TIDMPPP
RNS Number : 9796X
Pennpetro Energy PLC
28 December 2023
Trading Symbols
LSE: PPP
RNS: 9853X
28 December 2023
Pennpetro Energy PLC
("Pennpetro" or "the Company")
Unaudited Consolidated Interim Results for the six months ended
30 September 2023
Pennpetro Energy plc ( LSE: PPP ), an independent oil and gas
company focusing on production in the Gonzales County in Texas,
USA, is pleased to announce its financial results for the six
months ended 30 September 2023 (the " Period "). The full Interim
Results, with accompanying notes, are available on the Company's
website: www.pennpetroenergy.co.uk .
David Lenigas, Executive Chairman and Thomas Evans, Chief
Executive Officer, commented:
During the Period:
-- Whistling Straits #5H well was drilled to its total depth of
10,195 feet MD by the operator Millennium PetroCapital Corporation
("Millennium") under the original farm in arrangement whereby
Pennpetro was spending 33% of the well costs for a net 25% working
interest.
-- Millennium put the well to test using a JET pumping
arrangement in April that proved unsuccessful in lifting the drill
fluids for the well.
-- In June, Pennpetro signed a series of agreements with
Millennium to increase its stake in the Whistling Straits 5H well
from a 25% working interest ("WI") to a 100% WI and to assume
operatorship of the well with immediate effect in addition to
2,036.38 acres of oil leases. This acquisition was completed in
July.
-- Pennpetro also has the exclusive right to acquire a 100%
working Interest in two nearby Chalk Talk wells (Chalk Talk 1H and
Chalk Talk 4H) for no additional costs, if Nobel determines that
production can be restored to one or both wells within a 90-day
evaluation period. This option to acquire 100% of these Chalk Talk
wells was exercised in July.
Post Period:
-- Pennpetro embarked on a workover of its Chalk Talk #1H
("CT1H") well in October and commenced an extended well test on 1
November.
-- November oil production from CT1H was 4,827 barrels at an
average of 161 Barrels of oil per day ("bopd").
-- Oil sales for the month of November totalled 4,599.08 barrels.
-- Pennpetro put in place an oil sales agreement that sees the
oil it sells for the any month paid to Nobel Petroleum, its 100%
Texas subsidiary, on the 20(th) day of the following month.
-- Net cash received for November's oil production (after tax)
was US$329,658.09 which equates to US$255,032.62 net revenue
interest (after taxes and royalties).
-- Extended well testing of CT1H continues.
-- The workover of Chalk Talk 4H well commenced on 8 December and is ongoing.
Financial Highlights
In the six months ended 30 September 2023, the Company made an
operating loss of US$ 1,191,601 (30 June 2022: US$250,000) and a
basic and diluted loss per share of US$(1.22) (30 June 2022: US$(
0.26).
In June - to fund the new well acquisitions and workovers - the
Company placed 5,800,000 new ordinary shares of GBP0.01 each in the
Company and 9,200,000 existing ordinary shares of GBP0.01 each in
the Company transferred by existing shareholders unconnected to any
director, at a placing price of 2 pence each to raise GBP300,000
(before expenses).
Overview of Operations
Post Period Events
Horse Hill Farm-in
Post the end of the 31 September 2023 reporting period,
Pennpetro) announced that it has agreed to extend the binding Horse
Hill farm-in term sheet ( " Agreement " ) with UKOG (137/246) Ltd
and Horse Hill Developments Ltd ("HHDL"), both subsidiaries of UK
Oil & Gas plc (collectively " UKOG" ) until 30 June 2024.
The Horse Hill Oil Field ("Horse Hill"), located about 2 km
north of Gatwick airport.
The Agreement, as originally announced on 28 March 2023, enables
PPP to farm-in to the Horse Hill Oil Field on an incremental
production only basis via funding 100% of the acquisition of a
twelve square km 3D seismic survey and the drilling of the next
crestal infill production well, designated as HH-3.
The Agreement's binding farm-in terms, which are subject to
certain conditions as outlined below, cover the drilling of a new
crestal infill well, designated Horse Hill-3 ("HH-3"), to be
spudded after the completion of a Pennpetro funded high-definition
3D seismic survey. On completion of HH-3, Pennpetro will receive a
49% share of all production derived from Horse Hill-3 and future
wells plus a 49% interest in the Licences. UKOG's subsidiaries will
retain their current interests in all oil production from Horse
Hill-1 ("HH-1") and HHDL will remain as the named Licence
operator.
About Horse Hill Oil Field
As previously reported in the Pennpetro Energy RNS dated 28
March 2023.
" Following its discovery in 2014, Horse Hill was successfully
production tested in the Upper Portland sandstone and underlying
Kimmeridge limestone section from 2016 through to the start of
long-term continuous Portland production in 2020. UKOG advise that,
as of mid-March 2023, continuing oil production from HH-1 totalled
an aggregate of over 185,000 barrels of 35 - 41 API sweet crude.
Full planning and environmental consents are in place for four
additional infill production wells.
A 2018 Xodus CPR for UKOG estimated a gross mid case P50
Portland oil in place ("OIP") of 30 million barrels, with a
corresponding mid-case 2C recoverable Contingent Resource of 1.5
million barrels. The estimated mid case 5% recovery factor being
stated as in accord with other analogous fields in the Weald Basin.
It should be noted that the recovery factor being stated as in
accord with other analogous fields in the Weald Basin. It should be
noted that the total HH-1 Portland production to date potentially
leaves around 1.36 million barrels of the estimated mid-case
recoverable Portland resource available to infill drilling and
remaining HH-1 production.
In addition to the 132,000 barrels of 35-36 API Portland
continuous production as at mid-March 2023, approximately 53,000
barrels of 41 API sweet crude were produced from multiple zones
within the Kimmeridge limestones during production testing, before
being shut in to allow for longer term Portland production. In 2015
a Schlumberger report calculated an estimated mean OIP of 8.262
billion barrels lying within the entire Kimmeridge section
underlying the Licences.
Note: OIP should not be construed as either recoverable
Contingent resources or Reserves. The Kimmeridge therefore remains
a potentially viable secondary production target at Horse Hill.
"
Outlook
In line with our strategy, all our operations are in highly
active hydrocarbon plays where the potential economics of drilling
and producing oil remain attractive at sub-US$30 oil prices.
Our initial workovers at Chalk Talk 1H and Chalk Talk 4H have
proved successful for Pennpetro and are now generating solid
cashflow.
Our plan beyond these initial workovers is to review and
expedite the workovers in 2024 on the Whistling Straits #5H and
City of Gonzales #1 wells.
Pennpetro ' s new ventures announced since March of this year
are transformational for Pennpetro and we see excellent opportunity
for growth in 2024. The board takes this opportunity to thank
shareholders, old and new, its management, consultants, and
advisers for their continued support and if the current oil price
environment holds up this year it and allows the Company to move
towards it aims of being a positive cashflow oil developer and
producer.
For further information please visit the Company's website
www.pennpetroenergy.co.uk or follow us on twitter @pennpetro or
contact:
Pennpetro Energy PLC: tme@pennpetroenergy.com
Tom Evans, CEO
David Lenigas, Chairman +44 (0) 7881825378
lenigas@monaco-capital.com
Brokers:
Zeus Capital
Simon Johnson +44 (0) 207 614 5900
Peterhouse Capital Limited
Lucy Williams +44 (0) 20 7469 0930
Duncan Vasey +44 (0) 20 7220 9797
Flagstaff Strategic and Investor +44(0) 207 129 1474
Communications pennpetro@flagstaffcomms.com
Tim Thompson
Alison Allfrey
Anna Probert
Notes to Editors:
Pennpetro Energy is an independent oil and gas company focusing
on production in the Gonzales Oil Field in Texas, USA. Shares in
the company were admitted to the Official List of the London Stock
Exchange by way of a Standard Listing on 21 December 2017 with the
ticker symbol "PPP".
Its wholly owned subsidiary, Nobel Petroleum USA Inc. has a 100%
Working Interest in 2,036.38 acres in Gonzales County in Texas.
These acres include the Whistling Straits #5 well and the Chalk
Talk #1H and #4H wells. Noble also has a Participation, Development
and Option Agreement and Joint Operating Agreement with Texas based
Millennium PetroCapital Corporation over a 250,000-acre Area of
Mutual Interest in Gonzales County, Texas, aimed at exploiting the
prolific proven Austin Chalk oil and gas play. Pennpetro Energy has
also recently signed a conditional binding agreement to conduct a
new 3D seismic survey on the Horse Hill Oil Field near London's
Gatwick Airport which paves the way to drilling the next production
well (HH-3) for 49% of the revenue of this proposed well.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months
to 30 September to 30 June
2023 Unaudited 2022 Unaudited
$'000 $'000
--------------------------------------------- ----------------- ----------------
Continuing operations
Other income - -
Administration expenses (1,147) (60)
---------------------------------------------- ----------------- ----------------
Operating Loss (1,147) (60)
---------------------------------------------- ----------------- ----------------
Other net gains/(losses) - -
--------------------------------------------- ----------------- ----------------
Profit/(Loss) Before Interest and Income
Tax (1,147) (60)
---------------------------------------------- ----------------- ----------------
Net finance costs (45) (145)
Corporation tax expense - -
--------------------------------------------- ----------------- ----------------
Profit/(Loss) for the period (1,192) (205)
---------------------------------------------- ----------------- ----------------
Profit/(Loss) attributable to:
* owners of the Group - -
--------------------------------------------- ----------------- ----------------
Profit/(Loss) for the period (1,192) (205)
---------------------------------------------- ----------------- ----------------
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss
Currency translation differences (102) 299
---------------------------------------------- ----------------- ----------------
Total comprehensive income (1,294) 94
---------------------------------------------- ----------------- ----------------
Attributable to:
* owners of the Group - -
--------------------------------------------- ----------------- ----------------
Total comprehensive income (1,294) 94
---------------------------------------------- ----------------- ----------------
loss per share (cents) from continuing
operations attributable to owners of
the Parent - Basic and diluted (1.22) (0.26)
---------------------------------------------- ----------------- ----------------
CONDENSED CONSOLIDATED BALANCE SHEET
Notes As at As at As at
30 September 31 March 30 June 2022
2023 2023 Audited Unaudited
Unaudited $'000 $'000
$'000
------------------------------- ------ -------------- -------------- --------------
Non-Current Assets
Property, plant and equipment 1,485 1,485 1,384
Intangible assets 4 4,234 4,234 4,234
------------------------------- ------ -------------- -------------- --------------
5,719 5,719 5,618
------------------------------- ------ -------------- -------------- --------------
Current Assets
Trade and other receivables 314 315 308
Short term investments 360 82 93
Cash and cash equivalents 3 47 1
------------------------------- ------ -------------- -------------- --------------
677 444 402
------------------------------- ------ -------------- -------------- --------------
Total Assets 6,396 6,163 6,020
------------------------------- ------ -------------- -------------- --------------
Non-Current Liabilities
Borrowings 4,478 4,018 4,257
------------------------------- ------ -------------- -------------- --------------
Current Liabilities
Trade and other payables 801 967 1,115
------------------------------- ------ -------------- -------------- --------------
Total current Liabilities 801 967 1,115
------------------------------- ------ -------------- -------------- --------------
Total Liabilities 5,279 4,985 5,412
------------------------------- ------ -------------- -------------- --------------
Net Assets 1,117 1,178 608
------------------------------- ------ -------------- -------------- --------------
Equity Attributable to
owners of the Company
Share Capital 1,242 1,079 928
Share Premium 8,090 6,611 4,302
Convertible reserve 4,173 4,173 5,776
Reorganisation reserve (6,578) (6,578) (6,578)
Foreign exchange translation
reserve 97 226 306
Retained losses (5,907) (4,333) (4,126)
------------------------------- ------ -------------- -------------- --------------
Total equity attributable
to owners of the Company 1,117 1,178 608
------------------------------- ------ -------------- -------------- --------------
Total Equity 1,117 1,178 608
------------------------------- ------ -------------- -------------- --------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS '
EQUITY
Share Share Foreign Retained Total
capital premium Reorganisation exchange losses equity
$'000 $'000 Convertible reserve translation $'000 $'000
reserve $'000 reserve
$'000 $'000
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
As at 31 December
2021 979 4,122 6,022 (6,578) 7 (3,921) 630
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Comprehensive
income
(Loss) for the
period - - (246) - - (205) (451)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Other comprehensive
income
Currency translation
differences - - - - 299 - 299
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Total comprehensive
income - - (246) - 299 (205) (152)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Issue of ordinary
shares - 181 - - - - 181
Share issue costs (51) - - - - - (51)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Total transactions
with owners (51) (181) - - - - 130
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
As at 30 June
2022 928 4,302 5,776 (6,578) 306 (4,126) 608
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Share Share Foreign Retained Total
capital premium Reorganisation exchange losses equity
$'000 $'000 Convertible reserve translation $'000 $'000
reserve $'000 reserve
$'000 $'000
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
As at 1 April
2023 1,079 6,611 4,173 (6,578) 199 (4,306) 1,178
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Comprehensive
income
(Loss) for the
period - - - - - (1,192) (1,192)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Other comprehensive
income
Currency translation
differences - - - - (102) (409) (511)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Total comprehensive
income - - - - (102) (1,601) (1,703)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Issue of ordinary
shares 193 1,849 - - - - (2,042)
Share based payments (30) (370) - - - - (400)
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
Total transactions
with owners 163 1,479 - - - - 1,642
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
As at 30 September
2023 1,242 8,090 4,173 (6,578) 97 (5,907) 1,117
---------------------- --------- --------- -------------- ----------------- ------------- --------- ---------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
30 September 30 June
2023 Unaudited 2022 Unaudited
Note $ $
------------------------------------------- -------- ---------------- ----------------
Cash flows from operating activities
Loss before taxation (1,192) (205)
Adjustments for:
Depreciation - -
Exchange difference (107) 442
(Increase) in trade and other receivables 1 (2)
Increase in trade and other payables 166 844
----------------------------------------------------- ---------------- ----------------
Net cash used in operations (1,132) 1,079
----------------------------------------------------- ---------------- ----------------
Cash flows from investing activities
Disposal of short term investments (442) -
Purchase of intangible assets - -
Purchase of fixed assets - -
------------------------------------------- -------- ---------------- ----------------
Net cash used in investing activities (442) -
------------------------------------------- -------- ---------------- ----------------
Cash flows from financing activities
Proceeds from issue of ordinary shares 1,643 -
Proceeds from borrowings - 274
Share based payment charge (22) -
Finance costs (45) 145
----------------------------------------------------- ---------------- ----------------
Net cash from financing activities 1,576 419
----------------------------------------------------- ---------------- ----------------
Increase in cash and cash equivalents 2 (1)
Cash and cash equivalents at beginning
of period 47 2
Exchange differences on cash 46 -
------------------------------------------- -------- ---------------- ----------------
Cash and cash equivalents at end of
period 3 1
----------------------------------------------------- ---------------- ----------------
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
The principal activity of Pennpetro Energy PLC ( ' the Company '
) and its subsidiaries (together ' the Group ' ) is an oil and gas
developer with assets in Texas, United States. The Company ' s
US-based subsidiaries own a portfolio of leasehold petroleum
mineral interests centred on the City of Gonzales, in southeast
Texas, comprising the undeveloped central portion of the Gonzales
Oil Field. The Company ' s shares are listed on the standard market
of the London Stock Exchange. The Company is incorporated and
domiciled in England and Wales.
The address of the Company ' s registered office is 20b Wilton
Row, London, SW1X 7NS.
2. Basis of Preparation
The consolidated interim financial statements have been prepared
in accordance with the requirements of the LSE Rules for Companies.
As permitted, the Company has chosen not to adopt IAS 34 " Interim
Financial Statements " in preparing this interim financial
information. The consolidated interim financial statements should
be read in conjunction with the annual financial statements for the
year ended 31 March 2023, which have been prepared in accordance
with UK-adopted International Accounting Standards ( " UK-adopted
IAS").
The consolidated interim financial statements set out above does
not constitute statutory accounts. They have been prepared on a
going concern basis in accordance with the recognition and
measurement criteria of UK-adopted IAS. Statutory financial
statements for the year ended 31 March 2023 were approved by the
Board of Directors on 18 October 2023.
The consolidated interim financial statements are presented in
United States dollars as the Company believes it to be the most
appropriate and meaningful currency for investors. The functional
currency of the Company is pounds sterling, and the functional
currency of the US based subsidiaries is US Dollar.
Going concern
The Directors have prepared cashflow forecasts as part of their
assessment of the going concern position of the Company and Group.
The Board of Directors have considered these forecasts and have a
reasonable expectation that the Company and Group has adequate
resources to continue in operational existence through to 30
November 2024 as projected.
The factors that were extant at 31 March 2023 are still relevant
to this report and as such reference should be made to the going
concern note and disclosures in the 2023 Annual Report.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Group ' s
medium-term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Group ' s
2023 Annual Report and Financial Statements, a copy of which is
available on the Group ' s website:
https://www.pennpetroenergy.co.uk. The key financial risks are
liquidity risk, market risk, foreign exchange risk and credit
risk.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, income and
expenses, and disclosure of contingent assets and liabilities at
the end of the reporting period. Significant items subject to such
estimates are set out in note 4 of the Group ' s 2023 Annual Report
and Financial Statements. Actual amounts may differ from these
estimates. The nature and amounts of such estimates have not
changed significantly during the interim period.
3. Accounting Policies
The same accounting policies, presentation and methods of
computation have been followed in these condensed interim financial
statements as were applied in the preparation of the Group ' s
annual financial statements for the year ended 31 March 2023 except
for the impact of the adoption of the Standards and interpretations
described below and new accounting policies adopted as a result of
changes in the Group.
3.1. Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for
the financial periods beginning on or after 1 January 2023
The International Accounting Standards Board (IASB) issued
various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and
revisions were applicable for the period ended 30 September 2023
but did not result in any material changes to the Financial
Statements of the Group.
b) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective
date
IAS 1 and IFRS Practice Disclosure of Accounting Policies 1 January
Statement 2 (Amendments) 2023
---------------------------------- -------------
IAS 8 (Amendments) Accounting estimates 1 January
2023
---------------------------------- -------------
IAS 12 (Amendments) Income taxes 1 January
2023
IFRS 17 Insurance contracts 1 January
2023
---------------------------------- -------------
IAS 1 (Amendments) Classification of Liabilities as 1 January
Current or Non-Current 2024
---------------------------------- -------------
The Group is evaluating the impact of the new and amended
standards above which are not expected to have a material impact on
future Group Financial Statements.
4. Intangible assets
Cost and Net Book Value $
Balance as at 31 December 2021 4,234
Additions -
Balance as at 30 June 2022 4,234
Balance as at 1 April 2023 4,234
Additions -
-------------------------------- ------
As at 30 September 2023 4,234
-------------------------------- ------
5. Loss per share
The calculation of loss per share is based on a retained loss of
$1,191,601 for the six months ended 30 September 2023 (six months
ended 30 June 2022: $205,000) and the weighted average number of
shares in issue in the period ended 30 September 2023 of 97,361,726
(six months ended 30 June 2022: 78,846,153).
6. Approval of interim financial statements
The condensed interim financial statements were approved by the
Board of Directors on 28 December 2023.
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END
IR EAPAXAEFDFFA
(END) Dow Jones Newswires
December 28, 2023 02:00 ET (07:00 GMT)
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