TIDM88E
RNS Number : 1691E
88 Energy Limited
26 February 2020
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 2019 has been lodged on the ASX along with the
Company's 2019 year-end Corporate Governance Statement and Appendix
4G.
Each of these documents is available on the Company's website at
www.88energy.com and the Annual Report, which was sent to
shareholders today, can be accessed at the following link -
http://www.rns-pdf.londonstockexchange.com/rns/1691E_1-2020-2-26.pdf
Set out below is the Chairman's Statement as included in the
Company's Annual Report.
Also set out below is a summary of the Company's audited
financial information for the year ended 31 December 2019 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
Dave Wall, Managing Director Tel: +61 8 9485 0990
Email: admin@88energy.com
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Hartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities
Neil McDonald/Derrick Lee Tel: +44 131 220 6939
CHAIRMAN'S STATEMENT
Dear Shareholders
It is with great optimism that I present my Chairman's Report
for the 2019 financial year.
As I write, Nordic Rig#3 is on location and preparing to spud
the Charlie-1 well. The well is testing a conventional oil
prospect, defined by 3D seismic, comprising a sequence of stacked
Brookian sandstones, on the Alaskan north slope with a gross mean
unrisked prospective resource of 1.6 billion barrels (480MMBO net
to 88E). It is arguably one of the most significant wells to be
drilled by an ASX listed entity in 2020 and offers substantial
upside to 88E shareholders in the event of success.
Charlie-1 is effectively a step out of a discovery well drilled
by BP some 3 decades ago. This nearology significantly lowers the
prospect risk and was one of the factors that enabled 88E to
procure a drilling partner to carry the well cost up to US$ 23
million, in what has been a challenging market for farmouts. That
partner, UK based Premier Oil Plc, has a track record of successful
exploration.
As we approach the drilling of the Charlie-1 well, it is worth
reminding ourselves why 88E chose to explore in Alaska. At the
outset, 88E cast the net far and wide in search of a project that
could make a meaningful difference; one which would capture
investor attention with transformational upside. The source rocks
of Alaska have been described as unbelievably rich and prolific,
having sourced the largest conventional oil pool in North America,
the 15 billion barrel Prudhoe Bay field. Earlier this year, the
USGS estimated there was almost 4 billion barrels of oil yet to be
discovered, with most of that potential in the Brookian play that
88E is targeting. Almost all the remaining fields in Alaska are
stratigraphic traps rather than anticlines and require a subtler
exploration approach utilising modern seismic data, which 88E has
spent the last three years acquiring and interpreting.
Our early initiative to target Alaska has been validated by
recent exploration successes and the arrival of new entrants on the
Alaskan exploration scene. Between 2014 and 2019 alone, some 4
billion barrels of new oil was discovered in the State. It is not
surprising the December 2019 lease sale in Alaska by the Bureau of
Land Management was hailed as the most successful in as many as 13
years. S&P Global Platts reported early in January 2020 that
Oil companies could spend up to $24 billion on new production in
the Alaska over the next ten years. Access to existing
infrastructure; a very supportive and stable State Government and
significant exploration upside have long been recognised by
88E.
During 2019, 88E continued to leverage its early mover advantage
and is now Operator/Manager on several active Exploration Projects
across 250,000 net acres. Unlike the lower 48 States, Alaskan
leases have an attractive 10-year term with no mandatory
relinquishment and a low base royalty. Our prospective land holding
is now of a size one would normally associate with the big end of
town and provides continued scope to attract partners.
The 2019 Alaskan program, which included the unsuccessful Winx-1
well and the Premier farm-out, has been competently executed by our
Managing Director, David Wall, with the assistance of a small
dedicated team including former senior geologist and Exploration
Manager, Elizabeth Pattillo; petroleum engineer Hassan Fatahi; our
Alaskan based Operations Manager, Erik Opstad and the full support
of my fellow Directors.
88E has prudently raised additional capital in advance of the
2020 program. We all know the process of evaluation is not without
risk; however, we look to the future with considerable optimism as
we unlock both the conventional and unconventional potential of our
Alaskan exploration acreage.
Before closing I would like to thank the Department of Natural
Resources, the Alaska Oil and Gas Conservation Commission; the
North Slope Borough and other regulatory agencies that have
facilitated our exploration effort in the State.
Our mission would not be possible without your support as
shareholders in what has been a challenging yet exciting
environment. Our dual listing on both ASX and AIM has garnered a
wide investor base and we have been ably supported by our brokers
and advisers Hartleys and Cenkos.
We look forward to a successful 2020 year.
Yours faithfully,
Michael Evans
Non-Executive Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE FINANCIAL YEARED 31 DECEMBER 2019
Note 2019 2018
$ $
Revenue from continuing operations
Other income 3(a) 35,931 1,362,745
Administrative expenses 3(b) (1,215,226) (1,524,870)
Occupancy expenses (34,596) (44,958)
Employee benefit expenses 3(c) (1,983,685) (1,879,007)
Share-based payment expense 18 (95,276) (21,750)
Depreciation and amortisation expense (58,110) (50,609)
Finance cost (3,095,466) (4,224,698)
Other expenses 3(d) (30,277,141) (149,010)
Foreign exchange (loss) / gain (56,888) 538,564
-----------
Loss before income tax (36,780,457) (5,993,593)
Income tax expense 4 - -
------------ -----------
Loss after income tax for the year (36,780,457) (5,993,593)
------------ -----------
Other comprehensive income / (loss) for
the year
Items that may be reclassified to profit
or loss
Exchange differences on translation of
foreign operations 854,461 6,961,354
------------ -----------
Other comprehensive income / (loss) for
the year, net of tax 854,461 6,961,354
------------ -----------
Total comprehensive income / (loss) for
the year attributable to members of 88
Energy Limited (35,925,996) 967,761
------------ -----------
Loss per share for the year attributable
to the members of 88 Energy Limited:
Basic and diluted loss per share 5 (0.005) (0.001)
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
2019
Note 2019 2018
$ $
ASSETS
Current Assets
Cash and cash equivalents 6 15,903,117 21,722,211
Trade and other receivables 7 1,120,550 2,101,501
------------- -------------
Total Current Assets 17,023,667 23,823,712
------------- -------------
Non-Current Assets
Plant and equipment 8 12,900 11,172
Exploration and evaluation expenditure 9 52,928,315 76,983,981
Other Assets 10 23,615,216 22,977,103
-------------
Total Non-Current Assets 76,556,431 99,972,256
-------------
TOTAL ASSETS 93,580,098 123,795,968
------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 11 6,026,811 6,001,949
Provisions 12 282,199 255,353
Total Current Liabilities 6,309,010 6,257,302
-------------
Non-Current Liabilities
Borrowings 13 22,672,578 23,424,471
Total Non-Current Liabilities 22,672,578 23,424,471
------------- -------------
TOTAL LIABILITIES 28,981,588 29,681,773
------------- -------------
NET ASSETS 64,598,510 94,114,195
------------- -------------
EQUITY
Contributed equity 14 185,619,885 179,304,850
Reserves 15 23,578,127 22,628,390
Accumulated losses (144,599,502) (107,819,045)
-------------
TOTAL EQUITY 64,598,510 94,114,195
------------- -------------
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 2019
Accumulated
Issued Capital Reserves Losses Total
$ $ $ $
--------------- ----------- -------------- -------------
At 1 January 2019 179,304,850 22,628,390 (107,819,045) 94,114,195
--------------- ----------- -------------- -------------
Loss for the year - - (36,780,457) (36,780,457)
Other comprehensive income - 854,461 - 854,461
--------------- ----------- -------------- -------------
Total comprehensive income/(loss)
for the year after tax - 854,461 (36,780,457) (35,925,996)
Transactions with owners
in their capacity as owners:
Issue of share capital 6,750,000 - - 6,750,000
Share-based payments - 95,276 - 95,276
Share issue costs (434,965) - - (434,965)
--------------- ----------- -------------- -------------
Balance at 31 December
2019 185,619,885 23,578,127 (144,599,502) 64,598,510
--------------- ----------- -------------- -------------
At 1 January 2018 141,711,466 15,645,286 (101,825,452) 55,531,300
--------------- ----------- -------------- -------------
Loss for the year - - (5,993,593) (5,993,593)
Other comprehensive loss - 6,961,354 - 6,961,354
--------------- ----------- -------------- -------------
Total comprehensive income/(loss)
for the year after tax - 6,961,354 (5,993,593) 967,761
Transactions with owners
in their capacity as owners:
Issue of share capital 39,678,216 - - 39,678,216
Share-based payments - 21,750 - 21,750
Share issue costs (2,084,832) - - (2,084,832)
--------------- ----------- -------------- -------------
Balance at 31 December
2018 179,304,850 22,628,390 (107,819,045) 94,114,195
--------------- ----------- -------------- -------------
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 2019
Note 2019 2018
$ $
Cash flows from operating activities
Payment to suppliers and employees (3,465,770) (4,333,868)
Interest received 22,930 16,896
Interest & finance costs (2,395,536) (2,267,612)
Net cash flows used in operating activities 6(b) (5,838,376) (6,584,584)
------------ ------------
Cash flows from investing activities
Payments for exploration and evaluation
activities (29,725,227) (35,110,843)
Contribution from JV Partners in relation
to Exploration 23,860,234 12,156,384
Net cash flows used in investing activities (5,864,993) (22,954,459)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 6,530,000 39,677,293
Share issue costs (461,498) (2,124,000)
Payment of borrowing costs - (1,126,456)
Net cash flows from financing activities 6,068,501 36,426,837
------------ ------------
Net increase/(decrease) in cash and cash
equivalents (5,634,867) 6,887,794
Cash and cash equivalents at the beginning
of the year 21,722,211 14,014,422
Effect of exchange rate fluctuations on
cash held (184,227) 819,995
------------ ------------
Cash and cash equivalents at end of year 6(a) 15,903,117 21,722,211
------------ ------------
The Consolidated Statement of Cash Flows should be read in
conjunction with the notes to the financial statements.
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END
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February 26, 2020 02:11 ET (07:11 GMT)
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