Gulfsands Petroleum plc (GPX) 2015年年度報告「LSE」.pdf

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1、Annual Report and Accounts 2015About UsGulfsands Petroleum plc is an independent oil and gas exploration and production company,incorporated in the United Kingdom,whose shares are traded on the Alternative Investment Market(“AIM”)of the London Stock Exchange(symbol:GPX).The Group has interests in an

2、 oil development project in the Syrian Arab Republic(under force majeure as a result of EU sanctions),and oil and gas exploration projects in Morocco,Tunisia and Colombia.Visit us 1Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernance Group working int

3、erest 2C Contingent Resources of 87.3mmboe.Involvement in Syrian operations remains suspended during continuation of EU sanctions.Initiated farmout process for remaining Moroccan,Tunisian andColombian assets.Exploration periods for Fes and Rharb permits in Morocco expired during 2015.Cash available

4、for use by the Group at 31 December 2015 of$0.4 million.Restricted cash balances of$3.7million after provisions againstrecovery.Exploration writeoffs and impairments of$53.8 million intheyear.Continued significant reduction inthe ongoing expenses across theGroup.Post period highlights Open offer com

5、pleted,with 354,837,296 shares subscribed for and admitted to AIM on 14 January 2016,raising 14.2 million.The Convertible Loan Facility was repaid in full on 14 January 2016.Cash available post Open Offer and after the repayment of the loan was$5.6 million.ContentsStrategic ReportOur 2015 Summary 1E

6、xecutive Chairmans Statement 2Our Business Model 5Strategic Priorities and Monitoring Performance 6Principal Risks and Uncertainties 8Operations Review Syria 10 Morocco 12 Tunisia 15 Colombia 16Reserves and Resources Report 17Financial Review 20GovernanceBoard of Directors 25Directors Report 26Direc

7、tors Corporate Governance Report 28Directors Remuneration Report 30Audit Committee Report 33Financial StatementsGroup Contents 36Independent Auditors Report 37 Consolidated Income Statement 38Consolidated Balance Sheet 39Consolidated Statement of Changes in Equity 40Consolidated Cash Flow Statement

8、41Notes to the Consolidated Financial Statements 42Company Contents 73Company Balance Sheet 74Company Statement of Changes in Equity 75Company Cash Flow Statement 76Notes to the Parent Company Financial Statements 77Glossary of Terms 84Corporate Information 85Strategic ReportOur 2015 Summary2Gulfsan

9、ds Petroleum plc Annual Report and Accounts 2015Dear Shareholder2015 and early 2016 have continued to be a challenging time for Gulfsands.The Board has focused on realigning the strategy of the Group to be consistent with its financial capacity and risk tolerance and continues to pursue a strategy o

10、f farmout and divestiture for the nonSyrian assets.The Syrian assets remain a core part of the Groups strategy and we monitor the situation closely and ensure our ongoing readiness to return to operation when the political situationallows.During the year,the Board prepared an Open Offer to raise 14.

11、2 million which allowed shareholders to participate in the refinancing of the Company while strengthening the Balance Sheet and dramatically reducing the debt burden.Further capital may be required during the next twelve months,as explained further in note 1.3a to the Consolidated FinancialStatement

12、s.During 2015 the Groups interests in Morocco were reduced from three licences,covering four permits to one licence covering one permit.The Moulay Bouchta licence,awarded to Gulfsands during 2014,covers an area of some 2,800 km,including three abandoned legacy oil fields which demonstrate that there

13、 is an active hydrocarbon system present,likely to be oil prone.The initial two year exploration period runs to June 2016 during which time the Group must acquire 500 km of new 2D seismic and reprocess some existing seismic data.Gulfsands is in discussions with Office National des Hydrocarbures et d

14、es Mines(“ONHYM)regarding the outstanding work commitments on Moulay Bouchta and is hopeful a forward plan can be agreed that allows Gulfsands to continue to participate in the exploration of our remaining interest inMorocco.The exploration period of the Fes and Rharb licences in Morocco expired on

15、25 September and 9 November 2015 respectively.The Company continues to work with ONHYM to resolve the outstanding issues of potential penalties for nonfulfilment of work obligations,outstanding balances of training budgets and the final abandonment of wells and site restoration,further details can b

16、e found in notes 6.5 and 6.6 to the Consolidated Financial Statements.In Tunisia the Group was granted a two year extension on its Chorbane licence during which the work obligation of acquiring 200 km 2D seismic and drilling one exploration well must be completed;the current exploration phase will e

17、xpire in July 2017.The Group is looking to farmdown its 100%interest in exchange for a carried work programme.The Group also holds 100%interest in two Colombian exploration blocks.Under the contracts for Llanos Block 50 and Putumayo Block 14,the Group has a minimum work obligation of acquiring appro

18、ximately 100 km of 2D seismic and drilling one exploration well on each block before the end of the current phase,which runs to November 2016 for Llanos Block 50 and November 2017 for Putumayo Block 14.The Group is actively seeking farmin candidates to share the cost of the exploration programme on

19、these blocks.The Group continues to face many challenges over the coming months,principally:completing the restructuring of our portfolio of interests and refocusing the strategy on preserving the value of our interest in Block 26 in Syria.Strategic ReportExecutive Chairmans Statement3Gulfsands Petr

20、oleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceFinancial overviewThe Group posted a loss for the year of$69.2 million,including E&E writeoffs and impairments of$53.8 million.At year end the Group had total cash and cash equivalents of$0.4 million.At the date o

21、f this Report,the Group had unaudited cash and cash equivalents of$3.5 million.In 2014,the Group entered into a$20 million Facility Agreement with Arawak Energy Bermuda Ltd as a means of securing working capital.In June 2015 the Facility Agreement was acquired by Waterford Finance and Investment Ltd

22、 and Mr Richard Griffiths who together continued to provide working capital for the Group through to January 2016 when the outstanding loan with interest,totalling$14.5 million,was repaid out of the proceeds of the Open Offer.The Group has material work obligations that must be completed under its v

23、arious exploration licences and if these obligations are not met the Group may be forced to forfeit its working interest in these contracts and any sums of restricted cash lodged with host governments as guarantees for our performance of the minimum work obligations.Furthermore,some of the agreement

24、s contain provisions for the payment of penalties if the minimum work obligations are not fulfilled.The 2015 Financial Statements have been prepared on a going concern basis,and further details on this can be found in the Financial Review on pages 23 and 24.Board and Management changesIn February 20

25、15 Ken Judge left the Board and was served notice to terminate his executive services as Gulfsands legalcounsel.On 13 April 2015 Mahdi Sajjad was removed from his role as the Companys Chief Executive and on 30 June 2015 he was not reelected as a Director at the Companys Annual General Meeting.Mr Saj

26、jad has brought a claim in the High Court against Gulfsands Petroleum Levant Limited(“Gulfsands Levant”),a subsidiary of the Group,which arises out of his removal by the Board as CEO and termination of his employment.Mr Sajjad has also brought a claim in the Employment Tribunal against Gulfsands Lev

27、ant for constructive unfair dismissal based on the same factual circumstances as his High Court claim.In addition Mr Sajjad also brought a claim before the Lebanese Arbitration Board against Gulfsands Petroleum(MENA)Limited in relation to the branch office in Beirut.The Group is currently engaged in

28、 defending MrSajjads claims and in pursuing its counterclaim against Mr Sajjad,please see note 6.5 to the Consolidated Financial Statements for more details.In April 2015 Andrew West stood down as NonExecutive Chairman and remains on the Board as a NonExecutive Director.Simultaneously I was appointe

29、d to the Board as a Director and Executive Chairman.4Gulfsands Petroleum plc Annual Report and Accounts 2015Also in April 2015 Andrew Morris was appointed to the Board as a NonExecutive Director.Andrew is Chairman of Madagascar Oil Limited and his career includes a period with the global accounting

30、firm Ernst&Young.Mr Morris makes a valuable contribution to the Board on both technical and financial matters.In April 2015 Alan Cutler gave notice of resignation from his executive role as Director Finance and Administration.He stepped down from the Board in August 2015 and left the Company in Octo

31、ber 2015.At the Companys Annual General Meeting in June 2015,Ian Conway retired from the Board and did not stand for reelection.He continues his executive role as TechnicalDirector.Outlook for 2016 and beyondThe Group remains committed to maintaining its presence in Syria,and it considers its partne

32、rship with General Petroleum Corporation(“GPC”)as a key element for the safe stewardship of Block 26 while the various sanctions prevent Gulfsands from a more active role.We shall continue to seek to farmout the assets we hold in Morocco,Colombia and Tunisia ensuring we can benefit from any success

33、but without being exposed to the full cost ofexploration.I would like to thank all our staff for their hard work over the last twelve months and look forward to working with them in the future to develop Gulfsands into an oil and gas company we can all be proud to be part of.Yours sincerely,Alastair

34、 BeardsallExecutive Chairman17 March 2016Strategic ReportExecutive Chairmans Statement continuedThe Group remains committed to maintaining its presence in Syria,and it considers its partnership with General Petroleum Corporation(“GPC”)as a key element for the safe stewardship of Block 26 whilethe va

35、rious sanctions prevent Gulfsands from undertaking anactive role.5Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceDuring 2016 we expect to continue to streamline our staffing model including our technical capability to match our reduced involvemen

36、t in operations as we seek to farmout or divest our active projects.However our longerterm mission remains the same,to create real accretive value for our stakeholders by building a strong,independent exploration and productioncompany.conductBusiness Areas ofexpertiseStakeholdervalueFinancialdiscipl

37、ineBusiness developmentstrategyOur business model is based on the following building blocks:Experienced and entrepreneurial leadership team.Access to strong technical skills either from our inhouse team or network of advisers.Costeffective culture matched to a fitforpurpose mindset.Emphasis on build

38、ing strong local organisations and skill sets.Commitment to excellence in HSES.Rigorous approach to compliance and governance.Being a good corporate citizen wherever weoperate.Areas of expertise1 Careful husbanding of cash resources.Strong emphasis on cost control and cost/benefit analysis.Seeking a

39、ccess to cash flow from production at the earliest opportunity.Creating and maintaining a strong Balance Sheet.Financial discipline3 Utilise regional knowledge and relationships with partners,to identify exploration and production(“E&P”)opportunities capable of delivering hydrocarbon reserves that c

40、an be monetised.A disciplined approach to the evaluation and acquisition of E&P opportunities.Focus on growth in resources,reserves and sustainable production as key drivers of valuecreation.Business development strategy2 Striving to be a partner of choice in the countries and regions in which we op

41、erate.Establishing relationships with partners with an ability to add material value to our joint ventures.Respecting the environment and the health and safety of our employees and the local communities.Respecting all relevant international and local legislation and regulations.Business conduct4Stra

42、tegic ReportOur Business Model6Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportStrategic Priorities and Monitoring PerformanceOur strategic priorities are subject to our ability to finance projects through sourcing partners and/or raising finance.The following tables set out o

43、ur current strategic priorities and howwe measure our progress towards their realisation:Strategic imperativesProgress in the yearPlanned actionsProtection of Syrian interests and value Preserved all contractual rights and managed business relationships in a manner consistent with all relevant sanct

44、ions and force majeurestatus.Continued adherence to licence terms within terms of sanctions.Maintain readiness to return to conducting operations as soon as circumstances permit.Longer term,the creation of a diversified portfolio focused on the MENA region Limited progress during 2015 as Group focus

45、ed on refinancing.Discuss with ONHYM an extension to the Moroccan licence.Evaluate and rationalise interests in Morocco,Colombia and Tunisia.Evaluate existing assets comprehensively Evaluated all assets to assist in the determination of a future strategy.Morocco:progress farmout and/or divestment of

46、 assets,and seek time extension for completion of work commitments with ONHYM.Tunisia:progress farmout and/or divestment of asset.Colombia:progress farmout and/or divestment of assets.Longer term,to generate production and revenues No progress made during 2015.No planned activity for 2016.Maintain H

47、SES and community relations Established good community relations.Minimum HSES incidents during operations.Continue community,security and environmental assessment processes andoperations planning.Continued support of our current CSR projects where practicable.Maintain HSES standards at the forefront

48、 of operational objectives.Develop/maintain relationships with the communities with whom we work.Ensure Group is wellfinanced Maintained control over costs.Open Offer planned and underwritten(closedpost year end).Debt eliminated via Open Offer.Cost basis further reduced.Pursue new sources of finance

49、.Ensure tight management of financial resources with additional reductions in the cost base.Ensure financial commitments and available funding are brought into balance.Where appropriate,pursue farmout and divestment.7Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial St

50、atementsGovernanceKey Performance Indicators(“KPIs”)provide a means of measuring our progress in delivering our strategic objectives.The Group has identified five key performance indicators in respect of its corporatestrategy.KPIPerformanceCommentary and targetProved and Probable working interest Re

51、serves(mmboe)Audited,Proved and Probable Reserves stated on a working interest basis(page 17 for furtherdetails).During 2015 the Reserves held for Block 26 in Syria were reclassified as Contingent Resources as there is no certainty that development of the assets will resume within five years of thee

52、valuation.The Group remains ready to return to production and reclassify to Reserves assoon as circumstances allow.Contingent and Prospective Resources(mmboe)Audited 2C Contingent Resources and best estimate Prospective Resources both stated on an unrisked working interest basis(pages 18 and 19 for

53、furtherdetails).Contingent and Prospective Resources reflect the hydrocarbon potential of Gulfsands contractareas.Note Syrian resources are held under contracts currently in forcemajeure.The primary movement in the year of Contingent Resources is a result of reclassification of Block 26 Reserves toR

54、esources.The reduction during 2015 of Prospective Resource is the result of theexpiry of the Feslicence.Managements longerterm objective is to capture further Contingent and Prospective Resources and efficient conversion of such resources intoreserves.Capital expenditure($million)Accrued expenditure

55、 on exploration for and appraisal and development of oil and gas assets.Expenditures include fair values of acquired assets and capitalised internal costs on operated assets(pages 48 and 49 for further details).Focused costeffective expenditure on exploration,appraisal and reserve development activi

56、ty is key to the success of the Group but must remain within the financial capacity of the Group.Safety lost time incidents The number of incidents during the year which resulted in loss of working time.The Group conducted drilling,well completion and well testing operations on its Moroccan Rharb Ce

57、ntre permit during 2015.Managements commitment to the Groups HSES performance remains absolute.Total cash and cash equivalents($million)Cash and cash equivalents are funds immediately available to the Group(page 52 for further details).Ensuring the Group has sufficient cash resources to fulfil its c

58、ontractual obligations is key for the Group.073.575.82015201420136.823.848.520152014201302015201420131.01.087.313.612.3201520142013Contingent52655548201520142013Prospective7.933.82015201420130.48Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportPrincipal Risks and UncertaintiesA

59、ll staff within the Group take an active responsibility for identification of potential risks to the Group,to ensure these are communicated to the appropriate person and to participate in the mitigation processes.Risk registers are initially prepared at the business unit and function level and then

60、communicated to Executive Director level.The Executive Directors hold the daytoday responsibility for the risk management process and can delegate responsibility for specific risks to the appropriate seniormanager.The Group reviews the potential risks to its business and each is assessed in terms of

61、:the likelihood of occurrence;the magnitude of the potential impact on our operations,employees,performance,assets,reputation and shareholder expectations;and the means and extent to which risks can be mitigated.The Audit Committee of the Board reviews the risk registers periodically.The Group consi

62、ders its principal risks and uncertainties to be as follows:The Groups approach to risk management aims to identify material risks as early as possible,to reduce or eliminate the probability of those risks occurring,and to mitigate to the greatest extent practicable the impact on the Group if the ev

63、ent does occur.FinancingDescriptionImpactMitigationChange year on yearThe terms for the Groups exploration interests(licences)include minimum work obligations agreed with the relevant state regulator.Additional work programmes will ordinarily be required to fully evaluate the exploration potential.T

64、his work will require significant investment.As the Group rationalises its portfolio of assets,and thus reduces its requirement for capital investments,in the absence of revenue,the ongoing daytoday G&A costs willrequire financing.The nonsatisfaction of work obligations under each licence could put

65、our working interests,andrestricted cash balances at risk;furthermore some licences may require the payment of penalties if a minimum sum is not spent towards performing the work commitments.If the daytoday G&A costs are not financed the Board may be forced to place the Group into administration or

66、insolvency.Further discussion of these matters is contained in the going concern note 1.3a to the Consolidated Financial Statements.The Group strives to commit to work obligations that are appropriate for the assets and that are financeable.The minimum work obligations under a licence or contract ma

67、y require restructuring as our understanding of the assets improves.The Group will always strive to avoid performance of commitments that are without technical and commercial justification.The funding requirements of the Group are regularly reviewed and appropriate actions taken.It is Managements st

68、rategy to farmout or divest its remaining assets in Morocco,Tunisia and Colombia.The Fes and Rharb licences expired during 2015.The Group is in discussions with ONHYM over the potential penalties for nonfulfilment of the minimum work obligations.During 2015 the Group has reduced the gross G&A costs

69、and will continue this initiative into 2016.Health,safety,environment and securityDescriptionImpactMitigationChange year on yearThe Groups reputation and its value is critically dependent on:the protection of the health and safety of its staff,its contractors and members of the community in which it

70、 operates;the protection of the environment in which it operates;andthe security of its interests andassets.Failure in respect of these matters could severely impact on the Groups ability to work and obtain further business in the area of operation as well as putting it at risk of legal and financia

71、l liabilities.The Group maintains best practice policies and procedures in these areas and manages its business and its contractors in accordancetherewith.The Groups good safety record in Morocco has been maintained over the duration of our operations.Managements commitment to the Groups HSES perfor

72、mance has remainedabsolute.Bribery and corruptionDescriptionImpactMitigationChange year on yearTaking all reasonable measures to prevent bribery and corruption being perpetrated on,or within,the business is critical to the businessmodel.Possible reputation damage,legal liability and financial loss.E

73、mbedding the Code of Business Conduct within the work of theGroup.Diligence in reviewing business practices and results.Continued employment of the Code of Business Conduct and businessmonitoring.9Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceEx

74、ploration success/failureDescriptionImpactMitigationChange year on yearExploration for hydrocarbons is a high risk activity;historic industry drilling results indicate only one exploration well out of six drilled identifies hydrocarbons.The Groups portfolio outside of Syria is,to a significant exten

75、t,dependent upon achievement of explorationsuccess.Failure to discover hydrocarbons incommercial quantities and/or generate early revenues from production will impact the Groups financial performance andability to finance the growth anddevelopment of theGroupsassets.Exploration risk can be mitigated

76、 by careful analysis of the available geological,geophysical and petrophysical data prior todrilling.Furthermore,economic modelling based on the chance of success and a range of possible outcomes,prior to an acquisition and before commencement of individual operations is used in evaluation of risks

77、and identification of reduction measures.Risks will also be reduced where appropriate by bringing in partners either by farmin or through partialsale.Methodical and detailed evaluation of all oil and gas prospects in the Groups licence areas to assist in the determination of the Groups strategy.Busi

78、ness strategy fails to deliver on shareholder objectivesDescriptionImpactMitigationChange year on yearThe Group recognises the need to align its business strategy with the objectives of its shareholders and then to deliver on thatstrategy.Nonalignment and nondelivery could both lead to discontented

79、shareholders,a loss of confidence in Management and consequently a decline in share price and increased difficulty raising new capital.Regular communication by the Group to the investment community of its strategy and the results achieved.Regular dialogue with shareholders to ensure communications a

80、resatisfactory.During 2015 shareholders indicated their support for the Groups revised strategy with their approval for the Open Offer and subsequent underwritten capital raising.Geopolitical instabilities in operational areasDescriptionImpactMitigationChange year on yearThe Group operates in areas

81、in which it may be exposed to political instability and civil disturbances disrupting its operations.Currently the Groups interests in Syria are under force majeure as a consequence of EU sanctions beingimposed.Such instabilities can seriously impact upon the ability of the Group to carry out its op

82、erations leading to loss of time and value.In Syria the value of the Groups interests continue to be at risk from the continuing sanctions,the loss of ability to develop the portfolio of interests and the loss of physical control over itsassetsThe Group carries out a thorough risk assessment of any

83、proposed new country entry.The Group is not affiliated to any government,political party,religion,ethnic grouping or similar organisation,but maintains good relationships with communities and important local stakeholders.The Board accesses business intelligence and engages consultants to assist with

84、 risk management processes in thisarea.The Group has continued to monitor the operational areas and,where it can,is working with local communities and stakeholders to ensure its position is protected and advanced.Reliance on key staffDescriptionImpactMitigationChange year on yearThe Group has a smal

85、l staff of experienced people and relies heavily on their knowledge and experience in developing and delivering the Groups strategic objectives.Possibility of loss of management continuity and impairment of the businessmodel.Internal succession planning where possible together with maintaining conta

86、ct with a network of experienced people in the industry,including consultants on whom we may call if required.Significant downsizing during 2015(and into 2016)will be managed to minimise the loss of skills and experience that may be difficult to replace when operational activityincreases.Shareholder

87、 concentrationDescriptionImpactMitigationChange year on yearAt the date of this Report,a large proportion of the shares in the Company are held by two shareholders holding approximately 38.98%and 31.47%.High levels of share ownership between only two shareholders can offer stability of ownership and

88、 protection against opportunistic or predator approaches.However,concentrated share ownership can also result in undue influence by shareholders on the Board and Management that may be to the detriment of the minorityshareholders.Commit to high levels of corporate governance and ensure the business

89、is managed in a clear and transparent manner.Ensure the Board of Directors has sufficient independent directors and implement agreements with significant shareholders to allow the Board to manage the business without undue influence from any particular shareholder.During 2015 a Relationship Agreemen

90、t was entered into with Waterford,who,as at the date of this Report control 38.98%of the voting shares,that regulates how Waterford may influence the management of the Group.10Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportOperations ReviewBlock 26 covers an area of 5,414 km

91、in north east Syria and the PSC grants rights to the joint venture contractors to explore,develop and produce hydrocarbons from all depths outside the preexisting fields within the area and from the deeper stratigraphic levels below the preexisting discovered fields.Rights to the benefits of product

92、ion from discovered fields last for a minimum of 25 years from the date of development approval with an extension of a further ten years thereto at the partners option.Gulfsands joint venture partner in Block 26 is Sinochem Group,a Chinese conglomerate primarily engaged in the production and trading

93、 of chemicals and fertilizer,and exploration and production of oil.Under the Groups operatorship,two oil fields containing reservoirs of Cretaceous age have been discovered and appraised within the PSC area,Khurbet East(2008)and Yousefieh(2010).During 2011,combined production from these fields reach

94、ed a level of just under 25,000 barrels of oil per day before the impact of EU sanctions resulted in the curtailing of production levels.Two additional oil and gas discoveries within reservoirs of Triassic age have been identified within the Kurrachine and Butmah Dolomite formations,beneath the Cret

95、aceous aged oil producing reservoir in the Khurbet East field.Development approvals for these Triassic discoveries were granted in 2008 and 2011 respectively.A further oil discovery was made late in 2011 by Gulfsands in the Cretaceous aged reservoirs penetrated by the Al Khairat exploration well,a f

96、ew kilometres east of the Yousefieh field.This discovery awaits further evaluation and development work,and is not currently incorporated into the Companys existing Production Licence areas.SyriaGulfsands is the operator of the Block 26 Production Sharing Contract(“PSC”)and holds a 50%working intere

97、st in the PSC along with Sinochem Group(also 50%working interest).Gulfsands is not presently involved in any production or exploration activities on Block 26 as Force Majeure has been declared in respect of the contract following the introduction of EU sanctions inSyria.The Group has ensured that it

98、 remains compliant with all applicable sanctions in relation to Syria and intends to return to production and exploration activities as soon as permitted.SyriaBlock 26IraqJordanTurkeyDamascusDeir Az ZourAl QamishliAl HasakahAr RaqqahPosition during 2015 Continued compliance with applicable sanctions

99、.Block 26 facilities,wells and infrastructure remain secure and predominantly functional.Office presence maintained in Damascus.Retained technical capabilities through staff redeployment.11Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceOperation

100、of the Khurbet East and Yousefieh fields during the production phase has been undertaken by Dijla Petroleum Corporation(“DPC”),a joint operating company formed between Gulfsands,Sinochem and Syrian General Petroleum Company(“GPC”)for this purpose,to which staff of both Gulfsands and GPC had previous

101、ly been seconded.As a consequence of the EUs imposition of further sanctions in Syria which came into effect in early December 2011,in accordance with the terms of the PSC for Block 26,aNotice of Force Majeure was served on GPC,the principal counterparty to the PSC.The imposition of EU Sanctions has

102、 prohibited Gulfsands involvement in petroleum production operations in Syria and restricted its activities in relation to Block 26 generally and unless and until these sanctions are lifted or otherwise modified so as to permit the Companys return to its prior involvement in those activities,the Com

103、pany will be obliged to maintain its current position with respect to Block 26 PSC matters.Since the introduction of EU sanctions on 1 December 2011 and the subsequent declaration of Force Majeure under the PSC,Gulfsands has had no involvement with the operations of DPC,and Gulfsands staff seconded

104、to DPC have been withdrawn,leaving DPC under the management of GPC secondees.The final exploration period of the PSC was set to expire in August 2012,eight months after Force Majeure was declared in December 2011.While the final exploration period legally expired in August 2012,it is understood that

105、 the Syrian authorities may be prepared to grant the Group an additional period to undertake exploration work on Block 26 to replace that period of time which was lost when Force Majeure was declared.The Group has ensured that it remains compliant with all applicable sanctions in relation to Syria a

106、nd intends to return to production and exploration activities as soon as permitted and conditions allow.During 2015 the Groups Syria Reserves were reclassified to Contingent Resources as a result of the continuing EU Sanctions in Syria.This process was subject to external audit and confirmation.Sinc

107、e December 2011,Gulfsands has received from DPC updates on oil volumes produced from the Groups Syrian fields under DPCs operation.These updates have been received on an infrequent and irregular basis and it has not been possible for Gulfsands to verify the content of the information provided.The Gr

108、oup has been updating its remaining recoverable resource volumes for these fields on at least an annual basis based on the information that has been received from DPC.In February 2016 the Group received information from DPC stating that a total volume of 266,934 bbls of oil had been produced from th

109、e Groups fields during 2015 and exported by pipeline to the regional oil gathering station at Tal Addas,22km north east of the Groups Production Concessions.In addition,DPC reported for the first time,that oil also had been lifted from the Groups fields by an alternative oil export method,via produc

110、tion into tankers using gantry loading at the Khurbet East Production Facility.Furthermore DPC advised for the first time that this alternative export method had been in operation throughout 2014 and 2015,and that oil production during this period via this export method was an additional 3,138,739 b

111、bls(2014:1,984,390 bbls,and 2015:1,154,349bbls).Based on this new production information,the Group has updated the previously reported total oil production for 2014 of 399,325 bbls of oil to 2,383,715 bbls of oil via both export methods.2015 total oil production via both export methods is now update

112、d to a total 1,421,283 bbls of oil.The Group has not recognised any revenue for this or indeed any production,post the imposition of EU sanctions,but has updated its remaining recoverable resource volumes for these fields based on this new production information.The Group has evaluated that it holds

113、 within the Massive,Butmah and Kurrachine reservoirs of Khurbet East field,and the Yousefieh field,2C Contingent Resources of 69.7mmbbls of oil and condensate,and 33.4 bcf of gas(working interestbasis).The Group has also evaluated that the oil discovery at AlKhairat contains 2C Contingent Resources

114、of 12.0 mmbbls of oil(working interest basis).These resources have been subject to external audit.Sanction complianceGulfsands has taken extensive legal advice with respect to its obligations under the sanctions in place at the time and has liaised regularly with relevant regulators and generally ac

115、ted cautiously to be certain of remaining compliant with all relevant sanctions.The Board is determined to ensure that the Groups activities remain compliant and Management will continue to liaise closely with the relevant regulatory authorities to ensure this objective is achieved while continuing

116、to keep GPC fully informed of the breadth and scope of restrictions on our activities as a result of continuing to comply with applicablesanctions.Plan to monitor assets during 2016 Continued compliance with applicable sanctions.Maintain an office presence in Damascus whilst reducing the Groups tech

117、nical capabilities in order to save costs.Continue efforts to assimilate and verify where possible information from the field regarding:asset operations and facility/well integrity;and overall status of security in the near field area.Reconfirm to the extent that it is possible Gulfsands position on

118、 cost recovery.Update Gulfsands plans to maintain readiness to resume operational activities when sanctions are lifted.12Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportOperations Review continuedMoulay Bouchta contractContract expiry date:Initial Exploration Phase,June 2016.M

119、inimum work obligation:Acquisition and processing of 500 km of 2D seismic data to be captured in a new survey;reprocessing and interpretation of selected legacy 2D seismic lines and the existing 3D seismic data;and a legacy oil field reactivation study.Further details are provided in note 2.4 to the

120、 Consolidated Financial Statements.The Group acquired operatorship of the Moulay Bouchta permit during 2014,taking a 75%participating interest while Moroccos Office National des Hydrocarbures et des Mines(“ONHYM”)retained a 25%participating interest,theattributable cost of which will be carried by G

121、ulfsands uponthe usual terms for such participation through the exploration phase of the permit and until a commercial hydrocarbon discovery is made.The Moulay Bouchta permit encompasses an elongated area running west to east covering approximately 2,820 km,and is located to the north of the cities

122、of Rabat,Meknes and Fes.It covers terrain where the existence of a working petroleum system has been confirmed with the discovery and development of three light oil fields,the most recent of which was the Haricha Field which had produced a total of 2.8mmboe of oil and 4.2 bcf of gas when production

123、ceased in 1990.The prospectivity within Moulay Bouchta is considered to relate mainly to the potential for deeper and possibly larger hydrocarbon bearing structures within Jurassic and Cretaceous aged reservoirs to exist and be found within the permit area.Work programmes are continuing with respect

124、 to the meeting of the minimum work obligation activities on the permit;prospectivity for exploration and near field appraisal drilling opportunities as evaluated from existing seismic data is ongoing;a tender process has been undertaken during 2015 for the acquisition of 500 km of 2D line seismic w

125、ithin the permit,and a contractor company has been selected for this work once sanctioned and fully funded;legacy 2D seismic data from the permit area have been selected for reprocessing;contractors with a good track record for performing reprocessing work within this type of geological terrain are

126、under evaluation to reprocess the entire Haricha Field legacy oil field 3D survey data set;and a reservoir modelling study of the depleted Haricha Field is in progress with the aim to identify any potential for infield and/or area reactivation.Following interpretation of existing 2D legacy seismic d

127、ata,and prior to the acquisition of further 2D data,the Group has identified best estimate Prospective Resources of 11.4mmboe of oil and gas(75%working interest)within the Moulay Bouchta permit area.These resources have been subject toexternal audit.MoroccoGulfsands is the operator of the onshore Mo

128、ulay Bouchta exploration permit in northern Morocco which incorporates proven conventional oil and biogenic gas petroleum systems.Moroccan hydrocarbon exploration and exploitation permits are subject to a tax/royalty fiscal system whichisconsidered favourable by internationalstandards.MoroccoAlgeria

129、RabatCasablancaAtlanticOcean Mediterranean SeaSpainRharbCentreMoulayBouchtaRharbSudFes13Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceGulfsands is in discussions with ONHYM regarding the outstanding work commitments on Moulay Bouchta,and is hope

130、ful a forward plan can be agreed that allows Gulfsands to continue to participate in the exploration of its remaining interest in Morocco.The Group has initiated a process of divestment or farmdown of its interest in the Moulay Bouchta Petroleum Agreement,as a means of reducing its future financial

131、commitments.Ifthe Group is unable to farmdown or divest its interest in the agreement on favourable terms the Group is at risk of forfeiting its interest,and all or part of the$1.75 million of restricted cash held as a performance guarantee for completing the minimum work programme on the permit are

132、a.Note that there exists no parent company guarantee under the Moulay Bouchta Petroleum Agreement.Other exploration contractsFes contractThe Fes contract expired on 24 September 2015.During 2015 reprocessing by specialist consultants of 650km of 2D seismic data acquired by Gulfsands across the Fes p

133、ermit was undertaken,and subsequent inhouse reinterpretation and remapping of lead concepts yielded promising results.A request was made to ONHYM in March 2015 for the granting of a two year extension to the contract period in order for the Group to conduct a farmout process and thereby secure fundi

134、ng for executing the remaining work programme on the permit.On 16 October 2015 the Company announced that the extension period of the Fes Petroleum Agreement had expired and the request to further extend the agreement was not granted by ONHYM,and furthermore that:ONHYM advised that Gulfsands Morocco

135、 will forfeit its$5.0million in restricted cash held as a performance guarantee in relation to its minimum work obligation under the Fes Petroleum Agreement and the restricted cash had been drawn by ONHYM;and ONHYM had requested details of the costs incurred during the six year extension period in o

136、rder to determine if a penalty was payable,with such penalty being the estimated cost of the minimum exploration work programme of$18.5 million,less the costs actually incurred in respect of exploration work required to be carried out during the extension period.At least$18.5 million has been spent

137、onexploration activity during the extension period.The Group believes there are no grounds for any potential claims for financial sums and penalties and is seeking legal advice on the matter.On 25 January 2016 Gulfsands gave notice to ONHYM that if various matters:including that of any potential pen

138、alty for nonfulfilment of the minimum exploration work programme;and Gulfsands seeking the return of guarantee funds called;are not resolved at the end of a 60day period then Gulfsands reserves the right to proceed with arbitration as set out under the Fes Petroleum Agreement.Note,no parent company

139、guarantee exists under the Fes Petroleum Agreement.Rharb contractA ten month extension to the Rharb exploration contract,which governs the Rharb Centre and Rharb Sud permits,was granted by ONHYM in January 2015.Subsequently on 9November 2015 the Rharb contract expired.During 2015,on the Rharb Centre

140、 permit area Gulfsands completed the drilling and testing of its fifth and sixth biogenic gas exploration wells,at the Dardara South East location(“DRC1”)and the Douar Ouled Balkhair location(“DOB1”)respectively.Both wells proved to be gas discoveries,with maximum well test gas flow rates for each w

141、ell in excess of 10million standard cubic feet per day,and both were completed and then suspended as future gas productionwells.On the Rharb Sud permit,work continued on the identification of viable exploration lead concepts from legacy seismic and well data.14Gulfsands Petroleum plc Annual Report a

142、nd Accounts 2015Strategic ReportOperations Review continuedRharb contract continuedOn 9 November 2015,the Group submitted a request to further extend the Rharb Petroleum Agreement for a period of two years to allow the Group to appraise the three gas discoveries it had made during the 2014/15 period

143、 within theRharb Centre permit area.On 30 November 2015,the Company received a response from ONHYM dated 26 November 2015,advising that its request for an extension to the Rharb Petroleum Agreement had been rejected and furthermore that:Gulfsands Morocco will forfeit its$1.0 million in restricted ca

144、sh held as a performance guarantee in relation to its minimum work obligation under the Rharb Petroleum Agreement;ONHYM is seeking a penalty equal to the estimated cost of the minimum exploration work programme of the Rharb Petroleum Agreement less the costs actually incurred in respect of explorati

145、on work required,whereby ONHYM is claiming a sum of$7.5 million;ONHYM advised they will also,by separate request,seek the outstanding amount under the training obligation of the Rharb Petroleum Agreement;and ONHYM was seeking an update on the Groups progress in relation to the abandonment of the leg

146、acy producing wells and the cleaning and restoring of the well sites in the Rharb Centre permit area.The Group strongly refutes the claims for financial sums and penalties and is seeking legal advice on the matter.The estimated cost of the minimum exploration work programme under the Rharb Petroleum

147、 Agreement is$15.0 million and at least$15.0 million has been spent on exploration activity during the extension period.On 25 January 2016,Gulfsands gave notice to ONHYM that if various matters:including that of any potential penalty for nonfulfilment of the minimum exploration work programme;and Gu

148、lfsands seeking the return of guarantee funds called;are not resolved at the end of a 60day period then Gulfsands reserves the right to proceed with arbitration as set out under the Rharb Petroleum Agreement.Note,no parent company guarantee exists under the Rharb Petroleum Agreement.The Group also h

149、olds interests in three exploitation concessions lying within the Rharb permit area as follows:Zhana 1,a 25 year concession that expires in June 2025(GPX:65%,ONHYM:35%);Zhana 2,a 15 year concession that expires in February 2018(GPX:75%,ONHYM:25%);and Sidi Amer 1,a 15 year concession that expires in

150、July 2019(GPX:75%,ONHYM:25%).There are four wells on these three concessions that penetrate depleted,or near depleted gas reservoirs.The Group has no plans to reenter or produce from these four legacy wells or gas fields as such activities have been evaluated to be economically unattractive for reac

151、tivation work.Morocco continuedFollowing interpretation of existing 2D legacy seismic data,and prior to the acquisition of further 2D data,the Group has identified best estimate Prospective Resources of 11.4 mmboe of oil and gas(75%working interest)within the Moulay Bouchta permit area.Theseresource

152、s have been subject to external audit.15Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceChorbane contractContract expiry date:Second phase July 2017 following approval by the Ministry of a two year extension.Minimum work obligation:Drilling one ex

153、ploration well;andacquisition of 200 km of 2D seismic data.Further details are provided in note 2.4 to the Consolidated Financial Statements.The current exploration period under the contract originally ran to mid July 2015.In May 2015,Gulfsands submitted an application for a two year extension to th

154、is period during which the work obligation of acquiring 200 line km of 2D seismic and the drilling of one exploration well must be completed.Theapplication was confirmed as being successful by the Tunisian Ministry of Industry,Energy and Mines during December 2015,and the contract thereby extended t

155、o July2017.The Group will now proceed to divest the asset or alternatively farmdown its 100%interest in exchange for a carried work programme.The exploration risk level associated with the drilling of identified prospects and leads is considered to be medium for light oil in Eocene and Cretaceous ag

156、ed formations which exhibit moderate to good reservoir quality,but relatively high for wet gas in deeper Jurassic aged formations which are anticipated to be of low reservoir quality.The Group has identified best estimate Prospective Resources of 44 mmboe of oil and gas(100%working interest)within t

157、he Chorbane permit area.This resource estimate has been subject to external audit.TunisiaGulfsands has a 100%interest in the operated Chorbane exploration permit onshore Tunisia covering approximately 1,942 km.The permit is subject to a PSC signed in 2009.The fiscal terms of the PSC are considered r

158、easonable when compared on an internationalbasis.Chorbane BlockAlgeriaTunisiaSfaxTunisTripoliPalermoLibyaMaltaSicily(Italy)Kms010016Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportOperations Review continuedLlanos Block 50Contract expiry date:First exploration phase,November20

159、16.Minimum work obligation:Acquisition of an additional 103km of 2D seismic data to be captured in a new survey;and drilling one exploration well.Further details are provided in note 2.4 to the Consolidated Financial Statements.Putumayo Block 14Contract expiry date:First exploration phase,November20

160、17.Minimum work obligation:Acquisition of an additional 93km of 2D seismic data to be captured in a new survey;anddrilling one exploration well.Further details are provided in note 2.4 to the Consolidated Financial Statements.The Group continues to undertake the studies required prior to the commenc

161、ement of either 2D or possibly explorationoriented 3D seismic acquisition programmes onthe contract areas.The Group requires funding to execute the work programme on the permit and,to this end,has initiated during 2015 a farmout or divestment exercise for its interests in the contract areas prior to

162、 any significant financial commitment with respect to further exploration work.This process is ongoing.During the first quarter of 2015,Gulfsands Sud America Limited informed its then joint venture partner in Colombia,Luna Energy,that it was obliged to serve notice of default on Luna,on account of n

163、onpayment of outstanding cash calls relating to the LLA 50 and PUT14 E&P contracts.Subsequently,as payment remained nonforthcoming,Luna defaulted on its interests and Gulfsands assumed 100%working interest in both Blocks.ColombiaGulfsands has Exploration and Production Contracts(“E&P contracts”)over

164、 two onshore contract areas,LlanosBlock50(“LLA 50”)and Putumayo Block 14(“PUT 14”),covering approximately 514 km and 464km respectively.Gulfsands is operator of both Blocks with 100%working interest.Both contracts were awarded as part of the Ronda 2012 national licensing round,andare subject to tax/

165、royalty systems incorporating a low bidlevel of additional“X”factors royalties and work programme contributions.Llanos-50BlockPutumayo-14BlockBogotColombiaPanamaEcuadorPeruBrazilVenezuelaPastoQuibdSogamosoEl Carmen de Bolivar17Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFi

166、nancial StatementsGovernanceReservesReserves are categorised into Proved,Probable and Possible Reserves in accordance with the 2007 Petroleum Resources Management classification system(“PRMS”)of the Society of Petroleum Engineers(“SPE”).Definitions for Proved,Probable and Possible Reserves are conta

167、ined in the Glossary.Working interest Reserves estimates for Syria have,to date,represented the proportion attributable to the Groups 50%participating interest,of forecast future hydrocarbon production during the economic life of the Block 26 PSC,including the share of that production attributable t

168、o General Petroleum Corporation(“GPC”).Hydrocarbons discovered on the Block 26 PSC contract area in Syria have been evaluated as Reserves for several years leading up to,and after,the imposition of EU sanctions in Syria.The Groups Reserves over this period have been based on estimates made by Gulfsa

169、nds technical teams which are then reviewed by independent petroleum engineers from external parties.External reviews of the Groups Reserves have been performed by Senergy(GB)Limited(“Senergy”)since 2009.Since this time,commercial oil production from the Block 26 area has exceeded 21 mmbbls.The Comp

170、any recognises that it cannot give a definite timeline for the resumption of the full field development of the discovered fields within Block 26 that was suspended under the declaration of Force Majeure in 2011.Furthermore,the SPE PRMS Guidelines suggest that if the(re)commencement of development is

171、 five or more years from the date of evaluation then the volumes of hydrocarbons should be classified as Contingent Resources.The Company has concluded as of December 2015 that the uncertainty in any timeline over which EU sanctions in Syria may be lifted require that the volumes of oil,gas and cond

172、ensate previously reported as Syrian Reserves be reclassified by the Company as Contingent Resources.This is discussed further in the Resources section.Whilst no definite timeline for the conflict can be substantiated,the Board believes that the EU sanctions ultimately will be lifted and will contin

173、ue to monitor all activity focused on resolving the situation in Syria and reconsider the basis for reversing this reclassification in line with any future developments.ResourcesThe Groups Resources are based on estimates made by Gulfsands technical teams which are then reviewed by independent petro

174、leum engineers from external parties.External reviews of the Groups Resources have been performed for the Group by Senergy since 2009.Summary of Contingent ResourcesContingent Resources are those quantities of petroleum estimated,as of a given date,to be potentially recoverable from known accumulati

175、ons by the application of development projects,but are not currently considered to be commercially recoverable due to one or more contingencies.Contingent Resources are further categorised by the SPE into 1C,2C and 3C according to the level of uncertainty associated with the estimates.In accordance

176、with the 2007 SPE PRMS,a guideline risk factor should be stated associated with the Contingent Resources quoted for each category;the risk factor indicates the likelihood that the Group will ultimately commercially develop the Resource.The risk factor considers all technical and nontechnical factors

177、 that are impacting or are likely to impact on the likelihood of development,and is termed the“Chance of Development”.The estimation and reclassification of Syrian Reserves attributed to the Block 26 Khurbet East and Yousefieh Production Concessions to Contingent Resources conducted in December 2015

178、 has been prepared by the Company and reviewed by Senergy.In estimating the Resources it has been assumed that the period of time elapsed during which the Group has declared Force Majeure on its Block 26 development and production activities will ultimately be added as an equivalent time period exte

179、nsion to the contractually specified time period following which the Block 26 Production Concessions were due to expire.As a consequence of the EUs imposition of further sanctions in Syria which came into effect in early December 2011,GPC has assumed operational full control and responsibility for t

180、he management of DPC(the joint venture operating company set up for managing development and production operations within Block 26),and Gulfsands has withdrawn all of its staff previously seconded to DPC.Strategic ReportReserves and Resources Report18Gulfsands Petroleum plc Annual Report and Account

181、s 2015Resources continuedSummary of Contingent Resources continuedSince December 2011 Gulfsands has received from DPC updates on oil volumes produced from the Groups Syrian fields under DPCs operation.These updates have been received on an infrequent and irregular basis and it has not been possible

182、for Gulfsands to verify the content of the information provided.The Group has updated its remaining recoverable Resource volumes for these fields on at least an annual basis based on the information that has been received from DPC.In February 2016 the Group received information from DPC stating that

183、 a total volume of 266,934 bbls of oil had been produced from the Groups fields during 2015 and exported by pipeline to the regional oil gathering station at Tal Addas,22 km north east of the Groups Production Concessions.In addition,at this time DPC reported,for the first time,that oil also had bee

184、n lifted from the Groups fields by an alternative oil export method,via production into tankers using gantry loading at the Khurbet East Production Facility.Furthermore DPC advised for the first time that this alternative export method had been in operation throughout 2014 and 2015,and that oil prod

185、uction during this period via this export method was an additional 3,138,739 bbls(2014:1,984,390 bbls,and 2015:1,154349 bbls).Based on this new production information,the Group has updated the previously reported total oil production for 2014 of 399,325 bbls of oil to 2,383,715 bbls of oil via both

186、export methods.2015 total oil production via both export methods is now updated to a total 1,421,283 bbls of oil.These revised reported produced oil volumes for 2014 and 2015 have been used by the Gulfsands technical team to update the Groups Contingent Resource bookings(Gulfsands working interest 5

187、0%),which are stated as of 1 January 2016.The Resource figures have not been reviewed by independent resource engineers.In addition,Contingent Resources are estimated for the oil discovery at Al Khairat which is located a few kilometres outside of the Companys existing Block 26 Production Concession

188、 areas,and these estimates have been reviewed by Senergy.Unrisked working interest basis Risk factor (Chance of As at 1 January 2016 Constituent 1C 2C 3C development)Syria Block 26 (Working interest 50%)Khurbet East&Yousefieh Oil+Condensate,mmbbl 39.4 69.7 112.1 90%Production Concessions Gas,bscf 14

189、.7 33.4 68.7 90%Al Khairat discovery Oil,mmbbl 2.9 12.0 45.7 30%Total mmboe 44.7 87.3 169.3Risked working interest basisTotal mmboe 38.5 71.4 124.9 Note certain figures may not add up due to roundings.“Oil”includes condensate and NGLs.Gas is converted to mmboe at the conversion factor 1 bcf=0.1667 m

190、mboe.Strategic ReportReserves and Resources Report continued19Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceSummary of Prospective ResourcesProspective Resources are those quantities of petroleum estimated,as of a given date,to be potentially re

191、coverable from undiscovered accumulations.They are further categorised by the 2007 SPE PRMS into Low,Best and High estimates.Thequoted Low,Best and High estimates are the 90%probability(“P90”),50%probability(“P50”)and 10%probability(“P10”)values respectively derived from probabilistic estimates gene

192、rated using a”Monte Carlo”statistical approach.In accordance with the 2007 SPE PRMS,a guideline risk assessment should be provided associated with the Prospective Resources quoted for Low,Best and High estimate categories.The risk assessment here is the Chance of Discovery;the additional risk assess

193、ment relating to the Chance of Development is not normally quantified at this level of Resource classification.The Group has estimated Prospective Resources for its Moroccan Moulay Bouchta and Tunisian Chorbane onshore permits,andthese estimates have been reviewed by Senergy.Unrisked working interes

194、t basis Risk factor (Chance of As at 1 January 2016 Constituent Low Best High discovery)Morocco Moulay Bouchta permit (Working interest 75%)Jurassic leads Oil and Sales Gas,mmboe 1 11 75 MediumHighMorocco total mmboe 1 11 75 Risk factor (Chance of Constituent Low Best High discovery)Tunisia Chorbane

195、 permit (Working interest 100%)Sidi Agareb prospect Eocene/Upper Cretaceous Oil,mmbbl 8 27 63 9%25%Lafaya Deep&Sidi Daher prospects Jurassic leads Sales Gas,bcf 21 103 398 11%Tunisia total mmboe 12 44 129 Note certain figures may not add up due to roundings.“Oil”includes condensate and NGLs.Gas is c

196、onverted to mmboe at the conversion factor 1 bcf=0.1667 mmboe.20Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial ReviewGulfsands has continued to reduce its office expenses which,excluding restructuring costs,have reduced by 36%in the year compared with 2014.Selected

197、operational and financial data Year ended Year ended 31 December 31 December 2015 2014$000$000General administrative expenses (6,965)(5,469)Exploration costs writtenoff/impaired (53,799)(6,040)Loss from continuing operations (69,200)(12,113)E&E cash expenditure (10,085)(26,987)Cash and cash equivale

198、nts 420 7,907Restricted cash balances 3,691 11,514 Financial highlights for the year ended 31 December 2015 The loss for the year from continuing operations was$69.2 million(2014:$12.1 million).Gulfsands has continued to reduce its office expenses which,excluding restructuring costs,have reduced by

199、36%in the year compared with 2014.$51.0 million of E&E assets related to the Moroccan Fes and Rharb Petroleum Agreements have been writtenoff in the year following the expiry of the contracts in September and November respectively;in addition the related restricted cash balances of$6.0 million have

200、also been provided against.$2.8 million of E&E assets related to the Moroccan Moulay Bouchta Petroleum Agreement have been fully impaired at 31December 2015;in addition the related restricted cash balances of$1.75 million have also been provided against.The Group continues to value its investment in

201、 its Syrian interest at$102.0 million.The Arawak Loan Facility was assigned to Weighbridge Trust Limited in June 2015.During the year,prior to the assignment$5.0 million was drawndown under the facility.A further$3.2 million was drawndown under the facility post assignment.Cash and cash equivalents

202、reduced by$7.5 million in the year to$0.4 million at 31 December 2015(31 December 2014:$7.9 million).Operating performanceGeneral administrative expenses Year ended Year ended 31 December 31 December 2015 2014$000$000Office expenses 8,727 13,640Partner recoveries (552)(2,137)Restructuring costs 1,04

203、4 Depreciation and amortisation 506 602Office expenses capitalised (2,760)(6,636)General administrative expenses 6,965 5,46921Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceGeneral administrative expenses for the year ended 31December 2015 totall

204、ed$7.0 million(2014:$5.5 million).This increase reflects:oneoff costs incurred in the year as part of the Management restructuring;a decreased level of partner recoveries resulting in part from the termination of the Colombian joint venture agreement at the start of 2015;and a reduction in costs cap

205、italised against E&E assets as a result of the reduced operational activity in the year and the expiry of the Moroccan Rharb and Fes Petroleum Agreements.Underlying office expenses have actually decreased significantly,by some 36%,resulting from the increasing efforts to manage costs to fit the curr

206、ent business model andstrategy.Exploration writeoffs in the year totalled$51.0 million(2014:$6.0 million)and are a result of the expiry of both the Fes and Rharb Petroleum Agreements in Morocco during the year.The Fes Petroleum Agreement expired on 24September2015 and all E&E expenditure related to

207、the Fes permit has been fully writtenoff in the year,with writeoffs totalling$22.2 million,inclusive of$12.0 million fair value recognised on acquisition.The Rharb Petroleum Agreement expired on 9 November 2015,and the Groups request to further extend the agreement for a period of two years to allow

208、 the Group to appraise the gas discoveries made in 2014/15 was rejected.All E&E expenditure related to the Rharb Centre and Rharb Sud permits has been fully writtenoff in the year,with writeoffs totalling$28.8 million,inclusive of$5.8 million fair value recognised on acquisition.On the expiry of the

209、 contracts,ONHYM advised that Gulfsands Morocco would forfeit its restricted cash held as performance guarantees in relation to its minimum work obligations under the Fes Petroleum Agreement and the Rharb Petroleum Agreement.ONHYM drew the$5.0 million restricted cash held under the Fes contract duri

210、ng the year and this has been writtenoff in the year.$1.5 million of the restricted cash balance was due back to a third party in the event of its release so the net charge to the Income Statement in the year is$3.5 million.ONHYM did not draw the$1.0 million restricted cash held under the Rharb cont

211、ract until January 2016 but the recovery of this has been fully provided against at 31December 2015.$0.5 million of the restricted cash balance was due back to a third party in the event of its release so the net charge to the Income Statement in the year is$0.5 million.E&E asset impairments for the

212、 year were$2.8 million(2014:nil)and relate to the Moroccan Moulay Bouchta permit only.The financial commitments of the Moulay Bouchta contract are inconsistent with the Groups revised strategy and Gulfsands has therefore initiated a farmout process for this contract.However,given the licence expiry

213、date for the initial exploration phase in June 2016,the outstanding work commitments on the permit which could not physically be fulfilled before this date and the uncertainty of securing an industry partner before licence expiry,the expenditure to date attributed to the Moulay Bouchta permit of$2.8

214、 million,inclusive of a potential$1.75 million penalty for noncompletion of the minimum work obligations,has been fully impaired at 31 December 2015.In addition,the recovery of restricted cash balances of$1.75million held as a performance guarantee in relation to the minimum work obligation under th

215、e Moulay Bouchta contract has been fully provided against at 31 December 2015.The Group reported a loss before tax for continuing operations for the year ended 31 December 2015 of$69.2million(2014:loss from continuing operations$12.1 million).Theresults of 2014 also included a loss from discontinued

216、 operations of$4.0 million in respect of the US Gulf of Mexico operations which were disposed of in December 2014.Balance Sheet The Groups intangible exploration and evaluation assets are held at a net book value of$7.1 million at 31 December 2015(31 December 2014:$53.0 million)and relate to Tunisia

217、n and Colombian assets only.Capital expenditures for the year totalled$8.5 million(2014:$21.0 million)and predominantly relate to the drilling of the DRC1 and DOB1 Rharb Centre wells in Morocco.The DRC1 well commenced drilling in December 2014 and the DOB1 well commenced drilling on 28 January 2015.

218、Both the DRC1 and DOB1 wells were successfully drilled in the year to target depth,discoveries declared and the wells temporarily suspended as future gas producers.The Rharb Petroleum Agreement expired in November 2015 so these costs have since been fully writtenoff.There have been writeoffs totalli

219、ng$51.0 million in the year and E&E impairments of$2.8 million all which relate to the Moroccan assets.Management has reviewed the carrying value of all its remaining E&E assets at the date of this Report and notes that there are uncertainties caused by the upcoming expiry dates on certain contracts

220、 and the potential nonfulfilment of work obligations in the necessary timeframes which could result in termination of those contracts.Managements strategy is to protect the value of all of its exploration and evaluation assets,and it is seeking contract extensions and the restructuring of certain of

221、 its work obligations to allow the contracts to be appropriately farmeddown or divested.It should be noted that if Management is unsuccessful in its strategies for the E&E assets,the carrying value of the related assets and the restricted cash securing those work obligations could become impaired.Th

222、e contract/licence expiry dates,capital commitments and restricted cash balances held are detailed further in note 2.4 to the Consolidated Financial Statements.The Groups investment in DPC,the entity established in Syria,pursuant to the PSC,to administer the Groups Syrian oil and gas development and

223、 production assets(and which is considered to also include the related rights to production under the PSC),is recorded as an availableforsale investment.Due to the unknown duration of EU sanctions in force against Syria and uncertainty over the eventual outcome of events in the country,any valuation

224、 attributed to the investment is highly subjective and subject to material change and uncertainty.Management has reviewed their internal valuation methodology and believe that as a result of the further passage of time and the high degree of judgement required,it is no longer possible to reliably es

225、timate the investments fair value.Management will therefore carry forward the last valuation which could be reliably determined,being the$102 million previously disclosed and will carry forward this value.This value will be reviewed periodically for impairment and any impairment losses recognised th

226、rough the Income Statement.22Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial Review continuedBalance Sheet continuedAt 31 December 2015 Management has carried out an impairment review,using an economic model of the estimated future cash flows that could be generated

227、in respect of the Groups entitlement volumes in Block 26.The Management team has reviewed this economic model in detail and believe due to the high degree of subjectivity inherent in the valuation it is imperative that the valuation model and its key drivers and assumptions are as transparent as pos

228、sible.Management assessed the key drivers to be:the oil price,and the delay to resumption of production.For the year ended 31 December 2015 Management has decided to use the Brent forward curve to 2022 for its oil price assumption,and then a 2%per annum escalation factor applied thereafter as the fo

229、recast for the base case comparative.Given the other sources of oil price data reviewed,Management consider this to be a conservative approach.Gulfsands cannot give a definite timeline for the resumption of the full field development of the discovered fields within Block 26 that was suspended under

230、the declaration of Force Majeure in 2011.Whilst no definite timeline can be substantiated,the Board continues to believe that the EU Sanctions will be lifted within five years and will continue to monitor all activity focused on resolving the situation in Syria.Management has decided to use commence

231、ment of production in five years as the base casecomparative.The base case comparative model calculates:a gross Contractor undiscounted NPV(0)of$1.48 billion;Gulfsands 50%interest NPV(0)of$0.74 billion and Gulfsands discounted NPV(15)of$107.2 million.Therefore,Management believes no impairment is ne

232、cessary and has maintained the$102 million carrying value on the Balance Sheet at year end.The Boards view is that there has been little significant change to the circumstances and status of the Groups Syrian interests.The Board is still unable to provide a firm view as to the eventual outcome and t

233、he timing of resolution of the situation in Syria that would lead to the EU lifting sanctions against Syria,allowing Gulfsands to return,however,they continue to consider that its position in respect of its interests remains strong and all indications are that the Syrian authorities expect Gulfsands

234、 and its partner to return to operational control of their interests in accordance with the terms of the PSC as soon as circumstances permit.The Directors have reviewed the carrying value of this availableforsale financial asset at 31 December 2015 and are of the opinion that the carrying value,alth

235、ough subject to significant uncertainty,remains appropriate in the circumstances.Inventory held at 31 December 2015 totalled$1.1 million(2014:$2.4 million).Due to Managements revised strategy to farmout/divest its remaining Moroccan licence,it is anticipated that the inventory will not be utilised o

236、n future drilling and production activities in Morocco and instead value will be extracted via disposal.Therefore a provision of$1.1 million has been made at 31 December 2015 to reduce the value of the inventory to its expected net realisable value of$1.1 million.At 31 December 2015,the Group has de

237、commissioning and/or restoration obligations in respect of a number of wells and well sites in Morocco under the Moroccan Hydrocarbon Code totalling$0.4 million(2014:$1.0million).The wells and well sites are located on the expired Rharb and Fes permits and on the three exploitation concessions locat

238、ed within these permits.These include the three discoveries on the Rharb Centre permit:LTU1,DRC1 and DOB1,which have all been temporarily suspended.Included within the decommissioning and/or restoration obligations are obligations on all legacy wells drilled prior to the Groups acquisition of those

239、interests.Following further examination during 2015 of the scope of work involved,it is anticipated that the fulfilment of these obligations can be completed via rigless operations,resulting in a reduction in the provision.As the Rharb and Fes petroleum contracts expired during the year,at 31 Decemb

240、er 2015 all decommissioning provisions are disclosed as current liabilities and no discount rate has been applied to the estimated cost ofdecommissioningworks.The outstanding balance on the Weighbridge Loan Facility at 31 December 2015 is$14.4 million(31 December 2014:$4.9 million)following the draw

241、down of a further$8.2 million and interest and facility fees rolled up during the year.The Company announced on 30 June 2015 that Arawak had entered into an assignment agreement with Weighbridge Trust Limited(“Weighbridge”),acting as agent for Waterford Finance and Investment Limited(“Waterford”)and

242、 Mr Griffiths,to acquire the Convertible Loan Facility from Arawak.On 22 June 2015,the Group and Weighbridge entered into an agreement pursuant to which Weighbridge,acting as trustee for Waterford and Mr Griffiths with respect to their interests in the Convertible Loan Facility,provided certain unde

243、rtakings to the Company.Under the terms of the agreement,Weighbridge provided undertakings that it would not,at any time prior to 23 September 2015,exercise its rights to call for repayment of all outstanding amounts,whether immediately or within the notice period of 90 days,to exercise its conversi

244、on rights or to exercise its right to participate in any issue of new ordinary shares pursuant to the terms of the Convertible Loan Facility.Under the terms of the agreement,the Company agreed to grant its consent to the assignment of the Convertible Loan Facility from Arawak to Weighbridge.On 27 Au

245、gust 2015,Weighbridge agreed to extend each of its undertakings to 31 January 2016,being the Open Offer Long Stop Date.It also agreed to release the Company from its undertakings regarding necessary share authorities contained in the Convertible Loan Facility agreement.In providing the undertakings

246、to subscribe for their existing entitlements under the Open Offer,and to Underwrite the remaining Open Offer Shares to be issued under the Open Offer,it was agreed that the principal amount and interest and all fees and penalties accrued and outstanding under the Convertible Loan Facility would be a

247、pplied in paying up in full the Open Offer Shares to be subscribed pursuant to the Open Offer and the Underwriting.Post year end,the loan was discharged in full on 14 January 2016.23Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceCash flowThe tota

248、l decrease in cash and cash equivalents during the year was$7.5 million(2014:$25.9 million).Operating cash outflow from continuing operations increased in the year to$5.5 million(2014:$3.8 million)largely as a result of exceptional recoveries from partners in 2014 in relation to historic expenditure

249、.Investing cash outflow from continuing operations during the period totalled$10.1million(2014:$24.0million).This predominantly consists of exploration expenditure inclusive of$8.0 million spent on Moroccan operations and$1.5 million paid in final settlement of the amount payable for the 2013 acquis

250、ition of the additional interest in the Chorbane contract.Cash received from financing activities totalled$8.2 million,due to further drawdowns under the Weighbridge Loan Facility following its assignment.Financial positionAt 31 December 2015 the Group had total unrestricted cash and cash equivalent

251、s of$0.4 million(31 December 2014:$7.9million).Restricted cash balances at the end of the year(which are presented as longterm financial assets in the Balance Sheet)totalled$3.7 million(31 December 2014:$11.5 million),and represent funds securitised as collateral in respect of future work obligation

252、s with amounts not provided against principally in respect of the Groups Colombian interests.At31December 2015,a provision of$2.75 million was made against the restricted cash balances securitised as collateral in respect of future work obligations on the Rharb and Moulay Bouchta permits.During 2015

253、,$5.0 million of restricted cash balances were writtenoff in relation to the Fes Petroleum Agreement as ONHYM called these funds.It should be noted that if Management is unsuccessful in their strategy of contract/licence extensions and farmouts then the carrying value of the remaining restricted cas

254、h securing the work obligations may become impaired.Going concernAs at the date of this Report,the Group has cash balances immediately available to it totalling approximately$3.5 million with net current trade and other payables of approximately$1.2 million and ongoing costs expected to further decr

255、ease in the second half of 2016 approximating to$0.2 million per month.Restricted cash balances and the work commitments to which they relate are described in note 2.4 of the Consolidated Financial Statements.Significant focus has been given during the year to strengthening the Balance Sheet of the

256、Group.On 27 August 2015,the Company announced a Capital Raising to raise gross proceeds of approximately$22.0 million before costs by way of an Open Offer.The Open Offer was conditional upon,among other things,the passing of certain resolutions to permit the Open Offer to proceed.On 14 September 201

257、5,the Company convened a general meeting of shareholders to vote on the resolutions,at which all the resolutions were duly passed by shareholders.As a result,on 16 December 2015 the Company dispatched its Prospectus to shareholders setting out the detailed terms and conditions of the Open Offer.The

258、Open Offer was made to all Qualifying Shareholders(which excludes those shareholders resident in Australia and the US)to provide an opportunity to subscribe for an aggregate of 354,837,296 Open Offer Shares(representing a subscription of 350,733,941 new ordinary shares and a purchase of 4,103,355 tr

259、easury shares)on the basis of 3.01 Open Offer Shares for every 1 Existing Share held as at the Record Date,being 5:00pm on 14 December 2015,at an Open Offer Price of 4.0 pence per Open Offer Share.Waterford and Mr Griffiths,as existing shareholders in the Company,each irrevocably undertook to subscr

260、ibe for their full entitlements under the Open Offer and undertook to underwrite the remaining Open Offer Shares whereby they would acquire any of the shares that were not subscribed for by Qualifying Shareholders under the Open Offer.In providing the undertakings to subscribe for their existing ent

261、itlements under the Open Offer,and to Underwrite the remaining Open Offer Shares to be issued under the Open Offer,it was agreed that the principal amount and interest and all fees and penalties accrued and outstanding under the Convertible Loan Facility would be applied in paying up in full the Ope

262、n Offer Shares to be subscribed pursuant to the Open Offer and the Underwriting.The Open Offer closed for acceptances at 11am on 12January 2016 and the Company announced that it had received valid acceptances in respect of 151,760,157 Open Offer Shares from Qualifying Shareholders,and that pursuant

263、to the Underwriting,a further 203,077,139 Open Offer Shares had been subscribed for by Waterford and Blake,acompany owned and controlled by Mr Griffiths,such that a total of 354,837,296 Open Offer Shares had been subscribed for under the Open Offer representing share proceeds of approximately 14.2 m

264、illion($20.4 million).At the closing of the Open Offer and after satisfaction of the Convertible Loan Facility,the Group had cash and cash equivalents of$5.6million.24Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial Review continuedGoing concern continuedThe Group has

265、 continued a strategy of reducing costs and trying to reduce its net financial exposure to its oil and gas operations.The Group is running a farmout process for its interests in projects in Colombia,Tunisia and Morocco and is optimistic to recover its performance bonds where appropriate and receive

266、some consideration in recognition of the work already completed on the various projects.The Group is also seeking to recover the restricted cash,placed with banks as a guarantee for the completion of exploration activities on the Rharb and Fes permits,and recently drawn on by ONHYM.However,there is

267、no certainty that these initiatives will be successful or that material cash inflow will be achieved.If these initiatives are not successful the Groups cash forecast indicates that further funding would be required in approximately eight months time.Based upon its experience and ongoing discussions

268、with existing shareholders and potential partners,the Board is confident that the Group will be able to access appropriate resources to finance the revised strategy that it is moving forward with,however there are no binding agreements or commitments in place.Following completion of a review of the

269、going concern position of the Company and Group at the meeting of the Board of Directors on 16 March 2016,including the uncertainties described above,the Board has concluded that,with current consolidated cash and cash equivalents totalling$3.5 million and taking into account both the Boards strateg

270、y of farmingdown or divesting assets and the new financial resources that the Board might reasonably expect to become available,the Company and the Group will have sufficient resources to continue in operational existence for the foreseeable future,a period not less than twelve months from the date

271、of approval of this Financial Report.Accordingly,the Directors consider it appropriate to continue to adopt the going concern basis in preparing these Financial Statements.Notwithstanding the confidence that the Board has in its ability to finance the Groups reshaped business,the Directors,inaccorda

272、nce with Financial Reporting Council guidance in this area,conclude that at this time there is material uncertainty that such finance can be procured and failure to do so might cast significant doubt upon the Companys and the Groups ability to continue as a going concern and that the Company and the

273、 Group may therefore be unable to realise their assets and discharge their liabilities in the normal course of business.These Financial Statements do not include the adjustments that would result if the Group was unable to continue as a going concern.This Strategic Report was approved by the Board o

274、f Directors on 17 March 2016.Alastair BeardsallExecutive Chairman17 March 2016Cautionary statementThis Strategic Report has been prepared solely to provide additional information to shareholders to assess the Groups strategies and the potential for those strategies to succeed.The Strategic Report co

275、ntains certain forwardlooking statements.These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties,including both economic an

276、d business risk factors,underlying any such forwardlooking information.The Directors,in preparing this Strategic Report,have been guided by the requirements of section 414c of the Companies Act 2006.The Report has been prepared for the Group as a whole and therefore gives emphasis to those matters w

277、hich are significant to the Group as a whole.25Gulfsands Petroleum plc Annual Report and Accounts 2015Strategic ReportFinancial StatementsGovernanceGovernanceBoard of DirectorsAlastair John Beardsall,aged 62Executive ChairmanMr Beardsall was appointed to the Board in April 2015.He has been involved

278、in the oil industry for over 35 years.For the first twelve years,Mr Beardsall worked on international assignments with Schlumberger,the oilfield services company.From 1992 he began working for exploration and production operators,with increasing responsibility for exploration,development and product

279、ion ventures.Between September 2003 and October2009,Mr Beardsall was executive chairman of Emerald Energy plc;which was acquired by Sinochem Resources UK Limited in October 2009 for 7.50 per share in a transaction that valued Emerald at 532.0 million.Mr Beardsall is executive chairman of Sterling En

280、ergy plc(AIM:SEY),a nonexecutive director of Jupiter Energy Limited(AIM:JPRL)and advises other private companies in the oil and gas industry.Mr Beardsall holds and/or has held positions as an officer and/or director of several other companies in which Waterford has been and/or remains a substantial

281、shareholder.Mr Beardsall has no business,financial or commercial interests with Waterford beyond the fact of him being an officer or director of such other companies.Waterford is a substantial shareholder in Gulfsands and Mr Beardsall and Waterford have entered into the Waterford Relationship Deed w

282、ith the Company which embodies customary terms providing for the proper handling of any potential conflicts.Joseph Darby,aged 68Senior Independent NonExecutive DirectorMr Darby has over 40 years of experience in the energy sector,including eight years with Shell Petroleum before becoming managing di

283、rector of Thomson North Sea Ltd and later the chief executive of LASMO plc.He has held nonexecutive roles at Nordaq Energy plc,British Nuclear Fuels plc,Mowlemplc,Centurion Energy Inc and Alkane Energy plc.Mr Darby was previously chairman of Mowlem plc(200506)and Faroe Petroleum plc(200307).Mr Darby

284、 is currently a nonexecutive director of Premier Oil plc and was appointed a NonExecutive Director of Gulfsands in November 2012.Andrew Thomas West,aged 58NonExecutive DirectorMr West has spent much of his career as an investment banker specialising in mergers and acquisitions.He worked for Smith Ba

285、rney(198185),Lehman Brothers(198590),Guinness Mahon(199096)and from 199699 was managing director of Strand Partners,a privatelyowned investment banking firm specialising in energy and natural resources among other sectors.For the past 16 years,he has run his own consultancy practice.Mr West is curre

286、ntly a nonexecutive director or adviser to numerous companies,both public and private,and has had considerable experience as both a financial adviser and a nonexecutive director in the oil and gas sector.Mr West was appointed to the Board in March 2006 and became Chairman in July 2006;he stepped dow

287、n as Chairman in April 2015 and remains on the Board as a NonExecutive Director.Andrew James Morris,aged 47Independent NonExecutive DirectorMr Morris has extensive international business experience and advises and sits on the boards of several companies,ranging from early stage resource companies to

288、 emerging technology companies.He is currently nonexecutive chairman of Madagascar Oil Limited,an AIM listed company with oil and gas assets situated onshore Madagascar.He was founder of Persistency Capital,aprivate investment company,where he acted as both investor in,and adviser to,companies acros

289、s a broad range of sectors and geographies focusing on value investing,deal structuring and turnarounds.Mr Morris joined the Board of Gulfsands in April 2015.He is also director of Vokings Advisers Limited,a business advisory firm of which he is the principal.Previous directorships include Falcon Oi

290、l&Gas Ltd,SouthWest Energy Ltd,Kriisa Research Inc.and Direct Petroleum Exploration Inc.as well as Blake Oil and Gas Limited and various related parties.Previously,Mr Morris spent 15 years in the financial services industry,during which time he served as a director of Ernst&Young in London,where he

291、advised a broad range of organisations on enterprise risk management including advice on corporate governance,management reporting,financial control,operational risk and process improvement.Mr Morris holds a BSc(Hons)degree in Mathematics from Bristol University and is a Fellow of the Institute of C

292、hartered Accountants in England and Wales.John Bell,aged 50Independent NonExecutive DirectorMr Bell is a Chartered Engineer with over 30 years experience in the energy sector having worked at vice president or managing director level at BP plc,Statoil AS and Suncor Energy(Syria).Hehas spent a large

293、part of his career in the Middle East,as well as time in North Africa,the Americas,the UK North Sea,Scandinavia and the Caribbean.Mr Bell is currently executive chairman of Tethys Petroleum Ltd,a TSX and London Stock Exchange listed public oil and gas company.From May 2014 to December 2014,a company

294、 associated with Mr Bell had a consultancy agreement with a subsidiary of the Company.Subsequent to the termination of that agreement,the Board has considered Mr Bell to be an independent NonExecutive Director.James Lawrence EdeGolightly,aged 36NonExecutive DirectorMr EdeGolightly is chairman of Eas

295、t Balkan Properties plc,Quoram plc and Cronin plc and has extensive experience as a nonexecutive director on the boards of AIMquoted companies with international business interests.Mr EdeGolightly was a founder of ORA Limited in 2006,having previously worked as an analyst at Merrill Lynch Investment

296、 Managers and CommerzbankAG.He is a CFA Charterholder and holds an MA in Economics from Cambridge University.In 2012 he was awarded New Chartered Director of the Year by the Institute of Directors.Mr EdeGolightly was appointed a NonExecutive Director of Gulfsands in August 2014.Mr EdeGolightly holds

297、 a 5.0%interest in,and is a NonExecutive Director of,ORA Limited,which is a company chaired and majority owned by Mr Griffiths.Mr Griffiths,through other associated entities,is a substantial shareholder inGulfsands.26Gulfsands Petroleum plc Annual Report and Accounts 2015GovernanceDirectors ReportTh

298、e Directors present their Annual Report together with the audited Financial Statements of Gulfsands Petroleum plc and its subsidiary undertakings(the“Group”or the“Company”or“Gulfsands”)for the year ended 31 December 2015.The Corporate Governance Report,Audit Committee Report and Directors Remunerati

299、on Report set out on pages 28 to 35 form part of this Directors Report.Any significant events since the Balance Sheet date are detailed in note 6.7 to the Consolidated Financial Statements,however an indication of possible future developments in the business of the Group are included in the Strategi

300、c Report on pages 2 to24.DividendsThe Directors do not recommend payment of a dividend in respect of 2015(2014:nil).Capital structureDetails of the issued share capital,together with details of the movements in the Companys issued share capital during the year are set out in note 6.1 to the Consolid

301、ated Financial Statements.The Company completed a capital reorganisation on 14September 2015 which resulted in the subdivision of the existing ordinary shares at the time into ordinary shares and deferred shares.The ordinary and deferred shares carry no right to fixed income.Each ordinary share carr

302、ies the right to one vote at general meetings of the Company.The deferred shares have no voting rights.On 14 January 2016 the Company completed an Open Offer of ordinary shares to shareholders on the record date resulting in the issue of 350,733,941 new ordinary shares and the sale of 4,103,355 trea

303、sury shares.There are no specific restrictions on the size of a holding nor on the transfer of shares,which are both governed by the general provisions of the Articles of Association and prevailing legislation.The Directors are not aware of any agreements between holders of the Companys shares that

304、may result in restrictions on the transfer of securities or on voting rights.Details of employee share schemes are set out in note 6.1 to the Consolidated Financial Statements.No person has any special rights of control over the Companys share capital.As at 31 December 2015 all issued shares were fu

305、llypaid.Directors and their interestsThe Directors,who served during the year except as noted,and their interests in the Companys shares were as follows:At 31 December 2015 At 31 December 2014 Number of Number of Number of Number of ordinary shares share options ordinary shares share optionsAlastair

306、 Beardsall(1)Andrew West(7)140,144 140,144 Andrew Morris(2,7)80,000 Joseph Darby(7)25,000 John Bell James EdeGolightly(7)20,000 20,000 Alan Cutler(3)Mahdi Sajjad(4)8,685,268 250,000 8,685,268 750,000Ken Judge(5)2,666,750 150,000 2,616,750 450,000Ian Conway(6)112,490 167,490(1)Appointed 14 April 2015

307、.(2)Appointed 22 April 2015.(3)Appointed 13 September 2013,resigned as a Director on 26 August 2015.(4)Removed as CEO on 14 April 2015 and removed as a Director on 30 June 2015.The interest for Mr Sajjad includes shares held by Nordman Continental S.A.,acompany owned by a trust of which Mr Sajjads c

308、hildren are potential beneficiaries.(5)Removed as a Director on 3 February 2015.The interest for Mr Judge includes shares held by Hamilton Capital Partners Limited,an associated company of MrJudge.(6)Appointed 30 June 2014 and retired as a Director on 30 June 2015.Note,47,490 share options are restr

309、icted share options(2014:47,490).See note 6.1 to the Consolidated Financial Statements for further details.(7)Following the Open Offer on 14 January 2016,Mr West,Mr Morris,Mr Darby and Mr EdeGolightly all took up their entitlement of 3.01 shares per existing share andincreased their shareholdings to

310、 the following:Mr West 561,977;Mr Morris 320,800;Mr Darby 100,250 and Mr EdeGolightly 80,200.Directors interests in transactionsDetails of transactions with Directors for the year ended 31 December 2015 are set out in note 6.3 to the ConsolidatedFinancialStatements.27Gulfsands Petroleum plc Annual R

311、eport and Accounts 2015Strategic ReportFinancial StatementsGovernanceStatement of Directors responsibilitiesThe Directors are responsible for preparing the Strategic Report,Directors Report and the Financial Statements in accordance with applicable laws and International Financial Reporting Standard

312、s(“IFRS”)as adopted by the EU.Company law requires the Directors to prepare financial statements for each financial year.Under that law,the Directors have elected to prepare the Group and Company financial statements in accordance with IFRS as adopted by the European Union.Under company law,the Dire

313、ctors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.The Directors are also required to prepare financial statements in accordance with the

314、 rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.In preparing these financial statements,the Directors are required to:select suitable accounting policies and then apply them consistently;make judgements and accounting estimates that are reaso

315、nable and prudent;state whether they have been prepared in accordance with IFRS as adopted by the European Union,subject to any material departures disclosed and explained in the financial statements;and prepare the Financial Statements on the going concern basis unless it is inappropriate to presum

316、e that the Company will continue in business.The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that

317、the financial statements comply with the Substantial shareholdersExcept for the holdings of ordinary shares listed below,the Company has not been notified by,or become aware of,any persons holding 3%or more of the issued ordinary shares of the Company at 17 March 2016:Number of%of shares Name shares

318、 in issueWaterford Finance and Investment Limited 284,271,626 38.98%Blake Holdings Limited(1)136,998,528 28.98%ME Investments Limited 50,000,000 10.57%Seren Capital Management Limited(1)9,730,717 2.06%Cream Capital Limited(1)2,000,000 0.42%Richard Griffiths 50,000 0.01%(1)Companies associated with R

319、ichard Griffiths.requirements of the Companies Act 2006.They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.Website publicationThe Directors are responsible for ensuring the Annu

320、al Report and the financial statements are made available on a website.Financial statements are published on the Companys website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements,which may vary from legislation in other jurisdic

321、tions.The maintenance and integrity of the Companys website is the responsibility of the Directors.The Directors responsibility also extends to the ongoing integrity of the financial statements contained therein.Statement of disclosure to the auditorSo far as the Directors,at the time of approval of

322、 their Report,are aware:there is no relevant audit information of which the Companys auditor is unaware;and each Director has taken steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.This confi

323、rmation is given and should be interpreted in accordance with section 418 of the Companies Act 2006.AuditorA resolution to reappoint BDO LLP as auditor and that the Directors be authorised to fix their remuneration will be put to shareholders at the Annual General Meeting.By order of the Board,Alast

324、air BeardsallExecutive Chairman17 March 201628Gulfsands Petroleum plc Annual Report and Accounts 2015Gulfsands Petroleum plc is committed to maintaining high standards of corporate governance,business conduct and ethics throughout the Group.Gulfsands is not required to comply with the UK Corporate G

325、overnance Code(“the Code”);but it is the objective of the Board to apply the Code as is appropriate given the size of the Group.Where the Company does not,at the date of this Report,apply relevant provisions of the Code these are disclosed and explained in the following table:Code provisionsPrincipl

326、e with which Company is noncompliantExplanationA.2.1The roles of CEO and Chairman are currently combined.The role of CEO was vacated in April 2015,the Group may commence the search for a new CEO during 2016.The role of interim CEO is being undertaken by the Executive Chairman.A.3.1The current Chairm

327、an,appointed April 2015 is not independent.The Chairman was appointed in an executive capacity and holds positions as an officer and director of several other companies related to a substantial shareholder,and consequently is not considered independent.See page 25 for further details.B.2.1B.2.2B.2.4

328、The Company has no Nominations Committee.The matters normally delegated to the Nomination Committee are managed by the whole Board.The Board considers this appropriate for a company of our size.B.4.1B.4.2Formal induction,training and development processes are not in place for NonExecutive Directors.

329、The NonExecutive Directors arrange their own personal development and training;formal induction procedures have not been deemed necessary given the experience of the individuals concerned.GovernanceDirectors Corporate Governance ReportIn order to communicate its corporate governance standards to emp

330、loyees,contract staff and contractor personnel across the Group,the Board has established a Code of Business Conduct and Ethics which is available on the Companys website and supported by detailed internal policies and procedures.Compliance with the Code of Business Conduct and Ethics is a contractu

331、al requirement for all personnel.The Gulfsands BoardThe role of the BoardThe Board sets the Groups strategic objectives taking into account the financial and human resources available within the Group to meet these objectives.The Board determines the Companys key policies values and standards,effect

332、ively communicating these throughout the Group.Periodically the Board reviews the potential risks to the Group and the Board ensures the probability of these risks affecting the business are minimised via management and mitigation.The Boards role is to provide entrepreneurial leadership of the Group

333、 within a framework of effective controls and periodic reporting;this enables operational and financial performance to be actively monitored and managed.The composition of the BoardGulfsands business carries political,commercial and technical risks.Accordingly,particular attention is paid to the composition and balance of the Board to ensure that it has experience of the oil and gas industry,the r