REG - Caspian Sunrise plc - Interim results for six months ended 30 June 2024
25/09/2024 07:00
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RNS Number : 5080F Caspian Sunrise plc 25 September 2024
Caspian Sunrise PLC ("Caspian Sunrise" or the "Company")
Interim results for the six months ended 30 June 2024
Highlights for the period under review and subsequently
Corporate
· Conditional $88 million sale of the MJF & South Yelemes structures
· Conditional acquisition of the West Shalva Contract Area
Operational
· Aggregate production in the period 293,088 bbls (2023: 351,620 bbls)
· Well 155 producing at the rate of 700 bopd
· Deep Well 803 initial testing at 500 bopd
· Post period end production 1,600 bopd (2023: 1,953 bopd)**
· First commercial charter for the Caspian Explorer
Financial
· Total revenue $18.5 million (2023 $17.3 million)
· Revenue from oil production $10.5 million (2023: $12.5 million)
· Revenue from sales trading $5.9 million (2023: $3.8 million)
· Revenue from on shore drilling $nil (2023: $1.0 million)
· Revenue from offshore drilling $2 million (2023: $ nil)
· Gross Profit $8.0 million (2023: $12.4 million)
· Operating profit $3.2 million (2023: $8.1 million)
· Profit before tax $2.9 million (2023: $7.9 million)
· Net current liabilities $18.1 million (2023: $24.6 million)
· Cash $0.7 million (2023: $0.5 million)
· Total assets $140.6 million (2023: $130.7 million)
** based on production at end August 2024 & and end August 2023
Introduction
I am pleased to present the unaudited interim results for the six months ended
30 June 2024.
Overview
2024 to date has been a year of notable progress, including the
· conditional sale of the MJF & South Yelemes structures for a
headline price of $88 million
· first independently assessed reserves at the BNG deep structures
· first oil from initial testing at the Yelemes Deep structure
· completion of the first commercial drilling charter for the Caspian
Explorer
· independent shareholder approval of the acquisition of the West Shalva
Contract Area
We continue to transition from a business with revenue derived principally
from a single structure on a single asset to a more broadly based Group with
established and profitable businesses in oil exploration & production, oil
trading and oilfield services.
Oil Exploration & Production
BNG
Currently, the Group's principal operational asset is its 99% stake in the BNG
Contract Area, which is located approximately 40 km from Tengiz and extends
over 1,561 km2. The contract area has four identified structures, two of which
are shallow (MJF & South Yelemes and which are in the process of being
sold) and two of which are deep (Airshagyl and Yelemes Deep).
The prize at BNG is to demonstrate that the same geological characteristics
which are present at the world class Kashagan and Tengiz assets also extend to
the BNG Contract Area's deep structures.
BNG shallow structures
The bulk of the Group's production since 2016 has come from the MJF structure,
which in aggregate has produced in excess of 4.25 million barrels, but where,
as expected, production volumes from our established wells has declined.
Consequently, for most of the period under review, production volumes were
lower than in the corresponding period as a number of older wells were out of
production pending workovers to reverse production declines, which required
rigs in use elsewhere.
Since the period end workovers at some of the established wells and production
from new Well 155, where production volumes have stabilised at approximately
700 bopd, initially increased production from the MJF structure to
approximately 2,450 bopd before falling back to approximately 1,350 bopd at
the date of this report as production from new Well 155 has affected
production from some of our older wells.
At the South Yelemes structure production volumes during the period under
review remained broadly stable at 250 bopd. Well 815 on the South Yelemes
structure was spudded in July 2024 with a planned total depth of 1,900 meters.
Total production from the BNG shallow structures at the date of this report is
approximately 1,600 bopd.
BNG deep structures
During the period under review and subsequently most of our efforts with BNG's
deep structures has been at the Yelemes Deep structure and in particular at
Deep Well 803, which was spudded in December 2023 with a prime target at 3,950
meters and a secondary target at 4,200 meters.
The well, although above the main salt layer is part of the Yelemes Deep
structure and not part of the shallow structures, which are the subject of the
conditional $88 million disposal noted above.
Towards the end of the period under review oil was detected between depths of
3,360 meters and 3,420 meters and in September 2024 we announced initial
testing of the well at a rate of approximately 500 bopd. Further testing which
is required before a reliable assessment of the well can be completed is now
waiting on the licence upgrade discussed below.
At Deep Well 802 on the Yelemes Deep structure we are looking to partner with
a leading technical expert to bring the well into commercial production.
On the Airshagyl structure prolonged attempts to remove a stuck pipe at Deep
Well A5 were not successful and the rig used in the attempt was moved to drill
Well 815 on the shallow South Yelemes structure.
The plan with Deep Well A5 is to drill a new side track as a rig becomes
available. Again, as rigs become available, the intention is to use an acid
treatment at Deep Well A6 and to resume drilling at Deep Well A7.
BNG Licences
The existing full production licence at the MJF structure runs to 2043 and the
existing full production licence at the South Yelemes structure runs to
2046.
The joint appraisal licence for the Airshagyl and Yelemes Deep structures
expired in August 2024 but has been extended for up to 12 months to allow the
applications for separate 25 year full production licences to be considered.
Until the licences have been awarded no further work at either the Airshagyl
or Yelemes Deep structures is permitted.
BNG Reserves
At 31 December 2023 the reserves at the MJF and South Yelemes shallow
structures were in aggregate P1 13.6 mmbls and P2 21.8 mmbls.
Since then and in support of the licence upgrade at the Airshagyl structure C1
reserves under the former Soviet classification system and based solely on the
immediate vicinity of Wells A5, A6 & A7, were independently assessed at
6.8 million tonnes or approximately 48 mmbls. C2 reserves under the same
classification system were similarly assessed at approximately 4.0 million
tonnes or approximately 28.9 mmbls.
As noted above the same assessment at the Yelemes Deep structure first
requires completion of testing at Deep Well 803.
Other assets
At 3A Best no work was undertaken as the licence there has expired and cannot
be renewed without the payment of outstanding social obligations.
At Block 8 and West Shalva, which are both in the process of being acquired,
no work was undertaken. At Block 8 the plan is to reopen existing wells and
test new wells once the licences are renewed and we plan to drill a new well
at West Shalva in Q4 2024.
Oil Trading
We fund the refining of a portion of the oil produced at BNG and sell the
resulting oil products via a joint venture established on a 70:30 basis with
ourselves as the majority partner and with the minority partner providing the
required working capital.
Only oil sold to the domestic market, as opposed to oil sold either to
domestic mini refineries or to the international market, is eligible for oil
trading. Although total production in the period under review fell the volumes
of oil produced sold to the domestic market increased from approximately
183,000 barrels to approximately 252,000 barrels. We therefore had
approximately 38% more oil to trade than in the corresponding period.
However, to fund the Group while waiting on the proceeds from the sale of the
MJF and South Yelemes structures and from the Caspian Explorer charter the oil
trading division was forced to enter into contracts with longer settlement
dates and on terms less favourable than in the corresponding period. This,
together with declining prices for finished oil products, led to a significant
fall in oil trading gross profit.
Onshore oilfield services
CTS is the Group's wholly owned drilling company with four rigs, approximately
150 contractors and the ability to drill four wells simultaneously. In 2022
and 2023 CTS drilled wells on the Block 8 Contract Area, generating onshore
drilling revenue. To date in 2024 CTS has worked only on Group assets and so
has not recorded any external revenue.
Offshore oilfield services
During the period under review significant effort was expended on preparing
the Caspian Explorer for its first commercial drilling contract under the
Group's ownership. The charter for the first of two potential wells for a
consortium in which Eni S.p,A, the Italian multinational energy company is
the leading member commenced on time in July 2024 and was completed on 24
September 2024. Accordingly, the bulk of the revenue from the charter will be
recorded in the second half of the financial year.
While client confidentiality considerations limits the amount we can say on
the charter's progress, we are pleased with the outcome. Drilling was faster
than expected, which as we were employed on a daily rate basis will reduce
earlier expectations of total revenues. More importantly though, the strong
operational performance in our first commercial charter has significantly
increased the likelihood of securing additional charters in the coming years
and also significantly increased the resale value of the Caspian Explorer
should we ever consider selling.
Corporate Transactions
We have a number of live and prospective corporate transactions.
Sale of BNG's MJF & South Yelemes structures
In April 2024 we announced that we had granted 90 days exclusivity to Absolute
Resources LLP, a Kazakh registered entity, to conduct further due diligence in
connection with a conditional $83 million offer for the shallow structures on
the BNG Contract Area. At that time Absolute Resources LLP paid a $1 million
deposit.
In July 2024 we announced an extension to the exclusivity period until the end
of August 2024 and that the proposed acquisition price had increased to $88
million. At that time Absolute Resources LLP paid a further $1 million deposit
in part to cover the ongoing drilling costs at Well 815.
In September 2024 we announced that a conditional binding agreement had been
entered into to sell the MJF and South Yelemes structures to Absolute
Resources LLP for a headline cash consideration of $88 million, of which
advanced payments totaling approximately $14 million have been received.
Under the AIM Rules the size of the disposal compared to the size of the Group
requires the approval of Caspian Sunrise shareholders. A General Meeting has
been convened for 26 September 2024 at which shareholder approval will be
sought.
Acquisition of Block 8
In September 2023 we exercised our option to acquire the Block 8 Contract
Area.
On formal renewal of the Block 8 licences, completion of the acquisition
will then be dependent on the customary approvals from the Kazakh authorities
and the re-registration of ownership in the UAE.
Under the terms of the Block 8 Acquisition Agreement there is no significant
up-front cash payment or issue of shares. Virtually all the purchase
consideration is to be satisfied in cash via a royalty of $5 per barrel from
oil produced from Block 8 once owned by the Group with the purchase price
capped at $60 million.
We believe Block 8 represents, in addition to the deep structures at BNG, a
second potentially transformative asset in that either or both could enjoy the
same geological characteristics of the nearby world class Tengiz and Kashagan
assets.
The licence for the Sholkara structure has been renewed for a period of 3
years. We await the renewal of the licence for the Akkuduk structure and
based on further analysis and seismic interpretation we have decided not to
seek the renewal of the licence on the Toresay structure.
West Shalva
In April 2024 independent shareholders approved the acquisition of the West
Shalva Contract Area for an initial consideration of $5 million to be
satisfied by the issue of 99,206,349 shares to be issued at 4p per share. On
first oil an additional $5 million becomes payable by the issue of a further
99,206,349 shares, again to be issued at 4p per share. Additionally, the first
$5 million of revenue derived from the sale of West Shalva oil once under the
Group's ownership is payable in cash to the vendor in which case the maximum
total consideration would be $15 million.
West Shalva is expected to be a far easier oilfield from which to produce oil
than either BNG or Block 8. It does not have the salt layer present at both
BNG and Block 8, beneath which the exceptional temperatures and pressures have
made drilling difficult. Conversely, it does not have the same potential to
become a world class asset.
It is better located for access and to deliver oil being much closer to
refineries than either BNG or Block 8. It is also approximately 600 km further
south than BNG and Block 8 thereby enjoying a better climate, which should
result in fewer weather related delays than we encounter at BNG and are likely
to encounter at Block 8.
More strategically, owning West Shalva makes it easier to consider selling the
shallow structures at BNG while preserving oil trading revenues and without
the need to have rigs idle. We plan to use the rig previously used for testing
Deep Well 803 on the BNG Contract Area to drill our first well at West Shalva.
The appraisal licence at the West Shalva Contract Area runs until 2029. West
Shalva is a new Contract Area and accordingly has no existing assessed
reserves.
Financial Review
Revenue Six months ended Six months ended
30 June 2024 30 June 2023
$'000 $'000
Oil sales 10,496 12,464
Oil trading 5,893 3,798
On shore oil field services (CTS) 28 1,024
Offshore oil field services (Caspian Explorer) 2,090 nil
Total 18,507 17,286
Oil sales
In the period under review, as with the corresponding period, all the oil
produced was sold on the domestic or domestic mini refinery market with no oil
sold on the international markets.
Oil sales revenue for the period under review at approximately $10.5 million
was approximately 16% lower than in the corresponding period (2023: $12.5
million). This is principally the result of an approximate 18% fall in the
volume of oil produced.
Production volumes
In the period under review 293,088 barrels of oil were produced (2023: 351,620
barrels) at an average of 1,606 bopd (2023: 1,926 bopd).
Production from the MJF structure at 248,246 barrels was approximately 18%
lower than in 2023 (303,332 bbls), principally because wells 141, 142 and 145
were awaiting remedial action and either totally or mostly out of production.
Production from South Yelemes at 44,842 bbls at an average of 246 bopd was
approximately 8% lower than in 2023 48,671 at 267 bopd.
No oil was produced in either the period under review or the corresponding
period from either the Airshagyl or Yelemes Deep structures.
Achieved prices
No oil was sold on the international market where prices were typically $80
per barrel or better throughout the period under review.
Approximately 86% of oil produced was sold on the domestic market (2023: 48%)
where prices averaged approximately $36 per barrel excluding VAT (2023: $33
per barrel). Approximately 14% of oil produced was sold to local mini
refineries (2023: 52%) with prices averaging $37 per barrel.
The average price achieved for all production in the period under review was
approximately $36 per barrel excluding VAT (2023: $35 per barrel).
Cost of sales and gross profit
In the period under review the cost of sales for oil exploration and
production were approximately $3.2 million (2023: $2.7 million) resulting in a
gross profit for oil exploration and production of $7.3 million (2023: $9.8
million).
In the period under review approximately $4.6 million of exploration costs
were capitalised and added to unproven oil and gas assets (2023: $2 million).
Oil trading
Revenue
In the period under review sales trading revenue was approximately 55% greater
than in the corresponding period at $5.9 million (2023: $3.8 million)
reflecting the increased volumes of oil sold to the domestic market that was
eligible for oil trading.
Cost of sales and gross profit
The cost of sales, which are principally the refining and finance costs, were
$4.1 million (2023 $0.7 million), resulting in a lower gross profit of $1.7
million (2023: 3.1 million). The need to structure oil trading contracts to
fund the rest of the Group's operations while waiting on the proceeds from the
sale of the MJF and South Yelemes structures and from the Caspian Explorer
charter meant the oil trading contracts struck were generally on less
favourable terms than in the corresponding period.
On shore drilling services
Revenue & cost of sales
Where CTS works on assets already owned by the Group its charges are treated
as Group costs and included in the cost of sales for oil exploration and
production. However, where CTS works on assets in the process of being
acquired by the Group or on third party assets its charges are treated as
revenue.
During the period under review CTS did not undertake any work on assets held
outside the Group and accordingly no external revenue was earned and no
separately identifiable costs of sales are recorded.
In the corresponding period, revenue for CTS's work for third parties was
approximately $1.0 million, the cost of sales was $1.6 million and the gross
loss was $(0.6) million.
Offshore drilling services
Revenue
Approximately $2.1 million is recognised as income in the period under review
comprising advanced payments under the ENI charter. There was no such income
in the corresponding period.
The bulk of the revenue for the ENI charter will be recognised in the second
half of the current financial year.
Cost of sales and gross profit
Approximately $3.2 million of costs were incurred in preparing the Caspian
Explorer for its first commercial charter under the Group's ownership. The
extent of the charges reflects the length of time since the Caspian Explorer
was previously chartered for commercial drilling and the need to upgrade
safety equipment on board. It is unlikely similar costs would be incurred
preparing for drilling charters in future years
In the corresponding period there was no revenue for the Caspian Explorer.
Segmental trading summary
$'000 6 months ended 30 June 2024 6 months ended 30 June 2023
note Revenue Cost of Gross Revenue Cost of Gross
sales profit sales profit
Oil production 10,496 3,153 7,343 12,464 2,666 9,798
Oil trading 5,893 4,173 1,720 3,798 671 3,127
On shore drilling services 1 28 nil 28 1,024 1,566 (542)
Offshore drilling services 2 2,090 3,146 (1,056) nil nil nil
Total 18,507 10,472 8,035 17,286 4,903 12,383
Notes
1. On shore drilling services (CTS)
2. Offshore drilling services (Caspian Explorer)
Selling expenses
In the period under review, selling expenses, which are principally export
duties on oil sales, fell by approximately 71% from approximately $2.8 million
to approximately $0.9 million largely as the result of the absence of any
international sales.
Other administrative expenses
These are mostly general and administrative expenses, which increased by
approximately 78% to approximately $3.9 million (2023: $1.4 million)
reflecting the Group's increased level of operational activities.
Operating income
The result of the above is that operating income fell by approximately 60% to
approximately $3.2 million from $8.1 million in 2023.
Finance costs
Net finance costs were approximately $0.3 million (2023: approximately $0.16
million).
Profit before and after tax
Profit before and after tax was approximately $2.9 million (2023:
approximately $7.9million).
Non-current assets
Non-current assets at approximately $123.5 million were approximately $2.6
million greater than at the 2023 year end. This was the result of $4.6 million
additions to unproven oil & gas assets and plant property and equipment
related depreciation charges of approximately $1.6 million together with
smaller movements on other receivable and restricted use cash .
Net current liabilities
Net current liabilities at approximately $18.1 million were approximately $6.5
million lower than at the 2023 year end ($24.6 million).
Cash
Cash at the end of the period under review was approximately $0.7 million
compared to approximately $0.5 million at the 2023 year end.
Cashflows
Of the approximately $22.7 million received from customers approximately $16.5
million was paid to suppliers and staff; approximately $4.6 million was spent
on additions to unproven oil and gas assets; approximately $5.3 million was
spent on proven oil & gas assets; with a net increase in bank loans of
approximately $3.9 million.
The above resulted in an approximately $0.2 million increase in cash from $0.5
million at the 2023 year end to approximately $0.7 million at 30 June 2024.
Going concern
The audit report for the financial statements for the year ended 31 December
2023, which was published on 15 July 2024, set out why the Directors continue
to adopt the going concern approach to the preparation of those financial
statements. The Directors believe the same considerations and conclusions
apply to these interim financial statements.
Strategy
The Group's purpose remains to increase shareholder value through the
acquisition and development of its assets.
In the short term the Board intends to continue to generate profit and
cashflows from its existing established businesses and to complete the various
corporate transactions already under way.
Over the medium and longer term the Board intends to use the cash generated
from operations and asset realisations to continue to broaden the Group's
activities through targeted and opportunistic acquisitions, principally
focused on the oil & gas and mining sectors.
Outlook
Completion of the sale of the MJF and South Yelemes structures and the
acquisitions of the Block 8 and West Shalva contract areas would move the
group forward and provide significant additional funding for other projects.
Clive Carver
Chairman
24 September 2024
Contacts:
Caspian Sunrise PLC
Clive Carver, Chairman
+7 727 375 0202
Zeus Capital Limited, Nominated Adviser & Broker
James Joyce
+4420 3829 5000
James Bavister
Andrew de Andrade
Qualified person
Mr. Assylbek Umbetov, a member of the Association of Petroleum Engineers, has
reviewed and approved the technical disclosures in this announcement.
This announcement has been posted to:
www.caspiansunrise.com/investors (http://www.caspiansunrise.com/investors)
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information
is disclosed in accordance with the Company's obligations under Article 17 of
the UK MAR. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
Six months Six months ended 30 June 2023 Unaudited
ended 30
June 2024
Unaudited
US$000s US$000s
Revenue 18,507 17,286
Cost of sales (10,472) (4,903)
Gross Profit 8,035 12,383
Selling expense (896) (2,826)
Other administrative expenses (3,890) (1,449)
Operating Income 3,249 8,108
Finance cost (421) (245)
Finance income 103 81
Income before taxation 2,931 7,944
Taxation - (436)
Income after taxation 2,931 7,508
Income attributable to owners of the parent 2,493 7,447
Income (Loss) attributable to non-controlling interest 438 61
Income for the year 2,931 7,508
Earnings per share 3
Basic income per ordinary share (US cents)
0.13
0.36
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended
30 June 2024 30 June 2023
Unaudited Unaudited
US$000s US$000s
Income after taxation 2,931 7,447
Other comprehensive income:
Items to be reclassified to profit or loss in subsequent periods (4,463) 968
Exchange differences on translating
foreign operations
Total comprehensive income / (loss) for the period (1,532) 8,415
Total comprehensive income / (loss) attributable to:
Owners of the parent
(1,970) 8,354
Non-controlling interest 438 61
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2024
Unaudited Share capital Share Cumulative translation reserve Capital contribution reserve Merger Retained deficit Total Non-controlling interests Total equity
premium Reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2023 33,060 - (65,838) 2,102 11,511 90,626 71,461 (5,152) 66,309
Income after taxation - - - - - 2,493 2,493 438 2,931
Shares issue 56 125 - - - - 181 - 181
Exchange differences on translating foreign operations - - (4,463) - - - (4,463) - (4,463)
Total comprehensive
income for the period - - (4,463) - - 2,493 (1,789) 438 (1,351)
- - - -
Dividends declared
At 30 June 2024 33,116 125 (70,301) 2,102 11,511 93,119 69,672 (4,714) 64,958
For the six months ended 30 June 2023
Unaudited Share capital Cumulative translation reserve Capital contribution reserve Merger Retained deficit Total Non-controlling interests Total equity
Reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2023 33,060 (66,521) (2,362) 11,511 84,872 60,560 (5,667) 54,893
Income after taxation - - - - 7,447 7,447 61 7,508
Exchange differences on translating foreign operations - 968 - - - 968 - 968
Total comprehensive
income for the period - 968 - - 7,447 8,415 61 8,476
(2,442) (2,442) - (2,442)
Dividends declared
At 30 June 2023 33,060 (65,553) (2,362) 11,511 89,877 66,533 (5,606) 60,927
Reserve Description and purpose
Share capital The nominal value of
shares issued
Share premium Amount subscribed for share
capital in excess of nominal value
Deferred shares The nominal value of deferred
shares issued
Cumulative translation reserve Losses arising on retranslating the
net assets of overseas operations into US Dollars
Merger reserves Gains accrued as
the result of acquisitions made in previous periods
Capital contribution Reserve Capital contribution arised when a
shareholder has made an irrevocable gift to the Company
Retained deficit Cumulative
losses recognised in the profit or loss
Non-controlling interest The interest of
non-controlling parties in the net assets of the subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at As at
30 June 31 December 30 June
2024 2023 2023
Note US$000s US$000s US$000s
Assets Unaudited Audited Unaudited
Non-current assets
Unproven oil and gas assets 5 56,526 51,963 46,243
Property, plant and equipment 6 63,318 64,930 67,815
Other receivables 7 3,612 3,230 6,359
Restricted use cash - 706 707
Total non-current assets 123,456 120,829 121,124
Current assets
Inventories 3,475 1,497 2,457
Other receivables 13,041 12,149 6,668
Cash and cash equivalents 674 447 475
Total current assets 17,190 14,093 9,600
Total assets 140,646 134,922 130,724
Equity and liabilities 33,060
Equity
Share capital 8 33,116 33,060
Share premium 125 - -
--Other reserves 2,102 2,102 (2,362)
Merger reserve 11,511 11,511 11,511
Retained earnings 93,119 90,626 89,877
Cumulative translation reserve (70,301) (65,838) (65,553)
Shareholders' equity 69,672 71,461 66,533
Non-controlling interests (4,714) (5,152) (5,606)
Total equity 64,958 66,309 60,927
Current liabilities 16,095
Trade and other payables 17,425 22,498
Current tax liabilities 1,959 989 -
Short-term borrowings 9 8,692 3,624 2,456
Provision for BNG license payment 3,178 3,178 3,178
Other current provisions 4,029 4,481 6,089
Total current liabilities 35,283 28,367 34,221
Non-current liabilities
Borrowings 2,991 3,070 -
Deferred tax liabilities 6,989 7,378 6,219
Provision for BNG license payment 12,326 13,746 14,875
Other non-current provisions 1,420 1,160 477
Other payables 16,679 14,892 14,005
Total non-current liabilities 40,405 40,246 35,576
Total liabilities 75,689 68,613 69,797
Total equity and liabilities 140,646 134,922 130,724
This financial information was approved and authorised for issue by the Board
of Directors on 24 September 2024 and was signed on its behalf by:
Clive Carver
Chairman
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Six months ended
30 June 2024 30 June 2023
Unaudited Unaudited
US$000s US$000s
Cash flow provided by operating activities
Cash received from customers
22,691 13,764
Payments made to suppliers
and employees (16,448) (4,751)
Net cash used by
operating activities 6,244 9,013
Cash flow used in investing activities
Additions to unproven oil and gas assets
(4,564) (2,430)
Purchase of PP&E (5,270) (5,536)
Cash flow used in investing
activities (9,834) (7,966)
Cash flow used by financing activities
Loans provided (repaid) (468) (1,545)
Loans received 4,990 316
Other (705) -
Dividends paid - (3,025)
Net cash used by financing
activities 3,817 (4,254)
Net increase /decrease in cash and
cash equivalents 227 (3,207)
Cash and cash equivalents at
the start of the period 447 3,682
Cash and cash equivalents
at the end of the period 674 475
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
1. STATUTORY ACCOUNTS
The interim financial results for the period ended 30 June 2024 are
unaudited. The financial information contained within this report does not
constitute statutory accounts as defined by Section 434(3) of the Companies
Act 2006.
2. BASIS OF PREPARATION
Caspian Sunrise plc is registered and domiciled in England and Wales.
This interim financial information of the Company and its subsidiaries ("the
Group") for the six months ended 30 June 2024 has been prepared on a basis
consistent with the accounting policies set out in the Group's consolidated
annual financial statements for the year ended 31 December 2023. It has not
been audited or reviewed, does not include all of the information required for
full annual financial statements, and should be read in conjunction with the
Group's consolidated annual financial statements for the year ended 31
December 2023. The 2023 annual report and accounts, which received a
qualified opinion from the auditors, included a material uncertainty in
respect of going concern but did not contain a statement under section 498 (2)
or 498 (3) of the Companies Act 2006, have been filed with the Registrar of
Companies. As permitted, the Group has chosen not to adopt IAS 34 'Interim
Financial Reporting'.
The financial information is presented in US Dollars and has been prepared
under the historical cost convention.
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 31
December 2023 except for the effect of new standards effective from 1
January 2024 as explained below. These are expected to be consistent with the
financial statements of the Group as at 31 December 2023 that are/will be
prepared in accordance with IFRS and their interpretations issued by the
International Accounting Standards Board ("IASB") as adopted by the European
Union ("EU").
Several other amendments and interpretations apply for the first time in
2023, but do not have an impact on the interim consolidated financial
statements of the Group as well.
Going Concern
The Group's Financial Statements for the year ended 31 December 2023, which
were published on 15 July 2024, contained reference to the existence of a
material financial uncertainty, which only some 12 months on continues to
exist. This may cast significant doubt about the Group's ability to continue
as a going concern and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The financial information in these interim results has been prepared on a
going concern basis using current income levels but a reduced work programme.
On this basis the Directors believe that the Group will have sufficient
resources for its operational needs over the relevant period, being until
September 2024. Accordingly, the Directors continue to adopt the going concern
basis.
However, the Group's liquidity is dependent on a number of key factors:
· The Group continues to forward sell it domestic production
and receive advances from oil traders with $US3.4 million advanced at 30 June
2024, and the continued availability of such arrangements is important to
working capital. Whilst the Board anticipates such facilities remaining
available given its trader relationships, should they be withdrawn or reduced
more quickly than expected then additional funding would be required.
· Similarly, the Group sells to local mini refineries. Should
these arrangements be terminated or reduced then additional funding would be
required.
· For the time being the Group is not selling to the
international markets as a consequence of the impact of sanctions on Russia,
including access to pipelines and the price at which oil emerging from Russian
pipelines is sold. As ever, forecasts remain sensitive to oil prices, which
have shown significant volatility in recent times. In the event of a
significant decline in world and domestic oil prices additional funding would
be required.
3. INCOME PER SHARE
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year including shares to be issued.
There is no difference between the basic and diluted loss per share as the
Group made a loss for the current and prior year. Dilutive potential ordinary
shares include share options granted to employees and directors where the
exercise price (adjusted according to IAS33) is less than the average market
price of the Company's ordinary shares during the period.
The calculation of loss per share is based on:
Six months Six months
ended 30 June 2024 Unaudited ended 30 June 2023 Unaudited
The basic weighted average number of ordinary
shares in issue during the period 2,254,978,483 2,250,501,559
The income (loss) for the year attributable to owners of the parent (US$'000)
2,931 7,447
4. FINANCIAL EXPENSE
The Group incurred financial expenses of US$421,000 during the 6 months to 30 June 2024 (2023: US$330,000).
5. UNPROVEN OIL AND GAS ASSETS
During the six months period ended June 30 2024 the Company's unproven oil and
gas assets increased on US$ 4.6 million (2023: increase on US$ 2 million).
6. PROPERTY, PLANT & EQUIPMENT
Group Proved oil Motor Vehicles Other Total
and gas assets
US$'000 US$'000 US$'000 US$'000
Cost at 1 January 2023 59,097 2,191 8,470 69,758
Additions 7,646 - 16 7,662
Foreign exchange difference 648 39 70 757
Cost at 31 December 2023 67,391 2,230 8,556 78,177
Additions 2,938 - 2,332 5,270
Foreign exchange difference (2,874) - - (2,874)
Cost at 30 June 2024 67,456 2,230 10,888 80,573
Depreciation at 1 January 2023 5,020 641 2,996 8,657
Charge for the year 1,722 7 865 2,594
Foreign exchange difference 89 511 411 1,041
Depreciation at 31 December 2023 6,831 1,159 5,257 13,247
Charge for the year 722 8 1,973 2,703
Foreign exchange difference 528 323 455 1,306
Depreciation at 30 June 2024 8,081 1,490 7,685 17,256
Net book value at:
01 January 2023 54,077 1,550 4,519 56,453
31 December 2023 60,560 1,071 3,299 64,930
30 June 2024 59,375 740 3,203 63,318
7. OTHER NON-CURRENT RECEIVABLES
During the six months period ended June 30 2024 the Company has provided no
advances related to its drilling operations (2023: US$0.12 million). VAT
recoverable at the Group level as at 30.06.2024: US$3,215,000 (2023:
US$4,629,000).
8. CALLED UP SHARE CAPITAL
Number of ordinary shares $'000
Balance at 31 December 2023 2,250,501,560 33,060
Balance at 30 June 2024 2,254,978,483 33,116
9. BORROWINGS
Six months ended Year ended 31
December 2023
30 June 2024 US$'000
US$'000
Unaudited Audited
Total 6,694
11,683
Bank loans 8,692 3,211
Loans from related parties 2,991 3,483
At 30 June 2024 and 30 June 2023 all the loans at the group were payable to
the individuals and entities related to Oraziman family.
10. SUBSEQUENT EVENTS
On 3 September 2024 the Company announced it had entered into a conditional
and binding term sheet with Absolute Resources LLP for the disposal of the
shallow MJF and South Yelemes structures on the BNG contract area, for a
headline cash consideration of the Kazakh Tenge equivalent of
approximately US$88 million and that a further advance payment of
approximately US$12 million was received on 5 September 2024 taking the
upfront consideration then received to approximately US$14 million.
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