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EME Empyrean Energy Plc

0.55
-0.025 (-4.35%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Empyrean Energy Plc LSE:EME London Ordinary Share GB00B09G2351 ORD 0.2P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.025 -4.35% 0.55 0.45 0.65 0.49 0.49 0.49 657,094 16:35:10
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Oil And Gas Field Expl Svcs 0 -20.8M -0.0211 -0.23 4.83M

Empyrean Energy PLC Interim Results (5799S)

22/12/2016 7:07am

UK Regulatory


Empyrean Energy (LSE:EME)
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TIDMEME

RNS Number : 5799S

Empyrean Energy PLC

22 December 2016

Empyrean Energy Plc / Index: AIM / Epic: EME / Sector: Oil & Gas

22 December 2016

Empyrean Energy PLC ('Empyrean' or 'the Company')

Interim Results

Empyrean, the oil and gas company, is pleased to provide its Interim Report for the six months ended 30 September 2016.

Highlights

-- Key event during the period was the successful application for Withholding Tax Certificate filed and accepted by the Internal Revenue Service in the US allowing the Company to offset its existing US tax losses and pay anticipated US tax obligations on amounts already received from sale of the Sugarloaf AMI Project

o Withholding Tax Certificate also stipulated that future receipts from the sale are to have 15% withholding tax applied

o The second tranche of the escrowed funds, which is due for release on or about 19 February 2017, being one year after closing of the transaction on 19 February 2016, of US$3.075m is expected to be subject to withholding tax of 15 per cent. and may be subject to further adjustments

-- Shareholder and Court approval was gained for the implementation of a 7.9p return of capital to shareholders that was completed post period-end

-- Award of a permit for 100% of the exploration rights for Block 29/11, located in the Pearl River Mouth Basin, offshore China in December 2016, following a successful application to the China National Offshore Oil Corporation

o Significant resource potential and located on trend to significant oil and gas assets offshore China

o Empyrean will acquire and complete processing and technical evaluation of 500 km2 of 3D seismic data over the next 24 months or sooner if possible

-- The Company expects Block 29/11 to become the Company's primary focus in order to re-position the Company for growth and will look to farm-out or sell its remaining US assets.

For further information please visit www.empyreanenergy.com or contact the following:

 
 Empyrean Energy plc 
 Tom Kelly               Tel: +61 8 9481 0389 
 
 
 Cenkos Securities plc 
 Neil McDonald           Tel: +44 (0) 131 220 9771 
 Beth McKiernan          Tel: +44 (0) 131 220 9778 
 Nick Tulloch            Tel: +44 (0) 131 220 9772 
 
 
 St Brides Partners Ltd 
 Elisabeth               Tel: +44 (0) 20 7236 1177 
  Cowell 
 Lottie Brocklehurst     Tel: +44 (0) 20 7236 1177 
 

Chairman's Statement

2016 marked a new era for Empyrean. With the sale of our core Sugarloaf asset completed in February, our activities during the period under review were largely focused on post-completion refinancing and restructuring necessary to enable the Company to deliver on our promise to return value to shareholders. We also successfully invested our time into evaluating new projects, which culminated in December 2016 in our entry into an exciting new oil and gas prospect post period end. We look ahead to 2017 with an exciting new project in tow having been granted the exploration rights for Block 29/11, which is located offshore China in the Pearl River Mouth Basin. Given its significant resource potential, and its location on trend to world class oil and gas projects, to have been granted this licence represents a real coup for Empyrean and offers us the opportunity to add real value, subject to the usual risks involved in resource exploration, using our current cash resources. We look forward to providing further updates as we move forward with this project in 2017.

Block 29/11

Block 29/11 (the 'Permit') covers approximately 1,800km2, around 200km southeast of Hong Kong. Two prospects, Jade and Topaz, and multiple leads have been identified via vintage 2D seismic. We will acquire some of the vintage data and plan to acquire new 3D seismic data in order to progress these prospects and leads towards drill ready status. Once the 3D seismic has been acquired and processed, Empyrean has the option to enter into a pre-negotiated Production Sharing Contract ('PSC') for the Block.

The Permit lies close to a producing field and on trend with recent discoveries, thus enhancing the suggestion that the block may offer significant prospective resource potential. Topaz Energy introduced the opportunity to Empyrean and its principal, Mr Gaz Bisht, will work alongside the Company to implement the work programme. In return, the Company has agreed that Topaz will receive approximately GBP1.4m in cash or 70m EME shares at c.2p. This arrangement is subject to binding documentation being put in place and the issue of these shares will be subject to shareholder approval at an Extraordinary General Meeting (the 'EGM').

Option Variation

Empyrean also announced on 15 December 2016 that it has amended the terms of 60m options that had been acquired by a third party from (former lender) Macquarie Bank. The option exercise prices have been reworked as per the terms of the options to reflect the recent cash distribution to shareholders and now range from 0.1p - 4.1p/share. There will also be a resolution relating to a tranche of these options at the EGM if the Optionholder has not already exercised them.

Return of Value

In February 2016, we were delighted to successfully complete the sale of the Sugarloaf AMI Project located onshore Texas for up to US$71.5 million. Subsequently, when the first tranche of funds held in escrow was released, the Board declared an intention to retain only the funds needed to meet working capital requirements and the maintenance and development of the remaining assets.

On 3 October 2016 we announced the plans for a return of value, having repaid the Macquarie Bank loan facility and the Company having met its US tax obligations to date. The Company returned 7.9p for each ordinary share held at 5pm on 19 October 2016 after shareholder and court approval, in the week commencing 14 November 2016.

The process involved the issuing of one "B" share of 7.9p for each ordinary share held, followed by the Company cancelling the "B" shares in return for a capital payment of 7.9p for each share cancelled. Shareholder approval was given at a General Meeting on 19 October 2016 and court hearings on 27 October 2016 approved the plans. Shareholders received the capital repayment in the week of 14 November 2016.

Financial Review

Our cash at the end of the period was bolstered significantly by the sale of Sugarloaf AMI and was reported as US$27,053,000.

Outlook

With a new project in hand, we have a highly active period ahead. I hope shareholders share in our excitement for this opportunity, which sits in a prospective address and has substantial resource potential. In respect of our US assets, we intend to evaluate divestment opportunities and will engage with the market regarding our efforts here at the appropriate time.

Patrick Cross

Non-Executive Chairman

21 December 2016

Operational Review

Until the sale of its 3% working interest ('WI'), Empyrean's operational activities had been almost solely focused on development drilling in the Sugarloaf AMI Project. The sale of its WI in the Sugarloaf AMI Project to Carrier Energy Partners 11, LLC ('CEPII') completed on 22 February 2016 with the transaction having an effective date of 1 October 2015.

Empyrean retains an interest in the Riverbend Project (10 % WI) located in the Tyler and Jasper counties, onshore Texas and a 58.084% WI in the Eagle Oil Pool Development Project, located in the prolific San Joaquin Basin onshore, southern California and operated by Strata-X Energy.

Riverbend Project (10%)

The Cartwright No1 re-entry well produces gas and condensate from the arenaceous Wilcox Formation.

Production commenced on 13 May 2013, and well head rates rapidly decreased to a monthly production in June 2014 of 2,687 msc.ft of gas and 83 barrels of condensate. Thereafter Cartwright No1 re-entry has been shut in intermittently. The well is now virtually suspended producing only nominal amounts of gas condensate. In the last 6 months only 794 msc.ft of gas has been produced with virtually no condensate. Full production will recommence once the economic environment improves.

Eagle Oil Pool Development Project (58.084% WI)

Located in the prolific San Joaquin Basin onshore, southern California this development project has received little attention in the last 6 months due again to the economic climate.

No appraisal operations were carried out during this period. It is anticipated that a vertical well test of the primary objective, the Gatchell sands, followed by a horizontal appraisal well, would be the most likely scenario.

Definitions

MMBOE Million barrels of oil equivalent

Production Production available for sale

WTI West Texas intermediate crude, type of oil used as a benchmark in oil pricing

Frank Brophy BSc (Hons)

Technical Director

21 December 2016

Statement of Comprehensive Income

For the Period Ended 30 September 2016

 
                                                   6 months            6 months         Year 
                                                      to 30               to 30        ended 
                                                  September           September     31 March 
                                           2016 (unaudited)    2015 (unaudited)         2016 
                                                                                   (audited) 
                                  Notes             US$'000             US$'000      US$'000 
 
 Revenue                                                  1                  21           10 
                                         ------------------  ------------------  ----------- 
 
 Cost of sales 
 Operating costs                                          2                 (1)         (28) 
 Impairment of oil and             4, 
  gas properties                    5                   (3)                 (2)          (6) 
 Amortisation                       5                   (6)                 (5)         (12) 
                                         ------------------  ------------------  ----------- 
 Total cost of sales                                    (7)                 (8)         (46) 
 
 Gross (loss)/profit                                    (6)                  13         (36) 
 
 Administrative expenditure 
 Administrative expenses                              (110)               (109)        (289) 
 Directors' remuneration                              (443)               (378)        (577) 
 Compliance fees                                      (162)               (195)        (518) 
 Foreign exchange differences                       (1,777)                 (5)          243 
 Total administrative 
  expenditure                                       (2,492)               (687)      (1,141) 
 
 Operating (loss)/profit                            (2,498)               (674)      (1,177) 
 
 Finance income/(expense)                                60             (1,132)      (3,836) 
                                         ------------------  ------------------  ----------- 
 
 (Loss)/profit from continuing 
  operations before taxation                        (2,438)             (1,806)      (5,013) 
 Deferred tax credit/(tax 
  expense)                                              709                   -        (709) 
                                         ------------------  ------------------  ----------- 
 (Loss)/profit from continuing 
  operations after taxation                         (1,729)             (1,806)      (5,722) 
                                         ------------------  ------------------  ----------- 
 
   Profit on discontinued 
   operations net of tax                                  -               3,636        6,635 
                                         ------------------  ------------------  ----------- 
 
 (Loss)/profit after 
  taxation                                          (1,729)               1,830          913 
 
 Total comprehensive 
  (loss)/profit for the 
  year                                              (1,729)               1,830          913 
                                         ==================  ==================  =========== 
 Attributable to: 
 Equity shareholders 
  of the Company                                    (1,729)               1,830          913 
 
 Earnings per share from 
  continuing operations 
  (expressed in cents) 
 - Basic                            2               (1.70)c             (0.81)c      (2.58)c 
 - Diluted                                          (1.70)c             (0.76)c      (2.58)c 
 Earnings per share from 
  discontinued operations 
  (expressed in cents) 
 - Basic                            2                     -               1.64c        2.99c 
 - Diluted                                                -               1.54c        2.99c 
 

Statement of Financial Position

As at 30 September 2016

 
                                                   6 months            6 months         Year 
                                                      to 30               to 30        ended 
                                                  September           September     31 March 
                                           2016 (unaudited)    2015 (unaudited)         2016 
                                                                                   (audited) 
                                  Notes             US$'000             US$'000      US$'000 
 Assets 
 Non-current assets 
 Derivative financial 
  asset                             3                   623                   -          371 
 Oil and gas properties: 
  exploration and evaluation        4                 6,859              11,689        6,842 
 Oil and gas properties: 
  development and production        5                   152              54,813          156 
                                         ------------------  ------------------  ----------- 
 Total non-current assets                             7,634              66,502        7,369 
 
 Current assets 
 Trade and other receivables                          3,271               1,457       17,055 
 Cash and cash equivalents                           27,053                  73       17,473 
                                         ------------------  ------------------  ----------- 
 Total current assets                                30,324               1,530       34,528 
 
 Liabilities 
 Current liabilities 
 Trade and other payables                               520               7,810          648 
 Provisions                                               9                  88           42 
 Provision for corporation 
  tax                                                 1,302                   -        2,848 
 Borrowings                                               -               3,433            - 
 Derivative financial 
  liabilities                                           401                 359          195 
 Total current liabilities                            2,232              11,690        3,733 
 
 
 Net current assets / 
  (liabilities)                                      28,092            (10,160)       30,795 
 
 Non-current liabilities 
 Provisions                                               -                 417            - 
 Provision for corporation 
  tax                                                   750                   -          750 
 Borrowings                                               -              15,398            - 
 Deferred tax liability                                   -               3,375          709 
 Total non-current liabilities                          750              19,190        1,459 
 
 
 Net assets                                          34,976              37,152       36,705 
                                         ==================  ==================  =========== 
 
 Shareholders' equity 
 Share capital                      6                   710                 710          710 
 Share premium                                       40,250              40,250       40,250 
 Share based payment 
  reserve                                             2,357               2,476        2,946 
 Retained losses                                    (8,341)             (6,284)      (7,201) 
                                         ------------------  ------------------  ----------- 
 
 Total equity                                        34,976              37,152       36,705 
                                         ==================  ==================  =========== 
 

Statement of Cash Flows

For the Period Ended 30 September 2016

 
                                                        6 months            6 months         Year 
                                                           to 30               to 30        ended 
                                                       September           September     31 March 
                                                2016 (unaudited)    2015 (unaudited)         2016 
                                                                                        (audited) 
                                      Notes              US$'000             US$'000      US$'000 
 
 Cash generated from 
  operating activities 
  - continuing operations                                  (795)               (825)      (1,253) 
 Cash generated from 
  operating activities 
  - discontinued operations                                (116)               5,634        6,804 
 Payment corporation                                     (1,545)                   -            - 
  tax 
                                              ------------------  ------------------  ----------- 
 Net cash inflow from 
  operating activities                                   (2,456)               4,809        5,551 
 
 Net proceeds from disposal 
  of discontinued operations                                   -                   -       60,474 
 Amounts held in escrow                                   13,800                   -     (16,875) 
 Purchase of oil and 
  gas properties : exploration                              (17)                   -            - 
  and evaluation - continuing 
  operations 
 Purchase of oil and 
  gas properties : exploration 
  and evaluation - discontinued 
  operations                                                   -             (1,807)      (3,212) 
 Purchase of oil and 
  gas properties: development                                  -                (21)            - 
  and production - continuing 
  operations 
 Purchase of oil and 
  gas properties: development 
  and production - discontinued 
  operations                                                   -             (3,920)      (8,909) 
                                              ------------------  ------------------  ----------- 
 Net cash inflow / (outflow) 
  for investing activities                                13,783             (5,748)       31,478 
 
 Issue of ordinary share                                       -                   -            - 
  capital 
 Proceeds from borrowings                                      -                   -        3,038 
 Proceeds from hedging                                         -                   -        1,582 
 Repayment of borrowings                                       -             (2,000)     (25,435) 
 Finance income received/(expenses 
  paid)                                                       19               (943)      (2,944) 
                                              ------------------  ------------------  ----------- 
 Net cash inflow / (outflow) 
  from financing activities                                   19             (2,943)     (23,759) 
 
 Net increase/(decrease) 
  in cash and cash equivalents                            11,346             (3,882)       13,270 
 Cash and cash equivalents 
  at the start of the 
  year                                                    17,473               3,955        3,955 
 Forex on cash held                                      (1,766)                   -          248 
                                              ------------------  ------------------  ----------- 
 
 Cash and cash equivalents 
  at the end of the year                                  27,053                  73       17,473 
                                              ==================  ==================  =========== 
 

Statement of Changes in Equity

For the Year Period 30 September 2016

 
                              Share      Share      Share   Cashflow   Retained     Total 
                            capital    premium      based      hedge     losses    equity 
                                       reserve    payment    reserve 
                                                  reserve 
                            US$'000    US$'000    US$'000    US$'000    US$'000   US$'000 
 
 Balance at 31 
  March 2015                    710     40,250      2,946          -    (8,114)    35,792 
                          =========  =========  =========  =========  =========  ======== 
 
 Hedge transactions               -          -          -      (470)          -     (470) 
 
 Profit after 
  tax for the year                -          -          -          -      1,830     1,830 
 Total comprehensive 
  income for the 
  year                            -          -          -          -      1,830     1,830 
 
 Balance at 30 
  September 2015                710     40,250      2,946      (470)    (6,284)    37,152 
                          =========  =========  =========  =========  =========  ======== 
 
 Balance at 31 
  March 2015                    710     40,250      2,946          -    (8,114)    35,792 
 
 Profit after 
  tax for the year                -          -          -          -        913       913 
 Total comprehensive 
  loss for the 
  year                            -          -          -          -        913       913 
 
 Balance at 31 
  March 2016                    710     40,250      2,946          -    (7,201)    36,705 
                          =========  =========  =========  =========  =========  ======== 
 
 Reversal of prior 
  period equity-settled 
  share-based payments            -          -      (589)          -        589         - 
 
 Loss after tax 
  for the period                  -          -          -          -    (1,729)   (1,729) 
                          ---------  ---------  ---------  ---------  ---------  -------- 
 Total comprehensive 
  loss for the 
  period                          -          -          -          -    (1,729)   (1,729) 
 Balance at 30 
  September 2016                710     40,250      2,357          -    (8,341)    34,976 
                          =========  =========  =========  =========  =========  ======== 
 

The accompanying accounting policies and notes form an integral part of these financial statements.

Statement of Accounting Policies

For the Period Ended 30 September 2016

Basis of preparation

The Company's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and Companies Act 2006. The principal accounting policies are summarised below. The financial report is presented in the functional currency, US dollars and all values are shown in thousands of US dollars (US$'000). The financial statements have been prepared on a historical cost basis and fair value for certain assets and liabilities. These condensed interim financial statements of the Group for the six months ended 30 September 2016 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The same accounting policies, presentation and methods of computation are followed in these financial statements as were applied in the Group's latest audited financial statements for the year ended 31 March 2016.

The financial information for the period ended 30 September 2016 does not constitute the full statutory accounts for that period. They have not been audited by the Group's auditor. The Annual Report and Financial statements for the year ended 31 March 2016 have been filed with the Registrar of Companies. The independent auditor's report on the Annual Report and Financial statements was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.

Going concern

The Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing its financial statements. The Company had a cash balance of US$27.053m at 30 September 2016 (US$17.473m: 31 March 2016).

Notes to the Financial Statements

For the Period Ended 30 September 2016

   1.    Segmental analysis 

The primary segmental reporting format is determined to be the geographical segment according to the location of the asset. The Directors consider the Company to have the business segment of exploration for, development and production of oil and gas properties. There is one geographical trading segment being North America which is involved in the exploration for, development and production of oil and gas properties. The Company's registered office is located in the United Kingdom.

 
 Details                      Oil and Gas Properties:           Oil and Gas Properties:                   Total 
                            Exploration and Evaluation        Development and Production 
                           30 Sep    30 Sep     31 Mar 16    30 Sep    30 Sep     31 Mar 16   30 Sep 16    30 Sep    31 Mar 
                               16        15                      16        15                                  15        16 
                          US$'000   US$'000       US$'000   US$'000   US$'000       US$'000     US$'000   US$'000   US$'000 
 
 Revenue from continued 
  operations                    -         -             -         1        21            10           1        21        10 
 Revenue from 
  discontinued 
  operations                    -         -             -         -     6,011         6,205           -     6,011     6,205 
 Profit/(loss) on sale 
  of discontinued 
  operations                    -         -           246         -         -         1,329           -         -     1,575 
 Cost of sales of 
  continued operations        (3)       (2)           (6)       (4)       (7)          (40)         (7)       (9)      (46) 
 Cost of sales of 
  discontinued 
  operations                    -      (18)         (141)         -   (2,358)         (780)           -   (2,376)     (921) 
 Tax expense on 
  discontinued 
  operations                    -         -          (18)         -         -         (205)           -         -     (223) 
                         --------  --------  ------------  --------  --------  ------------  ----------  --------  -------- 
 Segment result               (3)      (20)            81       (3)     3,667         6,519         (6)     3,647     6,600 
 
 Unallocated corporate 
  expenses                                                                                      (2,492)     (685)   (1,142) 
                                                                                             ----------  --------  -------- 
 Operating 
  (loss)/profit                                                                                 (2,498)     2,962     5,458 
 Finance income and 
  expense                                                                                            60   (1,132)   (3,836) 
                                                                                             ----------  --------  -------- 
 (Loss)/profit before 
  taxation                                                                                      (2,438)     1,830     1,622 
 Deferred tax 
  revenue/(tax expense)                                                                             709         -     (709) 
                                                                                             ----------  --------  -------- 
 (Loss)/profit after 
  taxation                                                                                      (1,729)     1,830       913 
                                                                                             ----------  --------  -------- 
 Total comprehensive 
  profit/(loss) for the 
  financial year                                                                                (1,729)     1,830       913 
                                                                                             ==========  ========  ======== 
 
 Segment assets             7,020    11,850         7,003     3,850    56,084        17,407      10,870    67,934    24,410 
 Unallocated corporate 
  assets                                                                                         27,088        98    17,487 
                                                                                             ----------  --------  -------- 
 Total assets                                                                                    37,958    68,032    41,897 
                                                                                             ==========  ========  ======== 
 
 Segment liabilities          133     3,418           130       188     4,114           303         321     7,532       433 
 Unallocated corporate 
  liabilities                                                                                     3,373    23,348     4,759 
                                                                                             ----------  --------  -------- 
 Total liabilities                                                                                3,694    30,880     5,192 
                                                                                             ==========  ========  ======== 
 
 
                                                         6 months            6 months           Year ended 
                                                            to 30     to 30 September             31 March 
                                                        September    2015 (unaudited)                 2016 
                                                             2016 
                                                      (unaudited)                                (audited) 
 
 2. Earnings per share 
 
 The basic earnings per share is derived by dividing 
  the profit/(loss) after taxation for the year 
  attributable to ordinary shareholders by the 
  weighted average number of shares in issue being 
  221,833,853 (2015: 221,833,853). 
 
 Earnings per share from 
  continuing operations 
 (Loss)/profit after 
  taxation from continuing                         (US$1,729,000)      (US$1,806,000)     (US$5,722,000) 
  operations 
 (Loss)/earnings per 
  share - basic                                           (0.78)c             (0.81)c            (2.58)c 
 
 (Loss)/profit after 
  taxation from continuing                         (US$1,729,000)      (US$1,806,000)     (US$5,722,000) 
  operations adjusted 
  for dilutive effects 
 (Loss)/earnings per 
  share - diluted                                         (0.78)c             (0.76)c            (2.58)c 
 
 Earnings per share from 
  discontinued operations 
 (Loss)/profit after 
  taxation from discontinued                                    -        US$3,636,000       US$6,635,000 
  operations 
 (Loss)/earnings per 
  share - basic                                                 -               1.64c              2.99c 
 
 (Loss)/profit after 
  taxation from discontinued                                    -        US$3,636,000       US$6,635,000 
  operations adjusted 
  for dilutive effects 
 (Loss)/earnings per 
  share - diluted                                               -               1.54c              2.99c 
 
 For the current financial year, the average 
  price of the Company's shares has been lower 
  than the exercise price of the options and warrants 
  in issue and therefore the exercise of such 
  instruments would be anti-dilutive. As such 
  the diluted earnings per share is the same as 
  the basic loss per share. In the prior year, 
  these options and warrants were dilutive and 
  the weighted average number of dilutive shares 
  were 281,396,593. Details of the potentially 
  issuable shares that could dilute earnings per 
  share in future periods is set out in Note 6. 
 
                                                         6 months            6 months           Year ended 
                                                            to 30     to 30 September             31 March 
                                                        September    2015 (unaudited)                 2016 
                                                             2016 
                                                      (unaudited)                                (audited) 
 
 3. Derivative financial 
  asset 
 
 Derivative associated 
  with sale of Sugarloaf 
  AMI: 
 Balance brought forward                                      371                   -                  - 
 Additions                                                      -                   -                139 
 Revaluation of derivative 
  financial asset                                             252                   -                232 
 
                                                              623                   -                371 
                                                =================  ==================  ================= 
 
 
 
 Derivative financial assets consist of the fair 
  value of contingent consideration amounts attached 
  to the sale of Sugarloaf AMI during the prior 
  year. The fair value of the options was initially 
  measured at the effective date of the sale, 
  being 19 February 2016 and were subsequently 
  remeasured at 31 March 2016 and 30 September 
  2016. The fair value is measured using a Black 
  Average (Asian) Model with the following inputs: 
 
 Fair value assumptions                                        At 30               At 19         At 31 
                                                           September            February         March 
                                                                2016                2016          2016 
 
 Spot price                                                 US$48.24            US$29.64      US$38.34 
 Expected volatility                                         720-day             720-day       720-day 
                                                          historical          historical    historical 
 Risk-free interest rate                                      0.415%              0.385%        0.385% 
                                                           to 0.579%           to 0.538%     to 0.538% 
 
                                                            6 months            6 months          Year 
                                                               to 30               to 30         ended 
                                                           September           September      31 March 
                                                                2016    2015 (unaudited)          2016 
                                                         (unaudited) 
                                                                                             (audited) 
 
 4. Oil and gas properties: 
  exploration and evaluation 
 
 Balance brought forward                                       6,842              11,132        11,132 
 Additions                                                        20               3,092         3,067 
 Reclassified to oil and 
  gas properties: development 
  and production (Note 5)                                          -             (2,526)       (2,526) 
 Impairment                                                      (3)                 (9)          (47) 
 Discontinued operations                                           -                   -       (4,784) 
 
 Net book value                                                6,859              11,689         6,842 
                                                       =============  ==================  ============ 
 
 5. Oil and gas properties: 
  development and production 
 
 Balance brought forward                                         156              47,788           47,788 
 Additions                                                         2               6,243            6,263 
 Reclassified from oil 
  and gas properties: exploration 
  and evaluation (Note 4)                                          -               2,526            2,526 
 Movement in Oil and gas 
  decommissioning asset                                            -                (60)            (469) 
 Impairment                                                                            -                - 
 Amortisation                                                    (6)             (1,684)          (1,698) 
 Discontinued operations                                           -                   -         (54,254) 
                                                       -------------  ------------------  --------------- 
 
 Net book value                                                  152              54,813              156 
                                                       =============  ==================  =============== 
 
 
 
 
 6. Called up share capital 
 
 Issued and fully paid 
 221,833,853 (2015: 221,833,853)                         US$710   US$710   US$710 
  ordinary shares of 0.2p 
  each 
 
 Opening balance                                            710      710      710 
 
 Closing balance                                            710      710      710 
                                                        =======  =======  ======= 
 
 The Companies Act 2006 (as amended) abolishes 
  the requirement for a company to have an authorised 
  share capital. Therefore the Company has taken 
  advantage of these provisions and has an unlimited 
  authorised share capital. 
 
 Share options and warrants 
 
 The following equity instruments have been issued 
  by the Company and have not been exercised at 
  30 September 2016: 
 
 
 
 Option Class                         Financier options   Financier options   Financier options   Financier options(2) 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Grant Date                                19 July 2012        19 July 2012       25 March 2013           27 July 2015 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Options / warrants held 31 March 
  2015                                       15,000,000          15,000,000          15,000,000                      - 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Options / warrants granted during 
  year                                                -                   -                   -             15,000,000 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Options / warrants held 31 March 
  2016                                       15,000,000          15,000,000          15,000,000             15,000,000 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Exercise price (GBP)                           GBP0.08             GBP0.10             GBP0.12                GBP0.10 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Expiry date                               19 July 2017        19 July 2017       25 March 2018           26 July 2019 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 Value per security                         GBP0.018(1)         GBP0.014(1)         GBP0.016(1)            GBP0.018(1) 
-----------------------------------  ------------------  ------------------  ------------------  --------------------- 
 
 
 (1) The value of these options is being expensed 
  over a period of 4 years. 
  The options outstanding at 31 March 2016 had 
  a weighted average remaining contractual life 
  of 0.47 years and a weighted average exercise 
  price of GBP0.095. 
  (2) These options have been excluded from the 
  weighted average remaining contractual life 
  calculation above as they do not fall under 
  the scope of IFRS 2. 
 
 7. Events after the reporting 
 date 
 
 There were no significant events post reporting 
  date other than the following: 
 
  On 3 October 2016 the Company announced that 
  it proposed to return 7.9 pence to Shareholders 
  in respect of each Ordinary Share held. At the 
  General Meeting held on 19 October 2016 the 
  shareholders passed the resolution to approve 
  the return of value. 
 
  On 18 October 2016 the Company announced that 
  it had been informed by Macquarie Bank Limited 
  of the sale of its interest in options in respect 
  of 60,000,000 ordinary shares of 0.2p each in 
  the Company, to a third party (the 'Optionholder') 
  not connected with the Company. On 15 December 
  2016 the Company announced that it had reached 
  an agreement with the Optionholder on terms 
  to vary the exercise price of the Options in 
  order to reflect the amount of the Capital Return, 
  being 7.9p that the Company implemented in November 
  2016. All other terms of the Options, including 
  expiry dates, will remain unchanged other than 
  as set out below in relation to the 15,000,000 
  options with a new exercise price of 0.1p. The 
  new exercise price of the Options is proposed 
  to be as follows: 
   Number of Options   Exercise Price   Expiry Date 
   15,000,000          0.1 pence        19(th) July 2017 
   15,000,000          2.1 pence        19(th) July 2017 
   15,000,000          4.1 pence        25(th) March 2018 
   15,000,000          2.1 pence        26(th) July 2019 
 
 
  In relation to the 15,000,000 Options which 
  it is proposed will be exercisable at 0.1p, 
  the Company is required to seek shareholder 
  approval to effect this variation as the new 
  exercise price of 0.1p is below the nominal 
  value of shares in the Company of 0.2p. The 
  Company therefore intends to seek shareholder 
  approval to capitalise the difference between 
  the nominal value and the new exercise price 
  (GBP15,000) from reserves. The Optionholder 
  is unable to exercise this tranche of Options 
  on the revised terms in advance of shareholder 
  approval being granted or in the event that 
  shareholders do not approve the required capitalisation 
  from reserves. In order to satisfy the Optionholder 
  in this regard, the Company has agreed that, 
  if the Optionholder wishes to exercise this 
  tranche of Options prior to shareholder approval 
  being granted for the capitalisation from reserves 
  or should shareholder approval not be given, 
  then this tranche of Options will convert at 
  0.2p into a greater number of 18,000,000 Ordinary 
  Shares. 
 
  On 9 November 2016 the Company announced that 
  the High Court of Justice in England and Wales 
  had made an order approving the reduction of 
  capital indicating that the return of value 
  was effective as of 9 November 2016. 
 
  On 15 December 2016 the Company announced that 
  it had been awarded a permit for 100% of the 
  exploration rights for Block 29/11, located 
  in the Pearl River Mouth Basin, offshore China, 
  following a successful application to the China 
  National Offshore Oil Corporation and that the 
  Company would be the operator of the permit 
  during the exploration phase of the permit. 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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