REG - Petrel Resources PLC - Unaudited Interim Statement
18/09/2023 07:00
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RNS Number : 6721M Petrel Resources PLC 18 September 2023
18 September 2023
Petrel Resources plc
("Petrel" or "the Company")
Unaudited Interim Statement for the six months ended 30 June 2023
Petrel Resources plc (AIM: PET) today announces unaudited financial results
for the six months ended 30(th) June 2023.
Petrel is a hydrocarbon explorer with interests in Iraq, and Ghana.
Highlights
• Petrel has fine-tuned its Iraqi proposals, following feedback. We have
contractors and suppliers identified but seek improved fiscal terms to attract
partners.
• An updated Merjan oil field development proposal has been submitted to the
Ministry with a view to finalising a licence agreement.
• Iraqi oil output fell to 4.2 million barrels daily in July 2023, in line
with OPEC+ output cut agreements. Iraqi potential is substantially higher,
while infrastructural issues are being addressed.
• However, despite strong energy prices, and recovered demand, oil & gas
explorers' shares remain out-of-favour in the London market - though there is
Australian interest.
• Fiscal terms in the Middle East still reflect historical conditions
rather than current market realities. Politicians are slow to agree
contractual terms that maximise value for all parties.
• Ratification discussions on Tano 2A block with Ghanaian authorities
continue - though the authorities have sought to chip away at the acreage and
fiscal terms previously agreed. A new realism seems evident.
Chairman's Statement
Europe is de-industrialising, due to policies generally hostile to reliable
fuels, but global oil & gas demand continues to recover, as Asia recovers
from lock-downs.
The withdrawal of most majors from non-core basins undermined the farm-out
market after 2014. Majors who had entered OPEC country projects, often on
uneconomic terms, now exit marginal or non-core projects as they buy shares
back and issue record dividends instead of exploring.
Institutional reluctance to invest in exploration for reliable fuels
continues. Available funds are from private clients and traders demanding
discounts. We prefer to avoid incurring work commitments requiring dilution
at current prices. We prefer to prepare early-stage projects to farm down
when markets turn.
The world is changing: BRICS+ now have a larger GDP than the G-7. Europe is
declining, but Asia is not. The future is in the Global South (Brazil,
India, Indonesia and China, which, along with Nigeria and Mexico). Australian
brokers and investors have profited through the liquidity of Petrel's sister
company, Clontarf Energy plc. They press Petrel Resources plc to accept
Australian and Asian participation. So far, we have avoided dilution, [but
as we roll out high-potential new projects, and the share price hopefully
rises, it may be attractive to accept funding].
Petrel has assessed various expansion projects, which failed due diligence or
did not deliver funding on satisfactory terms. These included oil and gas, as
well as in new, dynamic sectors. Proposals are many but cash at market rates
is sometimes lacking.
Petrel offers a 23-year AIM record, with potential liquidity and capital
appreciation for robust opportunities. As investors re-focus on 'hard
industries' and cash flow, we veery much consider this is a time of
opportunity.
Financing
The directors and their supporters funded working capital needs, and are
prepared to participate in any necessary, future fundings.
The board expects to add another one or more Non-Executive Director with the
next major deal.
David Horgan
Chairman
17 September 2023
For further information please visit http://www.petrelresources.com/
(http://www.petrelresources.com/) or contact:
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU) No
596/2014 until the release of this announcement. In addition, market soundings
(as defined in MAR) were taken in respect of the matters contained in this
announcement, with the result that certain persons became aware of inside
information (as defined in MAR), as permitted by MAR. This inside
information is set out in this announcement. Therefore, those persons that
received inside information in a market sounding are no longer in possession
of such inside information relating to the company and its securities.
ENDS
For further information please visit http://www.petrelresources.com/
(http://www.petrelresources.com/) or contact:
Petrel Resources
David Horgan, Chairman +353 (0) 1 833 2833
John Teeling, Director
Nominated Adviser and Broker
Beaumont Cornish - Nominated Adviser +44 (0) 020 7628 3396
Roland Cornish
Felicity Geidt
Novum Securities Limited - Broker
Colin Rowbury
+44 (0) 20 399 9400
BlytheRay - PR +44 (0) 207 138 3206
Megan Ray
Said Izagaren +44 (0) 207 138 3553
+44(0)207 138 3208
Teneo
Luke Hogg +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Petrel Resources plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
€'000 €'000 €'000
Administrative expenses (164) (140) (311)
- - -
OPERATING LOSS (164) (140) (311)
LOSS BEFORE TAXATION (164) (140) (311)
Income tax expense - - -
LOSS FOR THE PERIOD (164) (140) (311)
Other comprehensive income - - -
TOTAL COMPREHENSIVE PROFIT FOR THE PERIOD (164) (140) (311)
LOSS PER SHARE - basic and diluted (0.09c) (0.09c) (0.19c)
CONDENSED STATEMENT OF FINANCIAL POSITION 30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
ASSETS: €'000 €'000 €'000
NON-CURRENT ASSETS
Intangible assets 933 933 933
933 933 933
CURRENT ASSETS
Trade and other receivables 30 12 34
Cash and cash equivalents 51 30 166
81 42 200
TOTAL ASSETS 1,014 975 1,133
CURRENT LIABILITIES
Trade and other payables (935) (847) (890)
(935) (847) (890)
NET CURRENT LIABILITIES (854) (805) (690)
NET ASSETS 79 128 243
EQUITY
Share capital 2,223 1,963 2,223
Capital conversion reserve fund 8 8 8
Capital redemption reserve 209 209 209
Share premium 21,812 21,786 21,812
Share based payment reserve 27 27 27
Retained deficit (24,200) (23,865) (24,036)
TOTAL EQUITY 79 128 243
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Capital Share based
Share Share Redemption Conversion Payment Retained Total
Capital Premium Reserves Reserves Reserves Losses Equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000
As at 1 January 2022 1,963 21,786 209 8 27 (23,725) 268
Total comprehensive income - (140) (140)
As at 30 June 2022 1,963 21,786 209 8 27 (23,865) 128
Issue of shares 260 26 - - - - 286
Total comprehensive income - (171) (171)
As at 31 December 2022 2,223 21,812 209 8 27 (24,036) 243
Total comprehensive income - (164) (164)
As at 30 June 2023 2,223 21,812 209 8 27 (24,200) 79
CONDENSED CONSOLIDATED CASH FLOW Six Months Ended Year Ended
30 June 23 30 June 22 31 Dec 22
unaudited unaudited audited
€'000 €'000 €'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period (164) (140) (311)
Foreign exchange 1 2 3
(163) (138) (308)
Movements in Working Capital 49 68 89
CASH USED IN OPERATIONS (114) (70) (219)
NET CASH USED IN OPERATING ACTIVITIES (114) (70) (219)
FINANCING ACTIVITIES
Shares issued - - 286
NET CASH USED IN FINANCING ACTIVITIES - - 286
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (114) (70) 67
Cash and cash equivalents at beginning of the period 166 102 102
Effect of exchange rate changes on cash held in foreign currencies (1) (2) (3)
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 51 30 166
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2023 and the
comparative amounts for the six months ended 30 June 2022 are unaudited.
The interim financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union. The interim
financial statements have been prepared applying the accounting policies and
methods of computation used in the preparation of the published consolidated
financial statements for the year ended 31 December 2022.
The interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the audited consolidated financial statements of the Group
for the year ended 31 December 2022, which are available on the Company's
website www.petrelresources.com (http://www.petrelresources.com)
The interim financial statements have not been audited or reviewed by the
auditors of the Group pursuant to the Auditing Practices board guidance on
Review of Interim Financial Information.
2. No dividend is proposed in respect of the period.
3. GOING CONCERN
The Group incurred a loss for the period of €164,206 (2022: loss of
€310,813) and had net current liabilities of €854,017 (2022: €689,811)
at the balance sheet date. These conditions as well as those noted below,
represent a material uncertainty that may cast significant doubt on the Group
and Company's ability to continue as a going concern.
Included in current liabilities is an amount of €902,531 (2022: €857,531)
owed to key management personnel in respect of remuneration due at the balance
sheet date. Key management have confirmed that they will not seek settlement
of these amounts in cash for a period of at least one year after the date of
approval of the financial statements or until the Group has generated
sufficient funds from its operations after paying its third party creditors.
The Group and Company had a cash balance of €51,098 (2022: €166,309) at
the balance sheet date. Additional finance may be required to fund working
capital requirements and develop existing projects. As the Group is not
revenue or cash generating it relies on raising capital from the public
market.
These conditions as well as those noted below, represent a material
uncertainty that may cast significant doubt on the Group and Company's ability
to continue as a going concern.
As in previous years the Directors have given careful consideration to the
appropriateness of the going concern basis in the preparation of the financial
statements and believe the going concern basis is appropriate for these
financial statements. The financial statements do not include the adjustments
that would result if the Group and Company were unable to continue as a going
concern.
4. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the
year attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue and ranking for dividend during the year. Diluted
earnings per share is computed by dividing the loss after taxation for the
year by the weighted average number of ordinary shares in issue, adjusted for
the effect of all dilutive potential ordinary shares that were outstanding
during the year.
The following table sets out the computation for basic and diluted earnings
per share (EPS):
30 June 23 30 June 22 31 Dec 22
€ € €
Loss per share - Basic and Diluted (0.09c) (0.09c) (0.19c)
Basic and diluted loss per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
€'000 €'000 €'000
Loss for the period attributable to equity holders (164) (140) (311)
Denominator Number Number Number
for basic and diluted EPS 177,871,800 157,038,467 160,919,745
Basic and diluted loss per share are the same as the effect of the outstanding
share options is anti-dilutive.
5. INTANGIBLE ASSETS
30 June 23 30 June 22 31 Dec 22
Exploration and evaluation assets: €'000 €'000 €'000
Opening balance 933 933 933
Additions - - -
Impairment - - -
Closing balance 933 933 933
Exploration and evaluation assets relate to expenditure incurred in
exploration in Ghana. The directors are aware that by its nature there is an
inherent uncertainty in Exploration and evaluation assets and therefore
inherent uncertainty in relation to the carrying value of capitalized
exploration and evaluation assets.
During 2018 the Group resolved the outstanding
issues with the Ghana National Petroleum Company (GNPC) regarding a contract
for the development of the Tano 2A Block. The Group has signed a Petroleum
Agreement in relation to the block and this agreement awaits ratification by
the Ghanaian
government.
Relating to the remaining exploration and
evaluation assets at the financial year end, the directors believe there were
no facts or circumstances indicating that the carrying value of the intangible
assets may exceed their recoverable amount and thus no impairment review was
deemed necessary by the directors. The realisation of these intangible assets
is dependent on the successful discovery and development of economic reserves
and is subject to a number of significant potential risks, as set out below:
· Licence obligations;
· Exchange rate risks;
· Uncertainty over development and operational costs;
· Political and legal risks, including arrangements with Governments for
licences, profit sharing and taxation;
· Foreign investment risks including increases in taxes, royalties and
renegotiation of contracts;
· Financial risk management;
· Going concern and
· Ability to raise finance.
Regional 30 Jun 23 30 Jun 22 31 Dec 22
Analysis
€'000 €'000 €'000
Ghana 933 933 933
6. SHARE CAPITAL
2023 2022
€'000 €'000
Authorised:
800,000,000 ordinary shares of €0.0125 10,000 10,000
Ordinary Shares -nominal value of €0.0125
Allotted, called-up and fully paid
Number Share Capital Share Premium
€'000 €'000
At 1 January 2022 157,038,467 1,963 21,786
Share issue - - -
At 30 June 2022 157,038,467 1,963 21,786
Share issue 20,833,333 260 26
At 31 December 2022 177,871,800 2,223 21,812
Share issue - - -
At 30 June 2023 177,871,800 2,223 21,812
Movements in issued share capital
There was no movement in the issued share capital of the company in the
current period.
7. OTHER RESERVES
Capital Redemption Reserve Capital Conversion Reserve Fund Share Based Payment Reserve
€'000 €'000 €'000
Balance at 1 January 2022 209 8 27
Movement during the year - - -
Balance at 30 June 2022 and 31 December 2022 209 8 27
Movement during the year - - -
Balance at 30 June 2023 209 8 7
Capital redemption reserve
The Capital redemption reserve reflects nominal value of shares cancelled by
the Company.
Capital conversion reserve fund
The ordinary shares of the company were re-nominalised from €0.0126774 each
to €0.0125 each in 2001 and the amount by which the issued share capital of
the company was reduced was transferred to the capital conversion reserve
fund.
Share Based Payment Reserve
The share-based payment reserve arises on the grant of share options under the
share option plan. Share options expired are reallocated from the share-based
payment reserve to retained deficit at their grant date fair value.
8. RETAINED DEFICIT
Retained Deficit
€'000
At 1 January 2022 (23,725)
Profit/)Loss) for the period (140)
At 30 June 2022 (23,865)
Profit/(Loss) for the period (171)
At 31 December 2022 (24,036)
Profit/(Loss) for the period (164)
At 30 June 2023 (24,200)
Retained deficit
Retained deficit comprises of losses incurred
in the current and prior years.
9. POST BALANCE SHEET EVENTS
There are no material post balance sheets events affecting the Group.
10. The Interim Report for the six months to 30(th) June 2023 was approved by
the Directors on 17 September 2023.
11. The Interim Report will be available on the Company's website at
www.petrelresources.com (http://www.petrelresources.com) .
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