TIDMPET
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/ 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.
S
For further information please visit 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
Roland Cornish
Felicity Geidt +44 (0) 020 7628 3396
Novum Securities Limited - Broker
Colin Rowbury +44 (0) 20 399 9400
BlytheRay - PR +44 (0) 207 138 3206
Megan Ray +44 (0) 207 138 3553
Said Izagaren +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
EUR'000 EUR'000 EUR'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: EUR'000 EUR'000 EUR'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
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'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
EUR'000 EUR'000 EUR'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 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
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 EUR164,206 (2022:
loss of EUR310,813) and had net current liabilities of EUR854,017
(2022: EUR689,811) 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 EUR902,531
(2022: EUR857,531) 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 EUR51,098 (2022:
EUR166,309) 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
EUR EUR EUR
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:
EUR'000 EUR'000 EUR'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: EUR'000 EUR'000 EUR'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 Analysis 30 Jun 23 30 Jun 22 31 Dec 22
EUR'000 EUR'000 EUR'000
Ghana 933 933 933
========== ========== ==========
6. SHARE CAPITAL
2023 2022
EUR'000 EUR'000
Authorised:
800,000,000 ordinary shares of EUR0.0125 10,000 10,000
======== ========
Ordinary Shares -nominal value of EUR0.0125
Allotted, called-up and fully paid
Number Share Capital Share Premium
EUR'000 EUR'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
EUR'000 Fund Share Based Payment Reserve
EUR'000 EUR'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
EUR0.0126774 each to EUR0.0125 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
EUR'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 .
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IR GPURWBUPWGQA
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September 18, 2023 02:00 ET (06:00 GMT)
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