TIDMADME
RNS Number : 8781P
ADM Energy PLC
23 June 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
23 June 2022
ADM Energy PLC
("ADM", the "Group" or the "Company")
Full Year Results
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC), a natural
resources investing company, announces its audited full year
results for the 12 months ended 31 December 2021.
Investment Highlights
Aje Field, OML 113
-- First full year of increased interest in the Aje Field,
Nigeria (ADM increased its equity investment from 5% to 9.2% in
December 2020)
-- Total oil production in 2021 of 407,705 bbls and barrels of
oil per day of 1,117 bopd 103 bopd net to ADM)
-- Completed the 15(th) and 16(th) liftings at the Aje Field in
April and October 2021 for a total of 457,379 barrels with a net
share of 49,099
Barracuda Field, OML 141
-- Acquired an indirect interest in a Risk Sharing Agreement
("RSA") for the development of the Barracuda Field. Subsequently,
commissioned a Competent Person's Report ("CPR") by Xodus on the
Barracuda Field
-- Post-period announced the result of the CPR on the Barracuda
prospect with a 2U (P50) case, the NPV10 is +$99mm with an IRR of
45%
Disposal of interest
-- Disposed of 188,778 shares in Superdielectrics Ltd
("Superdielectrics") for a total consideration of GBP849,501, which
provided a profit of GBP656,000 on ADM's original investment
Financial and Corporate Highlights
-- Revenue increased by 125% to GBP1.8m (2020: GBP0.8m),
reflecting a recovery in the oil price and ADM's increased profit
interest in the Aje Field
-- Loss after tax decreased 64% to GBP2.5m (2020: GBP6.9m loss)
-- Completed an oversubscribed fundraising of GBP1,220,000 in
March 2021, and raised an additional GBP475,000 in November
2021
-- Appointed Oliver Andrews, former Chief Investment Officer at
the Africa Finance Corporation, as Non-executive Chairman and Dr
Babatunde Pearse, as Chief Engineer on the Aje Development to
oversee the next phase of Aje development
-- Post period, in January 2022, the Company completed an equity
fundraising of approximately GBP561,000 with Optima Resources
Limited
Osamede Okhomina, CEO of ADM Energy, said: "2021 was a good year
of progress for ADM Energy. It was our first full year since almost
doubling our interest in the Aje Field which helped achieve a
significant increase in revenues over the previous year. We also
completed an acquisition giving us indirect interest in the
Barracuda field, strengthening our foothold in West Africa.
"2022 is set to be an important year for the development of Aje
with PetroNor expected to take a significant stake in the asset
demonstrating a commitment and confidence of the potential of Aje.
With PetroNor on board, the partners can push ahead with
development plans to increase production at Aje.
"In parallel to Aje and Barracuda, we continue to target the
acquisition of undervalued 2P reserves that can be added to our
investment portfolio and have had encouraging discussions with
potential partners regarding various opportunities. It remains a
buyers' market as majors look to divest non-core projects
presenting opportunities for companies such as ADM who have the
network, expertise, and access to capital to progress projects that
can potentially bring significant value creation for
shareholders."
Enquiries:
ADM Energy plc +44 20 7459 4718
Osamede Okhomina, CEO
www.admenergyplc.com
Cairn Financial Advisers LLP +44 20 7213 0880
(Nominated Adviser)
Jo Turner, James Caithie
Hybridan LLP +44 20 3764 2341
(Broker)
Claire Louise Noyce
ODDO BHF Corporates & Markets AG +49 69 920540
(Designated Sponsor)
Michael B. Thiriot
Luther Pendragon +44 20 7618 9100
(Financial PR)
Harry Chathli, Alexis Gore, Tan Siddique
About ADM Energy PLC
ADM Energy PLC (AIM: ADME; BER and FSE: P4JC) is a natural
resources investing company with an existing asset base in Nigeria.
ADM Energy holds a 9.2% profit interest in the oil producing Aje
Field, part of OML 113, which covers an area of 835km(2) offshore
Nigeria. Aje has multiple oil, gas, and gas condensate reservoirs
in the Turonian, Cenomanian and Albian sandstones with five wells
drilled to date.
ADM Energy is seeking to build on its existing asset base in
Nigeria and target other investment opportunities across the West
African region in the oil and gas sector with attractive risk
reward profiles such as proven nature of reserves, level of
historic investment, established infrastructure and route to early
cash flow.
Operating Review
2021 was an important year of progress for ADM Energy. It marks
the first full year since the Company consolidated its position in
the Aje Field OML 113, expanding ADM's profit interest from 5% to
9.2%. The Company announced the 15th and 16th liftings at the Aje
Field for a total of 457,379 barrels with a net share of
49,099.
For the full year, revenue increased by 125% to GBP1.8 million
(2020: GBP0.8 million) reflecting the first two liftings at the Aje
Field since the Company increased its interest in Aje alongside a
recovery in oil prices in 2021.
Alongside Aje, the Company entered 2021 with a strategy to
continue to pursue high-quality assets, with attractive risk-reward
profiles, and successfully completed the acquisition of an indirect
interest for the large-scale Barracuda Field in OML 141.
ADM also welcomed Oliver Andrews as Non-executive Chairman and
strengthened the team's technical expertise with the appointment of
industry veteran Dr Babatunde Pearse as Chief Engineer on the Aje
Development.
OML 113 - Aje Field
The Aje Field on OML 113 offshore Nigeria is an oil producing
asset which is rich in gas and condensate reserves. It is
strategically located 24km offshore Lagos where it benefits from
increasing local energy demand, particularly for gas, which is
viewed as a replacement fuel for diesel and commands a premium. The
field is also within close proximity to the West African Gas
Pipeline which presents a potential opportunity for gas
monetisation in neighbouring countries such as Benin and Togo.
Oil Production:
2021 2020
Gross 407,705 bbls 698,649 bbls
------------- -------------
1,117 bopd 1,909 bopd
------------- -------------
Net 37,595 bbls 36,295 bbls
------------- -------------
103 bopd 99.2 bopd
------------- -------------
This is the first full year since the Company announced the
completion of the transaction with EER (Colobos) Nigeria Limited
("EER") in December 2020 benefitting from an increased 9.2% profit
interest in the field, nearly doubling ADM's share of revenue,
reserves and net production.
During the period, oil production continued from the Aje Field
(Aje-4 and Aje-5) at an average of 1,117 bopd (FY 2020: 1909).
Total gross production volume amounted to approximately 407,705
barrels of oil. As stated previously, the drop in volume reflects
the decision by the Joint Venture Partners ("JV Partners") to
continue a more thorough and extended period of maintenance on the
Floating Production Storage and Offloading ("FPSO") while oil
prices were depressed at the beginning of the year and due to
limited gas handling capacity of the FPSO.
The Company announced the 15th and 16th liftings at the Aje
Field in April and October 2021 for a total of 457,379 barrels with
a net share of 49,099. These were the first liftings since the
Company consolidated its interest in the asset. The proceeds of the
liftings were applied against the project debt, contributing to a
reduction in the outstanding balance and the JV Partners anticipate
further liftings in 2022.
The JV Partners have assessed that the current FPSO is not
suitable for the long-term development plans for OML-113 and are
progressing plans to replace the current FPSO to increase capacity.
As a result, the JV Partners declined to commit to a long-term
extension of the current FPSO contract and the current FPSO
operator will stop production in preparation for demobilisation
from the field. This temporary suspension is a necessary step to
ensure future production is not limited by FPSO capacity and
production issues. The JV Partners are working towards securing an
optimum FPSO that will match plans to significantly increase
production from the redevelopment of the Aje field and the Company
will update the market in due course.
A crucial step forward in the future development of Aje came
post period in January 2022 when Panoro Energy ASA ("Panoro") and
PetroNor E&P Limited ("PetroNor") announced that the
transaction for Panoro to sell 10% of its ownership to PetroNor
(the "Transaction") had received all government approvals. PetroNor
and Panoro are progressing the final stages and have agreed a
long-stop date to complete the transaction at 30 June 2022.
PetroNor's decision to take a significant stake in the Aje field is
a strong endorsement of the potential of the asset.
The expected completion of the Transaction will accelerate the
JV Partners Final Investment Decision on the long-term field
development plans for the Aje Field and PetroNor's experience in
development and production will play a key role in the next phase
of Aje's development. The Field Development Plan, which includes
the potential drilling of three new wells, could significantly
increase production of oil and gas liquids at a time nations around
the world are seeking new sources of oil and gas. Chief Engineer on
the Aje Development, Dr Babatunde Pearse, who has an IOC background
and extensive industry experience will lead the planning,
development and oversee Front End Engineering Design ("FEED")
studies to support the Final Investment Decision.
Barracuda
In April 2021, ADM completed the acquisition of an indirect
interest in a Risk Sharing Agreement ("RSA") for the development of
the Barracuda Field. Located in OML 141, the Barracuda Field is an
existing discovery asset which covers 103km(2) in the swamp/shallow
waters of the Niger Delta.
In May 2021, the Company commissioned Xodus Group Limited
("Xodus"), an independent, international energy consultancy, to
prepare a CPR on the field which was completed in March 2022. Xodus
calculated gross, unrisked Prospective Resources for the RSA using
standard geological and engineering approaches applied to the data
made available by ADM.
The CPR demonstrated the prospect of Barracuda as prospective
and robust for development, assuming at least 70mmbbl Stock tank
oil initially in place ("STOIIP") is discovered, with a 2U (P50)
case, the NPV10 is +$99 million with an IRR of 45%.
The findings from the CPR provide a solid foundation to continue
towards the next stage of technical review which will include
subsurface analysis and gaining more analogue data from
neighbouring fields to better understand the trap mechanisms.
The Company will use the findings from the CPR and any
additional work required to further appraise the asset and make an
investment decision.
Interim Injunction
As announced in November 2021, K.O.N.H. (UK) Ltd ("KONH") was
notified by Noble Hill-Network Limited ("NHNL") of a dispute
regarding its ownership in NHNL and therefore its interest in the
Barracuda Field in OML 141. ADM and its legal advisers consider
that the dispute brought by NHNL is without merit and ADM confirms
there has been no change in its position as the majority
shareholder in KONH and the subsequent 70 per cent. indirect
interest in NHNL.
The Company and KONH obtained an interim injunction at the
Federal High Court of Nigeria, Lagos ("Court") restraining NHNL
from selling, disposing, divesting or tampering with the 70%
shareholding interest of KONH in NHNL to third-party investors or
in any other manner whatsoever.
NHNL applied to the court to set aside the interim injunction
order. The Court pronounced NHNL's application as lacking in merit
and the application was dismissed.
The Court has since adjourned this matter until 30 June 2022 and
the interim injunction remains in place.
Corporate
The Company has sought to appoint high calibre individuals who
will propel the business forward including Oliver Andrews as the
new Non-executive Chairman. He replaces Peter Francis who departed
due to personal circumstances, and whose contribution to the
business was noted and for which the board noted its appreciation.
Mr Andrews is the former Chief Investment Officer at the Africa
Finance Corporation, one of the largest investment funds in Africa.
Over the last 35 years, he has overseen investments of
approximately US$10 billion and originated investments deals in
natural resources and infrastructure across the continent, worth
US$100 billion.
ADM continues to bolster its technical team to advance the
Company's existing assets and evaluate new prospects. Dr Babatunde
Pearse was appointed as Chief Engineer for the Aje Field
Development Plan to oversee both the next phase of development at
Aje and the FEED ("Front End Engineering Studies"). Dr Pearse is an
industry veteran with an extensive background with International
Oil Companies ("IOC"s).
Financial Review
The financial results of the Group improved markedly on last
year as they benefitted from an increased profit interest in the
Aje Field, and the oil price recovered in the context of a somewhat
abating Covid crisis. Also, the Group successfully completed the
acquisition of a controlling indirect interest in the Risk Sharing
Agreement for the development of the large-scale Barracuda Field in
OML 141.
Revenue and profit
For the year ended 31 December 2021, the Group's revenue
increased by 125% to GBP1.8 million (2020: GBP0.8 million). The
higher revenue reflects the better oil price environment for the
two liftings which were completed in April and October 2021 for a
total gross production of 457,379 bbls with a net share of 49,099
bbls for ADM.
Operating costs increased by 36% to GBP1.9 million (2020: GBP1.4
million) as certain temporary cost-cutting initiatives taken by the
Aje partnership in 2020 to mitigate the impact of low oil prices,
were reversed as a response to a much better commodity pricing
environment.
Decommissioning provision amounted to GBP1.3 million (2020: GBP1
million).
Depreciation & amortisation expense decreased by 45% to
GBP0.05 million (2020: GBP0.09 million) reflecting the lower value
of ADM's interest in Aje after an impairment was recognised in 2020
to reflect the recent Petronor/Panoro transaction.
Administrative expenses decreased by 12% to GBP2.3 million
(2020: GBP2.6 million) remaining at a relatively high level and
reflecting high M&A evaluation activity, as well as the costs
related to the completion of the Group's acquisition of a
controlling indirect interest in the Barracuda Field RSA.
Finance costs decreased by 16% to GBP0.06 million (2020: GBP0.07
million).
As a result, the loss after taxation decreased 64% to GBP2.5
million (2020: GBP6.9 million loss). The Directors do not propose a
dividend (2020: GBPnil).
Cash flows and liquidity
After adjusting for the conversion of warrants issued in
settlement of fees and working capital movements, cash flow loss
from operating activities increased by 40% to GBP2.1 million (2020:
GBP1.5 million loss).
The GBP2.7 million owed to the Aje JV has this year been
accounted for in non-current liabilities rather than in current
liabilities. The liability will be repaid in due time out of Aje
production cash flows.
During the period, the Group raised additional equity of GBP1.7
million in two fundraisings. In March 2021, the Group raised
GBP1,220,000 of equity for general working capital purposes. In
November 2021, the Group raised GBP475,000 of equity also for
general working capital purposes.
As of 31 December 2021, the Group had cash and cash equivalents
of GBP110,000 (31 December 2020: GBP30,000).
Post period, in January 2022, the Company announced an equity
fundraising of approximately GBP561,000 with Optima Resources
Limited.
Funding and disposals
The Company raised a total of approximately GBP1.7 million in
two fundraisings in 2021. In March 2021, ADM completed an
oversubscribed fundraising raising GBP1,220,000 before expenses and
a further GBP475,000 raised in November 2021, including a
subscription from Directors. In addition, post period, the Company
announced an equity fundraise of approximately GBP561,000 with
Optima Resources Limited.
In May 2021, the Company completed the sale of 188,778 shares in
Superdielectrics for a total consideration of GBP849,501, a profit
of GBP656,000 and an increase in value of approximately 340% on
ADM's original investment of GBP199,875 in 2017 and 2018. The
proceeds of the sale, together with the above fundraises, have been
used to support ADM's growth strategy.
Outlook
The Company considers the progress it has made in 2021 provides
an excellent platform for growth. In Aje, ADM has an interest in a
high-quality asset with scope for significant increase in
production. PetroNor coming on board is a great endorsement of
Aje's potential and if, as is expected, PetroNor completes the
formalities of the acquisition, it adds a heavyweight partner that
will be keen to extract further value from the asset. It will
enable the partners to progress the Field Development Plan and
significantly increase production at a time when new supplies of
oil and gas are increasingly needed around the world.
Alongside Aje, Barracuda took a major step forward with the
completed CPR which showed Barracuda has the potential to be
prospective for development. In 2022 the Company will continue
further work and analysis to help further understand the assets
potential before making an investment decision.
With Aje and Barracuda progressing, there remain opportunities
for ADM, with its expertise, deep network and access to capital
with strong relationships with majors such as Trafigura, to add
additional high-quality assets to its investment portfolio. The
Company considers it is well placed to take advantage of a market
whereby International Oil Companies are in the process of extensive
divestment programmes and, in line with the Group's strategy, ADM
will continue to seek out assets in West Africa at attractive
valuations with substantial upside for shareholders. In addition,
and as part of its investment strategy, ADM remains open to
potential renewable energy investments, primarily in Europe, if
there is an opportunity to bring additional value to
shareholders.
Group Income Statement and Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
Note GBP'000 GBP'000
Continuing operations
Revenue 3 1,751 799
Operating costs (1,895) (1,423)
Administrative expenses (2,340) (2,616)
Impairment of investment - (4,628)
Consultancy fee income - 353
Operating loss 4 (2,484) (7,515)
Movement in fair value of investments - 678
Finance costs 5 (56) (67)
Loss on ordinary activities before taxation (2,540) (6,904)
Taxation 7 - -
Loss for the year (2,540) (6,904)
--------------------------------------------- ----- -------- --------
Other Comprehensive income:
Exchange translation movement 141 (233)
--------------------------------------------- ----- -------- --------
Total comprehensive income for the year (2,399) (7,137)
--------------------------------------------- ----- -------- --------
Basic and diluted loss per share: 8
From continuing and total operations (1.6)p (8.7)p
Group and Company Statements of Financial Position
as at 31 December 2021
GROUP COMPANY
2021 2020 2021 2020
Notes GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------ --------- --------- --------- ---------
NON-CURRENT ASSETS
Intangible assets 9 16,149 16,007 - -
Investment in subsidiaries 10 - - 12,335 12,316
Fixed asset investments 11 576 - 576 -
16,725 16,007 12,911 12,316
---------------------------------- ------ --------- --------- --------- ---------
CURRENT ASSETS
Investments held for trading 12 28 878 28 878
Inventory 13 33 32 - -
Trade and other receivables 14 130 109 130 109
Cash and cash equivalents 15 110 30 109 30
---------------------------------- ------ --------- --------- --------- ---------
301 1,049 267 1,017
---------------------------------- ------ --------- --------- --------- ---------
CURRENT LIABILITIES
Trade and other payables 16 1,534 4,206 1,515 1,429
Convertible loans 17 212 235 212 235
1,746 4,441 1,727 1,664
---------------------------------- ------ --------- --------- --------- ---------
NET CURRENT LIABILITIES (1,445) (3,392) (1,460) (647)
NON-CURRENT LIABILITIES
Convertible loans 17 - 284 - 284
Other borrowings 17 247 297 247 297
Other payables 2,783 - - -
Decommissioning provision 18 1,264 1,032 - -
---------------------------------- ------ --------- --------- --------- ---------
4,294 1,613 247 581
---------------------------------- ------ --------- --------- --------- ---------
NET ASSETS 10,986 11,002 11,204 11,088
---------------------------------- ------ --------- --------- --------- ---------
EQUITY
Share capital 19 10,267 9,450 10,267 9,450
Share premium 19 38,014 36,591 38,014 36,591
Other reserves 20 960 817 960 817
Currency translation reserve (709) (850) - -
Retained deficit (37,546) (35,006) (38,037) (35,770)
---------------------------------- ------ --------- --------- --------- ---------
Equity attributable to owners
of the Company and total equity 10,986 11,002 11,204 11,088
---------------------------------- ------ --------- --------- --------- ---------
Group Statement of Changes in Equity
For the year ended 31 December 2021
Exchange
Share Share translation Retained Total
capital premium reserve Other reserves deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------- ------------ -------------- -------- -------
At 1 January 2020 8,817 34,012 (617) 870 (28,152) 14,930
Loss for the year - - - - (6,904) (6,904)
Exchange translation
movement - - (233) - - (233)
---------------------- -------- -------- ------------ -------------- -------- -------
Total comprehensive
expense for the year - - (233) - (6,904) (7,137)
---------------------- -------- -------- ------------ -------------- -------- -------
Issue of new shares 633 2,544 - (134) - 3,043
Share issue costs - (21) - - - (21)
Warrants issued in
settlement of fees - - - 170 - 170
Warrants exercised - 56 - (106) 50 -
Issue of convertible
loans - - - 17 - 17
---------------------- -------- -------- ------------ -------------- -------- -------
At 31 December 2020 9,450 36,591 (850) 817 (35,006) 11,002
Loss for the year - - - - (2,540) (2,540)
Exchange translation
movement - - 141 - - 141
---------------------- -------- -------- ------------ -------------- -------- -------
Total comprehensive
expense for the year - - 141 - (2,540) (2,399)
---------------------- -------- -------- ------------ -------------- -------- -------
Issue of new shares 817 1,517 - - - 2,334
Share issue costs - (94) - 27 - (67)
Issue of convertible
loans - - - 2 - 2
Warrants issued in
settlement of fees - - - 114 - 114
At 31 December 2021 10,267 38,014 (709) 960 (37,546) 10,986
---------------------- -------- -------- ------------ -------------- -------- -------
Company Statement of Changes in Equity
For the year ended 31 December 2021
Share Share Retained Total
capital premium Other reserves deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------------- -------- -------
At 1 January 2020 8,817 34,012 870 (29,270) 14,429
Loss for the period and
total comprehensive expense - - - (6,550) (6,550)
------------------------------ -------- -------- -------------- -------- -------
Issue of new shares 633 2,544 (134) - 3,043
Share issue costs - (21) - - (21)
Issue of convertible loans - - 17 - 17
Warrants issued in settlement
of fees - - 170 - 170
Warrants exercised - 56 (106) 50 -
At 31 December 2020 9,450 36,591 817 (35,770) 11,088
------------------------------ -------- -------- -------------- -------- -------
Loss for the period and
total comprehensive expense - - - (2,267) (2,267)
------------------------------ -------- -------- -------------- -------- -------
Issue of new shares 817 1,517 - - 2,334
Share issue costs - (94) 27 - (67)
Issue of convertible loans - - 2 - 2
Warrants issued in settlement
of fees - - 114 - 114
At 31 December 2021 10,267 38,014 960 (38,037) 11,204
------------------------------ -------- -------- -------------- -------- -------
Group and Company Statements of cash flows
For the year ended 31 December 2021
GROUP COMPANY
Note 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ----- -------- -------- -------- --------
OPERATING ACTIVITIES
Loss for the period (2,540) (6,904) (2,267) (6,550)
Adjustments for:
Fair value adjustment to investments - (678) - (678)
Warrants issued in settlement
of fees 114 170 114 170
Finance costs 56 67 56 67
Impairment of intangible assets - 4,628 - 4,996
Depreciation and amortisation 47 85 - -
Decommissioning provision 215 - - -
Operating cashflow before working
capital changes (2,108) (2,632) (2,097) (1,995)
Increase in inventories - (32) - -
Decrease/(increase) in receivables (21) 303 (21) 303
Increase/(decrease) in trade
and other payables 570 1,410 545 783
-------------------------------------- ----- -------- -------- -------- --------
Net cash outflow from operating
activities (1,559) (951) (1,573) (909)
-------------------------------------- ----- -------- -------- -------- --------
INVESTMENT ACTIVITIES
Development costs - (181) - -
Acquisition of subsidiary (180) - (180) -
Proceeds on disposal of investments 850 - 850 -
Loans to subsidiary operation - - (19) (181)
Net cash outflow from investment
activities 670 (181) 651 (181)
-------------------------------------- ----- -------- -------- -------- --------
FINANCING ACTIVITIES
Continuing operations:
Issue of ordinary share capital 1,406 848 1,406 848
Share issue costs (67) (21) (67) (21)
Repayment of borrowings (338) - (338) -
Proceeds from short term loans - 278 - 278
Net cash inflow from financing
activities 1,001 1,105 1,001 1,105
-------------------------------------- ----- -------- -------- -------- --------
Net (decrease)/increase in
cash and cash equivalents from
continuing and total operations 112 (27) 79 15
Exchange translation difference (32) 42 - -
Cash and cash equivalents at
beginning of period 30 15 30 15
C ash and cash equivalents at
end of period 15 110 30 109 30
-------------------------------------- ----- -------- -------- -------- --------
Notes to the Financial Statements
For the year ended 31 December 2021
1. General Information
The Company is a public limited company incorporated in the
United Kingdom and its shares are listed on the AIM market of the
London Stock Exchange. The Company also has secondary listings on
the Quotation Board Segment of the Open Market of the Berlin Stock
Exchange ("BER") and Xetra, the electronic trading platform of the
Frankfurt Stock Exchange ("FSE").
The Company is an investment company, mainly investing in
natural resources and oil and gas projects. The registered office
and principal place of business of the Company is as detailed in
the Company Information section on page 2.
The information included in this announcement has been extracted
from the Company's report and accounts, and, therefore, as
references and page numbers may be incorrect. Shareholders should
read the Company's report and accounts in full which can be found
on its website.
2. Principal Accounting Policies
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied throughout all periods presented in the
financial statements.
As in prior periods, the Group financial statements have been
prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and interpretations
issued by the International Accounting Standards Board (IASB)
UK-adopted International Financial Reporting Standards (adopted
IFRSs). The financial statements have been prepared using the
measurement bases specified by IFRS for each type of asset,
liability, income and expense. The measurement bases are more fully
described in the accounting policies below.
The current period covered by these financial statements is the
year to 31 December 2021. The comparative figures relate to the
year ended 31 December 2020. The financial statements are presented
in pounds sterling (GBP) which is the functional currency of the
Group.
An overview of standards, amendments and interpretations to
IFRSs issued but not yet effective, and which have not been adopted
early by the Group are presented below under 'Statement of
Compliance'.
STATEMENT OF COMPLIANCE
New standards, amendments and interpretations adopted by the
Company
The company has applied the following standards and amendments
for the first time for its annual reporting period commencing 1
January 2021:
-- Amendment to "IFRS 4 "Insurance Contracts - deferral of IFRS
9" supports the companies implementing the new IFRS 17 standard and
it makes it simpler to report their financial performances.
-- The amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
"Interest Rate Benchmark Reform - Phase 2" integrate the amendments
made in 2019. The amendments referred in phase 2, address issues
that might affect financial reporting when an existing interest
rate benchmark is replaced with an alternative benchmark interest
rate (i.e., replacement issue) and assist companies in the
application of IFRS when changes are made to contractual cash flows
or hedging relationships due to the interest rate reform, and in
providing useful information to users of the financial
statements.
-- The Amendment to IFRS 16, "Covid-19-Related Rent Concessions
beyond 30 June 2021" extends the period of application of the 2020
amendment to IFRS 16, relative to the lessees' accounting of
concessions granted as a result of Covid-19, by one year.
The adoption of the standards and interpretations described
above, already in effect at the date of this report, did not have a
material impact on the measurement of the Group's assets,
liabilities, costs and revenues.
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2021 and have not been applied in preparing these financial
statements. None of these are expected to have a significant effect
on the financial statements of the Company. There are no other
IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company.
3. Going Concern
At 31 December 2021, the Group recorded a loss for the year of
GBP2,540,000 and had net current liabilities of GBP1,445,000, after
allowing for cash balances of GBP110,000.
During the period, the Group raised additional equity of GBP1.7
million in two fundraisings. In March 2021, the Group raised
GBP1,220,000 and in November 2021, the Group raised GBP475,000.
Post period, in January 2022, the Company announced an equity
fundraising of approximately GBP561,000 with Optima Resources
Limited. In May 2021 realised GBP850,000 from the sale of
investments to provide for working capital requirements, and the
Directors have prepared cashflow forecasts for the period to 30
September 2022 to assess whether the use of the going concern basis
for the preparation of the financial statements is appropriate. In
the short term, the Group will require further additional funding
in order to meet its liabilities as they fall due and continue to
operate as a going concern. The Directors have taken into
consideration the level and timing of the Group's working capital
requirements (which takes into account recent reductions in costs
and control of discretionary spending to preserve cash flow) and
has also considered the likelihood of successfully securing funding
to meet these needs. In particular, consideration has been given to
ongoing discussions around further third-party investment and the
extent to which these discussions are advanced both in respect of
short and longer term funding. The Directors acknowledge that while
they have an expectation that funding will be secured based on this
assessment, at the date of approval of these financial statements,
no such funding has been unconditionally committed. Therefore,
while the Directors have a reasonable expectation that the Group
has the ability to raise the additional finance required in order
to continue in operational existence for the foreseeable future,
the uncertainty surrounding the ability and likely timing of
securing such finance indicates that a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
as a going concern. Were no such funding to be secured, the Group
would have no realistic alternative but to halt operations and
prepare its financial statements
on a non-going concern basis.
4. Earnings and Net Asset Value Per Share
The basic and diluted earnings per share is calculated by dividing
the loss attributable to owners of the Group by the weighted
average number of ordinary shares in issue during the year.
2021 2020
GBP'000 GBP'000
-------------------------------------------- ------------- -----------
Loss attributable to owners of the
Group
- Continuing operations (2,540) (6,904)
--------------------------------------------- ------------- -----------
Continuing and discontinued operations (2,540) (6,904)
--------------------------------------------- ------------- -----------
2021 2020
Weighted average number of shares
for calculating basic and fully diluted
earnings per share 155,014,671 79,594,655
--------------------------------------------- ------------- -----------
2021 2020
pence pence
-------------------------------------------- ------------- -----------
Earnings per share:
Loss per share from continuing and
total operations (1.6) (8.7)
--------------------------------------------- ------------- -----------
The weighted average number of shares used for calculating the diluted
loss per share for 2021 and 2020 was the same as that used for calculating
the basic loss per share as the effect of exercise of the outstanding
share options was anti-dilutive. Net asset value per share ("NAV")
The basic NAV is calculated by dividing the loss total net
assets attributable to the owners of the Group by the number
of ordinary shares in issue at the reporting date. The fully
diluted NAV is calculated by adding the cost of exercising
any extant warrants and options to the total net assets and
dividing the resulting total by the sum of the number of shares
in issue and the number of warrants and options extant at the
reporting date.
2021 2020
GBP'000 GBP'000
------------------------------------------ ------------ ------------
Total net assets of the Group 10,986 11,002
Cost of exercise of warrants 1,318 1,715
------------------------------------------- ------------ ------------
Total net assets for calculation
of fully diluted NAV 12,304 12,717
------------------------------------------- ------------ ------------
2021 2020
Number of shares in issue at the
reporting date 204,480,863 122,769,073
Number of extant warrants 31,581,012 27,726,241
------------------------------------------- ------------ ------------
Total number of shares for calculation
of fully diluted NAV 236,061,875 150,495,314
------------------------------------------- ------------ ------------
2021 2020
------------------------------------------ ------------ ------------
NAV - Basic (pence per share) 5.4p 9.0p
------------------------------------------- ------------ ------------
NAV - Fully diluted (pence per
share) 5.2p 8.5p
------------------------------------------- ------------ ------------
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END
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