Annual Report 2010 - Ophir Energy

Notes to the
financial statements
1 Authorisation of financial
statements
Ophir Energy plc (the “Company” and the ultimate parent
of the Group) is a limited company incorporated and
domiciled in England and its registered offices are situated
at 55 Grosvenor Street, London W1K 3HY.
The Group’s and Company’s Financial Statements for the
year ended 31 December 2010 were authorised for issue
by the board of the directors on 28 March 2011 and the
statement of financial position was signed on the Board’s
behalf by Mr N Smith and Dr A Stein.
The Company has taken advantage of the exemption
provided under s408 of the Companies Act 2006 not
to publish its individual income statement and
related notes.
2 Basis of preparation and
significant accounting policies
2.1 going concern and basis of
accounting
The Directors are of the opinion that the Company and
the Group currently has sufficient funds to meet their
obligations and commitments as they fall due in the
foreseeable future and has therefore adopted the going
concern basis in preparing the Financial Statements.
The Group is currently conducting exploration activities
using existing funds from capital raised during prior years
in the form of shareholder funding. The Directors believe
that the Group has sufficient cash resources to meet its
current contractual commitments for the 12 months from
the date of this report. However the Directors recognise
that the Company will need to raise additional finance in
the short-term to fund the further planned and anticipated
activities, most notably the anticipated multi well
drilling campaign in Tanzania described in the
Directors’ report.
The Directors are in the process of evaluating a number
of funding proposals which include the issue of additional
equity via a private placing or pursuant to an admission
to a recognised stock exchange and/or a farm out or sale
of exploration interests. The Company considers that it
retains the strong support of its major shareholders and
the Directors believe that they have other options to raise
funds should that be required. The Directors are confident
that the required additional funds can be raised from any
one of a number of funding sources, but note that as
this has not been secured at the date of this report this
creates a material uncertainty which may cast significant
doubt about the Company’s ability to continue as a
going concern.
The Directors are confident of continuing funding based on
the range and feasibility of alternatives being explored, and
on this basis, believe that the adoption of the going concern
basis is appropriate and that no adjustments are required to
the carrying value of assets.
2.2 Basis of preparation and statement
of compliance
The Group’s and Company’s Financial Statements have
been prepared in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European
Union and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The consolidated Financial Statements have been
prepared on a historical cost basis except for revaluation
of certain derivative instruments measured at fair value.
The consolidated Financial Statements are presented in US
Dollars rounded to the nearest thousand dollars (US$’000)
except as otherwise indicated.
Comparative figures for the period to 31 December 2009
are for the year ended on that date.
2.3 significant accounting policies
The accounting policies adopted are consistent with those
of the previous financial year except as follows:
new and Amended Accounting standards and
interpretations
The Group has adopted the following new and amended
IFRS and IFRIC interpretations as of 1 January 2010:
• Amendment to IFRS 2 Group Cash Settled Share-based
Payment Arrangements
• IFRS 3 (revised) Business Combinations
• IAS 27 (amended) Consolidated and Separate Financial
Statements
• Amendment to IAS 39 Financial Instruments:
Recognition and Measurement – Eligible Hedged items
• IFRIC 12 Service Concession Arrangements
• IFRIC 17 Distribution of Non-cash Assets to Owners
• IFRIC 18 Transfers of Assets from Customers
• Improvements to IFRS (issued 2009)
When the adoption of the Standard or Interpretation is
deemed to have an impact on the Financial Statements or
the financial position and performance of the Group, its
impact is described below:
Impact from changes to accounting policies IFRS 3 Business
Combinations (revised) and IAS 27 Consolidated and
Separate Financial Statements (revised 2008).
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Ophir energy plc | 2010 ANNUAL REPORT
grOUp AccOUnTs | NOTEs TO THE fiNANCiAL sTATEmENTs