TIDMIOG
RNS Number : 0644C
Independent Oil & Gas PLC
27 September 2018
27 September 2018
Independent Oil and Gas plc
Interim Results
Independent Oil and Gas plc ("IOG" or the "Company") (AIM:
IOG.L), the AIM-listed development and production focused oil and
gas company with key interests in the Southern North Sea ('SNS'),
is pleased to present its unaudited interim results for the six
months ended 30 June 2018.
Operational Highlights
-- Completion of the transformational acquisition of 100%
operated ownership of the Thames Pipeline ('PL370') and the
demonstration of its viability to provide a stable export route for
the Company's 100% owned gas assets straight to the UK market and
National Transport System ('NTS').
o Offshore site and route survey along PL370, all proposed
platform locations and intra-field connecting pipelines completed
in May 2018;
o Completion of the Intelligent Pigging Programme ('IPP')
confirmed excellent condition of the PL370 infrastructure;
o Post period end, completion of tethered pig inspection
together with 150-bar pressure hydrotest confirms PL370 economic
life good for the next two decades and condition 'as new' confirmed
by analysis undertaken by Oilfield Testing Services.
-- Significant operational progress towards delivering IOG's SNS gas hub strategy.
o Environmental Impact Assessment ('EIA') submitted for the
Blythe Hub in January 2018 and the Vulcan Satellites Hub in April
2018;
o Platform fabrication Front End Engineering and Design ('FEED')
was completed by the Heerema Fabrication Group on 30 April 2018;
and
o FEED awarded in May 2018 to Wood Group UK Limited for the
Subsea, Umbilicals, Risers and Flowlines ('SURF') scope of work on
the dual hub development.
-- Strengthened portfolio around PL370 with the award of 100%
ownership of three new licence areas, during the UKCS 30(th)
Licensing Round - Goddard, Harvey SE and Abbeydale containing 224
BCF of discovered 2C resources.
-- 3D seismic reprocessing over the Harvey structure to optimise
appraisal well location completed post period end.
Corporate Highlights
-- Refreshed Board and management team to drive future growth.
o Andrew Hockey succeeds Mark Routh as Chief Executive Officer
and Mark Routh appointed Non-Executive Chairman;
o Mark Hughes appointed as Chief Operating Officer; and
o Post period end, Fiona MacAulay appointed as independent
Non-Executive Director ('NED') succeeding Andrew Hay who stepped
down as independent NED in February 2018.
Financial Highlights
-- Additional GBP10 million convertible loan facility signed
with London Oil & Gas Limited ('LOG') on 21 February 2018, with
a further GBP15 million funding package secured from LOG on 13
September 2018, post period end, principally to fund the Harvey
appraisal well.
-- Cash balance at period end of GBP4.61 million.
-- Post tax loss for the six months ended 30 June 2018 was GBP2.56 million.
Outlook
-- Harvey appraisal well to spud in January 2019, with the
potential to double the resource size of the Blythe Hub.
-- Final Investment Decision ('FID') on track for Q4 2018, with first gas targeted late Q2 2020.
-- Continue to progress post FID funding options including debt,
equity, offtake and contractor financing.
Andrew Hockey, CEO of IOG, said:
"We have made excellent progress in the first half of this year
as we focus our efforts on realising the potential of our SNS gas
hubs. The completion of the acquisition of the Thames Pipeline
transforms the viability of this project providing a stable export
route for our gas straight to the currently import-dependent UK
market. We are delighted with the progress we are making on
advancing this project towards production and look forward to
making further updates in due course.
"We are also pleased to have been successful in the 30(th) UKCS
Licensing Round where our targeted approach resulted in the award
of all three licences for which we applied, adding significant
resources to our portfolio."
Certain information communicated in this announcement was, prior
to its publication, inside information for the purposes of Article
7 of Regulation 596/2014.
Enquiries:
Independent Oil and Gas plc
Andrew Hockey (CEO) +44 (0) 20 3879
James Chance (CFO) 0510
finnCap Ltd
Christopher Raggett +44 (0) 20 7220
Anthony Adams 0500
Peel Hunt LLP
Richard Crichton +44 (0) 20 7418
David McKeown 8900
Camarco
Georgia Edmonds
Tom Huddart +44 (0) 20 3757
Monique Perks 4980
Notes
About Independent Oil and Gas
IOG owns substantial low risk, high value gas Reserves in the UK
Southern North Sea. The Company is targeting a 2P peak production
rate in excess of 200 MMcfd (c. 35,000 Boe/d) from its substantial
current portfolio (2P Reserves of 303 BCF) via an efficient hub
strategy. Alongside this it continues to pursue value accretive
acquisitions, to generate significant shareholder returns. All
IOG's licences are owned 100% and operated by IOG.
Further information can be found on
www.independentoilandgas.com.
The Directors present their interim report of operations and
unaudited consolidated financial statements of Independent Oil and
Gas plc ("the Company") and its subsidiaries ("the Group") for the
six months ended 30 June 2018. All amounts are shown in Pounds
Sterling, unless otherwise stated.
This interim financial report is the responsibility of and has
been approved by the Directors. The Directors are responsible for
preparing the Interim Report which has not been audited by the
Company's auditors. In addition to the results for the first six
months of 2018 ("1H 2018"), comparative information is provided for
the six months ended 30 June 2017 ("1H 2017"). Comparative
information for the Group's financial position is also provided the
year ended 31 December 2017 ("FY 2017").
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with International Financial
Reporting Standards ("IFRSs") as adopted by the European Union.
Chief Executive Review
The first half of 2018 has seen real progress on all fronts for
IOG on our UK SNS projects. We have made further strides toward our
goal of bringing otherwise bypassed indigenous gas into the
import-dependent UK market safely and at a low unit cost,
generating material cash flows for the Group and returns for
investors.
In April, we completed the acquisition of the 24-inch Thames
Pipeline from owners Perenco UK Limited, Tullow Oil SK Limited and
Spirit Energy Resources Limited for a nominal sum. We also worked
closely with the UK Oil & Gas Authority ('OGA'), the UK
government Department for Business, Energy & Industrial
Strategy ('BEIS') and the Health & Safety Executive ('HSE')
resulting in our appointment as pipeline operator. The
recommissioning of PL370 will unlock the value of our gas assets by
providing us with a low-cost export route to the UK gas market at
Bacton Terminal on the North Norfolk coast. This view has been
supported in 1H 2018 by external surveys of PL370 carried out by
the vessel, MV Fugro Galaxy, and by an extensive pigging and
pressure test campaign which demonstrated its internal integrity.
Assessment of the Bacton facilities has continued with engineering
studies underway to define the best approach to refurbishing the
Thames Reception Facility.
In May our 100% owned gas portfolio consisting of; (i) 303 BCF
of Proven and Probable ('2P') Reserves at the Blythe and Vulcan
Satellites Hubs (Post Tax NPV10 of GBP321 million); and (ii) our
exciting appraisal opportunity Harvey with 114 BCF best estimate
Prospective Resources, was augmented by the offer of three new
licences in the 30(th) UKCS Offshore Licensing Round where we
targeted opportunities within range of our own infrastructure. As
well as securing 100% of the Harvey asset, the awards for Goddard
(189 BCF mid case management estimate) and Abbeydale (11 BCF mid
case management estimate) with existing discoveries on structure
represent a material addition to our resource base.
The Field Development Plans ('FDP's) submitted to the OGA have
been optimised in 1H 2018 to reflect a two - phase development,
with Phase 1 comprising the Blythe, Elgood and Southwark Fields and
Phase 2 comprising the Nailsworth and Elland fields. EIAs were
submitted to BEIS in January and April for the Blythe and Vulcan
Satellite Hubs respectively and will support the FDP approval
process.
We continue to plan to develop our assets at Blythe, Southwark,
Nailsworth and Elland via four simple unmanned wellhead platforms
and a subsea tieback at Elgood, with up to ten long reach wells to
be drilled in total. FID is planned for Q4 2018 and first gas is
planned for late Q2 2020.
At Harvey we continue to see material upside, sufficient to
double the size of the Blythe Hub and are targeting drilling the
Harvey appraisal well in January 2019. Activity in 1H 2018 has
focused on the reprocessing of 3D seismic over Harvey to best
define and de-risk the well location.
In support of our plans, discussions are ongoing with drilling
rig owners, well construction service providers and subsea and
pipeline fabrication and installation contractors alongside the
arrangements already in place with Heerema Fabrication (platform
design and fabrication) and ODE (operations, maintenance and
pipeline operations).
Successful development execution requires firm funding to be in
place at FID. The progress made in 1H 2018 was due in large part to
the funding provided to us in the form of a new GBP10 million
convertible loan in February by our largest stakeholder LOG, with a
conversion price of 19p per share. I am pleased to say this new
loan has given the Company scope to execute the necessary pigging,
surveys and engineering studies to reach FID, targeted for Q4 2018.
Post period end we were also pleased to announce the agreement of
terms with LOG for a GBP15 million loan to fund the Harvey
appraisal well, pay down the remaining Skipper well creditors and
support the project through to FID. We were also delighted to see
Swiss investment house Burggraben acquire a 10% stake in the
Company throughout May and early June, reinforcing our belief in
the current development strategy.
Regarding post-FID development funding, in addition to
conventional debt and equity finance, the Company continues to
progress options to utilise finance linked to gas off-take. Debt
markets for independent oil and gas operators have normalised
considerably after the period of low oil prices and weak
profitability in the North Sea between 2014 and 2016. The Company's
independently assessed 2P reserves of 303 BCF, equivalent to 54
MMBoe, provides a solid footing to secure an optimal development
funding package for the portfolio during Q4 2018.
The Company needs a high-quality team of individuals to progress
the project through development and this year, we have strengthened
our capability at all levels of the organisation. In February, I am
pleased to say I assumed the role of Chief Executive and Mark Routh
stepped up to be Non-Executive Chairman. Andrew Hay left the Board
and we thank him for his service. In April, we welcomed Mark Hughes
to the executive team and Board as Chief Operating Officer. Mark
has considerable recent relevant SNS experience in development
engineering and management with RWE Dea and Gaz de France. Post
period end we appointed Fiona MacAulay as Independent Non-Executive
Director. Fiona brings a wealth of technical experience to the
Board and is CEO of AIM-listed Echo Energy plc.
In conclusion, I am happy to say that the Company is now
progressing towards FID and financing which will ultimately unlock
both cash flow generation from our SNS gas fields and the major
upside at our Harvey appraisal opportunity.
I would like to thank all shareholders for their support
throughout the year, and I look forward to furthering both the
Group and Company's progress in 2H 2018 and beyond.
Andrew Hockey
Chief Executive Officer
27 September 2018
Operational Review
UK - Southern North Sea ('SNS')
Thames Pipeline
Completion of the acquisition of PL370 from Perenco UK Limited,
Tullow Oil SK Limited and Spirit Energy Resources Limited occurred
on 16 April 2018.
The vessel MV Fugro Galaxy mobilised in late January 2018 and as
part of its work programme carried out a pipeline and route survey
along PL370.
Preparation for the IPP commenced on 20 February 2018 with
onshore mechanical preparation work at the Bacton Terminal. The
main IPP work took place in May 2018 and early June 2018. Three
pipeline sections were cut 60km offshore and retrieved to surface
and indicated that the pipeline is in extremely good condition. Two
successful pipeline pressure tests confirmed pipeline integrity.
Initial 60km gauge pigging runs from Bacton to the offshore tie-in
point were successfully executed.
The initial IPP run gathered insufficient data due to technical
malfunction with the pig and an alternative strategy was planned
and presented to the HSE.
Post period end, an internal crawler-based measurement device
was run between the Bacton terminal to a point 800m offshore to
assess the line's internal and external condition. The resulting
data analysis showed no internal corrosion nor external defects.
This subsequently allowed a 150-bar pressure hydrotest and this was
completed successfully.
Blythe
Blythe is planned to be developed with a single well tied back
to the Thames pipeline via an unmanned platform ('NUI'). Platform
FEED is complete. The MV Fugro Galaxy mobilised in late January
2018 and as part of its work programme carried out surveys across
the Blythe Hub (Blythe and Elgood fields) in support of the
development of the fields. At Blythe this work included site
surveys for platform location and pipeline route surveys to the
tie-in point at the Thames Pipeline and environmental sampling. The
EIA for the Blythe Hub was submitted on 31 January 2018 in line
with milestones agreed with the OGA.
IOG remains on track for Field Development Plan ('FDP') approval
for Blythe by end of Q4 2018, in line with agreed OGA milestones.
First gas is scheduled for late Q3 2020, subject to project
financing. During development engineering studies in 1H 2018, it
was decided to include Blythe as part of a Phase 1 development
comprising Blythe, Elgood and Southwark and at end 1H 2018 the FDP
was being amended accordingly.
Elgood
Elgood is planned to be developed with a single well tied back
subsea to the Blythe NUI. The MV Fugro Galaxy mobilised in late
January 2018 and as part of its work programme carried out surveys
across the Blythe Hub (Blythe and Elgood fields) in support of the
development of the fields. At Elgood this work included site
surveys for pipeline route surveys to the tie-in point at the
Thames Pipeline and environmental sampling. The EIA for the Blythe
Hub was submitted on 31 January 2018 in line with milestones agreed
with the OGA.
IOG remains on track for FDP approval for Elgood by end of Q4
2018, in line with agreed OGA milestones. First gas is scheduled
for Q1 2021, subject to project financing. During development
engineering studies in 1H 2018 it was decided to include Elgood as
part of a Phase 1 development comprising Blythe, Elgood and
Southwark and at end 1H 2018 the FDP was being amended
accordingly.
Vulcan Satellites
The Vulcan Satellites are planned to be developed with NUIs at
Southwark (three wells), Elland (two wells) and Nailsworth (three
wells), all tied back into PL370. Platform FEED is complete.
The MV Fugro Galaxy mobilised in late January 2018 and as part
of its work programme carried out surveys across the Vulcan
Satellites Hub (Southwark, Nailsworth and Elland fields) in support
of the development of the fields. This work included site surveys
for platform locations and pipeline route surveys to the tie-in
point at the Thames pipeline and environmental sampling. The EIA
for the Vulcan Satellites Hub was submitted in April 2018 in line
with milestones agreed with the OGA.
During development engineering studies in 1H 2018 it was decided
to include Southwark as part of a Phase 1 development comprising
Blythe, Elgood and Southwark and at end 1H 2018 the FDP was being
amended accordingly. Elland and Nailsworth will be developed in
Phase 2 of the development.
IOG remains on track for FDP approval for Phase 1 including
Blythe, Elgood and Southwark by end of Q4 2018, in line with agreed
OGA milestones. First gas is scheduled at Southwark for late Q2
2020 subject to project financing.
Harvey
IOG has a licence commitment to drill an appraisal well on P2085
Harvey by December 2019 and is planning to accelerate this to
January 2019, assisted by the recent GBP15 million financing from
key stakeholder LOG. Contractor and rig selection are underway and
will be complete by the end of Q3 2018. In the first half of 2018
work on P2085 has focused on reprocessing existing 3D seismic data
to pre-stack depth migration level with Schlumberger WesternGeco to
define the optimum location for this well.
Bacton
FEED commenced on the work required to receive Phase 1 gas from
the Thames pipeline into the reception facilities and then on
through the Perenco managed processing plant and thus to the
National Transmission System ('NTS'). Commercial discussions also
commenced with the plant owners to define tariffing terms and
modification requirements.
30(th) Licensing Round Awards (announced 23 May 2018)
Harvey South East P2441:
IOG was offered Block 48/24a in the 30(th) UKCS Seaward
Licensing Round and has accepted licence P2441 which contains the
easternmost extension of the Harvey structure and several other
dormant discoveries and prospects. On this licence the work
commitment is to reprocess existing 3D seismic data to pre-stack
depth migration level which has been covered by the work completed
post period end with Schlumberger WesternGeco across Blocks 48/24a
and 48/24b.
Gross Prospective Resources in the Harvey structure are judged
to be 45/114/286 BCF (Low/Best/High Estimates) in the ERCE
Competent Persons Report dated November 2017 and the award of
48/24a has secured all this volume for IOG in conjunction with
licence P2085.
Resources in the other discoveries and prospects on the block
will be subject to evaluation and appraisal following the results
of the 3D seismic reprocessing.
Goddard P2438:
IOG was offered Blocks 48/11c & 48/12b in the 30th UKCS
Seaward Licensing Round and has accepted licence P2438 which
contains Goddard, hitherto known as Glein, which is a dormant gas
discovery proved up by five wells drilled between 1985 and 2010.
Management estimates of the contingent resources on Goddard are
1C/2C/3C 45/189/396 BCF. The work commitment on this licence is to
reprocess existing 3D seismic data to pre-stack depth migration
level and to drill one firm well within 3 years from licence start
date on 1 October 2018.
Abbeydale P2442:
IOG was offered Block 53/1b in the 30(th) UKCS Licensing Round
and has accepted licence P2442 which contains the Abbeydale dormant
gas discovery, hitherto known as Aberdonia, which was discovered in
1996. On this licence the work commitment is to reprocess existing
3D seismic data to pre-stack depth migration level.
Management estimates contingent resources on Abbeydale are
1C/2C/3C 5/11/24 BCF. The new 3D seismic work program is expected
to increase these estimates to more commercial levels with a view
to tying into IOG's Thames pipeline as the export route.
UK - Northern North Sea ('NNS')
Skipper
The Company's focus remains on its SNS operated gas hubs. At
Skipper, a reservoir engineering study has been commissioned to
inform our technical understanding of the licence ahead of the
licence expiry in February 2019. The project remains commercially
unattractive owing to the heavy nature of the oil.
Andrew Hockey
Chief Executive Officer
27 September 2018
Financial Review
Income statement
The post-tax loss for the first six months of 2018 was GBP2.56
million, compared to GBP1.41 million for the first six months of
2017 and GBP2.75 million for full year 2017.
The current period loss includes charges of GBP0.48 million for
other administration expenses (1H 2017 - GBP0.31 million),
impairment charges of GBP0.15 million (1H 2017 - GBPnil), project
and pre-acquisition expenses of GBP0.29 million (1H 2017 - GBP0.55
million), a net loss on settlement of creditors of GBP0.11 million
(1H 2017 - GBP0.04 million), an exchange loss of GBP0.13 million
(1H 2017 - GBP0.14 million gain) and finance expenses of GBP1.40
million (1H 2017 - GBP0.66 million).
The exchange loss of GBP0.13 million for the current period,
compared to a gain of GBP0.14 million for the equivalent period of
2017 reflects fluctuations in exchange rates for US$ denominated
trade and loan creditors.
Finance expenses include GBP0.49 million (1H 2017 - GBP0.17
million) of loan and financing charges calculated on an effective
interest rate basis, plus GBP0.91 million (1H 2017 - GBP0.49
million) of accrued loan and other interest, net of capitalised
interest charged to development assets.
Statement of financial position
Oil and gas properties held as non-current assets of GBP34.82
million at 30 June 2018 (31 December 2017 - GBP21.50 million)
represents capital expenditures assigned to the Thames Pipeline
together with capital expenditures on the Group's Blythe, Elgood
and Vulcan Satellites pre-development interests, plus expenditures
on the Harvey appraisal property. Current assets include GBP0.30
million UK VAT receivable (31 December 2017 - GBP0.29 million).
Current liabilities include an amount of GBP2.88 million due to LOG
(31 December 2017 - GBPnil) representing amounts due on loan
facilities and GBP1.71 million owing to Oyster Petroleum Holdings
Limited (31 December 2017 - GBP1.64 million) representing deferred
consideration payable on approval of the Vulcan Satellites' Hub
FDP, estimated 1 October 2018. Other current liabilities include
trade and other creditors of GBP7.91 million (31 December 2017 -
GBP4.83 million) including deferred amounts owing to both GE Oil
& Gas UK Ltd and Transocean Drilling UK Limited in respect of
the Skipper well drilled in 2016. Non-current liabilities include
GBP22.19 million owing to LOG (31 December 2017 - GBP12.39 million)
representing amounts due on loan facilities less prepaid financing
costs. Also included are provisions of GBP4.58 million (31 December
2017 - GBP4.37 million) for deferred consideration payable on first
gas from both Blythe and the Vulcan Satellites, estimated 1 January
2020. There is also a decommissioning provision of GBP3.60 million
(31 December 2017 - GBP3.60 million) representing the abandonment
liability which was included as part of the Vulcan Satellites'
acquisition in October 2016.
Cash flow
After adjustment for non-cash items, cash used in operations was
GBP1.88 million (1H 2017 - GBP0.84 million). Investing activities
comprised the purchase and acquisition of oil and gas properties of
GBP5.30 million (1H 2017 - GBP0.70 million). This was principally
funded through net borrowings of GBP11.68 million (1H 2017 -
GBP1.45 million). The cash balance at the end of the period was
GBP4.61 million (31 December 2017 - GBP0.15 million).
Funding and liquidity
The Board has reviewed the Group's cash flow forecasts up until
December 2019 having regard to its current financial position and
operational objectives. These forecasts indicate that the Group
will need additional funding to enable it to meet its liabilities
as they fall due in the next eighteen months. The Board is
satisfied that the Group will have sufficient financial resources
available to meet its commitments based on the amount of available
cash within the Group, its existing debt facilities that can be
drawn down, the likelihood of it being able to secure additional
funding from existing stakeholders or new investors and to agree
either the rescheduling of certain existing liabilities to
creditors or conversion of such amounts to equity. Additionally,
the Group can cut discretionary expenditure and reduce financing
requirements further. Accordingly, the Board continues to adopt the
going concern basis for the preparation of this financial
information.
Risks and uncertainties
The Group operates in the oil and gas industry, an environment
subject to a range of inherent risks and uncertainties. Being at an
early stage in the Group lifecycle, the prime risks to which the
Group is subject to are the access to sufficient funding to
continue its operations, the status and financing of its partners,
changes in cost and reserves estimates for its assets, operational
delays and failures, changes in forward commodity prices and the
successful development of its oil and gas reserves. Further details
can be found in the audited Financial Statements for the year ended
31 December 2017.
Key performance indicators
The Group's main business is the acquisition and exploitation of
oil and gas acreage. Non-financial performance is tracked through
the accumulation of licence interests and the successful discovery
and exploitation of oil and gas reserves.
Outlook
The Company made excellent progress in the first half of 2018,
focusing its efforts on realising the potential of its SNS gas
hubs. The completion of the acquisition of PL370 and the
demonstration of its viability transforms this project as we can
provide a stable export route for the Company's gas assets straight
to the UK market and NTS. Progress is also being made on funding
the project through development to production. The effectiveness of
our strategy has also been demonstrated by the very encouraging
additions to the portfolio acquired in the 30(th) UKCS Seaward
Licensing Round.
Andrew Hockey
Chief Executive Officer
27 September 2018
Independent Oil and Gas plc
Consolidated statement of comprehensive income
for the six months ended 30 June 2018
Unaudited Unaudited
1H 2018 1H 2017
GBP000 GBP000
Other administration expenses (479) (305)
Impairment of oil and gas properties (151) -
Project, pre-acquisition and exploration
expenses (288) (546)
Net loss on settlement of liabilities (106) (37)
Foreign exchange (loss)/gain (128) 138
_________ _________
Total administration and other expenses (1,152) (750)
_________ _________
Operating loss (1,152) (750)
Finance expenses (1,403) (663)
_________ _________
Loss for the period before tax (2,555) (1,413)
Taxation - -
_________ _________
Total comprehensive loss for the period
attributable to equity holders of the
parent (2,555) (1,413)
_________ _________
(2.1)
Loss for the period per ordinary share - basic p (1.3) p
(2.1)
Loss for the period per ordinary share - diluted p (1.3) p
________ _________
The loss for the period arose from continuing activities.
Independent Oil and Gas plc
Consolidated statement of changes in equity
for the six months ended 30 June 2018
Share Share Share- based Accumulated Total
capital premium payment losses equity
reserve
Group GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2017 1,093 20,460 2,885 (28,738) (4,300)
Loss for the year - - - (2,751) (2,751)
______ _______ _______ ______ _______
Total comprehensive expense
attributable to owners
of the parent - - - (2,751) (2,751)
Transactions through
Equity
Settlement of creditors
via issue of shares 105 1,877 - - 1,982
Lapse of warrants - - (10) 10 -
Issue of share options - - 298 - 298
Exercise of share options 5 - (74) 74 5
______ _______ _______ ______ _______
110 1,877 214 84 2,285
______ _______ _______ ______ _______
At 31 December 2017 (Audited) 1,203 22,337 3,099 (31,405) (4,766)
______ _______ _______ ______ _______
Loss for the period - - - (2,555) (2,555)
______ _______ ________ ______ _______
Total comprehensive expense
attributable to owners
of the parent - - - (2,555) (2,555)
Transactions through
Equity
Issue of share options - - 148 - 148
Exercise of share options 33 - (750) 750 33
______ _______ _______ ______ _______
33 - 602 750 181
_______ _______ _______ ______ _______
At 30 June 2018 (Unaudited) 1,236 22,337 2,497 (33,210) (7,140)
______ _______ _______ ______ _______
Share capital
Amounts subscribed for share capital at nominal value.
Share premium
Amounts received on the issue of shares, more than the nominal
value of the shares, less issue costs.
Share-based payment reserve
Amounts reflecting fair value of options and warrants
issued.
Accumulated losses
Cumulative net losses recognised in the Statement of
Comprehensive Income net of amounts recognised directly in
equity.
Independent Oil and Gas plc
Consolidated statement of financial position
at 30 June 2018
Unaudited Audited
31 December
30 June 2018 2017
GBP000 GBP000
Non-current assets
Intangible assets: exploration & evaluation 450 185
Intangible assets: other 2 1
Property, plant and equipment: development
& production 34,367 21,316
Property, plant and equipment: other 45 20
34,864 21,522
------------- ------------
Current assets
Other receivables and prepayments 357 968
Cash and cash equivalents 4,609 145
4,966 1,113
Total assets 39,830 22,635
Current liabilities
Loans (2,875) -
Trade and other payables (13,719) (7,038)
(16,594) (7,038)
------------- ------------
Non-current liabilities
Loans (22,194) (12,394)
Provisions (8,182) (7,969)
(30,376) (20,363)
------------- ------------
Total liabilities (46,970) (27,401)
NET (LIABILITIES) (7,140) (4,766)
============= ============
Capital and reserves
Share capital 1,236 1,203
Share premium account 22,337 22,337
Share-based payment reserve 2,497 3,099
Accumulated losses (33,210) (31,405)
_________ _________
(7,140) (4,766)
Total equity _________ _________
Independent Oil and Gas plc
Consolidated cash flow statement
for the six months ended 30 June 2018
Unaudited Unaudited
1H 2018 1H 2017
GBP000 GBP000
Loss after tax (2,555) (1,413)
Adjustments for:
Depreciation and amortisation 3 3
Exploration asset write off 151 -
Loss on settlement of liabilities 106 37
Share based payments 67 131
Movement in other receivables (497) (76)
Movement in trade and other payables (610) (45)
Interest received (1) -
Interest and financing fees 1,404 663
Foreign exchange loss/(gain) 53 (138)
_________ _________
Net cash used in operating activities (1,879) (838)
Cash flows from investing activities
Purchase of intangible assets and property,
plant and equipment (5,296) (701)
Interest received 1 -
Acquisitions - -
_________ _________
Net cash used in investing activities (5,295) (701)
Cash flows from financing activities
Proceeds from issue of equity instruments of
the Group 33 7
Cash received from loans (net of costs) 11,681 3,471
Amounts repaid on loans - (2,019)
Interest and financing fees paid (76) (3)
_________ _________
Net cash generated from financing activities 11,638 1,456
Increase/(decrease) in cash and cash equivalents
in the period / year 4,464 (83)
Cash and cash equivalents at start of period
/ year 145 247
_________ _________
Cash and cash equivalents at end of period /
year 4,609 164
_________ _________
Independent Oil and Gas plc
Notes to the financial statements
for the six months ended 30 June 2018
Notes
(i) Basis of preparation
The financial information contained in this announcement does
not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006. The financial information
for the six months ended 30 June 2018 is unaudited. It is prepared
in accordance with the same accounting policies as used for the
year ended 31 December 2017 and those which are anticipated to be
relevant to the financial statements for the year ended 31 December
2018. In the opinion of the directors the financial information for
this period fairly presents the financial position, results of
operations and cash flows for the period in compliance with
IFRS.
IFRS 9 'Financial Instruments'
The Group does not foresee any major impact following the
adoption of IFRS 9 and no accounting adjustments have been made,
with reference to the LOG loans, in the financial statements for
the six months to 30 June 2018. This will be reviewed, and
potential adjustments made, in the financial statements for the
year ended 31 December 2018. The Group's accounting policy has been
revised to reflect the requirements of IFRS 9.
The Group's accounting policy for IFRS 9 is set out below:
a) Classification of financial assets and financial liabilities
IFRS 9 requires the use of two criteria to determine the
classification of financial assets: the entity's business model for
the financial assets and the contractual cash flow characteristics
of the financial assets. IFRS 9 goes on to identify three
categories of financial assets - amortised cost; fair value through
profit or loss (FVTPL); and fair value through other comprehensive
income (FVOCI). The accounting for the Group's financial
liabilities remains largely the same as it was under IAS 39. Akin
to the requirements of IAS 39, IFRS 9 requires contingent
consideration liabilities to be treated as financial instruments
measured at fair value, with the changes in fair value recognised
in the statement of profit or loss.
b) Impairment
IFRS 9 mandates the use of an expected credit loss model to
calculate impairment losses rather than an incurred loss model, and
therefore it is not necessary for a credit event to have occurred
before credit losses are recognised. The new impairment model
applies to the Group's loan commitments. The IFRS 9 impairment
model requiring the recognition of 'expected credit losses', in
contrast to the requirement to recognise 'incurred credit losses'
under IAS 39, has not had any impact on the Group's financial
statements.
Trade receivables are generally settled on a short time frame
and the Group's other financial assets are due from counterparties
without material credit risk concerns at the time of
transition.
The comparatives for the full year ended 31 December 2017 are
not the Company's full statutory accounts for that year. A copy of
the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors' report on those accounts was
unqualified, did not include references to any matters to which
auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 498(2)-(3) of
the Companies Act 2006.
(ii) Loss per share
The calculation of loss per share is based upon the weighted
average number of ordinary shares in issue during the period of
121,246,613 (30 June 2017: 109,305,966). Diluted loss per share is
calculated based upon the weighted average number of ordinary
shares plus the weighted average number of ordinary shares that
would be issued upon conversion of potentially dilutive share
options and warrants into ordinary shares. As the result for all
three periods presented was a loss, the calculation of the diluted
LPS was anti-dilutive and therefore the potential ordinary shares
were ignored for the purposes of calculating diluted LPS. The
weighted average number of ordinary shares on a diluted basis at 30
June 2018 is 149,393,771.
(iii) Dividend
The Directors do not recommend payment of a dividend.
(iv) Post Balance Sheet Events
a) GBP15M Loan Facility
An additional GBP15M loan facility was signed with LOG on 13
September 2018, primarily to fund the Harvey appraisal well,
forecast spud date January 2019. This incorporates the issue of 20
million warrants to LOG, with an expiry date of 5 years following
drawdown of the facility.
b) First Gas - Southwark & Blythe
First gas is now anticipated in late Q2 2020 for Southwark and
late Q3 2020 for Blythe.
Independent Oil and Gas plc
INFORMATION & ADVISERS
Country of incorporation of parent company
United Kingdom
Legal form
Public limited company with share capital
Directors
Mark Routh
Andrew Hockey
Mark Hughes
Rt. Hon. Charles Hendry
Martin Ruscoe
Fiona MacAulay
Registered office
60 Gracechurch Street
London
EC3V 0HR
Company registered number
07434350
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Legal counsel
Fieldfisher LLP
Riverbank House
2 Swan Lane
London
EC4R 3TT
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EQLFLVKFZBBV
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