Source - RNS
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:

Gross best estimate of 87 bcsf

US$44 million to US$95 million NPV range net to Prospex

£5 million to £8.4 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 £620,000

·     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 £2.521m, £1.746m during the period and £775,000 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 Plc

Tel: +44 (0) 203 586 1009

Katy Mitchell
Nick Prowting
Jay Ashfield

WH Ireland Limited

WH Ireland Limited

WH Ireland Limited

Tel: 0113 394 6600

Tel: +44 (0) 207 220 1658

Jon Belliss

Beaufort Securities Limited

Tel: +44 (0) 207 382 8300

Lucy Williams

Charles Goodfellow

Eran Zucker

Peterhouse Corporate Finance
Peterhouse Corporate Finance

Peterhouse Corporate Finance

Tel: +44 (0) 207 469 0932

Charlotte Heap

Frank Buhagiar

St Brides Partners Ltd

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177     

 

 

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 £5m to £8.4m (net to Prospex), representing a significant premium to the initial investment price £620,000 (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 £1.6 million in May 2016 and a subsequent raise of £775,000 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 months ended

 

  Six months ended

 

Year ended

 

 

30 June

 

30 June

 

31 December

 

 

2016

 

2015

 

2015

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

£

 

£

 

£

 

 

 

 

 

 

 

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)

 

 

£

 

£

 

£

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

 

 

 

 

capital

 

premium

 

earnings

 

reserve

 

reserve

 

reserve

 

interests

 

loan note

 

 Total

 

 

£

 

£

 

£

 

£

 

£

 

£

 

£

 

£

 

£

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)

 

 

£

 

£

 

£

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 ended

 

  Six months ended

 

Year ended

 

 

30 June

 

30 June

 

31 December

 

 

2016

 

2015

 

2015

 

 

(unaudited)

 

(unaudited)

 

(audited)

 

 

 

 

 

 

 

At 1 January

 

-

 

-

 

-

Addition, at cost

 

1,247,006  

 

2,176,487

 

 

         416,454

 

 

                 69,311

Fair value adjustment

 

 

 

At 30 June

 

 

 

 

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
 
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