REG - Beacon Energy PLC - Interim Results
14/10/2024 07:15
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RNS Number : 9699H Beacon Energy PLC 14 October 2024
14 October 2024
Beacon Energy plc
("Beacon Energy" or the "Company")
Interim Results
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"), announces its half-yearly report for the six months
ended 30 June 2024.
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
Interim Consolidated Statement of Comprehensive Income
Unaudited Audited Restated Unaudited
Six months ended
Period ended
Six months ended
30 Jun 2024
31 Dec 2023
30 Jun 2023
Notes $'000 $'000 $'000
Income
Operating income 634 962 313
Other income 33 10 2
Total income 667 972 315
Crude oil purchase from partners - (279) (130)
Operating expenses (1,725) (3,637) (448)
Operating loss (1,058) (2,944) (263)
4 (993) (3,830) (2,254)
Other administrative expenses
Net loss before Finance Costs and Taxation (2,051) (6,774) (2,517)
Finance costs (76) (362) 59
Effects of exchange gain/loss - 125 -
At acquisition negative goodwill 6 - 3,556 3,556
Profit / (Loss) before tax (2,127) (3,455) 1,098
Tax expense 946 (1) 325
Profit / (Loss) after tax attributable to owners of the parent (1,181) (3,456) 1,423
Other comprehensive income
Exchange differences on translation of foreign operations 212 (276) (507)
Total comprehensive Profit / (Loss) for the year attributable to owners of the (969) (3,732) 916
parent
Basic and diluted profit/(loss) per share attributable to owners of the parent 7 (0.01) (0.04) 0.03
during the year (expressed in US cents per share)
The accompanying notes from an integral part of these consolidated financial
statements.
Interim Consolidated Statement of Financial Position
Unaudited Audited Restated Unaudited
30 Jun 2024
31 Dec 2023
30 Jun 2023
Notes $'000 $'000 $'000
Non-current assets
Property, plant & equipment 24,671 20,336 11,569
Intangible assets 20 29 1,172
24,691 20,365 12,741
Current assets
Other receivables 1,150 875 1,844
Restricted cash 8 2,075 2,075 2,075
Cash and cash equivalents 1,404 2,754 4,491
4,629 5,704 8,410
Total assets 29,320 26,069 21,151
Current liabilities
Trade and other payables 9 (5,540) (5,229) (2,070)
Non-current liability 10 (6,802) (6,231) (5,571)
Total liabilities (12,342) (11,460) (7,641)
Net assets 16,978 14,609 13,510
Equity attributable to equity holders of the company
Share premium 68,343 65,245 60,252
Share reserve 3,041 2,801 2,047
Foreign Currency Translation Reserve (64) (276) (507)
Accumulated deficit (54,342) (53,161) (48,282)
Total shareholder funds 16,978 14,609 13,510
The accompanying notes from an integral part of these consolidated financial
statements.
Interim Consolidated Statement of Changes in Equity
Share premium Share reserve FCTR Accumulated deficit Total
equity
$'000 $'000 $'000 $'000 $'000
Balance at 1 January 2023 48,128 2,036 - (49,705) 459
Profit for the period to 30 June 2023 (restated and unaudited) - - - 1,423 1,423
Total comprehensive profit - - - 1,423 1,423
Transactions with equity shareholders of the parent:
Share based payments - 11 - - 11
Proceeds from shares issued 12,674 - - - 12,674
Cost of share issue (550) - - - (550)
Foreign currency translation reserve - - (507) - (507)
Balance at 30 June 2023 (restated and unaudited) 60,252 2,047 (507) (48,282) 13,510
Loss for the period to 31 December 2023 (audited) - - - (4,879) (4,879)
Total comprehensive loss - - - (4,879) (4,879)
Transactions with equity shareholders of the parent:
Share based payments - 754 - - 754
Proceeds from shares issued 5,039 - - - 5,039
Cost of shares issue (46) - - - (46)
Foreign currency translation reserve - - 231 - 231
Balance at 31 December 2023 (audited) 65,245 2,801 (276) (53,161) 14,609
Loss for the period to 30 June 2024 (unaudited) - - - (1,181) (1,181)
Total comprehensive loss - - - (1,181) (1,181)
Transactions with equity shareholders of the parent:
Share based payments - 240 - - 240
Proceeds from shares issued 3,262 - - - 3,262
Cost of share issue (164) - - - (164)
Foreign currency translation reserve - - 212 - 212
Balance at 30 June 2024 (unaudited) 68,343 3,041 (64) (54,342) 16,978
The accompanying notes from an integral part of these consolidated financial
statements.
Interim Consolidated Cash Flow Statement
Unaudited Audited Restated Unaudited
30 Jun 2024
31 Dec 2023
30 Jun 2023
Notes $'000 $'000 $'000
Cash flows from operating activities:
Loss before tax (1,181) (3,456) 1,423
Adjustments for:
Share-based payment 240 765 11
Depreciation on property plant and equipment 426 -
Negative goodwill - (3,556) (3,556)
Tax expense (946) 1 (324)
Interest paid - 362 -
Change in working capital items:
Movement in other receivables 276 227 (1,280)
Movement in trade and other payables (317) 4,615 1,659
Net cash used in operations (1,928) (616) (2,067)
Cash flows from investing activities
Investment in subsidiary - cash balances acquired - 2,492 2,492
Purchase of property, plant & equipment - (9,673) (1,031)
Net cash flows from investing activities - (7,181) 1,461
Cash flows from financing activities
Proceeds from issue of share capital 3,262 12,570 7,531
Share issue costs (164) (596) (550)
Net cash flows from financing activities 3,098 11,974 6,981
Net (decrease)/increase in cash and cash equivalents 1,170 4,177 6,375
Effect of exchange rate changes (2,520) 346 (115)
Cash and cash equivalents at beginning of period 4,829 306 306
Cash and cash equivalents at end of period 3,479 4,829 6,566
The accompanying notes from an integral part of these consolidated financial
statements.
Notes to the Interim Consolidated Financial Statements
1 Reporting entity
Beacon Energy plc (the "Company") is domiciled in the Isle of Man. The
Company's registered office is at 55 Athol Street, Douglas, Isle of Man IM1
1LA. These consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the "Group"). The Group is primarily
involved in the E&P business.
2 Basis of accounting
These interim consolidated financial statements have been prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting". These interim consolidated financial statements do not include all
the information and disclosures required in the annual financial statements
and should be read in conjunction with the Group's annual financial statements
for the period ended 31 December 2023, which were prepared in accordance with
IFRSs as adopted by the United Kingdom. However, selected explanatory notes
are included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the last annual financial statements.
In preparing these interim financial statements, management has made
judgements and estimates 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. 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 disclosed in the Group's
statutory financial statements for the year ended 31 December 2023.
Comparative figures for the interim period ended 30 June 2023 have been
restated to account for corrections to accounting treatment for the
acquisition of Rhein Petroleum GmbH that came about while preparing annual
accounts as at 31 December 2023. A reconciliation between originally reported
figures and restated figures has not been prepared.
The interim consolidated financial statements are presented in US Dollars
unless otherwise indicated.
There are no IFRSs or IFRIC interpretations that are effective for the first
time for the financial period beginning on or after 1 January 2024 that would
be expected to have a material impact on the Group.
The consolidated financial statements of the Group as at and for the year
ended 31 December 2023 are available upon request from the Company's
registered office at 55 Athol Street, Douglas, Isle of Man or the Company's
website www.beaconenergyplc.com (http://www.beaconenergyplc.com/)
These interim consolidated financial statements have been approved and
authorised for issue by the Company's Board of directors on 11 October 2024.
3 Going concern
The financial statements have been prepared on a going concern basis.
The Group monitors its cash position, cash forecasts and liquidity on a
regular basis and takes a conservative approach to cash management.
As at 30 June 2024, the Company had available cash resources (excluding
restricted cash) of US$1.4 million.
Following disappointing production rates from SCHB-2, the Company 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. Unfortunately, agreement with creditors
could not be reached and as a result the Company took the decision to place
Rhein Petroleum into a formal process with its creditors (akin to US Chapter
11 bankruptcy protection). This three-month process was expected to conclude
in early October although it has been extended by the creditor's
representative who is exploring
Notes to the Interim Consolidated Financial Statements (continued)
options to maximise recovery of value for creditors. As part of this process,
the Company has put forward a robust and fully financed restructuring plan
aimed at maximising cash generation from the Rhein Petroleum business and
delivering value for creditors. A resolution of the creditor process is
expected during Q4 2024.
Management's base case is that a suitable agreement will be reached with the
creditors of Rhein Petroleum and that, if the stabilised production can be
maintained, the Rhein Petroleum business will be self-funding going
forward.
Management have also considered a number of downside scenarios, including
scenarios where agreement cannot be reached with creditors, or where
production cannot be maintained at the current stabilised rate.
Under the base case forecast, the Group will have sufficient financial
headroom to meet forecast cash requirements for the 12 months from the date of
approval of these consolidated financial statements. However, in the downside
scenarios, in the absence of any mitigating actions, the Group may have
insufficient funds to meet its forecast cash requirements. Potential mitigants
include deferral and/or reduction of expenditure and raising additional
funding. It should be noted that Beacon Energy has not provided any parent
company guarantees related to the debts of Rhein Petroleum.
Accordingly, after making enquiries and considering the risks described above,
the Directors have assessed that the cash balance and forecast cash flows
provide the Group with adequate headroom for the following 12 months - as a
result, the Directors are of the opinion that the Group is able to operate as
a going concern for at least the next twelve months from the date of approval
of these financial statements.
Nonetheless, these conditions indicate the existence of a material uncertainty
which may cast doubt on the Group's ability to continue as a going concern.
The financial statements do not include the adjustments that would be required
if the Group were unable to continue as a going concern.
4 Expenses
Administration fees and expenses consist of the following:
Unaudited Audited Restated Unaudited
Six months ended
Period ended
Six months ended
30 Jun 2024
31 Dec 2023
30 Jun 2023
$'000 $'000 $'000
Audit fees 21 47 22
- Professional fees 147 418 172
- Administration costs (largely associated with acquisition) 60 816 834
- Employee share based payments 113 19 -
- Director share based payments (Note 5) 298 1,010 98
- Directors' fees (Note 5) 334 661 280
- Travel and entertainment 20 28 17
- Acquisition amounts written off - 831 831
Other administrative expenses 993 3,830 2,254
Included in administration costs for the financial year ended 31 December 2023
are costs related to the reverse takeover transaction.
Notes to the Interim Consolidated Financial Statements (continued)
5 Directors' remuneration
The remuneration of those in office during the period ended 30 June 2024 was
as follows:
Unaudited Restated Unaudited
Six months ended
Six months ended
Audited
30 Jun 2024
Period ended 30 Jun 2023
$'000 31 Dec 2023 $'000
$'000
Salaries paid in cash 294 503 171
Salary deferrals - 94 96
Accrued entitlement to shares and warrants 298 1,010 98
Directors' pension 40 64 13
632 1,671 378
Share options and warrants with a value of $298,000 were issued to directors
accrued during the 6- month period to 30 June 2024 ($98,000: 30 June 2023). In
the period ended 31 December 2023, the warrants issued to advisors accrued
with a value of $977,000 ($166,000: 31 December 2022.)
6 Business Combination
On 11 April 2023, the Company acquired the entire issued share capital of
Rhein Petroleum GmbH, an upstream oil and gas business operating in Germany.
This transaction can be best described as a business combination under IFRS3.
The reverse takeover transaction consisted of equity consideration of
3,488,549,633 ordinary shares and an associated consideration of 1,186,953,301
warrants at a price of 0.11 pence which is the fair value per share. On the
basis that the net assets acquired exceeded the consideration paid, negative
goodwill arose. This negative goodwill has been written off through the profit
and loss. Details of the purchase consideration and the net assets acquired
are as follows:
Goodwill
Restated $'000
Consideration transferred at Fair value 5,143
Less: Net identifiable assets at acquisition 18,769
Goodwill at acquisition 23,912
Less: Adjustments of loan balance acquired (27,468)
Goodwill at 31 December 2023 (3,556)
Net liabilities at fair value:
Notes to the Interim Consolidated Financial Statements (continued)
Fair value recognised on acquisition
$'000
Property, plant and equipment 11,743
Receivables 536
Cash and cash equivalents 2,492
Total assets 14,771
Trade payables (759)
Non-current liabilities (32,781)
Total liabilities (33,540)
Total identifiable net liabilities at fair value (18,769)
The Group measured immaterial acquired lease liabilities using the present
value of the remaining lease payments at the date of acquisition. The related
right-of-use assets were measured at an amount equal to the lease liabilities
and adjusted to reflect the favourable terms of the lease relative to market
terms.
7 Earnings per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
Unaudited Audited Restated Unaudited
Outstanding at 30 Jun 2024
Outstanding at 31 Dec 2023
Outstanding at 30 Jun 2023
Gain / (loss) attributable to owners of the Group (1,181) (3,456) 1,423
(USD thousands)
Weighted average number of ordinary shares in issue (thousands) 16,011,460,248 8,863,248 5,496,704
Gain / (loss) per share (US cents) (0.01) (0.04) 0.03
In accordance with International Accounting Standard 33 'Earnings per share',
no diluted earnings per share is presented as the Group is loss making.
8 Restricted cash
At reporting date, the Group had US$2,075,000 restricted cash, which is
backing guarantees to the mining authority related to future
decommissioning.
9 Trade and other payables
Trade and other payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business. Accounts payable are
classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised initially
at fair value, and subsequently measured at amortised cost
Notes to the Interim Consolidated Financial Statements (continued)
using the effective interest method. The increase in trade payables reflects
increased spend related to the SCHB-2 well.
Unaudited Audited Unaudited
Outstanding at 30 Jun 2024
Outstanding at 31 Dec 2023
Outstanding at 30 Jun 2023
US$'000 US$'000 US$'000
Trade payables 5,262 4,858 1,793
Accruals and other payables 278 371 277
5,540 5,229 2,070
10 Non-current liabilities
The non-current liabilities consist of a loan with Tulip Oil Holding B.V and
provisions in relation to future abandonment and decommissioning costs.
Unaudited Audited Unaudited
Outstanding at 30 Jun 2024
Outstanding at 31 Dec 2023
Outstanding at 30 Jun 2023
US$'000 US$'000 US$'000
Tulip Oil Holding loan payable 3,875 3,724 3,433
Provision for decommissioning 2,412 2,412 2,097
Other non-current liabilities 515 95 41
6,802 6,231 5,571
The loan between Rhein Petroleum GmbH and Tulip Oil Holding B.V. is secured on
the shares of Rhein Petroleum GmbH , incurs interest at a rate of 15% and is
repayable on 30 June 2025.
The provision for decommissioning is the estimated present value of the
amounts required to decommission the Group's oil and gas activities.
11 Shares in issue
The number of shares in issue at the beginning of the period was
13,374,679,620. The number of options and warrants on issue at the start of
the period was 3,295,960,536. On 29 February 2024 there was an issue of
5,137,000,000 ordinary shares for £0.05 to raise £2.6 million. The number of
ordinary shares in issue at the end of the period is 18,511,679,620. The
number of options and warrants at the end of the period is 3,544,360,536.
Notes to the Interim Consolidated Financial Statements (continued)
Options and warrants in issue:
Outstanding at 31 December 2023 Issued/(Expired) during the period Outstanding at 30 June 2024
Options
- Issued 17/3/2022 30,000,000 - 30,000,000
- Issued 19/12/2022 770,542,318 - 770,542,318
- Issued 20/12/2023 503,565,640 - 503,565,640
1,304,102,958 - 1,304,102,958
Warrants
- Issued 31/03/2021 3,851,159 - 3,851,159
- Issued 19/04/2021 45,553,120 - 45,553,120
- Issued 26/07/2022 500,000,000 - 500,000,000
- Issued 11/04/2023 1,325,753,299 - 1,325,753,299
- Issued 20/09/2023 116,700,000 - 116,700,000
Issued 28/02/2024 - 248,400,000 248,400,000
1,991,857,578 - 2,240,257,578
Total options and warrants 3,295,965,536 - 3,544,360,536
12 Commitments and contingencies
There were no capital commitments authorised by the Directors or contracted
other than those provided for in these financial statements as at 30 June 2024
(31 December 2023: None).
13 Subsequent events
On 1 July 2024, the Company requested that trading on AIM for the securities
be temporarily suspended.
On 27 August 2024, the Company announced that it had become clear that the
electrical submersible pump ("ESP") was running at the lower limit of its
operating range - approximately 50 bopd - and as such the SCHB-2 well had not
yet been able to achieve a stabilised flow rate. It also announced that plans
are well advanced to re-install a rod pump (at a cost of approximately
€75,000) to allow a stabilised flow rate to be achieved. This was
subsequently installed and a stabilised rate of 50 - 55 bopd achieved.
For further information, please visit www.beaconenergyplc.com
(http://www.beaconenergyplc.com/) and @BeaconEnergyPlc on Twitter
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