TIDMAAOG
RNS Number : 3818Y
Anglo African Oil & Gas PLC
08 September 2020
Anglo African Oil & Gas plc ("AAOG" or "the Company")
Unaudited Interim Accounts for the six months ended 30 June
2020
Chair's Statement
This interim accounts covers the six-months period to 30 June
2020, during this period the Company completed the sale of Anglo
African Oil & Gas Congo S.A.U ("AAOG Congo") the Company's
Congolese subsidiary which held the working interest in the Tilapia
Asset.
Faced with very limited cash resources and unable to fund the
ongoing operational costs and liabilities of AAOG and AAOG Congo,
and having considered the alternatives in detail with its advisers,
the Board took the decision that the best option for Ordinary
Shareholders was to find a buyer for AAOG Congo.
The Company announced on 27 December 2019, that it had entered
into a conditional sale and purchase agreement ("SPA") with Zenith
Energy Ltd for the sale of an 80% interest in AAOG Congo which
holds a 56% interest in Tilapia in the Republic of the Congo
("Disposal").
The consideration for the Disposal was GBP1 million, of which
GBP500,000 was in six equal monthly cash instalments from the date
of completion and GBP500,000 of Zenith Ordinary Shares. In
addition, Zenith was to fund AAOG's share of a US$5.5 million work
programme on Tilapia and fund the upfront cash element of any
signature bonus payable for the new licence negotiated with
Congolese Ministry of Hydrocarbons.
The Disposal would have resulted in AAOG retaining a carried
interest in AAOG Congo without the requirement to raise additional
funds for the future work programme.
The Company had anticipated that completion of the Disposal
would take place swiftly following the shareholders' meeting in
January 2020. Indeed, AAOG's cash position did not at the time
allow for the completion of the Disposal to be delayed much beyond
that. Disappointingly, Ministerial consent in the Republic of Congo
to the change of control of AAOGC, a condition to the Disposal, was
not forthcoming. Neither AAOG nor Zenith could say with any
certainty when such consent would be forthcoming, particularly in
light of the COVID-19 pandemic which restricted the ability to meet
with officials and progress matters.
AAOGC's creditor position in December 2019 was circa $3 million
and the team in country was continuing operations and managing the
creditors carefully with the cash that AAOG had been able to
contribute as well as receipts from the sale of oil production from
the Tilapia field. Since 20 January 2020, AAOG's primary cash
source has been its strategic investor, Forum Energy Services
Limited ("Forum"). Forum has indicated to the Board of AAOG that it
was not prepared to fund any further cash calls from AAOGC given
the uncertainty outlined above. This coupled with the collapse in
the oil price in March 2020 and the impact of the COVID-19 pandemic
meant a worsening financial position for AAOGC.
The Board of AAOG faced the very real prospect of AAOGC falling
into some form of insolvency procedure which would obviously mean
the Disposal would not complete and the Company would receive none
of the consideration from Zenith.
Given the uncertainty as to the timing of completion of the
Disposal, as well as no certainty on when AAOG could expect to
receive funds from Zenith and when Zenith would assume AAOGC's
liabilities and running costs pursuant to the Disposal, the Company
and Zenith therefore entered into an agreement in April 2020 to
accelerate the assumption by Zenith of the running costs and
liabilities of AAOGC, as well as amend the terms of the
consideration payable pursuant to the Disposal (the
"Consideration") and the terms of Completion.
The Company agreed to Dispose of 100% of AAOG's interest in
AAOGC rather than the 80% originally envisaged. The Consideration
was amended to GBP200,000 which was paid in cash. The payment of
the Consideration was not conditional on Ministerial consent.
Zenith therefore acquired 100% of AAOGC on 3 May 2020 and assumed
responsibility for all liabilities within and ongoing costs
associated with AAOGC from that Date. As a result, shareholders in
AAOG no longer have any exposure to the Tilapia asset or its
liabilities or receivables.
The Disposal constituted a fundamental change of business of the
Company as the Company ceased to own, control or conduct all or
substantially all, of its existing trading business, activities or
assets. The Company is now therefore an AIM Rule 15 cash shell and
as such will be required to make an acquisition or acquisitions
which constitutes a reverse takeover under AIM Rule 14 (including
seeking re-admission as an investing company (as defined under the
AIM Rules)) on or before the date falling six months from 5 May
2020 or be re-admitted to trading on AIM as an investing company
under the AIM Rules (which requires the raising of at least GBP6
million) failing which, the Company's Ordinary Shares will then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM will be cancelled six months from the date of
suspension should the reason for the suspension not have been
rectified.
The Company is now actively seeking an acquisition of an asset
or a company with the ability to increase value for shareholders
and the Board is actively reviewing opportunities.
Results for the year
Group's Loss for the period from continuing operations
GBP462,000 (2019 - GBP2,212,000), the reduced loss is due to lower
staffing costs and overhead's since the marketing and sale of
AAOG.
With the sale of AAOGC the Company continues to review and
reduce overhead costs, as it seeks new opportunities.
Finance
To protect the interests of its members the Company has entered
into an unsecured convertible loan note in June 2020 amounting to
GBP1,500,000 the first drawdown of GBP160,000 was completes on 12
June 2020. All drawdowns and associated fees are convertible into
ordinary shares.
The Company continues to discuss finance options with external
investors and its major shareholder.
Overall strategy
With the sale of its only asset in May 2020, the Company is
currently an AIM Rule 15 cash shell and is currently looking at
opportunities for acquisitions that will establish a near term cash
generating business in the natural resources sector.
The board will keep shareholders informed of its progress on a
regular basis.
Sarah Cope
Non-Executive Chair
_______________
Consolidated Statement of Comprehensive Income
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
(Restated (audited)
*)
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue - - -
Cost of sales - - (755)
--------- ---------- ----------
- - (755)
Administrative expenses 5 (462) (1,970) (3,604)
Share-based payment (charge) /credit - (47) 135
--------- ---------- ----------
Loss from operating activities
before exceptional items (462) (2,017) (4,224)
Fundraising costs - (195) -
--------- ---------- ----------
Loss from operating activities (462) (2,212) (4,224)
Finance costs - - (4,675)
--------- ---------- ----------
Loss before tax (462) (2,212) (8,899)
Taxation - - -
--------- ---------- ----------
Loss for the period from continuing
activities (462) (2,212) (8,899)
Loss for the period from discontinued
operation 9 (172) (241) (10,495)
--------- ---------- ----------
Total loss for the year (634) (2,453) (19,394)
Other comprehensive loss
Exchange differences on translating
foreign operations 229 60 40
---------- ----------
Total comprehensive loss for the
period (405) (2,393) (19,354)
Loss per share
Basic earnings (loss) per share 6
- From continuing operations (0.10) (0.92) (2.87)
--------- ---------- ----------
- From discontinued operations (0.04) (0.11) (3.39)
--------- ---------- ----------
Total (0.14) (1.03) (6.26)
========= ========== ==========
* The 30 June 2019 comprehensive income number have been
restated for discontinued operation, see note 9
Consolidated Statement of Financial Position as at 30 June
2020
30 June 30 June 31 December
2020 2019 2019
(audited)
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 7 - 139 -
Intangible assets 8 - 12,709 -
--------- --------- ------------
- 12,848 -
--------- --------- ------------
Current assets
Assets included in disposal
group
classified as held for sale 9 - - 5,482
Stock - 37 -
Trade and other receivables 10 52 3,651 497
Prepayments 77 89 9
Cash and cash equivalents 170 739 170
--------- --------- ------------
299 4,516 6,158
Total assets 299 17,364 6,158
========= ========= ============
Equity
Share capital 11 24,274 16,273 24,203
Share premium 17,210 17,159 17,110
Currency revaluation reserve - 249 229
Retained deficit (41,879) (24,351) (41,474)
--------- --------- ------------
(395) 9,330 68
--------- --------- ------------
Current liabilities
Liabilities included in disposal
group
classified as held for sale 9 - - 5,379
Trade and other payables 694 5,118 711
Provisions 12 - 2,916 -
694 8,034 6,090
Total equity and liabilities 299 17,364 6,158
========= ========= ============
Consolidated Statement of Changes in Equity
Share capital Share premium Currency Retained
translation deficit
reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December
2018 13,272 14,492 189 (21,945) 6,008
Share issue for the
period 3,000 3,000 - - 6,000
Costs of issue of
share capital - (333) - - (333)
Share-based payment
charge - - - 47 47
Total comprehensive
loss for the period - - 60 (2,453) (2,393)
---------------- ---------------- -------------- ----------- ---------
Balance at 30 June
2019 16,272 17,159 249 (24,351) 9,329
Share issue for the
period 7,931 318 - - 8,249
Costs of issue of
share capital - (367) - - (367)
Share-based payment
credit - - (182) (182)
Total comprehensive
loss for the period - - (20) (16,941) (16,961)
---------------- ---------------- -------------- ----------- ---------
Balance at 31 December
2019 24,203 17,110 229 (41,474) 68
Share issue for the
period 71 100 - - 171
Total comprehensive
loss for the period - - (229) (405) (634)
Balance at 30 June
2020 24,274 17,210 - (41,879) (395)
================ ================ ============== =========== =========
Consolidated Statement of Cashflows
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
(* Restated) (audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Total comprehensive loss for
the period (462) (2,212) (8,899)
Depreciation and amortisation 13 11
Impairment of fixed assets - - 27
Loss on issue of own equity - - 4,675
Share-based payment charge/(credit) 47 (135)
--------- ------------- ----------
Net cash used in continuing
operation (462) (2,152) (4,321)
Net cash used in discontinued
operation (172) (310) (1,482)
--------- ------------- ----------
Net cash used in operating activities (634) (2,462) (5,803)
Decrease/(increase) in trade
and other receivables 445 (20) (203)
(Increase)/decrease in prepayments (68) (44) 36
Decrease in trade and other
payables (17) (159) (756)
--------- ------------- ----------
Cash used in operating activities (274) (2,685) (6,726)
--------- ------------- ----------
Cash flows from investing activities
Proceeds from sale of investment 103 - -
in subsidiary
Purchase of tangible fixed assets - - (8)
Cash used by discontinued operations - (2,364) (2,065)
Net cash from/used in investing
activities 103 (2,364) (2,073)
--------- ------------- ----------
Cash flows from financing activities
Issue of share capital 171 6,000 9,574
Costs of issuing share capital - (333) (700)
Net cash flows from financing
activities 171 5,667 8,874
--------- ------------- ----------
Net increase in cash and cash
equivalents - 618 75
Cash and cash equivalents at
beginning of period 170 121 121
Cash and cash equivalents at
year end 170 739 196
Cash and cash equivalents included
in disposal group - (675) (26)
Cash and cash equivalents at
end of period 170 64 170
========= ============= ==========
*The 30 June 2019 Consolidated Statement of Cash Flow has been
restated for discontinued operation, see note 9.
Notes to the Financial Statements
1. REPORTING ENTITY
Anglo African Oil & Gas plc is a company incorporated and
domiciled in England and Wales. The address of the Company's
registered office is 27/28 Eastcastle Street, London, W1W 8DH.
In preparing the consolidated interim financial statements for
the six months ended 30 June 2020 the financial statements of its
subsidiary undertakings, Sonnberg Diamonds (Namibia) (Pty) Limited
and Anglo African Oil & Gas Congo SAU (AAOGC), has been
included in discontinued operations as AAOGC was sold in May
2020.
Anglo African Oil & Gas SAU is a company registered in
Republic of the Congo. The office address is Site de Tilapia, Route
Nationale no. 5, BP-1753, Pointe-Noire, Republic of the Congo.
Sonnberg Diamonds (Nambia) (Pty) Limited is a dormant company
registered in Namibia. The registered office address is PO Box 199,
Lüderitz Namibia.
2. ACCOUNTING POLICIES
Statement of compliance
This consolidated interim financial report does not include all
the information required for full annual financial statements
prepared in accordance with International Financial Reporting
Standards. The financial statements are unaudited and do not
constitute statutory accounts as defined in section 434(3) of the
Companies Act 2006. Selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in financial performance and position
of the Group since the last annual consolidated financial
statements for the year ended 31 December 2019.
A copy of the audited annual report for the year ended 31
December 2019 will be delivered to the Registrar of Companies after
the approval of shareholders. The auditor's report on these
accounts was qualified and did contain statements under s498(2) or
s498(3) of the Companies Act 2006.
This consolidated interim financial report was approved by the
Board of Directors on 7 September 2020.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in this
consolidated interim financial report are the same as those applied
by the Group in its consolidated financial statements for the year
ended 31 December 2019.
4. OPERATING SEGMENTS
In May 2020 the Company sold its 100% owned subsidiary Anglo
African Oil & Gas Congo, since the sale the Company has become
a Cash Shell under Rule 15 of AIM. Therefore, the Company only has
one operating segment reflected in these financial statements.
5. ADMINISTRATIVE EXPENSES
Administrative expenses include:
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
GBP'000 GBP'000 GBP'000
Costs incurred relating to potential
acquisition - 290 290
Depreciation and amortisation - 13 11
Directors Remuneration 133 395 572
The directors are considered to be key management personnel.
6 . BASIC AND DILUTED LOSS PER SHARE
Basic
The calculation of loss per share for the six months to 30 June
2020 is based on the loss for the period attributable to ordinary
shareholders of GBP634,000 divided by a weighted average number of
ordinary shares in issue of 439,958,935 (December 2019 -
GBP19,394,000 - Number 309,622,332).
In the opinion of the directors, all of the outstanding share
options and warrants are anti-dilutive and, hence, basic and fully
diluted loss per share are the same.
7. PROPERTY, PLANT AND EQUIPMENT
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
GBP'000 GBP'000 GBP'000
Cost
Balance at 1 January - 5,032 5,032
Additions continuing operations - - 8
Additions discontinuing operations - 41 101
Transfer to assets available for
sale - - (4,839)
Impairment - - (302)
Balance at period end - 5,073 -
Depreciation
Balance at 1 January - 4,921 4,921
Transfer to assets available for
sale - - (4,657)
Depreciation - 13 11
Impairment - - (275)
---------- --------- ---------
Balance at period end - 4,934 -
Carrying amounts
At period end - 139 -
========== ========= =========
8. INTANGIBLE ASSETS
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
GBP'000 GBP'000 GBP'000
Cost
Balance at 1 January 1,154 13,038 13,038
Additions discontinued operations - 2,323 1,964
Transfer to asset available
for sale - - (13,848)
--------- --------- ----------
Balance at period end 1,154 15,361 1,154
--------- --------- ----------
Amortisation
Balance at 1 January 1,154 2,652 2,652
Impairment - - 9,494
Transfer to asset available
for sale - - (10,992)
--------- --------- ----------
Balance at period end 1,154 2,652 1,154
--------- --------- ----------
Balance at period end - 12,709 -
========= ========= ==========
9. DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCOUNTED OPERATIONS GROUP
On 4 May 2020 the group sold its 100% owned subsidiary Anglo
African Oil & Gas Congo SAU (AAOGC), the gross proceeds of the
sale were GBP200,000, the carrying value of the disposal group has
been reduced to GBP103,000 to reflect the legal costs of the
disposal.
Under IFRS 5 the results of the disposal group are included
separately in the consolidated income statement and the
comparatives are restated. The detailed results are summarised as
follows:
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
GBP'000 GBP'000 GBP'000
Revenue 94 173 319
Cost of sales (192) (259) (1,070)
---------- ---------- -----------
(98) (86) (751)
Administrative expenses (74) (154) (265)
Impairment of exploration and
evaluation assets - - (9,493)
---------- ---------- -----------
Operating loss (172) (240) (10,509)
Finance cost - (1) (10)
---------- ---------- -----------
Loss from discontinuing operation
before tax (172) (241) (10,519)
Taxation - - 24
---------- ---------- -----------
Loss for the period from discontinuing
operation (172) (241) (10,495)
Other comprehensive income - -
---------- ---------- -----------
Total comprehensive loss for
the period (172) (241) (10,495)
Loss on re-measurement and
disposal
Loss before tax on re-measurement
to fair value less (172) (241) (10,495)
Total loss on re-measurement
and disposal (172) (241) (10,495)
Loss for the period from discontinuing
operations (172) (241) (10,495)
========== ========== ===========
Group
The carrying amounts of assets and
liabilities in this disposal group YEAR
are summarised as follows:ED
31.12.19
GBP'000
Non-current assets
Property, plant and equipment 182
Intangible assets 2,856
Current assets
Stock 37
Trade receivables 125
Other receivables 2,256
Cash and cash equivalents 26
-----------
Assets classified as held for sales 5,482
-----------
Current liabilities
Provisions 2,942
Trade and other payables 2,437
-----------
Liabilities classified as held for
sales 5,379
===========
10. TRADE AND OTHER RECEIVABLES
SIX SIX
MONTHS MONTHS YEAREDEDED
30.06.20 30.06.19 31.12.19
GBP'000 GBP'000 GBP'000
Trade receivables - 172 -
Directors' loan - - 25
Other receivables 52 5,981 472
Less: expected credit loss provision - (2,502) -
--------- --------- ---------
52 3,651 497
========= ========= =========
The 100% owned subsidiary Anglo African Oil & Gas Congo SAU
(AAOGC), was sold in May 2020, with the sale of the AAOGC the
Company impaired the amounts owed by AAOGC based on the sale
proceeds Note 9.
11. SHARE CAPITAL
Allotted, issued and fully paid:
Number: Class: Nominal SIX SIX
value: MONTHS MONTHS YEAR
ENDED ENDED ENDED
30.06.20 30.06.19 31.12.19
GBP GBP GBP
GBP0.001
*(2019 -
466,619,543 Ordinary GBP0.05) 466,620 11,896,453 19,827,420
39,922,460 Deferred GBP0.09 3,593,021 3,593,021 3,593,021
86,998,615 B Deferred GBP0.009 782,988 782,988 782,988
396,548,396 C Deferred GBP0.049 19,430,871 - -
----------- ----------- -----------
24,273,500 16,272,462 24,203,429
=========== =========== ===========
*On 13 January 2020 the Company reduced the nominal value of
each Ordinary Share from GBP0.05 to GBP0.001, by subdividing each
ordinary share into one new ordinary share of GBP0.001 and one
deferred share of GBP0.049.
The holders of deferred shares are not entitled to receive
dividends or to vote at meetings of the Company and have no
material interest in the Company's residual assets.
12. PROVISIONS
SIX SIX
MONTHS MONTHS YEAR
ENDED ENDED ENDED
30.06.20 30.06.19 31.12.19
GBP GBP GBP
Balance brought forward - 2,792 2,907
Provision for made during the
period - 124 35
Transfer to liabilities included
in disposal group classified
as held for sale - - (2,942)
---------- --------- ---------
At end of period - 2,916 -
========== ========= =========
13. RELATED PARTY TRANSACTION
During the period the Company was invoiced for consultancy
services from 'The Petroleum and Renewable Energy Company Limited'
totalling GBPNil (H1 2019 - GBP141,000) as at 30 June 2020 there
was Nil (H1 2019 - GBP28,000) of these invoices outstanding and
included in trade creditors. Phil Beck is a director of The
Petroleum and Renewable Energy Company Limited.
14. CONTINGENT LIABILITIES
The Company has received notice of a potential claim from Askell
Limited ("Askell"), an energy advisory firm, for US$1.75 million.
Askell's alleged claim relates to the Company's aborted efforts to
acquire the Tunisian assets of MedCo. No formal legal claim has
been filed against the Company.
The Board of Directors believes that Askell's potential claim is
without merit, as the claim is in respect of completion fees in
relating to the Medco acquisition. The acquisition was rejected by
the board of AAOG in March 2019.
15. EVENTS AFTER THE REPORTING PERIOD
On 18 August 2020 the Company issued 7,089,684 ordinary shares
at a price of GBP0.02821 each and on 2 September 2020 the Company
issued 15,158,637 ordinary shares at a price of GBP0.002553 each in
respect of the conversion by Riverfort Global Opportunities PCC
Limited ("Riverfort") of GBP20,000 and GBP38,700 respectively in
principal of the convertible loan note entered into between the
Company and Riverfort on 10 June 2020.
Enquiries:
Anglo African Oil & Gas plc info@aaog.com
Sarah Cope, Non-Executive Chair
finnCap Ltd (Nominated Adviser) Tel: +44 20 7220 0500
Christopher Raggett, Giles Rolls, Teddy
Whiley (Corporate Finance)
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END
IR SSSFLAESSEDU
(END) Dow Jones Newswires
September 08, 2020 10:45 ET (14:45 GMT)
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