Half-year Report

RNS Number : 1808I

Mosman Oil and Gas Limited

31 March 2020

 

31 March 2020

Mosman Oil and Gas Limited

("Mosman" or the "Company")

Unaudited Half Year Report

Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration, development and production company, announces its unaudited results for the six months ended 31 December 2019, which have been reviewed by the appointed auditors .

Operations Review

Strategy

Mosman's 2019 objective was to identify opportunities which will provide operating cash flow and have further development upside, in conjunction with adding value to the Company's existing exploration permits. The practical aspects of that strategy were updated with the decision to focus on the East Texas region, with emphasis on the Stanley and Greater Stanley projects, and disposing of the Arkoma and Welch projects once there is more certainty in the markets. The Company has steadily increased production and is positioned for growth. However, events of early 2020 mean that growth objectives will now have to be constrained to manage cash flow, and costs have been further reduced. With current oil prices, the outlook for the next year will be challenging particularly if the oil price remains low as the likely financial impact on Mosman will be significant. Accordingly, the Board has been conservative in the impairment tests and reduced the book value of certain assets.

Results

The unaudited results for the six months reflect the earlier decisions of the Board and it is pleasing to see revenue almost double to $998,369 and Gross Profit increased almost eight-fold to $571,937 compared to the previous December six monthly period.

Mosman has been working hard to become cash flow positive at an overall corporate level and also become profitable. Mosman was close to achieving its objectives recording a loss for the period before impairment costs of $178,782.

Including impairment costs of $4,142,016, the loss for the period was $4,320,798.

Post 31 December Events

Despite the pleasing financial result to 31 December, Mosman cannot operate in a vacuum and very recent events associated with COVID-19, as well as the collapse in the oil price have caused extreme market turbulence and will fundamentally affect ongoing operations. Accordingly, the Directors have acted quickly and have implemented several steps designed to further reduce costs and secure the Company's long-term future.

Part of that review was examining the carrying value of all assets, and that led directly to the $4,142,016 Impairment Expense. The USA production assets were impaired by $2,760,720, and the Australian exploration assets were impaired by $1,381,296. The impairment is designed to reflect a potential change in the assets carrying value due to the oil price collapse.

Producing Projects in USA

Mosman has Working Interests in onshore producing projects located in the USA. These projects and Mosman's working interests before royalties (WI) are:

Project	Location	Working Interest
Stanley Polk County	Texas	14.85 to 16.50%
Welch Permian Basin	Texas	100.00%
Arkoma Stacked Pay	Oklahoma	27.00%

Production Summary for the six months ending 31 December 2019

Net Production attributable to Mosman for the six months was 13,253 boe, an increase of c13% which follows the c81% increase in the six months to June 2019.

Production Details

Further details are outlined below:

	6 Months to 31 December 2019	6 Months to 31 December 2019	6 Months to 30 June 2019	6 Months to 30 June 2019
	Total Project	Net Attributable	Total Project	Net Attributable
	Gross boe	Net boe	Gross boe	Net boe
Stanley	42,268	6,877	14,153	2,353
Welch	6,851	5,252	6,210	4,760
Arkoma	5,868*	1,124*	16,945	4,227
Strawn **	-	-	503	402
Total boe	54,987	13,253	37,811	11,742

* Figures for five months of the period only as Mosman is awaiting December figures for Arkoma

**Strawn project was sold in June 2019

Additional Prospective Projects in USA

In addition, a Working Interest is owned in additional projects, including Challenger, Champion and the Greater Stanley area that was recently acquired and has some production. 

Acquisition and Development

A total of $510,526 was expended on acquisition costs and development expenditure during the period. Development expenditure during the period included workovers and repairs that were identified to increase production and develop individual assets.

Australian Exploration

Up until recently Mosman was continuing to progress the exploration portfolio in Australia and maintains its interest in the 100% owned granted permits EP 145 and one application (EPA 155).

On ground activities have recently been restricted.

Corporate

Funding

Mosman will continue to raise funds as required to expand its operations and production and support its current operations, within the limits of the capital markets.

There were no shares issued during the period. On 14 February 2020, the Company announced an equity placing and a subscription which is disclosed in Subsequent Events below.

Norseman Capital Ltd ("Norseman") (previously Gem International Resources Inc)

Mosman continues to hold its shareholding in Norseman and notes that it is now admitted to trade on the NEX Board of the Toronto Stock Exchange (TSX).

The current Board of Norseman (which includes Mosman's Executive Chairman) have recently overseen the relisting, a small capital raising and the settlement of most creditors.

Norseman is considering potential business opportunities, but in the current climate it is extremely difficult to predict the chance of completion, or the timetable.

Blackstone Oil and Gas LLC ('Blackstone')

Blackstone was previously Mosman's strategic partner and a co-investor in the Strawn and Arkoma projects. That arrangement has now ceased. Blackstone became indebted to Mosman for certain amounts due in respect of those projects. Payment has not been forthcoming despite various commitments made by Blackstone.

Mosman commenced legal action against Blackstone to recover amounts due under a promissory note. Mosman has now successfully obtained a Court judgement of c USD 171,000. The next step is for Blackstone's assets to be auctioned off with Mosman receiving the proceeds of the asset sales. The amount received will be dependent on the auction proceeds. Mosman will evaluate its alternatives for recovery of the balance of funds due from Blackstone (c USD 146,000 in addition to the promissory note).

Due to the uncertainty caused by recent events amounts owing by Blackstone have been substantially impaired

Subsequent Events

In February 2020, the Company raised $585,138 (before expenses) by placing 200,000,000 shares at a price of 0.15p per share, together with one warrant to subscribe for one share at an exercise price of 0.23p with a term of 12 months per placing share.

In addition, two Directors of Mosman, John Barr and Andy Carrol indicated their intent to subscribe for $120,000 on the same terms and conditions.

Subsequent to the end of the period, the combined global events of a collapse in the oil price and the spread of Covid-19, have affected all stock markets and most countries.  It is extremely difficult to predict the outcome of these matters. The Company has taken action to reduce costs, and all operations have been reviewed. These matters were announced on 24 March 2020 and included a focus on reducing operating costs and preserving the Company's cash resources.

Other than the above, t here were no significant events subsequent to the date of statement of financial position.
 

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For The Half Year Ended 31 December 2019

All amounts are in Australian Dollars

	Notes	Consolidated 6 months to 31 December 2019 $	Consolidated 6 months to  31 December 2018 $
Revenue		998,369	521,326
Cost of sales	2	(426,432)	(435,273 )
Gross profit		571,937	86,053
Interest i ncome		23,228	15,001
Other income		39,893	8,546
Administrative expenses		(95,766)	(94,095)
Corporate expenses	3	(433,166)	(417,494)
Directors fees		(60,000)	(60,000)
Exploration expenses incurred not capitalised		-	(7,987)
Employee b enefits expense		(34,004)	(46,093)
Evaluation and due diligence		(140,430)	(100,020)
Non-cash share based payments expense		-	(10,149)
Finance costs		(5,177)	(2,250)
Amortisation expense		(43,089)	(47,576)
Depreciation expense		(2,208)	(3,135)
Impairment expense		(4,142,016)	-
Costs associated with abandoned acquisitions	4	-	(40,214)
Share of net loss from joint operation		-	(11,354)
Loss from ordinary activities before income tax expense		(4,320,798)	(730,767)
Income tax expense		-	-
Net l oss for the period		(4,320,798)	(730,767)
Other c omprehensive income
Items that may be reclassified to profit or loss
Gain on financial assets at fair value through other comprehensive income (FVOCI)	5	60,626	-
Foreign currency (loss)/gain	5	(12,023)	60,330
Other comprehensive income for the period, net of tax		48,603	60,330
Total comprehensive loss attributable to members of the entity		(4,272,195)	(670,437)
Basic and diluted loss per share		(0.73) cents	(0.14) cents

The accompanying notes form part of these consolidated financial statements.
 

Condensed Consolidated Statement of Financial Position

As at 31 December 2019

All amounts are in Australian Dollars

	Notes	Consolidated Balance as at 31 December 2019	Consolidated Balance as at 30 June  2019
		$	$
Current Assets
Cash and cash equivalents		124,024	823,959
Trade and other receivables	6	180,702	330,160
Inventory		66,203	77,961
Other assets	7	67,545	35,756
Other financial assets		115,485	-
Total current assets		553,959	1,267,836
Non-Current Assets
Property, plant & equipment		11,827	14,034
Oil and gas assets	9	1,992,622	3,905,106
Loans receivable	8	96,445	337,201
Other receivables		50,000	50,000
Capitalised o il and g as exploration expenditure	10	250,000	1,615,956
Total non-current assets		2,400,894	5,922,297
Total Assets		2,954,853	7,190,133
Current Liabilities
Trade and other payables	11	609,473	569,234
Provisions		23,846	27,170
Total current liabilities		633,319	596,404
Total Liabilities		633,319	596,404
Net Assets		2,321,534	6,593,729
Shareholders' Equity
Contributed equity	12 a)	30,164,872	30,164,872
Reserves	13	579,440	530,837
Accumulated losses		(28,422,778)	(24,101,980)
Equity attributable to shareholders		2,321,534	6,593,729
Non-controlling interest		-	-
Total Shareholders' Equity		2,321,534	6,593,729

The accompanying notes form part of these consolidated financial statements.

 

Condensed Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December 2019

All amounts are in Australian Dollars

	Accumulated Losses	Contributed Equity	Reserves	Non-Controlling Interest	Total
	$	$	$	$	$
Balance at 1 July 2019	(24,101,980)	30,164,872	530,837	-	6,593,729
Comprehensive income
Loss for the period	(4,320,798)	-	-	-	(4,320,798)
Other comprehensive loss for the period	-	-	48,603	-	48,603
Total comprehensive loss for the period	(4,320,798)	-	48,603	-	(4,272,195)
Transactions with owners, in their capacity as owners, and other transfers:
New shares issued	-	-	-	-	-
Cost of raising equity	-	-	-	-	-
Total transactions with owners and other transfers	-	-	-	-	-
Balance at 31 December 2019	(28,422,778)	30,164,872	579,440	-	2,321,534
Balance at 1 July 2018	(22,921,464)	28,044,804	420,860	28,320	5,572,520
Comprehensive income
Loss for the period	(719,413)	-	-	(11,354)	(730,767)
Other comprehensive loss for the period	-	-	60,330	-	60,330
Total comprehensive loss for the period	(719,413)	-	60,330	(11,354)	(670,437)
Transactions with owners, in their capacity as owners, and other transfers:
New shares issued	-	887,377	-	-	887,377
Cost of raising equity	-	(62,808)	-	-	(62,808)
Total transactions with owners and other transfers	-	824,569	-	-	824,569
Balance at 31 December 2018	(23,640,877)	28,869,373	481,190	16,966	5,726,652

These accompanying notes form part of these consolidated financial statements
 

Condensed Consolidated Statement of Cash Flows

For the Half Year Ended 31 December 2019

All amounts are in Australian Dollars

		Consolidated 6 months to  31 December 2019	Consolidated  6 months to 31 December 2018
		$	$
Cash flows from operating activities
Receipts from customers		1,010,125	540,201
Interest received & other income		-	23,546
Payments to suppliers and employees		(1,257,973)	(1,087,329)
Bonds refunded		10,000	66,735
Interest paid		(5,177)	(2,249)
Net cash used in operating activities		(243,025)	(459,096)
Cash flows from investing activities
Payments for exploration and evaluation		(15,340)	(174,280)
Deposits paid for acquisition		-	(136,735)
Costs associated with abandoned acquisitions		-	(40,214)
Payments for oil and gas acquisitions		(162,009)	(690,449)
Payments for oil and gas assets		(332,411)	(171,311)
Net cash used in investing activities		(509,760)	(1,212,989)
Cash flows from financing activities
Proceeds from shares issued		-	887,376
Payments for costs of capital		-	(62,808)
Payments for loans to third parties		52,850	(33,870)
Transactions with non-controlling interest		-	(100,769)
Net cash provided by financial activities		52,850	689,929
Net decrease in cash and cash equivalents		(699,935)	(982,156)
Cash and cash equivalents at the beginning of the financial period		823,959	1,323,084
Cash and cash equivalents at the end of the financial period		124,024	340,928

The accompanying notes from part of these consolidated financial statements

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

  1. Summary of Significant Accounting Policies

  Statement of Compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS34 'Interim Financial Reporting'. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Group's 2019 annual financial report for the financial year ended 30 June 2019, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards (IFRS).

Going Concern
The condensed consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business.

The directors have considered the funding and operational status of the business in arriving at their assessment of going concern and believe that the going concern basis of preparation is appropriate, based upon the following:

· Current cash and cash equivalents on hand;

· The ability to further vary cash flow depending upon the achievement of certain milestones within the business plan and;

· The ability of the Company to obtain funding through various sources, including debt and equity.

Exploration and Evaluation Costs

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area for which the rights to tenure are current and that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

Impairment of Exploration and Evaluation Assets

The ultimate recoupment of the value of exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

Impairment tests are carried out when there are indicators of impairment in order to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

1. Summary of Significant Accounting Policies (Continued)

The key areas of judgement and estimation include:

· Recent exploration and evaluation results and resource estimates;

· Environmental issues that may impact on the underlying tenements; and

· Fundamental economic factors that have an impact on the operations and carrying values of assets and liabilities.

Revenue Reporting

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group's activities as described below. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.

Oil and Gas assets

The cost of oil and gas producing assets and capitalised expenditure on oil and gas assets under development are accounted for separately and are stated at cost less accumulated amortisation and impairment losses. Costs include expenditure that is directly attributable to the acquisition or construction of the item as well as past exploration and evaluation costs.

When an oil and gas asset commences production, costs carried forward are amortised on a units of production basis over the life of the economically recoverable reserves. Changes in factors such as estimates of economically recoverable reserves that affect amortisation calculations do not give rise to prior financial period adjustments and are dealt with on a prospective basis.

Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance.

New standards and interpretations

AASB 16: Leases

The consolidated group has adopted AASB 16 from 1 July 2019.

The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease liability in connection with all current leases except for those identified as low-value or having a remaining lease term of less than 12 months from the date of initial application.

On 31 December 2019, the Group did not have any non-low value operating leases with lease terms longer than 12 months. As a result, the adoption of AASB 16 did not have any effect on the Group's opening balances at 1 July 2019.

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

	Consolidated 6 months to 31 December 2019	Consolidated   6 months to 31 December 2018
	$	$
2.  Cost of sales
Cost of sales	165,843	129,846
Lease operating expenses	260,589	305,427
	426,432	435,273
3.  Corporate costs
Accounting, Company Secretary and Audit fees	96,537	92,933
Consulting fees - Board	161,000	221,750
Consulting fees - Other	82,963	56,538
Legal and compliance fees	92,666	46,273
	433,166	417,494
4.  Costs associated with abandoned acquisitions
Costs Incurred	-	40,214
		40,214

5.  Other comprehensive income
Gain on financial assets at fair value through other comprehensive income (FVOCI)	60,626			-
Foreign currency (loss)/gain	(12,023)			60,330
	48,603			60,330
		Consolidated Balance as at 31 December 2019		Consolidated   Balance as at 30 June 2019
	$		$
6.  Trade and other receivables
Deposits	-			10,642
GST receivable	24,247			18,002
Cash calls receivable1	-			208,791
Accrued revenue	148,238			84,516
Other receivables	8,217			8,209
	180,702			330,160

1. The $208,791 decrease in the receivable comprises of $209,000 impairment of the loan, less $209 of foreign exchange gains.

 

Condensed Notes to the Financial Statements For the Half-Year Ended 31 December 2019 All amounts are Australian Dollars
		Consolidated Balance as at 31 December 2019	Consolidated   Balance as at 30 June 2019
	$		$

7.  Other assets
Prepayments	67,545		35,756
	67,545		35,756

8.  Loans receivable
Loan to GEM International Resources Inc1	17,121		119,034
Loan to joint ventures2	71,367		210,210
Other loans	7,957		7,957
	96,445		337,201

1. This loan was repaid in full in February 2020;

2. The $138,843 decrease in the receivable comprises of $187,904 impairment of the loan, less $49,061 of interest and reimbursements due.

9.  Oil and gas assets
Cost brought forward	3,905,106		2,592,814
Acquisition of oil and gas assets during the period	162,009		883,151
Disposal of oil and gas assets on sale during the period	-		(133,503)
Capitalised equipment workovers	333,177		645,602
Amortisation for the year	(43,854)		(82,958)
Impairment of oil and gas assets3	(2,363,816)		-
Carrying value at end of the period	1,992,622		3,905,106
3. Impairment of $2,363,816 comprises of $1,475,395 relating to the Arkoma project, and $888,421 relating to the Welch project.
10.  Capitalised oil and gas expenditure
Costs brought forward		1,615,956	1,491,019
Exploration costs incurred during the period		15,340	124,937
Impairment of oil and gas expenditure4		(1,381,296)	-
Carrying value at the end of the period		250,000	1,615,956
4. Relates to impairment of exploration expenditure in the Amadeus Basin.
11.  Trade and other payables
Trade creditors		521,533	503,470
Other creditors and accruals		87,940	65,764
		609,473	569,234

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

12.  Contributed Equity
Ordinary Shares
Total shares at 31 December 2019: 885,810,968 (30 June 2019: 885,810,968) ordinary shares fully paid		885,810,968	885,810,968
a) Shares movements during the half-year		Value of shares $	No. of shares
Balance at 30 June 2019		30,164,872	885,810,968
	Shares issued	-	-
	Cost of issued shares	-	-
Balance at 31 December 2019		30,164,872	885,810,968
		Consolidated Balance as at 31 December 2019	Consolidated   Balance as at 30 June 2019
13.  Reserves
Options reserve		471,818	471,818
Asset revaluation reserve		(341,786)	(402,412)
Foreign currency translation reserve		449,408	461,431
		579,440	530,837
a) Options Reserve

Options Reserve at the beginning of the period	471,818	471,818
Options Reserve at the end of the period	471,818	471,818

b) Asset Revaluation Reserve

Asset Revaluation Reserve at the beginning of the period	(402,412)	(402,412)
Revaluation of FVOCI shares	60,626	-
Asset Revaluation Reserve at the end of the period	(341,786)	(402,412)

c) Foreign Currency Translation Reserve

Foreign Currency Translation Reserve at the beginning of the period	461,431	351,454
Current movement in the period	(12,023)	109,977
Foreign Currency Translation Reserve at the end of the period	449,408	461,431

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

14  Segment Information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board to make decisions about resources to be allocated to the segments and assess their performance.

Operating segments are identified by the board based on the Oil and Gas projects in Australia the United States. Discrete financial information about each project is reported to the board on a regular basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

The Group has three reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia, the United States. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

(i)  Segment performance
	New Zealand $		United States $	Australia $	Total $
Period ended 31 December 2019
Revenue
Revenue	-		998,369	-	998,369
Interest income	-		20,179	3,049	23,228
Other income	-		29,811	10,082	39,893
Segment revenue	-		1,048,359	13,131	1,061,490
Segment Result
Loss
Allocated
-  Corporate costs	-		(99,313)	(333,853)	(433,166)
-  Administrative costs	-		(23,020)	(72,746)	(95,766)
-  Lease operating expenses	-		(260,589)	-	(260,589)
-  Cost of sales	-		(165,843)	-	(165,843)
Segment net profit/(loss) before tax	-		499,594	(393,468)	106,126
Reconciliation of segment result to net loss before tax
Amounts not included in segment result but reviewed by the Board
-  Evaluation and due diligence	-		(47,542)	(92,888)	(140,430)
-  Amortisation	-		(43,089)	-	(43,089)
-  Impairment	-		(2,760,720)	(1,381,296)	(4,142,016)
Unallocated items
-  Employee benefits expense					(94,004)
-  Finance costs					(5,177)
-  Depreciation					(2,208)
Net Loss before tax from continuing operations					(4,320,798)
	Condensed Notes to the Financial Statements For the Half-Year Ended 31 December 2019 All amounts are Australian Dollars
(i)  Segment performance (continued)
	New Zealand $		United States $	Australia $	Total $
Period ended 31 December 2018
Revenue
Revenue	-		500,503	20,823	521,326
Interest income	-		14,524	477	15,001
Other income	924		-	7,622	8,546
Segment revenue	924		515,027	28,922	544,873
Segment Result
Loss
Allocated
-  Corporate costs	-		(11,178)	(406,316)	(417,494)
-  Administrative costs	(469)		(43,621)	(50,005)	(94,095)
-  Lease operating expenses	-		(305,427)	-	(305,427)
-  Cost of sales	-		(129,846)	-	(129,846)
-  Share of net loss of joint operation	-		(11,354)	-	(11,354)
Segment net profit/(loss) before tax	455		(13,601)	(427,399)	(413,343)
Reconciliation of segment result to net loss before tax
Amounts not included in segment result but reviewed by the Board
-  Exploration expenditure incurred    not capitalised	(7,987)		-	-	(7,987)
-  Evaluation and due diligence	-		-	(100,020)	(100,020)
-  Projects abandoned	(1,930)		-	(38,284)	(40,214)
-  Amortisation	-		(47,576)	-	(47,576)
Unallocated items
-  Employee benefits expense					(106,093)
-  Share based payments					(10,149)
-  Finance costs					(2,250)
-  Depreciation					(3,135)
Net Loss before tax from continuing operations					(730,767)

 

Condensed Notes to the Financial Statements For the Half-Year Ended 31 December 2019 All amounts are Australian Dollars
14  Segment Information (continued)
(ii)  Segment assets
	New Zealand $	United States $	Australia $	Total $
As at 31 December 2019
Segment assets as at 1 July 2019	-	4,618,616	2,571,517	7,190,133
Segment asset balances at end of period
-  Exploration and evaluation	-	-	15,050,298	15,050,298
-  Capitalised Oil and Gas Assets	-	4,488,389	-	4,488,389
-  Less: Amortisation	-	(131,950)	-	(131,950)
-  Less: Impairment	-	(2,363,817)	(14,800,298)	(17,164,115)
	-	1,992,622	250,000	2,242,622
Reconciliation of segment assets to total assets:
Other assets	-	305,387	406,844	712,231
Total assets from continuing operations	-	2,298,009	656,844	2,954,853

		New Zealand $			United States $		Australia $		Total $
As at 30 June 2019
Segment assets as at 1 July 2018			60,911		3,098,906		2,868,289		6,028,106
Segment asset balances at end of year
-  Exploration and evaluation			-		-		1,615,956		1,615,956
-  Capitalised oil and gas assets			-		4,126,703		-		4,126,703
Assets
-  Less: Amortisation			-		(88,094)		-		(88,094)
-  Less: Expenditure previously capitalized, written off in the year			-		(133,503)		-		(133,503)
			-		3,905,106		1,615,956		5,521,062
Reconciliation of segment assets to total assets:
Other assets			-		713,510		955,561		1,669,071
Total assets from continuing operations			-		4,618,616		2,571,517		7,190,133

 

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

14  Segment Information (continued)

(iii)  Segment liabilities
	New Zealand $	United States $		Australia $	Total $
As at 31 December 2019
Segment liabilities as at 1 July 2019	-	316,192		280,212	596,404
Segment liability (decreases) for the year	-	(118,525)		155,440	36,915
		197,667		435,652	633,319
Reconciliation of segment liabilities to total liabilities:
Other liabilities	-	-		-	-
Total liabilities from continuing operations	-	197,667		435,652	633,319
As at 30 June 2019
Segment liabilities as at 1 July 2018	146,071	136,374		173,141	455,586
Segment liability (decreases) for the year	(146,071)	179,818		107,071	140,818
	-	316,192		280,212	596,404
Reconciliation of segment liabilities to total liabilities:
Other liabilities	-	-		-	-
Total liabilities from continuing operations	-	316,192		280,212	596,404

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

15   Producing assets The Group currently has 3 (previously 4) producing assets, which the Board monitors as separate items to the geographical and operating segments. The Arkoma, Stanley, Strawn and Welch are Oil and Gas producing assets in the United States. It should be noted that the Strawn Project was a 50% joint operation and as a result the amounts below are only the apportionment of the Mosman ownership right. As noted elsewhere in this report the Strawn project was divested throughout the year due to its poor performance. Project performance is monitored by the line items below.

(i)  Project performance
		Arkoma $	Stanley $	Welch $	Other Projects $	Total $
Half-Year Ended 31 December 2019
Revenue
Oil and gas project related revenue		9,564	365,396	623,409	-	998,369
Producing assets revenue		9,564	365,396	623,409	-	998,369
Project-related expenses
-  Cost of sales		880	20,474	144,489	-	165,843
-  Lease operating expenses		10,560	15,401	214,301	20,327	260,589
Project cost of sales		11,440	35,875	358,790	20,327	426,432
Project gross profit
Gross profit		(1,876)	329,521	264,619	(20,327)	571,937
Condensed Notes to the Financial Statements For the Half-Year Ended 31 December 2019 All amounts are Australian Dollars
15   Producing assets (continued)
(i)  Project performance
		Arkoma $	Stanley $	Strawn $	Welch $	Total $
Half-Year Ended 31 December 2018
Revenue
Oil and gas project related revenue		41,621	8,223	55,667	415,815	521,326
Producing assets revenue		41,621	8,223	55,667	415,815	521,326
Project-related expenses
-  Cost of sales		-	-	14,738	115,108	129,846
-  Lease operating expenses		39,336	4,490	48,927	212,674	305,427
Project cost of sales		39,336	4,490	63,665	327,782	435,273
Project gross profit
Gross profit		2,285	3,733	(7,998)	88,033	86,053

Condensed Notes to the Financial Statements

For the Half-Year Ended 31 December 2019

All amounts are Australian Dollars

16  Expenditure Commitments

(a)  Exploration

The Company has certain obligations to perform minimum exploration work on Oil and Gas tenements held.  These obligations may vary over time, depending on the Company's exploration programs and priorities.  At 31 December 2019, the Company has estimated the monetary value of the total exploration commitments for the next 12 months are as follows:

Entity	Tenement	$
Trident Energy Limited1	EP 145	-
Oilco Pty Ltd	EPA155	-
		-

¹ An extension to the work program condition has been granted until 21 August 2020, when there will be a commitment for completion of 100km of 2D seismic surveys, seismic processing and interpretation and well planning. If the Company has not fulfilled the above obligations, a negotiation with the Northern Territory Department of Primary Industry and Resources may be commenced to extend the period for completion, or the permit relinquished. There can be no certainty that an extension may be granted.

(b)  Capital Commitments

The Company had no capital commitments at 31 December 2019 (2018 - $Nil).

17  Subsequent Events

In February 2020 the Company raised $585,138 (before expenses) by placing 200,000,000 shares at a price of 0.15p per share, together with one warrant to subscribe for one share at an exercise price of 0.23p with a term of 12 months per placing share.

In addition, two Directors indicated their intent to subscribe for $120,000 on the same terms and conditions.

Subsequent to the end of the period the global events of a collapse in the oil price and the spread of Covid-19 have affected most countries.  It is extremely difficult to predict the outcome of these matters. The company has taken action to reduce costs, and all operations have been reviewed. These matters were announced on 24 March 2020.

Other than the above, there were no significant events subsequent to the date of statement of financial position.

18  Dividends

No dividends have been paid or proposed during the half year ended 31 December 2019.

Enquiries:

Mosman Oil & Gas Limited John W Barr, Executive Chairman Andy Carroll, Technical Director [e-mail] [e-mail]	NOMAD and Joint Broker SP Angel Corporate Finance LLP Stuart Gledhill / Richard Hail / Soltan Tagiev [phone]
Alma PR Justine James [phone] [phone] [e-mail]	Joint Broker Monecor (London) Ltd trading as ETX Capital Thomas Smith [phone]

Updates on the Company's activities are regularly posted on its website: www.mosmanoilandgas.com  

 

END

 

 

IR KKDBPPBKKKNN