TIDMBOIL
RNS Number : 9588Z
Baron Oil PLC
27 May 2021
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 (which forms part of domestic UK law
pursuant to the European Union (withdrawal) act 2018) until the
release of this announcement.
27 May 2021
Baron Oil Plc
("Baron" or "the Company")
Final Results for the Year Ended 31 December 2020
Baron Oil Plc (AIM:BOIL), the AIM-quoted oil and gas exploration
company with projects in SE Asia, Latin America and the UK, is
pleased to announce its audited financial results for the year
ended 31 December 2020.
Highlights
-- Material milestone in March 2020 with the funding of the
initial 25% effective interest in the TL-SO-19-16 production
sharing contract, offshore Timor-Leste ("Chuditch"); subsequently
increased to 63.75%.
-- Strategic intent to acquire significant working interests in
potentially large oil & gas prospects signalled following board
changes in October.
-- During first half 2021, considerable progress made on Chuditch:
o One year extension to Contract Year 1 of the production
sharing contract granted;
o Significant upgrade in non-SPE PRMS compliant volumes;
o Successful raise of GBP3m (gross) via a placing and
subscription to support funding an Earn In agreement which
increased effective interest in the PSC to 63.75%;
o Baron's net share of estimated Mean prospective resources
increased to 2,248 BCF (375 MMBOE);
o Execution of a 3D seismic licensing and reprocessing
contract.
-- UK offshore licence P2478 (15% interest)
o Technical studies, delivered in early 2021, confirmed Dunrobin
prospect as a potentially attractive and substantial
opportunity;
o Activity set to increase once technical studies results
incorporated
-- Relinquishment of all other interests in United Kingdom licences.
-- Peru onshore Block XXI (100% interest)
o Ongoing COVID-19 restrictions throughout Peru prevented
tangible progress;
o Decision on drilling the El Barco-3X well expected during the
second half of 2021
Financials
-- Net result for the year was a loss before taxation of GBP920,000 (2019: loss of GBP1,674,000)
-- Loss after taxation attributable to shareholders was GBP920,000 (2019: loss of GBP1,674,000)
-- Exploration and evaluation expenditure of GBP145,000 (2019: GBP1,207,000)
-- IFRS6 intangible asset impairment charge of GBPnil (2019: GBP1,108,000)
-- Administration expenditure for the year was GBP710,000 (2019:
GBP442,000), largely reflecting share-based charges and the
temporary reduction in directors' contracted salaries in 2019
-- The end of year free cash balance was GBP1,190,000 (2019: GBP347,000)
The Company will hold its Annual General Meeting on 23 June 2021
and the Notice of Annual General Meeting to that effect will be
sent to Shareholders shortly.
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining
and Oil and Gas Companies, the technical information and resource
reporting contained in this announcement has been reviewed by Jon
Ford BSc, Fellow of the Geological Society, Technical Director of
the Company. Mr Ford has more than 39 years' experience as a
petroleum geoscientist. He has compiled, read and approved the
technical disclosure in this regulatory announcement and indicated
where it does not comply with the Society of Petroleum Engineers'
standard.
Commenting on the results, John Wakefield, Non-executive
Chairman, said:
"Over the next 12 months our focus will be on driving the
Chuditch PSC forward. Through the operator SundaGas Banda we have
already engaged TGS and will be working with them to undertake the
critical 3D seismic reprocessing project. The acceleration in
Timor-Leste's oil & gas activity is expected to continue and
the Chuditch PSC, with its potential Mean gross prospective
resources of 3,527 BCF (580 MMBOE) is sufficiently large to attract
interest from the major regional gas players and other potential
partners.
"In the UK, we anticipate renewed activity on the Dunrobin
prospect P2478 later in the year once the results of the regional
technical work have been incorporated; Peru is likely to remain
subdued. Elsewhere, the Company continues to screen new
opportunities which are consistent with its new asset
strategy."
"On a personal note, I would like to thank my colleagues and
partners for their warm welcome and hard work in ensuring that
Baron is well-placed to evaluate the potential of its Chuditch
asset during the current year as well as consider opportunities for
our other and future assets in due course."
"As for the next twelve months, our current commitments are
funded and we look forward to executing on our ambitious
plans."
The Company's Annual Report and Financial Statements for the
year ended 31 December 2020 will shortly be available for download
from the Company's website ( https://www.baronoilplc.com/ ) and
will be despatched by post shortly to those shareholders that have
requested a hard copy.
For further information, please contact:
Baron Oil Plc +44 (0)20 7117 2849
Andy Yeo, Chief Executive
Jon Ford, Technical Director
Allenby Capital Limited +44 (0)20 3328 5656
Nominated Adviser and Joint Broker
Alex Brearley, Nick Harriss, Nick Athanas (Corporate
Finance)
Kelly Gardiner (Sales and Corporate Broking)
Turner Pope Investments (TPI) Limited +44 (0)20 3657 0050
Joint Broker
Andy Thacker
CHAIRMAN'S STATEMENT & OPERATIONS REPORT
Financial and Financial Results
The net result for the year was a loss before taxation of
GBP920,000, which compares to a loss of GBP1,674,000 for the
preceding financial year; the loss after taxation attributable to
Baron Oil shareholders was GBP920,000, compared to a loss of
GBP1,674,000 in the preceding year.
Turnover for the year was GBPnil (2019: GBPnil), there being no
sales activity during the period.
Exploration and evaluation expenditure written off included in
the Income Statement amounts to GBP145,000. This arises from
expenditure of GBP114,000 in Peru on Block XXI, GBP29,000 in
technical consultancy costs and GBP2,000 relating to the
relinquished P2470 licence.
Shortly after the period end on 31 January 2021, licence P1918
(Colter) and the nearby onshore licences PEDL330 and PEDL345 were
relinquished. All expenditure on these licences was written off in
the year, however as these prospects had already been fully
impaired in 2019, there was no impact on the Income Statement.
Impairment provisions in respect of Peru Block XXI were reduced by
GBP133,000, this being attributable to exchange rate fluctuations
on the translation of US Dollar based Peruvian assets. The
directors judged that no other exploration assets required
impairment.
Administration expenditure for the year was GBP710,000, compared
to GBP442,000 in the preceding year, excluding the effects of
exchange rate movements. Directors and employee costs (less
GBP81,000 of share based charges) amounted to GBP374,000; listing,
compliance and other professional fees were GBP198,000; and other
overheads GBP55,000. The increase in Directors and employee cash
costs are largely due to a temporary reduction in directors'
contracted salaries in 2019.
During 2020, the Pound Sterling/US Dollar exchange rate was
highly volatile, but a strengthening of the Pound towards the end
of the year gave rise to an overall exchange gain of GBP157,000
(loss of GBP41,000 in 2019) on the Group's holding of US Dollar
assets.
At the end of the financial year, free cash reserves of the
Group had increased to GBP1,190,000 from a level at the preceding
year end of GBP347,000. The proceeds of new share issues in the
year amounting to GBP2,500,000 gross (GBP2,295,000 net of costs)
bolstered the Company's cash reserves; excluding this, the overall
cash outflow amounted to GBP1,452,000, consisting of GBP518,000 of
investment in SundaGas (Timor-Leste Sahul) Pte.Ltd, exploration and
evaluation activity of GBP145,000, and GBP789,000 of operating cash
outflow. During March and April 2021, the Company undertook a
further capital raise with a new ordinary share Placing and
Subscription of GBP3,000,000 gross (GBP2,768,000 net).
The Group continues to take a conservative view of its asset
impairment policy, giving it a Statement of Financial Position that
consists largely of net current assets and what the Board considers
to be a realistic value for its exploration assets. Given limited
cash resources, the Board will take a prudent approach in entering
into new capital expenditures beyond those expected to be committed
to existing ventures.
Report On Operations
Introduction
It is hard to believe that we have now lived with the
consequences of the COVID-19 pandemic for more than 18 months. We
were fortunate enough to enter 2020 without any immediate drilling
commitments and instead were able to focus on desktop studies to
advance our projects whilst maintaining control over costs.
The funding of the Chuditch Carry Agreement was a key milestone
in March 2020 as it not only secured a substantial asset but was
achieved in the early stages of the pandemic.
A number of board changes were announced in October 2020,
triggered by the retirement of Executive Chairman, Dr Malcolm
Butler. John Wakefield was appointed as Independent Non-executive
Chairman, Jon Ford changed his role to Technical Director, and
Andrew Yeo became Chief Executive of the Company.
Southeast Asia: Timor-Leste Tl-S0-19-16 PSC ("Chuditch PSC" or
"PSC")
(Baron 25% effective interest, rising to 63.75% post-reporting
period)
During 2020 Baron acquired a 33.33% interest in the shares of
SundaGas Timor-Leste (Sahul) Pte. Ltd. ("TLS"), the parent company
of the Timor-Leste subsidiary, SundaGas Banda Unipessoal Lda.
("Banda"), which is the Operator of and 75% interest holder in the
offshore Timor-Leste TL-SO-19-16 PSC. Banda had put in place the
required US$1 million Bank Guarantee (Baron assuming its share of
US$0.333 million) against the initial work commitment, which
included the reprocessing of legacy seismic data for the first two
years of the Initial Term of the PSC. Subject to satisfactory
results from the reprocessing and other technical work, the
subsequent commitment is for a well to be drilled in the third year
of the Initial Term.
The Chuditch PSC is located approximately 185 kilometres south
of Timor-Leste, 100 kilometres east of the producing Bayu-Undan
field, 50 kilometres south of the Greater Sunrise potential
development, and covers approximately 3,571km(2) in water depths of
50-100 metres. The Shell operated Chuditch-1 discovery in 1998,
which was drilled in 64 metres water depth in a total of 25 days
for around US$8 million, encountered a 25 metre gas column in
Jurassic Plover Formation reservoir sandstones on the flank of what
is interpreted to be a large faulted structure. The Chuditch area
was largely covered by part of a regional 3D survey which was
acquired by a previous operator in 2012.
The initial work programme is designed to extract the maximum
information from existing seismic data, utilising the technical
expertise of the TLS team and incorporating a training programme
for Timor-Leste nationals. There are issues with sea-bed topography
and shallow geological features that impact the existing seismic
image at the reservoir level local to the Chuditch area and a
pre-stack depth migration ("PSDM") processing routine, tailored to
resolve these issues, is necessary. Although the work carried out
previously by Shell determined that there were low reservoir, seal
and hydrocarbon charge risks, such modern processing is necessary
to define the size and shape of the accumulation, which impacts the
gas volumes in place and the location of potential future wells. In
particular, new advances in seismic processing technology enable a
considerably enhanced subsurface image to be achieved in areas with
complex seabeds and shallow geology. Accessing the original raw
acquisition data for the existing seismic volumes was therefore
critical for this programme. A combination of COVID-19 lockdowns
and data access issues meant that at the 2020 year end TLS had yet
to receive these key data for either 3D or 2D seismic. Despite
this, the TLS team was able to perform baseline geological and
geophysical studies and establish an initial presence in Dili, the
capital of Timor-Leste.
Since the beginning of 2021 we are pleased to report that
considerable progress has been made on the Chuditch PSC project,
building on the background work carried out during 2020:
-- in January 2021, we announced a significant upgrade in TLS's
non-SPE PRMS compliant gross volumes, based on the interpretation
of legacy 2D (unreprocessed) seismic, well and regional data:
o Mean gas initially in place volumes to 4,703 BCF (from 2,320
BCF)
o Mean prospective resources to 3,527 BCF (from 1,508 BCF)
o Inclusion of a significant new lead within the licence area,
Chuditch North East;
-- in February 2021, Autoridade Nacional do Petróleo e Minerais
("ANPM", the Timor-Leste state oil and gas regulatory authority)
granted a year's extension to Contract Year 1 of the PSC to enable
the timely completion of the committed work programme, in
particular the seismic reprocessing project;
-- in April 2021, we announced the completion of an earn in and
executed a seismic licensing and reprocessing contract:
o increasing our interest in TLS from 33.33% to 85%, thereby
increasing Baron's effective interest in the Chuditch PSC from 25%
to 63.75%;
o net share of non-SPE PRMS compliant mean prospective resources
increased from 882 BCF to 2,248 BCF (375 MMBOE);
o Baron agreed to fund the remainder of the Chuditch PSC work
programme to November 2022, estimated to be US$3.5 million. we
successfully raised gross proceeds of GBP3 million by the issue of
new shares to enable us to commit to this programme;
o Spectrum Geo Australia Pty Ltd., a wholly owned subsidiary of
TGS-NOPEC Geophysical Company ASA ("TGS"), was engaged for the
licensing and reprocessing of 1,270km(2) of 3D seismic data
covering the Chuditch-1 discovery and adjacent prospects.
Obtaining a material interest in a very large potential asset
and getting the seismic reprocessing back on track is judicious as
we are seeing a convergence of events which together have the
potential to make the Chuditch PSC an outstanding asset for the
Company:
-- an acceleration in Timor-Leste regional hydrocarbon
exploitation, including drilling activity and planned extensions of
existing infrastructure;
-- exposure to the SE Asia liquid natural gas ("LNG") market,
where future demand is forecast to exceed supply;
-- a sufficient level of prospective resources to attract the
interest of major regional gas players and other potential funding
partners.
The seismic reprocessing results are likely to be delivered
across the period from 4(th) quarter 2021 to 2(nd) quarter 2022.
Seismic data interpretation, geological and other studies will
occur in parallel ahead of a decision by Q4 2022 on whether to
enter the drilling phase, with the potential for a high impact
drilling programme in 2023.
The recent uptick in oil & gas activity in Timor-Leste
follows the Santos US$1.25 billion acquisition of ConocoPhillips'
northern Australia and Timor-Leste assets, completed in May 2020.
This package delivered Santos operatorship of a portfolio of
natural gas assets (Bayu-Undan and Barossa), partnerships with some
of SE Asia's largest LNG players, power generators and utility
companies, and a strategic holding in LNG infrastructure of
pipelines and the Darwin LNG plant located at Wickham Point,
Northern Territories, Australia. This interconnected system,
centred on Bayu-Undan (the only producing field currently in
Timor-Leste), is key to the evacuation and monetisation of gas from
the Timor Sea area. The Chuditch PSC lies only 100 kilometres east
of these facilities.
Santos and its partners have so far committed to expenditure of
more than US$4.5 billion to extend the life of existing fields and
pipelines, bring new fields onstream, and increase capacity at the
Darwin LNG plant from around 4 million tonnes per annum (mtpa) to
10mtpa. There are also moves being made by ENI (operator of the
Evans Shoal and Blackwood gas fields) and Santos to cooperate in
offshore developments in northern Australia and Timor-Leste, the
sharing of infrastructure, and CO(2) capture and storage with a
Joint Memorandum of Understanding being announced in May 2021.
In the context of these ongoing activities, the Chuditch PSC is
well placed to benefit from these activities, in terms of future
operational synergies and commercial development of gas in the
event of drilling success at Chuditch.
Peru: Block XXI, Onshore Licence (Baron 100%)
Baron has a 100% operated interest in onshore Block XXI, in the
Sechura Desert of northern Peru. As indicated in March 2021, the
Company intends to make a decision on the drilling of the El
Barco-3X project during the second half of 2021. We maintain a
preference for bringing in a drilling partner with operator
capabilities as we believe this represents the best way to develop
and monetise any discovery. However, strict COVID restrictions
remain in place throughout Peru, which prevents any progress in
relation to the drilling project, and it is unclear when and how
quickly oil and gas exploration activity will be allowed to
recommence. Currently the licence remains in Force Majeure.
Our application for a three year extension option to the
licence, a prerequisite for attracting a drilling partner, given
that we currently have only six months to drill and evaluate well
results once Force Majeure is lifted, is currently being assessed
by Perupetro, the Peru state regulatory authority. Once approved,
this will trigger a prescribed Government process which, if
successful, should allow a way forward for the project. In the
Piura area where the proposed well is situated, we are required to
undertake workshops with the local communities of Belisario and El
Barco ahead of any drilling authorisation.
United Kingdom Offshore Licence P2478 (Baron 15%)
Innovate Licence P2478, awarded in September 2019, is held by
Corallian Energy Limited (Operator, 45%), Upland Resources (UK
Onshore) Limited (40%) and Baron (15%). The licence's current
modest work commitment is to undertake reprocessing of legacy 2D
and 3D seismic data and perform other studies in order to reduce
risk and refine volumetric estimates ahead of making a "drill or
drop" decision before the end of Phase A of the licence period in
July 2023.
Covering blocks 12/27c, 17/5, 18/1 and 18/2 in the Inner Moray
Firth area of the North Sea, the licence contains the Dunrobin
prospect which consists of large shallow rotated fault blocks which
are mapped mostly on 3D seismic data including Direct Hydrocarbon
Indicators. The prospect is understood to be one of the few
remaining targets with Pmean prospective resources of the order of
100 MMBOE yet to be drilled in the North Sea.
In April 2020, the joint venture partners signed a Work Sharing
and Confidentiality Agreement with a large European E&P Company
("Interested Party") for licence P2478. Under the terms of the
agreement the Interested Party completed its own regional technical
work and shared its data and interpretations over the area with
Corallian and its partners in February 2021. The technical studies
delivered by the Interested Party confirmed and enhanced our
geological understanding and corroborated our view of Dunrobin as a
potentially attractive and substantial target. The results are
being incorporated into the ongoing work programme which includes
preparations for the seismic reprocessing in order to reduce
further the pre-drill risk on the prospect.
Other United Kingdom Licences
In keeping with its revised strategy to focus on high potential
impact projects, and by way of the normal course of portfolio
management, Baron has relinquished its interests in all other
United Kingdom Licences.
Conclusions
Over the next 12 months our focus - both operational and
financial - will be on driving the Chuditch PSC forward. Through
the operator SundaGas Banda we have already engaged TGS, and will
be working with them to undertake the critical 3D seismic
reprocessing which will provide an up-to-date assessment of the
true potential of the Chuditch discovery and offset prospects.
Notwithstanding the expected benefits of global economic
recovery as normality gradually returns, SE Asia gas prices are
already ahead of pre-COVID levels. An acceleration in Timor-Leste's
oil & gas activity is expected and the Chuditch PSC with its
potential Mean gross prospective resources of 3,527 BCF of gas is
sufficient to get noticed. The Earn In increased Baron's net share
of estimated non-SPE PRMS compliant Mean gas prospective resources
to 2,248BCF (equivalent to 375MMBOE).
Activity in Peru is likely to remain subdued in the short
term.
In the UK, we expect to see activity on P2478 once the results
of the regional technical work have been incorporated into the
ongoing work programme. Whilst we only have a modest 15% interest,
it remains a significant opportunity.
The Company continues to screen opportunities for acquiring
significant equity interests in high potential impact exploration
and appraisal activity at low entry costs.
As for the next twelve months, our current commitments are fully
funded and we look forward to executing on our ambitious plans.
I would like to thank my colleagues and partners for their warm
welcome and hard work in ensuring that Baron is well-placed to
evaluate the potential of its Chuditch asset during the current
year as well as consider opportunities for our other and future
assets in due course.
John Wakefield
Non-executive Chairman
26 May 2021
CONSOLIDATED INCOME STATEMENT FOR THE YEARED 31 DECEMBER 2020
Notes 2020 2019
GBP'000 GBP'000
Revenue - -
Cost of sales - -
Gross profit - -
Exploration and evaluation expenditure (145) (160)
Intangible asset impairment 10 59 (1,047)
Property, plant and equipment impairment
and depreciation 9 (2) -
Receivables and inventory impairment 3 74 16
Administration expenses (710) (442)
Loss on exchange 3 (157) (41)
Operating loss 3 (881) (1,674)
Loss from associated
undertaking 12 (44) -
Loss before interest
and taxation (925) (1,674)
Finance cost 5 - (1)
Finance income 5 5 1
Loss on ordinary activities
before taxation (920) (1,674)
Income tax expense 6 - -
Loss on ordinary activities
after taxation (920) (1,674)
Dividends - -
Loss for the year (920) (1,674)
-------------------------------------------- ------ ------------------- -----------------------
Loss on ordinary activities
after taxation is attributable to:
Equity shareholders (920) (1,674)
Non-controlling interests - -
(920) (1,674)
------------------------------------------ ------ ------------------- -----------------------
Earnings per ordinary share - continuing 8
Basic (0.023p) (0.099p)
Diluted (0.023p) (0.099p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEARED 31 DECEMBER 2020
Notes 2020 2019
GBP'000 GBP'000
Loss on ordinary activities after taxation
attributable to the parent (920) (1,674)
Other comprehensive income:
Release of option reserve 41 -
Exchange difference on translating foreign
operations (115) (69)
Total comprehensive loss for the year (994) (1,743)
--------------------------------------------- ------- ------------------- --------------------
Total comprehensive loss attributable
to
owners of the parent (994) (1,743)
------------------------------------------------------- ------------------- --------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2020
Notes 2020 2019
GBP'000 GBP'000
Assets
Non current assets
Property plant and equipment
--- oil and gas assets 9 - -
--- others 9 43 -
Intangibles 10 18 5
Goodwill - -
Associated undertaking 12 151 -
212 5
------------------------------------------------ --------- ------------------ ------------
Current assets
Trade and other receivables 376 49
Cash and cash equivalents 1,311 472
1,687 521
------------------------------------------------ --------- ------------------ ------------
Total assets 1,899 526
-------------------------------------------------- --------- ------------------ ------------
Equity and liabilities
Capital and reserves attributable to
owners of the parent
Share capital 1,107 482
Share premium account 32,156 30,507
Share option reserve 135 74
Foreign exchange translation
reserve 1,528 1,643
Retained earnings (33,130) (32,251)
Total equity 1,796 455
-------------------------------------------------- --------- ------------------ ------------
Current liabilities
Trade and other payables 58 64
Taxes payable 16 7
74 71
------------------------------------------------ --------- ------------------ ------------
Non-current liabilities
Lease finance 29 -
------------------------------ -------------- --------- ------------------ ------------
Total equity and liabilities 1,899 526
-------------------------------------------------- --------- ------------------ ------------
The financial statements were approved and authorised for issue
by the Board of Directors on 26 May 2021 and were signed on
its behalf by:
John Wakefield Andrew Yeo
Director Director
Company number: 05098776
COMPANY STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2020
Notes 2020 2019
GBP'000 GBP'000
Assets
Non current assets
Property plant and equipment
--- oil and gas
assets - -
--- others 9 43 -
Intangibles 10 18 5
Investments 195 25
256 30
-------------------------------------- ------ --------------------- ----------------------
Current assets
Trade and other
receivables 375 46
Cash and cash equivalents 1,183 336
1,558 382
-------------------------------------- ------ --------------------- ----------------------
Total assets 1,814 412
---------------------------------------- ------ --------------------- ----------------------
Equity and liabilities
Capital and reserves attributable
to owners of the parent
Share capital 1,107 482
Share premium account 32,156 30,507
Share option reserve 135 74
Foreign exchange translation reserve (163) (163)
Retained earnings (31,523) (32,261)
Total equity 1,712 (1,361)
---------------------------------------- ------ --------------------- ----------------------
Current liabilities
Trade and other
payables 58 1,766
Taxes payable 15 7
73 1,773
-------------------------------------- ------ --------------------- ----------------------
Non-current liabilities
Lease finance 29 -
-------------------------------------- ------ --------------------- ----------------------
Total equity and
liabilities 1,814 412
---------------------------------------- ------ --------------------- ----------------------
The financial statements were approved and authorised for issue
by the Board of Directors on 26 May 2021 and were signed on its
behalf by:
John Wakefield Andrew Yeo
Director Director
Company number:
05098776
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2020
Foreign
Share Share Retained Share option exchange Total
capital premium earnings reserve translation equity
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
January
2019 344 30,237 (30,577) 74 1,712 1,790
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
Shares issued 138 270 - - - 408
--------------- ------------------
Transactions
with
owners 138 270 - - - 408
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
Loss for the
year
attributable
to
equity
shareholders - - (1,674) - (1,674)
Foreign
exchange
translation
adjustments - - - - (69) (69)
--------------- --------------------------- ------------------
Total
comprehensive
income for
the period - - (1,674) - (69) (1,743)
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
As at 1
January
2020 482 30,507 (32,251) 74 1,643 455
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
Shares issued 625 1,670 - - - 2,295
--------------- ------------------
Transactions
with
owners 625 1,670 - - - 2,295
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
Loss for the
year
attributable
to
equity
shareholders - - (920) - (920)
Share based
payments - (21) - 102 - 81
Share option
reserve
released - - 41 (41) - -
Foreign
exchange
translation
adjustments - - - - (115) (115)
--------------- --------------------------- ------------------
Total
comprehensive
income for
the period - (21) (879) 61 (115) (954)
------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
As at 31
December
2020 1,107 32,156 (33,130) 135 1,528 1,796
--------------- ------------------------------------------ --------------------------- --------------------------- --------------------------- ------------------------------- ------------------
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY FOR
THE YEARED 31 DECEMBER 2020 - continued
Foreign
Share Share Retained Share option exchange Total
capital premium earnings reserve translation equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Company
As at 1
January
2019 344 30,237 (30,510) 74 (163) (18)
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
Shares issued 138 270 - - - 408
---------------
Transactions
with
owners 138 270 - - - 408
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
Loss for the
year - - (1,751) - - (1,751)
Total
comprehensive
income for
the period - - (1,751) - - (1,751)
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
As at 1
January
2020 482 30,507 (32,261) 74 (163) (1,361)
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
Shares issued 625 1,670 - - - 2,295
---------------
Transactions
with
owners 625 1,670 - - - 2,295
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
Profit for the
year - - 697 - - 697
Share based
payments - (21) - 102 - 81
Share option
reserve
released - - 41 (41) - -
Total
comprehensive
income for
the period - (21) 738 61 - 778
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
As at 31
December
2020 1,107 32,156 (31,523) 135 (163) 1,712
--------------- -------------------------------------------- --------------------------- ------------------------ --------------------------- --------------------------------- -----------------------
Share capital is the amount subscribed for shares at nominal
value.
Share premium represents the excess of the amount subscribed
for share capital over the nominal value of those shares net
of share issue expenses.
Retained earnings represents the cumulative loss of the group
attributable to equity shareholders.
Foreign exchange translation occurs on consolidation of the
translation of the subsidiaries balance sheets at the closing
rate of exchange and their income statements at the average
rate.
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
FOR THE
YEARED 31 DECEMBER 2020
Group Company Group Company
2020 2020 2019 2,019
--------------------------------------- ------------- ------------------ ----------------- -----------------
GBP'000 GBP'000 GBP'000 GBP'000
Operating activities (919) (797) (724) (563)
Investing activities
Return from investment and servicing
of finance 5 5 1 1
Advances to subsidiary and associated
undertakings (323) (441) - (155)
Acquisition of intangible assets (14) (14) (1,047) (1,047)
Investment in associated undertaking (195) (195) - -
(527) (645) (1,046) (1,201)
Financing activities
Proceeds from issue of share capital 2,295 2,295 408 408
Lease financing (6) (6) - -
Net cash inflow 843 847 (1,362) (1,356)
Cash and cash equivalents
at the beginning of
the year 347 336 1,709 1,692
Cash and cash equivalents
at the end of the year 1,190 1,183 347 336
---------------------------------------- ------------- ------------------ ----------------- -----------------
Reconciliation to Consolidated
Statement of Financial Position
Cash not available for
use 121 - 125 -
Cash and cash equivalents as shown
in the Consolidated Statement
of Financial Position 1,311 1,183 472 336
---------------------------------------- ------------- ------------------ ----------------- -----------------
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
FOR THE
YEARED 31 DECEMBER 2020 -
continued
Group Company Group Company
2020 2020 2019 2019
---------------------------------- ------------------ ------------------- ------------------ ------------------
GBP'000 GBP'000 GBP'000 GBP'000
Operating activities
Loss for the year
attributable to
controlling interests (920) 697 (1,674) (1,751)
Depreciation, amortisation and
impairment charges (57) 90 1,047 1,240
Share based payments 81 81 - -
Finance income shown as an
investing
activity (5) (5) (1) (1)
Profit on disposal of subsidiary
undertaking - (1,679) - -
Income from associated undertaking 44 - - -
Foreign exchange translation (52) 30 (4) 23
Operating cash outflows before
movements in working capital (909) (786) (632) (489)
----------------------------------- ------------------ ------------------- ------------------ ------------------
(Increase)/decrease in receivables (4) (5) 454 456
Tax paid - - - -
Decrease in payables (6) (6) (546) (530)
Net cash outflows from operating
activities (919) (797) (724) (563)
----------------------------------- ------------------ ------------------- ------------------ ------------------
NOTES TO THE FINANCIAL STATEMENTS
3. Operating Loss 2020 2019
------------------- -----------------------
GBP'000 GBP'000
The loss on ordinary activities before
taxation is stated after charging:
Auditors' remuneration
Group - audit 32 26
Company - audit 32 21
Group - other non-audit services 2 5
Company - other non-audit services 2 5
Exploration and evaluation expenditure 145 160
Impairment of intangible assets (59) 1,047
Depreciation of property, plant
and equipment 2 -
Impairment of foreign tax receivables (74) (16)
(Gain)/loss on exchange 157 41
The analysis of development and administrative expenses in the
consolidated income statement by nature of expense is:
2020 2019
---------------------------------------- ------------------- -----------------------
GBP'000 GBP'000
Employee benefit
expense 374 258
Share based payments 81 -
Exploration and evaluation expenditure 145 160
Depreciation, amortisation and
impairment charges (131) 1,031
Legal and professional
fees 198 133
Loss on exchange 157 41
Other expenses 57 51
881 1,674
---------------------------------------- ------------------- -----------------------
5. Finance income 2020 2019
------------------------------------------- ------------------ --------------------
GBP'000 GBP'000
Bank and other interest received 5 1
Finance cost - (1)
Total 5 -
6. Income tax expense 2020 2019
------------------------------------------- ------------------ --------------------
GBP'000 GBP'000
The tax charge on the loss on
ordinary activities was:-
UK Corporation Tax
- current - -
Foreign taxation - -
- -
------------------------------------------- ------------------ --------------------
The total charge for the year can be reconciled to the accounting
profit as follows:
2020 2019
------------------------------------------- ------------------ --------------------
GBP'000 GBP'000
Loss before tax
Continuing operations (920) 1,674
Tax at composite group rate of 19% (2019:
19%) (174) (318)
Effects of:
Losses not subject to tax 340 221
Movement on capital allowances (126) (153)
Increase in tax
losses (40) 250
Foreign taxation - -
Tax expense - -
---------------------------------------------- ------------------ --------------------
At 31 December 2020, the Group has tax losses of GBP28,990,000
(2019 - GBP28,208,000) to carry forward against future profits.
The deferred tax asset on these tax losses at 19% of GBP5,508,000
(2019: at 19%, GBP5,359,000) has not been recognised due to
the uncertainty of the recovery.
8. Earnings per
share
2020 2019
----------------------------------------------- -------------- --------------
Loss per ordinary
share
- Basic (0.023p) (0.099p)
- Diluted (0.023p) (0.099p)
Earnings per ordinary share is based on the Group's loss attributable
to controlling interests for the year of GBP920,000 (2019:
GBP1,674,000).
The weighted average number of shares used in the calculation
is the weighted average ordinary shares in issue during the
year.
2020 2019
-------------- --------------
Number Number
Weighted average ordinary shares in issue
during the year 3,988,470,466 1,685,313,686
Weighted average potentially dilutive options
and warrants issued 373,396,517 82,150,685
Weighted average ordinary shares for
diluted earnings per share 4,361,866,983 1,767,464,371
------------------------------------------------- -------------- --------------
Due to the Group's results, the diluted earnings per share
was deemed to be the same as the basic earnings per share for
that year.
9. Property,
plant and
equipment
Development Equipment Right for
and and use
production machinery asset
costs Total
GBP'000 GBP'000 GBP'000 GBP'000
Group
Cost
At 1 January
2019 - 34 - 34
Foreign
exchange
translation
adjustment - (4) - (4)
At 1 January
2020 - 30 - 30
Foreign
exchange
translation
adjustment - (1) - (1)
Expenditure - - 45 45
At 31 December
2020 - 29 45 74
--------------- ------------------------ ------------------------ ------------------------ ----------------------
Depreciation
At 1 January
2019 - 34 - 34
Foreign
exchange
translation
adjustment - (4) - (4)
At 1 January
2020 - 30 - 30
Foreign
exchange
translation
adjustment - (1) - (1)
Charge for the
period - - 2 2
At 31 December
2020 - 29 2 31
--------------- ------------------------ ------------------------ ------------------------ ----------------------
Net book
value
At 31 December
2020 - - 43 43
At 31
December 2019 - - - -
Company
Cost
At 1 January - - - -
2019
and 2020
Expenditure - - 45 45
At 31 December
2020 - - 45 45
--------------- ------------------------ ------------------------ ------------------------ ----------------------
Depreciation
At 1 January - - - -
2019
and 2020
Charge for the
period - - 2 2
At 31 December
2020 - - 2 2
--------------- ------------------------ ------------------------ ------------------------ ----------------------
Net book
value
At 31 December
2020 - - 43 43
At 31 December
2019 - - - -
9. Property, plant and equipment (continued)
Included in the above line items is a right-of-use asset of
GBP43,000 (2019: nil) in respect of a motor vehicle.
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the balance sheet. The right-of-use
asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and
remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date.
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
On the statement of financial position, right-of-use assets have
been included in property, plant and equipment.
10. Intangible fixed
assets Exploration
and evaluation
Licence costs Total
GBP'000 GBP'000 GBP'000
Group
Cost
At 1 January 2019 - 2,486 2,486
Foreign exchange translation adjustment - (61) (61)
Expenditure - 1,047 1,047
------------------------------------------ ----------------------------- ------------------- --------
At 1 January 2020 - 3,472 3,472
Foreign exchange translation adjustment - (59) (59)
Expenditure - 14 14
Disposals - (1,108) (1,108)
At 31 December 2020 - 2,319 2,319
------------------------------------------ ----------------------------- ------------------- --------
Impairment
At 1 January 2019 - 2,420 2,420
Charge for the period - 1,047 1,047
------------------------------------------ ----------------------------- ------------------- --------
At 1 January 2020 - 3,467 3,467
Charge for the period - (59) (59)
Disposals - (1,107) (1,107)
At 31 December 2020 - 2,301 2,301
------------------------------------------ ----------------------------- ------------------- --------
Net book value
At 31 December 2020 - 18 18
At 31 December 2019 - 5 5
10.
Intangible
fixed assets
(continued) Exploration
and evaluation
Licence costs Total
GBP'000 GBP'000 GBP'000
Company
Cost
At 1 January
2019 - 701 701
Expenditure - 1,047 1,047
At 1 January
2020 - 1,748 1,748
Expenditure - 14 14
Disposals - (1,109) (1,109)
At 31 December
2020 - 653 653
--------------- -------------------------------- --------------------------------- ---------------------------------
Impairment
At 1 January
2019 - 635 635
Charge for the
year - 1,108 1,108
At 1 January
2020 - 1,743 1,743
Charge for -
the year - -
Disposals (1,108) (1,108)
At 31 December
2020 - 635 635
--------------- -------------------------------- --------------------------------- ---------------------------------
Net book
value
At 31 December
2020 - 18 18
At 31 December
2019 - 5 5
The exploration and evaluation costs above represent the cost
in acquiring, exploring and evaluating the company's and group's
assets.
The impairment of all intangible assets has been reviewed, giving
rise to the following impairment charges, or reduction in impairment
charges.
Block XXI Peru: this licence was fully impaired in 2018.
UK offshore block P1918 ("Colter"): the drilling of an exploration
well commenced on 6 February 2019 and was completed on 25 February
2019, with a further side-track well being drilled, completing
on 8 March 2019. This licence continued into the second term
with effect from 1 February 2020 but the Company has now written
off this asset against the impairment provision, as the licence,
along with related licences PEDL330 and PEDL 345, were relinquished
on 31 January 2021.
12. Associated undertaking
Shares in
associated
undertaking Total
GBP'000 GBP'000
Group
Gross investment
value
At 1 January 2019
and 2020 - -
Additions 195 195
Share of post acquisition net
result (44) (44)
At 31 December 2020 151 151
----------------------------------- ------------------------ ---------------------
Impairment
At 1 January 2019 and 2020, and
31 December 2020 - -
---------------------------------- ------------------------ ---------------------
Carrying value
At 31 December 2020 151 151
At 31 December 2019 - -
On 27 April 2020, the Group acquired a 33.33% interest in
SundaGas (Timor-Leste Sahul) Pte. Ltd, incorporated in Singapore at
a gross cost of GBP195,000. In accordance with IAS28, the Group
accounts for its investment in this company using the equity
method.
Glossary
BCF Billion cubic feet.
Mean Reflects a mid-case volume estimate of resource derived using probabilistic methodology. This
is the mean of the probability distribution for the resource estimates and may be skewed by
high resource numbers with relatively low probabilities.
MMBOE Million barrels of oil equivalent. Volume derived by dividing the estimate of the volume of
natural gas in billion cubic feet by six in order to convert it to an equivalent in million
barrels of oil and, where relevant, adding this to an estimate of the volume of oil in millions
of barrels.
Prospective Resources Quantities of petroleum that are estimated to exist originally in naturally occurring
reservoirs,
as of a given date. Crude oil in-place, natural gas in-place, and natural bitumen in-place
are defined in the same manner.
SPE PRMS The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management System ("PRMS"):
a system developed for consistent and reliable definition, classification, and estimation
of hydrocarbon resources prepared by the Oil and Gas Reserves Committee of SPE and approved
by the SPE Board in June 2018 following input from six sponsoring societies: the World
Petroleum
Council, the American Association of Petroleum Geologists, the Society of Petroleum Evaluation
Engineers, the Society of Exploration Geophysicists, the European Association of Geoscientists
and Engineers, and the Society of Petrophysicists and Well Log Analysts.
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(END) Dow Jones Newswires
May 27, 2021 02:00 ET (06:00 GMT)
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