REG - Petrel Resources PLC - Unaudited Interim Statement
19/09/2024 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:20240919:nRSS7548Ea&default-theme=true
RNS Number : 7548E Petrel Resources PLC 19 September 2024
19 September 2024
Petrel Resources plc
("Petrel" or "the Company")
Unaudited Interim Statement for the six months ended 30 June 2024
Petrel Resources plc (AIM: PET) today announces unaudited financial results
for the six months ended 30(th) June 2024.
Chairman's Statement
Petrel is a junior hydrocarbon explorer with interests in Iraq and Ghana.
There are now many oil & gas projects available, with promising geology
and manageable logistics.
Demand for oil & oil products, as well as LNG, now surpasses preCovid-19
levels. Despite recent softening, prices are reasonable, and the supply-demand
balance steadily tightens as majors withdraw from non-core basins, focusing on
existing projects - often using cash to pay dividends and buy shares back,
rather than make long-term investments.
However, the fiscal terms available from most states reflect those which
became normal during times of better market conditions (2004 - 2014), but are
sub-optimal for explorers. Many producing countries, including Iraq, are now
talking about improved fiscal terms, but these have not yet been implemented.
As a result, most successful bidders in international bid-rounds tend to be
State Oil Companies, or in some cases majors with excess cash - often bidding
uneconomic fiscal terms.
Neither the stock market nor farm-out market have been supportive of juniors
or new frontier projects since 2014.
Given the improving supply-demand balance, and the clear need for major new
discoveries as existing fields deplete, what explains the negative stance
taken in the stock market?
The reason is that official policy (especially in Europe) has been to support
a 'Green Transition', and to avoid permitting new projects that might became
stranded assets - or lock economies into fossil fuels.
To some extent, this hard line is being reversed with worries over security of
supply following the Ukraine war from 2022 to date. The EU's 'Global Gateway'
(initially conceived to boost development, especially in Africa - as a
response to China's 'Belt and Road' initiative) has now morphed into a means
to secure supplies of 34 critical minerals, of which 17 are 'strategic'.
The USA passed its 'Inflation Reduction Act' in 2022, followed by the EU's
Critical Resource Minerals Act in 2024. The directors have been working
closely with the EU Commission's Critical Resource Minerals initiative since
2023. The opportunity is infinite, due to the paucity of EU companies
experienced in exploration and development especially in developing countries,
which require special skills that are not easily developed. Infrastructural
investment may be funded up to 50% of total through EU, or Member States'
lending bodies at circa 3.3% interest over 20 years. For qualifying 'Green
Projects' up to 80% is possible. Typically, for new projects in new areas
capex comprises 67% infrastructure, with plant, etc. making up the 33%
balance.
Petrel Resources plc, which is an Irish and EU company, has been encouraged to
apply its skills and contacts to help resolving the EU's critical need to
reduce dependency on Chinese-controlled mining and processing of strategic raw
materials. Given current market conditions, this makes sense for shareholders
and the EU.
Accordingly, our team has invested time and effort, over recent months, in
researching qualifying projects that fit within the EU's criteria.
Currently, the most advanced opportunities identified comprise adequate
sources of Helium, which is increasingly critical to high-tech and aerospace
industries. Though our petroleum contacts, we are aware of bypassed
discoveries, in the Former Soviet Union (FSU) and elsewhere, that show large
volume, high confidence reserves ideally suited to fulfil EU needs.
Historically, most major Helium (and indeed natural Hydrogen) discoveries have
been made - largely by accident - via oil & gas exploration. For reasons
of prevailing economics and demand at the time, most of these discoveries have
yet to be developed.
In light of current sanctions, it is impractical to develop such Helium (or
Cobalt or Lithium) deposits in Russia or Iran. However, jurisdictions such
as Kazakhstan are considered pro-western, and the EU has recently signed a
Strategic Cooperation Agreement with the Kazakh government, so this is now an
EU priority. The required gas exploration and production skills are closely
related to those familiar to our team from the petroleum industry. There seems
to be excellent potential opportunities for Petrel in such assets, subject to
securing necessary funding.
Initial review work gives our experts confidence in the reserve and resource
numbers. Potential offtake agreements - both for the EU, as well as China and
India are economic at current prices. Title is an issue in the FSU, though
many projects have proved solid and delivered good returns where the operator
is well-partnered and pays attention to local community relations. These are
Petrel's strengths.
Based on initial discussions, we do not see offtake, financing, and permitting
as insurmountable obstacles in such critical resources.
The EU has funding and needs critical resource minerals. We believe that we
have the contacts, skills and experience to deliver them.
Accordingly, it makes sense for Petrel to pivot, at least partially, away from
a pure petroleum focus in developing countries, and towards critical resources
for which EU support is available.
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
18 September 2024
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
Strand Hanson Limited - Nominated & +44 (0) 20 7409 3494
Financial Adviser
Richard Johnson
James Bellman
Robert Collins
Novum Securities Limited - Broker
Colin Rowbury
+44 (0) 20 399 9400
BlytheRay - PR +44 (0) 207 138 3204
Megan Ray
Said Izagaren
Teneo
Fia Long +353 (0) 1 661 4055
Alan Reynolds
Luke Hogg
Alan Tyrrell
Petrel Resources plc
Financial Information (unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Ended Year Ended
30 June 24 30 June 23 31 Dec 23
unaudited unaudited audited
€'000 €'000 €'000
Administrative expenses (155) (164) (304)
Impairment of exploration and evaluation assets (74) - (187)
OPERATING LOSS (229) (164) (491)
LOSS BEFORE TAXATION (229) (164) (491)
Income tax expense - - -
LOSS FOR THE PERIOD (229) (164) (491)
Other comprehensive income - - -
TOTAL COMPREHENSIVE PROFIT FOR THE PERIOD (229) (164) (491)
LOSS PER SHARE - basic and diluted (0.12c) (0.09c) (0.28c)
CONDENSED STATEMENT OF FINANCIAL POSITION At 30 June 24 At 30 June 23 At 31 Dec 23
unaudited unaudited audited
€'000 €'000 €'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets 672 933 746
672 933 746
CURRENT ASSETS
Trade and other receivables 22 30 10
Cash and cash equivalents 13 51 36
35 81 46
TOTAL ASSETS 707 1,014 792
CURRENT LIABILITIES
Trade and other payables (1,057) (935) (1,019)
(1,057) (935) (1,019)
NET CURRENT LIABILITIES (1,022) (854) (973)
NET ASSETS (350) 79 (227)
EQUITY
Share capital 2,298 2,223 2,236
Capital conversion reserve fund 8 8 8
Capital redemption reserve 209 209 209
Share premium 21,864 21,812 21,820
Share based payment reserve 27 27 27
Retained deficit (24,756) (24,200) (24,527)
TOTAL EQUITY (350) 79 (227)
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 2023 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
Issue of shares 13 8 21
Total comprehensive income - (327) (327)
As at 31 December 2023 2,236 21,820 209 8 27 (24,527) (227)
Issue of shares 62 44 106
Total comprehensive income - (229) (229)
As at 30 June 2024 2,298 21,864 209 8 27 (24,756) (350)
CONDENSED CONSOLIDATED CASH FLOW Six Months Ended Year Ended
30 June 24 30 June 23 31 Dec 23
unaudited unaudited audited
€'000 €'000 €'000
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period (229) (164) (491)
Impairment 74 - 187
Foreign exchange 1 1 1
(154) (163) (303)
Movements in Working Capital 26 49 153
CASH USED IN OPERATIONS (128) (114) (150)
NET CASH USED IN OPERATING ACTIVITIES (128) (114) (150)
FINANCING ACTIVITIES
Shares issued 106 0 21
NET CASH USED IN FINANCING ACTIVITIES 106 0 21
NET DECREASE IN CASH AND CASH EQUIVALENTS (22) (114) (129)
Cash and cash equivalents at beginning of the period 36 166 166
Effect of exchange rate changes on cash held in foreign currencies (1) (1) (1)
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 13 51 36
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2024 and the
comparative amounts for the six months ended 30 June 2023 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 2023.
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 2023, 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 €229,585 (FY2023: loss of
€491,086) and had net current liabilities of €1,022,121 (2023: €973,503)
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 €992,531 (31 December 2023:
€947,531) 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 €13,248 (31 December 2023:
€35,667) at the balance sheet date. The directors have prepared cashflow
projections for a period of at least twelve months from the date of approval
of these financial statements which indicate that additional finance will 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 24 30 June 23 31 Dec 23
€ € €
Loss per share - Basic and Diluted (0.12c) (0.09c) (0.28c)
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 (229) (164) (491)
Denominator Number Number Number
for basic and diluted EPS 183,693,718 177,871,800 177,899,197
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 24 30 June 23 31 Dec 23
Exploration and evaluation assets: €'000 €'000 €'000
Opening balance 746 933 933
Additions - - -
Impairment (74) - (187)
Closing balance 672 933 746
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 capitalised
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 Ghanian government.
As ratification has not yet been achieved in the
current year the directors, as a matter of prudence, opted to write down a
portion of the carrying value of the Tano 2A Block historic expenditure.
Accordingly, an impairment charge of €74,653 (FY2023: €186,633) was
recorded in the current period.
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 24 30 Jun 23 31 Dec 23
Analysis
€'000 €'000 €'000
Ghana 672 933 746
6. SHARE CAPITAL
2024 2023
€'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 2023 177,871,800 2,223 21,812
Share issue - - -
At 30 June 2023 177,871,800 2,223 21,812
Share issue 1,000,000 13 8
At 31 December 2023 178,871,800 2,236 21,820
Share issue 5,000,000 62 44
At 30 June 2024 183,871,800 2,298 21,864
Movements in issued share capital
On 3 January 2024 and 5 January 2024 a total of 5,000,000 warrants were
exercised at a price of 1.8p per warrant.
7. POST BALANCE SHEET EVENTS
There are no material post balance sheets events affecting the Group.
8. The Interim Report for the six months to 30(th) June 2024 was
approved by the Directors on 18 September 2024.
9. The Interim Report will be available on the Company's website at
www.petrelresources.com (http://www.petrelresources.com) .
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 GPUQCBUPCGARRecent news on Petrel Resources
See all newsREG - Petrel Resources PLC - Placing to Raise £250,000
AnnouncementREG - Petrel Resources PLC - Unaudited Interim Statement
AnnouncementREG - Petrel Resources PLC - Result of Annual General Meeting
AnnouncementREG - Petrel Resources PLC - Posting of Annual Report and Notice of AGM
AnnouncementREG - Petrel Resources PLC - Preliminary Results for the Year Ended 31 Dec 2023
Announcement