TIDMDELT
RNS Number : 9915W
Deltic Energy PLC
24 August 2022
The information contained within this announcement is deemed by
the Company to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations
2019/310. With the publication of this announcement via a
Regulatory Information Service, this inside information is now
considered to be in the public domain.
24 August 2022
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural
Resources
Deltic Energy Plc ("Deltic" or "the Company")
Interim Results
Deltic Energy Plc, the AIM-quoted natural resources investing
company with a high impact exploration and appraisal portfolio
focused on the Southern and Central North Sea, is pleased to
announce its interim results for the six months ended 30 June
2022.
Highlights
-- Potentially transformational Pensacola exploration well with
Shell due to commence drilling in October, targeting an estimated
309 BCF (P50 Prospective Resources) of natural gas.
-- Recently committed to a second potentially company-making
exploration well with the Selene prospect which contains an
estimated 318 BCF (P50 Prospective Resources) of natural gas.
-- In the current environment of high energy prices and with
ongoing security of supply issues these two prospects will be
enormously valuable if successful.
-- The Deltic-Capricorn Joint Venture ("JV") is making
significant progress across five Southern North Sea licences
including taking delivery of new 3D seismic data across licence
P2428.
-- Deltic's technical team have successfully completed the
initial phase of geological work on the Syros prospect in the
Central North Sea, and a farm-out process has now commenced as a
result.
-- Confirmation of new licensing round to be launched in autumn.
Preparatory work in anticipation of the UK's 33(rd) Offshore
Licensing Round has commenced with Deltic looking to further
strengthen and diversify its portfolio.
-- Following significant investment across the portfolio,
including preparatory works for the Pensacola well, the Company has
maintained a strong balance sheet with cash of GBP7.6m as at 30
June 2022 (30 June 2021: GBP11.1m) and remains fully funded for the
Pensacola well.
-- Loss for the period of GBP1,031,280 (six months to 30 June 2021: GBP691,754).
-- Cash out flow for the period of GBP2,464,362 (six months to 30 June 2021: GBP873,064).
Graham Swindells, CEO, commented:
"I am extremely proud of what we have achieved in the year so
far and very excited about the outlook for our company. We have
seen considerable progress made across our business, with key
developments involving our Pensacola and Selene Prospects, which
contain over 600 BCF (P50 Prospective Resources) of natural gas, as
well as progressing the licences which formed part of our
transformational farmout and partnership with Capricorn Energy. As
we stand on the verge of drilling our first well on Pensacola with
our partner Shell, and with Selene now to follow, we are further
demonstrating the success of our business model which is focussed
on identification of early stage opportunities and taking them from
licensing through to drilling whilst introducing partners of the
highest calibre."
C ha ir man's Statement
The future of UK North Sea natural gas is looking very good: not
only is this domestic resource a good investment, but it is also a
great way to provide skilled UK jobs; to deliver much needed income
to the UK Treasury; and to ensure secure domestic supplies of
energy whilst minimising greenhouse gas emissions compared with
imported volumes. Climate change is a major threat and must be
countered by a number of means including natural gas. This is
in-line with the Committee on Climate Change's proposals; the
Intergovernmental Panel on Climate Change and North Sea Transition
Deal. All of these recognise the continued demand for natural gas
with carbon capture and storage where projects are underway across
the UK.
In the last year, the UK has become more aware of the importance
of natural gas for heating of homes, businesses, hospitals and
schools, and for cooking family meals, as well as being the single
biggest source of UK electricity generation. Unfortunately, this
realisation has come with ever-increasing costs and concerns over
security of supply due to our dependence upon imports. Energy
supplies and costs are presented in almost every news programme at
present.
The dependence upon imported gas and a global energy market are
the result of policy decisions taken over the previous 15 to 20
years: cheap sources of overseas' volumes appeared attractive to an
economy where oil and gas absolutely dominate the energy landscape
of transport, heating and power generation. The growth of Liquid
Natural Gas ("LNG") transportation increased diversity of suppliers
around the globe but then fuelled demand as new markets accessed
the growing supply. The USA had never exported natural gas before
2016. Today, it is the biggest exporter of LNG in the world,
including to the UK. This global competition, along with the
economic rebound post-COVID and Russia's invasion of Ukraine, have
caused gas prices to the UK consumer to soar significantly.
Imported LNG creates double the greenhouse gas emissions of our
domestic supply.
Deltic and other companies stand ready to fill this gap with a
conveyor belt of potential gas fields ready or preparing for the
first phase of exploration drilling. At Pensacola, operated by
Shell, operations have begun to prepare the seabed for the arrival
of the drilling rig. Selene, also with Shell as operator, is
approved for drilling and plans are underway. The team at Capricorn
is busy analysing a group of prospects for the next wave of
drilling and the small team at Deltic is looking to add more
prospects in the upcoming licensing round. Both Shell and Capricorn
were introduced to these opportunities by Deltic.
This is the Deltic business model working as intended.
The UK needs North Sea natural resources. Deltic has a portfolio
of North Sea natural resources investments that are ready to be
progressed.
Mark Lappin
Chairman
24 August 2022
CEO Statement
I am delighted with what we have achieved in the year so far and
excited about what we have to look forward to. The year to date has
seen considerable progress made across our business, with the key
developments involving our two flagship prospects, Pensacola and
Selene, which we hold with Shell, as well as progressing the five
licences which formed part of our transformational farm out and
partnership with Capricorn Energy. Our achievements so far this
year have reinforced and demonstrated our company's business model
and strategy which is centred around identification of
opportunities at early stage and taking them from licensing through
to drilling whilst introducing partners of the highest calibre. As
such, our company is now about to drill its first well with Shell
with an additional well just announced, further enhancing and
de-risking the Deltic investment case.
In terms of near term drilling activity, i n June we confirmed
that a rig contract ha d been signed with Maersk for the drilling
of the Pensacola exploration well. Pensacola will be drilled using
the Maersk Resilient, a high quality jack-up rig, which has
previously been under contract to Shell and is currently drilling a
production well for Shell in the Dutch sector of the Southern North
Sea. We are particularly pleased to be using a quality rig which is
fully operational , which should allow us to benefit from the
operational efficiencies that are associated with a "hot" rig. The
commitment to the Maersk rig has also allowed us to firm up the
drilling schedule and represents another important step and a key
milestone as we move closer to drilling the much anticipated
Pensacola well. Well planning is in its final stages and Pensacola
is expected to be drilled in October. A successful outcome on this
first well would be transformational for Deltic and our
shareholders.
Most recently, we confirmed that Shell had taken the key step of
making a positive well investment decision and , hence , commit
ment to drilling our Selene Gas Prospect on Licence P2347 in the
Southern North Sea. The industry's regulator has been informed of
the well investment decision which importantly , means that Selene
is now a firm well. A well slot has yet to be confirmed and will be
subject to drilling schedules, but this is expected to be firmed up
as well planning progresses.
The importance of the further firm commitment from Shell to
drill this material, high - impact, low - risk gas prospect cannot
be underestimated and represents another highly significant
milestone for Deltic. The addition of another committed well to our
programme, following recent confirmation that Pensacola will be
drilled, significantly de-risks Deltic's investment case , and is a
further endorsement of the quality of Deltic's assets. It
demonstrates the success of our business model to identify
opportunities and create a conveyor belt of exploration
opportunities moving from licensing to drilling whil st attracting
the highest quality partners such as Shell.
At the start of the year, we had only just completed our
groundbreaking farm out with Capricorn Energy across a contiguous
group of five licences within our Southern North Sea gas
exploration portfolio. I have been very pleased to see the
commitment that has been made throughout the course of the year
following this wide ranging partnership. Significant investment has
been made across the licences, focused primarily on licence P2428
(Cupertino Area) on which new seismic was acquired and is being
interpreted. However, significant investment is also being made
into work programmes to advance licences P2567 (Cadence), P2560,
P2561 and P 2562 (South Breagh Area).
We remain confident that the partnership has the potential to
yield a number of drilling opportunities as this work continues and
look forward to continuing to build our partnership with Capricorn
as we jointly progress the next high impact drilling targets.
In the Central North Sea, although it has not been possible to
secure a partner to drill the Dewar prospect, we have made
excellent progress in maturing our recently awarded Syros prospect
on Licence P2542. The purchase of recently reprocessed seismic data
has facilitated a revised and more robust interpretation of the
prospect by our technical team. Following this work, we now
consider Syros to be a low risk prospect with estimated P50
prospective resources of 24.5 mmboe and a 58% geological chance of
success. Syros also sits in close proximity to existing
infrastructure with multiple offtake opportunities which would
allow it to be quickly and easily developed. We are in the process
of launching a farm out process with the aim of introducing a
partner to drill this prospect.
Although not always obvious, Government support for the North
Sea is strong. This was highlighted when the UK's Energy Security
Strategy was announced in April, which, in addition to stressing
the importance of UK energy security and the need for further
investment, confirmed that a further licensing round would be
launched in autumn this year. Acquiring new licences through
licensing rounds has been, and remains, an important component of
Deltic's strategy and success to date, and we are keenly
anticipating the opportunity this provides to further enhance the
Company's asset base and portfolio of potential drilling
opportunities.
Whilst the much publicised introduction of the Energy Profits
Levy ("Levy") in May was not a move Deltic would have supported or
felt made a great deal of sense economically, it has however
created a significant opportunity for Deltic. As an exploration
company, Deltic is not subject to the Levy, however, as a company
that thrives on partnerships for drilling, the associated
introduction of the Investment Allowance, which creates a 90% cost
saving on new investment in the North Sea, means that the economics
of Deltic's projects are significantly enhanced such that active
companies subject to the Levy will have a greater incentive to
invest in new projects and exploration, such as those within the
Deltic portfolio. Accordingly, Deltic will seek to take advantage
of this opportunity to create further partnerships, farm outs and
to facilitate drilling activity.
Gas prices have continued to surge in the course of 2022, and
the critical importance of energy security is now being recognised.
At the start of the year, most commentators believed that the spike
in prices would be relatively short lived. However, as the energy
crisis and conflict between Russia and Ukraine has continued, there
appears to be a general acceptance that a structural shift has
occurred in how our energy needs will be met such that energy
prices will remain significantly higher than historic averages in
the longer term, which should encourage further investment in
exploration. Fortunately, Deltic is not in the business of
predicting gas prices and its projects are all robust and
profitable at low prices down to 30p/therm and below (five year
forward curve (August 2022) is +120 p/therm). Importantly, we
believe that overall outlook for our company and our industry
remains very positive.
Looking ahead, we are incredibly excited at being on the verge
of drilling our first well with Shell. That will inevitably be the
primary focus over the coming months, but we are equally excited
about having added a further well to our drilling schedule in the
form of Selene, as well as advancing our other prospects to the
drilling stage and continuing to build our portfolio of
opportunities. The quality of our prospects, coupled with strong
partners committed to exploration and the opportunity to further
grow our business, gives us a great deal of confidence in our
potential to build on what we have achieved so far, to progress
multiple drilling opportunities over time, and to grow a business
which will play its part in the energy transition whilst creating
long term value for our shareholders.
Graham Swindells
Chief Executive Officer
24 August 2022
Ope r ati ng Revi ew
It has been another positive period with the Company announcing
a number of key milestones, including the signing of the rig
contract for the Pensacola well, which is due to spud in October,
and the announcement that the Shell-Deltic JV had reached a
positive well investment decision on the Selene prospect. This
means Deltic and its shareholders are now participating in two firm
wells, operated by our partner Shell, which Deltic estimates are
targeting combined gross P50 prospective resources of 627 BCF with
252 BCF (50 mmboe) net to Deltic.
The benefits of Deltic's portfolio of licences, which contain a
diverse range of prospects in different geological plays, is
becoming apparent as Capricorn continues to invest significant time
and resources in maturing the prospect inventory across the five
Southern North Sea licences which were farmed out to Capricorn in
2021. It is anticipated that this work could result in a number of
further exploration wells in the coming years.
The initial geotechnical evaluation of the Syros prospect,
located on Licence P2542 in the Central North Sea close to existing
infrastructure on the Montrose-Arbroath high, has been completed
with the revised prospect estimated to contain P50 prospective
resources of 24.5 mmboe. On the back of this re-evaluation, work is
now commencing on attracting partners to take this opportunity
through to drilling.
Additionally, the Deltic technical team has been planning for
the upcoming 33rd Licensing Round which the North Sea Transition
Authority ("NSTA") has indicated will commence before the end of
this year with licence awards expected mid-2023.
Southern North Sea Assets
P2252 - Pensacola (30% Deltic, Shell 70% (Operator))
During the period, the partnership has been focused on the
preparatory works required for the drilling of the Pensacola
exploration well. It was announced on 29 June that the rig contract
had been signed by Shell and that the Maersk Resilient would be
drilling the Pensacola well once it has completed operations on a
Shell operated development well in the Dutch sector. Preparation of
the seabed at the well location, in anticipation of arrival of the
drilling rig, has been completed and the well is scheduled to be
spudded in October.
A drilling the well on paper ("DWOP") exercise was recently
carried out with Shell, Deltic, Maersk and other key service
companies in The Netherlands to refine the well design and
operations in general. A further separate session was held
focussing specifically on data acquisition, wireline logging,
coring and well testing plans.
Pensacola is a Zechstein Reef prospect located to the north-west
of the Breagh gas field in the Southern North Sea. Deltic estimates
the prospect to contain gross P50 prospective resources of 309 BCF,
with a 55% geological chance of success, which will rank Pensacola
as one of the highest impact exploration targets to be drilled in
the gas basin in recent years.
Under the terms of the farm out to Shell, Deltic was carried
through the initial work programme including the acquisition of new
3D seismic across the Pensacola prospect. Costs for the Pensacola
well are shared in-line with the licence working interests, and
Deltic remains funded for the costs of the Pensacola well.
P2437 - Selene (50% Deltic, 50% Shell (Operator))
On 26 July, Deltic was delighted to announce that the JV has
made a positive well investment decision in relation to the Selene
prospect. The NSTA have been informed of the partnership's
intention to move to Phase C of the licence, and, as a result of
the positive well investment decision, the process of appointing
Shell as the licence and well operator has commenced. Well timing
is yet to be confirmed, although, based on previous timelines,
Deltic expects the well will be spudded within the next 18 months.
Meanwhile, efforts will focus on refining the well location and
data acquisition programmes to support site survey work, well
engineering, and permitting work during the summer of 2023.
Deltic remains convinced that the Selene Prospect is one of the
largest unappraised structures in the Leman Sandstone fairway of
the Southern Gas Basin and estimates that it contains gross P50
Prospective Resources of 318 BCF of gas (with a P90 to P10 range of
132 to 581 BCF) with a geological chance of success of 70%.
Under the terms of the farm out with Shell, Deltic holds a 50%
working interest in the licence, but will be carried for 75% of the
costs of drilling and testing the well on the Selene prospect, up
to a gross aggregate of USD$25 million.
P2428 - Cupertino Area (Deltic 40%, Capricorn 60%
(Operator))
The final processed version of the new 3D seismic data over
Licence P2428 was delivered at the beginning of May with further
additional products to aid interpretation developed by Capricorn
during June and July. The new 3D data is generally of good quality
and vastly superior to the legacy 2D data that had been available
prior to the 3D seismic being acquired. Naturally, the Plymouth
prospect was the initial focus, given the potential read-across
from the Pensacola well to be drilled later this year. However, the
new 3D data does not support the earlier interpretation made on the
legacy 2D seismic and the prospect has been downgraded in relation
to the other prospects and leads which exist on the licence.
Interpretation of the new data is ongoing, with Capricorn now
directing its attention towards maturing the other prospects and
leads in the Carboniferous, Leman Sandstone, and the Triassic
Bunter Sandstone, including the Cupertino and Richmond prospects
which were the original focus of the licence application.
In addition to the seismic interpretation, Capricorn is
completing and integrating a number of other geological workflows
into local and regional models, including petrophysical analysis,
sedimentological studies, basin modelling and structural analysis
to support the maturation of the various prospects and leads
identified on the block.
P2567 - Cadence (Deltic 40%, Capricorn 60% (Operator))
During the period, Capricorn has been focused on acquiring and
integrating the available legacy seismic data, various geotechnical
datasets, and the results of new petrophysical analysis into its
regional model. Significant effort has been expended on
understanding the legacy VE08 3D seismic survey that covers the
entire licence area to determine the best technical way forward for
reprocessing, and improving the data quality of that survey, using
the most up-to-date seismic reprocessing workflows. This enhanced
dataset is expected to be delivered before the end of the year and
will allow for a robust assessment of the Triassic and
Carboniferous prospectivity identified across the licence area.
P2560, P2561 and P2562 - South Breagh Area (Deltic 40%,
Capricorn 60% (Operator))
Similar to Licence P2567, Capricorn has been focused on
acquiring and integrating the available legacy seismic and
geotechnical datasets into its regional model. This has included
the purchase of a number of seismic datasets and commencement of
seismic reprocessing of the Lochran 3D seismic survey which covers
much of Licence P2560 and the northern part of P2562. It is
expected that the reprocessed seismic dataset will be available in
early 2023.
P2435 - Blackadder (Deltic 25%, Parkmead 75% (Operator))
Deltic has been informed by the Operator, The Parkmead Group,
that a farm out partner could not be found to assist in the
maturation of the Blackadder prospect, and that a positive well
investment decision could not be taken within the current licence
timelines. There are a number of technical challenges with the
Blackadder prospect, including inadequate seismic image quality
associated with the legacy datasets and a structurally complex
setting. The Operator has recommended that the licence be
relinquished and the NSTA has been informed that the partnership
intends to relinquish the licence at the end of the current licence
term on 30 September.
Central North Sea Assets
P2542 - Syros (Deltic 100%)
During the period, the Deltic technical team has been focused on
maturing the Syros oil prospect based on a newly reprocessed
seismic dataset that was delivered in Q1 2022. The Syros prospect
has been recognised by previous operators, however the new seismic
dataset with significantly enhanced image quality has allowed for a
significant reinterpretation, resulting in a simpler and more
robust prospect. The Syros prospect is now considered to be a
simple rotated fault block, with the Fulmar reservoir very similar
to the adjacent Godwin and Caley fields which produced first
hydrocarbons in 2014 and 2017, respectively.
The prospect is estimated to contain P50 prospective resources
of 24.5 mmboe with P90-P10 range of 12.4 to 33.3 mmboe and a GCOS
of 58%. There are multiple offtake options locally with the
Arbroath-Carnoustie infrastructure located only 6.5km to the east,
and multiple other offtake options including Cayley, Arbroath, Shaw
and Gannet within 13km of the licence.
Initial feedback from operators in the area has been positive
and a farm out process is commencing with the aim of receiving
offers before the end of the year.
P2352 - Dewar (Deltic 100%)
Despite extensive efforts and a significant amount of interest
from the industry, a farm out partner could not be found to
participate in the drilling of the Dewar prospect within the
current licence timelines. Consequently, the intention is to
relinquish the licence at the end of its current term on 30
September 2022 and the NSTA has been informed of our intention. The
Company will, however, consider re-applying for the Dewar licence
as part of its applications for new licences in the 33(rd)
Licensing Round.
33rd Offshore Licensing Round
As part of the new UK Energy Security Strategy, the UK
Government announced that the 33rd Offshore Licensing Round would
commence before the end of 2022. The exact dates, process and areas
to be included in the licensing round have yet to be clarified by
the NSTA, but Deltic expects the round to be opened in Q4 2022 with
potential licence awards in Q2 or Q3 2023.
Work has begun in-house to identify areas and prospects of
interest, as well as potential partnerships on certain
opportunities. Given recent changes to the UK tax regime, high
resource prices and general industry sentiment, especially towards
natural gas opportunities, we are expecting this upcoming round to
generate significant interest.
Andrew Nunn
Chief Operating Officer
24 August 2022
Qualified Person
Andrew Nunn, a Chartered Geologist and Chief Operating Officer
of Deltic, is a "Qualified Person" in accordance with the Guidance
Note for Mining, Oil and Gas Companies, June 2009 as updated 21
July 2019, of the London Stock Exchange. Andrew has reviewed and
approved the information contained within this announcement.
Fina n ci al Rev i ew
I am pleased to advise that Deltic finished the period to 30
June 2022 in good financial health with a cash position of GBP7.6m
(30 June 2021: GBP11.1m), having started investing in the
pre-drilling stage of the Pensacola well.
Income Statement
The C o m pany incurred a l oss for the peri od of GBP1,031,280,
co m pared with a l oss of GBP 691,754 f or the six mo nths to 30
June 2 021.
The operating loss of GBP1,028,861 (six months to 30 June 2021:
GBP674,718) included operating activity cash expenditure of
GBP1,155,363 (six months to 30 June 2021: GBP607,626), n on-cash
share-based pay ment ex pense of GBP136,341 (six months to 30 June
2021: GBP61,435), a write down on the Blackadder licence of
GBP48,188 (six months to 30 June 2021: GBPnil), and other non-cash
costs of GBP56,997 not directly attribu ted to existi ng licences
(six months to 30 June 2021: GBP62,585).
Expenditure directly relati ng to invest ment in the C om pan
y's N orth Sea licences is capitalised to intangible assets,
reflecting the o ng oing technical in vestment in the Co m pan y's
p ortf olio of lice nces. Expenditure on inta ngible assets,
primarily related to Pensacola well costs, t otalled GBP1,257,542
during the peri o d (six months to 30 June 2021: GBP210,884).
Trade and other payables of GBP162,516 ( 31 Dece m ber 2 021:
GBP931,148) decreased by GBP768,632 relating to operating and
investing activities.
Balance Sheet
The Company's cash position was GBP7,627,843 at 30 June 2022 (31
December 2021: GBP10,092,205), reflecting a net cash outflow of
GBP2,464,362 for the period (six months to 30 June 2021:
GBP873,064). Cash used in operating activities for the six months
to 30 June 2022 was GBP1,155,363 (six months to 30 June 2021:
GBP607,626). A further GBP1,246,629 was used in investing
activities (six months to 30 June 2021: GBP210,993), including
GBP1,257,542 relating to expenditure capitalised in intangible
assets (six months to 30 June 2021: GBP210,884), and GBP749
relating to the purchase of property, plant and equipment (six
months to 30 June 2021: GBP1,393).
Sarah McLeod
Chief Financial Officer
24 August 2022
UNAUDITED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE
LOSS
For the period ended 30 June 2022
Note Period Period Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
Unaudited Unaudited Audited
GBP GBP GBP
Write down on relinquished
intangible assets (48,188) - (288,551)
Other administrative expenses (980,673) (674,718) (1,912,987)
------------------------------------ ----- ------------ ------------ --------------
Total administrative expenses (1,028,861) (674,718) (2,201,538)
Other operating income - - 298,173
Operating loss (1,028,861) (674,718) (1,903,365)
Finance income 11,662 1,284 2,905
Finance costs (14,081) (18,320) (34,592)
Loss before tax (1,031,280) (691,754) (1,935,052)
Income tax expense - - -
------------ ------------ --------------
Loss and comprehensive
loss for the period attributable
to equity holders of the
Company (1,031,280) (691,754) (1,935,052)
Loss per share from continuing
operations expressed in
pence per share:
Basic and diluted 3 (0.07)p (0.05)p (0.14)p
UNAUDITED BALANCE SHEET
As at 30 June 2022
Note 30 June 30 June 31 December
2022 2021 2021
Unaudited Unaudited Audited
GBP GBP GBP
NON-CURRENT ASSETS
Intangible Assets 3,129,688 1,859,523 2,203,118
Property, Plant and Equipment 328,993 443,076 385,240
Other receivables 37,421 37,422 37,422
------------ ------------ ------------
3,496,102 2,340,021 2,625,780
CURRENT ASSETS
Trade and other receivables 72,578 84,740 190,398
Cash and cash equivalents 7,627,843 11,095,794 10,092,205
------------ ------------ ------------
7,700,421 11,180,534 10,282,603
TOTAL ASSETS 11,196,523 13,520,555 12,908,383
CAPITAL AND RESERVES ATTRIBUTABLE
TO EQUITY HOLDERS OF THE COMPANY
Share capital 4 7,029,824 7,029,824 7,029,824
Share premium 20,296,030 20,296,030 20,296,030
Share-based payment reserve 1,287,041 1,051,813 1,150,700
Accumulated retained deficit (17,844,829) (15,570,251) (16,813,549)
------------ ------------ ------------
TOTAL EQUITY 10,768,066 12,807,416 11,663,005
CURRENT LIABILITIES
Trade and other payables 162,516 352,811 931,148
Lease liability 90,588 94,388 98,995
------------ ------------ ------------
253,104 447,199 1,030,143
NON-CURRENT LIABILITIES
Lease liability 175,353 265,940 215,235
------------ ------------ ------------
TOTAL LIABILITIES 428,457 713,139 1,245,378
TOTAL EQUITY AND LIABILITIES 11,196,523 13,520,555 12,908,383
UNAUDITED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2022
Share-based Accumulated
Share Share payment Retained Total
capital premium reserve deficit equity
GBP GBP GBP GBP GBP
Balance at 1 January 2022 7,029,824 20,296,030 1,150,700 (16,813,549) 11,663,005
Comprehensive income for
the year
Loss for the period - - - (1,031,280) (1,031,280)
------------------------------------ ---------- ----------- ------------ ------------- ------------
Total comprehensive loss
for the period - - - (1,031,280) (1,031,280)
Contributions by and distributions
to owners
Share-based payment - - 136,341 - 136,341
Total contributions by
and distributions to owners - - 136,341 - 136,341
---------- -----------
Balance at 30 June 2022
(Unaudited) 7,029,824 20,296,030 1,287,041 (17,844,829) 10,768,066
------------------------------------ ---------- ----------- ------------ ------------- ------------
Balance at 1 January 2021 7,029,824 20,296,030 990,378 (14,878,497) 13,437,735
Comprehensive income for
the year
Loss for the period - - - (691,754) (691,754)
------------------------------------ ---------- ----------- ------------ ------------- ------------
Total comprehensive loss
for the period - - - (691,754) (691,754)
Contributions by and distributions
to owners
Share-based payment - - 61,435 - 61,435
Total contributions by
and distributions to owners - - 61,435 - 61,435
---------- -----------
Balance at 30 June 2021
(Unaudited) 7,029,824 20,296,030 1,051,813 (15,570,251) 12,807,416
------------------------------------ ------------ ------------- ------------
Balance at 1 January 2021 7,029,824 20,296,030 990,378 (14,878,497) 13,437,735
Comprehensive income for
the year
Loss for the year - - - (1,935,052) (1,935,052)
Total comprehensive loss
for the year - - - (1,935,052) (1,935,052)
Contributions by and distributions
to owners
Share-based payment - - 160,322 - 160,322
Total contributions by
and distributions to owners - - 160,322 - 160,322
---------- ----------- ------------ ------------- ------------
Balance at 31 December
2021 (Audited) 7,029,824 20,296,030 1,150,700 (16,813,549) 11,663,005
UNAUDITED STATEMENT OF CASH FLOWS
For the period ended 30 June 2022
Period ended 30 June 2022 Period ended 30 June 2021 Year ended 31 December
2021
Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating
activities
Loss before tax (1,031,280) (691,754) (1,935,052)
Adjustments for:
Finance income (11,662) (1,284) (2,905)
Finance costs 14,081 18,320 34,592
Depreciation 57,276 57,317 115,355
Amortisation - 5,268 5,625
Loss on disposal of
property, plant and
equipment (279) - 1,842
Gain from farm-out of
licence interest - - (298,173)
Write down on relinquished
intangible assets 48,188 - 288,551
Share-based payment 136,341 61,435 160,322
-------------------------- -------------------------- --------------------------
(787,335) (550,698) (1,629,843)
Decrease / (increase) in
trade and other receivables 64,467 (30,853) (136,511)
(Decrease) / increase in
trade and other payables (432,495) (26,075) 143,297
-------------------------- -------------------------- --------------------------
Net cash used in operating
activities (1,155,363) (607,626) (1,623,057)
Cash flows from investing
activities
Purchase of intangible
assets (1,257,542) (210,884) (853,744)
Purchase of property, plant
and equipment (749) (1,393) (5,895)
Proceeds from exploration
licence farm-ins - - 719,953
Interest received 11,662 1,284 2,905
Net cash used in investing
activities (1,246,629) (210,993) (136,781)
Cash flows from financing
activities
Payment of principal portion
of lease liabilities (48,289) (36,125) (82,223)
Interest on lease
liabilities (14,081) (18,320) (34,592)
-------------------------- -------------------------- --------------------------
Net cash used in financing
activities (62,370) (54,445) (116,815)
Decrease increase in cash
and cash equivalents (2,464,362) (873,064) (1,876,653)
Cash and cash equivalents at
beginning of period / year 10,092,205 11,968,858 11,968,858
-------------------------- -------------------------- --------------------------
Cash and cash equivalents at
end of period / year 7,627,843 11,095,794 10,092,205
NOTES TO THE FINANCIAL INFORMATION
For the period ended 30 June 2022
1. GENERAL
The interim financial information for the period to 30 June 2022
is unaudited and does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
2. ACCOUNTING POLICIES
The interim financial information in this report has been
prepared on the basis of the accounting policies set out in the
audited financial statements for the period ended 31 December 2021
together with new and amended standards applicable to periods
commencing 1 January 2022, which complied with UK adopted
International Accounting Standards (IFRS) in conformity with the
requirements of the Companies Act 2006, and with those parts of the
Companies Act 2006 applicable to companies reporting under
International Financial Reporting Standards ("IFRS").
IFRS is subject to amendment and interpretation by the
International Accounting Standards Board ("IASB") and the IFRS
Interpretations Committee and there is an on-going process of
review and endorsement by the UK Endorsement Board since January
2021.
The financial information has been prepared on the basis of IFRS
that the Directors expect to be applicable as at 31 December 2022,
with the exception of IAS 34 Interim Financial Reporting.
The Directors have assessed the Company's ability to continue as
a going concern. Although the oil and gas industry faces a period
of change under the current geopolitical environment, the Company
does not anticipate any negative issues impacting its ability to
operate as a going concern. Based on the cash and cash equivalents
balance at 30 June 2022 and the Company's commitments, the
Directors are of the opinion that the Company has adequate
financial resources to meet its committed Pensacola exploration
programme, based upon anticipated drilling costs per the planned
work schedule, and working capital requirements, and accordingly
will be able to continue and meet its liabilities as they fall due
for a minimum of 12 months from the date of signing these interim
financial statements.
The condensed financial information for the period ended 31
December 2021 set out in this interim report does not comprise the
Group's statutory accounts as defined in section 434 of the
Companies Act 2006.
The statutory accounts for the year ended 31 December 2021,
which were prepared under UK adopted International Accounting
Standards (IFRS) in conformity with the requirements of the
Companies Act 2006, and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS, have been delivered
to the Registrar of Companies. The auditors reported on these
accounts; their report was unqualified and did not contain a
statement under section 498(2) or 498(3) of the Companies Act
2006.
3. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Given the Company's reported loss for the period, share options
and warrants are not taken into account when determining the
weighted average number of ordinary shares in issue during the year
and therefore the basic and diluted loss per share are the
same.
Basic and diluted loss per share
Period ended 30 June 2022 Period ended 30 June 2021 Year ended 31 December
2021
Loss for the period (GBP) (1,031,280) (691,754) (1,935,052)
Weighted average number of
ordinary shares (number) 1,405,964,855 1,405,964,855 1,405,964,855
Loss per share from
continuing operations (0.07)p (0.05)p (0.14)p
=========================== =========================== ===========================
4. SHARE CAPITAL
a) Share Capital
The Company has one class of ordinary share which carries no
right to fixed income nor has any preferences or restrictions
attached.
Issued and fully paid:
30 June 30 June 31 December
2022 2021 2021
GBP GBP GBP
1,405,964,855 ordinary shares
of 0.5p each (30 June 2021:
1,405,964,855 ordinary shares) 7,029,824 7,029,824 7,029,824
5. SUBSEQUENT EVENTS
Subsequent to 30 June 2022, Deltic-Shell JV made a positive well
investment decision to drill the Selene Prospect (Licence P2437),
and Deltic has taken the decision to relinquish both the Blackadder
Prospect (P2535) and Dewar Prospect (Licence P2352).
6. COPIES OF INTERIM REPORT
Copies of the interim report are available to the public free of
charge from the Company at Deltic Energy Plc, First Floor, 150
Waterloo Road, London, SE1 8SB during normal office hours,
Saturdays and Sundays excepted, for 14 days from today and will
shortly be available on the Company's website at
www.delticenergy.com .
I n v e st i ng po l i cy
In addition to the development of the North Sea Oil & Gas
assets Deltic Energy Plc has acquired to date, the Company proposes
to continue to evaluate other potential oil & gas and mining
projects globally in line with its investing policy, as it aims to
build a portfolio of resource assets and create value for
shareholders. As disclosed in the Company's AIM Admission Document
in May 2012, the Company's Investment Policy is as follows:
The proposed investments to be made by the Company may be either
quoted or unquoted; made by direct acquisition or through farm-ins;
either in companies, partnerships or joint ventures; or direct
interests in oil & gas and mining projects. It is not intended
to invest or trade in physical commodities except where such
physical commodities form part of a producing asset. The Company's
equity interest in a proposed investment may range from a minority
position to 100 per cent. ownership.
The Board initially intends to focus on pursuing projects in the
oil & gas and mining sectors, where the Directors believe that
a number of opportunities exist to acquire interests in attractive
projects. Particular consideration will be given to identifying
investments which are, in the opinion of the Directors,
underperforming, undeveloped and/or undervalued, and where the
Directors believe that their expertise and experience can be
deployed to facilitate growth and unlock inherent value.
The Company will conduct initial due diligence appraisals of
potential projects and, where it is believed further investigation
is warranted, will appoint appropriately qualified persons to
assist with this process. The Directors are currently assessing
various opportunities which may prove suitable although, at this
stage, only preliminary due diligence has been undertaken.
It is likely that the Company's financial resources will be
invested in either a small number of projects or one large
investment which may be deemed to be a reverse takeover under the
AIM Rules. In every case, the Directors intend to mitigate risk by
undertaking the appropriate due diligence and transaction analysis.
Any transaction constituting a reverse takeover under the AIM Rules
will also require Shareholder approval.
Investments in early stage and exploration assets are expected
to be mainly in the form of equity, with debt being raised later to
fund the development of such assets. Investments in later stage
projects are more likely to include an element of debt to equity
gearing. Where the Company builds a portfolio of related assets, it
is possible that there may be cross holdings between such
assets.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek participation in
the management or representation on the Board of an entity in which
the Company invests with a view to improving the performance and
use of its assets in such ways as should result in an upward
re-rating of the value of those assets.
Given the timeframe the Directors believe is required to fully
maximise the value of an exploration project or early stage
development asset, it is expected that the investment will be held
for the medium to long term, although disposal of assets in the
short term cannot be ruled out in exceptional circumstances.
The Company intends to deliver Shareholder returns principally
through capital growth rather than capital distribution via
dividends, although it may become appropriate to distribute funds
to Shareholders once the investment portfolio matures and
production revenues are established.
Given the nature of the Investing Policy, the Company does not
intend to make regular periodic disclosures or calculations of its
net asset value.
The Directors consider that as investments are made, and new
investment opportunities arise, further funding of the Company will
be required.
Fo rw a rd l ooking statement
This interim rep ort c o ntains certain f orward-lo oking state
ments that are subject to the usual risk facto rs and uncertainties
ass ociated with the oil and gas ex plo ration and pro ducti on
business. Whilst the Direct ors believe the ex pectati on reflected
herein to be reaso n a ble in light of the info r mati on available
up to the ti me of their appro val of this report, the actual o
utcome may be materially different owing to fact ors either beyo nd
the Co m pan y 's control or otherwise within the C o m pan y's c o
ntrol b ut, f or ex a m ple, owing to a change of plan or strategy.
Accordingly, no reliance may be placed on t he fo rwar d-looking
state ments.
Gl o s sa ry of T e c hn ic al T e r ms
P RM S: Pet r oleum Res o urces Management System (2007)
BCF: Billion Cubic Feet
m m b oe : Million barrels of oil equivalent
P rospect i ve Res o urces: Are estimated volumes associated
with undiscovered accumulations. These represent quantities of
petroleum which are estimated, as of a given date, to be
potentially recoverable from oil and gas deposits identified on the
basis of indirect evidence but which have not yet been drilled.
Geological Chance of
Succe ss (GC oS): for pr ospecti ve re s o urces, means the
chance or pr o b a bility of disc o vering h y drocarb o ns in
sufficient quantity f or th em to be tested to t he surface. This,
then, is t he chance or pro bability of t he p r ospecti ve reso u
rce maturing into a co ntingent reso urce. Prospect i ve res ources
have b oth an associated chan ce of disc o very ( g e o l o gical
chan ce of s uccess) and a chance of de vel o pment (ec o no mic,
re gulat ory, market and facility, corp orate co mm itment and p
olitical risks). T he chance of commerciality is the pro du ct of t
h ese two risk c om p o n e nts. T hese e stim ates have been
risked for chance of disc o very but not f or chance of de vel o
pment.
P90 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a low estimate of resource.
P 5 0 reso urc e: reflects a v olu me esti mate that, assu ming
the accum ulation is d e vel o ped, there is a 5 0% p r o bability
t hat the quantities actual ly recove red will equal or exceed the
estim ate. This is theref ore a median or best case est i mate of
reso urce.
P10 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 10% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a high estimate of resource.
The P r o s pective Res o urces have b een prese nted in acc
ordan ce with the 2 0 07 Pet r oleum Reso u rces Manag e ment S
ystem ( P R MS) p repared by t he Oil and Gas Reser ves Com mittee
of the Society of Pet r oleum Engin eers (S PE), rev iewed, and
jointly sp o nso red by the W orld Petroleum C o uncil (W PC), the
American Association of Petro leum Ge olo gists (AA PG) and the S
ociety of Pet r oleum E valuation Enginee rs (SPEE).
**ENDS**
For further information please contact the following:
Deltic Energy Plc Tel: +44 (0) 20 7887
2630
Graham Swindells / Andrew Nunn / Sarah McLeod
Allenby Capital Limited (Nominated Adviser Tel: +44 (0) 20 3328
& Joint Broker) 5656
David Hart / Alex Brearley (Corporate Finance)
Kelly Gardiner (Sales and Corporate Broking)
Stifel Nicolaus Europe Limited (Joint Broker) Tel: +44 (0) 20 7710
7600
Callum Stewart / Simon Mensley / Ashton
Clanfield
Vigo Consulting (IR & PR Adviser) Tel: +44 (0) 20 7390
0230
Patrick d'Ancona / Finlay Thomson / Kendall
Hill
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END
IR BKNBQKBKBPFB
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August 24, 2022 02:00 ET (06:00 GMT)
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