TIDMPET
RNS Number : 1701N
Petrel Resources PLC
23 September 2019
23(rd) September 2019
Petrel Resources plc
("Petrel" or "the Company")
Interim Statement for the six months ended 30 June 2019
Petrel Resources plc (AIM: PET) today announces financial
results for the six months ended 30(th) June 2019.
Petrel's main focus in the period under review was on
re-building its Iraqi presence, the Ghanaian Tano 2A Block
Petroleum Agreement, and the Irish Atlantic Porcupine Basin:
Aware of the need to strengthen Petrel's balance sheet so as to
facilitate re-qualification in Iraq, and ratification in Ghana,
Petrel welcomed an influential group of substantial investors on
board for an initial 29.99% of the enlarged share capital. The net
proceeds will be utilised to acquire and develop assets in the
Middle East, particularly Iraq, and North Africa. The Middle East
& North Africa (MENA) region offers unique oil & gas
opportunities for those able to operate. Petrel has worked in the
Middle East since 1999, and has shown the ability to operate in
challenging circumstances, without loss of life or equipment.
The group of new investors in Petrel are nominating two
directors. They bring significant financial and hydrocarbon
experience in the MENA region, and may inject additional capital
and projects on agreed terms.
Iraq:
While challenges remain, the Iraqi government encourages
international investors with Iraqi operating experience. The
security situation has dramatically improved since 2018. Iraq
remains exempt from OPEC quotas, and Iraqi oil output has reached
4.7 million barrels of oil daily.
The next Iraqi bidding round (for exploration of blocks with gas
potential) is expected during 2020. The model contract is expected
to be an updated version of the Iraqi hybrid exploration and
development contract, incorporating aspects of service contract and
production sharing. These terms are more attractive for
international explorers than in prior bid rounds.
The improving security situation in western Iraq has again made
possible field-work on prime western desert exploration blocks,
including Block 6, on which we worked from 2002. Similarly, the
Merjan oil discovery, by Mobil in 1982, which has recently been
packaged with Kifl & west Kifl oilfields, has arisen as a
possible development project. The Merjan oilfield and surroundings,
on which Petrel operated a Technical Cooperation Agreement in joint
venture with Japanese giant Itochu from 2004 through 2007, has
recently been covered by 1,000 km sq a 3d seismic survey conducted
by the Iraqi Oil Exploration Company. This enhanced data should
further minismise the risks & costs of development.
Ghana:
Separately, Petrel and its partners are making slow progress
with the Ghanaian authorities. Petrel and its partners have entered
into discussions with prospective partners, whose resources may
expedite and ease the planned ratification of Tano 2A Block in the
prospective Ghana western basin, where circa 200,000 barrels of oil
daily are now being produced.
Irish Atlantic Porcupine Basin:
Despite 3d seismic programmes by several majors, the anticipated
multi-well drilling programme in the Irish Atlantic has been
delayed by a politically-inspired private members' bill hoping to
ban future licence rounds and extensions. There were only 3 wells
since 2013, including an unsuccessful ultra-deep Iolar well by
CNOOC & Exxon Mobil during 2019.
The bill was recently rejected by the Irish government, but
there is no guarantee that a future government would not adopt a
different approach.
In terms of prospectivity, the Porcupine Basin has established
source rock, moderate to excellent reservoirs, but the historical
issue has been top-seal. The industry expects discoveries but it
needs several wells to test the many plays.
There are 2 basic plays which attracted bigger players since
2013: Cretaceous plays similar to west Africa, e.g. Ghana, and the
'Conjugate Margin' Jurassic play modelled on eastern Canadian
discoveries.
The re-arrival of majors (ExxonMobil, Equinor, CNOOC/Nexen, ENI,
Total, etc. since 2015 is mainly due to the 'eastern Canadian
Jurassic play' which should equally apply to the Irish Atlantic
(which was joined to Canada until the Jurassic).
The province is frontier (with only 33 wells so far in the
Porcupine basin), with several sub-economic discoveries (Connemara,
Spanish Point, Burren, etc. (as well as the Corrib gas-field
further north in the Slyne Trough).
Frontier Exploration Licence (FEL) 11/18:
Petrel's Joint Venture with Woodside Energy is now focused on
the key FEL 11/18 - with several shallow water and rock targets,
located only 150km southwest of Kerry/Cork. There are a wide
variety of potential drill targets, especially of mid-depth of late
Jurassic / early Cretaceous age.
Petrel acquired this 10% working interest at no cost, as part of
the resolution of prior issues under arbitration. FEL 11/18 covers
circa 1,579km2 of acreage, combining a number of play types in
reasonable water and rock depths.
Our 10% stake brings access to all historic data, as well as
circa 1,600km2 of state-of-the-art 3D seismic data.
Frontier Exploration Licence (FEL) 3/14:
Petrel's 100% operated FEL 3/14 work programme from 8/2018 (when
Woodside exited their 85% operating working interest) until end
8/2019 is nearing completion.
We have applied for a further extension to seek drilling
partners, but this has not yet been granted.
Licensing Option (LO) 16/24:
Petrel has proposed a work programme for the conversion of our
recently expired Licensing Option 16/24 into a Frontier Exploration
Licence - but Petrel is not yet ready to commit to drilling a well
until this acreage has been farmed down.
Licensing Option 16/24 includes 664km2 bordering the Connemara
oil-field discovered by BP in 1983. Though sufficient oil did not
flow to be commercial, the proximity to mobile oil enhances our
acreage.
John Teeling
Chairman
20(th) September 2019
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
S
For further information please visit
http://www.petrelresources.com/ or contact:
Petrel Resources
John Teeling, Chairman +353 (0) 1 833 2833
David Horgan, Director
Nominated Adviser and Broker
Beaumont Cornish - Nominated Adviser
Felicity Geidt
Roland Cornish +44 (0) 020 7628 3396
Novum Securities Limited - Broker
Colin Rowbury +44 (0) 20 399 9400
Blytheweigh - PR +44 (0) 20 7138 3206
Julia Tilley +44 (0) 207 138 3553
Fergus Cowan +44 (0) 207 138 3208
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Petrel Resources plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
Year
Six Months Ended Ended
30 June 30 June 31 Dec
2019 2018 2018
unaudited unaudited audited
CONTINUING OPERATIONS EUR'000 EUR'000 EUR'000
Administrative expenses (115) (104) (239)
------------ ----------- --------------
OPERATING LOSS (115) (104) (239)
LOSS BEFORE TAXATION (115) (104) (239)
Income tax
expense - - -
------------ ----------- --------------
LOSS FOR THE PERIOD (115) (104) (239)
Other comprehensive income
Exchange
differences 24 57 96
TOTAL COMPREHENSIVE PROFIT FOR
THE PERIOD (91) (47) (143)
============ =========== ==============
LOSS PER SHARE - basic
and diluted (0.11c) (0.10c) (0.27c)
============ =========== ==============
CONDENSED CONSOLIDATED BALANCE 30 June 30 June 31 Dec
SHEET 2019 2018 2018
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
ASSETS:
NON-CURRENT ASSETS
Intangible
assets 2,593 2,357 2,523
------------ ----------- --------------
2,593 2,357 2,523
------------ ----------- --------------
CURRENT ASSETS
Trade and other
receivables 59 39 58
Cash and cash
equivalents 178 108 330
------------ ----------- --------------
237 147 388
TOTAL ASSETS 2,830 2,504 2,911
------------ ----------- --------------
CURRENT LIABILITIES
Trade and other payables (643) (558) (633)
------------ ----------- --------------
(643) (558) (633)
------------ ----------- --------------
NET CURRENT ASSETS (406) (411) (245)
NET ASSETS 2,187 1,946 2,278
============ =========== ==============
EQUITY
Share capital 1,307 1,246 1,307
Capital conversion reserve
fund 8 8 8
Capital redemption
reserve 209 0 209
Share premium 21,601 21,416 21,601
Share based payment reserve 27 27 27
Translation
reserve 519 456 495
Retained
deficit (21,484) (21207) (21,369)
------------ ----------- --------------
TOTAL EQUITY 2,187 1,946 2,278
============ =========== ==============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
Share
Capital Capital based
Share Share Redemption Conversion Payment Translation Retained Total
Capital Premium Reserves Reserves Reserves Reserves Losses Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
As at 1
January
2018 1,246 21,416 0 8 27 399 (21,103) 1,993
Total
comprehensive
income - 57 (104) (47)
-------- -------- ----------- ----------- ------------------ ------------ ----------- --------------
As at 30 June
2018 1,246 21,416 0 8 27 456 (21,207) 1,946
Shares issued 270 185 455
Share issue
expenses (27) (27)
Shares
cancelled (209) 209 0
Total
comprehensive
loss - 39 (135) (96)
-------- -------- ----------- ----------- ------------------ ------------ ----------- --------------
As at 31
December
2018 1,307 21,601 209 8 27 495 (21,369) 2,278
Total
comprehensive
loss - 24 (115) (91)
----------- ----------- ------------------ ------------
As at 30 June
2019 1,307 21,601 209 8 27 519 (21,484) 2,187
======== ======== =========== =========== ================== ============ =========== ==============
CONDENSED CONSOLIDATED Year
CASH FLOW Six Months Ended Ended
30 June 30 June 31 Dec
2019 2018 2018
unaudited unaudited audited
EUR'000 EUR'000 EUR'000
CASH FLOW FROM OPERATING
ACTIVITIES
Loss for the period (115) (104) (239)
------------ ----------- --------------
(115) (104) (239)
Movements in Working Capital 9 (38) (27)
------------ ----------- --------------
CASH USED IN OPERATIONS (106) (142) (266)
NET CASH USED IN OPERATING ACTIVITIES (106) (142) (266)
------------ ----------- --------------
INVESTING ACTIVITIES
Payments for exploration and evaluation
assets (47) (120) (196)
------------ ----------- --------------
NET CASH USED IN INVESTING
ACTIVITIES (47) (120) (196)
------------ ----------- --------------
FINANCING ACTIVITIES
Shares issued 0 0 455
Share issue
expenses 0 0 (27)
------------ ----------- --------------
NET CASH GENERATED FROM FINANCING
ACTIVITIES 0 0 428
------------ ----------- --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (153) (262) (34)
Cash and cash equivalents at beginning
of the period 330 371 371
Effect of exchange rate changes on cash
held in foreign currencies 1 (1) (7)
CASH AND CASH EQUIVALENT AT THE OF
THE PERIOD 178 108 330
============ =========== ==============
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2019
and the comparative amounts for the six months ended 30 June 2018
are unaudited.
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union. The interim financial statements have been
prepared applying the accounting policies and methods of
computation used in the preparation of the published consolidated
financial statements for the year ended 31 December 2018.
The interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the audited consolidated
financial statements of the Group for the year ended 31 December
2018, which are available on the Company's website
www.petrelresources.com
The interim financial statements have not been audited or
reviewed by the auditors of the Group pursuant to the Auditing
Practices board guidance on Review of Interim Financial
Information.
2. No dividend is proposed in respect of the period.
3. LOSS PER SHARE
30 June 30 June 31 Dec
19 18 18
EUR EUR EUR
Loss per share - Basic and Diluted (0.11c) (0.10c) (0.27c)
Basic and diluted loss per share
The earnings and weighted average number of ordinary shares
used in the calculation of basic loss per share are as follows:
EUR'000 EUR'000 EUR'000
Loss for the period attributable
to equity holders (115) (104) (239)
Weighted average number of ordinary
shares for the purpose of basic
earnings per share 104,557,246 99,681,992 87,733,283
Basic and diluted loss per share are the same as the effect of
the outstanding share options is anti-dilutive.
4. INTANGIBLE ASSETS
30 June 30 June 31 Dec
19 18 18
Exploration and evaluation assets: EUR'000 EUR'000 EUR'000
Opening balance 2,523 2,179 2,179
Additions 47 120 241
Exchange translation adjustment 23 58 103
________ ________ ________
Closing balance 2,593 2,357 2,523
Exploration and evaluation assets at 30 June 2019 represent
exploration and related expenditure in respect of projects in
Ireland and Ghana. The directors are aware that by its nature there
is an inherent uncertainty in relation to the recoverability of
amounts capitalised on the exploration projects.
Relating to the remaining exploration and evaluation assets at
the financial year end, the directors believe there were no facts
or circumstances indicating that the carrying value of the
intangible assets may exceed their recoverable amount and thus no
impairment review was deemed necessary by the directors. The
realisation of these intangible assets is dependent on the
successful discovery and development of economic reserves and is
subject to a number of significant potential risks, as set out
below:
-- Licence obligations;
-- Funding requirements;
-- Political and legal risks, including title to licence, profit
sharing and taxation;
-- Exchange rate risk;
-- Financial risk management;
-- Geological and development risks;
Directors' remuneration of EUR15,000 (December 2018: EUR30,000)
and salaries of EUR7,500 (December 2018: EUR15,000) were
capitalised as exploration and evaluation expenditure during the
period.
Regional Analysis 30 Jun 19 30 Jun 18 31 Dec 18
EUR'000 EUR'000 EUR'000
Ghana 918 866 911
Ireland 1,675 1,491 1,612
_______ _______ _______
2,593 2,357 2,523
5. SHARE CAPITAL
2019 2018
EUR'000 EUR'000
Authorised:
800,000,000 (Dec 18: 200,000,000) ordinary shares of EUR0.0125 10,000 2,500
Allotted, called-up and fully paid:
Number Share Capital Premium
EUR'000 EUR'000
At 1 January 2018 99,681,992 1,246 21,416
Issued during the period 21,622,622 270 185
Shares cancelled (16,747,368) (209) -
At 31 December 2018 104,557,246 1,307 21,601
Issued during the period - - -
At 30 June 2019 99,681,992 1,246 21,416
Movements in issued share capital
On 25 July 2018 the company received shareholder approval for
the following transaction:
(i) the contract between Amira Petroleum N.V., Amira
International Holding Limited and the Company for the purchase of
16,147,368 ordinary shares of EUR0.0125 each in the capital of the
Company for nominal consideration; and
(ii) the contract between Hannam & Partners (Advisory) Group
Services Ltd and the Company for the purchase of 600,000 ordinary
shares of 0.0125 each in the capital of the Company for nominal
consideration.
The aggregate 16,747,368 ordinary shares of EUR0.0125 each were
immediately cancelled upon their repurchase by the Company.
The purchase consideration of GBP20 was funded by the issue of
1000 Ordinary shares of EUR0.0125 at 2p per share.
On 11 October 2018 a total of 21,621,622 shares were placed at a
price of 1.85 pence per share. Proceeds were used to provide
additional working capital and fund development costs.
6. POST BALANCE SHEET EVENTS
On 30 July 2019 the company announced that the Company had
arranged a placing at EUR0.0125 per share raising EUR559,861 by the
issue of 44,788,913 new ordinary shares in the Company representing
29.99% of the enlarged share capital.
The net proceeds from the placing will be utilised by the
Company to acquire and develop assets in the Middle East and North
Africa.
7. The Interim Report for the six months to 30(th) June 2019 was
approved by the Directors on 20(th) September 2019.
8. The Interim Report will be available on the Company's website at www.petrelresources.com.
This information is provided by RNS, the news service of the
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END
IR EALNEAEKNEFF
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September 23, 2019 02:00 ET (06:00 GMT)
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