REG - Corcel PLC - Half-year Report
28/03/2024 13:30
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RNS Number : 7608I Corcel PLC 28 March 2024
Corcel PLC
("Corcel" or the "Company")
Half Year Report
28 March 2024
Corcel Plc ("Corcel" or the "Company"), the Angola focused exploration and
production company announces its unaudited half-yearly results for the
six-months ended 31 December 2023.
Highlights:
o Productive six months focused on completing the transition to focusing on
oil and gas, restructuring the balance sheet, expanding the executive team and
deepening the Board of Directors
o Operational focus falling firmly on Angola with additional initiatives
under consideration in Angola and overseas
o Progress at KON-11, Kwanza Basin, onshore Angola, with the Company
participating in the drilling of two wells in the historic Tobias Field -
TO-13 and TO-14
o TO-14 currently undergoing flow testing having encountered weather and
engineering delays, testing work continues on the well with oil encountered
and ultimate commercial prospectivity is yet to be determined
o Operator at KON-11 intends to complete testing of TO-14 and move to test
TO-13
o Data collection and planning activities expected on Blocks KON-12 and
KON-16 during the course of 2024 with the goal to delineate future well
targets
o Continued rationalisation of legacy mining assets including exploration
results at Canegrass and ongoing disposal of interest in Mambare nickel/cobalt
project
Chairman's Statement:
Dear Shareholders,
We believe that early 2024 finds Corcel on the verge of a material
transformation, with the groundwork for these developments having been
meticulously laid over the final six months of 2023.
During the period, the Company completed the acquisition of interests in three
oil blocks in Angola, namely KON-11, KON-12 and KON-16. The acquisition of
these interests, at a reasonable cost, allowed Corcel to accelerate its
transition to oil and gas and facilitated our participation in the reopening
of the Kwanza Basin, in Angola. The Kwanza Basin is a prolific oil and gas
region, shut down prematurely due to civil war in country, which began in the
mid-1970s and didn't conclude until 2002. The broad attractiveness of
onshore Angola includes brownfield targets, marginal field tax rates, an
extremely supportive government and an oil ministry keen to see onshore
production make up for the declines offshore. In addition, we believe Angola
has a compelling mix of blue-sky exploration targets offering a number of
potentially high upside exploration and development prospects.
E&P activities in Angola began nearly immediately following the
acquisition, with preparation for drilling the Tobias-13 ("TO-13") well in
KON-11 commencing at the end of August 2023 and well spud the following
month. Following the completion of the TO-13 well, the operator at KON-11,
Sonangol, moved the rig to the Tobias-14 ("TO-14") location, where we drilled
near the most prolific historic producer of the Tobias oilfield, having
reached several thousand barrels per day alone at its peak. Tobias had been
drilled and operated by Petrofina from the 1960s to the 1990s, where, on the
back of only a small number of wells, peak production reached some 17,500
bbls/day.
Following completion of the TO-14 well, Sonangol moved directly to testing,
before encountering a series of weather and logistical delays that slowed
progress early in the year. Now, at the time of writing, formal flow testing
has begun, and while engineering challenges have been encountered and have
been frustrating, we remain positive, knowing we have encountered oil in the
well and don't yet know its ultimate commercial prospectivity. While success
is never assured in oil and gas, we look forward to continued progress on
TO-14 leading to definitive results and then to the operator proceeding to
test the previously drilled TO-13 well.
Following testing results from these initial wells, the Company intends to
embark on a comprehensive development plan during the balance of 2024. This
plan is set to include a competent persons report, which will lead to our
ability, if supported by positive test results, to book reserves and
potentially access other financing structures. Positive results also would
lead to the installation of an early production system being installed, with
an aim to reach first oil and formal production by the end of the year.
These two existing wells would then over time be joined by additional
appraisal wells, as the KON-11 block partners move toward full field
development and reactivation of the Tobias field.
Following closely behind KON-11, development of KON-12 is likely to see a
series of data collection efforts to include eFTG "enhanced Full Tensor
Gravity Gradiometry" (a technology that is both cost-effective and which has
been developed materially over the past decade), as well as seismic
acquisition, moving on ultimately to drilling our first well in the Block.
Meanwhile, at Block-16, where Corcel is the operator, we anticipate a similar
order of activities as at KON-12, but with our having more control over the
timing and ultimate sequencing of events. KON-16 in particular, offers
substantial upside in the form of post-salt targets of 456 MMBbls and pre-salt
targets of 1,029 MMBbls, a historic well that had oil shows in both the pre
and post salt, and geology very analogous to the offshore Cameia discovery,
which has to date identified some 500 MMBbls. The Company considers that the
timing of KON-16 development may well be materially accelerated if KON-11
results prove favourable.
Meanwhile, the Company continues to plan and consider its next steps in the
sector, which may include further transactions in the region and overseas, but
which would, if pursued, be targeted to supplement the Company's primary focus
on execution in Angola.
Elsewhere in the business, the Company saw the ongoing development and
disposal of its residual mining interests, with terms agreed for the sale of
our 41% interest in the Mambare nickel/cobalt project in Papua New Guinea.
Initial work was also conducted and results received at the Canegrass lithium
project, where data pointed to broader prospects that might include nickel and
vanadium. The Board meanwhile seeks to maximize the value of these heritage
assets, while maintaining a firm eye on our operations in Angola.
More broadly, the six months to 31 December 2023, saw the Company's balance
sheet reinvigorated with the retirement of all historic corporate debt, and
the installation of a convertible loan note facility. A new Board of
Directors was recruited and installed, and our technical and financial
capabilities substantially widened. All of these efforts were designed to
prepare the Company for its next phase of growth. Corcel's expanded
capabilities include areas such as geology, drilling, business and commercial
development, facilitating Corcel moving from passive E&P investor to
operator over the course of the year.
With the personnel and primary project pieces now in place, it is up to the
reinvigorated team to drive the business towards its goals for the benefit of
all of our stakeholders. While we have accomplished a great deal over the
past six months, this is clearly only the beginning of our journey, and we
look forward to a bright future in 2024 as we look to build a sizeable, listed
oil and gas developer.
The Board and I want to thank our shareholders for their support.
Antoine Karam
Executive Chairman
Consolidated statement of financial position
as at 31 December 2023
Notes 31 December 2023 31 December 2022 30 June 2023
Unaudited, £'000 Unaudited, £'000 Audited, £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 6 - 1,921 -
Exploration and evaluation assets 3,499 1,217 2,014
Property, plant and equipment 494 52 1
FVTOCI financial assets 7 1 1 -
FVTPL financial assets 7 - - 1
Other receivables 749 1,514 2,231
Total non-current assets 4,743 4,705 4,247
Current assets
Cash and cash equivalents 143 226 257
Trade and other receivables 208 215 754
Total current assets 351 441 1,011
Assets held for sale 8 3,091 - 1,575
TOTAL ASSETS 8,185 5,146 6,833
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 9 2,871 2,770 2,842
Share premium account 29,005 25,674 28,138
Shares to be issued - 75 -
Other reserves 2,453 2,412 2,481
Retained earnings (29,211) (27,457) (27,945)
Total equity 5,118 3,474 5,516
LIABILITIES
Current liabilities
Trade and other payables 776 758 715
Short term borrowings 2,291 914 602
Total current liabilities 3,067 1,672 1,317
TOTAL EQUITY AND LIABILITIES 8,185 5,146 6,833
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2023
Notes 6 months to 31 December 2023 6 months to 31 December 2022
Unaudited, £'000 Unaudited, £'000
Gain on sale of JV projects 166 353
Administrative expenses 3 (1,388) (527)
Project expenses (32) (44)
Foreign currency (loss)/gain 63 16
Finance costs, net (74) (431)
Share of loss of associates and joint ventures - (67)
Loss for the period before taxation (1,265) (700)
Tax expense - -
Loss for the period after taxation (1,265) (700)
Earnings per share
Loss per share - basic, pence 4 (0.09) (0.13)
Loss per share - diluted, pence 4 (0.09) (0.13)
Consolidated statement of comprehensive income
for the period ended 31 December 2023
6 months to 31 December 2023 6 months to 31 December 2022
Unaudited, £'000 Unaudited, £'000
(Loss)/profit for the period (1,265) (700)
Unrealised foreign currency gain/(loss) on translation of foreign operations (29) (38)
Revaluation of FVTOCI investments 7 -
Total comprehensive loss for the period (1,294) (738)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2023
The movements in equity during the period were as follows:
Share capital Share premium account Shares to be issued Retained earnings Other reserves Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 July 2022 (audited) Changes in equity for six months ended 31 December 2,751 24,961 75 (26,757) 2,095 3,125
2021
Profit/ (loss) for the period - - - (700) - (700)
Other comprehensive (loss)/income for the period - - - - - -
Unrealised foreign currency gain arising on translation of foreign operations - - - - (38) (38)
Total comprehensive (loss)/income for the period - - - (700) (38) (738)
Transactions with owners
Issue of shares 19 738 - - - 757
Share issue and fundraising costs - (25) - - - (25)
Options issued - - - - 27 27
Warrants issued - - - - 328 328
Total Transactions with owners 19 713 - - 355 1,087
As at 31 December 2022 (unaudited) 2,770 25,674 75 (27,457) 2,412 3,474
As at 1 July 2023 (audited) 2,842 28,138 - (27,945) 2,481 5,516
Changes in equity for six months ended 31 December 2023
Profit/ (loss) for the period - - - (1,265) - (1,265)
Other comprehensive (loss)/income for the period - - - - - -
Unrealised foreign currency gain arising on translation of foreign operations - - - - (29) (29)
Total comprehensive (loss)/income for the period - - - (1,265) (29) (1,294)
Transactions with owners
Issue of shares 29 867 - - - 896
Share issue and fundraising costs - - - - - -
Options issued - - - - - -
Warrants issued - - - - - -
Total Transactions with owners 29 867 - - - 896
As at 31 December 2023 (unaudited) 2,871 29,005 - (29,210) 2,452 5,118
FVTOCI investments reserve Share-based payments reserve Warrants Reserve Foreign currency translation reserve Total other reserves
£'000 £'000 £'000 £'000 £'000
As at 1 July 2022 (audited) (2) 116 1,450 531 2,095
Changes in equity for six months ended 31 December 2022
Other Comprehensive income
Share options granted during the year - 27 - - 27
Warrants granted during the year - - 328 - 328
Unrealised foreign currency gains arising upon retranslation of foreign - - - (38) (38)
operations
Total comprehensive income/(loss) for the period - 27 328 (38) 317
As at 31 December 2022 (unaudited) (2) 143 1,778 493 2,412
As at 1 July 2023 (audited) (2) 169 1,778 536 2,481
Changes in equity for six months ended 31 December 2023
Other Comprehensive income
Share options granted during the year - - - - -
Warrants granted during the year - - - - -
Unrealised foreign currency gains arising upon retranslation of foreign - - - (29) (29)
operations
Total comprehensive income/(loss) for the period - - - (29) (29)
As at 31 December 2023 (unaudited) (2) 169 1,778 507 2,452
Consolidated statement of cash flows
for the period ended 31 December 2023
Note 6 months to 31December 2023 6 months to 31 December 2022
Unaudited Unaudited
£'000 £'000
Cash flows from operating activities
(Loss)/profit before taxation (1,265) (700)
Decrease/(increase) in receivables 546 62
Increase in payables 61 435
Depreciation 1 -
Share-based payments - 355
(Gain)/loss on foreign exchange (35) -
Finance cost, net 74 103
Share of loss of associates and joint ventures, net of tax - 67
Net cash flows from operations (618) 322
Cash flows from investing activities
Additional investments in JVs and investment in associates - (12)
Purchase of financial assets carried at amortised cost - -
Investment in exploration and evaluation assets (1,485) (20)
Purchase of property, plant and equipment (494) -
Net cash flows from investing activities (1,979) (32)
Cash flows from financing activities
Proceeds from issue of shares 896 537
Interest paid - (103)
Proceeds of new borrowings, as received net of associated fees 2,257 -
Repayment of borrowings (641) (509)
Net cash flows from financing activities 2,512 (75)
Net decrease in cash and cash equivalents (85) 215
Cash and cash equivalents at the beginning of period 257 25
Effects of foreign exchange translation on currency holdings (29) (14)
Cash and cash equivalents at end of period 143 226
Half-yearly report notes
for the period ended 31 December 2023
1 Company and Group
As at 30 June 2023 and 31 December 2023 the Company had one or more operating
subsidiaries and has therefore prepared full and interim consolidated
financial statements respectively.
The Company will report again for the full year ending 30 June 2024.
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the year ended 30 June 2023 has been
extracted from the statutory accounts of the Group for that year. Statutory
accounts for the year ended 30 June 2023, upon which the auditors gave an
unqualified audit report which did not contain a statement under Section
498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of
Companies.
2 Accounting Polices
Basis of preparation
The consolidated interim financial information has been prepared in accordance
with IAS 34 'Interim Financial Reporting'. The accounting policies applied
by the Group in these condensed consolidated interim financial statements are
the same as those applied by the Group in its consolidated financial
statements as at and for the year ended 30 June 2023, which have been prepared
in accordance with IFRS.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the
Group remain going concerns and so will be able to discharge its financial
obligations as they fall due. At 31 December 2023, the Group had cash and cash
equivalents of £0.143 million and £2.29 million of borrowings and access to
a variety of funding options, including the issuance of convertible loan notes
and the capacity to undertake capital market placings of new shares.
Having considered the prepared cashflow forecasts and the Group budget,
expected operational costs in Angola, as well as legacy battery metals
projects, the Directors currently believe that they will have access to
adequate resources in the 12 months from the date of the signing of these
Financial Statements. As a result, they consider it appropriate to continue to
adopt the going concern basis in the preparation of the Financial Statements.
Should the Group be unable to continue trading as a going concern, adjustments
would have to be made to reduce the value of the assets to their recoverable
amounts, to provide for further liabilities, which might arise, and to
classify non-current assets as current. The Financial Statements have been
prepared on the going concern basis and do not include the adjustments that
would result if the Group was unable to continue as a going concern.
3 Administrative expenses
6months to 31 December 2023 6 months to 31 December 2022
Unaudited Unaudited
£'000 £'000
Staff Costs:
Payroll 448 175
Pension 10 8
Staff welfare 3 -
Share based Payments -Staff - 26
Total: 499 235
Professional Services:
Accounting 57 51
Legal 35 17
Business Development 4 6
Marketing & Investor Relations 39 4
Funding costs 317 20
Other 86 35
Total: 538 133
Regulatory Compliance 63 67
Travel 143 2
Office and Admin Costs:
General 78 18
IT costs 8 3
Depreciation 1 -
Rent - Main Office 16 14
Insurance 42 55
Total: 145 90
Total administrative expenses 1,388 527
4 Loss per share
The following reflects the loss and share data used in the basic and diluted
profit/(loss) per share computations:
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
Loss attributable to equity holders of the parent company, in Thousand (1,265) (700)
Sterling (£'000)
Weighted average number of Ordinary shares of £0.0001 in issue, used for (0.09) (0.13)
basic and diluted EPS
Loss per share - basic and diluted, pence (0.09) (0.13)
At 31 December 2023 and at 31 December 2022, the effect of all the instruments
is anti-dilutive as it would lead to a further reduction of loss per share,
therefore they were not included into the diluted loss per share calculation.
Options and warrants that could potentially dilute basic EPS in the future,
but were not included in the calculation of diluted EPS because they are
anti-dilutive for the periods presented:
6 months to 6 months to
31 December 2023 31 December 2022
Unaudited Unaudited
Share options granted to employees - total, of them 26,687,412 26,687,412
- Vested at the end of the reporting period - -
- Not vested at the end of the reporting period 26,687,412 26,687,412
Warrants given to shareholders as a part of placing equity instruments 290,500,000 615,665,670
Total number of instruments in issue not included into the fully diluted EPS 317,187,412 642,353,082
calculation
5 Segmental analysis
The Group's operational segments are as follows:.
For the six-month period to 31 December 2023 Battery Metals Flexible Grid Solutions (FGS) Oil and Gas Corporate and unallocated
Total
£'000 £'000 £'000 £'000
Result
Segment results 119 (1) (14) (1,295) (1,191)
Loss before tax and finance costs 119 (1) (14) (1,295) (1,191)
Finance costs - - - (74) (74)
Profit/(Loss) for the period before taxation 119 (1) (14) (1,369) (1,265)
Taxation expense - - - - -
Loss for the period after taxation 119 (1) (14) (1,369) (1,265)
Total assets at 31 December 2023 4,234 - 3,618 332 8,185
For the six-month period to 31 December 2022 Battery Metals (Nickel and Vanadium) Flexible Grid Solutions Corporate and unallocated
Total
£'000 £'000 £'000 £'000
Result
Segment results (110) 331 (490) (269)
Loss before tax and finance costs (110) 331 (490) (269)
Finance costs - - (431) (431)
Loss for the period before taxation (110) 331 (921) (700)
Taxation expense - - - -
Loss for the period after taxation (110) 331 (921) (700)
Total assets at 31 December 2022 4,742 2 402 5,146
6 Investments in associates and joint ventures
31 December 2023 31 December 2022 30 June 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
At the beginning of the period - 1,988 1,988
Additional investments in JVs - - -
Share of loss for the period using equity method - (67) (76)
Impairments - - (337)
Transfer to assets held for sale - - (1,575)
At the end of the period - 1,921 -
In the year ended 30 June 2023, the Group's interests in the Mambare JV were
reclassified into Assets Held for Sale following determination that the
ongoing discussions around the disposal of this project met the criteria for
classification under IFRS 5.
7 Financial assets
31 December 2023 31 December 2022 30 June 2023
Unaudited Unaudited Audited
£'000 £'000 £'000
FVTOCI financial instruments at the beginning of the period 1 1 1
Disposals - - -
Revaluations and impairment - - -
FVTOCI financial assets at the end of the period (unaudited) 1 1 1
8 Assets Held for Sale
On 16 October 2023, the Group announced an agreement with Integrated Battery
Metals (the Purchaser) for the disposal of its 41% interest in the Mambare
nickel/cobalt project held via its interest in Oro Nickel Ltd, following
extensive discussions with the Purchaser over the course of the financial year
ended 30 June 2023.
Under IFRS 5, the interest in Oro Nickel Ltd is classified as an Asset Held
for Sale, as the directors had made a definitive determination to dispose of
the asset prior to the reporting date of these financial statements. As
such, the carrying value of the investment in the joint venture held in the
group was £3,091,449 (2022: £Nil) at the reporting date, comprising an
investment in the JV of £1,574,917 and loans to the JV of £1,516,532, and
has been reclassified on the balance sheet as Assets Held for Sale.
9 Share Capital of the company
The share capital of the Company is as follows:
Number of shares Nominal, £'000
Allotted, issued and fully paid
Deferred shares of £0.0009 each 1,788,918,926 1,610
A Deferred shares of £0.000095 each 2,497,434,980 237
B Deferred shares of £0.000099 each 8,687,335,200 860
Ordinary shares of £0.0001 each 1,344,381,984 135
As at 1 July 2023 (Audited) 2,842
Shares issued in the period
Ordinary shares of £0.0001 each 294,432,718 29
Allotted, issued and fully paid
Deferred shares of £0.0009 each 1,788,918,926 1,610
A Deferred shares of £0.000095 each 2,497,434,980 237
B Deferred shares of £0.000099 each 8,687,335,200 860
Ordinary shares of £0.0001 each 1,638,814,702 164
As at 31 December 2023 (Unaudited) 2,871
10 Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial
liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior year.
11 Events after the reporting period
On 2 January 2024 the Group was notified of the conversion of £250,000 of the
convertible loan notes issued to Extractions Premium and Mining Ltd. in the
prior year into 32,061,643 new ordinary shares. Following this conversion a
principal balance of £750,000 notes remained owing.
On 10 January 2024 the Group was notified of the exercise of 5,000,000
warrants for new ordinary shares at a price of £0.0035 per share.
On 12 January 2024 the Group granted 307,033,155 new options over ordinary
shares to the Directors and Key Executives of the Group. The options have a
exercise price of par, and vest over three years when the share price of the
Company reaches a range of values for 5 consecutive days, from £0.016 to
£0.064.
On 12 February 2024 the Group announce3d the commencement of testing of its
TO-14 well in Angola.
On 29 February the Group was notified of the conversion of the remaining
£750,000 of outstanding principal convertible loan notes by Extraction Srl,
resulting in the allotment of 432,555,025 new ordinary shares and in full
settlement of the remaining amounts owing under the convertible loan note
facility.
On 7 March 2024 the Group was notified of the exercise of 100,000,000 warrants
for new ordinary shares at a price of £0.0021 per share.
On 18 March 2024 the Group announced the results of initial exploration
activities on its Canegrass project, noting varying mineralisation results and
the potential for both vanadium and nickel prospectivity.
For further information, please contact:
Antoine
Karam
Corcel Plc Executive Chairman
Development@Corcelplc.com (mailto:Development@Corcelplc.com)
James Joyce / James Bavister /Andrew de Andrade
WH Ireland Ltd NOMAD & Broker
0207 220 1666
Patrick
d'Ancona
Vigo Communications IR
0207 3900
230
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