TIDM88E
RNS Number : 2588F
88 Energy Limited
18 March 2022
88 ENERGY LIMITED
ASX LODGEMENT OF ANNUAL REPORT
88 Energy Limited (ASX:88E; AIM:88E) ("88 Energy" or "Company")
advises that a copy of the Company's Annual Report for the year
ended 31 December 2021 (the "Annual Report") has been lodged on the
ASX along with the Company's 2021 year-end Corporate Governance
Statement and Appendix 4G.
The Annual Report, which was sent to shareholders today, is
available on the Company's website at www.88energy.com along with
copies of each of these other documents.
Set out below is the Chairman's Statement as included in the
Annual Report.
Also, set out below is a summary of the Company's audited
financial information for the year ended 31 December 2021 as
extracted from the Annual Report, being:
-- Consolidated Statement of Comprehensive Income;
-- Consolidated Statement of Financial Position;
-- Consolidated Statement of Changes in Equity; and
-- Consolidated Statement of Cash Flows.
Media and Investor Relations:
88 Energy Ltd
Ashley Gilbert, Managing Director
Tel: +61 8 9485 0990
Email:investor-relations@88energy.com
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Fivemark Partners , Investor and Tel: +61 410 276 744
Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
EurozHartleys Ltd Tel: +61 8 9268 2829
Dale Bryan
Cenkos Securities Tel: +44 131 220 6939
Neil McDonald / Derrick Lee
CHAIRMAN'S STATEMENT
Dear Shareholders,
It is my pleasure to write to you after joining 88E in early
August 2021 as Non-Executive Chairman. I was attracted to 88E as a
function of the quality of both its prospects and people. At the
time of writing, I am more enthused than ever with the outlook for
our business.
The past year has been one of substantial achievement for 88E.
Against a backdrop of persistent COVID-19 related challenges, the
business has advanced its plans efficiently, significantly, and
rapidly. This progress has been delivered alongside a resurgence in
global energy prices, as the world increasingly recognises the
significant role that hydrocarbons must continue to play in
servicing transitional energy needs.
Our most significant exploration activity during 2021 was
drilling the Merlin-1 exploration well on our Project Peregrine
acreage. Merlin-1 was spudded in March 2021 with drilling
operations completed in April 2021. Final interpretation of results
was completed in August 2021 with post well evaluation successfully
demonstrating the presence of light oil in the N20, N19 and N18
targets. This outcome was a highly significant one for 88E and has
given us great confidence in aggressively pursuing further
exploration work at Project Peregrine, including the upcoming
drilling of the Merlin-2 appraisal well.
In June 2021, we announced the successful acquisition of the
residual 50% working interest in Project Peregrine from Alaska
Peregrine Development Company. This was an outstanding outcome in
delivering us full control of, and upside from, future Project
Peregrine activities, while still retaining flexibility to
potentially farm-out to a partner with greater operational
capability at a future point.
That same month, 88E executed an agreement to sell its Alaskan
Oil and Gas Credits for US$18.7 million. This sale accelerated the
timeframe of our value realisation from the Tax Credits and enabled
the full repayment of our outstanding debt of US$16.1 million. With
its debt free balance sheet, 88E now holds significant flexibility
with respect to future funding and capital management initiatives.
In September 2021, we also raised A$24 million via an equity
placement to domestic and international institutional and
sophisticated investors. These funds are being directed towards
drilling of the Merlin-2 appraisal well and general corporate
activities.
At the time of writing, 88E had recently received the Permit to
Drill for the Merlin-2 appraisal well, mobilised the Arctic Fox rig
to the drilling location, and excitingly, spudded the Merlin-2 well
on 7 March 2022. This well is located to the east of Merlin-1,
where the multiple stacked sequences within the Brookian Nanushuk
Formation are expected to be of enhanced thickness and quality. We
look forward to updating you regularly on the progress of Merlin-2
drilling and results.
We have also been closely monitoring activity adjacent to the
northern border of our Project Icewine acreage, where the Kuparuk
was reported from the Talitha-A well drilled last year by Pantheon
Resources. This may have positive implications for the same
formation in our Icewine acreage. Further, at the time of writing,
Pantheon is undertaking flow testing activities on Talitha-A, as
well as undertaking drilling and planned testing of the Theta West
well.
During Q1 2021, 88E acquired the Umiat Oil Field to the
immediate south of Project Peregrine. As part of the acquisition,
we received the Umiat 3D seismic data. Further analysis of this
data has provided a better understanding of the Peregrine reservoir
geometries to the north as well as highlighting the potential for
future development of an Ultra-Low Sulphur Diesel (ULSD) production
facility at Umiat.
The past year has also seen evolution in the leadership of our
business. I congratulate Ashley Gilbert on his elevation to the
role of Managing Director and CEO. I hold Ashley in the highest
esteem and believe that he is already demonstrating himself an
excellent executive leader for our business. I would also like to
take this opportunity to thank our previous CEO, the long-serving
David Wall, for his commitment and energy to 88E. We wish David all
the best in his future endeavours.
We also welcomed Joanne Kendrick to the 88E Board as
Non-Executive Director and Rob Benkovic and Oli Mortensen to the
roles of Chief Operating Officer and Chief Financial Officer,
respectively. Thank you also to my predecessor as Chairman, Michael
Evans, for his lengthy and committed service to the business.
I would like to recognise the Department of Natural Resources,
the Alaska Oil and Gas Conservation Commission, the North Slope
Borough, Bureau of Land Management and other regulatory agencies
that have facilitated our exploration efforts on the North Slope.
Thank you also to all 88E personnel and contractors who have worked
hard, in sometimes trying conditions, to deliver the successes of
last year. We have a first-class team of truly committed
professionals who strongly believe in the potential of our acreage
and our approach to exploring it.
Finally, I would also like to thank you, our shareholders, for
your ongoing support. The 88E business model has always focussed on
targeting large-scale hydrocarbon deposits. The size of the prizes
we are pursuing is large, and sometimes the accompanying patience
required is also. I thank our shareholders for pursuing this
journey with us and we look forward to further unlocking the huge
potential value residing in our world-class Alaskan acreage. Stay
well.
Yours faithfully,
Philip Byrne
Non-Executive Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE FINANCIAL YEARED 31 DECEMBER 2021
Note 2021 2020
$ $
Revenue from continuing operations
Other income 3(a) 4,448,699 246,778
Administrative expenses 3(b) (3,048,444) (1,399,215)
Occupancy expenses (86,765) (60,664)
Employee benefit expenses 3(c) (1,958,388) (1,841,758)
Share-based payment expense 18 (738,965) (122,870)
Depreciation and amortisation expense (84,449) (93,387)
Finance cost (1,195,703) (2,595,406)
Other expenses 3(d) (48,471) (16,218,575)
Foreign exchange (loss) / gain 302,297 51,463
------------
Loss before income tax (2,410,189) (22,033,633)
Income tax expense 4 - -
----------- ------------
Loss after income tax for the year (2,410,189) (22,033,633)
----------- ------------
Other comprehensive income / (loss) for
the year
Items that may be reclassified to profit
or loss
Exchange differences on translation of
foreign operations 4,855,236 (7,120,022)
----------- ------------
Other comprehensive income / (loss) for
the year, net of tax 4,855,236 (7,120,022)
----------- ------------
Total comprehensive income / (loss) for
the year attributable to members of 88
Energy Limited 2,445,047 (29,153,655)
----------- ------------
Loss per share for the year attributable
to the members of 88 Energy Limited:
Basic and diluted loss per share 5 (0.0001) (0.003)
The Consolidated Statement of Profit or Loss and Other
Comprehensive Income should be read in conjunction with the notes
to the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Note 2021 2020
$ $
ASSETS
Current Assets
Cash and cash equivalents 6 32,317,887 14,845,347
Trade and other receivables 7 935,930 5,079,630
Other Current Asset 7 10,224,959
------------- -------------
Total Current Assets 43,478,776 19,924,977
------------- -------------
Non-Current Assets
Plant and equipment 8 9,675 4,641
Exploration and evaluation expenditure 9 101,357,767 48,213,290
Other Assets 10 936,536 17,216,644
-------------
Total Non-Current Assets 102,303,978 65,434,576
-------------
TOTAL ASSETS 145,782,754 85,359,552
------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 11 5,796,350 5,326,634
Provisions 12 146,270 339,199
Total Current Liabilities 5,942,620 5,665,833
-------------
Non-Current Liabilities
Borrowings 13 - 20,782,366
Total Non-Current Liabilities - 20,782,366
------------- -------------
TOTAL LIABILITIES 5,942,620 26,448,199
------------- -------------
NET ASSETS 139,840,134 58,911,353
------------- -------------
EQUITY
Contributed equity 14 285,809,214 208,963,513
Reserves 15 23,074,244 16,580,975
Accumulated losses (169,043,324) (166,633,135)
-------------
TOTAL EQUITY 139,840,134 58,911,353
------------- -------------
The Consolidated Statement of Financial Position should be read
in conjunction with the notes to the financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Issued Accumulated
Capital Reserves Losses Total
$ $ $ $
------------ ------------ -------------- -------------
At 1 January 2021 208,963,513 16,580,975 (166,633,135) 58,911,353
------------ ------------ -------------- -------------
Loss for the year - - (2,410,189) (2,410,189)
Other comprehensive
income - 4,855,236 - 4,855,236
------------ ------------ -------------- -------------
Total comprehensive
income/(loss) for the
year after tax - 4,855,236 (2,410,189) 2,445,047
Transactions with owners
in their capacity as
owners:
Issue of share capital 80,305,041 - - 80,305,041
Issue of Options - 1,072,790 - 1,072,790
Settlement of vested
PR's (173,722) (173,722)
Share-based payments - 738,965 - 738,965
Share issue costs (3,459,340) - - (3,459,340)
------------ ------------ -------------- -------------
Balance at 31 December
2021 285,809,214 23,074,244 (169,043,324) 139,840,134
------------ ------------ -------------- -------------
At 1 January 2020 185,619,885 23,578,127 (144,599,502) 64,598,510
------------ ------------ -------------- -------------
Loss for the year - - (22,033,633) (22,033,633)
Other comprehensive
loss (7,120,022) - (7,120,022)
------------ ------------ -------------- -------------
Total comprehensive
income/(loss) for the
year after tax - (7,120,022) (22,033,633) (29,153,655)
Transactions with owners
in their capacity as
owners:
Issue of share capital 24,130,013 - - 24,130,013
Share-based payments 122,870 - 122,870
Share issue costs (786,386) - - (786,386)
------------ ------------ -------------- -------------
Balance at 31 December
2020 208,963,513 16,580,975 (166,633,135) 58,911,353
------------ ------------ -------------- -------------
The Consolidated Statement of Changes in Equity should be read
in conjunction with the notes to the financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANICAL YEAR ENDED 31 DECEMBER 2021
Note 2021 2020
$ $
Cash flows from operating activities
Payment to suppliers and employees (4,594,024) (3,141,403)
Interest received 841 2,634
Interest & finance costs (1,052,539) (2,237,210)
Other Income - 259,072
Net cash flows used in operating activities 6(b) (5,645,722) (5,116,907)
------------ ------------
Cash flows from investing activities
Payments for exploration and evaluation
activities (41,791,086) (41,521,267)
Contribution from JV Partners in relation
to Exploration 20,816,000 32,184,152
Payments for Bonds (112,730) -
Proceeds from sale of tax credits 24,233,263 -
Net cash flows generated from/used in investing
activities 3,145,447 (9,337,115)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 14 42,521,478 14,870,000
Share issue costs (2,523,150) (840,000)
Payment of borrowing (20,909,692) (398,880)
Net cash flows from financing activities 19,088,636 13,631,120
------------ ------------
Net increase/(decrease) in cash and cash
equivalents 16,588,361 (822,902)
Cash and cash equivalents at the beginning
of the year 14,845,347 15,903,117
Effect of exchange rate fluctuations on
cash held 884,179 (234,868)
------------ ------------
Cash and cash equivalents at end of year 6(a) 32,317,887 14,845,347
------------ ------------
The Consolidated Statement of Cash Flows should be read in
conjunction with the notes to the financial statements.
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