TIDMSYN
RNS Number : 0403T
Synergia Energy Ltd
15 March 2023
http://www.rns-pdf.londonstockexchange.com/rns/0403T_1-2023-3-15.pdf
SYNERGIA ENERGY LTD
INTERIM FINANCIAL REPORT
Six Months Ended 31 December 2022
REVIEW OF OPERATIONS
OVERVIEW AND STRATEGY
Consistent with the Company's strategy to focus on gas
production and Carbon Capture and Storage ("CCS"), Synergia's
activities have centred on the Company's Cambay gas and condensate
field in India and on CCS opportunities in the UK and recently, in
India.
A significant development for the Company during the period was
the successful re-frac of the Cambay C-77H well facilitating
progress towards a full field development. To this end, a formal
farm out process was instigated in Q4 2022 with a view to farming
out up to 50% of the Cambay PSC to a suitable JV partner.
In addition, the Company added a further CCS project in the form
of the conceptual Cambay CCS scheme which we believe not only
leverages our Company's expertise in this sector but also has the
potential to make a material impact on India's carbon emissions
reduction aspirations.
Due to the continued high gas prices, the Company has put its
search for mature producing gas assets in the UK Continental Shelf
area on hold.
Cambay Field, Onshore Gujarat, India
(Synergia Energy: Operator and 100% Participating Interest)
The Cambay field was placed on production following a lengthy
hiatus in April 2022. The Company's primary producing well, C-77H,
provided the majority of the field's production during the period
even though it was shut in for approximately 2 months during the
re-frac operation. Prior to the re-frac, the original 4 fracked
zones were unable to provide sustained production due to liquid
loading which necessitated the frequent shutting in of the well to
allow wellhead pressure to be restored. It was believed that the 4
zones had been fracked sub-optimally.
In order to prove up a new fracking methodology, a bridge plug
was set above the original 4 fracked zones to isolate them from 2
new fracked zones at the heel of the well. The 2 new zones were
fracked in July 2022 and following a lengthy clean-up process, the
well finally provided stable and constant gas production at up to
275,000 SCFD despite the existence of a c.1500m column of
condensate. Through the period end the C-77H well exhibited plateau
production which verified the new fracking methodology and provides
a template for future new wells.
The C-77H re-frac operation confirmed the need for an artificial
lift ("AL") solution for Eocene wells in order to optimise gas and
gas condensate production. Progressive cavity pumps ("PCP") were
considered the best AL solution and an evaluation of PCP
configuration was commenced in conjunction with the preferred
supplier, PCM. Due to elastomer compatibility and availability
problems, the Company is evaluating a jet pump AL solution.
Based on the C-77H re-frac results, the Company believes new
multi-zone and fracked horizontal Eocene wells with AL can be
drilled with initial production rates of 4 mmscfd and 40% annual
decline rates.
A formal farm out process commenced in October 2022 with a view
to farming out up to 50% of the Cambay PSC. The process is being
managed by Moyes & Company. The primary objective of the farm
out is to facilitate the commencement of a full field development
of the Cambay field in H2 2023.
In November 2022, oil production from C-19z, C-20, C63 and C72
started to augment the gas and condensate production from C-77H and
C-73.
Cambay CCS Scheme
Leveraging its CCS expertise and experience in the UK, the
Company has developed a CCS scheme in India based on CO(2) storage
in the extensive Olpad Formation which extends under the Cambay
producing reservoirs. The scheme proposes the capture of CO(2)
emitted from the many gas and coal-fired power stations in the
vicinity of the Cambay field. CO(2) would be transported via
pipeline to a CCS hub on the Cambay field for injection into the
Olpad Formation for permanent storage.
Further technical studies will be required to confirm the
suitability of the Olpad Formation. In addition to the securing of
funding, the necessary regulatory and commercial frameworks will
need to be developed in order to bring this significant CCS scheme
to fruition.
United Kingdom Continental Shelf
Carbon Capture and Storage ("CCS")
Due to a potential overlap of CCS and windfarm activities in the
area around the Esmond and Forbes fields, these areas were excluded
by the NSTA from the licensing round. Consequently, the Company
undertook extensive technical evaluation of two alternative
licensing areas incorporating a mix of depleted gas reservoirs and
aquifers. The Company made two carbon storage license applications
under the NSTA's first carbon storage licensing round. The licenses
are planned to form part of Synergia's Medway Hub CCS project. It
is anticipated that the NSTA will commence the award of licenses at
the end of calendar Q1 2023.
JPDA 06-103, Timor Sea
Under the terms of the Deed of Settlement and Release, the final
instalment of US$250,000 (out of the original US$800,000) was made
to Autoridade Nacional Do Petroleo E Minerais ("ANPM") on 7
September 2022.
The movement in the loan payable relating to the settlement
during the period is detailed in Note 12 to the condensed
consolidated interim financial report, which shows balance of the
loan from Japan Energy E&P JPDA Pty Ltd ("JX") being at
US$440,970 at 31 December 2022. At report date, the balance of the
loan from JX was approximately US$253,549, following a repayment to
JX of US$196,754 on 13 February 2023.
The balance of the loan from JX at reporting date, plus
interest, is to be repaid to JX in August 2023, upon the loan's
maturity on 17 August 2023.
During the period, the non-defaulting parties to the JPDA joint
venture agreed to terminate the Joint Operating Agreement. Synergia
Energy will be progressing the final closure of the joint venture
accounts to conclude this matter.
West Kampar PSC, Central Sumatra, Indonesia
During the half-year, the Company was advised that its efforts
to regain a participating interest and control of the West Kampar
PSC in Indonesia were unsuccessful. The Company understands that
the West Kampar PSC was awarded to a third party. This marks the
end of the Company's activities in Indonesia.
Qualified Person
The technical information contained in the above disclosure has
been prepared by or under the supervision of Mr Jonathan Salomon
(B App Sc (Geology), GAICD), Executive Chairman employed by Synergia
Energy Ltd. Mr Salomon has over 36 years' experience in petroleum
geology and is a member of the American Association of Petroleum
Geologists, and the Society of Petroleum Engineers. Mr Salomon
meets the requirements of and acts as the Qualified Person under
the Alternative Investment Market Rules - AIM Note for Mining
and Oil & Gas Companies , and consents to the inclusion of this
information in this report in the form and context in which it
appears.
PERMIT SCHEDULE
PETROLEUM PERMIT SCHEDULE - 31 DECEMBER 2022
CHANGE
IN INTEREST
DURING THE EQUITY
ASSET LOCATION ENTITY PERIOD % % OPERATOR
----------------- ------------------- --------------- -------- -------------
Cambay Gujarat, India Synergia - 85.0 Synergia
Field PSC Energy Ltd Energy Ltd
----------------- -------------
Oilex N.L.
Holdings
(India) Limited - 15.0
------------------- ----------------------------------------------- -------- -------------
DIRECTORS' REPORT
FOR THE HALF-YEARED 31 DECEMBER 2022
The directors present their report together with the condensed
interim financial report of the group comprising of Synergia Energy
Ltd (the "Company" or "Synergia Energy") and its subsidiaries
(together collectively referred to as the "Group") for the
half-year ended 31 December 2022 and the auditor's review report
thereon.
DIRECTORS
The directors of the Company at any time during the interim
period and until the date of this report are detailed below. All
directors were in office for this entire period unless otherwise
stated.
Mr Jonathan Salomon Executive Chairman
Mr Roland Wessel Chief Executive Officer ("CEO") and Executive Director
Mr Colin Judd Chief Financial Officer ("CFO") and Executive Director
Mr Mark Bolton Non-Executive Director
Mr Paul Haywood Independent Non-Executive Director
Mr Peter Schwarz Independent Non-Executive Director
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial
period and the results of those operations are set out in the
Review of Operations on pages 1 to 3 of this report.
FINANCIAL AND OPERATING RESULTS
The Group incurred a consolidated loss after income tax of
$3,674,813 for the half-year (31 December 2021: loss of
$2,235,196).
During the half-year, production continued on the Cambay field
together with oil and gas sales following recommencement of
production which happened in April 2022. Oil sales during the
half-year amounted to $294,053 (31 December 2021: $nil) and gas
sales amounted to $396,767 (31 December 2021: $nil), providing
total revenues of $690,820 during the half-year (31 December 2021:
$nil). Cost of sales including production costs incurred during the
half-year amounted to $2,380,919 (31 December 2021: $nil), which
included re--fraccing costs of $1,845,527 (31 December 2021: $nil).
This resulted in the Group incurring a gross loss of $1,690,099
during the half-year (31 December 2021: $nil).
The prior period results included care and maintenance
expenditure of $187,908 (which included re--fraccing preparation
costs of $113,416 up to December 2021), with no care and
maintenance expenditure recorded in the current period due to the
recommencement of production in April 2022.
The expected credit losses incurred during the half-year were
significantly reduced to $22,712 (from $238,514 during the
half-year ended 31 December 2021) mainly due to GSPC no longer
being a 55% joint venture partner in Cambay since the previous
financial year on 4 February 2022. This also resulted in
exploration expenditure reducing to $385,788 (from $493,111 during
the half-year ended 31 December 2021) as no additional accrual of
exploration expenditure was required as at 31 December 2022 (31
December 2021: $129,613 additional exploration expenditure
required).
Net finance costs including net foreign exchange losses
increased during the half-year to $236,515 (31 December 2021:
$129,509), mainly due to an increase in the unwinding of discount
on site restoration provision to $144,632 during the half-year (31
December 2021: $25,147).
Cash and cash equivalents held by the Group as at 31 December
2022 has decreased to $1,364,423 (at 30 June 2022: $4,838,459). The
Group's borrowings as at 31 December 2022 increased to $650,878 (at
30 June 2022: $451,355).
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
The auditor's review report contains a statement of material
uncertainty regarding the Company's ability to continue as a going
concern. The consolidated financial statements have been prepared
on a going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlement of
liabilities in the ordinary course of business.
The funding requirements of the Group are reviewed on a regular
basis by the Group's Executive Directors and are reported to the
Board at each board meeting to ensure the Group can meet its
financial obligations as and when they fall due. In this regard,
please refer to the note below concerning the raising of GBP650,000
by way of a convertible loan note agreement subsequent to the
balance date. This loan will be utilised for working capital
purposes.
Cambay's gas and oil production and associated revenue streams
recommenced in the six months to 31 December 2022 but, until
sufficient operating cash flows are generated from its operations,
the Group remains reliant on equity raisings, joint venture
contributions or debt funding, as well as asset divestitures or
farmouts to fund its expenditure commitments.
The Group will require additional funding in due course to
continue its exploration activities, progress the Cambay
development and drilling programme, repay its loan balance, meet
its ongoing administrative expenses, and for any new business
opportunities that the Group may pursue.
Further information on the Group's going concern basis of
preparation is provided in Note 2 (c) of the consolidated financial
statements.
CORPORATE
Following shareholder approval received at the 13 July 2022
General Meeting, 174,831,394 fully paid ordinary shares ("shares")
were issued at GBP0.002 ($0.0035) per share raising approximately
GBP350k ($608k) before costs . The shares were the final instalment
of the placement previously arranged and announced on 4 May 2022.
69,932,558 shares out of 174,831,394 shares were issued on 21 July
2022 and the remaining 104,898,836 shares were issued on 3 August
2022.
Following the issue of these shares, 30,000,000 unlisted options
exercisable at GBP0.002 each and expiring on or before 30 April
2024 were issued on 13 September 2022. These unlisted options were
issued to Novum Securities Limited ("Novum") for their role as Lead
Manager pursuant to the capital raising advisory agreement relating
to the May 2022 placement.
As at 31 December 2022, the Company had:
-- Available cash resources of $1,364,423;
-- Borrowings of $650,878; and
-- Issued capital of 8,417,790,704 fully paid ordinary shares and 379,885,408 unlisted options.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 13 February 2023, the Company made a repayment to JX of
US$196,754. Following the repayment and further interest accrued,
at report date, the balance of the loan from JX is approximately
US$253,549.
On 22 February 2023, the Company announced that it entered into
a convertible loan agreement with certain sophisticated and/or
professional existing and new shareholders to secure a new
convertible loan facility of GBP650,000. The convertible loan
proceeds were received by the Company between 23 February 2023 and
9 March 2023 and will be used for working capital purposes. Under
the terms of the agreement, and as a consequence of the receipt
date of the funds, the option date and maturity date were extended
to 9 December 2023 and 9 March 2024 respectively.
A summary of the key terms of the convertible loan facility is
disclosed in Note 12 to the condensed consolidated interim
financial report.
There were no other significant subsequent events occurring
after the half-year end.
LEAD AUDITOR'S INDEPENCE DECLARATION
The lead auditor's independence declaration is set out on page 8
and forms part of the Directors' Report for the half-year ended 31
December 2022.
Signed in accordance with a resolution of the Board of
Directors.
Mr Jonathan Salomon Roland Wessel
Executive Chairman Chief Executive Officer and Director
West Perth, Western Australia
15 March 2023
AUDITOR'S INDEPENCE DECLARATION
TO THE DIRECTORS OF SYNERGIA ENERGY LTD
In relation to our review of the financial report of Synergia
Energy Ltd for the half year ended 31 December 2022, to the best of
my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the Corporations Act 2001 or
any applicable code of professional conduct.
PKF Perth
Shane Cross
Partner
15 March 2023
West Perth,
Western Australia
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited
family of legally independent firms and does not accept any
responsibility or liability for the actions or inactions of any
individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional
Standards Legislation.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEARED 31 DECEMBER 2022
31 December 31 December
Note 2022 2021
$ $
----------- -----------
Revenue 6 (a) 690,820 -
Cost of sales 6 (b) (2,380,919) -
----------- -----------
Gross Profit (1,690,099) -
Exploration expenditure (385,788) (493,111)
Care and maintenance expenditure 6 (c) - (187,908)
Administration expense 6 (d) (1,251,915) (1,150,753)
Expected credit losses expense 7 (22,712) (238,514)
Share-based payments expense 17 (84,094) (19,489)
Other expenses 6 (e) (3,689) (15,912)
----------- -----------
Results from Operating Activities (3,438,297) (2,105,687)
----------- -----------
Finance income 6 (f) 158 189
Finance costs 6 (g) (180,650) (123,466)
Net foreign exchange loss 6 (h) (56,024) (6,232)
----------- -----------
Net Finance Costs (236,516) (129,509)
----------- -----------
Loss Before Tax from Continuing Operations (3,674,813) (2,235,196)
Income tax expense - -
Loss for the Period from Continuing
Operations (3,674,813) (2,235,196)
Profit after tax for the period from - -
discontinued operations
Loss for the Period (3,674,813) (2,235,196)
----------- -----------
Other Comprehensive Income
Items that may be reclassified subsequently
to profit or loss
Foreign exchange differences on translation
of foreign operations 74,357 129,406
----------- -----------
Other Comprehensive Income for the
Period, Net of Income Tax 74,357 129,406
----------- -----------
Total Comprehensive Loss for the Period (3,600,456) (2,105,790)
----------- -----------
Loss per Share from Continuing
and Discontinued Operations
Basic loss per share (cents per share) (0.04) (0.04)
Diluted loss per share (cents per share) (0.04) (0.04)
The above Condensed Consolidated Statement of Profit or Loss and
Other Comprehensive Income is to be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Note 31 December
2022 30 June 2022
$ $
------------- -------------
Assets
Cash and cash equivalents 1,364,423 4,838,459
Trade and other receivables 7 477,906 127,058
Prepayments 10,454 15,617
Inventories 99,107 387,685
Investments 8 69,185 69,185
Total Current Assets 2,021,075 5,438,004
Development assets 9 20,540,522 20,310,614
Plant and equipment 28,105 29,830
Total Non-Current Assets 20,568,627 20,340,444
Total Assets 22,589,702 25,778,448
Liabilities
Trade and other payables 10 889,566 1,729,185
Employee benefits 11 195,717 180,827
Borrowings 12 650,878 451,355
------------- -------------
Total Current Liabilities 1,736,161 2,361,367
Provisions 11 9,125,394 8,833,483
Total Non-Current Liabilities 9,125,394 8,833,483
Total Liabilities 10,861,555 11,194,850
Net Assets 11,728,147 14,583,598
------------- -------------
Equity
Issued capital 16 192,817,143 192,181,384
Reserves 7,982,467 7,798,864
Accumulated losses (189,071,463) (185,396,650)
------------- -------------
Total Equity 11,728,147 14,583,598
------------- -------------
The above Condensed Consolidated Statement of Financial Position
is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEARED 31 DECEMBER 2022
Attributable to Owners of the Company
Foreign
Share-Based Currency
Issued Payments Translation Accumulated
Capital Reserve Reserve Losses Total Equity
Note $ $ $ $ $
----------- ----------- ------------ ------------- ------------
Balance at 1 July 2022 192,181,384 221,321 7,577,543 (185,396,650) 14,583,598
Total Comprehensive Income/(Loss)
Loss for the period - - - (3,674,813) (3,674,813)
----------- ----------- ------------ ------------- ------------
Other Comprehensive In
come
Foreign currency translation
differences - - 74,357 - 74,357
----------- ----------- ------------ ------------- ------------
Total Other Comprehensive
In come - - 74,357 - 74,357
----------- ----------- ------------ ------------- ------------
Total Comprehensive Income/(Loss)
for the Period - - 74,357 (3,674,813) (3,600,456)
----------- ----------- ------------ ------------- ------------
Transactions with Owners
of the Company
Contributions and Distributions
Shares issued 16 608,378 - - - 608,378
Capital raising costs
(1) 16 27,381 - - - 27,381
Share-based payment transactions 17 - 109,246 - - 109,246
----------- ----------- ------------ ------------- ------------
T otal Transactions with
Owners
of the Company 635,759 109,246 - - 745,005
----------- ----------- ------------ ------------- ------------
Balance at 31 December
2022 192,817,143 330,567 7,651,900 (189,071,463) 11,728,147
----------- ----------- ------------ ------------- ------------
Balance at 1 July 2021 185,355,925 - 7,096,752 (183,469,774) 8,982,903
Total Comprehensive Income/(Loss)
Loss a fter tax for the
period - - - (2,235,196) (2,235,196)
----------- ----------- ------------ ------------- ------------
Other Comprehensive In
come
Foreign currency translation
differences - - 129,406 - 129,406
----------- ----------- ------------ ------------- ------------
Total Other Comprehensive
In come - - 129,406 - 129,406
----------- ----------- ------------ ------------- ------------
Total Comprehensive Income/(Loss)
for the Period - - 129,406 (2,235,196) (2,105,790)
----------- ----------- ------------ ------------- ------------
Transactions with Owners
of the Company
Contributions and Distributions
Shares issued for cash 1,485,195 - - - 1,485,195
Capital raising costs
(1) (384,845) - - - (384,845)
Share-based payment transactions 17 19,489 53,133 - - 72,622
----------- ----------- ------------ ------------- ------------
T otal Transactions with
Owners
of the Company 1,119,839 53,133 - - 1,172,972
----------- ----------- ------------ ------------- ------------
Balance at 31 December
2021 186,475,764 53,133 7,226,158 (185,704,970) 8,050,085
----------- ----------- ------------ ------------- ------------
(1) Capital raising costs include cash payments and the fair
value of options granted to the underwriter.
The above Condensed Consolidated Statement of Changes in Equity
is to be read in conjunction with the accompanying notes .
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEARED 31 DECEMBER 2022
31 December 31 December
2022 2021
$ $
------------- ------------
Cash Flows from Operating Activities
Cash receipts from customers 467,308 -
Recovery of prior period operating costs 52,539 510,644
Payments to suppliers and employees (3,771,568) (1,543,727)
Repayment of JPDA 06-103 PSC termination
penalty (372,523) (348,481)
------------- ------------
Cash outflows from operations (3,624,244) (1,381,564)
Payments for exploration and evaluation
expenses (442,433) (349,347)
Interest received 158 189
Interest paid (4,790) (3,931)
Net Cash Used in Operating Activities (4,071,309) (1,734,653)
------------- ------------
Cash Flows from Investing Activities
Payment for deposit for Cambay Acquisition
(paid to bank guarantee and later called
upon by GSPC) - (2,903,141)
Payments for capitalised exploration and
evaluation - (7,352)
Acquisition of plant and equipment - (26,621)
Proceeds from sale of other investments - 118,694
Net Cash Used in Investing Activities - (2,818,420)
------------- ------------
Cash Flows from Financing Activities
Proceeds from issue of share capital 608,378 1,485,195
Payment for share issue costs (106,168) (141,361)
Proceeds from borrowings 372,523 348,481
Repayment of borrowings (199,906) (23,404)
Net Cash from Financing Activities 674,827 1,668,911
------------- ------------
Net Decrease in Cash and Cash Equivalents (3,396,482) (2,884,162)
Cash and cash equivalents at 1 July 4,838,459 4,310,767
Effect of exchange rate fluctuations on
cash held (77,554) (1,191)
------------- ------------
Cash and Cash Equivalents at 31 December 1,364,423 1,425,414
------------- ------------
The above Condensed Consolidated Statement of Cash Flows is to
be read in conjunction with the accompanying note
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE HALF-YEARED 31 DECEMBER 2022
1. REPORTING ENTITY
Synergia Energy Ltd (the "Company") is a for-profit entity
domiciled in Australia. The condensed consolidated interim
financial report as at and for the half-year ended 31 December 2022
comprise the Company and its subsidiaries (collectively the "Group"
and individually "Group Entities"). Synergia Energy Ltd is a
company limited by shares incorporated in Australia whose shares
are publicly traded on the Alternative Investment Market (" AIM")
of the London Stock Exchange ("LSE"). The Company's shares were
also recently publicly traded on the Australian Securities Exchange
("ASX") until its delisting from the ASX on 30 December 2022.
The Group is primarily involved in the exploration, evaluation,
development and production of hydrocarbons.
The consolidated annual financial report of the Group as at and
for the year ended 30 June 2022 is available upon request from the
Company's registered office at Level 1, 11 Lucknow Place, West
Perth, Western Australia 6005 or at www.synergiaenergy.com .
2. BASIS OF PREPARATION
(a) Presentation Currency
The condensed consolidated interim financial report is presented
in Australian Dollars ("$"), unless otherwise stated.
(b) Statement of Compliance
The condensed consolidated interim financial report is a general
purpose condensed financial report which has been prepared in
accordance with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Act 2001, and IAS 34 Interim
Financial Reporting. The condensed consolidated interim financial
report does not include all of the notes and information included
in an annual financial report and accordingly this report should be
read in conjunction with the consolidated annual financial report
of the Group as at and for the year ended 30 June 2022.
The Company is a company of the kind referred to in ASIC
Corporations (Rounding in Financials/Directors' Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with that
Corporations Instrument amounts in the half-year financial report
are rounded off to the nearest dollar, unless otherwise
indicated.
This condensed consolidated interim financial report was
authorised for issue by the Board of Directors on 15 March
2023.
(c) Going Concern Basis
The Directors believe it is appropriate to prepare the
consolidated financial statements on a going concern basis, which
contemplates continuity of normal business activities and the
realisation of assets and settlement of liabilities in the ordinary
course of business.
The Group incurred a loss of $3,674,813 (half-year ended 31
December 2021: $2,235,196) and had cash outflows from operating
activities of $4,071,309 (half-year ended 31 December 2021:
$1,734,653). The Group concluded the half-year at 31 December 2022
with cash and cash equivalents of $1,364,423 (at 30 June 2022:
$4,838,459) and had loans outstanding at period end of $650,878 (at
30 June 2022: $451,355) .
On 22 February 2023, the Company announced that it entered into
a convertible loan agreement with certain sophisticated and/or
professional existing and new shareholders to secure a new
convertible loan facility of GBP650,000. The convertible loan
proceeds were received by the Company between 23 February 2023 and
9 March 2023 and will be used for working capital purposes.
The Group also requires further funding within the next twelve
months in order to repay its loan balance, continue its exploration
activities, progress the Cambay development and drilling programme,
meet its ongoing administrative expenses , and for any new business
opportunities that the Group may pursue.
The Directors believe that the Group will be able to secure
sufficient funding to meet the requirements to continue as a going
concern, due to its history of previous capital raisings,
acknowledging that the structure and timing of any capital raising
is dependent upon investor support, prevailing capital markets,
shareholder participation, oil and gas prices and the outcome of
planned exploration and evaluation activities, which creates
uncertainty.
The Directors consider the going concern basis of preparation to
be appropriate based on its forecast cash flows for the next twelve
months and that the Group will be in a position to continue to meet
its minimum administrative, evaluation and development expenditures
and commitments for at least twelve months from the date of this
report.
If further funds are not able to be raised or realised, then it
may be necessary for the Group to sell or farmout its exploration
and development assets and to reduce discretionary administrative
expenditure.
The ability of the Group to achieve its forecast cash flows,
particularly the raising of additional funds, represents a material
uncertainty that may cast significant doubt about whether the Group
can continue as a going concern, in which case it may not be able
to realise its assets and extinguish its liabilities in the normal
course of business and at the stated amounts in the financial
statements.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in this condensed
consolidated interim financial report are the same as those applied
by the Group in its consolidated financial report as at and for the
year ended 30 June 2022.
New or Amended Accounting Standards and Interpretations
Adopted
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the Australian Accounting
Standards Board ("AASB") that are mandatory for the current
reporting period.
Any new or amended accounting standards, interpretations and
other accounting pronouncements that are not yet mandatory have not
been early adopted.
4. ESTIMATES AND JUDGEMENTS
The preparation of a condensed consolidated interim financial
report requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing this condensed consolidated interim financial
report, the significant judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial report as at and for the year ended 30 June 2022.
5. OPERATING SEGMENTS
The Group has identified its operating segments based upon the
internal reports that are reviewed and used by the executive
management team in assessing performance and that are used to
allocate the Group's resources. There has been no change in the
basis of segmentation from the Group's 30 June 2022 annual
consolidated financial report.
India JPDA (1) Indonesia United Kingdom Corporate (2) Consolidated
-------------- ----------------------- ----------------- ---------------- ----------------- ------------------------ ------------------------
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
6 Months Ended
31
December $ $ $ $ $ $ $ $ $ $ $ $
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Revenue
External
revenue 690,820 - - - - - - - - - 690,820 -
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Gross Loss (1,690,099) - - - - - - - - - (1,690,099) -
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Reportable
Segment
(Loss)/Profit
Before
Income Tax (2,037,985) (925,413) (9,054) (23,513) 62,867 (11,904) (80,304) (7,468) (1,373,821) (1,137,389) (3,438,297) (2,105,687)
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Net finance
costs (180,492) (123,277)
Foreign
exchange loss (56,024) (6,232)
Income tax - -
expense
----------- -----------
Net Loss for
the
Period (3,674,813) (2,235,196)
----------- -----------
India JPDA (1) Indonesia United Kingdom Corporate (2) Consolidated
-------------- ----------------------- ----------------- ---------------- ----------------- ------------------------ ------------------------
31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June
2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022
$ $ $ $ $ $ $ $ $ $ $ $
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Segment Assets 21,812,333 19,426,958 5,451 10,657 - - - - 771,918 6,340,833 22,589,702 25,778,448
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
Segment
Liabilities 9,822,654 9,823,249 4,765 372,034 17,261 86,190 6,055 - 1,010,820 913,377 10,861,555 11,194,850
-------------- ----------- ---------- ------- -------- ------ -------- -------- ------- ----------- ----------- ----------- -----------
There were no significant inter-segment transactions during the
half-year.
(1) Joint Petroleum Development Area.
(2) Corporate represents a reconciliation of reportable segment
revenues, profit or loss and assets to the consolidated figure.
6. REVENUE AND EXPENSES
31 December 31 December
2022 2021
$ $
------------ -----------
(a) Revenue
Oil sales 294,053 -
Gas sales 396,767 -
------------ -----------
690,820 -
------------ -----------
(b) Cost of Sales
Production costs (2,072,613) -
Amortisation of development assets (5,865) -
Movement in oil stocks inventory (302,441) -
------------ -----------
(2,380,919) -
------------ -----------
(c) Care and Maintenance Expenditure
Care and maintenance costs - (185,134)
Movement in oil stocks inventory - (2,774)
------------ -----------
- (187,908)
------------ -----------
(d) Administration Expenses
Employee benefits expense (647,592) (470,694)
Administration expense (604,323) (680,059)
(1,251,915) (1,150,753)
------------ -----------
(e) Other Expenses
Depreciation expense (3,689) (11,385)
Loss on disposal of plant and equipment - (4,527)
------------ -----------
(3,689) (15,912)
------------ -----------
(f) Finance Income
Interest income 158 189
158 189
------------ -----------
(g) Finance Costs
Interest expense - borrowings (36,018) (4,827)
Unwinding of discount on site restoration
provision (144,632) (25,147)
Equity securities designated at FVTPL
- net change in fair value - (93,492)
------------ -----------
(180,650) (123,466)
------------ -----------
(h) Foreign Exchange Loss - Net
Foreign exchange loss - realised 9,920 -
Foreign exchange loss - unrealised (65,944) (6,232)
------------ -----------
(56,024) (6,232)
------------ -----------
7. TRADE AND OTHER RECEIVABLES
31 December
2022 30 June 2022
$ $
------------ ------------
Current
Allocation of Receivables
Joint venture receivables 33,626 43,543
Other receivables 444,280 83,515
477,906 127,058
------------ ------------
Joint Venture Receivables
Joint venture receivables 411,149 400,341
Provision for expected credited losses (377,523) (356,798)
33,626 43,543
------------ ------------
Other Receivables
Corporate receivables 481,639 114,859
Provision for expected credited losses (37,359) (31,344)
444,280 83,515
------------ ------------
Joint venture receivables include the Group's share of
outstanding cash calls and recharges owing from joint venture
partners, as well as other minor receivables.
The Group considers that there is evidence of impairment if any
of the following indicators are present: financial difficulties of
the debtor, probability that the debtor will dispute amounts owing
and default or delinquency in payment (more than one year old).
Each receivable has been assessed individually for recovery, and
those deemed to have a low chance of recovery have been fully
provided for in the current period. The carrying value of trade and
other receivables approximates its fair value due to the assessment
of recoverability.
31 December
2022 30 June 2022
Allocation of Provision for Expected Credit
Losses $ $
------------ ------------
Joint venture receivables (377,523) (356,798)
Other receivables (37,359) (31,344)
------------ ------------
(414,882) (388,142)
------------ ------------
Half-Year
Ended 31 December
2022
Movement in Provision for Expected Credit
Losses $
------------------
Balance at 1 July 2022 (388,142)
Expected credit losses incurred during the
period (22,712)
Effect of movements in exchange rates (4,028)
------------------
Balance at 31 December 2022 (414,882)
------------------
8. INVESTMENTS, INCLUDING DERIVATIVES
31 December
2022 30 June 2022
$ $
------------ ------------
Current Investments
Equity securities - designated at FVTPL 69,185 69,185
69,185 69,185
------------ ------------
At 31 December 2022, the Group had 11,530,847 Armour shares on
hand (at 30 June 2022: 11,530,847 Armour shares on hand).
Fair Value Measurement
The fair value measurement of the equity securities has been
determined using a three-level hierarchy, based on the lowest level
of input that is significant to the entire fair value measurement,
being:
Level 1: Quoted prices (unadjusted) in active markets for
identical assets that the Group can access at the measurement
date
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset, either directly or
indirectly
Level 3: Unobservable inputs for the asset
Equity securities - designated as at FVTPL have been valued
using quoted market rates (Level 1). This valuation technique
maximises the use of observable market data where it is available
and relies as little as possible on entity specific estimates.
Dividends
Dividends received are recognised as other income by the Company
when the right to receive payment is established.
9. DEVELOPMENT ASSETS
31 December
2022 30 June 2022
Non-Current $ $
------------ ------------
Allocation of Development Assets
Cambay development asset 11,679,122 11,595,853
Cambay restoration asset 8,861,400 8,714,761
------------ ------------
Carrying Amounts - Total 20,540,522 20,310,614
------------ ------------
Half-Year
Ended
31 December
2022
Movement in Carrying Amount - Cambay Development Asset $
-------------
Cost - Cambay Development Assets
Balance at 1 July 2022 33,617,561
Effect of movements in foreign exchange rates (809,662)
-------------
Balance at 31 December 2022 32,807,899
-------------
Amortisation and Impairment Losses - Cambay Development
Asset
Balance at 1 July 2022 (22,021,708)
Amortisation charge for the period (5,865)
Effect of movements in foreign exchange rates 898,796
-------------
Balance at 31 December 2022 (21,128,777)
Carrying Amount - Cambay Development Asset 11,679,122
-------------
Movement in Carrying Amount - Cambay Restoration Asset
Cost - Cambay Restoration Asset
Balance at 1 July 2022 8,714,761
Effect of movements in foreign exchange rates 146,639
-------------
Balance at 31 December 2022 8,861,400
-------------
Amortisation and Impairment Losses - Cambay Restoration
Asset
Balance at 1 July 2022 -
Effect of movements in foreign exchange rates -
-------------
Balance at 31 December 2022 -
Carrying Amount - Cambay Restoration Asset 8,861,400
-------------
Carrying Amounts - Total
At 1 July 2022 20,310,614
-------------
At 31 December 2022 20,540,522
-------------
Cambay Field Development Assets
Development assets are reviewed at each reporting date to
determine whether there is any indication of impairment or reversal
of impairment. Indicators of impairment can include changes in
market conditions, future oil and gas prices and future costs.
Based on a review of key assumptions, no impairment indicators
were identified as at 31 December 2022. As such no impairment
charges were applied to the Cambay Field development assets during
the financial half-year ended 31 December 2022. Also, no further
reassessment was made of the restoration asset and provision as at
31 December 2022, the last reassessment of the restoration asset
and provision being made during the year ended 30 June 2022 (refer
to the consolidated annual financial report of the Group as at and
for the year ended 30 June 2022).
10. TRADE AND OTHER PAYABLES
31 December
2022 30 June 2022
$ $
------------ ------------
Current
Trade creditors 284,656 285,127
Accruals 604,910 1,081,161
Termination penalty payable (JPDA 06-103
PSC) - 362,897
------------ ------------
889,566 1,729,185
------------ ------------
Trade and Other Payables
The carrying value of trade and other payables is considered to
approximate its fair value due to the short-term nature of these
financial liabilities.
Termination Penalty Payable (JPDA 06-103 PSC) Half-Year
Ended
31 December
2022
$
Movement in Termination Penalty Payable Balance During
the Half-Year
-------------
Balance at 1 July 2022 362,897
Repayment of termination penalty (US$250,000) (372,523)
Effect of movements in exchange rates 9,626
-------------
Balance at 31 December 2022 -
-------------
The termination penalty payable was payable to Autoridade
Nacional Do Petroleo E Minerais ("ANPM"). The final instalment of
the termination penalty (US$250,000) was paid to ANPM on 7
September 2022, thereby fully extinguishing the Group's obligations
to ANPM.
11. PROVISIONS
31 December
2022 30 June 2022
$ $
------------ ------------
Current - Employee Benefits 195,717 180,827
Non-Current - Site Restoration and Well
Abandonment 9,125,394 8,833,483
------------ ------------
9,321,111 9,014,310
------------ ------------
Half-Year
Ended
31 December
Movement in Provision for Site Restoration and 2022
Well Abandonment During the Half-Year $
-------------
Balance at 1 July 2022 8,833,483
Unwinding of discount on site restoration provision 144,632
Effect of movements in exchange rates 147,279
-------------
Balance at 31 December 2022 9,125,394
-------------
12. BORROWINGS
31 December
2022 30 June 2022
$ $
------------ ------------
Unsecured loan 650,878 451,355
------------ ------------
650,878 451,355
------------ ------------
Terms and Repayment Schedule of US$800,000 Loan Facility
The above relates to an unsecured loan facility agreement for
US$800,000, which the Company entered into during the financial
year ended 30 June 2021 with two of its JPDA joint venture
partners, and which was restricted to fund the settlement of the
termination penalty payable to ANPM (see Note 10 ).
At 31 December 2022, the terms and conditions of the US$800,000
loan facility is as follows:
31 December
2022 30 June 2022
$ $
----------------- -----------------
Nominal
Interest Year Face Carrying Face Carrying
Currency Rate of Maturity Value Amount Value Amount
--------- --------- ------------ ------- -------- ------- --------
US$800,000 loan facility USD 11.0% 2023 650,878 650,878 451,355 451,355
650,878 650,878 451,355 451,355
------- -------- ------- --------
The movement of the loan during the half-year was as
follows:
Half-Year
Ended
31 December
2022
Movement in Loan Balance $
-------------
Balance at 1 July 2022 (US$310,938) 451,355
Repayments made to lender (US$140,414) (199,906)
Amounts drawn down to pay termination penalty (US$250,000) 372,523
Interest on facility balance (US$20,446) 31,228
Effect of movements in exchange rates (4,322)
-------------
Balance at 31 December 2022 (US$440,970) 650,878
-------------
The interest rate of the loan facility is 11% and the balance of
the loan, plus interest, is to be repaid to Japan Energy E&P
JPDA Pty Ltd ("JX") in two instalments (US$196,754 which was repaid
on 13 February 2023 and the remaining to be repaid in August 2023),
prior to the loan's maturity on 17 August 2023.
Subsequent Event:
As mentioned above, on 13 February 2023, the Company made a
repayment to JX of US$196,754. Following the repayment and further
interest accrued, at report date, the balance of the loan from JX
is approximately US$253,549.
In addition, on 22 February 2023, the Company announced that it
entered into a convertible loan agreement with certain
sophisticated and/or professional existing and new shareholders to
secure a new convertible loan facility of GBP650,000.
Summary of Key Terms of the Convertible Loan Facility:
Maturity Date: 9 March 2024 ( (2)
Option Date: 9 December 2023 ( (2)
Interest Rate: 5%
Conversion Terms: Option to convert the loan and interest payable (to
that point) in the period between the Option Date
and the Maturity Date. If conversion elected, loan
principal and accrued interest is payable by the
Company in new fully paid ordinary shares ("Common
Shares") at a GBP0.0008 conversion price, equating
to a maximum issue of, in aggregate, 853,125,000
new Common Shares.
Repayment Terms: No option for the Company to elect to repay ahead
of Maturity Date, or for the Company to elect repayment
to be made in cash.
Security: Unsecured
Arrangement Fee: None
Note:
(1) Standard form representations and warranties have been
agreed between the Company and the convertible loan lenders.
(2) The convertible loan proceeds were received by the Company
between 23 February 2023 and 9 March 2023 and, as a consequence,
the option date and the maturity date were extended to 9 December
2023 and 9 March 2024 respectively.
13. LEASES
Rental Lease Commitments
31 December
2022 30 June 2022
$ $
------------ ------------
Within one year 49,755 36,480
One year or later and no later than five - -
years
------------ ------------
49,755 36,480
------------ ------------
Expenses Related to Short-Term or Low Value Leases
31 December 31 December
2022 2021
$ $
------------ -----------
Operating lease rentals expensed during
the half-year 36,737 13,121
------------ -----------
14. EXPITURE COMMITMENTS
Exploration Expenditure Commitments
In order to maintain rights of tenure to exploration permits,
the Group is required to perform exploration work to meet the
minimum expenditure requirements specified by various state and
national governments. These obligations are subject to
renegotiation when an application for an exploration permit is made
and at other times. These obligations are not provided for in the
financial report. The expenditure commitments are currently
estimated to be $nil (30 June 2022: $nil).
There are no minimum exploration work commitments in the Cambay
Production Sharing Contract.
When obligations expire, are renegotiated, or cease to be
contractually or practically enforceable, they are no longer
considered to be a commitment.
Further expenditure commitments for subsequent permit periods
are contingent upon future exploration results. These cannot be
estimated and are subject to renegotiation upon the expiry of the
existing exploration leases.
Capital Expenditure Commitments
The Group had no capital expenditure commitments as at 31
December 2022 (30 June 2022: $nil).
15. CONTINGENT ASSETS, CONTINGENT LIABILITIES AND GUARANTEES
Contingent Assets and Contingent Liabilities at Reporting
Date
The Directors are of the opinion that there were no contingent
assets or contingent liabilities as at 31 December 2022 and as at
30 June 2022.
Guarantees
Synergia Energy Ltd has issued guarantees in relation to
corporate credit cards. The bank guarantees amount to $50,000 (30
June 2022: $50,000).
16. ISSUED CAPITAL - FULLY PAID
Half-Year Ended Year Ended
31 December 2022 30 June 2022
Number of Issued Number of Issued
Ordinary Capital Ordinary Capital
Shares $ Shares $
------------- ----------- ------------- -----------
Shares
On issue 1 July 8,242,959,310 192,181,384 5,685,971,571 185,355,925
Issue of share capital
Shares issued for cash ( (1) 174,831,394 608,378 2,497,758,909 7,503,616
Shares issued for non-cash - - 4,389,645 19,489
Exercise of unlisted options - - 54,839,185 136,393
Capital raising costs ( (2) - 27,381 - (834,039)
------------- ----------- ------------- -----------
Balance at 31 December / 30 June 8,417,790,704 192,817,143 8,242,959,310 192,181,384
------------- ----------- ------------- -----------
Additional information of the issue of ordinary shares:
(1) Following shareholder approval received at the 13 July 2022
General Meeting, 174,831,394 fully paid ordinary shares were issued
at GBP0.002 ($0.0035) per share. The shares were the final
instalment of the placement previously arranged and announced on 4
May 2022. 69,932,558 shares out of 174,831,394 shares were issued
on 21 July 2022 and the remaining 104,898,836 shares were issued on
3 August 2022.
(2) The overall credit "inflow" of capital raising costs during
the half-year period is a result of reversals of capital raising
costs which were over-accrued in previous financial periods, and
which were more than other capital raising costs incurred during
the period (including those for options granted to Novum during the
period). Refer to Note 17 (footnote ( 2) ) with regards to the fair
value of options granted to Novum.
The Company does not have authorised capital or par value in
respect of its issued shares. The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
17. SHARE-BASED PAYMENTS
Half-Year
Half-Year Ended
Ended
31 December 31 December
2022 2021
$ $
------------- ------------
Shares and Options - Equity Settled
Non-Executive Directors - remuneration shares - 19,489
Executive Directors - long-term incentive
options ( (1) 84,094 -
Total share-based payments expense and amount
recognised in the Condensed Consolidated
Statement of Profit or Loss and Other Comprehensive
Income 84,094 19,489
Share-Based Payments Recognised Directly
in Equity
Options granted to brokers and financiers
during the period ( (2) 25,152 53,133
------------- ------------
Total share-based payments recognised directly
in equity 25,152 53,133
Total Share-Based Payment Transactions 109,246 72,622
------------- ------------
Additional information on share-based payment transactions
during the period:
(1) Relates to 324,675,324 unlisted options which were issued to
Executive Directors (Messrs Salomon, Wessel and Judd) on 12 August
2022, following the Company's General Meeting held on 13 July 2022.
The options are exercisable at GBP0.0022 ($0.0039) and expire on 12
August 2027, with one third (1/3) vesting on 30 June 2022, one
third (1/3) vesting on 30 June 2023 and one third (1/3) vesting on
30 June 2024.
The total fair value of the unlisted options issued to Executive
Directors ($504,564) was calculated at the grant date of 13 July
2022 using the Black-Scholes Model. Expected volatility was
estimated by considering historical volatility of the Company's
share price over the period commensurate with the expected term.
The following factors and assumptions were used to determine the
fair value of the 324,675,324 unlisted options granted to Executive
Directors on 13 July 2022:
Risk
Price of Free
Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Vesting Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
------------- ------------------- --------------- ----------- ----------- ----------- ---------- -------- --------
13 July 2022 As indicated above 12 August 2027 GBP0.0009 GBP0.0022 GBP0.0016 75.15% 1.35% -
($0.0016) ($0.0039) ($0.0028)
------------------------------------------------- ----------- ----------- ----------- ---------- -------- --------
One third (1/3) of the value of these options ($168,188) was
expensed at 30 June 2022, with a further $84,094 expensed during
the half-year ended 31 December 2022.
(2) On 13 July 2022, at the Company's General Meeting held on
that date, 30,000,000 unlisted options were approved by
shareholders and granted to Novum, pursuant to the placing
agreement the Company had with Novum for their role as Lead Manager
pursuant to the capital raising advisory agreement relating to the
May placement.
The options are exercisable at GBP0.002 ($0.0039) and expires on
30 April 2024. The fair value of the unlisted options was
calculated at the grant date of 13 July 2022 using the
Black-Scholes Model. Expected volatility was estimated by
considering historical volatility of the Company's share price over
the period commensurate with the expected term.
The following factors and assumptions were used to determine the
fair value of the 30,000,000 unlisted options granted to Novum
during the period:
Price of Risk Free
Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Vesting Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
------------- ------------- -------------- ----------- ----------- ----------- ---------- --------- ----------
13 July 2022 13 July 2022 30 April 2024 GBP0.0005 GBP0.0020 GBP0.0016 75.15% 1.35% -
($0.0008) ($0.0039) ($0.0028)
------------------------------------------ ----------- ----------- ----------- ---------- --------- ----------
The options were issued on 13 September 2022 and have not been
exercised at the half-year report date.
No other options were issued during the half-year ended 31
December 2022. The balance of unlisted options at 31 December 2022
was 379,885,408 (30 June 2022: 736,505,236 options), as shown in
the schedule below:
Balance Issued Balance
Expiry Exercise at 1 July During the Options at 31 Dec
Issue Date Date Price 2022 Period Expired 2022
------------- ------------- ----------- ------------ ------------ -------------- ------------
19 Jan 2022 31 May 2024 GBP0.0024 25,210,084 - - 25,210,084
17 Mar 2022 31 Dec 2022 GBP0.0028 711,295,152 - (711,295,152) -
12 Aug 2022 12 Aug 2027 GBP0.0022 - 324,675,324 - 324,675,324
13 Sep 2022 30 Apr 2024 GBP0.0020 - 30,000,000 - 30,000,000
------------ ------------ -------------- ------------
736,505,236 354,675,324 (711,295,152) 379,885,408
------------ ------------ -------------- ------------
18. RELATED PARTY TRANSACTIONS
Arrangements with related parties continue to be in place,
including the 324,675,324 unlisted options issued on 12 August 2022
to the Executive Directors as long-term incentives. For details of
these arrangements, refer to the consolidated annual financial
report of the Group as at and for the year ended 30 June 2022.
No further related party arrangements were made during the
period to 31 December 2022.
19. CHANGE IN THE COMPOSITION OF THE GROUP
Since the last annual reporting date, there have been no
significant changes in the composition of the Group.
20. SUBSEQUENT EVENTS
On 13 February 2023, the Company made a repayment to JX of
US$196,754. Following the repayment and further interest accrued,
at report date, the balance of the loan from JX is approximately
US$253,549.
On 22 February 2023, the Company announced that it entered into
a convertible loan agreement with certain sophisticated and/or
professional existing and new shareholders to secure a new
convertible loan facility of GBP650,000. The convertible loan
proceeds were received by the Company between 23 February 2023 and
9 March 2023 and will be used for working capital purposes. Under
the terms of the agreement, and as a consequence of the receipt
date of the funds, the option date and maturity date were extended
to 9 December 2023 and 9 March 2024 respectively.
A summary of the key terms of the convertible loan facility is
disclosed in Note 12 .
Other than the above disclosures, there has not arisen in the
interval between the end of the financial half-year period and the
date of this report an item, transaction or event of a material and
unusual nature likely, in the opinion of the Directors of the
Company, to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the Group,
in future financial periods.
DIRECTORS' DECLARATION
In the opinion of the Directors of Synergia Energy Ltd (the
Company):
1. the condensed consolidated financial statements and notes set
out on pages 9 to 28 , are in accordance with the Corporations Act
2001 including:
(a) giving a true and fair view of the Group's financial
position as at 31 December 2022 and of its performance for the
half-year ended on that date; and
(b) complying with Australian Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001;
and
2. there are reasonable grounds to believe that the Group and
the Company will be able to pay its debts as and when they become
due and payable.
Signed in accordance with a resolution of the Directors.
Mr Jonathan Salomon Mr Roland Wessel
Executive Chairman Chief Executive Officer
West Perth
Western Australia
15 March 2023
INDEPENT AUDITOR'S REVIEW REPORT
TO THE MEMBERS OF SYNERGIA ENERGY LTD
Report on the Half-Year Financial Report
Conclusion
We have reviewed the half-year financial report of Synergia
Energy Ltd (the company) and controlled entities (consolidated
entity) which comprises the condensed consolidated statement of
financial position as at 31 December 2022, the condensed
consolidated statement of profit or loss and other comprehensive
income, the condensed consolidated statement of changes in equity
and the condensed consolidated statement of cash flows for the
half-year ended on that date, notes comprising a summary of
significant accounting policies and other explanatory information
and the directors' declaration of the consolidated entity
comprising the company and the entities it controlled at 31
December 2022, or during the half year.
Based on our review, which is not an audit, we have not become
aware of any matter that makes us believe that the accompanying
half-year financial report of Synergia Energy Ltd is not in
accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity's
financial position as at 31 December 2022 and of its performance
for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a
Financial Report Performed by the Independent Auditor of the
Entity. Our responsibilities are further described in the Auditor's
Responsibilities for the Review of the Financial Report section of
our report.
Material Uncertainty related to Going Concern
Without qualifying our conclusion, we draw attention to Note
2(c) in the financial report in which indicates that the
consolidated entity incurred a loss of ($3,674,813) (31 December
2021: ($2,235,196)) during the half year ended 31 December 2022, it
incurred negative operating cashflow of ($4,071,309) (31 December
2021: ($1,734,653)). These conditions, along with other matters as
set forth in Note 2(c) indicate the existence of a material
uncertainty which may cast significant doubt about the consolidated
entity's ability to continue as a going concern and therefore, the
consolidated entity may be unable to realise its assets and
discharge its liabilities in the normal course of business, and at
the amounts stated in the financial report.
Independence
We are independent of the company in accordance with the auditor
independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical
Standards Board's APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the annual financial report in Australia.
We have also fulfilled our other ethical responsibilities in
accordance with the Code.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation
of the half-year financial report that gives a true and fair view
in accordance with the Australian Accounting Standards and the
Corporations Act 2001 and for such internal controls as the
directors determine is necessary to enable the preparation of the
half-year financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
Auditor's Responsibilities for the Review of the Financial
Report
Our responsibility is to express a conclusion on the half-year
financial report based on our review. ASRE 2410 requires us to
conclude whether we have become aware of any matter that makes us
believe that the half-year financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair
view of the consolidated entity's financial position as at 31
December 2022 and its performance for the half year ended on that
date; and complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporation Regulations 2001.
A review of a half-year financial report consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
PKF PERTH
SHANE CROSS
PARTNER
15 March 2023
West Perth,
Western Australia
DEFINITIONS
Associated Gas Natural gas found in contact with or dissolved in crude oil in the reservoir. It can
be further
categorised as Gas-Cap Gas or Solution Gas.
----------------------------- ---------------------------------------------------------------------------------------
Barrels/Bbls Barrels of oil or condensate - standard unit of measurement for all oil and condensate
production.
One barrel is equal to 159 litres or 35 imperial gallons.
----------------------------- ---------------------------------------------------------------------------------------
BBO Billion standard barrels of oil or condensate.
----------------------------- ---------------------------------------------------------------------------------------
BCF Billion cubic feet of gas at standard temperature and pressure conditions.
----------------------------- ---------------------------------------------------------------------------------------
BCFE Billion cubic feet equivalent of gas at standard temperature and pressure conditions.
----------------------------- ---------------------------------------------------------------------------------------
BOE Barrels of Oil Equivalent. Converting gas volumes to the oil equivalent is customarily
done
on the basis of the nominal heating content or calorific value of the fuel. Common
industry
gas conversion factors usually range between 1 barrel of oil equivalent ("BOE") =
5,600 standard
cubic feet ("scf") of gas to 1 BOE = 6,000 scf. (Many operators use 1 BOE = 5,620 scf
derived
from the metric unit equivalent 1 m(3) crude oil = 1,000 m(3) natural gas).
----------------------------- ---------------------------------------------------------------------------------------
BOEPD Barrels of oil equivalent per day.
----------------------------- ---------------------------------------------------------------------------------------
BOPD Barrels of oil per day.
----------------------------- ---------------------------------------------------------------------------------------
CCGT Combined cycle gas turbines.
----------------------------- ---------------------------------------------------------------------------------------
CCS " Carbon Capture and Sequestration" or "Carbon Capture and Storage"
----------------------------- ---------------------------------------------------------------------------------------
CO(2) Carbon dioxide.
----------------------------- ---------------------------------------------------------------------------------------
Contingent Resources Those quantities of petroleum estimated, as of a given date, to be potentially
recoverable
from known accumulations by application of development projects, but which are not
currently
considered to be commercially recoverable due to one or more contingencies.
Contingent Resources may include, for example, projects for which there are currently
no viable
markets, or where commercial recovery is dependent on technology under development, or
where
evaluation of the accumulation is insufficient to clearly assess commerciality.
Contingent
Resources are further categorised in accordance with the level of certainty associated
with
the estimates and may be sub-classified based on project maturity and/or characterised
by
their economic status.
----------------------------- ---------------------------------------------------------------------------------------
Discovered in place volume Is that quantity of petroleum that is estimated, as of a given date, to be contained
in known
accumulations prior to production.
----------------------------- ---------------------------------------------------------------------------------------
FISO Floating injection, storage and offloading.
----------------------------- ---------------------------------------------------------------------------------------
FEED Front End Engineering Design.
----------------------------- ---------------------------------------------------------------------------------------
GOI The Government of India.
----------------------------- ---------------------------------------------------------------------------------------
GOR Gas to oil ratio in an oil field, calculated using measured natural gas and crude oil
volumes
at stated conditions. The gas/oil ratio may be the solution gas/oil, symbol Rs;
produced gas/oil
ratio, symbol Rp; or another suitably defined ratio of gas production to oil
production. Volumes
measured in scf/bbl.
----------------------------- ---------------------------------------------------------------------------------------
LNG Liquefied natural gas.
----------------------------- ---------------------------------------------------------------------------------------
MMBO Million standard barrels of oil or condensate.
----------------------------- ---------------------------------------------------------------------------------------
mD Millidarcy - unit of permeability.
----------------------------- ---------------------------------------------------------------------------------------
MD Measured Depth.
----------------------------- ---------------------------------------------------------------------------------------
MMbbls Million barrels of oil or condensate.
----------------------------- ---------------------------------------------------------------------------------------
MMscfd Million standard cubic feet (of gas) per day.
----------------------------- ---------------------------------------------------------------------------------------
MSCFD Thousand standard cubic feet (of gas) per day.
----------------------------- ---------------------------------------------------------------------------------------
NSTA North Sea Transition Authority.
----------------------------- ---------------------------------------------------------------------------------------
PI Participating Interest.
----------------------------- ---------------------------------------------------------------------------------------
Prospective Resources Those quantities of petroleum which are estimated, as of a given date, to be
potentially recoverable
from undiscovered accumulations.
----------------------------- ---------------------------------------------------------------------------------------
PSC Production Sharing Contract.
----------------------------- ---------------------------------------------------------------------------------------
Reserves Reserves are those quantities of petroleum anticipated to be commercially recoverable
by application
of development projects to known accumulations from a given date forward under defined
conditions.
Proved Reserves are those quantities of petroleum, which by analysis of geoscience and
engineering
data, can be estimated with reasonable certainty to be commercially recoverable, from
a given
date forward, from known reservoirs and under defined economic conditions, operating
methods
and government regulations.
Probable Reserves are those additional Reserves which analysis of geoscience and
engineering
data indicate are less likely to be recovered than Proved Reserves but more certain to
be
recovered than Possible Reserves.
Possible Reserves are those additional reserves which analysis of geoscience and
engineering
data indicate are less likely to be recoverable than Probable Reserves. Reserves are
designated
as 1P (Proved), 2P (Proved plus Probable) and 3P (Proved plus Probable plus Possible).
Probabilistic methods
* P90 refers to the quantity for which it is estimated
there is at least a 90% probability the actual
quantity recovered will equal or exceed.
* P50 refers to the quantity for which it is estimated
there is at least a 50% probability the actual
quantity recovered will equal or exceed.
* P10 refers to the quantity for which it is estimated
there is at least a 10% probability the actual
quantity recovered will equal or exceed.
----------------------------- ---------------------------------------------------------------------------------------
SCF/BBL Standard cubic feet (of gas) per barrel (of oil).
----------------------------- ---------------------------------------------------------------------------------------
SCFD Standard cubic feet (of gas) per day.
----------------------------- ---------------------------------------------------------------------------------------
TCF Trillion cubic feet of gas at standard temperature and pressure conditions.
----------------------------- ---------------------------------------------------------------------------------------
Tight Gas Reservoir The reservoir cannot be produced at economic flow rates or recover economic volumes of
natural
gas unless the well is stimulated by a large hydraulic fracture treatment, a
horizontal wellbore,
or by using multilateral wellbores.
----------------------------- ---------------------------------------------------------------------------------------
UKCS The United Kingdom Continental Shelf
----------------------------- ---------------------------------------------------------------------------------------
Undiscovered in place volume Is that quantity of petroleum estimated, as of a given date, to be contained within
accumulations
yet to be discovered.
----------------------------- ---------------------------------------------------------------------------------------
CORPORATE INFORMATION
Directors Stock Exchange Listings
Joe Salomon (B APP SC (Geology), Synergia Energy Ltd's shares
GAICD) are listed under the code SYN
Executive Chairman on the Alternative Investment
Roland Wessel Market ("AIM") of the London
Chief Executive Officer and Executive Stock Exchange ("LSE")
Director
Colin Judd AIM Nominated Adviser
Chief Financial Officer and Executive Strand Hanson Limited
Director 26 Mount Row
Mark Bolton (B Business) London W1K 3SQ
Non-Executive Director United Kingdom
Paul Haywood
Independent Non-Executive Director AIM Broker
Peter Schwarz Novum Securities Limited
(B Sc (Geology), M Sc (Petroleum 2nd Floor
Geology)) Lansdowne House
Independent Non-Executive Director 57 Berkeley Square
London W1J 6ER
Company Secretary United Kingdom
Jack Rosagro (B.Com, FGIA)
Registered and Principal Office Share Registry
Level 1, 11 Lucknow Place Computershare Investor Services
West Perth PLC
Western Australia 6005 The Pavilions
Australia Bridgwater Road
Ph. +61 (0)8 9485 3200 Bristol BS13 8AE
Fax +61 (0)8 9485 3290 United Kingdom
Ph. +44 (0) 870 703 6149
Postal Address Website: www.computershare.com
PO Box 255
West Perth
Western Australia 6872
Australia
India Operations - Gujarat Project Auditors
Office PKF Perth
2(nd) Floor, Shreeji Complex Level 5, 35 Havelock Street
Next to Rituraj Complex West Perth
Vasna Road, Village Akota Western Australia 6005
Vadodara - 390015 Australia
Gujarat, India
Website
www.synergiaenergy.com
Email
synergiaenergy@synergiaenergy.com
Synergia Energy Ltd
ACN 078 652 632
ABN 50 078 652 632
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