Quarterly Report • Nov 28, 2014
Quarterly Report
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Outlook(
15 Principal(Risks(and(Uncertainties
Statement(of(Responsibility
16E26 Financial(Reports
Three%significant%discoveries% announced%in%acreage%adjacent%to% African%Petroleum%Corporation,% two%of%which%have%stated%>1bnbbls of%oil%in%place
African( Petroleum( Corporation( Limited( ("African( Petroleum( Corporation"( or( the "Company")( is( an( independent(oil(and(gas(exploration(company(with( ten(licences(in( five( countries( offshore(West(Africa( (Côte( d'Ivoire,( Liberia,( Senegal,( Sierra( Leone( and( The(Gambia).((The(Company's(assets(are(located(in( fastEemerging( hydrocarbon( basins,( principally( the( West( African( Transform( Margin,( where( several( discoveries( have( been( made( in( recent( years,( including( three( significant( discoveries( during( 2014( by( Total( in( Côte( d'Ivoire( and( Cairn( Energy( in( Senegal.
African( Petroleum( Corporation( has( a( real( opportunity( to( become( a( leading( independent( exploration( company( through( its( highly( prospective(acreage(offshore(West(Africa.((
The( Company( continues( to( achieve( key( operational( milestones( across( its( eight( licences,( having( rapidly( matured( its( exploration( portfolio( by(acquiring(more( than( 16,000km2(of( 3D(seismic( data( and( drilling( three( exploration( wells,( one( of( which(was(a(discovery.((
African( Petroleum( Corporation(is( the( largest( net( acreage( holder( in( the( West( African( Transform( Margin,( rivaling( industry( majors( such( as,( Anadarko( Petroleum,( Chevron( Corporation,( Exxon Mobil,(Total,(ENI(and(Lukoil.((The(Company( has( mean( prospective( oil( resources( in( excess( of( 5.2( billion( barrels,( further( highlighting( the( scale( of(its(presence(in(the(region.!!
It%has%been%a%year%of%progress%for%African%Petroleum%Corporation%as%we%continue% to%build%our%reputation%as%a%fast%moving%explorer%in%both%emerging%and%frontier% basins.%%Having%already%achieved%a%number%of%significant%milestones%set%out%in% the% strategic% objectives% for% 2014,% the% Company's% focus% is% to% secure% longGterm% partners% before% the% end% of% the% year,% and% to% finalise% a% drilling% programme% for% 2015.!!
The% Company's% acreage% has%been% significantly%deGrisked%in% recent%months,%with%Total's% discovery%in% Côte%d'Ivoire%and%Cairn%Energy's%two%discoveries%in%Senegal.%%African%Petroleum%Corporation%is%a%very% strong%position%going%forward.%%Equally,%we%remain%excited%by%the%potential%in%both%Liberia%and%Sierra% Leone,%and%are%very%happy%to%return%to%The%Gambia.%%Such%moves%will%be%an%important%step%towards% our%goal%to%deliver%optimum%value%and%return%to%our%stakeholders.
As( previously( announced,( African( Petroleum( Corporation(is(seeking(strategic(partners(on(its( eight(licences(in(Côte(d'Ivoire,(Liberia,(Senegal( and( Sierra( Leone( in( order( to( share( risk( and( potential(reward(of(the(Company's(exploration( programme.((
On( 14( July( 2014,( African( Petroleum( Corporation( announced( that( it( had( entered( into( an( agreement( with( Buried( Hill( Africa( Limited( ("Buried( Hill")( to( farmEout( a( 10%( interest( in( Block( CIE509( offshore( Côte( d'Ivoire( in( return( for( Buried( Hill( funding( 21.1%( of( the( cost( of( the( next( exploration(well( to( be( drilled( on( Block( CIE509( and( an( additional( cash( payment( to( African( Petroleum( Corporation( representing( 10%( of( past( costs( incurred.(( Under( the( terms( of( the( farmEout( agreement,( African(Petroleum(Corporation(will(continue(as( Operator(on(the(licence(and(completion(of(the( farmEout( agreement( is( subject( to( the( satisfaction( or( waiving( of( certain( conditions( precedent.
The( Company( is( pleased( to( have( secured( an( initial( farmEin( on( Block( CIE509.( ( ( In( addition,( significant( progress( has( been( made( on( attracting( additional( farmEout( offers.( ( In( particular,( the( Company( has( received( a( high( level(of(interest(in(its(Côte(d'Ivoire,(Liberia(and( Senegal( licences( from( a( number( of( international( companies( and( industry( majors.(( A( number( of( factors( have( led( to( a( significant
increase( in( interest( in( the( Company's( licences,( primarily,(the(oil(discoveries(made(by(Total(in(Côte( d'Ivoire( and( the( two( Cairn( Energy( discoveries( in( Senegal.( ( The( Company( expects( this( heightened( interest( to( culminate( in( further( farmEin( offers( in( due(course.(((
During( the( period( the( Company( announced( that( NonEExecutive( Director( Mr( James( Smith( had( stepped( down from( the(Board( of(Directors,( taking( effect( from( 1(August( 2014.(( The( Company( further( announced( that(Mr(Mark( Ashurst( is( assuming( the( position( of( NonEExecutive( Director( of( the( Board,( stepping(down(from(his(role(as(Executive(Director.((
On(13(August(2014,(the(Company(announced(that(it(had(signed(agreements(with(International(Petroleum( Limited(("IOP")(regarding(the(conversion(of(US\$13(million(owed(by(IOP(to(the(Company(into(fully(paid(IOP( ordinary( shares.( ( Following( the( loan( conversion,( African( Petroleum( Corporation( holds( 233,890,450( ordinary(shares(in(IOP((representing(a(holding(of(approximately(14%)(and(5(million(share(options(with(an( exercise(price(of(AU\$0.06(per(share.
IOP( owns( and( operates( 4( blocks( in( Niger( onshore( covering( over( 70,000km2 with( a( modest( work( programme(of(4(wells,(seismic(and(FTG.((IOP is(listed(on(the(National(Stock(Exchange(of(Australia(and(had( a(market(capitalisation(of(A\$71(million(prior(to(suspension(of(trading(in(2013.
During(September(2014,(four(of(the(Company's(Board(of(Directors(purchased(on(market((OAX)(a(total(of( 750,000(ordinary(shares(in(the(Company.((
On( 26(August(2014,(African(Petroleum( Corporation(commenced( the(acquisition( of(approximately( 1,000( sq( km( of( 3D( seismic( data( over( offshore( licence( SLE4AE10,( Sierra( Leone.( ( The( 3D( seismic( survey( was( undertaken(by(TGS(using(the(Polarcus('Alima'(and(was(completed(in(September(2014.((An(initial(version( of(the(data(was(made(available(for(interpretation(in(November(2014.(
In( addition,( in( September( 2014( the( Company( signed( an( agreement( with( Electromagnetic( Geoservices( ("EMGS")( to(acquire(a( nonEexclusive(electro(magnetic( survey( over( the(Company's(Sierra( Leone(acreage( (SLE03(and(SLE4AE10).((African(Petroleum(Corporation(believes(many(of(the(outboard opportunities(in(the( acreage(can(be(derisked( further(with( this(technology,( the( thicker(nature(of( the(sands,(shallower(subsea( depths(and( the(absence( of(salt(and(carbonates(are(expected( to(create( fewer( false(anomalies( using( this( technology.((The(acquisition is(anticipated(to(commence(in(H1(2015.((
In( preparation( for( the( Company's( Côte( d'Ivoire( drilling( campaign,( anticipated( to( commence( in( 2015 (subject(to(finance),(the(Company(signed(a(contract(with(DrillQuip((Europe)(Limited(to(provide(two(SSE15( wellheads.( ( The( purchase( of( these( wellheads( is( a( positive( step( for( the( Company( and( a( move( towards( initiating(the(drilling(campaign(in(African(Petroleum(Corporation's(acreage(in(Côte(d'Ivoire.(The(Company( is(in(discussions(with(a(number(of(drilling(contractors(in(advance(of(securing(a(rig,(with(a(visible(softening( in(the(rig(market,(African(Petroleum(Corporation(is(in(a(strong(position(to(accelerate(activity(and(drill(at(a( markedly(cheaper(day(rate(than(seen(historically.((((
Subsequent(to(quarter(end,(an(Environmental(Impact(Assessment(has(been(tendered(and(initiated(for(the( drill(activity(anticipated(to(commence(in(Côte(d'Ivoire(in(Q4(2015.((
Subsequent( to(quarter(end,(on(28(November 2014 the(Company(announced(that(it(had(entered(into(an( agreement(with(The(Government(of(the(Republic(of(The(Gambia(to(reinstate(the(Company's(Alhamdulilah( Licence(Block(A1(and(Licence(Block(A4((the("Gambian(Licences"),(and(settle(all(prior(issues(concerning(the( Gambian Licences.((
The(reinstatement(of(the(Gambian(Licences(is(a(significant(and(positive(step(for(the(Company,(particularly( following(the(recent(oil(discoveries(made(by(Cairn(in(Senegal.
African(Petroleum(Corporation(has(also(agreed( to(a(revised(initial(exploration(period( that(will(expire(on((( 1( September( 2016( in( return( for( a( commitment( to( drill( an( exploration( well( on( one( of( the( Gambian Licences(and(reprocess(3D(seismic(on(Licence(Block(A4(prior(to(1(September(2016.
The(Company(has(contracted(ERC(Equipoise,( the(independent(Reservoir(Evaluation(company,( to(update( African( Petroleum( Corporation's( CPR.( ( The( updated( CPR,( anticipated( for( release( in( January( 2015,( will( incorporate(new(reprocessed(data(on(African(Petroleum(Corporation's(Senegal(licence(Rufisque(Offshore( Profond( and( integrate( well( results( of( recent( nearby( discoveries.( ( In( the( updated( CPR,( the( Company( expects( to( see( portfolio( updates( completed( for( Liberia,( Côte( d'Ivoire( and( Sierra( Leone,( and( with( the( recent(reinstated(Gambia(licence(blocks(further(volumes(will(also(be(added(to(the(portfolio.((((
In(April( 2014,(Total(announced(a( discovery( of( hydrocarbons(in(its(SaphirE1XB(exploration(well( block( CIE 514,(which(is(adjacent(to(African(Petroleum(Corporation's(acreage.((Total(reported(a(total(of(40(metres(of( net( oil( pay(and( 34°(API(light( oil.(This( discovery( is( significant( for( the( Company's(acreage(as(it( proves( oil( charge,(the(earlier(preEdrill(principal(risk(for(the(area.
In(Côte(d'Ivoire,(African(Petroleum(Corporation(holds(a(90%(working(interest(in(offshore(licences(CIE509( and( CIE513( (the( "CI( Licences"),( the( remaining(10%(is( held( by(Petroci,( the(National(Oil(Company(of( Côte( d'Ivoire.( The( Company( was( awarded( CIE513( in( December( 2011( and( CIE509( in( March( 2012,( with( a( combined(net(acreage(of(2,284km2 .(In(October(2012,(the(Company(acquired(4,200km2 of(3D(seismic(data( over( the( CI( Licences,( fulfilling( the( seismic( work( commitments( of( the( first( exploration( phase( for( both( licences.(
FastEtrack(3D(seismic(data(was(received(in(November(2012,(while(final(3D(seismic(depth(processing(of(the( entire( survey( was( completed( in( March( 2014.( Interpretation( of( the( data( has( identified( a( number( of( significant(prospects,(with(net(unrisked(mean(prospective(oil(resources(of(1,560(MMstb( (ERC(Equipoise,( CPR(2014),(
These(numbers(will(be(updated(and(upgraded(in(the(new(CPR((expected(for(release(Q1(2015)(as(the(new( seismic(volume( and( recent( Total( discovery( has( changed( the(view( on( this( portfolio( significantly.( (On( 22( April(2014(African(Petroleum( Corporation(announced( PSC(Amendments( to( both(licences( CIE509(and(CIE 513.(The(PSC(Amendments(include(an(adjustment(of(the(licence(periods(providing(oneEyear(extensions(to( the(first(exploration(periods(of(both(licences(at(the(expense(of(the(duration(of(future(exploration(periods.(
The(PSC(adjustment(allows( the(Company(more( time( for(drilling(of( the( first(period(commitment(wells(in( these(blocks.(The(first(exploration(period(for(block(CIE509(is(extended(to(March(2016(and(block(CIE513(has( been(extended(to(December(2015.(
The( Company( intends( to( use( some( of( this( additional( time( to( integrate( recently( completed( 3D( seismic( depth( processing( into( the( optimisation( of( exploration(well(locations(as(many(new( amplitude( supported( prospects( have( now( arisen( from( the( newly( processed( PSDM( 3D( data( on( trend( with( the( SaphirE1XB(Total(oil(discovery.(
The( new( PSDM( can( now( be( better( calibrated( to( the( recent( results( of( Total's( oil( discovery( in( CIE514,( as( African(Petroleum(Corporation(had(preE traded( the(3D(covering( both(Total's(CIE
514( operated( acreage( and( the( acreage( immediately(north( of( CIE513(and( CIE509( held( by( the( Vitol( operated( group.( The( CPR( will( be( updated( with( the( incorporation( of( the( new( interpretation(of(the(newly(processed(PSDM.
The( Company(also(intends( to(use( the(additional( time( from( the( licence( extensions( to( secure( the( appropriate( sixth( generation( rig( for( a( wider( drilling( programme,( and( build( a( partnership( group( to( explore( in( the( promising( area( of( the( Côte( d'Ivoire( deepEwater( margin.( African( Petroleum( Corporation( continues( to( seek( strategic(partners(in(its(Côte(d'Ivoire(acreage.(
As( announced( on( 14( July( 2014,( the( Company( entered( into( an( agreement( with( Buried( Hill( Africa(Limited(("Buried(Hill")(to farmEout(a(10%
interest( in( Block( CIE509,( in( return( for( Buried( Hill( funding( 21.1%( of( the( cost( of( the( next(exploration( well( to( be( drilled( on( the( block( and( an( additional( cash( payment( to( African( Petroleum( Corporation( representing( 10%( of( past( costs( incurred( ("FarmE out(Agreement").(Under(the(terms(of(the(FarmEout( Agreement,( African( Petroleum( Corporation( will( continue( as(Operator( on( the(licence.(( Completion( of( the( FarmEout( Agreement( is( subject( to( the( satisfaction( or( waiving( of( certain( conditions( precedent.( ( African( Petroleum( Corporation( is( delighted( with( this( initial( farm( out,( but( is( seeking( additional(partners(in(its(Côte(d'Ivoire(acreage.((
• TwoEyear(extension(of(Liberia(licence(blocks(announced(in(February(2014((
In(Liberia,(African(Petroleum(Corporation(is(both(the(operator,(and(holder(of(a(100%(working(interest,(in( production( sharing( contracts( LBE08( and( LBE09,( which( have( a( combined( net( acreage( of( 5,352km2 .( ( The( Company( has( completed( an( extensive( work( programme( on( its( Liberian( licences.( ( In( 2010,( African( Petroleum( Corporation( completed( the( acquisition( and( processing( of( 5,100km2(of( 3D( seismic( data( over( both( licences.( ( The( interpretation( of( this( data( identified( numerous( prospects( and( leads( in( the( Upper( Cretaceous(post(rift(section(and(also(a(number(of(Cretaceous(aged(synErift(opportunities.((
African(Petroleum(Corporation(has(successfully(executed(an(initial(exploration(programme(in(LBE09,(with( three( wells( drilled:( ApalisE1,( NarinaE1( and( Bee( EaterE1.( ( In( September( 2011,( African( Petroleum( Corporation(completed(drilling(on(its(first(exploration(well,(ApalisE1,(on(LBE09.((The(well(encountered(oil( shows(in(several(geological(units(including(the(shallow(unlogged((TertiaryEPaleocene)(and(proved(source( rock( in( the( Cenomanian.( ( The( NarinaE1( well( was( drilled( on( LBE09( in( January( 2012( targeting( a( major( Turonian(fan(system.((
The(NarinaE1(well(encountered(a(total(of(32(metres(of(net(oil(pay(in(the(primary(objective(Turonian(and( underlying( Albian( reservoirs( with( no( oil( water( contact( observed.( ( African( Petroleum( Corporation's( discovery(at(NarinaE1(was(the(first(to(prove(a(working(petroleum(system(in(the(central(Liberian(basin,(an( extremely(positive(result(for(the(Company(and(one(that(improves(the(chances(of(success(elsewhere(in(the( area.(
The(Company(drilled(its(third(well,(Bee(EaterE1,(on(LBE09(in(January(2013.((The(well(tested(an(upEdip(axial( section( of( the(Turonian( slope( fan( in( which( the( Company's( NarinaE1( discovery( had( been(made( in( 2012.(( The( Bee( EaterE1( well( encountered( a( tight( reservoir(interval,( but( provided( the( impetus( to( integrate( the( information(into(a(predictive(model(for(improved(reservoir(in(slope(fans(outboard(and(downEdip.((These( new(findings(have(been(incorporated(into(a(revised(interpretation(of(the(subsurface(across(the(portfolio,( with(new(basin(floor(fan(prospects(identified(in(both(blocks.((
In( September( 2013,( the( Company( completed( reprocessing( of( all( the( 3D( seismic( data( from( its( Liberian(
licences( to( improve( image( quality( and( support( the( maturation( of( additional( prospects( and( appraisal( opportunities.(( The( reprocessing( has( highlighted( that( certain(areas(may(benefit(from(improved( seismic( imaging( and( so( both( further( targeted(3D(reprocessing(and(acquisition( of( new( highEresolution( 3D( seismic( are( currently( being( considered( for( LBE09( to( cover(two(key(exploration(prospects(
(Narina( West( and( Night( Heron)( near( the( NarinaE1( well.( ( Detailed( stratigraphic( analysis( and( reservoir( quality( prediction( from( seismic( data( will(assist( in the( rapid( assessment( of( both( Narina(West( and(Night( Heron(to(further(deErisk(the(licence(area(to(enable(accurate(well(positioning(and(efficient(development(in( the( event( of( appraisal( success.( ( The( highEresolution( 3D( seismic( survey,( should( it( go( ahead,( will( incorporate( lessons( learned( from( seismic( reprocessing( and( will( be( acquired( utilising( state( of( the( art( technology.((
In( LBE08,( new( seismic( data( is( also( being( considered( to( cover( three( prospects( (Lovebird,( Darter( and( Turaco)( in( the( Southern( corner( of( the( licence( area.( ( Encouraging( amplitude( support( for( reservoir( and( potential( hydrocarbons( exist( within( the( current( reprocessed( dataset;( however,( near( surface( effects( (shallow( slump( zone( "mass( transport( deposit")( degrades( seismic( data( quality.(( New( 3D( highEresolution( datasets,(should(they(be(acquired,(will(better(delineate(and(further(deErisk(the(prospects(prior(to(drilling.(( Recent( rework( by( the( Company,( however,( has(identified( several( technology( uplifts( that( can( potentially( achieve( improved( seismic( imaging( through( reprocessing( the( existing( 3D( seismic( data( at( a( much( lower( cost,( both( reprocessing( and( new( acquisition( are( being( evaluated( ahead( of( the( 2015/2016( work( programme.((
The(Company(has(identified(a(number(of(key(prospects(in(the(Liberian(licences,(with(net(unrisked(mean( prospective(oil(resources(of(3,230MMstb((ERC(Equipoise,(CPR(2014).((African(Petroleum(Corporation(has( monitored(the(recent(results(published(by(Anadarko((with(partners(Mitsubishi(and(Repsol)(on(wells(IrokoE 1(and(TimboE1,(the(Company(awaits(further(information(from(the(postEwell(evaluation.((Additionally,(the( Company( awaits( results( from( the( Chevron( operated( well,( in( licence( LBE12,( drilled( in(Q2( 2014.( ( African( Petroleum(Corporation(expects(this(exploration(activity(in(adjacent(acreage(to(deErisk(its(licences(further.(
In( August( 2014,( Kosmos( Energy(signed( a( farmEin( agreement( to( acquire( a( 60%( interest in( two( third( party( licences( offshore( Senegal( in( return( for( drilling( up( to( three( wells( and( acquiring( approximately( 7,000km2 of( 3D( seismic.( ( Reuters( reported( that( Kosmos( Energy( has( committed( to( drill( two(wells( up( to(a( total(value( of( \$240(million,( and( it( will( then( drill( a( third( well( to( a( value( of( another(\$120(million.
On( 7( October( 2014,( Cairn( Energy( announced( an( important(and(potentially(commercial(oil(discovery( offshore( Senegal.( ( The( FANE1( exploration( well( recovered( light( oil( from( a( series( of( stacked( Cretaceous(sandstones,(with(APIs(ranging(from(28°( up(to(41°.((Cairn(Energy(believes(that(the(discovery( "may( have( significant( potential( as( a( standalone( discovery".(
Cairn(Energy(drilled(a(second(well,(SNEE1,(offshore( Senegal(in(1,100m(of(water(and(announced(on(the( 10( November( 2014( that( they( had( made( an( additional(discovery.((Initial(analysis(of(the(well,(as( reported( by( Cairn,( showed( 95m( gross( oil( bearing( column( with( a( gas( cap.( ( Excellent( reservoir( sands( with( net( pay( of( 36m( of( 32( API( oil( and( a( P50( contingent( resource( of( 330( MMbbls.( ( FAR( Ltd,( Cairn's( partners,( have( now( issued( notice( of( discovery( on( both( wells( and( reported;( "based( on( preliminary(estimates,(it( SNEE1.
Each( of( these( developments,( especially( their( proximity( to( the( Company's( acreage,( provide( a( very( positive( context( to( African( Petroleum( Corporation's(presence(offshore(Senegal.(
In(Senegal,(African(Petroleum( Corporation(holds( an(81% operated(working(interest(in(exploration( blocks( Rufisque( Offshore( Profond( ("ROP")( and( Senegal(Offshore(Sud(Profond(("SOSP")((together( the("Senegal(Licences").((The(Company's(Senegal( Licences( are( located( offshore( southern( and( central( Senegal,( with( a( net( acreage( of( 14,804km2 .((To( date,( the(Company(has(acquired( 10,000km2( of( 2D( seismic( data( over( its( Senegal( Licences(and(has(compiled(an(extensive(regional( database.((In(May(2012,(the(Company(completed( a(3,600km2(3D(seismic(acquisition(over(the(SOSP( licence( block.( ( In( the( ROP( block( an( existing( seismic( dataset( (2007( vintage)( covers( 1,800km2( and(was(purchased(from(Petrosen.(
This(base(dataset(will(benefit(from(reprocessing,( which(is( underway(and( the( final( product(will( be( delivered( in(Q4( 2014.( ( Several( large( Cretaceous( turbidite( fan( 'leads'( and( Albian( sand( shelf( and( turbite(fan(leads(have(been(identified,( these(will( be(matured( to( prospects( when( the( reprocessed( data(has(been(evaluated.
• Acreage(analogous(to(Senegal(licence( Sangomar(Offshore(Deep(where(Cairn(Energy(have(just(announced(two(oil(discoveries
On(27(November(2014,(African(Petroleum(Corporation(entered(into(an(agreement(with(The(Government( of( the( Republic( of( The( Gambia( to( reinstate( the( Company's( Alhamdulilah( Licence( Block( A1( and( Licence( Block( A4( (together( the( "Gambian( Licences")( on( a( 100%( interest( basis,( and( settle( all( prior( issues( concerning( the( Gambian( Licences.( ( The( reinstatement( of( the( Gambian( Licences( is( a( significant( and( positive(step( for( the(Company,(particularly( following( the(recent(oil(discoveries(made(by(Cairn(Energy(in( Senegal.((
Upon( reinstatement,( African( Petroleum( Corporation( agreed( to( a( revised( initial( exploration( period( that( will(expire( on(1(September( 2016 in(return( for(a( commitment( to( drill(an(exploration(well(on(one( of( the( Gambian(Licences(and(reprocess(3D(seismic(on(Licence(Block(A4(prior(to(1(September(2015.((((
The( Company(has(identified(leads(and( prospects(in( the(Gambian( Licences,(many( of(which(are(on( trend( with( the(discoveries(made at(FANE1( (announced(7(October( 2014)(and(SNEE1 (announced(10(November( 2014)(by(the(Cairn operated(group in(Senegal.
((
In( Sierra( Leone,( the( Company( holds( a( 100%( operated(working(interest(in(offshore(licences(SLE03( and( SLE4AE10.( African( Petroleum( Corporation( was( awarded( a( 100%( interest( in( SLE03( in( April( 2010,( which( is( currently( in( its( initial( exploration( period,( while(licence(SLE4AE10(was(awarded(as(part(of(
Sierra Leone's( third( offshore( licencing( round( in( 2012( and( is( also( in( the( initial( exploration( period.( The( Company's(Sierra(Leone(licences(cover(a(combined(net(acreage(of(5,855km2 and(are(located(to(the(south( of(Freetown,(offshore(Sierra(Leone.(
Since( gaining( operatorship( of( the( Sierra( Leone( licences,( African( Petroleum( Corporation( has( acquired( approximately(2,500km2 of(3D(seismic(data(over(block(SLE03,(approximately(1,000km2 of(3D(seismic(data( over( block( SLE4AE10( and( 2D( seismic( data( over( block( SLE4AE10.( The( Company( has( already( identified( a( number(of(key(prospects(in(its(Sierra(Leone(licences,(one(of(which(has(net(unrisked(mean(prospective(oil( resources(of(434(MMstb((ERC(Equipoise,(CPR(2014).
In(September(2013(the(Company(received(a(two(year(extension(to(the(first(exploration(period(for(SLE03,( extending(the(first(exploration(period(on(the(block(to(April(2015.
During(the(quarter,(the(Company(commenced(and(completed(the(acquisition(of(approximately(1,000km2 of(3D(seismic(data(on(Block(SLE4AE10,(offshore(Sierra(Leone(utilising(funds(from(the(last(equity(raise.(An( initial( version( of( the( data(was( delivered( for( interpretation(in(November( 2014.((This( seismic( acquisition( fulfills(the(remaining(obligations(in(Sierra(Leone(ahead(of(the(next(exploration(phase(in(both(blocks.((((
The(Vega(prospect,(a(large(amplitude(supported(dipEclosure(with(a(stratigraphic(upside(at(multiple(levels( has( been( identified( in( the( outboard.( ( This( prospect( has( Campanian,( Turonian,( Cenomanian( and( Albian( objectives.( ( Currently,( no( volumes( have( been( assigned( to( this( large( structure( in( the( Company's( CPR.(( Initial( work( at( the( Campanian( level( indicates( a( class( III( AVO( anomaly( of( several( billion( barrels.( ( The( prospect(lies(in(water(depths(ranging(between(3,400m(and(3,600m;(these(depths(can(be(drilled(by(some( of(the(current(6th generation(rigs.(
As(an(operator(of(offshore(concessions,(it(is(the(duty(of(African(Petroleum(Corporation(to(provide(a(safe( working(environment(and(minimise(any(adverse(impact(on(the(environment.(Health,(safety,(environment( and(security(policies are(embedded(throughout(all(of( the(Company's(core(operations.(In(this(regard,(we( strive( for( continuous( improvement( as( lessons( learned( from( past( operations( are( incorporated( into( business(practices(going(forward.(
Due( to( the( recent( Ebola( outbreak( in( West( Africa,( African( Petroleum( Corporation( has( implemented( precautionary(measures( to(ensure( the(safety(of(its(staff.(There(have(been( office( closures(in(Liberia(and( Sierra(Leone,(and(local(staff(have(been(urged(to(work(from(home(and(avoid(dangerous(regions.(Currently,( the(Company(does(not(have(any(active(operations(in(Sierra(Leone(or(Liberia(until(2016.(
On( 31( July( 2014( Liberia( and( Sierra( Leone( declared( a( State( of( Emergency,( whereby( they( ordered( the( closure(of(schools(and(markets(and( the( quarantining(of(affected(communities(in(an(attempt( to(halt( the( Ebola(epidemic.(African(Petroleum(Corporation(is( following( the(government(protocol(and(is(currently(in( consultations(with(host(government(officials(to(see(how(strategic(social(investments(can(be(leveraged(to( combat(Ebola(and(has(recently(donated(to(the(Gbowee(Foundation(to(help(them(improve(the(education( on(the(ground(through(community(based(organisations(to(train,(trace(and(find(and(diagnose(people(who(
have( come( into( contact( with Ebola.( The( World( Health( Organisation((WHO)(believes(this is(one(of(the(best(ways(to(bring( an(end(to(the(Ebola(Virus(Disease.
The( Company( continues( to( build(its(reputation(as(a( fast(moving( explorer( in( both( emerging( and( frontier( basins.( ( Having( already( achieved( a( number( of( significant( milestones( set( out( in( the( strategic( objectives( for( 2014,( the( Company's( focus( is( to( secure( longEterm( partners( in( order( to( share( the( risk( and( potential( reward(of(our(low(cost(exploration(programme.((Such(moves(will( be( a( significant( step( towards( African( Petroleum( Corporation's( goal(of(delivering(optimum(value(and(return(to(our(stakeholders.
2014(continues(to(see(significant(exploration(activity(along the(West(African(Transform(Margin(by(majors( and( independents( alike,( with( a( discovery( made( by( Total( in( Côte( d'Ivoire( in( April( 2014,( and( two( oil( discoveries(announced( by( Cairn( Energy( in( Senegal(in(October(and(November( 2014.( (African( Petroleum( Corporation( is( in( a( good( position( to( learn( from( these( results( and( leverage( from( this( information( effectively.
As( an( exploration( company( in( the( oil( and( gas( industry,( the( Company( operates( in( an( inherently( risky( sector.( ( Oil( and( gas( prices( are( subject( to( volatile( price( changes( from( a( variety( of( factors,( including( international( economic( and( political( trends,( expectation( of( inflation,( global( and( regional( demand,( currency( exchange( fluctuations,( interest( rates( and( global( or( regional( consumption( patterns.( ( These( factors(are(beyond(control(of(the(Company(and(may(affect(the(marketability(of(oil(and(gas(discovered.((In( addition,( the( Company( is( subject( to( a( number( of( risk( factors( inherent( in( the( oil( and( gas( upstream( industry,(including(operational(and(technical(risks,(reserve(and(resource(estimates,(risks(of(operating(in(a( foreign( country( (including( economic,( political,( social( and( environmental( risks)( and( available( resources.(( We( recognise( these( risks( and(manage( our( operations( in( order( to(minimize( our(exposure( to( the( extent( practical.
We(confirm( that, to( the(best(of( our(knowledge,( the(condensed(set(of( financial(statements( for( the( third( quarter(of(2014,(which(has(been(prepared(in(accordance(with(IAS34(Interim(Financial(Statements,(gives(a( true( and( fair( view( of( the( Company's( consolidated( assets,( liabilities,( financial( position( and( results( of( operations,(and(that(the(management(report(includes(a(fair(review(of(the(information(required(under(the( Norwegian(Securities(Trading(Act(section(5E6(fourth(paragraph.((
| CONSOLIDATED+STATEMENT+OF+COMPREHENSIVE+INCOME | |||||
|---|---|---|---|---|---|
| USD\$+'000s | Note | Q3+2014 (unaudited) |
Q3+2013 (unaudited) |
YTD+Q3+2014 (unaudited) |
YTD+Q3+2013 (unaudited) |
| Revenue | 6a | 887 | 754 | 3,824 | 1,698 |
| Aircraft!expenses | (1,057) | (1,041) | (3,527) | (2,534) | |
| Depreciation!expense | (248) | (519) | (771) | (1,450) | |
| Impairment!of!exploration!and!evaluation!expenditure | 434 | D | 434 | D | |
| Impairment!of!consumable!spares | (154) | (2,996) | (154) | (6,610) | |
| Impairment!of!aircraft | D | D | D | (1,300) | |
| Impairment!of!related!party!loans!&!deposits | 382 | (1,235) | (266) | (12,374) | |
| Rig!demobilisation/cancellation!costs | D | D | D | (3,753) | |
| Consulting!expense | (1,117) | (1,174) | (4,293) | (5,820) | |
| Compliance!and!regulatory!expenses | (175) | (137) | (709) | (439) | |
| General!administration!expenses | (238) | (1,145) | (970) | (2,266) | |
| Employee!benefits | 6b | (2,130) | (2,535) | (5,140) | (8,975) |
| Travel!expenses | (270) | (219) | (922) | (1,074) | |
| Occupancy!costs | (334) | 81 | (807) | (1,635) | |
| Net!foreign!currency!!gain/(losses) | (98) | 60 | 205 | (846) | |
| Finance!costs | (12) | (78) | 46 | (179) | |
| Other!expenses | D | D | (11) | D | |
| Loss+from+continuing+operations+before+income+tax | (4,130) | (10,184) | (13,061) | (47,557) | |
| Income!tax!expense | D | D | |||
| Loss+for+the+period,+attributable+to+the+members | (4,130) | (10,184) | (13,061) | (47,557) | |
| Other+comprehensive+income | |||||
| Items&that&may&be&subsequently&reclassified&to&profit∨&loss: | |||||
| Foreign!exchange!(loss)/gain!on!translation!of!functional!currency!to!presentation!currency | D | D | D | 169 | |
| Other+comprehensive+(loss)/income+for+the+period,+net+of+tax | X | X | X | 169 | |
| Total+comprehensive+loss+for+the+period | (4,130) | (10,184) | (13,061) | (47,388) | |
| Loss!for!the!period!is!attributable!to: | |||||
| NonDcontrolling!interest | (19) | 188 | (17) | (74) | |
| Owners!of!the!parent | (4,111) | (10,372) | (13,044) | (47,483) | |
| (4,130) | (10,184) | (13,061) | (47,557) | ||
| Total!comprehensive!loss!for!the!period!is!attributable!to: | |||||
| NonDcontrolling!interest | (19) | 188 | (17) | (74) | |
| Owners!of!the!parent | (4,111) | (10,372) | (13,044) | (47,314) | |
| (4,130) | (10,184) | (13,061) | (47,388) | ||
| Basic/diluted!loss!per!share!attributable!to!members!(US!cents!per!share) | (0.60) | (1.80) | (2.04) | (8.41) | |
| CONSOLIDATED+STATEMENT+OF+FINANCIAL+POSITION | |||
|---|---|---|---|
| USD\$+'000s | Note | 30+September+2014 | 31+December+2013 |
| (unaudited) | (audited) | ||
| ASSETS | |||
| Current+assets | |||
| Cash%and%cash%equivalents | 7 | 5,429 | 7,914 |
| Trade%and%other%receivables | 8 | 11,807 | 7,709 |
| Restricted%cash | 9 | 12,073 | 12,074 |
| Prepayments | 811 | 1,266 | |
| Total+current+assets+ | 30,120 | 28,963 | |
| NonMcurrent+assets | |||
| Property,%plant%and%equipment% | 2,530 | 3,158 | |
| Exploration%and%evaluation%expenditure | 10 | 411,434 | 403,273 |
| Intangible%assets | 219 | 352 | |
| Total+nonMcurrent+assets+ | 414,183 | 406,783 | |
| Total+assets+ | 444,303 | 435,746 | |
| EQUITY+AND+LIABILITIES | |||
| Equity+ | |||
| Issued%capital | 12 | 600,592 | 575,912 |
| Reserves | 13 | 16,511 | 17,282 |
| Accumulated%losses | (202,615) | (189,571) | |
| Attributable+to+equity+holders+of+the+parent | 414,488 | 403,623 | |
| NonMcontrolling+interests+ | (278) | (261) | |
| Total+equity+ | 414,210 | 403,362 | |
| LIABILITIES | |||
| Current+liabilities | |||
| Trade%and%other%payables | 11 | 30,093 | 32,384 |
| Total+current+liabilities | 30,093 | 32,384 | |
| Total+liabilities | 30,093 | 32,384 | |
| Total+equity+and+liabilities+ | 444,303 | 435,746 |
| USD\$+'000s | Note | Ordinary+Share+ capital |
ShareDbased+ payment+reserve |
Accumulated+ losses |
Foreign+currency+ translation+ reserve |
NonDcontrolling+ interest |
Total+equity |
|---|---|---|---|---|---|---|---|
| Balance+at+1+January+2013 | 575,912 | 25,795 | (101,467) | (11,952) | (135) | 488,153 | |
| Loss!for!the!period! Other!comprehensive!income |
: : |
: : |
(47,483) : |
: 169 |
(74) : |
(47,557) 169 |
|
| Total+comprehensive+loss+for+the+ period |
: | : | (47,483) | 169 | (74) | (47,388) | |
| Transactions+with+owners+in+their capacity+as+owners: Share:based!payments |
: | 3,168 | : | : | : | 3,168 | |
| Balance+at+30+September+2013 | 575,912 | 28,963 | (148,950) | (11,783) | (209) | 443,933 | |
| Balance+at+1+January+2014 | 575,912 | 29,371 | (189,571) | (12,089) | (261) | 403,362 | |
| Loss!for!the!period | D | D | (13,044) | D | (17) | (13,061) | |
| Other!comprehensive!income | D | D | D | D | D | D | |
| Total+comprehensive+loss+for+the+ period |
D | D | (13,044) | D | (17) | (13,061) | |
| Transactions+with+owners+in+their+ capacity+as+owners: Issue!of!capital |
26,175 | D | D | D | D | 26,175 | |
| Capital!raising!costs | (1,495) | D | D | D | D | (1,495) | |
| Share:based!payments | D | (771) | D | D | D | (771) | |
| Balance+at+30+September+2014 | 600,592 | 28,600 | (202,615) | (12,089) | (278) | 414,210 |
| CONSOLIDATED+STATEMENT+OF+CASH+FLOWS | ||
|---|---|---|
| USD\$+'000s | YTD+Q3+2014 | YTD+Q3+2013 |
| (unaudited) | (unaudited) | |
| Cash+flow+from+operating+activities | ||
| Payments)to)suppliers)and)employees | (17,350) | (20,837) |
| Rental)income) | 1,187 | 876 |
| Interest)received) | 40 | 140 |
| Finance)costs) | (70) | B |
| Net+cash+flow+from+operating+activities | (16,193) | (19,821) |
| Cash+flow+from+investing+activities | ||
| Payment)for)plant,)equipment)and)aircraft | (11) | (273) |
| Proceeds)from)disposal)of)plant)and)equipment) | 43 | B |
| Payment)for)investments | (14) | (1,235) |
| Payment)for)exploration)and)evaluation)activities | (11,648) | (77,600) |
| Cash)received)for)sale)of)consumable)spares | B | 2,519 |
| Loan)repaid)by)related)parties | 825 | 193 |
| Loan)to)related)parties | (308) | B |
| Cash)backing)security)returned | B | 60,433 |
| Net+cash+flow+from+investing+activities+ | (11,113) | (15,963) |
| Cash+flow+from+financing+activities | ||
| Proceeds)from)issue)of)shares | 26,175 | B |
| Capital)raising)costs | (1,495) | B |
| Net+cash+flow+from+financing+activities | 24,680 | T |
| Net+change+in+cash+and+cash+equivalents | (2,626) | (35,784) |
| Cash+and+cash+equivalents+at+the+beginning+of+the+period | 7,914 | 52,599 |
| Net)foreign)exchange)differences | 141 | 268 |
| Cash+and+cash+equivalents+at+the+end+of+the+period+ | 5,429 | 17,083 |
These) financial) statements) are) the) interim) financial) statements) of) African) Petroleum) Corporation) Limited) ("African) Petroleum) Corporation")) and) its) subsidiaries) (hereafter) "the) Company")) for) the) third) quarter) of) 2014.) African) Petroleum)Corporation)is)a)public)limited)company)incorporated)and)domiciled)in)Australia,)with)its)main)office)located) in)London,)United)Kingdom,)whose)shares)are)publicly)traded)on)the)Oslo)Axess,)a)regulated)market)place)of)the)Oslo) Stock)Exchange,)Norway)and)the)National)Stock)Exchange)of)Australia)("NSX").
This)general)purpose)condensed)interim)financial)report)for)the)quarter)ended)30)September)2014)has)been)prepared) in)accordance)with)IAS)34)Interim)Financial)Reporting)and) the)supplement) requirements)of) the)Norwegian)Securities) Trading)Act)(Verdipapirhandelloven).)
The)interim)financial)report)does)not)include)all)notes)of)the)type)normally)included)within)the)annual)financial)report) and)therefore)cannot)be)expected)to)provide)as) full)an)understanding)of)the) financial)performance,)financial)position) and)financing)and)investing)activities)of)the)Company)as)the)full)financial)report.
It)is)recommended)that)the)interim)financial)report)be)read)in)conjunction)with)the)annual)report)for)the)year)ended)31) December) 2013) and) considered) together) with) any) public) announcements) made) by) African) Petroleum) Corporation) during) the) nine)months)ended) 30) September) 2014) in)accordance)with) the) continuous) disclosure) obligations) of)Oslo) Axess)and)the)NSX)Listing)Rules.
The)interim)financial)report)is presented)in)United)States)Dollars)being)the)functional)currency)of)the)Company.
The) accounting) policies) adopted) are) consistent) with) those) disclosed) in) the) annual) report) for) the) year) ended) 31) December)2013.
The)preparation)of)the)interim)financial)report)entails)the)use)of)judgements,)estimates)and)assumptions)that)affect)the) application) of) accounting) policies) and) the) amounts) recognised) as) assets) and) liabilities,) income) and) expenses.) The) estimates)and)associated)assumptions)are)based)on)historical)experience)and)other) factors)that)are)considered)to)be) reasonable)under) the)circumstances.)The)actual) results)may)deviate) from) these)estimates.)The)material)assessments) underlying)the)application)of)the)Company's)accounting)policies)and)the)main)sources)of)uncertainty)are)the)same)for) the)interim)accounts)as)for)the)annual)accounts)for)2013.
The)interim)financial)report)has)been)prepared)on)a)going)concern)basis)which)contemplates)the)continuity)of)normal) business)activities)and)the)realisation)of)assets)and)the)settlement)of)liabilities)in)the)ordinary)course)of)business.)
As)at)30)September)2014,)the)Company)had)net)current)assets)of)US\$27,194)(31)December)2013:)net)current)liabilities) US\$3,421,121).)The)cash)and) restricted)cash)position)at)30)September)2014)was)US\$17,502,204) (31)December)2013:) US\$19,988,423).)However,)the)ability)of)the)Company)to)continue)as)a)going)concern,)including)the)continuation)of its planned)exploration)and)evaluation)activities)is)dependent)on)the)Company)executing)a)strategic)transaction)such)as)a) farmBout)and/or)raising)additional)capital)in)the)short)term.)At)the)date)of)this)report,)the)directors)are)satisfied)there) are) reasonable) grounds) to) believe) that) the) Company)will) be)able) to) raise)additional) capital,) in) order) to)enable) it) to) meet)its)obligations)as)and)when)they)fall)due.)
Should)the)Company)not)achieve)the)matters)set)out)above,)there)is)uncertainty)whether)it)would)continue)as)a)going) concern)and)therefore)whether)it)would)realise)its)assets)and)extinguish)its)liabilities)in)the)normal)course)of)business) and)at)the)amounts)stated)in)this)financial)report.)This)financial)report)does)not)include)any)adjustment)relating)to)the) recoverability)or)classification)of)recorded)asset)amounts)or)to)the)amounts)or)classifications)of)liabilities)that)might)be) necessary)should)the)Company)not)be)able)to)continue)as)a)going)concern.)
In)the)event)that)the)Company)is)unable)to)successfully)complete)a)capital)raising)or)execute)a)strategic)transaction)in) the)required)timeframe,)management)will)reconsider)the)carrying)value)of)the)exploration)and)evaluation)expenditure) as)set)out)in)Note)10.
| Q3+2014 | Q3+2013 | YTD+Q3+2014 | YTD+Q3+2013 | |
|---|---|---|---|---|
| (unaudited) US\$'000 |
(unaudited) US\$'000 |
(unaudited) US\$'000 |
(unaudited) US\$'000 |
|
| a) Revenue |
||||
| Bank)interest)income | 27 | 13 | 76 | 180 |
| Other)interest)income | 94 | 82 | 645 | 242 |
| Flight)revenue | 684 | 561 | 2,740 | 876 |
| Other)revenue | 82 | 98 | 363 | 400 |
| 887 | 754 | 3,824 | 1,698 | |
| Q3+2014 | Q3+2013 | YTD+Q3+2014 | YTD+Q3+2013 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| US\$'000 | US\$'000 | US\$'000 | US\$'000 | |
| b) Employee+benefits |
||||
| Employee)remuneration | 1,534 | 1,040 | 3,675 | 4,526 |
| Director's)remuneration | 610 | 757 | 1,995 | 2,704 |
| ShareBbased)payments)recognised) | 270 | 1,648 | 1,917 | 3,896 |
| ShareBbased)payments)reversed) | (284) | (910) | (2,447) | (2,151) |
| 2,130 | 2,535 | 5,140 | 8,975 |
| 30+September+2014 | 31+December+2013 | |
|---|---|---|
| US\$'000 | US\$'000 | |
| Cash)at)bank)and)on)hand | 5,429 | 7,914 |
| 5,429 | 7,914 |
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Trade)receivables | 3,709 | 2,109 |
| Loans)receivable)from)related)parties)1 | 1,996 | 1,862 |
| Other)receivables | 6,102 | 3,738 |
| 11,807 | 7,709 |
1)Further)information)on)loans)receivable)from)related)parties:
As)at)30)September)2014,) the)Company)has) recognised)an)impairment)provision) for) the)outstanding)balance)of) the) IOP) loan) facility) of) US\$11,949,194.) This) impairment) loss) may) be) reversed) if) IOP) executes) a) strategic) transaction)or)a)sale)of)assets,)such)that)their)liquidity)facilitates)repayment)of)the)loan.)
d) In) April) 2013,) IOP) granted) the) Company) for) a) period) of) 6) months,) commencing) 17) April) 2013,) the) sole) and) exclusive)right,)but)not)the)obligation,)to)acquire)up)to)100%)of)IOP's)rights)and)obligations)under)the)exploration) and)production)sharing)contracts)for)MangaB1,)MangaB2,)Aborak)and)Tenere)West)Blocks)in)the)Republic)of)Niger.
As)a)condition)of)exclusivity,)the)Company)paid)a)good)faith)deposit)of)US\$1,235,000.)As)the)exclusivity)period)has) now)expired,)IOP)is)obligated)to)refund)the)deposit,)without)interest,)to)the)Company.
Due)to)the)current)financial)position)of)IOP)and)notwithstanding)the)security)held,)the)Company)has)recognised)an) impairment)provision)for)the)outstanding)balance)of)the)deposit)with)IOP)of)US\$1,235,000.)This)impairment)loss) may) be) reversed) if) IOP) executes) a) strategic) transaction) or) a) sale) of) assets,) such) that) their) liquidity) facilitates) repayment)of)the)deposit.
e) In) August) 2014,) the) Company) signed) an) agreement) with)IOP) whereby)US\$559,090) is) to) be) paid) in) cash) to) the) Company)and) the)balance)of)amounts)owing) to)be)converted)into) fully)paid)ordinary)shares)in)IOP)at)a)price)of) A\$0.06)per)share.)As)at)30)September)2014,)this)transaction)had)not)completed.
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Current)restricted)cash | 12,073 | 12,074 |
| 12,073 | 12,074 |
Restricted) cash) balances) represent) interest) bearing) cash) backed) security) provided) in) relation) to) the) Company's) exploration)programmes.)The) security)deposits)will)be) released)upon)achievement)of)certain)drilling)milestones.)The) classification)of)restricted)cash)balances)as)either)current)or)nonBcurrent)within the)Statement)of)Financial)Position)is) based)on)management's)estimate)of)the)timing)of)completion)of)drilling)milestones.
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Acquisition)cost)at)beginning)of)period)(1)January) | 403,273 | 354,823 |
| Exploration)expenditure)incurred)and)capitalised)during)the)period | 7,727 | 94,788 |
| Impairment | 434 | (46,338) |
| Acquisition+cost+at+end+of+period | 411,434 | 403,273 |
The)value)of)the)Company's)interest)in)exploration)expenditure)is)dependent)upon:
The) Directors') assessment) of) carrying) amount) was) after) consideration) of) prevailing) market) conditions,) previous) expenditure) carried) out) and) the) potential) for) the) discovery) of) hydrocarbons.) The) ultimate) value) of) these) assets) is) dependent)upon)recoupment)by)commercial)development)or)the)sale)of)the)whole,)or)part,)of)the)Company's)interests) in)those)areas)for)an)amount)at)least)equal)to)the)carrying)value.
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Trade)payables | 2,510 | 6,063 |
| Withholding)tax)1 | 13,587 | 13,551 |
| Other)payables)and)accruals)2 | 12,234 | 11,279 |
| ShareBbased)payments)liability)3 | 1,762 | 1,491 |
| 30,093 | 32,384 |
1 An) accrual) for) withholding) tax) in) relation) to) the) Company's) exploration) activities) has) been) recognised.) In) certain) jurisdictions) the) Company) may) be) required) to) withhold) payment) on) services) provided) by) subcontractors.) Any) such) amounts) withheld) are) due) to) the) tax) authorities) and) will) be) credited) against) the) subcontractors) own) income) tax) liability.
2)Other)payables)include)amounts)accrued)for)in)respect)of)exploration)activities.))))
3 ShareBbased)payments)liability)relating)to)director)loans)as)disclosed)in)Note)8.
| 30+September+2014 No.+of+shares |
31+December+2013 No.+of+shares |
|
|---|---|---|
| Fully)paid)ordinary)shares | 685,857,457 | 565,144,637 |
| Reconciliation | ||
| Number)of)outstanding)shares)at)beginning)of)period)(1)January) | 565,144,637 | 565,144,637 |
| Issue)of)shares)pursuant)to)a)capital)raising | 120,712,820 | B |
| Number+of+outstanding+shares+at+the+end+of+period+ | 685,857,457 | 565,144,637 |
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Fully)paid)ordinary)shares | 600,607 | 575,912 |
| Reconciliation | ||
| Amount)of)outstanding)shares)at)beginning)of)period)(1)January) | 575,912 | 575,912 |
| Issue)of)shares)pursuant)to)a)capital)raising | 26,175 | B |
| Capital)raising)cost | (1,495) | B |
| Amount+of+outstanding+shares+at+the+end+of+period+ | 600,592 | 575,912 |
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| ShareTbased+payments+reserve | ||
| At)beginning)of)period)(as)at)1)January) | 29,371 | 25,795 |
| ShareBbased)payments | (771) | 3,576 |
| Total+shareTbased+payments+reserve | 28,600 | 29,371 |
| Foreign+currency+translation+reserve | ||
| At)beginning)of)period)(as)at)1)January) | (12,089) | (11,951) |
| Foreign) currency)exchange) differences) arising) on) translation) of) | ||
| functional)currency)to)presentation)currency | B | (138) |
| Total+foreign+currency+translation+reserve | (12,089) | (12,089) |
| Total+reserves | 16,511 | 17,282 |
For)management)purposes,)the)Company)is)organised)into)one)main)operating)segment,)which)involves)exploration)for) hydrocarbons.) All) of) the) Company's) activities) are) interrelated,) and) discrete) financial) information) is) reported) to) the) Board)(Chief)Operating)Decision)Makers))as)a)single)segment.)Accordingly,)all)significant)operating)decisions)are)based) upon)analysis)of)the)Company)as)one)segment.)The)financial)results)from)this)segment)are)equivalent)to)the)financial) statements)of)the)Company)as)a)whole.
The)analysis)of)the)location)of)nonBcurrent)assets)is)as)follows:
| 30+September+2014 | 31+December+2013 | |
|---|---|---|
| US\$'000 | US\$'000 | |
| Cote)d'Ivoire | 54,264 | 51,492 |
| Gambia | B | 133 |
| Liberia | 291,218 | 291,029 |
| Senegal | 38,714 | 37,952 |
| Sierra)Leone | 28,436 | 24,064 |
| United)Kingdom | 1,551 | 2,113 |
| 414,183 | 406,783 |
On) 7) October) 2014,) 233,890,450) shares) with) a) price) of) A\$0.06) each) and) 5,000,000) unlisted) options) exercisable) at) A\$0.06)per)option)on)or)before)2)October)2016,)were)issued) to) the)Company)by)International)Petroleum)Limited.)In) addition) to) issuing) the) shares) and) options) International) Petroleum) Limited) paid) the) Company) US\$559,090,) this) combined)consideration)was)in)satisfaction)of)all)monies)owing.
On)27)November 2014,)the)Company)entered)into)an)agreement)with)The)Government)of)the)Republic)of)The)Gambia) to)reinstate)the)Company's)Alhamdulilah)Licence)Block)A1)and)Licence)Block)A4)(the)"Gambian)Licences"),)and)settle)all) prior)issues)concerning)the)Gambian Licences. As)a)result)of)the)reinstatement)the)Company)is)assessing)the)carrying) value)of)exploration)and)evaluation)expenditure)on)the)Gambian)licences)and)it)is)anticipated)that)impairment)losses) previously)recognised)in)the)2013)yearBend)accounts)will)be)reversed)prior)to)the)current)yearBend.
No)other)event)has)arisen)between)30)September)2014)and)the)date)of)this)report)that)would)be)likely)to)materially) affect) the)operations)of) the)Company)or)its)state)of)affairs)which)have)not)otherwise)been)disclosed)in) this) financial) report.
The) Company) has) entered) into) obligations) in) respect) of) its) exploration) projects.) Outlined) below) are) the) minimum) expenditures)required)as)at)30)September)2014:)
| 30+September+2014 US\$'000 |
31+December+2013 US\$'000 |
|
|---|---|---|
| Within)one)year After)one)year)but)not)more)than)five)years More)than)five)years |
17,261 79,644 |
40,507 66,611 B |
| 96,905 | 107,118 |
The)carrying)values)of)financial)assets)and)financial)liabilities)at)30)September)2014)approximates)their)fair)values.
Charles)Matthews)B Chairman Stuart)Lake)B Chief)Executive)Officer Mark)Ashurst) Gibril)Bangura Jeffrey)Couch David)King Bjarne)Moe Timothy)Turner Anthony)Wilson
Angeline)Hicks
32)Harrogate)Street West)Leederville Western)Australia)6007 Australia)
Stratton)House 5)Stratton)Street London W1J)8LA United)Kingdom)
Telephone:)+44)203)435)7700 Facsimile:)+44)203)435)7701
Ernst)&)Young 11)Mounts)Bay)Road Perth) Western)Australia)6000
Telephone:)+61)8)9429)2222
Facsimile:)+61)8)9429)2436
Computershare)Investor)Services)Pty)Ltd Level)2,)45)St)George's)Terrace Perth Western)Australia)6000
Telephone:)+61)8)9332)2000 Facsimile:)+61)8)9323)2033
Oslo)Axess Code:&APCL
National)Stock)Exchange)of)Australia Code:&AOQ
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