TIDMRBD
RNS Number : 9001N
Reabold Resources PLC
28 September 2023
28 September 2023
REABOLD RESOURCES PLC
("Reabold" or the "Company")
Unaudited Interim Results for the Six Months Ended 30 June
2023
Reabold Resources plc (AIM: RBD), the oil & gas investing
company with a diversified portfolio of exploration, appraisal and
development projects, announces its unaudited interim results for
the six months ended 30 June 2023. The results are included below
and are also available at
https://reabold.com/investor-relations/reports-and-presentations/
.
Highlights
-- Good progress with onshore UK licence, PEDL183:
o The PEDL183 Joint Venture partnership (the "JV") agreed a
specific well path for the West Newton B-2 ("WN B-2") well, which
has been approved by the East Riding of Yorkshire Council. The
operator has received the necessary permit variation from the
Environmental Agency for the use of oil-based fluids at the A and B
sites. Drilling and testing of the B-2 well is expected by June
2024, once Rathlin (UK) Energy Limited's ("Rathlin") funding
solutions have been confirmed as operator of the licence.
o Reabold identified Crawberry Hill, a significant potential
discovery, on PEDL183, which was drilled by Rathlin in 2013 and
could add materially to the already significant resource within the
licence.
-- Acquisition of 16.2% equity interest in LNEnergy Limited
("LNEnergy") which was further increased to 17.6% post period end
for a total consideration of GBP2.5 million, GBP1.0 million of
which was in cash and GBP1.5 million of which was satisfied via the
issue of 810,810,811 new ordinary shares of 0.1p each in the
capital of the Company ("Ordinary Shares"). Recent indicative
national and regional approvals have enabled the Colle Santo gas
field to enter operational phase:
o LNEnergy's primary asset is an exclusive option over a 90%
interest in the Colle Santo gas field, a highly material gas
resource with an estimated 65bcf of 2P reserves [1] , with two
production wells already drilled. The field is development ready,
subject to approvals and permits.
o LNEnergy expects all the necessary approvals to be received in
order to carry out the Early Production Programme allowing early
revenue generation from the Colle Santo project.
o Reabold retains an option to increase its stake in LNEnergy to
26.1% for consideration of GBP1.8 million, which expires on 29
December 2023.
-- Reabold North Sea licences portfolio management:
o Post period end, Reabold announced the high-grading of its UK
North Sea offshore licences and will retain its interests in four
key licences in the North Sea, including the key Dunrobin prospect
on licence P2478.
o A CPR prepared by RPS was released in April 2023 covering all
four retained licences, which included 201 mmboe ([2]) aggregate
gross unrisked ([3]) Pmean Prospective Resources on licence
P2478.
o Completed acquisition of Simwell Resources Limited ("Simwell
Resources") in January 2023 which provided valuable data and added
to Reabold's understanding of the Zechstein play, which is
fundamental to the Company's onshore assets of West Newton and
Crawberry Hill.
-- Commencement of a share buyback programme in April 2023 for a
maximum amount of GBP750,000 as part of the proposed GBP4.0 million
return to shareholders announced via RNS on 3 October 2022 [4]
.
-- Net cash of GBP2.6 million at 30 June 2023. Cash inflows
expected in Q4 2023 as part of the contingent consideration
receivable arising from the sale of Corallian to Shell. For further
details of the contingent consideration receivable, please see
Review of Operations - UK offshore, and Note 11.
Sachin Oza and Stephen Williams, Co-CEOs of Reabold,
commented:
"We are encouraged with progress made across the Reabold
portfolio in 2023. The prospects for LNEnergy have developed
rapidly since May 2023, when we re-invested part of the proceeds
from the disposal of the Victory asset in the Colle Santo project.
The post period end indicative approvals from both the regional and
national regulators are key steps to unlocking the material
potential of the Colle Santo gas field and to near-term production.
We also made good progress with UK onshore licence PEDL183 and
anticipate commencement of drilling at the well during H1 2024. The
identification of an existing discovery, Crawberry Hill, a lso on
PEDL183, confirms the significant prospectivity in the licence.
"
"The next 12 months will be exciting for Reabold with
anticipated newsflow on our key assets and the expected receipt of
the GBP9.5 million contingent payment from Shell (as the balance of
the consideration for the Victory project). We will continue with
our disciplined strategy to allocate capital to undervalued oil
& gas assets where their development benefits from being close
to existing infrastructure and there is a clear path to
monetisation."
Enquiries:
Reabold Resources plc c/o Camarco
Sachin Oza +44 (0) 20 3757
Stephen Williams 4980
Strand Hanson Limited - Nominated & Financial +44 (0) 20 7409
Adviser 3494
James Spinney
James Dance
Rob Patrick
Stifel Nicolaus Europe Limited - Joint Broker +44 (0) 20 7710
Callum Stewart 7600
Simon Mensley
Ashton Clanfield
finnCap Ltd - Joint Broker
Christopher Raggett +44 (0) 207 220
Barney Hayward 0500
Camarco
Billy Clegg +44 (0) 20 3757
Rebecca Waterworth 4980
reaboldenquiries@camarco.co.uk
Forward looking statements
This disclosure contains certain forward-looking statements with
respect to the business of Reabold and certain of the plans and
objectives of Reabold that involve substantial known and unknown
risks and uncertainties. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will or may occur in the
future and are outside the control of Reabold. Actual results or
outcomes, may differ materially from those expressed in such
statements, depending on a variety of factors, including: the
impact of general economic conditions where Reabold operates,
industry conditions, changes in consumer preferences and societal
expectations, the pace of development and adoption of alternative
energy solutions, changes in laws and regulations including the
adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced, increased competition, the
timing of bringing new fields onstream, fluctuations in foreign
exchange or interest rates, stock market volatility, the success or
otherwise of partnering, Reabold's access to future credit
resources, and other risk factors discussed in Reabold's 2022
Annual Report. Accordingly, no assurances can be given that any of
the events anticipated by the forward looking statements will
transpire or occur, or if any of them do so, what benefits,
including the amount of proceeds, that Reabold will derive
therefrom.
Review of Operations
UK Onshore
Rathlin Energy (UK) Limited and West Newton - PEDL183
West Newton is an onshore hydrocarbon discovery located north of
Hull, England. To date, three wells have been drilled at West
Newton (A-1, A-2 and B-1Z) confirming a major discovery -
potentially one of the largest hydrocarbon fields discovered
onshore UK. Rathlin is the operator of the licence and holds a
66.67% interest. Reabold holds a 59.5% shareholding in Rathlin and
holds a direct 16.67% in the licence giving the Company an
aggregate c. 56% economic interest in West Newton.
In the first half of the year, the JV partnership, which
comprises Rathlin, Reabold and Union Jack Oil plc, agreed a
specific well path for the West Newton B-2 ("WN B-2") well. The JV
has continued to analyse the geophysical, petrophysical and test
data from the West Newton A and B wells in preparation for
drilling. The data analysis has already confirmed the likelihood of
intersecting good reservoir quality that, when taken in conjunction
with the optimised drilling and completion methods, is expected to
deliver good well productivity from a horizontal well from WN B-2
and, as such, the JV partnership has committed to the specific,
optimised well path for WN B-2. The WN B-2 well has been approved
by the East Riding of Yorkshire Council. Rathlin has received the
necessary permit variations from the Environmental Agency for the
use of oil-based fluids at the A and B sites. An invitation to
tender has been distributed to potential drilling rig providers. It
is envisaged that WN B-2 will be followed by a multi-well
development programme based on a 50 Mscf/d gas facility.
Rathlin, the operator of PEDL183 with a 66.67% licence interest,
is currently unfunded for its share of the WN B-2 well and is
currently assessing funding solutions including reducing its
working interest position by bringing in a partner to participate
in drilling on PEDL183. The drilling and testing of the WN B-2 well
is planned to be completed by June 2024, in-line with the time
limits set by the North Sea Transition Authority ("NSTA"). Reabold
may be in a position to provide additional funding to Rathlin
following receipt of the second tranche payment from Shell relating
to the sale of the Victory asset.
Alongside the drilling plans for the WN B-2 well, Reabold has
continued to appraise other opportunities within the PEDL183
licence. Reabold has undertaken a technical review of its Zechstein
play prospectivity in the UK, including the licences acquired
through the acquisition of Simwell Resources and PEDL183, combining
the significant quantity of seismic data, historical wells, core
analysis and other proprietary data and analysis assembled by the
Company.
Through this analysis, Reabold has identified on PEDL183 a
significant potential discovery, Crawberry Hill, which was drilled
by Rathlin in 2013 and which could add materially to the already
significant resource within PEDL183. The Crawberry Hill-1 well,
drilled in 2013, intersected 141m of Kirkham Abbey Formation with
good indications of gas shows and porosity. The well was originally
drilled to test a deeper target and does not have a full suite of
logs over the Kirkham Abbey interval.
ERC Equipoise Ltd ("ERCE") has undertaken a petrophysical
analysis of the conventional reservoir of the Kirkham Abbey
formation in the Crawberry Hill and Risby-1 wells and interprets
average porosities greater than 15% in the top 20m of the Kirkham
Abbey formation in Crawberry Hill-1.
Reabold believes the apparent discovery at Crawberry Hill to be
an exciting appraisal opportunity potentially significantly
enhancing the already strategic asset that is PEDL183.
UK Offshore
Victory contingent consideration receivable update
Further to the receipt of initial gross consideration of GBP10
million (c. GBP3.2 million net to Reabold) in November 2022, the
payment of the contingent consideration arising from the sale of
Corallian to Shell in 2022 will be staged as follows:
A single payment of GBP22.0 million (GBP9.5 million net to
Reabold) will be made, assuming the development and production
consent for the Victory gas field is secured from the North Sea
Transition Authority, on or before 1 December 2023. If consent has
not been granted by this date, then Shell will have the option to
either: i) pay GBP12.0 million (GBP5.1 million net to Reabold),
with the remaining GBP10.0 million (GBP4.4 million net to Reabold)
being paid at a later consent date; or ii) offer to transfer-back
the Victory licence to the current Corallian shareholders for GBP1
consideration.
The Company understands, from documents made available to the
public in August 2023 as part of the statutory public consultation,
that Shell intends to continue to pursue the development of the
Victory gas field. Shell conducted detailed surveys in 2023 to
allow, subject to the necessary consents and approvals, development
drilling and subsea installation activities to be undertaken from
Q2 2024 with first gas targeted from 2025.
Reabold is encouraged by the progress being made on Victory
field development and will provide a further update with regards to
the contingent consideration receivable on or around 1 December
2023 as and when appropriate.
P2478 (36%), P2504 and P2605 (both 100%) and P2486 (10%)
During the first half of the year, a high-grading exercise was
completed for Reabold's North Sea licences, which resulted in the
prioritisation of the highest potential return assets. As at the
start of October 2023, Reabold will have retained its interests in
four key licences in the North Sea - P2478 (36%), P2605, P2504
(both 100%) and P2486 (10%). This includes the key Dunrobin
prospect in licence P2478. In the first half of 2023, Reabold
relinquished interests in two North Sea licences (P2332 (30%) and
P2329 (10%)) and a further 2 licences (P2464 and P2493 (both 100%))
in July 2023). Reabold is due to relinquish its 10% interest in
licence P2427 at the end of September 2023.
Discussions to farm down these high-graded assets to help fund
the de-risking and value creation process continues.
P2478 (36%)
Licence P2478 is located in the Inner Moray Firth Basin. In
February 2023, Reabold released a CPR prepared by RPS on licence
P2478 effective 30 September 2022. The key points from the CPR are
set out below:
-- 201 mmboe(1) aggregate gross unrisked(2) Pmean Prospective Resources on licence P2478.
-- The Dunrobin West prospect ("Dunrobin West"), agreed by the
JV to be the proposed location of the first exploration well on the
licence, would target 119 mmboe aggregate gross unrisked Pmean
Prospective Resources(3) .
-- 34% Chance of Geologic Discovery (Pg) on Dunrobin West Jurassic primary target.
-- Secondary Triassic target at Dunrobin West, which along with
the Jurassic can be tested by a single vertical borehole, included
in formal resource assessment for the first time with a Pg of
12%.
-- Dunrobin West dry hole drilling costs to a total depth of 800
metres estimated by the JV to be GBP8.6 million gross.
-- The Company believes that Dunrobin West is geologically
analogous to the Beatrice field, which produced 164 mmboe.
-- Success at Dunrobin West would significantly de-risk Dunrobin
Central & East and Golspie analogous prospects.
(1) The CPR reports oil and gas Prospective Resources. The oil
equivalent value of the gas resources has been estimated by the
Company using a factor of 5.8bcf per mmboe.
(2) The unrisked aggregation was performed by the Company and
assumes that all prospects at all levels are successful.
(3) The unrisked aggregation of Dunrobin West was performed by
the Company. The volumes were presented for each reservoir in the
CPR and, at the Company request, were not aggregated
probabilistically.
In July 2023, the NSTA approved an extension of the licence
until July 2025, at which point a drilling decision will be made.
The extension was made via a Deed of Variation, which stipulates an
additional commitment to acquire a minimum of 30 square kilometres
of 3D seismic data. Reabold estimates the costs of its 36% share of
the 3D acquisition to be c.GBP0.7 million.
P2504 and P2605 (100%)
Licence P2504 is located in the East Shetland Basin and contains
the Oulton Discovery, Oulton West Jurassic Prospect and Oulton West
Eocene Prospect. The Oulton West Ecoene prospect exhibits seismic
amplitude anomalies analogous to the nearby Nuggets Fields. Per the
most recent CPR (effective 30 September 2022), the Oulton discovery
has contingent resources of 11mmbbls (2C) with an associated NPV10
of GBP59.0 million based on RPS's assumptions. Licence P2504 also
has unrisked Pmean prospective oil resources of 38mmbbl and
unrisked Pmean prospective gas resources of 26bcf(a) .
Licence P2605 is in the Faroe Shetland Basin, approximately 60
km northwest of Shetland, and contains the Laxford discovery and
Scourie prospect. Licence P2605 has unrisked Pmean Prospective gas
resources of 122bcf(a) .
(a) Pmean totals are by arithmetic summation (in-house)
P2486 (10%)
Reabold has retained its interest in licence P2486 in the
Southern North Sea following the acquisition of Simwell Resources
in January 2023. The operator is investigating farm out
opportunities prior to a drill or drop decision by July 2024. The
work undertaken on the Southern North Sea licences following the
Simwell Resources acquisition has provided the Company with
valuable data and added to its understanding of the Zechstein play,
which is fundamental to Reabold's West Newton and Crawberry Hill
assets onshore.
LNEnergy - Colle Santo gas field, Italy
In May 2023, Reabold acquired a 3.1% interest in LNEnergy for
cash consideration of GBP250,000 and received options to acquire,
at its sole discretion, further shares in LNEnergy. In June 2023,
Reabold exercised certain of these options to increase the
Company's stake in LNEnergy to 16.2% through a cash consideration
of GBP500,000 and the issuance of 810,810,811 new Ordinary Shares
as consideration for the increased investment. In September 2023,
Reabold increased its stake in LNEnergy to 17.6% for a further cash
consideration of GBP250,000. Reabold retains a final option
expiring 29 December 2023, to increase, at its sole discretion, its
investment in LNEnergy to 26.1% for a further consideration of
GBP1.8 million, which would be satisfied through either cash or new
Ordinary Shares, at the option of LNEnergy.
LNEnergy's primary asset is an exclusive option over a 90%
interest in the onshore Colle Santo gas field in Abruzzo, Italy.
With 65bcf of 2P reserves, as estimated by RPS as of 30 September
2022, this is a highly material undeveloped onshore gas resource.
Reabold believes this is the largest onshore proven undeveloped gas
field in mainland Western Europe. The field is development ready
subject to permits and approvals. Two wells have already been
drilled and are available for production, with no additional
drilling being required. The development will be a small-scale LNG
facility to produce initially at 10mmcf/d from the existing two
wells with over 20 years of ultimate production.
Post period end, in August 2023, Reabold announced that LNEnergy
had recently received a letter from the head of the Italian
National Bureau of Hydrocarbons and Georesources ("UNMIG"), the
minerals division of Italian Ministry of Environment and Energy
Security ("MASE"), giving permission to carry out well integrity
and well service testing on the two existing wells and to start
work on the installation and commissioning of the monitoring
network at the Colle Santo gas field. The letter is a positive
indication of support for the development of the Colle Santo gas
field and the next stage is to receive a formal decree from MASE to
conduct the work.
In September 2023, Reabold announced that the Abruzzo regional
government had confirmed its agreement with, and intention to
approve, by decree, the Early Production Programme for the Colle
Santo gas field, allowing early revenue generation from the Colle
Santo project. The Early Production Programme and associated
monitoring will facilitate completion of the work required by the
Visual and Environmental Impact Assessment Commission for the
granting of the full development concession for the Colle Santo gas
field.
The Early Production Programme includes the following:
-- Production of gas for a period of 24 months;
-- Conversion of gas to power for sale to the electricity grid; and
-- Renewal of the Abruzzo Region's earlier 24-month test approval permit.
The permissions from UNMIG and the Abruzzo regional government
significantly de-risk the full concession permit approval to allow
for over 20 years of production.
Colle Santo has the potential to generate an estimated EUR11-12m
of post-tax free cash flow per annum(1) . LNEnergy will seek to
secure EUR30m in debt financing to fund the exercise of the option
to purchase the Colle Santo gas field and development capex to
achieve first gas.
(1) LNEnergy Management estimate, at 9 mmcf/d sales gas and
EUR45/MWh
Daybreak Oil and Gas Inc - USA
Reabold has a 42% shareholding in Daybreak Oil and Gas Inc
("Daybreak"). Daybreak is an OTC traded oil and gas company engaged
in the exploration, development and production of onshore crude oil
and natural gas, primarily in California.
Danube Petroleum Limited - Parta and Iecea Mare licences,
Romania
Reabold has a 50.8% equity position in Danube Petroleum Limited
("Danube"), with ASX listed ADX Energy Ltd ("ADX") holding the
remaining 49.2%. Danube has a 100% interest in the Parta
exploration licence and a 100% interest in the Iecea Mare
production licence.
ADX has continued to engage with the Romanian authorities with
respect to preparation for a government decision in relation to the
Parta exploration licence extension. The Iecea Mare production
licence which has a validity (or term) of 20 years is not
affected.
Other Business and corporate
In February 2023, investors voted to support a capital reduction
and share buyback programme. The capital reduction was approved at
the High Court of Justice in March 2023 and a buyback programme of
up to GBP750,000 was announced in April 2023, as part of a proposed
GBP4.0 million return of excess cash to shareholders. For further
details on the progress of the buyback programme please see Note
8.
In April 2023, the board adopted the Reabold Resources plc 2023
Long Term Incentive Plan ("LTIP"). The maiden award has been made
to members of the Group's executive team and senior management. All
previous share option plans in the Company expired in March 2023.
Please see Note 10 for further details.
Financial Review
Group Income Statement
The Group's loss for the first half of 2023 was GBP3.65 million
(1H 2022: loss of GBP2.72 million).
The Group generated nil revenue and incurred nil cost of sales
in the first half of 2023 as a result of the completion of the
equity exchange agreement with Daybreak in May 2022 (1H 2022:
GBP560,000 and GBP834,000 respectively).
The Group incurred a loss of GBP895,000 on financial assets (1H
2022: gain of 1,165,000). The loss primarily arose from a decline
in the market value of Daybreak's shares.
Exploration expenses of GBP1.3 million were incurred in the
first half of 2023 (1H 2022: Nil). The charge in 2023 principally
relates to exploration expenditure written off as a result of the
relinquishment of several North Sea licences. See Note 5 for
further details.
Reabold's share of loss of associates was GBP263,000 (1H 2022:
GBP1.2 million). The decrease was largely due to the absence of
non-cash impairment charges which Corallian had incurred in 1H
2022. See Note 9 for a breakdown per associate.
The Group's administrative expenses for the period were GBP1.1
million (1H 2022: GBP0.7 million). The biggest driver being an
increase in legal fees as a result of the LNEnergy acquisition as
well as the impact of inflation across all suppliers. Foreign
exchange losses of GBP107,000 (1H 2021: gains of GBP695,000) arose
on US dollar denominated financial assets as sterling strengthened
compared to the US$ during 1H 2023.
Group Balance Sheet
Reabold retains a strong balance sheet with no borrowings,
limited decommissioning liabilities and cash inflows expected in Q4
2023 as part of the contingent consideration receivable arising
from the sale of Corallian to Shell. Receipt of the contingent
consideration will allow the Company to fund ongoing capital
investment programmes as well as seeking new acquisition and
investment opportunities. For further details of the contingent
consideration receivable please see Review of Operations - UK
offshore, and Note 11.
Exploration and evaluations assets increased from GBP6.8 million
at 31 December 2022 to GBP7.1 million at 30 June 2023. Additions at
West Newton as well as the acquisition of four North Sea licences
as part of the acquisition of Simwell Resources was largely offset
by several relinquishments within the North Sea portfolio. See Note
7 for further details.
Other non-current investments increased from GBP3.5 million at
year end to GBP4.6 million at 30 June 2023. The increase was driven
by the investment of GBP2.25 million into LNEnergy, offset by a
decline of GBP1.2 million in the market value of Reabold's
investment in Daybreak.
Group cash flow
The decrease in cash balances from GBP5.5 million at 31 December
2022 to GBP2.6 million at 30 June 2023 reflected cash used in
operations of GBP1.3 million and cash capital expenditure of GBP1.5
million.
Cash used in operations of GBP1.3 million for the half year
compared with GBP0.8 million for the same period last year,
consistent with the movements in administration expenses for the
periods as well as the introduction of exploration expenditure on
Reabold's North Sea licences.
Capital expenditure for the half year was GBP1.5 million
compared with GBP0.5 million in the same period in 2022 reflecting
the GBP0.75 million spend on the investment in LNEnergy and the
GBP0.5 million spend on the acquisition of Simwell Resources,
including transaction costs of GBP0.1 million. Capital expenditure
in 1H 2022 included GBP0.25 million on the acquisition of North Sea
licences from Corallian.
Future commitments
The Group has obligations to carry out defined work programmes
on its licences under the terms of the award of rights to these
licences.
Onshore PEDL183 - West Newton
Reabold and its partners have a commitment with the NSTA to
drill and test a new Kirkham Abbey deviated or horizontal appraisal
well by June 2024 as well as the recompletion or sidetrack and
testing of one of the WNA-1, WNA-2, or WNB-1Z wells in that same
timeframe. The Company estimates that its 16.67% share of the costs
to be c.GBP2.2 million.
Central North Sea - P2478
In July 2023, the Company was granted an extension until July
2025 for licence P2478. The extension was made via a Deed of
Variation to the licence by the NSTA, which stipulates an
additional commitment to acquire a minimum of 30 square kilometres
of 3D seismic data. Reabold estimates its 36% share of the 3D
acquisition costs to be c.GBP0.7 million.
Approved on behalf of the Board
Sachin Oza and Stephen Williams
Co-Chief Executive Officers
27 September 2023
Reabold Resources plc
Group Income Statement
For the period ended 30 June 2023
Six months Six months
ended 30 ended 30
June 2023 June 2022
GBP000 GBP000
Notes (Unaudited) (Unaudited)
--------------- --------------
Revenue - 560
Cost of sales - (834)
--------------- --------------
Gross profit - (274)
Net (loss) gain in financial assets measured
at fair value through profit or loss 11 (895) 1,165
Other income 24 26
Share of losses of associates 9 (263) (1,185)
Other expenses - (89)
Loss on sale of business - (2,345)
Exploration expense 5 (1,292) -
Administration expenses (1,111) (722)
Share based payments expense 10 (15) (17)
Foreign exchange (loss) gain (107) 695
--------------- --------------
Loss on ordinary activities (3,659) (2,746)
Finance costs - unwinding of discount on decommissioning
provisions (7) (9)
Finance income 16 39
Loss before tax for the period (3,650) (2,716)
Taxation - -
Loss for the period (3,650) (2,716)
Attributable to:
Reabold shareholders (3,650) (2,716)
(3,650) (2,716)
=============== ==============
Earnings per share
Basic and fully diluted loss per share (pence) (0.04) (0.03)
Reabold Resources plc
Group statement of comprehensive income
For the period ended 30 June 2023
Six months Six months
ended 30 ended 30
June 2023 June 2022
GBP000 GBP000
Notes (Unaudited) (Unaudited)
--------------- --------------
Loss for the period (3,650) (2,716)
--------------- --------------
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Currency translation differences - 77
Exchange (gains) on translation of foreign
operations reclassified
to loss on sale of business - (80)
--------------- --------------
Other comprehensive income/(loss) - (9)
--------------- --------------
Total comprehensive loss (3,650) (2,725)
--------------- --------------
Attributable to
--------------- --------------
Reabold Shareholders (3,650) (2,725)
--------------- --------------
Reabold Resources plc
Group balance sheet
As at 30 June 2023
30 June 31 Dec
2023 2022
GBP000 GBP000
Notes (Unaudited) (Audited)
------------- -----------
Non-current assets
Exploration & evaluation assets 7 7,100 6,815
Investments in associates 9 22,009 22,272
Other investments 11 4,559 3,484
------------- -----------
33,668 32,571
------------- -----------
Current assets
Prepayments 79 120
Trade and other receivables 94 181
Other investments 11 8,901 8,728
Restricted cash 25 25
Cash and cash equivalents 2,620 5,511
------------- -----------
11,719 14,565
------------- -----------
Total assets 45,387 47,136
------------- -----------
Current liabilities
Trade and other payables 58 198
Accruals 84 111
------------- -----------
142 309
------------- -----------
Non-current liabilities
Provision for decommissioning 374 367
------------- -----------
374 367
------------- -----------
Total liabilities 516 676
------------- -----------
Net assets 44,871 46,460
------------- -----------
EQUITY
Share capital 8 10,102 9,044
Share premium account 689 29,033
Capital redemption reserve 200 200
Treasury shares (122) -
Share based payment reserve 1,935 1,920
Retained earnings 32,067 6,263
------------- -----------
Total Equity 44,871 46,460
------------- -----------
Reabold Resources plc
Group statement of changes in equity
For the period ended 30 June 2023
Share Foreign
Share Capital based currency
Share premium Redemp-tion Treasury payments translat-ion Retained
capital account reserve Shares reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ---------- ---------- ------------- ---------- ---------- -------------- ---------- ---------
At 1 January
2022 9,044 29,033 200 - 1,898 9 6,308 46,492
Loss for the
year - - - - - - (2,716) (2,716)
Other
comprehensive
income - - - - - (9) - (9)
---------- ---------- ------------- ---------- ---------- -------------- ---------- ---------
Total
comprehensive
loss for the
period - - - - - (9) (2,716) (2,725)
Share based
payment - - - - 17 - - 17
At 30 June
2022 9,044 29,033 200 - 1,915 - 3,592 43,784
Profit for the
period - - - - - - 2,671 2,671
Other
comprehensive
income - - - - - - - -
Total
comprehensive
income for
the
period - - - - - - 2,671 2,671
Share based
payment - - - - 5 - - 5
At 31 December
2022
(audited) 9,044 29,033 200 - 1,920 - 6,263 46,460
Loss for the
period - - - - - - (3,650) (3,650)
Other
comprehensive
loss - - - - - - - -
Total
comprehensive
loss for the
period - - - - - - (3,650) (3,650)
Issue of
ordinary
share capital 1,058 1,110 - - - - - 2,168
Repurchase of
ordinary
share
capital - - - (122) - - - (122)
Reduction of
share
premium
account - (29,454) - - - - 29,454 -
Share based
payment - - - - 15 - - 15
---------- ---------- ------------- ---------- ---------- -------------- ---------- ---------
Balance 30
June
2023
(unaudited) 10,102 689 200 (122) 1,935 - 32,067 44,871
========== ========== ============= ========== ========== ============== ========== =========
Reabold Resources plc
Group cash flow statement
For the period ended 30 June 2023
Six months
Six months ended
ended 30 30 June
June 2023 2022
GBP000 GBP000
Note (Unaudited) (Unaudited)
-------------- --------------
Operating activities
Loss for the period (3,650) (2,716)
Adjustments to reconcile loss for the period
to net cash used in operating activities
Exploration expenditure written off 5 1,154 -
Depreciation - 318
Net loss (gain) on financial assts at fair value
through profit or loss 11 895 (1,165)
Net loss on sale of business - 2,345
Share of losses from associates 9 263 1,185
Net finance (income) costs (9) (30)
Share-based payments 10 15 17
Other non-cash movements - 89
Unrealised currency translation losses (gains) 107 (695)
Decrease (increase) in receivables 78 (220)
(Increase) in inventories - (22)
(Decrease) increase in payables (164) 50
Net cash used in operating activities (1,311) (844)
-------------- --------------
Investing activities
Expenditure on oil and gas assets - (8)
Expenditure on exploration & evaluation assets 7 (229) (193)
Acquisitions 3 (1,241) (250)
Investments in associates - -
-------------- --------------
Total cash capital expenditure (1,470) (451)
Interest received 16 1
Movements in restricted cash - (19)
Net cash disposed from sale of business - (16)
Net cash used in investment activities (1,454) (485)
Financing activities
Repurchase of shares 8 (122) -
Net cash used in financing activities (122) -
Currency translation differences relating to
cash and cash equivalents (4) -
(Decrease) in cash and cash equivalents (2,891) (1,329)
Cash and cash equivalents at the beginning of
the period 5,511 4,883
-------------- --------------
Cash and cash equivalents at the end of the period 2,620 3,554
============== ==============
Reabold Resources plc
Notes to the unaudited interim condensed consolidated financial
statements
1. Corporate information
The interim condensed consolidated financial statements of
Reabold Resources plc and its subsidiaries (collectively, the
"Group") for the six months ended 30 June 2023 were authorised for
issue in accordance with a resolution of the directors on 27
September 2023. Reabold Resources plc is a public limited company,
incorporated and domiciled in England & Wales, whose shares are
traded on AIM in London. The registered office is located at 20
Primrose Street, London, EC2A 2EW. The Group is principally engaged
in the investment in pre-cash flow upstream oil and gas
projects.
2. Basis of preparation
The interim condensed consolidated financial statements for the
six months ended 30 June 2023 have been prepared in accordance with
IAS 34 Interim Financial Reporting. The Group has prepared the
financial statements on the basis that it will continue to operate
as a going concern. The directors consider that there are no
material uncertainties that may cast significant doubt over this
assumption. They have formed a judgement that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the
financial statements.
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's annual consolidated financial statements as at 31 December
2022.
There are no new or amended standards or interpretations adopted
from 1 January 2023 onwards that have a significant impact on the
financial information.
The financial information presented herein has been prepared in
accordance with the accounting policies expected to be used in
preparing Reabold's annual consolidated financial statements for
the year ended 31 December 2023 which are the same as those used in
preparing Reabold's annual consolidated financial statements for
the year ended 31 December 2022, with the exception of the changes
described in the 'Updates to significant accounting policies'
section below.
Significant accounting judgements and estimates
Reabold's significant accounting judgements and estimates were
disclosed in Reabold's Annual Report 2022. These have been
subsequently considered at the end of the period to determine if
any changes were required to those judgements and estimates. No
significant changes were identified.
Updates to significant accounting policies
Own equity instruments - treasury shares
Own equity instruments that are reacquired (treasury shares) are
recognised at cost and deducted from equity. Treasury shares
represent Ordinary Shares repurchased and available for specific
and limited purposes. No gain or loss is recognised in profit or
loss on the purchase, sale, issue or cancellation of the Group's
own equity instruments. Any difference between the carrying amount
and the consideration, if reissued, is also recognised in
equity.
Change in segmentation
During the first half of 2023, the Group's reportable segments
changed consistent with a change in the way that resources are
allocated and performance is assessed by the chief operating
decision maker, who for Reabold is the co-chief executive officers,
from that date. From the first half of 2023, the Group's reportable
segments are onshore UK, offshore UK, and international. At 31
December 2022, the Group's reportable segments were UK/Europe and
USA.
Onshore UK comprises the Group's investment in Rathlin and the
Group's 16.67% direct interest in PEDL183, which was previously
reported as part of the UK/Europe segment.
Offshore UK comprises the Group's interest in UK North Sea
licences, which was previously reported as part of the UK/Europe
segment.
International comprises the Group's investments in Danube
Petroleum Ltd, Daybreak Oil & Gas Inc., and LNEnergy Ltd.
Comparative information for 2022 has been restated in Note 4 to
reflect the changes in reportable segments.
3. Acquisitions
On 3 January 2023, Reabold acquired 100% of the issued share
capital of Simwell Resources. Total cash consideration for the
acquisition was GBP491,000, including transaction costs of
GBP118,000. In addition to the cash consideration, 247,775,359 new
Ordinary Shares were issued as part of the consideration for the
acquisition.
Between May and June 2023, Reabold acquired 16.2% of the
ordinary share capital of LNEnergy for a cash consideration of
GBP750,000 and the issuance of 810,810,811 new Ordinary Shares to
LNEnergy.
4. Segmental information(a)
The directors consider the Group to have three segments, being
onshore UK, offshore UK and international. Other business and
corporate comprises the Group's treasury functions and corporate
activities. The following tables present revenue and profit/(loss)
information for the Group's operating segments for the six months
ended 30 June 2023 and 2022, respectively.
Period ended Other business
30 June 2023 UK onshore UK offshore International & corporate Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue - - - - -
------------ ------------- --------------- ---------------- ---------
Segment loss (278) (1,133) (1,207) (1,032) (3,650)
------------ ------------- --------------- ---------------- ---------
Period ended Other business
30 June 2022 UK onshore UK offshore International & corporate Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue - - 560 - 560
------------ ------------- --------------- ---------------- ---------
Segment loss (383) (712) (1,408) (213) (2,716)
------------ ------------- --------------- ---------------- ---------
The following table presents assets and liabilities information
for the Group's operating segments as at 30 June 2023 and 31
December 2022, respectively:
Other business
UK onshore UK offshore International & corporate Total
GBP000 GBP000 GBP000 GBP000 GBP000
Assets
------------ ------------- --------------- ---------------- ---------
30 June 2023 24,050 9,400 9,177 2,760 45,387
------------ ------------- --------------- ---------------- ---------
31 December
2022 24,090 9,161 8,141 5,744 47,136
------------ ------------- --------------- ---------------- ---------
Other business
UK onshore UK offshore International & corporate Total
GBP000 GBP000 GBP000 GBP000 GBP000
Liabilities
------------ ------------- --------------- ---------------- ---------
30 June 2023 374 - - 142 516
------------ ------------- --------------- ---------------- ---------
31 December
2022 367 72 - 237 676
------------ ------------- --------------- ---------------- ---------
(a) Comparative information for 2022 has been restated to
reflect the changes in reportable segments. For more information
see Note 2 basis of preparation - Change in segmentation
5. Exploration expense
The following table represents amounts included within the Group
income statement relating to activity associated with the
exploration for and evaluation of oil and natural gas
resources.
GBP000 GBP000
------------------------------------- ------------ ------------
Six months Six months
ended 30 ended 30
June 2023 June 2022
------------ ------------
Exploration expenditure written off 1,154 -
Other exploration costs 138 -
------------------------------------- ------------ ------------
Total exploration expense 1,292 -
------------------------------------- ------------ ------------
Exploration expenditure written off relates to the following
North Sea Licences: P2332 - GBP633,000, P2329 - GBP382,000, P2427 -
GBP42,000, P2464 - GBP94,000, P2493 - GBP3,000.
6. Loss per share
Basic loss per ordinary share is calculated by dividing the loss
for the period attributable to ordinary shareholders by the
weighted average number of Ordinary Shares outstanding during the
period. As the Group is reporting a loss in each period, in
accordance with IAS 33, outstanding share options are not
considered to be dilutive because the exercise of the share options
would have the effect of reducing the loss per share.
Six months Six months
ended 30 ended 30
June 2023 June 2022
Results for the period (GBP000)
Loss for the period attributable to Reabold
shareholders (3,650) (2,716)
Number of shares (thousand) (a)
Basic weighted average number of shares outstanding 9,191,540 8,929,613
Basic loss per share (pence) (0.04) (0.03)
Diluted loss per share (pence) (0.04) (0.03)
(a) Excludes treasury shares
7. Exploration and Evaluation Assets
Total
GBP000
---------
Cost:
At 1 January 2022 9,123
Exchange adjustments 240
Acquisitions 343
Additions 572
Disposals (3,463)
---------
At 31 December 2022 6,815
---------
Acquisitions 1,210
Additions 229
Exploration expenditure written off (1,154)
---------
At 30 June 2023 7,100
---------
Acquisitions in 2023 relate to the acquisition of Simwell
Resources.
Exploration expenditure written off relates to the following
North Sea Licences: P2332 - GBP633,000, P2329 - GBP382,000, P2427 -
GBP42,000, P2464 - GBP94,000, P2493 - GBP3,000.
The disposal of GBP3.5 million in 2022 represents the
derecognition of E&E assets in California as a result of the
equity exchange agreement with Daybreak.
8. Called-up Share Capital
Allotted, called-up and fully paid share capital at 30 June
was as follows:
Number GBP000
Ordinary Shares of 0.1p each
----------------- ---------
At 1 January 2022 8,929,612,550 8,930
At 31 December 2022 8,929,612,550 8,930
----------------- ---------
Issue of new shares 1,058,586,170 1,058
----------------- ---------
At 30 June 2023 9,988,198,720 9,988
----------------- ---------
"A" Deferred shares 6,915,896 114
----------------- ---------
10,102
----------------- ---------
During the first half of 2023 the Company repurchased 83,281,490
Ordinary Shares for a total consideration of GBP121,830, including
transaction costs of GBP994. All shares purchased were retained in
treasury. At 30 June 2023, 83,281,490 Ordinary Shares of nominal
value GBP83,281 were held in treasury. These treasury shares are
not taken into consideration in relation to the payment of
dividends and voting at shareholder meetings.
At 30 June 2023, the issued share capital of the Company
comprised 9,904,917,230 Ordinary Shares (excluding treasury shares)
par value 0.1p per share, each with one vote; and 6,915,896 "A"
Deferred shares of 1.65p. The "A" deferred shares do not carry
voting rights. The total number of voting rights in the Company is
therefore 9,904,917,320.
A further 28,291,347 Ordinary Shares were repurchased between
the end of the reporting period and 25 September 2023, the latest
practicable date before the completion of these financial
statements, for a total cost of GBP35,770. The number of shares in
issue is reduced when shares are repurchased.
247,775,359 new Ordinary Shares were issued in January 2023 as
part of the consideration for the acquisition of Simwell Resources.
810,810,811 new Ordinary Shares were issued in June 2023 as part of
the investment into LNEnergy.
9. Investments in associates
The following tables provide aggregated summarised financial
information for the Group's associates as it relates to the amounts
recognised in the Group income statement and on the Group balance
sheet.
GBP000
Income Statement
Losses from associates
------------ -----------------------------
30 June 30 June 2022
2023
------------ --------- ------------------
Rathlin 223 394
Danube 40 29
Corallian - 762
------------- --------- ------------------
263 1,185
--------- ------------------
GBP000
Balance Sheet
Investments in associates
---------- -----------------------------
30 June 31 Dec 2022
2023
---------- ----------- ----------------
Rathlin 17,381 17,604
Danube 4,628 4,668
----------- ----------- ----------------
22,009 22,272
----------- ----------------
Details of the Company's associates as at 30 June 2023 are shown
below
Associates % Country of incorporation Principal activities
-------------------------- ------ -------------------------- ----------------------------
Rathlin Energy (UK) 59.5 England & Wales Exploration and Evaluation
Limited
Danube Petroleum Limited 50.8 England & Wales Exploration and Evaluation
-------------------------- ------ -------------------------- ----------------------------
10. Share-Based payments
On 27 April 2023, the Board adopted the Reabold Resources plc
2023 LTIP. On adoption of the LTIP, 390,000,000 share options were
granted to members of the Group's executive team and senior
management. All previous share option plans in the Company expired
on 19 March 2023.
The vesting criteria of the options is based on Total
Shareholder Return ("TSR") over a three-to-five-year period. For
the awards to vest in full, the TSR of a share must be at or more
than six times (6x) the market value of a share at the grant date
using a 30-trading day average. The first measurement date shall be
at the end of year three, the second measurement date at the end of
year four and the final measurement date at the end of year five.
If TSR is less than 2.5x market value, 0% of the award vests. If
TSR is at 2.5x market value, 30% of the award vests and if TSR is
at 4x market value, 60% of the award vests. Performance between TSR
thresholds shall be calculated on a straight-line basis. The fair
value at grant date is estimated using a Monte Carlo model, taking
into account the terms and conditions upon which the options were
granted. The fair value of options granted during the six months
ended 30 June 2023 was estimated on the date of grant using the
following inputs and assumptions:
Dividend yield 0.0%
Volatility 68%
Risk-free rate
(3 years) 3.82%
Risk-free rate
(4 years) 3.73%
Risk-free rate
(5 years) 3.67%
Share price GBP0.0018
Exercise price Nil
The fair value of the options at grant date was GBP0.00109. For
the 6 months ended 30 June 2023, the Group has recognised GBP15,000
of share-based payment expense in the income statement (30 June
2022: GBP17,000).
11. Other investments
30 June 2023 31 Dec 2022
GBP000 GBP000
------------------------ ------------------------
Current Non-Current Current Non-Current
Investment in Connaught Oil
& Gas Ltd - 15 - 15
Contingent consideration 8,901 8,728 -
Investment in Daybreak - 2,294 - 3,469
Investment in LNEnergy - 2,250 - -
8,901 4,559 8,728 3,484
The contingent consideration relates to amounts arising on the
disposal of Corallian in 2022 which are financial assets classified
as measured at fair value through profit or loss. The payment of
the contingent consideration from Shell will be staged as
follows:
A single payment of GBP22 million (GBP9.5 million net to
Reabold) will be made, assuming the development and production
consent for the Victory gas field is secured from the North Sea
Transition Authority, on or before 1 December 2023. If consent has
not been granted by this date, then Shell will have the option to
either: i) pay GBP12 million (GBP5.1 million net to Reabold), with
the remaining GBP10 million (GBP4.4 million net to Reabold) being
paid at a later consent date; or ii) offer to transfer-back the
Victory licence to the current Corallian shareholders for GBP1
consideration.
The table below summarises the change in fair value of other
investments as reported in the income statement.
Change in fair value
--------------------------- --------------------------
Six months Six months
ended 30 ended 30
June 2023 June 2022
GBP000 GBP000
--------------------------- ------------ ------------
Convertible loan notes - 10
Contingent consideration 173 -
Investment in Daybreak (1,068) 1,155
(895) 1,165
------------ ------------
12. Events after the reporting period
On 12 September 2023, Reabold increased its stake in LNEnergy
from 16.2% to 17.6% for cash consideration of GBP250,000. For
further details on LNEnergy and the Colle Santo gas project please
see Review of Operations - LNEnergy - Colle Santo gas field,
Italy.
13. Non-Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 27 September 2023, is
unaudited and does not constitute statutory financial statements.
Audited financial information will be published in Reabold's 2023
Annual Report. Reabold's 2022 Annual Report has been filed with the
Registrar of Companies in England and Wales.
GLOSSARY
2C resources, 2C
Best estimate contingent resource, being quantities of
hydrocarbons which are estimated, on a given date, to be
potentially recoverable from known accumulations but which are not
currently considered to be commercially recoverable.
1U resources, 1U
Unrisked low estimate prospective resources.
2U resources, 2U
Unrisked best estimate prospective resource.
3U
Unrisked high estimate prospective resource.
Best estimate
With respect to resources categorisation, the most realistic
assessment of recoverable quantities if only a single result were
reported. If probabilistic methods are used, there should be at
least a 50% probability (P50) that the quantities actually
recovered will equal or exceed the best estimate.
bcf
Billion standard cubic feet.
boe
Barrels of oil equivalent.
Capital expenditure
Total cash capital expenditure as stated in the Group cash flow
statement.
CPR
Competent Persons Report.
High estimate
With respect to resources categorisation, this is considered to
be an optimistic estimate of the quantity that will actually be
recovered from the accumulation by a project. If probabilistic
methods are used, there should be at least a 10% probability (P10)
that the quantities actually recovered will equal or exceed the
high estimate.
IFRS
International Financial Reporting Standards.
Joint arrangement
An arrangement in which two or more parties have joint
control.
Joint control
Contractually agreed sharing of control over an arrangement,
which exists only when decisions about the relevant activities
require the unanimous consent of the parties sharing control.
Joint operation
A joint arrangement whereby the parties that have joint control
of the arrangement have rights to the assets, and obligations for
the liabilities, relating to the arrangement.
Low estimate
With respect to resources categorisation, this is a conservative
estimate of the quantity that will actually be recovered from the
accumulation by a project. If probabilistic methods are used, there
should be at least a 90% probability (P90) that the quantities
actually recovered will equal or exceed the low estimate.
mmboe
Million barrels of oil equivalent.
mmcf/d
Million cubic feet per day.
MWh
Megawatt hour.
NPV10
Net Present Value using a 10% discount factor.
NSTA
North Sea Transition Authority.
OTC
Over-the-counter.
Pmean
Reflects a mid-case volume estimate of resource derived using
probabilistic methodology. This is the mean of the probability
distribution for the resource estimates and may be skewed by
resource numbers with relatively low probabilities.
Prospective Resources
Quantities of hydrocarbons which are estimated, as of a given
date, to be potentially recoverable from undiscovered accumulations
by application of future development projects
[1] RPS estimate, September 2022
[2] The CPR reports oil and gas Prospective Resources. The oil
equivalent value of the gas resources has been estimated by the
company using a factor of 5.8bcf per mmboe.
[3] The unrisked aggregation was performed by the company and
assumes that all prospects at all levels are successful.
[4] For further details on the progress of the buyback programme
see note 8
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END
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