NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
NOTE 23 – RESTORATION PROVISION 
 
The restoration provision represents the best estimate of the present value of restoration costs relating to the 
Company’s oil and natural gas interests, which are expected to be incurred up to 2043.  Assumptions, based on the 
current economic environment, have been made which management believes are a reasonable basis upon which to 
estimate the future liability.  The estimate of future removal costs requires management to make significant 
judgments regarding removal date or well lives, the extent of restoration activities required, discount and inflation 
rates. These estimates are reviewed regularly to take into account any material changes to the assumptions.  
However, actual restoration c osts will reflect market conditions at the relevant time.  Furthermore, the timing of 
restoration is likely to depend on when the fields cease to produce at economically viable rates.  This in turn will 
depend on future oil and natural gas prices, which are inherently uncertain. 
 
 2014 2013 
Year ended 31 December US$’000 US$’000 
   
Balance at the beginning of the period        5,074 1,228 
New provisions 3,677 1,601 
Changes in estimates 1,541 2,021 
Disposals (2,314) (146) 
New provisions assumed from acquisition 822 397 
Reclassified to assets held for sale - (109) 
Unwinding of discount           66          82 
Balance at end of period     8,866    5,074 
 
NOTE 24 – DEFERRED TAX ASSETS AND LIABILITIES      
 
Deferred tax assets and liabilities are attributable to the following: 
 
  
 2014 2013 
Year ended 31 December US$’000 US$’000 
   
Net deferred tax assets:   
Share issuance costs     2,172          1,069 
Net operating loss carried forward 1,826 473 
Unrecognized foreign currency gain (loss)                    -              761 
Total net deferred tax assets           3,998           2,303 
   
Deferred tax liabilities:   
Development and production expenditure (106,343)   (114,042) 
Derivatives (3,351) - 
   
Offset by deferred tax assets with legally enforceable right of set-off:   
   
Net operating loss carried forward 5,943       10,373 
Other           1,083              958 
Total net deferred tax liabilities    (102,668)    (102,711) 
 
 
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