Interim Results

RNS Number : 9208Z

Ascent Resources PLC

24 September 2020

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

24 September 2020

FOR IMMEDIATE RELEASE

Ascent Resources plc

("Ascent" or "the Company")

Interim results for the period ended 30 June 2020

Ascent Resources plc, the AIM quoted onshore Caribbean, Hispanic American and European energy and natural resources focussed company is pleased to report its interim results for the six months ended 30 June 2020.

Summary:

· New Board appointed

· Restructuring of existing RiverFort debt and cancellation of equity swap agreement

· New market entry into Cuba with MOUs over producing Block 9B and Blocks 9A, 12 & 15

· Strategic review of Slovenian investment and proposal submitted to restructure Joint Venture arrangements

· Instigation of new Special Situations growth strategy

Post Period Highlights:

· Legal claim against Republic of Slovenia progressed with serving of Notice of Dispute under Bilateral Investment Treaty  and Energy Charter Treaty

Enquiries:

Ascent Resources plc Andrew Dennan, CEO	Via Vigo Communications
WH Ireland, Nominated Adviser & Broker James Joyce / Chris Savidge	0207 220 1666
Novum Securities, Joint Broker John Belliss	0207 399 9400

Chairman and CEO's statement

 

Ascent has already undergone significant change following the appointment of the new Board of Directors and executive team who took their seats in March and April this year.  The change has included the planned introduction of a Cuban portfolio, taking concrete steps to sort out the Slovenian legacy asset and, most importantly, the initiation of a countercyclical growth strategy focused on identifying Special Situation opportunities.  We expect to be in a position to reveal our first Special Situation transaction later this year.

Cuba Market Entry

The Company announced in April a broadening of its portfolio with a new market entry into Cuba with the acquisition of Energetical Limited securing the MOU to onshore Block 9B which contains the producing Majaguillar and San Anton fields. This initial action was quickly followed with a further signature of a binding memorandum of understanding directly with The Cuban National Oil Company ("CUPET"), over onshore Blocks 9A, 12 and 15 which represent over 7,000km2 of exploration acreage with each license having had prior oil shows or discoveries made. This presents the Company with a unique position to enter the highly prospective Cuban upstream space centred around a production lead strategy initially focused on 9B and dovetailing with significant exploration upside. The Company is also reviewing  potential investments in battery metals mining noting that Cuba has one of the largest deposits of Nickel worldwide. Nickel, as a battery metal, has the major advantage of helping to deliver high energy density and greater storage capacity at lower cost and with continuing advancements in nickel battery technology the metal is positioned to have an increasing role in global energy storage systems.

Slovenia

During the period, the new Board conducted a technical and economic review of the Petisovci asset and concluded that i) Forward gas prices are sufficiently high for the development to be cash generative; ii) Continued material production from the tight gas project would require regular stimulation activity; and iii) Further stimulation of PG-10 and PG-11A wells should have a material positive impact on production levels. Following the submission of a proposal by the Company, the JV partner has expressed willingness to enter into discussions to restructure the JV arrangements for the benefit of all parties. Following the Administrative Court of the Republic of Slovenia's recent confirmation of its decision to require an Environmental Impact Assessment ("EIA") in order to re-stimulate the PG-10 and PG-11A wells, a new technical team has been contracted to prepare a detailed stimulation plan and updated Field Development Plan.  These plans will form the basis of an EIA application in due course.

The Company is also progressing its legal claim against the Republic of Slovenia, to be brought under the Bilateral Investment Treaty and Energy Charter Treaty.  The Company instructed a specialist legal advisor to advance towards International Arbitration which resulted in the serving of a Notice of Dispute to the Republic of Slovenia which formally sets out the breaches Slovenia have made under the BIT and ECT. 

Corporate

During the period in review the Company has successfully restructured its financing arrangements with RiverFort with both the cancellation of the Equity Swap Agreement and reprofiling of the short term loan repayable on demand to a convertible instrument at a premium to the prevailing share price and maturing in 2022. This provides the Company with the runway to resolve its position in Slovenia and develop the business outside of Slovenia.  The Company has also successfully raised new equity in support of their appointments and to advance their new initiatives in Cuba. Post period in review a further financing package has been secured which will allow the company to accelerate its Special Situations strategy which should see us add further commodity and geographic diversification as well as hopefully provide for a pathway to material cash generation within 12 months of a transaction.

In March and April of this year, the prior Board of Directors exited and James Parsons took the seat of Executive Chairman, Andrew Dennan was appointed as Chief Executive Officer and Ewen Ainsworth and Leonardo Salvadori both joined as Non-Executive Directors of the Company. Post period in review the Company has also announced further changes to its Board and Senior Executive team with Leonardo Salvadori moving from his Plc Non-Executive Director position to step up and join the executive team as Technical Director. Two new appointments have been announced with Mr Malcolm Graham-Wood joining as Non-Executive Director and Mr Stephen Birrell joining the Company as Independent Non-Executive Director, both effective as of October. The Board would then be composed of two Independent Directors and a majority of Non-Executives as suggested by the Quoted Companies Alliance Corporate Governance Code, the corporate governance code that the Company has chosen to adopt.

Outlook

Following a phase of legacy clean up, the Company is now poised for success with a new energised team, a new countercyclical growth strategy, dual legal and industrial routes being pursued in Slovenia in addition to the entry into the highly prospective Cuban upstream space pre US Elections.

We wish our shareholders safe passage through these turbulent times and look forward to, perhaps long overdue, success at Ascent Resources plc on multiple fronts.

James Parsons  Andrew Dennan

Executive Chairman  Chief Executive Officer

23 September 2020  23 September 2020

CEO's report

Financial performance

Revenue for the first six month of 2020 was £nil, down from £242,000 in the prior period due to declining production volumes and revenues versus fixed operating costs.

Closing cash at 30 June 2020 was £304,000 compared to £77,000 in the prior period.

During the period the Company raised £848,000 before costs in two equity placings in March and May 2020. There was a cash outflow from operations of £536,000 and an inflow of £766,000 from financing activities which resulted in a net cash inflow for the six months of £227,000.

Operational performance

Production KPI's	Jan-20	Feb-20	Mar-20		Apr-20	May-20	Jun-20
Total production (000s Cubic Metres)	238	195		198	176	177	153
Total production (MCF)	8,413	6,875		6,994	6,231	6,267	5,387
Average daily - 000s cubic metres	7.7	6.7		6.4	5.9	5.7	5.1
Average daily - MMscfd	0.3	0.2		0.2	0.2	0.2	0.2
Condensate production (litres)	8,692	5,346		4,752	4,698	3,780	3,672
Litres per 1000 cubic metres of gas	36	27		24	27	21	24
BOE - Gas	1,450	1,185		1,206	1,074	1,080	929
BOE - Condensate	51	31		28	28	22	22
Revenue €k	-	-		-	-	-	-
Average € per MCF	-	-		-	-	-	-

Total production for the six months to 30 June 2020 was 1.14 million cubic metres of gas and 30,940 litres of condensate.

Gas sales to INA remain suspended as wellhead pressure is below the export pipeline pressure. The sales contract remains valid and should the Company increase production gas sales may be able to be resumed. The Company produced gas in the year to date which was sold locally to an industrial buyer through a low pressure pipeline, however the revenue from this is less than the fixed costs of the field and pursuant to a deal agreed in Q4 2019 the Company is not currently receiving any revenue from this declining production, with the proceeds being retained by the operating service provider to pay towards their fixed costs.

Consolidated Income Statement

for the Period ended 30 June 2020

		Period ended	Period ended
		30 June	30 June
		2020	2019
	Notes	£ '000s	£ '000s
Revenue		-	242
Cost of sales		(59)	(187)
Depreciation of oil & gas assets		(230)	(220)
Gross profit		(289)	(165)
Administrative expenses		(945)	(823)
Loss from operating activities		(1,234)	(988)
Finance income		-	-
Finance cost		(9)	(6)
Net finance costs		(9)	(6)
Loss before taxation	2	(1,243)	(994)
Income tax expense		-	-
Loss for the period after tax		(1,243)	(994)
Loss for the year attributable to equity shareholders		(1,243)	(994)
Earnings per share
Basic & fully diluted loss per share (£)	4	(0.03)	(0.04)

 

Consolidated Statement of Comprehensive Income

for the Period ended 30 June 2020

	Period ended	Period ended
	30 June	30 June
	2020	2019
	£ '000s	£ '000s
Loss for the year	(1,243)	(994)
Other comprehensive income
Foreign currency translation differences for foreign operations	1,835	(780)
Total comprehensive gain / (loss) for the year	592	(1,774)

Consolidated Statement of Changes in Equity

for the Period ended 30 June 2020

	Share capital	Share premium	Merger Reserve	Equity reserve	Share based payment reserve	Translation reserve	Retained earnings	Total
	£ '000s	£ '000s	£ '000s	£ '000s	£ '000s	£ '000s	£ '000s	£ '000s
Balance at 1 January 2019	6,146	71,648	570	16	1,657	1,400	(38,357)	43,080
Comprehensive income								-
Loss for the year	-	-	-	-	-	-	(944)	(944)
Other comprehensive income
Currency translation differences	-	-	-	-	-	(780)	-	(780)
Total comprehensive income	-	-	-	-	-	(780)	(944)	(1,774)
Transactions with owners
Issue of shares during the year net of costs	671	384	-	-	-	-	-	1,055
Share-based payments and expiry of options	-	-	-	-	168	-	-	200
Balance at 30 June 2019	6,817	72,032	570	16	1,825	620	(39,351)	42,529
Balance at 1 January 2019	6,146	71,648	570	16	1,657	1,400	(38,357)	43,731
Comprehensive income								-
Loss for the year	-	-	-	-	-	-	(3,660)	(3,660)
Other comprehensive income
Currency translation differences	-	-	-	-	-	(1,700)	-	(1,700)
Total comprehensive income	-	-	-	-	-	(1,700)	(3,660)	(5,360)
Transactions with owners
Issue of shares during the year net of costs	1,458	682	-	-	-	-	-	2,140
Expiry on loan note conversion rights	-	-	-	(16)	-	-	-	(16)
Share based payments	-	-	-	-	216	-	53	269
Balance at 31 December 2019	7,604	72,330	570	-	1,873	(300)	(41,964)	40,113
Balance at 1 January 2020	7,604	72,330	570	-	1,873	(300)	(41,964)	40,113
Comprehensive income								-
Loss for the year	-	-	-	-	-	-	(1,243)	(1,234)
Other comprehensive income
Currency translation differences	-	-	-	-	-	1,835	-	1,835
Total comprehensive income	-	-	-	-	-	1,835	(1,243)	592
Transactions with owners								-
Issue of shares during the year net of costs	113	678	-	-	-	-	-	791
Issue of shares on acquisition	30	173	-					203
Share-based payments	-	-	-	-	206	-	-	206
Balance at 30 June 2020	7,747	73,181	570	-	2,079	1,535	(43, 207)	41,905

Consolidated Statement of Financial Position

As at 30 June 2020

		30 June	31 December
		2020	2019
Assets	Notes	£ '000s	£ '000s
Non-current assets
Property, plant and equipment	5	23,460	22,069
Exploration and evaluation costs	5	19,445	18,576
Prepaid abandonment fund		240	240
Total non-current assets		43,145	40,885
Current assets
Inventory		-	-
Trade and other receivables	6	84	254
Cash and cash equivalents		304	77
Restricted cash		-	-
Total current assets		388	331
Total assets		43,533	41,216
Equity and liabilities
Attributable to the equity holders of the Parent Company
Share capital	10	7,747	7,604
Share premium account		73,181	72,330
Merger reserve		570	570
Equity reserve		-	-
Share-based payment reserve		2,079	1,873
Translation reserves		1,535	(300)
Retained earnings		(43,207)	(41,964)
Total equity attributable to the shareholders		41,905	40,113
Total equity		41,905	40,113
Non-current liabilities
Borrowings	8	375	-
Provisions		255	255
Contingent consideration due on acquisitions	9	450	-
Total non-current liabilities		1,080	255
Current liabilities
Borrowings	8	5	385
Trade and other payables	7	543	463
Total current liabilities		548	848
Total liabilities		1,628	1,103
Total equity and liabilities		43,533	41,216

 

Consolidated Statement of Cash Flows

for the six months ended 30 June 2020

	Period ended	Period ended
	30 June	30 June
	2020	2019
	£ '000s	£ '000s
Cash flows from operations
Loss after tax for the year	(1,243)	(994)
Depreciation	231	222
Change in receivables	170	123
Change in payables	80	(19)
Increase in share-based payments	206	168
Exchange differences	11	(445)
Finance cost	9	6
Net cash used in operating activities	(536)	(939)
Cash flows from investing activities
Payments for fixed assets	(3)	2
Payments for investing in exploration	-	(134)
Net cash used in investing activities	(3)	(132)
Cash flows from financing activities
Interest paid and other finance fees	-	(6)
Loans repaid	(12)	-
Proceeds from issue of shares	848	1,113
Share issue costs	(70)	(58)
Net cash generated from financing activities	736	1,049
Net increase in cash and cash equivalents for the year	227	(22)
Effect of foreign exchange differences	-	(3)
Cash and cash equivalents at beginning of the year	77	556
Cash and cash equivalents at end of the year	304	531

 

Notes to the Interim Financial Statements

For the six months ended 30 June 2020

1.  Accounting Policies

Reporting entity

Ascent Resources plc ('the Company') is a company domiciled in England. The address of the Company's registered office is 5 New Street Square, London EC4A 3TW. The unaudited consolidated interim financial statements of the Company as at 30 June 2020 comprise the Company and its subsidiaries (together referred to as the 'Group').

Basis of preparation

The interim financial statements have been prepared using measurement and recognition criteria based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted for use in the EU. The interim financial information has been prepared using the accounting policies which were applied in the Group's statutory financial statements for the year ended 31 December 2019.

New Standards adopted as at 1 January 2020

Accounting pronouncements which have become effective from 1 January 2020 are:

· IFRS 3 Business Combinations - definition of a business

· IAS 1 and IAS 8 - definition of material

· IFRS 9, IFRS 7 and IAS 39 - interest rate benchmark

· IFRS 7 - Insurance contracts

These accounting pronouncements do not have a significant impact on the Group's financial results or position.

All amounts have been prepared in British pounds, this being the Group's presentational currency.

The interim financial information for the six months to 30 June 2020 and 30 June 2019 is unaudited and does not constitute statutory financial information. The comparatives for the full year ended 31 December 2019 are not the Group's full statutory accounts for that year. The information given for the year ended 31 December 2019 does not constitute statutory financial statements as defined by Section 435 of the Companies Act. The statutory accounts for the year ended 31 December 2019 have been filed with the Registrar and are available on the Company's web site www.ascentresources.co.uk. The auditors' report on those accounts was unqualified. It did not contain a statement under Section 498(2)-(3) of the Companies Act 2006.

Going Concern

The Financial Statements of the Group are prepared on a going concern basis.

Production from Pg-10 and Pg-11A has declined and anticipated production revenue is not expected to cover anticipated costs until the Company has the funding and the permits required for further well re-entries.  

On 5 August 2020, the company completed a £0.3 million subscription and agreed a definitive loan agreement with Align Research Limited to provide £0.4 million through an unsecured loan facility. These funds will be used for working capital and project costs; however, the Company may require further funding to cover further development projects over the next twelve months.

The Directors have a range of different options including, but not limited to new borrowings, corporate transaction or new equity placings.

However, there can be no guarantee over the outcome of these options and as a consequence there is a material uncertainty of the Group's ability to raise the necessary finance, which may cast doubt on the Group's ability to operate as a going concern. Further, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

Principal Risks and Uncertainties:

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 11-12 of the Annual Review 2019, a copy of which is available on the Company's website at www.ascentresources.co.uk. 

2.  Operating loss is stated after charging

	Period ended	Period ended
	30 June	30 June
	2020	2019
	£ '000s	£ '000s
Employee costs	241	390
Share based payment charge	206	168
Included within Admin Expenses
Audit Fees	35	35
Fees payable to the company's auditor other services	-	-
	35	35

3.  Acquisitions

There has been one acquisition during the period.

The Board strategically expect acquisitions to be a common component of growth in the future.

Acquisitions made during the period to 30 June 2020 were:

Energetical Limited

As a first step towards building its Cuban portfolio, the Company acquired 100% of the share capital of Energetical Limited. The initial consideration for the acquisition of Energetical comprised of the issue of six million new ordinary shares ("Consideration Shares") to the selling shareholders ("Sellers") of Energetical. A further 450,000 of deferred consideration will be payable on the execution of production sharing contracts covering the 9B Block, of which 350,000 will be satisfied by the issue of new ordinary shares ("Deferred Consideration Shares"), priced at the 30 day VWAP at the time of issue and 100,000 will be paid in cash. The Sellers have agreed not to dispose of any of the Consideration Shares for a period of one year.  The Company has agreed to a carve-out to this lock-in which permits the sale of up to an aggregate of one million Consideration Shares following the expiry of an initial three-month period.

The amount of identifiable net assets assumed at the acquisition date is shown below:

	Fair Values
Recognised amounts of net assets acquired and liabilities assumed	£ '000s
Identifiable net assets	-
Exploration and evaluation assets	653
Total Consideration	653

Satisfied by:
Consideration - new ordinary shares issued at 3.38p	203
Contingent consideration	450
Total Consideration	653

The fair value acquired assesses the future cash flows associated with exclusive rights in securing a Production Sharing Contract ('PSC') on an onshore Cuban oil licence, delivered by exclusive rights to the 9B Block in Cuba ("Block 9B") that contains the onshore Majaguillar and San Anton fields, located on the North coast of Cuba and currently producing 190 bbls/day gross from three wells. 

4.  Earnings per share

	Period ended	Period ended
	30 June	30 June
	2020	2019
	£ '000s	£ '000s
Result for the period
Total loss for the year attributable to equity shareholders	(1,243)	(994)
Weighted average number of ordinary shares	Number	Number
For basic earnings per share	42,776,190	24,700,320
Earnings per share (£)	(0.03)	(0.04)

5.  Property, plant & equipment and Exploration and Evaluation assets

	Computer Equipment	Developed Oil & Gas Assets	Total Property Plant & Equipment	Exploration & evaluation
Cost	£000s	£000s	£000s	£000s
At 1 January 2019	6	24,808	24,814	18,968
Additions	-	3	3	134
Effect of exchange rate movements	-	(73)	(73)	(258)
At 30 June 2019	6	24,738	24,744	18,844
At 1 January 2019	6	24,808	24,814	18,968
Additions	-	3	3	52
Effect of exchange rate movements	-	(1,328)	(1,328)	(444)
At 31 December 2019	6	23,483	23,489	18,576
At 1 January 2020	6	23,483	23,489	18,576
Additions	4	-	4	653
Effect of exchange rate movements	-	1,592	1,592	216
At 30 June 2020	10	25,075	25,085	19,445
Depreciation
At 1 January 2019	-	(1,035)	(1,035)	-
Charge for the year	(2)	(220)	(222)	-
Effect of exchange rate movements	-	3	3	-
At 30 June 2019	(2)	(1,252)	(1,254)	-
At 1 January 2019	-	(1,035)	(1,035)	-
Charge for the year	(6)	(434)	(440)	-
Effect of exchange rate movements	-	55	55	-
At 31 December 2019	(6)	(1,414)	(1,420)	-
At 1 January 2020	(6)	(1,414)	(1,420)	-
Charge for the year	(1)	(231)	(232)	-
Effect of exchange rate movements	-	27	27	-
At 30 June 2019	(7)	(1,618)	(1,625)	-
Carrying value
At 30 June 2020	3	23,457	23,460	18,792
At 31 December 2019	-	22,069	22,069	18,576
At 30 June 2019	4	23,486	23,490	18,844

 

6.  Trade & other receivables

	30 June	31 December
	2020	2019
	£ '000s	£ '000s
Trade receivables	55	54
VAT recoverable	20	25
Prepaid abandonment liability	240	240
Amounts receivable on ESA	-	175
Prepayments & accrued income	9	-
	324	494
Less non-current portion	(240)	(240)
Current portion	84	254

7.  Trade & other payables

	30 June	31 December
	2020	2019
	£ '000s	£ '000s
Trade payables	434	392
Tax and social security payable	68	5
Other payables	-	-
Accruals and deferred income	41	66
	543	463

8.  Borrowings

	30 June	31 December
	2020	2019
Group	£ '000s	£ '000s
Non-current
Convertible loan notes	375	-
	375	-
	30 June	31 December
Group	2020	2019
Current	£ '000s	£ '000s
Convertible loan notes	5	17
Borrowings	-	368
Liability at the end of the period	5	385

The non-current convertible loan notes relate to the loan arrangement with Riverfort Global opportunities that was refinanced in February 2020. The outstanding loan of £375,020 has been re-negotiated to a two-year coupon free bullet with conversion rights for the lender at 7.5 pence per share. No conversion can occur until the share price exceeds 10 pence per share for five consecutive days.

The current convertible loan notes were due from redemption on 19 November 2019 and at the balance sheet date £5,625 remain unclaimed.

 

9.  Contingent consideration due on acquisitions

	30 June	31 December
	2020	2019
Group	£ '000s	£ '000s
Non-current
Energetical Limited	450	-
	450	-

The fair value of contingent consideration was based on the present value of cash flows and the market value of the shares to be issued.

10.  Share Capital

		30 June	31 December
		2020	2019
		£ '000s	£ '000s
Authorised
2,000,000,000 ordinary shares of 0.5p each		10,000	10,000
Allotted, called up and fully paid
3,019,648,452 deferred shares of 0.195p each		5,888	5,888
1,737,110,763 deferred shares of 0.09p each		1,563	1,563
59,109,652 ordinary shares of 0.5p each (2019: 3,019,648,452 ordinary shares of 0.2p each)		296	153
		7,747	7,604
Reconciliation of share capital movement		Ordinary shares No.	Ordinary shares No.
Opening		3,019,648,452	2,291,310,686
Share consolidation		(2,989,451,968)	-
Issue of shares during the year		28,913,168	728,337,766
Closing	59,109,652		3,019,648,452

The deferred shares have no voting rights and are not eligible for dividends.

Shares issued during the year

Issuance of equity throughout the year:

· On 13 March 2020, the Company raised £485,000 (£445,802 net of costs) via the Placing of 9,700,000 Ordinary shares with investors

· On 24 March 2020, the Company issued 166,666 shares at a price of 5p to exiting directors in lieu of a cash settlement and a further 390,000 shares at a price of 5p each per share and 214,286 shares at a price of 3.5p each to select professional advisors.

· On 8 April 2020, the Company issued 1,000,000 ordinary shares at a placing price of 5p per share in order to settle an amount of £50,000 with a relevant investor

· On 8 April 2002, the Company issued 91,167 ordinary shares as a result of the acquisition of Trameta doo announced on 1 August 2015. This was the final payment and no further contingent consideration of shares will be due.

· On 14 April 2020, the Company agreed to purchase Energetical Limited for the issuance of 6,000,000 new ordinary shares

· On 20 April 2020, the Company issued 623,777 new ordinary shares of 0.5p at a price of 3.5p to a professional advisor in lieu of fees.

· On 30 April 2020. The Company issued 7,727,272 new ordinary shares of 0.5p at a price of 2.75p, raising gross proceeds of £212,500

· On 4 May 2020, the Company issued 750,000 ordinary shares at a placing price of 5p per share in order to settle an amount outstanding in the amount of £37,500.

· On 7 May 2002, the Company issued 2,250,000 ordinary shares at a placing price of 5p per share relating to a settlement of remaining sums from a relevant investor.

 

11.  Share based payments

The Company has provided the Directors, certain employees and institutional investors with share options and warrants ('options').  Options are exercisable at a price equal to the closing market price of the Company's shares on the date of grant.  The exercisable period varies and can be up to seven years once fully vested after which time the option lapses.

Details of the share options outstanding during the year are as follows:

	Shares	Weighted Average price (pence)
Outstanding at 1 January 2019	152,576,254	2.38
Outstanding at 31 December 2019	152,576,254	2.38
Exercisable at 31 December 2019	77,013,744	2.94
Outstanding at 1 January 2020	152,576,254	2.38
Granted during the year	4,931,380	5.00
Outstanding at 30 June 2020	157,576,254	2.46
Exercisable at 30 June 2020	77,013,744	2.94

The value of the options is measured by the use of a binomial pricing model.  The inputs into the binomial model made in 2020 were as follows. 

Share price at grant date	3.25 - 4.50p
Exercise price	5.00p
Volatility	50%
Expected life	3 years
Risk free rate	0.5%
Expected dividend yield	0%

Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous 5 years.  The expected life is the expiry period of the options from the date of issue.

Options outstanding at June 2020 have an exercise price in the range of 1.58p and 20.00p (and a weighted average contractual life of 7.5 years.

Details of the warrants outstanding are as follows:

Issued	Exercisable from	Expiry date	Number outstanding	Exercise price
24 March 2020	Anytime until	24 March 2025	225,000	5.00p
24 March 2020	Anytime until	24 March 2020	199,482	5.00p
30 April 2020	Anytime until	30 April 2022	8,727,272	5.50p

The warrants outstanding at the period end have a weighted average remaining contractual life of 1.9 years. The exercise prices of the warrants are 5.00p per share. 

12.  Events after the reporting period

On 24 July 2020, the Company formally notified the Government of the Republic of Slovenia of the existence of disputes under the UK - Slovenia bilateral investment treaty ("BIT") and the Energy Charter Treaty ("ECT"). Notifying in particular the fact that certain actions have caused considerable harm to the Investors' investments in Slovenia constitute breaches by the Government of Slovenia of the protections established by the BIT and ECT.

On 27 July 2020, the company announced that Stephen Birrell and Malcolm Graham-Wood would be joining the board as non-executive directors with effect from 1 October 2020. It was also announced that Leonardo Salvadori would be assuming the role of part time Technical Director.

On 6 August 2020, the Company raised gross proceeds of £300,000 from the issue of 15,000,000 ordinary shares of 0.5p at 2p per share. The Company also agreed to issue 1,500,000 ordinary shares of 0.5p at a placing price of 2p per share in respect of an invoice received from a supplier who has agreed to receive the payment in lieu of their fees.

On 6 August 2020, the Company entered into a definitive loan agreement with Align Research Limited to provide, in aggregate, £400,000 through an unsecured loan facility for working capital purposes in support of the execution of the Special Situations strategy. The loan is to be drawn down in three tranches being £100,000 on 15 August 2020, £100,000 on 3 September 2020 and £200,000 on 4 October 2020. The loan plus a fixed coupon of 8% is repayable in full on maturity which is the 31 March 2021.

Additionally, the Company has agreed to repay a total of £135,000 of the total outstanding Riverfort loan of £375,020, which will be reduced to £240,020 and due to mature on the 11 February 2022.

 

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