TIDMPXOG
RNS Number : 1886N
Prospex Oil and Gas PLC
23 September 2019
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
23 September
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Half Year Report
Prospex Oil and Gas Plc, the AIM quoted investment company, is
pleased to announce its unaudited Interim Results for the six
months ended 30 June 2019.
Advancing a portfolio of late stage, onshore European oil and
gas projects focused on the foredeep play
Operational Overview
-- Podere Gallina Exploration Permit, onshore Italy - on course
for first gas production in 2020
o Preliminary award of production concession keeps first gas at
Selva field on track to commence in 2020 at a proposed initial rate
of up to 150,000 scm/day
o First reserves and contingent resources booked after Competent
Person's Report assigns 2P reserves / 2C resources / prospective
resources of 2.26 bcf / 2.40 bcf / 15.56 bcf, respectively, net to
Prospex's 17% interest
-- EIV-1 Suceava Concession, onshore Romania - production at
Bainet field continues in line with expectations
o Bainet field performing in line with average production rate
of 15,000 m3 per day assumed by Joint Venture for 2019 budgeting
purposes
o Enlargement of Suceava Exploration Concession to 984 sq.km
o The drilling of low cost Bainet-2 well targeting Bainet West,
a lookalike Bainet gas prospect, resulted in a dry hole for
estimated all in cost of EUR260,000 net to Prospex
o Suceava still holds multiple prospects and leads including a
gas discovery
-- Tesorillo Gas Project, onshore Spain - ongoing work programme
at the 38,000ha exploration licence in Southern Spain
o De-risking up to 830 billion cubic feet of gas (Best Estimate)
of gross unrisked Prospective Resources (Source: NSAI CPR 2015)
o Working towards an informed decision of whether to drill and
increase stake to 49.9%
o Updated Competent Person's Report to be commissioned
Financial Overview
-- GBP680,906 net loss after taxation from continuing operations (H1 2018 loss: GBP540,761)
-- GBP52,861 increase in the shareholders total equity value to
GBP6,349,995 (Full Year 2018: GBP6,297,134)
-- 10% decrease in administrative expenses to GBP484,713 (H1 2018: GBP538,680)
-- GBP800,000 raised via placing of 400,000,000 new ordinary
shares to fund the Company's share of costs for the 2019 Suceava
work programme, including drilling Bainet-2 well
Edward Dawson, Managing Director of Prospex, said, "The majority
of the Company's shareholder equity value of GBP6,349,995 is backed
by its 17% interest in the Podere Gallina licence in Italy
following the commercial gas discovery there in 2018. During the
period, our interest was assigned net 2P reserves of 2.26 bcf and
net contingent and prospective resources of 2.40 bcf and 15.56 bcf,
respectively in an updated CPR, which also assigned EUR4.6m (net)
to the 2P reserves at the Selva field. Not only did the CPR
demonstrate the significant asset backing behind the Company, but
also the considerable run room that remains in terms of additional
prospects and leads. Following preliminary government approval of a
production concession application in January 2019, we are working
with our partners to bring Selva into production at an initial rate
of up to 150,000 scm/day in 2020, and in the process generate a
material revenue stream for the Company.
"Elsewhere, in Spain a multi-strand work programme is underway
at the Tesorillo gas project, to de-risk up to 830 billion cubic
feet (Best Estimate) of gross unrisked Prospective Gas Resources
and identify potential well locations. In Romania we are evaluating
reprocessed seismic data before agreeing the best way forward for
the Suceava concession with our partner. Whilst the Bainet-2 well
result was disappointing, we believe there are still compelling
prospects and leads, not dependant on Bainet-2's results, to be
pursued in the concession. Finally, we continue to run the rule
over a number of new ventures, as we focus on growing our portfolio
of projects, building on our track record of participating in four
new wells in three years, and at the same time adding to the two
commercial gas discoveries we have made to date."
* *S * *
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Oil and Gas Plc Tel: +44 (0) 20 3948
1619
Rory Murphy Strand Hanson Limited Tel: +44 (0) 20 7409
Ritchie Balmer 3494
Jack Botros
Colin Rowbury Novum Securities Limited Tel: +44 (0) 20 7399
John Belliss 9427
Duncan Vasey Peterhouse Corporate Finance Tel: +44 (0) 20 7469
0932
Frank Buhagiar St Brides Partners Ltd Tel: +44 (0) 20 7236
Priit Piip 1177
CHAIRMAN'S STATEMENT
The Company holds a multistage portfolio of late stage European
onshore projects in Italy, Romania and Spain, which includes
commercial gas discoveries at the Podere Gallina permit onshore
Italy, and at the Suceava Concession in Romania where production
commenced in September 2018. The review period saw significant
milestones being achieved in Italy and as a result we are confident
the Selva field in Podere Gallina is on course to become our second
producing field in 2020, at which point it will provide us with a
highly cash generative platform with which to grow the Company
further.
The Company's first announcement of 2019 noted the receipt by
operator Po Valley Energy Limited of preliminary government
approval of the production concession application to develop the
Selva Malvezzi Gas-Field ('Selva') in northern Italy which was
discovered by the Podere Maiar well in December 2017. The field is
to be developed in two stages with stage one involving the low-cost
installation of a fully automated gas plant at the well site and
laying of a 1km pipeline to connect the plant to the grid. Based on
dynamic reservoir studies, stage one is targeting a gross daily
production rate of up to 150,000 cubic metres (5.3 mmscf/d).
The size of the natural gas resources at Podere Gallina was
highlighted in an updated CPR in April 2019. Having previously
assigned zero gross contingent resources ('2C') and 52.7 bcf gross
prospective resources to already identified prospects and leads,
CGG Services (UK) Limited ('CGG') now estimates the licence area
holds 14.1 bcf gross 2C and 91.5 bcf gross prospective resources
(Best Estimate). These are in addition to the 13.3 bcf of 2P
reserves assigned to Selva in February 2019. Prospex's 17% interest
in Podere Gallina therefore equates to net 2P reserves / 2C
resources / prospective resources of 2.26 bcf / 2.40 bcf / 15.56
bcf respectively. Notably, the EUR4.6m value of Prospex's 2.26bcf
gas reserves exceeds our current market cap, highlighting the value
case behind the Company.
Monetising Selva's reserves is subject to receipt of final
government approval which in turn requires the completion of the
usual regulatory permitting processes. This includes an
Environmental Impact Assessment, complemented with a
micro-seismicity study and the agreement of an ongoing monitoring
plan, all of which are currently being reviewed by the regulator.
We remain confident that final government approval will be granted
in 2019. Importantly, the production concession area will cover
areas with prospects and leads which together account for the above
14.1 bcf gross 2C resources and 91.5 bcf gross prospective
resources. As a result, it is anticipated the permitting process
for the development of any new discoveries will be considerably
shorter. These prospects will be targeted in stage two, as we look
to upgrade more of the considerable resource base to the more
valuable reserves categories, which in turn will open up
non-dilutive sources of funding such as reserves-based lending.
Selva remains on course to become Prospex's second producing
asset after the Bainet field in Romania came online in September
2018. In March 2019, we provided a six-month production update for
Bainet which included a 15,000 m(3) per day assumed production rate
for 2019 budgeting purposes. Six months on and we are pleased to
report that Bainet continues to perform in line with expectations.
Our aim in Romania has always been to drill multiple wells and
bring several fields into production to generate material cash
flows for further drilling. With this in mind, March 2019 saw us
announce the enlargement of the Suceava Exploration Concession,
which added the Bainet West target to our prospect inventory. In
the summer of 2019, we participated with the operator Raffles
Energy S.R.L. in the drilling of the Bainet-2 well, targeting
Bainet West. This failed to encounter commercial volumes of
hydrocarbons, however, at an all-in cost of EUR260,000 net to
Prospex, Bainet-2 was a low cost well which, combined with
targeting a lookalike prospect to the nearby producing Bainet
field, had an attractive risk / reward profile. Technical data
gained from the well will provide further insight into the use of
advanced geophysical techniques in the forward plan for the
concession, which, being in an area of multiple historic
discoveries and producing fields, remains a key asset in our
portfolio.
Our third core asset, the 38,000ha Tesorillo Project in southern
Spain, sits at the opposite end of the spectrum to Romania when it
comes to volumetrics. As with all our projects, Tesorillo lies in a
proven hydrocarbon region and holds historic discoveries including
the Almarchal-1 discovery well which flowed gas to surface on
testing in 1957. According to a 2015 report by Netherland Sewell
and Associates, Tesorillo could hold gross unrisked Prospective
Resources of 830 Bcf of gas (Best Estimate), with upside in excess
of 2 Tcf. Proving up these Company-making resources via the drill
bit is central to the ongoing work programme at Tesorillo, which is
focused on de-risking targets and confirming the preferred location
of future wells. It is intended to high grade two well locations
and take them through the permitting process.
Work carried out to date includes general field studies as part
of the Environmental and Social Impact Assessment ('ESIA') required
for the permitting of new wells, the first of which is likely to
investigate the same or similar trap configuration to the
Almarchal-1 discovery well. Newly reprocessed 2D seismic data
recently interpreted and integrated with new detailed surface
structural geology is providing more confidence about the
subsurface geometry of the exploration target - the Aljibe
sandstone in the Lowermost Miocene, consisting of several folds and
thrust ramps of 3 to 5km length which could be potential gas
traps.
Importantly, four very promising leads have been identified in
the northern half of the concession following work to integrate new
structural maps and cross sections, well reinterpretation and
satellite images. This additional prospectivity is very good news
but will require further imaging and mapping, either through
magneto telluric data or with seismic data acquisition in the
future. The high degree of geological complexity in Tesorillo
requires us to return to the field during the autumn in order to
re-calibrate a small number of magneto telluric stations, which
will allow a better imaging of the subsurface. As it stands, the
limited data set is precluding us from undertaking a new CPR at
this point.
We are encouraged by the basin wide work which is producing
additional areas of previously uncharted prospectivity. We are also
encouraged by our partner's enthusiasm and support for the project.
In March 2019, Petrel Energy changed its name to Warrego Energy
following a reverse takeover of the company. Warrego Energy, which
has a seasoned European management team with a very strong drilling
background, is in the process of completing the deepest well ever
drilled onshore Australia (5100m TD) at West Erregulla where it has
a 50% interest. Drilling commenced in May and results to date
support the pre-drill resource estimate in excess of 1 TCF. We
welcome them as partners and hope to build on what is already a
positive working relationship.
Financial Review
For the six months ended 30 June 2019, the Company is reporting
a net loss after taxation from continuing operations of GBP680,906
(H1 2018 loss GBP540,761). Unrealised losses arising on revaluation
of financial assets at fair value totalled GBP207,999 (H1 2018 loss
GBP20,553). Administrative expenses of GBP484,713 for the
year-to-date, compares with GBP538,680 for the six-month period
ended 30 June 2018. In March 2019, the Company raised GBP800,000
gross via an oversubscribed placing of 400,000,000 new ordinary
shares primarily to fund the Company's share of costs for the 2019
work programme at Suceava including the drilling of the Bainet-2
well. As at 30 June 2019, the Company held cash and cash
equivalents of GBP265,094 (30 June 2018: GBP489,497). Since 30
June, PXOG Marshall has recovered EUR196,000 of Italian VAT and it
has used these funds to repay part of its loan to the PLC. As at
the end of August 2019, the Company held cash balances of
GBP319,539.
Outlook
In the last three years, Prospex Oil & Gas has participated
in the drilling of four wells, made two gas discoveries, one of
which is already in production, and booked its maiden reserves.
While in the Board's eyes our share price does not reflect the
progress made to date, our financial performance is starting to do
so, specifically in the shareholders total equity value of our
investments which stood at GBP6,349,995 as at 30 June 2019. With a
pipeline of prospects already identified, work programmes underway
to de-risk these to the point of drilling, and production on course
to commence at Selva, there remains considerable scope across our
portfolio of projects to drive future financial performance. In
tandem with this, we continue to evaluate new ventures which match
our investment criteria. I look forward to providing further
updates on our progress, as we focus on realising the potential of
our asset base and generating value for our shareholders.
Finally, I would like to take this opportunity to thank the
Board and the management team for their continued hard work and
support.
Bill Smith
Non-Executive Chairman
September 2019
Prospex Oil and Gas Plc
Interim results
For the six months ended 30 June 2019
Consolidated statement of comprehensive income
Six months ended Six months ended Year ended
30 June 30 June 31 December
------------------------ --------------------- ------------------------
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
CONTINUING OPERATIONS
Administrative expenses (484,713) (538,680) (1,064,151)
Other income 22,045 18,472 60,601
------------------------ --------------------- ------------------------
OPERATING LOSS (462,668) (520,208) (1,003,550)
Gain/(loss) on revaluation of
investments (207,999) (20,553) 1,710,418
Gain/(loss) on disposal of
investment 14,791 - (8,407)
------------------------ --------------------- ------------------------
(655,876) (540,761) 698,461
Finance income - - 92,283
Finance costs (25,030) - (10,840)
------------------------ --------------------- ------------------------
(LOSS)/PROFIT BEFORE INCOME TAX (680,906) (540,761) 779,904
Income tax - - -
------------------------ --------------------- ------------------------
(LOSS)/PROFIT AND TOTAL
COMPREHENSIVE (LOSS)/INCOME FOR THE
PERIOD (680,906) (540,761) 779,904
======================== ===================== ========================
(Loss)/Earnings per share
- Basic and diluted (0.047)p (0.045)p 0.065p
======================== ===================== ========================
Consolidated statement of financial position
As at 30 June 2019
30 June 30 June 31 December
------------------------ --------------------------- ------------------------
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment - 219 -
Investment 4,021,066 2,406,236 4,307,617
Loans and other financial
assets 1,308,741 2,107,546 1,013,129
Trade and other receivables 937,401 - 897,371
6,267,208 4,514,001 6,218,117
------------------------ --------------------------- ------------------------
CURRENT ASSETS
Trade and other receivables 458,191 37,740 396,626
Cash and cash equivalents 265,094 489,497 233,138
------------------------ --------------------------- ------------------------
723,285 527,237 629,764
------------------------ --------------------------- ------------------------
TOTAL ASSETS 6,990,493 5,041,238 6,847,881
======================== =========================== ========================
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 6,435,587 6,035,587 6,035,587
Share premium account 10,085,220 9,756,759 9,756,759
Capital redemption reserve 43,333 43,333 43,333
Merger reserve 2,416,667 2,416,667 2,416,667
Retained earnings (12,630,812) (13,275,877) (11,955,212)
------------------------ --------------------------- ------------------------
TOTAL EQUITY 6,349,995 4,976,469 6,297,134
------------------------ --------------------------- ------------------------
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
- borrowings
Interest bearing loans
and borrowings 240,000 - 360,000
------------------------ --------------------------- ------------------------
CURRENT LIABILITIES
Trade and other payables 160,498 64,769 70,747
Financial liabilities
- borrowings
Interest bearing loans
and borrowings 240,000 - 120,000
------------------------ --------------------------- ------------------------
400,498 64,769 190,747
------------------------ --------------------------- ------------------------
TOTAL LIABILITIES 640,498 64,769 550,747
------------------------ --------------------------- ------------------------
TOTAL EQUITY AND LIABILITIES 6,990,493 5,041,238 6,847,881
======================== =========================== ========================
Statement of changes in equity
For the six months ended 30 June 2019
Capital
Share Share Retained redemption Merger
capital premium earnings reserve reserve Total
GBP GBP GBP GBP GBP GBP
Unaudited
At 1 January
2019 6,035,587 9,756,759 (11,955,212) 43,333 2,416,667 6,297,134
Total
comprehensive
income for
the period - - (680,906) - - (680,906)
Issue of
shares 400,000 400,000 - - - 800,000
Costs in
respect of
shares issued - (66,233) - - - (66,233)
Equity settled
share-based
payment - (5,306) 5,306 - - -
At 30 June
2019 6,435,587 10,085,220 (12,630,812) 43,333 2,416,667 6,349,995
=========================== =========================== ======================== ========================== ====================== ======================
Unaudited
At 1 January
2018 5,835,587 8,862,779 (12,735,116) 43,333 2,416,667 4,423,250
Total
comprehensive
income for
the period - - (540,761) - - (540,761)
Issue of
shares 200,000 1,000,000 - - - 1,200,000
Costs in
respect of
shares issued - (106,020) - - - (106,020)
At 30 June
2018 6,035,587 9,756,759 (13,275,877) 43,333 2,416,667 4,976,469
=========================== =========================== ======================== ========================== ====================== ======================
Audited
At 1 January
2018 5,835,587 8,862,779 (12,735,116) 43,333 2,416,667 4,423,250
Total
comprehensive
income for
the year - - 779,904 - - 779,904
Issue of
shares 200,000 1,000,000 - - - 1,200,000
Costs in
respect of
shares issued - (106,020) - - - (106,020)
At 31 December
2018 6,035,587 9,756,759 (11,955,212) 43,333 2,416,667 6,297,134
=========================== =========================== ======================== ========================== ====================== ======================
Cash flow statement
For the six months ended 30 June 2019
Six months ended Six months ended Year ended
30 June 30 June 31 December
--------------------------- --------------------------- -------------------------
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating activities
(Loss)/profit before
income tax (680,906) (540,761) 779,904
Depreciation of property
plant and equipment - 210 429
(Gain)/loss on disposal of
investments (14,791) - 8,407
Loss/(gain) on revaluation
of investments 207,999 20,553 (1,797,438)
(Increase)/decrease in
trade and other
receivables (397,207) 111,491 (1,057,746)
Increase/(decrease) in
trade and other payables 64,721 (1,077) (1,439)
Finance income - - (5,263)
Finance expense 25,030 - 10,840
--------------------------- --------------------------- -------------------------
Net cash used in operating
activities (795,154) (409,584) (2,062,306)
--------------------------- --------------------------- -------------------------
Investing activities
Purchase of investments - - (246,040)
Sale of investments 93,343 - 67,223
Interest received - - 2
Dividends received - - 5,261
--------------------------- ---------------------------
Net cash generated/(used
in) from investing
activities 93,343 - (173,554)
--------------------------- --------------------------- -------------------------
Financing activities
New loans in period - - 480,000
Loan (payments)/repayments
in period - (1,044,959) 44,958
Issue of share capital 800,000 1,200,000 1,200,000
Costs in respect of share
issue (66,233) (106,020) (106,020)
Net cash generated from
financing activities 733,767 49,021 1,618,938
--------------------------- --------------------------- -------------------------
Net increase in cash and
cash equivalents 31,956 (360,563) (616,922)
Cash and cash equivalents
at start of period 233,138 850,060 850,060
--------------------------- --------------------------- -------------------------
Cash and cash equivalents
at end of period 265,094 489,497 233,138
=========================== =========================== =========================
Notes to the interim financial statements
1 General information
Prospex Oil and Gas Plc is a company incorporated in the United
Kingdom, which is listed on the Alternative Investment Market of
the London Stock Exchange Plc. The address of its registered office
is Stonebridge House, Chelmsford Road, Hatfield Heath, Essex CM22
7BD. The Group is primarily involved in the exploration for, and
production of, natural gas.
2 Financial information
The interim financial information for the six months ended 30
June 2019 has not been audited or reviewed and does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The comparative financial information for the
year ended 31 December 2018 has been derived from the audited
financial statements for that period. A copy of those statutory
financial statements for the year ended 31 December 2018 has been
delivered to the Registrar of Companies. The report of the
independent auditors on those financial statements was unqualified
and did not contain a statement under Sections 498 (2) or (3) of
the Companies Act 2006.
The interim financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRS') as adopted by the European Union, IFRIC interpretations
and the Companies Act 2006 applicable to companies reporting under
IFRS and under the historical cost convention. They have also been
on a basis consistent with the accounting policies expected to be
applied for the year ending 31 December 2019 and which are also
consistent with those set out in the statutory accounts of the
Company for the year ended 31 December 2018, except for the
adoption of new standards and interpretations.
3 Taxation
On the basis of these accounts there is no tax charge for the
period.
4 Earnings per share
The earnings and number of shares used in the calculation of
earnings per share are as follows:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
-------------- -------------- --------------
2019 2018 2018
(unaudited) (unaudited) (audited)
Basic and diluted
(Loss)/profit for the
financial period (680,906) (540,761) 779,904
Weighted average number
of shares 1,445,637,335 1,205,858,239 1,202,086,287
(Loss)/earnings per share (0.047)p (0.045)p 0.065p
============== ============== ==============
The loss/profit and the weighted average number of shares used
for calculating the diluted loss/earnings per share are identical
to those for the basic loss/earnings per share. The exercise prices
of the outstanding share options and share warrants are above the
average market price of the shares and would therefore not be
dilutive under IAS 33 'Earnings per Share'.
5 Non-current investment
Shares in
group Investments
------------------------------------------------------
undertakings Listed Unlisted Totals
GBP GBP GBP GBP
Unaudited
At 1 January
2019 4,154,065 78,552 75,000 4,307,617
Revaluations (207,999) - - (207,999)
Disposals - (78,552) - (78,552)
At 30 June
2019 3,946,066 - 75,000 4,021,066
=========================== ========================= =========================== ===================
Unaudited
At 1 January
2018 2,143,247 183,542 100,000 2,426,789
Revaluations - (20,553) - (20,553)
At 30 June
2018 2,143,247 162,989 100,000 2,406,236
=========================== ========================= =========================== ===================
Audited
At 1 January
2018 2,143,247 183,542 100,000 2,426,789
Additions 246,040 - - 246,040
Disposals - (75,630) - (75,630)
Revaluations 1,764,778 (29,360) (25,000) 1,710,418
At 31 December
2018 4,154,065 78,552 75,000 4,307,617
=========================== ========================= =========================== ===================
The investments in subsidiary undertakings are accounted for at
fair value through the profit and loss, as the Company is deemed to
be an Investment Entity.
6 Dividends
The directors do not propose to declare a dividend for the
period.
7 Copies of interim results
Copies of the interim results can be obtained from the website
www.prospexoilandgas.com. From this site you may access our
financial reports and presentations, recent press releases and
details about the Company and its operations.
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
IR QBLFLKKFBBBZ
(END) Dow Jones Newswires
September 23, 2019 02:00 ET (06:00 GMT)
Prospex Oil And Gas (LSE:PXOG)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Prospex Oil And Gas (LSE:PXOG)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
