GRAND CAYMAN, CAYMAN ISLANDS, Aug 14, 2015 (Marketwired via COMTEX) — Tethys Petroleum Limited (TPL)(TPL) today announced its Results for the quarter ended June 30, 2015.
Q2 Financial Highlights (all figures reported in USD millions)
- Oil and gas revenue of USD6.8m (2014: USD7.1m)
- Gas revenue increased 137% to USD4.8m (2014: USD2.0m)
- Production expenses USD4.2m (2014: USD3.2m)
- G&A expenses down 39% to USD3.1m (2014: USD5.0m)
- EBITDA adjusted for share based payments(i) of negative USD4.4m (2014 USD2.5m)
- Loss for the period from continuing operations – USD25.3m – including: depletion of properties re-classified from Assets Held For Sale of USD19.4m (non-cash) and restructuring and transaction expenses of USD2.6m (2014: USD0.1m)
- Basic & diluted loss per share from continuing operations – USD0.08 (2014: USD0.01)
- Capital expenditure of USD4.0m (2014: USD2.5m)
- Cash and cash equivalents of USD4.9m (2014: USD11.6m)
(i) Non GAAP measure
Q2 Operational Highlights
- Total gas production up 77% to 3,250 barrels of oil equivalent (“BOE”)/day (2014: 1,839 BOE/day)
- Highest quarterly gas production in 3 years (since Q1 2012)
- Total Production up 21% to 5,204 BOE/day (2014: 4,312 BOE/day)
Q2 Corporate Highlights
- Non-completion of the SinoHan transaction resulting in the re-classification of Kazakh assets and liabilities from Assets Held For Sale
- USD9.3m convertible loan financings
- Announcement of intention to close Guernsey office
Post Q2 Highlights
- A strategic review of the business which encompasses options including asset sales, farm-outs, financing, investments at the corporate level, or the sale of the Company is continuing to be conducted
- Discussions have been ongoing with a number of interested parties on these potential avenues, subject to any agreed exclusivity or non-solicitation provisions
- USD5.0m convertible loan facility secured on August 10, 2015 with Nostrum Oil & Gas PLC (“Nostrum”)
- Tethys has entered into a limited period of exclusivity with Nostrum with respect to a possible offer received from Nostrum for the entire issued and to be issued share capital of the Company. The exclusivity period runs through to August 24, 2015 and is subject to certain customary exceptions
- Akkulka Production Contract (gas) Mining Allotment was expanded by 363% to 396.2 km2 (97,901 acres) from surface to the base of the Paleogene interval, effective July 10, 2015
- Current average Q3 production to date is 4,972 BOE/day comprising 1,795 bopd of oil and 539 Mcm/d (19.06 MMcf/d) of sales gas.
- Current average production to date in August is 4,494 BOE/day
John Bell, Executive Chairman, commented:
“The turnaround is now well underway, some of which is reflected in these financial results. I am encouraged by the performance of the gas division and the cost reductions achieved at Group level. The strategic review is ongoing, and the team is working hard to both conclude the strategic review process and continue to improve the operations.”
The full Quarterly Results together with Management’s Discussion and Analysis have been filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on the Tethys website at www.tethyspetroleum.com. The summary financial statements are attached to this press release.
The Company’s Second Quarter 2015 financial statements are prepared under International Financial Reporting Standards (“IFRS”).
Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian Region. This highly prolific oil and gas area is rapidly developing and Tethys believes that significant potential exists in both exploration and in discovered deposits.
This press release contains “forward-looking information”. Such forward-looking statements reflect our current views with respect to future events, including with respect to a strategic review process and any related discussions with parties, a possible offer from Nostrum and the existence of significant potential in both exploration and in discovered deposits in Central Asia and the Caspian Region and the rapid development of this oil and gas area. The forward-looking statements are based on the assumption that significant potential exists in both exploration and in discovered deposits in Central Asia and the Caspian Region and that this oil and gas area continues to rapidly develop. These forward-looking statements are subject to a number of risks and uncertainties, including the risk that the strategic review process is unsuccessful, the possible offer from Nostrum not proceeding and that significant potential in both exploration and in discovered deposits do not exist in Central Asia and the Caspian Region and that this oil and gas area does not continue to rapidly develop. See our Annual Information Form for the year ended December 31, 2014 for a description of risks and uncertainties relevant to our business, including our exploration activities. The “forward looking statements” contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.
There are numerous uncertainties inherent in estimating quantities of resources and cash flows that may be derived, including many factors that are beyond the control of the Company. The following is a non-exhaustive list of factors which may have a significant impact on the above estimates of prospective resources: despite the classification that they are as yet undiscovered but may be potentially recoverable the Company may be unable to carry out the development or their potential recovery; the activity may not be economically viable; the Company may not have sufficient capital or time to develop them; there may be no market or transportation routes for the potential production; legal, contractual, environmental and governmental concerns might not allow for the recovery being undertaken; reservoir characteristics might prevent recovery. The recovery of the resources is subject to the following risks and uncertainties: market fluctuations, the proximity and capacity of oil and gas pipelines and processing equipment, government regulation, political issues, export issues, competing suppliers, operational issues (exploration, production, pricing, marketing and transportation), extensive controls and regulations imposed by various levels of government, lack of capital or income, the ability to drill productive wells at acceptable costs, the uncertainty of drilling operations, factors such as delays, accidents, adverse weather conditions, and the availability of drilling rigs and the delivery of equipment.
Tethys Petroleum Limited Consolidated Statement of Financial Position (unaudited) (in thousands of US dollars) As at June 30, December 31, 2015 2014 Non-current assets Intangible assets 80,793 47,630 Property, plant and equipment 119,724 13,804 Restricted cash 2,116 623 Investments in joint arrangements 19 4 Trade and other receivables 5,033 - Deferred tax - 258 207,685 62,319 Current assets Cash and cash equivalents 4,942 3,112 Trade and other receivables 9,189 634 Loans to joint arrangements 2,456 - Inventories 1,055 - Restricted cash 697 116 Assets of a disposal group classified as held for sale - 172,514 18,339 176,376 Total assets 226,024 238,695 Equity Share capital 33,671 33,645 Share premium 321,764 321,724 Other reserves 43,043 42,845 Accumulated deficit (225,946) (198,560) Non-controlling interest 6,093 6,096 Total equity 178,625 205,750 Non-current liabilities Trade and other payables 176 - Financial liabilities - borrowings 20,735 5,489 Provisions 984 - Deferred tax 1,302 - 23,197 5,489 Current liabilities Financial liabilities - borrowings 5,984 5,139 Derivative financial instruments 3,668 - Current taxation 311 364 Trade and other payables 12,539 4,102 Provisions 1,700 1,759 Liabilities of a disposal group classified as held for sale - 16,092 24,202 27,456 Total liabilities 47,399 32,945 Total equity and liabilities 226,024 238,695 Tethys Petroleum Limited Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in thousands of US dollars except per share information) Three months ended Six months ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 Sales and other revenues 6,838 7,123 12,792 13,904 Sales expenses (1,279) (498) (2,381) (1,242) Production expenses (4,159) (3,214) (6,767) (7,012) Depreciation, depletion and amortisation (20,614) (148) (21,288) (299) Business development expenses - (580) - (1,320) Administrative expenses (3,103) (5,082) (5,924) (10,207) Restructuring costs (1,613) - (1,932) - Transaction costs of assets held for sale (945) (116) (1,065) (131) Share based payments (118) (77) (265) (196) Profit on sale of fixed assets 29 - 43 - Foreign exchange loss (208) (77) (215) (70) Fair value (loss)/gain on derivative financial instrument (1,547) 36 (469) 17 Profit/(loss) from jointly controlled entity 15 (65) (235) (1,268) Finance costs (1,949) (382) (2,527) (985) Loss before taxation from continuing operations (28,653) (3,080) (30,233) (8,809) Taxation 3,375 (588) 2,921 732 Loss for the period from continuing operations (25,278) (3,668) (27,312) (8,077) Loss for the period from discontinued operations net of tax (36) (153) (77) (645) Loss and total comprehensive income for the period (25,314) (3,821) (27,389) (8,722) Loss and total comprehensive income attributable to: Shareholders (25,313) (3,675) (27,386) (8,524) Non-controlling interest (1) (146) (3) (198) Loss and total comprehensive income for the period (25,314) (3,821) (27,389) (8,722) Loss per share attributable to shareholders: Basic and diluted - from continuing operations (USD) (0.08) (0.01) (0.08) (0.03) Basic and diluted - from discontinued operations (USD) - - - - Tethys Petroleum Limited Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands of US dollars) Three months ended Six months ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 Cash flow from operating activities Loss before taxation from continuing operations (28,653) (3,080) (30,233) (8,809) Loss before tax from discontinued operations (36) (155) (77) (647) Adjustments for Share based payments 118 77 265 196 Net finance cost 1,949 386 2,527 985 Depreciation, depletion and amortization 20,614 148 21,288 299 Profit on sale of fixed assets (29) - (43) - Fair value gain on derivative financial instruments 1,547 (36) 469 (17) Net unrealised foreign exchange loss 147 72 26 83 (Profit)/loss from jointly controlled entity (15) 65 235 1,268 Movement in provisions (1,197) (178) (1,990) (320) Net change in working capital 1,474 (639) 2,115 (548) Cash used in operating activities (4,081) (3,340) (5,418) (7,510) Corporation tax paid (4) (10) (134) (148) Net cash used in operating activities (4,085) (3,350) (5,552) (7,658) Cash flow from investing activities Interest received 46 48 91 98 Expenditure on exploration and evaluation assets (2,737) (1,349) (3,942) (4,566) Expenditures on property, plant and equipment (1,297) (3,486) (2,039) (7,535) Proceeds from sale of fixed assets 113 - 113 - Transfer to restricted cash (147) (460) (151) (460) Movement in advances to construction contractors 99 (2,681) 190 (1,728) Movement in value added tax receivable 368 177 719 (93) Net change in working capital 605 554 (1,522) 812 Net cash used in investing activities (2,950) (7,197) (6,541) (13,472) Cash flow from financing activities Proceeds from issuance of borrowings, net of issue costs 9,100 1,013 18,235 7,720 Repayment of borrowings (4,198) (1,062) (4,665) (7,091) Interest paid on borrowings (554) (440) (908) (923) Proceeds from issuance of equity - 14,947 - 14,947 Share issue costs - (1,198) - (1,246) Payment of other liabilities (27) (27) (56) (99) Net cash generated from financing activities 4,321 13,233 12,606 13,308 Effects of exchange rate changes on cash and cash equivalents 669 (333) 561 (231) Net (decrease)/increase in cash and cash equivalents (2,045) 2,353 1,074 (8,053) Cash and cash equivalents at beginning of the period 6,987 15,325 3,868 25,731 Cash and cash equivalents at end of the period 4,942 17,678 4,942 17,678 Cash and cash equivalents at end of the period comprises: Cash in assets of a disposal group held for sale - 6,036 - 6,036 Cash and cash equivalents 4,942 11,642 4,942 11,642 4,942 17,678 4,942 17,678
John Bell, Executive Chairman c/o Camarco
CAMARCO (Financial PR)
Billy Clegg / Georgia Mann
+44(0)203 757 4983