REG - Coro Energy PLC - Half-year Report
16/09/2022 07:00
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RNS Number : 6660Z Coro Energy PLC 16 September 2022
16 September 2022
Coro Energy Plc
("Coro" or the "Company" and together with its subsidiaries the "Group")
Half Year Report
Coro Energy Plc, the Southeast Asian energy company with a natural gas and
clean energy portfolio, announces its unaudited interim results for the
six-month period ended 30 June 2022.
Highlights
Operational
Oil & Gas
· Production from the Company's Italian gas portfolio (the
"Italian Portfolio"), against the backdrop of recent structural increases in
European gas prices, during the first half of 2022 was 2,425,342 scm
generating revenue of US $2.639m (EUR 2.556m).
· The operator of the Duyung PSC continues to make steady
progress commercially de-risking the Mako gas field and preparing for Final
Investment Decision ("FID").
Renewables
· Entry into a 25-year Power Purchase Agreement ("PPA")
with Phong Phu, a listed Vietnamese high volume manufacturer of textiles. The
3MW solar rooftop pilot project is expected to achieve maiden revenues before
the end of 2022 with long term net cash flows of approximately US $0.3m per
annum.
· Coro has two development stage renewables projects in the
Philippines, a 100MW solar project and a 100MW wind project. The Company is
currently focused on securing land access alongside regulatory permits and
approvals, securing offtake arrangements and data gathering at the proposed
sites.
Corporate
· Successful restructuring of the Company's EUR 22.5m Eurobond,
now maturing April 2024.
· Coro has a strong funding position from a combination of its
cash position of approximately US $1.6m (as at 30 June 2022), supported by the
free cash flow from its Italian Portfolio and the Vietnam solar pilot, which
is expected to be operational later this year.
Post Balance Sheet Events
· Revised Duyung Plan of Development ("PoD") approved by
partners.
· Duyung has compelling project economics and resources
demonstrated by the recent Operator commissioned competent person's report
("CPR"):
o 51% IRR
o NPV10 net to Coro of US $87m (US $577m gross) in the Best Case (2C)
scenario
o 42 Bcf net entitlement 2C resources to Coro during the PSC life
o Plateau production of 120 MMscf/d for six years in the Best Case (2C)
scenario
o CPR capital expenditure requirement to first gas estimated at US $251m
gross (US $38m net to Coro). Coro expects to secure a Reserve Based Lending
facility for a large portion of the capital.
· Duyung operator has indicated that termed Gas Sales
Agreements ("GSA"), for gas sold into Singapore, are under discussion with SKK
Migas with a view to finalising sales arrangements in the near future.
· Entered into an option agreement with an existing operator in
Italy to purchase the Company's Italian Portfolio for up to EUR 7.5m (the
"Option Agreement").
· Successful completion of installation of the Vietnam rooftop
solar pilot project and the commencement of commissioning.
· Leonardo Salvadori, was appointed Managing Director - Oil
& Gas and Michael Carrington, previously Coro's Chief Operating Officer,
was appointed as Managing Director - Renewables.
For further information please contact:
Coro Energy Plc Via Vigo Consulting Ltd
James Parsons, Executive Chairman
Ewen Ainsworth, Chief Financial Officer
Cenkos Securities plc (Nominated Adviser) Tel: 44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Vigo Consulting (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Charlie Neish
WH Ireland (Broker) Tel: 44 (0)20 7220 1670 / 44 (0)113 946 618
Harry Ansell
Katy Mitchell
Gneiss Energy Limited (Financial Advisor) Tel: 44 (0)20 3983 9263
Jon Fitzpatrick
Doug Rycroft
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation 596/2014 which is part of UK law by virtue of the
European Union (Withdrawal) Act 2018, as amended and supplemented from time to
time. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
The information contained in this announcement has been reviewed by Leonardo
Salvadori, Coro's Managing Director - Oil & Gas, a qualified geologist and
geophysicist and member of the Italian Society of Petroleum Engineers. The
volumes included in this announcement are in accordance with SPE standards.
Bcf means billion standard cubic feet of gas; MMscf/d means million standard
cubic feet of gas per day; bbl means barrels; and Mscf means thousand standard
cubic feet of gas.
STATEMENT FROM THE CHAIRMAN
Coro is a micro-cap company with gas production, gas reserves and a growing
clean energy portfolio. Underpinned by its strong Italian production and
four institutional lenders, Coro's shareholders are uniquely exposed to a
leveraged play on the gas price alongside a growing Southeast Asian renewables
portfolio.
The strengthening of commodity prices in the first half of 2022 has presented
a significant opportunity to Coro with the re-valuation of the Italian
Portfolio alongside a significant uplift in the core net asset value of the
flagship Duyung PSC.
Coro has looked to quickly capitalise on these recent developments by seeking
to dispose of its, now re-valued, Italian Portfolio and, together with the
Operator, commercially de-risking the Duyung PSC. Recent progress on the
Duyung PSC includes an updated PoD and an Operator CPR which include
compelling economics and confirm the Director's view of the upside Coro
shareholders are exposed to. We look forward to the signature of the
long-awaited GSA at Duyung which we believe will be a key inflexion point for
the Company and its partners.
My view remains that recent structural increases in global gas markets very
much now favour Coro and the Mako gas field.
Oil & Gas
Italy
Following structural increases in global gas prices, the Company relaunched
its Italian Portfolio earlier in the year. The Italian Portfolio has since
delivered significant free cash flows for the Group. During the first six
months of the year gas was produced from three fields: Sillaro, Casa Tiberi
and Rapagnano. Production was 2,425,342 scm (H1 2021: 1,228,597 scm) and
revenue was US $2,639,000 (EUR 2,556,000) (H1 2021: US $263,000 [EUR
219,046]). Operating costs and depreciation and amortisation expense during
the first half of the year totalled US $1,345,000 (H1 2021: US $454,000)
resulting in a gross profit of US $1,294,000 (H1 2021: gross loss of US
$191,000). The H1 2022 increase in gross profit reflects both an increase in
production and an increase in gas prices and the resulting revenue more than
offset the increase in operating costs and depreciation and amortisation
expenses.
Duyung
The Mako gas field is one of the largest gas discoveries (437 Bcf gross, full
field) 2C (contingent recoverable resources) in the West Natuna Basin and, the
Directors believe, the largest confirmed undeveloped resource in the area.
The Operator of the Duyung PSC is WNEL, a 100%-owned subsidiary of Conrad Asia
Energy Ltd, and has continued to technically mature the development of the
Mako gas field alongside negotiations of GSA(s), both in preparation for FID.
Significant progress has been made post the period as detailed below.
Renewables
Vietnam
On 11 April 2022, Coro announced the entry into a 25-year PPA for its rooftop
solar project in Vietnam.
The PPA was entered into by Coro Renewables Vietnam (85% owned by Coro and 15%
owned by Coro's local partner Vinh Phuc Energy JSC) and will see Phong Phu, a
listed Vietnamese high volume manufacturer of textiles, purchase 3MW of
electricity annually.
Electricity will be supplied under the PPA at 7.3 US cents (equivalent) per
kWh with a 1% annual escalator. The PPA is expected to generate aggregate
revenues of between US $9m and US $11m over the 25-year duration.
On 30 August 2022, Coro announced the successful completion of installation of
the Vietnam rooftop solar pilot project and the commencement of commissioning.
The 3-megawatt pilot project consists of over 4,500 solar panels and other
ancillary components which have been installed across four factory roofs, and
covers a total area of 16,120 square metres. The pilot project has been
delivered on budget and on schedule and is now into a commissioning phase
expected to be completed before the end of September 2022.
The pilot project will, on commissioning, provide proof of concept for Coro's
portfolio of rooftop Solar opportunities and represents the Company's first
installed and operated renewable energy project.
Coro continues to evaluate further solar projects in Vietnam.
Philippines
Coro has two development stage renewables projects in the Philippines, a 100MW
solar project and a 100MW wind project which, allowing for permitting
timelines and land access, could achieve ready-to-build status by the end of
the year or the first half of 2023. In addition to the wind data gathering
exercise, which has commenced with Lidar equipment onsite, further data
gathering is proposed using a Met Mast. Coro is currently focused on securing
land access alongside regulatory permits and approvals. Coro continues to
evaluate further solar projects in the Philippines.
Corporate
On 11 April 2022, Coro announced the successful restructuring of the Company's
EUR 22.5m Eurobond, now maturing in April 2024.
Coro has a strong funding position from a combination of its cash position of
approximately US $1.6m (as at 30 June 2022), supported by the free cash flow
from its Italian Portfolio and the Vietnam solar pilot, which is expected to
be operational later this year.
Post Reporting Period
Duyung
As announced on 9 September 2022, the partners in the Duyung PSC approved an
updated PoD and have approved and secured alignment with SKKMIGAS on the PoD.
The PoD now been submitted to the Indonesian Ministry of Energy and Mineral
Resources for approval. Coro holds a 15% interest in the Duyung PSC.
Coro also announced that an Operator commissioned CPR had been prepared by
GaffneyCline Associates ("GCA") for the Mako development.
Based on the CPR there are compelling project economics:
o 51% IRR
o NPV10 net to Coro of US$ 87M (US$ 577M gross) in the Best Case (2C)
scenario
o 42 Bcf net entitlement 2C resources to Coro during the PSC life
o Plateau production of 120 MMscf/d for six years in the Best Case
(2C) scenario
o CPR capital expenditure requirement to first gas estimated at
US$251M gross (US$38M net to Coro). Coro expects to secure a Reserve Based
Lending facility for a large portion of the capital.
The CPR is closely aligned with the PoD and is premised on a two-phased
development with six wells in phase 1 and a further two wells in phase 2 after
5 years of production. The wells will be tied back to a leased production
platform at the field, with sales gas transported via the West Natuna
Transportation System pipeline to Singapore for sales to the Singapore market.
The development plan includes first gas in 2025, with a 120 MMscf/d production
plateau and a gross recoverable 2C contingent resource of 413 Bcf gas total
and 281 Bcf net entitlement attributable to the Duyung PSC JV partners (42 Bcf
net to Coro) during the PSC life.
As reported in the CPR (dated 26 August 2022) and specified in the PoD
revision, upside exists to increase the plateau rate to 150 MMscf/d, should
reservoir deliverability be sufficient. GCA has confirmed Mako contingent
resources that are broadly in agreement with the PoD as set out in the table
below:
Duyung PSC - Contingent Resources, GCA Operator CPR
MAKO GAS FIELD CONTINGENT RESOURCES CONTINGENT RESOURCES CONTINGENT RESOURCES
(Bcf gas) GROSS (100%) WITHIN PSC GROSS (100%) * NET ATTRIBUTABLE TO CORO (15%) **
Reservoir: Low Best High Low Best High Low Best High
Upper sand, intermediate zone and Lower sand
During Duyung PSC life 249 413 442 219 363 389 25 42 45
Requires Duyung PSC extension 24 336 21 296 2 34
Total 249 437 779 219 384 685 25 44 79
* the CPR estimates that 88% of the Mako field is within the PSC boundary
** after deduction of the 23% contractor take
The CPR, and the updated PoD, assumes first gas in 2025 and calculates the
last economic production years prior to the current Duyung PSC expiry date for
Low, Best and High cases of 2033, 2036 and 2036 respectively, which extend to
2039 and 2054 for the Best and High respectively, if the Duyung PSC is
extended.
The CPR utilises a gas price of US$9.97/Mscf in 2025 which is calculated on a
Brent linked price formula with a Brent slope of 12% and a Brent price deck of
US$80/bbl in 2025, escalating 2% per annum from 2027 thereafter. Different gas
prices may eventually be agreed with the gas buyers and the regulator when the
GSAs are eventually signed. The CPR estimates that the post-tax NPV10
resulting from the Best Case Contingent Resources within the Duyung PSC
acreage and within the life of the Duyung PSC (363 Bcf) is some US $577m (US
$87m net to Coro) representing a 51% IRR.
Under the PoD and CPR, first gas from the Mako gas project is planned to be
evacuated via the West Natuna Transportation System. The development will
utilise a conductor support frame for one dry wellhead and gas import-export
support, bridged-linked to a leased bridge linked mobile offshore production
unit. The CPR Phase 1 capital expenditure is estimated to be US $251m and
total capital expenditure will be US $303m. These estimates will be updated as
a consequence of envisaged Front End Engineering and Design ("FEED") studies.
Coro expects to secure a Reserve Based Lending facility for a large portion of
the capital.
The Operator has indicated that termed Gas Sales Agreements, for gas sold into
Singapore, are under discussion with SKK Migas with a view to finalising sales
arrangements in the near future.
Italy
Coro announced that it has entered into an Option Agreement with an existing
operator in Italy (the "Optionholder") to purchase the Company's Italian
Portfolio for up to EUR 7.5m.
The Optionholder has the right to acquire 100% of the issued share capital of
Coro Europe Limited, the Company's wholly owned subsidiary which in turn holds
100% of the issued share capital of Apennine Energy S.p.A, the Group entity
holding the Company's interests in the Italian Portfolio. The Optionholder
paid to the Group EUR 0.3 million in respect of the award of the Option (the
"Option Payment").
Total receipts from a disposal pursuant to the Option of up to EUR 7.5m, of
which EUR 6.0m would be paid in cash at or prior to completion, and further
contingent payments of up to an aggregate of EUR 1.5m through a 10% net profit
interest ("NPI") in the Italian Portfolio over the three years from the date
of completion of any disposal of the Italian Portfolio under the Option
Agreement.
The Company retains full ownership and cash flows from the Italian Portfolio
prior to the completion of the disposal.
The disposal of the Italian Portfolio under the Option would be subject to
Coro shareholder approval pursuant to Rule 15 of the AIM Rules for Companies.
The proposed divestment is fully in line with the Company's strategic
objectives, enabling Coro to focus exclusively on growing its oil, gas and
clean energy portfolio in Southeast Asia where demand for energy and the
opportunity for material expansion remain very strong.
The proposed divestment provides an immediate cash payment and the ability to
retain cash flows from the Italian Portfolio in the near term prior to any
disposal, whilst also securing a fixed priced exit. The combination of
the Option cash consideration, the retained NPI and the cash
flows delivered by the Italian Portfolio under Coro's continued ownership in
the current gas price environment, would be expected by the Board to
represent approximately EUR 10m.
James Parsons
Executive Chairman
FINANCIAL REVIEW
Results for the Period
Further to the relaunch of the Italian Portfolio and the requirements of IFRS
5 it was determined that at 30 June 2022 the assets were not held for sale.
Therefore, for the half year, Italy has been reported as a continuing
operation and the comparative numbers for 2021 restated as if the Italian
Portfolio was not held for sale.
The Group made a loss after tax from continuing operations of US $3.0m
(restated H1 2021: US $3.2m).
The increase in gross profit of US $1.1m from the Italian operation was offset
by an increase in general and administrative costs of US $0.2m offset by an
increase in finance costs of US $1.1m primarily due to a reduced unrealised
foreign exchange gain on the Group's Eurobond compared to 2021.
Within G&A expenses, and as shown in more detail in note 4 below, the cost
increase was primarily due to employee related costs with the other categories
broadly offsetting each other.
Going Concern
The interim financial statements have been prepared under the going concern
assumption, which presumes that the Group will be able to meet its obligations
as they fall due for the foreseeable future.
The Group ended the period with cash of US $1.6m. The Group balance sheet
records net current liabilities of US $2.8m due to the classification of the
Group's Eurobond from current liabilities to non-current liabilities. The
bonds are scheduled to mature on 12 April 2024.
Ewen Ainsworth
Chief Financial Officer
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Six Months Ended 30 June 2022
Notes 30 June 2022 30 June 2021 Restated
$'000
$'000
Revenue 2,639 263
Operating costs (1,133) (399)
Depreciation and amortisation expense (212) (55)
Gross profit / (loss) 1,294 (191)
General and administrative expenses 4 (2,059) (1,843)
Depreciation expense (20) (50)
Impairment losses (1) (42)
Share of loss of associates (47) (65)
Loss from operating activities (833) (2,191)
Finance income 404 1,223
Finance expense (2,585) (2,243)
Net finance expense 4 (2,181) (1,020)
Total loss for the period (3,014) (3,211)
Other comprehensive income/loss
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations 2,124 (412)
Total comprehensive loss for the period (890) (3,623)
Loss attributable to:
Owners of the company (3,011) (3,211)
Non-controlling interests (3) -
Total comprehensive loss attributable to:
Owners of the company (888) (3,623)
Non-controlling interests (3) -
Basic loss per share from continuing operations ($) 5 (0.0004) (0.0018)
Diluted loss per share from continuing operations ($) 5 (0.0004) (0.0018)
The above condensed consolidated statement of comprehensive income should be
read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2022
Notes 30 June 2022 31 December 2021 Restated
$'000
$'000
Non-current assets
Inventory 150 163
Trade and other receivables 11 -
Deferred tax assets 1,239 1,342
Property, plant and equipment 6 3,973 3,905
Intangible assets 7 20,325 19,883
Investment in associates 300 401
Total non-current assets 25,998 25,694
Current assets
Cash and cash equivalents 1,616 3,551
Trade and other receivables 1,470 1,139
Inventory 37 37
Total current assets 3,123 4,727
Total assets 29,121 30,421
Liabilities and equity
Current liabilities
Trade and other payables 1,528 1,723
Provisions 188 155
Lease liabilities 217 -
Borrowings 8 - 26,637
Total current liabilities 1,933 28,515
Non-current liabilities
Provisions 6,889 7,436
Borrowings 8 26,629 -
Total non-current liabilities 33,518 7,436
Total liabilities 35,451 35,951
Equity
Share capital 9 2,943 2,943
Share premium 9 50,461 50,461
Merger reserve 9,707 9,707
Other reserves 10 6,396 4,181
Non-controlling interests (3) -
Accumulated losses (75,834) (72,822)
Total equity (6,330) (5,530)
Total equity and liabilities 29,121 30,421
The above condensed consolidated balance sheet should be read in conjunction
with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2021
Share capital Share premium Merger Reserve Other Reserves Accumulated Losses Total
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2021 1,103 45,786 9,707 3,305 (64,837) (4,935)
Total comprehensive loss for the period:
Loss for the period - - - - (3,211) (3,211)
Other comprehensive income - - - (412) - (412)
Total comprehensive loss for the period - - - (412) (3,211) (3,623)
Transactions with owners recorded directly in equity:
Issue of share capital 1,504 4,513 - - - 6,107
Share issue costs -- (826) - - - (826)
Shares issued for business combination 198 590 - - - 788
Share based payments for services rendered 122 367 - 171 - 660
Issue of warrants - - - 141 - 141
Balance at 30 June 2021 2,927 50,430 9,708 3,205 (68,048) (1,778)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended 30 June 2022
Share capital Share premium Merger Reserve Other Reserves Accumulated Losses Non-controlling interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2022 2,943 50,461 9,707 4,181 (72,823) - (5,531)
Total comprehensive loss for the period:
Loss for the period - - - - (3,011) (3) (3,014)
Other comprehensive income - - - 2,124 - - 2,124
Total comprehensive loss for the period - - - 2,124 (3,011) (3) (890)
Transactions with owners recorded directly in equity:
Share based payments for services rendered - - - 91 - - 91
Balance at 30 June 2022 2,943 50,461 9,707 6,396 (75,834) (3) (6,330)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended 30 June 2022
30 June 2022 30 June 2021 Restated
$'000
$'000
Cash flows from operating activities
Receipts from customers 2,425 410
Payments to suppliers and employees (3,461) (2,157)
Interest paid - (661)
Net cash used in operating activities (1,036) (2,408)
Cash flow from investing activities
Payments for property, plant & equipment (465) 3
Payments for intangible assets (446) (71)
Net receipts from / (payments for) rehabilitation activities - 102
Net cash (used in) / provided by investing activities (911) 34
Cash flows from financing activities
Proceeds from issue of shares - 6,017
Share issue costs paid in cash - (528)
Principal element of lease payments - (36)
Net cash provided by / (used in) financing activities - 5,453
Net (decrease) / increase in cash and cash equivalents (1,947) 3,079
Cash and cash equivalents brought forward 3,551 1,761
Effects of exchange rate changes on cash 12 (22)
and cash equivalents
Cash and cash equivalents carried forward 1,616 4,818
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2022
Note 1: Basis of preparation of the interim financial statements
The condensed consolidated interim financial statements of Coro Energy plc
(the "Group") for the six month period ended 30 June 2022 have been prepared
in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 31 December 2021,
which was prepared under International Financial Reporting Standards (IFRS) in
conformity with the requirements of the Companies Act 2006, and any public
announcements made by Coro Energy plc during the interim reporting period.
These condensed consolidated interim financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2021
prepared under IFRS have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Section 498(2) of the Companies Act 2006. These
condensed consolidated interim financial statements have not been audited.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period, except as set out
below.
Basis of preparation - going concern
The interim financial statements have been prepared under the going concern
assumption, which presumes that the Group will be able to meet its obligations
as they fall due for the foreseeable future.
Management prepared a consolidated cash flow forecast to the end of 2023 which
shows that the Group has sufficient cash resources to meet its obligations. In
making this assessment management considered the planned forecast expenditure
in the various jurisdictions in which it has a presence inclusive of general,
administrative and operating costs, capital expenditure and revenue from the
Italian Portfolio and the solar project in Vietnam and the exercise of the
option to acquire the Italian Portfolio. Whilst there are risks to the
forecast this is mainly viewed as being to the level of gas production
achieved in Italy and the related gas price and consequent sales proceeds
received and the exercise of the option to acquire the Italian Portfolio.
The going concern assumption does not include any further receipts from either
debt or equity financing which management believes is available and mitigates
any risk to the revenue from either Italy or Vietnam. In addition the planned
capital expenditure in the Philippines is largely uncommitted and could be
tailored to meet the Group and Company cash position if deemed appropriate.
The Group ended the period with cash of $1.6m. The Group balance sheet records
net current liabilities of $2.8m due to the classification of the Group's
Eurobond from current liabilities to non-current liabilities. The bonds are
scheduled to mature on 12 April 2024.
a) New and amended standards adopted by the Group
New and amended standards which became applicable on 1 January 2022 do not
have a material impact on the Group, and the Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting
these standards/amendments.
b) New accounting policies adopted by the Group
There were no new accounting policies adopted by the Group during the period,
nor any amendments to existing accounting policies.
Note 2: Significant changes
The financial position and performance of the Group was particularly affected
by the following events and transactions during the six months to 30 June
2022:
− Restructuring of the Group's Eurobond borrowing whereby the maturity
date was extended from 12 April 2022 to 12 April 2024, with all cash interest
payments suspended until the final maturity date, along with an increase in
the nominal coupon rate from 5% p.a. to 10% p.a. Refer to note 8;
− Reclassification of the Group's Italian gas business from discontinued
operations to continuing operations. Refer to note 11.
For further discussion of the Group's performance and financial position refer
to the Chairman and CEO's Statement.
The Group's results are not materially impacted by seasonality.
Note 3: Segment information
The Group's reportable segments as described below are based on the Group's
geographic business units. This includes the Group's upstream gas operations
in Italy, upstream gas operations and renewable energy operations in South
East Asia, along with the corporate head office in the United Kingdom. This
reflects the way information is presented to the Group's Chief Operating
Decision Maker, which is the Chief Executive Officer.
Italy Asia UK Total
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2022 2021 Restated 2022 2021 Restated 2022 2021 Restated 2022 2021 Restated
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Depreciation and amortisation (223) (96) - - (9) (9) (232) (105)
Finance expense (57) (25) - - (2,528) (2,218) (2,585) (2,243)
Share of loss of associates - - - - (47) (65) (47) (65)
Segment loss before tax from continuing operations (2021 restated) 803 (456) (237) (80) (3,580) (2,675) (3,014) (3,211)
Italy Asia UK Total
30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec
2022 2021 Restated 2022 2021 Restated 2022 2021 Restated 2022 2021 Restated
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Segment assets 7,638 8,224 18,466 17,985 3,017 4,212 29,121 30,421
Segment liabilities (7,664) (8,889) (151) (1,073) (27,636) (25,989) (35,451) (35,951)
Note 4: Profit and loss information
a) General and administrative expenses
General and administrative expenses in the income statement includes the
following significant items of expenditure:
30 June 30 June
2022 2021
Restated
$'000 $'000
Employee benefits expense 715 524
Business development 309 530
Corporate and compliance costs 494 280
Investor and public relations 135 128
Other G&A 214 131
G&A - non-operated joint operations 101 79
Share based payments (note 9) 91 171
2,059 1,843
b) Finance income / expense
30 June 30 June
2022 2021
Restated
$'000 $'000
Finance income
Foreign exchange gains 404 1,223
Interest income - -
Finance expense
Interest on borrowings (1,982) (2,218)
Finance charge on lease liabilities (8) -
Unrealised loss on foreign exchange (34) -
Accretion of rehabilitation provision (46) (25)
Foreign exchange losses (515) -
Net finance income / (expense) (2,181) (1,020)
Note 5: Loss per share
30 June 30 June
2022 2021
Basic loss per share from continuing operations ($) (0.0004) (0.0018)
Diluted loss per share from continuing operations ($) (0.0004) (0.0018)
The calculation of basic loss per share from continuing operations was based
on the loss attributable to shareholders of $3.0m (30 June 2021: $2.8m) and a
weighted average number of ordinary shares outstanding during the half year of
2,124,035,967 (30 June 2021: 793,502,096).
Diluted loss per share from continuing operations for the current and
comparative periods is equivalent to basic loss per share since the effect of
all dilutive potential ordinary shares is anti-dilutive.
Note 6: Property, plant and equipment
30 June 31 December
2022 2021
Restated
$'000 $'000
Office furniture and equipment 12 10
Oil and gas assets 3,496 3,895
Assets under construction 465 -
3,973 3,905
Reconciliation of the carrying amounts for each material class of intangible
assets for the six months ended 30 June 2022 are set out below:
Oil and gas assets:
30 June
2022
$'000
Carrying amount at beginning of period 3,895
Additions 108
Depreciation and amortisation (212)
Retranslation differences (295)
Carrying amount at end of period 3,496
Oil and gas assets relate to the Group's portfolio of oil and gas concessions
in Italy. There were no indicators of impairment noted at 30 June 2022.
Assets under construction comprises only additions related to the construction
of the Group's 3MW rooftop solar project in Vietnam.
Note 7: Intangible assets
30 June 31 December
2022 2021
Restated
$'000 $'000
Exploration and evaluation assets 19,146 19,114
Research and development assets 415 -
Software 10 15
Goodwill 754 754
20,325 19,883
Reconciliation of the carrying amounts for each material class of intangible
assets for the six months ended 30 June 2022 are set out below:
Exploration and evaluation assets:
30 June
2022
$'000
Carrying amount at beginning of period 19,114
Additions 156
Retranslation differences (124)
Carrying amount at end of period 19,146
Exploration and evaluation assets relates mainly to the Group's 15% interest
in the Duyung PSC, which contains the Mako gas field. There were no indicators
of impairment noted at 30 June 2022.
Research and development assets comprises only additions related to
expenditure directly attributable to the design and development of
identifiable and unique renewables projects controlled by the Group in the
Philippines.
No impairment of goodwill was noted following testing performed at 30 June
2022.
Note 8: Borrowings
30 June 31 December
2022 2021
$'000 $'000
Current
Eurobond - 26,637
- 26,637
Non-current
Eurobond 26,629 -
26,629 -
Borrowings relates to €22.5m Eurobonds with attached warrants which were
issued in 2019 to institutional investors. The bonds were issued in two equal
tranches A and B, ranking pari passu, with Tranche A paying an annual 5% cash
coupon and Tranche B accruing interest at 5% payable on redemption. The bonds
were scheduled to mature on 12 April 2022 at 100% of par value plus any
accrued and unpaid coupon. However, in April 2022 the Group completed a
restructuring of the Eurobonds which extended the maturity date by two years
to 12 April 2024, removed all cash interest payment obligations prior to the
maturity date, and increased the coupon interest rate from 5% to 10%. In the
event of a sale of the Group's interest in the Duyung PSC, the net cash
proceeds of such disposal(s) will be utilised to first repay the capital and
rolled up interest on the Eurobonds and thereafter to distribute 20% of
remaining net proceed(s) to holders of the Eurobonds. The remaining net
proceeds of any sales will be retained and/or distributed to shareholders by
the Company.
Note 9: Share capital and share premium
30 June Nominal Share Premium 30 June
2022 value $'000 2022
Number $'000 Total
000's $'000
As at 1 January and 30 June 2022 2,124,036 2,943 50,461 53,404
31 December 2021 Nominal Share 31 December 2021
Number value Premium Total
000's $'000 $'000 $'000
As at 1 January 2021 806,908 1,103 45,786 46,889
Shares issued during the period:
Issued as consideration for the acquisition of GEPL 142,500 200 597 797
Proceeds from share issuance 1,162,215 1,624 4,046 5,670
Issued for services rendered 12,414 16 32 48
Closing balance - 31 December 2021 2,124,036 2,943 50,461 53,404
Note 10: Reserves
a) Other reserves
Share based payments reserve
The Group issued 93,825,666 options under its existing Long Term Incentive
Plan ("LTIP") during the period to directors and management. The options vest
on the third anniversary of the grant date, provided the awardees remain
employed by the Group and the mid-market closing price per Coro ordinary share
on the last day of the vesting period is equal to or higher than 0.4275 pence
per ordinary share. Assuming those conditions are met, the number of options
which ultimately vest depends on the Company's Total Shareholder Return
("TSR") over the vesting period compared to a peer group of 20 companies.
Vested options will be exercisable at 0.1p per ordinary share.
The options have been valued on the grant date using a Black Scholes model,
resulting in a valuation of £0.0044 per award. The total value of the awards
will be expensed over the vesting period in line with the requirements of IFRS
2.
Functional currency translation reserve
The translation reserve comprises all foreign currency differences arising
from translation of the financial position and performance of the parent
company and certain subsidiaries which have a functional currency different to
the Group's presentation currency of USD. The total gain on foreign exchange
recorded in other reserves for the period was $2.1m (30 June 2021: $412k
loss).
Note 11: Restatement of comparative period in relation to Italy
For the comparative period of 1 January 2021 to 30 June 2021, as well as at 31
December 2021, the Group classified the assets and liabilities of its Italian
business as a disposal group held for sale following a decision by the Board
of Directors to prioritise full divestment of the Group's Italian operations
in the first half of 2019. Given the Italian business represents a separate
geographical area of operation for the Group, the Italian results have also
been treated as a discontinued operation.
In May 2021, the Group announced it had entered into a conditional Sale and
Purchase Agreement ("SPA") with Dubai Energy Partners, Inc ("DEPI") to dispose
of the Company's interest in Coro Europe Limited ("CEL"), which in turn owns
Apennine Energy SpA ("AES"), for cash consideration of €300,000 (the
"Disposal"). AES owns all the Group's gas properties in Italy. Completion of
the Disposal was conditional on, inter alia, receipt of required regulatory
approvals from the Italian authorities by 26 February 2022.
The Disposal had an economic effective date of 26 May 2021, however Coro
continued to control CEL and AES. As a result, the Group continued to
consolidate the results of CEL and AES in line with the requirements of IFRS
10. The required regulatory approvals to complete the Disposal were not
received by 26 February 2022 and as such, the Disposal was terminated by the
parties.
On 7 March 2022 the Group announced that having completed a full review of the
Italian assets, it was decided that to maximise shareholder value, the Italian
assets would no longer be marketed for sale and would instead be managed for
value and cash flow. As such the Italian business no longer qualified as a
disposal group or discontinued operation under IFRS 5 as at 30 June 2022 and
for the six months then ended.
The comparative figures in these financial statements have been restated to
show the Italian business as a part of continuing operations. The tables below
set out the impact of this restatement on the comparative figures.
Effect on the condensed consolidated balance sheet as at 31 December 2021:
Figure previously reported Adjustment Restated
$'000 $'000 $'000
Non-current assets
Inventory - 163 163
Deferred tax assets - 1,342 1,342
Property, plant and equipment 10 3,895 3,905
Intangible assets 18,309 1,574 19,883
Investment in associates 401 - 401
Total non-current assets 18,720 6,974 25,694
Current assets
Cash and cash equivalents 3,334 217 3,551
Trade and other receivables 106 1,033 1,139
Inventory 37 - 37
Total current assets 3,477 1,250 4,727
Assets of disposal group held for sale 8,224 (8,224) -
Total assets 30,421 - 30,421
Liabilities and equity
Current liabilities
Trade and other payables 425 1,298 1,723
Provisions - 155 155
Borrowings 26,637 - 26,637
Total current liabilities 27,062 1,453 28,515
Non-current liabilities
Provisions - 7,436 7,436
Total non-current liabilities - 7,436 7,436
Liabilities of disposal gorup held for sale 8,889 (8,889)
Total liabilities 35,951 - 35,951
Equity
Share capital 2,943 - 2,943
Share premium 50,461 - 50,461
Merger reserves 9,707 - 9,707
Other reserves 4,181 - 4,181
Accumulated losses (72,822) - (72,822)
Total equity (5,530) - (5,530)
Total equity and liabilities 30,421 - 30,421
Effect on the condensed consolidated statement of comprehensive income for the six months ended 30 June 2021:
Figure previously reported Adjustment Restated
$'000 $'000 $'000
Revenue - 263 263
Operating Costs - (399) (399)
Depreciation and amortisation expense - (55) (55)
Gross profit / (loss) - (191) (191)
Other income
General and administrative expenses (1,686) (157) (1,843)
Depreciation expense (9) (41) (50)
Impairment losses - (42) (42)
Share of loss of associates (65) - (65)
Loss from operating activities (1,760) (431) (2,191)
Finance income 1,223 - 1,223
Finance expense (2,218) (25) (2,243)
Net finance income / (expense) (995) (25) (1,020)
Loss before income tax expense (2,755) (456) (3,211)
Income tax benefit/(expense) - - -
Loss for the period from continuing operations (2,755) (456) (3,211)
Loss for the period from discontinued operations (456) 456 -
Total loss for the period (3,211) - (3,211)
Other comprehensive income/loss
Exchange differences on translation of foreign operations (412) - (412)
Total comprehensive loss for the period (3,623) - (3,623)
Loss attributable to:
Owners of the company (3,211) - (3,211)
Total comprehensive loss attributable to:
Owners of the company (3,623) - (3,623)
Note 12: Interests in other entities
Asia
The Group's wholly owned subsidiary, Coro Energy Duyung (Singapore) Pte Ltd,
is the owner of a 15% interest in the Duyung Production Sharing Contract
("PSC"), which contains the Mako gas field. The operator of the Duyung venture
is West Natuna Exploration Ltd ("WNEL"). WNEL is a subsidiary of Conrad
Petroleum Ltd and is incorporated in the British Virgin Islands with its
principal place of business in Indonesia.
The Duyung PSC partners have entered into a Joint Operating Agreement ("JOA")
which governs the arrangement. The Group accounts for its share of assets,
liabilities and expenses of the venture in accordance with the IFRSs
applicable to the particular assets, liabilities and expenses.
The Group's wholly owned subsidiary, Coro Clean Energy Vietnam Limited owns
85% of the issued share capital of the Vietnamese company, Coro Renewables VN1
Joint Stock Company, which owns 100% of Coro Renewables VN2 Company Limited,
which in tun owns 100% of Coro Renewables Vietnam Company Limited ("CRVCL").
Italy
The Group's wholly owned subsidiary, Apennine Energy SpA, holds production and
exploration licences in Italy. See Note 11.
ion Ventures
In 2020, the Company acquired a 20.3% interest in ion Ventures Holdings
Limited which is treated as an associate and accounted for under the equity
method.
The Group's share of loss of associates for the six month period ended 30 June
2022 was $47k. There were no dividends declared or paid by associates during
the period.
Note 13: Contingencies and commitments
Commitments
The remaining 2022 work program for the Duyung PSC is estimated at $1.0m net
to the Group, of which approximately $0.8m is capital in nature. The Group has
no other capital commitments.
Contingencies
As described in note 8, the Group has a contingent liability in relation to
its Eurobond borrowing. In the event of a sale of the Group's interest in
the Duyung PSC, the net cash proceeds of such disposal(s) will be utilised to
first repay the capital and rolled up interest on the Eurobonds and thereafter
to distribute 20% of remaining net proceed(s) to holders of the Eurobonds. As
at 30 June 2022 the Directors' assessment is that there is no certainty over
the likelihood of such a disposal, nor the quantum of the potential cash
proceeds.
The Group has no contingent assets,
Note 14: Subsequent events
Entered into an Option Agreement with an existing operator in Italy to
purchase the Company's Italian Portfolio for up to EUR 7.5m.
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