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Rose Petroleum PLC (ROSE)

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Tuesday 25 September, 2018

Rose Petroleum PLC

Half-year Report

RNS Number : 7747B
Rose Petroleum PLC
25 September 2018
 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

 

25 September 2018

 

Rose Petroleum plc

 

("Rose", the "Company" or the "Group")

 

Interim Results for the six months ended 30 June 2018

 

 

Rose Petroleum plc (AIM: ROSE), the North America-focused oil and gas company, is pleased to announce its unaudited interim results for the six months ending 30 June 2018.

 

A copy of the Company's unaudited interim report for the six months to 30 June 2018 will shortly be available from its website http://www.rosepetroleum.com.

 

Matthew Idiens, Chief Executive Officer of Rose Petroleum, said:

 

"Following a period of intense activity, we are at a really exciting time in the Company's development as we look to evolve from an oil explorer to an oil producer in the next quarter."

 

 

Contacts:

 

Rose Petroleum plc

Matthew Idiens (CEO)

Tel: +44 (0)20 7225 4595

Chris Eadie (CFO)

Tel: +44 (0)20 7225 4599

 

Allenby Capital Limited - AIM Nominated Adviser

Jeremy Porter / James Reeve / Liz Kirchner

 

Tel: +44 (0)20 3328 5656

 

Cantor Fitzgerald Europe -Financial Adviser and Joint Broker

Nicholas Tulloch

David Porter

Tel: +44 (0)131 257 4634 Tel: +44 (0)20 7894 7686

 

 

Turner Pope Investments - Joint Broker

Andy Thacker

Tel:  +44 (0)20 3621 4120

 

Media enquiries:

Allerton Communications

Peter Curtain

 

Tel:  +44 (0)20 3633 1730

[email protected]

 

Notes to editors

 

Rose Petroleum plc (http://www.rosepetroleum.com) is a North America-focused oil and gas company whose primary asset is approximately 80,000 net acres in the prolific oil and gas producing Paradox Basin in Utah, U.S.A., where it is earning into a 75% working interest. Using high-quality data gathered in a 3D seismic survey completed in October 2017, the Company has identified drilling locations in naturally fractured areas of the Paradox Formation with the intention of commencing a drilling programme in Q4 2018.

 

The Company's established management is supported by an expert technical team with extensive experience of the basin, where current operations nearby have proven successful, with significant initial production rates and low decline rates, offering strong break even economics.

 

The Company's strategy is to grow both organically and through acquisition, identifying additional hydrocarbon assets, conventional or unconventional, that would benefit from the Company's fast-acting, entrepreneurial approach.

 

Rose Petroleum has been quoted on AIM since June 2004.

 

 

 

 

 

 

ROSE PETROLEUM PLC

INTERIM REPORT FOR THE SIX MONTHS TO 30 JUNE 2018

The Board of Rose Petroleum plc ("Rose", the "Company" or the "Group") is pleased to present its unaudited interim report for the six-month period to 30 June 2018.

REVIEW OF ACTIVITIES

OVERVIEW AND OUTLOOK

The period under review has been one of sustained progress, and the Group aims to achieve its key strategic objective of spudding its first well on its acreage in the Paradox Basin, Utah, U.S.A. ("Paradox acreage" or "Paradox") before the end of 2018. The Group is earning into a 75% working interest in approximately 80,000 acres in the Paradox acreage through its joint venture partnership with Rockies Standard Oil Company ("RSOC").

This follows on from the successful 3D seismic acquisition in the fourth quarter of 2017.

The key operational milestones achieved during the period have been:

·     the assembling of a high quality operations team with extensive Paradox Basin experience to deliver the project;

·     the interpretation of the 3D data;

·     completion of an updated Competent Persons Report ("CPR") on the resources within Clastic 21 in the area covered by the 3D acquisition;

·     the commencement of the permitting of the Applications for Permit to Drill ("APD") for the first Paradox wells;

·     well design engineering and detailed costings of the initial wells;

·     the acquisition of further highly prospective new acreage that falls within the 3D shoot area; and

·     the engagement with financial and industry partners to obtain funding for the drilling of the first Paradox well and overall development of the project.

This activity has been carried out with continued cash conservation which remains a key priority for the Board.

The work carried out during the period, and particularly the interpretation and resource update work, has continued to highlight the substantial scale, value and geological potential of the Paradox project and it is very much hoped that the drilling operations planned for the fourth quarter of 2018 will enable the Group to unlock the potential of the Paradox acreage and begin to deliver the significant value on offer for its shareholders.

Gaffney Cline & Associates ("GCA") were engaged to prepare the CPR for the acreage of the 3D seismic acquisition held by Rose (the "3D area"), being approximately 17,250 acres of the total acreage held by Rose in Utah. This CPR focused solely on a single reservoir, the Cane Creek reservoir (the "CCR" or "Clastic 21"), of the multiple prospective reservoirs within the Paradox Formation. The CPR upgraded the resource classification from Prospective Resources to Contingent Resources within the 3D seismic acquisition area, and reported, net to the Group, a 2C Contingent Resource of 9.25 million barrels of oil ("MBO") and 18.50 billion standard cubic feet ("Bscf") of gas and an unrisked pre-tax NPV10 of US$122 million. For a full summary of the CPR, please refer to the Group's announcement on 22 June 2018.

The CPR clearly demonstrates the significant potential upside compared to the Group's current valuation. The Paradox Formation is made up of approximately 24 clastic zones, of which the Cane Creek Cycle (Clastic 21) is the primary producing zone of the basin to date. Up to five additional clastics, above the Cane Creek Cycle, are also thought to be prospective. The current CPR only covers a single reservoir interval (Clastic 21) out of these six potential stacked pays and only covers the small portion of the Group's total acreage position covered by the 3D acquisition, providing the opportunity to significantly increase resource numbers on the Paradox project in the future.

The Board also believes that the CPR ratifies the proposed appraisal plans for the Paradox acreage, which will be the first combination of horizontal drilling steered by high quality 3D seismic data on the Group's acreage. A similar approach has proved very successful in the development of the Cane Creek Field analogue directly south of the Group's acreage. Further, we continue to evaluate the remaining Clastic 21 potential outside the 3D area and shallower prospective zones both within the 3D area and outside it, which represent further upside opportunities within the Group's existing acreage footprint.

On 4 April 2018, the Group announced that it had increased its land position in the Paradox Basin with the acquisition of some highly prospective new acreage. The Group acquired a 75% working interest in an additional 3,320 gross acres (2,490 net acres) (the "new acreage") for US$36 per gross acre, resulting in a total consideration of approximately US$120,000.

The acquisition of the new acreage, which is continuous with the Joint Venture's existing acreage and is in close proximity to the producing 28-11 well, was achieved following detailed technical analysis of its geological potential. The new acreage is covered by the Group's 3D seismic survey which shows multiple highly attractive geological structures and potential well site locations.

The prospectivity of the Group's acreage is further underpinned by the existence of the producing 28-11 well which is found just outside the new acreage, 365 metres to the south-west, and produces from a porous and permeable fracture network within Clastic 21, as shown on our 3D seismic. The 28-11 is a vertical well that was drilled by Delta Petroleum in 2006 without the benefit of 3D seismic. It has produced 141,000 barrels of oil equivalent ("BOE"), and represents a key piece of evidence for the presence of a greater fracture network across the area covered by the 3D seismic. In addition to the 28-11 well, three other vertical wells have been drilled within the 3D seismic areal extent and all show the presence of moveable oil within the reservoir matrix. These factors give the Board a high degree of confidence in the potential of the Group's acreage and, as a result, it has been decided to proceed to apply for an APD permit for an additional well location in the new acreage, the 22-1 well, which is also planned as a horizontal well targeting Clastic 21. The APD is expected to be approved shortly.

Given the potential of the new acreage, the Group has been working with the BLM to include this new acreage within the Gunnison Valley Unit ("GVU"), where the Group's operational activity is focused. The addition of the new acreage within the GVU would give the Group more options in terms of first well location. This has been carried out in tandem with ongoing work to manage the existing acreage position and the Unit itself which requires careful oversight, particularly when taking into account the more proactive approach of the BLM towards land usage under the new political administration.

If the BLM approves the proposed plan to include the new acreage within the GVU, then the Group will also be able to propose the next obligation well within this added acreage. The GVU, which covers approximately 60,000 acres, presently requires four obligation wells; the first obligation well has already been completed (GVU 22-9) by Anadarko in 2012 and the Group plans to drill the next one this year. In addition to the 22-1 well, the Group is also in the process of permitting the GVU 29-1 well and the State 16-2L well. The permit approvals are expected to be received shortly.

The current discussions with the BLM in respect of the new acreage and unit reshape are not expected to impact on the Group's timeline on its plan of operations for the drilling programme. We have been working closely with the BLM on permitting in order to achieve this objective. Subject to rig availability and concluding project funding, it remains the Group's intention and expectation to drill its first Paradox well in the fourth quarter of this year.

The Group has assembled a highly experienced subsurface and surface operational team with extensive experience and a successful track record in the Paradox Basin. The team designed, managed and implemented a nine-well drilling programme in the Paradox Basin for Fidelity Exploration and Production Inc., directly to the south of the Group's acreage. Eight of these wells were commercial and production grew from circa 100 barrels of oil per day ("BOPD") to over 3,500 BOPD from 2012 to 2014. As the Group moves through the well selection, permitting and funding processes for the first Paradox well, the Group is already realising the benefits of having such a first class team.

As the Group's activity in the Paradox basin has intensified, Rose has been approached by a number of third parties about potential partnering and investment opportunities in the region. While the Group remains wholly focused on the Paradox project, the Directors believe that they should appraise any additional opportunities further, particularly those comprising producing or near-term producing assets, to see if there may be commercial synergies with the existing Paradox operations and whether they might add value to the Group's portfolio. The Paradox activity will remain the absolute priority, and there are no guarantees that any opportunities reviewed will develop further.

MINING DIVISION

The Group gave a full update on the status of its residual mining asset portfolio in its 2017 Annual Report. There have been no significant developments since the Annual Report was published in June 2018 and the profit from discontinued operations disclosed in the income statement relates to the conclusion of its activities in Mexico.

CUBA OPPORTUNITIES

The Group continues to have an open dialogue with the Cuban national oil company, CUPET, regarding oil and gas licences. We believe that the oil and energy sectors in Cuba will offer excellent potential in the future and we will continue to keep a watching brief for future investment opportunities. The Group is not currently incurring any expenditure in respect of these opportunities.

FINANCIAL REVIEW

The financial information is reported in United States Dollars ("US$").

Income Statement

The Group reports a net loss after tax of US$0.5 million or a loss of 0.41 US cents per share for the six months ended 30 June 2018 (30 June 2017: net loss after tax of US$2.2 million or a loss of 5.78 US cents per share).

The reduced loss for the period when compared to the prior year comparative period is primarily the result of unrealised foreign exchange differences that arise on the restatement of the Company's loans to its subsidiaries. These foreign exchange differences resulted in an unrealised gain of US$0.5 million for the six months ended 30 June 2018 (30 June 2017: unrealised loss of US$0.7 million). The gain in this period is the result of the strengthening of the US dollar against sterling.

Administrative expenses for the period were US$1.0 million (30 June 2017: US$0.9 million), and were consistent with those incurred in the prior year.

Balance Sheet

Intangible assets at 30 June 2018 were US$12.5 million (30 June 2017: US$10.2 million). The primary reason for the increase was the ongoing investment into the Paradox and specifically the 3D seismic acquisition in the second half of 2017.

Cash and cash equivalents at 30 June 2018 were US$2.0 million (30 June 2017: US$0.9 million) and increased as a result of equity fund raises in late 2017 and the first half of 2018.

Outlook

The period under review has seen the Group deliver on many of the key operational milestones required to enable the spudding of its first Paradox well before the end of the calendar year. The Board is looking ahead with confidence and is excited about the Group moving from being an oil explorer to an oil producer in the next quarter.

I would also like to take this opportunity to thank our shareholders, advisers and employees for their continued support.

 

 

MC Idiens                                           

Chief Executive Officer

                                                               

25 September 2018

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2018

 

 

Unaudited

six months

ended 30 June

Unaudited

six months

 ended 30 June

Audited

year ended

31 December

 

 

2018

2017

2017

 

Notes

US$'000

US$'000

US$'000

 

 

 

 

 

Continuing operations

 

 

 

 

Administrative expenses

 

(1,002)

(906)

(2,065)

Project development expenses

 

-

(66)

(154)

Impairment of intangible exploration and evaluation assets

 

 

 

-

 

-

 

82

Foreign exchange differences

 

459

(744)

(1,378)

 

 

                

                

                

Operating loss

 

(543)

(1,716)

(3,515)

 

 

 

 

 

Finance income

 

2

1

1

 

 

                

                

                

Loss on ordinary activities before taxation

 

(541)

(1,715)

(3,514)

 

 

 

 

 

Taxation charge

 

-

(308)

(1)

 

 

                

                

                

Loss for the period from continuing operations

2

 

 (541)

 (2,023)

 (3,515)

Discontinued operations

 

 

 

 

Profit/(loss) from discontinued operations, net of tax

 

52

(154)

384

 

 

                

                

                

Loss for the period attributable to owners of the parent company

 

 

 

(489)

 

(2,177)

 

(3,131)

 

 

                

                

                 

 

 

 

 

 

Loss per Ordinary Share

 

 

 

 

From continuing operations

 

 

 

 

Basic and diluted, cents per share

3

(0.45)

(5.37)

(6.23)

 

 

                

                

                

From continuing and discontinued operations

 

 

 

 

Basic and diluted, cents per share

3

(0.41)

(5.78)

(5.54)

 

 

                

                

                

           

 

 

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2018

 

 

Unaudited

six months

 ended 30 June

Unaudited

six months

 ended 30 June

Audited

year ended

31 December

 

 

2018

2017

2017

 

 

US$'000

US$'000

US$'000

 

 

 

 

 

Loss for the period attributable to owners of the parent company

 

 

(489)

 

(2,177)

 

(3,131)

 

 

 

 

 

Other comprehensive income

Items that may be subsequently reclassified to profit or loss, net of tax

 

 

 

 

Foreign currency translation differences on foreign operations

 

906

(1,960)

(3,682)

Foreign currency translation differences on discontinued operations

 

(10)

21

11

 

 

                

                

                

 

 

896

(1,939)

(3,671)

 

 

                

                

                

Total comprehensive income for the period attributable to owners of the parent company

 

 

407

 

(4,116)

 

(6,802)

 

 

                

                

                

           

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 June 2018

 

 

Unaudited

as at

 30 June

Unaudited

as at

 30 June

Audited

 as at

31 December

 

 

2018

2017

2017

 

Notes

US$'000

US$'000

US$'000

 

 

 

 

 

Non-current assets

 

 

 

 

Investments

 

500

-

500

Intangible assets

4

12,487

10,196

12,098

Property, plant and equipment

 

23

335

27

 

 

                

                

                

 

 

13,010

10,531

12,625

 

 

                

                

                

Current assets

 

 

 

 

Trade and other receivables

 

466

674

583

Cash and cash equivalents

 

1,965

874

2,185

 

 

                

                

                

 

 

2,431

1,548

2,768

 

 

                

                

                

Total assets

 

15,441

12,079

15,393

 

 

                

                

                

Current liabilities

 

 

 

 

Trade and other payables

 

(342)

(670)

(584)

Provisions

 

-

(110)

-

Taxation payable

 

-

(1)

-

 

 

                

                

                

 

 

(342)

(781)

(584)

 

 

                

                

                

 

 

                

                

                

Total liabilities

 

(342)

(781)

(584)

 

 

                

                

                

Net assets

 

15,099

11,298

14,809

 

 

                

                

                

 

 

 

 

 

Equity

 

 

 

 

Share capital

5

40,504

40,362

40,463

Share premium account

 

36,521

32,183

35,657

Other equity reserves

 

3,922

3,188

3,687

Cumulative translation reserves

 

(8,082)

(7,389)

(6,864) 

Retained deficit

 

(57,766)

(57,046)

(58,134)

 

 

                

                

                

Equity attributable to owners of the parent company

 

 

15,099

 

11,298

 

14,809

 

 

                

                

                

           

 

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

 

 

 

 

Share capital

Share premium account

Other equity reserves

Cumulative translation reserves

 

Retained deficit

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

As at 1 January 2018

40,463

35,657

3,687

(6,864)

    (58,134)

14,809

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

Issue of equity shares

41

962

342

-

-

1,345

Expenses of issue of equity shares

 

-

 

(98)

 

-

 

-

 

-

 

(98)

Share-based payments

-

-

99

-

-

99

Transfer to retained earnings in respect of forfeit options

 

-

 

-

 

(196)

 

-

 

196

 

-

Effect of foreign exchange rates

 

-

 

-

 

(10)

 

-

 

-

 

(10)

 

 

 

 

 

 

 

Total transactions with owners in their capacity as owners

 

 

41

 

 

864

 

 

235

 

 

-

 

 

196

 

 

1,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

(489)

(489)

Other comprehensive income:

 

 

 

 

 

 

Currency translation differences

 

-

 

-

 

-

 

906

 

-

 

906

Currency translation differences on discontinued operations

 

 

-

 

 

-

 

 

-

 

 

(671)

 

 

661

 

 

(10)

 

 

 

 

 

 

 

Total other comprehensive income for the period

 

-

 

-

 

-

 

235

 

661

 

896

 

 

 

 

 

 

 

Total comprehensive income for the period

 

-

 

-

 

-

 

235

 

172

 

407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences on equity at historical rates

 

 

-

 

 

-

 

 

-

 

 

(1,453)

 

 

-

 

 

(1,453)

 

 

 

 

 

 

 

As at 30 June 2018

40,504

36,521

3,922

(8,082)

(57,766)

15,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED)

 

 

 

 

Share capital

Share premium account

Other equity reserves

Cumulative translation reserves

 

Retained deficit

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

As at 1 January 2017

40,362

32,183

3,028

(8,376)

(54,869)

12,328

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

Issue of equity shares

101

3,918

-

-

-

4,019

Expenses of issue of equity shares

-

(250)

-

-

-

(250)

Share-based payments

-

(194)

508

-

-

314

Transfer to retained earnings in respect of forfeit options

 

-

 

-

 

134

 

-

 

(134)

 

-

Effect of foreign exchange rates

-

-

17

-

-

17

 

 

 

 

 

 

 

Total transactions with owners in their capacity as owners

 

101

 

3,474

 

659

 

-

 

(134)

 

4,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

(3,131)

(3,131)

Other comprehensive income:

 

 

 

 

 

 

Currency translation differences

-

-

-

(3,682)

-

(3,682)

Currency translation differences on discontinued operations

 

-

 

-

 

-

 

11

 

-

 

11

 

 

 

 

 

 

 

Total other comprehensive income for the year

 

-

 

-

 

-

 

(3,671)

 

-

 

(3,671)

 

 

 

 

 

 

 

Total comprehensive income for the year

 

-

 

-

 

-

 

(3,671)

 

(3,131)

 

(6,802)

 

 

 

 

 

 

 

Currency translation differences on equity at historical rates

 

-

 

-

 

-

 

5,183

 

-

 

5,183

 

 

 

 

 

 

 

As at 31 December 2017

40,463

35,657

3,687

(6,864)

    (58,134)

14,809

 

 

 

 

 

 

 

               

 

 

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

 

 

 

 

Share capital

Share premium account

Other equity reserves

Cumulative translation reserves

 

Retained deficit

 

 

Total

 

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

 

As at 1 January 2017

40,362

32,183

3,028

(8,376)

(54,869)

12,328

 

Transactions with owners in their capacity as owners:

 

 

 

 

 

 

 

Share-based payments

-

-

155

-

-

155

 

Effect of foreign exchange rates

-

-

5

-

-

5

 

 

 

 

 

 

 

 

 

Total transactions with owners in their capacity as owners

 

-

 

-

 

160

 

-

 

-

 

160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

(2,177)

(2,177)

 

Other comprehensive income:

 

 

 

 

 

 

 

Currency translation differences

-

-

-

(1,960)

-

(1,960)

 

Currency translation differences on discontinued operations

 

-

 

-

 

-

 

21

 

-

 

21

 

 

 

 

 

 

 

 

 

Total other comprehensive income for the period

 

-

 

-

 

-

 

(1,939)

 

-

 

(1,939)

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

-

 

-

 

-

 

(1,939)

 

(2,177)

 

(4,116)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency translation differences on equity at historical rates

 

-

 

-

 

-

 

2,926

 

-

 

2,926

 

 

 

 

 

 

 

 

 

As at 30 June 2017

40,362

32,183

3,188

(7,389)

(57,046)

11,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                       

 

ROSE PETROLEUM PLC

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2018

 

 

 

Unaudited

six months

 ended 30 June

Unaudited

six months

 ended 30 June

Audited

year ended

31 December

 

 

 

2018

2017

2017

 

Appendices 

US$'000

US$'000

US$'000

 

 

 

 

 

Net cash used in operating activities

a

(1,110)

(462)

(1,965)

 

 

 

 

 

Net cash (used in)/from investing activities

b

(346)

62

(998)

 

 

 

 

 

Net cash from financing activities

c

1,264

-

3,769

 

 

 

                

                

                

 

Net (decrease)/increase in cash and cash equivalents

 

 

 (192)

 

 (400)

 

806

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

2,185

1,273

1,273

 

 

 

 

 

Effect of foreign exchange rate changes

 

(28)

1

106

 

 

 

                

                

                

 

Cash and cash equivalents at end of period

 

1,965

874

2,185

 

 

 

                

                

                

 

               

 

 

ROSE PETROLEUM PLC

APPENDICES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2018

 

 

 

Unaudited

six months

 ended 30 June

Unaudited

six months

 ended 30 June

Audited

year ended

31 December

 

 

 

2018

2017

2017

 

 

 

US$'000

US$'000

US$'000

a

Operating activities

 

 

 

 

Loss before taxation from continuing operations

(541)

(1,715)

(3,514)

 

Profit/(loss)before taxation from discontinued operations

52

(150)

404

 

 

 

 

 

 

 

(489)

(1,865)

(3,110)

 

 

 

 

 

 

Finance income

(2)

(41)

(42)

 

 

 

 

 

 

Adjustments for:

 

 

 

 

Depreciation of property, plant and equipment

4

41

54

 

Gain on disposal of property, plant and equipment

(15)

-

-

 

Gain on disposal of discontinued operations

-

-

(1,339)

 

Impairment of intangible exploration and evaluation assets

-

-

(82)

 

Provision for non-recoverable taxes

37

-

197

 

Share-based payments

82

156

314

 

Effect of foreign exchange rate changes

(572)

644

1,388

 

 

 

 

 

 

Operating outflow before movements in working capital

(955)

(1,065)

(2,620)

 

Decrease in trade and other receivables

96

562

419

 

(Decrease)/Increase in trade and other payables

(251)

45

93

 

 

 

 

 

 

Cash used in operations

(1,110)

(458)

(2,108)

 

Income tax (paid)/ recovered

-

(4)

143

 

 

 

 

 

 

Net cash used in operating activities

(1,110)

(462)

(1,965)

 

 

 

 

 

b

Investing activities

 

 

 

 

Interest received

2

41

42

 

Purchase of intangible exploration and evaluation

assets

 

(349)

 

(79)

 

(1,990)

 

Proceeds on disposal of property, plant and equipment

1

-

-

 

Net cash inflow on disposal of discontinued operations

-

-

950

 

Proceeds from Options

-

100

-

 

 

 

 

 

 

Net cash (used in)/from investing activities

(346)

62

(998)

 

 

 

 

 

c

Financing activities 

 

 

 

 

Proceeds from issue of shares

1,345

-

4,019

 

Expenses of issue of shares

(81)

-

(250)

 

 

 

 

 

 

Net cash from financing activities

1,264

-

3,769

 

 

 

 

 

             

 

 

 

 

 

 

ROSE PETROLEUM PLC

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2018

 

1.  ACCOUNTING POLICIES   

Basis of preparation

This report was approved by the Directors on 24 September 2018.

The condensed consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs')

The condensed consolidated interim financial statements are presented in United States Dollar ('US$') as the Group's trading operations, and the majority of its assets are primarily represented in US$.

The Company is domiciled in the United Kingdom. The Company's shares are admitted to trading on the AIM market.

The current and comparative periods to June have been prepared using the accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 31 December 2017, and with those expected to be adopted in the Group's financial statements for the year ended 31 December 2018. This is the first set of the Group's financial statements where IFRS 9 and IFRS 15 have been applied. There is no material impact on the financial statements from the adoption of these standards.

In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', the comparative income statement has been re-presented so that the disclosures in relation to discontinued operations relate to all operations that have been discontinued by the balance sheet date.

Comparative figures for the year ended 31 December 2017 have been extracted from the statutory financial statements for that period which carried an unqualified audit report, did not contain a statement under section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

The financial information contained in this report does not constitute statutory financial statements as defined by section 434 of the Companies Act 2006, and should be read in conjunction with the Group's financial statements for the year ended 31 December 2017. This report has not been audited or reviewed by the Group's auditors.

During the first six months of the current financial year there have been no related party transactions that materially affect the financial position or performance of the Group and there have been no changes in the related party transactions described in the last annual financial report.

Having considered the Group's current forecast and projections, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue operating for at least the next 12 months. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.

The principal risks and uncertainties of the Group have not changed since the publication of the last annual financial report where a detailed explanation of such risks and uncertainties can be found.

2.  DIVIDENDS

The Directors do not recommend the payment of a dividend for the period.

 

 

3.  LOSS PER ORDINARY SHARE

Basic loss per Ordinary Share is calculated by dividing the net loss for the period attributable to owners of the parent company by the weighted average number of Ordinary Shares outstanding during the period. The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

 

 

 

Continuing operations unaudited six months ended 30 June 2018 US$'000

 

Continuing and discontinued operations

unaudited

six months

 ended

 30 June 2018

US$'000

 

Continuing operations

unaudited

six months ended 30 June 2017

US$'000

 

Continuing and discontinued operations

unaudited

six months

 ended 30 June

30 June 2017

US$'000

 

Continuing operations

audited

year ended

31 December

2017

US$'000

Continuing and discontinued operations

audited

year ended

31 December

2017

US$'000

 

Losses

 

 

 

 

 

 

 

Losses for the purpose of basic loss per Ordinary Share being net loss attributable to owners of the parent company

 

 

 

 

 

 

(541)

 

 

 

 

 

 

(489) 

 

 

 

 

 

 

(2,023)

 

 

 

 

 

 

(2,177) 

 

 

 

 

 

 

(3,515)

 

 

 

 

 

 

(3,131)

 

 

 

 

 

 

 

            

 

 

Number

'000

Number

'000

Number

'000

Number

'000

Number

'000

Number

'000

 

Number of shares

 

 

 

 

 

 

 

Weighted average number of shares for the purpose of basic loss per Ordinary Share

 

 

 

 

 

120,021

 

 

 

 

 

120,021

 

 

 

 

 

37,645

 

 

 

 

 

37,645

 

 

 

 

 

56,467

 

 

 

 

 

56,467

 

 

 

 

 

 

   

   

 

Loss per Ordinary Share

 

 

 

 

 

 

 

Basic and diluted, cents per share

 

 

(0.45)

 

 

(0.41)

 

 

(5.37)

 

 

(5.78)

 

 

(6.23)

 

 

(5.54)

 

 

 

 

 

 

            

            

                       

Due to the losses incurred, there is no dilutive effect from the existing share options, share based compensation plan or warrants.

In the period to 30 June 2018, the exercise price of the share options and warrants is greater than the market price and diluted earnings per share is the same as basic.

 

 

 

4.  INTANGIBLE ASSETS

 

 

   

Exploration and evaluation assets US$'000

Cost

 

 

 

 

At 1 January 2017

 

 

15,823

 

Additions

 

 

79

 

Exchange differences

 

 

45

 

 

 

 

                     

 

At 30 June 2017

 

 

15,947

 

Additions

 

 

1,944

 

Exchange differences

 

 

(28)

 

 

 

 

                     

 

At 31 December 2017

 

 

17,863

 

Additions

 

 

389

 

Exchange differences

 

 

(2)

 

 

 

 

                     

 

At 30 June 2018

 

 

18,250

 

 

 

 

                     

 

 

 

 

Impairment

 

 

 

 

At 1 January 2017

 

 

5,706

 

Exchange differences

 

 

45

 

 

 

 

                     

 

At 30 June 2017

 

 

5,751

 

Impairment charge

 

 

43

 

Exchange differences

 

 

(29)

 

 

 

 

                     

 

At 31 December 2017

 

 

5,765

 

Exchange differences

 

 

(2)

 

 

 

 

                     

 

At 30 June 2018

 

 

5,763

 

 

 

 

                     

 

 

 

 

Carrying amount

 

 

 

 

At 30 June 2018

 

 

12,487

 

 

 

 

                     

 

At 30 June 2017

 

 

10,196

 

 

 

 

                     

 

At 31 December 2017

 

 

12,098

 

 

 

 

                     

5.  SHARE CAPITAL

 

Unaudited

as at

 30 June

Unaudited

as at

 30 June

Audited

 as at

31 December

 

 

 

2018

2017

2017

 

 

 

Number

'000

Number

'000

Number

'000

 

 

 

 

 

 

 

Authorised

 

 

 

 

Ordinary Shares of 0.1p each

7,779,297

7,779,297

7,779,297

 

Deferred Shares of 9.9p each

227,753

227,753

227,753

 

 

 

                     

                     

                     

 

 

 

8,007,050

8,007,050

8,007,050

 

 

 

                     

                     

                     

 

 

Unaudited

as at

 30 June

Unaudited

as at

 30 June

Audited

 as at

31 December

 

 

 

2018

2017

2017

 

 

 

US'000

 

US'000

 

US'000

 

 

 

Allotted, issued and fully paid

 

 

 

 

143,413,940 Ordinary Shares of 0.1p each (30 June 2017: 37,644,709: 31 December 2017 112,644,709)

199

57

158

 

227,753 Deferred Shares of 9.9p each

40,305

40,305

40,305

 

 

 

                     

                     

                     

 

 

 

40,504

40,362

40,463

 

 

 

                     

                     

                     

 

                   

The Deferred Shares are not listed on AIM, do not give the holders any right to receive notice of, or to attend or vote at, any general meetings, have no entitlement to receive a dividend or other distribution or any entitlement to receive a repayment of nominal amount paid up on a return of assets on winding up nor to receive or participate in any property or assets of the Company. The Company may, at its option, at any time redeem all of the Deferred Shares then in issue at a price not exceeding £0.01 from all shareholders upon giving not less than 28 days' notice in writing.

On 18 September 2017, the Company consolidated every 100 Ordinary Shares at 0.1p each into one 'consolidated share'. Immediately following the consolidation each 'consolidated' share was sub-divided into one New Ordinary Share and one New Deferred Share. The sub-division was structured in such a way that each of the New Ordinary Shares retained the nominal value of 0.1p each. The New Ordinary and Deferred Shares have the same rights as the existing Ordinary and Deferred shares.

ISSUED ORDINARY SHARE CAPITAL

On 28 September 2017, the Company issued 60,000,000 Ordinary Shares of 0.1p each at a price of 0.4p per share, raising gross proceeds of US$3.2 million (£2.4 million).

On 10 October 2017, the Company issued 15,000,000 Ordinary Shares of 0.1p each at a price of 0.4p per share, raising gross proceeds of US$0.8 million (£0.6 million).

On 10 May 2018, the Company issued 11,264,000 Ordinary Shares of 0.1p each at a price of 0.325p per share, raising gross proceeds of US$0.5 million (£0.4 million).

On 22 May 2018, the Company issued 19,505,231 Ordinary Shares of 0.1p each at a price of 0.325p per share, raising gross proceeds of US$0.85 million (£0.6 million).

In addition, for each share issued in May 2018, the subscriber received a warrant for a new Ordinary Share at a price of £0.65p per share, resulting in the issue of 30,769,231 warrants which are exercisable at any time until May 2020.

 

 

 

Ordinary

Shares

Number

'000

Deferred Shares

Number

'000

 

 

 

 

 

 

 

 

At 1 January 2017 and 30 June 2017

 

3,764,471

190,108

 

 

 

 

 

                     

 

 

Share consolidation

 

37,645

37,645

 

 

Allotment of shares

 

75,000

-

 

 

 

 

 

                     

                     

 

At 31 December 2017

 

112,645

227,753

 

 

Allotment of shares

 

30,769

-

 

 

 

 

 

                     

                     

 

At 30 June 2018

 

143,414

227,753

 

 

 

 

 

                     

                     

                 

The information shown above has been restated to reflect the share consolidation which took place on 18 September 2017.

 


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