ASX LODGEMENT OF ANNUAL REPORT

RNS Number : 1684S

88 Energy Limited

08 March 2023

 

88 ENERGY LIMITED

ASX LODGEMENT OF ANNUAL REPORT

88 Energy Limited (ASX:88E; AIM:88E) ("88 Energy" or "Company") advises that a copy of the Company's Annual Report for the year ended 31 December 2022 (the "Annual Report") has been lodged on the ASX along with the Company's 2022 year-end Corporate Governance Statement and Appendix 4G.

The Annual Report, which was sent to shareholders today, is available on the Company's website at www.88energy.com along with copies of each of these other documents.

Set out below is the Chairman's Statement as included in the Annual Report.

Also, set out below is a summary of the Company's audited financial information for the year ended 31 December 2022 as extracted from the Annual Report, being:

· Consolidated Statement of Comprehensive Income;

· Consolidated Statement of Financial Position;

· Consolidated Statement of Changes in Equity; and

· Consolidated Statement of Cash Flows.

Media and Investor Relations:

88 Energy Ltd Ashley Gilbert, Managing Director
Tel: [phone] Email: [e-mail]
Fivemark Partners, Investor and Media Relations
Andrew Edge	Tel: [phone]
Michael Vaughan	Tel: [phone]
EurozHartleys Ltd
Dale Bryan	Tel: + 61 8 9268 2829
Cenkos Securities Plc	Tel: [phone]
Derrick Lee	Tel: [phone]
Pearl Kellie	Tel: [phone]

CHAIRMAN'S STATEMENT

Dear Shareholders,

It is with pleasure that I present 88 Energy's Annual Report, which contains details of our exploration activities, operations, and financial position as of 31 December 2022.

The global oil and gas market has undergone several significant changes since I first joined the 88 Energy Board. Throughout the year, the world has transitioned from the initial uncertainty caused by the COVID-19 pandemic to a period of geopolitical instability with the war in Ukraine causing disruptions to energy trade in Europe and beyond. At the same time, global attitudes and changing market sentiment in relation to the clean energy transition and decarbonisation initiatives have led to volatility in the oil and gas market.

This uncertainty has resulted in ongoing tightness in investment in the oil and gas industry. However, I firmly believe that the prevailing macroeconomic, political, and social factors that have contributed to the current global energy challenges demonstrate that hydrocarbons will have a significant role in global energy demand for the foreseeable future.

Within this context, 88 Energy is strategically placed to capitalise on investment opportunities that the oil and gas industry will continue to offer. Our combination of large acreage position, infrastructure-led exploration and ongoing capital discipline is, and will continue to be, attractive.

During the year, we acquired a ~73% working interest in Project Longhorn, a suite of quality oil and gas assets in the proven Texan Permian Basin. To date, the production of oil from these wells has resulted in net cash flow returns of more than A$4 million. Further opportunities exist to grow output and returns from these assets over the coming years.

In August 2022, we announced the decision to separate Project Icewine into two independent prospective resource estimates, Icewine West and Icewine East. Going forward, we are set to focus on Icewine East, renamed Project Phoenix, to reflect our refreshed exploration strategy for the acreage. As a measure of our conviction in the prospectivity of Project Phoenix, in the same month as the announcement of the maiden independent Prospective Resource Estimate for Phoenix, we raised gross proceeds of A$14.9 million to further advance planned exploration well activities on this acreage.

Through third quarter of 2022, we completed an interpretation of the previously licensed Franklin Bluffs 3D seismic survey data on Project Phoenix. Results from the analysis were used to define 'sweet spots' for the Shelf Margin Delta (SMD), Slope Fan System (SFS), Basin Floor Fan (BFF) and Kuparuk (KUP) play fairways. This critical analysis has informed our planned 2023 exploration activities and proposed drilling location, Hickory-1, which is designed to intersect and test up to six stacked conventional reservoirs. In December, we executed a contract with Nordic Calista for their Rig-2 to drill the Hickory-1 exploration well, with targeted spud in early March 2023.

In November 2022, the Company was announced as the winning bidder for select acreage offered as part of the North Slope Areawide 2022W Oil and Gas lease sale. The new acreage, known as Project Leonis, is another fantastic addition to our highly prospective Alaskan asset base.  Comprising 10 leases covering approximately 25,600 contiguous acres, Leonis is an attractive exploration proposition, which the Company is eager to progress. Further studies will be conducted to properly understand the regional setting and faulting of the area before making any definitive commitment to a future program of work.

I wish to thank all 88 Energy personnel and contractors for their efforts over the past year. We have a first-class team of truly committed professionals, dedicated to maximising the potential of our projects. We will continue to progress and refine the 88 Energy business model through furthering exploration activities in our core project areas, targeting large-scale hydrocarbon deposition and seeking out new venture opportunities.

As always, I would also like to thank you, our shareholders, for your support and dedication to our Company.  On behalf of the 88 Energy team, I wish to reaffirm our commitment to unlocking the huge potential value residing in our world-class Alaskan acreage.  I wish you all a wonderful and prosperous year ahead. Stay safe and well.

Yours faithfully,

Philip Byrne
Non-Executive Chairman

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

	Note	2022	2021
		$	$
Other income	3(a)	21,760	4,448,699
Share of profit/(loss) from equity accounted investment	11	3,317,877	-
Administrative expenses	3(b)	(2,778,962)	(3,048,444)
Occupancy expenses		(51,142)	(86,765)
Employee benefit expenses	3(c)	(2,335,914)	(1,958,388)
Share-based payment expense	18	(658,111)	(738,965)
Depreciation and amortisation expense		(60,307)	(84,449)
Finance cost		(8,583)	(1,195,703)
Other expenses		(12,869)	(48,471)
Foreign exchange (loss) / gain		493,647	302,297
Exploration & Evaluation Impairment/Expense	3(d)	(68,649,314)	-
Loss before income tax		(70,721,918)	(2,410,189)
Income tax expense	4	-	-
Loss after income tax for the year		(70,721,918)	(2,410,189)
Other comprehensive income / (loss) for the year Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations		6,378,972	4,855,236
Other comprehensive income / (loss) for the year, net of tax		(64,342,946)	4,855,236
Total comprehensive income / (loss) for the year attributable to members of 88 Energy Limited		(64,342,946)	2,445,047
Loss per share for the year attributable to the members of 88 Energy Limited:
Basic and diluted loss per share	5	(0.0042)	(0.0001)

The notes to the financial Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the statements .

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2022

		Note	2022	2021
			$	$
ASSETS
Current Assets
Cash and cash equivalents		6	14,123,731	32,317,887
Trade and other receivables		7	1,549,816	935,930
Other Current Asset		7	-	10,224,959
Total Current Assets			15,673,547	43,478,776
Non-Current Assets
Plant and equipment		8	20,337	9,675
Exploration and evaluation expenditure		9	96,422,918	101,357,767
Other Assets		10	940,424	936,536
Equity accounted investments		11	19,968,658	-
Total Non-Current Assets			117,352,337	102,303,978
TOTAL ASSETS			133,025,884	145,782,754
LIABILITIES
Current Liabilities
Trade and other payables		12	1,105,132	5,796,350
Provisions		13	244,736	146,270
Total Current Liabilities			1,349,868	5,942,620
TOTAL LIABILITIES			1,349,868	5,942,620
NET ASSETS			131,676,016	139,840,134
EQUITY
Contributed equity		14	340,972,669	285,809,214
Reserves		15	30,468,589	23,074,244
Accumulated losses			(239,765,242)	(169,043,324)
TOTAL EQUITY			131,676,016	139,840,134

The Consolidated Statement of Financial Position should be read in conjunction with the notes to the financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECMEBER 2022

	Issued Capital	Reserves	Accumulated Losses	Total
	$	$	$	$
At 1 January 2022	285,809,214	23,074,244	(169,043,324)	139,840,134
Loss for the year	-	-	(70,721,918)	(70,721,918)
Other comprehensive income	-	6,378,972	-	6,378,972
Total comprehensive income/(loss) for the year after tax	-	6,378,972	(70,721,918)	(64,342,946)
Transactions with owners in their capacity as owners:
Issue of share capital	58,524,106	-	-	58,524,106
Issue of Options	-	360,260	-	360,260
Settlement of vested PR's	-	(2,998)	-	(2,998)
Share-based payments	-	658,111	-	658,111
Share issue costs	(3,360,651)	-	-	(3,360,651)
Balance at 31 December 2022	340,972,669	30,468,589	(239,765,242)	131,676,016
At 1 January 2021	208,963,513	16,580,975	(166,633,135)	58,911,353
Loss for the year	-	-	(2,410,189)	(2,410,189)
Other comprehensive income	-	4,855,236	-	4,855,236
Total comprehensive income/(loss) for the year after tax	-	4,855,236	(2,410,189)	2,445,047
Transactions with owners in their capacity as owners:
Issue of share capital	80,305,041	-	-	80,305,041
Issue of Options	-	1,072,790	-	1,072,790
Settlement of vested PR's		(173,722)		(173,722)
Share-based payments	-	738,965	-	738,965
Share issue costs	(3,459,340)	-	-	(3,459,340)
Balance at 31 December 2021	285,809,214	23,074,244	(169,043,324)	139,840,134

The Consolidated Statement of Changes in Equity should be read in conjunction with the notes to the financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMEBR 2022

	Note	2022	2021
		$	$
Cash flows from operating activities
Payment to suppliers and employees		(4,907,742)	(4,594,024)
Interest and other income received		20,126	841
Interest & finance costs		-	(1,052,539)
Net cash flows used in operating activities	6(b)	(4,887,616)	(5,645,722)
Cash flows from investing activities
Payments for equity accounted investments		(10,693,565)	-
Payments for exploration and evaluation activities		(52,644,427)	(41,791,086)
Contribution from Joint Operation Partners in relation to Exploration		1,078,866	20,816,000
Proceeds (payment) for Bonds		137,930	(112,730)
Proceeds from Sale of tax credits		-	24,233,263
Distribution from Equity Accounted Investments		4,281,910	-
Net cash flows generated from/used in investing activities		(57,839,286)	3,145,447
Cash flows from financing activities
Proceeds from issue of shares	14	47,052,778	42,521,478
Share issue costs		(3,149,329)	(2,523,150)
Repayment of borrowings		-	(20,909,692)
Net cash flows from financing activities		43,903,449	19,088,636
Net increase/(decrease) in cash and cash equivalents		(18,823,453)	16,588,361
Cash and cash equivalents at the beginning of the year		32,317,887	14,845,347
Effect of exchange rate fluctuations on cash held		629,297	884,179
Cash and cash equivalents at end of year	6(a)	14,123,731	32,317,887

The Consolidated Statement of Cash Flows should be read in conjunction with the notes to the financial statements.

 

END

 

 

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