TIDMNUOG
RNS Number : 6051T
Nu-Oil and Gas PLC
31 March 2016
NU-OIL AND GAS PLC
AIM symbol: 'NUOG'
31 March 2016
NU-Oil and Gas plc
("NU-Oil" or "the Company")
Interim Results for the six months ended 31 December 2015
NU-Oil, the independent Oil and Gas Company, today announces its
interim results for the six months ended 31 December 2015.
Key points:
-- Strategy focused on utilising redeployable engineering
solutions that reduce Opex and Capex to build a portfolio of low
risk highly appraised marginal assets
-- Continuing focus on the development of portfolio through
Marginal Field Development Company (formerly ABT Oil and Gas
Ltd)
-- During the period the Company raised GBP435,000 before
expenses, primarily to implement its stranded and marginal field
strategy and to facilitate the acquisition of projects
-- Currently in discussions with regards to acquiring further
projects which are expected to become increasingly valuable as the
market improves
-- Executed a mandate with Fearnley Securities which has
particular expertise in maritime industries and will work with the
Company to develop the appropriate models, structures and financing
arrangements necessary to implement the business model
-- The Company reports a loss of GBP472,000 for the period, a
decrease of GBP611,000 in the loss reported over the corresponding
period in 2014
-- Implementation of the business plan will require an injection
of new capital into the business - the Directors' believe that the
additional capital should generate value in excess of any potential
shareholder dilution
Nigel Burton CEO of NU-Oil commented:
"NU-Oil has a clear focused strategy for commercialising
stranded and marginal fields based on solutions delivered by
MFDevCo and the MFD Consortium which significantly improve the
economics of developments. Despite some unforeseen delays,
discussions are well advanced with a number of operators to secure
projects that would positively impact upon the future of the
Company both in the short and long term. The aim is to build a
portfolio of projects and opportunities that do not expose NU-Oil
to exploration and appraisal risk."
For further information please visit the NU Oil and Gas website
www.nu-oilandgas.com or contact:
NU-Oil and Gas plc Tel: + 44 161 817
Alan Minty 7460
Nigel Burton Tel: +44 7785 234447
--------------------- -------------------- ----------------------
Jon Belliss Beaufort Securities Tel: +44 20 7382
Elliot Hance Limited 8300
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Neil McDonald Cenkos Securities Tel: + 44 131 220
Derrick Lee 9771
Tel: + 44 131 220
6939
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Elisabeth St Brides Partners Tel: +44 20 7236
Cowell Ltd 1177
Lottie Brocklehurst
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Note to Editors:
NU-Oil and Gas plc (NUOG) is an independent oil and gas company
whose strategy is to build a diverse portfolio of assets with a
strong emphasis on acquiring interests in stranded and marginal
fields. These fields are producing or highly-appraised. NUOG will
look to develop these assets utilising solutions delivered by
Marginal Field Development Company ("MFDevCo" formerly ABT Oil and
Gas Ltd) and the MFD Consortium, which can significantly improve
the development economics of a project. This is also expected to
enable the early booking of reserves.
Marginal Field Development Company (formerly ABT Oil and Gas
Ltd) (www.mfdevco.com)
Marginal Field Development Company ('MFDevCo') is a joint
venture between RMRI (www.rmri.co.uk) and NU-Oil and Gas plc. It
focuses on maximising recovery from the vast, undeveloped
hydrocarbon resources contained within marginal fields worldwide,
utilising appropriate re-deployable solutions to transform these
undervalued assets. MFDevCo manages the entire lifecycle of
marginal field projects from opportunity screening, suitability
assessment and financing through engineering to production and
decommissioning. The solutions developed can be used to:
-- Realise the potential from marginal or stranded fields
-- Extend the life of mature fields
-- Rejuvenate fields with a previous or existing development
solution that is currently sub-economic
-- Defer decommissioning liabilities
-- Provide early production systems
The Marginal Field Delivery Consortium www.mfdconsortium.com
The Marginal Field Delivery Consortium (the Consortium) is a
collaborative partnership, established and led by MFDevCo, between
upstream oil and gas industry specialists committed to developing
hydrocarbon resources around the world which cannot be economically
recovered using conventional methods. Through its members, the
Consortium offers the technology and services required to deliver
marginal oil and gas projects from project identification and
concept selection through to operation and decommissioning, using
cost-effective and re-deployable production solutions which
transform the economics of marginal fields by reducing the
development costs by up to 60% compared to using conventional
solutions.
The Consortium is led by MFDevCo and also includes:
Arup - ACE platform and project management
Kongsberg - Control and automation systems for 'normally
unattended' operations
Frames - Process and utility design for 'normally unattended'
solutions
RMRI - Managing regulatory aspects of 'normally unattended'
operations
Braemar ACM - Facility financing, yard broker and assistance
with project acquisition
AGR - Drilling management and well design services
Apollo - NU-SIFT structural engineering
Aibel - Project management and EPC contractor
Chairman's Statement and Operational Review
The oil price environment, attitude towards the sector,
cancellation of investment, and retrenching of companies might seem
to represent a perfect storm of negativity but in our view it
creates a tremendous opportunity to acquire projects that will
become extremely valuable as the market improves. The signs that
the market is improving are slowly starting to become evident and
they will be strongly correlated to the oil price. Although
confidence appears to be rising on claims that the oil price has
'bottomed out', this has not yet filtered through to increased
activity.
With this in mind, during the period the Company's activities
have continued with strong focus on the identification and
evaluation of opportunities which can be developed with lower Capex
and Opex solutions. Many opportunities have been considered and at
this time, three significant opportunities have been identified
where it would appear that utilising solutions delivered by MFDevCo
and the MFD Consortium would improve the economics and justify the
financing of the projects, with returns enhanced in the event that
the expected increase in oil price materialises. Preliminary
negotiations have commenced both with licensees and investors and,
at this time, good progress is being made in these discussions.
Once definitive and substantive terms have been reached on a
particular project they will be reported to shareholders and the
wider market in keeping with the Company's responsibilities.
An outcome of the general slow-down in oil sector activity, in
addition to the deferring of existing projects, is that the project
development process is taking longer than when the oil price was
higher; this is to be expected with the caution which currently
pervades the sector. But while progress for NU-Oil is most easily
measured by project commencement announcements, actual progress is
represented more widely with the acquisition of opportunities in
various formats.
As with downturns in any sector, a number of opportunities to
generate value as the market improves can be identified and then
acquired. These opportunities arise as a result of companies
adjusting their operating profile to function in the new
environment and are characterised by deferment or cancellation of
investment due to unfavourable project economics. The solutions
that we offer change the project economics albeit at a time when
the appetite of operators to sanction investment is low, although
we believe this will change as market conditions improve. The
Company needs to have the opportunity to utilise its access to
low-cost development solutions once funding becomes more readily
available.
The Company intends to take advantage of this downturn by
positioning itself to create value when the market improves. The
opportunities that we are striving to capitalise on take the form
of oil and gas assets that have, in some cases, already been
producing and that require a new development solution, greenfield
opportunities that require the implementation of an economic
solution and ancillary opportunities that are identified as a
result of identifying the first two.
(MORE TO FOLLOW) Dow Jones Newswires
March 31, 2016 02:00 ET (06:00 GMT)
Despite the reduced appetite to invest in the sector the project
economics generated by the implementation of the solutions that we
have access to would, we believe, generate strong returns, even at
the current oil price, and warrant investment consideration. The
Company has executed a mandate with Fearnley Securities, a
well-respected independent full service Norwegian investment bank
with a strong global presence. Fearnley's particular expertise is
in maritime industries and it will work with the NU-Oil to develop
the appropriate models, structures and financing arrangements
necessary to implement the business model. The Company will achieve
this wherever possible through specific project finance in which we
dilute our stake in a particular project through raising external
capital rather than diluting our own capital structure.
While we pull all this together we are conscious of controlling
NU-Oil's costs during this period. Consequently, we are seeking
where possible to reduce our overheads and defer costs, and
structure arrangements that will allow us to do that, until such
time as the sector's sentiment changes and projects are at such a
stage as to make them investible. An important part of that is the
cost of Directors and they too are allowing cash to be preserved
through the deferral of a significant element of their
remuneration.
With respect to our assets in western Newfoundland, we remain
convinced that they can be productive but in this environment the
capital requirements necessary to achieve that are beyond the
Company's reach. Consequently, we will be actively looking at
alternative means by which these assets can be taken forward.
Outlook
I still remain optimistic that the business model created is
appropriate for the current industry environment and will result in
developing the commercial arrangements that will provide the
Company with the framework with which it can regenerate.
Nevertheless, further implementation of the business plan will
require an injection of new capital into the business, but the
value that additional capital is able to generate should
significantly exceed the effect of any potential shareholder
dilution.
Once arrangements on potential projects are definitive they will
be reported to shareholders and the wider market in keeping with
the Company's responsibilities.
Alan Minty
Executive Chairman
31 March 2016
Financials
The accounts for the period have been prepared in accordance
with the International Financial Reporting Standards as adopted by
the European Union using accounting policies that are consistent
with those stated in the 2015 Annual Report and Accounts.
The Company reports a loss of GBP472,000 for the period, a
decrease of GBP611,000 in the loss reported over the corresponding
period in 2014. This is primarily due to the Company reducing its
overheads as it resolves the financial and corporate structure
required to implement its strategy.
The Company did not generate any revenue during the period
(2014: GBP27,000).
Group net liabilities as at 31 December 2015 were GBP3,003,000
(2014: net assets of GBP1,385,000). The change in the Company's
financial position is mainly attributable to an exceptional charge
of GBP4,115,000 (including the effect of foreign exchange) for an
impairment against the carrying value of the Group's Canadian
assets. This was necessary due to the recent movement in the oil
price and management's subsequent evaluation of the availability of
capital to develop the assets.
During the period the Company raised GBP435,000 before expenses
primarily to implement the Company's stranded and marginal field
strategy and to facilitate the acquisition of projects.
Future funding and capital requirements
The Directors believe that NU-Oil has developed a very
attractive business model in choosing to participate in the
development of the marginal fields via the investment that is has
made in Marginal Field Development Company (formerly ABT Oil and
Gas Ltd). Upon conclusion of the necessary foundations, we expect
to see an upturn in activity by utilising the offering to increase
our project portfolio. As stated above, we will require an
injection of new capital in order to implement our business plan
however we believe that the value generation will outstrip the
effect of any potential shareholder dilution.
Damian Minty
Chief Financial Officer
31 March 2016
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2015 2014 2015
GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- -----------
Revenue - 27 27
Cost of sales - - -
--------------------------- ------------- ------------- -----------
Gross Profit - 27 27
--------------------------- ------------- ------------- -----------
Administrative expenses (472) (1,110) (5,061)
--------------------------- ------------- ------------- -----------
Loss from operations (472) (1,083) (5,034)
--------------------------- ------------- ------------- -----------
Finance costs - - (240)
Loss before tax (472) (1,083) (5,274)
--------------------------- ------------- ------------- -----------
Taxation - - -
--------------------------- ------------- ------------- -----------
Loss for the year (472) (1,083) (5,274)
--------------------------- ------------- ------------- -----------
Loss per share (expressed
in pence per share)
Basic (0.2p) (0.6p) (2.8p)
Diluted (0.2p) (0.6p) (2.8p)
--------------------------- ------------- ------------- -----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at
31 December 31 December 30 June
2015 2014 2015
GBP'000 GBP'000 GBP'000
----------------------------- ------------- ------------- ---------
Non-current assets
Tangible fixed assets 791 4,830 851
Intangible assets 899 1,157 899
Other long term assets 405 543 426
----------------------------- ------------- ------------- ---------
2,095 6,530 2,176
----------------------------- ------------- ------------- ---------
Current assets
Trade and other receivables 907 619 899
Cash and cash equivalents 67 17 1
974 636 900
----------------------------- ------------- ------------- ---------
Total assets 3,069 7,166 3,076
Current liabilities
Trade and other payables (4,093) (3,737) (3,936)
Due to related parties (1,590) (1,594) (1,623)
----------------------------- ------------- ------------- ---------
(5,683) (5,331) (5,559)
----------------------------- ------------- ------------- ---------
Non-current liabilities
Provisions (389) (450) (416)
----------------------------- ------------- ------------- ---------
Total liabilities (6,072) (5,781) (5,975)
----------------------------- ------------- ------------- ---------
Net assets (3,003) 1,385 (2,899)
Shareholders' equity
Ordinary share capital 1,981 1,857 1,857
Share premium account 26,392 26,137 26,137
Reverse acquisition reserve 9,364 9,364 9,364
Other reserves (2,487) (2,487) (2,487)
Warrant reserve 355 355 355
Accumulated losses (38,608) (33,841) (38,125)
----------------------------- ------------- ------------- ---------
Total equity attributable
to owners of the parent (3,003) 1,385 (2,899)
----------------------------- ------------- ------------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
March 31, 2016 02:00 ET (06:00 GMT)
CONSOLIDATED STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2015 2014 2015
GBP'000 GBP'000 GBP'000
---------------------------------- ------------- ------------- -----------
Cash flows from operating
activities
Cash used in operations (354) (203) (599)
Net cash used in operating
activities (354) (203) (599)
---------------------------------- ------------- ------------- -----------
Cash flows from investing
activities
Expenditure on tangible (-) (-) -
assets
Net cash used in investing (-) (-) -
activities
---------------------------------- ------------- ------------- -----------
Cash flows from financing
activities
Proceeds from Placement 380 - -
of Shares (net of expenses)
Returned Deposits 77
Net cash flows from financing
activities 380 - 77
---------------------------------- ------------- ------------- -----------
Net (decrease) / increase
in cash and cash equivalents 26 (203) (522)
Cash and cash equivalents
at the start of the year 1 232 232
Exchange gains / (losses) 40 (12) 291
Cash and cash equivalents
at the end of the year 67 17 1
---------------------------------- ------------- ------------- -----------
NOTE: These statements have been prepared under International
Financial Reporting Standards as adopted by the European Union
using accounting policies consistent with those in the last Annual
Report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDWFISFMSEID
(END) Dow Jones Newswires
March 31, 2016 02:00 ET (06:00 GMT)
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