REG - Lansdowne Oil & Gas - Interim Results
29/09/2022 07:01
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RNS Number : 0686B Lansdowne Oil & Gas plc 29 September 2022
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).
29 September 2022
Lansdowne Oil & Gas plc
("Lansdowne" or the "Company")
Interim Results for the six months ended 30 June 2022
Lansdowne Oil & Gas ("Lansdowne" or "the Company") is pleased to announce
its unaudited results, for the six months ended 30 June 2022. 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. The Company has
targeted the Irish offshore shelf areas close to existing operating
infrastructure for exploration, as these provide shallow water (generally less
than 100 metres), and relatively low drilling costs and the Directors believe
that these factors, combined with favourable fiscal terms, have the potential
to deliver high value reserves and consequential shareholder value.
First half Highlights
Operational
· Barryroe Oil Field (SEL 1/11)
o Lease Undertaking Application remains under active consideration at the
Department of the Environment, Climate and Communications ("DECC")
o We now look forward to engaging constructively with DECC in the coming
weeks following a recent encouraging update from the Minister
o New reservoir and development studies to assess potential of first Phase
development of Barryroe, centred around the 48/24-10z area were completed
o New CPR completed by RPS over Phase 1 development area estimated 2C
Resources of 81.2 million barrels recoverable, 16.4 million barrels net to
Lansdowne
Financial highlights
· Cash balances at 30 June 2022 of £0.20 million (31 December 2021:
£0.20 million).
· Loss for the period after tax of £0.16 million (2021: loss £0.13
million).
· Loss per share of 0.02 pence (2021: loss 0.02 pence).
· The LC Capital Master Fund loan, due for repayment on 31 December
2021, was extended to 31 December 2022.
· As part of LCCMF's agreement to the Loan Extension, the warrants to
subscribe for up to 26 million new ordinary shares in the Company, granted to
LC Capital Targeted Opportunities Fund LP in December 2020 were extended to
now expire on 31 December 2022, in line with the Loan Extension and the
exercise price was adjusted to 0.525p/warrant (being the closing mid-market
price on 29 December 2021).
· In March 2022, 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.
· Associated with the fund raise, 1,821,826 warrants were granted to LC
Capital Targeted Opportunities Fund, LP in accordance with the provisions of
LCCTOC's warrant instrument.
· LC now holds 27,821,826 warrants over ordinary shares and the strike
price for these warrants has been amended to 0.5 pence per share from 0.525
pence per share pursuant to the LC warrant instrument.
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 Financial 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) .
For the six months ended 30 June 2022
Chairman's Statement
We have recognised for a long time that Barryroe should be developed in a
phased manner rather than a large and more demanding full-field development.
The benefits of a phased approach is that it allows lower initial CAPEX and a
shorter lead time to production and revenues.
During 2021, third-party technical studies were carried out to evaluate the
potential of a first phase of development of the Barryroe Field, centred
around the 48/24-10z well. These studies focused only on the oil-bearing Basal
Wealden A Sand, that tested oil at a rate of 3,514 barrels of oil per day and
gas at a rate of 2.93 million standard cubic feet per day.
As a result of these additional technical studies the Barryroe Partners
commissioned a new Competent Person's Report, that was prepared by RPS Group
Plc. and again, addressed the potential oil volumes in the Basal Wealden A
Sand, the reservoir reviewed in the earlier full-field Competent Persons
Report carried out by Netherland Sewell & Associates Inc. in 2012.
Overlaying the identified oil-bearing Basal Wealden A Sands are the important
gas bearing C Sands. The 48/24-10z well tested strong gas flow rates from the
C Sands.
The recent RPS Competent Persons Report did not address the gas volumes
present in the overlying C Sand which we believe are of significant volume and
value and can provide important energy security for Ireland.
The RPS Competent Persons Report concluded that the Phase 1 development, in
the P50 Case, has the potential to recover 81.2 million barrels of oil (16.24
million barrels net to Lansdowne) and deliver an NPV10% for Lansdowne's 20%
share of $104 million under a Brent Oil Price assumption of US$68 per barrel
in 2027, rising to $70/bbl in 2028 and 2029 and inflated at 2% per annum
thereafter
Again, it should be emphasised that this evaluation did not include the
considerable quantities of gas present in the C Sands.
It is Lansdowne's belief that the development of Barryroe has taken on a
critical energy security role for Ireland and we look forward to expediting
the development of this asset.
With the completion of the site survey over the K location in November 2021,
we can now move forward with the necessary appraisal well, which will address
both the A and C Basal Wealden Sand reservoirs and clarify the split between
oil and gas resource volumes.
Unfortunately, however, nothing can move forward without the granting of Lease
Undertaking over Barryroe, the application for which was submitted in April
2021. This continues to remain under consideration by the Department of
Environment, Climate and Communications ("DECC").
Outlook
Security of energy supply was already an important issue for Ireland and
re-confirmed in the review initiated by Minister Bruton in 2019. This has
become even more critical following the Russian invasion of Ukraine.
The EU is seeking to achieve a total embargo on Russian supplies of fossil
fuels and published a plan (REPower the EU) outlining actions to be taken to
end the era of dependence on Russian fossil fuels.
As part of the REPower the EU programme, it was recognised that in the short
term "…..we need alternative supplies of gas, oil and coal as quickly as
possible.
More recently, in her opening remarks at the Extraordinary Energy Council
meeting held on the 9(th) of September 2022, Commissioner Simson again called
for diversification of supply to seek to bring down gas prices at source and
stated that she planned to visit Algeria in the near future to discuss
additional supplies to Europe.
The report on the security of energy supply of Ireland's Electricity and
Natural Gas Systems has been long delayed, but finally emerged from DECC on 19
September 2022 ("Security of Energy Supply Report").
Some very important points were made in the introduction:
"Energy import dependency is a simple and widely used indicator of a country's
energy security, with indigenous sources of energy being considered as more
secure than imported energy. Ireland is one of the most energy import
dependent countries in the EU with oil making up the largest share of energy
imports i.e., 100% of oil and 71% of natural gas was imported in 2021.
Ireland's dependency on gas imports is increasing as our supply of indigenous
gas from the Corrib Gas Field declines."
Most responsible commentators recognise that fossil fuels will be required as
part of the energy mix for decades to come and using indigenous supplies
generates a much lower carbon footprint than imports.
Indeed, in the Security of Energy Supply Report it is recognised that
additional gas-fired power generating capacity will need to be installed, as
it will be required in periods of low wind speed and poor solar generation.
It is extraordinary that in the gas supply mitigation options considered in
the report, additional indigenous gas production from fields, such as
Barryroe, was not considered.
Along with the publication of the Security of Energy Supply Report, DECC
announced a consultation will now take place with interested parties asked to
provide response and submissions by the closing date of 28 October 2022.
We shall certainly be engaging in this process by once again highlighting the
important role that a Barryroe development can play in providing energy
security to Ireland and, importantly, in a relatively short time frame.
We will continue to press DECC and all other relevant authorities for the
award of a Lease Undertaking on Barryroe so that the partners can get back to
work and deliver a development decision in the near future that contributes to
future energy security for the benefit of the Irish people and the wider EU
community.
In a debate in Dáil Éireann on 21 September 2022, the Minister for
Environment, Climate and Communications, Eamon Ryan, stated in reply to a
question of how long it would take for a Lease Undertaking decision on
Barryroe: "I expect it shortly, within the coming weeks".
We welcome such an encouraging update and look forward to engaging
constructively with DECC in the coming weeks.
Jeffrey Auld
Chairman
Lansdowne Oil and Gas plc
Condensed Consolidated Income Statement and Statement of Comprehensive Income
Six months ended 30 June 2022
Unaudited Unaudited Audited
6 months 6 months Year
ended
ended
ended
30 June '22
30 June '21
31 Dec. '21
£000s £000s £000s
Administration expenses (130) (125) (82)
Impairment of intangible assets - - -
______ ______ _______
Operating loss (130) (125) (82)
Finance costs (28) (24) (49)
______ ______ ______
Loss before tax (158) (149) (131)
Income tax credit - - -
______ ______ ______
Loss for the financial period (158) (149) (131)
Other Comprehensive Income - - -
______ ______ ______
Total comprehensive loss for the financial period (158) (149) (131)
===== ===== ======
Loss per share (pence)
(0.02p) (0.02p) (0.02p)
Basic and diluted
===== ===== ======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Financial Position
As at 30 June 2022
Unaudited Unaudited Audited
30 June '22 30 June '21 31 Dec. '21
£000s £000s £000s
Assets
Non-Current Assets
Intangible assets 16,281 15,742 16,125
_______ _______ _______
Current Assets
Trade and other receivables 24 17 21
Cash and cash equivalents 177 495 199
_______ _______ _______
201 512 220
_______ _______ _______
Total Assets 16,482 16,254 16,345
======= ======= =======
Equity & Liabilities
Shareholders' Equity
Share capital 11,990 11,930 11,930
Share premium 28,491 28,284 28,284
Currency translation reserve 59 59 59
Share-based payment reserve 316 923 316
Accumulated deficit (26,094) (26,561) (25,936)
_______ _______ _______
Total Equity 14,762 14,635 14,653
Non-Current Liabilities
Provision for liabilities 388 317 388
Current Liabilities
Trade and other payables 279 299 277
Shareholder loan 1,053 1,003 1,027
_______ _______ _______
Total Liabilities 1,720 1,619 1,692
_______ _______ _______
Total Equity and Liabilities 16,482 16,254 16,345
======= ======= =======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Cash flows
Six months ended 30 June 2022
Unaudited Unaudited Audited
6 months
6 months
Year
ended
ended
ended
30 June '22
30 June '21
31 Dec. '21
£000s £000s £000s
Cash flows from operating activities
Loss for the period (158) (149) (131)
Adjustments for:
Interest payable and similar charges 25 25 48
(Increase) in trade and other receivables (3) - (4)
Increase in trade and other payables 3 36 86
_______ _______ _______
Net cash used in operating activities (133) (88) (1)
Cash flows from investing activities
Acquisition of intangible exploration assets (156) (52) (435)
_______ _______ _______
Net cash from investing activities (156) (52) (435)
Cash flows from financing activities
Proceeds from the issue of share capital 300 - -
Cost of raising shares (33) - -
_______ _______ _______
Net cash from financing activities 267 - -
----------- ----------- -----------
(22) (140) (436)
Net (decrease) in cash and cash equivalents
199 635 635
Cash and cash equivalents at start of period
_______ _______ _______
Cash and cash equivalents at end of period 177 495 199
======= ======= =======
Lansdowne Oil and Gas plc
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2022
Share Capital Share Premium Other Reserves Retained Losses Total
£000s £000s £000s £000s £000s
Unaudited
At 1 January 2021 11,930 28,284 982 (26,412) 14,784
Loss for the period - - - (149) (149)
_____ _______ _______ _______ _______
Total comprehensive loss for the period - - - (149) (149)
--------- --------- --------- ---------- ----------
At 30 June 2021 11,930 28,284 982 (26,561) 14,635
_____ _______ _______ _______ _______
Audited 11,930 28,284 982 (26,412) 14,784
At 1 January 2021
Loss for the period - - - (131) (131)
_____ _______ _______ _______ _______
Total comprehensive loss for the period - (131) (131)
- -
Lapse of share options - - (607) 607 -
_____ _______ _______ _______ _______
At 31 December 2021 11,930 28,284 375 (25,936) 14,653
_____ _______ _______ _______ _______
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
_____ _______ _______ _______ _______
Notes to the Interim Condensed Financial Statements
1. Basis of Presentation
Accounting Policies
The interim financial information for the six months ended 30 June 2022 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 2022 and the comparative results for the six months to 30
June 2021 are unaudited. The comparative amounts for the year ended 31
December 2021 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 2021, 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
Directors have carried out a detailed assessment of the Group's current and
prospective exploration activity, its relationship with the holder of its loan
note and cash flow projections and it is on this basis that 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 '22
30 June '21
31 Dec. '21
£000s £000s £000s
Loss per share arising from continuing operations attributable to the equity
holders of the Company
- basic and diluted (in pence) (0.02) (0.02) (0.02)
The calculations were based on the following information:
Loss attributable to equity holders of the Company (158) (149) (131)
Weighted average number of ordinary shares
In issue - basic and diluted 933,618,337 789,385,913 873,618,337
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
Oil and gas project expenditures, including geological, geophysical and
seismic costs, are accumulated as intangible assets prior to the determination
of commercial reserves. At 30 June 2022, intangible assets totalled £16.3
million (30 June 2021: £15.7 million), all of which relates to Ireland.
Movements in the period relate to additional spend on the licence areas of
£0.6 million.
5. Shareholder loan
The shareholder loan of £1.05 million (30 June 2021: £1 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 2022.
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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