REG - Ascent Resources PLC - Interim Results
13/09/2022 07:00
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RNS Number : 1836Z Ascent Resources PLC 13 September 2022
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
13 September 2022
FOR IMMEDIATE RELEASE
Ascent Resources plc
("Ascent" or "the Company")
Interim results for the period ended 30 June 2022
Ascent Resources plc (LON:AST), the AIM quoted onshore Caribbean, Hispanic
American and European energy and natural resources focussed company
("Company") is pleased to report its interim results for the six months ended
30 June 2022(the "Period" or "H1 2022").
Highlights:
· Launch of ESG Metals Strategy as a new target sector within its
natural resource focussed business, the Company continues to evaluate a number
of ESG Metal transactions.
· Signing of a non-binding head of terms with Enyo Law LLP, a
specialist arbitration and litigation legal firm, to advance a fully funded
non-recourse damages-based agreement for the arbitration proceedings against
the Republic of Slovenia.
· Raised £0.6m before expenses by way of a subscription and
placement with existing and new investors.
Post Period end highlights:
· Launched arbitration proceedings against the Republic of Slovenia
under the Energy Charter Treaty and UK-Slovenia bilateral investment treaty
with regards to breaches causing significant monetary damages in excess of
€500 million. It should be cautioned that in the event the Company is
successful in its claim any amount actually received by the Company may be
significantly lower.
· Receipt of the first net cash payment of €650,560 from
Slovenian partner in relation to production hydrocarbon production revenues
from the PG-10 and PG-11A wells from April 2020 through to December 2021.
Enquiries:
Ascent Resources plc Via Vigo Consulting
Andrew Dennan, CEO
WH Ireland, Nominated Adviser & Broker 0207 220 1666
James Joyce / Sarah Mather
Novum Securities, Joint Broker 0207 399 9400
John Belliss
Chairman and CEO's statement
We are delighted to report a strong six month period ended 30 June 2022 (the
"Period" or "H1 2022"), with the Company completing its 'no win-no fee' style
funding agreement for its claims against the Republic of Slovenia which was
rapidly followed by the formal launch of the associated arbitration
process. Post the Period end, the Company confirmed a monetary damages
claim in excess of €500 million and we believe this makes Ascent Resources
plc a unique and compelling proposition for shareholders.
Whilst gas production at the Petisovci project in Slovenia is buoyed by the
strong European gas market backdrop, the Company also continues to pursue an
industrial growth strategy across both onshore gas and ESG Metals where it
has, for some time now, been preparing for its maiden growth transaction.
Our vision remains, by the end of 2022, to have finalised this transformation
of Ascent such that the Company has both sustainable cash flow generation from
its operations and compelling upside exposure from a funded claim, all
supported by an "on the money" ESG compatible strategy in an exciting, growth
focused, part of the world.
We thank our shareholders for their support and look forward to achieving
success together.
Slovenia Arbitration
The future success of the Company's 75% interest in the Petisovci tight gas
project joint venture in Slovenia was hit with a significant blow in April
2022 when the Republic of Slovenia voted to approve amendments to the mining
law which now includes a complete ban on hydraulic stimulation for the purpose
of producing hydrocarbons. Consequently, the Company does now not expect to be
able to re-stimulate the PG-10 and PG-11A wells and any future development
plans can not include the use of mechanical stimulation. The Company responded
quickly serving the Republic of Slovenia ('Slovenia' or 'the State') with a
new notice of dispute of further breaches under the UK-Slovenia bilateral
investment treaty ('BIT') and the Energy Charter Treaty ('ECT') on 5 May 2022.
The Company then entered into a binding damages agreement, essentially a 'no
win - no fee' style arrangement, to appoint Enyo Law LLP, as announced on 30
May 2022. Enyo Law LLP is a specialist arbitration and litigation legal firm
who filed both of the Notice of Disputes on behalf of the Company and
represented the Company in last year's pre-arbitration negotiations with
the Republic of Slovenia. Post the Period end, the Company formally
initiated arbitration proceedings against the Republic of Slovenia with a
revised monetary damages claim in excess of €500 million on 15 August 2022.
It should be cautioned that in the event the Company is successful in its
claim any amount actually received by the Company may be significantly lower.
The claim is based on what the Board believe to be a populist campaign carried
out by Slovenia against the Company and our investment, which has prevented
the development of the Petišovci oil and gas field. In
particular, Slovenia has prevented the restimulation of two wells (PG-10 and
PG-11A) in 2017, which was necessary to maintain the levels of gas produced
from the tight rock reservoir (as has been done multiple times over the last
fifty years). This frustration of the ability to develop the field was
initiated via a decision of the State's regulator, the Slovenian Environment
Agency ("ARSO"), which determined that an Environmental Impact Assessment
("EIA") would be required to be approved in order to conduct the low-volume
hydraulic stimulation, even though such an EIA was not required and never had
been previously under Slovenian law, and ARSO's conclusion was contrary to the
conclusion of Slovenia's own expert bodies. This decision significantly
slowed down the development of the field by the Company. Pending such
low-volume hydraulic stimulation, the amount of gas produced by the field was
very significantly reduced, resulting in a significant loss of the Company's
revenues. At the same time, the Minister of the Environment and Spatial
Planning of Slovenia repeatedly made public statements portraying the
Investors, as well as the Petišovci project, in a negative light, and the
Company believes that leaks were made by ARSO to the press. This further
demonstrates that ARSO was biased against the Investors and that the ARSO's
decision was politically motivated. Slovenia's campaign against the Investors
culminated in a complete ban on low-volume hydraulic stimulation, which came
in effect on 5 May 2022. The Board believes that statements made during the
parliamentary debate on the ban leave no doubt that the Investors were being
specifically targeted by it.
Accordingly, the Company has submitted its dispute with the Republic of
Slovenia to arbitration administered by the International Centre for
Settlement of Investment Disputes ("ICSID"). The request for arbitration
follows the Notices of Dispute filed by Ascent Resources Plc and Ascent
Slovenia Ltd on 23 July 2020 and 5 May 2022 respectively in
which Slovenia was formally notified of the existence of a dispute under the
ECT and the BIT. The Request for Arbitration ("Request") is submitted
pursuant to Article 26 of the ECT and Article 8 of the 1996 Agreement between
the Government of the United Kingdom of Great Britain and Northern
Ireland and the Government of the Republic of Slovenia for the Promotion
and Protection of Investments.
Ascent brings this claim in relation to Slovenia's measures that have
destroyed the value of Ascent's investments in the Slovenian energy sector,
and which have de facto deprived Ascent of its right to produce gas
in Slovenia. Ascent's rights have been unlawfully expropriated by Slovenia,
in breach of the country's obligations under international law and both the
ECT and the BIT. The Company has therefore sustained losses for which it is
seeking compensation. According to preliminary estimates, the losses sustained
are in excess of €500 million. It should be cautioned that in the event the
Company is successful in its claim any amount actually received by the Company
may be significantly lower. The Company remains amenable to discussing
settlement with the Republic of Slovenia following its review of the matter or
otherwise pursuing this significant damages claim through to a binding result
for the Company.
Slovenia Operational Update
The PG-10 and PG-11A wells continue to produce gas with 11,934 SCM/month being
sold to local industrial buyers via the low-pressure pipeline. Through the
Period, the Company remained in dispute with both its JV partner Geoenergo, in
relation to agreeing the invoice amounts for hydrocarbons produced from the
wells, and also in dispute with its JV operating service provider Petrol Geo
(which is a related party of Geoenergo) in relation to their service agreement
and a significant change in circumstances. Post the Period end, the Company
agreed recognition of revenues for the period 2020 through to June 2022 which
will be reflected in the next annual report. The Company has agreed total
gross revenues of €1.68 million for the period of April 2020 through to June
2022. Furthermore, the Company is scheduled to have mediation with its JV
partner in September 2022 in relation to different interpretations of the
joint venture contract, which Ascent understands could result in the
recognition of further hydrocarbon revenues.
ESG Metals Strategy
As announced in January 2022, the Company continues to evaluate a number of
ESG Metal transactions across Latin and Hispanic America and it has now
identified Peru as its primary target geography for this strategy, which
focuses on ore processing and secondary mining recovery opportunities
consistent with global Environmental, Social and Governance ("ESG")
principles. The Company expects that these opportunities will typically
involve the reclassification, through highly efficient recovery techniques, of
surface stockpiled mining waste (previously viewed as a liability for mining
companies) as a valuable asset for processing/reprocessing ahead of commercial
sale to off-takers/other third-party buyers and/or participating in the
enfranchising of local artisanal peasant gold mining communities with access
to new tolling operations to process and commercialise their ore.
Peru is widely recognised as one of the largest and most diversified mineral
producers with some of the most extensive reserves in the world with mining
the most important sector in the Peruvian economy (some 10% of national
GDP). Peru is currently the world's second largest Copper and Silver
producer and Latin America's largest Gold, Zinc, Tin and Lead
producer. Peru's Long-Term Credit Rating is rated as BBB by most agencies,
which is amongst the strongest in the region. The country also benefits from
a long history of mining, a robust mining legal framework and a significant
pool of local expertise. The Company sees significant opportunity for
attractive entry points in natural resources with a focus on onshore oil and
gas developments and mining following the global pandemic which has triggered
international capital flight and significant capital constraints for
small-scale operators. The Company therefore initially expects to focus its
attention on small-scale operations (up to 350 tpd), which the Company
considers affordable, of an efficient operational scale and which have
multiple local tax and permitting benefits.
Corporate
At the beginning of the year, in support of the Company focusing its ESG Metal
strategy on Peru, the Company successfully raised new gross equity proceeds of
£0.6 million to fund working capital requirements and wider business
development activity at a price of 3.3 pence per new share, which represented
a nil discount to the closing bid price on the prior day. The subscribers
received one new equity warrant per new share subscribed for, with the warrant
being exercisable at pence per warrant share at any time in the next two
years.
During the Period, the Company agreed with the holders of the remaining 4
pence equity warrants that were issued on 6 August 2020 to an immediate
warrant exercise whereby all 4 pence warrants were exercised, realising new
equity proceeds of £242,500 for the Company, whilst the Company awarded one
and half new warrants for each warrant exercised, with each new warrant being
exercisable at 5p per new warrant at any time over the next three years.
In February 2022, Mr Ewen Ainsworth stepped down from his position as
Non-Executive Director following his acceptance of a full-time executive
position elsewhere.
Post the Period end, the Company has agreed invoices and began receiving
payment for historic revenues from the PG-10 and PG-11A wells for the period
of April 2020 through to June 2022. Accordingly, the Company expects to
recognise historic production revenues as well as associated production costs
in its next annual accounts.
Outlook
The team continue to work diligently across our key corporate priorities which
include championing redress from Slovenia pursuant to our $0.5+ billion ECT
and BIT funded monetary damages claim and delivering a complimenting maiden
new business transaction focused on development and near term production and
revenue generation. We look forward to delivering success for our
shareholders at Ascent Resources plc and engaging with them throughout our
continuing journey.
James
Parsons
Andrew Dennan
Executive
Chairman
Chief Executive Officer
12 September
2022
12 September 2022
CEO's report
Financial performance
Revenue for H1 2022 was £nil, as per the prior period. The closing cash
balance at 30 June 2022 was £174,000 (H1 2021: £766,000 and FY21: £97,000).
Post Period end the Company agreed invoices and began receiving payment for
historic revenues from the PG-10 and PG-11A wells for the period of April 2020
through to June 2022. Accordingly, the Company expects to recognise historic
production revenues as well as associated production costs in its next annual
accounts.
During the Period the Company raised £600,000 before costs in an equity
placing in January 2022 and a further £242,500 from a warrant exercise in
April 2022. There was a cash outflow from operations of £720,000 and an
inflow of £797,000 from financing, resulting in net cash flow of £77,000.
Operational performance
Jan Feb Mar Apr May Jun
Production KPI's 2022 2022 2022 2022 2022 2022
Total gas (k scm) 123.1 98.29 144.57 108.05 108.11 89.98
Total gas (MMcf) 4.35 3.47 5.11 3.82 3.82 3.18
Average daily gas (k scm) 3.97 3.51 4.66 3.6 3.49 3.00
Average daily gas (Mcf) 140.23 123.96 164.69 127.20 123.16 105.92
Total condensate (liters) 1,728 3,764 2,445 5,468 4,250 4,230
CGR (liters per 1000 scm gas) 14.04 38.30 16.91 50.60 39.31 47.01
BOE - gas 749.31 598.28 880.00 657.72 658.07 547.71
BOE - condensate 10.85 23.64 15.35 34.34 26.69 26.56
Total BOE 760.16 621.92 895.35 692.62 684.76 574.27
Total production for the Period was 672.10 thousand cubic metres of gas and
21,885 litres of condensate.
Gas sales to INA remain suspended as wellhead pressure is below the export
pipeline pressure, which is not expected to be remedied following the
Slovenian ban which includes the prohibition of low volume hydraulic
stimulation. The Company produced gas in the year to date which was sold
locally to an industrial buyer through a low-pressure pipeline. Post Period
end, the Company agreed invoices and began receiving payment for historic
revenues from the PG-10 and PG-11A wells for the period of April 2020 through
to June 2022. Accordingly, the Company expects to recognise historic
production revenues as well as associated production costs in its next annual
accounts.
Consolidated Income Statement
for the Period ended 30 June 2022
Period ended Period ended
30 June 2022 30 June 2021
Notes £'000s £'000s
Revenue - -
Cost of sales - (25)
Depreciation of oil & gas assets (122) (194)
Gross Profit (122) (219)
Administrative expenses (539) (826)
Loss from operating activities (661) (1,045)
Finance income - -
Finance cost (1) (10)
Net finance costs (1) (10)
Loss before taxation 2 (622) (1,055)
Income tax expense - -
Loss for the period after tax (622) (1,055)
Loss for the period attributable to equity shareholders (622) (1,055)
Earnings per share
Basic & fully diluted loss per share (£) 4 (0.005) (0.01)
Consolidated Statement of Comprehensive Income
for the Period ended 30 June 2022
Period ended Period ended
30 June 2022 30 June 2021
Notes £'000s £'000s
Loss for the period (622) (1,055)
Other comprehensive income
Foreign currency translation differences for foreign operations 599 (776)
Total comprehensive gain / (loss) for the period (63) (1,831)
Consolidated Statement of Financial Position
As at 30 June 2022
30 June 31 December
2022 2021
Notes £'000s £'000s
Assets
Non-current assets
Property, plant and equipment 5 21,512 21,111
Exploration and evaluation costs 5 18,576 18,463
Goodwill 653 653
Prepaid abandonment fund 300 300
Total non-current assets 41,041 40,527
Current assets
Inventory - -
Trade and other receivables 6 43 8
Cash and cash equivalents 174 97
Restricted cash - -
Total current assets 217 105
Total assets 41,258 40,632
Equity and liabilities
Attributable to the equity holders of the Parent Company
Share capital 10 8,129 7,998
Share premium account 75,752 75,021
Merger reserve 570 570
Equity reserve - -
Share-based payment reserve 2,129 2,129
Translation reserves 5 (594)
Retained earnings (47,228) (46,566)
Total equity attributable to the shareholders 39,357 38,588
Total equity 39,357 38,588
Non-current liabilities
Borrowings 8 536 536
Provisions 318 312
Total non-current liabilities 854 848
Current liabilities
Borrowings 8 5 5
Contingent consideration due on acquisitions 9 450 450
Trade and other payables 7 592 771
Total current liabilities 1,047 1,226
Total liabilities 1,901 2,074
Total equity and liabilities 41,258 40,632
Consolidated Statement of Changes in Equity
for the Period ended 30 June 2022
Share capital Share premium Merger reserve Equity reserve Share based payment reserve Translation reserve Retained earnings Total
£'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s
Balance at 1 January 2021 7,928 73,863 570 73 2,129 1,027 (44,595) 40,995
Comprehensive income
Loss for the period - - - - - - (1,055) (1,055)
Other comprehensive income
Currency translation differences - - - - - (776) - (776)
Total comprehensive income - - - - - (776) (1,055) (1,831)
Transactions with owners
Issue of shares during the year net of costs 70 1,176 - - - - - 1,246
Share-based payments - - - - 16 - - 16
Balance at 30 June 2021 7,998 75,039 570 73 2,145 251 (45,650) 40,424
Balance at 1 January 2021 7,928 73,863 570 73 2,129 1,027 (44,595) 40,995
Comprehensive income
Loss for the period - - - - - - (1,971) (1,971)
Other comprehensive income
Currency translation differences - - - - - (1,621) - (1,621)
Total comprehensive income - - - - - (1,621) (1,971) (3,592)
Transactions with owners
Issue of ordinary shares 70 1,176 - - - - - 1,246
Costs related to share issues - (18) - - - - - (18)
Equity value of convertible loan note - - - (73) - - - (73)
Balance at 31 December 2021 7,998 75,021 570 - 2,129 (594) (46,566) 38,558
Balance at 1 January 2022 7,998 75,021 570 - 2,129 (594) (46,566) 38,558
Comprehensive income
Loss for the period - - - - - - (662) (662)
Other comprehensive income
Currency translation differences - - - - - 599 - 599
Total comprehensive income - - - - - 599 (662) (63)
Transactions with owners
Issue of shares during the year net of costs 131 731 - - - - - 862
Share-based payments - - - - - - - -
Balance at 30 June 2022 8,129 75,752 570 - 2,129 5 47,228 39,357
Consolidated Statement of Cash Flows
for the six months ended 30 June 2022
Period ended Period ended
30 June 2022 30 June 2021
£'000s £'000s
Cash flows from operations
Loss after tax for the period (622) (1,055)
Depreciation 122 194
Change in receivables (35) 53
Change in payables (179) (89)
Increase in share-based payments 35 38
Exchange differences 25
Finance cost 10
Net cash used in operating activities (719) (824)
Cash flows from investing activities
Payments for fixed assets - -
Payments for investing in exploration (1) -
Net cash used in investing activities (1) -
Cash flows from financing activities
Interest paid and other finance fees - -
Loans repaid - (125)
Proceeds from borrowings - 375
Proceeds from issue of shares 842 1,265
Share issue costs (45) (40)
Net cash generated from financing activities 797 1,475
Net increase in cash and cash equivalents for the year 77 651
Effect of foreign exchange differences - -
Cash and cash equivalents at beginning of the year 97 115
Cash and cash equivalents at the end of the year 174 766
Notes to the Interim Financial Statements
For the six months ended 30 June 2022
1. Accounting Policies
Reporting entity
Ascent Resources plc ('the Company') is a company domiciled in England. The
address of the Company's registered office is 5 New Street Square, London EC4A
3TW. The unaudited consolidated interim financial statements of the Company as
at 30 June 2022 comprise the Company and its subsidiaries (together referred
to as the 'Group').
Basis of preparation
The interim financial statements have been prepared using measurement and
recognition criteria based on International Financial Reporting Standards
(IFRS and IFRIC interpretations) issued by the International Accounting
Standards Board (IASB) as adopted for use in the EU. The interim financial
information has been prepared using the accounting policies which were applied
in the Group's statutory financial statements for the year ended 31 December
2020.
New Standards adopted as at 1 January 2022
Accounting pronouncements which have become effective from 1 January 2022 are:
· IFRS 3 - Business Combinations
· IAS 16 - Property, Plant and Equipment
· IAS 37 - Provisions, Contingent Liabilities and Contingent Assets
These accounting pronouncements do not have a significant impact on the
Group's financial results or position.
All amounts have been prepared in British pounds, this being the Group's
presentational currency.
The interim financial information for the six months to 30 June 2022 and 30
June 2021 is unaudited and does not constitute statutory financial
information. The comparatives for the full year ended 31 December 2021 are not
the Group's full statutory accounts for that year. The information given for
the year ended 31 December 2021 does not constitute statutory financial
statements as defined by Section 435 of the Companies Act. The statutory
accounts for the year ended 31 December 2021 have been filed with the
Registrar and are available on the Company's web
site www.ascentresources.co.uk (http://www.ascentresources.co.uk) . The
auditors' report on those accounts was unqualified. It did not contain a
statement under Section 498(2)-(3) of the Companies Act 2006.
Going Concern
The Financial Statements of the Group are prepared on a going concern basis.
COVID-19 has had limited direct impact on Ascent's assets in Slovenia but
there may be delays in obtaining the necessary governmental approvals and
processes. Production operations in Slovenia have been unaffected to date.
On 18 January 2022, the Company completed a £0.6 million subscription and
raised a further £242,000 on 14 April 2022 from a warrant conversion. These
funds were used for working capital and project costs during the reporting
period. Furthermore, on 12 August 2022 and post period end, the Company
received the first net payment of €650,000 for hydrocarbon revenues for the
period April 2020 to December 2021. A further €857,000 of hydrocarbon
revenues for the period January 2022 to June 2022 is expected in the near
term. Following receipt of these production revenues, the Company expects to
recognise historic costs relating to a historic liability owed to the field
operator of approximately €230,000 and potentially other costs. However, the
Company may require further funding over the next twelve months to cover
further development in Slovenia and discretionary spend incurred with
executing on the ESG Metals Strategy through acquisition.
Based on historical and recent support from new and existing investors the
Board believes that such funding, if and when required, could be obtained
through new debt or equity issuances.
However, there can be no guarantee over the outcome of these options and as a
consequence there is a material uncertainty of the Group's ability to raise
the necessary finance, which may cast doubt on the Group's ability to operate
as a going concern. Further, the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business.
Principal Risks and Uncertainties:
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed on pages 11-12 of the Annual Review 2020, a copy
of which is available on the Company's website
at www.ascentresources.co.uk.
2. Operating loss is stated after charging
Period ended Period ended
30 June 2022 30 June 2021
£'000s £'000s
Employee costs 363 475
Share based payment charge - 16
Included within Administrative Expenses
Audit fees 9 40
Fees payable to the Company's auditor for other services - -
9 40
3. Earnings per share
Period ended Period ended
30 June 2022 30 June 2021
£'000s £'000s
Result for the period
Total loss for the period attributable to equity shareholders (622) (1,055)
Weighted average number of ordinary shares Number Number
For basic earnings per share 128,149,204 106,483,897
Earnings per share (£) (0.005) (0.01)
4. Property, plant & equipment and Exploration and Evaluation assets
Computer Developed Oil Total Property Exploration &
Equipment & Gas Assets Plant & Evaluation
Equipment
£'000s £'000s £'000s £'000s
Cost
At 1 January 2021 6 24,494 24,600 18,753
Additions - - - -
Effect of exchange rate movements - (624) (624) (149)
At 30 June 2021 6 23,870 23,876 18,604
At 1 January 2021 6 24,494 24,600 18,753
Additions 5 - 5 -
Effect of exchange rate movements - (1,631) (1,631) (290)
At 31 December 2021 11 22,963 22,974 18,463
At 1 January 2022 11 22,963 22,974 18,463
Additions 1 - 1 -
Effect of exchange rate movements - 573 573 113
At 30 June 2022 12 23,536 23,548 18,576
Depreciation
At 1 January 2021 (6) (1,811) (1,817) -
Charge for the year - (194) (194) -
Effect of exchange rate movements - - - -
At 30 June 2021 (6) (2,005) (2,011) -
At 1 January 2021 (6) (1,811) (1,817) -
Charge for the year - (328) (328) -
Effect of exchange rate movements - 282 282 -
At 31 December 2021 (6) (1,857) (1,863) -
At 1 January 2022 (6) (1,857) (1,863) -
Charge for the year (3) (121) (124) -
Effect of exchange rate movements - (49) (49) -
At 30 June 2022 (9) (2,027) (2,036) -
Carrying Value
At 30 June 2022 3 21,509 21,512 18,576
At 31 December 2021 5 21,106 21,111 18,463
At 30 June 2021 - 21,865 21,865 18,604
5. Trade & other receivables
30 June 2022 31 December 2021
£'000s £'000s
Trade receivables - -
VAT recoverable 73 42
Prepaid abandonment liability 300 300
Prepayments & accrued income (30) (34)
343 308
Less non-current portion (300) (300)
Current portion 43 8
6. Trade & other payables
30 June 2022 31 December 2021
£'000s £'000s
Trade payables 525 581
Tax and social security payable 47 16
Other payables - -
Accruals and deferred income 20 174
592 771
7. Borrowings
30 June 2022 31 December 2021
£'000s £'000s
Group
Non-current
Convertible loan notes 536 536
536 536
30 June 2022 31 December 2021
£'000s £'000s
Group
Current
Convertible loan notes 5 5
Borrowings - -
Liability at the end of the period 5 5
The non-current borrowings relate to the loan arrangement with Riverfort
Global Opportunities with a loan note balance as at 30 June 2022 of £270,000.
In December 2020 the Company signed a loan agreement provided equally by Align
Research Limited and Riverfort Global Opportunities and under this loan
agreement, the Company drew down a total of £375,000 in 2021, representing
£125,000 from Align and £250,000 from Riverfort. During 2021 the Company
repaid £125,000 resulting in a loan balance of £250,000 as of the end of
2021.
In December 2021, the Company extended the maturity of the outstanding loan
amount so that it is payable in six equal instalments commencing February
2023.
8. Contingent consideration due on acquisitions
30 June 2022 31 December 2021
£'000s £'000s
Group
Non-current
Ascent Hispanic Resources UK Limited 450 450
450 450
9. Share capital
30 June 2022 31 December 2021
£'000s £'000s
Authorised
2,000,000,000 ordinary shares of 0.5p each 10,000 10,000
Allotted, called up and fully paid
3,019,648,452 deferred shares of 0.195p each 5,888 5,888
1,737,110,763 deferred shares of 0.09p each 1,563 1,563
135,560,515 ordinary shares of 0.5p each (2021: 109,376,804 ordinary shares of 678 547
0.5p each)
8,129 7,998
Reconciliation of share capital movement Ordinary shares No. Ordinary shares No.
Opening 109,376,804 95,283,281
Issue of shares during the year 26,183,711 14,093,523
Closing 135,560,515 109,376,804
The deferred shares have no voting rights and are not eligible for dividends.
Shares issued during the year
Issuance of equity throughout the year:
· On 18 January 2022, the Company raised gross proceeds of £0.6
million by way of issue of 18,181,818 new ordinary shares at 3.3 pence per
share to new and existing shareholders. Additionally, the Company issued a
further 303,030 new ordinary shares to satisfy a £10,000 consultant invoices
on the same terms as the placing.
· On 3 February 2022, the Company issued a total of 1,636,363 new
ordinary shares of 0.5 pence each at an issue price of 3.3 pence per share.
303,030 of these shares where issued to a consultant in lieu of cash for
services provided, 242,424 shares where issued to staff and 1,909,909 shares
where issued Align Research Limited. This transaction constitutes a related
party transaction pursuant to AIM Rules for Companies. The independent
directors having consulted with WH Ireland Limited, consider the transaction
to be fair and reasonable insofar as the Company's shareholders are concerned.
· On 14 April 2022, the Company raised gross proceeds of £242,500
from the exercise of 6,062,500 warrants at an exercisable price of 4.4 pence
per new ordinary share.
10. Share based payments
The Company has provided the Directors, certain employees and institutional
investors with share options and warrants ('options'). Options are
exercisable at a price equal to the closing market price of the Company's
shares on the date of grant. The exercisable period varies and can be up to
seven years once fully vested after which time the option lapses.
Details of the share options outstanding during the year are as follows:
Shares Weighted Average price (pence)
Outstanding at 1 January 2021 7,348,142 253.72
Outstanding at 31 December 2021 7,348,142 253.72
Exercisable at 31 December 2021 1,450,763 248.72
Outstanding at 1 January 2022 7,348,142 253.72
Granted during the year -
Outstanding at 30 June 2022 7,348,142 253.72
Exercisable at 30 June 2022 1,450,763 248.72
Options outstanding at 30 June 2022 have an exercise price in the range of
2.9p and 778p and a weighted average contractual life of 4 years.
Details of the warrants issued in the period are as follows:
Issued Exercisable from Expiry date Number outstanding Exercise price
27 January 2022 Anytime until 26 January 2024 20,303,030 5.00p
27 January 2022 Anytime until 26 January 2024 1,000,000 5.00p
14 April 2022 Anytime until 14 April 2025 9,093,750 4.00p
Warrants Weighted Average price (pence)
Outstanding at 1 January 2022 21,914,254 6.80
Granted during the period 30,396,780 4.70
Exercised during the period (6,062,500) 5.10
Expired during the period (7,727,272) 5.50
Outstanding at 30 June 2022 38,521,262 5.00
Exercisable at 30 June 2022 38,521,262 5.00
The warrants outstanding at the period end have a weighted average remaining
contractual life of 2.1 years. The exercise prices of the warrants are between
4.00 - 7.50p per share.
11. Events after the reporting period
On 2 August 2022, the Company announced that it had come to agreement with the
JV partner on the PG-10 and PG-11A hydrocarbon revenue to recognise €1.68
million for the period April 2020 to June 2022.
On 12 August 2022, the Company announced that it had received the first net
payment of €650,560 for hydrocarbon revenues for the period April 2020 to
December 2021 as announced on 2 August 2022.
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