REG - Orcadian Energy PLC - Results for the half year ended 31 December 2022
30/03/2023 07:00
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RNS Number : 6891U Orcadian Energy PLC 30 March 2023
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under 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.
30 March 2023
Orcadian Energy plc
("Orcadian Energy", "Orcadian" or the "Company")
Results for the half year ended 31 December 2022
Orcadian Energy (AIM: ORCA), the low-emissions North Sea focused oil and gas
development company, is pleased to announce its unaudited results for the six
months ended 31 December 2022.
Activity Focus:
· To improve the technical and commercial definition of the Pilot
development project
· To seek partners and finance for the Pilot development project
· To maximise the value in our satellite discoveries and prospects
· To prepare applications for new opportunities in the 33(rd) Round,
now submitted
Highlights:
· Secured a one-year extension to the P2244 licence, which includes the
Pilot project
· Completed a revision of the technical resources on Pilot which
resulted in a 18.4% upgrade to the P50 case (management estimates)
· Entered into a Memorandum of Understanding with SLB (formerly
Schlumberger) for the exclusive provision of drilling and completion services
and equipment for the Pilot project
· Progressed the reprocessing of the Catcher North seismic survey with
TGS and started quantitative interpretation work
· Prepared 33(rd) Round applications (submitted 12 January 2023) which
included a 114 bcf gas discovery and a 153 bcf near drill-ready prospect.
· Identified two new low-risk exploration prospects with P50
prospective resources of 120 MMbbl and 70 MMbbl (management estimates, after
the reporting period)
· Since the end of the period under review, initial agreement reached
with Rapid for the disposal of the Crinan and Dandy discoveries; and
· Raised £500k before expenses on February 1 2023
Steve Brown, Orcadian's CEO, commented:
"The second half of 2022 was dominated by political and fiscal turmoil. We all
hope for calmer waters in 2023. Our absolute focus is to find a farm-in
partner or a new owner for Pilot and our intention is to elicit offers during
2Q and 3Q of 2023 so that a new operator can take the project forward; a
project which will help deliver a secure transition for the UKCS.
"We are in active discussions with potential new investors as Orcadian needs
additional working capital to secure the best deal for shareholders on Pilot.
"Those discussions have been buoyed by the identification of two new prospects
on our licences which have been illuminated by the quantitative interpretation
work done for us by TGS. These prospects are likely to contain a lighter oil
than seen on Pilot and have a very high chance of success as well as a
relatively low cost to drill. We will update shareholders on these discussions
as soon as possible."
For further information on the Company please visit the Company's website:
https://orcadian.energy (https://orcadian.energy)
Contact:
Orcadian Energy plc + 44 20 7920 3150
Steve Brown, CEO
Alan Hume, CFO
WH Ireland (Nomad and Joint Broker) +44 20 7220 1666
Katy Mitchell / Andrew de Andrade (Nomad)
Harry Ansell / Fraser Marshall (Corporate Broking)
Tavistock (PR) + 44 20 7920 3150
Nick Elwes / Simon Hudson orcadian@tavistock.co.uk
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules and in particular, the AIM Note
for Mining and Oil and Gas Companies, Maurice Bamford has reviewed and
approved the technical information and resource reporting contained in this
announcement. Maurice has more than 33 years' experience in the oil & gas
industry and 3 years in academia. He holds a BSc in Geology from Queens
University Belfast and a PhD in Geology from the National University of
Ireland. Maurice is a Fellow of the Geological Society, London, and a member
of the Petroleum Exploration Society of Great Britain. He is Exploration and
Geoscience Manager at Orcadian Energy.
About Orcadian Energy
Orcadian is a North Sea focused, low emissions, oil and gas development
company. In planning its Pilot development, Orcadian has selected wind power
to transform oil production into a cleaner and greener process. The Pilot
project is on a timeline for approval and we anticipate it will be amongst the
lowest carbon emitting oil production facilities in the world, despite being a
viscous crude. Orcadian may be a small operator, but it is also nimble, and
the Directors believe it has grasped opportunities that have eluded some of
the much bigger companies. As we strike a balance between Net Zero and a
sustainable energy supply, Orcadian intends to play its part to minimise the
cost of Net Zero and to deliver reliable organic energy.
Orcadian Energy (CNS) Ltd ("CNS"), Orcadian's operating subsidiary, was
founded in 2014 and is the sole licensee of P2244, which contains 78.8 MMbbl
of 2P Reserves in the Pilot discovery, and of P2320 and P2482, which contain a
further 77.8 MMbbl of 2C Contingent Resources in the Elke, Narwhal and
Blakeney discoveries (as audited by Sproule, see the CPR in the Company's
Admission Document for more details). Within these licences there are also 191
MMbbl of unrisked Prospective Resources. These licences are in blocks 21/27,
21/28, 28/2 and 28/3, and lie 150 kms due East of Aberdeen. The Company also
has a 50% working interest in P2516, which contains the Fynn discoveries.
P2516 is administered by the Parkmead Group and covers blocks 14/20g and
15/16g, which lie midway between the Piper and Claymore fields, 180 kms due
East of Wick.
Pilot, which is the largest oilfield in Orcadian's portfolio, was discovered
by Fina in 1989 and has been well appraised. In total five wells and two
sidetracks were drilled on Pilot, including a relatively short horizontal well
which produced over 1,800 bbls/day on test. Orcadian's proposed low emissions,
field development plan for Pilot is based upon a Floating Production Storage
and Offloading vessel (FPSO), with over thirty wells to be drilled by a
Jack-up rig through a pair of well head platforms and provision of power from
a floating wind turbine.
Emissions per barrel produced are expected to be about a tenth of the 2021
North Sea average, and less than half of the lowest emitting oil facility
currently operating on the UKCS. On a global basis this places the Pilot field
emissions at the low end of the lowest 5% of global oil production.
Chairman & CEO's Statement
The second half of 2022 was an extraordinary time in British politics. The
turbulence caused by the unseating of Boris Johnson, followed rapidly by the
defenestration of Liz Truss, and the installation of Rishi Sunak had an
immense impact on the energy industry. In short, that political and fiscal
turmoil ensured that 2022 was a year in which many oil companies chose not to
commit to new projects.
We are optimistic that 2023 will be different, and will be the year that the
UK government, and opposition alike, realise the vital role that the UK's oil
and gas industry has to play in delivering a secure transition. The UK
government's and Climate Change Committee's forecasts of oil and gas demand
rely on the UK importing that energy from overseas. Exporting emissions and
stifling the development of low-carbon production technologies seems entirely
counterproductive to rational climate goals. The Company's flagship project
Pilot has the potential to be a leading-edge, low-carbon development and we
estimate emissions can be as low as 2.6 kgCO(2e)/bbl, against a North Sea
average of 25 kgCO(2e)/bbl.
The UK oil and gas industry can lead a transformation in how offshore oil and
gas is produced so that global emissions from the production process are
driven down. the people in the oil and gas sector have the skills, energy, and
enthusiasm to do this and to make the UK a leader in using wind power to power
the North Sea. The establishment of the Department for Energy Security and Net
Zero will, we hope, deliver the right focus on a secure transition that will
actually reduce, rather than displace, global emissions, boost domestic energy
production and deliver good jobs.
We were initially encouraged by the structure of the Energy Profits Levy
("EPL") as it had clearly, and cleverly, been designed to be both temporary
and to encourage upstream investments. The second incarnation of EPL has
continued that encouragement to invest and the inclusion of a decarbonisation
allowance is very supportive of our plans to deploy a floating wind turbine to
provide the bulk of the electrical power the Pilot development needs.
The structure of the windfall tax is significantly advantageous to companies
that are already producing and paying taxes in the UK Continental Shelf. For
example, a producing company's financial exposure is just 25% of the capital
cost to first oil on a new prospect or development, whilst for a non-producing
company the exposure is 100% of the capital cost 1 (#_ftn1) . The impact on
Orcadian is clear, we will focus on attracting UK producing and tax paying
companies as partners in, or new owners for, the Pilot development. We do have
another approach to financing the development, which is to find investors
willing to furnish the required facilities in return for a tariff or day rate.
This infrastructure financing arrangement could create a very attractive
project for investors, and we are now preparing to engage with specific
funding and contracting parties based in the Middle East.
We are working hard on both strategies. We are committed to seeing the Pilot
project developed and we will do everything in our power to chart a path
forward for the very significant resource we have under licence.
Management's estimated resource for the Pilot reservoir grew by over 18% in
the reporting period. This was largely down to an increase in the mapped
oil-in-place which emerged as we interpreted the newly reprocessed seismic
which we had licensed from TGS in June 2022. Part of the resource upgrade was
also founded upon the reservoir modelling work we did which has given us an
excellent understanding of how polymer flood works on a field like Pilot.
However, we do not rely solely upon reservoir models, we are constantly
reviewing the performance of analogue fields and we have been massively
encouraged by the success enjoyed by Ithaca on Captain in the North Sea,
Hilcorp on the Milne Point project in Alaska and CNRL on the Britnell/Pelican
Lake project in Alberta. Every projection we make for production performance
is benchmarked against the performance of these projects. Our production
forecasts are typically more conservative than the actual results from these
analogues.
The Captain reservoir, operated by Ithaca, is the field most like Pilot. Both
are offshore, lying about 3000' below the sea, are cool at 31ºC, have
excellent and similar porosity, permeability and net to gross characteristics.
The Pilot oil is somewhat more viscous than Captain, but the projects at Milne
Point and Pelican Lake are successful with oil viscosities both similar to and
substantially higher than we see in Pilot. The Captain polymer flood project
has blazed a trail for the Pilot development. Ithaca, and Chevron before them,
have solved the technical and logistical challenges of implementing an
offshore polymer flood and we follow everything they report avidly.
In February 2023 we attended and presented at a polymer conference hosted by
SNF in Aberdeen and we were delighted to hear that Ithaca were enjoying
"consistent success across the Captain reservoir development". We remain
convinced that polymer flooding is the right solution for developing viscous
oil on the UKCS, and we believe it is one of few opportunities for the
industry to maintain production given that about 8 billion barrels of
discovered viscous oil in place remains undeveloped. Encouraging polymer
floods of these viscous oil discoveries should be a key plank of the UK
government's energy security strategy.
The prize on the Pilot development has been confirmed and enhanced by the
technical work we did in 2022. 2023 is the year we need to deliver this
project into new tax advantaged hands.
The work we have done with TGS has been revelatory and has far exceeded our
internal expectations. When we licensed over 2,000 km(2) of the best quality
data available in the area, and asked TGS to reprocess both the Catcher North
and Catcher surveys, we had high hopes that we would get encouragement that
Carra and Bowhead would be drillable targets and that we could farm these
prospects out.
TGS has employed a seismic attribute analysis, which they have been developing
over recent years, that can distinguish lithology and fluid fill when certain
conditions are met. Being able to identify fluid fill with a high degree of
certainty is the Holy Grail of seismic interpretation. The TGS technique was
originally designed for use in frontier basins that lack significant well
coverage, since it did not require any local well information. In extensively
drilled areas, such as on Orcadian's Western Platform acreage, this is equally
beneficial, but in a different way. Actual well results can be used to check
the predictive ability of the technique and give statistically based guidance
to the geological chance of success.
Where we have mapped the Tay play (the fairway that we are focussed on) with
the new seismic attribute, twenty-seven out of twenty-seven reservoir
penetrations were correctly predicted by the attribute, across changing
geological conditions. We see this as highly significant especially since the
technique was not conditioned with local well data.
Work is currently ongoing, but the results to date have completely reshaped
and reinvigorated our exploration strategy for the area. We have now
identified two exciting and deeper prospects, each likely to contain a
significantly less viscous oil than in Pilot. Based on preliminary mapping,
one has a P50 prospective resource of 120 MMbbl, the other 70 MMbbl.
Additional geophysical modelling work has also explained why these prospects
had not been high-graded with the previously used seismic attributes.
We have requested from NSTA, a further extension to Phase A of the P2320
licence, which contains Feugh and Bowhead, to provide additional time to
secure a well commitment on the licence (see the Company's announcement dated
22 March 2022 for more details on this licence).
The attribute that TGS has mapped for us over our Tay play fairway is called
relative Extended Elastic Impedance, or rEEI for short. For the more
technically minded of you we recommend the paper "Practical application of
global siliciclastic rock property trends to AVA interpretation in frontier
basins
(https://www.tgs.com/articles/global-siliciclastic-rock-property-to-ava-interpretation)
" by Dave Went, of TGS. (Link:
https://www.tgs.com/articles/global-siliciclastic-rock-property-to-ava-interpretation
(https://www.tgs.com/articles/global-siliciclastic-rock-property-to-ava-interpretation)
)
We illustrate the results we have seen with the map below. This is an image of
the rEEI response over the Pilot reservoir with our proposed drilling envelope
superimposed. This outline shows where we intend to place both production and
injection wells and predated the rEEI attribute analysis.
Image reproduced with the kind permission of TGS
Gas caps are easy to spot; gas filled sand creates a high amplitude response
and is obvious on virtually any seismic attribute. This is just as true for
rEEI and the orange-red response clearly identifies the gas cap in the east of
Pilot itself as well as a number of small four-way dip closed structures to
the east of Pilot, including the Harbour discovery, well 21/27-1A.
Shales and brine filled sands both show up as dark blue on this display as
they are difficult to distinguish, one from the other, with the rEEI technique
at shallow depths. Oil filled sands show up as cyan with a brown/orange
speckle. The conformity of the seismically predicted oil-bearing sands with
our previous structurally based interpretation is extraordinary. The channels
which feed sand into the Pilot field are crystal clear and the path taken by
the channel which separates Pilot Main from Pilot South is consistent with the
model we had developed to explain the almost 90 feet difference in oil water
contacts between Pilot Main and Pilot South. Previously we could not image the
cause of the barrier between the two pools.
We are of course committed to finding a development or financing partner for
Pilot and success in farming out the Pilot project would be transformational
for the Company, but to add to that we have uncovered a significant
prospective resource with a very high geological chance of success right on
our own doorstep.
Whilst the Company is considering all options at this stage, any disposal of
Licence P2244 and the Pilot project would likely be a fundamental disposal
pursuant to Rule 15 of the AIM Rules for companies. Such a disposal would
therefore be conditional on the consent of shareholders; and require both an
announcement and the publication of a shareholder circular detailing the
potential disposal. Further announcements will be made in due course if this
option is pursued by the Company.
Clearly, and as we noted when we completed a small fundraise at the beginning
of February, the Company needs to raise additional funds in the near term for
working capital and also to repay the loan facility with Shell of c. £1m
which is due to be repaid in August 2023. We can confirm we are in active
discussions with a number of financing counterparties in respect of that
requirement, and the addition of this exciting exploration strategy will be
very helpful to our success in those financing discussions. We will also
update shareholders as these discussions progress.
Finally, I would also like to take this opportunity to thank all our
shareholders for their continued support and look forward to providing further
updates as appropriate on what we believe will be a key year for the Company
and the development of Pilot.
Joe Darby Steve Brown
Chairman CEO
29 March 2023 29 March 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2022
Unaudited Unaudited Audited
6 Month Period Ended 6 Month Period Ended 12 Month Period Ended
31 December 2022 31 December 2021 30 June
2022
Note £ £ £
Administrative expenses (455,196) (519,650) (1,694,576)
Operating Loss (455,196) (519,650) (1,694,576)
Finance costs (36,493) (19,277) (41,869)
Other income 2,187 - 466,667
Listing costs - (325,449) (316,949)
Loss before tax (489,503) (864,376) (1,586,727)
Taxation - - -
Loss for the period (489,503) (864,376) (1,586,727)
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Other comprehensive income - - -
Total comprehensive income (489,503) (864,376) (1,586,727)
Basic and Diluted Earnings per share 4 (0.74p) (1.38p) (2.51p)
All operations are continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Unaudited Unaudited Audited
as at as at as at
31 December 2022 31 December 2021 30 June
2021
Note £ £ £
Non-current assets
Property, plant and equipment 3,264 1,842 3,414
Intangible assets 5 3,768,546 2,694,666 3,303,400
3,771,810 2,696,508 3,306,814
Current assets
Trade and Other Receivables 6 58,689 63,217 1,055,829
Cash and cash equivalents 225,446 1,517,902 271,439
284,135 1,581,119 1,327,268
Total assets 4,055,945 4,277,627 4,634,082
Non-current liabilities
Borrowings 7 - (815,185) (956,184)
- (815,185) (956,184)
Current liabilities
Trade and Other Payables 8 (428,381) (516,902) (553,509)
Borrowings 7 (992,678) - -
(1,421,059) (516,902) (553,509)
Total liabilities (1,421,059) (1,332,087) (1,509,693)
Net assets 2,634,886 2,945,540 3,124,389
9 66,612 63,755 63,755
Equity
Ordinary share capital
Share premium 9 4,788,432 3,890,089 3,890,089
Share warrants reserve 9 15,000 15,000 15,000
Shares to be issued 9 - - 901,200
Reverse Acquisition Reserve 3 (38,848) (38,848) (38,848)
Retained earnings (2,196,310) (984,456) (1,706,807)
Total equity 2,634,886 2,945,540 3,124,389
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2022
Ordinary Share capital Share premium Share warrants reserve Reverse Acquisition Reserve Retained earnings Total
Shares to be issued
Note £ £ £ £ £ £ £
Balance as at 1 July 2021 (audited) 52,202 - (120,080) (106,726)
- - (38,848)
Loss for the period and total comprehensive income - - - - - (864,376) (864,376)
Issue of shares 9 7,625 3,042,375 - - - - 3,050,000
Share issue costs 9 - (233,358) - - - - (233,358)
Conversion of loans 9 3,928 1,096,072 - - - - 1,100,000
Issue of warrants 9 - (15,000) 15,000 - - - -
Balance as at 31 December 2021 (unaudited) 63,755 3,890,089 15,000 - (38,848) (984,456) 2,945,540
Loss for the period and total comprehensive income - - (722,351) (722,351)
- - -
Shares to be issued 9 - - - 901,200 - - 901,200
Balance as at 30 June 2022 (audited) 63,755 3,890,089 (1,706,807) 3,124,389
15,000 901,200 (38,848)
Loss for the period and total comprehensive income - - - - - (489,503) (489,503)
Issue of shares 9 2,857 997,143 - (1,000,000) - - 1,000,000
Share issue costs 9 - (98,800) - 98,800 - - -
Balance as at 31 December 2022 (unaudited) 66,612 4,788,432 15,000 - (38,848) (2,196,310) 2,634,886
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2022
Unaudited Unaudited Audited
6 Month Period Ended 6 Month Period Ended 12 Month Period Ended
31 December 2022 31 December 2021 30 June
2022
Note £ £ £
Cash flows from operating activities
Loss before tax for the year (489,503) (864,376) (1,586,727)
Adjustments for:
Depreciation 150 - 674
Unrealised foreign exchange loss (gain) - 33,222 151,629
(Increase) / decrease) in trade and other receivables 6 (2,859) 25,331 32,720
(Decrease) / Increase in trade and other payables 8 (60,714) (24,928) 36,000
Finance costs in the period 36,493 19,277 41,869
Net cash flows from operating activities (516,433) (811,474) (1,323,836)
Investing activities
Purchases of property, plant and equipment - - (2,246)
Purchases of exploration and evaluation assets 5 (430,760) (666,822) (1,348,677)
Net cash used in investing activities (430,760) (666,822) (1,350,677)
Financing activities
Proceeds from issue of ordinary share capital 9 1,000,000 3,000,000 3,000,000
Share issue costs paid 9 (98,800) (183,358) (233,358)
Net cash used in financing activities 901,200 2,816,642 2,766,642
Net (decrease) / increase in cash and cash equivalents (45,993) 1,338,346 91,883
Cash and cash equivalents at beginning of period 271,439 179,556 179,556
Cash and cash equivalents and end of period 225,446 1,517,902 271,439
Significant non-cash transactions:
There were no significant non-cash transactions during the period.
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
Orcadian Energy PLC (the "Company") is a public limited company which is
domiciled and incorporated in England and Wales under the Companies Act 2006
with the registered number 13298968. The Company's registered office is 6(th)
floor, 60 Gracechurch Street, London, EC3V 0HR, and it ordinary shares are
admitted to trading on AIM, a market of the London Stock Exchange.
The principal activity of the Group is managing oil and gas assets and the
Group holds a 100% interest in, and is licence administrator for, UKCS Seaward
Licences P2244, which contains the Pilot and Harbour heavy oil discoveries,
P2320, which contains the Blakeney, Feugh, Dandy & Crinan discoveries and
P2482 which contains the Elke and Narwhal discoveries. The Group also has a
50% working interest in P2516, which contains the Fynn discoveries. P2516 is
administered by the Parkmead Group and covers blocks 14/20g and 15/16g, which
lie midway between the Piper and Claymore fields.
2. Summary of significant accounting policies
The principal accounting principles applied in the preparation of these
financial statements are set out below. These principles have been
consistently applied to all years presented, unless otherwise stated.
2.1. Basis of preparation
The interim financial information set out above does not constitute statutory
accounts within the meaning of the Companies Act 2006. It has been prepared on
a going concern basis in accordance with UK-adopted international accounting
standards. Statutory financial statements for the year ended 30 June 2022 were
approved by the Board of Directors on 15 December 2022 and delivered to the
Registrar of Companies. The report of the auditors on those financial
statements was unqualified.
The interim financial information for the six months ended 31 December 2022
has not been reviewed or audited. The interim financial report has been
approved by the Board on 28 March 2023.
2.2. Going concern
The financial statements have been prepared on a going concern basis. The
Group is not yet revenue generating and an operating loss has been reported.
The Group has historically been reliant on raising finance, both debt and
equity, to enable it to meet its obligations as they fall due.
The Directors have reviewed a detailed forecast based on the funds expected to
be raised and forecasted expenditure, including all required spend to meet
licence requirements. This forecast has been stress tested by management in
reaching their going concern conclusion. Having made due and careful enquiry,
the Directors acknowledge that funds will need to be raised within the next 12
months to enable the Group to meets its obligations as they fall due, however,
the Directors are confident that the required funds will successfully be
raised through the equity market to funds its operations over the next 12
months.
The Directors, therefore, have made an informed judgement, at the time of
approving financial statements, that the Group is a going concern but they
acknowledge that the dependence on raising further funds during the next 12
months represents a material uncertainty.
2.3. Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Company's medium term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Company's 2022 Annual Report and Financial Statements, a copy
of which is available on the Company's website: https://orcadian.energy
(https://orcadian.energy) . The key financial risks are securing finance for
the Pilot project and an emerging cost inflation risk.
2.4. Critical accounting estimates
The preparation of interim financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the end of the reporting period. Significant items subject to
such estimates are set out in note 3 of the Company's 2022 Annual Report and
Financial Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 30 June 2022, as described in those
annual financial statements.
3. Group reorganisation under common control
The acquisition in the year ended 30 June 2021 met the definition of a group
reorganisation due to the Company and the subsidiary being under common
control at the date of acquisition. As a result, and since Orcadian Energy Plc
did not meet the definition of a business per IFRS 3, the acquisition fell
outside of the scope of IFRS 3 and the predecessor value method was used to
account for the acquisition.
These consolidated financial statements for the period ended 31 December 2022
are of the Company's wholly owned subsidiary, Orcadian Energy (CNS) Ltd.
On 11 May 2021, the Company issued 52,201,601 shares to acquire the entire
issued share capital of Orcadian Energy (CNS) Ltd.
The net assets of Orcadian Energy (CNS) Ltd at the date of acquisition was as
follows:
£
Property Plant & Equipment 1,357
Intangible Assets 1,719,292
Current Assets 447,425
Current Liabilities (284,745)
Non-Current Liabilities (1,869,975)
Net assets 13,354
The reserve that arose from the acquisition is made up as follows:
£
As at 31 December 2020 -
Cost of the investment in Orcadian Energy (CNS) Ltd 52,202
Less: net assets of Orcadian Energy (CNS) Ltd at acquisition (13,354)
As at 30 June 2021 (audited) and as at 31 December 2021 (unaudited) 38,848
4. Earnings per share
The calculation of the basic and diluted earnings per share is calculated by
dividing the loss for the year for continuing operations for the Company by
the weighted average number of ordinary shares in issue during the year.
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due
to the losses incurred in all three periods presented, there is no dilutive
effect from the subsisting share warrants.
Unaudited Unaudited Audited
6 Month Period Ended 6 Month Period Ended 12 Month Period Ended
31 December 2022 31 December 2021 30 June
2021
£ £
£
Loss for the purposes of basic earnings per share being net loss attributable (489,503) (864,376) (1,586,727)
to the owners
Weighted average number of Ordinary Shares 66,519,149 62,809,231 63,278,315
Loss per share (0.74p) (1.38p) (2.51p)
The weighted average number of shares is adjusted for the impact of the
acquisition as follows:
5. Intangible assets
Oil and gas exploration assets
£
Cost
As at 30 June 2021 (audited) 1,814,615
Additions 880,051
As at 31 December 2021 (unaudited) 2,694,666
Additions 608,734
As at 30 June 2022 (audited) 3,303,400
Additions 465,146
As at 31 December 2022 (Unaudited) 3,768,546
6. Trade and other receivables
Group Unaudited Unaudited Audited
as at as at as at
31 December 2022 31 December 2021 30 June
2022
£ £ £
VAT receivable 55,188 63,217 55,829
Other receivables 3,500 - 1,000,000
58,688 63,217 1,055,829
7. Borrowings
Unaudited Unaudited Audited
as at as at as at
31 December 2022 31 December 2021 30 June
2022
£ £ £
STASCO Loan 992,678 815,185 956,184
992,678 815,185 956,184
Current liabilities 992,678 - -
Non-current liabilities - 815,185 956,184
8. Trade and other payables - due within one year
Unaudited Unaudited Audited
as at as at as at
31 December 2022 31 December 2021 30 June
2022
£ £ £
Trade payables 177,849 294,918 184,636
Accruals 250,532 191,049 334,631
Other creditor - 30,935 34,242
428,381 516,902 553,509
9. Ordinary share capital and share premium
Group
Issued Number of shares Ordinary share capital Share
£ premium
£
As at 30 June 2021 (audited) 52,201,602 52,202 -
Issue of shares 7,625,000 7,625 3,042,375
Share issue costs - - (233,358)
Conversion of loans 3,928,572 3,928 1,096,072
As at 31 December 2021 (unaudited) 63,755,174 63,755 3,905,089
As at 30 June 2022 (audited) 63,755,174 63,755 3,890,089
Issue of shares 2,857,143 2,857 997,143
Share issue costs - - (98,800)
As at 31 December 2022 (unaudited) 66,612,317 66,612 4,788,432
On 6 July 2022, the Company issued 2,857,143 ordinary shares of the Company at
35 pence each. At 30 June 2022, these shares were recorded on the statement of
financial position as Shares to be issued. The value of the Shares to be
issued reserve reflected the gross proceeds of the share placement of
£1,000,000, less £98,800 of accrued share issue costs. Upon completion on 6
July 2022 the net value of Shares to be issued was re-allocated to Share
capital and Share premium.
On 15 July 2021 the Company placed 7,500,000 New Ordinary Shares ("the Raise")
at 40p each to raise gross proceeds of £3,000,000, and also issued 125,000
new shares at 40p each to a supplier in part payment of an outstanding bill.
On 15 July 2021 all Convertible Loan Notes ("CLNs") were converted in to
ordinary shares at a price of 28 pence each. In total 3,928,572 ordinary
shares were issued in full discharge of the CLNs.
The ordinary shares confer the right to vote at general meetings of the
Company, to a repayment of capital in the event of liquidation or winding up
and certain other rights as set out in the Company's articles of association.
On 15 July 2021 the Company issued 75,000 warrants over ordinary shares of the
Company at 40 pence each, exercisable at any time over a three year period
from the date of issue. The warrants were valued using the Black-Scholes
pricing model. The inputs into the Black-Scholes model are as follows:
Grant date 15 July 2021
Exercise price 40.00 pence
Expected life 3 years
Expected volatility 77.32%
Risk free rate of interest 0.0242%
Dividend yield Nil
Fair value of option 20.00 pence
Volatility has been estimated based on the historic volatility of a collection
of comparable companies over a period equal to the expected term from the
grant date.
10. Events after the reporting period
Since 31 December 2022, the Company has been focussed on the following
activities:
· Identification of two new prospects with P50 prospective resources of
120 MMbbl and 70 MMbbl (management estimates);
· Increase in P50 technically recoverable resources at the Pilot field
to 97 MMbbl (management estimates);
· Signing of a non-binding heads of terms for the disposal of non-core
projects Crinan and Dandy;
· Lodged three licence applications in the 33(rd) Offshore licencing
round;
· Completion of share placement raising £500,000 before costs through
the issue of 5 million ordinary shares at 10 pence per share.
1 (#_ftnref1) More information on the UK Government's windfall tax scheme
can be found here:
https://www.gov.uk/government/publications/autumn-statement-2022-energy-taxes-factsheet/energy-taxes-factsheet
(https://www.gov.uk/government/publications/autumn-statement-2022-energy-taxes-factsheet/energy-taxes-factsheet)
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