2019 Interim Results

RNS Number : 6299H

Upland Resources Limited

26 March 2020

 

26 March 2020

UPLAND RESOURCES LIMITED

("Upland" or the "Company")

INTERIM RESULTS FOR THE SIX-MONTH PERIOD FROM 1 JULY TO 31 DECEMBER 2019

Upland Resources Limited (LSE: UPL), the oil and gas company actively building a portfolio of attractive upstream assets, is pleased to announce its interim results for the six-month period between 1 July 2019 and 31 December 2019. 

Highlights include:

· Steady progress has been made on licence activities in the second half of 2019.

· Tunisia - on 24 December 2019, the publication of the Decree of the Minister of Industry and Small and Middle Enterprises was published in the Official Gazette of the Tunisian Republic. This marked the commencement of the initial two-year term for the Prospecting Licence in the Saouaf permit area in Tunisia.

· Additional Tunisian opportunities have also been identified and are being progressed.

· Sarawak - the Company is working to progress an award of new licences in  Sarawak, Malaysia where through a number of initiatives with local parties, Upland maintains a well-placed position.

· In addition, the Company has identified a number of other opportunities in South-East Asia (both within and outside Malaysia) which offer unique and game changing potential for the Company to partner with established regional players to participate in both late life and marginal field assets.

· On the 7 October 2019, Dr Steve Staley, resigned as CEO and was succeeded by Mr Christopher Pitman as the Interim CEO.

· In November 2019, Optiva Securities, broker and financial advisor to Upland, exercised warrants to subscribe for 6,336,154 new shares at 1.3p per share, raising £82,370 through the subscription.

·   Pre-tax loss of £516,552 for the six months to 31 December 2019, compared to a £414,407 loss for the comparable six months to 31 December 2018. 

· The Company has no debt and plans to grow through the identification and closure of significant new business opportunities which should facilitate access to additional finance.

 

Post period end

· On 6 January 2020, the Board of Directors appointed Mr Christopher Pitman as the CEO on a permanent basis together with Mr Aimi Aizal Bin Nasharuddin (based within Malaysia) as a Non-Executive Director.

· On 6 March 2020 the Company announced that it had successfully raised £250,000 via a subscription managed by Optiva Securities Limited.  These funds will be employed to further progress the Company's projects in Tunisia and for general working capital purposes.

· Further updates will be provided in due course.

For more detailed information please see the full Director's Interim Report below. The Interim Report and Accounts will be available shortly at the Company's website www.uplandres.com

Christopher Pitman, Upland Resources Limited CEO, said:

"We are pleased by the progress that the business has continued to make particularly with licence activities in respect of the Saouaf permit area in Tunisia. In addition to these developments we have also appointed experienced additional non-executive directors to the Board.

Whilst we are aware that our industry faces challenging headwinds, we believe that our debt-free capital structure and pipeline leaves us well placed to pursue exciting portfolio opportunities, grow the business and provide value to shareholders."

This announcement contains inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 on market abuse

For further information, please contact:

Upland Resources Limited Christopher Pitman, CEO	www.uplandres.com Tel: [phone]
	[e-mail]
Optiva Securities Limited	www.optivasecurities.com
Jeremy King (Corporate Finance)	Tel: [phone] [e-mail]
Christian Dennis (Corporate Broker)	Tel: [phone]  [e-mail]
FTI Consulting
Ben Brewerton	Tel: [phone] [e-mail]
Christopher Laing	Tel: [phone] [e-mail]
Flowcomms Ltd
Sasha Sethi	Tel: [phone] [e-mail]

Notes

Upland Resources Limited is an upstream oil and gas company whose highly experienced management team has a track record of creating major value for both privately and publicly owned entrepreneurial oil companies (Surestream Petroleum and Zarara Energy) and international service companies (Petroleum Geo-Services and Schlumberger).

UPLAND RESOURCES LIMITED REPORT OF THE DIRECTORS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2019 Upland Resources ("Upland" or the "Company") has made steady progress on licence activities in the second half of 2019. On the 15 August 2019, the Company changed its domicile from the British Virgin Islands to Jersey to enhance corporate governance. This migration to Jersey means that the Company has now become subject to the City code on Takeovers and Mergers. On 3 September 2019, two additional non-executive directors, Mr Dixon Wong and Mr Christopher Pitman, were appointed to the Board. The Company announced on the 20 September 2019 that its wholly owned subsidiary, Upland Resources (UK Onshore) Limited, and its partners had been awarded the P2478 and P2470 'Innovate' licences by the UK Oil and Gas Authority as a result of the competitive UK 31st Offshore Licensing Round.  Both licences are located within the northern (P2470) and southern (P2478) areas of the Inner Moray Firth basin. The licences are held by Upland Resources (UK Onshore) Limited (40%), Corallian Energy Limited (45%) and Baron Oil (15%). On the 7 October 2019, Dr Steve Staley, resigned as CEO and a director with immediate effect for personal reasons and was succeeded by Mr Christopher Pitman as the Interim CEO. Optiva Securities Limited issued an exercise notice on the 8 November in respect of warrants related to a warrant agreement with the Company dated 25 November 2016.  This warrant exercise raised £82,370 through the subscription for 6,336,154 new shares at 1.3p per share.  The New Ordinary Shares were admitted to the Official List of the FCA on 15 November 2019. On 24 December 2019, the Decree of the Minister of Industry and Small and Middle Enterprises dated 14 November 2019 in respect of the Prospecting Licence in the Saouaf permit area Tunisia was published in the Official Gazette of the Tunisian Republic.  This publication marked the commencement of the initial two year licence term. The Company continues to progress an award of a new licence in Sarawak and has identified other exciting opportunities in Malaysia, elsewhere in South-East Asia and also Tunisia Events since the end of the reporting period On the 6 January 2020, the Board of Directors appointed Mr Christopher Pitman as the CEO on a permanent basis together with Mr Aimi Aizal Bin Nasharuddin as a Non-Executive Director. The Company also announced that it had successfully raised £250,000 via a subscription managed by Optiva Securities Limited.  These funds will be employed to further progress the Company's projects in Tunisia and for general working capital purposes. Results for the period The financial results for the six month period ended 31 December 2019 are appended to this report. Upland made a pre-tax loss of £516,552 for the six months to 31 December 2019, compared to a £414,407 loss for the comparable six months to 31 December 2018.  The principal reasons for the increased costs in the six-month period are the costs associated with supporting the Company's activities and one-off costs in connection with the appointment of new directors to the Board. The Company has no debt and plans to grow through the identification and closure of significant new business opportunities which should facilitate access to additional finance. The Board of Directors acknowledge that 2020 will be difficult with extremely challenging conditions caused through the collapse in the oil price and the uncertainty with regard to the impact of the Coronavirus pandemic.  The current inability to travel freely to our permit areas and to regions identified as new opportunities will, without doubt, cause some delays to our 2020 work programme. However, in the current environment, the costs of undertaking such work programmes* will undoubtably fall substantially, which will be to the advantage of the Company. * Note that as per RNS of 24 December 2018 Upland had deposited a US$1 million bank guarantee lodged in favour of the Tunisian Government against these first phase work commitments. This is in place and will be released in a phased manner, as the work programme progresses. Risks and uncertainties The Group has identified the following as key risks in the second six months of this financial year: Sub-surface risks Risk (1): The success of the business relies on accurate and detailed analysis of the sub-surface. This can be impacted by poor quality data, either historical or recently gathered, and limited coverage. Certain information provided by external sources may not be accurate. Mitigation: All externally provided and historical data is rigorously examined and discarded when appropriate. New data acquisition is considered and adequate programmes implemented, but historical data can be reviewed and reprocessed to improve the overall knowledge base. Risk (2): Data can be misinterpreted, leading to the construction of inaccurate models and subsequent plans. Mitigation: All analytical outcomes are challenged internally and peer reviewed. Interpretations are carried out on modern geoscience software. Corporate risks Risk: The Group's success depends upon skilled management as well as technical and administrative staff. The loss of service of critical members of the Group's team could have an adverse effect on the business. Mitigation: The Group periodically reviews the compensation and contract terms of its staff and consultants to ensure they are competitive. Going Concern After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern basis in preparing the Company's financial statements. Auditing This interim report and accounts for the six month period ended 31 December 2019 (the "Interim Report and Accounts") has not been audited or reviewed pursuant to the Financial Reporting Council guidance on 'Review of Interim Financial Information''. Statement of Directors' Responsibilities The Interim Report and Accounts is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Report and Accounts in accordance with the Disclosure and Transparency Rules (the "DTRs") of the United Kingdom's Financial Conduct Authority (the "FCA"). The DTRs require that the accounting policies and presentation applied to the half yearly figures must be consistent with those applied in the latest published annual accounts. The Directors confirm that, to the best of their knowledge, the set of financial statements contained in the Interim Report and Accounts, which have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group, as required by DTR 4.2.2 and in particular include a fair review of:- • the important events that have occurred during the half of the financial year and their impact on the set of financial statements contained in the Interim Report and Accounts, as required by DTR 4.2.7R; • the principal risks and uncertainties for the remaining half of the year as required by DTR 4.2.7R; and • related party transactions that have taken place in the first half of the current financial year. The Directors of Upland Resources Limited are Bolhassan Di (Non-Executive Chairman), Christopher Pitman (Chief Executive Officer), Dixon Kit Seng Wong (Non-Executive), Aimi Nasharuddin (Non-Executive) and Jeremy King (Non-Executive). Bolhassan Di  Christopher Pitman Chairman  Chief Executive Officer 25 March 2020

UPLAND RESOURCES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE INTERIM SIX MONTH PERIOD ENDED 31 DECEMBER 2019
		6 months to 31 December 2019		6 months to 31 December 2018
		£		£
Revenue		-		-
Exploration and evaluation expenditure		(3,922)		-
Administrative expenses		(512,630)		(342,777)
Operating loss		(516,552)		(342,777)
Finance costs		-		(71,630)
Loss before taxation		(516,552)		(414,407)
Taxation		-		-
Loss and Total Comprehensive Income for the Period Attributable to Equity Owners of the Parent Company		(516,552)		(414,407)
Loss per share in pence - basic and diluted		(0.09)		(0.07)
The results above derive wholly from continuing operations.

 

UPLAND RESOURCES LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
		31 December 2019		30 June 2019
	Note	£		£
Current assets
Trade and other receivables	2	6,593		104,082
Cash and cash equivalents		792,587		1,064,601
		799,180		1,168,683
Total assets		799,180		1,168,683
Equity
Share capital		-		-
Share premium		7,767,332		7,684,962
Retained earnings		(7,248,018)		(6,731,466)
Total equity		519,314		953,496
Current liabilities
Trade and other payables	3	279,866		215,187
Total equity and liabilities		799,180		1,168,683

	UPLAND RESOURCES LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE INTERIM SIX MONTH PERIOD ENDED 31 DECEMBER 2019
			Premium on shares			Retained earnings			Total equity
			£			£			£
	At 1 July 2019		7,684,962			(6,731,466)			953,496
	Issue of shares		82,370			-			82,370
	Loss for the period		-			(516,552)			(516,552)
	At 31 December 2019		7,767,332			(7,248,018)			519,314
			Premium on shares			Retained earnings			Total equity
			£			£			£
	At 1 July 2018		7,619,962			(2,336,961)			5,283,001
	Issue of shares		65,000			-			65,000
	Loss for the period		-			(414,407)			(414,407)
	At 31 December 2018		7,684,962			(2,751,368)			4,933,594
UPLAND RESOURCES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE INTERIM SIX MONTH PERIOD ENDED 31 DECEMBER 2019
						6 months to 31 December 2019			6 months to 31 December 2018
						£			£
Cash Flows from Operating Activities
Loss from operations						(516,552)			(342,777)
Decrease/(increase) in trade and other receivables						97,489			(382,097)
Increase/(decrease) in trade and other payables						64,679			(53,341)
Net cash flow from operating activities						(354,384)			(778,215)
Cash Flows from Investing Activities
Expenditures incurred on exploration and evaluation assets						-			(2,657,087)
Net cash flow from investing activities						-			(2,657,087)
Cash Flows from Financing Activities
Proceeds from issue of ordinary shares, net of issue costs						82,370			2,928,131
Net cash generated from financing activities						82,370			2,928,131
Net (decrease) in cash and cash equivalents						(272,014)			(507,171)
Cash and cash equivalents at the beginning of the period						1,064,601			2,173,720
Cash and cash equivalents at the end of the period						792,587			1,666,549

 

UPLAND RESOURCES LIMITED NOTES TO THE INTERIM ACCOUNTS
1	Accounting policies
	The same accounting policies and methods of computation are followed in these interim accounts as compared with the most recent annual financial statements.
2	Trade and other receivables
					31 December 2019				30 June 2019
					£				£
	Other debtors				-				2,663
	Prepayments				6,593				101,419
					6,593				104,082
3	Trade and other payables
					31 December 2019				30 June 2019
					£				£
	Trade payables				160,681				59,206
	Other payables				26,905				18,571
	Accrued expenses				92,280				137,410
					279,866				215,187
UPLAND RESOURCES LIMITED NOTES TO THE INTERIM ACCOUNTS (CONTINUED)
4		Related party transactions
		The directors are considered to be the key management personnel of the company. During the interim period, the company paid fees to directors amounting to £76,713 (year ended 30 June 2019 - £298,717). During the interim period, the company was charged fees and commission of £10,000 (year ended 30 June 2019 - £20,000) by a company of which a director of the company is also a director and shareholder. During the interim period, the company was charged consultancy fees of £18,000 (year ended 30 June 2019 - £56,000) by a director of the company.
5		Commitments and post balance sheet events
		Upland's wholly-owned subsidiary, Upland (Saouaf) Limited ("Upland Saouaf"), has signed permit documents, with its partner ETAP (the Tunisian state oil company), for the exclusive Saouaf hydrocarbon exploration and appraisal licence ("the Licence"). The Licence is to be operated by Upland Saouaf and is held 50/50 in the joint names of Upland Saouaf and ETAP. The terms of the Licence commit Upland Saouaf to carry out a minimum work programme including the acquisition of 300 km of new 2D seismic data. A $1 million bank guarantee has been put in place by Upland, which will be reimbursed as elements of the work programme are completed. The Licence is for an initial term of two years, and may be converted and thereby extended in term at Upland Saouaf's option, providing the work commitments of the initial term have been fulfilled within the two years. In addition, at the balance sheet date, Upland's wholly-owned subsidiary, Upland Resources (UK Onshore) Limited ("Upland UK"), held a 25% interest in PEDL 299. A cost-sharing arrangement has been put in place under the Joint Operating Agreement between the co-licencees (INEOS Upstream and Europa Oil & Gas). Under that arrangement, it is estimated that Upland UK's share of the costs over the remaining 2 years of the licence will be £700,000. However, such work is subject to its progression by the co-licencees and the granting of relevant permissions.

 

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