Jay Bhattacherjee commented: "I would like to thank shareholders for their continued support.  This is a very promising time for the Company, with a line of sight to first commercial production from Kiliwani North and ongoing appraisal of the Ntorya discovery.  Going forward the Company will maintain strict cost control measures while opportunistically using the downturn in commodity prices to expand its business with production and development led opportunities in Africa." 

For further information:
Aminex PLC	[phone]
Jay Bhattacherjee, Chief Executive Officer
Max Williams, Finance Director
Corporate Brokers
Shore Capital Stockbrokers - Jerry Keen	[phone]
Davy Corporate Finance - Brian Garrahy	[phone]
GMP Securities Europe LLP - Rob Collins	[phone]
Yellow Jersey PR (Financial PR)	[phone]
Dominic Barretto Kelsey Traynor

CHAIRMAN'S LETTER

Dear Shareholder,

Herewith are Aminex PLC's ("Aminex") results for the year ended 31 December 2014.  The Group made a loss for the financial year of $7.01 million (2013: $17.28 million).

Early in 2014 Aminex completed an equity raising of approximately $15 million before expenses which strengthened its balance sheet and enabled it to advance its projects in Tanzania.  In conjunction with the equity raising, Aminex agreed the delay in the repayment date of its $8 million corporate debt until 31 July 2015 as detailed in the Financial Review section below.  In the latter part of the year it agreed a sale of part of its interest in the Kiliwani North gas field and this has been completed since the year end.  The proceeds are being used to retire a portion of its corporate debt which will de-gear the balance sheet.  Also during the year, the Company achieved its previously stated objective of selling its remaining US properties and in doing so eliminating its exposure to the oil price which has fallen materially since then.

Further 2D seismic was acquired on the Ruvuma PSA during the year which has high graded the prospectivity of the area.  Partners are being sought to accelerate development activity on the Ruvuma acreage in order to provide gas into the country's new pipeline infrastructure which is due to be completed and commissioned in the first half of 2015.  In the Nyuni Area, a technical review has led Aminex and partners to favour exploration in the deep water part of the licence where drilling success rates are in excess of 90%.

In 2015 Aminex will become an African producer of natural gas for the first time when Kiliwani North comes on stream after delays which have been outside the Company's control.  Kiliwani North will be connected to the main infrastructure via a sales line from the Kiliwani North wellhead at no further cost to the joint venture partners other than the supply and installation of a metering unit. The Kiliwani North Gas Sales Agreement is expected to be completed once it has passed the regulatory process and prior to any gas being delivered.

The last quarter of 2014 was a difficult time for our industry as crude prices fell beyond most people's expectations.  Apart from the effects of negative sentiment in the markets, however, Aminex has not been badly affected by this new oil price environment which is highly unlikely to change the prices which it expects to obtain for its Tanzanian gas.  Nevertheless, the Company has prudently undertaken a round of cost cutting measures.

During the year, the composition of the Board has changed with the appointment of Jay Bhattacherjee, Philip Thompson and Max Williams in March 2014 as Executive Directors.  Around that time Mike Rego left the Company to take up an overseas appointment.    In the second half of the year, David Hooker and Derek Tughan retired as Non-Executive Directors after long and valuable service to the Company.  On behalf of the Board I would like to thank all the departing directors most warmly for their contributions.  We were pleased to welcome Tom Mackay to the Board as a Non-Executive Director last September.  Tom is a highly experienced oil industry professional, both technically and commercially, and we will be asking shareholders to approve his appointment at the forthcoming Annual General Meeting.  As a consequence of director retirements, Andrew Hay has been appointed Senior Non-Executive Director and Keith Phair has been appointed Chairman of the Audit Committee.

I would like to thank shareholders for staying with us in turbulent times and for supporting our new management team as we move into a new phase of becoming an African gas producer. We look forward to seeing as many of you as possible at the Annual General Meeting in Dublin on 20 May 2015.

Yours sincerely,

Brian Hall

Chairman

CHIEF EXECUTIVE'S REVIEW

Aminex will shortly become an African producer for the first time and this will transform the Group.  The team continues to explore and maximise the prospectivity of the Group's assets in preparation for production and the development of the onshore Ruvuma Basin where the Company has an existing discovery.

Tanzania

The major new regional gas pipeline being developed by the Tanzania Petroleum Development Corporation ('TPDC') was under construction throughout 2014 and is expected to be ready to receive commissioning gas in the first half of 2015.  There is still work to do but the lion's share is complete and finalisation is in sight.   The pipeline provides a commercialisation route for Kiliwani North gas and opens up the future commercialisation of the Company's Ntorya discovery and any other discoveries made in the Company's onshore Ruvuma Basin acreage.

Kiliwani North is expected to produce initially at a rate of 20 MMcfd through a new processing plant currently being constructed by the TPDC on Songo-Songo Island.    The Company will sell gas directly at wellhead which will entail minimal operating costs and no liability to finance sales lines or for ongoing pipeline transportation tariffs. A Gas Sales Agreement has been negotiated and is passing through government approval stages.  The agreement is part of a larger commercial transaction with neighbouring producers who will use the same facilities.  The Company is aware of shareholder frustration surrounding the delays in finalising the agreement and appreciates the patience shown.

During 2014 the Company completed a new seismic acquisition programme in the vicinity of its Ntorya-1 discovery well on the Ruvuma PSA acreage.  The programme was designed to identify the channel fairway associated with the Tertiary and Cretaceous reservoirs where the Ntorya-1 well tested gas at 20 MMcfd with 139 barrels of associated condensate.  The seismic programme was completed on time and within budget.  Based on management interpretations a resource increase from 1.3 TCF to 2.3 TCF was determined.  The Company currently has an obligation to drill a minimum of four exploration wells by the end of 2016 but is in discussions with the TPDC first to focus efforts on the development of Ntorya with a view to accelerating the supply of gas into the new regional pipeline system.  Should the Company have success in its appraisal and development drilling programme in the Ruvuma basin, any gas discovered can be commercialised through the new pipeline.

At the Nyuni Area PSA, the Company is looking to focus exploration activity on the deep water sector of the licence.  The Tanzanian authorities have agreed to replace a commitment to shoot 2D seismic in the shallow zones with 3D seismic in the deep water sector.  This will enable the acquisition of 700 square kilometres of new seismic in the deep water.  As part of this approval, a two well commitment due to be carried out this year has been deferred to the next exploration phase which expires in October 2019.

United States

In 2014 the Company completed its US disposal programme through selling Aminex USA, Inc., the main assets of which were the Shoats Creek field, Louisiana, and Alta Loma field, Texas, to Northcote Energy Ltd. and Springer Oil & Gas LLC.  The Company is now focused on developing its production-led business in Africa.

Egypt

At the West Esh el Mallaha-2 ("WEEM-2") concession in Egypt, the Company holds a free-carried 10% interest.  The South Malak-2 well was drilled in 2014 and was declared a discovery well in February 2015 by the Ministry of Petroleum in Egypt.  Further progress on the concession is subject to the submission of a field development plan.  In view of Aminex's carried position and the funding partner's cumulative costs which will need to be recovered, on receipt of the proposed field development plan Aminex will review the economic benefits which would accrue to the Company and act accordingly.

Moldova

In line with its Africa-focused strategy, the Company has reached a provisional agreement to dispose of its interests in Moldova.  The Company has a Partnership Agreement with a local operator and no immediate further capital expenditures are planned in the country.     

Evaluation of new opportunities

Throughout the period, the Company's management and technical team has been evaluating and analysing new business opportunities with the aim of creating a larger and stronger base for its activities in Africa, balancing risk against opportunity.

Looking Forward

I would like to thank our staff and all those that have been associated with the Company's progress for their consistent hard work and our shareholders for their continued support.  This is a very promising time for the Company, with a line of sight to first commercial production from Kiliwani North and ongoing appraisal of the Ntorya discovery.

Jay Bhattacherjee

Chief Executive

FINANCIAL REVIEW

Financing and future operations

After successfully completing a $15 million fundraising in February 2014, Aminex achieved its targets to acquire, process and interpret additional 2D seismic over the Ruvuma acreage in Tanzania, dispose of its US assets and, with the successful completion of a partial disposal in the Kiliwani North Development Licence ('KNDL') for $3.5 million in February 2015, materially reduce its indebtedness.

The $15 million, before expensese fundraising comprised a placing, an open offer to existing shareholders and the support of certain creditors agreeing to convert amounts owed to new Ordinary Shares in Aminex.  This was supplemented later in the year with the conversion of other debts to equity and the exercise of warrants.  The Company also negotiated, through the continued support of the lender, an extension to the repayment date for the $8 million corporate loan to no later than 31 July 2015.  The partial disposal of 6.5% of the Kiliwani North Development Licence for a consideration of $3.5 million in February 2015 has enabled the Company to reduce the corporate loan materially since the year-end.

The new 2D seismic acquired over Ruvuma enabled management to increase its estimates of resources over the Ntorya and Likonde prospects to 2.3 TCF and to identify at least four drillable locations to assist with the development of the Ntorya appraisal area.  While discussions continue with a small number of potential farmees for the Ruvuma PSA, Aminex and its joint venture partner will also consider drilling the Ntorya-2 well based on the new interpreted seismic without a farm-out.  Other appraisal, development and exploration targets are currently under review.

Production from the KNDL remains scheduled to commence in the first half of 2015.  The gas infrastructure being constructed by the Tanzanian government is complete for all practical purposes and the commissioning phase should start during the first half of 2015.  The KNDL joint venture anticipates minimal further capital outlay, limited to the acquisition and installation of a gas metering unit.   All other facilities are being constructed and funded by the Tanzania Petroleum Development Corporation ('TPDC').  There have been delays in the finalisation of the Gas Sales Agreement ('GSA') due to regulatory procedures in Tanzania.  The GSA will be signed prior to any commercial production.  The agreement for a disposal of 6.5% of the KNDL since the year end gives the purchaser an option to acquire a further 6.5% for $3.5 million within thirty days of the GSA being signed.  Although Aminex's interest in the KNDL would be reduced to 52%, the exercise of this option would enable further substantial corporate debt repayment prior to the final repayment date of 31 July 2015.

The Directors are seeking to concentrate the Company's resources on achieving high value for shareholders.  The Company has been reducing costs and commitments by implementing a strategy of disposing of non-core assets.  On 22 August 2014, Aminex received the approval of shareholders for the disposal of the Group's subsidiary company, Aminex USA, Inc.  The consideration comprised cash of $150,000 and shares with a value of $350,000 in Northcote Energy Limited, an AIM-listed company, without any lock up restrictions, together with monthly production payments of $10 per barrel based on production from 1 January 2015 up to a maximum of $4.5 million.  The Directors are also looking to dispose of other non-core assets.

Although the Company has reduced its cost base to reflect current market conditions, it has strengthened its technical team and will develop the team further as circumstances allow. 

During 2015, Aminex will continue to seek alternative financing options to enable the further reduction and full repayment of the corporate loan or if necessary a refinancing solution.   The Company looks forward to the first commercial revenues from Kiliwani North and is currently planning the drilling of Ntorya-2 in the Ruvuma Basin.  Following the formal agreement for deferral of a two well commitment into the next work period on the Nyuni Area PSA, the Company and its partners plan to acquire 3D seismic over the outboard sector of that PSA where potential deep water leads have been identified.

Revenue Producing Operations

The US oil and gas properties have been accounted for during the period as discontinued operations to reflect their disposal, following shareholder approval at an Extraordinary General Meeting held on 22 August 2014.  The results for the comparative period have been restated accordingly.

Revenues for continuing operations arise from oilfield services, comprising the provision of technical and administrative services to joint venture operations and sales of equipment to third parties.  For the current period revenues were $444,000 (2013: $724,000 restated).  Cost of sales was $412,000 (2013: $516,000 restated).  The gross profit for the period was $32,000 (2013: $208,000 restated).

Group administrative expenses, net of costs capitalised against projects, were $2.80 million (2013: $2.59 million restated).  The increase was due to one-off payroll costs, part of which related to the senior management remuneration conditional on the successful completion of the fundraising in February 2014, and consultancy fees.  These were off-set by management's continuing review of services received and the implementation of cost savings throughout the Group which has led to a reduction in the monthly overhead while available resources are focused on technical and operational capability.  The Group's resulting net loss from operating activities was $3.64 million (2013: $2.50 million restated).

Finance costs reflects an interest charge of $2.24 million (2013: $4.42 million restated), which mainly consists of the charge for the corporate loan, the basis of the charge having been adjusted at the end of February 2014 for the extension of the repayment date to 31 July 2015 and for a re-calculation of the exercise price of warrants granted to the lender. The charge also includes the unwinding of the discount on the decommissioning provision and bank interest.

The results for the US operations are disclosed as discontinued operations.  The loss on discontinued operations for the current period was $1.14 million after transaction costs (2013: $10.35 million restated). 

The Group's net loss for the period amounted to $7.01 million (2013: $17.28 million).

Balance Sheet

The Group's investment in exploration and evaluation assets increased from $75.1 million at 31 December 2013 to $78.7 million at 31 December 2014 as a result of 2D seismic acquisition, processing and interpretation on the Ruvuma PSA and general ongoing licence costs.  After review, the Directors have concluded that there is no impairment to these assets, which include the cost of the Ntorya-1 gas discovery.  Following the disposal of the US assets, the carrying value of property, plant and equipment has decreased from $19.0 million at 31 December 2013 to $13.5 million at 31 December 2014, which represents the carrying value of the Kiliwani North field and the net book value of the Group's plant and equipment.  Non-current assets also include the fair value of the production payments up to a maximum of $4.5 million due from future production on the US assets sold during the year and the fair value of an investment in an AIM-listed company, Northcote Energy Limited, which was received as part-consideration on the sale of the US assets.  Current assets include assets held for sale of $0.85 million comprising the fair value of the Moldova assets.  The Directors consider that the Moldova assets are non-core and they are expected to be sold within the short-term.  After review, the Directors concluded that the carrying value of the Moldova assets remains impaired but consider the provision of $0.62 million made at the half-year to be adequate.  Other current assets comprise trade and other receivables of $1.22 million and cash and cash equivalents of $1.77 million.

Under current liabilities, loans and borrowings relating to the corporate loan (see commentary under Going Concern Review) have increased from $9.7 million at 31 December 2013 to $10.2 million at 31 December 2014: the increase reflects an additional loan charge for the year of $2.2 million, an additional transfer of $0.5 million to the share warrant reserve and interest paid of $1.2 million.  Trade payables amount to $1.9 million (2013: $7.2 million). The decommissioning provision, current and non-current, has decreased to $0.4 million (2013: $2.3 million) after the disposal of decommissioning liabilities on US properties on the sale of Aminex USA, Inc. and now relates only to liabilities in Tanzania.  Total equity has increased by $9.0 million between 31 December 2013 and 31 December 2014 to $86.5 million.  The movement comprises the net increase in issued capital and share premium of $15.5 million arising mainly from the fundraising in February and an increase in the share warrant reserve of $0.5 million.  The foreign currency translation reserve remains in line with the previous year and the loss of $7.0 million for the year under review has increased the retained loss to $80.1 million.

Cash Flows

The net increase in cash and cash equivalents for the year ended 31 December 2014 was $1.60 million compared with a net decrease of $0.33 million for the comparative period.  The Company raised net proceeds of $12.7 million received on the issue of new equity through a placing and open offer in February 2014 and on the exercise of certain warrants in September 2014.  Net cash outflows from operating activities amounted to $3.45 million (2013: net inflows $0.8 million) after interest payments of $1.2 million (2013: $0.2 million).  Expenditure on exploration and evaluation assets in 2014 amounted to $7.1 million, relating mainly to new 2D seismic acquired on the Ruvuma PSA acreage, together with the related cost of processing and interpretation, as well as continuing licence costs and the settlement of liabilities carried forward from 2013.  Expenditure on property, plant and equipment of $0.2 million mainly related to licence costs and settlement of 2013 liabilities on the KNDL.  After transaction costs of $0.4 million for the disposal of the US properties and offsetting interest received and loan repayments, the cash balance at 31 December 2014 totalled $1.8 million (31 December 2013: $0.2 million).

Going Concern

The Directors have given careful consideration to the Group's ability to continue as a going concern. During the year ended 31 December 2014, the Group reached agreement with Argo Capital Management (Cyprus) Limited, representing the provider of an $8 million loan facility (the 'Argo Loan') (see Note 14), to extend the scheduled repayment date of this loan to the end of July 2015.  Based on current cash flow projections, the Group will not be in a position to repay the balance of the loan, (estimated to be approximately $7.8 million including interest and redemption premium and after actual and expected capital repayments since 31 December 2014), in full on the due date or meet its operational and capital expenditure planned for 2015 and 2016.

However the Directors have taken into account that in February 2015 the Group completed the partial sale of its interest in the Kiliwani North Development Licence, selling 6.5% for $3.5 million, of which Aminex applied net proceeds of $3.3 million to pay down the Argo Loan.  Under the terms of the Asset Sale Agreement, the purchaser has an option to acquire a further 6.5% for consideration of $3.5 million: the option period is for thirty days following the signing of a Gas Sales Agreement for Kiliwani North gas by Aminex's subsidiary company, Ndovu Resources Limited.  While the additional sale of 6.5% in the Kiliwani North Development Licence remains at the purchaser's option, the Directors have a reasonable expectation of the option being taken up and the consideration received prior to the Argo Loan repayment date of 31 July 2015 and therefore being able to pay down an amount of approximately $3.3 million from net proceeds of the second sale.  The Directors are in discussions regarding the amendment of the terms of the Argo Loan, including the potential extension of the repayment period to enable the balance of the loan to be repaid from revenues from Kiliwani North expected to start being received in the second half of 2015.  The Directors are also in discussions with third parties to seek a re-financing of the Argo Loan.  The Directors are also reviewing other measures available to the Group, including the sale of assets, deferral of planned expenditure and alternative methods of raising capital to enable it to repay the Argo Loan.

These factors indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making enquiries and having considered the uncertainties described above and the options available to the Group, the Directors have a reasonable expectation that the Group either will be able to extend the repayment period of or re-finance the Argo Loan and will have sufficient funds available to it to meet other planned expenditures when they fall due for the foreseeable future. Based on the above, the Directors continue to adopt the going concern basis for the preparation of the financial statements.  The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

The Directors understand that, as in prior years, the auditor will likely make reference to this in the auditor's report and that the auditor's opinion will not be modified in this respect

Max Williams

Finance Director

OPERATIONS REPORT

TANZANIA

Kiliwani North Development Licence - Near-term production

                                             At 31 December 2014      At date of report

Aminex (operator)                             65%                          58.5%

RAK Gas Commission                        25%                             25%

Bounty Oil                                              10%                             10%

Solo Oil plc                                                   -                            6.5%

Aminex expects first production from the Kiliwani North field during the current half-year.  This will start with the supply of gas to pressure-test the new sales pipeline and gas plant.  Revenue gas will commence flowing shortly thereafter.  The construction of the major new regional gas pipeline system in Tanzania, from the south-east corner of the Ruvuma Basin, close to the border with Mozambique, to Dar es Salaam, is complete and commissioning is expected during the first half of 2015. The new facilities are within easy reach of Aminex's Kiliwani North and Ntorya discoveries in Tanzania, making gas production on and close to shore in Tanzania commercially viable.  Negotiations on a Gas Sales Agreement ('GSA') remain subject to continuing delays as the draft agreement passes through various Tanzanian governmental reviews but Aminex expects the GSA to be completed and signed in the near future, with satisfactory payment protection terms in place and prior to first production from the Kiliwani North field.  The Tanzanian government's newly installed 540 km 36" diameter pipeline will provide ample delivery capability for Kiliwani North gas and a new treatment plant on Songo-Songo Island is located less than 2 km from Kiliwani North.  TPDC's contractors have constructed a sales line from the Kiliwani North wellhead to the nearby processing plant at their cost and Kiliwani North gas will be sold at wellhead through a metering unit which the Company is installing at minimal cost to the joint venture.  The price that the Company will receive will be net at wellhead and not subject to any pipeline tariff or processing cost.  Kiliwani North-1 has been production-tested at 40 MMscfd but production is expected to commence at 20 MMscfd (approximately 3,500 BOED) from the field in order to manage depletion most effectively.  The Company believes that this level of production can be maintained for 36 months and then declined in a manner best suited to maximising the life of the reservoir.  After a partial disposal of Kiliwani North to Solo Oil plc, completed in February 2015, Aminex's wholly-owned subsidiary Ndovu Resources Limited ('Ndovu') has a 58.5% working interest and is the operator of the field.

Ruvuma PSA - Onshore Appraisal and Exploration

Aminex (operator)                                          75%

Solo Oil plc                                                         25%

An appraisal licence (or "Location") has been issued by the Tanzanian Government for the Ntorya-1 gas discovery.  Aminex acquired 181 km of 2D seismic during 2014 to appraise the Ntorya discovery and to select drill locations over the key Likonde and Namisange prospects.    The Ntorya-1 well, drilled in 2012, discovered a gross 25-metre sandstone interval and, based on the new 2014 seismic, Aminex estimates 1.9 TCF Pmean gas in-place resource for the Cenomanian sandstone reservoir.  The Ntorya-1 well flowed over 20 million cubic feet per day on a 1" choke (equivalent to over 3,000 BOPD) with produced 139 barrels of 53˚ API associated condensate, believed by the Company to be the largest volume of liquid hydrocarbons tested to date in the Ruvuma Basin, onshore or offshore.  The Ntorya-2 appraisal well, planned to be drilled in 2015, will target the primary Cenomanian and the secondary Tertiary reservoir intervals.  It will test a total of 2.3 TCF Pmean estimated gas in-place.

Prior to Ntorya-1, the Company and its partners drilled Likonde-1 in 2010 which identified a 250-metre reservoir section with strong indications of migrated liquid hydrocarbons and which encountered source gas at depth.  The new seismic data has identified two new drill locations updip of Likonde-1 and an additional well location over the Namisange prospect aimed at unlocking the potential of that part of the PSA area.

Drilling is scheduled to begin in the second half of 2015 to appraise the Ntorya discovery.  The new regional gas pipeline will provide ample delivery capability for gas from the expected development of Ntorya and probably for any subsequent discoveries which the Company may make in the Ruvuma basin. The main pipeline will pass within 12 km of the Ntorya-1 discovery well.

Exploration drilling is planned over key prospects prior to the termination of the PSA in December 2016 when the remainder of the exploration acreage, outside designated appraisal, development or production licences, is due to be relinquished.

Nyuni Area PSA - Onshore, Shelf and Deepwater Exploration

Aminex (operator)                             70%

RAK Gas Commission                        25%

Bounty Oil                                                5%

The Nyuni Area PSA was awarded in late 2011 for an eleven year period and replaced the Nyuni/East Songo-Songo PSA after it had expired, with all obligations met and a commercial discovery established.  Aminex has drilled, as operator, four exploration wells in the Nyuni Area, including the Kiliwani North gas discovery which is now the subject of a separate development licence and ready to produce.

With its partners, the Company's focus has now moved from the shelf to the deep water, highly prospective outboard sector of the PSA where 3D seismic is planned, for which a variation of the work commitment and an extension to the current work period has recently been approved by the TPDC.  Aminex has identified the key Pande West lead on 2D seismic in the deep water, eastern part of the PSA acreage and expects to find more prospects on the basis of a new 3D seismic programme.  The drilling success rate from 3D seismic in the deeper water east of the continental shelf is very high due to the quality of the petroleum system in this basin.  Aminex is currently reviewing appropriate seismic vessel options operating in the close vicinity, so as to minimise mobilisation/demobilisation costs, to acquire 3D seismic data over this area. Lower oil prices are currently impacting seismic costs, which should provide further cost savings on the acquisition programme.  As the Company's initial focus is primarily on the Ruvuma PSA acreage and development of the Ntorya discovery, the Company is unlikely to be in a position to drill an expensive deep water well in the Nyuni Area in the foreseeable future without introducing a larger company as farm-in partner.

EGYPT - Onshore Exploration

Gulf of Suez - West Esh el Mellaha-2 PSC ('WEEM-2')

Aminex Petroleum Egypt Limited         80%

Triumph Energy Group                               20%

Aminex has a 10% beneficial interest in this PSC through its 12.5% shareholding in Aminex Petroleum Egypt Limited.  Aminex's interest in this PSC is free-carried by a partner through to first commercial production and the Company therefore has no day-to-day control over the timing of drilling operations. Three wells were drilled prior to 2014, of which one tested oil in non-commercial quantities.  Activity was restricted due to political issues in Egypt and a change of control of Aminex Petroleum Egypt Limited's ultimate parent company.  The Egyptian authorities extended the second period of the WEEM-2 PSC to facilitate completion of a delayed drilling programme and Aminex was notified in September 2014 that the South Malak-2 ('SM-2') well had been spudded.  In February 2015 the SM-2 well was declared a discovery well by the Ministry of Petroleum in Egypt.  Tests showed production flow rates of approximately 430 barrels per day of 40˚ API crude.  Based on the success of SM-2, a full field development programme will be presented to the Egyptian Authorities and partners prior to commercial development.  Once the full development plan has been presented and in view of the Company's carried interest which will generate income only after the funding partners have recovered their cumulative investment, Aminex will assess the economic benefit of this discovery to the Company and act accordingly. 

MOLDOVA - Production

Following the acquisition of Canyon Oil & Gas Limited in February 2014, Aminex has an interest under the terms of a partnership agreement with Valiexchimp SRL, the concession-holder of two licences for the Valeni and Victorovca oil and gas fields in the Republic of Moldova.  Since signing the agreement and prior to its acquisition by Aminex, Canyon drilled two wells.  As the Board considers the Moldovan assets not to be core to Aminex's business, no further wells are currently planned and the Company has reached provisional agreement to dispose of its interest. 

OILFIELD SUPPLY & LOGISTICS

During the year, Aminex ceased to supply equipment through its service division, AMOSSCO, as part of the process of reducing costs and concentrating on core exploration and production assets.  The Group will continue to provide technical and administrative support to Aminex's operated joint ventures.

Group Income Statement

for the year ended 31 December 2014

	Notes	2014 US$'000	2014 US$'000	2013 US$'000	2013 US$'000
				(restated)	(restated)
Revenue	2		444		724
Cost of sales			(412)		(516)
Gross profit			32		208
Administrative expenses		(2,795)		(2,589)
Depreciation of other assets		(9)		(11)
			(2,804)		(2,600)
Loss from operating activities before other items			(2,772)		(2,392)
Impairment provision against assets held for sale	11		(622)		-
Impairment loss on available for sale assets			(243)		-
Loss on disposal of quoted financial investment			-		(108)
Loss from operating activities			(3,637)		(2,500)
Finance income	3		11		-
Finance costs	4		(2,239)		(4,423)
Loss before tax			(5,865)		(6,923)
Income tax expense			-		-
Loss from continuing operations	2		(5,865)		(6,923)
Discontinued operations
Loss from discontinued operations	5		(1,143)		(10,354)
Loss for the financial year attributable to equity holders of the Company			(7,008)		(17,277)
Basic and diluted loss per Ordinary Share (in US cents)	6		(0.41)		(2.11)
Basic and diluted loss per Ordinary Share (in US cents) - continuing operations	6		(0.34)		(0.85)

Group Statement of Comprehensive Income

for the year ended 31 December 2014

		2014 US$'000		2013 US$'000
Loss for the financial year		(7,008)		(17,277)
Other comprehensive income:
Items that are or maybe reclassified to profit or loss:
Currency translation differences		(19)		(234)
Total comprehensive income for the financial year attributable to the equity holders of the Company		(7,027)		(17,511)

Group Balance Sheet

 at 31 December 2014

	Notes		2014  US$'000		2013  US$'000
ASSETS
Exploration and evaluation assets	7		78,734		75,050
Property, plant and equipment	8		13,510		19,039
Available for sale assets	10		107		-
Trade and other receivables	12		2,800		-
Total non-current assets			95,151		94,089
Assets held for sale	11		850		-
Trade and other receivables			1,217		2,515
Cash and cash equivalents			1,765		166
Total current assets			3,832		2,681
Total assets			98,983		96,770
LIABILITIES Current liabilities
Loans and borrowings	14		(10,218)		(9,706)
Trade and other payables			(1,863)		(7,236)
Decommissioning provision	9		-		(287)
Total current liabilities			(12,081)		(17,229)
Non-current liabilities
Loans and borrowings			-		(19)
Decommissioning provision	9		(425)		(2,053)
Total non-current liabilities			(425)		(2,072)
Total liabilities			(12,506)		(19,301)
NET ASSETS			86,477		77,469
EQUITY
Issued capital	13		67,094		65,629
Share premium			93,505		79,431
Capital conversion reserve fund			234		234
Share option reserve			3,891		3,891
Share warrant reserve			3,031		2,535
Foreign currency translation reserve			(1,166)		(1,147)
Retained earnings			(80,112)		(73,104)
TOTAL EQUITY			86,477		77,469

Group Statement of Changes in Equity

for the year ended 31 December 2014

	Share capital	Share premium	Capital conversion reserve fund	Share option reserve	Share warrant reserve	Foreign currency translation reserve	Retained earnings	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
At 1 January 2013	65,629	79,431	234	3,883	-	(913)	(55,827)	92,437
Transactions with shareholders recognised directly in equity
Share based payment charge	-	-	-	8	-	-	-	8
Share warrants granted	-	-	-	-	2,535	-	-	2,535
Comprehensive income:
Currency translation differences	-	-	-	-	-	(234)	-	(234)
Loss for the financial year	-	-	-	-	-	-	(17,277)	(17,277)
At 1 January 2014	65,629	79,431	234	3,891	2,535	(1,147)	(73,104)	77,469
Transactions with shareholders recognised directly in equity
Shares issued	1,465	14,074	-	-	(211)	-	-	15,328
Share warrants granted	-	-	-	-	707	-	-	707
Comprehensive income:
Currency translation differences	-	-	-	-	-	(19)	-	(19)
Loss for the financial year	-	-	-	-	-	-	(7,008)	(7,008)
At  31 December 2014	67,094	93,505	234	3,891	3,031	(1,166)	(80,112)	86,477

Group Statement of Cashflows

for the year ended 31 December 2014

	2014 US$'000		2013 US$'000
Operating activities
Loss for the financial year	(7,008)		(17,277)
Depletion, depreciation and decommissioning	92		950
Impairment provision against assets held for sale	872		9,304
Finance income	(11)		-
Finance costs	2,295		4,577
Loss on disposal of subsidiary undertaking	368		-
Impairment of available for sale assets	243		-
Loss on disposal of quoted financial investment	-		108
Gain on disposal of producing asset	-		(5)
Equity-settled share-based payment charge	-		8
Decrease in trade and other receivables	1,505		2,132
(Decrease)/ increase in trade and other payables	(625)		1,252
Net cash (absorbed by)/generated by operations	(2,267)		1,049
Cost of decommissioning	-		(25)
Interest paid	(1,179)		(198)
Net cash (outflows)/inflows from operating activities	(3,446)		826
Investing activities
Acquisition of property, plant and equipment	(234)		(641)
Expenditure on exploration and evaluation assets	(7,053)		(8,831)
Proceeds from sale of producing asset	-		150
Cost of disposal of subsidiary undertaking	(368)		-
Proceeds from disposal of quoted financial investment	-		189
Interest received	11		-
Net cash outflows from investing activities	(7,644)		(9,133)
Financing activities
Proceeds from the issue of share capital	14,907		-
Payment of transaction costs on the issue of share capital	(2,205)		-
Advances on new loans	-		8,000
Loans repaid	(13)		(22)
Net cash inflows from financing activities	12,689		7,978
Net increase/(decrease)  in cash and cash equivalents	1,599		(329)
Cash and cash equivalents at 1 January	166		495
Cash and cash equivalents at 31 December	1,765		166

Notes to the Financial Information
for the year ended 31 December 2014

1              Statement of accounting policies

The financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the EU ('EU IFRSs').

Basis of preparation

At the date of issue of this announcement the Group's statutory financial statements for the year ended 31 December 2014, and therefore the result showing in the announcement, are unaudited. In the opinion of the Directors, the announcement includes all adjustments necessary for a fair presentation of the results for the periods presented.

The accounting policies used are consistent with those set out in the audited Annual Report for the year ended 31 December 2014, which will be available shortly on the Company's website, www.aminex-plc.com, except as noted below.

i)      New accounting standards and interpretations adopted

Below is a list of standards and interpretations that were required to be applied in the year ended 31 December 2014.  There was no material impact to the financial statements in the current year from these standards set out below:

·     IFRS 10 Consolidated Financial Statements

·     IFRS 11 Joint Arrangements

·     IFRS 12 Disclosure of Interests in Other Entities

·     IAS 27 Separate Financial Statements (2011) (Amended)

·     IAS 28 Investments in Associates and Joint Ventures (2011)

·     IAS 32 Financial Instruments: Presentation (Amended)

·     Investment entities (amendment to IFRS 10) - effective 1 January 2014

·     IFRIC 21: Levies - effective 1 January 2014

·     Novation of derivatives and continuation of hedge accounting (amendments to IAS 39) - effective 1 January 2014

ii)    New standards and interpretations not adopted

Standards that are not yet required to be applied but can be early adopted are set out below. None of these standards have been applied in the current period. There would not have been a material impact on the financial statements if these standards had been applied in the current accounting period. These will be applied as required on a prospective basis.

•    Annual improvements to IFRSs 2010-2012 Cycle and Annual Improvements to IFRSs 2011-2013 Cycle - effective 1 February 2015 (see below)

As part of its annual improvements process, the IASB has published non-urgent but necessary amendments to IFRS.  Together, the two cycles cover a total of nine standards, with consequential amendments to other standards. The amendments apply prospectively for annual periods beginning on or after 1 February 2015 and are available for early adoption. The topics covered in these revisions are listed below.

1              Statement of accounting policies (continued)

Annual Improvements to IFRSs 2010-2012 Cycle

•    IFRS 2 Share-based Payment: definition of a vesting condition

•    IFRS 3 Business Combinations: accounting for contingent consideration in a business combination

•    IFRS 8 Operating segments: (i) aggregation of operating segments and (ii) reconciliation of the total of the reportable segments' assets to the entity's assets

•    IFRS 13 Fair Value Measurements: short-term receivables and payables

•    IAS 16 Property, Plant and Equipment: revaluation method - proportionate restatement of accumulated depreciation

•    IAS 24 Related Party Disclosures: key management personnel services

•    IAS 38 Intangible Assets: revaluation method; proportionate restatement of accumulated amortisation

Annual Improvements to IFRSs 2011-2013 Cycle

•    IFRS 1 First-time adoption of IFRS: meaning of 'effective IFRSs'

•    IFRS 3 Business Combinations: scope exceptions for joint ventures

•    IFRS 13 Fair Value Measurement: scope of paragraph 52 (portfolio exception)

•    IAS 40 Investment Property: clarifying the interrelationship between IFRS 3 and IAS 40 when classifying property as investment or owner-occupied property

2              Segmental information

The Group considers that its operating segments consist of (i) Producing Oil and Gas Properties, (ii) Exploration Activities and (iii) Oilfield Services and Supplies.  These segments represent are those that are reviewed regularly by the Chief Executive Officer (Chief Operating Decision Maker) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. However it 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 items comprise mainly head office expenses, cash balances and certain other items. 

Segmental revenue - continuing operations		2014 US$'000		2013 US$'000 (restated)
Region of destination
Provision of oilfield services and supplies
Africa		444		719
Europe		-		5
Revenue		444		724

Segment loss for the financial year
Africa - exploration assets	(253)		(171)
Europe - oilfield goods and services	(53)		(179)
Europe - groups costs (1)	(5,559)		(6,573)
Discontinued operations	(1,143)		(10,354)
Total group loss for the financial year	(7,008)		(17,277)
2              Segmental information (continued)	2014  US$'000		2013  US$'000 (restated)
Segment assets
Africa - producing oil and gas properties	13,488		13,292
Africa - exploration assets	80,043		77,345
Europe - oilfield goods and services	56		47
Europe - group assets (2)	4,546		256
Europe - assets held for sale (3)	850		-
US - producing oil and gas properties (discontinued)	-		5,830
Total assets	98,983		96,770
Segment liabilities
Africa - exploration assets	(1,961)		(5,425)
Europe - oilfield goods and services	-		(8)
Europe - group liabilities (4)	(10,545)		(11,488)
US - producing oil and gas properties (discontinued)	-		(2,380)
Total liabilities	(12,506)		(19,301)
(1) Group costs primarily comprise interest expense on financial liabilities and salary and related costs.
(2) Group assets primarily comprise cash and working capital.
(3) Group assets held for sale consist of non-core assets in Moldova.
(4) Group liabilities primarily comprise loans and borrowings and trade payables and related costs.
Capital expenditure
Africa - exploration assets	3,684		1,960
Africa   - producing  assets	196		195
Europe - group assets	28		9
Europe - producing  assets	1,092		-
US - producing oil and gas properties (discontinued)	11		245
Total capital expenditure	5,011		2,409
Non-cash items: continuing operations
Europe: depreciation - Group assets	9		11
Share-based payment charge	-		8
Gain on disposal of producing assets	-		(5)
Loss on disposal of quoted financial investment	-		108
Interest expense on financial liabilities measured at amortised cost	2,198		4,420
Impairment provision against assets held for sale	622		-
Impairment provision against quoted financial investment	243		-

3              Finance income

		2014 US$'000		2013 US$'000 (restated)
Deposit interest income		11		-

4              Finance costs    

		2014 US$'000		2013 US$'000 (restated)
Interest expense on financial liabilities measured at amortised cost		2,198		4,420
Other finance costs - decommissioning provision interest charges		39		3
Other finance charges		2		-
		2,239		4,423

Included in finance costs for the period is an interest charge of US$2.2 million in respect of the US$8 million corporate loan.  The charge for the current period comprises the remaining charge due on the loan prior to modifications effective on 24 February 2014, which were the extension of the loan repayment date and the re-pricing of the warrants granted to the lender from €0.06 per warrant to £0.01 per warrant.  In compliance with IFRS 2, the modifications of the loan terms and the warrant pricing have given rise to an additional finance charge, including a further warrant charge of US$496,000, which will be charged on an effective interest rate basis from the date of modification to the repayment date of 31 July 2015.

5              Discontinued operations

During the year, the Company disposed of its wholly-owned subsidiary Aminex USA, Inc., for which shareholder approval was received on 22 August 2014. The total consideration for the disposal amounted to US$5 million and comprised (i) 24,850,012 shares in Northcote Energy Ltd, ('Northcote') an AIM listed oil and gas company, with a fair market value of US$350,000 on the date of completion (22 August 2014), (ii) cash consideration of US$150,000, and (iii) a production payment of US$10 per barrel until a total of US$4,500,000 has been recovered. The first payments are to be based on production from 1 January 2015.  The Directors have reviewed the timing of anticipated production payments and are satisfied that the net present value, using a discount factor of 10%, of US$2.9 million included in non-current and current assets represents the fair value of future expected production payments.  The shares held in Northcote at 31 December 2014 are classified as available for sale assets on the balance sheet.

The results from the US operation have been presented as a discontinued operation as the entity disposed of represents a separate geographical area of operation. The income statement for the prior year has been restated to show the discontinued operations separately from continuing operations.

5              Discontinued operations (continued)

(a) Results of discontinued operation	2014 US$'000		2013 US$'000 (restated)
Revenue	165		1,552
Cost of sales	(384)		(932)
Depletion, depreciation and decommissioning of oil and gas interests	(83)		(939)
Gross loss	(302)		(319)
Administrative losses	(167)		(605)
Finance costs - decommissioning provision interest charge	(56)		(148)
Other finance charges	-		(6)
Results from operating activities	(525)		(1,078)
Income tax	-		-
Results from operating activities, net of tax	(525)		(1,078)
Cost of disposal of discontinued operation	(368)		-
Impairment provision against discontinued operation	(250)		-
Gain on disposal of fixed asset	-		28
Impairment provision against producing asset	-		(9,304)
Loss for the period attributable to equity holders of the Company	(1,143)		(10,354)
Basic and diluted loss per share (cents) - discontinued operation	(0.07)		(1.26)
(a)  Cash flow from/(used in) discontinued operations
Net cash from operating activities	6		185
Net cash used in investing activities	(11)		(245)
Net cash outflow for the period	(5)		(60)
(b)  Effect of discontinued operations on the financial position of the Group			2014 US$'000
Property, plant and equipment			(5,418)
Trade and other receivables			(62)
Cash and cash equivalents			(15)
Trade and other payables			46
Decommissioning provision			2,010
Net assets and liabilities			(3,439)
Consideration received			350
Consideration to be received			3,089
Total consideration			3,439

6                 Loss per Ordinary Share

The basic loss per Ordinary Share is calculated using a numerator of the loss for the financial year and a denominator of the weighted average number of Ordinary Shares in issue for the financial year.  The diluted loss per Ordinary Share is calculated using a numerator of the loss for the financial year and a denominator of the weighted average number of Ordinary Shares outstanding and adjusting for the effect of all potentially dilutive shares, including share options, assuming that they had been converted.

The calculations for the basic loss per Ordinary Share for the years ended 31 December 2014 and 2013 are as follows:

		2014		2013
Loss for the financial year (US$'000)		(7,008)		(17,277)
Weighted average number of Ordinary Shares ('000)		1,704,114		818,658
Basic and diluted loss per Ordinary Share (US cents)		(0.41)		(2.11)
Continuing operations (US cents)		(0.34)		(0.85)

There is no difference between the basic loss per Ordinary Share and the diluted loss per Ordinary Share for the years ended 31 December 2014 and 2013 as all potentially dilutive Ordinary Shares outstanding are anti-dilutive.  There were 21,115,000 (2013: 26,615,000) anti-dilutive share options in issue as at 31 December 2014 and 88,176,455 (2013: 40,932,916) warrants in issue at 31 December 2014.

7                 Exploration and evaluation assets

			US$'000
Cost
At  1 January 2013			77,636
Additions			1,674
Employment costs capitalised			286
Increase in decommissioning provision			182
At 1 January 2014			79,778
Additions			3,207
Employment costs capitalised			477
At 31 December 2014			83,462
Provisions for impairment
At 1 January and  31 December 2014			4,728
Net book value
At 31 December 2014			78,734
At 31 December 2013			75,050

The Group does not hold any property, plant or equipment within exploration and evaluation assets.

The Directors have considered the licence, exploration and appraisal costs incurred in respect of its exploration and evaluation assets, which are, with the exception of the partial write down on the Nyuni-1 well in Tanzania, carried at historical cost.  These assets have been assessed for impairment and in particular with regard to remaining licence terms, likelihood of renewal, likelihood of further expenditures and ongoing acquired data for each area, as more fully described in the Operations Report. The Directors are satisfied that there are no further indicators of impairment but recognise that future realisation of these oil and gas assets is dependent on further successful exploration and appraisal activities and the subsequent economic production of hydrocarbon reserves.

8              Property, plant and equipment

	Development property - Tanzania US$'000	Developed and producing oil and gas properties - USA US$'000	Other assets US$'000		Total US$'000
Cost
At 1 January 2013	12,926	24,396	453		37,775
Additions in the year	195	245	9		449
Reclassified as held for sale **	-	(3,177)	-		(3,177)
Increase/(decrease) in decommissioning provision	171	(177)	-		(6)
Written off in period	-	(153)	-		(153)
Disposed of during the year	-	(62)	-		(62)
Exchange rate adjustment	-	-	3		3
At 1 January 2014	13,292	21,072	465		34,829
Additions in the year	196	11	28		235
Acquisition of subsidiary *	-	-	1,092		1,092
Reclassified as held for sale *	-	-	(1,104)		(1,104)
Disposed of during the year	-	(21,083)	(4)		(21,087)
Exchange rate adjustment	-	-	(9)		(9)
At 31 December 2014	13,488	-	468		13,956
Depreciation and impairment
At 1 January 2013	-	7,993	445		8,438
Charge for the year	-	939	11		950
Impairment	-	9,304	-		9,304
Reclassified as held for sale **	-	(2,739)	-		(2,739)
Written off in period	-	(124)	-		(124)
Eliminated on disposal	-	(42)	-		(42)
Exchange rate adjustment	-	-	3		3
At 1 January 2014	-	15,331	459		15,790
Charge for the year	-	83	9		92
Reclassified as held for sale	-	-	(254)		(254)
Impairment provision	-	(15,415)	254		(15,161)
Eliminated on disposal	-	1	(3)		(2)
Exchange rate adjustment	-	-	(19)		(19)
At 31 December 2014	-	-	446		446
Net book value
At 31 December 2014	13,488	-	22		13,510
At 31 December 2013	13,292	5,741	6		19,039

* "Other assets" include the additions for Moldova assets subsequently reclassified to assets held for sale.

**In the prior year, the South Weslaco field was reclassified as held for sale and this asset was subsequently disposed of in October 2013.

8              Property, plant and equipment (continued)

Property, plant and equipment shown above includes assets held under finance leases as follows:

		2014 US$'000		2013 US$'000
Net carrying value		-		31
Depreciation charge		1		32

During the year, the Company disposed of its wholly-owned subsidiary Aminex USA Inc., including its portfolio of assets which largely consisted of producing oil and gas properties at Shoats Creek and Alta Loma (see Note 5).

Following the award of the Kiliwani North Development Licence 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.  Depletion will be charged once the field commences commercial production.  The Directors have reviewed the carrying value of the asset at 31 December 2014 based on estimated discounted future cashflows and are satisfied that no impairment has occurred.

9              Decommissioning provision

			US$'000
At January 2013			2,057
Discount unwound in the year - continuing operations			3
Discount unwound in the year - discontinued operations			148
Increase in decommissioning provision - exploration and evaluation assets			182
Decrease in decommissioning provision - property, plant and equipment			(6)
Release from decommissioning provision on disposal of property, plant and equipment			(19)
Payments made in the year			(25)
At 1 January 2014			2,340
Discount unwound in the year - continuing operations			39
Discount unwound in the year - discontinued operations			56
Release from decommissioning provision on disposal of property, plant and equipment			(2,010)
At 31 December 2014			425
	2014 US$'000		2013 US$'000
Current	-		287
Non-current	425		2,053
Total decommissioning provision	425		2,340

10           Available for sale assets

		2014		2013
		US$'000		US$'000
At 1 January		-		-
Additions		350		297
Disposals		-		(297)
Impairment loss charged to income statement		(243)		-
At 31 December		107		-

As part of the disposal proceeds for the Company's wholly-owned subsidiary Aminex USA, Inc., the Company was granted shares with a fair market value of US$350,000 in Northcote Energy Limited, an AIM listed oil and gas company (see Note 5).  The fair value of this investment has decreased significantly and this decrease in value is considered by the Directors to constitute an impairment of the assets at 31 December 2014. Accordingly the impairment has been expensed in the income statement.                                        

In the prior year, the Company completed its disposal to Northcote of its interest in the oil and gas leases in South Weslaco for a consideration of US$447,000 which consisted of a cash payment of US$150,000 and 12,348,372 ordinary shares in Northcote, resulting in a gain on disposal of US$5,000.  The Company sold its shareholding in Northcote during the prior year for a net consideration of US$189,000, resulting in a loss on disposal of US$108,000.

11           Assets held for sale

On 24 February 2014, the Company acquired the entire share capital of Canyon Oil and Gas Limited ('Canyon') for a consideration of 80,000,000 Ordinary Shares with a value of US$1.33 million at that date. Upon acquisition of Canyon, the Company became the beneficial owner of the partnership agreement between Canyon and Valiexchimp SRL, the operator of the Victorovca and Valeni licenses in the Republic of Moldova. The Directors do not consider the assets in Moldova to be core to the business of the Group and have no plans to drill any new wells under the agreement and have reached a provisional agreement to sell these assets. The Directors are satisfied that it is appropriate to classify the Moldova assets as an asset held for sale within current assets as a sale is highly probable within twelve months of the date of issue of this report.  At 30 June 2014, the Directors reviewed the carrying value of the Victorovca and Valeni licenses for indicators of impairment and the net assets held for sale were considered to be impaired and their carrying value written down by US$622,000 to a carrying value of US$850,000.  At 31 December 2014, the Directors again reviewed the carrying value of the Victorovca and Valeni licenses for indicators of impairment. The Directors are satisfied that no further impairment is considered to have occurred.

12           Trade and other receivables - non-current

Non-current trade and other receivables that fall due after one year relate to part of the consideration from disposal of Aminex USA, Inc. and comprise a production payment of US$10 per barrel until a total of US$4.5 million has been recovered. The first payments are to commence based on production from 1 January 2015 (see note 5 for further details).  The Directors have reviewed the timing of anticipated production payments and are satisfied that the net present value of US$2,938,000, using a discount factor of 10%, represents the fair value of future expected production payments.  An amount of US$138,000 is receivable within one year and US$2.8 million is receivable after one year.

13           Issued capital

At an Extraordinary General Meeting, held on 24 February 2014, the Group renominalised its ordinary shares, reducing the nominal value of each Ordinary Share from €0.06 to €0.001. At the Extraordinary General Meeting each Ordinary Share was subdivided into one new Ordinary Share of €0.001 and one new Deferred Share of €0.059.

On 24 February 2014, the Group issued 957,791,100 Ordinary Shares for a combination of cash, a reduction of debt in exchange for equity, and as consideration for the acquisition of Canyon Oil and Gas Limited increasing share capital by US$15.3 million. The premium arising on the issue amounted to US$12.4 million, after share issue costs of US$2.2 million.  On 4 March 2014, the Group issued 67,079,689 Ordinary Shares for cash in respect of an open offer to shareholders increasing share capital by US$0.09 million. The premium arising on the issue, after share issue costs, amounted to US$1.0 million.  On 22 May 2014, the Group issued 3,750,000 Ordinary Shares for the settlement of third party service provider fees increasing share capital by US$0.005 million. The premium arising on the issue amounted to $0.04 million.  On 15 September 2014, the Group issued 10,638,770 Ordinary Shares for the settlement of third party service provider fees increasing share capital by US$0.01 million together with a premium arising on the issue amounted to $0.14 million.  On 23 September 2014, the Group issued 30,287,500 Ordinary Shares as a result of the exercise of warrants by a warrant holder.  The increase in share capital amounted to US$0.04 million together with a premium of $0.45 million. 

Allotted called up and fully paid	Number	€	US$
Ordinary shares of €0.06 each:
At 31 December 2013	818,658,421	49,119,505	65,629,490
Renominalisation of share capital
Ordinary shares	818,658,421	818,658	1,093,825
Deferred shares	818,658,421	48,300,847	64,535,665
New ordinary shares issued during 2014 post renominalisation	1,069,547,059	1,069,547	1,464,096
At 31 December 2014	2,706,863,901	50,189,052	67,093,586

Comprised of:
Ordinary shares of €0.001	1,888,205,480
Deferred shares of  €0.059	818,658,421
	2,706,863,901

The increase in Ordinary Shares of €0.001 each during the year in the issued Ordinary Share capital and share premium (net of issue costs) of the Company related to the following:

Details	Date of issue	Number	Issued capital US$'000	Share premium US$'000	Total US$'000
Placing	24 February 2014	957,791,100	1,314,760	12,416,209	13,730,969
Open offer	4 March 2014	67,079,689	92,181	1,026,239	1,118,420
Placing	22 May 2014	3,750,000	5,121	44,024	49,145
Placing	15 September 2014	10,638,770	13,514	140,347	153,861
Placing	23 September 2014	30,287,500	38,520	447,726	486,246
		1,069,547,059	1,464,096	14,074,545	15,538,641

14           Loans and borrowings

In February 2014, the Company agreed with the lender, a fund managed by Argo Capital Management (Cyprus) Ltd, for an extension of the repayment period to 31 July 2015.  The loan facility, originally agreed in January 2013, initially carried a 12.5% coupon for the period which increased to 15% from 1 July 2013 and a repayment premium which is 20% of the loan. The loan is secured by fixed charges over certain of the Group's subsidiary companies and a floating charge over the Group's assets. 

At an Extraordinary General Meeting held on 24 February 2014, the exercise price of warrants originally granted to the lender was re-priced from €0.06 per share to Stg£0.01 per share and the new exercise price applied to new warrants granted to the lender as a result of the fund raising completed in February 2014.  The cost of these warrants falls within the scope of IFRS 2 Share-based Payment and is recognised over the term of the facility.  All warrants are exercisable until 30 June 2017.  The warrants are subject to anti-dilution rights at the same exercise price.   The Company has recalculated the fair value of the warrants at the date of grant using the Black Scholes model and an additional US$496,000 has been included in a share warrant reserve in the Group Statement of Changes in Equity at 31 December 2014, with a corresponding amount offset against the initial value of the loan to reflect the modification of the terms of the loan. The key assumptions used to value the warrants include a volatility rate of 60% and a risk free rate of 0.33%.

Following  the extension of the repayment period of the Argo loan and the revaluation of the warrants, US$2.20 million has been charged to the Group Income Statement as Finance Costs (December 2013: US$4.42 million) (see Note 4). Finance Costs have been calculated using the effective interest rate method, based on management's best estimate of expected cash flows arising from the interest, redemption premium and principal repayments in addition to the charge associated with the warrants.

15           Acquisition of a subsidiary

During the year the Group acquired 100% of the shares in Canyon Oil and Gas Limited ('Canyon'). In the period from acquisition to 31 December 2014, Canyon contributed a loss of US$51,000.  Prior to acquisition Canyon had accumulated retained losses of US$350,000.

Consideration comprised 80 million Ordinary Shares in Aminex PLC and was valued at US$1.33 million based on the price at which the shares were issued as part of the placing on 24 February 2014.  Costs of US$138,000 were incurred in respect of legal and professional fees.

The identifiable assets acquired and liabilities assumed were as follows:

			US$'000
Property, plant and equipment			1,092
Cash			93
Loans and borrowings			(222)
Total identifiable assets			963

The Directors considered the carrying value of the net assets acquired at the acquisition date and determined this equated to fair value.  Goodwill arising on the acquisition, amounting to US$368,000, has been included in the impairment charge of US$622,000.  The Group intends to dispose of the Canyon producing asset in the near term and at 31 December 2014 has classified it as held for sale (see Note 11 for further details).

16           Capital Commitments - exploration activity

In accordance with the relevant Production Sharing Agreements, Aminex has a commitment to contribute its share of the following outstanding work programmes:

(a)  On the Nyuni Area PSA, Tanzania: to acquire 800 kilometres of 2D seismic, 200 kilometres of which shall be acquired in the transition zone and to drill two wells by the end of the initial work period ending October 2015.  147 km of the transition commitment was acquired in 2012.  In February 2015 the Tanzanian authorities agreed to the deferral of the two well drilling commitment into the four-year First Extension Period which will expire in October 2019.  The deferral is conditional on an Environmental Impact Assessment, which has already commenced, and the eventual acquisition of 3D seismic in the deep water sector of the licence, which will be subject to the completion of a tendering process.

(b)  On the Ruvuma PSA, Tanzania: the PSA has entered the second and final extension period.  In January 2014, a Variation Addendum to the PSA was signed so that the commitment to drill two exploration wells in the previous period could be incorporated into the current work period.  Four exploration wells are required to be drilled by the December 2016.  In addition to the exploration wells, an appraisal well is planned to be drilled in late 2015 as part of the appraisal work programme for the Ntorya Prospect.

17           Related party transactions

During the course of the year, the Group entered into the following related party transactions:  (a) consultancy fees were paid to Blixtra Limited, a company connected with Mr. J.C. Bhattacherjee amounting to US$54,000 (2013: US$ nil), (b) fees were paid to Storm Petroleum Limited, a company connected with Mr. D.S. Hooker, amounting to US$26,000 (2013: US$31,000),  (c) fees amounting to US$11,000 (2013: US$ nil) were paid to Upstream Solutions Limited, a company connected with Mr. T. Mackay,  (d) Corporate advisory fees of US$205,000 (2013: US$ nil) were paid to Edmond de Rothschild Securities (UK) Limited, of which Mr. A.N.J. Hay is a director, (e) consultancy fees were paid to Mr. W.A.P. Thompson amounting to US$74,000 (2013: US$ nil).

18           Post balance sheet events

In February 2015, Aminex completed the sale of 6.5% of the Kiliwani North Development Licence to Solo Oil plc ('Solo') for US$3.5 million.  Under the Asset Sale Agreement, Solo has an option to acquire a further 6.5% interest on the same terms within thirty days of the Kiliwani North Gas Sales Agreement being signed.

In March 2015, Aminex received confirmation that the Tanzanian authorities had agreed to the deferral of a two well drilling commitment on the Nyuni Area PSA, which was due to be completed by the end of October 2015, into the four-year First Extension Period which expires in October 2019.  The deferral is conditional on an Environmental Impact Assessment, which has already commenced, and eventually acquiring 3D seismic in the deep water which will be subject to completion of a tendering process.

19           2014 Annual Report and financial statements

The 2014 Annual Report and financial statements will be posted to shareholders shortly.

20           Statutory information

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2014 or 2013 within the meaning of the Companies (Amendment) Act, 1986.  The statutory accounts for 2014 will be finalised on the basis of the financial information presented by the Directors in the preliminary announcement and together with the independent auditor's report thereon will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  The statutory accounts for 2013, including an unqualified audit report thereon, were filed with the Registrar of Companies.

21           Estimates, key risks and uncertainties

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.  Key estimates and judgments related to the preparation of these financial statements relate to notes 7 (Exploration and evaluation assets), and 8 (Property, plant and equipment) and these were the same as those applied in the most recent published financial statements for the Group.  Principal risks and uncertainties affecting the Group relate to exploration and production risk, commodity and currency prices, finance risk relating to uncertain factors detailed in the basis of preparation relating to the Company as a going concern and other political risks particular to the countries in which we operate, as more fully described in the operations report, and in our most recent published financial statements.

22           Board approval

The Board of Directors approved the preliminary financial statements for the year ended 31 December 2014 on 14 April 2015. 

 

END

 

 

FR SFFEFDFISEEL