Source - RNS
RNS Number : 8730K
Sirius Petroleum PLC
27 September 2016
 

 

27 September 2016

 

 

Sirius Petroleum Plc.

 

("Sirius" or the "Company")

 

Half Year Report
for the six month period ended 30 June 2016

 

Sirius Petroleum (AIM:SRSP), the investing Company focused on oil and gas development and production opportunities in Nigeria, announces its interim results for the six month period ended 30 June 2016.

 

Enquiries

 

Sirius Petroleum plc  

Bobo Kuti

+44 (0) 20 3740 7460

www.siriuspetroleum.com

 

Cantor Fitzgerald Europe (Nomad  and Broker)

David Porter / Sarah Wharry

 

+44 (0) 207 894 7000

 

Gable Communications Limited

John Bick

+44 (0) 20 7193 7463

Email: [email protected]

 


Half Year Report

 

Results

 

The interim results for the six month period ended 30 June 2016 reflect the costs incurred during the period to continue our evaluation work on the Ororo Field, in collaboration with our Technical Advisors, Havoc Partners and our Nigerian partners, Owena Oil & Gas and Guarantee Petroleum, and our London and Nigerian operations as we progress our Project Funding discussions in relation to drilling the Ororo-2 well.

 

The operating loss in the half year amounted to $698,000, a significant reduction of $864,000 on the six months to 30 June 2015 operating loss of $1,562,000, (year to 31 December 2015: $3,215,000) giving a loss per share of 0.04 cents (30 June 2015: 0.19 cents, 31 December 2015 0.30 cents).

 

Financing

 

During the period the Company issued 166,666,667 new ordinary shares of 0.25p each at 0.3p, raising £500,000 before expenses. Since the period end the Company has issued a further 200,000,000 new ordinary shares of 0.25p each at 0.25p, raising a further £500,000 before expenses. The Company has also entered into a convertible loan agreement since the period end for £500,000. The loan is for a term of one year and accrues 10% interest.

 

Outlook

International oil service providers are offering turn-key services, equipment and personnel to finance low-risk development projects.  The Board has now received a further two proposals from multinational service providers following the Company's initial vendor finance proposal.  This competitive process will create the most efficient structure and pricing for the drilling of the Ororo field.

 

On 8 September, Sirius announced the results of a Competent Person's Report (CPR) on the Ororo Field, which was produced by independent petroleum consultants, Rockflow Resources Limited ("Rockflow"). The report confirmed a Mid Case Net Present Value (NPV10) of the asset of $49.2m, based on a $50 per barrel flat real oil price for life of field. The scenario would generate peak oil production of 6,000 stb/d and peak gas production at 25 MMScfd, which equates to combined peak production at 10,310 barrels of oil equivalent per day (boepd).

 

The High Case confirmed significant potential which exists on the field located in a world-class petroleum system. A summary of this report is available on our website under Reports & Publications in the Investor Relations section.

 

Rockflow produced an updated cash flow model in relation to the Ororo Field and in light of the current oil price, the decline of rig rates, and reduction of development costs, the economic cut off of the project is $27/bbl, which is substantially lower than today's oil price.

 

In conclusion, the Directors believe that Sirius is well positioned to conclude its Project Funding given the underlying quality of the Ororo asset, the recent fundraise and the progress made with Guarantee Petroleum and Owena Oil & Gas in relation to moving forward with the preparatory work on the Ororo Field.

 

Annual General Meeting

 

The Annual General Meeting will be held at 10.00 am on Thursday, 17 November 2016 at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG.  A Notice convening the meeting will be sent separately to shareholders shortly, and an announcement will be made when this has been done.

 

Jack Pryde

 

Chairman

 

26 September 2016

 

 

 

 

 

 

 

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2016

 


Note

Unaudited Period ended 30 June 2016


Unaudited Period ended 30 June 2015


Audited        Year ended  31 December 2015


US$'000


US$'000


US$'000








36


39


78







Share based payment charge


-


(442)


(895)

Other administrative expenses


(734)


(1,159)


(2,398)








Total administrative expenses


(734)


(1,601)


(3,293)

Loss from operations


(698)


(1,562)


(3,215)

Finance costs


(4)


(621)


(837)

Loss before taxation


(702)


(2,183)


(4,052)


 


 


 

Taxation


-


-


-







Loss after taxation and loss attributable to the equity holders of the Company


(702)


(2,183)


(4,052)







Other comprehensive income







Exchange differences on translating foreign operations


(5)


(50)


(14)

Total comprehensive loss for the period


(707)


(2,233)


(4,066)














Total basic and diluted (cents per share)

2

(0.04)


(0.19)


(0.30)



 

 

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2016

 


Share capital

Share premium account

Share-based payment reserve

Other reserves

Exchange reserve

Retained earnings

Total equity


US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000









Balance at 1 January 2015

4,733

20,622

9,299

305

(252)

(35,750)

(1,043)

Share based payments

-

-

442

-

-

-

442

Share issue

808

3,145

(816)

-

-

-

3,137

Share issue costs

-

(35)

-

-

-

-

(35)

Issue of loan fees equity instruments

-

-

-

191

-

-

191

Settlement of loan fees equity instruments

-

-

-

(496)

-

(923)

(1,419)

Transactions with owners

808

3,110

(374)

(305)

-

(923)

2,316

Loss for the period

-

-

-

-

-

(2,183)

(2,183)

Other comprehensive income for the period

-

-

-

-

(50)

                -  

(50)

Balance at 30 June 2015

5,541

23,732

8,925

              -  

(302)

(38,856)

(960)

Share based payments

-

-

453

-

-

-

453

Share issue

1,603

1,656

(742)

-

-

-

2,517

Share issue costs

-

(136)

-

-

-

-

(136)

Transfer on lapse of share options/warrants

-

-

(1,411)

-

-

1,411

-

Issue of loan fees equity instruments

-

-

-

611

-

-

611

Settlement of loan fees equity instruments

-

-

-

(611)

-

(86)

(697)

Transactions with owners

1,603

1,520

(1,700)

              -  

               -  

1,325

2,748

Loss for the period

-

-

-

-

-

(1,869)

(1,869)

Other comprehensive income for the period

-

-

-

-

36

-

36

Balance at 31 December 2015

7,144

25,252

7,225

              -  

(266)

(39,400)

(45)

Issue of share capital

597

120


-

-

-

717

Share issue costs


(51)

-

-

-

-

(51)

Transactions with owners

597

              69

              -  

              -  

               -  

                -  

666

Loss for the period

-

-

-

-

-

(702)

(702)

Other comprehensive income for the period

-

-

-

-

(5)

-

(5)

Balance at 30 June 2016

7,741

25,321

7,225

-

(271)

(40,102)

(86)

 

 

 

 

 

SIRIUS PETROLEUM PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2016

 



Unaudited        30 June 2016


Unaudited        30 June 2015


Audited            31 December 2015







Assets

Note

US$'000


US$'000


US$'000








Non-current







Intangible exploration and evaluation assets

3

3,950


2,427


3,862

Property, plant and equipment


25


-


40



3,975


2,427


3,902

Current







Cash and cash equivalents


111


14


45

Trade and other receivables

4

60


194


110








Total current assets


171


208


155








Total assets


4,146


2,635


4,057








Liabilities







Current







Trade and other payables


3,727


3,090


3,584

Loans payable


505


505


518








Total liabilities


4,232


3,595


4,102








Equity







Issued share capital

5

7,741


5,541


7,144

Share premium


25,321


23,732


25,252

Share based payment reserve


7,225


8,925


7,225

Exchange reserve


(271)


(302)


(266)

Retained earnings


(40,102)


(38,856)


(39,400)

Equity attributable







to owners of the company


(86)


(960)


(45)








Total equity and liabilities


4,146


2,635


4,057








 

 

 

 

 

 

 

SIRIUS PETROLEUM PLC

CONSOLIDATED  STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 JUNE 2016

 



Unaudited Period ended


Unaudited Period ended


Audited Year ended



30 June 2016


30 June 2015


31 December 2015










US$'000


US$'000


US$'000

Operating activities







Loss after tax


(702)


(2,183)


(4,052)

Depreciation


4


-


4

Finance cost


4


336


837

Decrease/(increase) in trade and other receivables


49


(141)


(95)

Equity settled share-based payments


-


442


895

Expenses settled in shares


-


137


479

Increase in trade and other payables


164


859


906

Net cash (outflow) from operating activities


(481)


(550)


(1,026)








Investing activities







Purchase of property, plant and equipment


-


-


(44)

Investment in intangibles


(266)


(135)


(1,551)

Net cash (outflow) from investing activities


(266)


(135)


(1,595)








Financing activities







Proceeds from issue of share capital


717


-


1,708

Share issue costs


(51)


(35)


(171)

Finance cost


-


(10)


(34)

Loans received


36


760


1,142

Net cash inflow from financing activities


702


715


2,645








Net change in cash and cash equivalents


(45)


30


24

Cash and cash equivalents at beginning of period


45


19


19

Exchange difference on cash and cash equivalents


111


(35)


2

Cash and cash equivalents at end of period


111


14


45

 

 

 

 

SIRIUS PETROLEUM PLC

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 JUNE 2016

1. BASIS OF PREPARATION

The unaudited interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention.  The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2015 have been delivered to the Registrar of Companies. The auditor's report on those financial statements was unmodified.

 

Going concern

 

The directors have prepared cash flow projections through to 30 September 2017.  These projections only take account of the on-going management costs of the Group, and the clearance of all payables outstanding at the date of this report (other than amounts owed to directors, ex-directors and amounts accrued in relation to payments which are to be paid if and when production of oil commences).  The projections do not assume any oil extraction or income from oil trading nor do they assume any acquisitions take place or that any additional assessment of the prospective resources is undertaken over and above that authorised as at the date of this report. 

 

The cash flow projections indicate that the Group has sufficient headroom to meet its immediate working capital requirements. The directors are in discussions with a number of parties and are confident that they will be able to raise further funds as required. On the basis of the assumptions above and following a detailed review by the directors of the Group's cash flow forecast, the directors believe that the Group will have sufficient cash resources to meet its liabilities as they fall due for a period of at least 12 months.

 

Segmental reporting

 

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group's Chief Executive Officer to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.

The Chief Executive Officer reviews financial information for and makes decisions about the Group's performance as a whole, as the Group has not generated revenue during the period.

Subject to further acquisitions and the future development of the business in Nigeria the Group expects to further review its segmental information during the forthcoming financial year.

 

Fees and Loans Settled in Shares

 

Where shares have been issued as consideration for services provided or loans outstanding they are measured at fair value. The difference between the carrying amount of the financial liability (or part thereof) extinguished, and the fair value of the shares, is recognised in profit or loss.

 

2. LOSS per share 

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.  The impact of the options and warrants on the loss per share is anti-dilutive.

 


Unaudited


Unaudited


Audited


six months ended


six months ended


year ended


30 June 2016


30 June 2015


31 December 2015







Loss on ordinary activities after tax ($'000)

(702)


(2,183)


(4,052)







Weighted average number of shares for calculating basic loss per share

    1,817,516,702


    1,162,343,230


    1,349,954,048







Basic and diluted loss per share (US cents)

(0.04)


(0.19)


(0.30)

 

3. INTANGIBLE EXPLORATION AND EVALUATION ASSETS

Cost of oil and gas exploration - pending determination


US$'000

Cost


At 1 January 2015

                  2,311

Additions

                      135

Exchange difference

(19)

At 30 June 2015

                   2,427

Additions

                   1,435

At 31 December 2015

                   3,862

Additions

                       266

Exchange difference

(178)

At 30 June 2016

                   3,950



Amortisation and impairment


At 1 January 2015, 30 June 2015, 31 December 2015 and 30 June 2016

 -



Net book value at 30 June 2016

                   3,950

Net book value at 31 December 2015

                   3,862

Net book value at 30 June 2015

                   2,427

 

During the year ended 31 December 2011 Sirius Ororo OML95 Limited entered into an agreement with Guarantee Petroleum Company Limited and Owena Oil and Gas Limited which gives it the right to acquire a 40% interest in the Ororo Oil Field.

The consideration for the 40% interest in the field was $1,000,000 paid on the date of the agreement with a further $500,000 due on the commencement of the operation of the well. At the time of signing the agreement, the Directors considered the fair value of the liability in respect of the additional $500,000 payable. Based on an assessment of how likely it would be that this would be paid discounted at 15%, the Directors considered the amount to be immaterial and did not, therefore, recognise a liability at that time.

At 31 December 2012, the Directors reassessed their estimate of the future cash flows in accordance with the Group's accounting policies. Following the additional work as noted below and the completion of the feasibility report along with the ongoing funding negotiations, the Directors were confident of commencement of the operation of the well. As a result, this liability was now expected to become payable. The Directors have reviewed the assumptions made and consider the timing to have changed, therefore, the carrying value of the liability has been assessed at the same value as at 31 December 2014 at $318,000 and is included in other payables (2014: $318,000).

The Group has undertaken certain works including commissioning the preparation of a Competent Persons Report and has conducted an environmental impact assessment. It has also commenced planning appropriate community projects and site surveys to finalise the subsequent drilling programme and will also cover certain operational costs related to the field. Under the agreement with our partners, the Group will cover all costs of this phase of the project. Costs plus interest of LIBOR+3% will be recoverable on the production of oil before the profit interest split is applied; these costs are being added to the costs of the asset.

The Directors have reviewed the investment for impairment. The Directors have reviewed the valuation of the  Ororo field incorporating volumetrics and a Field Development Plan prepared by Rockflow Resources Ltd, with a valuation of the asset based on current Capex estimates and current oil price. This valuation review supports the value of the investment held on the balance sheet.  

The Group intends investing further amounts into the Ororo Oil Field, as part of its strategic development plans. The costs of the capital and operating costs will be covered by either separate funding facilities or by financial and technical industry partners on a joint farm-in basis.

4. trade and other receivables


Unaudited


Unaudited


Audited


30 June 2016


30 June 2015


31 December 2015


US$'000


US$'000


US$'000







Trade receivables

8


-


9

Other receivables

26


177


72

Prepayments and accrued income

26


17


29

Total

60


194


101

 

Trade and other receivables are usually due within 30 - 60 days and do not bear any effective interest rate.  The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of fair value.

 

5. trade and other PAYABLES


Unaudited


Unaudited


Audited


30 June 2016


30 June 2015


31 December 2015


US$'000


US$'000


US$'000







Trade payables

475


539


335

Other payables

               354


                 367


                531

Accruals

            2,898


            2,184


             2,718

Total

3,727


3,090


3,584

 

The fair value of trade and other payables has not been disclosed as, due to their short duration, management considers the carrying amounts recognised in the balance sheet to be a reasonable approximation of their fair value.

 

6.  SHARE CAPITAL

The movement in ordinary shares and share premium in the period was as follows:

 



Number


Nominal amount (USD $'000)


Share premium (USD $'000)














1,098,737,213


4,733


20,622


162,704,348


630


2,205


46,183,795


178


940

Share issue costs


-


-


(35)

At 30 June 2015


1,307,625,356


5,541


23,732


123,737,500


116


841


275,000,000


1,067


640


15,000,000


420


175

Share issue costs


-


-


(136)

At 31 December 2015


1,721,362,856


7,144


25,252


166,666,667


597


120

Share issue costs


-


-


(51)

At 30 June 2016


1,888,029,523


7,741


25,321

 

7.  POST BALANCE SHEET EVENTS

 

On 25 July 2016, 200,000,000 ordinary shares of 0.25p were issued at par for cash raising £500,000 before expenses.

 

Following this share issue there are 2,088,029,523 ordinary shares of 0.25p in issue, each of which is a voting share.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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