20 September 2017
Global Petroleum Limited
("the Company" or "Global")
Final Results for the Year Ended 30 June 2017, Appendix 4G
The Directors of Global Petroleum Limited present their report for the Group comprising of Global Petroleum Limited ("the Company" or "Global" or "Parent") and the entities it controlled at the end of, or during, the year ended 30 June 2017 ("Consolidated Entity" or "Group").
The Company confirms that a full copy of its latest Annual Report and Accounts, as well as the relevant Appendix 4G will be available shortly on the Company's website (www.globalpetroleum.com.au).
Full copies of the Directors' Report and 2016-2017 Financial Statements are available at:
http://www.asx.com.au/asx/statistics/announcements.do?by=asxCode&asxCode=GBP&timeframe=R&dateReleased=20%2F09%2F2017
Chairman and CEO's Review
In terms of the wider economic picture during the last financial year, commodity prices have improved slightly with the Brent oil price averaging $51 per barrel in the reporting year to 30 June 2017, compared to $45 in the preceding year to end June 2016. Unsurprisingly, the outlook for operational and commercial activity remains challenging, but recent equity raisings by energy companies in the London capital market demonstrate that financing is available for the right opportunities.
The Company's Petroleum Exploration Licence offshore Namibia is currently in Phase 2, which has a duration of 24 months until December 2017. In place of the previous well commitment in Phase 2, the Company undertook to reprocess and re-interpret previously acquired 2D seismic data and to shoot 800 kilometres of new 2D. The evaluation of the reprocessed data proved to be very encouraging, increasing confidence in a syn-rift oil play in the outboard or deep water region offshore Namibia as well as the likely presence of both reservoir and source within the Company's blocks. This evaluation has significantly improved Global's view of the overall prospectivity of its acreage enabling the upgrading of the three leads previously identified to prospects, in particular the Gemsbok prospect.
Accordingly, the Company announced during the reporting period that it had entered into a contract with seismic contractor Seabird Exploration of Norway to acquire 834 km of full fold 2D seismic data over its blocks, primarily focused on Gemsbok. The seismic survey was duly carried out, and successfully completed post the end of the reporting period. Based on the preliminary technical information obtained, the Company remains highly encouraged as efforts now move to interpretation of the 2D seismic.
Regarding the Company's four exploration applications offshore Italy, environmental decrees were published in late 2016 by the Italian authorities in relation to two of the Company's four applications (d 82 F.R-GP and d 83 F.R GP). Subsequently, a number of appeals were lodged against the two environmental decrees by a mixture of local and urban authorities, and by special interest groups. The Company understands that similar appeals have been made over the last two years or so against environmental decrees granted to other companies in the Southern Adriatic, and that these appeals were rejected by the Regional Administrative Tribunal of Latium.
The slow progress towards final grant of the Italian licences is disappointing, however, the Company has not lost sight of its very positive view of the prospectivity of the application areas and we intend to persevere through the appeals proces.
Financial
During the year ended 30 June 2017, the Group recorded a loss after tax of US$1,856,463 (2016: loss US$2,336,513). Cash balances at 30 June 2017 amounted to US$7,807,605 (2016: US$10,172,598). The Group has no debt.
Strategy and Outlook
The further evaluation of the prospectivity of the Company's Namibian Licence - in particular the delineation of the Gemsbok structure - in our view constitutes real progress. In addition, the Company has continued to evaluate opportunities which would balance its existing portfolio, notably those more in the nature of investment in contingent resources or exploration in proven hydrocarbon provinces. Accordingly, over the past 12 months, we have been engaged in detailed discussions with certain counterparties, which ultimately proved unsuccessful. However, we will continue to evaluate appropriate opportunities, both asset purchases and potential corporate combinations. We retain a significant cash position compared to many of our peers, and remain confident of making a key investment in due course.
We look forward to meeting Shareholders at the Company's Annual General Meeting later in 2017.
John van der Welle |
Peter Hill |
Chairman |
Chief Executive Officer |
Operating and Financial Review
Namibian Project
The Namibian Project consists of a participating interest in Petroleum Exploration Licence Number 29 ("Licence") covering Offshore Blocks 1910B and 2010A in the Republic of Namibia. The Licence, issued on 3 December 2010, originally covered 11,730 square kilometres and is located offshore Namibia in water depths ranging from 1,300 metres to 3,000 metres.
The Company's wholly owned subsidiary, Jupiter Petroleum (Namibia) Limited, is operator of the Licence with an 85% interest in the two blocks. Partners NAMCOR (the Namibian state oil company) and Bronze Investments Pty Ltd hold 10% and 5% respectively, both as carried interests.
In December 2015, the Company entered into the First Renewal Exploration Period (Phase 2) of the Licence, making a mandatory relinquishment of 50% of the Licence Area. Phase 2 is for a duration of 24 months with a reduced Minimum Work Programme. In place of the previous well commitment in Phase 2, the Company undertook to reprocess and re-interpret previously acquired 2D seismic data, and to shoot 800 kilometres of new 2D data. To this end, in 2016 the Company's technical team evaluated reprocessed 2D seismic data from the 1990s which it had purchased, and also reprocessed and evaluated speculative 2D seismic data shot over its Blocks in 2011/12 by seismic contractor TGS. The evaluation of this data proved to be very encouraging. Notably the work increased confidence in a syn-rift oil play in the outboard or deep water region offshore Namibia as well as the likely presence of both reservoir and source within the Company's blocks, thus significantly increasing Global's confidence in the overall prospectivity of its blocks.
Accordingly, the three leads previously identified were upgraded to prospect status as a consequence of the perceived reduction in risk. Of these, Global believes that the Gemsbok structure is currently the most significant exploration opportunity. Gemsbok is mapped as a 200 sq km structurally controlled dip closure adjacent to a deep syn-rift graben. The feature has closure at several levels from the Lower Cretaceous to the Tertiary and the proximity to the mapped graben means that it is also well placed on the hydrocarbon migration pathway. Clearly this is a very exciting development for Global - the direct analogue to Gemsbok is the multi-billion barrel, sub salt, syn-rift play of Southern Angola. Despite recent encouragement from exploration further south offshore Namibia, the syn-rift remains relatively under-explored and we believe Gemsbok is ideally located for a syn-rift test.
During the reporting period, the Company announced that it had entered into a contract with seismic contractor Seabird Exploration of Norway in order to acquire 834 km of full fold 2D seismic data over its blocks, primarily focused on Gemsbok. The seismic survey was duly carried out, and successfully completed post the end of the reporting period. The initial preliminary technical information from the vessel is of a very high quality and appear to confirm the scale and structural extent of Gemsbok. The Company remains highly encouraged as efforts now move to seismic data processing and interpretation
Permit Applications in the Southern Adriatic, Offshore Italy
In August 2013, the Company submitted an application and proposed work programme and budget to the Italian Ministry of Economic Development for four exploration areas offshore Italy. The Permit Applications were then published on 30 September 2013 in the Official Bulletin allowing other competitive bids to be made over the subsequent three months. In accordance with Italian offshore regulations, Global subsequently submitted the relevant documentation to the respective authorities in relation to environmental requirements, and in connection with the satisfaction of certain technical and financial requirements. The Company was subsequently informed that it had duly satisfied the technical/financial requirements. The Company has previously announced that environmental decrees have been published by the Italian authorities in relation to two of the Company's four applications (d 82 F.R-GP and d 83 F.R -GP), and that a number of appeals have been launched against the two environmental decrees by a mixture of local and urban authorities, and by special interest groups. The Company understands that similar appeals were recently made against environmental decrees granted to other companies in the Southern Adriatic, and that these appeals were rejected by the Regional Administrative Tribunal of Latium
The southern Adriatic is currently undergoing a significant new phase of oil and gas exploration. Seismic acquisition companies have begun large, multi-client 2D acquisition programmes across the entire basin, from Italy to Croatia.
In Montenegro, offshore concessions were awarded in 2016 to Marathon, OMV and Eni, with these companies also having been awarded offshore licences in Croatia. Shell have operated with some success in Albania exploring and developing fields with similar geological characteristics to those encountered offshore in the Southern Adriatic.
The activity in terms of licensing and the size of companies involved underscores the interest in the Adriatic area and is viewed very positively by the Company as an endorsement of its Mediterranean focus
Business Development
Global remains in a strong financial position from which to fund work activity on its Namibian acreage, its Italian application interests (subject to award), and to implement a change of focus through acquisition.
The Company has continued to evaluate opportunities which would balance its existing portfolio, notably those more in the nature of investment in contingent resources or exploration in proven hydrocarbon provinces. Accordingly it has, over the past 12 months, been engaged in detailed discussions with certain counterparties, which ultimately proved unsuccessful. However the Company intends to continue to evaluate appropriate opportunities, both asset purchases and potential corporate combinations. The Company retains a significant cash position compared to many of its peers, and remains confident of making a key investment in due course.
Presentation currency
The financial information in this annual report is presented in United States dollars (US$)
Results of Operations
|
2017 US$ |
2016 US$ |
Loss from continuing operations before tax |
(1,856,463) |
(2,336,513) |
Income tax benefit (expense) |
- |
- |
Net profit (loss) |
(1,856,463) |
(2,336,513) |
The results of the Group include revenue from interest income of US$48,814 (2016: US$43,942).
Review of financial condition
As at 30 June 2017, the Group had cash of US$7,807,605 (2016: US$10,172,598) and had no debt.
Global Petroleum Limited |
|
Peter Hill, Managing Director & CEO |
+44 (0) 20 7495 6802 |
Damien Cronin, Company Secretary |
+61 (0) 7 3310 8732 |
Cantor Fitzgerald Europe (Nominated Adviser & Joint Broker) |
|
Sarah Wharry / Craig Francis |
+44 (0) 20 7894 7000 |
GMP FirstEnergy Capital LLP (Joint Broker) |
|
Hugh Sanderson |
+44 (0) 20 7448 0200 |
Tavistock (Financial PR & IR) |
|
Simon Hudson / Niall Walsh |
+44 (0) 20 7920 3150 |
