TIDMJPRL
RNS Number : 6397F
Jupiter Energy Ltd
29 July 2016
29 July 2016
Jupiter Energy Limited ("Jupiter" or the "Company")
QUARTERLY UPDATE ON ACTIVITIES FOR THE PERIOD TO 30 JUNE
2016
KEY POINTS:
-- 5 existing Convertible Notes with a nominal value of $US15.5m
plus accrued interest as at 31 May 2016 of $US5,345,753 (total
$US20,845,753) rolled into 4 new Promissory Notes with a repayment
date of 1 July 2018.
-- 1 existing Promissory Note with a face value of $US8,633,333
plus accrued interest as at 31 May 2016 of $US1,250,894 (total
$US9,914,227) rolled into a new Promissory Note with repayment date
of 1 July 2018.
-- New $US5m Framework Funding Agreement, by way of a new
Promissory Note, effective from 24 May 2016 with a repayment date
of 1 July 2018.
-- Based on a Care & Maintenance budget, new Funding
Agreement provides working capital through to at least 30 June
2017.
-- Alastair Beardsall retired from the Board on 31 May 2016.
-- Appointment of a Business Development Manager in Astana.
-- All producing wells, shut in since February 2015, remain
closed until domestic oil pricing reaches a level where oil
production is cashflow positive.
-- Discussions continue with relevant parties regarding the
resolution of the Akkar North division of Reserves.
-- Steady progress made during Quarter with the application for
an Extension of the Exploration Licence.
-- Ministry of Energy has given permission to the Company to
raise equity via the issue of new shares.
Jupiter Energy Limited (ASX: "JPR", AIM: "JPRL" and KASE:
"AU_JPRL") presents the following update on activities for the 3
month period ending 30 June 2016 (the "Quarter"). Also included in
this report are details of subsequent events that have occurred up
to the date of this release.
The Quarter in brief:
There were no oil sales made during the Quarter. All producing
wells were shut in during February 2015, and remain shut in, due to
low domestic oil prices.
Outlook for Future Oil Sales:
The Company announced on 19 February 2015 that as a result of
the material reduction in world oil prices, the sales price being
achieved for domestic oil in Kazakhstan had fallen to levels that
made oil production from Block 31 cashflow uncommercial.
The Company therefore decided to cease production from its
producing Akkar East wells (J-51 and J-52) until the domestic oil
price improved. The Company continues to monitor local pricing on
an ongoing basis, and believes that production may recommence if an
oil price of at least $US12/bbl at the wellhead is achievable but
is unable to give any guarantee that oil production will recommence
in any specific timeframe.
When production does recommence, the Company also plans to bring
wells 19, J-58 and J-59 onto production, assuming the requisite
funding is in place to build the appropriate infrastructure at the
three well sites.
Funding Update:
The Company announced on 3 June 2016 that it had reached
agreement with its Convertible Note holders to rollover the
12,400,000 Convertible Notes with a total value of $US20.8m
(including accrued interest) into Promissory Notes with a repayment
date of 1 July 2018.
The key terms for the new Promissory Notes are:
-- Unsecured
-- Effective 31 May 2016
-- Repayable on 1 July 2018
-- Interest rate of 15% pa
-- Interest will accrue and be repayable with the principal
-- Lenders can elect to be repaid if there is a change of
control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or
there is a change in control of the ownership of the Block 31
Licence
The Convertible Notes and all accrued interest were due for
repayment on 20 September 2016.
The Company also advised that its major shareholder Waterford
had agreed to rollover its Promissory Note that as at 31 May 2016,
amounted to $US8,633,333 in principal with accrued interest of
$US1,250,894 (total $US9,914,227) into a new Promissory Note with
the following key terms:
-- Unsecured
-- Effective 31 May 2016
-- Repayable on 1 July 2018
-- Interest rate of 15% pa
-- Interest will accrue and be repayable with principal
-- Lender can elect to be repaid if there is a change of control
in Jupiter Energy Limited or Jupiter Energy Pte Ltd or there is a
change in control in contract 2275 covering the Block 31
Licence
The Promissory Note and all accrued interest were due for
repayment on 1 July 2016.
The Company also advised that Waterford had agreed to put in
place a new Framework Funding Agreement that made up to a further
$US5m (including accrued interest) available to the Company by way
of a new $US5m Promissory Note. As at 30 June 2016, the Company has
drawn down $US744,989 (including accrued interest) under this new
Framework Agreement.
The new Funding Agreement will fund the Company's operations
whilst it continues to finalise long term funding arrangements for
the development of its Block 31 licence area in Kazakhstan.
The funding arrangement will be the same as the previous one,
namely that the Company will request monthly drawdowns against the
$US5m amount and the drawdowns will be based on an agreed Care
& Maintenance budget.
Based on the current budgeted cashflow requirements, this new
funding arrangement will provide the Company with sufficient
working capital until at least the end of the 2016/17 financial
year (i.e. 30 June 2017).
The key terms of the new Framework Agreement with Waterford
are:
-- Effective 24 May 2016
-- Drawdowns will roll into a Promissory Note
-- Promissory Note is repayable on 1 July 2018
-- Interest rate of 15% pa
-- Interest will accrue and be repayable with principal
-- Lender can elect to be repaid if there is a change of control
in Jupiter Energy Limited or Jupiter Energy Pte Ltd or there is a
change in control in contract 2275 covering the Block 31
Licence
West Zhetybai Trial Production Licences (wells J-58 and
J-59):
In order to get the J-58 and J-59 wells ready for Trial
Production, the appropriate surface production infrastructure must
be put in place for both wells. This equipment will need to be
purchased.
The Company will keep shareholders updated on progress.
Extension of J-50 Trial Production Licence:
The Company advised shareholders on 28 November 2014 that the
application to extend the Trial Production Licence for well J-50
was being held by the Kazakh Committee of Geology pending
resolution of the allocation of reserves associated with the
well.
The J-50 well has been shut in since 29 December 2014 (the date
at which the last Trial Production licence expired).
The underlying issue delaying the Trial Production Licence
renewal is the demand by the Committee of Geology that Jupiter
Energy reach agreement with its neighbour MangistauMunaiGas (MMG)
over the division of reserves associated with both companies' share
of the Akkar North accumulation. Jupiter Energy has been in
dialogue with MMG on this issue for some time but has been unable
to reach formal agreement with MMG with respect to the division of
Akkar North reserves.
The Company is now seeking legal advice before formally
referring the matter of resolving J-50 reserves to a higher
authority within Kazakhstan in an effort to bring the matter to a
conclusion and will keep shareholders updated on this
situation.
Application for an Extension to the Exploration Period:
In late March 2016, the Company submitted a formal application
to the Ministry of Energy for a 4 year extension to the Exploration
Period on Block 31. The Company had already advised the Ministry of
Energy of its intention to lodge an application for an extension to
at least 29 December 2018 and the formal application has now been
lodged requesting an extension through to 20 December 2020.
The submission followed the guidelines set out by the Ministry
of Energy for such an application and the Company believes that it
has solid grounds for the extension to be granted taking into
account its drilling success in discovering the Akkar East and West
Zhetybai oilfields during the current Exploration Period and the
fact that it has met over 100% of its contracted work program
commitments during the initial 10 year Exploration Period.
Initial feedback from the Ministry of Energy has been positive
and the Company continues to work through the application process
and will keep shareholders updated on progress.
The current Exploration Period runs to 29 December 2016.
Organisational Changes:
On 31 May 2016 Alastair Beardsall retired from the Jupiter
Board.
On 1 June 2016 the Company appointed Marat Akchulakov as
Business Development Manager based in Astana. Marat is a lawyer by
training and brings over 20 years of Oil and Gas Industry
experience to Jupiter. He will act as the Company's daily interface
into the various regulatory bodies based in Astana.
EXPO 2017:
Kazakhstan is hosting EXPO 2017 and the Company has been asked
to act as a co- sponsor in one of the key events being held at the
EXPO.
"Future Energy" is looking to receive applications from start up
companies around the world that focus on the green economy. Areas
of interest will include renewable energy, energy efficiency, new
energy sources, clean technologies and the like and it is hoped
that over 700 applications will be received and from that a list of
100 projects will be selected to enter the event. From that initial
100 projects, a top 30 will then be invited to participate in EXPO
2017 in Kazakhstan and during EXPO 2017 the final 3 projects will
be selected to receive an award.
Jupiter is pleased to be involved in a competition focused on
such innovation and will make a $US300,000 contribution towards the
funding of the event.
Forward Plan - Operations:
The Company has been experiencing delays in progressing the
development of Block 31 over the past year due to constraints on
several fronts.
Subject to obtaining the requisite funding and extension to the
Exploration Period, the Company plans to continue with its drilling
program as soon as it is possible. At this stage, the drilling of
two wells is planned for 2017 assuming the Exploration Extension is
granted during 2016.
The use of limited unsecured debt to fund the Company has been
driven by the fact that the Company was unable to get the required
permission from the Ministry of Energy (the Waiver) to raise equity
through the issue of new shares. The Company is pleased to advise
that the Ministry of Energy has now agreed to issue a Waiver,
allowing the Company to raise equity via the issue of new shares.
Current market conditions make an equity raising in the short term
challenging but the Company is pleased that it is now in a position
to seek new capital as and when market conditions improve.
Licence Information:
As is required under ASX disclosure rules, the Company confirms
that it currently holds the following licence:
Country Block / Interest Interest Interest
Licence held as acquired held as
at 31 March / disposed at 30 June
2016 of during 2016
the Quarter
------------ ---------- ------------- ------------- ------------
Kazakhstan Block 31 100% Nil 100%
------------ ---------- ------------- ------------- ------------
Capital Structure and Finances:
As at 30 June 2016, the Company has 153,377,693 listed shares
trading under the ASX ticker "JPR", the AIM ticker "JPRL" and the
KASE ticker "AU_JPRL".
The Company has no options or Performance Shares, listed or
unlisted, in issue.
As at 30 June 2016, the Company had a total of five (5)
Promissory Notes with the following holders:
-- Waterford Petroleum Limited: $US8,786,904 *
-- Waterford Petroleum Limited: $US9,914,227 (was announced on 3
June 2016 as $US9,911,178 due to miscalculation of accrued
interest)
-- Mobile Energy Limited: $US9,375,014
-- Midocean Holdings Limited: $US2,022,082
-- Other Private Investors: $US661,753
* The Convertible Note held by Pebblestone Holdings Limited
signed on 31 May 2013 (value as at 31 May 2016, including accrued
interest: $US2,720,658) has been assigned to Waterford Petroleum
Limited and is included in this value along with Waterford
Petroleum Limited's original Convertible Notes (plus accrued
interest) which have been rolled over into Promissory Notes.
Total Company debt outstanding on 30 June 2016 comprised 5 new
Promissory Notes with a value of $US30,759,980.
As at the date of this Report, the Company has drawn down
$US958,892(including accrued interest) under the new Funding
Agreement and therefore has a further $US4,041,108 (including
accrued interest) available to it under this Agreement.
Unaudited net cash reserves as at 30 June 2016 stood at
approximately $A670,731.
The Directors of the Company continue to defer their Directors'
Fees until such time that the Company has an improved cashflow.
Summary:
Progress during the Quarter continued to be constrained although
initial feedback from the Ministry of Energy for extension to the
Exploration Period on Block 31 was positive and sufficient working
capital is now in place until the end of the 1st half of 2017 to
enable the Company to work towards resolving its longer term
funding requirements.
If shareholders have any questions regarding this Quarterly
report they are welcome to contact the Company on +61 89 322
8222.
Geoff Gander
Chairman/CEO
ENDS
Enquiries:
Jupiter Energy (+61 89 322 8222)
Geoff Gander (geoff@jupiterenergy.com)
finnCap Ltd +44 (0)20 7220 0500
Matt Goode/Emily Watts/Christopher Raggett (Corporate
Finance)
Simon Johnson (Corporate Broking)
Competent Persons Statement:
Keith Martens, BSc Geology and Geophysics, with over 35 years'
oil & gas industry
experience, is the qualified person who has reviewed and
approved the technical information contained in this report.
About the Company:
Jupiter Energy Limited is an oil exploration and production
company, quoted on the AIM, ASX and KASE markets. The Company is
focused on developing its onshore assets in western Kazakhstan. In
2008 the Company acquired 100 per cent of the Block 31 permit,
located in the oil-rich Mangistau Basin, close to the port city of
Aktau.
Jupiter has a proven in-country management team, led by an
experienced, international Board, together possessing the skills,
knowledge, network and attention to detail needed to operate
successfully in Kazakhstan. The forward plan will see Jupiter
develop a group production facility on Block 31 to process, store
and export oil. This topside infrastructure is a key element in
moving to long-term production and the achievement of self-funding
for further development of Block 31.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCRLMRTMBBTMPF
(END) Dow Jones Newswires
July 29, 2016 03:30 ET (07:30 GMT)
Jupiter Energy (LSE:JPRL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Jupiter Energy (LSE:JPRL)
Historical Stock Chart
From Jul 2023 to Jul 2024