2020 Final Results

RNS Number : 0770D

Prospex Energy PLC

25 June 2021

 

Prospex Energy PLC/ Index: AIM / Epic: PXEN / Sector: Oil and Gas

Prospex Energy PLC ('Prospex' or the 'Company')

2020 Final Results

Prospex Energy PLC, the AIM quoted investment company, is pleased to announce its audited annual results for the year ended 31 December 2020.

Building a European focused gas production and power generation business

for the energy transition

Portfolio Overview

Podere Gallina Exploration Permit, onshore Italy - focused on bringing Selva gas field ('Selva') into production at an initial rate of up to 150,000 scm/day

· Significant progress made with production concession permitting process 

o  Full environmental approval received from the Italian Government post period end following technical approval received in January 2020

o  Preparation of documentation in support of application for a full production licence for Selva

· Advancing discussions with potential non-equity funders for Prospex's c. €580,000 share of Selva development costs

· Post period end commencement of development and preliminary work to prepare the field for production in mid-2022

El Romeral, onshore Spain - completion of acquisition of integrated gas and power project

· Permitting process underway for a multi-well drilling programme targeting low risk opportunities to increase gas supply to 100% project owned power plant which is currently constrained to operating at c. 22% capacity due to current wells' tail production

o  Two development locations with 5 billion cubic feet ('Bcf') of gross contingent resources

o  11 prospects with 90 Bcf of gross, un-risked prospective resources with high Chance of Success of >70% (in most cases)

· Full capacity at the plant can be achieved with one successful new well coming on stream which, combined with selling electricity at Spain's historic average price of €70 per MWh (including subsidy), has the potential to indicatively generate project level financials (on a gross basis) of:

o  €4.2 million annual revenues

o  €2.4 million profit before tax

o  €1.8 million profit after tax

Financial/Corporate Overview

· Total Assets of £5,748,211 (2019: £6,341,890) provide significant asset backing

· 11% reduction in administrative expenses to £972,193 (2019: £1,091,871)

· £720,000 raised via an oversubscribed placing of 600,000,000 new ordinary shares to help fund the Company's acquisition of a 49.9% indirect stake in El Romeral

o  Certain Directors acquired new shares in the Company with an aggregate value of £140,000 as part of the Placing

· Share re-organisation effecting one new ordinary share for 25 existing ordinary shares

· Change of Company name to Prospex Energy plc

· Divestment of 50% interest in the economic rights of the EIV-1 Suceava Concession, onshore Romania for up to £215,000 in cash

Edward Dawson, Managing Director of Prospex, said, "Prospex has emerged from what has been a highly challenging year with strong asset backing in the form of total assets of £5,748,211, a focused portfolio of investments following the acquisition of El Romeral and the disposal of Suceava, and with its roadmap to build a highly cash generative, ESG focused, gas and power investment company very much intact. 

"Following the recent granting of full environmental approval for the development of the Selva gas field in Italy, an application for a full production licence is expected to be submitted shortly, paving the way for production to commence in mid-2022 at a maximum rate of up to 150,000 cubic metres per day.  Having recently completed the acquisition of a 49.9% interest in the vertically integrated El Romeral gas and power project in Q1 2021, the permitting process is underway for a multi-well drilling programme, potentially commencing in 2022, targeting an increase in gas production and electricity generation at the 100% project-owned power plant. 

"As a result, we have two independent work programmes ongoing, each of which have the potential to generate material revenue streams for Prospex in 2022 and beyond.  These revenues will in turn be reinvested in the multiple follow-up opportunities that have been identified on our licences in Italy and Spain to grow the Company further and, in the process, build Prospex into a European energy supplier, one with visible and stable earnings and one with a focus on cleaner natural gas."

* * ENDS * *

For further information visit www.prospexenergy.com or contact the following:

Edward Dawson	Prospex Energy Plc	Tel: [phone]
Rory Murphy Ritchie Balmer Rob Patrick	Strand Hanson Limited	Tel: [phone]
Colin Rowbury Jon Belliss	Novum Securities Limited	Tel: [phone]
Duncan Vasey	Peterhouse Corporate Finance	Tel: [phone]
Frank Buhagiar Cosima Akerman	St Brides Partners Ltd	Tel: [phone]

  Chairman's Report for the year ended 31 December 2020

Despite the disruption caused by the global pandemic, the year under review, and beyond, has still seen major progress towards building Prospex into a European focused gas and power business, one that can play a part in the ongoing global energy transition. In Spain, we completed the acquisition of a 49.9% interest in the El Romeral Integrated gas and power project, which adds an interest in three producing gas wells and an operational power plant to Prospex's portfolio.  In Italy, regulatory milestones were passed in the permitting process required to bring the 17%-owned Selva gas field in Italy into production, which is set to transform Prospex's financial profile in the medium to long term.  Elsewhere, the divestment of a 50% interest in the Suceava gas asset in Romania enables us to focus on our flagship Italian and Spanish projects. 

A gas and power business and the energy transition may appear odd bedfellows, but the two are arguably inter-dependant.  Moving from a fossil-fuelled world to a decarbonised one requires a substantial scaling up of the contribution to the global energy mix made by renewable technologies.  Considerable progress has been made to date but, despite this, renewables are still having to grow from a relatively low base.  Much more needs to be done, a fact implicit in governments around the world setting carbon neutral targets that often lie one or more decades out into the future.  Such is the scale of the work that has to be undertaken, it is widely accepted that the world will have to rely on hydrocarbons for a large portion of its energy needs for years to come.  This does not mean that hydrocarbon focused energy companies have a licence to carry on as normal.  They too can make their own positive contributions towards the goal of global decarbonisation. 

It is set against this context that Prospex's focus on natural gas production and power generation via its core Podere Gallina Permit in Italy and El Romeral integrated gas and power project in Spain ought to be seen.  For natural gas is by far the cleanest hydrocarbon in terms of carbon emissions when combusted.  As I have reported previously, the EIA has estimated that in terms of CO2 emitted per unit of energy output, natural gas emits 117 pounds of CO2 per million British thermal units ('Btu') of energy compared to 228.6 pounds from coal, 161.3 pounds from diesel fuel and heating oil, and 157.2 pounds from gasoline.  The benefits to the environment from displacing oil and coal with natural gas for power generation are clear.  

As well as the environmental benefits, there is also a business case behind Prospex's focus on gas.  Thanks to gas being typically sold at prices agreed via long-term contracts, producers largely avoid the volatility associated with spot markets, which in turn provides significant visibility to earnings. We believe shareholders will soon see for themselves the business case for gas once production commences at the Podere Maiar well on the Selva gas field in Italy in 2022.  We estimate Podere Maiar, along with the three existing gas wells supplying a project-owned power plant at El Romeral in Spain, have the potential to produce over 7,800,000 scm net to Prospex over the course of a year.  At today's prices, this level of gas production would generate a material revenue stream that would support the monetisation of low-risk follow-up opportunities across our Italian and Spanish projects to grow the asset base and revenues further. 

Thanks to our existing assets, we have a roadmap to generate considerable value for investors and at the same to play our part in the global fight against climate change:

Internally generated revenues + multiple follow-up opportunities + natural gas focus = roadmap to an ESG focused, highly cash flow generative gas and power investment company

Podere Gallina, Po Valley onshore Italy

All the ingredients in the above formula can be found in the Podere Gallina permit in Italy in which Prospex holds a 17% interest.  Once the Selva gas field comes on stream in 2022 at an initial daily rate of up to 150,000 cubic metres (5.3 mmscf/d), Prospex will have a material stream of internally generated revenues.  In addition to the 13.3 Bcf (2P) Selva field, Podere Gallina holds multiple follow-up opportunities including the two historic gas producing North Flank and South Flank reservoirs at Selva, which geophysical services consultancy CGG Services (UK) Limited has estimated have a 60% - 70% chance of holding gross contingent resources ('2C') of 14.1 Bcf.  The permit also holds the East Selva, Fondo Perino, Cembalina, and Riccardina prospects, which are estimated to hold aggregate gross prospective resources (best estimate) of 91.5 Bcf.  All the targets identified at Podere Gallina are focused on cleaner natural gas.

For now, the priority at Podere Gallina is to bring Selva on stream.  The field development plan is centred around the installation of a fully automated gas plant at the site of the Podere Maiar 1dir well site, which successfully tested the field in 2018.  The gas plant will be connected to the Italian National Grid by a one-kilometre-long pipeline.  In all, the development will have a footprint of less than half a hectare, while it has been designed in such a way to prevent any emissions from gas production at the site.  The net cost to Prospex to bring Selva into production is estimated at €580,000, of which €400,000 relates to civil works and hardware with the remainder made up of ancillary expenses.   Bringing Selva online is therefore low cost and, thanks to the field's gross reserves of 13.3bcf, we can pursue non-equity funding to cover our share of the development costs. We are in discussions with potential providers and will update as and when appropriate.

In the meantime, major milestones have been achieved with the permitting process, despite the disruption caused by the global pandemic.  A preliminary gas Production Concession (80.68km²) was granted by the Italian Ministry for Economic Development in early 2019 and during the year under review, formal technical environmental approval for the development of Selva was received from the Italian Environment Ministry. This was followed post period end in April 2021 with full environmental approval from the Italian Government, which paves the way for the grant of a full production licence from Italy's Economic Development Ministry. Targeting first production in mid-2022, preliminary development work has now commenced at the site.

El Romeral, onshore Spain

As with Selva, El Romeral has the potential to become a significant internal revenue generator, holds multiple follow-up opportunities and is focused on cleaner natural gas.  We announced the conditional acquisition of up to a 49.9% indirect stake in the integrated gas production and power station project in southern Spain in December 2019.  The onset of the pandemic just months later resulted in a delay in the approval process for the acquisition and the transfer of the asset to our Spanish affiliate, Tarba Energia ('Tarba'), both of which took place post period end in Q1 2021.  Completion may have taken longer than we had anticipated but we firmly believe the wait will prove to have been well worth it, especially as the acquisition adds power generation to our portfolio.  

El Romeral currently comprises three producing wells which supply gas to a 100% project-owned 8.1MW power station.  These three wells are late life, and the maximum gas productivity of the wells currently limits the power plant to operating at c. 22% capacity.  Thanks to the presence of multiple low risk targets, including two development locations with gross contingent resources of 5 Bcf and 11 prospects with gross prospective gas resources of 90 Bcf, there is considerable scope to increase gas production at the project. We estimate one new well being brought online will be sufficient to achieve 100% capacity utilisation at the plant . 

At full capacity, El Romeral will become a second material revenue generator for Prospex: producing electricity at the power plant's name plate rate of c. 60,000 MWh gross per annum and selling at Spain's historic average electricity price of €70 per MWh (including subsidy) has the potential to deliver indicative project level annual revenues and profit before tax of €4.2 million and €2.4 million respectively (€1.8 million profit after tax).  This level of revenues and profits would put El Romeral on a par with Selva. 

Post period end, Tarba has submitted early stage environmental documents as part of the application process for the drilling of multiple wells at El Romeral, potentially commencing in 2022. 

Other projects

In addition to Podere Gallina and El Romeral, Prospex holds a 15% interest along with an option to increase this to 49.9% in Tesorillo, a large gas project in southern Spain where historic discoveries, notably the 1957 Almarchal-1 discovery well, have been made.  Following the onset of COVID, in March 2020, a work programme focused on identifying and de-risking a prospect inventory was paused. 

In October 2020, we announced the divestment of the Company's wholly owned subsidiary, PXOG Massey Limited ('Massey'), the sole asset of which is a 50% interest in the economic rights of the EIV-1 Suceava Concession, onshore Romania.  Under the terms of the sale, Prospex will receive up to £215,000 in cash in respect of historical debt owed to the Company by Massey and nominal consideration for shares in Massey.  The divestment follows the completion of a strategic review of Prospex's portfolio following the acquisition of a 49.9% interest in El Romeral. 

Financial Review

For the period ended 31 December 2020, the Company is reporting Total Assets of £5,748,211 (31 Dec 2019: £6,341,890), the value of which is largely comprised of the Company's investment in PXOG Marshall Ltd, the vehicle for the Company's Italian assets.  This movement includes revaluations of the Company's investments ('the Investments') and movements (repayments and advances) on loans receivable from those investments.

Unrealised losses arising on revaluation of Investments at fair value amounted to £377,498 (2019: unrealised loss - £270,220). This resulted from the revaluation of PXOG Marshall Ltd, which included an update to forward gas price assumptions that had been used in a previous CPR. The time frame for this exercise coincided in a weakening in Italian gas prices in response to the pandemic and associated lockdowns. Since the revaluation was carried out, Italian gas prices have risen as vaccination programmes and economic activity have picked up. 

The fluctuation in Total Assets is primarily due to the write down of loans of £744,317 (2019: £203,705) triggered by the sale of PXOG Massey Ltd.

Aside from the nominal cost of equity being included in the Company's Investments, the bulk of the carrying value of the Company's Spanish investments is represented within loans made by the Company to the investment vehicle for the Spanish assets and other receivables.

As at 31 December 2020, the fair value of the Company's investments stood at £3,620,890 (2019: £3,998,388), with a further £1,762,990 (2019: £2,218,326) of loans to investee companies expected to be repaid in due course. The latter is after a provision of  nil (2019: £203,705). The combined value of these equity investments and current and non-current loans is £5,383,880 (2019: £6,216,714). The Company continues to have significant asset backing relative to its market capitalisation.

Administrative expenses for the full year totalled £972,193, an 11% reduction on 2019's £1,091,871, as management took steps to reduce the Company's cost base further in response to the impact of the pandemic on economic activity. During the period, the Company received a loan of approximately £50,000 from its bank under the Government's COVID-19 Bounce Back Loan Scheme.

The Company is reporting a net loss after taxation from continuing operations of £1,806,492 (2019: loss - £1,300,669). Unrealised losses arising from the revaluation at fair value of financial assets including PXOG Marshall Ltd and the write-off of the loans to PXOG Massey Ltd totalled £1,121,815 (2019: loss - £473,925).

In February 2020, the Company raised £720,000 gross via an oversubscribed placing of 600,000,000 new ordinary shares to help fund the Company's acquisition of a 49.9% indirect stake in El Romeral. Certain Directors of the Company took part in the Placing, acquiring new shares in the Company with an aggregate value of £140,000.

As at 31 December 2020, the Company held cash and cash equivalents of £220,618 (2019: £69,387).  Post period end in March 2021, the Company raised £750,000 gross via a placing of 50,000,000 new ordinary shares to fund planned programmes in Spain and Italy and also to fund the evaluation of new business opportunities.

In June 2020, the Company completed a share re-organisation effecting a one new ordinary share for 25 existing ordinary shares.

Outlook

The world is a very different place to what it was 12 months ago.  While vaccination programmes are being rolled out across the world to curb the spread of COVID-19, the effects of the pandemic will continue to be felt for years to come.  One potential lasting consequence of the coronavirus is that it could well lead to a sustained acceleration in the ongoing movement to decarbonise the global economy.  We are already seeing this in the continued development of environmental legislation across Europe. 

Individual European countries may be moving at their own pace, but all are looking to cut emissions within EU and global frameworks.  In Italy, after a two-year moratorium on exploration was introduced in 2019, it appears exploration will restart in 2021, but in a more restrictive manner. In Spain, post year end, the country passed its Climate Change and Energy Transition Law.  As part of a broad range of measures, Spain has decided not to issue any new exploration licences and has further tightened up and made further restrictions on certain types of exploitation permit.  Our interests in exploitation permits at this time seem largely unaffected, whether any further changes to the right to explore are made remains to be seen. Legislative pragmatists do recognise the need for transition, and we hope that, once countries set their road maps to carbon neutrality, we will be able to explore and exploit as per the permitting framework.  The Company therefore believes its current producing / development assets can run all if not the vast majority of their economic life.  As a result, we believe Prospex is well placed to play its part in the energy transition.

Our flagship projects in Italy and Spain are focused on gas, widely viewed as a key transitional fuel on account of it being significantly cleaner than oil and coal. Both projects are either already or soon to be producing.  Both hold multiple and significant low risk follow-up exploration / development opportunities.  The building blocks are in place to transform Prospex into a highly cash generative gas and power producer that is fit for purpose for the energy transition.  With Selva expected to commence production in mid-2022 and with the application process now commenced for a multi-well drilling programme at El Romeral, potentially in 2022, the year ahead promises to see major progress made and I look forward to providing further updates in the year ahead. 

Finally, I would like to take this opportunity to thank the Board and management team for their continued hard work, commitment, and support during what has been an unprecedented period for all. 

Bill Smith  

Non-executive Chairman

24 June 2021

 

Statement of Profit or Loss and Other Comprehensive Income

for the year ended 31 December 2020

		2020		2019
CONTINUING OPERATIONS
Other operating income		247,143		198,528
Administrative expenses		(972,193)		(1,091,871)
OPERATING LOSS		(725,050)		(893,343)
Loss on revaluation of investments		(1,121,815)		(473,925)
Profit on disposal of investment		-		40,462
		(1,846,865)		(1,326,806)
Finance income		91,362		76,612
Finance costs		(50,989)		(50,475)
LOSS BEFORE INCOME TAX		(1,806,492)		(1,300,669)
Income tax		-		-
LOSS AFTER INCOME TAX		(1,806,492)		(1,300,669)
OTHER COMPREHENSIVE INCOME		-		-
TOTAL COMPREHENSIVE LOSS FOR THE YEAR		(1,806,492)		(1,300,669)
LOSS PER SHARE - BASIC AND DILUTED		(2.10p)		(2.12p)

 

Statement of Financial Position

31 December 2020

		2020		2019
		£		£
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment		-		-
Investments		3,620,890		3,998,388
Loans and other financial assets		-		1,048,978
Trade and other receivables		989,645		808,360
		4,610,535		5,855,726
CURRENT ASSETS
Trade and other receivables		917,058		416,777
Cash and cash equivalents		220,618		69,387
		1,137,676		486,164
TOTAL ASSETS		5,748,211		6,341,890
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital		7,035,589		6,435,587
Share premium		10,185,819		10,095,358
Merger reserve		2,416,667		2,416,667
Capital redemption reserve		43,333		43,333
Retained earnings		(14,965,030)		(13,260,713)
TOTAL EQUITY		4,716,378		5,730,232
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
- Interest bearing loans and borrowings		579,998		386,523
CURRENT LIABILITIES
Trade and other payables		164,262		96,294
Financial liabilities - borrowings
- Interest bearing loans and borrowings		287,573		128,841
		451,835		225,135
TOTAL LIABILITIES		1,031,833		611,658
TOTAL EQUITY AND LIABILITIES		5,748,211		6,341,890

 

Statement of Changes in Equity

for the year ended 31 December 2020

	Share capital	Share premium	Merger reserve	Capital redemption reserve	Retained earnings	Total
Balance at 1 January 2019	6,035,587	9,756,759	2,416,667	43,333	(11,955,212)	6,297,134
Changes in equity
Profit for the year	-	-	-	-	(1,300,669)	(1,300,669)
Issue of shares	400,000	400,000	-	-	-	800,000
Costs of shares issued	-	(66,233)	-	-	-	(66,233)
Lapse of share options		10,142	-	-	(10,142)	-
Equity-settled share-based payments		(5,310)	-	-	5,310	-
Balance at 31 December 2019	6,435,587	10,095,358	2,416,667	43,333	(13,260,713)	5,730,232
Changes in equity
Loss for the year	-	-	-	-	(1,806,492)	(1,806,492)
Issue of shares	600,002	119,998	-	-	-	720,000
Costs of shares issued	-	(29,537)	-	-	-	(29,537)
Lapse of share options	-	-	-	-	-	-
Equity-settled share-based payments	-	-	-	-	102,175	102,175
Balance at 31 December 2020	7,035,589	10,185,819	2,416,667	43,333	(14,965,030)	4,716,378

 

Statement of Cash Flows

for the year ended 31 December 2020

		2020		2019
Cash outflow from operations		(1,106,861)		(776,978)
Cash flows from investing activities
Proceeds from sale of investments		-		119,014
Interest paid		(51,664)		-
Net cash outflow from investing activities		(51,664)		119,014
Cash flows from financing activities
New loan notes		265,000		-
Bank loan		49,632
Loan repayment/(payments)		304,661		(239,554)
Share issue		720,000		800,000
Costs of shares issued		(29,537)		(66,233)
Net cash inflow from financing activities		1,309,756		494,213
Increase/(decrease) in cash and cash equivalents		151,231		(163,751)
Cash and cash equivalents at beginning of year		69,387		233,138
Cash and cash equivalents at end of year		220,618		69,387

RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

		2020		2019
Cash flows from operations
Loss before income tax		(1,806,492)		(1,300,669)
Loss on revaluation of fixed asset investments		377,498		270,220
Profit on sale of investments		-		(40,462)
Provision against loan to subsidiary undertaking		744,317		203,705
Finance income		(91,362)		(76,612)
Finance costs		50,989		50,475
Operating loss		(725,050)		(893,343)
(Increase)/decrease in trade and other receivables		(590,204)		105,929
Increase in trade and other payables		67,968		10,436
Equity settled share-based payments		102,175		-
Issue of loan note to settle liabilities		38,250		-
Net cash outflow from operations		(1,106,861)		(776,978)

 

Notes to the financial information

Year ended 31 December 2020

1    Basis of preparation and accounting policies

Prospex Energy Plc is a public limited company, is registered in England and Wales and is quoted on the AIM Market of the London Stock Exchange Plc. The Company's registered office address is Stonebridge House, Chelmsford Road, Hatfield Heath, Essex CM22 7BD.

The audited financial information set out in this statement does not constitute the Company's statutory accounts for the years ended 31 December 2020 or 31 December 2019, as defined in section 434 of the Companies Act 2006.

Statutory accounts for 2019 have been delivered to the Registrar of Companies and those for 2020 will be delivered in due course. The Company's auditors, Adler Shine LLP, have reported on the 2209 accounts; their report was unqualified and did not contain statements under s498 (2) or (3) Companies Act 2006. Their report included a statement of material uncertainty relating to going concern, drawing attention to the Going Concern policy below, the reliance on future fund raising to continue the company's activities as budgeted and the significant doubt on the ability to continue as a going concern, should future fund raising be unsuccessful. Their opinion is not modified in this respect. Whilst the financial information included in this announcement has been computed in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") this announcement does not itself contain sufficient information to comply with IFRS.

The principal accounting policies used in preparing this preliminary results announcement are those that the Company applies in its statutory accounts for the year ended 31 December 2020 and are unchanged from those disclosed in the Company's Annual Report and Accounts for the year ended 31 December 2019.

2    Going concern

The current economic environment is challenging, and the Company has reported an operating loss for the year of £725,050. These losses are expected to continue in the current accounting year to 31 December 2021.

The Company regularly carries out fund-raising exercises in order that it can provide the necessary working capital and investment funds for the Company. As detailed in note 24, since the year end, the Company has raised £750,000 before expenses, through the issue of new ordinary shares. The board expects to continue to raise additional funding as and when required to cover the Group's development, primarily from the issue of further shares, or, if available on suitable terms, debt finance.

Furthermore, the directors have evaluated the impact to the company in respect of the COVID-19 (Coronavirus) pandemic ongoing at the time of approving these financial statements. The company's investment activities through its subsidiary undertakings take place in countries that have been impacted by the virus. Beyond a short-term energy price drop, mid to long term prices remain only marginally affected. The business has been affected but has been able to transfer office-based activities to a "working from home" in host countries in lock down. Fields activities so far have not been affected but are minimal anyway. The industry by its nature does, and is required to, interface with its regulators; to date regulators in host countries are still engaging, via email. Whilst it remains hard to assess the impact on timelines, the fact that civil servants remain engaged is taken as a positive in a negative environment. Financial markets remain volatile but have settled down from the extremes seen during 2020. Whilst market conditions, largely attributed to COVID-19, are currently tough the directors believe the quality and long-term nature of the underlying assets in the subsidiary undertakings will enable further financing as required. As a result, the directors do not consider there to be a material uncertainty to the company's ability to continue as a going concern as a result of COVID-19.

The Directors have prepared detailed financial forecasts and cash flows looking beyond 12 months from the date of the approval of these financial statements. In developing these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that are expected to prevail over the forecast period. The Directors estimate that the cash held by the Company together with known receivables will be sufficient to support the current level of activities into the first quarter of 2022. The Directors are continuing to explore sources of finance available to the Company and based upon initial discussions with a number of existing and potential investors they have a reasonable expectation that they will be able to secure sufficient cash inflows for the Company to continue its activities for not less than 12 months from the date of approval of these financial statements; they have therefore prepared the financial statements on a going concern basis.

3  Income tax

No liability to UK corporation tax arose for the year ended 31 December 2020 nor for the year ended 31 December 2019.

4    Loss per share

The loss and number of shares used in the calculation of earnings per ordinary share are set out below:

		2020		2019
Basic:
Loss for the financial period		(1,806,492)		(1,300,669)
Weighted average number of shares*		85,855,239		61,475,232
Loss per share		(2.10p)		(2.12p)

The loss and the weighted average number of shares used for calculating the diluted loss per share are identical to those for the basic loss per share. The outstanding share options and share warrants would have the effect of reducing the loss per share and would therefore not be dilutive under IAS 33 'Earnings per Share'.

*The comparative weighted average number of shares for 2019 has been adjusted to account for the share reorganisation which was effected during the year whereby 1 new ordinary share of 0.1p each was issued in exchange for 25 existing ordinary shares of 0.1p each.

4  Publication of report and accounts

Full financial statements for the year ended 31 December 2020 will be posted to shareholders before 30 June 2021 and are now available on the Company's website www.prospex.energy.

 

END

 

 

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