TIDMI3E
RNS Number : 2048S
i3 Energy PLC
29 September 2017
i3 Energy plc
Unaudited interim results for i3 Energy North Sea Limited
(formerly i3 Energy Limited) for the six months ended 30 June
2017
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, presents the interim accounts of I3
Energy North Sea Limited ('i3', 'i3 Energy' or the 'Company'), its
operating subsidiary, for the six months to June 2017. i3 Energy
plc acquired I3 Energy North Sea Limited after the interim period
end via a share for share exchange ahead of its admission to AIM in
July 2017.
Highlights
-- Successfully completed a private placement raising GBP4.2m
through Convertible Loan Notes before expenses to fund Liberator
front-end engineering and design, project management, site survey,
environmental statement development, and general corporate
purposes
-- Continued advancing the Company's Liberator oil field
development, a high-quality, low-cost, oil development targeting
7,300 barrels of oil equivalent per day ("BOEPD"):
o Working with the supply chain on development design and
engineering
o Engagement with infrastructure owners regarding Liberator
production offtake
o Refinement of Field Development Plan ("FDP") with the UK Oil
& Gas Authority ("OGA")
Post Period and Outlook
-- Admitted i3 Energy plc to the Alternative Investment Market
("AIM") of the London Stock Exchange with first day of dealings on
25 July 2017
-- Remain focused on the safe and efficient development of the Liberator field
o Continuing to advance proposals with the supply chain
regarding the provision of a rig, well services, and well services
project management related to the development of Liberator
o Progressing discussions with the Blake field partners
regarding Liberator offtake terms across the producing Blake
Infrastructure
o Progressing the process for FDP approval from the OGA
o Completing the Environmental Statement for two development
drill centres at Liberator
-- Continue to explore numerous funding options to develop
Liberator including equity and debt capital markets, joint venture
partnering and supply chain financing
-- Working several North Sea asset opportunities and advanced
30(th) Offshore Licensing Round screening
-- Seismic purchased covering 830 km(2) across multiple blocks
Neill Carson, Chief Executive Officer of i3 Energy said:
"The first six months of 2017 have been an incredibly busy time
for the Company with our successful private placement, admission to
AIM, strengthening of the Board and good operational progress
advancing our 100% operated Liberator oil field.
"Looking ahead our core priority remains securing the required
funding to bring this highly attractive asset into development and
we would like to thank all of our shareholders for their continued
support."
CONTACT DETAILS:
i3 Energy plc
Neill Carson (CEO) / Graham c/o Camarco
Heath (CFO) Tel: +44 (0) 203
757 4980
WH Ireland Limited (Nomad
and Joint Broker)
James Joyce, James Bavister Tel: +44 (0) 207
220 1666
Cantor Fitzgerald Europe
(Joint Broker)
Sarah Wharry Tel: +44 (0) 207
894 8896
GMP FirstEnergy (Joint Broker)
Jonathan Wright, David van Tel: +44 (0) 207
Erp 448 0200
Camarco
Georgia Edmonds, Jane Glover, Tel: +44 (0) 203
James Crothers 757 4980
Notes to Editors:
i3 Energy is an oil and gas development company initially
focused on the North Sea. The Company's core asset is the Liberator
oil field discovered by well 13/23d-8 located in License P.1987,
Block 13/23d in which it has a 100% operated interest.
The Company's strategy is to acquire high quality, low risk
producing and development assets, to broaden its portfolio and grow
its reserves and production.
i3 Energy has a strong management team with a track record of
delivery and was founded by Neill Carson, previously founder and
CEO of Ithaca Energy, where he built an asset portfolio including
multiple developments.
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
Chief Executive Officer's Report
We were delighted to complete our acquisition of the Liberator
oil field on 28(th) December 2016 from Dana Petroleum as it
furnished i3 with a high-quality, low-cost development opportunity,
which upon successful delivery will provide a strong foundation for
growth. Completion of the Liberator acquisition on a 100% owned and
operated basis immediately defined for us our critical undertakings
for 2017, and the first half of the year saw concerted effort on
those tasks required to deliver first oil from Liberator on the
nearest achievable timeline. These tasks broadly fall into two
categories, the first being those that advance the technical,
commercial, and regulatory requirements of Liberator's development,
and the second being the sourcing of sufficient funding to enable
us to successfully execute our Liberator Field Development
Plan.
During the early part of the year and on the back of our
acquisition we were pleased to issue approximately GBP4.2 million
of convertible loan notes through a private placement. Though
financing to date has enabled the company to advance Liberator's
delivery, further funding is required to obtain Field Development
Plan approval from the UK Oil & Gas Authority and is a
prerequisite to the Company's commitment to key contracts for
critical kit, equipment and services. In May and June, we
positioned ourselves for a concurrent IPO and listing to AIM. A
softening in commodity prices during that period combined with a
backdrop of numerous other factors prevented us from attaining the
necessary commitment levels required to fully fund the Liberator
development and, as such, i3 did not raise additional capital at
that time. As to retain the considerable effort and cost expended
on our AIM listing, a majority of i3's Loan Noteholders agreed to
convert their Notes to ordinary share capital in the Company,
permitting us to conclude admission to AIM. i3 Energy plc began
trading on 25(th) July with circa 25.7 million shares in issuance,
with Management and Board holding 65%. Listing the Company was
crucial to ensure that in the future, both on our timing and when
market conditions are more favourable, that capital markets could
be swiftly accessed as an avenue for funding. We are deeply focused
on delivering the Liberator development during the course of 2018
and, as such, continue to explore all potential funding avenues
including, but not limited to, capital markets, joint venture
partnering, debt facilities, and vendor financing.
As a required component of our AIM Admission Document, we
engaged Gaffney, Cline & Associates ("GCA") as our Competent
Person to opine on the hydrocarbon resources in the Liberator
field. We were pleased with GCA's assessment that the 2C Contingent
Resources attributed to the on-licence portion of Liberator is 9.4
MMboe and produces a pre-tax net present value, discounted at 10%,
of US$ 249 million under certain assumptions. We have since
continued to optimize our well locations for the Liberator
development and expect to recognize increased recoverable
hydrocarbon volumes in a proposed H1 2018 CPR update.
A key component of Liberator's development is the successful
negotiation of an offtake agreement with the owners of the adjacent
Blake field infrastructure across which Liberator hydrocarbons will
be produced for offloading. i3 is very appreciative of the positive
engagement received from the Blake field Operator, Repsol Sinopec
Resources UK Limited, as we continue to progress the necessary
technical and commercial elements to accommodate Liberator's
utilization of the Blake facilities. On August 25(th) , we were
pleased to announce the completion of all site survey and pipeline
route sampling operations over two areas close to the Liberator
field that we've identified as development drill centres, and on
September 21(st) we announced the commencement of "host"
engineering studies, being undertaken on i3's behalf by Repsol,
which will confirm the technical requirements and construction
schedule for the tie-in of Liberator to the existing Blake
infrastructure. Our management team believes that projects such as
Liberator - yet to be developed satellites near later life but
well-maintained infrastructure - is a prime example of the type of
collaboration that's required now and in the future between smaller
operators and large infrastructure owners to Maximise Economic
Recovery in the UK and that this development closely adheres to the
guidance given by the OGA in that regard.
Also during the first half of 2017, our technical and commercial
teams continued to source all necessary equipment and services to
conduct our expected 2018 development campaign, with time-critical
components procured to avoid potential schedule disruption. Other
major contracts are dependent upon funding and will be executed in
due course. Additionally, we have had very constructive interaction
with the UK Oil & Gas Authority on Liberator and our wider
development aspirations, and have recently submitted our Draft
Field Development Plan at the request of OGA after undergoing a
peer review of the Liberator field by their technical team.
Altogether a very busy year to date with much progress made
towards our goal of delivering material returns through the
development of high-quality, low-cost, deliverable assets.
During the first half of the year the Company had a net loss for
the period of GBP1,897,948 (30 June 2015 - net loss of GBP46,751).
The majority of the loss consists of the accrued interest in
relation to i3's Loan Notes and G&A expenses associated with i3
Energy plc's AIM listing, ongoing development of the Liberator
asset, and day-to-day operating expenses.
GBP4,195,869 (before expenses) was raised during the first half
through a private placement of Loan Notes, with the proceeds being
used to fund Liberator Field Cluster front-end engineering and
design, project management, environmental statement, site survey
and general corporate purposes.
Moving forward, we will continue to tightly manage our existing
cash resources, which stood at GBP2.8 million at the end of June
2017, as we progress the funding and development of an asset that
has the potential to deliver substantial shareholder value. While
we advance Liberator's development, we will continue to assess and
pursue what we believe to be highly accretive asset opportunities
in the North Sea.
I would like to offer my thanks to i3's team. Each member has
continued to work diligently with the limited resources available
to them while demonstrating their ongoing commitment to the Company
and belief in the Liberator project through their willingness to
work at a fraction of market salaries.
With gratitude, I also extend my thanks to our shareholders and
early investors for your continued support. There is considerable
risk at the inception of any venture and we recognize you for your
willingness to come alongside us in that. We remain excited about
our near-term objectives and see great opportunities ahead.
Neill Carson
Chief Executive Officer
28 September 2017
Statement of Comprehensive Income for the six months
ended 30 June 2017
Six Months Six Months Year to
to 30/06/17 to 30/06/16 31/12/16
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
Administrative expenses (769,185) (46,751) (363,844)
Exploration expenditure (7,392) - (25,324)
Operating loss (776,577) (46,751) (389,168)
Finance expense:
Interest payable and similar
costs 5 (1,121,371) - (15,666)
Total finance expense (1,121,371) - (15,666)
Loss on ordinary activities
before taxation (1,897,948) (46,751) (404,834)
Tax charge for the period/year - - -
Net loss for the period/year
and total comprehensive
loss (1,897,948) (46,751) (404,834)
Net loss per share
From continuing operations
Basic and diluted
13 0.28 0.02 0.07
======= ===== =====
The accompanying notes are an integral part of these Interim
accounts.
Balance Sheet as at 30
June 2017
30/06/17 30/06/2016 31/12/16
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS Note
Non-current assets
Property, plant & equipment 22,886
Exploration and evaluation
assets 7 2,316,192 - 1,725,772
Total non-current 2,339,078 - 1,725,772
Current assets
Cash at bank and in hand 2,799,588 - 18,905
Trade and other receivables 8 160,896 676 10,449
Total current assets 2,960,484 676 29,354
Current liabilities
Trade and other payables 9 (713,393) (46,751) (165,131)
Convertible loan notes
payable (6,884,794) - (1,990,264)
Total current liabilities (7,598,187) (46,751) (2,155,395)
Net current liabilities (4,637,703) (46,075) (2,126,041)
Total assets less current
liabilities (2,298,625) (46,075) (400,269)
Net liabilities (2,298,625) (46,075) (400,269)
Capital and reserves
Called up share capital 10 701 676 701
Share-based payment reserve 3,456 3,864
Retained earnings (2,302,782) (46,751) (404,834)
Shareholders' (deficit)/funds (2,298,625) (46,075) (400,269)
The financial statements of i3 Energy North Sea Limited, company
number 09187479, were approved by the Board of Directors and
authorized for issue on 28 September 2017. Signed on behalf of the
Board of Directors by:
Neill Carson
Director
The accompanying notes are an integral part of these interim
accounts.
Statement of Changes in Equity for the six months
ended 30 June 2017
Note Share Share-based Retained Total
capital payment
reserve
As at 31 December 2015 10 1 - - 1
Loss for the period and
total comprehensive income - - (46,751) (46,751)
Issue of share capital 10 675 - - 675
Share-based payment expense - - - -
-------- ----------- ----------- -----------
As at 30 June 2016 676 - (46,751) (46,075)
======== =========== =========== ===========
Balance at 31 December
2016 701 3,864 (404,834) (400,269)
Loss for the period and
total comprehensive income - - (1,897,948) (1,897,948)
Issue of share capital - - - -
Share-based payment expense - (408) - (408)
-------- ----------- ----------- -----------
Balance at 30 June 2017 701 3,456 (2,302,782) (2,298,625)
======== =========== =========== ===========
The accompanying notes are an integral part of these interim
accounts.
Statement of Cash Flows for the six months ended
30 June 2017
6 months 6 months Year to
to 30/06/2017 to 30/06/2016 31/12/16
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
OPERATING ACTIVITIES
Loss for the period/year (1,897,948) (46,751) (404,834)
Adjustments for:
- Unrealised currency translation
(gains)/loss 12 (214,038) - 137,498
- Share-based payment expense (408) - 3,864
Operating cash flows before
movements in working capital:
- (Increase) in receivables 8 (150,447) (676) (10,448)
- Increase in interest
payable 5 898,526 - 8,068
- Increase in current liabilities 9 548,262 46,751 165,131
Net cash used in operating
activities (816,053) (676) (100,721)
INVESTING ACTIVITIES
Expenditure on exploration
and evaluation assets 7 (590,420) - (1,725,772)
Property, plant & equipment (22,885) -
Net cash used in investing
activities (613,305) - (1,725,772)
FINANCING ACTIVITIES
Proceeds on issue of ordinary
shares - 676 700
Proceeds from loan notes 12 4,210,041 - 1,844,698
Net cash from financing
activities 4,210,041 - 1,845,398
Net decrease in cash and
cash equivalents 2,780,683 - 18,905
Cash and cash equivalents,
beginning of period/year 18,905 - -
CASH AND CASH EQUIVALENTS, OF PERIOD/YEAR 2,799,588 - 18,905
The accompanying notes are an integral part of these interim
accounts.
Notes to the Interim Accounts for the Six Months Ended 30 June
2017
1 Corporate information
I3 Energy North Sea Limited (formerly I3 Energy Limited) ("i3",
"i3 Energy", or the "Company" is a private company limited by
shares incorporated in England and Wales. The registered office is
located at New Kings Court, Tollgate, Chandler's Ford, Eastleigh,
Hampshire, SO53 3LG. I3 Energy North Sea Limited was incorporated
on 22 August 2014. The nature of the Company's operations and its
principal activities consists of the development and production of
oil and gas in the UK North Sea. Its parent and ultimate
controlling party is i3 Energy plc, a company incorporated in
England, which holds 100% of the issued ordinary shares of the
Company. The registered office of i3 Energy plc is located at New
Kings Court, Tollgate, Chandler's Ford, Eastleigh, Hampshire, SO53
3LG.
2 Basis of preparation
Statement of Compliance
The interim accounts have been prepared under the historic cost
convention, using the accounting policies that will be applied in
the Company's statutory financial statements for the year ended 31
December 2017 and in accordance with the Disclosure and
Transparency Rules of Financial Conduct Authority (previously the
Financial Services Authority) and with IAS 34 'Interim Financial
Reporting'. The interim accounts should be read in conjunction with
the annual financial statements for the year ended 31 December
2016, which have been prepared in accordance with IFRS as adopted
by the European Union.
The reports for the six months ended 30 June 2017 and 30 June
2016 are unaudited and un-reviewed and do not constitute statutory
accounts as defined by the Companies Act 2006. The financial
statements for 31 December 2016 have been prepared and delivered to
the Registrar of Companies. The auditors' report on those financial
statements was unqualified, but did include reference to
uncertainties which may cast significant doubt about the Company's
ability to continue as a going concern, to which the auditors drew
attention by way of an emphasis of matter without qualifying their
opinion. Their report did not contain a statement under section 498
of the Companies Act 2006.
Going concern
The Company is working to secure the requisite funding required
to develop the Liberator asset from, but not limited to, one or a
combination of the capital markets and/or a partial sale of
Liberator to an industry partner and/or the provision of supply
chain financing.
Given the Company's reliance upon its ability to raise funds,
the matters discussed in the Chief Executive Officer's Report,
specifically the costs associated to execute the Company's initial
strategy, including putting Liberator into production, give rise to
a material uncertainty that may cast doubt upon the Company's
ability to continue as a going concern such that it may be unable
to realise its assets and discharge its liabilities in the normal
course of business. As of the date of this Report, the Company is
actively engaged in discussions to raise requisite funding through
one or a combination of joint venture partnering, debt facilities,
and/or equity issuance that the Directors are confident will
successfully conclude within a 12 month time period. Therefore,
based on the matters discussed above and making appropriate
enquiries, the Directors have concluded that the financial
information should be presented on the basis that the Company is a
going concern. Accordingly, the financial information does not
include adjustments relating to the carrying value of assets, the
amounts and classification of liabilities, or other adjustments
that might result should the Company be unable to continue as a
going concern.
3 Significant accounting policies
The accounting policies adopted are consistent with those
applied in the previous financial year, unless otherwise
indicated.
Financial instruments:
Cash and cash equivalents:
Cash and cash equivalents comprise cash on hand and cash held on
current account or on short-term deposits at variable interest
rates with original maturity periods of up to three months. Any
interest earned is accrued monthly and classified as interest
income within finance income.
Trade and other receivables:
Trade and other receivables are initially recognised at fair
value when related amounts are invoiced then carried at this amount
less any allowances for doubtful debts or provision made for
impairment of these receivables.
Trade and other payables:
These financial liabilities are all non-interest bearing and are
initially recognised at the fair value of the consideration
payable.
Impairment of financial assets:
In relation to financial assets, a provision for impairment is
made when there is objective evidence (such as the probability of
insolvency or significant financial difficulties of the debtor)
that the Company will not be able to collect all of the amounts due
under the original terms of the invoice. The carrying amount of
receivables is reduced through use of an allowance account.
Impaired debts are derecognised when they are assessed as
uncollectible.
Financial liabilities at Fair Value Through Profit or Loss ("
FVTPL")
Financial liabilities at FVTPL comprise of the Company's
convertible loan notes payable. Financial liabilities are
classified as at FVTPL when the financial liability is (i)
contingent consideration that may be paid by an acquirer as part of
a business combination to which IFRS 3 applies, (ii) held for
trading, or (iii) it is designated as at FVTPL.
A financial liability is classified as held for trading if:
-- it has been incurred principally for the purpose of repurchasing it in the near term; or
-- on initial recognition it is part of a portfolio of
identified financial instruments that the Company manages together
and has a recent actual pattern of short-term profit-taking; or
-- it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for
trading or contingent consideration that may be paid by an acquirer
as part of a business combination may be designated as at FVTPL
upon initial recognition if:
-- such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise
arise; or
-- the financial liability forms part of a group of financial
assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with
the Company's documented risk management or investment strategy,
and information about the grouping is provided internally on that
basis; or
-- it forms part of a contract containing one or more embedded
derivatives, and IAS 39 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or
liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with
any gains or losses arising on re-measurement recognised in profit
or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability and is
included in the 'other gains and losses' line item in the income
statement.
Embedded derivatives
Derivatives embedded in other financial instruments or other
host contracts are treated as separate derivatives when their risks
and characteristics are not closely related to those of the host
contracts and the host contracts are not measured at FVTPL.
Equity:
Equity instruments issued by the Company are usually recorded at
the proceeds received, net of direct issue costs, and allocated
between called up share capital and share premium accounts as
appropriate.
Foreign currency:
The Company does not have any foreign operations. Transactions
denominated in currencies other than functional currency are
translated at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are re-translated at the rate of exchange ruling at the
balance sheet date. All differences that arise are recorded in the
income statement.
For the purpose of the financial information, the results and
financial position are expressed in GBP.
Exploration and evaluation assets:
Exploration and evaluation expenditures (E&E):
Exploration and evaluation (pre-license) costs are recognised in
the statement of comprehensive income as incurred. E&E costs,
including the costs of acquiring undeveloped land and drilling
costs are initially capitalised until the drilling of the well is
complete and the results have been evaluated. The costs are
accumulated in cost centres by well, field or exploration area
pending determination of technical feasibility and commercial
viability. The technical feasibility and commercial viability of
extracting a mineral resource is considered to be determinable
when proved or probable reserves are determined to exist. If
proved and or probable reserves are found, the drilling costs and
associated undeveloped land are transferred to development and
production assets once the Company has obtained FDP and after
completing an impairment assessment. The cost of undeveloped land
that expires or any impairment of capitalised E&E expenditures
recognised during a period is charged to the statement of
operations and comprehensive income.
E&E assets are assessed for impairment if (i) sufficient
data exists to determine technical feasibility and commercial
viability, and (ii) facts and circumstances suggest that the
carrying amount exceeds the recoverable amount. For the purposes of
impairment testing, exploration and evaluation assets are allocated
to cash-generating units (CGU's). Any impairment identified is
charged to the statement of operations and comprehensive income as
additional depreciation. Where conditions giving rise to impairment
subsequently reverse, the effect of the impairment charge is also
reserved as a credit to the statement of operations and
comprehensive income, net of any depreciation that would have been
charged since the impairment.
Share-based payments:
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. The fair value excludes the
effect of non-market-based vesting conditions.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Company's estimate of
equity instruments that will eventually vest. At each balance sheet
date, the Company revises its estimate of the number of equity
instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity reserves.
Deferred taxation:
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset, and they relate to
income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
realised.
4 Revenue
The Company had nil revenue during for the six month period
ended 30 June 2017 (30 June 2016 - Nil).
5 Interest payable and similar costs
Period Period
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Interest payable 363 - -
Interest payable on redeemable
loan notes 898,526 - 8,068
Commission payable on loan notes 222,482 - 7,598
========= ======== ============
Total interest payable and similar
costs 1,121,371 - 15,666
========= ======== ============
6 Taxation
I3 Energy North Sea Limited had no liability to UK corporation
tax on the ordinary activities for the period ended 30 June 2017
(30 June 2016 - Nil). As at 31 December 2016 the Company had
taxable losses of GBP161,934 (30 June 2015 - Nil) for which no
deferred tax asset has been recognised. This is due to uncertainty
over the availability of future taxable profits to offset these
losses against.
7 Exploration and evaluation assets
Exploration
and evaluation
assets Total
GBP GBP
As at 30 June 2016 - -
Additions 1,725,772 1,725,772
As at 31 December 2016 - 1,725,772
Additions 590,420 2,316,192
--------------- ---------
As at, 30 June 2017 - 2,316,192
=============== =========
8 Trade and other receivables
As at As at As at
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
VAT receivable 54,018 - 10,449
Prepaids 106,878 - -
Share subscription receivable - 676 -
--------- -------- ------------
Total trade and other receivables 160,896 676 10,449
========= ======== ============
9 Trade and other payables
As at As at As at
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Trade creditors 206,632 17,279 25,524
Accrued liabilities 506,761 29,472 139,607
-------- -------- ------------
Total trade and other payables
falling due within one year 713,393 46,751 165,131
======== ======== ============
The average credit period taken for trade purchases is 30 days.
No interest is charged on the trade payables. The directors
consider that the carrying amount of trade payables approximates to
their fair value.
10 Authorised, issued and called-up share capital
Nominal
Value Called
Issuance Ordinary A Ordinary GBP per up Share
Date Shares Shares Share Capital
As at 31 December
2015 1 1.00 1
Issuance of A ordinary 01 Mar
shares 16 - 6,750,000 0.0001 675
Subdivision of ordinary 31 May
share 16 (1) 10,000 0.0001 -
--------- ----------- -------- ---------
As at 30 June 2016 - 6,760,000 0.0001 676
Change of class of 01 Jul
shares 16 6,760,000 (6,760,000) 0.0001 -
Issue of ordinary 15 Dec
shares 16 250,000 - 0.0001 25
--------- ----------- -------- ---------
As at 31 December
2016 7,010,000 - 0.0001 701
Issue of ordinary - - - -
shares
--------- ----------- -------- ---------
As at 30 June 2017 7,010,000 - 0.0001 701
========= =========== ======== =========
The ordinary shares confer the right to vote at general meetings
of the Company, to a repayment of capital in the event of
liquidation or winding up and certain other rights as set out in
the Company's articles of association.
11 Related party transactions
The Company had the following related party transactions:
a. During the six months ended 30 June 2017, the Company had nil
in share subscription receivable (30 June 2016 - GBP1.00) (31 Dec
2016 - GBP1.00) relating to share issuance costs by a director and
officer of the Company.
12 Convertible Loan Notes
On or before 28 December 2016, the Company issued Loan Notes in
the amount of GBP1,844,698, of which the proceeds were used to fund
the SPA with Dana Petroleum and for general corporate purposes.
This issue comprised of GBP1,100,000 50 per cent. Loan Notes and
GBP744,698 25 per cent. Loan Notes. A summary of the terms of the
Loan Notes is as follows:
-- Security: None
-- Interest: None
-- Mandatory conversion/redemption conditions:
-- AIM listing; and
-- Minimum raise of USD 36 million
-- Conversion Election
25 per cent. Loan Notes
Conversion price: Lower of 75% of IPO price (in USD) and USD
0.60/share (IPO will be on AIM and shares will trade in GBP)
Conversion option: Anytime at option of noteholder at USD
0.60/share
-- 50 per cent. Loan Notes
Conversion price: Lower of 50% of IPO price (in USD) and USD
0.40/share (IPO will be on AIM and shares will trade in GBP)
Conversion option: Anytime at option of noteholder at USD
0.40/share
-- Redemption Election
25 per cent. Loan Notes
Redemption price: Principal plus 25% redemption premium
automatically paid within 10 business days of certain mandatory
redemption conditions
50 per cent. Loan Notes
Redemption price: Principal plus 50% redemption premium
automatically paid within 10 business days of certain mandatory
redemption conditions
Term:
25 per cent. Loan Notes
125% of principal to be repaid after 28th December 2017 in the
event of non-conversion/non-redemption
50 per cent. Loan Notes
150% of principal to be repaid after 28th December 2017 in the
event of non-conversion/non-redemption
At the time of subscribing for the i3 Energy Loan Notes, the
subscriber had the option to select a conversion election or a
redemption election. Selections were made as follows:
1. GBP1,531,717 of the Loan Notes will convert to shares as follows:
I. GBP1,100,000 at the lower of 50% of IPO price (in USD) and
USD 0.40/share
II. Conversion option: Anytime at option of noteholder at USD
0.40/share
And the balance of GBP431,717 will convert as follows:
I. Lower of 75% of IPO price (in USD) and USD 0.60/share
II. Conversion option: Anytime at option holder at USD
0.60/share
2. GBP312,981 of the funds will be redeemed as follows:
Redemption price: Principal plus 25% redemption premium
automatically paid within 10 business days of certain mandatory
redemption conditions
In the first half of 2017, the Company successfully raised
GBP4,195,869 before expenses through the issuance of further Loan
Notes of which proceeds will be used to fund Liberator Field
Cluster front-end engineering and design, project management,
environmental statement, potential site survey, and general
corporate purposes.
The Loan Notes issued by the Company shall rank pari passu
equally and rateably with the any present and future unsecured debt
obligations of the Company. If the notes have not been converted,
they will be redeemed on 28 December 2017 at the agreed redemption
price.
The Loan Notes are not deemed to contain an equity component and
the options meet the definition of a derivative and are not closely
related to the host contract. Due to the complexity of performing
separate valuations for each derivative, the Company has elected
under IAS 39 to designate the entire hybrid loan notes as fair
value with subsequent changes in value flowing through profit and
loss.
The net proceeds received from the issue of the convertible loan
notes is as follows:
GBP
Proceeds of issue of convertible loan notes
as at 30 June 2016 -
Proceeds of issue of convertible loan notes
as at 31 Dec 2016 1,844,698
Liability component at date of issue 1,844,698
Interest charged 8,068
Unrealized FX loss as at 31 December 2016 137,498
=========
Liability component at 31 December 2016 1,990,264
=========
Proceeds of issue of convertible loan notes
as at 30 June 2017 4,210,041
---------
Interest charged 898,526
Unrealized FX loss as at 30 June 2017 (214,038)
=========
Liability component a 30 June 2017 6,884,793
=========
The interest expensed for the six month period ended 30 June
2017 is calculated by applying an effective interest rate of 25 per
cent and 50 per cent to the liability components of GBP4,878,200
and GBP1,100,000 respectively for the period since the Loan Notes
were issued. The liability component is measured at amortised cost.
The difference between the carrying amount of the liability
component at the date of issue and the amount reported in the
balance sheet at 30 June 2017 represents the effective interest
rate less interest paid to that date.
On 13 June 2017, the holders of the 50 per cent. Loan Notes
waived the requirement for the Company to raise a minimum of USD 36
million before their notes automatically convert at a price of USD
0.40/share. Such waiver is conditional on Admission taking place on
or before 27 December 2017.
The existing 25 per cent. Loan Notes were amended and restated
on 29 June 2017, and a further loan note instrument constituting
US$2,500,000 unsecured convertible Loan Notes was entered into on
17 February 2017 and subsequently amended and restated on 29 June
2017 (the "New Notes").
A summary of the terms in the amended 25 per cent. Loan Notes
and the New Notes are as follows:
-- Interest: None
-- Mandatory conversion/redemption conditions:
o AIM listing and;
o Minimum raise of USD 20 million (in respect of New Notes
only)
-- Conversion Election:
o 25 per cent. Loan Notes
Conversion price: USD 0.54/share (IPO will be on AIM and shares
will trade in GBP)
Conversion option: On Admission or at anytime at option of
noteholder at USD 0.54/share
o New Notes
Conversion price: Lower of 75% of the issue price upon a minimum
USD 20 million fundraise and USD 0.54/share (IPO will be on AIM and
shares will trade in GBP)
Conversion option: Upon a minimum USD 20 million fundraise (post
Admission) or at anytime at option of noteholder in multiples of
USD 500,000 at USD 0.54/share
-- Redemption Election:
o 25 per cent. Loan Notes and New Notes
Redemption price: Principal plus (i) 25% redemption premium if
redeemed on or before 28 December 2017; or (ii) 35% Redemption
premium if redeemed after 28 December 2017, automatically paid
within 10 business days of mandatory redemption conditions
-- Term
o 25 per cent. Loan Notes and New Notes
o 135% of principal to be repaid at the earlier of AIM listing
date plus 13 months or 31 August 2018 in the event of
non-conversion/non-redemption prior to that date
At the time of subscription for the Loan Notes and pursuant to
subsequent amendments to the Loan Notes, the subscriber had the
option to select a conversion election or a redemption election.
Selections were made as follows:
-- GBP1,100,000 of the funds will convert upon AIM listing at USD 0.40/share
-- GBP2,413,364 of the funds will convert upon AIM listing at USD 0.54/share
-- GBP2,006,750 of the funds elected to convert in the future as follows:
o Lower of 75% of IPO price (in USD) and USD 0.54/share
o Conversion option: Anytime at option of noteholder in
multiples of USD 500,000 at USD 0.54/share
-- GBP520,452 of the funds will be redeemed as follows:
o Redemption price: Principal plus (i) 25% redemption premium if
redeemed on or before 28 December 2017; or (ii) 35% redemption
premium if redeemed after 28 December 2017, automatically paid
within 10 business days of certain mandatory redemption
conditions
13 Loss per share
From continuing operations
The calculation of the basic and diluted loss per share is based
on the following data:
Period Period Year Ended
Ended Ended 31 December
30 June 30 June 2016
2017 2016
Earnings
Earnings for the purposes
of basic loss per share being
net loss attributable to
owners of i3 Energy (GBP) 1,897,948 46,751 404,834
Weighted average number of
Ordinary Shares 6,750,001 2,256,165 5,678,683
Loss for the purposes of
diluted earnings per share
(GBP) 0.28 0.02 0.07
======================= ========== ===============================
The 30 June 2017, 30 June 2016 and 31 December 2016 calculations
use the Ordinary Shares, both basic and diluted, held at these
dates. The diluted loss per Ordinary Share is calculated by
adjusting the weighted average number of Ordinary shares
outstanding to assume conversion there would be no potential
dilutive Ordinary Shares in issue. The effect of potential dilutive
Ordinary Shares would be anti-dilutive and therefore are not
included in the above calculation of diluted earnings per Ordinary
Share.
14 Subsequent events
i3 Energy plc ("plc"), incorporated on 30 March 2017, is a
public limited company incorporated in England and Wales (company
number 10699593) with its registered office at New Kings Court,
Tollgate, Chandler's Ford, Eastleigh, Hampshire, United Kingdom. On
17 July 2017, pursuant to a share for share exchange agreement
between plc, the Company and the then-holders of the entire share
capital of the Company (the "Exchange Agreement"), plc issued
16,499,999 ordinary shares of GBP0.0001 each and 5,000 deferred
shares of GBP10 each (the "New Shares"), and the plc Subscriber
Share was deemed paid up in full, all in consideration for plc's
acquisition of the entire issued share capital of the Company. In
connection with this, the board of plc recommended, and by special
resolution, the shareholders of plc approved, authority to plc's
directors to allot and waive all pre-emption rights in order to
allot the new shares pursuant to the Exchange Agreement and to
maintain sufficient capacity to issue shares in the event of
conversion of the Loan Notes. On completion of the Exchange
Agreement, plc became the ultimate holding company of the
Company.
Simultaneously with the completion of the Exchange Agreement,
the holders of Loan Notes in the Company sold to plc the rights and
obligations under the existing Loan Notes held by them in the
Company. In exchange for doing so, the then-holders of Loan Notes
in the Company were issued Loan Notes by plc in the same amounts on
the same terms as those sold to plc. Simultaneously with completion
of the Exchange Agreement, the following employees released the
original options held by them over shares in the Company (the
"Original Options"), in consideration for the grant of options over
an equal number of shares in plc (the "New Options").
-- Ian Little - 250,000 Original Options; and
-- Mihai Butuc - 250,000 Original Options
The New Options are held on the same terms and conditions as the
Original Options, and the options held by each such employee are on
identical terms and conditions.
On 25th July 2017, i3 Energy plc announced the Admission and
dealings in its ordinary shares on the AIM market of the London
Stock Exchange under the TIDM "i3E". The total number of ordinary
shares in issue immediately following Admission was 25,690,892,
inclusive of approximately GBP3.5 million Loan Notes which
converted to 9,190,892 ordinary shares prior to Admission.
On 25(th) August 2017 plc announced that all site survey and
pipeline route sampling operations at its Liberator field had been
successfully completed on time and within budget. The MV Poseidon
(operated by MG3) conducted site surveys across two areas close to
the Liberator field, identified by i3 as development drill centres
for expected future production operations. The survey acquired
seismic, sonar, soils strengths and environmental sample data to
assess drilling hazards and provide accurate soils data for
construction activities on the field and associated in-field
pipeline route.
On 21(st) September 2017 plc announced that the engineering
studies to enable i3's Liberator field to be tied into existing
Blake field 'host' infrastructure and produced through the Bleo
Holm Floating Production Storage and Offloading vessel have
commenced, the results of which will be used to support the
Liberator FDP which is under consultation with the OGA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLMATMBTTMLR
(END) Dow Jones Newswires
September 29, 2017 02:03 ET (06:03 GMT)
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