TIDMBOIL
RNS Number : 3128N
Baron Oil PLC
31 May 2022
31 May 2022
Baron Oil Plc
("Baron Oil", "Baron", the "Company", or the "Group")
Final Results for the Year Ended 31 December 2021
Baron Oil (AIM: BOIL), the AIM-quoted oil and gas exploration
company, is pleased to announce its audited financial results for
the year ended 31 December 202 1 .
Operational Highlights
-- Strategy implemented to focus on owning significant equity
interests in high impact oil and gas exploration and appraisal
activities
-- Significant increases in the stakes in both the Timor-Leste
Chuditch PSC (from 25% to 75%) and the UK P2478 licence (from
15% to 32%) during the year
-- Considerable progress made on Chuditch during the year including
the results of a review of prospective resources by THREE60
Energy and interim 3D seismic PSDM products which were received
from the processing contractor TGS-NOPEC, showing encouraging
improvements in subsurface imaging. Iterative processing and
interpretation feedback has subsequently continued
-- On UK P2478, Phase A technical work commitments with Baron's
direct technical involvement commenced following the Farm-Up
agreement signed with the joint venture partners
-- P ost period end steps taken to relinquish Block XXI in Peru
Financial Highlights
-- Loss after taxation attributable to shareholders was GBP1,127,000
(2020: GBP920,000 loss)
-- Exploration and evaluation expenditure of GBP218,000 (2020:
GBP145,000)
-- Consolidation for the first time of TLS gives rise to the
creation of an intangible oil and gas asset amounting to
GBP1,362,000. In addition, evaluation and development expenditure
on the asset by the Group during the period amounts to a
further GBP1,307,000, with the total carrying value of this
asset being GBP2,669,000 at 31 December 2021
-- Administration expenditure for the year was GBP1,321,000
(2020: GBP710,000), largely as a result of the consolidation
of TLS for nine months and share-based charges
-- Free cash balance at 31 December 2021 was GBP1,650,000 (31
December 2020: GBP1,190,000)
Commenting on the results, John Wakefield, Non-executive
Chairman, said:
" 2021 was a year of considerable progress for Baron,
implementing our strategy to own significant equity interests in
high impact oil and gas exploration and appraisal activities. We
increased our stakes in both the Timor-Leste Chuditch PSC and the
UK P2478 licence during the year and, with the oil & gas
tailwinds behind us, I believe the Company is now in its best shape
for many years."
"We have worked hard to pivot the Company towards assets where
we have significant interests in meaningful and active
opportunities. Our task over the next year or so is to progress our
two major projects through the key evaluation points with a view to
unlocking value for shareholders. On the back of our recently
oversubscribed GBP1.65 million (gross) fund raise we have funding
to get these activities to their next decision points and I look
forward to reporting on our further progress in due course."
Posting of Annual Report and Notice of AGM
The Company's Annual Report and Financial Statements , for the
year ended 31 December 202 1, will be available for download from
the Company's website ( https://www.baronoilplc.com/ ) later today
and will be despatched by post shortly to those shareholders that
have requested a hard copy.
The Company will hold its Annual General Meeting at 11 a.m. BST
on 28 June 2022 at 38-43 Lincoln's Inn Fields, London WC2A 3PE and
the Notice of Annual General Meeting to that effect will be sent to
shareholders shortly and will be available on the Company's
website.
For further information, please contact:
Baron Oil Plc +44 (0) 20 7117 2849
Andy Yeo, Chief Executive
Allenby Capital Limited +44 (0) 20 3328 5656
Nominated Adviser and Broker
Alex Brearley, Nick Harriss, Nick Athanas (Corporate
Finance)
Kelly Gardiner (Sales and Corporate Broking)
IFC Advisory Limited +44 (0) 20 3934 6630
Financial PR and IR
Tim Metcalfe, Florence Chandler
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 40 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.
CHAIRMAN'S STATEMENT & OPERATIONS REPORT
Financial and Financial Results
The net result for the year was a loss before taxation of
GBP1,127,000, which compares to a loss of GBP920,000 for the
preceding financial year; the loss after taxation attributable to
Baron Oil shareholders was GBP1,127,000, compared to a loss of
GBP920,000 in the preceding year.
Turnover for the year was GBPnil (2020: GBPnil), there being no
sales activity during the period.
Exploration and evaluation expenditure written off included in
the Income Statement amounts to GBP218,000. Impairment provisions
in respect of Peru Block XXI were increased by GBP17,000, this
being attributable to exchange rate fluctuations on the translation
of US Dollar based Peruvian assets, together with a further
GBP7,000 impairment of a related tax receivable. The directors
judged that no other exploration assets required impairment.
The rise in Administration expenses for the year to GBP1,321,000
(2020: GBP710,000) requires explanation. The largest impact of
GBP285,000 is due to the consolidation of SundaGas (Timor-Leste
Sahul) Pte. Ltd. ("TLS") for a nine month period having been
previously accounted for as an associated undertaking. It also
includes a rise of GBP205,000 for non-cash share-based payments
arising on the grant of options and finally we incurred additional
non-recurring UK costs of GBP75,000 relating to consultancy
arrangements and thereafter completion of notice of a former
director. Overall, there have been no material changes to our
budgets. It is worth noting that we anticipate a further rise in
TLS expenses in 2022, again budgeted, as we move to a full 12 month
reporting period at the Group level and the Dili office in
Timor-Leste is now fully operational.
During 2021, the Pound Sterling/US Dollar exchange rate was
relatively stable, with an overall exchange gain of GBP22,000 (loss
of GBP157,000 in 2020) on the Group's holding of US Dollar
assets.
In April 2021, the Company increased its stake in TLS to a
controlling interest of 85% at a cash cost of US$1,243,000; and
acquired the remaining 15% on 17 June 2021 in exchange for the
issue of 1,157,202,885 ordinary shares in the Company. Baron was
not required to make any further contribution to the bank guarantee
deposit. The full value of the guarantee deposit of US$1,000,000 is
now consolidated, with US$667,000 shown as a payable to SundaGas
Pte. Ltd.
There is a gain of GBP302,000 arising on the deemed disposal of
the interest in the associated undertaking under IFRS3 that arises
on the acquisition of the remaining equity in TLS.
TLS is regarded as a single asset company under IFRS3 and its
consolidation for the first time gives rise to the creation of an
intangible oil and gas asset amounting to GBP1,362,000. In
addition, evaluation and development expenditure on the asset by
the Group during the period amounts to a further GBP1,307,000, with
the total carrying value of this asset being GBP2,669,000 at 31
December 2021.
At the end of the financial year, free cash reserves of the
Group had increased to GBP1,650,000 from a level at the preceding
year end of GBP1,190,000. The proceeds of placings and subscription
of new shares in the year amounting to GBP3,000,000 gross
(GBP2,768,000 net of costs) bolstered the Company's cash reserves.
The Group's investment in intangible assets in the UK and
Timor-Leste amounted to GBP2,465,000 in the period, including the
cost of acquiring TLS, plus a further non-capitalised exploration
and evaluation activity of GBP218,000, and GBP1,072,000 of
operating cash outflow. In April 2022, the Company undertook a
further capital raise with a new ordinary share Placing and
Subscription of GBP1,650,000 gross (GBP1,505,000 net of costs).
The Group continues to take a conservative view of its asset
impairment policy, giving it a Statement of Financial Position that
consists of significant 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
Baron reset its strategy in 2021 to focus on owning significant
equity interests in high impact oil and gas exploration and
appraisal activities. In pursuit of these goals, we have delivered
significant increases in our stakes in both the Timor-Leste
Chuditch PSC (from 25% to 75%) and the UK P2478 licence (from 15%
to 32%) during the year, whilst subsequent to the year-end taking
steps to relinquish Block XXI in Peru.
We currently have two major projects progressing towards key
evaluation points, both of which are material in terms of potential
value, equity interest and prospective resources, with relatively
short timelines to potential drill decisions. It is timely that we
are bringing these projects forward when issues of energy security
and structural imbalances in Liquified Natural Gas ("LNG"), amongst
other factors, has led to a sustained period of high prices for oil
and gas.
Southeast Asia: Timor-Leste TL-SO-19-16 PSC ("Chuditch PSC" or
"PSC");
(Baron 75% interest)
Background
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 potential Greater Sunrise
development and covers approximately 3,571 km(2) in water depths of
50-100 metres. The Chuditch-1 discovery well, drilled by Shell in
1998 in 64 metres water depth, encountered a 25 metre gas column in
Jurassic Plover Formation sandstone reservoirs on the flank of what
is interpreted to be a large faulted structure, at a depth of
around 3,000 metres. The Chuditch trend is largely covered by part
of a regional 3D seismic survey which was acquired by a previous
operator in 2012.
Baron holds a 75% working interest and operates the PSC through
its wholly owned subsidiary company SundaGas Banda Unipessoal Lda.
("Banda"), with the remaining 25% held by TIMOR GAP Chuditch
Unipessoal Lda., a subsidiary of the state-owned national oil
company, whose share of PSC expenditure is carried until first
production.
The work programme obligations in the first two years of the
initial three year term of the PSC (to be completed by 18 December
2022) include the reprocessing of legacy seismic data. 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. Banda has in place a US$1 million
Bank Guarantee against the initial work commitment, of which Baron
posted its initial share of US$0.333 million in April 2021, with
US$0.667 million remaining in place from SundaGas Pte. Ltd.
("SGPL"), the original parent company prior to the increase in
Baron's interest.
The initial work programme is designed to address issues with
sea-bed topography and shallow geological features that
significantly impact the existing seismic image at the reservoir
level local to the Chuditch area and create artifacts that seismic
processing technologies have hitherto been unable to remove. A
pre-stack depth migration ("PSDM") processing routine has been
tailored to resolve these issues, utilising new algorithms that
address areas of complex seabed and shallow geology. Although
computationally intensive and time-consuming, this work is expected
to result in a considerably enhanced subsurface image, critical for
the definition of the size and shape of the accumulation, which
impacts the gas volumes in place and the location of potential
future wells.
2021 and subsequent activities
Significant progress was made on Chuditch during the year, which
included the progressive increase in Baron's interest in SundaGas
(Timor-Leste Sahul) Pte. Ltd. ("TLS") from 33.33% to 100%. TLS is
the parent company of Banda, the Timor-Leste registered subsidiary,
which is the operator of and 75% interest holder in the offshore
Timor-Leste TL-SO-19-16 PSC.
In February, Autoridade Nacional do Petróleo e Minerais
("ANPM"), the Timor-Leste state oil and gas regulatory authority,
granted Banda an extension to Contract Year One of the PSC to
enable the timely completion of the committed work programme, in
particular the seismic reprocessing project. This means that the
PSC is currently in Contract Year Two, with Year Three commencing
on 19 December 2022.
In April, Baron announced the completion of an earn in,
supported by a GBP3 million (gross) fund raise, increasing the
Company's interest in TLS from 33.33% to 85%. Baron agreed to fund
the remainder of the Chuditch PSC work programme to November 2022,
estimated to be US$3.5 million.
In June, Baron announced an alignment of interests in relation
to the Chuditch PSC, by way of a share exchange, whereby the
Company agreed to acquire the remaining 15% of TLS from SGPL in
exchange for the issue of 9.99% of Baron's enlarged share capital.
Through this share exchange, Baron secured full control of the
operating company of the PSC and alignment with the Banda technical
and commercial personnel who continue to drive the Chuditch project
forward.
In July, the Company announced the results of a review of
prospective resources by THREE60 Energy Asia Sdn. Bhd. ("THREE60
Energy"), an independent consultancy specialising in petroleum
reservoir assessment and asset evaluation, for the Chuditch
PSC:
-- Independent review of the Chuditch PSC, validated to SPE
PRMS 2018 industry standards, indicates aggregate gross
Mean Prospective Resources of 3,368 Bscf of gas and 30
MMbbl of condensate, equivalent to a total of 591 MMBOEs;
-- Subsurface risks for prospects and lead are estimated
to be low, since they share analogous geological characteristics
to the Chuditch-1 and other gas discoveries in adjacent
Timor-Leste and Australian waters;
-- The High Estimate of aggregate gross Prospective Resources
equivalent to 1,156 MMBOE may reflect the potential for
a single, large accumulation.
In September, a farmout initiative was launched running in
parallel with the seismic reprocessing and other technical and
commercial studies. This initiative is ongoing and is expected to
accelerate as technical studies near completion and uncertainties
around the Chuditch project are reduced.
In December, interim 3D seismic PSDM products were received from
the processing contractor TGS-NOPEC, showing encouraging
improvements in subsurface imaging. Iterative processing and
interpretation feedback has subsequently continued, including the
delivery of further interim steps. In-house interpretation of the
reprocessed 3D seismic data is expected to commence in June 2022
and we look forward to updating shareholders on the results of the
final 3D PSDM data thereafter.
A decision on whether to enter the drilling phase, with the
potential for a high impact drilling programme in 2023, is
scheduled to be taken in Q4 2022 following receipt and
Interpretation of the final seismic reprocessing data volumes.
In parallel with the 3D seismic reprocessing project, additional
geological and engineering studies have been completed or are
ongoing, including:
-- Extensive 2D regional seismic interpretation and mapping
and petroleum systems modelling exercises to provide a
regional context of the Chuditch trend;
-- A revised petrophysical evaluation of the Chuditch-1 discovery,
confirming the quality of Chuditch reservoirs as potentially
gas productive;
-- A well engineering study to provide preliminary designs
and indicative costs for a Chuditch appraisal well and
a step-out exploration well; and
-- A facilities and gas export engineering study, evaluating
the layout and costs of infield facilities required for
a future Chuditch LNG development, the various pipeline
and standalone options for gas export, and the treatment
and storage of carbon dioxide.
This work culminated in an update announcement and live investor
presentation in late January 2022 which was attended by more than
100 participants. The presentation, which is available on the Baron
website, covered a wide range of topics including:
-- An updated technical overview;
-- A description of the overall commercial context;
-- Options for potential future gas export strategies via
pipeline to LNG facilities, or standalone solutions such
as a Floating Liquefied Natural Gas (FLNG) facility;
-- Preliminary concepts for the handling of carbon dioxide
and CCS (carbon capture and storage); and
-- A preliminary design for a Chuditch appraisal well, with
an indicative dry hole cost estimate in the range of US$15-$20
million.
At the regulatory level, Banda continues to enjoy a strong and
constructive relationship with ANPM. An operational office was
opened in Dili in early 2022 and the recruitment of a
fit-for-purpose local management and technical team was completed
during Q2 2022.
Post the reporting period ANPM announced the results of the
Second Timor-Leste Licensing Round. Baron, having studied the
available acreage in the round, did not submit a bid, believing
that Chuditch represents the current highest value opportunity in
offshore Timor-Leste. The Company is encouraged by the award to ENI
Australia B.V, a subsidiary of the Italian major oil company, of
Block P which neighbours the Chuditch PSC area. Santos NA
Timor-Leste Pty Ltd was awarded Block R.
United Kingdom Offshore Licence P2478 "Dunrobin";
(Baron 32%)
Background
Innovate Licence P2478, awarded in September 2019, is currently
held by Corallian Energy Limited ("Corallian", Licence
Administrator, interest 36%), Baron (32%), and Upland Resources (UK
Onshore) Limited (32%).
The work commitments on the Licence are to undertake
reprocessing of legacy 2D and 3D seismic data and perform other
studies in order to better understand the subsurface risks, reduce
the range of volumetric uncertainty, as well as providing drilling
location candidates 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 candidate direct
hydrocarbon indicators. Regional and local petroleum systems are
considered by the Joint Venture Partners to be proven. Well costs
are expected to be modest at c.GBP7 million (gross) as the prospect
lies in shallow water of less than 100 metres and the total
drilling depth of the well is prognosed to be approximately 660
metres. Dunrobin is evaluated by Baron to contain estimated gross
mean prospective resources of the order of 100 MMbbl (a non-SPE
PRMS Standard estimate).
2021 and subsequent activities
In Q1 2021, the Joint Venture Partners received the results of
technical studies from a large European E&P company under a
work sharing agreement signed in 2020, which enhanced the partners'
understanding of the petroleum geology and corroborated their view
of Dunrobin as a potentially attractive and substantial target.
In August, in order to build on the work already undertaken and
to accelerate progress, a Farm-Up Agreement was signed with
existing partners Corallian and Upland whereby Baron increased its
interest in the Licence from 15% to 32% in exchange for agreeing to
pay 100% of the costs of the remaining Phase A work commitments up
to a cap of GBP160,000 (the "Agreement"). Other costs are borne by
all partners proportionate to their revised interests. Corallian
remains the Licence Administrator with Baron assuming the role of
technical overseer of the remaining Phase A work commitments. No
consideration was payable to Corallian or Upland under the
Agreement. Formal consent for the transfer of interests was
received from the UK's Oil and Gas Authority, now renamed the North
Sea Transition Authority ("NSTA"), in October 2021.
Work on the outstanding Phase A technical work commitments with
Baron's direct technical involvement commenced during Q4 2021. The
key components, that of 3D and 2D seismic reprocessing plus
geochemical studies, are expected to be delivered early in Q3 2022
with the interpretation anticipated to be available in Q4 2022. The
Board believes this will provide the partners sufficient time to
mature the Dunrobin prospect ahead of the July 2023 "drill or drop"
decision and, potentially, to engage with prospective drilling and
funding partners.
Baron is encouraged by the UK government's recent updated policy
paper (British Energy Security Strategy, 7 April 2022) which has
the potential to revive the business and regulatory hydrocarbon
exploration environment in the UK North Sea and so have a positive
impact on the chances of the Dunrobin prospect being drilled.
Block XXI, Peru - Request for Relinquishment of Licence;
(Baron 100%)
In April 2022, Baron announced that, through its fully owned
subsidiary, Gold Oil Peru SAC, it had requested the relinquishment
of its legacy Licence Block XXI ("Licence") in Peru. The Licence
has been largely under Force Majeure ("FM") for a variety of
reasons since 2017 and Baron has been frustrated in its attempts to
access the area in order to carry out operations. With no certainty
around pathways or timelines to drilling the Company took the
decision to relinquish the Licence and will ultimately withdraw
from Peru.
Under the terms of the Licence Agreement, if the Licence is
currently under FM and has remained so for a continuous period of
more than 12 months, as is the case, the Licence holder may ask
Perupetro SA (the Peruvian national Oil & Gas Agency and
Licensing Authority) to release the licensee's Bank Guarantee,
which in our case is US$160,000. Thereafter, there will be a
requirement to establish and file an Abandonment Plan for approval
by the relevant authorities.
New Ventures
The Company continues to screen early stage opportunities for
acquiring significant equity interests in high impact exploration
and appraisal activity at low entry costs. In this context, the
opportunity to participate in new licence rounds or to make out of
round applications fits well with our overall strategy.
Conclusions
Baron is in its best shape for many years. We have worked hard
to pivot the Company towards assets where we have significant
interests in meaningful and active opportunities. Our task over the
next year or so is to progress our two major projects through the
key evaluation points with a view to unlocking value for
shareholders. On the back of our recent oversubscribed GBP1.65
million (gross) fund raise in April 2022, we have funding to get
these activities to their next decision points.
Currently, the oil and gas industry tailwinds are highly
favourable and seem likely to be sustained across the medium term,
whether that be driven by energy security, the unique position of
gas as the transition fuel or structural issues over the supply of
LNG, especially in Asia. It is worth noting that Shell in its
annual LNG Outlook 2022 now predicts that the growing supply-demand
gap for LNG will appear by 2025, some five years earlier than
originally expected, despite production increases set for an 80%
rise by 2040. Chuditch, with the potential for first gas in 2026
and located at the gateway to Asian energy markets, looks to be in
an enviable position.
We are fortunate to be bringing Chuditch forward at a time when,
after two years of COVID induced inactivity, we are beginning to
detect recovery in the farmout market. Our plans for Chuditch have
advanced throughout 2021 and we are about to take the major step of
receiving the final reprocessed 3D seismic data from TGS-NOPEC to
allow a comprehensive interpretation of the subsurface. We believe
we have a high quality value proposition to offer at Chuditch,
where we have a 75% interest in a gas discovery and associated
prospectivity considered to be relatively low cost and low risk,
with aggregate gross prospective resources currently in the range
of up to 1,156 MMBOE (High Estimate).
In addition, we have accelerated the maturation and increased
our equity in the Dunrobin prospect in UK Licence P2478 as the
follow up to Chuditch. Here, the outlook has been transformed since
the beginning of 2022, led by rising oil prices and the recent
publication of the UK government's updated security strategy which
has the potential to revive activity in the UK North Sea. The
technical work underway is aimed at providing a potential drilling
location candidate ahead of making a "drill or drop" decision by
July 2023. Dunrobin is currently evaluated by Baron to contain
estimated gross mean prospective resources of the order of 100
MMbbl (a non-SPE PRMS Standard estimate).
Baron is highly encouraged by the progress being made with our
Chuditch and Dunrobin projects against the backdrop of robust price
and demand scenarios for LNG-scale gas in the Asia-Pacific region
and oil in the North Sea. Combined, we see considerable potential
for shareholder value in these key assets and the Company is
focussed on delivering that value through 2022 and beyond.
John Wakefield
Non-executive Chairman
30 May 2022
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 31 DECEMBER 2021
Notes 2021 2020
GBP'000 GBP'000
Revenue - -
Cost of sales - -
Gross profit - -
Exploration and evaluation expenditure (218) (145)
Intangible asset impairment 10 (17) 59
Property, plant and equipment depreciation 9 (11) (2)
Receivables impairment 3 (7) 74
Administration expenses (1,321) (710)
Gain/(loss) on exchange 3 22 (157)
Other operating income 3 89 -
Operating loss 3 (1,463) (881)
Income from associated undertaking 12 29 (44)
Gain on disposal of associated undertaking 12 302 -
Loss before interest
and taxation (1,132) (925)
Finance cost 5 (2) -
Finance income 5 7 5
Loss on ordinary activities
before taxation (1,127) (920)
Income tax expense 6 - -
Loss on ordinary activities
after taxation (1,127) (920)
Dividends - -
Loss for the year (1,127) (920)
---------------------------------------------- ------ --------- -----------------------------------
Loss on ordinary activities
after taxation is attributable to:
Equity shareholders (1,127) (920)
Non-controlling interests - -
(1,127) (920)
-------------------------------------------- ------ --------- -----------------------------------
Earnings per ordinary share - continuing 8
Basic (0.012p) (0.023p)
Diluted (0.012p) (0.023p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
Notes 2021 2020
GBP'000 GBP'000
Loss on ordinary activities after taxation
attributable to the parent (1,127) (920)
Other comprehensive income:
Release option reserve 33 41
Exchange difference on translating
foreign operations 33 (115)
Total comprehensive loss for the
year (1,061) (994)
--------------------------------------------- ------- -------- --------
Total comprehensive loss attributable to owners
of the parent (1,061) (994)
------------------------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2021
Notes 2021 2020
GBP'000 GBP'000
Assets
Non current assets
Property plant and equipment
- oil and gas assets 9 - -
- others 9 34 43
Intangible fixed assets 10 2,736 18
Goodwill 11 - -
Associated undertaking 12 - 151
2,770 212
------------------------------------- ---------- --------- ---------
Current assets
Trade and other receivables 14 54 376
Cash and cash equivalents 15 2,509 1,311
2,563 1,687
------------------------------------- ---------- --------- ---------
Total assets 5,333 1,899
--------------------------------------- ---------- --------- ---------
Equity and liabilities
Capital and reserves attributable
to owners of the parent
Share capital 18 2,896 1,107
Share premium account 19 34,061 32,156
Share option reserve 19 388 135
Foreign exchange translation
reserve 19 1,561 1,528
Retained earnings 19 (34,224) (33,130)
Total equity 4,682 1,796
--------------------------------------- ---------- --------- ---------
Current liabilities
Trade and other payables 16 620 58
Taxes payable 16 12 16
632 74
------------------------------------- ---------- --------- ---------
Non-current liabilities
Lease finance 17 19 29
--------------------------------------- ---------- --------- ---------
Total equity and liabilities 5,333 1,899
--------------------------------------- ---------- --------- ---------
The financial statements were approved and authorised for issue
by the Board of Directors on 30 May 2022 and were signed on
its behalf by:
John Wakefield Andrew Yeo
Director Director
COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2021
Notes 2021 2020
GBP'000 GBP'000
Assets
Non current assets
Property plant and equipment
- oil and gas assets - -
- others 9 33 43
Intangible fixed assets 10 68 18
Investments 13 3,029 195
3,130 256
-------------------------------------- --------- --------- ---------
Current assets
Trade and other receivables 14 46 375
Cash and cash equivalents 15 1,527 1,183
1,573 1,558
-------------------------------------- --------- --------- ---------
Total assets 4,703 1,814
---------------------------------------- --------- --------- ---------
Equity and liabilities
Capital and reserves attributable to
owners of the parent
Share capital 18 2,896 1,107
Share premium account 19 34,061 32,156
Share option reserve 19 388 135
Foreign exchange translation
reserve 19 (163) (163)
Retained earnings 19 (32,586) (31,523)
Total equity 4,596 1,712
---------------------------------------- --------- --------- ---------
Current liabilities
Trade and other payables 16 76 58
Taxes payable 16 12 15
88 73
-------------------------------------- --------- --------- ---------
Non-current liabilities
Lease finance 17 19 29
---------------------------------------- --------- --------- ---------
Total equity and liabilities 4,703 1,814
---------------------------------------- --------- --------- ---------
The financial statements were approved and authorised for issue
by the Board of Directors on 30 May 2022 and were signed on
its behalf by:
John Wakefield Andrew Yeo
Director Director
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
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 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 1
January 2021 1,107 32,156 (33,130) 135 1,528 1,796
--------------- ------------------------------------------ ----------------------- ------------------------------- ------------------------------- ------------------------------- --------
Shares issued 1,789 1,905 - - - 3,694
--------------- --------
Transactions
with owners 1,789 1,905 - - - 3,694
--------------- ------------------------------------------ ----------------------- ------------------------------- ------------------------------- ------------------------------- --------
Loss for the
year
attributable
to equity
shareholders - - (1,127) - - (1,127)
Share based
payments - - - 286 - 286
Share option
reserve
released - - 33 (33) - -
Foreign
exchange
translation
adjustments - - - - 33 33
--------------- ------------------------------- --------
Total
comprehensive
income for
the period - - (1,094) 253 33 (808)
--------------- ------------------------------------------ ----------------------- ------------------------------- ------------------------------- ------------------------------- --------
As at 31
December
2021 2,896 34,061 (34,224) 388 1,561 4,682
--------------- ------------------------------------------ ----------------------- ------------------------------- ------------------------------- ------------------------------- --------
Share Foreign
Share Share Retained 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 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 1
January 2021 1,107 32,156 (31,523) 135 (163) 1,712
--------------- -------------------------------------------- ------------------------- --------- -------- --------------------------------- ---------------------------------
Shares issued 1,789 1,905 - - - 3,694
---------------
Transactions
with owners 1,789 1,905 - - - 3,694
--------------- -------------------------------------------- ------------------------- --------- -------- --------------------------------- ---------------------------------
Loss for the
year - (1,096) - - (1,096)
Share based
payments - - - 286 - 286
Share option
reserve
released - - 33 (33) - -
Total
comprehensive
income for
the period - - (1,063) 253 - (810)
--------------- -------------------------------------------- ------------------------- --------- -------- --------------------------------- ---------------------------------
As at 31
December
2021 2,896 34,061 (32,586) 388 (163) 4,596
--------------- -------------------------------------------- ------------------------- --------- -------- --------------------------------- ---------------------------------
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 2021
Group Company Group Company
2021 2021 2020 2,020
---------------- -------- ---------------------------- ---------------------------- ----------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Operating
activities (576) (681) (919) (797)
Investing
activities
Return from
investment and
servicing
of finance 7 7 5 5
Advances to
subsidiary and
associated
undertakings 323 (707) (323) (441)
Performance bond
guarantee
deposit (742) - - -
Acquisition of
intangible
assets (2,415) (50) (14) (14)
Acquisition of
tangible assets (1) (1)
Investment in
associated
undertaking (93) (1,909) (195) (195)
Disposal of
associated
undertaking 272 - - -
(2,649) (2,660) (527) (645)
Financing
activities
Proceeds from
issue of share
capital 3,694 3,694 2,295 2,295
Lease financing (9) (9) (6) (6)
Net cash inflow 460 344 843 847
Cash and cash
equivalents
at the
beginning
of the year 1,190 1,183 347 336
Cash and cash
equivalents
at the end of
the
year 1,650 1,527 1,190 1,183
----------------- -------- ---------------------------- ---------------------------- ----------------------------
Reconciliation
to Consolidated
Statement of
Financial
Position
Cash not
available
for use 859 - 121 -
Cash and cash
equivalents as
shown in the
Statement of
Financial
Position 2,509 1,527 1,311 1,183
----------------- -------- ---------------------------- ---------------------------- ----------------------------
Group Company Group Company
2021 2021 2020 2020
----------------------------------------- -------- -------- -------- --------
GBP'000 GBP'000 GBP'000 GBP'000
Operating activities
(Loss)/profit for the year attributable
to controlling interests (1,127) (1,096) (920) 697
Depreciation, amortisation and
impairment charges 28 135 (57) 90
Share based payments 286 286 81 81
Finance income shown as an investing
activity (7) (7) (5) (5)
Gain on disposal of subsidiary
undertaking - - - (1,679)
Gain on disposal of associated
undertaking (302) - - -
Income from associated undertaking (29) - 44 -
Foreign exchange
translation 19 (19) (52) 30
Operating cash outflows before
movements in working capital (1,132) (701) (909) (786)
------------------------------------------ -------- -------- -------- --------
(Increase)/decrease in receivables (1) 6 (4) (5)
Increase/(decrease) in payables 557 14 (6) (6)
Net cash outflows from operating
activities (576) (681) (919) (797)
------------------------------------------ -------- -------- -------- --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
3. Operating loss 2021 2020
--------- ---------
GBP'000 GBP'000
The operating loss is stated after charging:
Auditors' remuneration
Company - audit 25 28
Other group entities
-audit 14 4
Group and Company - other non-audit
services 3 2
Exploration and evaluation expenditure 218 145
Impairment of intangible assets 17 (59)
Depreciation of property, plant and
equipment 11 2
Impairment of foreign tax receivables 7 (74)
(Gain)/loss on exchange (22) 157
Other operating income (89) -
Other operating income arises on the capitalisation into cost
of investment of development costs written off in prior years
in respect of Chuditch, Timor-Leste. This is due to a reconstruction
of the balance sheet of SundaGas (Timor-Leste Sahul) Pte. Ltd.
("TLS") when the Group took majority control in TLS.
The analysis of development and administrative expenses in the
consolidated income statement by nature of expense is:
2021 2020
----------------------------------------------------- --------- ---------
GBP'000 GBP'000
Employee benefit expense 521 374
Share based payments 261 81
Exploration and evaluation expenditure 218 145
Depreciation, amortisation and impairment
charges 35 (131)
Legal and professional
fees 454 198
(Gain)/loss on exchange (22) 157
Other expenses 85 57
1,552 881
----------------------------------------------------- --------- ---------
5. Finance income 2021 2020
------------------------------------- -------- --------
GBP'000 GBP'000
Bank and other interest received 7 5
Finance cost (2) -
Total 5 5
6. Income tax expense 2021 2020
------------------------------------------ --------------------------------- ---------------------------------
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 result as follows:
2021 2020
--------------------------------------- --------------------------------- ---------------------------------
GBP'000 GBP'000
Loss before tax
Continuing operations (1,127) (920)
Tax at composite group rate of 22.4%
(2020: 19%) (253) (174)
Effects of:
Losses not subject to
tax 123 340
Movement on capital allowances (97) (126)
Increase in tax losses 227 (40)
Foreign taxation - -
Tax expense - -
------------------------------------------ --------------------------------- ---------------------------------
At 31 December 2021, the Group has tax losses of GBP32,933,000
(2020 - GBP28,990,000) to carry forward against future profits.
The deferred tax asset on these tax losses at a composite group
rate of 18.1% of GBP5,964,000 (2020: at 19%, GBP5,508,000) has
not been recognised due to the uncertainty of the recovery.
8. Earnings per
share
2021 2020
----------------------------------------------- --------------- --------------
Loss per ordinary
share
- Basic (0.012p) (0.023p)
- Diluted (0.012p) (0.023p)
Earnings per ordinary share is based on the Group's loss attributable
to controlling interests for the year of GBP1,127,000 (2020:
GBP920,000).
The weighted average number of shares used in the calculation
is the weighted average ordinary shares in issue during the year.
2021 2020
--------------- --------------
Number Number
Weighted average ordinary shares in issue
during the year 9,460,727,853 3,988,470,466
Weighted average potentially dilutive options
and warrants issued 1,986,979,453 373,396,517
Weighted average ordinary shares for
diluted earnings per share 11,447,707,306 4,361,866,983
------------------------------------------------- --------------- --------------
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
Equipment and Right for
machinery use asset Total
GBP'000 GBP'000 GBP'000
Group
Cost
At 1 January 2020 30 - 30
Foreign exchange translation
adjustment (1) - (1)
Expenditure - 45 45
At 1 January 2021 29 45 74
Foreign exchange translation
adjustment 1 - 1
Expenditure 1 - 1
At 31 December
2021 31 45 76
----------------------------------- -------------- ----------- --------
Depreciation
At 1 January 2020 30 - 30
Foreign exchange translation
adjustment (1) - (1)
Charge for the
period - 2 2
At 1 January 2021 29 2 31
Charge for the
period - 11 11
At 31 December
2021 29 13 42
----------------------------------- -------------- ----------- --------
Net book value
At 31 December
2021 2 32 34
At 31 December
2020 - 43 43
Company
Cost
At 1 January 2020 - - -
Expenditure - 45 45
At 1 January 2021 - 45 45
Expenditure 1 - 1
At 31 December
2021 1 45 46
----------------------------------- -------------- ----------- --------
Depreciation
At 1 January 2020 - - -
Charge for the
period - 2 2
At 1 January 2021 - 2 2
Charge for the
period - 11 11
At 31 December
2021 - 13 13
----------------------------------- -------------- ----------- --------
Net book value
At 31 December
2021 1 32 33
At 31 December
2020 - 43 43
Included in the above line items are right-of-use assets of
GBP32,000 (2020: GBP43,000) 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
costs Total
GBP'000 GBP'000
Group
Cost
At 1 January 2020 3,472 3,472
Foreign exchange translation
adjustment (59) (59)
Expenditure 14 14
Disposals (1,108) (1,108)
At 1 January 2021 2,319 2,319
Foreign exchange translation
adjustment 17 17
Expenditure 1,356 1,356
Consolidation of single asset
company 1,362 1,362
At 31 December 2021 5,054 5,054
--------------------------------------------- --------------- ----------
Impairment
At 1 January 2020 3,467 3,467
Foreign exchange translation
adjustment - -
Charge for the period (59) (59)
Disposals (1,107) (1,107)
--------------------------------------------- --------------- ----------
At 1 January 2021 2,301 2,301
Charge for the period 17 17
At 31 December 2021 2,318 2,318
--------------------------------------------- --------------- ----------
Net book value
At 31 December 2021 2,736 2,736
At 31 December 2020 18 18
10. Intangible fixed assets (continued) Exploration
and evaluation
costs Total
GBP'000 GBP'000
Company
Cost
At 1 January 2020 1,748 1,748
Expenditure 14 14
Disposals (1,109) (1,109)
At 1 January 2021 653 653
Expenditure 50 50
At 31 December 2021 703 703
-------------------------------------------- --------------- -------------------------------
Impairment
At 1 January 2020 1,743 1,743
Disposals (1,108) (1,108)
At 1 January 2021 635 635
At 31 December 2021 635 635
-------------------------------------------- --------------- -------------------------------
Net book value
At 31 December 2021 68 68
At 31 December 2020 18 18
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 above impairment charges, or reduction in
impairment charges.
During the year, the Group increased its holding in SundaGas
(Timor-Leste Sahul) Pte. Ltd ("TLS") from 33.33% to 100%. As a
consequence of the increased holding in TLS, the company is now
consolidated into the Group Income Statement and Statement of
Financial Position. As TLS is a single asset company in
pre-production phase, it is included as an oil and gas asset
purchase rather than as a business combination, and its carrying
value is included in intangible assets.
Block XXI Peru: this licence was fully impaired in 2018 and the
process for its relinquishment commenced in May 2022.
UK offshore block P1918 ("Colter"): this licence continued into
the second term with effect from 1 February 2020 but the Company
has 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 2020 - -
Additions 195 195
Share of post acquisition
net result (44) (44)
At 1 January 2021 151 151
Additions 93 93
Share of post acquisition
net result 29 29
Disposal (273) (273)
At 31 December 2021 - -
---------------------------- ------------ --------
Impairment
At 1 January 2020 and 1
January 2021 - -
Charge for the year - -
At 31 December 2021 - -
---------------------------- ------------ --------
Carrying value
At 31 December 2021 - -
At 31 December 2020 151 151
On 27 April 2020, the Group acquired a 33.33% interest in
SundaGas (Timor-Leste Sahul) Pte. Ltd ("TLS"), incorporated in
Singapore at a gross cost of GBP195,000. In accordance with IAS28,
the Group accounted for its investment in this company using the
equity method.
During the period, the Company increased its stake in TLS from
33.33% to 100%. In accordance with IFRS3, this is treated as an
effective disposal of the interest in the associated undertaking
requiring a remeasurement of its cost to fair value. This results
in a gain on disposal of GBP302,000.
Glossary
BSCF Billion standard cubic feet of natural gas.
Geological chance of success The estimated probability that exploration activities will confirm the
existence of a significant
accumulation of potentially recoverable petroleum.
GIIP Volume of natural gas initially in-place in a reservoir.
High or 3U Estimate Denotes the high estimate qualifying as Prospective Resources. Reflects a
volume estimate
that there is a 10% probability that the quantities actually recovered will
equal or exceed
the estimate.
Licence Operator or Administrator The Company nominated to carry out operational activities. In the context
of the UK jurisdiction,
during the initial Phase A of a licence the nominated Company is termed a
licence administrator.
MMBBL Million barrels of oil or condensate.
MMBOE, Oil equivalent 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 or condensate, 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 2018 The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management
System ("PRMS")
is 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.
Quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations
by application of future development projects. The total quantity of
petroleum that is 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 Unrisked Prospective Resources Denotes the unrisked estimate qualifying as SPE PRMS 2018 Prospective
Resources.
Mean Reflects an unrisked median or best-case volume estimate of resource
derived using probabilistic
methodology. This is the mean of the probability distribution for the
resource estimates and
is often not the same as 2U as the distribution can be skewed by high
resource numbers with
relatively low probabilities.
PSC Production Sharing Contract.
PSDM Pre-Stack Depth Migration version of processed seismic data.
TGS-NOPEC TGS-NOPEC Geophysical Company.
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END
FR BKKBKKBKBPPN
(END) Dow Jones Newswires
May 31, 2022 02:01 ET (06:01 GMT)
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