TIDM88E
RNS Number : 5742R
88 Energy Limited
09 March 2021
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 2020 (the "Annual Report") has been lodged on the
ASX along with the Company's 2020 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 2020 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 Tel: +61 8 9485 0990
Dave Wall, Managing Director Email: admin@88energy.com
Finlay Thomson , Investor Relations Tel: +44 7976 248471
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
2020 will be remembered as a year in which a global pandemic
wreaked havoc on the world economy driving down demand for crude
oil. A price war between OPEC and Russia, US political upheaval and
the charge toward greener energy added to this volatile mix. It is
pleasing therefore to report that in this very high-risk
environment confronted by adverse conditions 88E retained its
focus, growing its Alaskan portfolio and exploration program.
In April 2020, the company announced the results of the
Charlie-1 well. The well was drilled on time and within budget and
penetrated sandstones in seven stacked targets and shale in one
target. Analysis of logs and sidewall cores subsequently confirmed
condensate discoveries in the Torok Formation and oil in the Seabee
Formations. Importantly the cost for Charlie-1 was borne by an
industry partner and the well results have provided an excellent
base for follow up exploration / appraisal via industry
farmout.
Success at Charlie-1 was followed by an off market bid for XCD
Energy, which delivered the Project Peregrine to 88E. adding to our
Alaskan exploration portfolio. The project was then farmed out to a
US based group, maintaining leverage for our shareholders whilst
lowering the cost risk. The takeover and subsequent farmout were
both executed during an adverse environment and speaks volumes for
88E's management.
As I write, Rig-111 is on location preparing to drill the
Merlin-1 well which is targeting 645 million barrels of gross mean
prospective resource. Flow testing of Merlin-1 is planned if
wireline logging confirms a discovery. A second well, Harrier-1, is
planned to commence immediately following completion of operations
at Merlin-1, subject to results from Merlin-1, scheduling and
permit approvals. Harrier-1 is targeting a gross mean prospective
resource of 417 million barrels.
Each of the Merlin and Harrier prospects is located on trend to
an existing discovery in the same play type. This has de-risked the
prospects considerably and resulted in a relatively high
independently estimated geologic chance of success. This continues
our record of participating in significant wells offering
substantial upside to 88E shareholders in the event of success.
As we approach the results of the Merlin-1 well, it is again
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 generated and expulsed about 1.5 trillion barrels of oil.
Yet only a small fraction of that 1.5 trillion barrels has been
found, leaving vast potential remaining to be discovered. Almost
all the remaining fields in Alaska are stratigraphic traps rather
than anticlines and require a subtler exploration approach, which
88E is pursuing as it targets reservoirs adjacent to those same
source rocks.
Our early initiative to target Alaska has been validated by
recent exploration successes and the arrival of new entrants on the
Alaskan exploration scene. As recently as February 2021 exploration
success has been reported by Pantheon Resources close to the border
of our central acreage. During the year, S&P Global Platts
reported that Oil companies could spend up to $24 billion on new
production in 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.
88E is now Operator on several active Exploration / Appraisal
Projects across 444,517 net acres, including the recently acquired
Tract 29 and Umiat Unit Leases. Unlike the lower 48 States, Alaskan
leases have an attractive 7-10-year term with no mandatory work
commitments and a low 16.5% 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 Alaskan program has been competently executed by our
Managing Director, David Wall, with the assistance of a small,
dedicated team. David has announced that he will be moving on once
drilling and evaluation of Project Peregrine is concluded this
season. David leaves on good terms and we wish him well. His role
will be filled by Ashley Gilbert who has worked closely with David
over several years. Our Alaskan based Operations Manager, Erik
Opstad will continue in this role and enjoys our full support.
88E has prudently raised additional capital in advance of the
2021 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.
Amidst the gloom cast by Covid-19 there is the potential for a
future oil boom for several reasons. There has been a big decline
in exploration; major oil companies are hedging bets by betting on
renewable energy; widespread Covid-19 inoculations, unprecedented
fiscal stimulation and low interest rates will drive economic
growth and hence demand for oil. Some analysts predict oil will
trade in the plus $80 per barrel range later this year and these
factors will likely create tailwinds for our Alaskan
initiatives.
Before closing I would like to thank 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 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 EurozHartleys and Cenkos.
We look forward to a successful 2021 year.
Yours faithfully,
Michael Evans
Non-Executive Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE FINANCIAL YEARED 31 DECEMBER 2020
Note 2020 2019
$ $
Revenue from continuing operations
Other income 3(a) 246,778 35,931
Administrative expenses 3(b) (1,399,215) (1,215,226)
Occupancy expenses (60,664) (34,596)
Employee benefit expenses 3(c) (1,841,758) (1,983,685)
Share-based payment expense 18 (122,870) (95,276)
Depreciation and amortisation expense (93,387) (58,110)
Finance cost (2,595,406) (3,095,466)
Other expenses 3(d) (16,218,575) (30,277,141)
Foreign exchange (loss) / gain 51,463 (56,888)
------------
Loss before income tax (22,033,633) (36,780,457)
Income tax expense 4 - -
------------ ------------
Loss after income tax for the year (22,033,633) (36,780,457)
------------ ------------
Other comprehensive income / (loss) for
the year
Items that may be reclassified to profit
or loss
Exchange differences on translation of
foreign operations (7,120,022) 854,461
------------ ------------
Other comprehensive income / (loss) for
the year, net of tax (7,120,022) 854,461
------------ ------------
Total comprehensive income / (loss) for
the year attributable to members of 88
Energy Limited (29,153,655) (35,925,996)
------------ ------------
Loss per share for the year attributable
to the members of 88 Energy Limited:
Basic and diluted loss per share 5 (0.003) (0.005)
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 2020
Note 2020 2019
$ $
ASSETS
Current Assets
Cash and cash equivalents 6 14,845,347 15,903,117
Trade and other receivables 7 5,079,630 1,120,550
------------- -------------
Total Current Assets 19,924,977 17,023,667
------------- -------------
Non-Current Assets
Plant and equipment 8 4,641 12,900
Exploration and evaluation expenditure 9 48,213,290 52,928,315
Other Assets 10 17,216,644 23,615,216
-------------
Total Non-Current Assets 65,434,576 76,556,431
-------------
TOTAL ASSETS 85,359,552 93,580,098
------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 11 5,326,634 6,026,811
Provisions 12 339,199 282,199
Total Current Liabilities 5,665,833 6,309,010
-------------
Non-Current Liabilities
Borrowings 13 20,782,366 22,672,578
Total Non-Current Liabilities 20,782,366 22,672,578
------------- -------------
TOTAL LIABILITIES 26,448,199 28,981,588
------------- -------------
NET ASSETS 58,911,353 64,598,510
------------- -------------
EQUITY
14 &
Contributed equity (a) 208,963,513 185,619,885
Reserves 15 16,580,975 23,578,127
Accumulated losses (166,633,135) (144,599,502)
-------------
TOTAL EQUITY 58,911,353 64,598,510
------------- -------------
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 2020
Issued Accumulated
Capital Reserves Losses Total
$ $ $ $
------------ ------------ -------------- -------------
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 income (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
------------ ------------ -------------- -------------
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 loss - 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
------------ ------------ -------------- -------------
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 2020
Note 2020 2019
$ $
Cash flows from operating activities
Payment to suppliers and employees (3,141,403) (3,465,770)
Interest received 2,634 22,930
Interest & finance costs (2,237,210) (2,395,536)
Other Income 259,072
Net cash flows used in operating activities 6(b) (5,116,907) (5,838,376)
------------ ------------
Cash flows from investing activities
Payments for exploration and evaluation
activities (41,521,267) (29,725,227)
Contribution from JV Partners in relation
to Exploration 32,184,152 23,860,234
Net cash flows used in investing activities (9,337,115) (5,864,993)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 14 14,870,000 6,530,000
Share issue costs (840,000) (461,498)
Payment of borrowing costs (398,880) -
Net cash flows from financing activities 13,631,120 6,068,501
------------ ------------
Net (decrease) in cash and cash equivalents (822,902) (5,634,867)
Cash and cash equivalents at the beginning
of the year 15,903,117 21,722,211
Effect of exchange rate fluctuations on
cash held (234,868) (184,227)
------------ ------------
Cash and cash equivalents at end of year 6(a) 14,845,347 15,903,117
------------ ------------
The Consolidated Statement of Cash Flows should be read in
conjunction with the notes to the financial statements.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR ZZGGFZLDGMZG
(END) Dow Jones Newswires
March 09, 2021 02:00 ET (07:00 GMT)
88 Energy (LSE:88E)
Historical Stock Chart
From Apr 2024 to May 2024
88 Energy (LSE:88E)
Historical Stock Chart
From May 2023 to May 2024