FUNDING IN PLACE TO EXECUTE, PERFORM AND GROW
Dublin and London - May 27, 2015 - Providence Resources P.l.c. (PVR LN, PRP ID), the Irish based Oil and Gas Exploration Company, today announces Preliminary Results for the year ended December 31, 2014.
Tony O'Reilly, Chief Executive Officer commented:
"2014 was a year of significant progress on a number of fronts for Providence despite a very challenging backdrop for the Oil and Gas industry. With the support of our existing shareholders and new investors, we have secured additional financing in recent months to allow us continue to execute our strategy. Providence remains focused on building on its diversified material exploration and appraisal portfolio offshore Ireland and will do so by continuing to leverage in partners with whom we can co-venture and who can help validate the prospectivity of our acreage."
2014 FINANCIAL HIGHLIGHTS
POST YEAR-END PROGRESS
BARRYROE FARM OUT UPDATE
In February, in response to media speculation, Providence confirmed that it had reached agreement on commercial terms with a proposed farminee on its Barryroe asset, offshore Ireland, with such farm in being subject to closing conditions, most specifically financing. The Company advises that the closing conditions referred to have yet to be satisfied and that it is seeking to clarify the status of those conditions and the proposed farminee's position. Shareholders are reminded that there is no certainty that a farm in will be concluded with the proposed farminee and that further announcements will be issued in due course, as appropriate. In the interim, as this was not an exclusive arrangement, Providence has continued commercial discussions in respect of its Barryroe asset with various counterparties, a number of whom are currently active in the data room process.
BOARD CHANGES
Having acted as Chairman since 1997, Dr. Brian Hillery has retired from the Board with effect from May 26, 2015. On behalf of our colleagues at Providence, we wish to extend our most sincere thanks to Brian for his leadership over the years. During his tenure, the Company has substantially grown its asset base to become the leading and most diversified operator offshore Ireland. We wish him well in his retirement. Mr. James S.D. McCarthy has accepted the Board's invitation to take up the role as Chairman with effect from May 26, 2015.
OUTLOOK
The industry backdrop remains challenging both at a macro level and specifically within our peer group. The current oil price environment has continued to hamper investment within our sector, but recent market dynamics have changed and the recent rise in oil prices, combined with increasing M&A activity, is a positive signal for the sector. In such an environment, Providence remains well-placed to deliver on its plans and we remain optimistic about the prospects both for the Company and the overall Irish Oil and Gas sector. We are determined to lead the industry in identifying and realising the significant potential that exists offshore Ireland.
NEXT REPORTING
Providence will next update the market at its AGM which is scheduled for June 26, 2015. The provisional date for the release of Interim Results for the period ending June 30, 2015 is September 29, 2015.
INVESTOR ENQUIRIES
Providence Resources P.l.c. | |
Tony O' Reilly, Chief Executive Officer | Tel: +353 1 219 4074 |
Dr. John O'Sullivan, Technical Director | Tel: +353 1 219 4074 |
Cenkos Securities Plc | Tel: +44 131 220 9771 |
Neil McDonald/Derrick Lee | |
J&E Davy | Tel: + 353 1 679 6363 |
Eugenee Mulhern/Antony Farrell | |
MEDIA ENQUIRES | |
Powerscourt | |
Lisa Kavanagh/Rob Greening | Tel: +44 207 250 1446 |
Murray Consultants | Tel: +353 1 498 0300 |
Pauline McAlester | |
ABOUT PROVIDENCE RESOURCES
Providence Resources is an Irish based Oil and Gas Exploration Company with a portfolio of appraisal and exploration assets located offshore Ireland and the UK. Providence's shares are quoted on the AIM in London and the ESM in Dublin.
TERMS USED IN THIS ANNOUNCEMENT
MMBO - Million Barrels of Oil MMBOE - Million Barrels of Oil Equivalent
BCF - Billion Cubic Feet of Gas BOPD - Barrels of Oil Per Day
AVO - Amplitude Variation with Offset
ANNOUNCEMENT
This announcement has been reviewed by Dr. John O'Sullivan, Technical Director, Providence Resources P.l.c.
John holds a B.Sc. in Geology from University College Cork, Ireland, a M.Sc. in Applied Geophysics from the National University of Ireland, Galway and a M.Sc. in Technology Management from The Smurfit School of Business at University College Dublin. John was recently awarded a PhD in Geology from Trinity College Dublin. John has worked in the offshore business for more than 25 years and is a fellow of the Geological Society of London and member of The Petroleum Exploration Society of Great Britain and Society of Petroleum Engineers. Definitions in this press release are consistent with SPE guidelines. SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in preparing this announcement.
PROVIDENCE RESOURCES P.l.c.
Condensed consolidated income statement
For the year ended 31 December 2014
Notes | Year ended 31 December 2014 Audited '000 | Year ended 31 December 2013 Audited '000 | |
Revenue - continuing operations | 1 | - | - |
Administration expenses | (6,119) | (6,484) | |
Pre-licence expenditure | (245) | (68) | |
Impairment of exploration, and evaluation assets | (99) | (678) | |
Operating loss | 1 | (6,463) | (7,230) |
Finance income | 39 | 180 | |
Finance expense | 3 | (5,065) | (713) |
Loss before income tax | (11,489) | (7,763) | |
Income tax expense | - | (5) | |
Loss for the year from continuing operations | (11,489) | (7,768) | |
Profit/(loss) from discontinued operations (net of income tax) | 2 | - | 4,971 |
Loss for the financial year | (11,489) | (2,797) | |
Loss per share (cent) - continuing operations | |||
Basic loss per share | 7 | (17.77) | (12.03) |
Diluted loss per share | 7 | (17.77) | (12.03) |
Earnings/(loss) per share (cent) - discontinued operations | |||
Basic earnings/(loss) per share | 7 | - | 7.70 |
Diluted profit/(loss) per share | 7 | - | 7.70 |
Loss per share (cent) - total | |||
Basic loss per share | 7 | (17.77) | (4.33) |
Diluted loss per share | 7 | (17.77) | (4.33) |
The total loss for the year is entirely attributable to equity holders of the Company.
PROVIDENCE RESOURCES P.l.c.
Condensed consolidated statement of comprehensive income
For the year ended 31 December 2014
Year ended 31 December 2014 Audited '000 | Year ended 31 December 2013 Audited '000 | |
Loss for the financial year | (11,489) | (2,797) |
Continuing operations | ||
OCI items that can be reclassified into profit and loss | ||
Foreign exchange translation differences | 2,257 | 1,426 |
Net change in fair value of cash flow hedges transferred to income statement | - | - |
Cashflow hedges - net fair value loss | - | - |
- related deferred tax | - | - |
Total income recognised in other comprehensive income from continuing operations | 2,257 | 1,426 |
Total comprehensive expense for the year | (9,232) | (1,371) |
The total comprehensive expense for the period is entirely attributable to equity holders of the Company.
PROVIDENCE RESOURCES P.l.c.
Condensed consolidated statement of financial position
As at 31 December 2014
Notes | 31 December 2014 Audited '000 | 31 December 2013 Audited '000 | |
Assets | |||
Exploration and evaluation assets | 4 | 89,733 | 80,089 |
Property, plant and equipment | 31 | 35 | |
Total non-current assets | 89,764 | 80,124 | |
_______ | _______ | ||
Trade and other receivables | 1,887 | 2,891 | |
Restricted cash | 3,296 | - | |
Cash and cash equivalents | 5,256 | 8,998 | |
Total current assets | 10,439 | 11,889 | |
_______ | _______ | ||
Total assets | 100,203 | 92,013 | |
Equity | |||
Share capital | 5 | 18,151 | 18,151 |
Capital conversion reserve fund | 623 | 623 | |
Share premium | 5 | 210,230 | 210,230 |
Foreign currency translation reserve | 4,643 | 2,386 | |
Share based payment reserve | 4,282 | 5,382 | |
Retained deficit | (176,339) | (165,950) | |
Total equity attributable to equity holders of the Company | 61,590 | 70,822 | |
Liabilities | |||
Decommissioning provision | 6,034 | 5,105 | |
Total non-current liabilities | 6,034 | 5,105 | |
Trade and other payables | 13,231 | 16,086 | |
Loans and borrowings | 6 | 19,348 | - |
Total current liabilities | 32,579 | 16,086 | |
Total liabilities | 38,613 | 21,191 | |
Total equity and liabilities | 100,203 | 92,013 |
PROVIDENCE RESOURCES P.l.c.
Condensed consolidated statement of changes in Equity
For the year ended 31 December 2014
Share Capital '000 | Capital Conversion Reserve Fund '000 | Share Premium '000 | Singleton Revaluation Reserve '000 | Foreign Currency Translation Reserve '000 | Share Based Payment Reserve '000 | Retained Deficit '000 | Total '000 | |
At 1 January 2013 | 18,136 | 623 | 209,975 | 2,471 | (3,752) | 4,942 | (164,297) | 68,098 |
Total comprehensive income | ||||||||
Loss for financial year | - | - | - | - | - | - | (2,797) | (2,797) |
Currency translation | - | - | - | - | 1,426 | - | - | 1,426 |
Cashflow hedge | - | - | - | - | - | - | - | - |
Total comprehensive income | - | - | - | - | 1,426 | - | (2,797) | (1,371) |
Transactions with owners, recorded directly in equity | ||||||||
Shares issued in year | - | - | - | - | - | - | - | - |
Share based payments | - | - | - | - | - | 1,584 | - | 1,584 |
Share options exercised in year | 15 | - | 255 | - | - | - | - | 270 |
Share options forfeited in year | - | - | - | - | - | (217) | 217 | - |
Reclassified to gain on disposal | - | - | - | (2,471) | 4,712 | - | - | 2,241 |
Share options lapsed in year | - | - | - | - | - | (927) | 927 | - |
At 31 December 2013 | 18,151 | 623 | 210,230 | - | 2,386 | 5,382 | (165,950) | 70,822 |
At 1 January 2014 | 18,151 | 623 | 210,230 | - | 2,386 | 5,382 | (165,950) | 70,822 |
Total comprehensive income | ||||||||
Loss for financial year | - | - | - | - | - | - | (11,489) | (11,489) |
Currency translation | - | - | - | - | 2,257 | - | - | 2,257 |
Cashflow hedge | - | - | - | - | - | - | - | - |
Total comprehensive income | - | - | - | - | 2,257 | - | (11,489) | (9,232) |
Transactions with owners, recorded directly in equity | ||||||||
Shares issued in year | - | - | - | - | - | - | - | - |
Share based payments | - | - | - | - | - | - | - | - |
Share options exercised in year | - | - | - | - | - | - | - | - |
Share options forfeited in year | - | - | - | - | - | - | - | |
Share options lapsed in year | - | - | - | - | - | (1,100) | 1,100 | - |
Reclassified to gain on disposal | - | - | - | - | - | - | - | - |
At 31 December 2014 | 18,151 | 623 | 210,230 | - | 4,643 | 4,282 | (176,339) | 61,590 |
PROVIDENCE RESOURCES P.l.c.
Condensed consolidated statement of cash flows
For the year ended 31 December 2014
Year ended 31 December 2014 | Year ended 31 December 2013 | |
Audited | Audited | |
'000 | '000 | |
Cash flows from operating activities | ||
Loss before income tax for year - continuing operations | (11,489) | (7,763) |
Profit/(loss) before income tax for the year - discontinued operations | - | 4,971 |
(11,489) | (2,792) | |
Adjustments for: | ||
Depletion and depreciation | 18 | 272 |
Gain on sale of discontinued operations | - | (6,096) |
Abandonment provision | - | (379) |
Impairment of exploration and evaluation assets | 99 | 678 |
Finance income | (39) | (180) |
Finance expense | 5,065 | 3,455 |
Equity settled share based payment charge | - | 1,584 |
Foreign exchange | (441) | 101 |
Change in trade and other receivables | 1,004 | 2,907 |
Change in trade and other payables | (2,855) | (8,869) |
Interest paid | (1,350) | (363) |
Hedge repayments | - | (33) |
Net cash outflow from operating activities | (9,988) | (9,715) |
Cash flows from investing activities | ||
Interest received | 39 | 180 |
Acquisition of exploration and evaluation assets | (8,221) | (13,691) |
Acquisition of development and production assets | - | - |
Acquisition of property, plant and equipment | (14) | (14) |
Disposal of development and production assets - AJE | - | - |
Change in restricted cash | (3,296) | 910 |
Disposal of development and production assets - Singleton | - | 16,235 |
Net cash from investing activities | (11,492) | 3,620 |
Cash flows from financing activities | ||
Proceeds from issue of share capital | - | 270 |
Share capital issue costs | - | - |
Repayment of loans and borrowings | - | (1,565) |
Proceeds from drawdown of loans and borrowings | 16,699 | - |
Net cash from financing activities | 16,699 | (1,295) |
Net decrease in cash and cash equivalents | (4,781) | (7,390) |
Cash and cash equivalents at 1 January | 8,998 | 16,831 |
Effect of exchange rate fluctuations on cash and cash equivalents | 1,039 | (443) |
Cash and cash equivalents at 31 December | 5,256 | 8,998 |
Basis of preparation
The consolidated preliminary financial results announcement of the Company, for the year ended 31 December 2014 comprises of the Company and its subsidiaries (together referred to as the "Group").
The financial information included in this preliminary financial results announcement, has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU IFRS) which comprises standards and interpretations approved by the International Accounting Standards Board (IASB).
The consolidated preliminary financial information presented herein does not constitute the Company's statutory financial statements for the years ended 31 December 2014, with the meaning of Regulation 40(1) of the European Communities (Companies: Group Accounts) Regulations, 1992 of Ireland, insofar as such Group accounts would have to comply with disclosure and other requirements to those Regulations. The statutory financial statements for the year ended 31 December 2014, together with the independent auditor's report thereon, will be filed with the Irish Registrar of Companies following the Company's Annual General Meeting and will also be available on the Company's website www.providenceresources.com. The consolidated financial statements were approved by the Board of Directors on 26 May 2015.
The preparation of the condensed consolidated preliminary financial information requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results could differ materially from these estimates. In preparing this financial information, the significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty are the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2013.
The accounting policies applied in the condensed consolidated preliminary financial information are the same as those applied in the consolidated financial statements as at and for the year ended 31 December 2013, as set out on pages 25 to 31 of the 2013 Annual Report. There were no new standards or amendments to standards which were mandatory for the first time for the financial year beginning 1 January 2014 which had a significant impact on the financial information.
PROVIDENCE RESOURCES P.l.c.
Note 1
Operating segments
All revenue is generated from assets in the UK, and is included in discontinued operations.
Year ended 31 December 2014 | Year ended 31 December 2013 | |
Audited | Audited | |
'000 | '000 | |
Segment net loss for the period | ||
Republic of Ireland - exploration assets | (99) | (678) |
Corporate expenses | (6,364) | (6,552) |
Operating loss | (6,463) | (7,230) |
Segment assets | ||
UK - exploration assets | 1,799 | 1,141 |
Republic of Ireland - exploration assets | 89,908 | 78,948 |
US | 30 | 189 |
Group assets | 8,466 | 11,735 |
Total assets | 100,203 | 92,013 |
Segment Liabilities | ||
UK - exploration assets | (37) | (74) |
Republic of Ireland - exploration assets | (16,176) | (21,047) |
US - liabilities | - | (7) |
Group liabilities | (22,400) | (63) |
Total Liabilities | (38,613) | (21,191) |
Capital Expenditure | ||
UK - exploration assets | 417 | 367 |
Republic of Ireland - exploration assets | 7,804 | 13,324 |
Republic of Ireland - property, plant and equipment | 14 | 14 |
Total capital expenditure, net of cash calls | 8,235 | 13,705 |
Impairment charge | ||
Republic of Ireland - exploration assets | 97 | 678 |
UK - exploration assets | 2 | - |
99 | 678 |
PROVIDENCE RESOURCES P.l.c.
Note 2
Discontinued Operations
Held for sale assets and liabilities
UK disposal - 28th February 2013.
2014 | 2013 | |
Audited | Audited | |
Assets | '000 | '000 |
Development and production assets | - | 39,637 |
Derivative instruments | - | 1,411 |
Trade and other receivables | - | 1,779 |
Cash and cash equivalents | - | 1,425 |
- | 44,252 | |
Liabilities | ||
Loans and borrowings | - | 31,918 |
Decommissioning provision | - | 822 |
Deferred tax | - | 1,733 |
Trade and other payables | - | 1,881 |
- | 36,354 | |
Gain on sale of discontinued operations - UK disposal
'000 | |
Net proceeds received | 17,028 |
Disposal costs | (793) |
16,235 | |
Net assets disposed of | 7,898 |
Transfer from revaluation reserve | (2,471) |
Transfer from FCTR | 4,712 |
10,139 | |
Gain on sale of discontinued operation | 6,096 |
PROVIDENCE RESOURCES P.l.c.
Note 2
Discontinued Operations - continued
The gain on sale of discontinued operations - UK disposal
Year ended 31 December 2014 | Year ended 31 December 2013 | |
Audited | Audited | |
'000 | '000 | |
Results of discontinued operations | ||
Revenue | - | 2,411 |
Cost of sales | - | (615) |
Gross profit | - | 1,796 |
Administration expenses | - | (179) |
Impairment of assets | - | - |
Results from operating activities | - | 1,617 |
Finance expense | - | (2,742) |
Results from operating activities before tax | - | (1,125) |
Income tax credit/(charge) | - | - |
Results from operating activities after tax | - | (1,125) |
Gain on sale of discontinued operations | - | 6,096 |
Profit / (loss) for the year | - | 4,971 |
Cashflows from discontinued operations | ||
Net cash from operating activities | - | 1,772 |
Net cash from investing activities | - | - |
Net cash from financing activities | - | (1,565) |
Net cash flows for the year | - | 207 |
The profit/(loss) from discontinued operations is attributable entirely to the owners of the company. The results for 2013 represent two months of activity.
Earnings per share from discontinued operations
2014 | 2013 | |
cent | cent | |
Basic earnings / (loss) per share | - | 7.70 |
Diluted earnings / (loss) per share | - | 7.70 |
PROVIDENCE RESOURCES P.l.c.
Note 3
Finance Expense
Year ended 31 December 2014 | Year ended 31 December 2013 | |
Audited | Audited | |
'000 | '000 | |
Recognised in income statement: | ||
Amortisation of arrangement fees and other amounts | 516 | - |
Unwinding of discount on decommissioning provision | 929 | 713 |
Interest Charge | 1,467 | - |
Foreign exchange loss on revaluation of loan, net | 2,153 | - |
Total finance expense recognised in income statement | 5,065 | 713 |
Recognised directly in other comprehensive income | ||
Foreign currency differences on foreign operations | 2,257 | 6,138 |
Reclassified to gain on disposal | - | (4,172) |
Net change in fair value of cashflow hedge transferred to income statement | - | - |
Total finance expense recognised in comprehensive income | 2,257 | 1,426 |
Note 4
Exploration and evaluation assets
Republic of Ireland | UK | Total | |
'000 | '000 | '000 | |
Cost and book value | |||
At 1 January 2013 | 66,302 | 774 | 67,076 |
Additions | 13,006 | 127 | 13,133 |
Administration expenses | 1,517 | 240 | 1,757 |
Cash calls received in year | (1,199) | - | (1,199) |
Impairment charge | (678) | - | (678) |
At 31 December 2013 | 78,948 | 1,141 | 80,089 |
At 31 December 2013 | 78,948 | 1,141 | 80,089 |
Additions | 6,815 | 367 | 7,182 |
Cash calls received in year | (750) | - | (750) |
Administration expenses | 1,739 | 50 | 1,789 |
Impairment charge | (97) | (2) | (99) |
Foreign exchange translation | 1,440 | 82 | 1,522 |
At 31 December 2014 | 88,095 | 1,638 | 89,733 |
PROVIDENCE RESOURCES P.l.c.
Note 5
Share Capital and Share Premium
Number | |||
Authorised: | '000 | '000 | |
At 1 January and 31 December 2012 | |||
Deferred shares of 0.011 each | 1,062,442 | 11,687 | |
Ordinary shares of 0.10 each | 123,131 | 12,313 | |
Number | Share Capital | Share Premium | |
Issued: | 000's | '000 | '000 |
Deferred shares of 0.011 each | 1,062,442 | 12,750 | 5,691 |
Ordinary share of 0.10 each | 49,809 | 5,386 | 204,284 |
At 1 January 2013 | 64,498 | 18,136 | 209,975 |
Share options exercised in year | 151 | 15 | 255 |
At 31 December 2013 | 64,649 | 18,151 | 210,230 |
At 31 December 2014 | 64,649 | 18,151 | 210,230 |
Note 6
Loans and Borrowings
Melody loan facility | Melody loan fees | Total | |
'000 | '000 | '000 | |
Repaid during year | - | - | - |
Drawn down in year | 17,572 | (873) | 16,699 |
Written off to income statement | - | 496 | 496 |
Foreign exchange difference | 2,155 | (2) | 2,153 |
At 31 December 2014 | 19,727 | (379) | 19,348 |
PROVIDENCE RESOURCES P.l.c.
Note 7
Earnings per share
31 December 2014 | 31 December 2014 | 31 December 2014 | 31 December 2013 | 31 December 2013 | 31 December 2013 | |
Audited | Audited | Audited | Audited | Audited | Audited | |
Continuing operations | Discontinued operations | Total | Continuing operations | Discontinued operations | Total | |
(Loss) / profit attributable to equity holders of the company from continuing operations ('000) | (11,489) | - | (11,489) | (7,768) | 4,971 | (2,797) |
The basic weighted average number of ordinary shares in issue | ||||||
In issue at beginning of year ('000s) | 64,649 | 64,649 | 64,649 | 64,498 | 64,498 | 64,498 |
Adjustment for shares issued in year ('000s) | - | - | - | 64 | 64 | 64 |
Weighted average number of ordinary shares ('000s) | 64,649 | 64,649 | 64,649 | 64,562 | 64,562 | 64,562 |
Basic and diluted (loss) / earnings per share (cent) | (17.77) | - | (17.77) | (12.03) | 7.70 | (4.33) |
There is no difference between the loss per ordinary share and the diluted loss per ordinary share for the current period as all potentially dilutive ordinary shares outstanding are anti-dilutive.
PROVIDENCE RESOURCES P.l.c.
Note 8
Related party transactions
(a) Mr. Tony O'Reilly, has, through Kildare Consulting Limited, a company beneficially owned by him, a contract for the provision of service to the company outside the Republic of Ireland effective 1 September 2013. The amount paid under the contract in the year ended 31 December 2014 was 446,775. The contract was renewed in May 2015. It is of two years duration and is subject to one year's notice period.
Note 9
Commitments
The Group has capital commitments of approximately 8.1m to contribute to its share of costs of exploration and evaluation activities during 2015.