Final Results

RNS Number : 5517T

CEB Resources PLC

21 July 2015

 



21 July 2015

CEB Resources plc

("CEB" or the "Company")

Final Results

CEB Resources plc is pleased to announce its financial results for the year ended 30 April 2015.

Chairman's Statement

During the year, the Company exited its coal investments in Poland and Australia, and at the year-end held only its base metals investment in Australia. The Company has subsequently embarked on a joint venture in the oil and gas sector in Indonesia, details of which were announced in June 2015.

During the year, the Company realised a profit of USD 851,000 on its holding in Carbon Investment S.o.o. ("Carbon Investment") the owner of the advanced Mariola thermal coal project in Southern Poland.  This was achieved by assigning its share option and initial 10% equity stake in Carbon Investment to Balamara Resources Limited ("Balmara") in return for 15,000,000 ordinary shares in Balamara with a value of AUD 1,170,000 (USD 1,099,000) and cash of AUD 100,000 (USD 94,000). A total of 20,000,000 ordinary shares in the Company were issued to Carbon Investment as part consideration of the original investment cost were cancelled and returned to the Company. This represented a threefold return on the initial investment within a space of five months.  As announced, all shares in Balamara have now been sold thereby realising a net profit on the two investments of USD 219,000. 

As announced a successful aeromagnetic survey has been flown at the Australian Peelwood base metals project identifying strong new drilling targets outside the existing ore zone. Both parties to the farm-in arrangement were pleased with the success of this initial survey which has resulted in the delineation of two new strong targets which will be considered for follow-up drilling exploration programs in due course. We have left the valuation of our holding in the Peelwood Project ("Peelwood") unchanged for the 2015 financial year ay USD 179,000.

Financial results and Corporate Governance

The Company continues to keep a very tight control on costs, which amounted to just USD 303,000 in the period.

As a result of the above movements, we show a loss in the period of USD 122,000 and the NAV per share has decreased from 0.3 US cents in April 2014 to 0.2 US cents in April 2015.

On 1 October 2014 the Company changed its Nominated Advisor and Joint Broker from N+1 Singer Advisory LLP to Sanlam Securities UK Limited. The AGM was held on the 31st October 2014 in Perth Western Australia with all resolutions passed. The Company and YA Global Master SPV. Ltd. ("YAGM") entered into an Equity Swap Agreement on 13 March 2014 (the "Swap Agreement") which was also closed in April 2015 by the issue of 29,182,675 ordinary shares for a consideration of GBP 47,000.

Finances

The Company recently raised a further GBP 1,600,000 by way of placing primarily to facilitate the joint venture and so is well funded. 

Recent Developments - Indonesia

Subsequent to the year end the Company has entered into an agreement with Corsair Petroleum (Singapore) Pte Ltd ("Corsair") whereby Corsair has agreed to assign a participating interest in a vehicle which intends to consider and if applicable, apply for two oil and gas concessions in Indonesia, primarily in Aceh and Sumatra. Aceh and Sumatra are known productive oil and gas regions with strong local support for the development of assets.

Oil was first discovered in Aceh in 1883 by Royal Dutch Shell.  There are a number of producing oil and gas fields including the Arun gas field (3 bn boe) which was discovered in 1971 by Mobil, which became a cornerstone of the global LNG business following the first cargo of LNG being delivered to Japan in 1977.  Due to historic insecurity in the province of Aceh, the oil and gas industry in the region has suffered from under-investment.  However with the declaration of Special Region Status the region has benefited from a decade of peace and the Aceh government is now actively looking for investment to upgrade and optimise its oil and gas industry.

Indonesia is a prolific hydrocarbon rich region and was one of the founding members of OPEC.  Some 128 basins have been identified, with the Government estimating that the remaining reserves total 7.9 bn bbls and 159 TCF of gas.  The country is the 7th largest producer of LNG in the world and the 28th in terms of oil production.  The gas industry is characterised by strong domestic demand and a high pricing environment.  Sumatra is the engine room of the oil and gas industry with in excess of 70 oil companies operating in the region, including Pertamina, the national oil company, ConocoPhillips, Caltex, and ExxonMobil.

Finally, I'd like to thank all shareholders and our consultants for their ongoing support and hard work in what has been a pro-active 12 months. I look forward to updating all further in coming months and welcome David Whitby a successful oil and gas operator, on to the Company's Board.   

Cameron Pearce

Chairman

For further information, please contact:

David Whitby	CEB Resources plc	Tel: [phone]
Cameron Pearce	CEB Resources plc	Tel: [phone]
Lindsay Mair Andrew Wagstaff	Sanlam Securities UK Limited (Nomad and Joint Broker)	Tel: [phone]
Lucy Williams Charles Goodfellow	Peterhouse Corporate Finance Limited (Joint Broker)	Tel: [phone]
Nick Bealer	Cornhill Capital (Joint Broker)	Tel: [phone]
Frank Buhagiar	St Brides Partners Limited	Tel: [phone]
Graham Smith	IOMA Fund & Investment Management Limited (Administrator)	Tel: [phone]

Statement of Comprehensive Income
for the year ended 30 April 2015

		2015		2014
	Note	$'000		$'000
Interest income		1		4
Sundry income		-		225
Profit on disposal of subsidiaries		-		45
Realised gain on sale of investments at fair value through profit or loss	4	219		-
Net investment profit		220		274
Administration fees and expenses	1	(303)		(894)
Foreign exchange loss		(39)		(81)
Loss for the year before taxation		(122)		(701)
Taxation	2	-		-
Loss for the year		(122)		(701)
Basic and diluted loss per share	3	($0.001)		($0.004)

Statement of Financial Position
as at 30 April 2015

	Note		2015		2014
			$'000		$'000
Non-current assets
Investments at fair value through profit or loss	4		179		751
Total non-current assets			179		751
Current assets
Trade and other receivables			22		31
Cash and cash equivalents			354		97
Total current assets			376		128
Total assets			555		879
Current liabilities
Trade and other payables			(43)		(47)
Total liabilities			(43)		(47)
Net assets			512		832
Represented by:
Share premium	5		3,616		3,855
Distributable reserve			(3,104)		(3,023)
Total equity			512		832
Net asset value per share ($)	6		0.002		0.003

Statement of Changes in Equity for the year ended 30 April 2015

	Share Capital  $'000	Share Premium $'000	Capital Redemption Reserve  $'000	Distributable Reserve  $'000	Foreign Currency Translation Reserve $'000	Total Equity  $'000
Balance at 1 May 2013	2,643	-	277	5,091	2,184	10,195
Loss for the year	-	-	-	(701)	-	(701)
Redesignation of shares to nil par value	(2,643)	2,643	-	-	-	-
Release of Capital Redemption Reserve	-	-	(277)	277	-	-
Other comprehensive income
Realisation of translation reserves	-	-	-	2,184	(2,184)	-
Transactions with owners recorded directly in equity
Shares issue proceeds	-	1,508	-	-	-	1,508
Share issue costs	-	(296)	-	-	-	(296)
Distribution	-	-	-	(9,874)	-	(9,874)
Balance at 30 April 2014	-	3,855	-	(3,023)	-	832

	Share Premium $'000	Distributable Reserve  $'000	Total Equity  $'000
Balance at 1 May 2014	3,855	(3,023)	832
Loss for the year	-	(122)	(122)
Transactions with owners recorded directly in equity
Share cancellation (Note 5)	(239)	-	(239)
Share based payments	-	41	41
Balance at 30 April 2015	3,616	(3,104)	512

Statement of Cash Flows
for the year ended 30 April 2015

	Note	2015		2014
		$'000		$'000
Cash flows from operating activities
Loss for the year		(122)		(700)
Adjustments for:
Profit on disposal of subsidiaries		-		(45)
Interest income		(1)		(4)
Realised gain on sale of investments at fair value   through profit or loss	4	(219)		-
Share based payment expense	5	41		-
Foreign exchange differences		39		-
Tax paid	2	-		-
Write off of fixed assets		-		16
Changes in working capital
Change in trade and other receivables		9		78
Change in trade and other payables		(4)		(287)
Net cash flows used in operating activities		(257)		(942)
Cash flows from investing activities
Purchase of investments		-		(512)
Proceeds on sale of investment		551		9,516
Interest received		1		4
Net cash flows generated from investing activities		552		9,008
Cash flows from financing activities
Shares issued		-		973
Dividends paid		-		(9,874)
Net cash flows used in financing activities		-		(8,901)
Net increase/(decrease) in cash and cash equivalents		295		(835)
Cash and cash equivalents at start of year		97		932
Effect of exchange rate fluctuations on cash held		(38)		-
Cash and cash equivalents at end of year		354		97

Significant non-cash transactions:

Part of the consideration for the sale of the Company's interest in Carbon Investment was shares in Balamara with a value of USD 1,099,000. As part of the sale of the Company's investment in Carbon Investment, 20,000,000 shares were cancelled with a value of USD 239,000.

Notes to the Financial Statements for the year ended 30 April 2015

The financial information set out above does not comprise the Company's statutory accounts. The Annual Report and Financial Statements for the year ended 30 April 2015 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 30 April 2015 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the EU.

1    Administration fees and expenses

Administration fees and expenses consist of the following:

	2015		2014
	$'000		$'000
Audit fees	16		16
Insurance	12		55
Professional fees	106		386
Administration costs	19		186
Directors' fees (Note 7)	83		232
Sundry expenses	26		19
Options expense (Note 5)	41		-
Total	303		894

2        Taxation

The Company is resident for tax purposes in the Isle of Man and is subject to Isle of Man income tax at the current rate of 0%.

The Company has invested in a company resident in Australia and will be subject to tax on distributions and gains levied by those jurisdictions.

3        Loss per share

Basic loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of ordinary shares outstanding during the year.

	2015		2014
Loss attributable to shareholders   ($'000)	(122)		(701)
Weighted average number of ordinary shares in issue (thousands)	238,480		165,487
Basic loss per share	($0.001)		($0.004)

There were 37,250,462 warrants in issue at the 30 April 2015 (2014: 37,250,462 warrants in issue). These are not dilutive as a loss was incurred for the year.

There were 31,000,000 options in issue at the 30 April 2015 (2014: 6,000,000 options in issue). These are not dilutive as a loss was incurred for the year.

4        Investments at fair value through profit or loss

	2015		2014
	$'000		$'000
Investments at fair value through profit or loss opening balance	751		-
Purchase of investments	1,099		751
Sale of investments (proceeds)	(1,890)		-
Realised gain on sale of investments	219		-
Investments at fair value through profit or loss closing balance	179		751

There was one investment held at the year-end:

On 18 December 2013 the Company entered an Option Agreement with Balamara to farm into its Peelwood concession located in NSW, Australia. Under the agreement the Company, could earn into 49% of Peelwood. This option was partly exercised on 28 January 2014 earning the Company 20% of the concession at a cost of AUD 200,000 or USD 179,000. Further rights to exercise options have now lapsed. The investment remains valued at the cost of AUD at the year-end, being the Directors best estimate of fair value.

a)       Fair value estimation

Financial instruments held by the Company carried at fair value comprise one unquoted investment.

The Company measures fair value by using the following fair value hierarchy:

Level 1:  Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2:  Inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); and

Level 3:  Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.  These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. Where investments have recently been made the cost of the transaction is deemed the best evidence of market value in the absence of any significant changes. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2; otherwise they are classified as level 3.

All the Company's investments are included within level 3 and are designated financial assets at fair value through profit or loss:

Level 3 inputs

The following table gives information about how the fair values of Company investments are determined (in particular, the valuation techniques and inputs used).

Assets and liabilities	Nature of investment	Fair value as at 30 April 2015	Valuation techniques and key inputs	Significant unobservable input
Financial assets at fair value through profit or loss	20% of equity investment in Peelwood	USD 179,000	Market approach- last transaction of investment	Last transaction price i.e, cost

Last transaction price was the Company's purchase price, which the Directors consider represents fair value.

5    Equity Reserves

	Number of shares
	2015	2014
Issued ordinary shares at nil par value	261,897,303	252,714,628
Warrants issued	37,250,462	37,250,462
Options issued	31,000,000	6,000,000

All shares are fully paid and each ordinary share carries one vote.

25,000,000 options were granted during the period, 20,000,000 were granted to Directors of the Company. These were valued at USD 41,000 (0.107 pence per share). They were granted on 4 February 2015 and are exercisable for a period of two years from the issue date at a price of 0.175 pence per share, being the mid-market price at the date granted. 6,000,000 options were granted during the prior year period, these were valued at nil. They were granted on 9 December 2013 and are exercisable for a period of two years from the issue date at a price of 2 pence per share.

Options have been valued using the Black-Scholes model. No options have been exercised at the Balance Sheet date. 

No warrants were granted during the period. 37,250,462 warrants were issued on 9 December 2013 and are exercisable for a period of two years from the issue date at a price of 2 pence per share. Warrants have been valued using the Black-Scholes model. No warrants have been exercised at the Balance Sheet date. 

Please refer to the Directors' Report for details of shares, options and warrants held by the Directors at 30 April 2014 and 2015.

(a)        Share Premium

	2015
	$'000
Opening balance	3,855
Share cancellation	(239)
Closing balance	3,616

On 17 February 2014 the Company issued 20,000,000 ordinary shares at a price of 0.715 pence per share as part-consideration for the purchase of 10% equity in Carbon Investment. On 14 July 2014 the Company sold its investment in Carbon Investments to Balamara. The 20,000,000 ordinary shares previously issued were cancelled and returned to the Company. The cost of USD 239,000 of these shares was removed from equity and included as a realised gain on sale of investments.

The Company and YAGM entered into an Equity Swap Agreement on 13 March 2014 over 27,586,207 Company shares held by YAGM. The cumulative liability of GBP 47,000 generated under the Swap Agreement up to 31 March 2015 representing a return of funds to YAGM based on the share price performance of the Company was settled on 14 April 2015 by the issue 29,182,675 new ordinary shares in the Company a price of 0.1607 pence per share to YAGM. As at 30 April 2015 YAGM held 36,079,225 ordinary shares in the Company, representing 13.78% of the issued shares. The Final settlement date of the Swap Agreement was 30 June 2015, however on 19 May 2015 it was confirmed by YAGM that the final settlement date would be changed to 30 April 2015 and the liability of GBP 25,517 for the month of April 2015 would be waived. Subsequent to the year end YAGM have sold all their shares in the Company.

6    Net asset value (NAV) per share

The NAV per share is calculated by dividing the net assets attributable to the equity holders of the Company at the end of the year by the number of shares in issue. 

	2015		2014
Net assets	$492,000		$832,000
Number of shares in issue	261,897,303		252,714,628
NAV per share	$0.002		$0.003

7    Directors' remuneration

Fees earned during the year and previous year are as below:

	2015		2014
	$'000		$'000
Cameron Pearce	73		13
Jeremy King	10		3
Josef (Yossi) Raucher (up to 13 December 2013)	-		102
Timothy Walker (up to 13 December 2013)	-		12
Eitan Milgram (up to 13 December 2013)	-		102
	83		232

For details of shares, options and warrants held by Directors during the period and at the Balance Sheet date please refer to the Directors Report.

8    Subsequent events

On 30 April 2015 the Company entered into a Participation Agreement ("the Agreement") with Northcote Energy Limited ("Northcote"), which came into effect on 1 May 2015. The agreement entitles Northcote to participate up to 12.5% in any of the Company's Indonesian investments over 5 years from the date of the Agreement (see Corsair Assignment Agreement below for further details). In return Northcote will pay a proportionate share of all project costs. Northcote has subscribed for 50,000,000 shares in the Company post year-end.   

On 6 May 2015 50,000,000 ordinary shares in the Company were issued at a price of 0.2 pence per share for gross proceeds of GBP 100,000.

On 8 May 2015 the Company entered into a loan agreement with Corsair Petroleum (Singapore) Pte Limited ("Corsair") to provide Corsair with an unsecured loan of USD 25,000. The loan bears interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest will be made by 8 May 2016.

On 12 May 2015 trading in the Company's shares was suspended from the AIM pending the conclusion of the Company's negotiations and entering into the Corsair Assignment Agreement. Trading was resumed on 11 June 2015.

On 19 May 2015 it was confirmed by YAGM that the final settlement date of the Swap Agreement in place between YAGM and the Company would be changed to 30 April 2015 and the liability of GBP 25,517 for the month of April 2015 would be waived. See Note 5 for further details.

On 4 June 2015 the Company entered into an Assignment Agreement with Corsair for a 70% participating interest in PT Wangsa Energi Prakarsa ("the Project"), which will apply for two Indonesian gas concessions. Under the terms of the Assignment Agreement  the purchase price will total GBP 500,000, which will be provided through the issuance of Company shares to Corsair, plus share options in the Company equal to 20% of the issued share capital after the issuance of the 31,250,000 ordinary shares detailed below In return the Company has the right to 90% of the available cash flows from the Project until the full cost of the investment plus an internal rate of return of 9% is received by the Company. Once this value of distributions has been received by the Company CEB, distributions to the Company will revert to its 70% participating interest. Corsair has the right to 10% of the available cash flows from the Project, until the full cost of their investment is received, then it will revert to its 5% participating interest. The full payment of the investment is subject to certain conditions being met, and the purchase price will be paid in tranches as each condition is fulfilled as detailed below:

-    Execution of the Assignment Agreement

-     Purchase of one concession

-     Purchase of two concessions

-     Gross production from the Project exceeding an average of 400 barrels of equivalent oil for a period of 30 days

The first condition was met on 4 June 2015, and 31,250,000 Company shares at 0.4 pence per share were issued to fulfil the first tranche payment of GBP 125,000 on 11 June 2015. In addition, 34,344,865 share options were issued at an exercisable price of 0.4 pence per share, which can be exercised up to 4 June 2018. These options were valued at the issue date using the Black-Scholes model at GBP 100,000. If the Company purchases a concession, such a  transaction will be treated as a reverse takeover under Rule 14 of the AIM rules. This will represent a fundamental change to the Company's business from an investing company to a gas and oil company, which will be subject to shareholder approval.

On 5 June 2015 David Whitby was appointed as Managing Director and Chief Executive Officer of the Company. David Whitby is a beneficial owner of Corsair. Through his beneficial ownership of Corsair David Whitby owns 7,812,500 shares in the Company which were issued on 4 June 2015. 

On 10 June 2015 the Company entered into a loan agreement with Corsair to provide Corsair with an unsecured loan of USD 250,000. The loan bears interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest will be made by 10 June 2016.

On 11 June 2015 370,000,000 ordinary shares were issued for trading at a price of 0.4 pence per share, raising gross proceeds of GBP 1,500,000. Of these 50,000,000 were subscribed to by Northcote.

On 15 July 2015 the Company entered into a loan agreement with Corsair to provide Corsair with an unsecured loan of USD 225,000. The loan bears interest of 5% per annum payable on repayment of the loan. Full repayment of the principal amount plus accrued interest will be made by 15 July 2016.

9    Availability of Report and Accounts

The Report and Accounts will be available from the Company's registered office at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP and on the Company's website www.cebresources.com shortly.

 

END

 

 

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