TIDMLOGP
RNS Number : 7233K
Lansdowne Oil & Gas plc
26 September 2016
Lansdowne Oil & Gas plc
Interim results for the six months ended 30 June 2016
26 September 2016
Lansdowne Oil & Gas plc ("Lansdowne" or "the Company") is
pleased to announce its interim results for the six months ended 30
June 2016. Lansdowne is an upstream oil and gas company, focused on
exploration and appraisal activities in the North Celtic Sea Basin,
off the south coast of Ireland. The Company has targeted the Irish
offshore shelf areas close to existing operating infrastructure for
exploration, as these provide shallow water (generally less than
100 metres), and relatively low drilling costs. The Directors
believe that these factors, combined with favourable fiscal terms,
have the potential to deliver high value reserves.
First half highlights
-- In the second quarter of 2016, the Company secured an
additional GBP2.1 million of funding by way of a placing in order
to meet an additional liability arising from the Transocean Court
Case relating to the drilling of the Barryroe appraisal well in
2012.
-- At the same time, a portion of the LC Capital Master Fund
loan was converted into equity, the remaining loan extended to end
June 2017 and the interest rate reduced
-- In addition, the Company put in place an option, with Brandon
Hill Capital, to provide additional finance to the sum of
GBP500,000. Exercise of the option is conditional upon the Company
being required to reimburse Providence Resources in respect of
further costs associated with the Transocean Dispute.
-- Action was also taken to further reduce overhead costs
-- Throughout the first half of the year, Providence Resources
continued farm-out negotiations on behalf of the Barryroe
partnership (Lansdowne 20%) and this process is continuing.
-- Cash balances at 30 June 2016 of GBP0.83 million (31 December 2015:GBP0.32 million).
-- Loss for the period after tax GBP0.52 million (31 December 2015: loss GBP15.1 million).
-- Loss per share 0.3 pence (31 December 2015: loss 10.2 pence).
For further information please contact:
Lansdowne Oil & Gas plc
Steve Boldy +353 1 495 9259
Cantor Fitzgerald
Sarah Wharry
David Porter +44 (0) 20 7894 7000
Beaufort Securities +44 (0) 20 7382 8300
Jon Belliss
Lansdowne Oil and Gas plc
Interim results for the six months ended 30 June 2016
Chairman's Statement
The first half of 2016 proved to be very challenging for the
Company. Oil prices continued to decline, reaching a low-point
below $30/bbl in the first quarter. Furthermore, on 13(th) April
2016, a judgement was handed down by the Court of Appeal
overturning an earlier ruling against Transocean in a dispute with
Providence Resources ("Providence") about certain spread costs.
The case related to amounts claimed by Transocean against
Providence regarding the use of the semi-submersible drilling unit,
the Arctic III, in 2011/12 on the Barryroe oilfield, offshore
Ireland. The total claim, which was made by Transocean in 2012,
amounted to approximately US$19 million. Providence, in defence of
its position, counterclaimed against Transocean. The Hon. Mr
Justice Popplewell, in his judgement of 19 December 2014 in the
Commercial Court in London, found that Transocean was in breach of
contract for failing to maintain various parts of its sub-sea
equipment and that Transocean was not, therefore, entitled to the
full amount claimed. The ruling also supported Providence's
position that Providence was entitled to set off certain spread
costs against Transocean's claim.
As previously announced, Transocean sought and was granted the
right to appeal one aspect of Mr Justice Popplewell's judgement.
This specifically related to Providence's right of set off and the
appeal turned on the Court's interpretation of the wording of the
consequential loss clause in the rig contract. The appeal was heard
in March 2016.
The financial implications of the Court of Appeal's judgement
resulted in the payment of approximately US$7 million (excluding
interest and costs) to Transocean by the Barryroe partners. In line
with its working interest in the field, Lansdowne was liable for
20% of this amount (c. US $1.4 million) and any amounts to be paid
in the future.
Given the financial implications of this, Lansdowne shares were
suspended pending clarification of the Company's financial
position. The Company moved to address the situation and a General
Meeting held on 9 June 2016 gave shareholder approval to allot new
shares and for a necessary share capital re-organisation. A placing
was then completed to raise GBP2.1 million to settle the
outstanding amounts due and to provide working capital and
Lansdowne's shares returned to trading on 22 June 2016.
Coincident with the placing, a portion (GBP930,000) of the LC
Capital Master Fund loan was converted into equity at a placing
price of 1p/share, the remaining loan was extended to the end of
June 2017 and the interest rate was reduced from 10% per annum to
5% per annum.
In addition, the Company now has an option, exercisable on one
or more occasions at any time for 12 months from June 2016, to
require Brandon Hill Capital to use its reasonable endeavours to
procure subscribers for new ordinary shares in the capital of the
Company to raise up to an aggregate additional GBP500,000 (the
"Additional Placing"). This will be at the lower of 1 penny per
share or the price that is a 10% discount to the closing mid-market
share price of the Company's ordinary shares on the day on which
the Company requests Brandon Hill Capital to undertake the
Additional Placing. To the extent it is unable to procure
subscribers for the requisite number of new ordinary shares,
Brandon Hill Capital will itself subscribe for such new ordinary
shares at such price. Exercise of the option is conditional, inter
alia, upon the Company being required to reimburse Providence
Resources in respect of further costs and/or awards associated with
the Transocean dispute and the proceeds of the Additional Placing
must be applied by the Company for this purpose.
The Company also moved to further reduce running costs, with
Richard Slape, Commercial Director, leaving after the successful
completion of the re-financing and Johnny Greenall, Chairman,
retiring at the AGM on 20 July 2016.
I would like to thank both of them for all their efforts and
wish them the very best for the future.
Financial results
The Group recorded a loss after tax of GBP0.52 million for the
first six months of 2016 compared to a loss of GBP0.55 million for
the first six months of 2015.
Group operating expenses for the first half of 2016 were GBP0.42
million compared to operating expenses of GBP0.51 million for the
first six months of 2015.
Net finance expense was GBP0.1 million for the current period
against net finance expense of GBP0.04 million for the first six
months of 2015.
Cash balances at 30 June 2016 were GBP0.83 million (31 December
2015: GBP0.32 million).
Total equity attributable to the ordinary shareholders of the
Group has decreased from GBP24.87 million as at 30 June 2015 to
GBP12.89 million as at 30 June 2016.
Outlook
The Court of Appeal ruling posed a real problem at what was
already a difficult time for your Company. However, the Company was
successful in its re-financing efforts and I would like to thank
all that took part, but in particular the support of Brandon Hill
Capital and Beaufort Securities, (who are in the process of being
appointed joint broker to Lansdowne) and LC Capital, was essential
to providing a successful outcome.
Now that the immediate problems associated with the litigation
payment have been resolved, it is time to look forward to creating
value from our 20% interest in Barryroe. This is by any standards a
significant resource with attractive costs of development and
production and our entire focus is to move this project forward
against a background of greatly reduced drilling and operating
costs and a stabilising oil price environment.
Viscount Torrington
Chairman
Lansdowne Oil & Gas plc
Condensed Consolidated Income Statement
Six months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec.
16 15 15
GBP000s GBP000s GBP000s
Administration expenses (419) (514) (1,048)
Impairment of intangible
assets - - (14,949)
______ ______ _______
Operating loss (419) (514) (15,997)
Finance income - - -
Finance costs (97) (36) (129)
______ ______ ______
Loss before tax (516) (550) (16,126)
Income tax credit - - 1,052
______ ______ ______
Loss for the financial
period (516) (550) (15,074)
===== ===== ======
Loss per share (pence)
Basic and diluted (0.3p) (0.4p) (10.2p)
===== ===== ======
Lansdowne Oil & Gas plc
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec.
16 15 15
GBP000s GBP000s GBP000s
Loss for the Period (516) (550) (15,074)
Currency translation
differences - - -
______ ______ ______
Total comprehensive
loss for the period (516) (550) (15,074)
====== ====== ======
Lansdowne Oil & Gas plc
Condensed Consolidated Statement of Financial Position
As at 30 June 2016
Unaudited Unaudited Audited
30 June 30 June 31 Dec.
16 15 15
GBP000s GBP000s GBP000s
Assets
Non-Current Assets
Intangible assets 14,536 27,485 14,335
_______ _______ _______
Current Assets
Trade and other receivables 838 197 92
Cash and cash equivalents 828 546 320
_______ _______ _______
1,666 743 412
_______ _______ _______
Total Assets 16,202 28,228 14,747
======= ======= =======
Equity & Liabilities
Shareholders' Equity
Share capital 11,271 8,065 8,087
Share premium 25,100 25,247 25,247
Currency translation
reserve 59 59 59
Share-based payment
reserve 923 923 923
Accumulated deficit (24,466) (9,425) (23,950)
_______ _______ _______
Total Equity 12,887 24,869 10,366
Non-Current Liabilities
Deferred tax liability - 1,053 -
Provision for liabilities 250 227 240
_______ _______ _______
250 1,280 240
_______ _______ _______
Current Liabilities
Trade and other payables 1,937 2,079 2,173
Shareholder loan 1,128 - 1,968
_______ _______ _______
3,065 2,079 4,141
_______ _______ _______
Total Liabilities 3,315 3,359 4,381
_______ _______ _______
Total Equity and Liabilities 16,202 28,228 14,747
======= ======= =======
Lansdowne Oil & Gas plc
Condensed Consolidated Statement of Cash flows
Six months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June
2016 2015 31 Dec. 2015
GBP000s GBP000s GBP000s
Cash flows from operating
activities
Loss for the period (516) (550) (15,074)
Adjustments for:
Impairment of assets - - 14,949
Interest payable and
similar charges 102 11 127
Equity settled share-based
payment - 30 29
Tax credit - - (1,052)
(Increase)/decrease
in trade and other
receivables (746) - 105
(Decrease)/increase
in trade and other
payables (236) 101 196
_______ _______ _______
Net cash used in operating
activities (1,396) (408) (720)
Cash flows from investing
activities
Acquisition of intangible
exploration assets (201) (334) (2,133)
_______ _______ _______
Net cash from investing
activities (201) (334) (2,133)
Cash flows from financing
activities
Proceeds from issuance
of ordinary shares 2,105 1,012 1,034
Proceeds from new
loan - - 1,863
_______ _______ _______
Net cash generated
from financing activities 2,105 1,012 2,897
----------- ----------- -----------
Net increase in cash
and cash equivalents 508 270 44
Cash and cash equivalents
at start of period 320 276 276
_______ _______ _______
Cash and cash equivalents
at end of period 828 546 320
_______ _______ _______
Lansdowne Oil & Gas plc
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2016
Share Share Other Retained Total
Capital Premium Reserves Losses
GBP000s GBP000s GBP000s GBP000s GBP000s
Unaudited
At 1 January 2015 7,027 25,273 59 (7,982) 24,377
Loss for the period - - - (550) (550)
_____ _______ _______ _______ _______
Total comprehensive
income for the period - - - (550) (550)
Issue of new shares 1,038 (26) - - 1,012
Share based payment
charge - - - 30 30
At 30 June 2015 8,065 25,247 59 (8,502) 24,869
_____ _______ _______ _______ _______
Audited
At 1 January 2015 7,027 25,273 59 (7,982) 24,377
Loss for the period - - - (15,074) (15,074)
_____ _______ _______ _______ _______
Total comprehensive
income for the period - - - (15,074) (15,074)
Share based payments
charge - - - 29 29
Issue of new shares
- gross consideration 1,060 1,060
Cost of share issues - (26) - - (26)
_____ ______ _______ _______ ______
At 31 December 2015 8,087 25,247 59 (23,027) 10,366
_____ _______ _______ _______ _______
Unaudited
At 1 January 2016 8,087 25,247 59 (23,027) 10,366
Loss for the period - - - (516) (516)
_____ _______ _______ _______ _______
Total comprehensive
income for the period - - - (516) (516)
Issue of new shares 3,184 - - - 3,184
Cost of share issues - (147) - - (147)
_____ _______ _______ _______ _______
At 30 June 2016 11,271 25,100 59 (23,543) 12,887
_____ _______ _______ _______ _______
Notes to the Interim Condensed Financial Statements
1. Basis of Presentation
Accounting Policies
The interim financial information for the six months ended 30
June 2016 has been prepared on the basis of the accounting policies
which were adopted in the 2015 Annual Report and Accounts and IAS
34, "Interim Financial Reporting".
The interim financial information does not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. The results for the six months to 30 June 2016 and the
comparative results for the six months to 30 June 2015 are
unaudited. The comparative amounts for the year ended 31 December
2015 do not constitute the statutory financial statements for that
year. The interim financial information should be read in
conjunction with the annual financial statements for the year ended
31 December 2015, which have been prepared in accordance with IFRSs
as adopted by the European Union. Those financial statements have
been delivered to the Registrar of Companies and include the
auditor's report which was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. They did,
however, contain an emphasis of matter over the going concern basis
of preparation for the Group.
Going concern
The Directors have prepared the interim financial information on
the going concern basis which assumes that the Group and Company
and its subsidiaries will continue in operational existence for the
foreseeable future. The Directors have carried out a detailed
assessment of the Group's current and prospective exploration
activity, its relationship with the holder of its loan note and
cash flow projections and it is on this basis that the directors
consider it appropriate to prepare this interim financial
information on a going concern basis. This interim financial
information does not include any adjustment that would result from
the going concern basis of preparation being inappropriate.
2. Segmental Analysis
The Group has only one reportable business segment, which is the
exploration for oil and gas reserves in Ireland. All operations are
classified as continuing.
3. Loss per share
The loss for the period was wholly from continuing
operations.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec.
16 15 15
GBP000s GBP000s GBP000s
Loss per share for loss
from continuing operations
attributable to the equity
holders of the Company
- basic and diluted (0.3p) (0.4p) (10.2p)
The calculations were
based on the following
information:
Loss attributable to
equity holders of the
Company (516) (550) (15,074)
Weighted average number
of ordinary shares
In issue - basic and
diluted 186,101,994 153,582,061 157,698,252
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group has one class of
dilutive potential ordinary shares - share options. As a loss was
recorded for both periods the issue of new shares would have been
anti-dilutive.
4. Intangible Assets
Oil and gas project expenditures, including geological,
geophysical and seismic costs are accumulated as intangible assets
prior to the determination of commercial reserves. At 30 June 2016,
intangible assets totalled GBP14.5 million (30 June 2015: GBP27.5
million), all of which relates to Ireland. Movements in the period
relate to additional spend on the licence areas of GBP0.2
million.
5. Copies of the Interim Report
Copies of the interim results can be obtained from the Company
Secretary, Lansdowne Oil & Gas plc, 6 Northbrook Road, Dublin 6
and from the Company's website www.lansdowneoilandgas.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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