11:47 Tue 23 Jun 2020
Angus Energy PLC - Half-year Report
("Angus Energy", "Angus" or the "Company")
Interim Accounts for the six months ended
Angus Energy is pleased to announce its interim accounts for the six months ended
Chairman's Statement
Dear shareholders,
I am pleased to share with you the interim results for the six months ended
Operational Highlights
At Saltfleetby, we have made steady progress in planning for reconnection. A planning application for process facilities at the main site and a further application for a short pipeline extension to National Grid has been submitted to
When I last reported to you, I reported how our commitment to the Brockham, Balcombe and Lidsey assets remained solid, notwithstanding the disappointing results from the Kimmeridge BR X4Z well in
At Balcombe, the
At Brockham we have prepared a Hydrogeological Risk Assessment to address our water injection proposals. This is currently under review with the
At Lidsey production was stopped in February due to a down hole pump issue. We note that the headline price of oil in Q2 of this year means that the loss of production has only a marginal effect on cashflow. In the future, we look forward to addressing further seismic work on the Field which we consider to be highly prospective.
Financial Highlights
On
On
On
On
On
As at
As at
Outlook
This global pandemic crisis which we are currently witnessing has had an immediate and tangible impact on us all. Oil prices have been under tremendous pressure as demand subsides with large parts of the industry going into hibernation. No-one can yet foresee how patterns of supply and demand will be altered following lifting of the lockdown. We doubt that it will be business as usual, but we do look forward to some normalisation of activity. It is no small blessing that we diversified from an oil exploration company to an oil and gas production company in the last twelve months as there is a consensus view that gas prices will, over the medium term, have better support than oil prices. We remain excited about the Company's prospects and are confident that our efforts for the rest of 2020 will have a transformational effect.
Lord Clanwilliam
Non-Executive Chairman
Enquiries:
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Tel: +44 (0) 208 899 6380 |
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Tel: +44 (0) 207 628 3396 |
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Tel: +44 (0) 113 394 6600 |
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Tel: +44 (0) 203 004 9512 |
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Notes
About
The Interims are set out below:
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended
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Note |
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Six months 31 March 2020 Unaudited |
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Six months 31 March 2019 Unaudited |
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£'000 |
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£'000 |
Revenue |
4 |
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68 |
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137 |
Cost of sales |
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(283) |
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(122) |
Gross profit/(loss) |
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(215) |
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15 |
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Administrative expenses |
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(1,389) |
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(1,648) |
Share based payment charge |
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- |
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(25) |
Operating loss |
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(1,604) |
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(1,658) |
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Finance income |
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- |
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4 |
Loss on ordinary activities before taxation |
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(1,604) |
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(1,654) |
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Income tax expense |
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- |
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- |
Loss for the period attributable to the equity holder of the Company |
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(1,604) |
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(1,654) |
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Loss per share (EPS): |
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£ |
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£ |
Basic and diluted (whole £'s) |
10 |
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(0.003) |
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(0.004) |
ANGUS ENERGY PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2020
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As at 31 March |
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As at 31 March |
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As at 30 September |
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2020 Unaudited |
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2019 Unaudited |
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2019 Audited |
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Note |
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£'000 |
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£'000 |
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£'000 |
Non-current assets |
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Property, plant and equipment |
5 |
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14 |
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14 |
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14 |
Exploration and evaluation assets |
6 |
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6,366 |
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5,755 |
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5,878 |
Oil production assets |
7 |
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6,407 |
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6,508 |
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6,416 |
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12,787 |
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12,277 |
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12,308 |
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Current assets |
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Trade and other receivables |
8 |
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336 |
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742 |
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794 |
Cash and bank balances |
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2,591 |
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941 |
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3,419 |
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2,927 |
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1,683 |
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4,213 |
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Total Assets |
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15,714 |
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13,960 |
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16,521 |
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Equity |
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Share capital |
11 |
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1,208 |
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917 |
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1,082 |
Share premium |
11 |
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21,273 |
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17,879 |
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21,117 |
Merger reserve |
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(200) |
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(200) |
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(200) |
Accumulated loss |
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(11,165) |
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(6,226) |
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(9,561) |
Total Equity |
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11,116 |
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12,370 |
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12,438 |
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Current liabilities |
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Trade and other payables |
9 |
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1,589 |
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1,038 |
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1,031 |
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Non-current liabilities |
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Provisions |
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3,009 |
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552 |
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3,052 |
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Total liabilities |
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4,598 |
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1,590 |
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4,083 |
Total Equity and Liabilities |
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15,714 |
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13,960 |
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16,521 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended
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Share Capital |
Share premium |
Merger Reserve |
Retained Earnings |
Total equity |
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£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
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Balance at |
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763 |
14,142 |
(200) |
(4,597) |
10,108 |
Loss for the period |
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- |
- |
- |
(1,654) |
(1,654) |
Total comprehensive income for the period |
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- |
- |
- |
(1,654) |
(1,654) |
Transaction with owner |
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Issue of shares |
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155 |
4,045 |
- |
- |
4,200 |
Less: issuance cost |
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(309) |
- |
- |
(309) |
Granted of warrants |
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- |
- |
- |
25 |
25 |
Balance at |
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918 |
17,878 |
(200) |
(6,226) |
12,370 |
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Balance at |
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763 |
14,142 |
(200) |
(4,597) |
10,108 |
Loss for the year |
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- |
- |
- |
(5,043) |
(5,043) |
Total comprehensive income for the year |
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- |
- |
- |
(5,043) |
(5,043) |
Transaction with owners: |
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Issue of shares |
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319 |
7,450 |
- |
- |
7,769 |
Less: issuance cost |
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- |
(475) |
- |
- |
(475) |
Granted of share option |
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- |
- |
- |
79 |
79 |
Balance at |
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1,082 |
21,117 |
(200) |
(9,561) |
12,438 |
Loss for the period |
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- |
- |
- |
(1,604) |
(1,604) |
Total comprehensive income for the period |
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- |
- |
- |
(1,604) |
(1,604) |
Transaction with owners: |
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Issue of placing shares |
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126 |
273 |
- |
- |
399 |
Less: issuance costs |
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(117) |
- |
- |
(117) |
Granted of warrants |
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- |
- |
- |
- |
- |
Balance at |
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1,208 |
21,273 |
(200) |
(11,165) |
11,116 |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended
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Six months 31 March |
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Six months 31 March |
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2020 Unaudited |
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2019 Unaudited |
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£'000 |
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£'000 |
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Cash flow from operating activities |
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Loss before taxation |
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(1,604) |
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(1,654) |
Adjustment for: |
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Finance income |
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- |
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(4) |
Share based payment charge |
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- |
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25 |
Depreciation and amortisation charges |
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12 |
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20 |
Operating cash flows before movements in working capital |
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(1,592) |
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(1,613) |
Decrease/ (increase) in trade and other receivables |
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457 |
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53 |
Decrease/(increase) in trade and other payables |
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559 |
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(402) |
Cash used in operating activities |
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(576) |
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(1,962) |
Income tax paid |
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- |
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- |
Net cash used in operating activities |
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(576) |
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(1,962) |
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Cash flows from investing activities |
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Decommissioning cost |
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(43) |
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- |
Acquisition of exploration and evaluation assets |
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(488) |
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(537) |
Acquisition of fixed assets and oil production assets |
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(3) |
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(1,297) |
Net cash used in investing activities |
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(534) |
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(1,834) |
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Cash flows from financing activities |
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Net proceeds from issue of share capital |
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282 |
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3,981 |
Net cash generated from financing activities |
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282 |
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3,981 |
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Net increase in cash & cash equivalents |
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(828) |
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95 |
Cash and equivalent at beginning of year |
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3,419 |
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846 |
Cash and equivalent at end of year |
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2,591 |
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941 |
NOTES TO THE FINANCIAL INFORMATION
1. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
This financial information is for the Company and its subsidiaries undertakings (together, the "Group").
The principal activities of the entities of the Group are as follows:
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Country of |
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Incorporation |
Principal Activities |
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i) |
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Investment holding company |
ii) |
Angus Energy Weald Basin No. 1 Limited |
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Investment holding company |
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iii) |
Angus Energy Weald Basin No. 2 Limited |
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Investment holding company |
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iv) |
Angus Energy Weald Basin No. 3 Limited |
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Oil & Gas extraction for distribution to third parties |
The principal place of business of the Group is in
The interim consolidated financial information is presented in the nearest thousands of Pound Sterling (£'000), which is the presentation currency of the group. The functional currency of each of the individual entity is the local currency of each individual entity.
2. BASIS OF PREPARATION
The interim consolidated financial information for the six months ended
The principal accounting policies used in preparing the interim results are the same as those applied in the Group's financial statements as at and for the year ended
A copy of the audited consolidated financial statements for the year ended
The interim report for the six months ended
Going Concern
The COVID-19 pandemic has not had a significant immediate impact on the company's operations.
In response to this extraordinary period, the Directors have taken the prudent decision to introduce cost saving measures where possible in order to preserve working capital. The Directors have assessed the company's ability to continue as a going concern and have reasonable expectation that the company has adequate resources to continue operations for a period of at least 12 months from the date of approval of these financial statements.
As at
3. CRITICAL ACCOUNTING ESTIMATES AND SOURCES OF ESTIMATION UNCERTAINTY
In applying the accounting policies, the directors may at times require to make critical accounting judgements and estimates about the carrying amount of assets and liabilities. These estimates and assumptions, when made, are based on historical experience and other factors that the directors consider are relevant.
The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial year, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are reviewed are as stated below.
Key accounting judgements
(a) Impairment of non-current asset
The group's non-current assets represent its most significant assets, comprising of oil production assets, exploration and evaluation (E&E) assets on its onshore site.
Management is required to assess exploration and evaluation (E&E) assets for indicators of impairment and has considered the economic value of individual E&E assets. The carrying amount of the E&E asset are subject to a separate review for indicators if impairment, by reference of the impairment indicators set out in IFRS 6, which is inherently judgemental.
Processing operations are large, scarce assets requiring significant technical and financial resources to operate. Their value may be sensitive to a range of characteristics unique to each asset and key sources of estimation uncertainty include proved reserve estimates, future cash flow expected to arise from the cash-generating unit and a suitable discount rate.
In performing impairment reviews, the Group assesses the recoverable amount of its operating assets principally with reference to the Group's independent competent person's report, estimates of future oil prices, operating costs, capital expenditure necessary to extract those reserves and the discount rate to be applied to such revenues and costs for the purpose of deriving a recoverable value.
As detailed in note 6 and 7, the carrying value amount of the Group's E&E assets and oil production assets at
4. OPERATING SEGMENTS
Operating segments are prepared in a manner consistent with the internal reporting provided to the management as its chief operating decision maker in order to allocate resources to segments and to assess their performance.
Currently, the Group's principal revenue is derived from the sale of oil. All revenue arose from continuing operations within the
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31 March 2020 |
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31 March 2019 |
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£'000 |
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£'000 |
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Sale of oil |
68 |
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137 |
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All the non-current assets of the Group are located in the
All revenue arising from sale of oil is derived from a single customer.
5. PROPERTY, PLANT AND Equipment
During the period, the Group incur
6. EXPLORATion ANd evALUaTion ASSETS
During 2019, the Group acquired a 51% interest of the Saltfleetby Gas Field (PEDL005) from
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Total |
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£'000 |
Cost or valuation |
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At |
5,755 |
Additions |
123 |
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------------------------------------- |
At |
5,878 |
Additions |
488 |
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------------------------------------- |
At |
6,366 |
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------------------------------------- |
Amortisation |
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At |
- |
Charge for the period |
- |
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------------------------------------- |
At |
- |
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------------------------------------- |
Net book value |
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At |
5,878 |
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============================== |
At |
6,366 |
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============================== |
At |
5,755 |
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============================== |
7. OIL PRODUCTION ASSETS
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Total |
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£'000 |
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Cost or valuation |
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At |
5,252 |
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Additions |
1,297 |
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------------------------------------- |
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At |
6,549 |
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Additions |
824 |
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------------------------------------- |
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At |
7,373 |
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Additions |
- |
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------------------------------------- |
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At |
7,373 |
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------------------------------------- |
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Depreciation and impairment |
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At |
27 |
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Charge for the period |
14 |
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------------------------------------- |
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At |
41 |
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Depreciation for the period |
16 |
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Impairment for the period |
900 |
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------------------------------------- |
At |
957 |
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Charge for the period |
9 |
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------------------------------------- |
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At |
966 |
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------------------------------------- |
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Net book value |
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At |
6,416 |
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============================== |
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At |
6,407 |
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============================== |
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At |
6,508 |
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============================== |
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Depreciation of oil production assets is included in cost of sales in the consolidated statement of comprehensive income.
As at
8. TRADE AND OTHER RECEIVABLES
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31 March 2020 |
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31 March 2019 |
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£'000 |
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£'000 |
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£'000 |
VAT recoverable |
127 |
|
68 |
|
90 |
Amount due from farmees |
98 |
|
278 |
|
296 |
Amount due from director |
- |
|
211 |
|
216 |
Other receivables |
111 |
|
185 |
|
192 |
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------------------------------- |
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----------------------------- |
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----------------------------- |
|
336 |
|
742 |
|
794 |
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------------------------------- |
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----------------------------- |
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----------------------------- |
The carrying amount of trade and other receivables approximates to their fair value.
9. TRADE AND OTHER PAYABLES
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31 March 2020 |
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31 March 2019 |
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30 September 2019 |
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£'000 |
|
£'000 |
|
£'000 |
Trade payables |
733 |
|
800 |
|
678 |
Other taxation |
133 |
|
122 |
|
320 |
Accruals |
- |
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- |
|
30 |
Other payables |
723 |
|
116 |
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3 |
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------------------------------- |
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----------------------------- |
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----------------------------- |
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1,589 |
|
1,038 |
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1,031 |
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------------------------------- |
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----------------------------- |
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----------------------------- |
10. EARNINGS PER SHARE
Basic EPS amounts are calculated by dividing the loss for the year attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period.
Diluted EPS amounts are calculated by dividing the loss for the year attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
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31 March 2020 |
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31 March 2019 |
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Net loss attributable to equity holders of the Group |
(1,604,000) |
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(1,654,000) |
Weighted average number of ordinary shares |
549,004,028 |
|
399,806,692 |
Basic and diluted (loss) per share |
(0.003) |
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(0.004) |
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The diluted loss per share was not applicable as there were no dilutive potential ordinary shares outstanding at the end of the reporting period.
11. Share Capital AND RESERVE
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Number of shares |
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Ordinary shares £'000 |
Share Premium £'000 |
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Issued: |
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As at 30 September 2017/18 |
381,721,985 |
|
763 |
14,142 |
|
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22,222,222 |
|
44 |
1,956 |
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55,000,000 |
|
110 |
2,090 |
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Less: issuance cost |
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(309) |
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As at |
458,944,207 |
|
917 |
17,879 |
|
18 April 2019-issue of shares |
8,324,024 |
|
17 |
450 |
|
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70,824,700 |
|
142 |
2,868 |
|
|
735,076 |
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2 |
30 |
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2,000,000 |
|
4 |
56 |
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Less: Issuance of costs |
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(166) |
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As at |
540,828,007 |
|
1,082 |
21,117 |
|
|
13,766,520 |
|
28 |
72 |
|
|
17,319,016 |
|
35 |
65 |
|
|
32,133,676 |
|
63 |
136 |
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Less: Issuance of cost |
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(117) |
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As at |
604,047,219 |
|
1,208 |
21,273 |
|
On
On
On
The ordinary shares have a par value of £0.002 per share and are fully paid. These shares carry no right to fixed income and have no preferences or restrictions attached to them.
12. SHARE OPTIONS AND WARRANTS
On 13 October 2016, the Group implemented an Enterprise Management Incentive Scheme followed by a
NED and Consultant Share Option Scheme (The Scheme).
At 30 September 2019, the Group had 53,418,304 share options and 7,469,914 warrants outstanding in respect of ordinary shares.
During the period ended 31 March 2020 the Group has not issued any options or warrants. The outstanding and exercisable of share options and warrants was 60,888,218 with a weighted average price of £0.0519 at 31 March 2020.
The inputs into the model were as follows:
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Warrants |
Stock price |
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1.3p |
Exercise price |
|
6.18p |
Interest rate |
|
0.5% |
Volatility |
|
30% |
Time to maturity |
|
3 years |
13. SEASONALITY OF GROUP BUSINESS
There are no seasonal factors that materially affect the operations of any company in the Group.
14. PROVISIONS FOR OTHER LIABILITIES AND CHANGES
|
31 March 2020 |
|
31 March 2019 |
|
30 September 2019 |
|
£'000 |
|
£'000 |
|
£'000 |
Abandonment costs |
3,009 |
|
552 |
|
3,052 |
|
--------------------------------------- |
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--------------------------------------- |
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--------------------------------------- |
The Group makes full provision for the future costs of decommissioning oil production facilities and pipelines on the installation of those facilities. The amount provision is expected to be incurred up to 2029 when the producing oil and gas properties are expected to cease operations.
These provisions have been created based on the Group's internal estimates and expectation of the decommissioning costs likely to incur in the future. For the period under review, the directors have assessed that the discount rate and inflation rate to be applied to the current cost of decommissioning to be similar. On this basis, the current cost is considered to be similar to the discounted net present value.
15. RELATED PARTY TRANSACTION
In March 2017, the Company provided former Director
16. SUBSEQUENT EVENTS
On 17 April 2020, the Group issued a 4% per annum £1,400,000 Convertible Loan Note to Knowe Properties Limited, a significant shareholder in the Company. The New Loan Note is unsecured and is convertible at maturity after two years. Alternatively, and at the Company's option, the Loan Note is repayable in part or whole at any time up to two months before maturity with an accompanying grant of warrants equal to the face value of the amount repaid. The warrants are exercisable at the lower of 1.3 pence or a 30% premium to the Conversion Price.
On 20 April 2020, a proportion of the issue proceeds of the New Loan Note was used to repay £250,000 of the outstanding £600,000 of the earlier Convertible Loan Note issued on 24 October 2019 led by Riverfort Global Opportunities PCC Limited, and additionally the terms for conversion of the remaining £350,000 have been altered as follows. New repayment dates have been set at six equal monthly instalments between 24 May and 24 October 2020 and, if the Company elects not to pay an amount on the due date, that amount will become either convertible at any time as per the original terms or simply repayable at final maturity. Otherwise no amount may now be converted. 15,000,000 warrants have been granted to the noteholders at a strike price of 1 pence in exchange for waiving rights under their notes.
On 21 May 2020, a further £58, 333 of the Riverfort convertible loan was repaid.
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