REG - Petro Matad Ltd - Half-year Report
Petro Matad Limited
('Petro Matad' or the 'Company')
Interim results for the six months ended 30 June 2019
LONDON, 3 September 2019: Petro Matad Limited, the AIM quoted Mongolian oil explorer, announces its unaudited interim results for the six months ended 30 June 2019.
Financial Summary
The Group posted a loss of USD 4.41 million for the six-month period ended 30 June 2019, which compares to a loss of USD 6.65 million for the comparable period in 2018. The Company's cash balance at 30 June 2019 was USD 16.12 million (USD 3.79 million in cash and USD 12.33 million in Financial Assets), which compares to a cash balance of USD 15.55 million (USD 12.54 million in cash and USD 3.01 million in Financial Assets) on 30 June 2018.
Following the two successful placings in 2018, no new fund raises have been undertaken in 2019 as the Company's cash resources are sufficient to fully meet the costs of the planned 2019 drilling programme.
Operational Update
The Heron 1 exploration well in the Tamsag Basin of Block XX spudded with the DQE International 40105 rig on 19 July 2019. Land permits for Heron (and Gazelle) have been received and drilling operations continue towards a planned total depth (TD) of 3,050 metres. The well is an appraisal of the T19-46 oil field immediately to the north in Block XIX and is targeting a prospect with 25 MMbo of Mean Prospective Recoverable Resource. The Company expects to be in a position to announce the results of the drilling and logging of the well during the week commencing 9 September 2019.
The Gazelle 1 exploration well will follow Heron 1 after a six-kilometre rig move and will take approximately 35 days to drill and log. The planned TD is 2,500 metres and the Gazelle Prospect has an estimated Mean Prospective Recoverable Resource of 13 MMbo. Gazelle 1 is located updip of Petro China's T19-46-1 oil well on the western flank of the Tamsag Basin which is the primary source kitchen for the fields in Block XIX.
The Red Deer 1 exploration well in the Asgat Sag Basin of Block XX spudded with the Daton Petroleum Engineering and Oilfield Service LLC rig, DXZ1, on 4 August 2019. The well is targeting a prospect with 48 MMbo of Mean Prospective Recoverable Resource. Drilling operations continue towards the planned TD of 2,100 metres. Results from the drilling and logging of the well are expected to be completed by mid-September 2019.
In the event of a discovery in one or more of the 2019 exploration wells, the Company will bring in a separate rig for testing. A call-off testing contract has been signed, which ensures testing operations, if warranted, can commence soon after discovery.
The Company successfully obtained two-year PSC extensions for Blocks IV and V, as was announced on 26 June 2019.
Further operational updates will be provided in due course.
-Ends -
Further information please contact:
Petro Matad Limited
Mike Buck, CEO
+976 7014 1099 / +976 7575 1099
Shore Capital (Nominated Adviser and Broker)
Richard Johnson
Andy Crossley
Toby Gibbs
+44 (0) 20 7408 4090
Stifel Nicolaus Europe Limited (Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
+44 (0) 20 7710 7600
FTI Consulting (Communications Advisory Firm)
Sara Powell
Ben Brewerton
+44 (0) 20 3727 1000
All Reserves and Resources definitions and estimates shown in this report are based on the SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").
Technical information in this news release has been reviewed by the Company's Exploration Manager, Mr. Jerry Smart. He has 37 years of industry experience in oil and gas exploration and production with LASMO, Eni, Salamander Energy and Ophir Energy. He holds a B.Sc. in Geology from King's College, London.
Glossary
MMbo Million barrels of oil
Mean The arithmetic average of the low, mid and high case estimates of recoverable prospective resources
Prospective Resources Estimated volumes associated with undiscovered accumulations. These represent quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from oil and gas deposits identified on the basis of indirect evidence but which have not yet been drilled
TD Total Depth
About Petro Matad
Petro Matad is the parent company of a group focussed on oil exploration, as well as future development and production in Mongolia. At the current time, Petro Matad holds 100% working interest and the operatorship of three Production Sharing Contracts with the Government of Mongolia. Block XX has an area of 10,367 square kilometres in the far eastern part of the country, and Blocks IV and V have an area of 29,062 square kilometres and 21,143 square kilometres, respectively, in the central western part of the country.
Petro Matad Limited is incorporated in the Isle of Man under company number 1483V. Its registered office is at Victory House, Prospect Hill, Douglas, Isle of Man, IM1 1EQ.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 30 JUNE 2019
Consolidated
30 Jun 2019
30 Jun 2018
$'000
$'000
Continuing Operations
Revenue
Interest Income
508
180
Other Income
2
5
510
185
Expenditure
Consultancy fees
(62)
(63)
Depreciation and amortisation
(101)
(144)
Employee benefits expenses
(1,510)
(2,072)
Exploration expenditure
(2,152)
(2,870)
Other expenses
(1,091)
(1,690)
Profit/(Loss) from continuing operations before income tax
(4,406)
(6,654)
Income tax expense
-
-
Profit/(Loss) from continuing operations after income tax
(4,406)
(6,654)
Net Loss
(4,406)
(6,654)
Other comprehensive income/(loss)
Exchange rate differences on translating foreign operations
(1)
(30)
Other comprehensive income/(loss), net of income tax
(1)
(30)
Total comprehensive loss
(4,407)
(6,684)
Profit/(Loss) attributable to owners of the parent
(4,406)
(6,654)
Total comprehensive income/(loss) attributable to owners of the parent
(4,407)
(6,684)
Earnings/(loss) per share (cents per share)
- Basic and diluted earnings/(loss) per share
(0.67)
(1.38)
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Consolidated
30 Jun 2019
31 Dec 2018
30 Jun 2018
$'000
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
3,790
2,111
12,542
Trade and other receivables
42
9
12
Prepayments
220
202
226
Financial assets
12,334
19,161
3,010
Inventory
205
213
216
Total Current Assets
16,591
21,696
16,006
Non-Current Assets
Exploration and evaluation
15,275
15,275
15,275
Property, plant and equipment
319
340
476
Total Non-Current assets
15,594
15,615
15,751
TOTAL ASSETS
32,185
37,311
31,757
LIABILITIES
Current liabilities
Trade and other payables
477
1,286
939
Total Current Liabilities
477
1,286
939
TOTAL LIABILITIES
477
1,286
939
NET ASSETS
31,708
36,025
30,818
EQUITY
Issued capital
143,174
143,174
126,098
Reserves
2,579
2,660
2,942
Accumulated losses
(114,045)
(109,809)
(98,222)
TOTAL EQUITY
31,708
36,025
30,818
CONDENSED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2019
Consolidated
30 Jun 2019
30 Jun 2018
$'000
$'000
Cash flows from operating activities
Payments to suppliers and employees
(5,568)
(8,510)
Interest received
508
180
Net cash flows from/(used in) operating activities
(5,060)
(8,330)
Cash flows from operating activities
Purchase of property, plant and equipment
(87)
(42)
Proceeds of financial assets
6,827
-
Proceeds from the disposal of plant and equipment
-
4
Net cash flows from/(used in) investing activities
6,740
(38)
Cash flows from financing activities
Proceeds from issue of shares
-
15,985
Capital raising costs
-
(218)
Net cash flows from/(used in) financing activities
-
15,767
Net increase/(decrease) in cash and cash equivalents
1,680
7,399
Net foreign exchange differences
(1)
53
Cash and cash equivalents at beginning of period
2,111
5,090
Cash and cash equivalents at end of period
3,790
12,542
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2019
Consolidated
Attributable to equity holders of the parent
Issued Capital
$'000
Accumulated Losses
$'000
Other
Reserves $'000
Total
$'000
As at 1 January 2018
109,769
(91,679)
2,980
21,070
Income/(Loss) for the period
-
(6,654)
-
(6,654)
Other comprehensive income
-
-
(30)
(30)
Total comprehensive income/(loss) for the period
109,769
(98,333)
2,950
14,386
Transactions with owners in their capacity as owners
Issue of share capital
16,895
-
-
16,895
Cost of capital raising
(1,081)
-
-
(1,081)
Share based payments
515
111
(8)
618
As at 30 June 2018
126,098
(98,222)
2,942
30,818
As at 1 January 2019
143,174
(109,809)
2,660
36,025
Income/(Loss) for the period
-
(4,406)
-
(4,406)
Other comprehensive income
-
-
(1)
(1)
Total comprehensive income/(loss) for the period
143,174
(114,215)
2,659
31,618
Transactions with owners in their capacity as owners
Issue of share capital
-
-
-
-
Cost of capital raising
-
-
-
-
Share based payments
-
170
(80)
90
As at 30 June 2019
143,174
(114,045)
2,579
31,708
1. CORPORATE INFORMATION
The financial report covers the consolidated entity of Petro Matad Limited and its controlled entities.
Petro Matad Limited, a company incorporated in the Isle of Man on 30 August 2007 has four wholly owned subsidiaries, including Capcorp Mongolia LLC and Petro Matad LLC (both incorporated in Mongolia), Central Asian Petroleum Corporation Limited ("Capcorp") and Petromatad Invest Limited (both incorporated in the Cayman Islands). Its major shareholder is Petrovis Matad Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the annual Financial Report of Petro Matad Limited as at 31 December 2018. The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2018.
It is also recommended that the half-year financial report is considered together with any public announcements made by Petro Matad Limited and its controlled entities during the half-year ended 30 June 2019.
(a) Basis of Preparation
The half-year consolidated financial report is a general purpose financial report, which has been prepared in accordance with the requirements of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ('IASB'). The half-year financial report has been prepared on a historical cost basis, except where stated.
The financial report is presented in US dollars and all values are rounded to the nearest thousand dollars ($'000).
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
(b) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December each year.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
3. CONTRIBUTED EQUITY
CONSOLIDATED
30 Jun 2019
31 Dec 2018
$'000
$'000
Ordinary shares (i)
662,196,306 shares issued and fully paid
(31 Dec 2018: 662,196,306)
143,174
143,174
143,174
143,174
(i) Ordinary shares
Full paid ordinary shares carry one vote per share and carry the right to dividends.
4. RESERVES
A detailed breakdown of the reserves of the Group is as follows:
Merger reserve
Equity benefits reserve
Foreign currency translation
Total
Consolidated
$'000
$'000
$'000
$'000
As at 1 July 2018
831
3,268
(1,157)
2,942
Currency translation differences
-
-
(32)
(32)
Share based payments
-
(250)
-
(250)
As at 31 December 2018
831
3,018
(1,189)
2,660
Currency translation differences
-
-
(1)
(1)
Share based payments
-
(80)
-
(80)
As at 30 June 2019
831
2,938
(1,190)
2,579
5. EARNINGS/(LOSS) PER SHARE
The following reflects the income and share data used in the total operations basic and diluted earnings/(loss) per share computations:
CONSOLIDATED
30 Jun
2019
30 Jun
2018
Basic earnings/(loss) per share
Total basic earnings/(loss) per share (US$ cents per share) (note a)
(0.67)
(1.38)
Diluted earnings/(loss) per share
Total diluted earnings/(loss) per share (US$ cents per share) (note b)
(0.67)
(1.38)
(a) Basic earnings/(loss) per share
The profit/(loss) and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000)
(4,406)
(6,654)
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
662,196
482,124
(b) Diluted earnings/(loss) per share
The profit/(loss) and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:
Net profit/(loss) attributable to ordinary shareholders (US$'000)
(4,406)
(6,654)
Weighted average number of ordinary shares for the purposes of basic earnings per share ('000)
662,246
482,124
Share Options and Conditional Share Awards could potentially dilute basic loss per share in the future, however they have been excluded from the calculation of diluted loss per share because they are anti-dilutive for both years presented.
6. EVENTS AFTER THE REPORTING DATE
None
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