REG - Westmount Energy Ld - Interim Results
29/03/2022 07:00
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RNS Number : 2963G Westmount Energy Limited 29 March 2022
29 March 2022
WESTMOUNT ENERGY LIMITED
("Westmount" or the "Company")
Interim Results
Westmount Energy Limited (UK AIM: WTE.L, USA OTCQB: WMELF), the AIM-quoted oil
and gas investment company focussed on the Guyana-Suriname Basin is pleased to
announce its unaudited Interim Results for the six months ended 31 December
2021.
Copies of the Company's interim results are available on the Company's
website, www.westmountenergy.com, and will be posted to shareholders shortly.
2021 Highlights
· Groundwork continues for the next drilling campaigns on the
Kaieteur and Canje blocks via detailed analysis and integration of sub-surface
data acquired in the 2020-2021 drilling campaign and the reassessment of play
and prospect risks
· Environmental permitting process is ongoing at the Guyanese EPA
with respect to potential new drilling programs on the Canje and Kaieteur
blocks from 2022
· High quality reservoirs identified in first drilling campaign on
Kaieteur and Canje blocks - but no standalone commercial discoveries to date
· Tanager-1 Discovery contains gross 65.3 MMbbls (42.7 MMbbls Net
to Kaieteur Block) contingent resources (2C, unrisked)(2) in high quality
Maastrichtian reservoir - but is non-commercial as a standalone development
· Cash balance of £1.1M at 31 December 2021; no debt
· Sector consolidation manoeuvres - proposed 'all paper'
acquisition of JHI Associates Inc. by Eco (Atlantic) Oil & Gas Ltd.
CHAIRMAN'S REVIEW
Although the COVID-19 pandemic continued to ebb and flow throughout the 2(nd)
half of 2021 a rapid global economic recovery was underway by year end,
sparking tightening supply chains, increased inflationary pressures and rising
interest rates. Within the oil sector these forces translated into robust
demand, struggling supply even within the OPEC+ disciplinary framework and
dwindling stockpiles. With the booming demand for oil and gas, accentuated in
part by poor regional performance of some renewable sources of energy,
outpacing supply, prices continued to surge with Brent settling above
USD$91/bbl by the end of January 2022. All of this prior to the emergence of
geopolitical turmoil sparked by the Russian invasion of Ukraine on 24 February
2022, with increased volatility and oil price rises accelerating thereafter,
briefly touching USD$140/bbl for Brent in early March. Oil prices continue to
rally on the back of coordinated sanctions imposed by western governments and
businesses, including an outright ban on Russian energy imports by the US
administration, a phasing out of Russian oil imports by the UK before year end
and ongoing discussions within the EU where some members risk considerable
economic pain if such a ban is agreed.
During the second half of the year Guyana has continued its journey towards
becoming a significant oil producing nation with rapidly progressing offshore
developments, including the expected installation of at least six Floating
Production Storage and Offloading (FPSO) units on the Stabroek Block by 2027
(with a production capacity of more than 1 million BOPD) and the potential for
up to 10 FPSOs based upon the current discovered resource inventory of in
excess of 10 billion barrels of oil equivalent.(1,2) Three of these FPSOs
are already operating or are under construction - with the Liza Phase 1
(Destiny FPSO) expected to reach a production rate of 140,000 BOPD during 2022
(20,000 BOPD above nameplate capacity), Liza Phase 2 (Unity FPSO) on stream
since February 2022 with ramp-up to its full production capacity of 220,000
BOPD expected later in the year and with a third field development, Payara
(Prosperity FPSO), also with 220,000 BOPD capacity, on track for start-up in
2024. In addition, the Stabroek consortium has submitted a 4(th) development
plan for government and regulatory review, with respect to the Yellowtail
discoveries, targeting a gross production capacity of 250,000 BOPD and first
oil in 2025. A number of follow-on developments are also envisaged, including
a 5th project centred on the Uaru discovery(1), subject to government
approvals and project sanctioning.
In parallel with the development of the already discovered resource offshore
Guyana, the multi-billion barrels undiscovered upside in the basin continues
to attract aggressive exploration investment, driven by large prospects, low
breakeven costs, low carbon emissions and the energy transition dynamics. In
October 2021, on the back of a string of exploration successes, estimates of
gross discovered resources on the Stabroek Block were revised upwards to
approximately 10 billion barrels of oil equivalent. The preceding exploration
drilling 'purple patch' included discoveries at Redtail-1, Yellowtail-2,
Uaru-2, Mako-2, Longtail-3, Turbot-2, Whiptail-1, Whiptail-2, Pinktail-1 and
Cataback-1 bringing the total number of reported significant discoveries to
date on the Stabroek Block to twenty-one. This successful run has continued
into the new year with two further discoveries (Fangtooth-1 and Lau Lau-1)
announced in early January 2022.(2) The positive outcome at Fangtooth-1 is of
particular significance as this was the first well dedicated to a deep
exploration target in the Stabroek area, with the results indicating the
potential for commercial exploitation of the deeper plays and offering
encouragement for the drilling of deep targets elsewhere in the basin,
including on the Kaieteur and Canje Blocks. Furthermore, a follow-up well,
Tarpon-1, has been spudded on Stabroek circa 100 kms to the northwest of the
Liza Field targeting Lower Campanian clastics and a deeper Jurassic carbonate
play. This is one of 12 exploration and appraisal wells scheduled for
drilling on the Stabroek Block in 2022(2) - signalling continued aggressive
evaluation of the multi-billion barrels exploration potential in the basin
within fixed prospecting licence timeframes.
Separately, in January 2022, the Joint Venture of CGX Energy Inc. and Frontera
Energy Corporation reported the Kawa-1 discovery located in the north of the
Corentyne Block. This well was spudded in a water depth of 355 metres and
drilled to a Total Depth of 6,578 metres. Wireline logging indicates that the
well encountered 61m of net hydrocarbon bearing reservoirs within
Maastrichtian, Campanian, Santonian and Coniacian intervals. Reservoir fluids
are uncertain as MDT fluid samples were not obtained from the well, though the
presence of liquid hydrocarbons has been interpreted in the Santonian
reservoir, from other analyses.(3) Kawa-1 was plugged and abandoned and the
commercial potential of the discovery has yet to be determined. The Joint
Venture is planning to follow-up with the Wei-1 exploration well, in the
second half of 2022, targeting stacked Campanian and Santonian channel
sandstone reservoirs.
In the Surinamese sector, the Total/Apache consortium has increased the number
of discoveries on Block 58 from four to five with the announcement of the
Krabdagu-1 discovery in February 2022(4). Prior stacked reservoir discoveries
on Block 58 reported generally light oil and gas-condensate pay in shallower
Campanian reservoirs overlying light oil pay in deeper Santonian reservoirs -
pointing towards some potential challenges around valorization of large
associated gas volumes. The Krabdagu-1 well encountered 90 metres of net oil
pay in good quality Maastrichtian and Campanian reservoirs and is currently
undergoing flow testing. Total, as operator, continues to focus on appraisal
of the shallower Maastrichtian-Campanian reservoirs with a view to progression
towards FID for the initial standalone oil development on Block 58. Results at
Sapakara South-1 appraisal well, drilled 4 kms east of the Sapakara-1
discovery well, were announced in November 2021 - confirming the presence of
30m net high-quality black oil in Maastrichtian-Campanian sandstones which
flowed 4,800 BOPD during a restricted flow test, with analysis indicating a
connected in-place resource of more than 400 MMbbls in a single reservoir.
However, disappointing Maastrichtian-Campanian appraisal outcomes were
reported during the period on the eastern side of Kwaskwasi and at Keskesi
South-1.(4) In addition, during November 2021, the Total/Apache consortium
reported a non-commercial discovery at the Bonboni-1 exploration well in the
north of Block 58. This well encountered high quality water bearing reservoirs
in the primary Maastrichtian-Campanian targets though a single Maastrichtian
sandstone contained 16m of net oil pay with an estimated 25(o)API oil gravity.
Exploration drilling results continue to support the presence of multiple
plays, quality reservoirs and the potential for stacked-pay drilling
opportunities within the basin. Although the Upper Cretaceous
Maastrichtian-Campanian Liza play dominates in terms of number of discoveries
and discovered volumes to date the deeper Santonian pools on Block 58, in
conjunction with the deeper hydrocarbons reported at Liza-3, Tripletail-1,
Yellowtail-2, Uaru-2, Turbot-2, Longtail-3, Hassa-1 and Fangtooth-1 on the
Strabroek Block, together with the hydrocarbon shows reported at Sapote-1 on
the Canje Block, and the logged net pay in the Santonian-Coniacian intervals
at Kawa-1 on the Corentyne Block, all suggest an extensive emerging deeper
play fairway within the basin. Additional deep drilling with multiple targets
is scheduled for 2022 at Beebei Potaro-1 (Repsol, Kanuku Block), at Wei-1 (CGX
Energy Inc., Corentyne Block), at Rasper-1 (Apache, Block 53) and at
Zanderij-1 (Shell, Block 42) where the operator is targeting the Santonian and
deeper intervals.
It is against this backdrop that the hydrocarbon plays and prospect
inventories on the Kaieteur and Canje blocks are being reassessed - by
integrating the analysis of the extensive core and fluid samples collected
during the 2020-2021 drilling campaigns, by updating the regional petroleum
system models and by high grading prospects for the next phase of drilling.
Kaieteur Block
The first well on the Kaieteur block, Tanager-1, remains the deepest well
drilled in the Guyana-Suriname Basin to date. It was spudded on 11 August
2020, using the Stena Carron drillship. The well was drilled in a water depth
of 2,900 metres and reached a total depth of 7,633 metres circa mid-November
2021. Evaluation of LWD, wireline logging and sampling data confirmed 16
metres of net oil pay (20(o)API oil) in high-quality sandstone reservoirs of
Maastrichtian age. Although high quality reservoirs were also encountered at
the deeper Santonian and Turonian intervals, initial interpretation of the
reservoir fluids was reported to be equivocal, requiring further analysis -
results of which have yet to be disclosed. Post well analysis and integration
of the data collected continues with a view to highgrading the next drilling
target on the Kaieteur block.
A post-well Netherland, Sewell & Associates Inc. ("NSAI") published CPR
(14 February 2021) indicates that the Tanager-1 Maastrichtian discovery
contains a 'Best Estimate' Unrisked Gross (2C) Contingent Oil Resource of 65.3
MMBBLs (Low to High Estimates 17.7 MMBBLs to 131 MMBBLs) - with a 'Best
Estimate' Unrisked Net (2C) Contingent Oil Resource attributable to the
Kaieteur Block of 42.7 MMBBLs (Low to High Estimates 11.3 MMBBLs to 86
MMBBLs). However, this discovery is currently considered to be non-commercial
as a standalone development.
Subsequent to the Tanager-1 discovery, on 24 May 2021, it was announced that
Hess Corporation ("Hess") had increased its working interest ("WI") in the
Kaieteur Block, offshore Guyana, from 15% to 20% via the farm-down of a 5% WI
by Cataleya Energy Limited ("CEL"). Although the details of this farm-in
transaction were not disclosed, this farm-in, by one of the Stabroek block
partners and a leading player in the Guyana-Suriname basin, suggests
confidence in the prospective resource potential of the Kaieteur Block and
augurs well for the continuing exploration of the area.
On 23 August 2021 it was announced that the date for elective nomination, by
the operator, of the prospect target for the 2(nd) well on the Kaieteur Block
has been extended by seven months and on 22 March 2022 a further extension of
the nomination date was agreed to 2 October 2023. The Kaieteur Block partners
agreed to this extension to facilitate continuing geological and geophysical
analysis by the operator and integration of recent and ongoing deep play
drilling program results on adjacent blocks into the Kaieteur prospect
nomination decision. Under a farm-in agreement executed with ExxonMobil
(operator) in 2016, any drilling consequent to the 2(nd) well prospect
nomination decision will commence within nine months of the nomination date.
The operator, as farminee, continues to bear all farmor JV expenses during the
prospect nomination extension period.
In September 2021, the operator, ExxonMobil, submitted an application for
environmental authorization to the Environmental Protection Agency (EPA) to
proceed with a 12 well exploration campaign on the Kaieteur Block.
The Kaieteur Block is currently operated by an ExxonMobil subsidiary, Esso
Production & Exploration Guyana Limited (35%), with Cataleya Energy
Limited ("CEL") (20%), Ratio Guyana Limited ("RGL") (25%) and a subsidiary of
Hess Corporation, Hess Guyana (Block B) Exploration Limited (20%) as partners.
Westmount retains a holding of approximately 5.3% of the issued share capital
of Cataleya Energy Corporation ("CEC") the parent company of CEL and circa
0.04% of the issued share capital of Ratio Petroleum Energy Limited
Partnership ("Ratio Petroleum") the ultimate holding entity with respect to
RGL.
Canje Block
The first well on the Canje block, Bulletwood-1, was spudded on 31 December
2020 using the Stena Carron drillship and was completed in early March 2021.
The well was safely drilled in a water depth of 2,846 metres to its planned
target depth of 6,690 meters. The primary target in the well was a Campanian
age confined channel complex. The well encountered quality reservoirs but
non-commercial hydrocarbons. There has been limited disclosure of the well
results to date as detailed analysis of the data collected is ongoing.
However, the initial results confirm the presence of the Guyana-Suriname
petroleum system and the potential prospectivity of the Canje Block.
Initial drilling operations at the second well on the Canje block, Jabillo-1,
commenced on 14 March 2021 using the Stena Carron drillship. Previously
published information indicated that Jabillo-1 was targeting a Late
Cretaceous, Liza-age equivalent, basin floor fan(2). After interruption for a
brief period of maintenance work on the drillship drilling operations at
Jabillo-1 recommenced circa the 5 June 2021 and were completed in early July.
The well was safely drilled in a water depth of 2,903 metres to its planned
target depth of 6,475 meters. The well did not encounter commercial
hydrocarbons.
The third well on the Canje block, Sapote-1, was spudded circa 29 August 2021,
using the Stena DrillMAX drillship, and reached TD in late October 2021. This
well is located in the southeast of the Canje Block, approximately 60kms north
of the Campanian and Santonian Maka Central-1 stacked pay discovery. The well
was safely drilled in a water depth of 2,549 metres to a total depth of 6,758
meters. It encountered non-commercial hydrocarbons in one of the deeper
exploration targets.
Westmount holds an indirect interest in the Canje Block as a result of its
circa 7.2% interest in the issued share capital of JHI Associates Inc.
("JHI"). The company also holds an additional indirect interest in the Canje
Block as a result of its shareholding in Eco (Atlantic) Oil and Ltd. ("EOG")
and following the investment in JHI Associates Inc. ("JHI") announced by EOG
on 28 June 2021. Subsequent to this EOG transaction and a previous 2018
farm-out to Total JHI was fully carried/funded for the 2021 three well
drilling campaign and is also funded for additional drilling.
On 14 March 2022, EOG announced that it had signed a Commercially Binding Term
Sheet to acquire 100% of JHI, including its wholly owned subsidiary JHI
Associates (BVI) Inc., via a cashless transaction.(5)
The Canje Block is currently operated by an ExxonMobil subsidiary, Esso
Exploration & Production Guyana Limited (35%), with TotalEnergies E&P
Guyana B.V. (35%), JHI Associates (BVI) Inc. (17.5%) and Mid-Atlantic Oil
& Gas Inc. (12.5%) as partners.
Orinduik Block
Westmount continues to hold an indirect interest in the Orinduik Block as a
result of its circa 0.7% interest in the issued share capital of Eco
(Atlantic) Oil and Gas Ltd. ("EOG"). Over the last nine months the focus of
the Orinduik Block JV partners has been on the analysis and assimilation of
the 2019/20 drilling results and data gathering program, the reprocessing and
re-interpretation of the 3D seismic data, and the highgrading of the
Cretaceous light oil prospect inventory with a view to target selection for
the next drilling campaign on the Orinduik Block.
The Orinduik Block is currently operated by Tullow Guyana B.V. (60%), with
TOQAP Guyana B.V. (25%) and EOG (15%) as partners. TOQAP Guyana B.V. is
jointly owned by TotalEnergies E&P Guyana B.V. (60%) and Qatar Petroleum
(40%).
Portfolio Effect
Westmount's investment strategy has been to provide shareholders exposure to a
portfolio of drilling outcomes in the Guyana-Suriname Basin. Since 2019, we
have participated, indirectly via our investee companies, in six wells
(Jethro-1, Joe-1, Tanager-1, Bulletwood-1, Jabillo-1 and Sapote-1), offshore
Guyana, which have yielded three oil discoveries (Jethro, Joe and Tanager),
but no standalone commercial success to date. While these initial drilling
outcomes are below our expectations for the portfolio, the results provide
encouragement and must be viewed in the context of 'large step-out' wells
evaluating giant stratigraphic prospects while seeking to establish the
perimeter of the multiple Tertiary and Cretaceous play fairways both to the
northeast and southwest of the prolific Stabroek block.
In any case, the drilling to date has confirmed the presence of high-quality
reservoirs of various stratigraphic ages in the Kaieteur, Canje and Orinduik
areas, which are capable of supporting deep-water developments when containing
commercial volumes of light oil. Recent public domain presentation and
commentary suggests that trap adequacy and hydrocarbon migration/timing are
the key exploration risks inferred from these initial drilling results,
outwith of the Stabroek Block sweet-spot. These results together with the
analysis and synthesis of the extensive well data gathering programs executed
by the respective operators should improve understanding of the plays, reduce
sub-surface risk and inform prospect selection for the next round of drilling
on these blocks. We remain hopeful that the geoscience learning curve
combined with the portfolio effect provided by drilling an extended sequence
of prospects in this prolific basin will win out over individual prospect
risks to yield a commercial discovery. We look forward to the next drilling
campaign across these blocks which will commence as soon as the re-evaluation
groundwork has been completed. ExxonMobil, the operator of the Kaieteur and
Canje blocks, has already submitted an application for environmental
authorization to the Environmental Protection Agency (EPA) with respect to
potential 12 well drilling programs on both the Kaieteur and Canje blocks.
Investment portfolio summary
As of 31 December 2021, Westmount had a cash balance of £1.1M and is debt
free.
Westmount continues to hold a total of 5,651,270 shares in JHI, representing
approximately 7.2% of the issued common shares in JHI as of 28 June 2020.
Westmount continues to hold a total of 567,185 common shares in CEC,
representing approximately 5.3% of the issued share capital of CEC as of 10
August 2020.
Westmount continues to hold 1,500,000 shares in EOG, representing
approximately 0.75% of the common shares in issue as of 6 September 2021.
Westmount continues to hold 89,653 shares in Ratio Petroleum representing
approximately 0.04% of the issued share capital.
The reported financial loss for the period is primarily made up of a non-cash
loss on financial assets held at fair value through the profit and loss, some
of which is as a result of Foreign Exchange movements on the portfolio
Investments when valued at the period end.
The proposed 'all paper' acquisition of JHI by EOG, announced on 14 March
2022, offers a consideration to JHI shareholders of 1.1994 new common shares
in EOG for each JHI share held, which would lead, upon completion, to JHI
shareholders holding approximately 34% of the enlarged issued share capital of
EOG.(5) At the time of going to press we are awaiting receipt of an
information circular from JHI with further details of the proposed
transaction.
Summary/Outlook
Notwithstanding unprecedented volatility, some forecasters are predicting
USD$185/bbl by year end if Russian supply continues to be disrupted though
price rises in the near term might be tempered via 'demand destruction' and/or
a revived Iran nuclear deal and/or the re-emergence of COVID-19 regional
lockdowns in China. Longer term the conflicting challenges of growing the
global energy supply by about 20 percent over the next 20 years while reaching
net zero emissions by 2050 is being undermined by underinvestment in the oil
and gas sector. As the 'unintended consequences' in 2021 have shown energy
transition is complex and multi-dimensional which suggests that reliable
sources of energy such as low cost, low carbon oil and gas that can be rapidly
commercialised, will have a role to play in the energy system for decades to
come.
Drilling activity in the Guyana-Suriname basin continues to accelerate driven
by the industry's focus on 'advantaged barrels' as a result of the unique
combination of prospect sizes, reservoir quality, low carbon intensity and low
breakeven metrics ($25/bbl-$35/bbl), that is available offshore Guyana. While
the initial drilling outcomes from the Westmount portfolio have yet to deliver
a standalone commercial discovery, the results to date provide encouragement
and must be viewed in the context of initial 'large step-out' wells evaluating
giant stratigraphic prospects while seeking to establish the perimeter of the
multiple play fairways both to the northeast and southwest of the prolific
Stabroek block. We are also heartened by the industry's continuing appetite
for exploration acreage in the Guyana-Suriname basin - such as the Hess 5%
farm-in on the Kaieteur Block (post Tanager-1) and the award of three blocks
in the Surinamese Shallow Offshore Bid Round 2020/21 to Chevron (Block 5) and
TotalEnergies + Qatar Petroleum (Blocks 6 and 8). Furthermore, the
applications for environmental authorisation submitted to the Guyanese EPA by
ExxonMobil the operator of the Canje and Kaieteur blocks augurs well for
potentially extensive new drilling programs on these blocks after the
re-evaluation groundwork is completed.
Westmount's strategy remains one of offering shareholders exposure to high
impact drilling outcomes. Our primary investee companies CEC, JHI and EOG
are well funded for participation in near term drilling opportunities.
Consolidation manoeuvres may bring book value realignment while offering risk
diversification and exposure to multiple additional high impact drilling
events. In this context, and in spite of the access challenges, your Board
remains focused on investment opportunities and deployment of capital that
gives additional exposure to drilling in emerging basins. There are likely to
be more consolidation opportunities amongst the junior players within the
Guyana-Suriname Basin, as exploration matures and in response to risk
management demands of investor capital.
GERARD WALSH
Chairman
28 March 2022
Notes
(1)ExxonMobil 2022 Investor Day Presentation.
(2)Hess 4(th) Quarter 2021 Conference Call Remarks.
(3)CGX Energy Inc. News Releases 2 March 2022 and 4 March 2022.
(4)APA Corporation News Releases 29 July, 29 September and 16 November 2021;
21 February 2022.
(5)Eco (Atlantic) Oil & Gas Ltd. News Release 14 March 2022.
For further information, please contact:
Westmount Energy Limited www.westmountenergy.com (http://www.westmountenergy.com)
David King, Director Tel: +44 (0) 1534 823059
Anita Weaver
Cenkos Securities plc (Nomad and Broker) Tel: +44 (0) 20 7397 8900
Nicholas Wells / Neil McDonald (Corporate Finance)
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2021
Six months ended Six months ended Year ended
31 Dec 2021 31 Dec 2020 30 Jun 2021
(unaudited) (unaudited) (audited)
£ £ £
Net loss on financial assets held at fair value through profit or loss (6,895,191) (954,021) (692,288)
Net (loss) / gain on financial liabilities held at fair value through profit - (13,370) 103,205
or loss
Finance costs - (21,980) (33,702)
Administration expenses (128,466) (165,217) (267,397)
FX gain / (loss) 4,187 (89,482) (100,160)
Share options expense (12,938) (998) (25,877)
Operating loss (7,032,408) (1,245,068) (1,016,219)
Loss before tax (7,032,408) (1,245,068) (1,016,219)
Tax - - -
Comprehensive loss for the period / year (7,032,408) (1,245,068) (1,016,219)
Basic loss per share (pence) (4.88) (0.91) (0.72)
Diluted loss per share (pence) (4.87) (0.91) (0.69)
All results are derived from continuing operations.
The Company had no items of other comprehensive income during the period /
year.
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
31 Dec 2021 31 Dec 2020 30 Jun 2021
(unaudited) (unaudited) (audited)
£ £ £
ASSETS
Non-current assets
Financial assets at fair value through profit or loss 7,570,440 13,766,866 14,465,631
7,570,440 13,766,866 14,465,631
Current assets
Other receivables 4,519 1,106 4,441
Cash and cash equivalents 1,094,101 2,245,047 1,218,922
1,098,620 2,246,153 1,223,363
Total assets 8,669,060 16,013,019 15,688,994
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 39,070 55,885 39,534
Derivative financial instruments - 146,703 -
Borrowings - 414,699 -
39,070 617,287 39,534
Total liabilities 39,070 617,287 39,534
EQUITY
Share capital 16,652,482 16,652,482 16,652,482
Share option account 482,608 444,791 469,670
Retained earnings (8,505,100) (1,701,541) (1,472,692)
Total equity 8,629,990 15,395,732 15,649,460
Total liabilities and equity 8,669,060 16,013,019 15,688,994
CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2021
Share capital account Share option account Retained earnings Total equity
£ £ £ £
As at 1 July 2020 13,955,623 443,793 (456,473) 13,942,943
- - (1,016,219) (1,016,219)
Comprehensive Income
Loss for the year ended 30 June 2021
Share issue 2,696,859 - - 2,696,859
Transactions with owners
Share options expense - 25,877 - 25,877
As at 30 June 2021 16,652,482 469,670 (1,472,692) 15,649,460
Comprehensive Income
Loss for the period ended 31 December 2021 - - (7,032,408) (7,032,408)
Transactions with owners
Share options expense - 12,938 - 12,938
As at 31 December 2021 16,652,482 482,608 (8,505,100) 8,629,990
Share capital account Share option account Retained earnings Total equity
£ £ £ £
As at 1 July 2019 5,829,872 444,846 (344,980) 5,929,738
Comprehensive Income
Profit for the year ended 30 June 2020 - - (111,493) (111,493)
Share issue 8,125,751 - - 8,125,751
Transactions with owners
Share options credit - (1,053) - (1,053)
As at 30 June 2020 13,955,623 443,793 (456,473) 13,942,943
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2021
Six months ended Six months ended Year ended
31 Dec 2021 31 Dec 2020 30 Jun 2021
(unaudited) (unaudited) (audited)
£ £ £
Cash flows from operating activities
Total comprehensive loss for the period / year (7,032,408) (1,245,068)
(1,016,219)
Adjustments for:
Net loss on financial assets at fair value through profit or loss 6,895,191 954,021 692,288
Net loss / (gain) on financial liabilities at fair value through profit or loss - 13,370 (103,205)
Interest on borrowings - 21,980 33,702
Share options expense 12,938 998 25,877
Movement in other receivables (78) (1,106) (4,441)
Movement in trade and other payables (464) 9,479 (6,874)
Purchase of investments - (2,997,161) (737,334)
Proceeds from sale of investments - 356,011 356,011
Net cash out flow from operating activities (124,821) (2,887,476) (760,194)
Cash flows from financing activities
Repayment of convertible loan notes - - (456,548)
Proceeds from issue of ordinary shares - 2,696,859 -
Net cash generated from financing activities - 2,696,859 (456,548)
Net decrease in cash and cash equivalents (124,821) (190,617) (1,216,742)
Cash and cash equivalents at the beginning of the period / year 1,218,922 2,435,664 2,435,664
Cash and cash equivalents at the end of the period / year 1,094,101 2,245,047 1,218,922
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2021
1. Accounting Policies
Basis of accounting
The interim financial statements have been prepared in accordance with the
International Accounting Standard ("IAS") 34, Interim Financial Reporting.
The interim financial statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Company's annual financial statements for the year ended
30 June 2021. The annual financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS").
The same accounting policies and methods of computation are followed in the
interim financial statements as in the Company’s annual financial statements
for the year ended 30 June 2021.
2. Investments
Six months ended Six months ended Year
31 December 2021 31 December 2020 ended
30 June
2021
(unaudited) (unaudited) (audited)
£ £ £
Argos Resources Limited, at market value 12,400 21,300 27,300
Cost, 1,000,000 shares 310,775 310,775 310,775
(31 December 2020: 1,000,000 shares, 30 June 2021: 1,000,000 shares)
Cataleya Energy Corporation, at market value 4,204,032 4,149,230 4,105,846
Cost, 567,185 shares 4,518,215 4,518,215 4,518,215
(31 December 2020: 567,185, 30 June 2021: 567,185 shares)
Eco Atlantic Oil & Gas Oil Limited, at market value 273,000 348,000 433,500
Cost, 1,500,000 shares 240,000 240,000 240,000
(31 December 2020: 1,500,000 shares, 30 June 2021: 1,500,000 shares)
JHI Associates Inc, at market value 3,072,878 9,245,741 9,884,072
Cost, 5,651,270 shares 7,770,027 7,355,249 7,770,027
31 December 2020: 5,363,770 shares, 30 June 2021: 5,651,270 shares)
Ratio Petroleum Energy Limited Partnership shares, at market value 8,130 - 14,913
Cost, 89,653 shares 22,256 - 22,256
(31 December 2020: nil shares, 30 June 2021: 89,653 shares)
Ratio Petroleum Energy Limited Partnership warrants, at market value - 2,595 -
Cost, nil warrants - 48,200 -
(31 December 2020: 89,653 warrants, 30 June 2021:nil warrants)
Total market value 7,570,440 13,766,866 14,465,631
Total cost 12,861,273 12,472,439 12,861,273
Total fair value adjustment (5,290,833) 1,294,427 1,604,358
Reverse prior year fair value adjustment (1,604,358) (2,191,025) (2,191,024)
Current period fair value movement (6,895,191) (896,598) (586,666)
Realised loss - (57,423) (105,622)
Unrealised loss (6,895,191) (896,598) (586,666)
Current period income statement impact (6,895,191) (954,021) (692,288)
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