Source - GNW

Providence Resources P.l.c. - Half Year 2016 Results

LEADING OFFSHORE IRELAND

Dublin and London - September 29, 2016 - Providence Resources P.l.c. (PVR LN, PRP ID), the Irish based Oil and Gas Exploration Company, today announces its unaudited interim results for the half year ended June 30, 2016.

Tony O'Reilly, Chief Executive Officer commented:

"Providence enters the second half of the year with renewed optimism. A solid balance sheet and significantly enhanced financial strength, combined with the planned near term drilling activity at our Druid prospect have the potential to create significant shareholder value.

During the first half of 2016, the market volatility that characterized the E&P sector in 2015 continued and presented the industry with significant commercial and financial challenges.  A dearth of M&A activity in the sector, compounded by some very specific pressures relating to the scheduled Melody debt repayment, coupled with the adverse Court of Appeal ruling, had material implications for Providence.  However, thanks to the support of our existing shareholders and new investors, we successfully raised new funds in July 2016 to allow us to completely restructure our balance sheet and provide the financial resources and flexibility to advance our very extensive portfolio of assets.  Importantly, we were able to repay all of our corporate debt, settle the outstanding litigation with Transocean and provide the appropriate resources to finance the drilling of the high impact Druid exploration well in 2017.

The success of this financing clearly demonstrates shareholder support for our strategy to develop our unique portfolio of appraisal and exploration assets offshore Ireland. In that context, the Irish offshore has become a very attractive location for industry majors as evidenced by the record number of new licensing authorisations awarded in the 2015 Atlantic Margin Licensing Round. 

The securing of funds to be able to drill the Druid prospect is a rare opportunity for us to avail of the cost dynamics that currently exist in the industry.  With estimated Pmean in place oil resources of over 3 BBO, we believe that Druid represents one of the few world class deep-water exploration prospects being planned for drilling in 2017.  Having secured the necessary finance and now with an even lower cost estimate than previously forecast, we are moving forward with our drilling programme targeting a spud date in June 2017.

Key to the Providence portfolio is Barryroe, where the financial restructuring combined with the industry's falling cost profile, now provides increased flexibility in terms of our commercial farm out negotiations.  We look forward to updating the market further as we continue to develop and consolidate our leading position offshore Ireland."

H1 2016 OPERATIONAL HIGHLIGHTS

APPRAISAL PROJECTS

  • Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11)
         - Upper C-Sand GIIP within SEL 1/11 & OPL1 Option area now estimated at c. 400 BSCF
         - Latest well cost estimates for single vertical well c. US$25 million
 
  • Spanish Point Gas Condensate Project, Northern Porcupine Basin (FEL 2/04 & 4/08)
        - Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round
 
  • Helvick / Dunmore Oil Discoveries North Celtic Sea Basin 
        - Award of Lease Undertakings
        - 50% staged farm in by Marginal Field Development Company Limited

EXPLORATION PROSPECTS

  • Druid / Drombeg Oil Prospects, Southern Porcupine Basin (FEL 2/14)
        - Multi-domain analysis confirms that the 3D seismic responses from the Druid and Drombeg prospects are consistent with the presence of 2 large vertically stacked stratigraphically trapped oil accumulations
        - Total cumulative in place un-risked prospective resources of c. 5.095 BBO (Pmean)
  •         Druid - c. 3.180 BBO (Pmean)
  •         Drombeg - c. 1.915 BBO (Pmean)

        - Both Druid and Drombeg prospects could be evaluated with a single vertical exploration well  
        - Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round

  • Newgrange Prospect, Goban Spur Basin (FEL 6/14)
        - Seismic supports top seal and reservoir presence for Cretaceous target
        - Pre-Cretaceous structural closure far larger than previously mapped
        - Adjecent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round
 
  • Avalon Oil Prospect, Northern Porcupine Basin (LO 16/27)
        - Award of new Licensing Option in 2015 Atlantic Margin Licensing Round
        - Large AVO stratigraphic Paleocene oil play analogous to Druid
 
  • Dunquin Oil Prospect, Southern Porcupine Basin (FEL 3/04)
        - Dunquin North post-well technical studies continuing
        - Evidence of more significant residual oil in the Dunquin North well
        - Adjacent third party Licensing Options awarded in 2015 Atlantic Margin Licensing Round
 
  • Kish Oil Prospect, Kish Bank Basin (SEL 2/11)
        - Company's working interest increased to 100%

PORTFOLIO MANAGEMENT

  • Relinquishments made to Licence Authorisations over:

        - Cuchulain, Southern Porcupine Basin (FEL 1/99)
        - Polaris, Rathlin Basin (P 1885)
        - Dragon (UK), St George's Channel Basin (P 1930)

H1 2016 FINANCIAL HIGHLIGHTS

  • Further reduction in administration costs and legal expenses
     
  • Operating loss for the period of €2.216 million (€3.787 million in H1 2015)
     
  • Loss of €4.440 million (€8.425 million in H1 2015)
     
  • Loss per share of 3.17 cents (7.94 cents in H1 2015)
     
  • At June 30, 2016, total cash and cash equivalents were €0.522 million (€11.289 million at June 30, 2015) 
     
  • At June 30, 2016 debt was €19.546 million (€15.610m at June 30, 2015)
     
  • June 21, 2016 - Capital fundraising announced (and approved at the EGM on July 14, 2016)with proceeds proposed to be used to:
        - Retire corporate debt
        - Make payment to Transocean
        - Provide working capital
        - Finance the Company's share of funding the drilling of the Druid exploration well

       

LITIGATION AGAINST TRANSOCEAN DRILLING UK LIMITED ("TRANSOCEAN")

  • April 2016 Court of Appeal Ruling  
        - In April 2016, the Court of Appeal of England and Wales overturned one aspect of the judgment handed down by the Commercial Court in London in December 2014 in relation to the Transocean litigation. Accordingly, the Company was ordered to pay Transocean the gross amount of c.US$6.77 million in respect of certain costs claimed by Transocean in the original legal proceedings issued against the Company by Transocean in May 2012
        - Pursuant to the Court of Appeal Order, on April 27, 2016, the Company paid £225,000, being part of Transocean's legal costs for appeal, and a balance of £183,000 was paid on July 18, 2016
        - Lansdowne, the Company's joint venture partner in Barryroe, is liable for 20% share of all costs associated with the litigation
        - In addition, the Court of Appeal Order stated that other matters in dispute between the Company and Transocean will be the subject of a further hearing in the Commercial Court in London unless otherwise resolved between the parties
 
  • Appeal to the Supreme Court
        - The Company has sought leave to appeal the Court of Appeal Order Judgment to the Supreme Court in the UK.  A decision on the grant of such leave to appeal is expected to take between nine months to one year and further announcements will be made in this regard in due course

POST JUNE 30 EVENTS

  • Barryroe Oil Project, North Celtic Sea Basin (SEL 1/11)
        - Farm out discussions continue
  • Druid/ Drombeg Oil Prospects, Southern Porcupine Basin (FEL 2/14)
        - Election made to enter Phase 2 of Licence (includes the commitment of one exploration well)
        - Druid 2017 Drilling Programme
  •         Appointment of Well Management Company
  •         Invitation To Tender ("ITT") issued for the provision of a deep-water drilling unit
  •         Druid well design to allow for optional penetration of underlying Drombeg prospect
  •         Planned spud date for Druid well is June 2017, subject to regulatory consents
  •         Revised Druid well cost estimates is c. $35 million (compared to previous estimate of $46 million)
  •         Additional cost for deepening of well to penetrate the Drombeg prospect amounts to c. $15 million
  •         Farm out discussions continue
  • Newgrange Prospect, Goban Spur Basin (FEL 6/14)
        - Prospective Resource Potential of c. 13.6 TSCF GIIP or c. 9.2 BBO STOIIP
        - Top Seal capacity analysis indicates potential for a hydrocarbon column of up to 350 metres
        - Latest internal well gross cost estimate of c. $22.5 million
        - Farm out discussions continue
 
  • Spanish Point Gas Condensate Project, Northern Porcupine Basin (FEL 2/04)
        - Farm out campaign continues
 
  • Dunquin Oil Prospect, Southern Porcupine Basin (FEL 3/04)
        - ENI assumes operatorship following withdrawal of ExxonMobil
        - Providence's equity increased to 26.846%*

                    * Includes equity acquired from Atlantic Petroleum in July 2015, which is subject to approval of the Minister for Communications, Climate Action and Environment.

PLACING OFFER AND OPEN OFFER

  • July 14, 2016 - EGM held
        - All resolutions passed with at c. 99% acceptances
 
  • Details of Placing
        - Raised gross proceeds of £53.712 million through issuance of 447.607 million shares £0.12 pence per share
        - Significantly increased the depth of institutional shareholder base
 
  • Details of Open Offer
        - Raised proceeds of €1.516 million through the issuance of 9.975 million shares**

                ~ Directors subscribed for 1.956 million shares** at a cost of €0.297 million

                      **Includes 200,000 direct share subscription by Lex Gamble
       

  • Following Admission of Placing and Open Offer shares, the Company's total issued and voting share capital now comprises 597,658,958 ordinary shares of €0.10 each

POST FINANCING EVENTS

  • Melody Debt Retired
        - Post the EGM, all amounts outstanding under the loan facility with Melody were paid in full by the payment of cash equal to US$20 million (together with accrued interest) and the allotment of 9,938,033 ordinary shares of €0.10 cents each (at the Placing price of £0.12 per share)
        - Post repayment, the floating charge over the Company's assets held by Melody was released
        - Providence is now debt free
 
  • Court of Appeal - Transocean Litigation
        - The Company discharged the balance of the uncontested sums owing to Transocean in respect of the Court of Appeal order made on April 13, 2016
        - The hearing of Transocean's claim in respect of Part 36 of the English Civil Procedure Rules has now been listed to be heard by Mr Justice Popplewell on Friday, October 14, 2016
        - In the event that Transocean is successful in the Commercial Court in relation to the Part 36 claim, the Company estimates that it would be required to make additional net payment of c.US$3.1 million to Transocean
        - In the event of an adverse adjudication, it is open to the Company to appeal such a decision

SUMMARY OF KEY ASSETS/RESOURCE BASE

APPRAISAL ASSETS

  • Barryroe Oil Project, North Celtic Sea Basin (PVR-80%)
    Field Size (2C): 346 MMBOE REC
    Net to PVR: 277 MMBOE REC
  • Hook Head Oil Project, North Celtic Sea Basin (PVR-72.5%)
    Field Size (2C): 35 MMBOE REC
    Net to PVR: 25 MMBOE REC
  • Spanish Point Gas Condensate Project, Northern Porcupine Basin (PVR-58%)
    Field Size (2C): 337 MMBOE REC
    Net to PVR: 195 MMBOE REC

EXPLORATION ASSETS

  • Dunquin South Oil Prospect, Southern Porcupine Basin (PVR-26.85%*)
    Prospect Size (Pmean): 1,389 MMBOE REC
    Net to PVR: 372 MMBOE REC
    * Includes equity acquired from Atlantic Petroleum in July 2015, which is subject to approval of the   Minister of Communication, Climate Action and the Environment
  • Avalon Oil prospect, Southern Porcupine Basin (PVR-80%)
    Prospect Size (Pmean): TBC
    Net to PVR: TBC
  • Druid Oil Prospect, Southern Porcupine Basin (PVR-80%)
    Prospect Size (Pmean): 3.180 BBO STOIIP
    Net to PVR: 2.544 BBO STOIIP
  • Drombeg Oil Prospect, Southern Porcupine Basin (PVR-80%)
  Prospect Size (Pmean): 1.915 BBO STOIIP
  Net to PVR: 1.532 BBO STOIIP
  • Newgrange Gas Prospect, Goban Spur Basin (PVR-80%)
    Prospect Size (Pmean): 13.6 TSCF GIIP
    Net to PVR: 10.8 TSCF
  • Kish Oil Prospect, Kish Bank Basin (PVR-100%)
  Prospect Size (P50): 210 MMBO REC
  Net to PVR: 210 MMBOE REC

 


BOARD CHANGES

  • Appointment of Mr. Pat Plunkett as Non-executive Chairman with effect from October 1, 2016
     
  • Mr. James McCarthy to remain as a Non-executive Director
     
  • Retirement of Dr. Phil Nolan as a Non-executive Director with effect from October 1, 2016

OUTLOOK
Whilst the industry backdrop still remains challenging, with our completely restructured balance sheet and extensive mature portfolio, we are very well placed to deliver on our plans.  With clear shareholder endorsement of our strategy to exploit our portfolio, and with a major drilling campaign at Druid planned for 2017, we are optimistic about the prospects both for Providence and the overall Irish Oil and Gas sector. We remain both determined and uniquely positioned to lead the industry in identifying and realizing the significant potential that exists offshore Ireland.

INVESTOR ENQUIRIES  
  
Providence Resources P.l.c. Tel: +353 1 219 4074
Tony O'Reilly, Chief Executive Officer       
   
Cenkos Securities plc Tel: +44 131 220 9771
Neil McDonald/Derrick Lee  
  
J&E Davy Tel: +353 1 679 6363
Anthony Farrell  
   
MEDIA ENQUIRIES  
  
Powerscourt Tel: +44 207 250 1446
Lisa Kavanagh/Peter Ogden  
  
Murray Consultants Tel: +353 1 498 0300
Pauline McAlester  

ABOUT PROVIDENCE RESOURCES
Providence Resources is an Irish based Oil and Gas Exploration Company with a portfolio of appraisal and exploration assets located offshore Ireland.  Providence's shares are quoted on AIM in London and the ESM in Dublin.

GLOSSARY OF TERSM USED
BBO - Billion Barrels of Oil                           
BSCF - Billion Standard Cubic Feet of Gas             
EGM - Extraordinary General Meeting 
FEL - Frontier Exploration Licence           
GIIP - Gas Initially in Place                                          
LO - Licensing Option                                    
LU - Lease Undertaking
MMBO - Millions of Barrels of Oil            
MMBOE - Millions of Barrels of Oil Equivalent   
OPL - Offshore Production Lease
Pmean - the expected average value or risk-weighted average of all possible outcomes
Rec - Recoverable                                          
SEL - Standard Exploration Licence                         
STOIIP - Stock Tank of Oil Initially in Place
TSCF - Trillion Standard Cubic Feet of Gas

ANNOUNCEMENT
This announcement has been reviewed by Dr John O'Sullivan, Technical Director, Providence Resources P.l.c.  John is a geology graduate of University College, Cork and holds a Masters in Applied Geophysics from the National University of Ireland, Galway. He also holds a Masters in Technology Management from the Smurfit Graduate School of Business at University College Dublin and a doctorate in Geology from Trinity College Dublin.  John is a Chartered Geologist and a Fellow of the Geological Society of London.  He is also a member of the Petroleum Exploration Society of Great Britain, the Society of Petroleum Engineers and the Geophysical Association of Ireland.  John has more than 25 years of experience in the oil and gas exploration and production industry having previously worked with both Mobil and Marathon Oil.  John is a qualified person as defined in the guidance note for Mining Oil & Gas Companies, March 2006 (London Stock Exchange). Definitions in this press release are consistent with SPE guidelines. 

SPE/WPC/AAPG/SPEE Petroleum Resource Management System 2007 has been used in preparing this announcement.

SUMMARY OF KEY ASSETS

Ref Licence Issued Key Asset Operator Partners % Classification
NORTH CELTIC SEA BASIN
1 SEL 1/11 2011 BARRYROE Providence Lansdowne 80.00 Oil discovery
               
2 SEL 2/07 2007 HOOK HEAD Providence Atlantic; Sosina 72.50 Oil and gas discovery
               
2 LU 2016 HELVICK Providence Atlantic; Sosina, Lansdowne, MFDC 56.25 Oil and gas discovery
2 LU 2016 DUNMORE Providence Atlantic; Sosina, MFDC* 65.25 Oil discovery
NORTHERN  PORCUPINE BASIN
3 FEL 2/04 2004 SPANISH POINT Cairn Sosina 58.00 Oil and gas discoveries
3 FEL 4/08 2008 SPANISH POINT NTH Cairn Sosina 58.00 Oil and gas exploration
SOUTHERN PORCUPINE BASIN
4 FEL 3/04 2004 DUNQUIN SOUTH Eni Repsol; Sosina 26.85 Oil and gas exploration
               
5 LO 16/27 2016 AVALON Providence Sosina 80.00 Oil and gas exploration
               
6 FEL 2/14 2014 DRUID/DROMBEG Providence Sosina 80.00 Oil exploration
GOBAN SPUR BASIN
7 FEL 6/14 2014 NEWGRANGE Providence Sosina 80.00 Oil and gas exploration
KISH BANK BASIN
8 SEL 2/11 2011 KISH BANK Providence   100.00 Oil and gas exploration
               

PROVIDENCE RESOURCES P.l.c.
Condensed consolidated income statement
For the 6 months ended 30 June 2016

  Notes 

6 months ended 30 June 2016
Unaudited
€'000
 

6 months ended 30 June 2015
Unaudited
€'000

 
 

Year ended 31 December 2015
Audited
€'000
Continuing operations

 
       
Administration and legal expenses 3(1,739)(3,250)(6,437)
Pre-licence expenditure  (59)(441)(856)
Impairment of  exploration and evaluation  assets  (418)(96)(5,787)
Operating loss2(2,216)(3,787)(13,080)
      
Finance income  62334
Finance expense 4(2,230)(4,661)(11,091)
      
Loss before income tax (4,440)(8,425)(24,137)
Income tax expense  ---
Loss for the period (4,440)(8,425)(24,137)
        
Loss per share (cent) - continuing operations      
Basic and diluted loss per share 8(3.17)(7.94)(19.57)

PROVIDENCE RESOURCES P.l.c.
Consolidated statement of comprehensive income
For the 6 months ended 30 June 2016

 6 months ended 30 June 2016
Unaudited
€'000
6 months ended 30 June 2015
Unaudited
€'000
Year ended 31 December 2015
Audited
€'000
Loss for the financial period(4,440)(8,425)(24,137)
Items that may be reclassified to profit or loss   
    
Foreign exchange translation differences (2,266)6,0767,178
     
Total income and expense recognised in other comprehensive income from continuing operations  

(2,266)
 

6,076
 

7,178
      
Total comprehensive expense for the period(6,706)(2,349)(16,959)

The total recognised expense for the period is entirely attributable to equity holders of the Company.

PROVIDENCE RESOURCES P.l.c.
Consolidated statement of financial position
As at 30 June 2016

  Notes30 June 2016
Unaudited
€'000
30 June 2015
Unaudited
€'000
31 December 2015
Audited
€'000
Assets        
Exploration and evaluation assets 596,90496,50498,211
Property, plant and equipment  13635168
Intangible assets  243-296
Total non-current assets 97,28396,53998,675
      
Trade and other receivables  2,4003382,174
Cash and cash equivalents  52211,2896,518
Total current assets 2,92211,6278,692
     
Total assets 100,205108,166107,367
        
Equity      
Share capital 625,69425,69425,694
Capital conversion reserve fund  623623623
Share premium 6226,998226,998226,998
Foreign currency translation reserve  9,55510,71911,821
Share based payment reserve  3,1513,9963,586
Retained deficit  (203,785)(184,478)(199,780)
Total equity attributable to equity holders of the Company 62,23683,55268,942
        
Liabilities      
Decommissioning provision  7,3246,8757,424
Total non-current liabilities 7,3246,8757,424
      
Trade and other payables  11,0992,12912,712
Loans and borrowings 719,54615,61018,289
Total current liabilities 30,64517,73931,001
        
Total liabilities 37,96924,61438,425
Total equity and liabilities 100,205108,166107,367

PROVIDENCE RESOURCES P.l.c.
Consolidated statement of changes in Equity
For the 6 months ended 30 June 2016

  Share Capital €'000Capital Conversion Reserve Fund  €'000Share Premium €'000Foreign Currency Translation Reserve  €'000Share Based Payment Reserve €'000Retained Deficit €'000Total €'000
At 1 January 201518,151623210,2304,6434,282(176,339)61,590
Loss for financial period - - - - - (8,425) (8,425)
Currency translation - - - 6,076 - - 6,076
Total comprehensive income - - - 6,076 - (8,425) (2,349)
Transactions with owners, recorded directly in equity              
Share options lapsed in period - - - - (286) 286 -
Shares issued in period 7,543 - 16,768 - - - 24,311
At 30 June 201525,694623226,99810,7193,996(184,478)83,552
               
At 1 January 201625,694623226,99811,8213,586(199,780)68,942
Loss for financial period - - - - - (4,440) (4,440)
Currency translation - - - (2,266) - - (2,266)
Total comprehensive income - - - (2,266) - (4,440) (6,706)
Transactions with owners, recorded directly in equity              
Share options lapsed in period - - - - (435) 435 -
At 30 June 201625,694623226,9989,5553,151(203,785)62,236
               
At 1 January 201518,151623210,2304,6434,282(176,339)61,590
Loss for financial year - - - - - (24,137) (24,137)
Currency translation - - - 7,178 - - 7,178
Total comprehensive income - - - 7,178 - (24,137) (16,959)
Transactions with owners, recorded directly in equity              
Share options lapsed in year - - - - (696) 696 -
Shares issued in period 7,543 - 16,768 - - - 24,311
At 31 December 201525,694623226,99811,8213,586(199,780)68,942

PROVIDENCE RESOURCES P.l.c.
Consolidated statement of cash flows      
For the 6 months ended 30 June 2016

  6 months ended 30 June 20166 months ended 30 June 2015Year ended 31 December 2015
  UnauditedUnauditedAudited
  €'000€'000€'000
Cash flows from operating activities      
     
Loss before income tax for the period (4,440)(8,425)(24,137)
Adjustments for:    
Depletion and depreciation 341034
Amortisation of intangible assets 52-17
Impairment of exploration and evaluation assets 418965,787
Finance income (6)(23)(34)
Finance expense 2,2304,66111,091
Foreign exchange (572)(1,255)(2,684)
Change in trade and other receivables (226)1,549(287)
Change in trade and other payables (1,705)(11,194)(521)
Interest paid (996)(1,512)(4,204)
       
Net cash (outflow) from operating activities(5,211)(16,093)(14,938)
       
Cash flows from investing activities     
Interest received 62334
Acquisition of exploration and evaluation assets (326)(2,190)(7,746)
Acquisition of property, plant and equipment -(15)(484)
Change in restricted cash -3,2963,296
       
Net cash from investing activities(320)1,114(4,900)
       
Cash flows from financing activities     
Proceeds from issue of share capital -25,75425,754
Share capital issue costs -(1,443)(1,443)
(Repayments) / proceeds from loans and borrowings -(3,671)(3,671)
       
Net cash from financing activities-20,64020,640
       
Net (decrease)/increase in cash and cash equivalents(5,531)5,661802
       
Cash and cash equivalents at beginning of  period6,5185,2565,256
Effect of exchange rate fluctuations on cash and cash equivalents (465)372460
       
Cash and cash equivalents at end of period52211,2896,518

PROVIDENCE RESOURCES P.l.c.
Note 1
Basis of preparation

Providence Resources P.l.c ("the Company") is a company incorporated in the Republic of Ireland. The unaudited consolidated interim financial statements of the Company for the six months ended 30 June 2016 (the "Interim Financial Statements") include the Company and its subsidiaries (together referred to as the "Group").  The Interim Financial Statements were authorised for issue by the Directors on 28 September 2016.

The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU.  These condensed set of financial statements included in this half-yearly report have been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the Group's accounting policies as disclosed in the 2015 Annual Report, which are available from the group's website www.providenceresources.com.

The Interim Financial Statements do not constitute statutory financial statements.  The statutory financial statements for the year ended December 31, 2015, extracts from which are included in these Interim Financial Statements, were prepared under IFRSs as adopted by the EU and will be filed with the Registrar of Companies with the Company's 2015 annual return. 

The Interim Financial Statements are presented in Euro, rounded to the nearest thousand, which is the functional currency of the parent company and also the presentation currency for the Group's financial reporting.

PROVIDENCE RESOURCES P.l.c.
Note 2
Operating segments

  6 months ended 30 June 20166 months ended 30 June 2015Year ended 31 December 2015
  UnauditedUnauditedAudited
  €'000€'000€'000
       
Segment net (loss) for the period      
UK - exploration assets (73) - (1,841)
Republic of Ireland - exploration assets (345) (96) (3,946)
Corporate expenses (1,798) (3,691) (7,293)
       
Operating loss for the period(2,216)(3,787)(13,080)
       
Segment assets      
       
UK - exploration assets - 1,879 73
Republic of Ireland - exploration assets 96,905 94,997 100,710
US 32 - 32
Group assets 3,268 11,290 6,552
Total assets100,205108,166107,367
       
Segment Liabilities      
       
UK - exploration (101) (57) (14)
Republic of Ireland - exploration (18,322) (8,882) (19,634)
US - - -
Group liabilities (19,546) (15,675) (18,777)
Total Liabilities(37,969)(24,614)(38,425)
       
Capital Expenditure      
UK - exploration assets 71 88 103
Republic of Ireland - exploration assets 255 2,102 7,643
Republic of Ireland - property, plant and equipment - 15 484
Total Capital Expenditure3262,2058,230
       
Impairment charge      
Republic of Ireland - exploration assets 345 96 3,946
UK - exploration assets 73 - 1,841
  418965,787

PROVIDENCE RESOURCES P.l.c.
Note 3
Administration and legal Expense

  6 months ended 30 June 20166 months ended 30 June 2015Year ended 31 December 2015
  UnauditedUnauditedAudited
  €'000€'000€'000
       
Corporate, exploration and development expenses 1,952 2,290 3,783
Legal expenses 110 329 2,127
Foreign exchange difference 219 1,478 1,550
       
Total administration expenses for the period2,2814,0977,460
       
Capitalised in exploration and evaluation assets (542) (847) (1,023)
       
Total charged to the income statement1,7393,2506,437

PROVIDENCE RESOURCES P.l.c.
Note 4
Finance Expense

  6 months ended 30 June 20166 months ended 30 June 2015Year ended 31 December 2015
  UnauditedUnauditedAudited
  €'000€'000€'000
       
Interest expense 1,010 1,399 2,367
Amortisation of arrangement fees and other amounts 1,680 720 2,861
Unwinding of discount on decommissioning provision (74) 748 1,390
Interest charge on legal settlement - - 2,141
Foreign exchange (gain)/loss on revaluation of loan (386) 1,794 2,332
       
Total finance expense recognised in income statement2,2304,66111,091
       
Recognised directly in equity      
       
Foreign currency differences on foreign operations (2,266) 6,076 7,178
       
Total finance expenses recognised in equity(2,266)6,0767,178

  

PROVIDENCE RESOURCES P.l.c.
Note 5
Exploration and evaluation assets

  Republic of IrelandUKTotal
  €'000€'000€'000
Cost and book value      
       
At 1 January 2015 88,095 1,638 89,733
Additions 1,273 70 1,343
Administration expenses capitalised 830 17 847
Impairment charge (96) - (96)
Foreign exchange translation 4,523 154 4,677
At 30 June 201594,6251,87996,504
       
At 1 January 2015 88,095 1,638 89,733
Additions 6,805 84 6,889
Administration expenses capitalised 1,004 19 1,023
Cash call received in year (166) - (166)
Impairment charge (3,946) (1,841) (5,787)
Foreign exchange translation 6,419 100 6,519
At 31 December 201598,211-98,211
       
At 1 January 2016 98,211 - 98,211
Additions 507 65 572
Cash calls received in period (788) - (788)
Administration expenses capitalised 537 5 542
Impairment charge (345) (73) (418)
Foreign exchange translation (1,218) 3 (1,215)
At 30 June 201696,904-96,904

  

PROVIDENCE RESOURCES P.l.c.
Note 6
Share Capital and Share Premium

    Number  
Authorised:   '000 €'000
At 1 January 2016      
Deferred shares of €0.011 each   1,062,442 11,687
Ordinary shares of €0.10 each   223,131 22,313
       
At 30 June 2016      
Deferred shares of €0.011 each   1,062,442 11,687
Ordinary shares of €0.10 each*   223,131 22,313
       
       
  Number Share Capital Share Premium
Issued: '000 €'000 €'000
       
Deferred shares of €0.011 each 1,062,442 11,687 5,691
Ordinary share of €0.10 each 64,649 6,464 204,539
       
At 1 January 2015 64,649 18,151 210,230
Shares issued 75,427 7,543 18,211
Share issue costs - - (1,443)
At 30 June 2015140,07625,694226,998
    
At 31 December 2015140,07625,694226,998
       
At 30 June 2016140,07625,694226,998

PROVIDENCE RESOURCES P.l.c.
Note 7
Loans and Borrowings

  Loan facilityLoan feesTotal
  €'000 €'000 €'000
At 1 January 2015 19,727 (379) 19,348
Drawn down in period 1,519 (4,125) (2,606)
Charged to income statement - 720 720
Repaid during period (3,646) - (3,646)
Foreign exchange 1,794 - 1,794
At 30 June 201519,394(3,784)15,610
       
At 1 January 2015 19,727 (379) 19,348
Drawn down in period 1,519 (4,125) (2,606)
Charged to income statement - 2,861 2,861
Repaid during period (3,646) - (3,646)
Foreign exchange 2,332 - 2,332
At 31 December 201519,932(1,643)18,289
       
Drawn down during period   (37) (37)
Charged to income statement - 1,680 1,680
Foreign exchange (386) - (386)
At 30 June 201619,546-19,546
       
Analysed as follows: 30 June 201631 December 201530 June 2015
Non-Current €'000 €'000 €'000
Credit facility - - -
Total---
       
Current      
Credit facility 19,546 18,289 15,610
Total19,54618,28915,610
       
At end of period19,54618,28915,610

In May 2016, the Group extended its loan facility with Melody LLC through to 13 June 2016. The interest rate is 10% and the facility is secured over the assets of the Group via a floating charge. See Note 11 for further details.


PROVIDENCE RESOURCES P.l.c.
Note 8
Earnings per share

 30 June 201630 June 201531 December 2015
 UnauditedUnauditedAudited
 €'000€'000€'000
    
Loss attributable to equity holders of the company from continuing operations (4,440) (8,425) (24,137)
    
The basic weighted average number of Ordinary share in issue ('000)    
    
In issue at beginning of year 140,076 64,649 64,649
Adjustment for shares issued in period - 41,444 58,689
       
Weighted average number of ordinary shares 140,076 106,093 123,338
       
Basic loss per share (cent) - continuing operations(3.17)(7.94)(19.57)
       
       
The weighted average number of ordinary shares for diluted earnings per share calculated as follows:      
       
Weighted average number of ordinary shares 140,076 106,093 123,338
       
Diluted loss per share (cent) - continuing operations(3.17)(7.94)(19.57)

There is no difference between the loss per ordinary share and the diluted loss per share for the current period as all potentially dilutive ordinary shares outstanding are anti-dilutive.

PROVIDENCE RESOURCES P.l.c.
Note 9
Related party transactions

Mr. Tony O'Reilly, has through Kildare Consulting Limited, a company beneficially owned by him, a contract for the provision of service to the company outside the Republic of Ireland effective May 1, 2015. It is of two years duration and is subject to one year's notice period. The amount paid under the contract from 1 January to 30 June 2016 was €186,990.

PROVIDENCE RESOURCES P.l.c.
Note 10
Commitments

As at 30 June 2016, the Group has capital commitments of approximately €3.2m to contribute to its share of costs of exploration and evaluation activities.

PROVIDENCE RESOURCES P.l.c.
Note 11
Post Balance Sheet Events

Equity fundraising
The Company announced on 21 June 2016 a conditional equity placing and open offer. The equity placing raised net proceeds of c.US$68.4 million (€60.5 million) while the open offer raised c. €1.516m. The resolutions were voted on by shareholders at an Extraordinary General Meeting on 14 July 2016 and all the resolutions were passed.

Transocean Drilling UK Limited legal case
In May 2012, Transocean initiated proceedings against the Company for c.US$19 million. The Company counterclaimed pleading that Transocean was in breach of contract because their rig and their equipment were not in good working condition or adequate to conduct the drilling activities over most of a period from late December 2011 through to early February 2012. In December 2014, a judgment was handed down by the Commercial Court in London (the "Judgment") which confirmed the Company's pleadings that it should not have to pay Transocean for those periods when the rig was not operable, due to breaches of contract arising from Transocean's failure to carry out maintenance on safety critical parts of its sub-sea equipment. The Judgment provided that the Company should also be allowed to set-off certain third party costs against Transocean's claim. The Judgment allowed the parties to agree the final account, with the Company paying a net amount of c.US$6.15 million and Lansdowne paying c.US$1.54 million.

Transocean was subsequently granted the right to appeal one aspect of the Judgment. In April 2016 the Court of Appeal ruled in favour of Transocean's appeal (the "Appeal Judgment"). The
appeal of this one aspect of the Judgment turned on the Court of Appeal's interpretation of the wording of the consequential loss clause in the rig contract.

In relation to the Appeal Judgement, by Order of Her Majesty's Court of Appeal of England and Wales made on 13 April 2016 (the "EWCA Order"), the Company was ordered to pay Transocean a gross amount of c.US$6.77 million on or before 4.00 p.m. on 6 May 2016 in respect of certain costs claimed by Transocean in the context of the original legal proceedings issued against the Company by Transocean in May 2012.  This amount has been fully accrued as at 31 December 2015. The EWCA Order further stated that the Company was required to pay part of Transocean's legal costs of the appeal in the sum of gross £225,000 by 27 April 2016 (with the remainder to be agreed and paid at a future date). This amount was fully accrued as at 31 December 2015.

These legal costs in the sum of £225,000 were paid to Transocean on 27 April 2016 and the remaining balance of £183,000 was paid on the 18 July 2016. In addition, the EWCA Order stated that other matters in dispute between the Company and Transocean in the legal proceedings will be the subject of a further hearing in the Commercial Court in London unless otherwise resolved between the parties.

The two main matters which arise out of the Court of Appeal judgment and which remain unresolved as at the date of the financial statements are as follows:

(a) the quantification of interest on the judgment sum awarded by the Court of Appeal to Transocean; and

(b) whether Transocean is entitled to its legal costs (and interest thereon) in respect of the first instance decision handed down by the Commercial Court in London in December 2014, on the basis of Transocean having previously made an offer to the Company (the "Settlement Offer") to reach a settlement in respect of those proceedings pursuant to Part 36 of the English Civil Procedure Rules (the "CPR"). Part 36.14 of the CPR provides that, where judgment against a defendant (in this case, the Company) is at least as advantageous as the proposals in the Part 36 offer, the offeror (in this case, Transocean) would be entitled to its legal costs and interest on those costs together with interest on the principal sums from the date upon which the period for acceptance of the offer expired.

Transocean contends that, as the aggregate amount payable to them as a result of the Judgment and the Appeal Judgment is more advantageous to Transocean than the terms of the Settlement Offer, that Transocean is now entitled to recover from the Company its costs (and interest thereon) in respect of the first instance proceedings. The Company will be required to make an additional payment to Transocean pursuant to paragraph (a) above in the sum of (net) c.US$0.4 million (however, the final amount has yet to be agreed/determined) and, in the event that Transocean is successful in the Commercial Court in relation to the matter outlined in paragraph (b) above, an additional payment of (net) c.US$3.1 million.

As of the date of the interim financial statements, the date of 14 October 2016 has been set by the Commercial Court to consider these matters. In the event of an adverse adjudication, it is open to the Company to appeal such a decision.

Following the issue of the EWCA Order, the Company and Transocean reached agreement (the "TO Agreement") whereby the Company agreed to make a payment of (gross) US$2 million to Transocean (in part satisfaction of the EWCA Order) payment of which has now been made. The Company made a further payment on the 18 July 2016 to Transocean. Lansdowne, the Company's joint venture partner in Barryroe, is also liable for its (20 per cent interest) share of all costs associated with the litigation.

The Company confirms that it has sought leave to appeal the Appeal Judgment to the Supreme Court in the UK. A decision on the grant of such leave to appeal is expected to take between nine months and one year to be reached and further announcements will be made in this regard in due course.

Melody
The company's facility with Melody was due for repayment on the 22 May 2016 for $21.7m. The Company reached agreement with Melody to extend the repayment date of the facility to the 13 June 2016 and to extend the period within which to cure any event of default from 3 Business days to 25 Business days (subject to the preservation of the Lenders' rights and remedies under the Facility agreement or at law in respect of any event of default arising in relation to insolvency proceedings). Accordingly, in the event of non-payment of the amounts due to Melody by 13 June 2016, the Company was required to remedy such default by the close of business on 15 July 2016.

The company made the payment due to Melody on the 15 July 2016 for the $20m while the remaining liability of $1.7m was converted into 9,938,033 shares which was authorised at the EGM on 14 July 2016.

As at the date of approval of these interim financial statements, the Company has no loans outstanding after the settlement of the Melody loan facility.




This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Providence Resources plc via Globenewswire

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