TIDMPET

RNS Number : 7752A

Petrel Resources PLC

04 June 2021

4(th) June 2021

Petrel Resources plc

("Petrel" or "the Company")

Preliminary Results for the Year Ended 31(st) December 2020

Petrel announces its results for the year ended 31(st) December 2020.

A copy of the Company's Annual Report and Accounts for 2020 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com . Copies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.

The Company's Annual General Meeting will be held on 27(th) July 2021 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 10.00 am.

We are closely monitoring the Coronavirus (COVID-19) situation. The Board takes its responsibility to safeguard the health of its shareholders, stakeholders and employees very seriously and so certain measures will be put in place for the AGM in response to the COVID-19 pandemic. Details of these measures will be provided in a letter that will be attached to the Notice of AGM.

E NDS

   For further information please visit http://www.petrelresources.com/   or contact: 

Enquiries:

 
            Petrel Resources 
 John Teeling, Chairman                  +353 (0) 1 833 2833 
 David Horgan, Director 
 
 Nominated Adviser and Broker 
 Beaumont Cornish - Nominated Adviser 
  Roland Cornish 
  Felicity Geidt                          +44 (0) 020 7628 3396 
 Novum Securities Limited - Broker 
  Colin Rowbury                            +44 (0) 20 399 9400 
 
 Blytheweigh - PR                        +44 (0) 207 138 3206 
  Megan Ray                               +44 (0) 207 138 3553 
  Madeleine Gordon-Foxwell                +44 (0) 207 138 3208 
 
 Teneo 
  Luke Hogg                                +353 (0) 1 661 4055 
  Alan Tyrrell                             +353 (0) 1 661 4055 
  Ciara Wylie                              +353 (0) 1 661 4055 
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). The person who arranged for the release of this announcement on behalf of the Company was Jim Finn, Director.

Statement Accompanying the Preliminary Results

It's very difficult to write a chairman's report fifteen months into an effective world lockdown of exploration activities. International travel has ceased, obtaining visas is difficult as embassies are not staffed, attempts to gain meetings with authorities are stymied as officials work remotely. Nevertheless work goes on and deals are worked out over zoom calls.

The stalemate continues over the ownership of 32 million Petrel shares. These shares are subject to a high court injunction on their sale. Despite numerous and ongoing discussions with the original buyers of the shares no progress has been made. The original buyers, a French based group very experienced in resources, are either unwilling or unable to clarify ownership and to give the undertaking necessary to lift the injunction. The company is committed to and actively involved in attempting to find a solution. Proposals to date lack clarity on title and funding and do not address the ownership of 32 million shares.

Petrel has ongoing interest in Iraq and Ghana. The Irish offshore exploration ground was dropped in the face of an offshore oil exploration ban on all new licences and in the event of a discovery on existing licences, the likelihood of years of opposition to any development. Ireland is now a no-go area for native fossil fuel development, instead relying on imported oil, gas and electricity. Within a few years our only indigenous gas supplier, the Corrib feed will be depleted, so we will be 100% dependent on supplies of gas from Russia, though UK interconnectors, and electricity from France, most likely generated by nuclear power.

Renewables are the future but they are years if not decades away from being able to supply consistent, stable, cost effective power to boil a kettle, drive a car or run a manufacturing operation. Those of us active in the natural resources sector in Ireland have failed to persuade politicians and the media of the inherent dangers to supply. I hope I am wrong.

Meanwhile Petrel continues to push its interest in Iraq and Ghana. For the foreseeable future oil will play a major part in world economic development. Iraq has some of the best oil deposits in the world. In a stable era Iraqi oil production would be 2 or 3 times the current under 4 million barrels a day. For more than 20 years Petrel has been in Iraq. Activities have languished in year past but the addition of an Iraqi director, Riadh Mahomud Hameed and the contact of French investors led to a re-opening of contacts. It has been, and remains a difficult and dangerous place to explore. Led by Riadh we are putting exploration proposals to the authorities. We are particularly keen to revisit the Merjan field where we earlier produced development proposals.

Ghana, where Petrel holds a 30% interest (Clontarf 60%, local interest 10%) in offshore block Tano 2A continues to frustrate. Covid has played a significant role in recent delays. Meetings expected to take place in Europe in spring 2020 were cancelled and have not yet been reinstated. This 12 year saga shows no sign of being finalised.

Future

While we continue to engage with the French group and respect and admire their experience and contacts, we have to move on. Our focus in the immediate future will be Iraq.

At the same time we will open discussions with groups in other jurisdictions who might see Petrel as a way to monetise their oil and gas assets.

John Teeling

Chairman

3rd June 2021

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEARED 31 DECEMBER 2020

 
                                                           2020          2019 
                                                            EUR           EUR 
 
 Administrative expenses                              (399,133)     (345,508) 
 
 Impairment of exploration and evaluation assets       (51,552)   (1,613,591) 
 
 OPERATING LOSS                                       (450,685)   (1,959,099) 
 
 
 LOSS BEFORE TAXATION                                 (450,685)   (1,959,099) 
 
 Income tax expense                                           -             - 
 LOSS FOR THE FINANCIAL YEAR: all attributable 
 to equity holders of the parent                      (450,685)   (1,959,099) 
 
 Other comprehensive income                                   -             - 
 
 Items that are or may be reclassified 
 subsequently to profit or loss                               -             - 
 
 Exchange differences                                         -     (119,048) 
 
 TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR    (450,685)   (2,078,147) 
 
 
 Loss per share - basic and diluted                     (0.29c)       (1.50c) 
 
 

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020

 
                                            2020           2019 
                                             EUR            EUR 
 Assets 
 
 Non-Current Assets 
 
 Intangible assets                       931,967        983,969 
 
                                         931,967        983,969 
 
 
 Current Assets 
 
 Trade and other receivables              34,994         38,036 
 Cash and cash equivalents               333,900        367,777 
 
                                         368,894        405,813 
 
 Current Liabilities 
 
 Trade and other payables              (710,541)      (629,885) 
 
 Net Current Liabilities               (341,647)      (224,072) 
 
 NET ASSETS                              590,320        759,897 
 
 
 Equity 
 
 Called-up share capital               1,962,981      1,866,827 
 Capital conversion reserve fund           7,694          7,694 
 Capital redemption reserve              209,342        209,342 
 Share premium                        21,786,011     21,601,057 
 Share based payment reserve              26,871         26,871 
 Translation reserve                           -        376,154 
 Retained deficit                   (23,402,579)   (23,328,048) 
 
 TOTAL EQUITY                            590,320        759,897 
 
 

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEARED 31 DECEMBER 2020

 
                                                Capital      Capital     Share 
                                             Redemption   Conversion     Based 
                         Share       Share      Reserve      Reserve   Payment  Translation      Retained 
                       Capital     Premium                      fund   Reserve      Reserve       Deficit        Total 
                           EUR         EUR          EUR          EUR       EUR          EUR           EUR          EUR 
At 31 December 
 2018                1,306,966  21,601,057      209,342        7,694    26,871      495,202  (21,368,949)    2,278,183 
Shares 
 issued                559,861           -            -            -         -            -             -      559,861 
Total comprehensive 
 income 
 for the 
 financial 
 year                        -           -            -            -         -    (119,048)   (1,959,099)  (2,078,147) 
                     ---------  ----------  -----------  -----------  --------  -----------  ------------  ----------- 
At 31 December 
 2019                1,866,827  21,601,057      209,342        7,694    26,871      376,154  (23,328,048)      759,897 
                     ---------  ----------  -----------  -----------  --------  -----------  ------------  ----------- 
Shares 
 issued                 96,154     184,954            -            -         -            -             -      281,108 
Total comprehensive 
 income 
 for the 
 financial 
 year                        -           -            -            -         -            -     (450,685)    (450,685) 
Transfer 
 of reserves                                                                      (376,154)       376.154            - 
                     ---------  ----------  -----------  -----------  --------  -----------  ------------  ----------- 
At 31 December 
 2020                1,962,981  21,786,011      209,342        7,694    26,871            -  (23,402,579)      590,320 
                     =========  ==========  ===========  ===========  ========  ===========  ============  =========== 
 

Share premium

Share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are expensed through the statement of comprehensive income when incurred.

Capital redemption reserve

On 25 July 2018 the shareholders approved the buy back and cancellation of 16,747,368 shares for nominal consideration from Amira Petroleum N.V., Amira International Holdings Limited and their advisors. These shares were immediately cancelled upon their repurchase and the nominal value of these shares were transferred into the capital redemption reserve.

Capital conversion reserve fund

The ordinary shares of the company were renominalised from EUR0.0126774 each to EUR0.0125 each in 2001 and the amount by which the issued share capital of the company was reduced was transferred to the capital conversion reserve fund.

Share based payment reserve

The share based payment reserve arises on the grant of share options under the share option plan.

Translation Reserve

The translation reserve arises from the translation of foreign operations. A transfer from the translation reserve to retained deficit occurred during the year as a result of the impairment of the related intangible assets.

Retained deficit

Retained deficit comprises of losses incurred in the current and prior years.

PETREL RESOURCES PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE FINANCIAL YEARED 31 DECEMBER 2020

 
                                                                   2020          2019 
                                                                    EUR           EUR 
 CASH FLOW FROM OPERATING ACTIVITIES 
 
 Loss for the financial year                                  (450,685)   (1,959,099) 
 Impairment charge                                               51,552     1,613,591 
 Foreign exchange                                                 4,623             - 
 
 OPERATING CASHFLOW BEFORE 
 MOVEMENTS IN WORKING CAPITAL                                 (394,510)     (345,508) 
 
 Movements in working capital: 
 Increase/(Decrease) in trade and other payables                 80,656      (47,730) 
 Decrease in trade and other receivables                          3,042        19,980 
 
 CASH USED IN OPERATIONS                                      (310,812)     (373,258) 
 
 
 NET CASH USED IN OPERATING ACTIVITIES                        (310,812)     (373,258) 
 
 INVESTING ACTIVITIES 
 
 Receipts/(Payments) for exploration and evaluation assets          450     (150,870) 
 
 NET CASH USED IN INVESTING ACTIVITIES                              450     (150,870) 
 
 
 FINANCING ACTIVITIES 
 
 Shares issued                                                  281,108       559,861 
 
 NET CASH GENERATED FROM FINANCING ACTIVITIES                   281,108       559,861 
 
 
 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS          (29,254)        35,733 
 
 Cash and cash equivalents at beginning of financial year       367,777       329,503 
 
 Effect of exchange rate changes on cash held in 
 foreign currencies                                             (4,623)         2,541 
 
 Cash and cash equivalents at end of financial year             333,900       367,777 
 
 

NOTES:

   1.    ACCOUNTING POLICIES 

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2019. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

   2.    LOSS PER SHARE 
 
                                          2020      2019 
                                           EUR       EUR 
 
 Loss per share - basic and diluted    (0.29c)   (1.50c) 
 
 

Basic loss per share

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

 
                                                       2020          2019 
                                                        EUR           EUR 
 
 Loss for the financial year attributable to 
  equity holders                                  (450,685)   (1,959,099) 
 
 
                                                       2020          2019 
                                                     Number        Number 
 Weighted average number of ordinary shares 
  for the 
 purpose of basic earnings per share            153,961,544   130,647,568 
 
 

Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive.

   3.    GOING CONCERN 

The Group incurred a loss for the financial year of EUR450,685 (2019: loss of EUR1,959,099) and had net current liabilities of EUR341,647 (2019: EUR224,072) and a retained earnings deficit of EUR23,402,579 (2019 deficit of EUR23,328,048) at the balance sheet date. These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group and Company's ability to continue as a going concern.

Included in current liabilities is an amount of EUR677,531 (2019: EUR587,531) owed to key management personnel in respect of remuneration due at the balance sheet date. Key management have confirmed that they will not seek settlement of these amounts in cash for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.

The Group and Company had a cash balance of EUR333,900 (2019: EUR367,777) at the balance sheet date. The directors have prepared cashflow projections for a period of at least twelve months from the date of approval of these financial statements which indicate that additional finance may be required to fund working capital requirements and develop existing projects. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group and Company. As the Group is not revenue or cash generating it relies on raising capital from the public market. The Group completed capital raisings during the year.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

   4.    INTANGIBLE ASSETS 
 
 Exploration and evaluation assets:        2020          2019 
                                            EUR           EUR 
 Cost: 
 Opening balance                        983,969     2,523,279 
 Additions                                    -       195,870 
 Disposals                                (450)             - 
 Exchange translation adjustment              -     (121,589) 
 Impairment                            (51,552)   (1,613,591) 
 
 Closing balance                        931,967       983,969 
 
 
 
 Segmental Analysis       2020      2019 
                           EUR       EUR 
 Ghana                 931,967   931,967 
 Ireland                     -    52,002 
 Iraq                        -         - 
 
                       931,967   983,969 
 
 

Exploration and evaluation assets relate to expenditure incurred in exploration in Ireland and Ghana. The directors are aware that by its nature there is an inherent uncertainty in Exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

Due to legislative uncertainty since 2017, exacerbated by the Taoiseach's public statements in September 2019 against the issue of new Atlantic oil exploration licenses, Petrel has discontinued farm-out discussions with a gas super-major. Also, the board reluctantly dropped our 100% owned and operated Frontier Exploration License (FEL) 3/14, despite multiple identified targets. Similarly, the board decided not to apply to convert our prospective Licensing Option (LO) 16/24 into a Frontier Exploration License. Accordingly, the directors have impaired in full all expenditure relating to the above mentioned licenses, resulting in an impairment charge of EUR51,552 in the current year and EUR1,613,591 in the prior year.

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government.

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 note risk; 
   --    Political risk; 
   --    Financial risk management; and 
   --    Geological and development risks. 

Directors' remuneration of EURNil (2019: EUR30,000) and salaries of EURNil (2019: EUR15,000) were capitalised as exploration and evaluation expenditure during the financial year.

   5.    SHARE CAPITAL 
 
                                                   2020         2019 
                                                    EUR          EUR 
 Authorised: 
 800,000,000 ordinary shares of EUR0.0125    10,000,000   10,000,000 
 
 
 
 
 Allotted, called-up and fully 
  paid: 
                                       Number       Share        Share 
                                                  Capital      Premium 
                                                      EUR          EUR 
 
 At 1 January 2019                104,557,246   1,306,966   21,601,057 
 Issued during the financial 
  year                             44,788,913     559,861            - 
 
 At 31 December 2019              149,346,159   1,866,827   21,601,057 
 
 
 At 1 January 2020                149,346,159   1,866,827   21,601,057 
 Issued during the financial 
  year                              7,692,308      96,154      184,954 
 
 At 31 December 2020              157,038,467   1,962,981   21,786,011 
 
 

Movements in share capital

On 30 July 2019 a total of 44,788,913 shares were placed at a price of 1.25 cents per share. Proceeds were used to provide additional working capital and fund development costs.

On 26 May 2020 a total of 7,692,308 shares were placed at a price of 3.25 pence per share. Proceeds were used to provide additional working capital and fund development costs.

   6.    POST BALANCE SHEET EVENTS 

There were no material post balance sheet events affecting the Company or Group.

   7.    ANNUAL GENERAL MEETING 

The Company's Annual General Meeting will be held on 27(th) July 2021 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 10.00 am.

   8.    GENERAL INFORMATION 

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2020. The financial information for 2019 is derived from the financial statements for 2019 which have been delivered to the Companies Registration Office. The auditors have reported on 2019 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, investment in subsidiaries and amounts due by group undertakings. The financial statements for 2020 will be delivered to the Companies Registration Office.

A copy of the Company's Annual Report and Accounts for 2020 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com . Copies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.

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END

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June 04, 2021 02:00 ET (06:00 GMT)

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