TIDMSOU
RNS Number : 8815J
Sound Energy PLC
15 September 2016
15 September 2016
SOUND ENERGY PLC
("Sound Energy" or the "Company")
HALF YEARLY REPORT FOR THE SIX MONTHSED 30 JUNE 2016
Sound Energy, the European and African focused upstream oil and
gas company, announces its unaudited half year report for the six
months ended 30 June 2016.
Half-year Highlights
Morocco
-- Significant gas discovery with the potential for a multi Tcf
connected gas field, at Tendrara (onshore Morocco)
-- First Tendrara well, TE-6, encountered approximately 28
metres of net gas pay in the TAGI reservoir, flow achieved
pre-simulation, 17 mmscf/d achieved on test
-- Significant near term development plan to secure near term cash flow
-- Oil & Gas Investment Fund S.A.S. ("OGIF"), the partner on
the licence, has expressed interest to fund a new pipeline
connecting Tendrara to the Gazoduc Maghreb Europe ("GME")
pipeline
-- Second well on Tendrara, was spud on 25 August 2016, with a
view to proving a sub-horizontal drilling concept
-- Secured the Meridja exploration permit, adjacent to Tendrara
-- Acquisition and farm-out of Sidi Moktar licences
Italy
-- Final Badile drilling permission received in May 2016
-- First farm-out secured with Schlumberger who will fund EUR7.5
m of first well at Badile in exchange for an option on 20% of the
licence
-- Memorandum of Understanding regarding a rig contract in
relation to Badile signed with Pergemina SPA
Corporate
-- Brian Mitchener, a proven world class hydrocarbon finder,
joined the team as Executive Vice President, Exploration
-- Inclusion in FTSE AIM UK 50 Index with effect from Monday 19
September 2016 and migration of trading to SETS, the LSE premier
electronic trading service
-- Completion of group debt-refinancing with issue of 5-year EUR28.8 million bonds
Upcoming milestones
-- TE-7 drilling results and extended well test
-- Planned drilling of an outpost well on Tendrara with a view
to proving the multi Tcf potential
-- Countdown to second Strategic Play, Badile
For further information please contact:
Vigo Communications - PR Adviser Tel: +44 (0)20 7830 9700
Patrick d'Ancona
Chris McMahon
Alexandra Roper
Sound Energy j.parsons@soundenergyplc.com
James Parsons, Chief Executive Officer
Smith & Williamson - Nominated Adviser Tel: +44 (0)20 7131 4000
Azhic Basirov
David Jones
Ben Jeynes
Cantor Fitzgerald Europe - Broker Tel: +44 (0)20 7894 8896
Sarah Wharry
David Porter
Statement from the Chairman and Chief Executive Officer
Whilst the challenging sector backdrop continues, Sound Energy
is delivering its counter cyclical growth agenda, leveraging its
world class portfolio, people and partners.
In August 2016, we were delighted to announce a resounding
success at our first strategic play with a material gas discovery
at Tendrara following the successful drilling of our first well on
the structure. This success was shared with Schlumberger, our
strategic partner, who both technically de-risks the asset as well
as providing funding for the first three wells.
The results seen at TE-6, together with the lack of a gas/water
contact at any of the historical wells, suggests the possibility of
a significant gas column within a continuous extended structure and
therefore a potential multi Tcf gas field. We are continuing our
appraisal of the Tendrara licence area, with the spud of TE-7 on 25
August 2016. This well aims to prove sufficient volumes for a
concession application as well as proving the benefits of
sub-horizontal drilling.
We will begin to unlock the long term potential of Tendrara with
the drilling of one or more outpost wells and the shooting of
additional seismic.
The Company has also recently secured, subject to regulatory and
other approvals, a 55% interest in the Meridja exploration permit,
which is adjacent to the Tendrara licence and shares the same
fundamental geology.
Following securing the final permission to drill the Badile
prospect, onshore Italy, in May 2016, the countdown to our second
Strategic Play has been initiated. A key step in this process has
been the expansion of the Schlumberger partnership to include
Badile, with Schlumberger gaining access to a 20% profit interest
in the licence in exchange for funding 30% of the estimated cost of
the first well and 20% of all costs thereafter. We also continue to
finalise the acquisition of the 75% operated asset in the Sidi
Moktar licences, onshore Morocco, and thus our third Strategic
Play, with regulatory approvals expected shortly.
Our portfolio continues to include a blend of high upside
exploration assets, low risk appraisal/development assets and
production, which is diversified across Italy and Morocco. The
pursuit of an onshore regional gas strategy, underpinned by solid
European gas fundamentals and a stable, growing, gas-hungry country
in Morocco has enabled the Company to continue to flourish.
The Company remains in a strong financial position, with a cash
balance of $27 million at 31 August 2016 after the receipt of $1.1
million Indonesian contingent consideration, the drilling of TE-6
and the completion of its planned debt refinancing during the
summer.
2016 is looking to be a pivotal year for the Company.
Our achievements would not have been possible without the
efforts of our people, the governments and partners we work with
and our supportive shareholders. We would like to take this
opportunity to thank all of them.
"2016 has been an incredibly exciting period for the Company so
far, with Tendrara, Meridja and the Eastern Morocco TAGI play
having demonstrated the potential to be a material hydrocarbon
province and therefore to transform both Sound Energy and the
Moroccan gas industry."
Stephen Whyte James Parsons
Chairman CEO
Operations update
Multi Tcf Potential in Eastern Morocco
"A rate of 17 mmscf/d was achieved. This rate is significantly
above initial expectations and represents a highly commercial
rate."
Tendrara and Meridja
Value from discovery
During the first half of 2016, the first Tendrara well, TE-6,
was drilled to a measured vertical depth of 2,665 metres and
successfully encountered approximately 28 metres of net gas pay in
the TAGI reservoir. Flow was achieved pre-stimulation and,
post-stimulation, a rate of 17 mmscf/d (0.5 million scm/d) was
achieved. This rate is significantly above initial expectations and
represents a highly commercial rate.
The reservoir bottom hole pressure recorded was 420 bars and the
static pressure recorded in the well correlates, in terms of gas
gradient, with all of the wells previously drilled in the licence
area. The combination of these factors together with the fact that
none of the historically drilled wells on the licence have
identified a gas/water contact, suggests the possibility of a
significant gas column within a continuous extended structure.
Realising potential
The Company's second well on the licence, TE-7, was spud on 25
August 2016, with a view to proving sufficient gas volumes and well
deliverability to enable finalisation of the field development plan
and a concession application. The well objectives include
demonstrating the benefits of sub-horizontal drilling, which is
expected to be implemented as the production well concept for
Tendrara.
The TE-7 site, lies between TE-5 and TE-6 and is approximately
830 metres to the Northeast of TE-5 and 1.6 kilometres from TE-6.
Drilling is planned to reach a total measured depth of 3,440 metres
with specific tools being used to geo steer the well at close to an
88 degree angle inside the TAGI reservoir to ensure a horizontal
drain of between 600 and 900 metres. The sub-horizontal section
will run to the North, parallel to the minimum horizontal stress
observed in TE-6. An extended well test will follow clean-up and
initial testing will take approximately 70 days thereafter to
confirm production sustainability and to aid comprehensive field
development planning.
The Company, in conjunction with Schlumberger, is currently
considering options for one or more outpost wells, as well as
further studies, required to prove the potential of the structure.
This may include and extend beyond the reservoir identified at
TE-2, some 30km to the North East of TE-6.
The Company exercised its option to acquire, subject to
regulatory and other approvals, a 55% participating interest in the
Meridja exploration permit, onshore Morocco, from OGIF in June
2016. The Meridja licence area is adjacent to the Tendrara licence
and is a highly prospective 9,000 km(2) area with the same
fundamental geology as Tendrara.
Condensed Interim Consolidated Income Statement
Six months ended Year
Six months ended 30 June ended
30 June 2016 2015 31 Dec 2015
Unaudited Unaudited Audited
Notes GBP'000s GBP'000s GBP'000s
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Revenue 529 478 859
Other income 715
Operating costs (801) (291) (538)
Impairment of producing assets - - (6,347)
Exploration costs (28) (1) (5,838)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Gross profit/(loss) 415 186 (11,864)
Administrative expenses (2,346) (1,490) (3,181)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Group operating loss from continuing operations (1,931) (1,304) (15,045)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Finance revenue 5 2,717 12 52
Foreign exchange gain/(loss) 807 (2,000) (1,389)
External interest costs (1,183) (602) (1,905)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Profit/(loss) for period before taxation 410 (3,894) (18,287)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Tax expense - - -
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Profit/(loss) for period after taxation 410 (3,894) (18,287)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Other comprehensive (loss)/income
Foreign currency translation income/(loss) 631 (100) (320)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Total comprehensive profit/(loss) for the period 1,041 (3,994) (18,607)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Profit/(loss) for the period attributable to:
Equity holders of the parent 1,041 (3,994) (18,607)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Basic and diluted profit/(loss) per share for the period
attributable to the equity holders
of the parent (pence) 3 0.08 (0.91) (3.90)
------------------------------------------------------------- ----- ---------------- ---------------- ------------
Condensed Interim Consolidated Balance Sheet
As at 30 June 2016
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
Notes GBP'000s GBP'000s GBP'000s
---------------------------------- ----- ----------- ----------- ----------
Non-current assets
Property, plant and equipment 6,952 12,403 5,558
Intangible assets 4 14,204 13,859 9,564
Land and buildings 1,493 1,294 1,327
---------------------------------- ----- ----------- ----------- ----------
22,649 27,556 16,449
---------------------------------- ----- ----------- ----------- ----------
Current assets
Inventories 327 - -
Other receivables 14,147 2,434 2,506
Prepayments 116 94 99
Cash and short term deposits 14,466 17,489 15,240
---------------------------------- ----- ----------- ----------- ----------
29,056 20,017 17,845
---------------------------------- ----- ----------- ----------- ----------
Total assets 51,705 47,573 34,294
---------------------------------- ----- ----------- ----------- ----------
Current Liabilities
Trade and other payables 10,028 3,626 2,097
Loans repayable in under one year 5 7,704 - 5,751
---------------------------------- ----- ----------- ----------- ----------
17,732 3,626 7,848
---------------------------------- ----- ----------- ----------- ----------
Non-current liabilities
Deferred tax liabilities 2,160 1,958 1,992
Loans due in over one year 5 9,152 13,538 7,157
Provisions 1,780 1,082 1,138
---------------------------------- ----- ----------- ----------- ----------
13,092 16,578 10,287
---------------------------------- ----- ----------- ----------- ----------
Total liabilities 30,824 20,204 18,135
---------------------------------- ----- ----------- ----------- ----------
Net Assets 20,881 27,369 16,159
---------------------------------- ----- ----------- ----------- ----------
Capital and Reserves
Equity share capital 86,868 83,086 86,315
Warrant Reserve 3,209 369 369
Foreign currency reserve 1,699 1,288 1,068
Accumulated deficit (70,895) (57,374) (71,593)
---------------------------------- ----- ----------- ----------- ----------
Total Equity 20,881 27,369 16,159
---------------------------------- ----- ----------- ----------- ----------
Condensed Interim Consolidated Statement of Changes in
Equity
Share Accumulated Foreign currency Total
capital Share premium Deficit Warrant Reserve reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------- --------- ------------- ----------- --------------- ------------------------ ---------
At 1 January 2016 5,039 81,276 (71,593) 369 1,068 16,159
------------------------- --------- ------------- ----------- --------------- ------------------------ ---------
Total Profit for the
period - - 410 - - 410
Other comprehensive
income - - - - 631 631
------------------------- --------- ------------- ----------- --------------- ------------------------ ---------
Total comprehensive
income for the period - - 410 - 631 1,041
Fair value of warrants
issued with bonds - - - 2,840 - 2,840
Issue of share capital 53 500 - - - 553
Share based payments - - 288 - - 288
------------------------- --------- ------------- ----------- --------------- ------------------------ ---------
At 30 June 2016
(unaudited) 5,092 81,776 (70,895) 3,209 1,699 20,881
------------------------- --------- ------------- ----------- --------------- ------------------------ ---------
Share Share Accumulated Total
capital premium Deficit Warrant Reserve Foreign currency reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
At 1 January 2015 4,153 67,145 (53,621) 369 1,388 19,434
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Total Loss for the period - - (18,287) - - (18,287)
Other comprehensive income - - - - (320) (320)
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Total comprehensive
income/(loss) - - (18,287) - (320) (18,607)
Issue of share capital 886 15,342 - - - 16,228
Transaction costs - (1,211) - - - (1,211)
Share based payments - - 315 - - 315
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
At 31 December 2015 5,039 81,276 (71,593) 369 1,068 16,159
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Share Share Accumulated Total
capital premium Deficit Warrant Reserve Foreign currency reserves equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
At 1 January 2015 4,153 67,145 (53,621) 369 1,388 19,434
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Total Loss for the period - - (3,894) - - (3,894)
Other comprehensive income - - - - (100) (100)
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Total comprehensive
income/(loss) - - (3,894) - (100) (3,994)
Issue of share capital 675 12,034 - - - 12,709
Transaction costs - (921) - - - (921)
Share based payments - - 141 - - 141
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
At 30 June 2015 (unaudited) 4,828 78,258 (57,374) 369 1,288 27,369
---------------------------- --------- --------- ----------- --------------- ------------------------- ---------
Condensed Interim Consolidated Cash Flow Statement
Year
Six months ended Six months ended ended
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
--------------------------------------------------------- ---------------- ---------------- ---------
Cash flow from operating activities
Cash flow from operations (377) (1,593) (3,487)
Interest received 51 12 52
--------------------------------------------------------- ---------------- ---------------- ---------
Net cash flow from operating activities (326) (1,581) (3,435)
--------------------------------------------------------- ---------------- ---------------- ---------
Cash flow from investing activities
Purchase of drilling inventories (327) - -
Capital expenditure and disposals (470) (292) (1,156)
Exploration and development expenditure (3,173) (3,156) (6,545)
--------------------------------------------------------- ---------------- ---------------- ---------
Net cash flow from investing activities (3,970) (3,448) (7,701)
--------------------------------------------------------- ---------------- ---------------- ---------
CSTI Funding contract (13) (115) (117)
Net proceeds from debt 5,292 - -
Repayment of borrowings (2,724) - -
Net proceeds from equity issue 553 11,163 15,017
Interest payments (461) (382) (1,051)
--------------------------------------------------------- ---------------- ---------------- ---------
Net cash flow from financing activities 2,647 10,666 13,849
--------------------------------------------------------- ---------------- ---------------- ---------
Net (decrease)/increase in cash and cash equivalents (1,649) 5,637 2,713
Net foreign exchange difference 875 (756) (81)
Cash and cash equivalents at the beginning of the period 15,240 12,608 12,608
--------------------------------------------------------- ---------------- ---------------- ---------
Cash and cash equivalents at the end of the period 14,466 17,489 15,240
--------------------------------------------------------- ---------------- ---------------- ---------
Year
Six months ended Six months ended ended
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
------------------------------------------------------------- ---------------- ---------------- ---------
Cash flow from operations reconciliation
Profit/(loss) before tax 410 (3,894) (18,287)
Finance revenue (2,717) (12) (52)
Exploration expenditure written off and impairment of assets - - 12,185
Increase/(decrease) in accruals and short term payables 7,104 (329) (97)
Depreciation 181 98 136
Share based payments charge 288 141 315
Finance costs and exchange differences 376 2,602 2,588
Increase in short term receivables (6,019) (199) (275)
------------------------------------------------------------- ---------------- ---------------- ---------
Cash flow from operations (377) (1,593) (3,487)
------------------------------------------------------------- ---------------- ---------------- ---------
Notes to the Condensed Interim Consolidated Financial
Statements
1. Basis of preparation
The condensed interim consolidated financial statements do not
represent statutory accounts within the meaning of section 435 of
the Companies Act 2016. The financial information for the year
ended 31 December 2015 is based on the statutory accounts for the
year ended 31 December 2015. Those accounts, upon which the
auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
The condensed interim financial information is unaudited and has
been prepared on the basis of the accounting policies set out in
the Group's 2015 statutory accounts in accordance with IAS 34
Interim Financial Reporting.
The seasonality or cyclicality of operations does not impact on
the interim financial statements.
2. Segment information
The Group categorises its operations into two business segments
based on exploration and appraisal and development and production.
The Group's exploration and appraisal activities are carried out in
Morocco and Italy. The Group's reportable segments are based on
internal reports about the components of the Group which are
regularly reviewed by the Board of Directors, being the Chief
Operating Decision Maker ("COMD"), for strategic decision making
and resources allocation to the segment and to assess its
performance. Sales during the period arose from producing licences
in Italy. The segment results for the period ended 30 June 2016 are
as follows:
Segment results for the period ended 30 June 2016
Corporate Development & Production Exploration & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
--------------------------------------------- --------- ------------------------ ----------------------- ---------
Sales and other operating revenues - 529 - 529
Other income 715 - - 715
Operating costs - (801) - (801)
Exploration costs - - (28) (28)
Administration expenses (2,346) - - (2,346)
--------------------------------------------- --------- ------------------------ ----------------------- ---------
Operating loss segment result (1,631) (272) (28) (1,931)
--------------------------------------------- --------- ------------------------ ----------------------- ---------
Finance revenue 2,717 - - 2,717
Finance costs and exchange gains (376) - - (376)
--------------------------------------------- --------- ------------------------ ----------------------- ---------
Profit/(loss) for the period before taxation 710 (272) (28) 410
--------------------------------------------- --------- ------------------------ ----------------------- ---------
The segments assets and liabilities at 30 June 2016 are as
follows:
Exploration
Corporate Development & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
-------------------- --------- ------------------------ ------------ ---------
Capital expenditure 274 6,678 15,697 22,649
Other assets 22,802 62 6,192 29,056
Total liabilities (11,546) (1,938) (17,340) (30,824)
-------------------- --------- ------------------------ ------------ ---------
The geographical split of non-current assets is as follows:
UK Italy Morocco
GBP'000s GBP'000s GBP'000s
---------------------------------------- --------- --------- ---------
Development and production assets - 6,678 -
Land and buildings - 1,493 -
Fixtures, fittings and office equipment 38 170 66
Goodwill - 2,160 -
Exploration and evaluation assets - 7,809 4,122
Software 103 8 2
---------------------------------------- --------- --------- ---------
Total 141 18,318 4,190
---------------------------------------- --------- --------- ---------
Segment results for the period ended 30 June 2015
Corporate Development & Production Exploration & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------ --------- ------------------------ ----------------------- ---------
Sales and other operating revenues - 478 - 478
Operating costs - (291) - (291)
Exploration costs - - (1) (1)
Administration expenses (1,490) - - (1,490)
------------------------------------ --------- ------------------------ ----------------------- ---------
Operating loss segment result (1,490) 187 (1) (1,304)
------------------------------------ --------- ------------------------ ----------------------- ---------
Finance revenue 12 - - 12
Finance costs and exchange losses (2,602) - - (2,602)
------------------------------------ --------- ------------------------ ----------------------- ---------
Loss for the period before taxation (4,080) 187 (1) (3,894)
------------------------------------ --------- ------------------------ ----------------------- ---------
The segments assets and liabilities at 30 June 2015 were as
follows:
Corporate Development & Production Exploration & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
-------------------- --------- ------------------------ ----------------------- ---------
Capital expenditure 67 12,336 15,153 27,556
Other assets 20,017 - - 20,017
Total liabilities (1,958) (6,669) (11,577) (20,204)
-------------------- --------- ------------------------ ----------------------- ---------
The geographical split of non-current assets is as follows:
UK Italy
GBP'000s GBP'000s
---------------------------------------- --------- ---------
Development and production assets - 12,336
Land and buildings - 1,294
Fixtures, fittings and office equipment 42 25
Goodwill - 1,959
Exploration and evaluation assets - 11,813
Software - 87
---------------------------------------- --------- ---------
Total 42 27,514
---------------------------------------- --------- ---------
Segment results for the year ended 31 December 2015
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------ --------- ------------- ------------ ---------
Sales and other operating revenues - 859 - 859
Operating costs - (538) - (538)
Exploration costs - - (5,838) (5,838)
Impairment of producing assets - (6,347) - (6,347)
Administration expenses (3,181) - - (3,181)
------------------------------------ --------- ------------- ------------ ---------
Operating loss segment result (3,181) (6,026) (5,838) (15,045)
------------------------------------ --------- ------------- ------------ ---------
Interest receivable 52 - - 52
Finance costs and exchange losses (3,294) - - (3,294)
------------------------------------ --------- ------------- ------------ ---------
Loss for the period before taxation (6,423) (6,026) (5,838) (18,287)
------------------------------------ --------- ------------- ------------ ---------
The segments assets and liabilities at 31 December 2015 were as
follows:
Development Exploration
Corporate & Production & Appraisal Total
GBP'000s GBP'000s GBP'000s GBP'000s
------------------- --------- ------------- ------------ ---------
Non-current assets 137 5,391 10,921 16,449
Current assets 17,845 - - 17,845
Total liabilities (7,743) (1,498) (8,894) (18,135)
------------------- --------- ------------- ------------ ---------
The geographical split of non-current assets is as follows:
UK Italy Morocco
GBP'000s GBP'000s GBP'000
---------------------------------------- --------- --------- --------
Development and production assets - 5,391 -
Land and buildings - 1,327 -
Fixtures, fittings and office equipment 37 101 29
Goodwill - 1,992 -
Exploration and evaluation assets - 6,960 512
Software 100 - -
---------------------------------------- --------- --------- --------
Total 137 15,771 541
---------------------------------------- --------- --------- --------
3. Profit/(loss) per share
The calculation of basic profit/(loss) per Ordinary Share is
based on the profit/(loss) after tax and on the weighted average
number of Ordinary Shares in issue during the period. The
calculation of diluted profit/(loss) per share is based on the
profit/(loss) after tax on the weighted average number of ordinary
shares in issue plus weighted average number of shares that would
be issued if dilutive options and warrants were converted into
shares. Basic and diluted profit/(loss) per share is calculated as
follows:
Profit/(loss) after tax from Weighted average Profit/(loss) per share (basic)
continuing operations shares in issue from continuing operations
June June December June June December June June December
2016 2015 2015 2016 2015 2015 2016 2015 2015
GBP'000s GBP'000s GBP'000s million million million pence pence pence
------ ---------- --------- --------- -------- -------- -------- ---------- --------- ------------
Basic 410 (3,894) (18,287) 506 430 467 0.08 (0.91) (3.90)
------ ---------- --------- --------- -------- -------- -------- ---------- --------- ------------
Weighted average
Profit/(loss) after tax from shares in issue and dilutive Profit/(loss) per share (diluted)
continuing operations potential ordinary shares from continuing operations
June June December June June December June June December
2016 2015 2015 2016 2015 2015 2016 2015 2015
GBP'000s GBP'000s GBP'000s million million million pence pence pence
-------- ---------- --------- --------- ---------- ---------- --------- ---------- ---------- -------------
Diluted 410 (3,894) (18,287) 538 430 467 0.08 (0.91) (3.90)
-------- ---------- --------- --------- ---------- ---------- --------- ---------- ---------- -------------
4. Intangibles
Year
Six months ended Six months ended ended
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
---------------------------- ---------------- ---------------- ---------
Cost
At start of period 20,198 13,948 13,948
Additions 4,000 5,497 6,560
Exchange adjustments 657 (454) (310)
---------------------------- ---------------- ---------------- ---------
At end of period 24,855 18,991 20,198
---------------------------- ---------------- ---------------- ---------
Impairment and Depreciation
At start of period 10,634 5,060 5,060
Charge for period 17 72 5,574
---------------------------- ---------------- ---------------- ---------
At end of period 10,651 5,132 10,634
---------------------------- ---------------- ---------------- ---------
Net book amount 14,204 13,859 9,564
---------------------------- ---------------- ---------------- ---------
On 8 August 2016, the Company announced a significant gas
discovery at the Company's Tendrara licence, onshore Morocco.
Capital expenditure will be incurred as additional wells are
expected to be drilled before the end of 2016.
5. Loans and Borrowings
Year
Six months ended Six months ended ended
30 June 30 June 31 Dec
2016 2015 2015
Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
---------------------- ---------------- ---------------- ---------
Current liability
Other loans 7,704 - 5,751
---------------------- ---------------- ---------------- ---------
Non-current liability
5-year secured bonds 8,125 - -
Other loans 1,027 13,538 7,157
---------------------- ---------------- ---------------- ---------
9,152 13,538 7,157
---------------------- ---------------- ---------------- ---------
On 21 June 2016, the Company announced that Greenberry S.A
("Greenberry") had subscribed for 5- year non-amortising secured
bonds with an aggregate value of the issue of EUR28.8 million (the
"bonds"). Alongside the bonds, the Company was to issue 70,312,500
warrants to subscribe for new ordinary shares in the Company at an
exercise price of 30 pence per ordinary share and an exercise
period of approximately five years, concurrent with the term of the
bonds, to Greenberry (the "warrants"). The bonds are secured over
the share capital of Sound Energy Holdings Italy Limited. The bonds
have a 5% coupon and were issued at a 32% discount to par value. A
total cash fee of EUR1.1 million was payable by the Company to
Greenberry.
The warrants were recorded within equity at their fair value and
the remaining proceeds of the notes net of issue costs were
recorded as non-current liability. As per the terms of the
subscription agreement with Greenberry the bonds were to be issued
in tranches. The liability reported as at 30 June 2016 is
attributable to the tranches that had been issued to Greenberry as
at that date. The final tranche of the bonds was issued subsequent
to the period end.
Part of the proceeds of the bonds was used to settle an existing
Reserve Based Lending facility of EUR7.0 million at a discount of
50% which, after allocation of attributable transaction costs,
resulted in a credit being recognised in the income statement of
GBP2.7 million during the period.
6. Shares in issue and share based payments
As at 30 June 2016, the Company had 509,211,611 ordinary shares
in issue. In the period to 30 June 2016, a total of 5.3 million
warrants at 10.4p were exercised.
On 24 March 2016, the Company announced that it had on 23 March
2016 issued a total of 9,050,000 options, of which 3,000,000 were
awarded to an officer of the Company, to subscribe for new ordinary
shares in the Company at a price of 16 pence per ordinary share.
The options will vest on 23 March 2019 and will be exercisable
thereafter at any time until 23 March 2021. The Options will vest
subject to the pre-determined performance criteria that if the
price per ordinary share in the Company increases over the
three-year vesting period by 15%, 10%, or 5% on a compounded
annualised basis then all, two-thirds, or one-third of the options
respectively will vest.
7. Post Balance Sheet events
On 8 August 2016, the Company announced the issue of 70,312,500
warrants at an exercise price of 30 pence per share to Greenberry
in line with a subscription agreement entered into on 21 June 2016
in which Greenberry subscribed for 5 year non-amortising bonds
(Note 5).
On 8 August 2016, the Company announced the issue of 1,500,000
options to non-executive directors of the Company at an exercise
price of 60 pence per share and the exercise of 1,780,000 options
by an officer of the Company.
On 29 July 2016, the Company announced issue of 300,000 new
ordinary shares following the exercise of 300,000 options to
subscribe for new ordinary shares in the Company at a price of 16.5
pence per new ordinary share.
On 27 July 2016, the Company announced the signature of an
agreement with Schlumberger group entities ("Schlumberger") where
by Schlumberger has agreed to fund EUR 7.5 million of services to
be provided by Schlumberger on the Badile well. The agreement is
subject to certain standard conditions precedent and signing of the
relevant agreements. In exchange the Company has agreed to grant
Schlumberger an option, exercisable at nil additional cost at any
time during a six-month period following the completion of a well
test and the declaration of a potential commercial discovery at the
Badile licence, to acquire a 20% net profit interest in the Badile
licence.
On 7 July 2016, the Company announced that it had received a
non-binding expression of interest from Oil & Gas Investment
Fund ("OGIF"), its partner on the Tendrara licence, expressing
OGIF's interest in funding, building and operating a new pipeline
connecting Tendrara to the Gazoduc Maghreb Europe (GME)
pipeline.
Subsequent to the period end to 31 August 2016, a total of 16.6
million warrants at 10.4p and 8.1 million warrants at 24p were
exercised.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKQDBFBKDOCD
(END) Dow Jones Newswires
September 15, 2016 02:00 ET (06:00 GMT)
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