TIDMGAS
RNS Number : 6925M
Gasol plc
29 August 2013
29th August 2013
Gasol plc
("Gasol" or "the Company")
Preliminary Results
Focused on providing gas for the next generation of Africans
Gasol plc (AIM: GAS) the West African energy development
company, today announces its preliminary results for the year ended
31 March 2013.
Operational highlights
-- Board strengthened by the appointments of Dr Rilwanu Lukman
as the new non executive chairman and Fassine Fofana as a non
executive director;
-- The Company's refocused strategy aims to make Gasol the
leading supplier of gas for power generation in West Africa. It
aims to:
o develop its own gas reserves in the Gulf of Guinea and to
supply this gas to power projects in West Africa; and
o until natural gas reserves become available, Gasol is working
on plans that will secure availability of regasified LNG as an
interim fuel supply to support current power generation
requirements in the West African region;
-- Good progress on development of the Company's Liquefied
Natural Gas ("LNG") Import Project in Benin;
-- Option Agreement signed, and extended for a further 6 months
to 24 February 2014, for the acquisition of African Power
Generation Limited ("AfGen"), which has an existing pipeline of LNG
Import Projects;
-- Key Strategic Alliances signed with Socar Trading S.A. and by
AfGen with Dredging International to support the Company's LNG
Import Project in Benin;
-- Joint venture agreement signed with Societe BenGaz S.A,
("Bengaz S.A") for the establishment of a JV company (to be named
"Cogaz") and the distribution and sale of natural gas in Benin and
Togo;
-- Memorandum of Understanding signed for Cogaz to supply gas to
Communaute Electrique du Benin, the electric authority for both
Benin and Togo;
-- Memorandum of Understanding between AfGen and Ghana National Gas Company Ltd to explore the establishment of various joint venture arrangements for the supply of natural gas into Ghana.
Financial highlights
-- Cash at bank of GBP6.75 million as at 31 March 2013;
-- Successful placement of GBP13.2 million ($20 million) bond
facility with institutional investors;
-- GBP670,825 ($1 million) in new funds in the form of a
convertible loan from Socar Trading S.A.;
-- Repayment of existing debt of GBP2.5 million from African Gas
Development Corporation Limited;
-- Successful restructuring of the Company's share capital
through a 50 into 1 consolidation of existing shares;
-- Roll-over of existing GBP694,000 convertible loan facility
from Banque Benedict Hentsch & Cie S.A.;
-- Losses for the year increased to GBP4.03 million (2012: GBP1.99 million);
-- Net cash expenditure on operating activities increased to
GBP3.47 million (2012: GBP1.48 million) as a result of increased
project development activities.
Rilwanu Lukman, Gasol Chairman, commented:
"We believe that Gasol's LNG to power strategy will meet the
requirements of governments in West Africa. The Company's success
in attracting superior alliance partners and the speed with which
it has secured the rights to the Benin project have placed the
Company in an excellent position to transition from a development
company to a revenue earning operating company.
"I look forward to seeing our first projects reach completion
and to making Gasol an African gas champion providing gas for the
next generation of Africans."
Enquiries
Gasol plc
Alan Buxton, Chief Operating +44 (0) 20 7290
Officer 3300
Panmure Gordon (UK) Limited
Dominic Morley (Corporate
Finance)
Callum Stewart (Corporate
Finance)
Adam Pollock (Corporate +44 (0) 20 7459
Broking) 3600
+44 (0) 7768 537
Yellow Jersey PR Limited 739
Dominic Barretto +44 (0) 7799 003
Kelsey Traynor 220
GASOL PLC
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2013
Chairman's Statement
I am pleased to have joined Gasol at a time when significant
positive steps in implementing its strategy for the supply of
natural gas and liquefied natural gas ("LNG") have been taken. In
the past year, Gasol has advanced its business strategy by
developing a pipeline of projects that progresses its mandate to
deliver gas to West Africa. The Company has made major steps to
take advantage of opportunities that presented themselves during
the year and has a clear focus on bringing one or more of its
projects to financial close as smoothly and efficiently as
possible. It has also secured significant financing in order to
develop its outlined strategy to support initial development
work.
Our vision
Gasol's vision is to supply gas to gas constrained markets,
where liquid fuels are currently being used for power generation.
Domestic gas reserves offer the most cost effective fuel for power
generation and industrial use, but developing these reserves
requires substantial capital investment, which can take several
years to structure and put in place. During this development
period, Gasol can deploy its floating LNG solution. The re-gasified
LNG is still less expensive than diesel and other liquid fuels, and
the early availability of gas allows local gas distribution
networks to develop so that they are ready when the domestic
reserves come on line. When the domestic gas becomes available,
Gasol will have the option to relocate its floating storage and
re-gasification unit ("FSRU") to another country or remain in place
as a back-up gas supply to ensure energy security, an advantage
which a land based LNG facility does not have.
Economic environment
The positive fundamental factors underpinning gas markets that
were set out in last year's Chairman's Statement by my predecessor
continue to hold true. Energy security, balanced energy portfolios
and the replacement of older, polluting generating equipment with
new, clean burning gas fired equipment continue to be at the
forefront of most government energy policies in Africa. As a
result, the demand for gas remains strong in the medium term.
The demand for new power generating capacity in Africa is also
well established and will continue to grow for the foreseeable
future. The biggest obstacle to increasing the electricity supply
in most countries is the high cost of purchasing liquid fuels for
generation. High cost fuel results in high cost electricity and
local utilities often need to use their limited resources to
subsidise the cost of electricity to the general public instead of
investing in much needed additional generating capacity. With the
ability to offer lower cost gas to replace liquid fuels, Gasol
continues to find opportunities to invest in the power generation
sector and to secure gas supply agreements with local
utilities.
The most difficult economic factor to assess continues to be the
price of LNG in the medium term. Spot LNG prices, particularly in
Asia, have started to soften slightly after the spikes caused by
the 2011 earthquakes in Japan, but prices remain at historic highs.
However, downward pressure on LNG prices are foreseeable due to the
start of LNG exports from Australia and the construction of the
first LNG export facility in the United States, which will allow
the LNG market to tap North America's substantial shale gas
reserves. These changes should result in lower spot market prices
for LNG and more competitive rates for long and medium term LNG
supply agreements.
Target markets
Gasol's primary target market continues to be West Africa. The
ongoing supply constraints in Nigeria mean that gas exports in the
region remain minimal and 2012 saw little in the way of new
discoveries of gas reserves on the west coast of Africa. Therefore,
many West African governments are continuing to consider LNG import
projects, where Gasol's strategy to concentrate on floating storage
and regasification solutions remains very competitive.
In addition to West Africa, Gasol has also looked for potential
opportunities in other locations where floating LNG solutions could
be especially effective. Many of these opportunities can be found
in countries that are in the early stages of developing their own
domestic sources of gas.
GASOL PLC
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2013
Building relationships
Building trustworthy relationships is an essential element of
Gasol's business plan and is an area in which the Company has had a
particularly strong year. The management team has worked hard to
identify and develop relationships with key participants in the LNG
and power sectors, including engineering advisors, environmental
consultants, construction service providers and equipment
suppliers. On the financial side, Gasol has sought to establish
relationships with development finance institutions and commercial
banks. These early relationships will be refined and cultivated and
will become part of a seamless development process that can be
deployed quickly and efficiently in any gas constrained
location.
One of the highlights of the year was the Company's strategic
alliance with Socar Trading S.A. ("STSA"), which is part of one of
the world's largest oil companies with assets in excess of $20bn.
STSA's financial strength complements Gasol's technical expertise
and STSA will provide key support for Gasol's projects by acting as
the primary lessee for the FSRUs, which will be subleased to
Gasol's project companies. STSA's substantial resources will
provide comfort to third parties that the project companies will be
able to meet their lease obligations under the FSRU charters.
Gasol is also working closely with its affiliate, AfGen, to take
advantage of its network of key suppliers of goods and services. By
working with trusted suppliers, Gasol is able to move ahead with
the development of its projects with more confidence. On 21 August
2013, the Company agreed with AGDC to extend the period for
exercise of its option to acquire the entire issued share capital
of AfGen by 6 months to 24(th) February 2014.
Benin LNG Import Project
Significant progress in Gasol's project in Benin has been made.
When completed, the project will be capable of injecting a
substantial volume of gas per day into the West African Gas
Pipeline ("WAGP") for distribution to Benin, Togo and Ghana. Gasol
is currently in negotiations to conclude firm off-take contracts
for the Benin and Togo markets. The Company is also working with
AfGen to secure an arrangement for sales into Ghana.
Negotiations are also proceeding satisfactorily with the
Government of Benin in respect of the concession for the LNG import
facility, with the West African Gas Pipeline Company ("WAPCO") in
respect of the interconnection with the WAGP and with potential
lenders to secure the financing commitments necessary to implement
the project. The Company intends to focus on bringing this project
to financial close as quickly as possible.
In addition to the Benin project, Gasol has three to four
additional projects in development and the Company intends to make
specific announcements regarding these opportunities as they
mature.
Annual General Meeting
I am pleased to report that the reorganisation of the Company's
capital structure, approved at the last Annual General Meeting, was
successfully implemented.
Financial results
Many of the projects that Gasol is considering are capital
intensive with long lead times until revenue generation. In
addition, Gasol's financial statements reflect the increased
development activity this year that was needed to give form to the
Company's vision for gas to power projects. However, until the
first project reaches operation, the Company remains without a
material source of income. For the financial year ended 31 March
2013, the loss after tax for the financial year is GBP4,030,308,
equating to a loss per share of 13 pence (2012 loss: GBP1,991,582,
equating to a loss per share of 8 pence), which principally
represents the administrative and technical assistance costs of
undertaking project development.
Net cash expenditure on operating activities during the year was
GBP3,492,781 2012: GBP1,481,661). The primary reason for the
increased expenditure this year was the Company's transition to
active project development,
GASOL PLC
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2013
which is reflected in the increased expenditure for staff costs
as further staff have been recruited, aborted transaction costs and
legal and professional fees for securing financing and developing
relationships with its alliances. Whilst management continues to
monitor all costs closely, we are now investing in resources to
bring our projects to completion and these increased costs will be
reflected in the 2014 financial accounts.
Outlook
I would like to take this opportunity to thank my predecessor,
Cornelia Meyer, for her service to the Board and to Gasol. I am
very pleased that Cornelia has agreed to continue with Gasol as a
strategic advisor to the Company and to lend her experience and
advice going forward.
We believe that Gasol's LNG to power strategy will meet the
requirements of governments in West Africa. The Company's success
in attracting superior alliance partners and the speed with which
it has secured the rights to the Benin project have placed the
Company in an excellent position to transition from a development
company to a revenue earning operating company.
I look forward to seeing our first projects reach completion and
to making Gasol an African gas champion providing gas for the next
generation of Africans.
Rilwanu Lukman
Non-Executive Chairman
28(th) August 2013
GASOL PLC
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2013
Chief Operating Officer's Statement
Progress
I recently had a meeting with a major oil company and was
delighted at the name recognition that Gasol has achieved in just
one year. The executive I met with not only knew the Gasol name,
but he also congratulated me on the progress that Gasol had made
with its project in Benin.
Over the past year, the Company has made substantial progress in
turning its concept of delivering re-gasified LNG to west Africa
into reality. The achievement of a number of major commercial
milestones over the last 12 months means that Gasol, working in
conjunction with AfGen, now has all the significant pieces of the
jigsaw underway in order to complete its first project and deliver
re-gasified LNG to the Port of Cotonou, in Benin. These milestones
can be summarised as follows:
-- Option Agreement signed, and extended for a further 6 months
to 24 February 2014, for the acquisition of AfGen
-- Joint Venture Agreement with Bengaz SA, who will act as
Gasol's local partner in Benin. Bengaz have been instrumental in
progressing local aspects of the Benin Project, particularly the
Concession Agreement for the port area at Cotonou where the LNG
storage vessel will be located.
-- Strategic Alliance with STSA for the delivery of energy
management services to the Benin Project. STSA is a wholly owned
subsidiary of the State Oil Company of Azerbaijan ("SOCAR"), and
has significant ambitions to establish itself as a major trader of
LNG, as well as gas and power. The alliance with STSA gives Gasol
three pillars to support its development of the Benin project: the
reliable delivery of LNG, the lease of a LNG storage vessel and the
lease of a bespoke re-gasification barge designed to meet the
requirements of the WAGP.
-- Support from Dredging International for the design and
construction of a breakwater at the entrance to the Port of Cotonou
and for the dredging of an anchorage basin formed by the breakwater
(to 15 metres). Dredging International is a strategic alliance
partner of AfGen and a subsidiary of the Belgian company, DEME,
which is in turn owned by Vinci of France. Dredging International
had previously been selected by the Cotonou Port Authority, after
competitive tender, to undertake dredging works at the entrance of
the harbour and to construct an additional breakwater at the port,
which gave them an unassailable advantage in vying for the
construction works that Gasol requires at Cotonou. Gasol has been
able to realise significant savings in both time and cost because
Dredging International already have teams mobilised at the port. A
Design & Build Contract is currently being negotiated with
Dredging International and its local affiliate, Sogea Satom, for
the construction works.
-- MoU with the Communaute Electronique du Benin, the
electricity authority for Benin and Togo, to supply 60mmscfd of gas
for their power plant requirements. We are now in the progress of
negotiating a full Gas Sales Agreement with the CEB.
-- MoU between AfGen and GNGC, the state owned gas champion for
Ghana. The MoU provides for the creation of a joint venture
company, which will acquire gas from a number of sources including
the Benin LNG Import Project and act as a supplier of local gas, as
well as re-gasified LNG, to power plants and industrial users in
Ghana.
-- Positive reception from WAPCO, the management company of the
WAGP, for Gasol's application for reserved capacity to ship
re-gasified LNG through the WAGP under their new open access
regime.
-- Appointment of Royal Haskoning DV as Owner's Engineer for the Project.
-- Appointment of Roche as environmental consultant to undertake
the Environmental & Social Impact Assessment for the
Project.
GASOL PLC
PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2013
Funding
Gasol's achievements in respect of commercial matters were
matched in respect of its achievements in financial matters. We
were pleased to be able to make significant funding announcements
in March of this year, including:
-- GBP13.2 million ($20 million) unsecured bond. The bond has
been placed with institutional investors, has a 3 year term and an
interest rate of 10 per cent. The bond was listed on the Dublin
Stock Exchange on 21(st) August 2013, thereby eliminating costs
related to the imposition of withholding tax on interest
payments.
-- GBP670,825 ($1 million) convertible unsecured bond with STSA.
The bond has a 2 year term and is convertible in the second year,
at the lower of 18p and the (90 day VWAP) of Gasol shares prior to
conversion.
-- Gasol repaid the GBP2.5 million convertible loan outstanding
from its major shareholder, AGDC.
In addition, Gasol rolled over the convertible loan provided
Banque Benedict Hentsch & Cie to 31 December 2013.
Management and Staff
Gasol management and staff have all made significant
contributions to the Company's progress this year and I am proud of
what we have been able to achieve in a relatively short period of
time. I thank everyone at Gasol for their commitment and the
personal sacrifices they have made.
The challenge for the new year is to turn that progress into
something concrete by achieving commercial and financial close of
the Benin Project, and to be ready to tackle new LNG-to-power
opportunities that present themselves.
Alan Buxton
Chief Operating Officer
GASOL PLC
PRELIMINARY RESULTS
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2013
Year ended Year ended
31 March 31 March
2013 2012
Note GBP GBP
Other operating income 68,000 68,000
Administrative expenses (3,381,454) (1,778,784)
----------- -----------
Loss from operations (3,313,454) (1,710,784)
Finance income 14,262 1,889
Finance costs (731,116) (282,687)
Loss before tax (4,030,308) (1,991,582)
Income tax expense - -
Loss for the year (4,030,308) (1,991,582)
=========== ===========
Loss per ordinary share
Basic and diluted loss
per share 4 (13p) (8p)
=========== ===========
All results relate to continuing activities.
All losses and other comprehensive income for the year are
attributable to equity shareholders of the parent
GASOL PLC
PRELIMINARY RESULTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 MARCH 2013
Share Share Reverse Convertible Capital Capital Translation Warrant Retained Total
capital premium acquisition loan redemption contribution reserve and losses equity
reserve reserve reserve reserve option
reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 April
2012 7,598,463 72,989,363 (63,104,556) 187,286 - 83,787 12,267 1,774,810 (18,832,049) 709,371
Comprehensive
income
Loss for the
year - - - - - - - - (4,030,308) (4,030,308)
------------ ----------- ------------- ------------ ----------- ------------- ------------ ---------- -------------
Total
comprehensive
income for
the year
ended
31 March 2013 - - - - - - - - (4,030,308) (4,030,308)
Loan
conversion 500,000 - - (370,163) - - - - 370,163 500,000
Warrants
issued
on lines of
funding - - - - - - - 252,180 - 252,180
Credit to
equity
due to the
convertible
loan - - - 182,877 - - - - - 182,877
Shares issued
in relation
to share
options
and warrants 5,589 146,447 - - - - - - - 152,036
Buy back and
subsequent
cancellation
of shares (7,936,494) - - - 7,936,494 - - - - -
At 31 March
2013 167,558 73,135,810 (63,104,556) - 7,936,494 83,787 12,267 2,026,990 (22,492,194) (2,233,844)
GASOL PLC
PRELIMINARY RESULTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 MARCH 2012
Reverse Convertible Capital Warrant
Share Share acquisition loan contribution Translation and options Retained Total
capital premium reserve reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 April
2011 5,524,445 72,574,560 (63,104,556) 260,870 83,787 13,157 1,625,805 (16,840,467) 136,711
Comprehensive
income
Loss for the
year - - - - - - - (1,991,582) (1,991,582)
Other
comprehensive
income
Currency - -
translation
differences - - - - - - -
---------- ----------- ------------- ------------ ------------- ------------- ------------ ------------- ------------
Total
comprehensive
income for
the
year ended 31
March
2012 - - - - - - - (1,991,582) (1,991,582)
Loan
conversion 2,074,018 414,803 (260,870) 2,227,951
Warrants
issued
on lines of
funding
and share
options - - - - - - 149,005 - 149,005
Credit to
equity
due to the
convertible
loan - - - 187,286 - - - - 187,286
------------ ------------
2,074,018 414,803 - 187,286 - - 149,005 - 2,564,242
At 31 March
2012 7,598,463 72,989,363 (63,104,556) 187,286 83,787 12,267 1,774,810 (18,832,049) 709,371
GASOL PLC
PRELIMINARY RESULTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 MARCH 2013
31 March 31 March
2013 2012
GBP GBP
Assets
Non-current assets
Goodwill 3,000,000 3,000,000
Property, plant and
equipment 1,397 2,929
Total non-current assets 3,001,397 3,002,929
-------------- ------------------------
Current assets
Trade and other receivables 718,515 176,602
Cash and cash equivalents 6,750,255 206,243
-------------- ------------------------
Total current assets 7,468,770 382,845
Total assets 10,470,167 3,385,774
-------------- ------------------------
Liabilities
Current liabilities
Trade and other payables 656,268 560,963
Borrowings 767,325 2,115,440
Total current liabilities 1,423,593 2,676,403
-------------- ------------------------
Net current assets 6,045,177 709,371
Non-current liabilities
Borrowings 11,280,418 -
Net (liabilities) /
assets (2,233,844) 709,371
============== ========================
Equity
Share capital 167,558 7,598,463
Share premium 73,135,810 72,989,363
Reverse acquisition
reserve (63,104,556) (63,104,556)
-------------- ------------------------
Total issued equity 10,198,812 17,483,270
Convertible loan reserve - 187,286
Capital contribution
reserve 83,787 83,787
Capital redemption reserve 7,936,494
Translation reserve 12,267 12,267
Warrant and option reserve 2,026,990 1,774,810
Retained losses (22,492,194) (18,832,049)
Total equity attributable
to equity holders of
the parent (2,233,844) 709,371
============== ========================
GASOL PLC
PRELIMINARY RESULTS
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2013
Year ended Year ended
31 March 31 March
2013 2012
GBP GBP
Loss before taxation (4,030,308) (1,991,582)
Adjustments for:
Finance income (14,262) (1,889)
Finance costs 731,116 282,687
Depreciation charges 1,532 7,723
Share-based payment charge 99,477 119,533
Operating cash flows before
movements in working capital (3,212,445) (1,583,528)
Increase in receivables (527,677) (32,673)
Increase in payables 247,341 134,540
Net cash used in operating
activities (3,492,781) (1,481,661)
----------- -----------
Cash flows from investing
activities
Interest received 26 1,889
Purchase of tangible fixed
assets - (3,057)
Net cash received from /
(used in) investing activities 26 (1,168)
----------- -----------
Cash flows from financing
activities
Interest paid (67,430) (5,723)
Repayment of loan (3,008,136) -
Proceeds from issue of convertible
loan notes 2,519,081 1,520,000
Proceeds from issue of bond
instruments 13,217,600 -
Commission costs on issue
of bond instruments (2,624,348) -
Net cash generated from financing
activities 10,036,767 1,514,277
----------- -----------
Net increase in cash and
cash equivalents 6,544,012 31,448
Cash and cash equivalents
at beginning of year 206,243 174,795
Cash and cash equivalents
at end of year 6,750,255 206,243
=========== ===========
GASOL PLC
NOTES TO THE PRELIMINARY RESULTS
YEAR ENDED 31 MARCH 2013
1. Status of financial information
On 27th August 2013, the Directors approved the preliminary
results for publication. While the audited consolidated financial
statements for the year ended 31 March 2013, from which the
preliminary results have been extracted, are prepared in accordance
with International Financial Reporting Standards (IFRSs) as adopted
by the European Union, these preliminary results do not contain
sufficient information to comply with IFRSs. Statutory accounts for
31 March 2012 have been delivered to the Registrar of Companies
while the Directors expect to publish the full financial statements
that comply with IFRS as adopted by the European Union in September
2013.
The auditors have reported on those accounts; their report was
unqualified but did include reference to matters which the auditors
drew attention by way of emphasis without qualifying their report
and did not contain statements under section 498 (2) or (3) of the
Companies Act 2006 in respect of the accounts for 2012.
2. Going concern
The Directors have prepared cash flow forecasts which indicate
that Gasol will require additional funding in the form of debt or
equity within the next 9 to 12 months in order to meet its
commitments as they fall due and to fund the expenditure required
to progress the gas projects to cash generation.
Gasol is currently involved in discussions with external
investors and advisors to secure future financing arrangements in
the form of both debt and equity instruments. The Directors believe
that based on preliminary discussions the outcome will be positive.
The Board is also confident that it retains the continuing support
from its major shareholders to provide additional funding should
other sources not be forthcoming. However, the Directors appreciate
that this lack of formal agreements mean there can be no certainty
that the additional funding will be secured within the necessary
timescale. Nevertheless, with the expectation of Gasol formally
agreeing new funding from its major shareholders and other
financial investors, the Directors have a reasonable expectation
that the Group has adequate resources to continue trading for the
foreseeable future and have therefore concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
These conditions indicate the existence of a material
uncertainty which may cast significant doubt about the Company's
ability to continue as a going concern. The financial statements do
not include the adjustments that would result if the Group was
unable to continue as a going concern.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management
to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the end of the reporting period. Actual results may
vary from the estimates used to produce these financial
statements.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Significant items subject to such estimates and assumptions
include, but are not limited to:
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash-generating units to which goodwill
has been allocated. The value in use calculation requires the
entity to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to
calculate present value.
GASOL PLC
NOTES TO THE PRELIMINARY RESULTS
YEAR ENDED 31 MARCH 2013
The goodwill represents the potential value of the current
portfolio of projects and the value is underpinned by the economic
benefit of future cash flows generated from the project
portfolio.
The main risks and sensitivities impacting the valuation of the
goodwill relate to the following:
-- ability of upstream partners to secure the gas assets;
-- obtaining government approvals;
-- reaching binding joint venture agreements between the parties;
-- securing sufficient funding to meet expected project development costs; and
-- delivering gas within the projected timeframe.
The Directors' economic assessment of the project portfolio at
31 March 2012 is GBP3,000,000. In addition and in determining the
supporting net present value of the project portfolio future cash
flows, the relevant probabilities of success at each stage of the
individual projects have been assessed and the risk factored in to
the valuation.
The Directors acknowledge that the use of estimates is
inherently judgemental but believe they have been relatively
prudent in forming their views and utilised the significant
experience of the Board and Management in determining the values
used. Whilst there is the possibility that the projects will yield
a lower than expected value, there remains significant up-side
potential.
The Directors will continue to monitor the valuation of the cash
generating units that support the goodwill.
Other areas
Other estimates include but are not limited to the allowance for
doubtful accounts; future cash flows associated with assets; useful
lives for depreciation, depletion and amortisation and fair value
of financial instruments.
4. Loss per ordinary share
The calculation of a basic loss per share of 13 pence for the
year (2012: 8 pence*) is based on the loss for the period
attributable to equity holders of Gasol Plc of GBP4,030,308 (2012:
GBP1,991,582*) and on the weighted average number of shares in
issue during the period of 31,905,919 (2012: 24,976,474).
The options are considered anti-dilutive as inclusion would
reduce the loss per share. As such, no diluted loss per share is
reported.
At 31 March 2013, there were 2,595,333 potentially dilutive
shares (2012: 1,835,333*) as part of a share-based payment scheme
and outstanding warrants.
*As a result of a share consolidation during the year the
current year and comparatives have been amended to reflect the
current shares issued to allow comparison between the years.
5. Segmental information
The Group complies with IFRS 8 Operating Segments, which
requires operating segments to be identified on the basis of
internal reports about components of the Group that are regularly
reviewed by the Chief Operating Officer to allocate resources to
the segments and to assess their performance.
In the opinion of the Directors, the operations of the Group
comprise one class of business, being the development of the
Group's own sources of gas and its gas to power projects in West
Africa.
6. Subsequent events
On 21 August 2013, the Company agreed with AGDC to extend the
period for exercise of its option to acquire the entire issued
share capital of AfGen by 6 months to 24(th) February 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUCCRUPWGMR
Gasol (LSE:GAS)
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