Interim Results for the 6 months ended 30/06/2022

RNS Number : 2518B

Challenger Energy Group PLC

30 September 2022

 

30 September 2022

Challenger Energy Group PLC

("Challenger Energy" or the "Company")

Interim Results for the six months ended 30 June 2022

Challenger Energy (AIM: CEG), the Caribbean and Atlantic -margin focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, announces its Interim Results for six months to 30 June 2022.

The Interim Results are set out in full below and are also available on the Company's website https://www.cegplc.com/ .

For further information, please contact:

Challenger Energy Group PLC Eytan Uliel, Chief Executive Officer	Tel: [phone]
Strand Hanson Limited - Nomad Rory Murphy / James Spinney / Rob Patrick	Tel: [phone]
Arden Partners plc - Broker Simon Johnson	Tel: [phone]
CAMARCO Billy Clegg / James Crothers / Hugo Liddy	Tel: [phone]

Notes to Editors

Challenger Energy is a Caribbean and Atlantic margin focused oil and gas company, with a range of exploration, appraisal, development and production assets and licences, located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of Uruguay and The Bahamas. In Trinidad and Tobago, Challenger Energy has five (5) producing fields, two (2) appraisal / development projects and a prospective exploration portfolio in the South West Peninsula. In Suriname, Challenger Energy has on onshore appraisal / development project. Challenger Energy's exploration licences in Uruguay, the South West Peninsula of Trinidad, and The Bahamas offer high-impact value exposure within the overall portfolio value.

Challenger Energy is quoted on the AIM market of the London Stock Exchange. 

https://www.cegplc.com  

ENDS

Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2022

		Six months ended 30 June 2022 (Unaudited)	Six months ended 30 June 2021 (Unaudited)	Year ended 31 December 2021 (Audited)
	Note	$ 000's	$ 000's	$ 000's
Net petroleum revenue		2,680	2,305	4,360
Cost of sales		(2,522)	(3,188)	(6,121)
Gross profit/(loss)		158	(883)	(1,761)
Administrative expenses		(4,720)	(4,768)	(9,098)
Impairment charges		-	(416)	(7,416)
Operating foreign exchange losses		(1,378)	(283)	(17)
Operating loss		(5,940)	(6,350)	(18,292)
Other income	2	8,567	-	256
Finance income	2	1,927	1	7
Finance costs		(275)	(5,480)	(5,630)
Profit/(loss) before taxation		4,279	(11,829)	(23,659)
Income tax expense		-	8	(38)
Profit/(loss) for the year attributable to equity holders of the parent company		4,279	(11,821)	(23,697)
Other comprehensive income/(expense)
Exchange differences on translation of foreign operations		1,105	(469)	(148)
Other comprehensive income/(expense) for the year net of taxation		1,105	(469)	(148)
Total comprehensive income/(expense) for the year attributable to equity holders of the parent company		5,384	(12,290)	(23,845)
Earnings/(loss) per share (cents)
Basic and diluted *		0.1	(2.19)	(3.6)

* Earnings/loss per share for the six-month period to 30 June 2022 and 30 June 2021 is stated after the effects of the 1 for 10 share consolidation which took effect on 28 May 2021.

All operations are considered to be continuing (see note 3).

The accompanying accounting policies and notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS ENDED 30 JUNE 2022

		At 30 June 2022 (Unaudited)	At 30 June 2021 (Unaudited)	At 31 December 2021 (Audited)
	Note	$ 000's	$ 000's	$ 000's
Assets
Non-current assets
Intangible exploration and evaluation assets	4	94,389	96,020	94,405
Goodwill	4	4,610	4,610	4,610
Tangible assets	5	21,874	26,152	22,748
Right of use assets	6	6	40	14
Investment in associate		-	47	-
Escrow and abandonment funds		1,601	1,344	1,564
Deferred tax asset		6,998	8,065	6,929
Total non-current assets		129,478	136,278	130,270
Current assets
Trade and other receivables		5,428	4,518	4,274
Inventories		270	177	259
Restricted cash		434	946	560
Cash and cash equivalents		5,308	6,957	1,555
Total current assets		11,440	12,598	6,648
Total assets		140,918	148,876	136,918
Liabilities
Current liabilities
Trade and other payables	7	(11,985)	(22,792)	(23,537)
Lease liabilities		(27)	(65)	(36)
Borrowings		(77)	(286)	(643)
Total current liabilities		(12,089)	(23,143)	(24,216)
Non-current liabilities
Borrowings		(147)	(890)	(187)
Provisions		(6,164)	(6,283)	(6,294)
Deferred tax liability		(7,009)	(8,065)	(6,941)
Total non-current liabilities		(13,320)	(15,238)	(13,422)
Total liabilities		(25,409)	(38,381)	(37,638)
Net assets		115,509	110,495	99,280
Shareholders' equity
Called-up share capital	8	2,540	218	218
Share premium reserve	8	180,272	171,411	171,734
Share based payments reserve		5,411	5,295	5,312
Retained deficit		(97,102)	(89,505)	(101,381)
Foreign exchange reserve		1,104	(322)	(1)
Convertible debt option reserve		-	114	114
Other reserves		23,284	23,284	23,284
Total equity attributable to equity holders of the parent company		115,509	110,495	99,280

The accompanying accounting policies and notes form an integral part of these financial statements. These Interim Financial Statements were approved and authorised for issue by the Board of Directors on 29 September 2022 and signed on its behalf by:
Eytan Uliel	Simon Potter
Director	Director

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2022

	Six months ended 30 June 2022 (Unaudited)	Six months ended 30 June 2021 (Unaudited)	Year ended 31 December 2021 (Audited)
	$ 000's	$ 000's	$ 000's
Cash flows from operating activities
Profit/(loss) before taxation	4,279	(11,829)	(23,659)
(Increase)/decrease in trade and other receivables	(539)	(388)	772
(Decrease) in trade and other payables	(1,188)	(4,801)	(5,105)
(Increase) in inventories	(11)	(5)	(87)
Impairment of tangible and intangible assets	-	416	7,416
Depreciation of property, plant and equipment	1,077	1,690	2,944
Depreciation of right of use asset	9	57	86
Loss on disposal of investment in associate	-	-	47
Loss on disposal of property, plant and equipment	10	-	11
Amortisation	16	150	263
Share settled payments	1,113	638	644
Other income	(8,567)	-	(256)
Finance income	(1,927)	(1)	(7)
Finance costs	275	5,480	5,630
Share based payments	99	67	84
Income tax received/(paid)	-	9	(99)
Foreign exchange loss on operating activities	1,378	283	17
Net cash outflow from operating activities	(3,976)	(8,234)	(11,299)
Cash flows from investing activities
Purchase of property, plant and equipment	(212)	(2,140)	(5,385)
Proceeds from sale of property, plant and equipment	5	-	36
Payments for exploration and evaluation assets	-	(13,595)	(13,745)
Decrease in restricted cash	125	1	386
Other income received	-	-	256
Interest received	-	1	7
Net cash outflow from investing activities	(82)	(15,733)	(18,445)
Cash flows from financing activities
Issue of ordinary share capital	8,508	14,532	14,456
Share issue costs	-	(410)	(19)
Principal elements of lease payments	(9)	(40)	(86)
Interest payable on lease liabilities	-	(5)	(7)
Finance costs	(265)	(2,427)	(2,575)
Repayment of borrowings	(144)	(248)	(648)
Proceeds of borrowings	-	2,259	2,259
Net cash inflow from financing activities	8,090	13,661	13,380
Net increase in cash and cash equivalents	4,032	(10,306)	(16,364)
Effects of exchange rate changes on cash and cash equivalents	(279)	(599)	57
Cash and cash equivalents at beginning of period	1,555	17,862	17,862
Cash and cash equivalents at end of period	5,308	6,957	1,555

 

The accompanying accounting policies and notes form an integral part of these financial statements.

STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2022

	Called up share capital	Share premium reserve	Share based payments reserve	Retained deficit	Foreign exchange reserve	Convertible debt option reserve	Other reserves	Total Equity
	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's
Group
At 1 January 2022	218	171,734	5,312	(101,381)	(1)	114	23,284	99,280
Loss for the period	-	-	-	4,279	-	-	-	4,279
Currency translation differences	-	-	-	-	1,105	-	-	1,105
Total comprehensive expense	-	-	-	4,279	1,105	-	-	5,384
Issue of ordinary shares	2,322	8,538	-	-	-	-	-	10,860
Realisation of conversion feature	-	-	-	-	-	(114)	-	(114)
Share based payments	-	-	99	-	-	-	-	99
Total contributions by and distributions to owners of the Company	2,322	8,538	99	-	-	(114)	-	10,845
Balance at 30 June 2022	2,540	180,272	5,411	(97,102)	1,104	-	23,284	115,509

	Called up share capital	Share premium reserve	Share based payments reserve	Retained deficit	Foreign exchange reserve	Convertible debt option reserve	Other reserves	Total Equity
	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's
Group
At 1 January 2021	123	152,717	5,228	(77,684)	147	396	23,284	104,211
Loss for the period	-	-	-	(11,821)	-	-	-	(11,821)
Currency translation differences	-	-	-	-	(469)	-	-	(469)
Total comprehensive expense	-	-	-	(11,821)	(469)	-	-	(12,290)
Issue of ordinary shares	95	18,694	-	-	-	-	-	18,789
Recognition of conversion feature	-	-	-	-	-	505	-	505
Realisation of conversion feature	-	-	-	-	-	(787)	-	(787)
Share based payments	-	-	67	-	-	-	-	67
Total contributions by and distributions to owners of the Company	95	18,694	67	-	-	(282)	-	18,576
Balance at 30 June 2021	218	171,411	5,295	(89,505)	(322)	114	23,284	110,495

STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE SIX MONTHS ENDED 30 JUNE 2022

	Called up share capital	Share premium reserve	Share based payments reserve	Retained deficit	Foreign exchange reserve	Convertible debt option reserve	Other reserves	Total Equity
	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's	$ 000's		$ 000's
Group
As at 31 December 2019	61	96,157	4,868	(63,692)	-	-	23,284		60,678
Loss for the year	-	-	-	(13,992)	-	-	-		(13,992)
Currency translation differences	-	-	-	-	147	-	-		147
Total comprehensive expense	-	-	-	(13,992)	147	-	-		(13,845)
Share capital issued	62	56,560	-	-	-	-	-		56,622
Recognition of conversion feature	-	-	-	-	-	396	-		396
Share based payments	-	-	360	-	-	-	-		360
Total contributions by and distributions to owners of the Company	62	56,560	360	-	-	396	-		57,378
As at 31 December 2020	123	152,717	5,228	(77,684)	147	396	23,284		104,211
Loss for the year	-	-	-	(23,697)	-	-	-		(23,697)
Currency translation differences	-	-	-	-	(148)	-	-		(148)
Total comprehensive expense	-	-	-	(23,697)	(148)	-	-		(23,845)
Share capital issued	95	19,017	-	-	-	-	-		19,112
Recognition of conversion feature	-	-	-	-	-	505	-		505
Realisation of conversion feature	-	-	-	-	-	(787)	-		(787)
Share based payments	-	-	84	-	-	-	-		84
Total contributions by and distributions to owners of the Company	95	19,017	84	-	-	(282)	-		18,914
As at 31 December 2021	218	171,734	5,312	(101,381)	(1)	114	23,284		99,280

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 20 JUNE 2022

1	Basis of preparation
	The financial statements have been prepared on the historical cost basis, except for the measurement of certain assets and financial instruments at fair value as described in the accounting policies below. The financial statements have been prepared on a going concern basis, refer to the Going Concern section below for more details. The financial statements are presented in United States dollars ($) and all values are rounded to the nearest thousand dollars ($'000) unless otherwise stated.
	Basis of consolidation
	The financial statements incorporate the results of the Company and its subsidiaries (the "Group") using the acquisition method. Control is achieved where the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Inter-company transactions and balances between Group companies are eliminated in full. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group. The investment in associate (an entity over which the Group had significant influence) had been recorded at cost and had not been adjusted to reflect the Group's 25% share of the net profits/losses and assets/liabilities of the associate from the date of acquisition to the balance sheet date as it was deemed immaterial. Pursuant to commercial negotiations in relation to the associate during 2021, the Group relinquished its interest in the associate for nil consideration and does not hold any further interest in this associate at 30 June 2022 and at 31 December 2021.
	Going Concern These financial statements have been prepared by the Directors on a going concern basis, which assumes that the Group and Company will continue in operation for the foreseeable future. At 30 June 2022, the Group and Company had $5.3 million and $4.2 million in unrestricted cash funding. During the reporting period, the Group and Company completed a comprehensive restructuring and recapitalisation exercise which resulted in: i)  the Group and Company raising approximately £7.3 million (or approximately $10 million) (before expenses) via the issue of new shares, to fund certain payments to creditors as part of the agreed discounted payment plan, as well as to fund a work programme for 2022; ii)  a substantial reduction in balance sheet payables, debts and potential liability exposures, that would have reasonably required settlement in cash, from approximately $23.5 million as of 31 December 2021 to approximately $2.5 million, being the estimated liabilities amount that would be required for settlement in cash by the Group in the foreseeable future. The substantial majority of liability settlements took place during the reporting period; and iii)  the Company reducing its net current liability position from approximately $10.1 million at 31 December 2021 to a net current asset position of approximately $4.1 million at 30 June 2022 as a result of the settlements made during the reporting period. Following the restructuring and recapitalisation, the Directors have prepared a cash flow forecast which anticipates the Group and Company being able to continue in operation for at least the next twelve months from the date of this report.  The cash flow forecast includes underlying assumptions and estimates, including oil price, sustained production from the Group's producing fields in Trinidad and Tobago along with certain incremental production from the intended work programme, reliability of reserves estimates and renewal of licences upon expiry. In addition, the projections assume offsetting of certain tax liabilities and deferral of certain historical liabilities in Trinidad and Tobago that the Directors believe are either not likely to require settlement in cash or are capable of being deferred and settled on long-dated payment terms so as to not require material amounts of cash during the forecast period. Certain of these items are outside of the Group and Company's control and unfavourable actual outcomes may materially and adversely affect the Group's cash resources and cast significant doubt on the Group and the Company's ability to continue as a going concern. In such an event, the Group and the Company may be required to implement certain other measures including, but not limited to, i)  raising additional third-party capital in form of equity, debt or other instruments of a similar nature, and / or ii)  undertake cost reduction, and / or iii)  sell certain assets of the Group, and a successful outcome of such measures cannot be guaranteed. These financial statements do not include the adjustments that would result if the Group or the Company were unable to continue as a going concern.

 

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

2	Other income and Finance income
	Other income and Finance income predominantly comprise haircuts secured from the Group's historical creditors and a secured financier, as part of negotiated settlements agreed pursuant to the Group's restructuring and recapitalisation exercise.
3	Turnover and segmental analysis
	Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. The Board has determined there is a single operating segment: oil and gas exploration, development and production. However, there are three geographical segments: Trinidad & Tobago & Suriname (operating), The Bahamas (operating) and The Isle of Man, UK, Uruguay, Spain, Saint Lucia, Cyprus, Netherlands & USA (all non-operating). The segment including Trinidad & Tobago has been reported as the Group's direct oil and gas producing and revenue generating operating segment. The Bahamas segment includes the Bahamian exploration licences on which drilling activities were conducted in 2020 and 2021. The non-operating segment including the Isle of Man (the Group's parent), which provides management service to the Group and entities in Uruguay, Saint Lucia, Cyprus, Spain, the Netherlands, and the U.S.A. all of which are non-operating in that they either hold investments, or are dormant, or in the case of Uruguay had not yet commenced operations as of the year-end. Their results are consolidated and reported on together as a single segment.

	Six months to 30 June 2022	Operating	Operating	Non-Operating Entities (*)	Total
		Trinidad & Suriname	Bahamas
		$'000	$'000	$'000	$'000
	Operating profit/(loss) by geographical area
	Net petroleum revenue (**)	2,680	-	-	2,680
	Operating profit/(loss)	(1,316)	(127)	(4,497)	(5,940)
	Other income	1,937	-	6,630	8,567
	Finance (charges)	(86)	-	(189)	(275)
	Finance income	1	-	1,926	1,927
	Profit/(loss) before taxation	536	(127)	3,870	4,279
	Other information
	Depreciation, amortisation and impairment	1,079	5	18	1,102
	Capital additions	203	-	8	211
	Segment assets
	Tangible and intangible assets	22,196	93,971	4,712	120,879
	Deferred tax asset	6,998	-	-	6,998
	Abandonment fund	1,601	-	-	1,601
	Trade and other receivables	3,860	516	1,052	5,428
	Inventories	270	-	-	270
	Restricted cash	380	-	54	434
	Cash	986	4	4,318	5,308
	Consolidated total assets	36,291	94,491	10,136	140,918
	Segment liabilities
	Trade and other payables	(9,704)	(1,049)	(1,232)	(11,985)
	Borrowings	(224)	-	-	(224)
	Deferred tax liability	(7,009)	-	-	(7,009)
	Lease liabilities	-	(21)	(6)	(27)
	Provisions	(3,825)	-	(2,339)	(6,164)
	Consolidated total liabilities	(20,762)	(1,070)	(3,577)	(25,409)

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

3	Turnover and segmental analysis (continued)

Six months to 30 June 2021	Operating	Operating	Non-Operating Entities (*)	Total
	Trinidad & Suriname	Bahamas
	$'000	$'000	$'000	$'000
Operating profit/(loss) by geographical area
Net petroleum revenue (**)	2,305	-	-	2,305
Operating profit/(loss)	(2,110)	(1,359)	(2,881)	(6,350)
Other income	-	-	-	-
Finance (charges)	(119)	(8)	(5,353)	(5,480)
Finance income	1	-	-	1
Loss before taxation	(2,228)	(1,367)	(8,234)	(11,829)
Other information
Depreciation, amortisation and impairment	1,817	459	37	2,313
Capital additions	2,136	21,338	3	23,477
Segment assets
Tangible and intangible assets	28,215	93,880	4,727	126,822
Investment in associate	47	-	-	47
Deferred tax asset	8,065	-	-	8,065
Abandonment fund	1,344	-	-	1,344
Trade and other receivables	3,377	590	551	4,518
Inventories	177	-	-	177
Restricted cash	888	-	58	946
Cash	678	4	6,275	6,957
Consolidated total assets	42,791	94,474	11,611	148,876
Segment liabilities
Trade and other payables	(8,714)	(931)	(13,147)	(22,792)
Borrowings	(768)	-	(408)	(1,176)
Deferred tax liability	(8,065)	-	-	(8,065)
Lease liabilities	(20)	(40)	(5)	(65)
Provisions	(3,617)	-	(2,666)	(6,283)
Consolidated total liabilities	(21,184)	(971)	(16,226)	(38,381)

(*) Intercompany balances and transactions between Group entities have been eliminated.

(**) Sales revenues were derived from a single customer within each of these operating countries.

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

4	Intangible assets - Group
		Goodwill	Exploration & evaluation assets
		$ 000's	$ 000's
	Cost
	As at 1 January 2021	7,045	75,372
	Additions	-	21,489
	Foreign exchange difference on translation	-	(29)
	As at 31 December 2021	7,045	96,832
	Foreign exchange difference on translation	-	(16)
	As at 30 June 2022	7,045	96,816
	Accumulated amortisation and impairment
	As at 1 January 2021	2,435	113
	Amortisation	-	263
	Impairment	-	2,069
	Foreign exchange difference on translation	-	(18)
	As at 31 December 2021	2,435	2,427
	Amortisation	-	16
	Foreign exchange difference on translation	-	(16)
	As at 30 June 2022	2,435	2,427
	Net book value
	As at 30 June 2022	4,610	94,389
	As at 31 December 2021	4,610	94,405
	As at 31 December 2020	4,610	75,259

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

5	Tangible assets
		Oil and gas assets		Property, plant and equipment (*)		Decommissioning costs		Total
		$ 000's		$ 000's		$ 000's		$ 000's
	Cost or Valuation
	As at 1 January 2021	23,398		2,258		1,995		27,651
	Additions	5,065		79		241		5,385
	Disposals	-		(117)		-		(117)
	Foreign exchange difference on translation	(160)		(207)		(11)		(378)
	As at 31 December 2021	28,303		2,013		2,225		32,541
	Additions	33		178		-		211
	Disposals	-		(76)		-		(76)
	Foreign exchange difference on translation	19		(195)		1		(175)
	As at 30 June 2022	28,355		1,920		2,226		32,501
	Accumulated depreciation and Impairment
	At 1 January 2021	1,115		616		137		1,868
	Depreciation	2,330		346		268		2,944
	Disposals	-		(83)		-		(83)
	Impairment	3,933		68		1,346		5,347
	Foreign exchange difference on translation	(84)		(196)		(3)		(283)
	At 31 December 2021	7,294		751		1,748		9,793
	Depreciation	859		187		31		1,077
	Disposals	-		(61)		-		(61)
	Foreign exchange difference on translation	10		(193)		1		(182)
	As at 30 June 2022	8,163		684		1,780		10,627
	Net book value
	As at 30 June 2022	20,192		1,236		446		21,874
	As at 31 December 2021	21,009		1,262		477		22,748
	As at 31 December 2020	22,283		1,642		1,858		25,783

(*) Property, plant and equipment includes leasehold improvements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

6	Right of use assets
		Group leased properties	Group motor vehicles		Total Group
		$ 000's	$ 000's		$ 000's
	Cost
	As at 1 January 2021	468	62		530
	Additions	17	-		17
	Disposals	-	(30)		(30)
	Foreign exchange difference on translation	(1)	-		(1)
	As at 31 December 2021	484	32		516
	Additions	-	-		-
	Foreign exchange difference on translation	1	-		1
	As at 30 June 2022	485	32		517
	Accumulated depreciation
	As at 1 January 2021	398	35		433
	Depreciation	72	14		86
	Disposals	-	(17)		(17)
	Foreign exchange difference on translation	-	-		-
	As at 31 December 2021	470	32		502
	Depreciation	9	-		9
	Foreign exchange difference on translation	-	-		-
	As at 30 June 2022	479	32		511
	Net book value
	As at 30 June 2022	6	-		6
	As at 31 December 2021	14	-		14
	As at 31 December 2020	70	27		97

7	Trade and other payables
	Trade and other payables at 30 June 2022 amount to approximately $12.0 million reflecting effects of the restructuring exercise that the Group commenced in December 2021. Trade and other payables include dues, amounting to approximately $2.5 million in aggregate, that are considered to be of a routine working capital nature, and that are being settled in the ordinary course of business and / or under certain agreed payment plans. The remainder of trade and other payables are not expected to be required to be settled in cash in the foreseeable future, and with a vast majority of these amounts not expected to require any cash settlement at all, and thus will ultimately, with the passage of time, will cease to be recorded as liabilities. A summary of these is set out below: (i)  approximately $4.6 million is in respect of legacy trade and other payables in Trinidad and Tobago which are not expected to require any settlement in cash. This includes dues in relation to one of the Group's dormant licences in Trinidad and Tobago, and which the Group expects to settle by way of negotiation with the Trinidadian Ministry of Energy and Energy Industries ("MEEI"). Specifically, the Group has proposed to MEEI a rebasing of this licence whereby all claimed past dues would be cancelled, the annual licence fees rebased to an appropriate level, and a new future work programme agreed. To the extent a suitable arrangement of this nature cannot be agreed with MEEI, the Company intends to surrender the licence, in which case the subsidiary company holding the licence will be placed into administration, and all liabilities claimed in respect of this licence will be eliminated, without recourse to the Company, as confirmed by a legal opinion;

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

7	Trade and other payables (continued)
	(ii)  approximately $3.3 million is in respect of taxes owed in Trinidad and Tobago that the Group expects to settle by way of offset against tax refunds due to the Group in Trinidad and Tobago ($2.1 million, including under 'Trade and other receivables'). The balance amount relates to a notional estimate of penalties that apply in accordance with the tax laws in Trinidad and Tobago - as at the date of this report these are notional estimates only and have not been levied or assessed, and the Group does not expect that they will be levied or assessed and that ultimately no cash payment will be required as the Group had claimed the benefit of a tax amnesty during the 2021 tax amnesty period implemented by the Trinidad and Tobago tax authorities, with the final resolution of this matter remaining pending; and (iii)  approximately $1.6 million is in respect of various dues comprising, i) $0.5 million is in respect of accruals in relation to restructuring and recapitalisation costs, which are expected to be settled in shares without any cash cost to the Company, ii) $0.5 million is in respect of potential insurance "top-up" exposure, due to the ultimate cost of the Perseverance-1 well in The Bahamas exceeding the initial estimated cost - however, as at the date of this report no demand for this additional payment has been made and the Group expects that this exposure will not crystalise given that the well was completed safely and without incident over 18 months ago, and iii) $0.6 million is in respect of accrued licence fee which the Group expects to offset against $0.5 million refundable advances (included in trade and other receivables) resulting in no material incremental cash exposure to the Group. It is also noted that, following the completion of the restructuring and recapitalisation, the Company has no remaining financial debt and the vast majority of the liability position across the Group as detailed above is at the level of subsidiary undertakings, without recourse to the Company.

8	Share capital - Group & Company
	Called up, allotted, issued and fully paid ordinary shares of 0.0002p each	Number of shares	Nominal value	Share premium
			$ 000's	$ 000's
	At 1 January 2021	4,506,673,349	123	152,717
	At 1 January 2021 after capital reorganisation	450,667,335	123	152,717
	Shares issued at average price of 1.9p per share	19,687,500	5	5,106
	Shares issued at average price of 0.27p per share	13,500,000	4	515
	Shares issued at average price of 0.15p per share	14,938,577	4	300
	Shares issued at average price of 3.5p per share	196,688,957	55	8,689
	Shares issued at average price of 3.5p per share	74,658,600	21	3,665
	Shares issued at average price of 0.15p per share	19,111,423	5	391
	Shares issued at average price of 0.15p per share	7,270,522	1	351
	At 31 December 2021	796,522,914	218	171,734
	At 1 January 2022	796,522,914	218	171,734
	Shares issued at average price of 0.1p per share	691,401,490	185	739
	Shares issued at average price of 0.1p per share	3,480,645,475	919	3,366
	Shares issued at average price of 0.1p per share	4,651,629,600	1,218	4,433
	At 30 June 2022	9,620,199,479	2,540	180,272
		Number of shares	Nominal value	Share premium
			$ 000's	$ 000's
	At 31 December 2020	450,667,335	123	152,717
	At 31 December 2021	796,522,914	218	171,734
	At 30 June 2022	9,620,199,479	2,540	180,272

During the period, 8,823 million shares were issued (2021: 339 million).

At the end of the period, the number of shares in issue comprised 9,620 million ordinary shares (2021: 789 million). During the period, transaction costs for issued share capital totalled $748,777 (2021: $754,068), these amounts were allocated to share premium. The total authorised number of ordinary shares at 30 June 2022 was 50,000,000,000 shares with a par value of 0.02 pence per share (2021: 2,000,000,000 shares of 0.02 pence per share).  All issued shares of 0.02 pence are fully paid.

NOTES TO THE FINANCIAL STATEMENTS FOR THE INTERIM PERIOD ENDED 30 JUNE 2022 (CONTINUED)

9	Share based payments reserve

Options and warrants

Share options have been granted to Directors, selected employees and consultants to the Company. 

The Group had no legal or constructive obligation to repurchase or settle any options in cash.  Movements in the number of share options and warrants outstanding during the year are as follows:

		Average exercise price per share	No. Options & Warrants
	At 1 January 2022	12.81p	96,797,894
	Expired	35p	(9,375,000)
	Cancelled	10.23	(73,803,215)
	Granted	0.14p	1,536,559,485
	Exercised	-	-
	As at 30 June 2022	0.24p	1,550,179,164
	Exercisable at end of period	0.01p	816,559,485

The fair value of the warrants and options granted in the period was estimated using the Black Scholes model. 

10

Events after reporting date

There were no material events which took place following the reporting date which require disclosure in these Interim Financial Statements except that on 15 July 2022 Mr. Tim Eastmond resigned as the Chief Financial Officer and an Executive Director of the Company for personal reasons and Mr. Gagan Khurana, the Group's Chief Commercial Officer assumed the role of acting Chief Financial Officer in addition to his commercial duties.

11	Other Information
	The financial information set out above does not constitute the Group's statutory accounts for the period ended 31 December 2021 but is derived from those accounts. A copy of this interim statement is available on the Company's website: www.cegplc.com

 

END

 

 

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