RNS Number : 1034A Roxi Petroleum Plc
03 June 2016
Roxi Petroleum plc
("Roxi" or the "Company")
Final Results
Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to announce its audited final results for the year ended 31 December 2015.
The Report and Accounts will be posted to the Company's website on: www.roxipetroleum.com/roxi/en/investors .
The Report and Accounts and Notice of Annual General Meeting will shortly be posted to shareholders. The Company's AGM will be held at the offices of Fladgate LLP, 16 Great Queen Street, London WC2B 5DG, at 11.00am on Wednesday 29 June 2016.
Enquiries:
Roxi Petroleum PLC +7 727 375 0202 Clive Carver, Chairman
WH Ireland Limited +44 (0) 207 220 1666 James Joyce / James Bavister
Highlights
Operational
During the period under review & subsequently
Deep wells A5 and 801
Drilled to a total depths of 4,442 meters and 5,050 meters respectively
Extended flow test to commence once wells are cleared of excess drilling fluids
Deep well A6
Spudded in November 2015, with a target total depth of 5,000 meters, has reached a depth of 3,944 meters
Salt layer crossed without incident
Delays resulting from cementing issues to be overcome by use of new 7 inch casing
BNG Shallow wells
Producing at the rate of 825 bopd (487 bopd net to Roxi)
Production at Well 143 increased to a maximum of 815 bopd using a 7 mm choke
Munaily
Producing at the rate of 75 bopd (44 net to Roxi)
Agreement reached with Chinese partner to reenter 20 Soviet era wells at no costs to Roxi
Beibars
Expected to be released from forcemajeure
Financial
During the period under review
Reported profit for the year $10.6 million (2014: $5.7 million)
Profit on the sale of Galaz $18.7 million
Proceeds from the sale of Galaz available to further develop BNG $35 million
BNG Royalty cancelled in return for the issue of 46,661,654 Roxi shares
Subsequently
Agreement in principle reached between Roxi and the beneficial owners of Baverstock to merge our interests so that the enlarged Roxi would increase its ownership of the BNG and Munaily assets from 58.41% to 99%. A final legal agreement would be conditional on shareholder and regulatory approval.
Strategic Report
The Directors present their strategic report on the Group for the year ended 31 December 2015. Introduction
This strategic report comprises; the Group's objectives; the Group's strategy; the Group's business model; and a review of the Group's business using key performance indicators.
The Chairman's statement, which also forms part of the strategic review, contains review of and a comprehensive analysis of the development and performance of the company's business during the financial year, and the position of the company's business at the end of that year and forms part of the strategic report.
Additionally, a summary of the principal risks and uncertainties facing the business is set out following the Chairman's statement.
Objectives
The Group's objective is to create shareholder value from the development of oil and gas projects.
The Group has a number of secondary objectives, including promoting the highest level of heath & safety standards, developing our staff to their highest potential and being a good corporate citizen in our chosen countries of operations.
Strategy
The Group's long term strategy is to build an attractive portfolio of oil and gas exploration and production assets in Central Asia, and in particular Kazakhstan where the board have the greatest experience.
In the short term the Group will continue to seek to maximise the value of the Company's flagship asset BNG.
Business model
The Board plans to develop the BNG Contract Area such that by summer 2018, the expected date when a full production licence will be applied for, the BNG Contract Area has been drilled to identify the greatest level of reserves and production consistent with not unduly diluting Roxi's shareholders interest in the asset.
Over the medium term the Group will consider acquiring additional assets where the board believes an acquisition would increase shareholder value. The Directors believe the Group is exceptionally well placed through its local presence to increase shareholder value by opportunistic acquisitions of undervalued oil and gas assets.
Additionally, the Board believes there is a significant opportunity to assist much larger companies seeking to enter the vast Kazakhstan's oil and gas market where they wish to have a well placed local partner.
Key performance indicators
Review of the Group's business using key performance indicators. The Key Performance Indicators are: Operational
Production
At the date of this report production from the:
BNG Contract Area was 825 bopd (487 bopd net to Roxi)
Munaily Contract Area was 75 bopd (44 net to Roxi)
Production from BNG must under the terms of the current licence be sold at domestic prices.
Production from Munaily may be sold at international prices.
Reserves
Details of the Group's assets and reserves are set out in the Chairman's statement.
Financial
Other than the costs associated with maintaining the London listing for the Group's shares the principal expenses of the Company relate to the drilling programme at BNG, which after the work programme obligations are essentially discretionary.
To fund these costs Roxi has the proceeds of the production from BNG, which is currently 825 bopd. This is expected to increase materially should any of the three deep well, A5, 801 or A6 commence production under testing.
In the event the Roxi board decides to develop BNG at a rate faster than could be funded by current production additional equity or debt would be required.
The principal and other risks and uncertainties facing the business
The Company and the Group are subject to various risks relating to political, economic, legal, social, industry, business and financial conditions. The following risk factors, which are not exhaustive, are particularly relevant to the Company and the Group's business activities:
Financing risks
Despite the recent dramatic fall in the price of rigs and crew exploring due to Kazakh Tenge depreciation it is still an expensive business, with each well drilled potentially costing between $1.52 million for a shallow well and up to $46 million for a 5,000 meter well.
The Group continually monitors the financing arrangements to ensure the continuation of the operational activities and expects to fund the costs of its planned development programme over the next 12 months from the proceeds of the receipt of oil plus, if appropriate, from the introduction of new equity of loan capital.
Exploration risk
Despite our recent successes with our shallow wells there is no assurance that the Group's future
Roxi Petroleum plc published this content on 03 June 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 03 June 2016 06:36:09 UTC.
Original documenthttp://www.roxipetroleum.com/roxi/uploads/pressreleases/final-results-2015.pdf
Public permalinkhttp://www.publicnow.com/view/9706564804190998F33B82D23F623B33D3DB4417