TIDMPRD
RNS Number : 4776X
Predator Oil & Gas Holdings PLC
30 April 2019
Predator Oil and Gas Holdings Plc
('Predator' or 'the Company' or 'the Group')
Annual Report and Financial Statements for the Year Ended 31
December 2018
Predator Oil and Gas Holdings Plc, the Jersey-based Oil and Gas
Company, with a portfolio of attractive upstream gas assets
adjacent to European gas infrastructure entry points is pleased to
announce its audited annual report and financial statements for the
year ended 31 December 2018 ("2018 Report"), extracts of which are
set out below.
The Company's 2018 Report is being posted to shareholders.
Copies of the Annual Financial Report will shortly be available to
download from the Company's website at
www.predatoroilandgas.com.
The financial information set out below does not constitute the
Company's statutory accounts for the year ending 31 December
2018.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014
Key Activities in 2018
-- Developed a portfolio of high impact oil and gas assets in
the Republic of Trinidad and Ireland
-- Negotiated Petroleum Agreement for onshore Morocco
-- Established potential for production and cash flow from
Trinidad in the near and medium term
-- Developed Pilot C02 EOR operational plan in Trinidad, put
together by the Company. with Heritage, FRAM, Environmental
Monitoring Authority, Ministry and Massy Gas Products which
potentially forms the template for all future onshore C02 EOR
operations
-- Progressed offshore Ireland and Morocco to maintain exposure
to high potential, transformational gas acreage by initiating the
acquisition of assets at low cost prior to rising gas prices and
renewed concerns over security of gas supply
-- Generated project economic models to support the strategy for
early monetisation in a success case of the Company's strategic
focus on gas assets around existing mature infrastructure offshore
Ireland and onshore Morocco
-- Equity funds raised on IPO ensured the Company was
fully-funded for near-term operations with the medium-term strategy
of completing farmouts and M & A transactions being progressed
through technical studies to de-risk future capital requirements
using the Company's material licence positions and proprietary
knowledge to secure acceptable financial terms
-- Group structure established suitable for potential M & A
and farmout transactions to reflect the diversified portfolio of
near-term production; exploration and appraisal, and exploration in
different geographic regions with different fiscal terms
Share Price Performance and Capital Raising
At the time of listing in May 2018 the Company's share price was
2.8p, but by the end of the year it had increased by 190% to 8.13p.
On Listing a placing of 46,428,600 shares at 2.8p raised gross
proceeds of GBP1.3 million. The funds raised have been or will be
used in support of the Company's 2018/19 work programmes, primarily
in Trinidad. We are very grateful for the support shown to the
Company in the fundraising by our existing shareholders and of
course subsequently by our new shareholders who we welcome to the
Company.
Highlights of Financial Results for 2018
-- Loss from operations of GBP0.792 million (2017: Loss of GBP0.448 million).
-- Cash balance at period end of 2018 GBP0.973 million (2017: GBP0.521 million).
For further information please contact:
Predator Oil & Gas Holdings Plc +44 (0)1534 834 600
Sarah Cope, Chairman Info@predatoroilandgas.com
Paul Griffiths, Chief Executive Officer
Novum Securities Ltd (Broker)
Jon Bellis +44 (0)207 399 9425
CHAIRMAN'S STATEMENT
I am pleased to present the 2018 financial results for the year
and a detailed summary of our activities during the year and into
the early months of 2019.
Following four very difficult years for the oil and gas sector,
arising from the sharp decline in oil prices in particular, there
had been a subsequent reduction in exploration activity,
availability of capital and a severe contraction in the size of the
potential farmout market.
More significantly, there is also a growing sector awareness
that the Fossil Fuel Industry must adapt quickly to address growing
global concerns regarding C02 emissions and climate change that
result from an over-reliance on fossil fuels as a source of primary
energy to support economic development.
In developing the Company's asset portfolio during 2018 the
strategic focus has been on building a responsible fossil fuel
exploration and production business.
Predator's focus on gas reflects the fact that gas has lower C02
emissions than oil and is a relatively flexible fossil fuel, being
more widely available and affordable and with multiple potential
roles in the energy transition towards a greater dependence on
renewable energy.
Cash flows have increased in the industry during 2018 and the
sharp decline in operating costs attributed to the fall in the
price of oil has now allowed the industry to focus on replacing
reserves and identifying new business growth opportunities through
exploration, appraisal and near-term development. Gas assets with
credible technical merits and a clear pathway to monetisation close
to existing infrastructure are potentially an attractive
proposition and compatible with the sector backdrop outlined
above.
The global energy consumption mix is still dominated by fossil
fuel energy and to reduce this reliance requires a considerable
period of time and large amounts of capital investment in renewable
energy projects whilst sustaining economic development to pay for
such investments.
Natural gas continues to play a key role in Ireland's energy
system providing approximately 30% of the country's primary energy
needs. In 2018 50% of Ireland's electricity was powered by natural
gas, and despite significant investment in and contributions from
renewable energy Ireland presently remains one of the worst C02
polluters per capita within the European Union.
In Morocco 80.4% of thermal electricity generating capacity is
based on coal with minor fuel oil, which results in high levels of
C02 emissions.
By seeking to explore for and develop indigenous gas in Ireland
and Morocco Predator seeks to make a small but practical
contribution to the role gas has in decarbonising the living
environment, whilst still maintaining the security and cost
effectiveness of energy supply, which is critical to sustaining
economic development.
In Trinidad Predator, through its Pilot C02 Enhanced Oil
Recovery project, is seeking to utilise some C02 emissions from one
of Trinidad's ammonia plants which would otherwise be vented into
the atmosphere. A significant proportion of the C02 utilised in the
Pilot will be sequestrated in the ground. The potential for
upscaling enhanced oil production using C02 injection within
Trinidad's large inventory of mature oil fields may potentially
provide further business development opportunities.
Predator was formed during the year to consolidate the
acquisition of an existing non-operated, potentially
revenue-generating, business opportunity in Trinidad and an
operated exploration and appraisal portfolio offshore Ireland.
During the year progress was made on adding an exploration project
onshore Morocco. A successful public listing raised GBP1.3 million
of capital primarily to develop the Trinidad project. Predator's
public listing was the first by a junior oil and gas company in
2018.
Trinidad is a core asset in the Predator portfolio as it offers
the potential for early cash flow from production revenues with
which to provide medium-term contributions to Predator's balance
sheet. During the year the emphasis has been on prudently moving
the project scope from infill drilling to enhancing oil recoveries
and production rates using C02 injection, a process widely used to
good effect in the United States. Commercial rationale for this was
based upon reducing the quantum of capital investment per barrel of
oil
produced and the payback time on investment, whilst increasing
forecast production rates per well. Securing exclusivity to the C02
supply was an important primary objective in order to have the
opportunity to be in the prime position to upscale C02 EOR
operations after a potentially successful Pilot.
During the year Predator has applied for Successor
Authorisations in Ireland, one of which has subsequently been
granted in 2019, and developed its business model for these gas
assets. Ireland has proved to be a challenging environment over the
recent years for executing projects in a timely manner. The
completion of the sale of the Corrib gas field combined with a new
drive to reduce C02 emissions to avoid EU fines and to improve
security of gas supply has potentially created the conditions to
re-energise the gas sector to possibly create a changed environment
for potentially substantive transactions for gas assets proximal to
existing infrastructure with rapidly developing capacity ullage.
Predator is well-placed to exploit such an opportunity for business
development using our management team, which has considerable
transaction experience in Ireland.
Morocco is becoming an exciting addition to the portfolio of gas
projects and offers a high-quality opportunity for low capital
investment in drilling close to existing under-utilised gas
infrastructure. The level of general interest already shown in this
asset, which was screened and selected based on our management's
long history of involvement in operations and farm-out activity in
Morocco, is very encouraging. Morocco is set to become an
additional pillar supporting Predator's business growth potential
during 2019 and is consistent with current sector sentiments in
relation to gas and the environment.
Recognising the changing environment in which we operate, your
Board and management's most recent strategic review has concluded
that Predator must focus the majority of its cash resources on
executing and developing its short-term production capability in
Trinidad whilst maintaining in good standing an attractive
portfolio of material high quality gas assets to facilitate
de-risking the financing thereof through farmouts and potential M
& A transactions.
Predator will continue to operate with a very small management
team with specialist knowledge and experience and a track record in
executing and delivering projects to the highest possible standards
and for the benefit of the Company and its shareholders.
We have a robust Board experienced in many diverse aspects of
the corporate business of a public company and all of whom make
important contributions to the Board's deliberations to provide
diligent oversight of Predator's business. Collectively we strive
to meet the best corporate governance standards and maintain a
strong commitment to judiciously developing the business of the
Company in line with shareholder expectations.
The outcome to Brexit in 2019 may pose significant new
challenges in terms of creating instability in the financial
markets and currency exchange rate fluctuations, reducing access to
UK-based oil field services, and in creating conditions liable to
weaken investor sentiment and decision-making processes. The
Company has some protection in that it does not operate in the
United Kingdom and is intending to generate revenues in United
States dollars from production in Trinidad. However, whilst Brexit
remains unresolved uncertainty will persist and possible outcomes
cannot be predicted with confidence.
In conclusion I am encouraged by our achievements to date over a
short period of time in developing a portfolio of material assets,
each of which could potentially transform the Company in its own
right. Predator has performed well on the Standard Listing segment
of the Official List on the Main Market of the London Stock
Exchange during 2018. At year end our share price was 190% higher
than our IPO price without shareholder dilution, out-performing the
AIM All-Share Chart for 2018. I look forward to reporting on our
progress in the coming year.
Finally, I would like to thank our management team for their
diligence and hard work during the year. The commitment and support
of my fellow Board members is also very much appreciated.
Sarah Cope
Chairman
30 April 2019
Events Since Year End
Operational
Near-Term Production Projects
Inniss-Trinity C02 EOR Pilot Project, Onshore Trinidad
- Approval received from Heritage Petroleum Ltd for the Pilot
CO2 EOR Project conditional on EMA and Ministry permits and
consents
- Option to purchase FRAM extended to 31 December 2019
- Exclusivity period for CO2 gas supply from Massy Gas Products
Ltd extended to 31 May 2019, subject to finalising C02 Gas Sales
Contract
- New CPR specific to C02 EOR operations commissioned
Near-Term Exploration Projects
Guercif Petroleum Agreement ("PA") Onshore Morocco
- Bank Guarantee arranged
- Guercif PA formally signed on 19 March 2019
- Rig selection discussions ongoing
- Planning for Environmental Impact Assessment commenced
- CPR for Guercif commissioned
Medium Term Exploration and Appraisal Projects
Corrib South Licensing Option 16/26 Slyne Basin, Atlantic Margin
Ireland
- Farmout and M & A activity progressing whilst waiting on
award of Frontier Exploration Licence
Ram Head Licensing Option 16/30 Celtic Sea Basin, Ireland
- New CPR incorporating new reservoir engineering data commissioned
- Potential synergies with the decommissioning of the Kinsale
facilities being investigated with other interested parties
- Award of 12-month extension to the Ram Head Licensing Option
16/30 received and accepted on 10 April 2019
Financial
On 15 February 2019 GBP1,500,000 was raised in the form of
convertible loan notes. The loan notes carry no coupon, are
repayable at a premium of 5% and a fee of 10% of the principal
amount. The loan notes are convertible at the election of the
lender at 90% of the volume weighted average share price. The term
of the loan notes is two years. The lender Arato Global
Opportunities Limited, also agreed to make available an additional
GBP250,000 on the same terms. The lender was issued with 2,083,333
warrants at an exercise price of 12p with a vesting period of two
years. Novum Securities Limited, the arranger of the convertible
loan notes, was issued with 2,000,000 in warrants on the same
terms.
On 12 April,2019 following the receipt of notice from Arato
Global Opportunities Limited for the conversion of GBP150,000 of
the Loan Note, issued on 15 February 2019, 1,966,888 New Ordinary
Shares were allotted and issued. Following the issue of such
1,966,888 New Ordinary Shares, the Company's issued share capital
was 102,104,038 shares of no par value, each with one vote per
share (and no such shares are held in treasury). The total number
of voting rights was therefore 102,104,038 following said issue of
shares.
Cash balance of GBP0.922 million in the Group as at 30April 2019
annual report date
Consolidated statement of comprehensive
income
For the year ended 31 December 2018
01.01.2018 01.01.2017
to 31.12.2018 to 31.12.2017
(audited) (unaudited)
Continuing operations Notes GBP GBP
-------------------------------------------- ------ --------------- ---------------
Administrative expenses (761,302) (414,370)
Loan impairment/write off (32,171) (34,276)
Operating loss (793,473) (448,646)
Finance income 1,012 492
Loss for the year before taxation (792,461) (448,154)
Taxation - -
Loss for the year after taxation (792,461) (448,154)
-------------------------------------------- ------ --------------- ---------------
Other comprehensive income - -
Total comprehensive loss for the year attributable
to the owners of the parent (792,461) (448,154)
---------------------------------------------------- --------------- ---------------
Earnings per share (in pence) 6 (1.0) (0.8)
Consolidated statement of financial position
As at 31 December 2018
31.12.2018 31.12.2017
(audited) (unaudited)
Notes GBP GBP
---------------------------------------------- ------ ------------ ------------
Non-current assets
Tangible fixed assets 8 3,622 -
---------------------------------------------- ------ ------------ ------------
3,622 -
Current assets
Trade and other receivables 10 12,250 68,804
Cash and cash equivalents 973,600 520,939
---------------------------------------------- ------ ------------ ------------
985,850 589,743
Total assets 989,472 589,743
---------------------------------------------- ------ ------------ ------------
Equity attributable to the owner of the
parent
Share capital 13 1,584,795 537,085
Reconstruction reserve 3,547,190 3,547,190
Other reserves 81,570 -
Retained deficit (4,294,352) (3,501,891)
---------------------------------------------- ------ ------------ ------------
Total equity 919,202 582,384
Current liabilities
Trade and other payables 11 70,270 7,359
---------------------------------------------- ------ ------------ ------------
Total liabilities 70,270 7,359
---------------------------------------------- ------ ------------ ------------
Total liabilities and equity 989,472 589,743
---------------------------------------------- ------ ------------ ------------
The accounting policies as shown in the annual report and the notes
below form an integral part of these financial statements
The Company has adopted the exemption in terms of Companies (Jersey)
law 1991 and has not presented its own income statement in these
financial statements. The Group reported a loss after taxation for
the year of GBP0.8million (2017: GBP0.4million loss). The financial
statements on pages 5 to 8 were approved and authorised for issue
by the Board of Directors on 30 April2019 and were signed on its
behalf by:
Paul Griffiths
Director
30 April 2019
Company Registered number: 125419
Consolidated statement of changes
in equity
For the year ended 31 December
2018
Attributable to owners of the
parent
Share Reconstruction Other Retained Total
Capital Reserve Reserves deficit
GBP GBP GBP GBP GBP
--------------------------------- ---------- --------------- ---------- ------------ ----------
Balance at 31 December 2016 375,000 3,375,000 - (3,053,737) 696,263
Issue of ordinary share capital 162,085 172,190 - - 334,275
Total contributions by and
distributions to owners of
the parent recognised directly
in equity 537,085 3,547,190 - (3,053,737) 1,030,538
--------------------------------- ---------- --------------- ---------- ------------ ----------
Loss for the year - - - (448,154) (448,154)
Other comprehensive income - - - - -
Total comprehensive income
for the year - - - (448,154) (448,154)
--------------------------------- ---------- --------------- ---------- ------------ ----------
Balance at 31 December 2017 537,085 3,547,190 - (3,501,891) 582,384
--------------------------------- ---------- --------------- ---------- ------------ ----------
Issue of ordinary share capital 1,300,001 - - 1,300,001
Issue of warrants - - 27,051 - 27,051
Issue of share options - - 54,519 - 54,519
Listing costs capitalised (252,292) - - - (252,292)
Total contributions by and
distributions to owners of
the parent recognised directly
in equity 1,047,709 - 81,570 - 1,129,279
--------------------------------- ---------- --------------- ---------- ------------ ----------
Loss for the year - - - (792,461) (792,461)
Other comprehensive income - - - - -
Total comprehensive income
for the year - - - (792,461) (792,461)
--------------------------------- ---------- --------------- ---------- ------------ ----------
Balance at 31 December 2018 1,584,794 3,547,190 81,570 (4,294,352) 919,202
--------------------------------- ---------- --------------- ---------- ------------ ----------
Consolidated statement of cash flows
For the year ended 31 December 2018
01.01.2018 01.01.2017
to 31.12.2018 to 31.12.2017
(audited) (unaudited)
Notes GBP GBP
---------------------------------------------- ------- --------------- ---------------
Cash flows from operating activities
Loss for the period before taxation (792,461) (448,154)
Adjustments for:
Consultancy fees - 300,000
Loans waived 32,171 34,276
Issue of share options 54,519 -
Finance income (1,012) (492)
Depreciation 392 -
Decrease/(Increase) in trade and other
receivables 24,383 (36,293)
Increase in trade and other payables 62,911 3,238
Net cash used in operating activities (619,097) (147,425)
----------------------------------------------- ------- --------------- ---------------
Cash flow from investing activities
Purchase of computer equipment (4,014) -
Net cash generated from investing activities (4,014) -
----------------------------------------------- ------- --------------- ---------------
Cash flows from financing activities
Proceeds from issuance of shares, net
of issue costs 1,074,760 -
Finance income received 1,012 -
Net cash generated from financing activities 1,075,772 -
----------------------------------------------- ------- --------------- ---------------
Net increase/(decrease) in cash and cash
equivalents 452,661 (147,425)
Cash and cash equivalents at the beginning
of the year 520,939 668,364
Cash and cash equivalents at the end of
the year 973,600 520,939
----------------------------------------------- ------- --------------- ---------------
Notes to the financial statements
For the year ended 31 December 2018
1. Segmental analysis
The Group operates in one business segment, the exploration,
appraisal and development of oil and gas assets. The Group has
interests in three geographical segments being Africa (Morocco),
Europe (Ireland) and the Caribbean (Trinidad and Tobago)
The Group's operations are reviewed by the Board (which is
considered to be the Chief Operating Decision Maker ('CODM')) and
split between oil and gas exploration and development and
administration and corporate costs.
Exploration and development is reported to the CODM only on the
basis of those costs incurred directly on projects..
Administration and corporate costs are further reviewed on the
basis of spend across the Group.
Decisions are made about where to allocate cash resources based
on the status of each project and according to the Group's strategy
to develop the projects. Each project, if taken into commercial
development, has the potential to be a separate operating segment.
Operating segments are disclosed below on the basis of the split
between exploration and development and administration and
corporate.
Europe Caribbean Africa Corporate
GBP'000 GBP'000 GBP'000 GBP'000
Year to 31 December 2018
Gross profit (loss) (71) (123) (30) (483)
Depreciation -
Other administrative and
overhead expenses (32)
Share option and warrant
expense (55)
Finance income - - 1
Finance expense
Taxation (charge) - -
Profit (loss) for the year
from continuing
operations (71) (123) (30) (569)
Total assets 255 - - 966
Total non-current assets - - - -
Additions to non-current - - - -
assets
Total current assets 255 - - 966
Total liabilities (4) (137) (30) (61)
There are no non-current assets held in the Group's country of
domicile, being the Jersey Isles (2017: GBPnil).
2. Group loss from operations
2018 2017
Group Group
GBP'000 GBP'000
Operating loss is stated after charging/
(crediting):
Auditors' remuneration (note 3) 67.5 -
Depreciation - -
Share option expense - -
Foreign exchange (gain) (19) 0.8
3. Auditor's remuneration
2018 2017
Group Group
GBP'000 GBP'000
Fees payable to the Group's auditor
for the audit of the Group's annual
accounts -
Fees payable to the Group's auditor
for other services: -
- Audit of the accounts of the Group 20 -
- Other services 48 -
68 -
---------------- -----------------
4 Taxation
2018 2017
Factors affecting the tax charge Group Group
for the year
GBP'000 GBP'000
Loss on ordinary activities before
tax : (792) (448)
Loss on ordinary activities at Jersey
standard 0% tax (2017: 0%) 0 0
Tax charge (credit) for the year: 0 0
-------- ----------------
No deferred tax asset or liability has been recognised as the
Standard Jersey corporate tax rate is 0%
5 Personnel
2018 2017
Group Group
GBP'000 GBP'000
Personnel costs (including directors)
consist of:
Consultancy fees 242 300
Share based payments 55 -
Healthcare costs - -
Pension costs - -
297 300
-------- ------------------
The average number of personnel (including
directors) during the year was as
follows:
Management 5 2
Other operations - -
5 2
---------------- ---
Four Directors at the end of the period have share options
receivable under long term incentive schemes. The highest paid
Director received an amount of GBP98,200 (2017: nil). The Group
does not have employees. All personnel are engaged under
consultancy contracts as service providers
6 Earnings per share
31 Dec 2018 31 Dec 2017
Group Group
Loss per ordinary share has been calculated
using the weighted average number
of ordinary shares in issue during
the relevant financial year.
The weighted average number of ordinary
shares in issue for the period is: 82,201,718 53,708,550
Losses for the period: (GBP'000) (GBP792) (GBP448)
Earnings per share basic and diluted
(pence) (1.0p) (0.8p)
Dilutive loss per Ordinary Share equals
basic loss per Ordinary Share as,
due to the losses incurred in 2018
and 2017, there is no dilutive effect
from the subsisting share options
7 Loss for the financial year
The Group has adopted the exemption in terms of Companies
(Jersey) law 1991 and has not presented its own income statement in
these financial statements.
8 Property, plant and equipment
Fixed Assets
Computer
equipment
GBP
--------------------- -----------
Cost
At 31 December 2017 -
Additions 4,014
--------------------------- -----------
At 31 December 2018 4,014
--------------------------- -----------
Amortisation
At 31 December 2017 -
Charge for the year 392
--------------------------- -----------
At 31 December 2018 392
--------------------------- -----------
Carrying amount
At 31 December 2017 -
At 31 December 2018 3,622
--------------------------- -----------
9 Investments in subsidiaries
2018 2017
Group Group
GBP'000 GBP'000
Cost at the beginning of the year - -
Additions during the year 537 -
Cost at the end of the year 537 -
-------- --------
The principal subsidiaries of Predator Oil and Gas Holdings Plc,
all of which are included in these consolidated Annual Financial
Statements, are as follows:
Country Proportion
Group of registration Class held by Group Nature of business
2018 2017
------------------ ---------- ----- ---------- ----------------------
Jersey
Predator Oil and , Channel Licence options
Gas Ventures Limited Islands Ordinary 100% 100% offshore Ireland
------------------ ---------- ----- ---------- ----------------------
Predator Gas Ventures Jersey Ordinary 100% - Exploitation licence
Limited , Channel onshore Morocco
Islands
------------------ ---------- ----- ---------- ----------------------
Jersey Drilling rights
Predator Oil and , Channel for a CO2 pilot
Gas Trinidad Limited Islands Ordinary 100% 100% oil recovery project
------------------ ---------- ----- ---------- ----------------------
The registered address of all of the Group's companies is at 3rd
Floor, Standard Bank House, 47-49 La Motte Street, Jersey, JE2 4SZ,
Channel Islands.
10 Trade and other receivables
Dec 2018 Dec 2017
Group Group
GBP'000 GBP'000
Loan receivable 32 32
Provision for impairment (32)
Prepayments 12 37
12 69
--------- ---------
Prepayments in 2018 are in respect of an insurance premium paid
in advance and are expensed within 60 days. There are no material
differences between the fair value of trade and other receivables
and their carrying value at the year end.
11 Trade and other payables
Dec 2018 Dec 2017
Group Group
GBP'000 GBP'000
Trade payables 3 -
Accrued expenses 67 7
70 7
--------- ---------
All payables are required to be settled within 30days.
12 Financial instruments - risk management
Significant accounting policies
Details of the significant accounting policies in respect of
financial instruments are disclosed on pages 51 to 56 of the annual
report. The Group's financial instruments comprise cash and items
arising directly from its operations such as other receivables,
trade payables and loans.
Financial risk management
The Board seeks to minimise its exposure to financial risk by
reviewing and agreeing policies for managing each financial risk
and monitoring them on a regular basis. No formal policies have
been put in place in order to hedge the Group's activities to the
exposure to currency risk or interest risk; however, the Board will
consider this periodically. A foreign exchange hedge was entered
into during the year whereby Sterling GBP was converted to United
States $.
The Group is exposed through its operations to the following
financial risks:
-- Credit risk
-- Market risk (includes cash flow interest rate risk and foreign currency risk)
-- Liquidity risk
The policy for each of the above risks is described in more
detail below.
The principal financial instruments used by the Group, from
which financial instruments risk arises are as follow:
-- Receivables
-- Cash and cash equivalents
-- Trade and other payables (excluding other taxes and social security) and loans
The table below sets out the carrying value of all financial
instruments by category and where applicable shows the valuation
level used to determine the fair value at each reporting date. The
fair value of all financial assets and financial liabilities is not
materially different to the book value.
2018 2017
Group Group
GBP'000 GBP'000
Loans and receivables
Cash and cash
equivalents 973 521
Receivables 12 69
Available for
sale financial
assets
Available for - -
sale investments
(valuation level
1)
Other liabilities
Trade and other
payables (excl
short term loans) 70 7
Loans and borrowings - -
Credit risk
Financial assets, which potentially subject the Group to
concentrations of credit risk, consist principally of cash,
short-term deposits and other receivables. Cash balances are all
held at recognised financial institutions. Other receivables are
presented net of allowances for doubtful receivables. Other
receivables currently form an insignificant part of the Group's
business and therefore the credit risks associated with them are
also insignificant to the Group as a whole.
The Group has a credit risk in respect of inter-company loans to
subsidiaries. The Company is owed GBP196,830 by its subsidiaries.
The recoverability of these balances is dependent on the commercial
viability of the exploration activities undertaken by the
respective subsidiary companies. The credit risk of these loans is
managed as the directors constantly monitor and assess the
viability and quality of the respective subsidiary's investments in
intangible oil & gas assets.
Maximum exposure to credit risk
The Group's maximum exposure to credit risk by category of
financial instrument is shown in the table below:
2018 2018 2017 2017
Carrying Maximum Carrying Maximum
value exposure value exposure
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 973 1034 521 521
Receivables 12 12 69 69
Loans and borrowings - - - -
The holding company's maximum exposure to credit risk by class
of financial instrument is shown in the table below:
2018 2018 2017 2017
Carrying Maximum Carrying Maximum
value exposure value exposure
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 973 1034 521 521
Receivables 12 12 69 69
Loans to Group Companies 197 197 - -
Market risk
Cash flow interest rate risk
The Group has adopted a non-speculative policy on managing
interest rate risk. Only approved financial institutions with sound
capital bases are used to borrow funds and for the investments of
surplus funds.
The Group seeks to obtain a favourable interest rate on its cash
balances through the use of bank deposits. The Group's bank ceased
paying interest on cash balances during the year, therefore the
Group is not currently affected by interest rate changes. At
31December,2018, the Group had a cash balance of GBP0.973 million
(2017: GBP0.521 million) which was made up as follows:
2018 2017
Group Group
GBP'000 GBP'000
Sterling 455 521
United States Dollar 518 -
973 521
--------- ------------------
At the reporting date, the Group had a cash balance of
GBP0.922million
The Group had no interest bearing debts at the current year
end
Foreign currency risk
Foreign exchange risk is inherent in the Group's activities and
is accepted as such. The majority of the Group's expenses are
denominated in Sterling and therefore foreign currency exchange
risk arises where any balance is held, or costs incurred, in
currencies other than Sterling. At 31 December 2018 and 31 December
2017, the currency exposure of the Group was as follows:
Sterling US Dollar Euro Other Total
At 31 December 2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 455 518 - - 973
Trade and other receivables 12 - - - 12
Trade and other payables 70 - = - 70
At 31 December 2017
Cash and cash equivalents 521 - - - 521
Trade and other receivables 69 - - - 69
Trade and other payables 7 - - - 7
The effect of a 10% strengthening of Sterling against the US
dollar at the reporting date, all other variables held constant,
would have resulted in increasing post tax losses by GBP51,800
(2017:GBPnil ). Conversely the effect of a 10% weakening of
Sterling against the US dollar at the reporting date, all other
variables held constant, would have resulted in decreasing post tax
losses by GBP51,800 (2017:GBPnil)
Liquidity risk
Any borrowing facilities are negotiated with approved financial
institutions at acceptable interest rates. All assets and
liabilities are at fixed and floating interest rate. The Group
seeks to manage its financial risk to ensure that sufficient
liquidity is available to meet the foreseeable needs both in the
short and long term. See also references to Going Concern
disclosures in the Strategic Report on pages 6 and 10.
Capital
The objective of the directors is to maximise shareholder
returns and minimise risks by keeping a reasonable balance between
debt and equity. At 31December 2018 the Group had no debt
13 Share Capital
Ordinary
Nominal
No of shares value
As at 31 December 53,708,550 GBP537,085
2017
Issued during 46,428,600 GBP1,300,001
the year *
Less listing costs (GBP252,292)
------------- -----------------
As at 31 December 100,137,150 GBP1,584,794
2018
------------- -----------------
* Details of the shares issued during the year are as shown in
the table below and in the Statement of Changes of Equity on shown
above
Date of No of shares Issue Purpose of issue
issue price
21March 53,708,550 GBP0.01 Acquire Predator Oil & Gas Ventures
2018 Limited
21 May 46,428,600 GBP0.028 Fund operations
2018
14 Share based payments
Equity - settled share based payments
Warrant and Share option expense
2018 Group 2017 Group
GBP'000 GBP'000
Warrant and share option expense:
- In respect of remuneration contracts 55 -
- In respect of financing arrangements 27 -
----------- -----------
Total expense / (credit) 82 -
----------- -----------
The Group operates a share option plan for directors. Details of
share options granted in the year to 31 December 2018 are noted
below.
On 24 May 2018 both Paul Griffiths and Ron Pilbeam were granted
share options each of 4,005,486 exercisable at GBP0.028 each and
Steve Staley and Sarah Cope were granted share options each of
1,001,370 exercisable at GBP0.028 each
The options are subject to the following vesting conditions:
1/3 of the option shares 3,337,904 on gross production from the
wells drilled under the Well Participation Agreement Predator Oil
and Gas Ventures Limited and FRAM Exploration Trinidad Limited
of 50 BOPD (measured over a consecutive 30 day period)
1/3 of the option shares 3,337,904 on incremental gross production
from a Pilot C02 test of 300 BOPD (measured over a consecutive
30 day period)
1/3 of the option shares 3,337,904 on incremental total gross production
from wells for which the Company receives revenues of 1,000 BOPD
(measured over a consecutive 30 day period)
Each option shall lapse 5 years after the date on which it vests,
assuming it is not exercised before then and no event occurs to
cause it to lapse early.
Each option shall lapse 5 years after the date on which it
vests, assuming it is not exercised before then and no event occurs
to cause it to lapse early. The Black Scholes model has been used
to fair value the options, the inputs into the model were as
follows
Grant date 24 May, 2018
Share price
GBP0.028
Exercise price
GBP0.028
Term
5 years
Expected volatility 400%
Expected dividend yield 0%
Risk free rate
0.80%
Fair value per option
GBP0.028
The total fair value of the options: GBP54,519
Expected volatility was determined by reference to the Company's
share price since admission to the Standard List of the London
Stock Exchange and the year end. The risk free rate is based on the
UK three year bond yield.
On 24 May 2018 the Company's granted 2,231,248 warrants to Novum
Securities Limited and 160,714 warrants to Optiva Securities
Limited in consideration of services provided to the Company
pursuant to the terms of the Placing Agreement and conditional upon
admission becoming effective. The warrants may be exercised at
GBP0.028 each in whole or in part at any time and from time to time
from the date of their grant until the third anniversary of
admission.
The Black Scholes model has been used to fair value the
warrants, the inputs into the model were as follows
Grant date 24 May, 2018
Share price GBP0.028
Exercise price
GBP0.028
Term
3 years
Expected volatility
60%
Expected dividend yield
0%
Risk free rate
0.80%
Fair value per warrant
GBP0.0113
Total fair value of warrants GBP27,051
15 Reserves
Details of the nature and purpose of each reserve within owners'
equity are provided below:
-- Share capital represents the nominal value each of the shares in issue.
-- The Other Reserves are included in the Consolidated Statement
of Changes in Equity and in the Consolidated Statement of Financial
Position and represent the accumulated balance of share benefit
charges recognised in respect of share options and warrants granted
by the Company, less transfers to retained losses in respect of
options exercised or lapsed.
-- The Retained Deficit Reserve represents the cumulative net
gains and losses recognised in the Group's statement of
comprehensive income.
-- The Reconstruction Reserve arose through the acquisition of
Predator Oil & Gas Ventures Limited. This entity was under
common control and therefore merger accounting was adopted.
16 Related party transactions
Directors and key management emoluments are disclosed note 5 and
in the Remuneration report.
Paul Griffiths holds 44,773,293 ordinary shares, 44.7% (43.8% as
at the reporting date) of the issued share capital in the Company,
and is the Group's controlling shareholder
17 Acquisition of Predator Oil & Gas Ventures Limited
On 21 March 2018 the Predator Oil and Gas Holdings Plc acquired the
entire issued share capital of Predator Oil and Gas Ventures Limited
for a consideration of GBP537,085. The consideration was satisfied
by the issue of the 53,708,550 new Ordinary shares of No Par Value.
GBP
------------------------------------------------------------------- ---------
Consideration
Issue of 53,708,550 Ordinary
NPV shares 537,085
Total consideration 537,085
------------------------------------------------------------------------- ---------
The assets and liabilities recognised as a result of the
acquisition are as follows:
Cash 387,444
Loans receivable 43,458
Total net assets acquired 430,902
------------------------------------------------------------------------- ---------
The acquisition of Predator Oil & Gas Ventures Limited does not constitute
a business combination under IFRS3 because the entity was under common
control and therefore merger accounting has been adopted.
18 Contingent liabilities and capital commitments
The Group had at the reporting date no capital commitments or
contingent liabilities
19 Litigation
The Group is not involved in any litigation
20 Events after the reporting date
1. A licence was awarded to Predator Gas Ventures Limited by
ONHYM on 20March 2019 for the exploitation of Guercif Moulouya
Tortonian Prospect in Northern Morocco
2. On 15 February, 2019 GBP1,500,000 gross, was raised in the
form of convertible loan notes to progress inter alia the Guercif
licence. The loan notes carry no coupon, are repayable at a premium
of 5% and a fee of 10% of the principal amount. The loan notes are
convertible at the election of the lender at 90% of the volume
weighted average share price ruling on the preceding two trading
days. The term of the loan notes is two years. The lender, Arato
Global Opportunities Limited, also agreed to make available an
additional GBP250,000 on the same terms. The lender was issued with
2,083,333 warrants at an exercise price of 12p with a vesting
period of two years. Novum Securities Limited, the arranger of the
convertible loan notes, was issued with 2,000,000 in warrants on
the same terms.
3. On 12 April,2019 following the receipt of notice from Arato
Global Opportunities limited for the conversion of GBP150,000 of
the Loan Note, issued on 15 February 2019, 1,966,888 New Ordinary
Shares were allotted and issued. Following the issue of such
1,966,888 New Ordinary Shares, the Company's issued share capital
was 102,104,038 shares of no par value, each with one vote per
share (and no such shares are held in treasury). The total number
of voting rights was therefore 102,104,038 following said issue of
shares.
4. On 10 April 2019 the Company announced its acceptance of a
one year extension of the term of the Licensing Option 16/30 ("LO
16/30")('Ram Head') to 30 November 2019 subject to the carrying out
of the work programme agreed with the Department of Communications,
Climate Action and Environment, the conditions that are attached to
Licensing Option 16/30 and the Licensing Terms for Offshore Oil and
Gas Exploration and Development and Production 2007
respectively.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UKUARKOASUUR
(END) Dow Jones Newswires
April 30, 2019 02:01 ET (06:01 GMT)
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