TIDMLGO
RNS Number : 0028L
LGO Energy PLC
28 September 2016
For Immediate Release 28 September 2016
LGO Energy PLC
("LGO" or the "Company")
Unaudited Interim Results for 6 month period ending 30 June
2016
Chief Executive's Review
In the first half of 2016 LGO has remained focussed on its
operations in Trinidad and Spain. The Company has also been able to
address the financial pressures that resulted from the loan default
with BNP Paribas ("BNPP") which followed the sharp fall in oil
prices in late 2015. The Company has improved its balance sheet
through the reduction of costs, renegotiation of the terms of its
bank loan and through making payments to major creditors by way of
LGO shares and equity placements. LGO hopes that with renewed
financial stability and higher oil prices drilling operations can
recommence at the Goudron Field during the second half of the year
targeting the underexploited Mayaro Sandstone interval. Preparatory
work for the enhanced oil recovery ("EOR") pilot scheme is now also
well advanced and it is hoped that that project can be submitted
for regulatory approval by year end 2016.
Highlights
For the 6 month Period ending 30 June 2016
OPERATIONAL
-- Group oil sales in the period were 84,470 barrels net to LGO (1H2015: 208,209 barrels)
-- Spanish oil production has been maintained at an average of
132 barrels of oil per day ("bopd") (1H2015: 83 bopd)
-- Four well recompletions; GY-671, GY-50, GY-673 and GY-277,
have been successfully carried out at Goudron supporting 1H2016
production which averaged 418 bopd (1H2015: 1,191 bopd)
-- A new updated resource assessment issued in July 2016 for the
Goudron Field has increased reserves in all categories, proven,
probable and possible, and has increased oil in place to 975
million barrels ("mmbbls")
-- Lower royalty rates have been negotiated to support the
Goudron production at oil prices below US$50/bbl, reducing the
royalty rate on the majority of barrels produced to below 10%, a
reduction of 40% effective from 1st February 2016.
-- Plans for the drilling of the first ten Mayaro Sandstone
infill wells now await final approval by the Trinidad
authorities
-- An initial pilot EOR scheme has been prepared and is expected
to be submitted for regulatory approval before the end of 2016
CORPORATE
-- In the 6 months ending the 30 June, the Company raised a
gross amount of GBP5,576,284 through the issue of 2,595,122,080
shares at an average price of 0.215p. Of this total, 425,912,746
shares were issued to suppliers for settlement of creditor
balances.
-- After the reporting date, on the 18 August 2016, the Company
issued 727,877,588 shares at 0.146p to Well Services Petroleum
Company Limited for settlement of creditor balances.
-- On the 22 September, the Company raised GBP795,000 through a
placement of 795 million shares at a price of 0.10p for working
capital purposes.
-- At the end of Q3, the debt outstanding to BNPP was reduced to US$3m.
FINANCIAL
-- Revenue for period of GBP1,921,000 (1H 2015 GBP6,610,000), an decrease of 71%
-- Gross profit for period was a loss of GBP130,000 (1H 2015 a profit of GBP2,062,000)
-- Pre-tax group loss for period of GBP1,925,000 (1H 2015 loss
of GBP2,525,000) a 24% improvement.
NOTES
All figures are net to LGO unless otherwise stated.
Trinidad & Tobago
Strategically the Company remains focussed on Trinidad, which
represents the majority of near-term activity and significant
long-term growth potential, both within existing assets and in
additional assets acquired through third-party arrangements or
directly from the Trinidad and Tobago government. The Company holds
interests in three producing fields; Goudron, Icacos and Bonasse,
and in a number of private petroleum leases where production has
yet to be established.
Goudron
LGO acquired the rights to the Goudron Field, by way of an
Incremental Production Service Contract ("IPSC"), through its
wholly owned subsidiary, Goudron E&P Limited ("GEPL"), in
October 2012. The Goudron Field lies in the Eastern Fields Area in
south eastern onshore Trinidad. Under the terms of the IPSC the
Company acts as a service contractor to the Petroleum Company of
Trinidad & Tobago ("Petrotrin") who reimburse LGO on the basis
of the oil sales and oil price.
The Goudron Field contains two separate reservoir packages; the
shallow Mayaro (formally referred to as Goudron) Sandstones and the
deeper Grose Morne and Cruse equivalent C-sands. During drilling in
2014 and 2015 a deeper, pre-Cruse, interval of turbidite sands was
penetrated and evaluated and this has added an additional,
previously unexplored, deep resource for future exploitation.
The Company's plans for the development of the Goudron Field
included four distinct phases:
Phase 1: reactivation of existing wells and the repair and
replacement of infrastructure
Phase 2: drilling of the deep reservoir (C-sand) to further
raise production and establish the basis for an EOR (water flood)
project
Phase 3: infill drilling of the shallow reservoir (Goudron or
Mayaro Sandstone) and the simultaneous carrying out of a pilot
waterflood project in the C-sands
Phase 4: a full-field EOR project depending on results of the
pilot scheme
Phases 1 and 2 have been completed and work on Phase 3 is
waiting to commence.
During Phase 1 GEPL established a permanent camp, repaired and
expanded the oil tank batteries, and repaired and extended the
electrical grid and associated roads and bridges. In addition the
Company placed on production about 70 of the pre-existing wells
dating back to the 1920's. Production was raised from 30 to over
300 bopd, taking LGO Group production over 500 bopd for the first
time.
Phase 2 started with the drilling of GY-664 in May 2014 and
continued through to October 2015 when GY-678 was drilled and
experienced technical problems. A total of 15 new deviated C-sand
wells were drilled from a series of newly constructed drilling pads
establishing GEPL as one of the most active operators on the
island. The average cost of a deviated C-sand well was US$1.5
million. During the drilling of the 2014 and 2015 program data
critical to the anticipated EOR project was collected. Production
from the field peaked in early 2015 at just over 2,000 bopd.
An infill program of up to 70 Mayaro Sandstone wells has been
designed and plans are in place for the first 10 locations. The
Company already holds existing regulatory approval for 45 further
wells. The average Mayaro Sandstone well will be drilled to a depth
between 1,000 and 1,750 feet at an estimated cost of less than
US$500,000 per well. This program will be executed using a small
footprint heavy workover rig adapted by means of leased equipment
to drill simple vertical wells close to the existing infrastructure
without the need for extensive pad construction.
In parallel with the Mayaro Sandstone infill drilling program,
and as part of Phase 3 of the development, a water injection pilot
project has been designed using existing C-sand wells (two
injectors and six producers). Permitting of the Pilot EOR is
expected to be complete in 2017 at which time, subject to funding,
the project will commence. The results of the Phase 3 EOR Pilot
will determine the detailed form of the Phase 4 development.
In July, following the end of the reporting period, LGO issued a
new updated resource assessment for the Goudron Field. The previous
work by LR Senergy in 2015 was integrated with the ongoing studies
by LGO and the data from the seven new wells acquired in 2015. The
analysis was independently audited by Deloitte's Resource
Evaluation & Advisory team in Alberta, Canada ("Deloitte"). As
announced on 18 July, volumes in all reserves categories, proven,
probable and possible, have increased, as well as the estimated oil
in place within the field which has risen by over 20 percent.
Estimated oil initially in place ("STOIIP") within the field has
increased since the 2015 independent review and is now reported to
be up to 975 mmbbls. The majority of the 21% increase relates to a
thickening of the C-sand and pre-Cruse reservoir unit which is
observed in logs of wells drilled during the 2015 campaign, notably
well GY-678. The increased STOIIP is especially important in the
context of a waterflood enhanced oil recovery ("EOR") project at
Goudron which is currently at a planning stage. The present
Deloitte report includes a gross 3C estimate of 63.40 mmbbls, which
is very close to the 2012 estimate and again confirms the
significant potential of the planned EOR phase of the field
development.
Proved (1P) gross oil reserves in the Mayaro Sandstone and
C-sand reservoirs has increased by 3% to 1.58 mmbbls, which when
adjusted for the oil produced in the period (240,000 barrels),
represents a 22% increase in proven reserves when compared to the
June 2015 resource report. The gross proven and probable reserves
(2P) have increased by 4% to 11.79 mmbbls. Proved, probable and
possible reserves (3P) have increased by 9% to 25.60 mmbbls.
Table 1: Goudron Reserves and Contingent Resources (mmbbls)
Reserves Contingent Resources
-------- ----------------------------------- ---------------------------------------------
mmbbls Proved Proved Proved + Low Estimate Best Estimate High Estimate
+ probable probable
+ possible
-------- ------- ------------ ------------ ------------- -------------- --------------
Total
Oil 1.580 11.791 25.598 3.150 22.20 63.40
-------- ------- ------------ ------------ ------------- -------------- --------------
Deloitte CPR, April 2016
The Company was severely constrained as to the deployment of
capital in the field following GY-678 and the oil price collapse in
late 2015, and until April 2016 production levels dropped across
all well types, old and new. The Company has more recently been
able to invest in a number of low cost recompletions, and an active
well maintenance campaign as oil prices rose and stabilized in the
range of US$40 to US$50/barrel. Furthermore, the Company had also
negotiated a significant reduction in the overriding royalty by
Petrotrin at lower oil prices for production above 150 bopd,
further improving the margin to support operations in the Goudron
Field.
A number of wells were selected for additional perforating. The
first five, GY-671, GY-50, GY-673, GY-277 and GY-668, have now been
worked over and placed on pumped production. Additional investment
will enable further low cost production uplift from legacy and
recent wells, and the results of that program will be announced on
an ongoing basis through the remainder of 2016.
Drilling of the first of the Mayaro Sandstone infill targets, as
part of the originally planned Phase 3 development, is hoped to
commence before year end.
South West Peninsula
Through its local subsidiary, Leni Trinidad Limited ("LTL"), LGO
holds a 50% interest in the producing Icacos Oil Field in the South
West Peninsula ("SWP") where production has been maintained at
roughly 35 bopd gross. LTL also holds a 25% shareholding in Beach
Oil Field Limited ("BOLT") acquired in October 2015. BOLT operates
the Bonasse Field in the South West Peninsula where production
remains low pending further work. LTL holds an exclusivity
agreement with BOLT on acquiring all BOLT's deep rights in the SWP;
that exclusivity has been extended by mutual agreement until 31
March 2017 pending award by the Trinidad and Tobago Ministry of
Energy and Energy Industries ("MOEEI") of a renewal of the relevant
private petroleum licence ("PPL").
Operations have been restricted to routine well maintenance at
the Icacos Field in 2016 in order to maintain production at current
levels. An application to the MOEEI for a new PPL has been made for
the Icacos Field and is a pre-requisite for further development
work to commence. An extension of the PPL covering the Bonasse
leases has also been applied for with the MOEEI prior to commencing
additional work, including drilling additional wells, to raise
production levels.
LGO also holds, through LTL, a number of 100% owned private
petroleum leases totalling approximately 1,750 acres, and the
Company is in the process of obtaining a PPL from the MOEEI in
order to finalise ongoing field survey activities with a view to
drilling exploration wells at some point in the future.
A number of significant prospects for oil and gas have been
identified in the South West Peninsula acreage using a combination
of data acquired from BOLT and integrated with a proprietary soil
geochemistry survey as well as the LTL sponsored Full Tensor
Gravity survey acquired in 2015. Future drilling of the various
shallow and deep prospects now depends on completion of the
licensing process currently with the MEEI for consideration.
Spain
LGO holds 100% ownership through its wholly owned subsidiary,
Compañia Petrolifera de Sedano ("CPS"), in the La Lora Production
Concession ("La Lora") which contains the producing Ayoluengo
Oilfield in northern Spain. An application for the production of
oil from the nearby Hontomin discovery within the Huermeces permit
was made some time ago and is pending award. The award of an
economically viable production concession at the Hontomin Field is
dependent on the Ayoluengo oil field facilities remaining in
place.
The current 50-year La Lora concession expires at the end of
January 2017 after which, so long as the Ayoluengo Field is still
producing and a number of other conditions are met, the concession
can be renewed for one, or potentially two, further 10-year
periods. In August 2015 a full application for the renewal of La
Lora was filed with the relevant authorities in Spain and the
management remain confident that the concession will be renewed.
That application is currently awaiting final review by the Spanish
Council of State, however, due to the lack of a government in Spain
throughout 2016 and with no sign of change in the short term, it is
possible that the decision may not be finalised before January. In
the event that the application is not processed by January 2017 LGO
is preparing to provide for transition arrangements for the field
operations to continue until such time as the application can be
duly considered by the relevant government bodies.
Initial post-renewal work plans include the side-tracking of a
number of existing wells into areas of the reservoir believed to
contain unswept oil based on extensive studies of the well and 3D
seismic data. The combination of new well bores into areas of
unswept oil is anticipated to provide significant production
uplift.
The Company currently maintains a regular well intervention
programme using a combination of hot oil, xylene and
acid, which continues to provide improvements in production of these mature, active wells. These interventions, using the Company owned Cardwell work-over rig, have continued throughout 2016 to optimise production whilst limiting operating costs.
Oil sales in 2015 were made exclusively to Saint-Gobain Vicasa
SA ("Saint-Gobain") under a contract renewed in 2012 and again in
September 2015. This contract was terminated by Saint-Gobain in
late 2015 due to a change in ownership of the main recipient
factory. Notwithstanding the contract termination oil has continued
to be purchased by the factory and arrangements are in place to
continue with this arrangement on a month by month basis.
During 2016 with oil prices at record lows and restricted
off-take from Saint-Gobain, CPS has built up additional oil in
storage and it has recently started to market a bulk cargo of up to
approximately 10,000 barrels of oil. Storage capacity at Ayoluengo
is currently limited to approximately 16,000 barrels, but can be
expanded should market conditions favour the continuing retention
of high levels of stock.
In 2015 CPS also renewed its long-term contractual arrangements
to supply the BP España Castellon refinery under certain conditions
that may be met once new investments have been made following the
renewal of the La Lora concession.
Due to a lack of access in some areas covered by national parks
and a reduced interest in exploration, CPS is in the process of
relinquishing the exploration permits held in Northern Spain and is
seeking the return of performance guarantees associated with these
permits from the Spanish authorities. It is anticipated that
process will complete in 2017.
Outlook
The Company continues to focus on the long-term value of the
significant potential in its portfolio, most notably at Goudron,
Ayoluengo and in the South West Peninsula, whilst continuing to
maintain short-term capital discipline. Operations at the Goudron
Field continue, and despite the reduced new well drilling activity
levels, the Company has accelerated routine maintenance operations
and completed four low cost recompletions. Plans are in place to
commence the drilling of a number of shallow Mayaro Sandstone
infill wells when capital permits.
Whilst the debt remains at call and on demand, it is now reduced
to US$3 million and LGO is considering opportunities to refinance
the BNPP liability with a view to enabling greater amounts of
capital to be applied across the range of production enhancement
opportunities at the Goudron Field.
Safe and environmentally sound onshore production operations
where there are proven reserves will remain central to the
Company's long-term growth proposition.
Neil Ritson
Chief Executive Officer
27 September 2016
Enquiries:
LGO Energy plc +44 (0) 203 794 9230
Neil Ritson
Fergus Jenkins
Beaumont Cornish Limited +44 (0) 20 7628 3396
Nomad
Roland Cornish
Rosalind Hill Abrahams
FirstEnergy Capital LLP +44 (0) 20 7448 0200
Joint Broker
Jonathan Wright
David van Erp
Bell Pottinger +44 (0) 20 3772 2500
Financial PR
Henry Lerwill
GLOSSARY & NOTES
AIM London Stock Exchange Alternative Investment
Market
barrel or 45 US gallons
bbl
bbls barrels of oil
best estimate the most likely estimate of a parameter
or P50 based on all available data, also often
termed the P50 (or the value of a probability
distribution of outcomes at the 50% confidence
level)
BNPP BNP Paribas
BOLT Beach Oilfield Limited
bopd barrels of oil per day
C-sand sandstone reservoirs below the pre-Mayaro
unconformity and above the pre-Lower
Cruse unconformity encompassing sandstones
of equivalent age to both the Gros Morne
and the Lower Cruse formations
CESL Columbus Energy Services Limited
CPR Competent Persons Report
CPS Compañia Petrolifera de Sedano
EOR enhanced oil recovery
FTG Full Tensor Gravity Gradiometry. Full
tensor gradiometers measure the rate
of change of the gravity vector in all
three perpendicular directions
GEPL Goudron E&P Limited
Goudron Sandstone reservoir sands above the pre-Mayaro
unconformity, also known as the Mayaro
Sandstone
IPSC incremental production service contract
La Lora La Lora Production Concession in Spain
LTL Leni Trinidad Limited
Mayaro Sandstone reservoir sands above the pre-Mayaro
unconformity, also known as the Goudron
Sandstone
MOEEI Trinidad and Tobago Ministry of Energy
and Energy Industries (formally the Ministry
of Energy and Energy Affairs, MOEEA)
m thousand
mm million
mmbbls million barrels of oil
Saint-Gobain Saint-Gobain Vicasa SA
STOIIP or stock tank oil initially in place, those
oil in place quantities of oil that are estimated
to be in known reservoirs prior to production
commencing
Petrotrin The Petroleum Company of Trinidad and
Tobago Limited
PPL private petroleum rights license
sidetrack an additional or replacement well bore
created from an existing well bore at
a depth below the surface casing
WTI West Texas Intermediate; oil price marker
crude
The estimates provided in this statement are based on the
Petroleum Resources Management System ("PRMS") published by the
Society of Petroleum Engineers ("SPE") and are reported consistent
with the SPE's 2011
guidelines. All definitions used in the announcement have the meaning given to them in the PRMS.
Qualified Person's statement:
The information contained in this announcement has been reviewed
and approved by Neil Ritson, Executive Director for LGO Energy plc.
Mr Ritson is a member of the Society of Petroleum Engineers, a
Fellow of the Geological Society and an Active Member of the
American Association of Petroleum Geologists. Mr Ritson has over 38
years of relevant experience in the oil industry
FINANCIAL STATEMENTS
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE INTERIM PERIODED 30 JUNE 2016
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015 (Audited)
(Unaudited) (Unaudited)
Notes GBP 000's GBP 000's GBP 000's
Revenue 1,921 6,610 9,475
Cost of sales * (2,051) (4,548) (9,808)
-------------- -------------- ----------------------------
Gross profit (130) 2,062 (333)
Administrative expenses (1,659) (2,475) (4,196)
Amortisation and depreciation (500) (785) (1,732)
Exceptional item ** 444 - (2,515)
-------------- -------------- ----------------------------
Loss from operations (1,845) (1,198) (8,776)
Finance charges *** (80) (1,327) (240)
Impairment charge - - (2,457)
-------------- -------------- ----------------------------
Loss before taxation (1,925) (2,525) (11,473)
Income tax credit/(expense) - (117) 930
-------------- -------------- ----------------------------
Loss for the period (1,925) (2,642) (10,543)
-------------- -------------- ----------------------------
Other comprehensive income
Exchange differences on translation of foreign
operations 1,534 (898) 23
-------------- -------------- ----------------------------
Other comprehensive income for the period net
of taxation 1,534 (898) 23
-------------- -------------- ----------------------------
Total comprehensive income for the period
attributable to equity holders of the parent (391) (3,540) (10,520)
-------------- -------------- ----------------------------
Loss per share (pence)
Basic 3 (0.05) (0.09) (0.35)
Diluted 3 (0.05) (0.09) (0.35)
* During the six month period ended 30 June 2016, cost of sales
included the depreciation of specific oil and gas assets of
GBP680,000 (year ended 31 December 2015: GBP3,474,000).
** During the six month period ended 30 June 2016, costs in
relation to the abandoned well that were expensed during the year
ended 31 December 2015 were adjusted, as a result of a negotiated
settlement agreed with a creditor.
*** During the six month period ended 30 June 2015, finance
charges included an unrealised fair value loss of GBP730,000 in
relation to the BNPP loan facility.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
As at 30 June 2016 As at 30 June 2015 As at 31 December 2015
(Unaudited) (Unaudited) (Audited)
Notes GBP 000's GBP 000's GBP 000's
Assets
Non-current assets
Goodwill 4 - 3,083 -
Intangible evaluation assets 4 12,209 11,949 11,477
Oil and gas assets 5 14,827 14,221 14,754
Property, plant and equipment 5 2,735 2,377 2,690
Investment in associate 36 - 34
Total non-current assets 29,807 31,630 28,955
Current assets
Inventories 522 426 309
Trade and other receivables 2,650 2,603 2,475
Cash and cash equivalents 1,170 9,468 4,127
Total current assets 4,342 12,497 6,911
------------------- ------------------- -----------------------
Total assets 34,149 44,127 35,866
------------------- ------------------- -----------------------
Liabilities
Current liabilities
Trade and other payables (4,215) (5,377) (6,212)
Borrowings (2,340) (2,811) (7,006)
Taxation - - (20)
Deferred consideration (120) (120) (120)
Total current liabilities (6,675) (8,308) (13,358)
Non-current liabilities
Borrowings (242) (5,850) (246)
Deferred consideration - (1,233) -
Deferred taxation - (1,096) -
Provisions (1,130) (895) (1,011)
------------------- ------------------- -----------------------
Total non-current liabilities (1,372) (9,074) (1,257)
------------------- ------------------- -----------------------
Total liabilities (8,047) (17,382) (14,615)
------------------- ------------------- -----------------------
Net assets 26,102 26,745 21,251
------------------- ------------------- -----------------------
Shareholders' equity
Called-up share capital 6 2,930 1,525 1,632
Share premium 60,508 55,185 56,564
Share based payments reserve 1,309 1,309 1,309
Retained earnings (43,967) (34,423) (42,156)
Revaluation surplus 3,237 3,519 3,351
Foreign exchange reserve 2,085 (370) 551
------------------- ------------------- -----------------------
Total equity attributable to equity
holders of the parent 26,102 26,745 21,251
------------------- ------------------- -----------------------
GROUP STATEMENT OF CASH FLOW
FOR THE INTERIM PERIODED 30 JUNE 2016
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Cash outflow from operating activities
Operating (loss) (1,845) (1,198) (8,776)
(Increase) /decrease in trade and other receivables (175) 200 (279)
Increase/(decrease) in trade and other payables (1,987) 46 1,057
(Increase)/decrease in inventories (213) (123) (6)
Depreciation 985 1,443 4,496
Amortisation 195 152 710
Net cash inflow/(outflow) from operating activities (3,040) 520 (2,798)
Cash flows from investing activities
Payment to acquire associate - - (34)
Payments to acquire intangible assets (1) (1,192) (833)
Payments to acquire tangible assets (174) (3,892) (7,202)
Net cash (outflow) from investing activities (175) (5,084) (8,069)
-------------- -------------- -------------------
Cash flows from financing activities
Issue of ordinary share capital 5,576 8,296 9,853
Share issue costs (334) (387) (458)
Finance charges paid (9) (132) (262)
Repayment of borrowings (5,461) (3,552) (4,224)
Proceeds from borrowings - 8,171 8,511
Net cash inflow from financing activities (228) 12,396 13,420
-------------- -------------- -------------------
Net increase/(decrease) in cash and cash equivalents (3,443) 7,832 2,553
Foreign exchange differences on translation 486 53 (9)
Cash and cash equivalents at beginning of period 4,127 1,583 1,583
-------------- -------------- -------------------
Cash and cash equivalents at end of period 1,170 9,468 4,127
-------------- -------------- -------------------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE INTERIM PERIODED 30 JUNE 2016
Called up Share Share based Retained Foreign Revaluation Total Equity
share premium payments earnings exchange surplus
capital reserve reserve reserve
GBP 000's GBP000's GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's
As at 31
December 2014 1,364 47,437 1,296 (32,169) 528 3,907 22,363
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
period - - - (2,642) - - (2,642)
Revaluation
surplus
amortisation 388 (388) -
Currency
translation
differences - - - - (898) - (898)
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (2,254) (898) (388) (3,540)
Share capital
issued 161 8,135 - - - - 8,296
Cost of share
issue - (387) - - - - (387)
Share based
payments - - 13 - - - 13
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 161 7,748 13 - - - 7,922
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30 June
2015 1,525 55,185 1,309 (34,423) (370) 3,519 26,745
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 31
December 2014 1,364 47,437 1,296 (32,169) 528 3,907 22,363
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
year - - - (10,543) - - (10,543)
Revaluation
surplus
amortisation - - - 556 - (556) -
Currency
translation
differences - - - - 23 - 23
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (9,987) 23 (556) (10,520)
Share capital
issued 268 9,585 - - - - 9,853
Cost of share
issue - (458) - - - - (458)
Share based
payments - - 13 - - - 13
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 268 9,127 13 - - - 9,408
As at 31
December 2015 1,632 56,564 1,309 (42,156) 551 3,351 21,251
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
period - - - (1,925) - - (1,925)
Revaluation
surplus
amortisation - - - 114 - (114) -
Currency
translation
differences - - - - 1,534 - 1,534
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (1,811) 1,534 (114) (391)
Share capital
issued 1,298 4,278 - - - - 5,576
Cost of share
issue - (334) - - - - (334)
Share based
payments - - - - - - -
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 1,298 3,944 - - - - 5,242
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30 June
2016 2,930 60,508 1,309 (43,967) 2,085 3,237 26,102
------------- ------------- ------------ ------------- ------------ ------------- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE INTERIM PERIODED 30 JUNE 2016
1. Basis of preparation
The financial information has been prepared under the historical
cost convention and on a going concern basis and in accordance with
International Financial Reporting Standards and IFRIC
interpretations adopted for use in the European Union ("IFRS") and
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The financial information for the period ended 30 June 2016 has
not been audited or reviewed in accordance with the International
Standard on Review Engagements 2410 issued by the Auditing
Practices Board. The figures were prepared using applicable
accounting policies and practices consistent with those adopted in
the statutory accounts for the period ended 31 December 2015. The
figures for the period ended 31 December 2015 have been extracted
from these accounts, which have been delivered to the Registrar of
Companies, and contained an unqualified audit opinion.
The financial information contained in this document does not
constitute statutory accounts. In the opinion of the directors the
financial information for this period fairly presents the financial
position, result of operations and cash flows for this period.
This Interim Financial Report was approved by the Board of
Directors on 27 September 2016.
Statement of compliance
These condensed consolidated interim financial statements have
been prepared in accordance with International Accounting Standard
('IAS') 34 - Interim Financial Reporting as adopted by the European
Union. Accordingly the interim financial statements do not include
all of the information or disclosures required in the annual
financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of LGO Energy Plc and its controlled entities. The
financial statements of controlled entities are included in the
consolidated financial statements from the date control commences
until the date control ceases.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent
accounting policies.
All inter-company balances and transactions have been eliminated
in full.
Foreign currencies
The functional currency of each entity is determined after
consideration of the primary economic environment of the entity.
The group's presentational currency is Sterling.
2. Segmental analysis
Corporate Operating Operating Non-operating Total
Six months 1 January 2016 to UK Spain Trinidad
30 June 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - 467 1,454 - 1,921
--------- --------- --------- ------------- -------
Operating (loss)/profit * (655) (78) (1,102) (10) (1,845)
Finance charges - - (80) - (80)
--------- --------- --------- ------------- -------
Profit/(loss) before taxation (655) (78) (1,182) (10) (1,925)
--------- --------- --------- ------------- -------
Other information
Depreciation and amortisation (42) (92) (1,046) - (1,180)
Capital additions - 10 165 - 175
--------- --------- --------- ------------- -------
Segment assets
Non-current assets 283 8,281 21,243 - 29,807
Trade and other receivables 543 239 1,868 - 2,650
Inventories - 333 189 - 522
Cash 701 12 447 10 1,170
--------- --------- --------- ------------- -------
Consolidated total assets 1,527 8,865 23,747 10 34,149
--------- --------- --------- ------------- -------
Segment liabilities
Trade and other payables (316) (282) (3,605) (12) (4,215)
Deferred taxation - - - - -
Borrowings - - (2,582) - (2,582)
Deferred consideration (120) - - - (120)
Provisions - (791) (339) - (1,130)
--------- --------- --------- ------------- -------
Consolidated total liabilities (436) (1,073) (6,526) (12) (8,047)
--------- --------- --------- ------------- -------
* Operating (loss)/profit includes management fee
income/expenses charged by the Company to its subsidiaries.
2. Segmental analysis (continued)
Corporate Holding Holding Operating Operating Corporate Total
Six months 1 January 2015 to UK Cyprus St Lucia Spain Trinidad US
30 June 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - - - 543 6,067 - 6,610
--------- ------- -------- --------- --------- --------- --------
Operating (loss)/profit (789) (116) (3) (291) 2 (1) (1,198)
Finance charges (121) - - - (1,206) - (1,327)
--------- ------- -------- --------- --------- --------- --------
Profit/(loss) before taxation (910) (116) (3) (291) (1,204) (1) (2,525)
--------- ------- -------- --------- --------- --------- --------
Other information
Depreciation and amortisation (18) - - (70) (1,507) - (1,595)
Capital additions 273 - - 140 4,739 - 5,152
--------- ------- -------- --------- --------- --------- --------
Segment assets
Non-current assets 3,339 - - 7,809 20,482 - 31,630
Trade and other receivables 430 - - 247 1,926 - 2,603
Inventories - - - 102 324 - 426
Cash 851 - 16 60 8,541 - 9,468
--------- ------- -------- --------- --------- --------- --------
Consolidated total assets 4,620 - 16 8,218 31,273 - 44,127
--------- ------- -------- --------- --------- --------- --------
Segment liabilities
Trade and other payables (675) - (2) (200) (4,500) - (5,377)
Deferred taxation - - - - (1,096) - (1,096)
Borrowings - - - - (8,661) - (8,661)
Deferred consideration (1,353) - - - - - (1,353)
Provisions - - - (673) (222) - (895)
--------- ------- -------- --------- --------- --------- --------
Consolidated total liabilities (2,028) - (2) (873) (14,479) - (17,382)
--------- ------- -------- --------- --------- --------- --------
2. Segmental analysis (continued)
Corporate Operating Operating Non-operating Total
Year ended UK Spain Trinidad
31 December 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - 1,112 8,363 - 9,475
---------- ---------- ---------- -------------- ---------
Operating (loss)/profit (1,380) (1,093) (6,158) (145) (8,776)
Loan impairment - - - - -
Asset Impairment (1,850) - (607) - (2,457)
Finance charges (123) - (117) - (240)
Profit/(loss) before taxation (3,353) (1,093) (6,882) (145) (11,473)
---------- ---------- ---------- -------------- ---------
Other information
Depreciation and amortisation (57) (582) (4,567) - (5,206)
Capital additions 381 220 7,434 - 8,035
---------- ---------- ---------- -------------- ---------
Segment assets
Non-current assets 325 7,631 20,999 - 28,955
Trade and other receivables 437 96 1,942 - 2,475
Inventories - 135 174 - 309
Cash 406 159 3,554 8 4,127
---------- ---------- ---------- -------------- ---------
Consolidated total assets 1,168 8,021 26,669 8 35,866
---------- ---------- ---------- -------------- ---------
Segment liabilities
Trade and other payables (450) (270) (5,480) (12) (6,212)
Taxation - - - (20) (20)
Borrowings - - (7,252) - (7,252)
Deferred consideration (120) - - - (120)
Provisions - (703) (308) - (1,011)
---------- ---------- ---------- -------------- ---------
Consolidated total liabilities (570) (973) (13,040) (32) (14,615)
---------- ---------- ---------- -------------- ---------
3. Loss per share
The calculation of loss per share is based on the loss after
taxation divided by the weighted average number of share in issue
during the period.
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
Loss after taxation (GBP000's) (1,925) (2,642) (10,542)
Weighted average number of ordinary shares used in calculating
basic loss per share (millions) 4,232 2,965 3,044
Weighted average number of ordinary shares used in calculating
diluted loss per share (millions) 4,524 3,263 3,343
Basic loss per share (pence) (0.05) (0.09) (0.35)
Diluted loss per share (pence) (0.05) (0.09) (0.35)
As the inclusion of the potential issuable ordinary shares would
result in a decrease in the loss per share, they are considered to
be anti-dilutive and as such, a diluted earnings per share is not
included.
4. Intangible evaluation assets
Intangible evaluation assets Software Goodwill Total
GBP000's GBP000's GBP000's GBP000's
Cost
As at 31 December 2014 14,047 - 3,083 17,130
Adjustment - - (1,233) (1,233)
Additions 700 133 - 833
Foreign exchange differences on translation (324) - - (324)
----------------------------- --------- --------- ---------
As at 31 December 2015 14,423 133 1,850 16,406
Additions 1 - - 1
Foreign exchange differences on translation 1,256 - - 1,256
As at 30 June 2016 15,680 133 1,850 17,663
----------------------------- --------- --------- ---------
Amortisation and impairment
As at 31 December 2014 2,461 - - 2,461
Amortisation 692 18 - 710
Impairment - - 1,850 1,850
Foreign exchange differences on translation (92) - - (92)
----------------------------- --------- --------- ---------
As at 31 December 2015 3,061 18 1,850 4,929
Amortisation 178 17 - 195
Foreign exchange differences on translation 330 - - 330
----------------------------- --------- --------- ---------
As at 30 June 2016 3,569 35 1,850 5,454
----------------------------- --------- --------- ---------
Net book value
As at 30 June 2016 12,111 98 - 12,209
----------------------------- --------- --------- ---------
As at 31 December 2015 11,362 115 - 11,477
----------------------------- --------- --------- ---------
As at 31 December 2014 11,586 - 3,083 14,669
----------------------------- --------- --------- ---------
5. Property, plant and equipment
Oil and gas assets Property, plant and Decommissioning costs Total
equipment
GBP 000's GBP 000's GBP 000's GBP 000's
Cost
As at 31 December 2014 13,348 2,403 905 16,656
Additions 6,355 706 141 7,202
Foreign exchange differences
on translation 351 13 (35) 329
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 20,054 3,122 1,011 24,187
Additions 142 32 - 174
Foreign exchange differences
on translation 1,046 232 108 1,386
------------------- ----------------------------- ---------------------- ----------
As at 30 June 2016 21,242 3,386 1,119 25,747
------------------- ----------------------------- ---------------------- ----------
Depreciation
As at 31 December 2014 1,175 945 41 2,161
Depreciation 4,030 415 51 4,496
Foreign exchange differences
on translation 95 (7) (2) 86
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 5,300 1,353 90 6,743
Depreciation 793 175 17 985
Foreign exchange differences
on translation 322 123 12 457
------------------- ----------------------------- ---------------------- ----------
As at 30 June 2016 6,415 1,651 119 8,185
------------------- ----------------------------- ---------------------- ----------
Net book value
As at 30 June 2016 14,827 1,735 1,000 17,562
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 14,754 1,769 921 17,444
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2014 12,173 1,458 864 14,495
------------------- ----------------------------- ---------------------- ----------
6. Called up share capital
Called up, allotted, issued and fully paid Number of shares Nominal value (GBP000's)
As at 31 December 2014 2,728,840,849 1,364
15 January 2015 for cash at 3.00p per share 52,500,000 27
23 February 2015 for cash at 2.50p per share 96,062,500 48
24 February 2015 for cash at 2.50p per share 172,760,000 85
As at 30 June 2015 3,050,163,349 1,524
----------------- -------------------------
9 July 2015 consideration at 3.30p per share 3,889,697 2
5 October 2015 cash at 0.90p per share 111,111,110 56
12 October 2015 consideration at 0.90p per share 14,679,556 7
8 December 2015 consideration at 0.43p per share 41,487,776 21
14 December 2015 consideration at 0.28p per share 43,668,470 22
----------------- -------------------------
As at 31 December 2015 3,264,999,958 1,632
----------------- -------------------------
22 January 2016 consideration at 0.23p per share 28,848,519 14
16 March 2016 cash at 0.25p per share 424,209,334 212
16 March 2016 consideration at 0.25p per share 235,995,235 118
18 April 2016 cash at 0.25p per share 120,000,000 60
4 May 2016 cash at 0.20p per share 1,625,000,000 813
9 June 2016 consideration at 0.19p per share 161,068,992 81
----------------- -------------------------
As at 30 June 2016 5,860,122,038 2,930
----------------- -------------------------
During the period, 2,595.1 million shares were issued (year
ended 31 December 2015: 536.2 million).
Total share options in issue
Exercise price Vesting criteria Expiry date Number of options
1.00p - 31 December 2020 56,000,000
1.00p 500 bopd 31 December 2020 49,333,333
1.00p 600 bopd 31 December 2020 49,333,333
1.00p 700 bopd 31 December 2020 49,333,334
4.00p 1,250 bopd 31 December 2020 16,250,000
4.00p 1,500 bopd 31 December 2020 45,000,000
4.00p 1,750 bopd 31 December 2020 16,250,000
------------------
As at 30 June 2016 281,500,000
------------------
During the period, no options were issued (year ended 31
December 2015: nil). No options were exercised (year ended 31
December 2015: nil), lapsed (year ended 31 December 2015: nil) or
cancelled (year ended 31 December 2015: nil).
Total warrants in issue
Exercise price Expiry date Number of warrants
4.50p 25 June 2017 4,081,802
6.20p 15 October 2017 2,158,692
5.10p 22 December 2017 3,931,838
4.20p 16 January 2018 4,915,084
2.50p 23 February 2018 2,688,225
As at 30 June 2016 17,775,641
-------------------
During the period, no warrants were issued (year ended 31
December 2015: 7.6 million). No warrants were exercised (year ended
31 December 2015: nil), lapsed (year ended 31 December 2015: nil)
or cancelled (year ended 31 December 2015: nil).
7. Events after the reporting date
On 18(th) August 2016, the Company announced the issue of
727,877,588 new ordinary shares of 0.05p each at a price of 0.1463p
to Well Services Petroleum Company Limited ("Well Services"), a
creditor of Goudron E & P Ltd, a subsidiary of the Company, as
consideration for outstanding fees for services provided of
US$1,379,331.
On 22(nd) September 2016, the Company raised GBP795,000 before
expenses through a placement of 795,000,000 new ordinary shares of
0.05p each at a price of 0.10p.
8. The financial information set out above does not constitute
the Group's statutory accounts for the period ended 31 December
2015, but is derived from those accounts.
9. A copy of this interim statement is available on the Company's website: www.lgo-energy.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LRMFTMBITBAF
(END) Dow Jones Newswires
September 28, 2016 02:00 ET (06:00 GMT)
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