REG - Beacon Energy PLC - Corporate Update

Beacon EnergyAnnouncement

28/06/2024 07:00

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RNS Number : 2477U  Beacon Energy PLC  28 June 2024

28 June 2024

Beacon Energy plc

("Beacon Energy" or the "Company")

Corporate Update

 

 

Beacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio
of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum
GmbH ("Rhein Petroleum"), provides the following corporate update.

 

·    The SCHB-2 well continues to intermittently produce a combination of
oil, gas and water using an electrical submersible pump ("ESP"). The continued
production of water (which is likely to be completion fluid, spent acid and
losses from the side track and original well bore) combined with pressure data
suggests the well continues to clean-up.

 

·    While a stabilised rate has yet to be achieved, management continue
to believe that production from the SCHB-2 well is likely to stabilise in the
50 - 100 barrels of oil per day ("bopd") range.

 

·    Production in this range, when combined with existing production from
SCHB-1 and Lauben (approximately 30 bopd), is estimated to generate gross
revenues of €2.3 - 3.7 million per annum (at US$85/bbl Brent).

 

·    The Company has undertaken a thorough review of the Rhein Petroleum
cost base in order to maximise cash generation. Cost reduction measures are
anticipated to reduce Rhein Petroleum's annual cash operating costs from
approximately €2.5m currently to approximately €1.3m. Such cost reduction
measures are likely to take 3 - 6 months to realise.

 

·    The Company has also engaged with approximately 90% of the creditors
of Rhein Petroleum with the aim of agreeing a reduction in liabilities and a
deferred payment plan based on future cash flow generation of Rhein Petroleum.
The Company expects Rhein Petroleum to enter into a formal process with its
creditors shortly which provides for an up to three-month negotiation period.

 

·    As part of the broader cost reduction measures, Larry Bottomley and
Stephen Whyte have agreed to leave the Company's board. As a result, the board
will comprise Mark Rollins (Non-executive Chairman), Stewart MacDonald (CEO),
Ross Warner (Independent Non-executive Director) and Leo Koot (Non-executive
Director).

As previously disclosed, as a result of the current uncertainties outlined
above and the uncertain impact on assets impairment and going concern in the
accounts, the Company will not be in a position to finalise and publish its
Annual Report for the year to 31 December 2023 ("Annual Report") by 30 June
2024, as stipulated by Rule 19 of the AIM Rules for Companies (the "AIM
Rules"). The Company is targeting the publication of the Annual Report as soon
as practically possible which is likely to be during the first half of August
2024.

As a result, trading in the Company's ordinary shares on AIM will be suspended
with effect from 07:30 a.m. on 1 July 2024 pending publication of the
Annual Report. It is expected that suspension from trading will be lifted with
the publication of the Annual Report.

Stewart MacDonald, CEO of the Company, said:

"We have moved quickly to identify and implement a very material cost
reduction strategy aimed at maximising cash generation from Rhein Petroleum.

 

Discussions with the Rhein Petroleum creditors have been very constructive. We
are focused on a plan which seeks to re-phase liabilities such that they can
be funded from Rhein Petroleum's future cash flow."

 

Mark Rollins, Chairman of the Company, said:

"I would like to take this opportunity to thank Larry and Steve for their
valuable contributions to Board deliberations. Our thanks go especially to
Larry for stepping into the CEO role in early 2022 and leading the Company
through the reverse takeover and subsequent re-listing of the Company in
2023."

 

Enquiries:

 Beacon Energy plc                                          +44 (0)20 7466 5000

 Stewart MacDonald (CEO)
 Strand Hanson Limited (Financial and Nominated Adviser)    +44 (0)20 7409 3494

 Rory Murphy / James Bellman
                                                            +44 (0)20 7466 5000

 Buchanan (Public Relations)

 Ben Romney / Barry Archer / George Pope
                                                                 +44 (0)20 7186 9030

 Tennyson Securities Limited (Broker)

 Peter Krens / Ed Haig-Thomas

 

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