Interim Results
FOR IMMEDIATE RELEASE
16 August 2019
Predator Oil & Gas Holdings Plc / Index: LSE / Epic: PRD / Sector: Oil & Gas
Predator Oil & Gas Holdings Plc
("Predator" or the "Company" and together with its subsidiaries "the Group")
Report and Interim Financial Statements for the 6 months to 30 June 2019
Financial Highlights:
· Loss from operations reduced to £0.512 million (2018: full year Loss of £0.792 million).
· Cash balance, at period end of £0.728 million (2018 year end: £1.326 million). A further £1.18 million (US$1.5million) held as restricted cash.
· On 15 February 2019 raised £1.5 million by the issue of Convertible Loan Notes to Arato Global Opportunities LLC to fund a returnable bank guarantee required in respect of the work programme on the Guercif licence in Morocco, and for general working capital purposes.
· On 15 February 2019, 2,083,333 warrants were issued at an exercise price of 12p with a vesting period of two years, to Arato Global Opportunities LLC and 2,000,000 in warrants on the same terms issued to Novum Securities Limited, the arranger of the convertible loan notes.
· During the period £350,000 of the Loan Notes have been redeemed by conversion into 5,110,803 ordinary shares.
· On 7 June 2019 appointment of Brandon Hill Capital as the Company's broker
· On 30 July 2019 re-appointment of Novum Securities as a joint broker
Operational Highlights:
· On 19 March 2019 Predator Gas Ventures Limited was awarded the Guercif Petroleum
Agreement in Northern Morocco by ONHYM which includes the Moulouya Tortonian Prospect
and is being prepared for early drilling
· On 10 April 2019 Predator Oil & Gas Ventures Limited accepted a one year extension of the
term of the Licensing Option 16/30 ("LO 16/30")('Ram Head') to 30 November 2019 subject to
the carrying out of the work programme agreed with the Department of Communications,
Climate Action and Environment.
Post reporting date:
· On 19 July 2019, Sarah Cope resigned as Non-Executive Director of the Company and Carl Kindinger was appointed as Non-Executive Director and interim Chairman with immediate effect.
· In respect of the C02 EOR project on 4 July 2019, the Group announced
o Certificate of Environmental Clearance issued
o Well completion design updated to potentially reduce costs and enhance economics
o Well workovers AT-4 and AT-5X were to begin shortly
o A CPR giving contingent, development pending, resources of 5.3 to 8.9 MM boe
· On 12 August 2019 the Group announced that it has commenced workover operations to survey downhole the AT-4 and AT-5X wells to ensure there are no obstructions that would prevent Predator's preferred downhole CO2 EOR completion design from being installed for the first injectivity and production test.
Paul Griffiths Chief Executive of Predator commented:
"During the reporting period losses have been reduced and cash and restricted cash increased whilst adding the potentially transformational for the Company Moulouya_1 Prospect in Morocco. We excitedly await the early turn of the drillbit. Multiple prospects and leads have been identified in the area of the Guercif PA to ensure that there is significant "running room" in this sparsely drilled prospective area. The Directors look forward to significant news flow and an exciting time for its shareholders during the next 6 months as it continues with plans to drill the Moulouya_1 Prospect and progress to production in Trinidad. Ireland too could potentially offer some exciting medium-term M and A opportunities as security of energy supply becomes potentially of even greater significance if Brexit is successfully completed."
Predator Oil & Gas Holdings Plc
Report and Interim Financial Statements
For the 6 months to 30 June 2019
Predator Oil & Gas Holdings Plc ('the Company' or 'The Group'), an oil and gas exploration and development company, listed on the Standard Listing segment of the Official List on the Main Market of the London Stock Exchange, announces its unaudited interim results for the six month period ended 30 June 2019.
CEO Operations Report
Predator Oil & Gas Holdings Plc ("Predator" or the "Company") continued to make good progress in the first half of 2019.
Morocco
During the reporting period, Predator, through its wholly-owned subsidiary Predator Gas Ventures Ltd., completed the signing of the Guercif Petroleum Agreement (the "Guercif PA") and Association Contract with the Office National des Hydrocarbures et des Mines ("ONHYM") which covers an area of 7,269 km². Predator is the designated operator with a 75% working interest (ONHYM 25%).
The agreed work programme includes the drilling of one well to a maximum depth of 2,000 metres in the Initial Period of the exclusive exploration licence of 30 months' duration.
On 15 February 2019 the Company issued a Convertible Loan Note in favour of Arato Global Opportunities LLC (the "Lender") to raise £1.5 million to provide a refundable Bank Guarantee of US$1.5 million to be put in place in respect of the work programme agreed to be carried out by the Company under the terms of the Guercif PA, and for general working capital purposes. The Bank Guarantee is refunded in full to the Company upon completion of the Guercif work programme.
Terms of the Convertible Loan Note
The nominal amount of each Loan Note is £1 and the aggregate principal amount is £1.5 million. There is no coupon attaching to the Loan Notes and the term is 24 months after which the Loan Notes are repayable in cash in an amount of 105% of the principal amount plus a fee of 10% of the principal amount being repaid. The Lender has also agreed to make available to the Company a further £250,000 principal of Loan Notes on the same terms, subject to certain conditions, for additional working capital if required.
The Loan Notes are convertible at the election of the Lender at 105% of the principal amount being converted. The conversion price is calculated as 90% of the volume weighted average share price of a Predator Ordinary Share as shown on the London Stock Exchange for the two trading days immediately preceding the notice of conversion from the Lender. The Loan Notes can otherwise be redeemed at any time by the Company in cash in an amount of 105% of the principal amount plus a fee of 10% of the principal amount being repaid.
In addition, the Lender is being issued with warrants to subscribe for 2,083,333 Ordinary Shares in the Company at an exercise price of 12p per share for a period of 2 years, and Novum Securities, the Company's broker who has arranged the Loan Notes, is being issued with warrants to subscribe for 2,000,000 Ordinary Shares in the Company at an exercise price of 12p per share.
The Company received Shareholder approval on 13 June 2019 for the authority to issue up to 100 million Ordinary shares to cover the Loan Note conversion and the exercise of the warrants granted to each of the Lender and Novum Securities.
Arato Global Opportunities is an investment fund focussed on small and midcap growth companies.
The Directors believe that the Guercif PA has an attractive risk/reward balance based on the identification of the Tertiary "Moulouya" gas prospects. The Moulouya prospects are a target for Tertiary reservoirs equivalent to those producing in the Rharb Basin. Gas shows in two offset wells in the target interval combined with inexpensive drilling costs and an uncomplicated development scenario to potentially utilise the Maghreb gas pipeline, which lies just 4 kilometres from the primary gas prospect, support management's risk/reward analysis. Morocco's attractive fiscal regime and gas sales pricing, together with the country's strategic requirement to replace coal-fired power generation with gas, drives the commercial case for preferentially developing gas in the Guercif PA area.
The Company's Competent Person's Report ("CPR") undertaken by SLR Consulting ("SLR") issued during the reporting period assigns a range of prospective gas resources net to Predator of between 320 and 659 BCF (Best and High Estimates respectively) with a 21% Chance of Success and based on a 66% recovery factor.
SLR indicate an unrisked value of US$ 1.95 million per BCF for developed Moroccan gas giving an unrisked range of values for the Company's Moulouya_1 Prospect of between US$624 to 1,285 million, clearly demonstrating management's risk/reward business development strategy.
Exploring for gas in Morocco is consistent with the Company's ethos of being a responsible fossil fuel business as replacing coal-fired power generation in Morocco could potentially lead to a significant reduction in the country's current level of C02 emissions.
At the end of the reporting period the Company was in discussions with several parties in the context of availing of potential rig-sharing opportunities within a time window consistent with the anticipated receipt of all regulatory and environmental approvals required to commence drilling operations.
A well location for the first well to test the Moulouya_1 Prospect has been selected, subject to the approval of our joint venture partner ONHYM. Progress on provisional well design, well planning and identification of critical long-lead well inventory items has been made. Five separate gas targets have been programmed for evaluation in the first well.
Trinidad
During the reporting period the Company has continued to make steady progress in respect of its Enhanced Oil Recovery Pilot Project using carbon dioxide injection ("CO2 EOR") in the Inniss-Trinity field onshore Trinidad. The Company replaced its originally proposed infill drilling programme with FRAM Exploration (Trinidad) Ltd. ("FRAM") with the Pilot C02 EOR Project. The Directors believe that this would offer greater potential well productivity compared to conventional infill drilling. The Company has advanced the Pilot C02 by completing reservoir engineering studies and securing exclusivity over Trinidad's C02 surplus supply.
The Company has received preliminary approval from Heritage Petroleum Company Ltd. to proceed with C02 EOR planning on their licence under FRAM's operated Incremental Production Services Contract, providing an important validation from the State oil company of management's technical and commercial model for CO2 EOR.
The added technical and environmental complexity of the CO2 EOR Pilot, being the first of its kind in Trinidad, and the requirement for new environmental approvals has delayed the Company's desired objective in achieving incremental oil production at the end of the reporting period.
Ireland
During the reporting period the Company extended Licensing Option 16/30 offshore Ireland to 30 November 2019 for a work programme agreed with the Department of Communications, Climate Action and Environment ("DCCAE") including inter alia the purchase and reprocessing of existing seismic data and ongoing desk-top studies.
A new CPR was produced by SLR confirming original prospective gas resources for the Ram Head gas discovery (made by Marathon in 1984/5) net to the Company in the range of 725.5 to 1,826.6 BCF (Best and High Estimates respectively). The new CPR incorporated for the first time a Conceptual Development Scenario based on 10 development wells and including new desk-top reservoir engineering work undertaken on behalf of the Company. The results show that a technical recovery rate of 96% could be achieved at an initial field rate of 400 mm cfgpd based on gross in place gas of 1,834 BCF if developed direct to shore via a new 20" gas pipeline.
At the end of the reporting period the Company was still anticipating the award of a Successor Authorisation (Frontier Exploration Licence) to the Corrib South Licensing Option 16/26. The application for a Successor Authorisation is still actively under consideration by the DCCAE and the Company continues to provide additional updated information required before formalities can be completed and a decision can be made.
During the reporting period the Company has engaged in preliminary discussions with several parties regarding potential M & A transactions incorporating the Company's strategically valuable Irish gas assets. The Directors are of the opinion that these assets could be consolidated with other compatible gas assets in Ireland to form an integrated business that would have a larger critical mass and therefore a greater influence in determining the energy mix going forward in Ireland to address the new political environment driven by climate change concerns versus security of energy supply.
Post Reporting Date
On 4 July 2019 the Company announced significant progress in respect of its CO2 EOR Pilot in Trinidad, most importantly in obtaining the Certificate of Environmental Clearance for C02 EOR operations, without which operations could not proceed.
With the independent approval of the Company's Pilot CO2 Project by one of the most important and influential government agencies in the oil and gas sector in Trinidad now secured, the Company remains on track to exit 2019 as an oil producer and revenue creator.
New well completion designs were generated to concentrate C02 injection into only the potentially most productive oil sands, to significantly reduce initial capital and operating costs below the previously budgeted figure of US$ 600,000 and to materially improve the net-back per barrel based on the previous guidance of an average of US$10 per barrel. The net-back per barrel is expected to improve further as economies of scale are introduced by potentially expanding a successful CO2 EOR Pilot.
Capital costs for the CO2 EOR Pilot have been ring-fenced within the Company's currently available cash balances.
Planning is underway to carry out a well workover survey of the first proposed pilot C02 injection well and EOR production well (AT-4 and AT-5X respectively) in preparation for downhole completion.
A new CPR was produced by SLR giving contingent (development pending) CO2 EOR resources for the Inniss-Trinity field in the range of 5.3 to 8.9 million barrels of oil (Best and High Estimate respectively). A successful CO2 EOR Pilot would de-risk these Contingent Resources.
The Company has an exclusive option until 31 December 2019 to acquire FRAM for US$ 4.2 million, representing US 79 cents to 47 cents per barrel based on the above Contingent Resources.
A successful Guercif drilling programme in combination with a successful CO2 EOR Pilot could potentially create the opportunity to complete an acquisition of FRAM, subject to all regulatory consents, without a significant dilution factor for shareholders.
On 8 July 2019 the Company reported that the Government of Ireland had decided not to proceed with the Climate Emergency Bill, which if progressed would have had a negative impact on hydrocarbon exploration offshore Ireland. Whilst this pragmatic approach is welcomed by the Company, Ireland still remains a high risk political environment for oil and gas investment. Consequently the Company adopts a cautious approach to developing its Irish assets and seeks to minimise any discretionary capital requirements for Ireland, preferring to wait and see how the Government of Ireland's decision works out in practice.
On 19 July 2019 the Company announced a directorate change with the acceptance of the resignation of Sarah Cope from the Board and the position of Non-executive Chairman. Carl Kindinger was appointed Interim Non-executive Chairman. Mr. Kindinger has extensive financial experience in public companies and will strengthen prudent oversight of the Company's finances going forward as the Company enters an important phase in its business development strategy.
Paul Griffiths
Chief Executive Officer
15 August, 2019
The Chairman's Statement
In 2018 the Company was unprepared for the impact of the climate change debate in Ireland and the fact that it would be so aggressively pursued almost exclusively against the fossil fuel industry. The Company is better prepared now and has developed a strategic plan to mitigate the risks. Morocco was added to the portfolio to maintain our business development strategy focussed on gas, which creates lower CO2 emissions. Trinidad has been progressed to ensure all environmental approvals have been consented before operations begin. Morocco and Trinidad take a pragmatic approach to near-term fossil fuel exploitation as a bridge to a cleaner energy future and the political, regulatory and environmental regime reflects this pragmatism and is still very supportive of a responsible fossil fuel industry. These are still jurisdictions that make the fossil fuel industry commercially viable.
During the period oil prices have been volatile falling from the peak levels seen in October 2018. Prices were steady at the end of the reporting period but the outlook remains very volatile due to geopolitical events that can occur unpredictably at any time. Costs of oil industry goods and services remain low but the combination of lower oil prices and climate change activism remains a drag on activity levels in many companies. This favours Predator by reducing the level of competition in securing attractive assets and the quantum of our capital and operating cost requirements. The Company is focussed on gas which is seen as a strategic commodity in terms of security of energy supply and an attractive component of the energy mix going forward to a cleaner energy environment, due to its capacity to generate lower CO2 emissions when compared directly to oil.
The nature of the funding of oil and gas projects is changing as equity funding in public markets for small cap companies becomes increasingly more difficult. Convertible loan instruments are becoming more common. Opportunities by investors to invest directly in the Company at asset level are now being sought. In these circumstances the technical quality and risk/reward balance of the assets becomes paramount together with the ability for near-term drilling and early monetisation.
Carl Kindinger
Chairman
15 August 2019
Contacts
For further information please contact:
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Predator Oil & Gas Holdings Plc Paul Griffiths, Chief Executive Officer Carl Kindinger, Non-Executive Chairman
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+44 (0)1534 834600 |
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Brandon Hill Capital Jonathan Evans / Oliver Stansfield John Beliss / Colin Rowbury |
+44 (0)203 463 5000
+44(0)207 399 9400 |
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Notes to Editors:
Predator is an oil and gas exploration company with the objective of participating with FRAM Exploration Trinidad Ltd. in further developing the remaining oil reserves in the producing Inniss Trinity oil field onshore Trinidad, primarily through the application of C02 EOR technology. Potential for cash flow exists by executing a Pilot Enhanced Oil Recovery project using locally-sourced carbon dioxide for injection into the oil reservoirs ("C02 EOR"). Near-term expansion and growth potential is focussed on upscaling the C02 EOR operations in the Inniss-Trinity oil field and potential acquisitions of assets suitable for C02 EOR development, subject to all necessary approvals.
In addition, Predator also owns and operates exploration and appraisal assets in current licensing options offshore Ireland, for which Successor Authorisations have been applied for, adjoining Shell's Corrib gas field in the Slyne Basin on the Atlantic Margin and east of the Kinsale gas field and Barryroe oil field in the Celtic Sea. A Successor Authorisation has been granted for the Celtic Sea asset whilst the result of an application for a Frontier Exploration Licence over the Slyne Basin exploration asset is is pending.
Predator is operator of the Guercif Petroleum Agreement onshore Morocco which is initially prospective for Tertiary gas in prospects less than 10 kilometres from the Maghreb gas pipeline.
The Company has a highly experienced management team with a proven track record in the oil and gas industry.
Interim Management Report 30 June 2019
The interim management report and interim results are set out in the following pages.
The Directors present their report and the unaudited consolidated financial statements together with related notes, of Predator Oil & Gas Holdings Plc and its subsidiaries ("the Group") for the six months ended 30 June 2019. The statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at the year ended 31 December 2018. The results for the period ended 30 June 2019 are unaudited. These statements are in agreement with accounting records which have been properly kept in accordance with Section 103 of the Companies (Jersey) Law 1991.
Financial Highlights:
· Loss from operations of £0.512 million (2018: full year Loss of £0.792 million).
· Cash balance, at period end of £0.728 million (2018 year end: £1.326 million). A further £1.18million (US$1.5million) held as restricted cash.
· On 15 February, 2019 raised £1.5 million by the issue of Convertible Loan Notes to Arato Global Opportunities LLC to fund a returnable bank guarantee required in respect of the work programme on the Guercif licence in Morocco, and for general working capital purposes.
· On 15 February, 2019, 2,083,333 warrants were issued at an exercise price of 12p with a vesting period of two years, to Arato Global Opportunities LLC and 2,000,000 in warrants on the same terms issued to Novum Securities Limited, the arranger of the convertible loan notes.
· During the period £350,000 of the Loan Notes have been redeemed by conversion into 5,110,803 ordinary shares.
· On 7 June2019 appointment of Brandon Hill Capital as the Company's broker
· On 30 July2019 appointment of Novum Securities as a joint broker
Operational Highlights:
· On 19 March 2019 Predator Gas Ventures Limited was awarded the licence for the exploitation of the Guercif Moulouya Tortonian Prospect in Northern Morocco by ONHYM
· On 10 April 2019 Predator Oil & Gas Ventures Limited accepted a one year extension of the term of the Licensing Option 16/30 ("LO 16/30")('Ram Head') to 30 November 2019 subject to the carrying out of the work programme agreed with the Department of Communications, Climate Action and Environment.
Post reporting date:
· On 19 July 2019, Sarah Cope resigned as Non-Executive Director of the Company and Carl Kindinger was appointed as Non-Executive Director and interim Chairman with immediate effect.
· In respect of the C02 EOR project on 4 July 2019, the Group announced
o Certificate of Environmental Clearance issued
o Well completion design updated to potentially reduce costs and enhance economics
o Well workovers AT-4 and AT-5X were to begin shortly
o A CPR giving contingent, development pending, resources of 5.3 to 8.9 MM boe
· On 12 August 2019 the Group announced that it has commenced workover operations to survey downhole the AT-4 and AT-5X wells to ensure there are no obstructions that would prevent Predator's preferred downhole CO2 EOR completion design from being installed for the first injectivity and production test.
Responsibility Statement
We confirm that to the best of our knowledge:
- The Interim Report has been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU;
- Gives a true and fair value of the assets, liabilities, financial position and Loss of the Group;
- The Interim Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year and
- The Interim Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.
The Interim Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by
Carl Kindinger
Chairman
15 August 2019
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Condensed consolidated interim financial statements
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01.01.2019 to 30.06.2019 |
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01.01.2018 to 30.06.2018 |
|
01.01.2018 to 31.12.2018 |
|
|||||||||||||||
|
|
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
|||||||||||||||
|
|
Notes |
£ |
|
|
|
£ |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Administrative expenses |
|
(472,273) |
|
(305,865) |
|
(761,302) |
|
|||||||||||||||
|
Loan impairment/write off |
|
- |
|
- |
|
(32,171) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Operating loss |
|
(472,273) |
|
(305,865) |
|
(793,473) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Finance income |
|
- |
|
405 |
|
1,012 |
|
|||||||||||||||
|
Finance expense |
|
(39,990) |
|
- |
|
- |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Loss for the period before taxation |
|
(512,263) |
|
(305,460) |
|
(792,461) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
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Taxation |
|
- |
|
- |
|
- |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Loss for the period after taxation |
|
(512,263) |
|
(305,460) |
|
(792,461) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
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Other comprehensive income |
|
- |
|
- |
|
- |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
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Total comprehensive loss for the period attributable to the owner of the parent |
|
(512,263) |
|
(305,460) |
|
(792,461) |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||
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Loss per share (in pence) |
3 |
(0.5) |
|
(0.8) |
|
(1.0) |
|
|||||||||||||||
|
Condensed consolidated statement of financial position |
|
|
|
|
|
As at 30 June 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
30.06.2019 |
|
31.12.2018 |
|
|
|
(unaudited) |
|
(audited) |
|
|
Notes |
£ |
|
£ |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Exploration and evaluation |
|
3,574 |
|
- |
|
Tangible fixed assets |
|
4,621 |
|
3,622 |
|
|
|
8,195 |
|
3,622 |
|
Current assets |
|
|
|
|
|
Trade and other receivables |
4 |
1,189,551 |
|
12,250 |
|
Cash and cash equivalents |
5 |
728,767 |
|
973,600 |
|
|
|
1,918,318 |
|
985,850 |
|
|
|
|
|
|
|
Total assets |
|
1,926,513 |
|
989,472 |
|
|
|
|
|
|
|
Equity attributable to the owner of the parent |
|
|
|
|
|
Share capital |
6 |
1,934,794 |
|
1,584,794 |
|
Reconstruction reserve |
|
3,547,190 |
|
3,547,190 |
|
Other reserves |
|
162,954 |
|
81,570 |
|
Retained deficit |
|
(4,806,615) |
|
(4,294,352) |
|
Total equity |
|
838,323 |
|
919,202 |
|
|
|
|
|
|
|
Non-Current liabilities |
|
|
|
|
|
Convertible loan notes |
7 |
1,018,605 |
|
- |
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
69,584 |
|
70,270 |
|
|
|
|
|
|
|
Total liabilities |
|
1,088,189 |
|
70,270 |
|
|
|
|
|
|
|
Total liabilities and equity |
|
1,926,513 |
|
989,472 |
|
Condensed consolidated statement of changes in equity |
|
|
|
|||||||
|
For the 6 months to 30 June 2019 |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
|
|
Attributable to owner of the parent |
|
|
|||||||
|
|
Share Capital |
Share premium |
Share based payments |
Retained deficit |
Total |
|
||||
|
|
£ |
£ |
£ |
£ |
£ |
|
||||
|
|
|
|
|
|
|
|
||||
|
Balance at 31 December 2017 |
537,085 |
3,547,190 |
- |
(3,501,891) |
582,384 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Loss for the period |
- |
- |
- |
(305,460) |
(305,460) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total comprehensive income for the period |
- |
- |
- |
(305,460) |
(305,460) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Issue of ordinary share capital |
1,300,001 |
- |
- |
- |
1,300,001 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Listing costs capitalised |
(225,241) |
- |
- |
- |
(225,241) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total transactions with owners |
1,074,760 |
- |
- |
- |
1,074,760 |
|
||||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
|
Balance at 30 June 2018 |
1,611,845 |
3,547,190 |
- |
(3,807,351) |
1,351,684 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Loss for the period |
- |
- |
- |
(487,001) |
(487,001) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total comprehensive income for the period |
- |
- |
- |
(487,001) |
(487,001) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Fair value of warrants |
|
|
27,051 |
|
27,051 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Fair value of share options |
|
|
54,519 |
|
54,519 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Listing costs capitalised |
(27,051) |
- |
- |
- |
(27,051) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total transactions with owners |
(27,051) |
- |
81,570 |
- |
54,519 |
|
||||
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
|
Balance at 31 December 2018 |
1,584,794 |
3,547,190 |
81,570 |
(4,294,352) |
919,202 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Loss for the period |
- |
- |
- |
(512,263) |
(512,263) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total comprehensive income for the period |
- |
- |
- |
(512,263) |
(512,263) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Issue of ordinary share capital |
367,500 |
- |
- |
- |
367,500 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Fair value of warrants |
- |
- |
81,384 |
- |
81,384 |
|
||||
|
|
. |
|
|
|
|
|
||||
|
Loan note conversion premium |
(17,500) |
- |
- |
- |
(17,500) |
|
||||
|
|
|
|
|
|
|
|
||||
|
Total transactions with owners |
350,000 |
- |
81,384 |
- |
431,384 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Balance at 30 June 2019 |
1,934,794 |
3,547,190 |
162,954 |
(4,806,615) |
838,323 |
|
||||
|
|
|
|
|
|
|
|
||||
|
Condensed consolidated statement of cash flows |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
For the 6 months to 30 June 2019 |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the consolidated interim financial statements for the six months ended 30 June 2019
General information
Predator Oil & Gas Holdings Plc ("the Company") and its subsidiaries (together "the Group") are engaged principally in the operation of an oil and gas development business in the Republic of Trinidad and Tobago and an exploration and appraisal portfolio in Ireland and Morocco. The Company's ordinary shares are on the Official List of the UK Listing Authority in the standard listing section of the London Stock Exchange.
Predator Oil & Gas Holdings plc was incorporated in 2017 as a public limited company under Companies (Jersey) Law 1991 with registered number 125419. It is domiciled and registered at 3rd Floor, Standard Bank House, 47-49 La Motte Street, Jersey, JE2 4SZ, Channel Islands.
Basis of preparation
The condensed consolidated interim financial statements are prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS").
The condensed consolidated interim financial statements contained in this document do not constitute statutory accounts under Companies (Jersey) Law 1991. In the opinion of the directors, the condensed consolidated interim financial statements for this period fairly presents the financial position, result of operations and cash flows for this period.
Statutory financial statements for the year ended 31 December 2018 were approved by the Board of Directors on 30 April 2019. The report of the auditors on those financial statements was unqualified.
The Board of Directors approved this Interim Financial Report on 14 August 2019.
Statement of compliance
The Interim Report includes the consolidated interim financial statements which have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'. The condensed interim financial statements should be read in conjunction with the annual financial statements for the period ended 31 December 2018, which have been prepared in accordance with IFRS as adopted by the European Union.
Going concern
The condensed consolidated interim financial statements have been prepared on a going concern basis. At the date of these financial statements the Directors expect that the Group will require further funding for the Group's corporate overheads; Irish licence interests, Moroccan licence and for the development of a CO2 EOR pilot project in Trinidad.
On 15 February 2019 the Group entered into a convertible loan note raising £1.5m gross (£1.4m net), largely to progress the Moroccan Guercif licence awarded on 20 March 2019. The Directors are confident that the Group will be able to raise further funds as it considers appropriate to meet requirements over the course of the next 12 months, in cash, as debt finance, joint venture or farminee partner equity, share issues or otherwise. Failing the success of these fundraising activities the Directors will be prepared to accept appropriate reductions in their remuneration to conserve cash resources.
Cyclicality
The interim results for the six months ended 30 June 2019 are not necessarily indicative of the results to be expected for the full year ending 31 December 2019. Due to the nature of the entity, the operations are not affected by seasonal variations at this stage.
Accounting Policies
The condensed consolidated interim financial statements have not been audited, nor have they been reviewed by the Company's auditors in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures have been prepared using applicable accounting policies and practices consistent with those adopted in the audited annual financial statements for the year ended 31 December 2018, with the exception of the following policy in relation to borrowings.
Borrowings
Borrowings are initially recognised at the fair value of consideration received less directly attributable transaction costs. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method.
Changes in accounting policies and disclosures
i) New and amended standards adopted by the Group and Company
The following IFRSs and IFRICs became effective for the first time on 1 January 2019 and have been adopted by the Group:
|
Standard |
Impact on initial application |
|
IFRS 16 |
Leases |
|
IFRS 9 (Amendments) |
Prepayment features with negative compensation |
|
IAS 28 (Amendments) |
Long term interests in associates and joint ventures |
|
2015-2017 Cycle |
Annual improvements to IFRS Standards |
|
|
|
There were no IFRSs and IFRICs adopted that have a material effect on the Group Financial Statements.
ii) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
|
Standard |
Impact on initial application |
Effective date |
|
IFRS 3 (Amendments) IAS 1 & IAS 8 (Amendments) |
Business combinations Definition of material |
1 January 2020* 1 January 2020* |
*Subject to EU endorsement
Of the other IFRSs and IFRICs, none are expected to have a material effect on the Group Financial Statements.
Areas of estimates and judgement
The preparation of the interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. The critical accounting estimates and judgements made are in line with those made in the audited financial statements for the year ended 31 December 2018, with the exception of exploration costs capitalise at 30 June 2019 which will be subject to the Directors' impairment assessment. As at 30 June 2019, these costs were not material.
1. Financial risk management
Risks and uncertainties
The Board continually assesses and monitors the key risks of the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's 2018 Annual Report and Financial Statements, a copy of which is available from the Group's website: www.predatoroilandgas.com. The key financial risks are market risk (including cash flow interest rate risk and foreign currency risk), credit risk and liquidity.
2. Segmental analysis
The Group operates in one business segment, the exploration, appraisal and development of oil and gas assets. The Group has interests in three geographical segments being Africa (Morocco), Europe (Ireland) and the Caribbean (Trinidad and Tobago)
The Group's operations are reviewed by the Board (which is considered to be the Chief Operating Decision Maker ('CODM')) and split between oil and gas exploration and development and administration and corporate costs.
Operating segments are disclosed below on the basis of the split between exploration and development and administration and corporate.
|
Unaudited
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
There are no non-current assets held in the Group's country of domicile, being the Jersey Isles (2018: £Nil).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
30.06.2019 |
30.06.2018 |
31.12.2018 |
|
3 |
Earnings per share |
|
|
(unaudited) |
(unaudited) |
(audited) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares |
|
|
101,717,999 |
38,124,124 |
82,201,718 |
|
|
|
|
|
|
|
|
|
|
(Loss) attributable to ordinary equity holders of the company |
|
(512,263) |
(305,460) |
(792,461) |
|
|
|
|
|
|
|
|
|
|
|
Total basic earnings per share attributable to the ordinary equity holders (in pence) |
|
|
(0.50) |
(0.80) |
(0.96) |
The calculation of earnings per share is based on the loss attributable to equity holders divided by the weighted average number of shares in issue during the period.
Any share options would result in a decrease in the earnings per share; they are considered to be anti-dilutive, and as such, a diluted loss per share is not included.
|
|
|
|
|
30.06.2019 |
30.06.2018 |
31.12.2018 |
|
|
|
|
|
(unaudited) |
(unaudited) |
(audited) |
|
4 |
Trade and other receivables |
|
|
£ |
£ |
£ |
|
|
Current |
|
|
|
|
|
|
|
Security deposit (US$1,500,000) |
|
|
1,183,058 |
- |
- |
|
|
Loans receivable |
|
|
1 |
31,758 |
32,171 |
|
|
Provision for impairment |
|
|
- |
- |
(32,171) |
|
|
Prepayments |
|
|
6,492 |
32,594 |
12,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,189,551 |
64,352 |
12,250 |
The Company's subsidiary, Predator Gas Ventures Limited, on 19 March 2019, provided a bank guarantee of US$1.5 million to Office National des Hydrocarbures et des Mines, who act for the Moroccan State, as a condition of being granted the Guercif exploration licence. Predator Gas Ventures Limited was required to lodge a security deposit of US$1.5 million with Barclays Bank Plc to secure the guarantee facility. The restricted access cash balance of £1,183,058 represents the aforesaid security deposit and is denominated in US Dollars. These funds are refundable on the completion of the Minimum Work Programme set out in the terms of the Guercif Petroleum Agreement and Association Contract. All other receivables are denominated in Pound Sterling.
|
|
|
|
|
2019 |
|
2018 |
2018 |
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
(audited) |
|
|
5. Cash Balances |
|
|
|
£ |
|
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
Sterling |
|
|
|
298,259 |
|
1,325,968 |
455,293 |
|
|
United States Dollar |
|
|
|
430,509 |
|
- |
518,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
728,768 |
|
1,325,968 |
973,600 |
|
|
6. |
Share capital |
|
|
|
Number of shares |
|
Nominal value |
|
|
|
|
|
|
|
|
|
|
|
Issued and fully paid ordinary shares |
|
|
|
|
|
|
|
|
Opening Balance as at 1 January 2019 |
|
|
|
100,137,150 |
|
1,584,794 |
|
|
11 May 2019 |
|
|
|
|
|
|
|
|
Loan note conversion |
|
|
|
1,966,888 |
|
157,500 |
|
|
Less conversion premium |
|
|
|
- |
|
(7,500) |
|
|
13 May 2019 |
|
|
|
|
|
|
|
|
Loan note conversion |
|
|
|
1,441,664 |
|
105,000 |
|
|
Less conversion premium |
|
|
|
- |
|
(5,000) |
|
|
28 May 2019 |
|
|
|
|
|
|
|
|
Loan note conversion |
|
|
|
1,702,251 |
|
105,000 |
|
|
Less conversion premium |
|
|
|
- |
|
(5,000) |
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2019 |
|
|
|
105,247,953 |
|
1,934,794 |
|
|
|
|
|
|
30 .06. 2019 |
|
31.12.2018 |
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
7. |
Non-Current Liability |
|
|
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Arato Global Opportunities LLC |
|
|
|
1,150,000 |
|
- |
|
|
less transaction cost |
|
|
|
131,395 |
|
- |
|
|
|
|
|
|
1,018,605 |
|
- |
The Company entered into a Convertible Loan Note Instrument with Arato Global Opportunities LLC on 15 February 2019 for £1,500,000, the nominal amount of each note was £1.00 and can be increased to £1,750,000. The notes are converted at 105% in multiples of £50,000 as a conversion price per ordinary share being 90% of the VWAP for the 2 trading days preceding the conversion, and to the extent not already redeemed or converted shall be redeemed in full the earlier of 15 February 2021 or in the event of default. The loan notes carry no coupon, are repayable at a premium of 5%. A fee of 10% of the principal amount applies if the loan notes are not converted into equity prior to 15 February 2021. The lender was issued with 2,083,333 warrants at an exercise price of 12p with a vesting period of two years. Novum Securities Limited, the arranger of the convertible loan notes, was issued with 2,000,000 in warrants on the same terms.
The Directors have assessed the accounting treatment for the instrument under the requirements of IAS 32 and have concluded that it should be treated as a liability.
The fair value of the 4,083,333 warrants was determined at £81,384. See note 8.
Novum Securities Limited was paid a £90,000 placement fee in for the Convertible Loan Note Instrument. The total transaction cost of £171,384, accounted for in terms of IFRS9, was offset against the carrying value of the Convertible Loan Note and amortised according to the effective interest rate method giving rise to a £39,989 charge to the income statement during the Period.
At the date of these interim financial statements £350,000 of the loan notes had been redeemed.
8. Warrants
On 15 February 2019 the Company granted 2,083,333 and 2,000,000 warrants respectively to Arato Global Opportunities LLC and Novum Securities Limited pursuant to the Convertible Loan Note agreement. The warrants are exercisable at any time between the date of issue and 15 February 2021 at a subscription price of 12p per share.
The total number of warrants in issue at 30 June2019 are:
1. 2,391,962 exercisable at 2.8p before 24 May,2021
2. 4,083,333 exercisable at 12p before 15February, 2021
The warrant agreements for the aforesaid 4,083,333 warrants issued on 15 February,2019 do not contain vesting conditions and therefore the full share based payment charge, being the fair value of the warrants using the Black-Scholes model, has been recorded immediately. A fair value of £81,384 was deemed as a transaction cost in terms of IFRS9 and was offset against the Convertible Loan Note Principal of £1,500,000. £350,000 in loan notes were redeemed during the Period. Accordingly, a £39,989 charge was taken to the income statement during the Period in respect of the aforesaid loan note redemptions as a funding cost applying the effective interest method.
The valuation of these warrants involves making a number of estimates relating to price volatility, future dividend yields and continuous growth rates
The Black Scholes model has been used to fair value the warrants, the inputs into the model were as follows:
|
|
|
|
Grant date |
15 February 2019 |
|
Share price |
£0.070 |
|
Exercise price |
£0.120 |
|
Term |
2 years |
|
Expected volatility |
80% |
|
Expected dividend yield |
0% |
|
Risk free rate |
0.73% |
|
Fair value per warrant |
£0.0200 |
|
Total fair value of the warrants |
£81,384 |
|
9. |
Investment in subsidiaries
|
|
|
|
|
Country of |
|
Ownership |
|
|
|
Principal activity |
|
incorporation |
|
interest |
||
|
|
Predator Oil and Gas Ventures Limited |
licence options in offshore Ireland |
|
Jersey |
|
100% |
||
|
|
|
|
|
|
|
|||
|
|
Predator Oil and Gas Trinidad Limited |
drilling rights for a CO2 pilot oil recovery project |
|
Jersey |
|
100% |
||
|
|
|
|
|
|
|
|||
|
|
Predator Gas Ventures Limited |
Exploitation licence onshore Morocco |
|
Jersey |
|
100% |
||
|
|
|
|
|
|
|
|||
|
10. |
Related party transactions |
|
|
|
|
|
|
|
|
|
Paul Griffiths holds 44,773,293 ordinary shares, 42.5% (44.7%) as at the reporting date of the issued share capital in the Company and is the Group's controlling shareholder. |
|||||||
|
|
||||||||
11. Subsequent events
On 19 July 2019, Sarah Cope resigned as Non-Executive Director of the Company and Carl Kindinger was appointed as Non-Executive Director and interim Chairman with immediate effect.
In respect of the C02 EOR project on 4 July 2019, the Group announced the following:
-a Certificate of Environmental Clearance had been issued
-Well completion design had been updated to potentially reduce costs and enhance
economics
-Well workovers AT-4 and AT-5X were to begin shortly
-A CPR giving contingent, development pending, resources of 5.3 to 8.9 MM boe
- On 12 August 2019 the Group announced it had commenced workover operations to survey downhole the AT-4 and AT-5X wells to ensure that there are no obstructions that would prevent Predator's preferred downhole CO2 EOR completion design from being installed for the first injectivity and production test.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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