TIDMPXOG
RNS Number : 5016K
Prospex Oil and Gas PLC
22 September 2016
Prospex Oil and Gas Plc / Index: AIM / Epic: PXOG / Sector: Oil
and Gas
22 September 2016
Prospex Oil and Gas Plc ('Prospex' or the 'Company')
Interim Results
Prospex Oil and Gas Plc, the AIM quoted investment company,
announces its interim results for the sixth month period ended 30
June 2016.
Highlights:
-- Acquisition of 49% stake in Hutton Poland in line with
strategy to invest in high impact onshore and shallow offshore
European opportunities with short timelines to production
-- Hutton Poland owns 100% of the 1,150 sq km Kolo Licence,
onshore Poland which includes the drill-ready Boleslaw Prospect
-- Competent Person's Report highlights Boleslaw's attractive economics:
o Gross best estimate of 87 bcsf
o US$44 million to US$95 million NPV range net to Prospex
o GBP5 million to GBP8.4 million risked valuation range net to
Prospex, - provides asset backing to Company's current market
capitalisation and is a significant premium to initial investment
costs of GBP620,000
-- Boleslaw fully funded and on track to be drilled in Q4 2016
-- Additional highly prospective targets on Kolo licence
-- Strong cash position following successful raise of GBP2.521m,
GBP1.746m during the period and GBP775,000 post
-- Continue to evaluate other investment opportunities in the
European onshore and shallow offshore oil and gas sector
Edward Dawson, Managing Director of Prospex, said, "In the Kolo
Licence, we have an excellent short-term investment opportunity,
and have confidence Hutton Poland will exploit this highly
prospective resource which has transformational potential. With
contractors secured drilling operations at the first target,
Boleslaw-1 exploration well, are on course to commence in Q4 2016,
which we believe on its own, has the potential to re-rate our
valuation. This is the first of a number of targets on the licence
area which are prospective and Hutton Poland remain focused on
achieving milestones at Boleslaw.
"At the same time we continue to explore other opportunities
that we believe will allow us to deliver on our wider strategy to
invest in high impact European opportunities with short timelines
to production in the coming months and years ahead. As with
Boleslaw, we are looking at undervalued projects that would benefit
from low cost re-evaluation/re-working, with multiple, tangible
value trigger points within 12 months of acquisition, as we look to
build a leading oil and gas investment company."
For further information visit www.prospexoilandgas.com or
contact the following:
Edward Dawson Prospex Oil and Gas Tel: +44 (0) 203
Plc 586 1009
Katy Mitchell WH Ireland Limited Tel: 0113 394
Nick Prowting WH Ireland Limited 6600
Jay Ashfield WH Ireland Limited
Tel: +44 (0)
207 220 1658
Jon Belliss Beaufort Securities Tel: +44 (0) 207
Limited 382 8300
Lucy Williams Peterhouse Corporate Tel: +44 (0) 207
Charles Goodfellow Finance 469 0932
Eran Zucker Peterhouse Corporate
Finance
Peterhouse Corporate
Finance
Charlotte Heap St Brides Partners Tel: +44 (0) 20
Frank Buhagiar Ltd 7236 1177
St Brides Partners
Ltd
Chairman's Statement
We have made excellent progress over the period and I am
delighted with what we have been able to achieve in such a short
space of time. Our focus over the past six months centred on
investing in high impact offshore and shallow onshore opportunities
in Europe, where we believe our proven team, which has successfully
built and sold oil and gas companies, can identify and secure
exciting and value accretive opportunities. We evaluated a huge
amount of projects during the period, with the acquisition of a 49%
stake in the attractive but undervalued Hutton Poland ('Hutton')
being the most significant.
Since acquisition, considerable progress has been made towards
advancing work at the 1,150 sq km Kolo Licence ('Kolo'), located in
the productive Polish Central Basin, which holds multiple
opportunities including the Boleslaw prospect as well as an
independent oil prospect and a further gas anomaly. The
opportunities present at Kolo was one of the key tenets that
attracted us to this investment, and we were delighted that an
independent Competent Person's Report ('CPR') prepared by AGR TRACS
in May 2016 identified the significant, untapped potential value
present at the project, deeming it "a worthwhile and attractive
exploration opportunity".
At the drill-ready Boleslaw prospect, where Hutton Poland are
targeting two mapped reservoirs, the CPR assigned a gross best
estimate of 87 bscf and a risked current valuation ranging from
GBP5m to GBP8.4m (net to Prospex), representing a significant
premium to the initial investment price GBP620,000 (see
announcements dated 8 January 2016 and 08 April 2016).
Exalo Drilling ('Exalo') has been contracted to drill the
Boleslaw-1 exploration well, marking another significant milestone
in the Project's advancement. The immediate next steps involve the
completion of the Boleslaw permitting effort and final approval of
the drilling programme from the Polish government's Ministry of
Environment, which will be followed by pad construction and the
mobilisation of the drill rig ahead of the commencement of drilling
operations, which are on track to commence in Q4 2016. With
significant high impact milestones being achieved in the near term,
we anticipate that the months ahead will be an exciting period for
the Company; a period in which we will endeavour to continue to
build value, explore prospective opportunities and generate uplift
for our shareholders.
The successful equity raise of GBP1.6 million in May 2016 and a
subsequent raise of GBP775,000 post period end in August 2016,
places us in a strong position and ensures the advancement of the
Boleslaw-1 investment, which provides us with high impact potential
in the short-term, while allowing us to explore longer term
opportunities, a number of which we are actively evaluating.
I believe we have an excellent platform in place for growth. The
market is conducive to our model and we believe we can acquire
assets that fit our investment criteria and have the ability to add
long-term value. This would not be possible without our team, and I
would like to take this opportunity to thank them, as well as our
advisers and shareholders for their continued support as we look
forward to the period ahead with confidence. Prospex continues to
establish itself as an oil and gas investment company, which I
believe will generate significant value for shareholders in the
process.
Bill Smith
Non-Executive Chairman
Consolidated statement of comprehensive income
Six
Six months months Year
ended ended ended
30 June 30 June 31 December
--------------------------- ------------------------ ----------------------
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
Administrative expenses (198,163) (257,814) (601,892)
Gain arising on restructuring - 152,361 98,885
--------------------------- ------------------------ ----------------------
Operating loss (198,163) (105,453) (503,007)
Finance income - 162 162
--------------------------- ------------------------ ----------------------
Loss before income taxation (198,163) (105,291) (502,845)
Income tax expense - - 411
--------------------------- ------------------------ ----------------------
Loss for the period
from continuing operations (198,163) (105,291) (502,434)
Discontinued operations
Profit for the period
from discontinued operations - 521,745 571,745
--------------------------- ------------------------ ----------------------
(198,163) 416,454 69,311
Other comprehensive
income
Change in fair value
of available for sale
assets 2,374,650 - -
Currency translation
differences on disposal
of foreign operation - (39,467) -
--------------------------- ------------------------ ----------------------
Loss/(profit) for the
period and total comprehensive
income attributable
to owners of the parent
for the period 2,176,487 376,987 69,311
=========================== ======================== ======================
Earnings/(loss) per
share - basic and diluted
Continuing operations 3.61p (0.52)p (1.64)p
=========================== ======================== ======================
Discontinued activities - 2.56p 1.86p
=========================== ======================== ======================
Consolidated statement of financial position
As at 30 June 2016
30 June 30 June 31 December
--------------------- ------------------------ ------------------------
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and
equipment 35,383 - 1,274
Investment in associate 3,621,656 - -
Non-current financial
assets 198,080 - -
Total non-current assets 3,855,119 - 1,274
--------------------- ------------------------ ------------------------
Current assets
Trade and other receivables 45,702 169,448 155,909
Cash and cash equivalents 523,392 859,407 382,216
--------------------- ------------------------ ------------------------
Total current assets 569,094 1,028,855 538,125
--------------------- ------------------------ ------------------------
LIABILITIES
Current liabilities
Trade and other payables (108,015) (256,858) (80,875)
--------------------- ------------------------ ------------------------
Total liabilities (108,015) (256,858) (80,875)
--------------------- ------------------------ ------------------------
Net current assets/(liabilities) 461,079 771,997 457,250
--------------------- ------------------------ ------------------------
Net assets 4,316,198 771,997 458,524
===================== ======================== ========================
EQUITY
Equity attributable
to owners of the parent
Called up share capital 4,403,234 2,657,234 2,657,234
Share premium account 6,667,901 6,732,715 6,732,714
Capital redemption reserve 43,333 43,333 43,333
Merger reserve 2,416,667 2,416,667 2,416,667
Retained earnings (9,214,937) (11,077,952) (11,391,424)
--------------------- ------------------------ ------------------------
Total equity 4,316,198 771,997 458,524
===================== ======================== ========================
Statement of changes in equity
For the six months ended 30 June 2016
Foreign Capital Non
Share Share Retained currency redemption Merger controlling Convertible
loan
capital premium earnings reserve reserve reserve interests note Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Unaudited
Balance at
1 January 2016 2,657,234 6,732,714 (11,391,424) - 43,333 2,416,667 - - 458,524
Total
comprehensive
income for
the period - - 2,176,487 - - - - - 2,176,487
Issue of shares 1,746,000 - - - - - - - 1,746,000
Share issue
costs - (64,813) - - - - - - (64,813)
Balance at
30 June 2016 4,403,234 6,667,901 (9,214,937) - 43,333 2,416,667 - - 4,316,198
================= ================= ==================== ====================== =================== ================= =================== =================== ===================
Unaudited
Balance at
1 January 2015 2,304,398 6,063,208 (11,531,728) 39,467 43,333 2,416,667 (166,865) 100,216 (731,304)
Total
comprehensive
income for
the period - - 416,454 (39,467) - - - - 376,987
Issue of shares 352,836 723,314 - - - - - - 1,076,150
Share issue
costs - (53,807) - - - - - - (53,807)
Equity settled
share based
payment - - 37,322 - - - - - 37,322
On completion
of CVA - - - - - - - (100,216) (100,216)
On disposal
of
subsidiaries - - - - - - 166,865 - 166,865
Balance at
30 June 2015 2,657,234 6,732,715 (11,077,952) - 43,333 2,416,667 - - 771,997
================= ================= ==================== ====================== =================== ================= =================== =================== ===================
Audited
Balance at
1 January 2015 2,304,398 6,063,208 (11,531,728) 39,467 43,333 2,416,667 (166,865) 100,216 (731,304)
Total
comprehensive
income for
the year - - 69,311 - - - - - 69,311
Issue of shares 352,836 723,314 - - - - - - 1,076,150
Share issue
costs - (53,808) - - - - - - (53,808)
On completion
of CVA - - - - - - - (100,216) (100,216)
Equity settled
share based
payment - - 70,993 - - - - - 70,993
On disposal
of
subsidiaries - - - (39,467) - - 166,865 - 127,398
Balance at
31 December
2015 2,657,234 6,732,714 (11,391,424) - 43,333 2,416,667 - - 458,524
================= ================= ==================== ====================== =================== ================= =================== =================== ===================
Cash flow statement
For the six months ended 30 June 2016
Six months ended Six months ended Year ended
30 June 30 June 31 December
------------------------- ------------------- ------------------------
2016 2015 2015
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating activities
Operating loss (198,163) (257,814) (601,892)
Depreciation of property
plant and equipment 8,400 - 425
Decrease/(increase)
in trade and other receivables 110,207 (14,174) (130,552)
Increase/(decrease)
in trade and other payables 27,140 68,604 (96,409)
Equity-settled share
based payment - 37,322 70,993
Other movement - (31,824) 33,955
------------------------- ------------------- ------------------------
Net cash used in operating
activities - continuing
operations (52,416) (197,886) (723,480)
------------------------- ------------------- ------------------------
Investing activities
Finance income - 162 162
------------------------- -------------------
Net generated from investing
activities - 162 162
------------------------- ------------------- ------------------------
Capital expenditure
Payments to acquire
property, plant and
equipment (42,509) - (1,699)
------------------------- ------------------- ------------------------
Net cash outflow for
capital expenditure (42,509) - (1,699)
------------------------- ------------------- ------------------------
Acquisitions and disposals
Purchase of investments (1,445,086) - -
Cash on disposal of
subsidiary undertaking - - (247)
------------------------- ------------------- ------------------------
Net cash used in acquisitions
and disposals (1,445,086) - (247)
------------------------- ------------------- ------------------------
Financing activities
Issue of share capital 1,746,000 1,076,150 1,076,150
Costs in respect of
share issue (64,813) (53,808) (53,808)
Convertible loan notes - - 50,000
Proceeds received from
the issue of derivative
financial assets - 12,055 12,404
Net cash generated from
financing activities 1,681,187 1,034,397 1,084,746
------------------------- ------------------- ------------------------
Net increase in cash
and cash equivalents 141,176 836,673 359,482
Cash and cash equivalents
at start of period 382,216 22,734 22,734
------------------------- ------------------- ------------------------
Cash and cash equivalents
at end of period 523,392 859,407 382,216
========================= =================== ========================
Notes to the interim financial statements
1 General information
Prospex Oil and Gas Plc is a company incorporated in the United
Kingdom, which is listed on the Alternative Investment Market of
the London Stock Exchange Plc. The address of its registered office
is Stonebridge House, Chelmsford Road, Hatfield Heath, Essex CM22
7BD. The Group is primarily involved in the exploration for
gold.
2 Financial information
The interim financial information for the six months ended 30
June 2016 has not been audited or reviewed and does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The comparative financial information for the
year ended 31 December 2015 has been derived from the audited
financial statements for that period. A copy of those statutory
financial statements for the year ended 31 December 2015 has been
delivered to the Registrar of Companies. The report of the
independent auditors on those financial statements was unqualified
and did not contain a statement under Sections 498 (2) or (3) of
the Companies Act 2006.
The interim financial statements have been prepared in
accordance with International Financial Reporting Standards
('IFRS') as adopted by the European Union, IFRIC interpretations
and the Companies Act 2006 applicable to companies reporting under
IFRS and under the historical cost convention. They have also been
on a basis consistent with the accounting policies expected to be
applied for the year ending 31 December 2016 and which are also
consistent with those set out in the statutory accounts of the
Company for the year ended 31 December 2015, except for the
adoption of new standards and interpretations.
3 Taxation
On the basis of these accounts there is no tax charge for the
period.
4 Earnings per share
The earnings and number of shares used in the calculation of
earnings per share are as follows:
Six months ended Six months ended Year ended
30 June 30 June 31 December
------------------------- ------------------ -----------------------
2016 2015 2015
(unaudited) (unaudited) (audited)
Basic and diluted
Continuing operations 2,176,487 (105,291) (502,434)
Discontinued operations - 521,745 571,745
Profit for the
financial period 2,176,487 416,454 69,311
========================= ================== =======================
Weighted average
number of shares 60,327,994 20,345,260 30,677,884
Loss per share
- continuing activities 3.61p (0.52)p (1.64)p
========================= ================== =======================
Earnings per share
- discontinued
activities - 2.56p 1.86p
========================= ================== =======================
There was no dilutive effect in respect of the share options
outstanding during the period.
5 Non-current investment
The Group owns 49% of the equity share capital of Hutton Poland
Limited. The investment is accounted for at fair value through the
profit and loss, as the Company is deemed to be an Investment
Entity.
The carrying value of the Group's investment was as follows:
Six months Six months
ended ended Year ended
30 June 30 June 31 December
------------ ------------ ------------
2016 2015 2015
(unaudited) (unaudited) (audited)
At 1 January - - -
Addition, at cost
------------ ------------ ------------
Fair value adjustment
1,247,006
2,374,650 - -
At 30 June 2,176,487 416,454 69,311
------------ ------------ ------------
6 Dividends
The directors do not propose to declare a dividend for the
period.
7 Copies of interim results
Copies of the interim results can be obtained from the website
www.prospexoiland gas.com. From this site you may access our
financial reports and presentations, recent press releases and
details about the company and its operations.
* * ENDS * *
This information is provided by RNS
The company news service from the London Stock Exchange
END
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