Information  X 
Enter a valid email address

Afentra PLC (AET)

  Print          Annual reports

Thursday 09 September, 2021

Afentra PLC

Results for the six months ending 30 June 2021

RNS Number : 1897L
Afentra PLC
09 September 2021
 

09 September 2021

Afentra   p l c

 

Results for the six months ending 30 June 2021

 

Overview

Afentra plc ('Afentra' or the 'Company'), together with its subsidiary undertakings (the 'Group'), is an upstream oil and gas company quoted on the AIM market of the London Stock Exchange.

 

The Company's strategy is to build an oil and gas business of scale through the acquisition of both operated and non-operated production assets and discovered resources in Africa, where its management team have extensive operational experience. Afentra is well positioned to take advantage of the energy transition and associated market dynamics which is creating opportunities for experienced operators with a strong track record to acquire quality producing assets.

 

The Company currently has a position in the onshore Odewayne exploration block that is operated by Genel Energy, where its 34% interest is fully carried.

 

Operations summary

· Odewayne Licence - new Afentra team continue its technical assessment and outlook on block prospectivity in discussion with the operator

· Business Development - experienced team now in place and actively pursuing potential deals in Africa, primarily focused on operated and non-operated production assets

 

Corporate summary

· 18 February 2021: Several institutional and high net worth investors purchased shares sold by existing shareholders including Waterford Finance and Investment Limited (equating to its entire 29.23% shareholding in the Company) and Mistyvale Limited (equating to its entire 15.66% shareholding in the Company)

· 16 March 2021: Paul McDade and Ian Cloke join the Board of Directors as CEO and COO respectively

· 30 March 2021: Jeffrey MacDonald and Gavin Wilson join the Board of Directors as Independent non-executive Chairman and Independent non-executive Director respectively

· 13 April 2021: The Company announced its intention to change its name from Sterling Energy plc to Afentra plc and adopt new articles of association. The proposed changes were approved at the General Meeting held on 30 April 2021

· 5 May 2021: Afentra plc launched and Anastasia Deulina is appointed as Chief Financial Officer

 

Financial summary

· Cash resources as at 30 June 2021 of $40.8 million (30 June 2020 of $43.8 million).

· A d j usted EBITDAX loss of $1.5 million (1H 2020: loss $289k).

· Loss after tax of $2.4 million (1H 2020: loss $866k).

· The Group remains debt free and fully carried for Odewayne operations (Third and the Fourth Period).

 

Paul McDade, Chief Executive Officer, Afentra plc commented: "2021 has been an eventful period during which we have established Afentra plc and set the company on an exciting strategic path.  The market drivers for the energy transition across Africa are presenting a wide range of compelling opportunities and we believe that our proven operating track record, focused ESG agenda, strong balance sheet and supportive shareholder base put us in a unique position to capitalise on these opportunities."

 

For further information contact:

 

Afentra plc +44 (0)20 7405 4133

Paul McDade, CEO

Anastasia Deulina, CFO

 

Buchanan (Financial PR) +44 (0)20 7466 5000

Ben Romney

Jon Krinks

James Husband

 

Peel Hunt LLP (Nominated Advisor and Joint Broker) +44 (0)20 7418 8900

Richard Crichton

David McKeown

 

Tennyson Securities (Joint Broker) +44 (0)20 7186 9033

Peter Krens

 

CEO Statement

I am pleased to provide an update on Afentra's progress in the first half of 2021, a period in which we have launched with a new name, management team and a clearly defined strategic vision.  It is also a period, after the economic and industry challenges caused by the pandemic through 2020, in which we have begun to see a steady strengthening of commodity prices and cautious optimism within the sector and wider economies. 

Afentra was launched in May 2021 with a clear agenda; to capitalise on opportunities presented by the accelerating energy transition in Africa and in doing so support a responsible transfer of asset ownership that provides beneficial outcomes for all stakeholders involved.

To deliver this vision, Afentra has assembled a high-quality team with a proven track record for operational   excellence, commercial focus, environmental stewardship, transparent governance and delivering a positive socio-economic impact.  We have ambitious plans for growth and aim to become a leading pan-African operator of scale, delivering long-term value for our shareholders through accretive transactions.

As International Oil Companies (IOCs) seek to meet the expectations of certain stakeholders to rationalise and diversify their portfolios away from carbon intensive activities, they are starting to divest parts of their African upstream assets. This is creating an opportunity rich landscape for responsible companies like Afentra. We are looking at a wide range of operated and non-operated opportunities and, with our experienced team, are well positioned as a credible counterparty for both IOCs seeking to divest assets and an experienced partner for host governments to work with. 

Afentra's strong balance sheet and cost discipline also puts the company in an excellent position to review and compete for acquisition opportunities as they arise. The cash at hand also provides optionality with regards to the funding structure for any acquisitions, enabling us to consider smaller compelling opportunities without the need to raise capital. 

The strengthening of the oil price is obviously welcomed by the industry, but does not alter the divestment agenda, nor does it have a material impact on the valuations or competitive landscape for our target acquisitions.  It does however improve the economics of target assets which will in turn enhance the appetite within the capital markets to fund acquisitions.

Afentra is built upon an effective ESG framework. We have aligned ourselves with the UN Sustainable Development Goals (UNSDGs) and will increasingly meet the specific targets of the UNSDGs as we progress from acquisition through to operatorship and production.

At the heart of our approach is the conviction that African countries must be able to benefit from the positive socio-economic impact of their natural resources during the energy transition, while also upholding the highest possible environmental standards. We believe that it is important for all stakeholders that divested assets end up in the hands of quality operators that are committed to transparent disclosure of environmental data. Afentra believes that through strong environmental stewardship and a focused operating approach, we will be able to reduce the carbon emissions of any acquired assets over time.

With regard to our existing asset in Somaliland, we are currently progressing the technical assessment of Odewayne alongside our partner Genel.  Afentra remains fully carried on this asset by Genel and we look forward to gaining a deeper understanding of the appropriate forward work program as that technical evaluation progresses through the second half of the year. 

Overall, it has been a very active first half of the year for Afentra and we are making headway with our stated growth ambitions. The market drivers are gathering momentum and your company feels particularly well placed to capitalise on the array of upstream opportunities that will be presented as a result of the energy transition across Africa. We remain patient in our approach and believe we have put in place all the required building blocks to deliver long-term value.  We thank our shareholders for their support and look forward to delivering positive outcomes for all our stakeholders through the second half of the year and beyond.

 

 

Operations Review

Somaliland

Somaliland offers one of the last great opportunities to target an undrilled onshore rift basin in Africa. The Odewayne block, with access to Berbera deepwater port less than a 100km to the north, is ideally located to commercialise any discovered hydrocarbons. The company has continued to work the reprocessed 2D seismic survey along with field data and legacy geological field studies to determine if a Mesozoic age sedimentary basin is present in the block and its prospectivity.

Odewayne (W.I. 34%) Exploration block

Overview

This large, unexplored, frontier acreage position covers 22,840km2, the equivalent of c. 100 UK North Sea blocks. Exploration activity prior to the 2017 regional 2D seismic acquisition program has been limited to the acquisition of airborne gravity and magnetic data and surface fieldwork studies, with no wells drilled on block.

The Company's wholly owned subsidiary, Afentra (East Africa) Limited ('A(EA)L'), holds a 34% working interest in the PSA (fully carried by Genel Energy Somaliland Limited for its share of the costs of all exploration activities during the Third and Fourth Periods of the PSA). The Odewayne production sharing agreement is in the Third Period, with a 1,000km, 10km by 10km 2D seismic grid acquired in 2017 by BGP. The Third Period has been further extended, through the 8th deed of amendment. This data was reprocessed in 2019 and is currently being reviewed after the disruption caused by Covid in 2020-21.

In 2H 2021 the Company will review the reprocessed 2D seismic data set and will update its technical assessment and outlook on block prospectivity accordingly. Alongside the seismic reprocessing review, the Operator is undertaking a number of work streams and it is anticipated that these will aid the JV partnership in developing an appropriate forward work program to further evaluate the prospectivity of the licence.

Outlook on buy and build strategy

In March 2021 the Company shifted focus to support a responsible energy transition in Africa by establishing itself as a credible partner for divesting IOCs and Host Governments. The Company is specifically targeting producing assets and discovered resources in Africa. The focus will be on operated positions but will also consider non-operated positions alongside credible operators with shared standards and within a joint venture where we can leverage our operating experience to influence outcomes and add value to operator plans. The Company has developed a rigorous ESG agenda which is being utilised in the screening process to ensure any acquisition opportunities meet our risk criteria and provide scope to reduce emissions through focused operational excellence. 

An experienced technical and commercial team, of staff and consultants, with deep knowledge of the West African region has been assembled and is screening a number of opportunities.

 

Financial Review

Selected financial data

 

1H 2021

1H 2020

FY 2020

Cash and cash equivalents net to Group ($m)

40.8

43.8

42.7

Adjusted EBITDAX 1 ($m)

(1.5)

(0.3)

(0.8)

Loss after tax ($m)

(2.4)

(0.9)

(1.9)

Debt ($m)

 -

 -

 -

NAVPS 2 (at period end) (GBP pence)

20.2

23.9

21.3

Share price (at period end) (GBP pence)

15.0

11.5

9.4

1 Adjusted EBITDAX is calculated as earnings before interest, taxation, depreciation, amortisation, impairment, pre-licence expenditure, provisions and share-based payments.

2 Net asset value per share

Loss from operations

T he loss from operations for 1H 2021 was $2.5 million (1H 2020: loss $1.1 million) for the reasons described below.

During the period, net administrative expenditure increased to $2.5 million (1H 2020: $1.1 million) as a result of exceptional (one off) items relating to costs associated with the migration to Afentra, a change in management and an increase in contractors and advisors. Pre-licence costs for 1H 2021 was $862k (1H 2020: $716k).

Adjusted EBITDAX and loss after tax

A d j usted EBITDAX totalled a loss of $1.5 million (1H 2020: loss $289k).

Finance income of $46k represents interest received ($11k) and foreign exchange gains ($35k) on cash held by the Group (1H 2020: $288k).

Finance costs totalled $23k (1H 2020: $56k).

T he loss after tax totalled $2.4 million (1H 2020: loss $866k). Basic loss per share was 1.11 US¢ per share (1H 2020: 0.39 US¢ loss per share). No dividend is proposed to be paid for the six months to 30 June 2021 (30 June 2020: nil).

Cash flow

Net cash outflow from operating activities (pre-working capital movements) totalled $2.3 million (1H 2020: outflow $988k). After working capital, net cash outflow from operating activities totalled $1.8 million (1H 2020: outflow $1.2 million).

Statement of financial position

At 30 June 2021, Afentra held $40.8 million cash and cash equivalents available for its own use (30 June 2020: $43.8 million).

Group net assets at 30 June 2021 were $61.4 million (30 June 2020 were $64.9 million). Non-current assets totalled $22.0 million (30 June 2020: $22.0 million) with net current assets reducing to $40.1 million (30 June 2020: $43.7 million).

Going Concern

T he Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the CEO Statement and in the Operations Review. The financial position of the Group is described in the Financial Review.

T he Company has sufficient cash resources for its working capital needs for at least the next 12 months. As a consequence, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. This assessment has been made by the Directors who remain confident the group has sufficient cash resources to meet its liabilities as they fall due for a period of at least 12 months from the date of signing these financial statements, and notwithstanding the impact that Covid-19 has had internationally. The Directors believe that the Group is in a strong position to absorb any potential impact on the Group arising from Covid-19.  Accordingly, they continue to adopt the going concern basis in preparing the results for the six months ended 30 June 2021.

Disclaimer

T his document contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Group believes the expectation reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to factors either beyond the Group's control or otherwise within the Group's control but where, for example, the Group decides on a change of plan or strategy. Acco rdingly, no reliance may be placed on the figures contained in such forward-looking statements.

Glossary

$

US Dollars

2D

two dimensional

Adjusted EBITDAX

earnings before interest, taxation, depreciation, amortisation, impairment, pre-

licence expenditure, provisions and share based payments

AIM

Alternative Investment Market of the London Stock Exchange

Group

Afentra plc, together with its subsidiary undertakings (the 'Group')

km

kilometre

NAVPS

Net asset value per share

Petrosoma

Petrosoma Limited (JV partner in Somaliland)

PSA

production sharing agreement

Seismic

Geophysical investigation method that uses seismic energy to interpret the geometry of rocks in the subsurface

km2

square kilometre

WI

working interest

 

Condensed consolidated income statement for the six months to 30 June 2021

 

 

 

 

 

Restated

 

 

 

 

Six months to

 

Six months to

 

Year ended

 

 

30th June 2021

 

30th June 2020

 

31st December 2020

 

 

$000

 

$000

 

$000

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

 

 

 

 

Other administrative expenses

 

(1,605)

 

(382)

 

(953)

Pre-licence costs

 

(862)

 

(716)

 

(1,221)

Total administrative expenses

 

(2,467)

 

(1,098)

 

(2,174)

 

 

 

 

 

 

 

Loss from operations

 

(2,467)

 

(1,098)

 

(2,174)

 

 

 

 

 

 

 

Finance income

 

46

 

288

 

326

Finance expense

 

(23)

 

(56)

 

(58)

 

 

 

 

 

 

 

Loss before tax

 

(2,444)

 

(866)

 

(1,906)

 

 

 

 

 

 

 

Tax

 

  -

 

  -

 

  -

 

 

 

 

 

 

 

Loss for the period attributable to the owners of the parent

 

(2,444)

 

(866)

 

(1,906)

Other comprehensive expense - items to be

 

 

 

 

 

 

reclassified to the income statement in subsequent periods

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation adjustments

 

(5)

 

6

 

7

Total comprehensive (expense)/income for the period

 

(5)

 

6

 

7

 

 

 

 

 

 

 

Total comprehensive expense for the period attributable to the owners of the parent

 

(2,449)

 

(860)

 

(1,899)

 

 

 

 

 

 

 

Basic and diluted loss per share (US cents)

 

(1.11)

 

(.39)

 

(.87)

 

 

 

 

 

 

 

 

 

 

Condensed consolidated statement of financial position as at 30 June 2021

 

 

 

 

 

Restated

 

 

 

 

As at

 

As at

 

As at

 

Note

30th June 2021

30th June 2020

 

31st December 2020

 

 

$000

$000

 

$000

 

 

(unaudited)

(unaudited)

 

(audited)

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Intangible exploration and evaluation assets

3

21,252

 

21,142

 

21,209

Property, plant and equipment

 

746

 

848

 

844

 

 

21,998

 

21,990

 

22,053

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Trade and other receivables

 

228

 

148

 

193

Cash and cash equivalents

 

40,772

 

43,798

 

42,674

 

 

41,000

 

43,946

 

42,867

 

 

 

 

 

 

 

Total assets

 

62,998

 

65,936

 

64,920

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

28,143

 

28,143

 

28,143

Currency translation reserve

 

(202)

 

(198)

 

(197)

Retained earnings

 

33,501

 

36,985

 

35,945

Total equity

 

61,442

 

64,930

 

63,891

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

825

 

178

 

209

Lease liability

 

120

 

  98

 

205

 

 

945

 

276

 

414

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Lease liability

 

576

 

  700

 

581

Long-term provision

 

35

 

  30

 

34

 

 

611

 

730

 

615

 

 

 

 

 

 

 

Total liabilities

 

1,556

 

1,006

 

1,029

 

 

 

 

 

 

 

Total equity and liabilities

 

62,998

 

65,936

 

64,920

 

 

 

 

 

 

 

 

 

 

 

Condensed consolidated statement of changes in equity for the six months ended 30 June 2021

 

 

 

 

Currency

 

 

 

 

Share

translation

Retained

 

 

 

capital

reserve

earnings

Total

 

 

$000

$000

$000

$000

 

 

 

 

 

 

At 1 January 2020

 

28,143

(204)

37,851

65,790

Total comprehensive expense for the period attributable to the owners of the parent

 

  -

6

(866)

(860)

At 30 June 2020 - restated

 

  28,143

(198)

36,985

64,930

Total comprehensive expense for the period attributable to the owners of the parent

 

  -

(1)

(1,040)

(1,039)

At 31 December 2020

 

  28,143

(197)

35,945

63,891

Total comprehensive expense for the period attributable to the owners of the parent

 

  -

(5)

(2,444)

(2,449)

At 30 June 2021

 

  28,143

(202)

33,501

61,442

 

 

 

 

 

 

 

 

Condensed consolidated statement of cash flows for the six months ended 30 June 2021

 

 

 

 

 

Restated

 

 

 

 

Six months to

 

Six months to

 

Year ended

 

Note

30th June 2021

 

30th June 2020

 

31st December 2020

 

 

$000

$000

 

$000

 

 

(unaudited)

(unaudited)

 

(audited)

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

(2,444)

 

(866)

 

(1,906)

Depreciation, depletion & amortisation

 

119

 

166

 

193

Finance income and gains

 

(46)

 

(288)

 

(326)

Finance expense and losses

 

23

 

  -

 

59

Operating cash outflow prior to working capital movements

 

(2,348)

 

(988)

 

(1,980)

(Increase)/decrease in trade and other receivables

 

(35)

 

84

 

57

Increase/(decrease) in trade and other payables

 

616

 

(262)

 

(230)

Increase in provision

 

1

 

  -

 

4

Net cash outflow from operating activities

 

(1,766)

 

(1,166)

 

(2,149)

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Interest received

 

11

 

284

 

326

Purchase of property, plant and equipment

 

(9)

 

  -

 

(12)

Exploration and evaluation costs

3

(43)

 

(23)

 

(90)

 

 

 

 

 

 

 

Net cash (used)/generated from investing activities

 

(41)

 

261

 

224

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Principal paid on lease liability

 

(121)

 

(108)

 

(237)

Interest paid on lease liability

 

(20)

 

(29)

 

(46)

 

 

 

 

 

 

 

Net cash used in financing activities

 

(141)

 

(137)

 

(283)

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(1,948)

 

(1,042)

 

(2,208)

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

42,674

 

44,851

 

44,851

 

 

 

 

 

 

 

Effect of foreign exchange rate changes

 

46

 

(11)

 

31

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

40,772

 

43,798

 

42,674

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the consolidated results for the six months ended 30 June 2021

 

1.  Basis of preparation

T he financial information contained in this announcement does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006.

T he financial information for the six months ended 30 June 2021 is unaudited. In the opinion of the Directors, the financial information for this period fairly represents the financial position of the Group. Results of operations and cash flows for the period are in compliance with International Financial Reporting Standards (IFRSs).   T he accounting policies, estimates and judgements applied are consistent with those disclosed in the annual financial statements for the year ended 31 December 2020. These financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2020.

The financial information for the six months ended 30 June 2020 has been restated as a consequence of an IFRS 9 adjustment by the Group.

A ll financial information is presented in USD, unless otherwise disclosed.

An unqualified audit opinion was expressed for the year ended 31 December 2020, as delivered to the Registrar.

The Directors of the Company approved the financial information included in the results on 09 September 2021.

2.  Results & dividends

T he Group has retained earnings at the end of the period of $33.5 million (30 June 2020: $37.0 million retained earnings) to be carried forward. The Directors do not recommend the payment of a dividend (1H 2020: nil).

3.  Intangible exploration and evaluation (E&E) assets

 

 

Total

 

 

$000

 

 

(unaudited)

 

 

 

Net book value at 31 December 2019

 

21,119

Additions during the period

 

23

Net book value at 30 June 2020

 

21,142

Additions during the period

 

67

Net book value at 31 December 2020

 

21,209

Additions during the period

 

43

Net book value at 30 June 2021

 

21,252

 

 

 

Group intangible assets:

 

Odewayne PSA, Somaliland: SE(EA)L 34%, Genel Energy Somaliland Limited 50%, Petrosoma 16%

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR DZGGLLRMGMZM

a d v e r t i s e m e n t