REG - Lansdowne Oil & Gas - Interim Results - six months ended 30 June 2023
28/09/2023 07:00
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RNS Number : 9017N Lansdowne Oil & Gas plc 28 September 2023
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the retained EU law version
of the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service ("RIS"),
this inside information is now considered to be in the public domain. If you
have any queries on this, then please contact Steve Boldy, the Chief Executive
Officer of the Company (responsible for arranging release of this
announcement).
28 September 2023
Lansdowne Oil & Gas plc
("Lansdowne" or the "Company")
Interim Results for the six months ended 30 June 2023
Lansdowne Oil & Gas ("Lansdowne" or "the Company") is pleased to announce
its unaudited results, for the six months ended 30 June 2023. Lansdowne is an
upstream oil and gas company, focused on exploration and appraisal activities
in the North Celtic Sea Basin, off the south coast of Ireland.
First half Highlights
Operational
· Barryroe Oil Field (SEL 1/11)
o On 19 May 2023 Barryroe Offshore Energy received a letter from the Irish
Department of the Environment, Climate and Communications ("DECC"), advising
that the Minister, Eamon Ryan, would not grant the Lease Undertaking, as
sought, on grounds of financial capability. DECC also confirmed in the letter
that the application was satisfactory from a technical perspective.
o As a result of the refusal to grant a Lease Undertaking, On 19 June 2023,
Lansdowne's legal advisors, Ashurst LLP, initiated arbitration proceedings
under the Energy Charter Treaty ("ECT") by submitting a letter giving notice
pursuant to Article 26 (2) (c) of the ECT requiring Ireland to participate in
discussions with a view to settling the dispute. Submission of this letter
triggered a three month "cooling-off" period during which time the parties are
expected to seek to settle the matter amicably.
· Helvick Oil Field Lease Undertaking
o The extension to this Lease Undertaking remains under consideration by
DECC.
Financial highlights
· Cash balances at 30 June 2023 of £0.04 million (31 December 2022:
£0.01 million).
· Loss for the period after tax of £16.1 million (2022: loss £0.4
million).
· Loss per share of 1.62 pence (2022: loss 0.04 pence).
· The LC Capital Master Fund loan, due for repayment on 31 December
2022, was extended to 31 December 2023.
· In January 2023, the Company placed 60,000,000 new ordinary shares
with new and existing investors at a placing price of 0.5 pence per share,
raising £300,000 before costs.
· In association with the Placing, 3,000,000 warrants ("Broker
Warrants") have been granted to TFL, with
an exercise price of 0.5p per ordinary share. The Broker Warrants are
exercisable up until the third anniversary of Admission.
· In connection with the Placing, the Company also granted a total of
60,000,000 warrants ("Investor Warrants") to placees participating in the
Placing, on a one Investor Warrant per Placing Share basis, to subscribe for
new ordinary shares in the Company at a price of 1.0 pence per share. The
Investor Warrants will be exercisable until the second anniversary of
Admission.
· Separately, 1,788,000 warrants were granted to LC Capital Targeted
Opportunities Fund, LP ("LC") in accordance with the provisions of LC's
warrant instrument.
Post Balance Sheet Events
· In July 2023 the Company announced that it had placed:
o 60,000,000 new shares of 0.1 pence each, under the Company's existing
share allotment authorities.
o 140,000,000 new shares of 0.1 pence each, conditional upon the passing of
resolutions at the Company's Annual General Meeting ("AGM") on 9(th) August
2023 granting new share allotment authorities.
o The relevant resolutions were duly passed at the AGM
o The shares were priced at 0.1 pence per placing share, raising £200,000
before costs.
· In association with the Placing, 10,000,000 warrants ("Broker
Warrants") were granted to Tavira Financial Limited, with an exercise price of
0.1p per ordinary share. The Broker Warrants will be exercisable up until
the third anniversary of admission of the Conditional Placing Shares to
trading on AIM.
· Separately, 5,960,000 warrants ("LC Warrants") were granted to LC
Capital Targeted Opportunities Fund, LP ("LC") in accordance with the
provisions of LC's warrant instrument, the terms of which were previously
announced on 31 December 2021 (the "LC Warrant Instrument").
· Following the issue of the LC Warrants, LC holds an aggregate
35,569,826 warrants over ordinary shares and the strike price of these
warrants has been amended to 0.1 pence per share from 0.5 pence per share
pursuant to the LC Warrant Instrument.
· In August 2023 the Company announced that, as it had not received a
response other than an acknowledgement of its initial June letter, a further
letter had been submitted by Ashurst LLP on behalf of Lansdowne with a
reminder that if Ireland persists in its failure to engage in order to settle
the dispute amicably, Ireland will be in breach of its obligations under
Article 26 (2) (c) of the ECT. Receipt of this letter was acknowledged by a
return letter from the Irish State Solicitors office.
· As the decision to not award the Barryroe Lease Undertaking was not
revoked prior to the expiration of the three month "cooling-off" period, the
Company was designated as an AIM Rule 15 cash shell with effect from 20
September 2023.
For further information please contact:
Lansdowne Oil & Gas plc +353 1 963 1760
Steve Boldy
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Nominated Adviser and Joint Broker
Stuart Gledhill
Richard Hail
Tavira Securities Limited +44 (0) 20 3192 1739
Joint Broker
Oliver Stansfield
Notes to editors:
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focused, oil and gas
exploration and appraisal company quoted on the AIM market and head quartered
in Dublin.
For more information on Lansdowne, please refer to www.lansdowneoilandgas.com
(http://www.lansdowneoilandgas.com) .
Chairman's Statement
Six months ended 30 June 2023
The refusal of the relevant Minister in the Department of the Environment,
Climate and Communications ('DECC'), Eamon Ryan, to grant a Lease Undertaking
for the Barryroe Field was both surprising and disappointing, coming more than
two years after the submission of the application in April 2021.
This decision has been immensely damaging to the Company and its shareholders
and we believe the Minister and DECC have failed to act in a fair and
equitable manner with the Barryroe Partners, as they are required to do under
the terms of the Energy Charter Treaty.
The Company has therefore, through its legal advisors Ashurst LLP, initiated
arbitration proceedings as allowed for under the ECT.
Outlook
The Company continues to pursue an amicable resolution with Ireland; however,
it remains steadfast in its belief of a positive award under the ECT should
this avenue be followed. To this end the Company has continued its discussions
with litigation funders who have expressed a willingness to engage once the
statutory three-month window has passed, in the event that a resolution is not
reached.
The Company will also track developments at Barryroe Offshore Energy, where an
Examiner has been appointed. It has been reported that Barryroe Offshore
Energy is considering a number of paths forward, including a potential
Judicial Review in the Irish Courts, that might also lead to the Lease
Undertaking being granted and the development of the Barryroe field to
proceed.
We continue to maintain that the failure to allow the Barryroe oil and gas
field to progress to development is against the best interests of Ireland.
Energy Security has been an increasing concern in Ireland for several years.
This was further highlighted in a recent report by Euromonitor International
looking at global energy vulnerability, quoted in an article in the Irish
Times on 8 August 2023. This study found that Ireland ranked 70th out of 100
countries in terms of vulnerability - third worst amongst EU countries.
Furthermore, to ignore indigenous sources of oil and gas will ensure that the
current very high levels of imports of oil (currently 100%) and gas (currently
c. 74%) will continue, which will work against the commitment to work to the
net zero emissions target, as imported oil and gas come with much higher
emission levels.
Jeffrey Auld
Chairman
Lansdowne Oil and Gas plc
Condensed Consolidated Income Statement and Statement of Comprehensive Income
Six month ended 30 June 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended
ended
ended
30 June '23
30 June '22
31 Dec. '22
£000s £000s £000s
Administration expenses (117) (130) (218)
Impairment of intangible assets (15,882) - -
______ ______ _______
Operating loss (15,999) (130) (218)
Finance costs (109) (28) (146)
______ ______ ______
Loss before tax (16,108) (158) (364)
Income tax credit - - -
______ ______ ______
Loss for the financial period (16,108) (158) (364)
Other Comprehensive Income - - -
______ ______ ______
Total comprehensive loss for the financial period (16,108) (158) (364)
===== ===== ======
Loss per share (pence)
(1.62p) (0.02p) (0.04p)
Basic and diluted
===== ===== ======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Financial Position
As at 30 June 2023
Unaudited Unaudited Audited
30 June '23 30 June '22 31 Dec. '22
£000s £000s £000s
Assets
Non-Current Assets
Intangible assets - 16,281 16,336
_______ _______ _______
- 16,281 16,336
_______ _______ _______
Current Assets
Trade and other receivables 16 24 19
Cash and cash equivalents 41 177 15
_______ _______ _______
57 201 34
_______ _______ _______
Total Assets 57 16,482 16,370
======= ======= =======
Equity & Liabilities
Shareholders' Equity
Share capital 12,050 11,990 11,990
Share premium 28,684 28,491 28,475
Currency translation reserve 59 59 59
Share-based payment reserve - 316 -
Warrants reserve 115 - 115
Accumulated deficit (41,997) (26,094) (25,889)
_______ _______ _______
Total Equity (1,089) 14,762 14,750
Non-Current Liabilities
Provision for liabilities - 388 512
Current Liabilities
Trade and other payables 140 279 129
Shareholder loan 1,006 1,053 979
_______ _______ _______
Total Liabilities 1,146 1,720 1,620
_______ _______ _______
Total Equity and Liabilities 57 16,482 16,370
======= ======= =======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Cash flows
Six months ended 30 June 2023
Unaudited Unaudited Audited
6 months
6 months
Year
ended
ended
ended
30 June '23
30 June '22
31 Dec. '22
£000s £000s £000s
Cash flows from operating activities
Loss for the period (16,108) (158) (364)
Adjustments for:
Impairment (reversal of) intangible assets 15,882
Interest payable and similar charges 109 25 146
Decrease/(increase) in trade and other receivables (80) (3) 2
Increase in trade and other payables 12 3 (23)
_______ _______ _______
Net cash used in operating activities (185) (133) (239)
Cash flows from investing activities
Acquisition of intangible exploration assets (58) (156) (211)
_______ _______ _______
Net cash from investing activities (58) (156) (211)
Cash flows from financing activities
Proceeds from the issue of share capital 300 300 300
Cost of raising shares (31) (33) (34)
_______ _______ _______
Net cash from financing activities 269 267 266
----------- ----------- -----------
26 (22) (184)
Net (decrease) in cash and cash equivalents
15 199 199
Cash and cash equivalents at start of period
_______ _______ _______
Cash and cash equivalents at end of period 41 177 15
======= ======= =======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2023
Share Capital Share Premium Other Reserves Warrants Reserve Retained Losses Total
£000s £000s £000s £000s £000s £000s
Unaudited
At 1 January 2022 11,930 28,284 375 - (25,936) 14,653
Loss for the period - - - - (158) (158)
_____ _______ _______ _______ _______ _______
Total comprehensive loss for the period - - - (158) (158)
-
Issue of new shares - gross consideration 60 240 - - 300
-
Cost of share issues - (33) - - - (33)
--------- --------- --------- ---------- ---------- ----------
At 30 June 2022 11,990 28,491 375 - (26,094) 14,762
_____ _______ _______ _______ _______ _______
11,930 28,284 375 (25,936) 14,653
-
Audited
At 1 January 2022
Loss for the period - - - - (364) (364)
_____ _______ _______ _______ _______ _______
Total comprehensive loss for the period - (364) (364)
- - -
Issue of new shares - gross consideration 60 240 - - 300
-
Issue of shares - warrants - (15) - 15 - -
Issue of warrants to holder of loan notes - - - 95 195
100
Cost of share issues - (34) - - - (34)
Lapse of share options - - (316) - 316 -
_____ _______ _______ _______ _______ _______
At 31 December 2022 11,990 28,475 59 115 (25,889) 14,750
_____ _______ _______ _______ _______ _______
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Changes in Equity (continued)
Six months ended 30 June 2023
Unaudited
At 1 January 2023 11,990 28,475 59 115 (25,889) 14,750
Loss for the period - - - - (16,108) (16,108)
_____ _______ _______ _______ _______ _______
Total comprehensive loss for the period - - - (16,108) (16,108)
-
Issue of new shares - gross consideration 60 240 - - 300
-
Cost of share issues - (31) - - - (31)
_____ _______ _______ _______ _______ _______
At 30 June 2023 12,050 28,684 59 115 (41,997) (1,089)
_____ _______ _______ _______ _______ _______
Lansdowne Oil & Gas plc
Notes to the Interim Condensed Financial Statements
Six months ended 30 June 2023
1. Basis of Presentation
Accounting Policies
The interim financial information for the six months ended 30 June 2023 has
been prepared on the basis of the accounting policies which were adopted in
the 2016 Annual Report and Accounts and IAS 34, "Interim Financial Reporting".
The interim financial information does not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. The results for the six
months to 30 June 2023 and the comparative results for the six months to 30
June 2022 are unaudited. The comparative amounts for the year ended 31
December 2022 do not constitute the statutory financial statements for that
year. The interim financial information should be read in conjunction with the
annual financial statements for the year ended 31 December 2022, which have
been prepared in accordance with IFRSs as adopted by the European Union. Those
financial statements have been delivered to the Registrar of Companies and
include an auditor's report which was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. It did, however,
contain an emphasis of matter over the going concern basis of preparation for
the Group financial statements.
Going concern
The Directors have prepared the interim financial information on the going
concern basis which assumes that the Group and Company and its subsidiaries
will continue in operational existence for the foreseeable future.
The Intangible asset of £16.3 million and related decommissioning provision
were written off. However, the Company has now advanced the engagement with
external legal counsel and has continued to pursue the steps required to move
towards arbitration to protect its investment in the Barryroe Project.
Lansdowne's legal advisors, Ashurst LLP, have initiated arbitration
proceedings under the Energy Charter Treaty by submitting a letter giving
notice pursuant to Article 26 (2) (c) of the ECT requiring Ireland to
participate in discussions with a view to settling the dispute. The Company's
legal advisors, Ashurst LLP, received a letter from the Irish State Solicitors
office on 18 September 2023 in response to the letters we had submitted. This
letter denies Lansdowne's claim that Ireland has breached the terms of the ECT
but indicates that they would be willing to give consideration to proposals
for a meeting with a representative of the Department of the Environment,
Climate and Communications.
The Company will review the letter from the Irish State Solicitors Office in
detail and may seek such a meeting, although with the three-month period
allowed for amicable settlement of the claim, Lansdowne is also now free to
instigate formal arbitration proceedings.
On 20 July 2023, the Company announced the placing of 200,000,000 new ordinary
shares with new and existing investors at a placing price of 0.01 pence per
placing share, raising £200,000 before costs.
The proceeds of this placing will be used to meet the Company's expected
working capital requirements through to the end of October 2023.
Based on the above information, the director's relationship with the holder of
its loan note and after reviewing cash flow projections, the directors
consider it appropriate to prepare this interim financial information on a
going concern basis. This interim financial information does not include any
adjustment that would result from the going concern basis of preparation being
inappropriate.
2. Segmental Analysis
The Group has only one reportable business segment, which is the exploration
for oil and gas reserves in Ireland. All operations are classified as
continuing.
3. Loss per share
The loss for the period was wholly from continuing operations.
Unaudited Unaudited Audited
6 months
6 months
Year
ended
ended
ended
30 June '23
30 June '22
31 Dec. '22
£000s £000s £000s
Loss per share arising from continuing operations attributable to the equity
holders of the Company
- basic and diluted (in pence) (1.62) (0.02) (0.04)
The calculations were based on the following information:
Loss attributable to equity holders of the Company (16,108) (158) (364)
Weighted average number of ordinary shares
In issue - basic and diluted 993,618,337 933,618,337 919,974,501
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The Group has one class of dilutive potential ordinary shares - share
options. As a loss was recorded for all periods reported, the issue of new
shares would have been anti-dilutive.
4. Intangible Assets
On 19 May 2023, Barryroe Offshore Energy received a letter from the Irish
Department of the Environment, Climate and Communications ("DECC") advising
that Eamon Ryan, Minister for the Environment, Climate and Communications (the
"Minister") was unwilling to grant the Lease Undertaking, as sought, on
grounds of financial capability. DECC also confirmed in the letter that the
application was satisfactory from a technical perspective.
The decision by the Minister not to grant the Lease Undertaking is
disappointing not only for the Company, but also other stakeholders, including
Ireland, which continues to import significant amounts of oil & gas,
something the development of Barryroe could help to address.
Given the lack of progress on the Lease Undertaking, Lansdowne had already
commenced discussions with external legal advisors on the potential to pursue
legal proceedings to protect its investment in Barryroe, prior to receipt of
the letter from DECC.
The Company has now advanced the engagement with external legal counsel and
has continued to pursue the steps required to move towards arbitration to
protect its investment in the Barryroe Project. These discussions are already
well advanced, and the Company believes there is clear evidence of the DECC
and the Minister failing to act in a fair and equitable manner with the
Barryroe
Partners consistent with its obligations under Irish law and also
international law. Given Lansdowne is a UK domiciled Company it expects to
pursue its claim in international arbitration pursuant to the investment
protection regime established under the Energy Charter Treaty to which both
the Ireland and the United Kingdom are signatories.
Lansdowne's legal advisors, Ashurst LLP, have initiated arbitration
proceedings under the Energy Charter Treaty by submitting a letter giving
notice pursuant to Article 26 (2) (c) of the ECT requiring Ireland to
participate in discussions with a view to settling the dispute.
The Company's legal advisors, Ashurst LLP, received a letter from the Irish
State Solicitors office on 18 September 2023 in response to the letters we had
submitted. This letter denies Lansdowne's claim that Ireland has breached the
terms of the ECT but indicates that they would be willing to give
consideration to proposals for a meeting with a representative of the
Department of the Environment, Climate and Communications.
Further updates will be made with respect to the legal process as appropriate,
along with more information on the claims sought by Lansdowne in this matter.
Oil and gas project expenditures, including geological, geophysical and
seismic costs, are accumulated as intangible assets prior to the determination
of commercial reserves. In light of the above, at 30 June 2023, the intangible
assets of £16.4 million and related decommissioning provision were fully
impaired.
5. Shareholder loan
The shareholder loan of £1.11 million (30 June 2022: £1.05 million) relates
to a senior secured loan note issued in 2015 to LC Capital Master Fund Limited
at a coupon rate of 5% and the loan is repayable on 31 December 2023.
6. Copies of the Interim Report
Copies of the interim results can be obtained from the Company Secretary,
Lansdowne Oil & Gas plc, Paramount Court, Corrig Road, Sandyford Business
Park, Dublin 18 and from the Company's website www.lansdowneoilandgas.com
(http://www.lansdowneoilandgas.com) .
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