TIDMLOGP
RNS Number : 1271R
Lansdowne Oil & Gas plc
26 June 2020
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"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain. If you have any queries on this, then please contact
Steve Boldy, the Chief Executive Officer of the Company
(responsible for arranging release of this announcement).
26 June 2020
Lansdowne Oil & Gas plc
("Lansdowne" or "the Company")
Audited results for the year ended 31 December 2019
Lansdowne Oil & Gas ("Lansdowne" or "the Company") is
pleased to announce its audited results, for the year ended 31
December 2019. Lansdowne is an upstream oil and gas company,
focused on exploration and appraisal activities in the North Celtic
Sea Basin, off the south coast of Ireland. The Company has targeted
the Irish offshore shelf areas close to existing operating
infrastructure for exploration, as these provide shallow water
(generally less than 100 metres), and relatively low drilling costs
and the Directors believe that these factors, combined with
favourable fiscal terms, have the potential to deliver high value
reserves.
Lord Torrington, Independent Non-Executive Chairman, commented
:
"2019 has proved another challenging year for the Company,
however, the Board remains steadfast in its belief of the
significant potential of Barryroe and is focused on unlocking its
inherent value. The Board has been encouraged by the new Farm-Out
campaign initiated in the fourth quarter of 2019 that has received
a positive response from industry and we are now in detailed
discussions with a potential counterparty that has been given a
period of exclusivity in order to agree an appraisal work programme
and develop commercial terms with the aim of concluding a binding
Farm-Out agreement.
In addition to the challenges the Company already faced, the
onset of the Coronavirus pandemic has impacted the entire global
economy, resulting in a dramatic reduction in oil and gas
consumption and a collapse in their prices.
In time the world will need to go back to work and oil and gas
demand, and prices, will recover and this process is already
underway.
We believe Barryroe remains an attractive opportunity, with
substantial established oil and gas resources, in shallow water,
close to existing infrastructure and with a low break-even price,
estimated by the operator Providence to be c. $26/bbl.
The environmental concerns regarding oil and gas will not go
away, but the evaluation of Carbon Capture and Storage options to
accompany Barryroe development offers a responsible way to take the
project forward whilst minimizing the carbon footprint.
Ireland will require diverse, cost effective and secure energy
supplies as it rebuilds its economy and Barryroe can play an
important role in this.
I would like to thank all our existing shareholders for the
support and patience they have shown in 2019 and following the
extraordinary events in 1H 2020. The Board believes Barryroe is a
compelling appraisal asset with existing net 2C resources of
69MMboe (plus additional exploration potential), the Company is
trading at a valuation of around US$0.11 per contingent resource
barrel and, accordingly, we continue to believe there is the scope
for a significant re-rating of the Company valuation upon
announcement of a binding Farm-Out agreement and on future
operational developments. Lansdowne is currently funded through to
the end of 2020 and we look forward to updating shareholders on
developments. "
Operational highlights
-- Barryroe Oil Field (SEL 1/11)
o Termination of the Farm-Out Agreement following the failure of
APEC to fulfil the terms
Financial highlights
-- On 25 June 2019, the Company secured debt funding of
GBP150,000 from LC Capital and GBP150,000 from Brandon Hill Capital
Limited, both existing significant shareholders in the Company (the
"Shareholder Loans").
-- Cash balances at 31 December 2019 of GBP0.02 million (2018: GBP0.16 million).
-- Operating expenses for the year were GBP0.1 million (2018: GBP0.2 million).
-- Loss for the year after tax of GBP0.2 million (2018: loss GBP0.3 million).
-- Diluted loss per share of 0.03 pence (2018: loss 0.05 pence).
Post-balance sheet events
Operational
-- Barryroe Oil Field (SEL1/11)
o The process of reassignment of equity back to Providence/EXOLA
and Lansdowne from APEC progressed with the Department of
Communications Climate Action and the Environment (DCCAE)
o New farm-out process led to the signing of a term-sheet with
SpotOn Energy Limited and granting of exclusivity through to 31
October 2020 with a view to concluding a binding farm-out
Financial
-- In February 2020, the Company placed 83,333,333 new ordinary
shares of 0.1 pence each ("Ordinary Shares") at a placing price of
0.6 pence a share to raise GBP500,000 before costs (the
"Placing").
-- At the same time, the Shareholder Loans entered into with
Brandon Hill Capital Ltd. and LC Capital in June 2019, were
converted into new Ordinary Shares at the Placing Price.
-- In connection with the Placing and the conversion of the
Shareholder Loans, the Company also granted a total of 139,368,491
warrants, on a one warrant per Placing or Loan Share basis, to
subscribe for new Ordinary shares in the Company at a price of 1.2
pence per share, with an expiry of 31 December 2020.
-- With low corporate overhead costs, following the February
2020 capital raise, Lansdowne has sufficient working capital to the
end of 2020.
-- The Company has net 2C Resources of 69 MMboe and is trading
at a valuation of around $0.11 per contingent resource barrel.
For further information please
contact:
Lansdowne Oil & Gas plc +353 1 963 1760
Steve Boldy
SP Angel Corporate Finance
LLP +44 (0)20 3470 0470
Nominated Adviser and Joint
Broker
Stuart Gledhill
Richard Hail
Brandon Hill Capital Limited +44 (0) 20 3463 5061
Joint Broker
Oliver Stansfield
Notes to editors:
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focused,
oil and gas exploration and appraisal company quoted on the AIM
market and head quartered in Dublin.
For more information on Lansdowne, please refer to
www.lansdowneoilandgas.com
Results for the year ended 31 December 2019
Chairman's Statement
Introduction
2019 has proved another challenging year for the Company,
however, the Board remains steadfast in its belief of the
significant potential of Barryroe and is focused on unlocking its
inherent value. The Board has been encouraged by the new Farm-Out
campaign initiated in the fourth quarter of 2019 that has received
a positive response from industry and we are now in detailed
discussions with a potential counterparty that has been given a
period of exclusivity in order to agree an appraisal work programme
and develop commercial terms with the aim of concluding a binding
Farm-Out agreement.
Prior to the new Farm-Out campaign, and despite being granted a
number of extensions, APEC Energy Enterprise Limited ("APEC")
failed to deliver funds to EXOLA (a wholly owned subsidiary of
Providence Resources plc) as called for under the terms of the
Farm-Out Agreement entered into in 2018 with respect to Standard
Exploration Licence (SEL) 1/11, containing the Barryroe Field.
A final deadline was set for 30th September 2019, but funds did
not arrive by that date, following which EXOLA advised APEC that it
would commence with the licence reversion process of APEC's 50%
working interest in SEL 1/11 to EXOLA and Lansdowne on a 40% and
10% basis, respectively.
The failure of APEC to deliver on the Barryroe Farm-Out
Agreement was a bitter blow after such a long period of dialogue
and planning.
The oil and gas industry in Ireland also faced regulatory and
policy headwinds in 2019, culminating in the announcement in
September 2019, that there would be no new licences granted for
offshore oil exploration.
The Irish Department of Communications, Climate Action and
Environment issued a Policy Statement in December 2019 that further
clarified the position. This statement confirmed that all existing
applications and authorisations in place before 23 September 2019
(such as SEL 1/11 containing Barryroe and the Helvick Lease
Undertaking) can progress through the standard lifecycle stages for
exploration, extraction and production of natural gas and/or
oil.
Financial Results
With the delay and uncertainty regarding the Barryroe Farmout,
on 25 June 2019 the Company entered into a Loan Agreement for GBP
300,000 (the "Loan") with two major shareholders - Lampe Conway
& Co LLC and Brandon Hill Capital Limited (collectively the
"Major Shareholders").
Under the Agreement, split equally between the Major
Shareholders, Lansdowne was able to draw down funds at its
discretion in part or in full.
The Group recorded an after tax loss of GBP0.2 million for the
year ended 31 December 2019 compared to a loss of GBP0.3 million
for the year ended 31 December 2018.
Group operating expenses for the year were GBP0.1 million,
compared to GBP0.2 million in 2018.
Net finance expense for the year was GBP57,000
(2018:GBP100,000).
Cash balances of GBP0.02 million (2018: GBP0.16 million) were
held at the end of the financial year
Total equity attributable to the ordinary shareholders of the
Group was GBP13.6 million as at 31 December 2019 (GBP13.7 million
as at 31 December 2018).
Post Balance Sheet Events
In February 2020, Providence confirmed that the regulatory
process to transfer equity back to Exola and Lansdowne was
progressing and that upon conclusion the licence interests would
revert back to Exola DAC 80% and Lansdowne Celtic Sea Limited
20%.
In February 2020, it was also confirmed that a number of parties
were reviewing the Barryroe opportunity, under the new Farm-Out
initiative.
Attention was also drawn to the fact that Barryroe contains
substantial amounts of gas, along with the identified oil
resources. One of the uncertainties that is required to be
addressed through the appraisal drilling is the exact split of oil
versus gas and whether Barryroe is a large oil field with a gas
cap, or a large gas field surrounded by an oil rim.
In April 2020, Providence announced that a non-binding term
sheet had been signed with SpotOn Energy Limited ("SpotOn"). SpotOn
is a Norwegian company working with a consortium of world leading
service providers to deliver cost effective offshore oil and gas
developments.
Providence announced that a period of exclusivity had been
granted to SpotOn, through to 31 October 2020, during which the
objective is to agree an appraisal work programme and commercial
terms and conclude a binding farm-out agreement.
In February 2020, the Company announced that it had placed
83,333,333 new ordinary shares at a placing price of 0.6 pence a
share to raise GBP500,000 before costs.
In addition, the loans entered into with Brandon Hill Capital
Ltd. ("BHC") and LC Capital Targeted Opportunities Fund ("LCCTOF")
in June 2019, which had been fully drawn down, were converted into
new ordinary shares at the Placing Price. This resulted in the
issuing of 25,934,246 new ordinary shares to each of BHC and
LCCTOF.
In connection with the Placing and the conversion of the
Shareholder Loans, the Company also granted a total of 139,368,491
warrants, on a one warrant per Placing or Loan Share basis, to
subscribe for new ordinary shares in the Company at a price of 1.2
pence per share, with an expiry of 31 December 2020.
The placing shares and the majority of the loan conversion
shares were issued under the existing shareholder authorities, with
the remainder of the loan conversion shares and the warrants being
formally approved by shareholders at a General Meeting of the
Company held in March 2020.
The proceeds of the Placing are expected to be sufficient to
fund the Company's share of costs on the Barryroe Licence and for
on-going working capital requirements to the end of 2020.
Outlook
In addition to the challenges the Company already faced, the
onset of the Coronavirus pandemic has impacted the entire global
economy, resulting in a dramatic reduction in oil and gas
consumption and a collapse in their prices.
Despite all of this, we believe Barryroe remains an attractive
opportunity, with substantial established oil and gas resources, in
shallow water, close to existing infrastructure and with a low
break-even price, estimated by the operator Providence to be c.
$26/bbl.
In time, the world will need to go back to work and oil and gas
demand, and prices, will recover.
The environmental concerns regarding oil and gas will not go
away, but the evaluation of Carbon Capture and Storage options to
accompany Barryroe development offers a responsible way to take the
project forward whilst minimizing the carbon footprint.
Ireland will require diverse, cost effective and secure energy
supplies as it rebuilds its economy and Barryroe can play an
important role in this.
One of our Non-Executive Directors, John Aldersey-Williams, has
decided not to stand for re-election at the forthcoming Annual
General Meeting. John joined the Lansdowne Board in 2012, when he
was CEO of Sea Energy PLC, at that time a significant shareholder
in Lansdowne. John has made a wide contribution to Lansdowne and we
thank him for all his efforts and wish him well as he moves to
focus his work in the zero-carbon energy sector. John will continue
as a Director until the Annual General Meeting when he will stand
down.
I would like to thank all our existing shareholders for their
support and patience they have shown in 2019 and following the
extraordinary events in 1H 2020. The Board believes Barryroe is a
compelling appraisal asset with existing net 2C resources of
69MMboe (plus additional exploration potential), the Company is
trading at a valuation of around US$0.11 per contingent resource
barrel and, accordingly, we continue to believe there is the scope
for a significant re-rating of the Company valuation upon
announcement of a binding Farm-Out agreement and on future
operational developments. Lansdowne is currently funded through to
the end of 2020 and we look forward to updating shareholders on
developments.
Lord Torrington
Chairman
24 June 2020
Lansdowne Oil & Gas plc
Consolidated Statement of Financial Position
As at 31 December 2019
2019 2018
Note GBP'000 GBP'000
Assets
Non- current assets
Intangible assets 4 15,543 15,311
Current Assets
Trade and other receivables 20 47
Cash and cash equivalents 16 159
--------- ---------
36 206
--------- ---------
Total Assets 15,579 15,517
========= =========
Equity and Liabilities
Shareholders' Equity
Share capital 5 11,722 11,718
Share premium 5 26,864 26,833
Currency translation reserve 59 59
Share-based payment reserve 923 923
Accumulated deficit (26,005) (25,826)
--------- ---------
Total Equity 13,563 13,707
--------- ---------
Non-Current Liabilities
Provisions 316 316
Current Liabilities
Shareholder loan 1,305 1,046
Trade and other payables 395 448
--------- ---------
Total Liabilities 2,016 1,810
--------- ---------
Total Equity and Liabilities 15,579 15,517
========= =========
Lansdowne Oil & Gas plc
Consolidated Income Statement
For the year ended 31 December 2019
2019 2018
Note GBP'000 GBP'000
Administrative expenses (122) (193)
Operating loss (122) (193)
Finance costs (57) (100)
Loss for the year before tax (179) (293)
Income tax - -
-------- --------
Loss for the year (179) (293)
-------- --------
Loss per share (pence):
Basic loss per ordinary share 3 (0.03p) (0.05p)
-------- --------
Diluted loss per ordinary share 3 (0.03p) (0.05p)
-------- --------
The results for the year all arise on continuing operations. The
group has no other comprehensive income or expense in the current
or prior year.
Lansdowne Oil & Gas plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Share Currency
Share Share based translation Accumulated Total
capital premium payment reserves deficit equity
GBP'000 GBP'000 Reserve GBP'000 GBP'000 GBP'000
GBP'000
Balance at 1 January 2018 11,571 25,126 923 59 (25,533) 12,146
Loss for the financial year - - - - (293) (293)
Total comprehensive loss
for the year - - - - (293) (293)
Issue of new shares - gross
consideration 147 1,810 - - - 1,957
Cost of share issues - (103) - - - (103)
---------- ---------- --------- ------------- -------------- ----------
Balance at 31 December 2018 11,718 26,833 923 59 (25,826) 13,707
---------- ---------- --------- ------------- -------------- ----------
Balance at 1 January 2019 11,718 26,833 923 59 (25,826) 13,707
Loss for the financial year - - - - (179) (179)
---------- ---------- --------- ------------- -------------- ----------
Total comprehensive loss
for the year - - - - (179) (179)
Issue of new shares - gross
consideration (note 5) 4 31 - - - 35
Balance at 31 December 2019 11,722 26,864 923 59 (26,005) 13,563
========== ========== ========= ============= ============== ==========
Lansdowne Oil & Gas plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
2019 2018
Note GBP'000 GBP'000
Cash flows from operating activities
Loss for the year (179) (293)
Adjustment for:
Interest payable and similar charges 58 98
(Increase)/decrease in trade and other
receivables 28 (24)
Increase in trade and other payables (53) 80
Net cash used in operating activities (146) (139)
-------- --------
Cash flows from investing activities
Acquisition of intangible exploration assets 4 (232) (639)
Net cash used in investing activities (232) (639)
-------- --------
Cash flows from financing activities
Proceeds from the issue of share capital 35 1,025
Cost of raising shares - (103)
Proceeds from new loan 200 -
-------- --------
Net cash from financing activities 235 922
-------- --------
Net increase/(decrease) in cash and cash
equivalents (143) 144
Cash and cash equivalents at 1 January 159 15
-------- --------
Cash and cash equivalents at 31 December 16 159
======== ========
Lansdowne Oil & Gas plc
Notes to the Financial Information
For the year ended 31 December 2019
1. Basis of presentation
The consolidated financial statements are presented in Sterling,
the Company's functional currency, and all values are rounded to
the nearest thousand (GBP'000) except where otherwise
indicated.
The Directors have prepared the financial statements on the
going concern basis which assumes that Group and company will
continue in operational existence for at least twelve months from
the date of the approval of these financial statements.
The Directors have carried out a detailed assessment of the
Group's ability to continue as a going concern including assessing
its current and prospective exploration activity, its relationship
with the holder of its loan note and preparing cash flow
projections for the period to 30 June 2021.
In February 2020, the Company raised GBP500,000 before costs by
placing 83,333,333 new ordinary shares with new and existing
investors. On 25 June 2019, LC Capital Targeted Opportunities Fund,
L.P. and Brandon Hill Capital Limited both entered into shareholder
loan agreements in the aggregate of GBP300,000 with Lansdowne,
following which all facilities under the loan agreements were fully
drawn by Lansdowne. As part of the equity fundraising event in
February 2020, both LC Capital and Brandon Hill also agreed to
convert the full amount of the outstanding liabilities on their
respective shareholder loans into new ordinary shares in the
Company.
Notwithstanding the equity raised and conversion of shareholder
loans into new ordinary shares, the cash flow projections indicate
that the Group's and Company's ability to continue as a going
concern is dependent on securing additional debt or equity
funding.
The Directors have considered the various matters set out above
and determined that these events and conditions constitute a
material uncertainty that may cast significant doubt on the Group's
and Company's ability to continue as a going concern and that they
may therefore be unable to realise assets and discharge liabilities
in the normal course of business. The Directors remain confident
that the Group and company will be in a position to secure such
funding as may be required and will have sufficient cash resources
available to meet their liabilities for at least 12 months from the
date of approval of these financial statements. On that basis, the
directors consider it appropriate to prepare the financial
statements on a going concern basis. These financial statements do
not include any adjustment that would result from the going concern
basis of preparation being inappropriate.
2. Segmental reporting
The Group has one reportable operating and geographic segment,
which is the exploration for oil and gas reserves in Ireland. All
operations are classified as continuing and currently no revenue is
generated from the operating segment.
3. Loss per ordinary share
The loss for the year was wholly from continuing operations.
2019 2018
GBP'000 GBP'000
Loss for the year attributable to equity holders (179) (293)
Weighted average number of ordinary shares in
issue - basic and diluted 665,071,764 613,569,327
Loss per share arising from continuing operations
attributable to the equity holders of the Company
- basic and diluted (in pence) (0.03) (0.05)
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group has one class of
potential ordinary shares being share options. As a loss was
recorded for both 2019 and 2018, potentially issuable shares would
have been anti-dilutive. The number of potentially issuable shares
at 31 December 2019 is 146,685,452 (2018: 146,685,452).
4. Intangible assets
Exploration /
appraisal assets
Group GBP'000
Cost
At 1 January 2018 14,672
Additions 639
At 31 December 2018 15,311
------------------
At 1 January 2019 15,311
Additions 232
At 31 December 2019 15,543
------------------
Oil and gas project expenditures, all of which relate to
Barryroe, including geological, geophysical and seismic costs, are
accumulated as intangible assets prior to the determination of
commercial reserves. The directors have assessed the current
ongoing activities and future planned activities and are satisfied
that the carrying value is appropriate. The directors recognise
that the future realisation of the Group's exploration appraisal
assets are dependent on further successful exploration
activities.
During 2019, the Barryroe Partners (Providence and Lansdowne)
agreed a series of amendments to the Updated FOA, which provided
for extensions to the date by APEC of the initial loan advance US$
9 million.
A final deadline was set at 30th September 2019, but the funds
did not arrive from APEC. Following this non-performance by APEC of
their obligations under the FOA, action was taken by the Barryroe
Partners to commence the regulatory process required to transfer
APEC's 50% equity in Standard Operating Licence 1/11, which
contained the Barryroe field, back to Providence and Lansdowne,
with their equity interest reverting back to 80% and 20%
respectively. The necessary paperwork is advancing through the
Department of Communications, Climate Action and Environment.
Subsequently the Barryroe Partners also commenced the
remarketing of a Joint Venture interest in Operating Licence 1/11
leading to an announcement on 6th April that a Term Sheet had been
signed with SpotOn Energy Limited for a potential Barryroe Farmout,
thus demonstrating the potential value of the Barryroe project even
in a low oil price environment.
5. Share capital - Group and Company
2019 2018
Authorised
665,349,846 ordinary shares at GBP0.01 pence
each 665,349,846 661,849,846
Issued, called up and fully
paid:
Share Share
Number of Capital premium Total
shares GBP'000 GBP'000 GBP'000
------------ --------- --------- ----------
At 1 January 2018 510,164,394 11,571 25,126 36,697
Issued in year 151,685,452 147 1,810 1,957
Share issue costs - - (103) (103)
At 31 December 2018 661,849,846 11,718 26,833 38,551
------------ --------- --------- ----------
Issued in year 3,500,000 4 31 35
Share issue costs - - - -
------------ --------- --------- ----------
At 31 December 2019 665,349,846 11,722 26,864 38,586
------------ --------- --------- ----------
6. Accounts
Copies of the annual accounts for the year ended 31 December
2019 will be sent to shareholders shortly and will be available
from the Group's office at Paramount Court, Corrig Road, Sandyford
Business Park, Dublin 18 Ireland and the Group's website
www.lansdowneoilandgas.com .
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
FR KKPBNQBKDDAB
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