REG - Pennpetro Energy PLC - Interim Results for six months ended 30 Sept 2023
28/12/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231228:nRSb9796Xa&default-theme=true
RNS Number : 9796X Pennpetro Energy PLC 28 December 2023
Trading Symbols
LSE: PPP
RNS: 9853X
28 December 2023
Pennpetro Energy PLC
("Pennpetro" or "the Company")
Unaudited Consolidated Interim Results for the six months ended 30 September
2023
Pennpetro Energy plc (LSE: PPP), an independent oil and gas company focusing
on production in the Gonzales County in Texas, USA, is pleased to announce its
financial results for the six months ended 30 September 2023 (the "Period").
The full Interim Results, with accompanying notes, are available on the
Company's website: www.pennpetroenergy.co.uk
(http://www.pennpetroenergy.co.uk) .
David Lenigas, Executive Chairman and Thomas Evans, Chief Executive Officer,
commented:
During the Period:
· Whistling Straits #5H well was drilled to its total depth of 10,195
feet MD by the operator Millennium PetroCapital Corporation ("Millennium")
under the original farm in arrangement whereby Pennpetro was spending 33% of
the well costs for a net 25% working interest.
· Millennium put the well to test using a JET pumping arrangement in
April that proved unsuccessful in lifting the drill fluids for the well.
· In June, Pennpetro signed a series of agreements with Millennium to
increase its stake in the Whistling Straits 5H well from a 25% working
interest ("WI") to a 100% WI and to assume operatorship of the well with
immediate effect in addition to 2,036.38 acres of oil leases. This acquisition
was completed in July.
· Pennpetro also has the exclusive right to acquire a 100% working
Interest in two nearby Chalk Talk wells (Chalk Talk 1H and Chalk Talk 4H) for
no additional costs, if Nobel determines that production can be restored to
one or both wells within a 90-day evaluation period. This option to acquire
100% of these Chalk Talk wells was exercised in July.
Post Period:
· Pennpetro embarked on a workover of its Chalk Talk #1H ("CT1H") well
in October and commenced an extended well test on 1 November.
· November oil production from CT1H was 4,827 barrels at an average of
161 Barrels of oil per day ("bopd").
· Oil sales for the month of November totalled 4,599.08 barrels.
· Pennpetro put in place an oil sales agreement that sees the oil it
sells for the any month paid to Nobel Petroleum, its 100% Texas subsidiary, on
the 20(th) day of the following month.
· Net cash received for November's oil production (after tax) was
US$329,658.09 which equates to US$255,032.62 net revenue interest (after taxes
and royalties).
· Extended well testing of CT1H continues.
· The workover of Chalk Talk 4H well commenced on 8 December and is
ongoing.
Financial Highlights
In the six months ended 30 September 2023, the Company made an operating loss
of US$1,191,601 (30 June 2022: US$250,000) and a basic and diluted loss per
share of US$(1.22) (30 June 2022: US$(0.26).
In June - to fund the new well acquisitions and workovers - the Company placed
5,800,000 new ordinary shares of £0.01 each in the Company and 9,200,000
existing ordinary shares of £0.01 each in the Company transferred by existing
shareholders unconnected to any director, at a placing price of 2 pence each
to raise £300,000 (before expenses).
Overview of Operations
Post Period Events
Horse Hill Farm-in
Post the end of the 31 September 2023 reporting period, Pennpetro) announced
that it has agreed to extend the binding Horse Hill farm-in term sheet
("Agreement") with UKOG (137/246) Ltd and Horse Hill Developments Ltd
("HHDL"), both subsidiaries of UK Oil & Gas plc (collectively "UKOG")
until 30 June 2024.
The Horse Hill Oil Field ("Horse Hill"), located about 2 km north of Gatwick
airport.
The Agreement, as originally announced on 28 March 2023, enables PPP to
farm-in to the Horse Hill Oil Field on an incremental production only basis
via funding 100% of the acquisition of a twelve square km 3D seismic survey
and the drilling of the next crestal infill production well, designated as
HH-3.
The Agreement's binding farm-in terms, which are subject to certain conditions
as outlined below, cover the drilling of a new crestal infill well, designated
Horse Hill-3 ("HH-3"), to be spudded after the completion of a Pennpetro
funded high-definition 3D seismic survey. On completion of HH-3, Pennpetro
will receive a 49% share of all production derived from Horse Hill-3 and
future wells plus a 49% interest in the Licences. UKOG's subsidiaries will
retain their current interests in all oil production from Horse Hill-1
("HH-1") and HHDL will remain as the named Licence operator.
About Horse Hill Oil Field
As previously reported in the Pennpetro Energy RNS dated 28 March 2023.
"Following its discovery in 2014, Horse Hill was successfully production
tested in the Upper Portland sandstone and underlying Kimmeridge limestone
section from 2016 through to the start of long-term continuous Portland
production in 2020. UKOG advise that, as of mid-March 2023, continuing oil
production from HH-1 totalled an aggregate of over 185,000 barrels of 35 ̊-
41 ̊ API sweet crude. Full planning and environmental consents are in place
for four additional infill production wells.
A 2018 Xodus CPR for UKOG estimated a gross mid case P50 Portland oil in place
("OIP") of 30 million barrels, with a corresponding mid-case 2C recoverable
Contingent Resource of 1.5 million barrels. The estimated mid case 5% recovery
factor being stated as in accord with other analogous fields in the Weald
Basin. It should be noted that the recovery factor being stated as in accord
with other analogous fields in the Weald Basin. It should be noted that the
total HH-1 Portland production to date potentially leaves around 1.36 million
barrels of the estimated mid-case recoverable Portland resource available to
infill drilling and remaining HH-1 production.
In addition to the 132,000 barrels of 35-36 ̊ API Portland continuous
production as at mid-March 2023, approximately 53,000 barrels of 41 ̊ API
sweet crude were produced from multiple zones within the Kimmeridge limestones
during production testing, before being shut in to allow for longer term
Portland production. In 2015 a Schlumberger report calculated an estimated
mean OIP of 8.262 billion barrels lying within the entire Kimmeridge section
underlying the Licences.
Note: OIP should not be construed as either recoverable Contingent resources
or Reserves. The Kimmeridge therefore remains a potentially viable secondary
production target at Horse Hill."
Outlook
In line with our strategy, all our operations are in highly active hydrocarbon
plays where the potential economics of drilling and producing oil remain
attractive at sub-US$30 oil prices.
Our initial workovers at Chalk Talk 1H and Chalk Talk 4H have proved
successful for Pennpetro and are now generating solid cashflow.
Our plan beyond these initial workovers is to review and expedite the
workovers in 2024 on the Whistling Straits #5H and City of Gonzales #1 wells.
Pennpetro's new ventures announced since March of this year are
transformational for Pennpetro and we see excellent opportunity for growth in
2024. The board takes this opportunity to thank shareholders, old and new, its
management, consultants, and advisers for their continued support and if the
current oil price environment holds up this year it and allows the Company to
move towards it aims of being a positive cashflow oil developer and producer.
For further information please visit the Company's website
www.pennpetroenergy.co.uk (http://www.pennpetroenergy.co.uk) or follow us on
twitter @pennpetro or contact:
Pennpetro Energy PLC: tme@pennpetroenergy.com (mailto:tme@pennpetroenergy.com)
Tom Evans, CEO
David Lenigas, Chairman +44 (0) 7881825378
lenigas@monaco-capital.com
Brokers: +44 (0) 207 614 5900
Zeus Capital
Simon Johnson
Peterhouse Capital Limited
Lucy +44 (0) 20 7469 0930
Williams
+44 (0) 20 7220 9797
Duncan Vasey
+44(0) 207 129 1474
Flagstaff Strategic and Investor Communications
pennpetro@flagstaffcomms.com
Tim Thompson
Alison Allfrey
Anna Probert
Notes to Editors:
Pennpetro Energy is an independent oil and gas company focusing on production
in the Gonzales Oil Field in Texas, USA. Shares in the company were admitted
to the Official List of the London Stock Exchange by way of a Standard Listing
on 21 December 2017 with the ticker symbol "PPP".
Its wholly owned subsidiary, Nobel Petroleum USA Inc. has a 100% Working
Interest in 2,036.38 acres in Gonzales County in Texas. These acres include
the Whistling Straits #5 well and the Chalk Talk #1H and #4H wells. Noble also
has a Participation, Development and Option Agreement and Joint Operating
Agreement with Texas based Millennium PetroCapital Corporation over a
250,000-acre Area of Mutual Interest in Gonzales County, Texas, aimed at
exploiting the prolific proven Austin Chalk oil and gas play. Pennpetro Energy
has also recently signed a conditional binding agreement to conduct a new 3D
seismic survey on the Horse Hill Oil Field near London's Gatwick Airport which
paves the way to drilling the next production well (HH-3) for 49% of the
revenue of this proposed well.
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 30 September 2023 Unaudited 6 months to 30 June 2022 Unaudited
$'000 $'000
Continuing operations
Other income - -
Administration expenses (1,147) (60)
Operating Loss (1,147) (60)
Other net gains/(losses) - -
Profit/(Loss) Before Interest and Income Tax (1,147) (60)
Net finance costs (45) (145)
Corporation tax expense - -
Profit/(Loss) for the period (1,192) (205)
Profit/(Loss) attributable to:
- owners of the Group - -
Profit/(Loss) for the period (1,192) (205)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Currency translation differences (102) 299
Total comprehensive income (1,294) 94
Attributable to:
- owners of the Group - -
Total comprehensive income (1,294) 94
loss per share (cents) from continuing operations attributable to owners of (1.22) (0.26)
the Parent - Basic and diluted
CONDENSED CONSOLIDATED BALANCE SHEET
Notes As at As at As at
30 September 2023 31 March 2023 Audited 30 June 2022
Unaudited $'000 Unaudited
$'000 $'000
Non-Current Assets
Property, plant and equipment 1,485 1,485 1,384
Intangible assets 4 4,234 4,234 4,234
5,719 5,719 5,618
Current Assets
Trade and other receivables 314 315 308
Short term investments 360 82 93
Cash and cash equivalents 3 47 1
677 444 402
Total Assets 6,396 6,163 6,020
Non-Current Liabilities
Borrowings 4,478 4,018 4,257
Current Liabilities
Trade and other payables 801 967 1,115
Total current Liabilities 801 967 1,115
Total Liabilities 5,279 4,985 5,412
Net Assets 1,117 1,178 608
Equity Attributable to owners of the Company
Share Capital 1,242 1,079 928
Share Premium 8,090 6,611 4,302
Convertible reserve 4,173 4,173 5,776
Reorganisation reserve (6,578) (6,578) (6,578)
Foreign exchange translation reserve 97 226 306
Retained losses (5,907) (4,333) (4,126)
Total equity attributable to owners of the Company 1,117 1,178 608
Total Equity 1,117 1,178 608
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share capital Share premium Foreign exchange translation reserve Retained losses Total equity
$'000 $'000 Reorganisation reserve $'000 $'000 $'000
Convertible reserve $'000
$'000
As at 31 December 2021 979 4,122 6,022 (6,578) 7 (3,921) 630
Comprehensive income
(Loss) for the period - - (246) - - (205) (451)
Other comprehensive income
Currency translation differences - - - - 299 - 299
Total comprehensive income - - (246) - 299 (205) (152)
Issue of ordinary shares - 181 - - - - 181
Share issue costs (51) - - - - - (51)
Total transactions with owners (51) (181) - - - - 130
As at 30 June 2022 928 4,302 5,776 (6,578) 306 (4,126) 608
Share capital Share premium Foreign exchange translation reserve Retained losses Total equity
$'000 $'000 Reorganisation reserve $'000 $'000 $'000
Convertible reserve $'000
$'000
As at 1 April 2023 1,079 6,611 4,173 (6,578) 199 (4,306) 1,178
Comprehensive income
(Loss) for the period - - - - - (1,192) (1,192)
Other comprehensive income
Currency translation differences - - - - (102) (409) (511)
Total comprehensive income - - - - (102) (1,601) (1,703)
Issue of ordinary shares 193 1,849 - - - - (2,042)
Share based payments (30) (370) - - - - (400)
Total transactions with owners 163 1,479 - - - - 1,642
As at 30 September 2023 1,242 8,090 4,173 (6,578) 97 (5,907) 1,117
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
30 September 2023 Unaudited 30 June 2022 Unaudited
$ $
Note
Cash flows from operating activities
Loss before taxation (1,192) (205)
Adjustments for:
Depreciation - -
Exchange difference (107) 442
(Increase) in trade and other receivables 1 (2)
Increase in trade and other payables 166 844
Net cash used in operations (1,132) 1,079
Cash flows from investing activities
Disposal of short term investments (442) -
Purchase of intangible assets - -
Purchase of fixed assets - -
Net cash used in investing activities (442) -
Cash flows from financing activities
Proceeds from issue of ordinary shares 1,643 -
Proceeds from borrowings - 274
Share based payment charge (22) -
Finance costs (45) 145
Net cash from financing activities 1,576 419
Increase in cash and cash equivalents 2 (1)
Cash and cash equivalents at beginning of period 47 2
Exchange differences on cash 46 -
Cash and cash equivalents at end of period 3 1
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. General Information
The principal activity of Pennpetro Energy PLC ('the Company') and its
subsidiaries (together 'the Group') is an oil and gas developer with assets in
Texas, United States. The Company's US-based subsidiaries own a portfolio of
leasehold petroleum mineral interests centred on the City of Gonzales, in
southeast Texas, comprising the undeveloped central portion of the Gonzales
Oil Field. The Company's shares are listed on the standard market of the
London Stock Exchange. The Company is incorporated and domiciled in England
and Wales.
The address of the Company's registered office is 20b Wilton Row, London, SW1X
7NS.
2. Basis of Preparation
The consolidated interim financial statements have been prepared in accordance
with the requirements of the LSE Rules for Companies. As permitted, the
Company has chosen not to adopt IAS 34 "Interim Financial Statements" in
preparing this interim financial information. The consolidated interim
financial statements should be read in conjunction with the annual financial
statements for the year ended 31 March 2023, which have been prepared in
accordance with UK-adopted International Accounting Standards ("UK-adopted
IAS").
The consolidated interim financial statements set out above does not
constitute statutory accounts. They have been prepared on a going concern
basis in accordance with the recognition and measurement criteria of
UK-adopted IAS. Statutory financial statements for the year ended 31 March
2023 were approved by the Board of Directors on 18 October 2023.
The consolidated interim financial statements are presented in United States
dollars as the Company believes it to be the most appropriate and meaningful
currency for investors. The functional currency of the Company is pounds
sterling, and the functional currency of the US based subsidiaries is US
Dollar.
Going concern
The Directors have prepared cashflow forecasts as part of their assessment of
the going concern position of the Company and Group. The Board of Directors
have considered these forecasts and have a reasonable expectation that the
Company and Group has adequate resources to continue in operational existence
through to 30 November 2024 as projected.
The factors that were extant at 31 March 2023 are still relevant to this
report and as such reference should be made to the going concern note and
disclosures in the 2023 Annual Report.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business.
The key risks that could affect the Group's medium-term performance and the
factors that mitigate those risks have not substantially changed from those
set out in the Group's 2023 Annual Report and Financial Statements, a copy of
which is available on the Group's website: https://www.pennpetroenergy.co.uk.
The key financial risks are liquidity risk, market risk, foreign exchange risk
and credit risk.
Critical accounting estimates
The preparation of condensed interim financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities, income and expenses, and disclosure of contingent assets and
liabilities at the end of the reporting period. Significant items subject to
such estimates are set out in note 4 of the Group's 2023 Annual Report and
Financial Statements. Actual amounts may differ from these estimates. The
nature and amounts of such estimates have not changed significantly during the
interim period.
3. Accounting Policies
The same accounting policies, presentation and methods of computation have
been followed in these condensed interim financial statements as were applied
in the preparation of the Group's annual financial statements for the year
ended 31 March 2023 except for the impact of the adoption of the Standards and
interpretations described below and new accounting policies adopted as a
result of changes in the Group.
3.1. Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for the financial
periods beginning on or after 1 January 2023
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the period
ended 30 September 2023 but did not result in any material changes to the
Financial Statements of the Group.
b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 1 and IFRS Practice Statement 2 (Amendments) Disclosure of Accounting Policies 1 January 2023
IAS 8 (Amendments) Accounting estimates 1 January 2023
IAS 12 (Amendments) Income taxes 1 January 2023
IFRS 17 Insurance contracts 1 January 2023
IAS 1 (Amendments) Classification of Liabilities as Current or Non-Current 1 January 2024
The Group is evaluating the impact of the new and amended standards
above which are not expected to have a material impact on future Group
Financial Statements.
4. Intangible assets
Cost and Net Book Value $
Balance as at 31 December 2021 4,234
Additions -
Balance as at 30 June 2022 4,234
Balance as at 1 April 2023 4,234
Additions -
As at 30 September 2023 4,234
5. Loss per share
The calculation of loss per share is based on a retained loss of $1,191,601
for the six months ended 30 September 2023 (six months ended 30 June 2022:
$205,000) and the weighted average number of shares in issue in the period
ended 30 September 2023 of 97,361,726 (six months ended 30 June 2022:
78,846,153).
6. Approval of interim financial statements
The condensed interim financial statements were approved by the Board of
Directors on 28 December 2023.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAPAXAEFDFFARecent news on Pennpetro Energy
See all newsREG - Pennpetro Energy PLC - Corporate Update
AnnouncementREG - Pennpetro Energy PLC - Adjournment of Annual General Meeting
AnnouncementREG - Pennpetro Energy PLC - Adjournment of AGM
AnnouncementREG - Pennpetro Energy PLC - Appointment of Chief Executive Officer
AnnouncementREG - Pennpetro Energy PLC - Notice of Annual General Meeting
Announcement