TIDMLOGP
RNS Number : 2337D
Lansdowne Oil & Gas plc
28 June 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain. If you have any queries on this, then please contact
Steve Boldy, the Chief Executive Officer of the Company
(responsible for arranging release of this announcement).
28 June 2021
Lansdowne Oil & Gas plc
("Lansdowne" or "the Company")
Audited results for the year ended 31 December 2020
Lansdowne Oil & Gas ("Lansdowne" or "the Company") is
pleased to announce its audited results, for the year ended 31
December 2020. 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
and the Directors believe that these factors, combined with
favourable fiscal terms, have the potential to deliver high value
reserves.
Lord Torrington, Independent Non-Executive Chairman, commented
:
I am pleased to report that, with the oil price having returned
to pre-pandemic levels of c. $70/bbl, the Barryroe Partners
(Lansdowne 20% and Exola/Providence 80%) have retaken control of
the project and will now be masters of our destiny. Lansdowne
retains 69MM boe net 2C resources and we look forward to returning
to operations and moving to development.
The onset of the global Covid-19 Pandemic early in 2020 led
quickly to a down-turn in all economic activity and oil and gas
prices declined dramatically, with the Brent Oil price sliding
below $30/bbl.
Nevertheless, work continued on Barryroe and in April it was
announced that a non-binding term sheet had been signed with SpotOn
Energy Limited ("SpotOn"), a Norwegian company working with a
consortium of world leading service providers to deliver cost
effective offshore oil and gas developments and this led to the
Barryroe Partners (Lansdowne 20% and Exola/Providence 80%) signing
a Farm-Out Agreement ("FOA") with SpotOn at the end of
November.
Under the Agreement, SpotOn was to fund 100% of an Early
Development Scheme (EDS) focused on the eastern part of Barryroe
and the subsequent full field development, to earn a 50% interest
in the Licence.
The rationale for locating the EDS in the eastern part of
Barryroe is that the 48/24-10z well was drilled in this area and
established good flow rates from the Basal Wealden A Sand (3,504
bopd) as well as strong gas flow rates from the overlying Basal
Wealden C Sand. Furthermore, the 3D seismic quality is optimal in
this area and the structural configuration shows low dips and
little faulting. The concept of a phased development of Barryroe,
commencing in the eastern part of the field, has long been
advocated and a first well location was identified by the Barryroe
Partners in 2017 - labelled the K Location. A site survey
application was lodged for this area in 2020.
After the year end, work continued on the technical and funding
aspects of the Barryroe EDS, but problems arose with certain
aspects of SpotOn's planned financing model and it became apparent
that SpotOn would not be able to deliver the funding as required
under the FOA and during April 2021 the Barryroe Partners
terminated the FOA, as allowed under its terms.
The Barryroe Partners have now retaken control of the project
and Lansdowne will as a result retain its 20% original equity in
the project, maintaining 69MM Boe net 2C resources.
In April 2021 a revised Lease Undertaking work programme was
submitted to the Department of the Environment, Climate and
Communications, designed to move Barryroe to a declaration of
commerciality, turning 2C resources into 2P reserves and
subsequently seeking the award of a Petroleum Lease, prior to the
commencement of production via the EDS.
Approval to proceed with a site survey over the K Location was
granted in February 2021 and operations are expected to take place
later this year, with the drilling of the K well expected in the
second half of 2022.
It has been another difficult year, but the world is cautiously
moving forward and emerging from the effects of the Covid-19
Pandemic. The oil price has returned to pre-Pandemic levels and
currently sits at near $70/bbl. Studies have long shown that
Barryroe is a viable project above c. $25/bbl and will deliver
strong returns at current oil and gas prices.
Barryroe contains significant volumes of both oil and gas and
can play a vital role in delivering secure indigenous supplies for
Ireland during the transition to a low carbon future.
The quest to move forward the development of Barryroe's oil and
gas resources has been a long and sometimes frustrating journey and
I would like to thank all our shareholders for their continued
support through this difficult time.
We now look forward to the resumption of operations and moving
the Barryroe project to development.
Operational highlights
-- Barryroe Oil Field (SEL 1/11)
o Termination of the Farm-Out Agreement following the failure of
SpotOn to fulfil the terms
o Updated Lease Undertaking submitted to the Department of the
Environment, Climate and Communications in April 2021, with an
updated work programme designed to move Barryroe to a declaration
of commerciality, turning 2C resources into 2P reserves
Financial highlights
-- In February 2020, the Company placed 83,333,333 new ordinary
shares on 0.1 pence each ("Ordinary Shares") at a placing price of
0.6 pence a share to raise GBP500,000 before costs
-- At the same time, the Shareholder Loans entered into with
Brandon Hill Capital and LC Capital in June 2019, were converted
into new Ordinary Shares at the placing price
-- Warrants granted in connection with the Placing and
conversion of Shareholder Loans - 139,368,491 warrants granted at
an exercise price of 1.2 pence per share.
-- During the fourth quarter 73,066,666 warrants were exercised,
raising and additional GBP876,800 for the Company
-- Cash balances at 31 December 2020 of GBP0.64 million (2019: GBP0.02 million).
-- Operating expenses for the year were GBP0.3 million (2019: GBP0.1 million).
-- Loss for the year after tax of GBP0.4 million (2019: loss GBP0.2 million).
-- Diluted loss per share of 0.05 pence (2019: loss 0.03 pence).
-- The Company has net 2C Resources of 69 MMboe and is trading
at a valuation of around $0.13 per contingent resource barrel.
For further information please
contact:
Lansdowne Oil & Gas plc +353 1 963 1760
Steve Boldy
SP Angel Corporate Finance
LLP +44 (0)20 3470 0470
Nominated Adviser and Joint
Broker
Stuart Gledhill
Richard Hail
Brandon Hill Capital Limited +44 (0) 20 3463 5061
Joint Broker
Oliver Stansfield
Notes to editors:
About Lansdowne
Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focused,
oil and gas exploration and appraisal company quoted on the AIM
market and head quartered in Dublin.
For more information on Lansdowne, please refer to
www.lansdowneoilandgas.com
Results for the year ended 31 December 2020
Chairman's Statement
Introduction
I am pleased to report that, with the oil price having returned
to pre-pandemic levels of c. $70/bbl, the Barryroe Partners
(Lansdowne 20% and Exola/Providence 80%) have retaken control of
the project and will now be masters of our destiny. Lansdowne
retains 69MM boe net 2C resources and we look forward to returning
to operations and moving to development.
The year 2020 started with a renewed Farm-Out campaign for the
Barryroe Field and initial progress was quite promising, with
several parties reviewing the asset.
The onset of the global Covid-19 Pandemic, however, led quickly
to a down-turn in all economic activity and oil and gas prices
declined dramatically, with the Brent Oil price sliding below
$30/bbl.
Nevertheless, work continued on Barryroe and in April it was
announced that a non-binding term sheet had been signed with SpotOn
Energy Limited ("SpotOn"), a Norwegian company working with a
consortium of world leading service providers to deliver cost
effective offshore oil and gas developments. A period of
exclusivity was granted to SpotOn, to agree an appraisal work
programme and commercial terms and conclude a binding farm-out
agreement.
This led to the Barryroe Partners (Lansdowne 20% and
Exola/Providence 80%) signing a Farm-Out Agreement ("FOA") with
SpotOn at the end of November.
Under the Agreement, SpotOn was to fund 100% of an Early
Development Scheme (EDS) focused on the eastern part of Barryroe
and the subsequent full field development, to earn a 50% interest
in the Licence. SpotOn was to fund the Barryroe Partners retained
50% interest (Lansdowne 10%, Exola/Providence 40%) by a
non-recourse loan.
The rationale for locating the EDS in the eastern part of
Barryroe is that the 48/24-10z well was drilled in this area and
established good flow rates from the Basal Wealden A Sand (3,504
bopd) as well as strong gas flow rates from the overlying Basal
Wealden C Sand. Furthermore, the 3D seismic quality is optimal in
this area and the structural configuration shows low dips and
little faulting. The concept of a phased development of Barryroe,
commencing in the eastern part of the field, has long been
advocated and a first well location was identified by the Barryroe
Partners in 2017 - labelled the K Location. A site survey
application was lodged for this area in 2020.
After the year end, work continued, on the technical and funding
aspects of the Barryroe EDS, but problems arose with certain
aspects of SpotOn's planned financing model and they were granted
additional time, to the end of April 2021, to find a solution.
Unfortunately, it became apparent that despite being granted this
additional time, SpotOn would not be able to deliver the funding as
required under the FOA and during April the Barryroe Partners
terminated the FOA, as allowed under its terms.
The Barryroe Partners have now retaken control of the project
and Lansdowne will as a result retain its 20% original equity in
the project, maintaining 69MM Boe net 2C resources.
In April 2021, a revised Lease Undertaking work programme was
submitted to the Department of the Environment, Climate and
Communications, designed to move Barryroe to a declaration of
commerciality, turning 2C resources into 2P reserves and
subsequently seeking the award of a Petroleum Lease, prior to the
commencement of production via the EDS
Approval to proceed with a site survey over the K Location was
granted in February 2021 and operations are expected to take place
later this year, with the drilling of the K well expected in the
second half of 2022
Financial Results
In February 2020, the Company placed 83,333,333 new ordinary
shares of 0.1 pence each ("Ordinary Shares") at a placing price of
0.6 pence a share to raise GBP500,000 before costs (the
"Placing").
At the same time, the Shareholder Loans entered into with
Brandon Hill Capital Ltd and LC Capital in June 2019, were
converted into new Ordinary Shares at the placing price.
In connection with the Placing and the conversion of the
Shareholder Loans, the Company also granted a total of 139,368,491
warrants, on a one warrant per Placing or Loan Share basis, to
subscribe for new Ordinary shares in the Company at a price of 1.2
pence per share, with an expiry date of 31 December 2020.
During the fourth quarter some 73,066,666 of the warrants were
exercised, raising an additional GBP876,800 for the Company. The
remainder of the Warrants lapsed on expiry at 31 December 2020.
In December GBP175,000 of the LC Capital Loan ("the Loan") was
repaid, leaving c. GBP980,000 outstanding. The term of the Loan was
extended to 31 December 2021 and in conjunction with the Loan
extension, 26 million Warrants were issued to LC Capital at an
exercise price of 1.2p and an expiry date of 31 December 2021.
The Group recorded an after tax loss of GBP0.4 million for the
year ended 31 December 2020 compared to a loss of GBP0.2 million
for the year ended 31 December 2019.
Group operating expenses for the year were GBP0.3 million,
compared to GBP0.1 million in 2019.
Net finance expense for the year was GBP59,000 (2019:
GBP57,000).
Cash balances of GBP0.64 million (2019: GBP0.02 million) were
held at the end of the financial year
Total equity attributable to the ordinary shareholders of the
Group was GBP14.8 million as at 31 December 2020 (GBP13.6 million
as at 31 December 2019).
Outlook
It has been another difficult year, but the world is cautiously
moving forward and emerging from the effects of the Covid-19
Pandemic. The oil price has returned to pre-Pandemic levels and
currently sits at near $70/bbl. Studies have long shown that
Barryroe is a viable project above c. $25/bbl and will deliver
strong returns at current oil and gas prices.
The issue of climate change and the need to control emissions of
greenhouse gases grows ever more prominent. There is no question
but that the transition is underway to deliver low carbon/carbon
neutral energy supplies.
There is also no doubt however, that this transition will take
time. In 2020 gas provided 51% of Ireland's electricity generation
and 64% of this gas was imported from Britain via interconnectors.
Oil continues to be the dominant energy source in Ireland, with
consumption of around 140,000bpd and 100% of this is imported.
Barryroe contains significant volumes of both oil and gas and
can play a vital role in delivering secure indigenous supplies
during the transition to a low carbon future.
There is also potential for Carbon Capture and Storage to be
developed in conjunction with Barryroe, with CO(2) being stored in
the nearby depleted fields.
The quest to move forward the development of Barryroe's oil and
gas resources has been a long and sometimes frustrating journey and
I would like to thank all our shareholders for their continued
support through this difficult time.
We look forward to the resumption of operations and moving the
Barryroe project to development.
Lord Torrington
Chairman
25 June 2021
Lansdowne Oil & Gas plc
Consolidated Statement of Financial Position
As at 31 December 2020
2020 2019
Note GBP'000 GBP'000
Assets
Non- current assets
Intangible assets 4 15,690 15,543
Current Assets
Trade and other receivables 17 20
Cash and cash equivalents 635 16
--------- ---------
652 36
--------- ---------
Total Assets 16,342 15,579
========= =========
Equity and Liabilities
Shareholders' Equity
Share capital 5 11,930 11,722
Share premium 5 28,284 26,864
Currency translation reserve 59 59
Share-based payment reserve 923 923
Accumulated deficit (26,412) (26,005)
--------- ---------
Total Equity 14,784 13,563
--------- ---------
Non-Current Liabilities
316 316
Provisions
Current Liabilities
Shareholder loan 979 1,305
Trade and other payables 263 395
--------- ---------
Total Liabilities 1,558 2,016
--------- ---------
Total Equity and Liabilities 16,342 15,579
========= =========
Lansdowne Oil & Gas plc
Consolidated Income Statement
For the year ended 31 December 2020
2020 2019
Note GBP'000 GBP'000
Administrative expenses (348) (122)
Operating loss (348) (122)
Finance costs (59) (57)
Loss for the year before tax (407) (179)
Income tax - -
-------- --------
Loss for the year (407) (179)
-------- --------
Loss per share (pence):
Basic loss per ordinary share 3 (0.05p) (0.03p)
-------- --------
Diluted loss per ordinary share 3 (0.05p) (0.03p)
-------- --------
The results for the year all arise on continuing operations. The
group has no other comprehensive income or expense in the current
or prior year.
Lansdowne Oil & Gas plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Share Currency
Share Share based translation Accumulated Total
capital premium payment reserves deficit equity
GBP'000 GBP'000 Reserve GBP'000 GBP'000 GBP'000
GBP'000
Balance at 1 January 2019 11,718 26,833 923 59 (25,826) 13,707
Loss for the financial year - - - - (179) (179)
Total comprehensive loss
for the year - - - - (179) (179)
Issue of new shares - gross
consideration 4 31 - - - 35
Balance at 31 December 2019 11,722 26,864 923 59 (26,005) 13,563
---------- ---------- --------- ------------- -------------- ----------
Balance at 1 January 2020 11,722 26,864 923 59 (26,005) 13,563
Loss for the financial year - - - - (407) (407)
---------- ---------- --------- ------------- -------------- ----------
Total comprehensive loss
for the year - - - - (407) (407)
Issue of new shares - gross
consideration 208 1480 - - - 1,688
Cost of share issues - (60) - - - (60)
Balance at 31 December 2020 11,930 28,284 923 59 (26,412) 14,784
========== ========== ========= ============= ============== ==========
Lansdowne Oil & Gas plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
2020 2019
Note GBP'000 GBP'000
Cash flows from operating activities
Loss for the year (407) (179)
Adjustment for:
Interest payable and similar charges 60 58
Decrease in trade and other receivables 3 28
(Decrease) in trade and other payables (132) (53)
Net cash used in operating activities (476) (146)
-------- --------
Cash flows from investing activities
Acquisition of intangible exploration assets 4 (147) (232)
Net cash used in investing activities (147) (232)
-------- --------
Cash flows from financing activities
Proceeds from the issue of share capital 1,688 35
Cost of raising shares (60) -
Proceeds from new loan - 200
Repayment of loan (386) -
-------- --------
Net cash from financing activities 1,242 235
-------- --------
Net increase/(decrease) in cash and cash
equivalents 619 (143)
Cash and cash equivalents at 1 January 16 159
-------- --------
Cash and cash equivalents at 31 December 635 16
======== ========
Lansdowne Oil & Gas plc
Notes to the Financial Information
For the year ended 31 December 2020
1. Basis of presentation
The consolidated financial statements are presented in Sterling,
the Company's functional currency, and all values are rounded to
the nearest thousand (GBP'000) except where otherwise
indicated.
The Directors have prepared the financial statements on the
going concern basis which assumes that Group and Company will
continue in operational existence for at least twelve months from
the date of the approval of these financial statements.
The Directors have carried out a detailed assessment of the
Group's and Company's ability to continue as a going concern
including assessing its current and prospective exploration
activity, its relationship with the holder of its loan note and
preparing cash flow projections for the period to 30 June 2022.
The cash flow projections indicate that the Group's and
Company's ability to continue as a going concern is dependent on
securing additional debt or equity funding.
The Directors anticipate that the Company will raise new funds,
either from a further equity placing or via shareholder loans, upon
award of a Lease Undertaking for Barryroe sufficient to fund the
Company's share of costs on the Barryroe Licence together with
on-going working capital requirements.
In addition, the Directors expect that the maturity date of
shareholder loans which are due for repayment in December 2021 may
be extended should this be requested by the Company.
The Directors have considered the various matters set out above
and determined that these events and conditions constitute a
material uncertainty that may cast significant doubt on the Group's
and Company's ability to continue as a going concern and that they
may therefore be unable to realise assets and discharge liabilities
in the normal course of business. The Directors remain confident
that the Group and Company will be in a position to secure such
funding as may be required and will have sufficient cash resources
available to meet their liabilities for at least 12 months from the
date of approval of these financial statements.
On that basis, the directors consider it appropriate to prepare
the financial statements on a going concern basis. These financial
statements do not include any adjustment that would result from the
going concern basis of preparation being inappropriate.
2. Segmental reporting
The Group has one reportable operating and geographic segment,
which is the exploration for oil and gas reserves in Ireland. All
operations are classified as continuing and currently no revenue is
generated from the operating segment.
3. Loss per ordinary share
The loss for the year was wholly from continuing operations.
2020 2019
GBP'000 GBP'000
Loss for the year attributable to equity holders (407) (179)
Weighted average number of ordinary shares in
issue - basic and diluted 789,385,913 665,071,764
Loss per share arising from continuing operations
attributable to the equity holders of the Company
- basic and diluted (in pence) (0.05) (0.03)
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
potential ordinary shares being share options. As a loss was
recorded for both 2020 and 2019, potentially issuable shares would
have been anti-dilutive. The number of potentially issuable shares
at 31 December 2020 is 34,258,887 (2019: 146,685,452).
4. Intangible assets
Exploration /
appraisal assets
Group GBP'000
Cost
At 1 January 2019 15,311
Additions 232
At 31 December 2019 15,543
------------------
At 1 January 2020 15,543
Additions 147
At 31 December 2020 15,690
------------------
Oil and gas project expenditures, all of which relate to
Barryroe, including geological, geophysical and seismic costs, are
accumulated as intangible assets prior to the determination of
commercial reserves. The directors have assessed the current
ongoing activities and future planned activities and are satisfied
that the carrying value is appropriate. The directors recognise
that the future realisation of the Group's appraisal assets are
dependent on moving these forward to development and
production.
Following the termination of the SpotOn FOA, the Barryroe
Partners have retaken control of the project and Lansdowne will as
a result retain its 20% original equity in the project, maintaining
69MM Boe net 2C resources.
At the time of initiating discussions with SpotOn the oil price
had fallen to below $30/bbl as a result of the impact of
Covid-19.
The oil price has recovered sharply since the autumn of 2020 and
now stands at c.$70/bbl.
In April 2021, a revised Lease Undertaking work programme was
submitted to the Department of the Environment, Climate and
Communications, designed to move Barryroe to a declaration of
commerciality, turning 2C resources into 2P reserves and
subsequently seeking the award of a Petroleum Lease, prior to the
commencement of production via the EDS.
Approval to proceed with a site survey over the K Location was
granted in February 2021 and operations are expected to take place
later this year, with the drilling of the K well expected in the
second half of 2022.
5. Share capital - Group and Company
2020 2019
Authorised
873,618,337 ordinary shares at GBP0.01
pence each 873,618,337 665,349,846
Issued, called up and fully
paid:
Share Share
Number of Capital premium Total
shares GBP'000 GBP'000 GBP'000
-------------- --------- --------- ----------
At 1 January 2019 661,849,846 11,718 26,833 38,551
Issued in year 3,500,000 4 31 35
At 31 December 2019 665,349,846 11,722 26,864 38,586
-------------- --------- --------- ----------
Issued in year 208,268,491 208 1,480 1,688
Share issue costs - - (60) (60)
-------------- --------- --------- ----------
At 31 December 2020 873,618,337 11,930 28,284 40,214
-------------- --------- --------- ----------
6. Accounts
Copies of the annual accounts for the year ended 31 December
2020 will be sent to shareholders shortly and will be available
from the Group's office at Paramount Court, Corrig Road, Sandyford
Business Park, Dublin 18 Ireland and the Group's website
www.lansdowneoilandgas.com
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