Interim Results

RNS Number : 4771B

Lansdowne Oil & Gas plc

21 September 2018

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain. If you have any queries on this, then please contact Steve Boldy, the Chief Executive Officer of the Company (responsible for arranging release of this announcement).

Lansdowne Oil & Gas plc

Interim Results for the six months ended 30 June 2018

21 September 2018

Lansdowne Oil & Gas ("Lansdowne" or "the Company") is pleased to announce its unaudited results for the six months ended 30 June 2018. Lansdowne is an upstream oil and gas company, focused on exploration and appraisal activities in the North Celtic Sea Basin, off the south coast of Ireland. The Company has targeted the Irish offshore shelf areas close to existing operating infrastructure for exploration, as these provide shallow water (generally less than 100 metres), and relatively low drilling costs and the Directors believe that these factors, combined with favourable fiscal terms, have the potential to deliver high value reserves and consequential shareholder value.

First Half highlights

·      Barryroe Oil Field (Standard Exploration Licence "SEL" 1/11)

o  On March 28, 2018 the Company (through its wholly owned subsidiary Lansdowne Celtic Sea Limited) and its partner Providence Resources P.l.c. (through its wholly owned subsidiary EXOLA DAC "EXOLA"), entered into a Farm-out agreement with APEC Energy Enterprises Limited ("APEC") for a multi-well Drilling Programme

o  During the period work progressed to finalise details of the Drilling Programme and to draft the associated legal documentation

·      Helvick Lease Undertaking

o  MFDEVCO continued evaluation work as required under the Farm-Out Agreement

·      Financial

o  Share Placing completed in April 2018 at Stg1.3p/share (Placing Price) to raise £900,000 before costs

o  Brandon Hill Capital Loan of £326,911 converted to shares at the Placing Price

o  LC Capital Master Fund Loan in the amount of £680,000 partially converted to shares at the Placing Price and the remainder of the loan in the amount of £1,020,449 extended until 30 June 2019

Financial

·      Cash balances at 30 June 2018 of £0.07 million (31 December 2017: £0.02 million)

·      Loss for the period after tax of £0.2 million (full year to 31 December 2017: loss £0.3 million)

·      Loss per share of 0.02 pence (full year to 31 December 2017: loss 0.1 pence)

Post-First Half events 

Barryroe Oil Field 

Binding Farm-Out with APEC

On 20 September 2018, the Company announced the signing of a revised and binding Farm-Out Agreement ("Updated FOA") with APEC.

The Updated FOA provides for a full cost-carried firm drilling programme comprising of the drilling and testing of four vertical wells and one horizontal sidetrack (collectively the "Drilling Programme"), plus the optional drilling of two further horizontal wells. 

Cash Payments

o  With the signing of the Updated FOA, APEC will now proceed with the payment of $9.0 million to EXOLA for certain agreed front-loaded project related costs

o  A further $10.5 million payment will be made to EXOLA to cover future operational costs, such payment to be made 14 days prior to the commencement of drilling

Drilling Programme

o  The drilling of four vertical wells to allow for the evaluation of the main Basal Wealden reservoir interval

o  The first well to include the drilling of a sidetrack to provide a 200 metre horizontal section in the Basal Wealden

o  Drill stem testing is planned for three of the four vertical wells, as well as the horizontal sidetrack

o  The four vertical wells are located across the geographic extent of the Barryroe structure and are designed to test the full potential of the Basal Wealden

o  Drilling to the underlying Purbeckian and Upper Jurassic section is planned in three of the four wells

o  Planning for the drilling of these wells is already advanced, together with the consenting of the recently contracted Gardline "Ocean Observer" to carry out the well site survey operations during Q4 2018, subject to regulatory approval

o  Rig procurement, based on a Q2 2019 mobilisation for the Drilling Programme is also well advanced, as are contracts with various oil field service providers

o  At the completion of the Drilling Programme, APEC also has an option to drill, test and complete two further horizontal wells to the Basal Wealden reservoir interval ("Option Wells")

Financing

o  APEC is directly responsible for paying 50% of all cost obligations associated with the Drilling Programme, and the Option Wells (if applicable)

o  APEC to finance, by way of a non-recourse loan facility (the "Loan"), the remaining 50% of all cost obligations attributable to EXOLA and Lansdowne in respect of the Drilling Programme, as well as the Option Wells (if applicable)

o  The Loan, drawable against the budget for the Drilling Programme, will incur an annual interest rate of LIBOR +5% and will be repayable from production cashflow from SEL 1/11 with APEC being entitled to 80% of production cashflow from SEL 1/11 until the Loan is repaid in full

o  Following repayment of the Loan, APEC will be entitled to 50% of production cashflow from SEL 1/11 with EXOLA and Lansdowne being entitled to 40% and 10% of production cashflow, respectively

Operations

o  EXOLA will remain as Operator of SEL 1/11 for the execution of the Drilling Programme

o  Following completion of the Drilling Programme, APEC will have the right to become Operator for the development/production phase (subject to Ministerial consent)

Working Interest

o  Following governmental approval for the assignment of equity to APEC, the revised working interest will be APEC (50%), EXOLA (40%), and Lansdowne (10%), with EXOLA retaining the role of Operator of SEL 1/11 

Lansdowne Oil and Gas plc

Interim results

For the six months ended 30 June 2018

Chairman's Statement

In March 2018, the Company announced that it, along with EXOLA, a wholly owned subsidiary of Providence Resources, had entered into a Farm-Out Agreement ("FOA") with APEC Energy Enterprises Limited ("APEC") over SEL 1/11, containing the Barryroe Field.

Following the signing of the FOA significant work has taken place to finalise the Drilling Programme and to progress planning for drilling of the multi-well programme, which is expected to commence in the Second Quarter of 2019.

In April 2018, the Company announced that it had placed 69,230,761 new ordinary shares at a placing price of Stg1.3p/share to raise £900,000 before costs.

In addition, Brandon Hill Capital agreed to convert its entire Loan, amounting to £326,911 (including interest), into new shares at the placing price. Furthermore, LC Capital Master Fund agreed to convert a substantial portion of its loan, amounting £680,000, into new shares, also at the placing price.

In May 2018, at a General Meeting of the Company, these conversions were formally approved.

Outlook

We are delighted with the finalising of the Barryroe Farm-Out Agreement with APEC, and we look forward to the commencement of the multi-well drilling programme. This exciting programme will delineate the full field potential of Barryroe and is anticipated to lead to development sanction.  

Now that Lansdowne is on a firmer footing with a clear path forward, Steven Lampe has decided to take a step back and is resigning from the Board, but will continue to be involved with the Company in an observer status. On behalf of the Board and all shareholders, I would like to place on record our thanks to Steven Lampe and LC Capital for their relentless support through the last few very difficult years.

Tim Torrington

Chairman

Steven Lampe commented:

"Although there have been some challenging times, it has been a pleasure to serve on the Lansdowne Board. We at LC Capital remain supportive of the Company and I feel this is a good time to take a step back, which will allow me to spend more time on other assets within the LC Capital portfolio."

For further information please contact:

Lansdowne Oil & Gas plc Steve Boldy	[phone]

Cantor Fitzgerald Europe Nominated Adviser and Joint Broker David Porter

[phone]

Nicholas Tulloch                                                                                   [phone]

Brandon Hill Capital

Joint Broker

Oliver Stansfield                                                                                  [phone] 

Qualified Person Review

This release has been reviewed by Stephen Boldy, Chief Executive of Lansdowne, who is a petroleum geologist with 38 years' experience in petroleum exploration and management. Dr Boldy has consented to the inclusion of the technical information in this release in the form and context in which it appears.

Notes to editors:

About Lansdowne

Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focussed, oil and gas exploration and appraisal company quoted on the AIM market and head quartered in Dublin.

Lansdowne holds acreage in the North Celtic Sea Basin, including a 20% stake in Exploration Licence SEL1/11 which contains the Barryroe oil field.

For more information on Lansdowne, please refer to www.lansdowneoilandgas.com

Lansdowne Oil & Gas plc

Condensed Consolidated Income Statement and Statement of Comprehensive Income

Six months ended 30 June 2018

	Unaudited	Unaudited	Audited
	6 months ended	6 months ended	Year ended
	30 June '18	30 June '17	31 Dec. '17
	£000s	£000s	£000s
Administration expenses	(99)	(87)	(226)
Impairment of intangible assets	-	-	-
	______	______	_______
Operating loss	(99)	(87)	(226)
Finance costs	(57)	(57)	(121)
	______	______	______
Loss before tax	(156)	(144)	(347)
Income tax credit	-	-	-
	______	______	______
Loss for the financial period	(156)	(144)	(347)
Other Comprehensive Income	-	-	-
	______	______	______
Total comprehensive loss for the financial period	(156)	(144)	(347)
	=====	=====	======
Loss per share (pence)
Basic and diluted	(0.02p)	(0.03p)	(0.1p)
	=====	=====	======

 

Lansdowne Oil & Gas plc

Condensed Consolidated Statement of Financial Position

As at 30 June 2018

	Unaudited	Unaudited	Audited
	30 June '18	30 June '17	31 Dec. '17
	£000s	£000s	£000s
Assets
Non-Current Assets
Intangible assets	15,003	14,495	14,672
	_______	_______	_______
Current Assets
Trade and other receivables	404	26	23
Cash and cash equivalents	71	31	15
	_______	_______	_______
	475	57	38
	_______	_______	_______
Total Assets	15,478	14,552	14,710
	=======	=======	=======
Equity & Liabilities Shareholders' Equity
Share capital	11,718	11,571	11,571
Share premium	26,841	25,126	25,126
Currency translation reserve	59	59	59
Share-based payment reserve	923	923	923
Accumulated deficit	(25,689)	(25,330)	(25,533)
	_______	_______	_______
Total Equity	13,852	12,349	12,146
Non-Current Liabilities
Provision for liabilities	302	275	288
Current Liabilities
Trade and other payables	304	303	367
Shareholder loan	1,020	1,625	1,909
	_______	_______	_______
Total Liabilities	1,626	2,203	2,564
	_______	_______	_______

Total Equity and Liabilities	15,478	14,552	14,710
	=======	=======	=======

Lansdowne Oil & Gas plc

Condensed Consolidated Statement of Cash flows

Six months ended 30 June 2018

	Unaudited	Unaudited	Audited
	6 months ended	6 months ended	Year ended
	30 June '18	30 June '17	31 Dec. '17
	£000s	£000s	£000s
Cash flows from operating activities
Loss for the period	(156)	(144)	(347)
Adjustments for:
Interest payable and similar charges	58	57	119
(Increase)/decrease in trade and other receivables	(382)	12	15
(Decrease)/increase in trade and other payables	(49)	(63)	106
	_______	_______	_______
Net cash used in operating activities	(529)	(138)	(107)
Cash flows from investing activities
Acquisition of intangible exploration assets	(330)	(96)	(273)
	_______	_______	_______
Net cash from investing activities	(330)	(96)	(273)
Cash flows from financing activities
Proceeds from the issue of  share capital	1,861	-	-
Proceeds from new loan	-	100	230
Repayment of loan	(946)	-	-
	_______	_______	_______
Net cash from financing activities	915	100	230
	-----------	-----------	-----------
Net increase/(decrease) in cash and cash equivalents	56	(134)	(150)
Cash and cash equivalents at start of period	15	165	165
	_______	_______	_______
Cash and cash equivalents at end of period	71	31	15
	=======	=======	=======

Lansdowne Oil & Gas plc

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2018

	Share Capital	Share Premium	Other Reserves	Retained Losses	Total
	£000s	£000s	£000s	£000s	£000s
Unaudited
At 1 January 2017	11,571	25,126	982	(25,186)	12,493
Loss for the period	-	-	-	(144)	(144)
	_____	_______	_______	_______	_______
Total comprehensive loss for the period	-	-	-	(144)	(144)
	---------	---------	---------	----------	----------
At 30 June 2017	11,571	25,126	982	(25,330)	12,349
	_____	_______	_______	_______	_______
Audited At 1 January 2017	11,571	25,126	982	(25,186)	12,493
Loss for the period	-	-	-	(347)	(347)
	_____	_______	_______	_______	_______
Total comprehensive loss for the period	-	-	-	(347)	(347)
	_____	______	_______	_______	______
At 31 December 2017	11,571	25,126	982	(25,533)	12,146
	_____	_______	_______	_______	_______
Unaudited
At 1 January 2018	11,571	25,126	982	(25,533)	12,146
Loss for the period	-	-	-	(156)	(156)
	_____	_______	_______	_______	_______
Total comprehensive loss for the period	-	-	-	(156)	(156)
Conversion  of new shares	147	1,760	-	-	1,907
Cost of share issues	-	(45)	-	-	(45)
	_____	_______	_______	_______	_______
At 30 June 2018	11,718	26,841	982	(25,689)	13,852
	_____	_______	_______	_______	_______

 

Notes to the Interim Condensed Financial Statements

1.   Basis of Presentation

Accounting Policies

The interim financial information for the six months ended 30 June 2018 has been prepared on the basis of the accounting policies which were adopted in the 2016 Annual Report and Accounts and IAS 34, "Interim Financial Reporting".

The interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The results for the six months to 30 June 2018 and the comparative results for the six months to 30 June 2017 are unaudited. The comparative amounts for the year ended 31 December 2017 do not constitute the statutory financial statements for that year. The interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2017, which have been prepared in accordance with IFRSs as adopted by the European Union. Those financial statements have been delivered to the Registrar of Companies and include an auditor's report which was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. It did, however, contain an emphasis of matter over the going concern basis of preparation for the Group financial statements.

Going concern 

The Directors have prepared the interim financial information on the going concern basis which assumes that the Group and Company and its subsidiaries will continue in operational existence for the foreseeable future. The Directors have carried out a detailed assessment of the Group's current and prospective exploration activity, its relationship with the holder of its loan note and cash flow projections and it is on this basis that the directors consider it appropriate to prepare this interim financial information on a going concern basis. This interim financial information does not include any adjustment that would result from the going concern basis of preparation being inappropriate.

2.   Segmental Analysis

The Group has only one reportable business segment, which is the exploration for oil and gas reserves in Ireland. All operations are classified as continuing.

3.   Loss per share

The loss for the period was wholly from continuing operations.

	Unaudited	Unaudited	Audited
	6 months ended	6 months ended	Year ended
	30 June '18	30 June '17	31 Dec. '17
	£000s	£000s	£000s
Loss per share for loss from continuing operations attributable to the equity holders of the Company
- basic and diluted	(0.02p)	(0.03p)	(0.1p)
The calculations were based on the following information:
Loss attributable to equity holders of the Company	(156)	(144)	(347)
Weighted average number of ordinary shares
In issue - basic and diluted	569,571,452	510,164,394	334,116,800

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has one class of dilutive potential ordinary shares - share options. As a loss was recorded for all periods reported, the issue of new shares would have been anti-dilutive.

4.   Intangible Assets

Oil and gas project expenditures, including geological, geophysical and seismic costs, are accumulated as intangible assets prior to the determination of commercial reserves. At 30 June 2018, intangible assets totalled £15 million (30 June 2017: £14.5 million), all of which relates to Ireland. Movements in the period relate to additional spend on the licence areas of £0.33 million.

5.   Copies of the Interim Report

Copies of the interim results can be obtained from the Company Secretary, Lansdowne Oil & Gas plc, 6 Northbrook Road, Dublin 6 and from the Company's website www.lansdowneoilandgas.com.

 

END

 

 

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