TIDMPRD
RNS Number : 2060J
Predator Oil & Gas Holdings PLC
16 August 2019
FOR IMMEDIATE RELEASE
16 August 2019
Predator Oil & Gas Holdings Plc / Index: LSE / Epic: PRD /
Sector: Oil & Gas
Predator Oil & Gas Holdings Plc
("Predator" or the "Company" and together with its subsidiaries
"the Group")
Report and Interim Financial Statements for the 6 months to 30
June 2019
Financial Highlights:
-- Loss from operations reduced to GBP0.512 million (2018: full
year Loss of GBP0.792 million).
-- Cash balance, at period end of GBP0.728 million (2018 year
end: GBP1.326 million). A further GBP1.18 million (US$1.5million)
held as restricted cash.
-- On 15 February 2019 raised GBP1.5 million by the issue of
Convertible Loan Notes to Arato Global Opportunities LLC to fund a
returnable bank guarantee required in respect of the work programme
on the Guercif licence in Morocco, and for general working capital
purposes.
-- On 15 February 2019, 2,083,333 warrants were issued at an
exercise price of 12p with a vesting period of two years, to Arato
Global Opportunities LLC and 2,000,000 in warrants on the same
terms issued to Novum Securities Limited, the arranger of the
convertible loan notes.
-- During the period GBP350,000 of the Loan Notes have been
redeemed by conversion into 5,110,803 ordinary shares.
-- On 7 June 2019 appointment of Brandon Hill Capital as the Company's broker
-- On 30 July 2019 re-appointment of Novum Securities as a joint broker
Operational Highlights:
-- On 19 March 2019 Predator Gas Ventures Limited was awarded the Guercif Petroleum
Agreement in Northern Morocco by ONHYM which includes the
Moulouya Tortonian Prospect
and is being prepared for early drilling
-- On 10 April 2019 Predator Oil & Gas Ventures Limited accepted a one year extension of the
term of the Licensing Option 16/30 ("LO 16/30")('Ram Head') to
30 November 2019 subject to
the carrying out of the work programme agreed with the
Department of Communications,
Climate Action and Environment.
Post reporting date:
-- On 19 July 2019, Sarah Cope resigned as Non-Executive
Director of the Company and Carl Kindinger was appointed as
Non-Executive Director and interim Chairman with immediate
effect.
-- In respect of the C02 EOR project on 4 July 2019, the Group announced
o Certificate of Environmental Clearance issued
o Well completion design updated to potentially reduce costs and
enhance economics
o Well workovers AT-4 and AT-5X were to begin shortly
o A CPR giving contingent, development pending, resources of 5.3
to 8.9 MM boe
-- On 12 August 2019 the Group announced that it has commenced
workover operations to survey downhole the AT-4 and AT-5X wells to
ensure there are no obstructions that would prevent Predator's
preferred downhole CO2 EOR completion design from being installed
for the first injectivity and production test.
Paul Griffiths Chief Executive of Predator commented:
"During the reporting period losses have been reduced and cash
and restricted cash increased whilst adding the potentially
transformational for the Company Moulouya_1 Prospect in Morocco. We
excitedly await the early turn of the drillbit. Multiple prospects
and leads have been identified in the area of the Guercif PA to
ensure that there is significant "running room" in this sparsely
drilled prospective area. The Directors look forward to significant
news flow and an exciting time for its shareholders during the next
6 months as it continues with plans to drill the Moulouya_1
Prospect and progress to production in Trinidad. Ireland too could
potentially offer some exciting medium-term M and A opportunities
as security of energy supply becomes potentially of even greater
significance if Brexit is successfully completed."
Predator Oil & Gas Holdings Plc
Report and Interim Financial Statements
For the 6 months to 30 June 2019
Predator Oil & Gas Holdings Plc ('the Company' or 'The
Group'), an oil and gas exploration and development company, listed
on the Standard Listing segment of the Official List on the Main
Market of the London Stock Exchange, announces its unaudited
interim results for the six month period ended 30 June 2019.
CEO Operations Report
Predator Oil & Gas Holdings Plc ("Predator" or the
"Company") continued to make good progress in the first half of
2019.
Morocco
During the reporting period, Predator, through its wholly-owned
subsidiary Predator Gas Ventures Ltd., completed the signing of the
Guercif Petroleum Agreement (the "Guercif PA") and Association
Contract with the Office National des Hydrocarbures et des Mines
("ONHYM") which covers an area of 7,269 km(2). Predator is the
designated operator with a 75% working interest (ONHYM 25%).
The agreed work programme includes the drilling of one well to a
maximum depth of 2,000 metres in the Initial Period of the
exclusive exploration licence of 30 months' duration.
On 15 February 2019 the Company issued a Convertible Loan Note
in favour of Arato Global Opportunities LLC (the "Lender") to raise
GBP1.5 million to provide a refundable Bank Guarantee of US$1.5
million to be put in place in respect of the work programme agreed
to be carried out by the Company under the terms of the Guercif PA,
and for general working capital purposes. The Bank Guarantee is
refunded in full to the Company upon completion of the Guercif work
programme.
Terms of the Convertible Loan Note
The nominal amount of each Loan Note is GBP1 and the aggregate
principal amount is GBP1.5 million. There is no coupon attaching to
the Loan Notes and the term is 24 months after which the Loan Notes
are repayable in cash in an amount of 105% of the principal amount
plus a fee of 10% of the principal amount being repaid. The Lender
has also agreed to make available to the Company a further
GBP250,000 principal of Loan Notes on the same terms, subject to
certain conditions, for additional working capital if required.
The Loan Notes are convertible at the election of the Lender at
105% of the principal amount being converted. The conversion price
is calculated as 90% of the volume weighted average share price of
a Predator Ordinary Share as shown on the London Stock Exchange for
the two trading days immediately preceding the notice of conversion
from the Lender. The Loan Notes can otherwise be redeemed at any
time by the Company in cash in an amount of 105% of the principal
amount plus a fee of 10% of the principal amount being repaid.
In addition, the Lender is being issued with warrants to
subscribe for 2,083,333 Ordinary Shares in the Company at an
exercise price of 12p per share for a period of 2 years, and Novum
Securities, the Company's broker who has arranged the Loan Notes,
is being issued with warrants to subscribe for 2,000,000 Ordinary
Shares in the Company at an exercise price of 12p per share.
The Company received Shareholder approval on 13 June 2019 for
the authority to issue up to 100 million Ordinary shares to cover
the Loan Note conversion and the exercise of the warrants granted
to each of the Lender and Novum Securities.
Arato Global Opportunities is an investment fund focussed on
small and midcap growth companies.
The Directors believe that the Guercif PA has an attractive
risk/reward balance based on the identification of the Tertiary
"Moulouya" gas prospects. The Moulouya prospects are a target for
Tertiary reservoirs equivalent to those producing in the Rharb
Basin. Gas shows in two offset wells in the target interval
combined with inexpensive drilling costs and an uncomplicated
development scenario to potentially utilise the Maghreb gas
pipeline, which lies just 4 kilometres from the primary gas
prospect, support management's risk/reward analysis. Morocco's
attractive fiscal regime and gas sales pricing, together with the
country's strategic requirement to replace coal-fired power
generation with gas, drives the commercial case for preferentially
developing gas in the Guercif PA area.
The Company's Competent Person's Report ("CPR") undertaken by
SLR Consulting ("SLR") issued during the reporting period assigns a
range of prospective gas resources net to Predator of between 320
and 659 BCF (Best and High Estimates respectively) with a 21%
Chance of Success and based on a 66% recovery factor.
SLR indicate an unrisked value of US$ 1.95 million per BCF for
developed Moroccan gas giving an unrisked range of values for the
Company's Moulouya_1 Prospect of between US$624 to 1,285 million,
clearly demonstrating management's risk/reward business development
strategy.
Exploring for gas in Morocco is consistent with the Company's
ethos of being a responsible fossil fuel business as replacing
coal-fired power generation in Morocco could potentially lead to a
significant reduction in the country's current level of C02
emissions.
At the end of the reporting period the Company was in
discussions with several parties in the context of availing of
potential rig-sharing opportunities within a time window consistent
with the anticipated receipt of all regulatory and environmental
approvals required to commence drilling operations.
A well location for the first well to test the Moulouya_1
Prospect has been selected, subject to the approval of our joint
venture partner ONHYM. Progress on provisional well design, well
planning and identification of critical long-lead well inventory
items has been made. Five separate gas targets have been programmed
for evaluation in the first well.
Trinidad
During the reporting period the Company has continued to make
steady progress in respect of its Enhanced Oil Recovery Pilot
Project using carbon dioxide injection ("CO2 EOR") in the
Inniss-Trinity field onshore Trinidad. The Company replaced its
originally proposed infill drilling programme with FRAM Exploration
(Trinidad) Ltd. ("FRAM") with the Pilot C02 EOR Project. The
Directors believe that this would offer greater potential well
productivity compared to conventional infill drilling. The Company
has advanced the Pilot C02 by completing reservoir engineering
studies and securing exclusivity over Trinidad's C02 surplus
supply.
The Company has received preliminary approval from Heritage
Petroleum Company Ltd. to proceed with C02 EOR planning on their
licence under FRAM's operated Incremental Production Services
Contract, providing an important validation from the State oil
company of management's technical and commercial model for CO2
EOR.
The added technical and environmental complexity of the CO2 EOR
Pilot, being the first of its kind in Trinidad, and the requirement
for new environmental approvals has delayed the Company's desired
objective in achieving incremental oil production at the end of the
reporting period.
Ireland
During the reporting period the Company extended Licensing
Option 16/30 offshore Ireland to 30 November 2019 for a work
programme agreed with the Department of Communications, Climate
Action and Environment ("DCCAE") including inter alia the purchase
and reprocessing of existing seismic data and ongoing desk-top
studies.
A new CPR was produced by SLR confirming original prospective
gas resources for the Ram Head gas discovery (made by Marathon in
1984/5) net to the Company in the range of 725.5 to 1,826.6 BCF
(Best and High Estimates respectively). The new CPR incorporated
for the first time a Conceptual Development Scenario based on 10
development wells and including new desk-top reservoir engineering
work undertaken on behalf of the Company. The results show that a
technical recovery rate of 96% could be achieved at an initial
field rate of 400 mm cfgpd based on gross in place gas of 1,834 BCF
if developed direct to shore via a new 20" gas pipeline.
At the end of the reporting period the Company was still
anticipating the award of a Successor Authorisation (Frontier
Exploration Licence) to the Corrib South Licensing Option 16/26.
The application for a Successor Authorisation is still actively
under consideration by the DCCAE and the Company continues to
provide additional updated information required before formalities
can be completed and a decision can be made.
During the reporting period the Company has engaged in
preliminary discussions with several parties regarding potential M
& A transactions incorporating the Company's strategically
valuable Irish gas assets. The Directors are of the opinion that
these assets could be consolidated with other compatible gas assets
in Ireland to form an integrated business that would have a larger
critical mass and therefore a greater influence in determining the
energy mix going forward in Ireland to address the new political
environment driven by climate change concerns versus security of
energy supply.
Post Reporting Date
On 4 July 2019 the Company announced significant progress in
respect of its CO2 EOR Pilot in Trinidad, most importantly in
obtaining the Certificate of Environmental Clearance for C02 EOR
operations, without which operations could not proceed.
With the independent approval of the Company's Pilot CO2 Project
by one of the most important and influential government agencies in
the oil and gas sector in Trinidad now secured, the Company remains
on track to exit 2019 as an oil producer and revenue creator.
New well completion designs were generated to concentrate C02
injection into only the potentially most productive oil sands, to
significantly reduce initial capital and operating costs below the
previously budgeted figure of US$ 600,000 and to materially improve
the net-back per barrel based on the previous guidance of an
average of US$10 per barrel. The net-back per barrel is expected to
improve further as economies of scale are introduced by potentially
expanding a successful CO2 EOR Pilot.
Capital costs for the CO2 EOR Pilot have been ring-fenced within
the Company's currently available cash balances.
Planning is underway to carry out a well workover survey of the
first proposed pilot C02 injection well and EOR production well
(AT-4 and AT-5X respectively) in preparation for downhole
completion.
A new CPR was produced by SLR giving contingent (development
pending) CO2 EOR resources for the Inniss-Trinity field in the
range of 5.3 to 8.9 million barrels of oil (Best and High Estimate
respectively). A successful CO2 EOR Pilot would de-risk these
Contingent Resources.
The Company has an exclusive option until 31 December 2019 to
acquire FRAM for US$ 4.2 million, representing US 79 cents to 47
cents per barrel based on the above Contingent Resources.
A successful Guercif drilling programme in combination with a
successful CO2 EOR Pilot could potentially create the opportunity
to complete an acquisition of FRAM, subject to all regulatory
consents, without a significant dilution factor for
shareholders.
On 8 July 2019 the Company reported that the Government of
Ireland had decided not to proceed with the Climate Emergency Bill,
which if progressed would have had a negative impact on hydrocarbon
exploration offshore Ireland. Whilst this pragmatic approach is
welcomed by the Company, Ireland still remains a high risk
political environment for oil and gas investment. Consequently the
Company adopts a cautious approach to developing its Irish assets
and seeks to minimise any discretionary capital requirements for
Ireland, preferring to wait and see how the Government of Ireland's
decision works out in practice.
On 19 July 2019 the Company announced a directorate change with
the acceptance of the resignation of Sarah Cope from the Board and
the position of Non-executive Chairman. Carl Kindinger was
appointed Interim Non-executive Chairman. Mr. Kindinger has
extensive financial experience in public companies and will
strengthen prudent oversight of the Company's finances going
forward as the Company enters an important phase in its business
development strategy.
Paul Griffiths
Chief Executive Officer
15 August, 2019
The Chairman's Statement
In 2018 the Company was unprepared for the impact of the climate
change debate in Ireland and the fact that it would be so
aggressively pursued almost exclusively against the fossil fuel
industry. The Company is better prepared now and has developed a
strategic plan to mitigate the risks. Morocco was added to the
portfolio to maintain our business development strategy focussed on
gas, which creates lower CO2 emissions. Trinidad has been
progressed to ensure all environmental approvals have been
consented before operations begin. Morocco and Trinidad take a
pragmatic approach to near-term fossil fuel exploitation as a
bridge to a cleaner energy future and the political, regulatory and
environmental regime reflects this pragmatism and is still very
supportive of a responsible fossil fuel industry. These are still
jurisdictions that make the fossil fuel industry commercially
viable.
During the period oil prices have been volatile falling from the
peak levels seen in October 2018. Prices were steady at the end of
the reporting period but the outlook remains very volatile due to
geopolitical events that can occur unpredictably at any time. Costs
of oil industry goods and services remain low but the combination
of lower oil prices and climate change activism remains a drag on
activity levels in many companies. This favours Predator by
reducing the level of competition in securing attractive assets and
the quantum of our capital and operating cost requirements. The
Company is focussed on gas which is seen as a strategic commodity
in terms of security of energy supply and an attractive component
of the energy mix going forward to a cleaner energy environment,
due to its capacity to generate lower CO2 emissions when compared
directly to oil.
The nature of the funding of oil and gas projects is changing as
equity funding in public markets for small cap companies becomes
increasingly more difficult. Convertible loan instruments are
becoming more common. Opportunities by investors to invest directly
in the Company at asset level are now being sought. In these
circumstances the technical quality and risk/reward balance of the
assets becomes paramount together with the ability for near-term
drilling and early monetisation.
Carl Kindinger
Chairman
15 August 2019
Contacts
For further information please contact:
Predator Oil & Gas Holdings
Plc
Paul Griffiths, Chief Executive
Officer
Carl Kindinger, Non-Executive
Chairman +44 (0)1534 834600
Brandon Hill Capital
Jonathan Evans / Oliver Stansfield +44 (0)203 463 5000
Novum Securities
John Beliss / Colin Rowbury +44(0)207 399 9400
Notes to Editors:
Predator is an oil and gas exploration company with the
objective of participating with FRAM Exploration Trinidad Ltd. in
further developing the remaining oil reserves in the producing
Inniss Trinity oil field onshore Trinidad, primarily through the
application of C02 EOR technology. Potential for cash flow exists
by executing a Pilot Enhanced Oil Recovery project using
locally-sourced carbon dioxide for injection into the oil
reservoirs ("C02 EOR"). Near-term expansion and growth potential is
focussed on upscaling the C02 EOR operations in the Inniss-Trinity
oil field and potential acquisitions of assets suitable for C02 EOR
development, subject to all necessary approvals.
In addition, Predator also owns and operates exploration and
appraisal assets in current licensing options offshore Ireland, for
which Successor Authorisations have been applied for, adjoining
Shell's Corrib gas field in the Slyne Basin on the Atlantic Margin
and east of the Kinsale gas field and Barryroe oil field in the
Celtic Sea. A Successor Authorisation has been granted for the
Celtic Sea asset whilst the result of an application for a Frontier
Exploration Licence over the Slyne Basin exploration asset is is
pending.
Predator is operator of the Guercif Petroleum Agreement onshore
Morocco which is initially prospective for Tertiary gas in
prospects less than 10 kilometres from the Maghreb gas
pipeline.
The Company has a highly experienced management team with a
proven track record in the oil and gas industry.
Interim Management Report 30 June 2019
The interim management report and interim results are set out in
the following pages.
The Directors present their report and the unaudited
consolidated financial statements together with related notes, of
Predator Oil & Gas Holdings Plc and its subsidiaries ("the
Group") for the six months ended 30 June 2019. The statements have
been prepared in accordance with IAS 34 Interim Financial
Reporting. They do not include all the information required for a
complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
consolidated financial statements as at the year ended 31 December
2018. The results for the period ended 30 June 2019 are unaudited.
These statements are in agreement with accounting records which
have been properly kept in accordance with Section 103 of the
Companies (Jersey) Law 1991.
Financial Highlights:
-- Loss from operations of GBP0.512 million (2018: full year Loss of GBP0.792 million).
-- Cash balance, at period end of GBP0.728 million (2018 year
end: GBP1.326 million). A further GBP1.18million (US$1.5million)
held as restricted cash.
-- On 15 February, 2019 raised GBP1.5 million by the issue of
Convertible Loan Notes to Arato Global Opportunities LLC to fund a
returnable bank guarantee required in respect of the work programme
on the Guercif licence in Morocco, and for general working capital
purposes.
-- On 15 February, 2019, 2,083,333 warrants were issued at an
exercise price of 12p with a vesting period of two years, to Arato
Global Opportunities LLC and 2,000,000 in warrants on the same
terms issued to Novum Securities Limited, the arranger of the
convertible loan notes.
-- During the period GBP350,000 of the Loan Notes have been
redeemed by conversion into 5,110,803 ordinary shares.
-- On 7 June2019 appointment of Brandon Hill Capital as the Company's broker
-- On 30 July2019 appointment of Novum Securities as a joint broker
Operational Highlights:
-- On 19 March 2019 Predator Gas Ventures Limited was awarded
the licence for the exploitation of the Guercif Moulouya Tortonian
Prospect in Northern Morocco by ONHYM
-- On 10 April 2019 Predator Oil & Gas Ventures Limited
accepted a one year extension of the term of the Licensing Option
16/30 ("LO 16/30")('Ram Head') to 30 November 2019 subject to the
carrying out of the work programme agreed with the Department of
Communications, Climate Action and Environment.
Post reporting date:
-- On 19 July 2019, Sarah Cope resigned as Non-Executive
Director of the Company and Carl Kindinger was appointed as
Non-Executive Director and interim Chairman with immediate
effect.
-- In respect of the C02 EOR project on 4 July 2019, the Group announced
o Certificate of Environmental Clearance issued
o Well completion design updated to potentially reduce costs and
enhance economics
o Well workovers AT-4 and AT-5X were to begin shortly
o A CPR giving contingent, development pending, resources of 5.3
to 8.9 MM boe
-- On 12 August 2019 the Group announced that it has commenced
workover operations to survey downhole the AT-4 and AT-5X wells to
ensure there are no obstructions that would prevent Predator's
preferred downhole CO2 EOR completion design from being installed
for the first injectivity and production test.
Responsibility Statement
We confirm that to the best of our knowledge:
- The Interim Report has been prepared in accordance with
International Accounting Standards 34, Interim Financial Reporting,
as adopted by the EU;
- Gives a true and fair value of the assets, liabilities,
financial position and Loss of the Group;
- The Interim Report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
set of interim financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year and
- The Interim Report includes a fair review of the information
required by DTR 4.2.8R of the Disclosure and Transparency Rules,
being the information required on related party transactions.
The Interim Report was approved by the Board of Directors and
the above responsibility statement was signed on its behalf by
Carl Kindinger
Chairman
15 August 2019
Condensed consolidated interim financial statements
Consolidated statement of comprehensive
income
For the 6 months to 30 June 2019
01.01.2019 01.01.2018 01.01.2018
to 30.06.2019 to 30.06.2018 to 31.12.2018
(unaudited) (unaudited) (audited)
Notes GBP GBP
------------------------------------- ------ --------------- --------------- ---------------
Administrative expenses (472,273) (305,865) (761,302)
Loan impairment/write off - - (32,171)
Operating loss (472,273) (305,865) (793,473)
Finance income - 405 1,012
Finance expense (39,990) - -
Loss for the period before taxation (512,263) (305,460) (792,461)
Taxation - - -
Loss for the period after taxation (512,263) (305,460) (792,461)
------------------------------------- ------ --------------- --------------- ---------------
Other comprehensive income - - -
Total comprehensive loss for
the period attributable to the
owner of the parent (512,263) (305,460) (792,461)
------------------------------------- ------ --------------- --------------- ---------------
Loss per share (in pence) 3 (0.5) (0.8) (1.0)
Condensed consolidated statement of financial
position
As at 30 June 2019
30.06.2019 31.12.2018
(unaudited) (audited)
Notes GBP GBP
----------------------------------------- ------ ------------ ------------
Non-current assets
Exploration and evaluation 3,574 -
Tangible fixed assets 4,621 3,622
----------------------------------------- ------ ------------ ------------
8,195 3,622
Current assets
Trade and other receivables 4 1,189,551 12,250
Cash and cash equivalents 5 728,767 973,600
----------------------------------------- ------ ------------ ------------
1,918,318 985,850
Total assets 1,926,513 989,472
----------------------------------------- ------ ------------ ------------
Equity attributable to the owner of
the parent
Share capital 6 1,934,794 1,584,794
Reconstruction reserve 3,547,190 3,547,190
Other reserves 162,954 81,570
Retained deficit (4,806,615) (4,294,352)
----------------------------------------- ------ ------------ ------------
Total equity 838,323 919,202
Non-Current liabilities
Convertible loan notes 7 1,018,605 -
Current liabilities
Trade and other payables 69,584 70,270
----------------------------------------- ------ ------------ ------------
Total liabilities 1,088,189 70,270
----------------------------------------- ------ ------------ ------------
Total liabilities and equity 1,926,513 989,472
----------------------------------------- ------ ------------ ------------
Condensed consolidated statement of changes
in equity
For the 6 months to 30 June
2019
Attributable to owner of the
parent
Share Share Share Retained Total
Capital premium based deficit
payments
GBP GBP GBP GBP GBP
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Balance at 31 December 2017 537,085 3,547,190 - (3,501,891) 582,384
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Loss for the period - - - (305,460) (305,460)
Total comprehensive income for
the period - - - (305,460) (305,460)
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Issue of ordinary share capital 1,300,001 - - - 1,300,001
Listing costs capitalised (225,241) - - - (225,241)
Total transactions with owners 1,074,760 - - - 1,074,760
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Balance at 30 June 2018 1,611,845 3,547,190 - (3,807,351) 1,351,684
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Loss for the period - - - (487,001) (487,001)
Total comprehensive income for
the period - - - (487,001) (487,001)
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Fair value of warrants 27,051 27,051
Fair value of share options 54,519 54,519
Listing costs capitalised (27,051) - - - (27,051)
Total transactions with owners (27,051) - 81,570 - 54,519
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Balance at 31 December 2018 1,584,794 3,547,190 81,570 (4,294,352) 919,202
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Loss for the period - - - (512,263) (512,263)
Total comprehensive income for
the period - - - (512,263) (512,263)
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Issue of ordinary share capital 367,500 - - - 367,500
Fair value of warrants - - 81,384 - 81,384
.
Loan note conversion premium (17,500) - - - (17,500)
Total transactions with owners 350,000 - 81,384 - 431,384
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Balance at 30 June 2019 1,934,794 3,547,190 162,954 (4,806,615) 838,323
------------------------------------ ------------------- -------------- ---------- ------------ ----------
Condensed consolidated statement of cash flows
For the 6 months to 30 June 2019
01.01.2019 01.01.2018 01.01.2018
to 30.06.2019 to 30.06.2018 to 31.12.2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
--------------------------- --------------- --------------- ---------------
Cash flows from operating
activities
Loss for the period before
taxation (512,263) (305,460) (792,461)
Adjustments for:
Loans waived - - 32,171
Issue of share options - - 54,519
Finance expense 39,990 - -
Finance income - (405) (1,012)
Depreciation - - 392
Foreign exchange 31,109 598 -
Decrease/(Increase) in
trade
and other receivables (1,208,410) 4,451 24,383
(Decrease)/Increase in
trade
and other payables (686) 33,290 62,911
Net cash used in operating
activities (1,650,260) (267,526) (619,097)
---------------------------- --------------- --------------- ---------------
Cash flow from investing
activities
Purchase of exploration and
evaluation
assets (3,574) - -
Purchase of computer
equipment (999) (2,013) (4,014)
Net cash generated from
investing
activities (4,573) (2,013) (4,014)
---------------------------- --------------- --------------- ---------------
Cash flows from financing
activities
Proceeds from issuance of
shares,
net of issue costs - 1,074,760 1,074,760
Proceeds from issue of
convertible
loan notes, net of issue
costs 1,410,000 - -
Finance income received - 405 1,012
Net cash generated from
financing
activities 1,410,000 1,075,165 1,075,772
---------------------------- --------------- --------------- ---------------
Net increase in cash and
cash
equivalents (244,833) 805,626 452,661
Cash and cash equivalents at
the
beginning of the period 973,600 520,939 520,939
Effects of exchange rate
changes
on cash and cash equivalents - (598) -
Cash and cash equivalents
at
the end of the period 728,767 1,325,967 973,600
---------------------------- --------------- --------------- ---------------
Notes to the consolidated interim financial statements for the
six months ended 30 June 2019
General information
Predator Oil & Gas Holdings Plc ("the Company") and its
subsidiaries (together "the Group") are engaged principally in the
operation of an oil and gas development business in the Republic of
Trinidad and Tobago and an exploration and appraisal portfolio in
Ireland and Morocco. The Company's ordinary shares are on the
Official List of the UK Listing Authority in the standard listing
section of the London Stock Exchange.
Predator Oil & Gas Holdings plc was incorporated in 2017 as
a public limited company under Companies (Jersey) Law 1991 with
registered number 125419. It is domiciled and registered at 3rd
Floor, Standard Bank House, 47-49 La Motte Street, Jersey, JE2 4SZ,
Channel Islands.
Basis of preparation
The condensed consolidated interim financial statements are
prepared under the historical cost convention and on a going
concern basis and in accordance with International Financial
Reporting Standards and IFRIC interpretations adopted for use in
the European Union ("IFRS").
The condensed consolidated interim financial statements
contained in this document do not constitute statutory accounts
under Companies (Jersey) Law 1991. In the opinion of the directors,
the condensed consolidated interim financial statements for this
period fairly presents the financial position, result of operations
and cash flows for this period.
Statutory financial statements for the year ended 31 December
2018 were approved by the Board of Directors on 30 April 2019. The
report of the auditors on those financial statements was
unqualified.
The Board of Directors approved this Interim Financial Report on
14 August 2019.
Statement of compliance
The Interim Report includes the consolidated interim financial
statements which have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting'.
The condensed interim financial statements should be read in
conjunction with the annual financial statements for the period
ended 31 December 2018, which have been prepared in accordance with
IFRS as adopted by the European Union.
Going concern
The condensed consolidated interim financial statements have
been prepared on a going concern basis. At the date of these
financial statements the Directors expect that the Group will
require further funding for the Group's corporate overheads; Irish
licence interests, Moroccan licence and for the development of a
CO2 EOR pilot project in Trinidad.
On 15 February 2019 the Group entered into a convertible loan
note raising GBP1.5m gross (GBP1.4m net), largely to progress the
Moroccan Guercif licence awarded on 20 March 2019. The Directors
are confident that the Group will be able to raise further funds as
it considers appropriate to meet requirements over the course of
the next 12 months, in cash, as debt finance, joint venture or
farminee partner equity, share issues or otherwise. Failing the
success of these fundraising activities the Directors will be
prepared to accept appropriate reductions in their remuneration to
conserve cash resources.
Cyclicality
The interim results for the six months ended 30 June 2019 are
not necessarily indicative of the results to be expected for the
full year ending 31 December 2019. Due to the nature of the entity,
the operations are not affected by seasonal variations at this
stage.
Accounting Policies
The condensed consolidated interim financial statements have not
been audited, nor have they been reviewed by the Company's auditors
in accordance with the International Standard on Review Engagements
2410 issued by the Auditing Practices Board. The figures have been
prepared using applicable accounting policies and practices
consistent with those adopted in the audited annual financial
statements for the year ended 31 December 2018, with the exception
of the following policy in relation to borrowings.
Borrowings
Borrowings are initially recognised at the fair value of
consideration received less directly attributable transaction
costs. After initial recognition, borrowings are subsequently
measured at amortised cost using the effective interest rate
method.
Changes in accounting policies and disclosures
i) New and amended standards adopted by the Group and Company
The following IFRSs and IFRICs became effective for the first
time on 1 January 2019 and have been adopted by the Group:
Standard Impact on initial application
-------------------- -----------------------------------------------
IFRS 16 Leases
-----------------------------------------------
IFRS 9 (Amendments) Prepayment features with negative compensation
-----------------------------------------------
IAS 28 (Amendments) Long term interests in associates and joint
ventures
-----------------------------------------------
2015-2017 Cycle Annual improvements to IFRS Standards
-----------------------------------------------
There were no IFRSs and IFRICs adopted that have a material
effect on the Group Financial Statements.
ii) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet
effective and have not been early adopted are as follows:
Standard Impact on initial application Effective date
-------------------- ------------------------------ -----------------
IFRS 3 (Amendments) Business combinations 1 January 2020*
IAS 1 & IAS 8 Definition of material 1 January 2020*
(Amendments)
------------------------------ -----------------
*Subject to EU endorsement
Of the other IFRSs and IFRICs, none are expected to have a
material effect on the Group Financial Statements.
Areas of estimates and judgement
The preparation of the interim financial statements requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the end of the reporting
period. The critical accounting estimates and judgements made are
in line with those made in the audited financial statements for the
year ended 31 December 2018, with the exception of exploration
costs capitalise at 30 June 2019 which will be subject to the
Directors' impairment assessment. As at 30 June 2019, these costs
were not material.
1. Financial risk management
Risks and uncertainties
The Board continually assesses and monitors the key risks of the
business. The key risks that could affect the Group's medium-term
performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2018 Annual
Report and Financial Statements, a copy of which is available from
the Group's website: www.predatoroilandgas.com. The key financial
risks are market risk (including cash flow interest rate risk and
foreign currency risk), credit risk and liquidity.
2. Segmental analysis
The Group operates in one business segment, the exploration,
appraisal and development of oil and gas assets. The Group has
interests in three geographical segments being Africa (Morocco),
Europe (Ireland) and the Caribbean (Trinidad and Tobago)
The Group's operations are reviewed by the Board (which is
considered to be the Chief Operating Decision Maker ('CODM')) and
split between oil and gas exploration and development and
administration and corporate costs.
Operating segments are disclosed below on the basis of the split
between exploration and development and administration and
corporate.
Europe Caribbean Africa Corporate Total
Unaudited Six months to 30June 2019
Gross profit (loss) - - - - -
Depreciation - - - - -
Share option and warrant
expense 39,989 39,989
Other overhead expenses 29,475 93,758 81,037 268,001 472,271
Profit (loss) for the year
from continuing 29,475 93,758 81,037 307,990 512,263
operations
Total assets 104,386 0 1,346,362 475,764 1,926,512
Total non-current assets 0 0 3,574 4,621 8,195
Additions to non-current
assets 0 0 0 0 0
Total current assets 104,386 1,342,788 471,143 1,918,317
Total liabilities 2,263 3,663 12,511 1,069,752 1,088,189
There are no non-current assets held in the Group's country of domicile, being the Jersey Isles (2018: GBPNil).
30.06.2019 30.06.2018 31.12.2018
3 Earnings per share (unaudited) (unaudited) (audited)
--- ---------------------------------------- ------------ ------------ ------------------
Weighted average number of
shares 101,717,999 38,124,124 82,201,718
(Loss) attributable to ordinary equity
holders of the company (512,263) (305,460) (792,461)
Total basic earnings per
share attributable to the
ordinary equity holders (in
pence) (0.50) (0.80) (0.96)
------------------------------------------ ------------ ------------ ------------------
The calculation of earnings per share is based on the loss
attributable to equity holders divided by the weighted average
number of shares in issue during the period.
Any share options would result in a decrease in the earnings per
share; they are considered to be anti-dilutive, and as such, a
diluted loss per share is not included.
30.06.2019 30.06.2018 31.12.2018
(unaudited) (unaudited) (audited)
4 Trade and other receivables GBP GBP GBP
--- --------------------------------- ------------ ------------ -----------
Current
Security deposit (US$1,500,000) 1,183,058 - -
Loans receivable 1 31,758 32,171
Provision for impairment - - (32,171)
Prepayments 6,492 32,594 12,250
1,189,551 64,352 12,250
------------------------------------- ------------ ------------ -----------
The Company's subsidiary, Predator Gas Ventures Limited, on 19
March 2019, provided a bank guarantee of US$1.5 million to Office
National des Hydrocarbures et des Mines, who act for the Moroccan
State, as a condition of being granted the Guercif exploration
licence. Predator Gas Ventures Limited was required to lodge a
security deposit of US$1.5 million with Barclays Bank Plc to secure
the guarantee facility. The restricted access cash balance of
GBP1,183,058 represents the aforesaid security deposit and is
denominated in US Dollars. These funds are refundable on the
completion of the Minimum Work Programme set out in the terms of
the Guercif Petroleum Agreement and Association Contract. All other
receivables are denominated in Pound Sterling.
2019 2018 2018
(unaudited) (unaudited) (audited)
5. Cash Balances GBP GBP GBP
------------------------- ----------------------- ------------ -----------------------
Sterling 298,259 1,325,968 455,293
United States Dollar 430,509 - 518,306
728,768 1,325,968 973,600
---------------------- ----------------------- ------------ -----------------------
6. Share capital Number Nominal
of shares value
---- --------------------------------- ------------ ----------
Issued and fully paid ordinary
shares
Opening Balance as at 1 January
2019 100,137,150 1,584,794
11 May 2019
Loan note conversion 1,966,888 157,500
Less conversion premium - (7,500)
13 May 2019
Loan note conversion 1,441,664 105,000
Less conversion premium - (5,000)
28 May 2019
Loan note conversion 1,702,251 105,000
Less conversion premium - (5,000)
Balance at 30 June 2019 105,247,953 1,934,794
------------------------------------ ------------ ----------
30 .06. 31.12.2018
2019
(unaudited) (audited)
7. Non-Current Liability GBP GBP
--- --------------------------- -------------- -------------
Arato Global Opportunities 1,150,000 -
LLC
less transaction cost 131,395 -
1,018,605 -
--- --------------------------- -------------- -------------
The Company entered into a Convertible Loan Note Instrument with
Arato Global Opportunities LLC on 15 February 2019 for
GBP1,500,000, the nominal amount of each note was GBP1.00 and can
be increased to GBP1,750,000. The notes are converted at 105% in
multiples of GBP50,000 as a conversion price per ordinary share
being 90% of the VWAP for the 2 trading days preceding the
conversion, and to the extent not already redeemed or converted
shall be redeemed in full the earlier of 15 February 2021 or in the
event of default. The loan notes carry no coupon, are repayable at
a premium of 5%. A fee of 10% of the principal amount applies if
the loan notes are not converted into equity prior to 15 February
2021. The lender was issued with 2,083,333 warrants at an exercise
price of 12p with a vesting period of two years. Novum Securities
Limited, the arranger of the convertible loan notes, was issued
with 2,000,000 in warrants on the same terms.
The Directors have assessed the accounting treatment for the
instrument under the requirements of IAS 32 and have concluded that
it should be treated as a liability.
The fair value of the 4,083,333 warrants was determined at
GBP81,384. See note 8.
Novum Securities Limited was paid a GBP90,000 placement fee in
for the Convertible Loan Note Instrument. The total transaction
cost of GBP171,384, accounted for in terms of IFRS9, was offset
against the carrying value of the Convertible Loan Note and
amortised according to the effective interest rate method giving
rise to a GBP39,989 charge to the income statement during the
Period.
At the date of these interim financial statements GBP350,000 of
the loan notes had been redeemed.
8. Warrants
On 15 February 2019 the Company granted 2,083,333 and 2,000,000
warrants respectively to Arato Global Opportunities LLC and Novum
Securities Limited pursuant to the Convertible Loan Note agreement.
The warrants are exercisable at any time between the date of issue
and 15 February 2021 at a subscription price of 12p per share.
The total number of warrants in issue at 30 June2019 are:
1. 2,391,962 exercisable at 2.8p before 24 May,2021
2. 4,083,333 exercisable at 12p before 15February, 2021
The warrant agreements for the aforesaid 4,083,333 warrants
issued on 15 February,2019 do not contain vesting conditions and
therefore the full share based payment charge, being the fair value
of the warrants using the Black-Scholes model, has been recorded
immediately. A fair value of GBP81,384 was deemed as a transaction
cost in terms of IFRS9 and was offset against the Convertible Loan
Note Principal of GBP1,500,000. GBP350,000 in loan notes were
redeemed during the Period. Accordingly, a GBP39,989 charge was
taken to the income statement during the Period in respect of the
aforesaid loan note redemptions as a funding cost applying the
effective interest method.
The valuation of these warrants involves making a number of
estimates relating to price volatility, future dividend yields and
continuous growth rates
The Black Scholes model has been used to fair value the
warrants, the inputs into the model were as follows:
Grant date 15 February 2019
Share price GBP0.070
Exercise price GBP0.120
Term 2 years
Expected volatility 80%
Expected dividend yield 0%
Risk free rate 0.73%
Fair value per warrant GBP0.0200
Total fair value of the warrants GBP81,384
9. Investment in subsidiaries Country Ownership
of
Principal activity incorporation interest
Predator Oil and Gas Ventures licence options
Limited in offshore Ireland Jersey 100%
drilling rights
Predator Oil and Gas Trinidad for a CO2 pilot
Limited oil recovery project Jersey 100%
Exploitation licence
Predator Gas Ventures Limited onshore Morocco Jersey 100%
10. Related party transactions
Paul Griffiths holds 44,773,293 ordinary shares, 42.5% (44.7%)
as at the reporting date of the issued share capital in the Company
and is the Group's controlling shareholder.
11. Subsequent events
On 19 July 2019, Sarah Cope resigned as Non-Executive Director
of the Company and Carl Kindinger was appointed as Non-Executive
Director and interim Chairman with immediate effect.
In respect of the C02 EOR project on 4 July 2019, the Group
announced the following:
-a Certificate of Environmental Clearance had been issued
-Well completion design had been updated to potentially reduce
costs and enhance
economics
-Well workovers AT-4 and AT-5X were to begin shortly
-A CPR giving contingent, development pending, resources of 5.3
to 8.9 MM boe
- On 12 August 2019 the Group announced it had commenced
workover operations to survey downhole the AT-4 and AT-5X wells to
ensure that there are no obstructions that would prevent Predator's
preferred downhole CO2 EOR completion design from being installed
for the first injectivity and production test.
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.
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 SFLFSIFUSELA
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